Good morning and good afternoon, everyone. This is Omar Maher from EFG Hermes. I'd like to welcome everyone to Presight's 1Q 2026 results conference call. As usual, the call will begin with the discussion of the key highlights of the quarter, and this will be followed by a Q&A session. I will now hand the call over to Roger Tejwani, Senior Director of Investor Relations at Presight. Thank you.
Thank you, Omar, and good afternoon, ladies and gentlemen, and thank you all for joining us on today's call covering Presight's first quarter 2026 results. As usual, the call today will comprise a short presentation of the strategic and financial highlights of the period hosted by Presight's CEO and CFO, and we'll follow that by Q&A. The presentation you're about to see is available on the investors section of the company's website. Please also note that the contents of this call may contain forward-looking statements which should be considered in conjunction with the disclaimer included in the presentation. I'll now hand over to our CEO, Thomas.
Good afternoon, everyone, thank you once again for joining us to discuss our first quarter 2026 results. If I were to do a quick summarization of this quarter in 3 words, it would be resilience, sovereignty, and opportunity. The quarter was marked by a dynamic regional environment with an increased geopolitical uncertainty that was shaping our customers' priorities towards system resilience, continuity, and performance under stress. Throughout this period, Presight maintained uninterrupted operations across all market and continued to support sovereign customers and mission-critical national infrastructure without disruption. Through this period, we had several calls with many of you and demonstrated that it was business as usual. This consistency reflects the strength of our operating model. It combines a continuity-focused delivery approach, a platform architecture that is built for real-world conditions, and highly experienced teams that can adapt and re-rapidly execute under pressure.
More importantly, while others are reducing on-ground presence, our teams were fully engaged, expanding use cases across areas such as emergency response planning, infrastructure resilience, public safety. Their professionalism and commitment and ability to translate strategy into real-world execution remains a core strength of our operating model. Looking ahead, this evolving geopolitical landscape is reinforcing the importance of national resilience, continuity, and robust data security and governance. This is driving increasing demand across both domestic and international markets for our secured sovereign mission-critical AI systems that are built on in-country infrastructure, hosting sovereign data and providing resilient compute capabilities. In parallel, awareness is growing on the role sovereign AI can play across the full public safety, safe city, and defense optimization value chain. Against this backdrop, Presight's differentiated and durable competitive positioning remains highly relevant, supporting a clear and compelling long-term growth trajectory.
Our sovereign-first approach combines integrated capabilities across analytics and AI platforms, sovereign infrastructure, data governance, and end-to-end operational delivery in highly regulated environments, supported by a deep pool of technical talent and long-standing technology partnerships. Anchored by our safe and smart city platform as a scalable modular foundation for expansion into adjacent public safety and non-kinetic defense-related application, Presight is now well-positioned to execute its strategy and progress confidently into the next phase of growth. Turning now to offer you some operational highlights in the quarter. Despite the intense operating environment, we demonstrated sustained momentum as the sovereign AI partner of choice in supporting the UAE's ambition to become a global leader in sovereign and responsible AI and building the world's first AI-native government. We broaden our digital transformation footprint across high-potential international markets, supporting national AI strategies and public sector modernization initiatives, diversifying our long-term revenue streams.
We continue to support AIQ in broadening its domestic presence and unlocking international growth opportunities. We continue to build out our integrated innovation model that provides emerging technologies with a continuous pathway from early-stage acceleration to long-term commercial scaling. In the UAE, we're happy to report that we signed nine new contracts and agreements in the first quarter. One that is strategically important at the federal level is the one that was signed with the Ministry of Foreign Trade and the Federal Competitiveness and Statistics Centre to renewing Abu Dhabi Accountability Authority's contract at the Emirate level. Our clients has entrusted us to bring applied intelligence to enhance data-driven policymaking, regulatory framework, trade governance, and the resilience of a critical national infrastructure. I'll briefly touch on two of these. Firstly, agreement with the UAE Ministry of Foreign Trade to build a first AI-powered trade platform.
