Green flags with this or other Arabic scripts are commonly seen in Islam. They should not be confused with the Saudi national flag. These other flags normally do not have the sword symbol.
The flag is made so that the shahada reads correctly, from right to left, from either side. The sword points from hoist to fly on both sides. The flag is sinister hoisted. This means that the obverse side (front) has the hoist side (flagpole side) to the right.