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NCI: New Contract for Up to $18.2M; Operations Unaffected by Conflict

What you need to know:
• NTG has signed a three-year Framework Agreement with a major Saudi real estate developer for up to $18.2M in IoT and Smart City services.
• The customer is a portfolio company of one of Saudi Arabia’s largest investment entities, won through a referral by an existing NTG client.
• NTG’s operations remain unaffected by recent escalation in Middle East military activity; Egypt Offshore Centres continue to operate normally.
• We recently initiated coverage on NTG and interviewed Adam Zaghloul, VP of Strategy and Planning. Click here for our initiation, and here to watch the interview.

This morning, NTG Clarity Networks (NCI:TSXV, NYWKF:OTCPK) announced the signing of a three-year Framework Agreement with a vertically integrated real estate development company in Saudi Arabia which serves the hospitality sector and is a portfolio company of one of the Kingdom’s largest investment entities. The agreement covers offshore and on-site digital transformation and software development services, with a focus on IoT and Smart City solutions. We are maintaining our BUY rating and our target price of $2.50/share on NTG Clarity Networks.

The Framework Agreement establishes an initial spending ceiling of $18.2M over its three-year term, with gross margins of ~36% (in line with recent quarters). Revenue will be recognized as individual purchase orders are issued and work is completed. The Company noted that initial POs are expected in the coming months, and it will disclose individual purchase orders as they are received.

The Agreement does not include a minimum spend commitment and the $18.2M ceiling, if fully realized over three years, would imply ~$6.1M annually, a meaningful contribution representing ~6% of our 2026E revenue of $96.2M. Our model remains unchanged as we expected these types of announcements. Combined with ~36% gross margins and NTG’s cost-efficient offshore delivery model based in Egypt, the agreement has attractive economics. Management stated that this was one of the larger engagements that the Company has been positioning for throughout 2025 via proactive talent acquisition.

This engagement originated through a referral from an existing NTG customer, which is also a portfolio company of the same investment entity, reinforcing the referral-driven growth model that supported our investment thesis (see here). NTG’s management has consistently highlighted that strong relationships with major Saudi conglomerates and government-affiliated entities create a compounding growth dynamic, as satisfied customers introduce NTG to other companies within their investment networks. We look forward to 2026 guidance and the Q4 financials which will be announced over the coming months.