This partnership really underscores how Presight supports the UAE leadership strategy through technology-enabled economic transformation. The platform will not only accelerate foreign trade growth and strengthen the UAE's position as a global gateway for goods and services, delivering real-time intelligence to enhance trade flows, anticipate trade disruptions, and facilitate frictionless cross-border trade. It will result in the world's first trade ministry to be AI native. This is also critically important as we face global supply chain challenges now and for the foreseeable near future. The ministry now have a tool and a platform to be able to navigate the challenges ahead. Secondly, we signed two new multi-year contracts with Abu Dhabi Accountability Authority focusing on autonomous audit capabilities and intuitive document management.
The authority has been a long-standing Presight client and a strong example of our repeatable deployable framework in action, where solutions have scaled vertically within the authority and horizontally across related federal entities, driving recurring revenue streams and margin expansion. Growing demand for secured sovereign and rapidly deployed AI systems, combined with Presight's established capabilities in delivery and reference deployments in the UAE, continues to drive our expansion across international markets. We expanded our presence in the African continent. In the quarter 3 MoU supporting national digital transformation initiative was signed with the governments of Burkina Faso, Côte d'Ivoire, and Gabon. Our international growth has been rapid, with overseas market accounting for 30% of our total revenue in the 1st quarter, and it has been highly intentional and disciplined. In each market, we partner directly with sovereign stakeholders to support the deployment of national digital infrastructure.
We focus on in-country capabilities, working with local system integrators, investing in local talent, and supporting AI ecosystem. Through this approach, we establish embedded technology nodes within national AI architectures, enabling the deployment of repeatable AI frameworks that scale efficiently across cities, nations, and regions. This model supports sustainable international expansion while reinforcing long-term customer alignment and platform scalability. Our work in Africa and Central Asia are good examples of this. In Africa, we are in the final stages of negotiating a commercially significant phase two government agreement to deliver a nationwide public safety digital transformation program, reinforcing our position as a strategic technology partner in the country's long-term digital modernization agenda.
In Kazakhstan, the comprehensive AI transformation program launched in 2025, which includes a major smart city role in Astana, the establishment of our regional headquarters, and the deployment of a supercomputer cluster and AI lab, is generating an incremental pipeline of in-country opportunities valued at almost $500 million, with a further AED 200 million across the broader Central Asia. Our smart city platform deployment across 20 cities and 28 international border points in Albania announced in Q4 2025 is already gathering follow-on engagements across the Balkans. In fact, today, at the end of the closing day, we will announce our agreement with Montenegro to develop their smart city.
Turning to AIQ, its established portfolio of AI optimization-focused technology solutions continues to demonstrate strong and growing strategic relevance, particularly in a more challenging production environment where customers are increasingly focused on maximizing efficiency, improving asset performance, and extracting greater value from existing infrastructure. AIQ solutions are well aligned with these priorities, reinforcing its role as a critical technology partner and supporting sustained demand across its core end markets. During the quarter, AIQ signed two domestic and international agreements. Domestically, a strategic agreement with ADNOC Group, TotalEnergies, and G42 to bring together a world-class subsurface data domain expertise and AI capabilities to explore innovations across the subsurface value chain, including seismic pro-processing and reservoir simulation.
Internationally, an MoU with National Oilwell Varco, a Texas-based global provider of energy technology, to jointly test and validate AI-driven drilling optimization solutions and target proof of concept and pilot deployment in live operating environments internationally. Focusing on innovation, our AI accelerator together with the Presight-Shorooq $100 million venture fund remains a core component of our group's AI innovation ecosystem. It forms an integrated innovation platform that provides us early access to emerging AI capabilities and a continuous pathway from early-stage acceleration to long-term capital and commercial scales. This model simultaneously strengthens our long-term innovation pipeline, ensures we continue to build a differentiated pipeline of deployable, high-impact applied intelligence capabilities across sovereign and regulated environments that can translate into sustainable long-term revenue opportunities.
