How the industry works
-
1The inventory
Fleet procurement and financing
Nothing earns until a great deal of capital has left. Vehicles are ordered by the thousand from the manufacturers, and the only edge here is size: a bulk order is discounted against list and a larger one further. No license to win, nothing scarce to secure.
The money is borrowed: a vehicle is paid for on delivery and earns over three or four years. Budget Saudi carried almost no debt until 2022 and runs the largest fleet here. Theeb has built off the heaviest balance sheet of the three, and Lumi quadrupled the smallest fleet on the dearest capital.
Fleet size, 2018 to FY2025Budget SaudiTheebLumiVehicles on fleet at the year end. Between them the three spent SAR 3.3B on vehicles in FY2025 alone, before any one of them had earned a riyal.
OEM bulk ordersAsset financingVehicles on the ground, paid for on day one. Not one of them has earned anything yet.
-
2The operating model
Utilization and segmentation
The fleet splits between two books that behave almost nothing alike. A long lease hands vehicles to a company or a government body for one to three years at a fixed rate: thinner margins, contracted cash. A daily rental hands one car to one person for a weekend, and moves with Hajj, Umrah and the Riyadh Season.
Budget Saudi runs the most lease-weighted book of the three. Theeb is the only one earning more at the counter than on contract. Lumi sits between them and earns the most per vehicle. The stage turns on the utilization rate, which none of them discloses.
Revenue by business model, FY2025Long-term leaseShort-term rentalVehicle sales and otherThe three disclosed revenue lines. Chauffeur and limousine work is not reported separately by any of the three, so it sits inside the hire lines rather than beside them.
Short-term rentalLong-term leaseVehicles out earning, on two books that fail in two different ways. Both are being consumed while they do it.
-
3The efficiency
Maintenance and lifecycle management
A vehicle on hire is being used up. All three run their own workshops, because a car in somebody else's queue earns nothing. Budget Saudi keeps the largest network here, Lumi the smallest.
Repairs and maintenance moves with how hard the fleet is worked, and the order follows the mix at the stage before: Theeb, earning most at the counter, has carried the heaviest bill every year since 2021. Depreciation is the larger cost and it is a policy, a useful life chosen in advance.
Repairs and maintenance, 2018 to FY2025Budget SaudiTheebLumiShare of revenue. Theeb and Lumi report no revenue for FY2018, so their lines begin a year later rather than at zero.
Workshop networkDepreciation policyVehicles serviced, and written down month by month against a residual value nobody has tested yet.
-
4The residual value
De-fleeting and used car sales
Much of the profit here is realised at the end of a vehicle's life rather than during it, which is true of no other asset-heavy business on the exchange. At a set age or mileage the car comes off hire and is sold: proceeds through revenue, carrying value through cost of sales.
Sell above book and the gain lands in net profit; sell below it and the depreciation policy was too gentle. FY2025 was not a good year: Budget Saudi realised a fraction of the margin it took two years earlier, Theeb sold for very nearly book, and Lumi sold below it for the second year running.
Sale of used vehicles, FY2025The disclosed used-vehicle line, against the cost of the vehicles sold. Proceeds above the carrying value are the gain this industry is meant to bank at the end of the cycle. The exhibit further down this page reads the trade off the wider Other Revenues line instead, which is why it reports a different margin on it.
Used-car showroomsGain on disposalThe vehicle is gone. Only now does anyone know what renting it actually earned.
How they make money
-
Where the contracts are
Long-term leasing
The biggest of the three doors, and the one with the least to argue about. Fleets go out to government bodies, contractors and corporates for one to three years at a rate fixed on day one, so the revenue is booked before the year starts. Budget Saudi holds close to half of it, which is more of this door than it holds of the sector's fleet.
Share of the leasing door, FY2025Multi-year contracts to companies and government bodies, at a rate agreed in advance.
-
Where the pricing is
Short-term rental
The only door repriced daily, and the volatile one. A car goes out for a weekend at whatever the counter is charging that morning, so the rate moves with demand and an idle day earns nothing. Theeb leads it on the smallest revenue base in the sector, and Budget Saudi is last through the door it dominates next door.
Share of the rental door, FY2025Airport counters, city branches and walk-ups, repriced whenever demand moves.
-
Where the assumption was
Beyond lease and rent
Everything else, and it is not one business. At Theeb the line is retired vehicles and nothing else. Lumi adds insurance claims to the same trade. Budget Saudi carries a genuinely separate segment here, logistics and international freight, worth the gap between the two halves of its bar. Read as one thing, this door flatters its disposal margin and nobody else's.
Share of the third door, FY2025Sale of used vehiclesEverything elseEverything that is neither a lease nor a rental. At Theeb it is retired vehicles and nothing else; Lumi adds insurance claims, and Budget Saudi a logistics and international freight business.
