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Saudi Arabia’s telecom champion delivered its highest-ever annual revenue and a 12.5% jump in adjusted net profit, yet the numbers only tell half the story. A $13 billion data center bet and an 8-million-strong digital bank are quietly reshaping stc into something far larger than a carrier.
The Numbers Behind the Record
stc group reported consolidated revenue of SR77.8 billion ($20.7 billion) for the fiscal year ended December 31, 2025, a 2.5% increase over the prior year, according to filings with the Saudi Exchange (Tadawul). Gross profit rose to SR37.7 billion, operating profit reached SR14.4 billion, and EBITDA climbed to approximately SR24.5 billion — a 6.1% gain after stripping out non-recurring items. The adjusted net profit growth of 12.5% is the figure the company wants investors to focus on, and for good reason: reported net profit actually fell to SR14.83 billion from SR24.69 billion in 2024, a decline driven entirely by the prior year’s one-off SR13.97 billion gain from the sale of controlling stakes in tower subsidiary TAWAL and the Digital Infrastructure Company, as detailed in stc’s Tadawul disclosure (source: Saudi Exchange announcement, February 17, 2026).
The fourth-quarter dividend of SR0.55 per share maintains the fixed quarterly payout that has made stc one of the Tadawul’s most reliable income plays. At the current share price of roughly SR43.60, the annualized SR2.20 distribution delivers a yield of approximately 5.0%, underpinned by a payout ratio that the company held near 84% through the first nine months of the year. All eight analysts covering the stock on Investing.com rate it a buy, with a consensus 12-month target of SR48.78 — implying roughly 12% upside from current levels (source: Investing.com, as of February 16, 2026).
Center3 and the $13 Billion Data Center Gamble
The earnings release was solid, but stc’s strategic pivot into data center infrastructure is where the long-term valuation story lies. Subsidiary center3, spun out in late 2022 as a carrier-neutral platform, has committed to a total of $13 billion in investment — $3 billion already deployed and an additional $10 billion earmarked through 2030 — targeting 1 gigawatt of total IT load capacity across Saudi Arabia, Bahrain and select international markets (source: center3 press release, August 4, 2025; confirmed by Data Centre Dynamics and Zawya). The first major phase aims to deliver 300 megawatts of installed capacity by 2027, with high-density, hyperscale-ready facilities designed to host AI training workloads and large language model inference.
The timing is deliberate. Saudi Arabia’s data center market is projected to expand from $1.33 billion in 2024 to $3.9 billion by 2030, a compound annual growth rate of 19.6%, fueled by hyperscaler buildouts from AWS, Google, Microsoft and Oracle alongside the kingdom’s own giga-projects. Center3 has deepened its positioning through a joint venture with HUMAIN — a subsidiary of the Public Investment Fund — to develop and operate AI-focused data centers starting with an initial 250-megawatt phase. The partnership is central to the broader US-Saudi strategic alignment that extends from nuclear energy cooperation to digital infrastructure, as Riyadh pursues its Vision 2030 objective of becoming a global technology hub.
From Carrier to Platform: 5G, Fintech and 6G Trials
Group CEO Olayan Alwetaid framed the results as evidence of stc’s transition from a traditional carrier to a diversified digital platform. The 5G network surpassed 10,800 sites during the year, fiber-to-the-home connections reached 3.75 million households, and the group conducted the first regional trial of 7 GHz spectrum technology in preparation for 6G deployment. stc also claimed the first global trial of an optical solution delivering 2.4 terabits per second.
STC Bank, the group’s digital banking arm, expanded its customer base beyond 8 million users, establishing itself as one of the kingdom’s fastest-growing fintech platforms. The bank operates under the Saudi Central Bank’s digital banking licence and represents stc’s most direct play on Saudi Arabia’s rapidly formalizing digital payments ecosystem, which is expanding alongside the broader push to build sovereign technology capacity across competing global economies.
Brand Dominance, but Valuation Questions Persist
Brand Finance’s 2026 report ranked stc as the strongest brand in the Middle East for the sixth consecutive year, third globally among telecom brands by strength and ninth by total brand value. The MSCI ESG rating improved to AA. On the capital markets side, a $2 billion sukuk issuance drew subscriptions four times the offered amount, signalling robust institutional appetite for stc credit.
Still, the stock has underperformed over the past year. Shares trade roughly 10% below their 52-week high of SR48.30, and the market capitalization of approximately SR219 billion places stc at a trailing price-to-earnings ratio of around 15 times adjusted profit — a discount to global peers that reflects the Tadawul’s concentrated investor base and questions about how quickly center3’s capital-intensive buildout will generate earnings accretion. For now, stc is a yield story with a growth option attached. Whether the data center gamble transforms it into something more depends on execution over the next three to five years.