Our first cohort of 10 companies selected from more than 120 global applicants delivered measurable results and commercial outcomes, including equity investments across 8 companies selected in alignment with our strategy to deliver resilient, governed, and scalable systems of complex and regulated environments. Notable among these were AMI Labs, co-founded by Turing Award recipient, Yann LeCun, who develops the world model AI architectures designed to learn from and reason about the physical world, supporting the evolution of predictive and decision-oriented AI systems. We have also established a commercial partnership with our accelerator participant, Nodeshift, combining our applied AI capabilities, commercial expertise, and global enterprise and government reach with Nodeshift's secure and on-prem air-gap generative AI infrastructure. Nodeshift is exactly the kind of company that is shaping how AI is developed in the real world, removing friction where it matters most.
In many regulated environments, AI capabilities are ready but cannot be fully leveraged because data is not permitted to move. This is a common and material constraint for customers operating under strict regulatory and sovereignty requirements, one that NodeShift is purpose-built to address. A single governed interface spanning more than 140 models, including Claude, GPT, and Gemini, enables data to remain on-prem and fully governed, supporting secure human-in-the-loop end-to-end workflows across enterprise systems operating wholly within the government, the customer environment, rather than across multi-tenanted SaaS AI platforms. In the first quarter, as we launched the second cohort of the accelerator program, we received 376 applications from 62 countries spanning North America, Europe, the Middle East, and Asia. Applicant focus areas include enterprise AI, agentic systems, automation, advanced data analytics, and sector-specific use cases across financial services, healthcare, government, smart cities, and cybersecurity.
A significant proportion of applicants are ready revenue generating and have secured prior institution funding, resulting in a more mature and deployable-ready pipeline for regulated environments, and we look forward to partnering with them more on this commercial journey. I'll now hand over to Ram to take you through the numbers.
Well, thank you, Thomas, and good afternoon, everyone. It's a pleasure to be here today to share the momentum we are building across our businesses. Performance during the quarter demonstrates the continued resilience and the scalability of the Group's operating and financial models. Key financial metrics delivered double-digit growth despite notably elevated prior year comparator, which had benefited from accelerated international software deployments and a maiden first quarter contribution from AIQ following its acquisition in June 2024. As a result, revenue, EBITDA, and post-tax profit growth in the prior year were 115%, 72%, and 25% respectively. In Q1 2026, Group revenue increased by 22.2% year-on-year, with organic growth broadly in line with the contribution from AIQ, which accounted for 29.8% of the total revenue.
Performance reflected effective execution of backlog, contribution from new domestic contract wins secured during the quarter, and continued momentum across international markets. The Group's strategy to scale globally and deliver sustainable long-term value through diversified revenue streams continue to advance. Revenue generated outside UAE represented 30% of the Group revenue, increasing 63% year-on-year in absolute terms to about AED 207 million. Growth was supported by ongoing multi-year deployments in Jordan, Kazakhstan, and Albania, all of which continue to progress in line with expectations. Aggregate new orders secured during the quarter totaled AED 371 million, with international orders accounting for 39% of the total intake, supporting continued diversification of our order backlog.
Group EBITDA growth reflected a higher contribution from software revenues at AIQ, which accounted for 32.6% of the total Group EBITDA, partially offset by a greater weighting of infrastructure-led deployments at Presight. This shift in deployment mix resulted in a 194 basis points year-on-year reduction in the Group EBITDA margin to 23.1%. Group profit before tax increased by 11.8% to AED 157.5 million, driven by the same underlying factors as EBITDA performance and incorporating a modest year-on-year decline in finance income, primarily reflecting the lower interest rate environment. As a result, the pre-tax margin declined by 211 basis points year-on-year to 22.9%. Group post-tax profit increased 11.5%, with AIQ contributing 27.6% of the total.
Post-tax profit attributable to shareholders amounted to AED 115.8 million, representing a year-on-year growth of 6.5%. From a margin perspective, the post-tax margin of 19.4% represented a 186 basis point year-on-year reduction, primarily reflecting the relative deployment mix during the quarter as previously outlined. Now, moving on to some of the key performance indicators that we track. The Group's revenue base continues to benefit from a high proportion of multi-year contracts. During the first quarter, 95.7% of the revenue were derived from multi-year contracts, broadly consistent with the prior year, reflecting the long-duration nature of the contract base, which had an average tenure of 3.2 years over the past three years, providing inherent stability and predictability.