Where the cash goes
-
Where the money goes
Back into the fleet
The largest outflow in the business and the only one that cannot be deferred: a fleet that is not renewed ages out of the rate it can charge. It never reaches the investing line, because vehicles are trading stock as much as fixed assets and their cash runs through operating activities.
Lumi has spent more on vehicles than it booked in revenue in four of its seven years. Theeb has run above seventy percent in each of the last three. Budget Saudi has been the lowest of the three in four of those years and still put more than half its revenue into vehicles in FY2025.
Purchase of vehicles, 2018 to FY2025Budget SaudiTheebLumiShare of revenue. The line runs past 100% wherever a company bought more vehicles in a year than it booked in revenue, which is a statement about how fast it was building rather than about its margins.
-
Where it does not
Capital expenditure
Branches, workshops, showrooms, yards and systems: everything except the cars, and small beside them. This is the line an investor looks up to find what a company spends, and here it is the wrong line. It has never reached five percent of revenue at any of the three.
The gap is where the cash sits, not a disclosure failure. But it means free cash flow struck the usual way is measuring how fast the fleet is growing rather than what the business earns. Lumi is highest at the right-hand end and still under two percent.
Capital expenditure, 2018 to FY2025Budget SaudiTheebLumiShare of revenue, as the cash flow statement reports it. Everything except the vehicles, and note the axis: the whole of this chart fits inside the bottom three percent of the one above it.
-
What is left over
Back to the shareholders
Out to shareholders, and not available to buy a vehicle with. Where the asset is consumed and replaced on a four-year cycle that is a sharper trade-off than a payout ratio makes it look, and it is the only one of the three arms here that is genuinely optional. Only two of the three use it.
Budget Saudi has paid in every year covered here and is the only one that has. Theeb cut the dividend per share in FY2025 in a year when its share count rose by more than half, so the per-share line and the dividend bill are telling opposite stories. Lumi has never declared one.
Dividends per share, 2018 to FY2025Budget SaudiTheebLumiRiyals a share, as declared. Lumi's flat line is a real zero and not a gap: it has never declared a dividend. Theeb's FY2019 figure is left off, because SAR 32 a share on a pre-listing share count is not on the same basis as the years beside it.
The three operators
No license, no allocation, no scarce input, and three companies buying vehicles from the same manufacturers. Below is what each one actually runs, on the same four questions the four stages asked: what it owns, what it hires out, who paid for it, and how it leaves.
Budget Saudi 4260
- Listed
- Sep 2007
- Market cap
- SAR 3.7B
- Revenue
- SAR 2.4B
- Net margin
- 14.1%
- Free cash flow
- SAR 92.5M
- Dividend / share
- SAR 1.50
Theeb 4261
- Listed
- Mar 2021
- Market cap
- SAR 2.5B
- Revenue
- SAR 1.5B
- Net margin
- 12.0%
- Free cash flow
- SAR -311M
- Dividend / share
- SAR 1.46
Lumi 4262
- Listed
- Sep 2023
- Market cap
- SAR 2.7B
- Revenue
- SAR 1.7B
- Net margin
- 11.9%
- Free cash flow
- SAR 144M
- Dividend / share
- SAR 0.00
Figures for FY2025. Market cap is at the year-end close. Listed is the month each company began trading on the Main Market.
Side by side, FY2025
Everything above is the mechanism. This is the year just reported, on one page, with all 3 of them measured the same way.
| Measure | Budget Saudi4260 | Theeb4261 | Lumi4262 |
|---|---|---|---|
| Financial Highlights | |||
| Net revenuesscale of the business | SAR 2.4B | SAR 1.5B | SAR 1.7B |
| Revenue growthyear on year | +22.7% | +14.9% | +7.7% |
| EBITDA marginbefore capital charges | 41.8% | 46.5% | 45.8% |
| Net profit marginper riyal of sales | 14.1% | 12.0% | 11.9% |
| Cash Highlights | |||
| Days sales outstandingdays to collect a sale | 130 days | 123 days | 84 days |
| Capex % of revenuesas the cash flow statement reports it | 1.3% | 0.7% | 1.9% |
| Dividends per sharedeclared for the year | SAR 1.50 | SAR 1.46 | SAR 0.00 |
| Free cash flowafter capital spending | SAR 92.5M | SAR -311M | SAR 144M |
| Operational Highlights | |||
| Fleet sizevehicles at year end | 59,095 | 41,662 | 37,800 |
| Customer acquisition costmarketing spend per new customer | SAR 142 | SAR 109 | SAR 51 |
| Rental revenue per rental pointcounter income per branch | SAR 4.4M | SAR 9.9M | SAR 12.6M |
| Lease and rental revenue per vehiclehire income only, disposals excluded | SAR 27,011 | SAR 28,124 | SAR 30,962 |
| Other Highlights | |||
| Board remunerationpaid to directors | SAR 3.0M | SAR 2.6M | SAR 5.2M |
| Saudization rateof the workforce | 51.0% | 44.0% | 41.5% |
| Employeesheadcount at year end | 1,743 | 1,772 | 1,385 |
| Revenue per employeenet revenues per full-time employee | SAR 1.4M | SAR 0.8M | SAR 1.2M |
Marking the stronger figure is arithmetic, not a recommendation. A company can lead every row here and still be the wrong price.
