Systems Limited (PSX: SYS), Pakistan’s largest listed technology company, has reported a consolidated profit after tax of Rs3.03 billion for the first quarter ended March 31, 2026, representing earnings per share (EPS) of Rs2.05 – a 21% increase compared to the same period last year. Despite the strong earnings growth, the company’s gross margins declined to 25% during the quarter.
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Management attributed the margin compression to a combination of wage inflation, higher fuel costs, appreciation of the Pakistani rupee against foreign currencies, and fewer working days in the reporting period. The company also highlighted a slowdown in collections, particularly from the Kingdom of Saudi Arabia (KSA), which contributed to an increase in trade receivables. Management warned that collections from Middle Eastern markets could face additional pressure if regional geopolitical tensions persist.
| Metric | Q1 2026 | YoY Change |
|---|---|---|
| Profit After Tax | Rs3.03 billion | +21% |
| Earnings Per Share (EPS) | Rs2.05 | +21% |
| Gross Margin | 25% | Declined |
Strategic Pivot to North America
To diversify revenue streams and reduce dependence on Middle Eastern markets, Systems Limited is increasingly focusing on growth opportunities in North America following the integration of Confiz, a strategic acquisition aimed at strengthening the company’s international footprint. According to management, the acquisitions of Confiz and BAT SAA have collectively added between eight and ten enterprise‑level clients to the company’s customer portfolio, providing opportunities for further revenue growth and cross‑selling of services.
Visa Restrictions and Workforce Composition
Addressing concerns regarding visa‑related restrictions in the United Arab Emirates, management stated that such restrictions no longer pose a significant threat to the company’s operations or hiring plans. Only 52% of its workforce in the region consists of Pakistani nationals, while the remainder comprises employees from other countries.
Tax Policy Advocacy
On the policy front, management disclosed that it had participated in pre‑budget consultations with the government and advocated for the continuation of the existing 0.25% Final Tax Regime (FTR) applicable to IT exporters. The company expressed optimism that the preferential tax framework would be retained in the upcoming federal budget, citing its importance for maintaining the competitiveness of Pakistan’s technology export sector. Management also discussed proposals related to tax harmonization between freelancers and salaried employees, as well as reforms linked to the Export Facilitation Scheme (EFS) .
Future Outlook
Despite short‑term margin pressures and regional uncertainties, analysts believe the company remains well‑positioned to benefit from Pakistan’s expanding IT exports and increasing global demand for digital transformation services.
About Systems Limited
Systems Limited (PSX: SYS) is Pakistan’s leading information technology and business process outsourcing company, providing digital transformation, enterprise solutions, and technology consulting services to clients across the globe. The company has a strong presence in North America, Europe, the Middle East, and Asia.