This long-term contract profile, together with the expansion of our current order backlog, which increased on a pro forma basis by 45% since December 2025 to AED 4.9 billion, enhances the visibility over future revenue and cash flow generation. Revenue generated from backlog contracts accounted for 82.9% of the total revenue in the quarter, which is consistent with the prior year, demonstrating continued effective conversion of orders into revenue. The group's financial resilience remains strong with about AED 2 billion of cash and no debt, providing significant flexibility to deploy capital efficiently across strategic expansion initiatives, continued innovation and talent development, as well as selective value-enhancing opportunities. Capital allocation remains aligned with group's discipline strategy, prioritizing organic growth, IP-led M&A across existing and adjacent verticals, and targeted investments in early-stage companies through our accelerator program.
Net operating cash flow for the quarter amount to AED 108 million of outflows, reflecting a slower collection during the March as anticipated. Collections have since normalized with approximately AED 150 million dirhams collected to date in the second quarter. Before I hand it back to Thomas for his closing remarks, I want to talk briefly about the outlook. Our medium-term guidance issued in February this year remains unchanged. The high proportion of multi-year contracts continued strong momentum across international markets and growing backlog with a good forward revenue coverage provide a high degree of visibility and confidence in sustainability of the group's growth trajectory. Just to add a little bit more context to the numbers, our 2025 to 2029 forecast is based on an organic growth only, with any future inorganic activity providing an upside to this guidance.
The uplift in forward EBITDA guidance reflects two factors: increasing operating leverage in the international business as greenfield expansion enters its renewal phase and having established a very strong platform for growth that reduce need to scale technical headcount and R&D investments as rapidly in the past three years. Our guidance on post-tax profit assumes a constant 15% effective tax rate and anticipates a further decline in interest rates, which will impact finance income. In assessing the anticipated full year 2026 outturn, it is also helpful to consider the historical quarterly phasing with the required contribution for the remainder of this year below the average level achieved over the past three years. With that, I will hand it back to Thomas before we open up the line for your questions.
Thanks, Ram. Against a complex and evolving operating backdrop, Presight delivered a resilient first quarter performance underpinned by the strength of our sovereign-first operating model, platform-led architecture, and growing geographic diversification. Above all, the expertise and complement of the Presight team. Our current trading remains in line with our full year expectations, with limited adverse implications for our operating model arising from recent demographic, macroeconomic, and foreign exchange volatility. Order backlog has stepped up materially in the recent weeks. Domestic and international agreements in emerging sectors and new markets are progressing at pace. The momentum is supported by a rising global demand for enhanced national and institution resilience, together with a robust data security and governance requirement. Thank you for being here at the first Q1 results, and with that, I hand back to our host as we open the line for Q&A.
Thank you, Thomas and Ram, for the presentation. We'll move to Q&A. If you'd like to ask questions, you can either use the raise hand function to ask the question verbally or use the written questions from Slido. First question is from Karen So. Please go ahead.
Yes, hello. Hi, Thomas and Ram. Thank you for the opportunity to ask questions. This is Karin So from JP Morgan. I have 3 questions, please. The first one is on the pro forma backlog that you provided on this AED 4.9 billion. I was curious if you could break down how much of the sequential uplift in orders were driven by contract renewals versus new contract wins. And if possible, how is it looking kind of domestically versus internationally as well? And then the second question is on the profitability this quarter. Historically, it seems like Q1 and Q4 tend to be your stronger margin quarters. But then this quarter, we saw a step down for margins in Presight ex-AIQ. Appreciate your clarification on the infrastructure weighting.
Perhaps can you help us understand, was this specific to any contracts this quarter, or does it reflect a more structural trend you see for the full year? Then my third question is you mentioned about this 5%-10% revenue expectation longer term from safe city and defense. I guess with the announcement of the Ministry of Defense deploying AI projects, I guess could you elaborate on your exposure within this sector currently, and how you see that kind of develop in the medium term? Thank you very much.
