Tabby's Saudi unit Q2 profit falls 54% as revenue grows 21% year on year

Tabby's Saudi subsidiary reported a 54% fall in second-quarter net profit, in the buy now, pay later group's first full quarter since the outbreak of the regional conflict.

Net profit at Tabby Financing Company CJSC, the SAMA-licensed entity that houses the group's Saudi consumer lending, fell to SAR 11.6 million ($3.1 million) in the three months to 30 June from SAR 25.1 million a year earlier, according to interim accounts reviewed by EY.

Revenue rose 21% year on year to SAR 389 million ($104 million) but came in 9% below the first quarter, when the company earned SAR 68 million on revenue of SAR 427 million.

Revenue for the six months grew 27% to SAR 816 million ($218 million) while net profit fell 12% to SAR 79.7 million ($21 million), a half-year decline accounted for entirely by a second quarter in which profit landed 83% below the first.

Merchant commission, the fee Tabby earns at checkout and still the bulk of its revenue, grew 7% year on year against 19% in the first quarter, while the fees Tabby charges consumers directly, led by its "snooze" instalment deferral, tripled to SAR 68 million ($18 million) and now account for 17.5% of revenue, up from 7% a year earlier.

Tabby's gross Saudi loan book stood at SAR 3.48 billion ($929 million) at the end of June, around 11% smaller than the SAR 3.92 billion reported at the end of March, when it crossed $1 billion for the first time.

Customers repaid SAR 365 million more than the company lent out between April and June, based on the half-year disclosures and the first-quarter position, and write-offs of around SAR 74 million were more than double the previous quarter's.

The book shrank with Tabby's Saudi funding effectively frozen. Its net external debt has sat SAR 520 million ($139 million) above the ceiling prescribed by the Saudi Central Bank since at least the end of last year, nothing new has been drawn from Flow Finance I DAC, the Irish vehicle that funds its lending, since late September, and cash has fallen to SAR 274 million ($73 million) from SAR 737 million at the start of the year.

EY flagged the breach for a third consecutive set of accounts, and where the first-quarter statements said Tabby was in the process of securing SAMA approval for a higher ceiling, the latest notes record the breach without repeating that language or offering any update.

The accounts say the geopolitical environment had no material effect on the credit quality of the loan book and that operations ran without disruption, assessments that speak to risk and continuity but not to whether Saudi shoppers were simply spending less at Tabby's merchants.

Gross profit still rose 24% year on year, leaving the squeeze to come from the cost base beneath it. Operating expenses grew 64% on the continuing build-out of in-Kingdom tech, customer support and staffing that Tabby calls localisation, and charges for expected loan losses rose 34%, running nearly 70% above the first quarter as the share of loans more than 90 days overdue climbed to 9.5% from 7.7% at the end of March.

On 4 June the company added small business financing and broader consumer lending to its SAMA licence, and in the final days of the month it launched a Sharia-compliant instalment loan product whose income will appear as a separate Murabaha line from next quarter, taking the business beyond the pay-in-four product that built its book and into term lending that earns profit over the life of a loan. Longer loans mean a longer book, and a longer book needs more funding, the one resource the unresolved ceiling currently caps.

The interim financial statements were authorised for issue by Tabby's board on 27 July 2026.

FWDstart will publish a deeper examination of the filings in the coming days.

Figures converted at SAR 3.75 = $1. Based on Tabby Financing Company CJSC's reviewed condensed interim IFRS financial statements for the three-month and six-month periods ended 30 June 2026.