NTWK

Shares of NETSOL Technologies (NTWK) have gained 9.6% since the company reported its earnings for the fourth quarter of fiscal 2026. This compares to the S&P 500 index's 0.8% decline over the same time frame. Over the past month, the stock has gained 32.6% compared to the S&P 500's 0.9% return. The company reported fourth-quarter fiscal 2026 revenues of $20.7 million, creating a quarterly record and rising 12.5% from $18.4 million a year earlier. GAAP net income attributable to NETSOL rose 45.9% to $3.8 million from $2.6 million in the prior-year quarter, whereas earnings increased to 32 cents per share from 22 cents. Subscription and support revenues advanced 9% year over year to $8.9 million, whereas services revenues climbed 21.3% to $11.7 million. Gross profit increased 27.3% to $13.2 million and the gross margin expanded to 63.6% from 56.2%. Operating income rose 40.2% to $4.5 million, with the operating margin improving to 21.6% from 17.4%. Non-GAAP EBITDA, however, was unchanged year over year at $4.7 million. NetSol Technologies Inc. price-consensus-eps-surprise-chart | NetSol Technologies Inc. Quote At June 30, 2026, NETSOL reported remaining performance obligations of $49.1 million, with $22.5 million expected to be recognized as revenues over the following 12 months. The company also introduced a contracted-revenue metric, which stood at approximately $60 million at the end of the fiscal year. Cash and cash equivalents totaled $27.1 million at June 30, up 56.3% from $17.4 million a year earlier. Working capital was $29.2 million, while total debt and finance lease obligations were $8.4 million. Management said that the working-capital timing pressure seen at March 31 reversed during the fiscal fourth quarter, helping strengthen liquidity. Management highlighted the fiscal fourth-quarter improvement as evidence of stronger execution entering fiscal 2027. The company continued to emphasize Transcend Finance as its core global growth platform and Transcend Retail as a major U.S. growth initiative. During the year, NETSOL secured multiple Transcend go-lives and upgrades, including a BMO Equipment Finance migration from a legacy platform. Management said that such conversions can increase subscription revenues as customers move from maintenance arrangements to modern subscription relationships. NETSOL is also expanding AI-enabled functionality across credit decisioning, document processing, development and delivery. Management said that the objective is to make operations more scalable while directing capacity toward product development, customer delivery and growth. The quarter benefited from broad revenue growth, particularly the 21.3% increase in service revenues, alongside continued expansion in recurring subscription and support revenues. Gross-margin improvement was also substantial, with management pointing more broadly to revenue mix, delivery leverage and capitalization of qualifying software-development costs as contributors to improved profitability during fiscal 2026. Management nevertheless cautioned that agreement timing, implementation milestones and development capitalization can create quarter-to-quarter volatility. NETSOL expects fiscal 2027 net revenues to grow 13-16% from fiscal 2026. The gross margin is projected at 50% or better, whereas consolidated adjusted EBITDA is expected to increase 15-25% to $10.5-$11.4 million. The outlook assumes continued subscription growth, the execution of contracted implementations, disciplined cost management and no material acquisitions. NETSOL is reviewing its portfolio for simplification, including products, legal entities and activities based on strategic fit, growth potential, margins, cash requirements and complexity. It is also evaluating structural options related to minority interests in its Pakistan-based business, although management stressed that no transaction has been approved. The company continues to assess selective partnerships, joint ventures and acquisitions in core or closely related areas, subject to financial and strategic return criteria. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NetSol Technologies Inc. (NTWK) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. - Achieved record fiscal 2026 performance driven by a deliberate shift from a services-heavy model to a recurring subscription and support platform business. - Validated the North American upgrade strategy through a landmark contract with BMO, serving as a template for transitioning legacy LeasePak customers to the modern Transcend Finance platform. - Expanded the U.S. growth engine via Transcend Retail, securing a major deployment across 350 franchise dealerships for a premium global OEM. - Leveraged market leadership in China to facilitate international expansion, following customers as they enter new markets like Indonesia. - Strengthened corporate governance by adding former senior executives from BMW, Daimler Truck, and Ford to the Board of Directors. - Implemented an AI-enabled development model to reduce resource intensity and improve engineering scalability without necessarily increasing headcount. - Attributed margin expansion to improved delivery leverage, favorable revenue mix, and the capitalization of qualifying software development costs. - Projected fiscal 2027 revenue growth of 13% to 16%, supported by existing contracted implementations and continued subscription momentum. - Anticipates consolidated adjusted EBITDA growth of 15% to 25%, reflecting a focus on disciplined cost management and operational efficiency. - Prioritizing the scaling of Transcend Retail across the U.S. dealer market and embedding AI across both product functionality and internal operations. - Evaluating structural options to address minority interests in Pakistan to improve the conversion of consolidated profit into value for NetSol shareholders. - Maintaining a gross margin target of approximately 50% or better, with potential for upgrades as new agreements are monitored quarter-over-quarter. - Returned to the Russell Indexes, including the Russell 3000E and Russell Microcap, to increase eligibility for institutional investment mandates. - Reported a new 'contracted revenue' metric of approximately $60 million to provide better visibility into the durability of the revenue base. - Noted that while consolidated net income grew 22.4%, earnings attributable to NetSol shareholders were impacted by foreign exchange losses and increased noncontrolling interests. - Identified potential variability in quarterly results due to the timing of implementation milestones, customer decisions, and advanced billings. - Management characterized the 50% guidance as a 'stable' baseline for new and existing agreements. - They expect to monitor and potentially upgrade this guidance as they progress through the fiscal year, noting they closed the recent quarter at a higher rate. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. - Upgrading the seven remaining LeasePak customers in the U.S. provides a significant 'bump up' in recurring subscription revenue. - The transition converts traditional maintenance relationships into modern, high-visibility subscription models. - Growth is focused on Tier 1 OEMs and large dealership groups; initial successful launches are expected to trigger rollouts across entire groups (averaging 15-20 dealers each). - Management claims a competitive edge as the only vendor managing both the lender and dealer sides of the transaction. - The $27.1 million cash position is earmarked for organic growth, product innovation, and potential 'close to core' acquisitions in the U.S. and Europe. - Management is actively evaluating structural options for the Pakistan subsidiary to better align earnings with NetSol shareholders. - Confirmed that coverage from a reputable research firm will begin following the earnings call to address the stock's perceived undervaluation. - Management is actively pursuing multiple analyst coverages to better communicate the company's trajectory to the market.