Thanks, Karin. Karin, thank you. Let me try and take the first two questions about backlog and profit margins, and then maybe Thomas can provide some commentary around the MOD business. From a backlog perspective, the incremental backlog that we have received post-close in March 31st, it's 100% domestic. I would say it's almost materially a renewal contract of one of our national platform that we operate on a mission-critical basis. It goes on to show the enormous amount of stickiness that we have, and it's a long-term, you know, contract over multi-multiple years. There's a smaller new win that adds to this new agency that we have won a contract with. The 90% plus is basically an existing renewal that's coming through.
We are expecting that to happen in Q1, due to timing issues, it's kind of slipped into April. From a profitability standpoint, you're correctly, if you just take a step back. The margin profile at any given time is an aggregation of the various contracts that are being deployed and in various stages of the implementation plan. It's nothing structural. It's essentially a timing as we are deploying a lot of international contracts. As you can see, our international revenue went up by almost 63% year-on-year. It kind of refers back logically to the fact that there's a lot more deployment in these greenfield projects that is going on, we expect these margins to retain back to as we have guided earlier in February.
Just to give you a sense, as I alluded to in my final comments in my presentation, as you know, it's pretty much an average, if you look at the average performance over the last 2 to 3 years, the contribution from quarter two to quarter four basically is about 84% to 85%, and we will continue to follow the trend very comfortably. While there is a bit of a reduction shrinkage in margin by about 190 points this quarter, we feel reasonably confident that we will come back to what we have guided to at the end of the year. With respect to the MOD.
Yeah, okay. I think 2 things happened in the macro space in this quarter. 1, you have the Anthropic Department of Defense, OpenAI, Palantir in the U.S. They're true light to how applied AI models can be used in the defense sector. Second, the occurrence of the conflict restarted on the 20th of February. Both has pointed to 1 very clear outcome, that sovereign AI for resilient, for sovereignty is needed in every nation's agenda. A big part of it when the conflict happened, the MOD, the government turned to us as a AI champion to look at what can we repurpose for dual use into the MOD sector. These are non-kinetic, non-offensive requirements that includes us to be able to improve efficiency through agentic AI approaches, better insights in the collation of disparate datasets within the different organization.
That has led us to start a foray of repurposing our larger data management platforms into enterprise defense operations. In the last calls that we have taken during the crisis itself, we've also positioned that we now expect in the next 12 to 24 months, defense will form a growing sector within the Presight sectoral portfolio. We are looking actively in that space. I think the requirement has now become more practical than theoretical, and the need for applied AI solutions to be developed by a sovereign AI partner like Presight to be used across not the warfare, but the manpower, operation logistics, supply chain management, care management, operations of a defense organization, is now apparent that we have strong opportunities there.
That's great. Very helpful. Thank you very much.
Thanks, Karin.
Thank you. Next one is from Evgenii Annenkov. Please go ahead.
Hi, team. It's Evgenii Annenkov from Jefferies. Congratulations with the solid results, thank you for taking my questions. I have three, if I may. First one is on AIQ. Can you please discuss what new opportunities do you see for the business in the context of the UAE leaving OPEC? How soon can we see AIQ being involved in the midstream and downstream elements of the value chain? My second question is on the margins. I understand the margin trajectory is driven by two elements, project mix, also some like-for-like improvement. On like-for-like, could you walk us through the key levers that you have at your disposal?
In particular, it would be helpful to hear more about the opportunity around co-coding AI agents and how meaningful the contribution to margins could be over time. My third question is on cash generation. Your cash position has remained relatively flat at around AED 2 billion for several quarters. Could you remind us what a typical working capital cycle looks like for the business and whether international expansion has led to any structural increase, maybe in working capital requirements? Specifically, as we look to year-end, should we expect the cash balance to move materially above AED 2 billion? Thank you.
Thanks, Evgenii. On AIQ, I think two things to note. UAE's decision to leave OPEC and OPEC+, you know, is not one that is sudden. I think that's the first thing. AIQ has been supporting ADNOC in its years of being able to do more with less. That is the thesis of RoboWell, the thesis of ForeSite, the products, the thesis of the ENERGYai large language model. It is about doing more with less. Of course, leaving OPEC allows UAE to have a free rein in increasing or decreasing production as needed. AIQ's products remains highly relevant. ENERGYai is in its second year of delivery. We are seeing sign-offs and application into the real-world operations of upstream.
