I've been living in Dubai for the last 15years and work as a management consultant, doing most of my work in Saudi. The ICT investment in Saudi is very real (see recent AI announcement after Trump visit). The country is coming from a low base in digitisation and investing heavily in building digital government services, among others. It is also true that customers tend to be recurring, once relationship has been built. Some of the digital government initiatives are multi-year multi million contracts, so the investment pipeline at the country level is big.
On the increase in receivables: the problem in Saudi is that clients (especially government ones) take a long time to pay you. It can take 6m to 1 year in some cases. Eventually you get paid - but can take time.
Currency wise - in Saudi you paid in Saudi Riyal (SAR, which is pegged to the USD) or in USD. Earning in SAR/USD and paying salaries in Egyptian pounds is a good cost arbitrage in my opinion.
Good work Aditya. I'm a new fan of your substack :-)
Thanks for this — incredibly helpful perspective. That point on receivables aligns with what Adam mentioned on the call as well: revenue recognition continues uninterrupted, but cash collection can lag due to slower government processing cycles, especially around Eid.
Also completely agree on the SAR/USD earnings + EGP cost base — that kind of structural arbitrage is a quiet but powerful edge in NTG’s model.
Appreciate the kind words, and welcome to 10x Radar :)
Hi Good article but I have few questions. First I understand the history, language and cultural things. But longer term, do they receive any reurring revenue ? What types of projects are they doing IE: converting travl to the cloud for hotels restaurants etc? Who ownes the softeare and servers? I do no tlike pure service co's as its a one and done I like the recurring revenue.
Management noted that 85%+ of clients are recurring or re-engaging — so it’s not “one-and-done,” even if it’s not SaaS-style ARR. That said, I’ll be asking management for more clarity on current project types and recurring components. Will share an update once I have it.
My two cents,
I've been living in Dubai for the last 15years and work as a management consultant, doing most of my work in Saudi. The ICT investment in Saudi is very real (see recent AI announcement after Trump visit). The country is coming from a low base in digitisation and investing heavily in building digital government services, among others. It is also true that customers tend to be recurring, once relationship has been built. Some of the digital government initiatives are multi-year multi million contracts, so the investment pipeline at the country level is big.
On the increase in receivables: the problem in Saudi is that clients (especially government ones) take a long time to pay you. It can take 6m to 1 year in some cases. Eventually you get paid - but can take time.
Currency wise - in Saudi you paid in Saudi Riyal (SAR, which is pegged to the USD) or in USD. Earning in SAR/USD and paying salaries in Egyptian pounds is a good cost arbitrage in my opinion.
Good work Aditya. I'm a new fan of your substack :-)
Thanks for this — incredibly helpful perspective. That point on receivables aligns with what Adam mentioned on the call as well: revenue recognition continues uninterrupted, but cash collection can lag due to slower government processing cycles, especially around Eid.
Also completely agree on the SAR/USD earnings + EGP cost base — that kind of structural arbitrage is a quiet but powerful edge in NTG’s model.
Appreciate the kind words, and welcome to 10x Radar :)
Hi Good article but I have few questions. First I understand the history, language and cultural things. But longer term, do they receive any reurring revenue ? What types of projects are they doing IE: converting travl to the cloud for hotels restaurants etc? Who ownes the softeare and servers? I do no tlike pure service co's as its a one and done I like the recurring revenue.
Management noted that 85%+ of clients are recurring or re-engaging — so it’s not “one-and-done,” even if it’s not SaaS-style ARR. That said, I’ll be asking management for more clarity on current project types and recurring components. Will share an update once I have it.
Thanks.