Maharah CEO sees up to 13% revenue growth in 2026

Maharah CEO Abdulaziz Al-Kathiri

Maharah Human Resources Co. is targeting revenue growth of 10% to 13% in 2026, alongside a 10% to 12% workforce expansion, CEO Abdulaziz Al-Kathiri told Argaam.

The company intends to maintain a gross profit margin of 10% to 12% and a net income margin of 7% to 9%, he added.

Al Kathiri said Maharah expects its business segment to post revenue and workforce growth of 6% to 7%, reaching around 46,000 to 47,000 employees by the end of 2026. The company plans to focus on government and semi-government entities, professional staffing, the Esnad platform, and the petrochemicals sector.

He added that the individual segment is expected to deliver revenue growth of 15% to 18%, with workforce expansion of about 27% to 30%, raising headcount to between 17,000 and 20,000 employees, supported by new service launches, geographic expansion and improved utilization rates.

Al-Kathiri said Maharah exceeded its 2025 targets and is entering 2026 with strong operational discipline and a stronger financial position.

Q: Maharah posted strong first-quarter 2026 results, with revenue of SAR 923 million, up 30%, operating profit up 89% and net profit of SAR 64.8 million. However, net profit was below SAR 139.5 million in Q4 2025. Can you explain the performance?

A: The lower net profit in Q1 2026 versus Q4 2025 reflects a one-off SAR 105 million capital gain booked in the prior quarter from the sale of Maharah’s stake in Care Shield Holding. Underlying performance remained strong in Q1 2026, with revenue rising 30% year-on-year (YoY), or SAR212 million, driven by 33% growth in the business segment and 17% in the individual segment, supported by workforce growth of 22% and 2%, respectively.

Compared with Q4 2025, revenue increased 8%, with business and individual segment revenues up 6% and 10%, respectively.

Excluding the one-off gain, first-quarter net profit exceeded fourth-quarter 2025 levels by SAR30 million, or 88%, supported by SAR 6 million in higher gross profit, an SAR 8.5 million decline in administrative expenses, SAR 4 million lower marketing costs, SAR 3 million lower financing expenses due to reduced debt, and the absence of impairment losses recorded in the previous quarter.

The 89% increase in operating profit better reflects Maharah’s underlying performance, while gross margin improved to 11% from 9%, signaling sustainable efficiency gains. First-quarter results also excluded contributions from one associate due to the unavailability of financial statements.

Q: The auditor’s report included a qualification related to your investment in Saudi Health Services (SHS), while no results were recorded during Q1. How are you addressing this?

A: The auditor’s qualification related to Maharah’s investment in the SHS due to the unavailability of financial information, which prevented the external auditor from completing procedures and applying the equity accounting method. As a result, no contribution from the associate was recognized in Q1 2026 earnings.

Maharah had previously disclosed the award of a contract exceeding SAR3 billion involving the associate as it continued to monitor the investment while safeguarding shareholder interests.

Any accounting treatment or financial impact will be recognized once the required financial data becomes available. Strategically, Maharah remains open to either retaining the investment to benefit from future growth or monetizing it if an attractive opportunity arises.

Q: Your results showed growth in petrochemicals (154%), hospitality (56%), operations and maintenance (43%), healthcare (33%) and Saudi workforce outsourcing (34%). What drove this growth and is it sustainable?

A: Growth was driven by Maharah’s positioning within Saudi Arabia’s economic transformation and its diversified sector exposure. Petrochemicals revenue rose 154% on contracts with major operators, hospitality increased 56% on tourism and global events, operations and maintenance advanced 43% on Vision 2030-related projects, while healthcare grew 33% on private healthcare expansion.

Saudi workforce outsourcing increased 34%, supported by rising localization requirements and demand from mega-projects and international events. Our diversified sector exposure reduces reliance on any single industry and is expected to sustain momentum in the coming quarters.

Q: Individual-segment revenue grew 15% in 2025, with gross margin reaching 13%. Momentum continued in Q1 2026. What are the main growth drivers?

A: Growth in the individual segment reflects structural improvements following investments over the past two years, with a smart scheduling and demand-management system increasing utilization by 12% and efficiency by 25%. In addition, the diversified recruitment sources improved cost flexibility, and digital sales rose 70%, reducing customer acquisition costs.

Individual-segment revenue increased 17% in Q1 2026. Maharah is targeting revenue growth of 15%-18%, workforce expansion of 27%-30% and gross margins of 12%-15% for the segment this year.

Q: You signed an agreement with Al Mawarid in 2025. What impact do you expect on the 2026 results?

A: Maharah’s agreement with Al Mawarid Manpower Co. is expected to expand its specialized professional staffing business in Saudi Arabia by leveraging the US-listed firm’s expertise, technology and network across 75 countries.

Operations began in Q1 2026 following the opening of a dedicated headquarters, with stronger momentum expected in the second half as major contracts are signed. The agreement is viewed as a long-term capability-building initiative supporting Maharah’s target to reach SAR3.75 billion in revenue by 2030.

Q: The Saudi workforce outsourcing and government segments grew 34% in Q1, after 76% growth in 2025. Where do you stand today, and how will you sustain growth?

A: Maharah is currently the kingdom’s largest Saudi HR outsourcing provider, with more than 1,400 Saudi employees.

Growth has been driven by rising localization requirements, Vision 2030 projects and global events, while our competitive edge includes sector leadership, diversified exposure across industries ranging from construction and healthcare to petrochemicals, government and finance, and a market share exceeding 50% of workforce requests on the Kafaa Spending Efficiency platform. The segment is expected to remain among our fastest-growing businesses over the next three years.

Q: Based on first-quarter performance, what are your targets for 2026?

A: Maharah is targeting consolidated revenue growth of 10%-13% and workforce expansion of 10%-12% in 2026, while maintaining gross margins of 10%-12% and net margins of 7%-9%.

The business segment is expected to grow 6%-7%, reaching 46,000-47,000 employees by year-end, supported by government and semi-government demand, professional staffing, the Esnad platform and petrochemicals.

The individual segment is expected to post revenue growth of 15%-18% and workforce growth of 27%-30%, reaching 17,000-20,000 employees through new services, geographic expansion and higher utilization.

We exceeded all 2025 targets, delivering 39% revenue growth against guidance of 15%-20% and workforce growth of 23% versus an 11% target.

Q: How are you dealing with the regional environment in terms of operations and recruitment?

A: Maharah monitors regional developments daily and has seen no material operational or financial impact so far.

Recruitment diversification across more than 70 nationalities provides resilience, with key sourcing markets in Asia and Africa largely unaffected, while the company maintains contingency plans shaped by lessons learned during the Covid period.

Potential disruptions may include higher travel costs due to fuel prices or flight rescheduling from airspace restrictions, though these are manageable and are not expected to materially affect results or service levels.