They are now, and they were announced, they are now working strongly with downstream operations, bringing in different types of AI solutions across operation efficiency. They now have a strong to-be-announced pipeline on international deals that are closing. We're starting to see the behavior of AIQ taking the journey of Presight in its first year, where we move from a single large client to slowly moving away the dependency outside of the UAE and inter-international market. I can't disclose the name yet, but we're getting very strong progress in India, and we're getting very strong progress in Kazakhstan. In Kazakhstan, especially because of Presight's current strong position across the entire AI landscape in Kazakhstan, and the fact that we have an operating entity there.
Thank you, Thomas. On the margin, sort of like for like you noted correctly, Yevgeniy. Q1 2025 was an elevated performance because of the fact that we had 1 full quarter of AIQ built into the consolidated numbers vis-à-vis Q1 2024. To that extent, the growth, the base was a much higher level. Insofar as our margin profiles for the year goes, as I mentioned in my remarks, there are 2 things that's gonna happen. 1, insofar as the international expansion, we have a pretty large collection of deployments going on which are greenfield, but we also anticipate our land and expand strategy to start kicking in in the second half of the year. It typically would mean is the contribution of the platform, so the software-related portions of the revenue.
Because the national, you know, the architecture is already set up during the first phase. The second phase is typically would yield a much higher margin mix because of the higher greater proportion of software. That is one aspect which will continue to help us bring up the margin profile as we go through the year and beyond. With respect to your questions about efficiency tools like coding agents, it is being adopted by our CTO's office and our technical teams.
It also is reflected in our guidance, with respect to what I mentioned in my remarks, insofar as our need to continue to spend more on a fixed cost below the with respect to the R&D efforts and with respect to, you know, solutioning and various other technical aspects of what we call fixed cost below gross margin cost. That will start to kind of taper off as a proportion of our revenue growth. That would yield us gradually to get some operating leverage to be built into the overall margin for the year and then beyond. With respect to your cash position, your observation is correct. The collections have slowed down, but just to kind of give a bit of context.
If you think about our customer base, it's almost 100% government customers. The governments do have processes, majority of the cash collections is going to be coming from domestic accounts. You know, we had a quarter where there were significant external factors going on that was basically not helping us with the timing aspect of it. Just to give you a sense, we finished the Q1 post Q1. We almost collected in the following weeks, AED 150 million, which we are targeting to collect in Q1. Essentially, we expect the full year cash generation to be much better than what we had in FY 2025.
To that extent, we do anticipate to gain traction and accelerate our collection process as we kinda bring down the co-contract assets to receivables and then further from receivables to the actual cash balance. So far, the indications are our discussions with our customers is very fruitful, and then we expect this cash balance to be shored up. Which would also be reflected in slightly an elevated cash balance. Because of the operating cash flows this year, we expect it to be better than what we did in 2025.
Thank you so much, Ram and Thomas. Thank you. Thank you.
Thank you. Next one is from Shahrukh Nawaz. Please go ahead.
We can't hear.
I'm not sure Shahrukh can hear us. All right. Until he's back, we can move to the next questions in writing. First one is: Hi, team. Congratulations on the solid results. Could you please comment CCC and the reasons behind the delay in collections during the quarter? Also, does the collection trends differ between local and international operations?
Yes, I think some portions of this question was covered in my earlier remarks.
Yes. Yeah.
Yeah. To that extent, you know, just to give a, you know, We'll just directly go to the second part of the question. Yes, there is a distinct difference between a domestic collection process and an international collection process. The domestic customers are pretty much pristine credit, you know, with a AA+ Standard & Poor's assessment of the credit ratings. Almost all of our receivables with the domestic customers are with customers with very pristine credit. Typically, the time involved is about you could say about 120 days from the time the invoice is accepted to the time that the actual payments are processed. It's a normal routine government process.