Does the capital earn its keep
Return on invested capital against what that capital costs, every year from FY2018 to FY2025. Above the line the business is creating value. Below it, it is consuming value, however healthy the revenue line looks.
Budget Saudi+0.2pt FY2025
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|---|---|---|
| ROIC | 14.3% | 12.5% | 13.3% | 13.8% | 12.1% | 12.4% | 9.1% | 9.9% |
| WACC | 5.5% | 4.9% | 3.8% | 5.3% | 6.7% | 9.5% | 7.8% | 9.7% |
| Spread | +8.8pt | +7.6pt | +9.5pt | +8.5pt | +5.4pt | +2.9pt | +1.2pt | +0.2pt |
Theeb+1.0pt FY2025
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|---|---|---|
| ROIC | n/a | 13.5% | 8.2% | 11.9% | 13.6% | 10.6% | 11.5% | 9.6% |
| WACC | n/a | 4.3% | 4.3% | 4.8% | 6.5% | 7.7% | 8.6% | 8.6% |
| Spread | n/a | +9.2pt | +3.9pt | +7.1pt | +7.1pt | +2.9pt | +2.9pt | +1.0pt |
Lumi+0.6pt FY2025
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|---|---|---|
| ROIC | n/a | 5.5% | 8.0% | 14.4% | 11.8% | 9.5% | 11.1% | 10.7% |
| WACC | n/a | 4.8% | 3.6% | 3.9% | 4.4% | 7.6% | 9.7% | 10.2% |
| Spread | n/a | +0.7pt | +4.4pt | +10.6pt | +7.4pt | +1.9pt | +1.4pt | +0.6pt |
What decides the next two years
Whether the spread survives another year of this
The margin between what these fleets earn and what the capital costs has closed by more than four fifths at all three since FY2021, and FY2025 is the narrowest year of the eight for every one of them. It does not have far left to go. Two things would widen it again: rates coming down, which is not in anyone's gift here, or the fleet pausing long enough for earnings to catch up with the capital already committed. Watch which of the three blinks first, and note that the one that keeps buying while the others stop will print the worst numbers for a year or two and may be making the better decision.
What the used cars fetch
Close to a third of this industry's revenue is a vehicle being sold, and the price it fetches is the retrospective verdict on several years of depreciation assumptions. The Kingdom's used-car market has absorbed a fleet that has more than doubled, and every one of those vehicles comes back to it eventually. If residual values soften it arrives in these accounts twice: once as a thinner margin on the disposals, and again as a depreciation charge that turns out to have been too light on everything still on the road.
Whether the receivable keeps lengthening
Two of the three have added the better part of two months to their collection periods since FY2019, and the likeliest reason is a revenue mix tilting towards leasing to companies and to government bodies. That is a change in who the customer is rather than a collections failure, and at this level it is not alarming. It would become so if it carried on, because the vehicle behind every unpaid invoice has already been paid for once, on balance sheets that are now carrying real debt.
Whether three is the right number of companies
There is no license here and no scarce input. Nothing stops a fourth operator, a manufacturer's own captive fleet or a ride-hailing platform buying vehicles at the same discount and competing for the same corporate contracts. You do not need a fourth entrant to see what that does, because the pressure is already in the exhibits above: three companies with different networks, different revenue mixes and very different balance sheets have arrived at very nearly the same return on capital, which is what a market with no barrier to entry eventually does to everyone standing in it.
The full workings
Every statement, ratio and cost-of-capital build behind this piece, for all 3 companies, on one page.
Open the data appendixThe cohort is the sector: all three listed car rental companies report to 31 December and all three are covered here, so a “sector median” on this site is the median of the whole listed industry rather than of a sample. Two qualifications. The histories are not equally long: Theeb and Lumi's sheets begin in FY2019, so the FY2018 industry column is Budget Saudi alone and is not a market total. And the share counts move: Theeb's rose by more than half in FY2025 and Lumi's pre-listing count was a fraction of today's, so per-share figures are not comparable across those boundaries even though the underlying profits are.