Got impacted a bit because of the Q1 events. Like I said, we expect this to be, you know, come back on track as we proceed to Q2 through Q4 this year. With respect to international contracts, there are additional safeguards that we have to build in at the time of the contract signatures or execution with the customers. The global south market offers us customers with varying credit ratings. We typically involve investment grade financing agencies or export offices. For example, Abu Dhabi Exports Office plays a critical role in signing up bilateral financing agreements with these customers. The process of collection involves a drawdown of the counters of these financing agencies.
Whilst the initial time to set up these structures, commercial structures takes a bit of a time, but once the project achieves a milestone, then it's a question of simple drawdown, which enables us to collect the money here in Abu Dhabi, mitigates us from a lot of country risks, FX risks, liquidity risks that are that these markets may be exposed to.
Thank you, Ram. Next one is, what opportunities do you expect from the latest initiatives by government to make government more AI-friendly? Have you seen any interest in this regard?
Yes, for sure. I know it looks like the government announced this 50% AI services as a result of the, you know, being resilient and coming out of crisis. You know, it's not. The Abu Dhabi AI Native Government Initiative that Presight is deeply part of has been announced much earlier. The recent announcement by Sheikh Mohammed bin Rashid is an affirmation to what we want to do. In this quarter, at the beginning of this quarter, Presight is building the first AI native ministry, not a service. The entire ministry is AI native for the Ministry of Foreign Trade. In the same month, Presight announced with the General Secretariat of the Cabinet that we built the first regulatory intelligence framework that was launched in Davos.
We continue to see these opportunities. In fact, in a couple of weeks' time is the annual Dubai Government Retreat. Presight is a key partner to that. You will hear us in the news about us supporting the government in educating close to 80,000 government employees on what agentic AI means and how do you adopt that. The second thing to look at is the vision of 50% that of the government services to be agentic really demonstrates the pragmatic approach that UAE government has, which is in line to what Presight has been doing. It's not about moving everything into an agentic workflow. It's about bringing selected workflows, like what we have been doing for Abu Dhabi and the UAE, and then maintaining human in the loop.
This is consistent to what Presight provides across government services, finance, energy, public sector. It is consistent to us being a sovereign AI solution partner that develops key governmental platforms, AI-driven on sovereign AI infrastructure. Yes, we see a lot of opportunities coming up, but this is not a new opportunity. This is an affirmation of the work that has started back in 2025.
Thank you, Thomas. We have Shahrukh Nawaz back again. Please go ahead.
Hi, this is Shahrukh from Bank FAB. Can you hear me?
Yes, we can.
Yeah. First of all, congratulations on good set of results. I have three questions. First is, for the upcoming new contracts or renewals, do you expect to increase the pricing considering the recent market scenario? For the multi-year contracts, are the pricing locked in, or is there a scope to increase? Second is, does the company focuses more towards the international expansion for the upcoming periods, and it will be mostly in which segment? The last question is: Has the recent geopolitical tension impacted your G&A and marketing expenses? Do you see margin pressure in the second quarter and the third quarter period with that?
All right. First question was, with respect to the G&A, you know, before I get to the other two. The answer is no. We expect the, as I alluded to in my remarks earlier, we expect the below gross margin cost to be tapering off and giving us the operating leverage with respect to the revenue growth. To that extent, we don't expect any significant movements in marketing expenses. The international expansion, contracts, it's basically going to be around the public services and safe cities.
Just to give you a sense of the field of play, in the last 12 months or so, we have won numerous safe city programs, Astana Smart City in Kazakhstan, the Albania's smart city program. It's basically essentially the platform that we have, safe city platforms that we have in Abu Dhabi, that we kind of scale up or scale down to suit these new markets. That's something along with public services, which we expect to continue to drive our international growth. We expect on an overall basis an equilibrium of about 40% of our overall revenue streams to come from international contracts.
Insofar as the pricing discussions go, when you look at multi-year contracts, obviously the pricing is dependent on a lot of things. Just to give you a sense, one is, you gotta bake in the inflation, inflationary pressures over a period of 3 to 5 years. That's an average tenure of our contract. The second, insofar as with respect to more topical issues that's going on currently, the price of, for example, the chipsets, et cetera, et cetera, that has to be baked in as well. It is a wrinkle that has crept up into these contracting process.
Of course, it affects everybody, affects the customers because of the price of service and the availability of service is an issue, for example. We on a majority of basis, we are able for forward-looking contracts that are yet to be won, we are able to adjust those prices and make sure that we provide provisions within the contract that does not tie us down to specific fixed pricing when the underlying, you know, ICT infrastructure cost may be variable. For contracts that are already done, you know, it's a fixed fee consideration, and then we don't see much of an impact on those.
Okay. Thank you.
Thank you. Next one, it says, in light of recent discussions, around infrastructure reliability in the region, including the AWS incident, could you update us on the current status and roadmap for the Stargate project? Should we expect the full campus to be delivered over time, or could there be any pacing adjustments?
Right now, the current U.A.E.-U.S. AI partnership campus, the first 200 megawatt will be delivered according to plan. The AWS incidents were largely outside the U.A.E., so that's the second piece. The third thing is, I think through the 42 days of conflict, U.A.E. has demonstrated that the ability to protect critical infrastructure, of course, the data centers were targeted across the territory. It's well in place, right? There is no holding back. The site is still ongoing. The 200 megawatts will still come online, and we expect the momentum that we expect every half a year, every quarter to half a year, 200 megawatts will come online because the demand for compute in the country and in the region continues to be anticipated to be high.
Thank you, Thomas. There's another one that says, you have referenced emerging opportunities in the defense sector. Could you elaborate on the specific areas you are addressing? Additionally, do you anticipate increased defense spending could have second-order effects on digital or technology budgets across other governments, government sectors?
One, we are repurposing. You know, the fundamental or genesis of Presight has been big data analytics and applied AI. The big data platform synergy, you know, is one that can be redeployed to bring in disparate data sets within the Ministry of Defense. That's one area we're looking at. Second, the Ministry of Defense, like an organization outside of the joint defense and air defense operations, is an organization that needs to drive efficiency across multiple functions using agentic AI. We are talking to them from facility management, from an enterprise agentic AI usage, to bring everything from J1, which is manpower, to J4, which is supply chain logistics, into one. The area that we're not gonna pursue is anything kinetic, anything that is hardware-centric, and anything that is offensive.
Everything that is non-kinetic that we're already doing very good at in our public safety and national security applications can be pivoted to it. The second question: Is there gonna be increase in defense spending? Not to speak on behalf of the stakeholders, but I think for certainty, because now we're in a crisis situation that requires, you know, additional resources. I think there would be, but that does not mean a slowdown or drawdown in the existing government budgets to drive AI. I think that is the key message that was echoed by, you know, the message that Sheikh Mohammed bin Rashid sent, that we will continue to drive applied AI and agentic AI solutions across the UAE government. He has given a two-year and balanced scorecard framework to the federal government to report on the adoption of that.
I think you'll see both in tandem, and I think many that will drive to this, of course, us leaving OPEC, increased oil prices, does give a lead into stronger budgets and more resources needed to do what the UAE has to do to enforce themselves economically and strategically in the region.
Thank you very much, Thomas. Those are all the questions for today, I'll leave it to you if you'd like to make any closing remarks.
I guess once again, thank you to the group that is on the call. I believe we possibly have spoken to many of you in the first 40 days of the conflict. We thank you for the confidence. We thank you for understanding when we said there were timing issues across the quarter. I guess our performer Audible attests to that. We are very privileged to be, you know, recognized as the National AI Champion in the U.A.E. and being awarded and continue collaborated with the government on so many AI initiatives. At the same time, if you look at the international work that we've done, if you look at Astana city's project being handed over, we're starting Almaty city, smart city in Kazakhstan.
The Albania project has started, and the same time I said at the close of business day today, we will announce Montenegro. The pattern on which you see us operate internationally, where we land, expand, and then influence the region, continues to be a strong, productive, and 1 that is revenue accretive approach. Thank you for the time. This is Q1. We look forward to speaking to you when Q2 comes and better clarity, of course, around what the regional conflict would look like. Thank you.
Thanks a lot, Thomas, Ram, Roger, and everyone for your participation. This concludes the call, and have a nice day.
Thank you.