Image source: The Motley Fool. Mon, Sep 28, 2026 - Founder and Chief Executive Officer - Najeeb Ghauri - Global Head of Sales and Group Managing Director of Europe - Asad Ghauri - Chief Financial Officer - Sardar Abubakr - Senior Vice President and Corporate Legal Affairs, General Counsel and Corporate Secretary - Patti McGlasson Operator: Good morning, and welcome to NetSol Technologies Fourth Quarter and Full Fiscal Year Ended June 30, 2026 Earnings Conference Call. On the call today are Founder and Chief Executive Officer of NetSol Technologies, Inc., Najeeb Ghauri; Global Head of Sales and Group Managing Director of Europe, Asad Ghauri; Chief Financial Officer, Sardar Abubakr; and Senior Vice President and Corporate Legal Affairs, General Counsel and Corporate Secretary, Patti McGlasson. Also available for the Q&A portion, our Chief Accounting Officer, Roger Almond; and Chief Marketing Officer, Erik Wagner. I will now turn the call over to Patti, who will provide the necessary disclaimer regarding the forward-looking statements made during today's call. Patti, please go ahead. Patti McGlasson: Thank you. Good morning, everyone, and thank you for joining us today. After we review the company's business highlights and financial results for the fourth quarter and full fiscal year ended June 30, 2026, we will open the call for questions. Before we begin, I'd like to remind you that our remarks today will include forward-looking statements within the meaning of the federal securities laws, including the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include our fiscal 2027 guidance, reflect management's current expectations and are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied. We encourage you to review the cautionary statements and risk factors contained in NetSol's press release issued earlier today as well as our filings with the Securities and Exchange Commission, including our most recent Form 10-K and quarterly reports on Form 10-Q. I'd also like to note that today's discussion will include certain non-GAAP financial measures. A reconciliation of these measures to their most direct comparable GAAP figure can be found in the press release issued earlier today. A supplemental investor presentation is available through the webcast link and in the Investor Relations section of our website at ir.netsoltech.com and has been furnished as an exhibit to the Form 8-K we will file with our press release issued this morning. Lastly, please remember that this call is being recorded and will be available for replay on our website at ir.netsoltech.com and through a link included in today's press release. I will now hand the call over to our Founder and CEO, Najeeb Ghauri. Go ahead, Najeeb. Najeeb Ghauri: Thank you, Patti. Good morning, everyone, and thank you for joining our call today to review our results for the fourth quarter and full fiscal year ended June 30, 2026. Fiscal '26 was the strongest financial year in NetSol's history. Total net revenues were $74.4 million, up 12.5% year-over-year basis and over -- our $73 million guidance. Non-GAAP EBITDA grew almost 23% and income from operations nearly doubled. The growth reached the bottom line this year. These results reflect a company in the middle of a deliberate transformation from a services and license business and a platform business, recurring subscription and support revenue now represents approximately half of our total revenue. Later in the call, Sardar Abubakr, our CFO, will walk you through the remaining performance obligations and the measures we will report each quarter so you can track the durability of this base. In June, NetSol returned to the Russell Indexes, added to 6 benchmarks, including the Russell 3000E and the Russell Microcap Index. Index membership matters for a company our size. It makes NetSol eligible for the many institutional mandates that are limited to index constituents, and it puts us back in the universes where institutional investors screen. Let me talk about the business behind these numbers. Fiscal 2026 gave us the proof points across every part of our strategy. Earlier this month, we announced that BMO has signed a contract to upgrade from our legacy platform to Transcend Finance. BMO is one of the largest banks in North America, and this agreement is the clearest validation yet of our upgrade strategy. We have customers across North America who have run our acquired legacy software for decades. Each of them now has a modern path forward, and BMO shows what that path looks like. A long-tenured customer choosing to deepen the relationship with NetSol on our newest technology. Across the rest of the business, the platform continued to deliver. In December, we signed one of the largest Transcend Finance contract extension in our history with a Tier 1 global auto captive customer. Transcend Retail became a growth engine in the U.S., and Asad Ghauri will take you through the momentum in detail. Our Asia Pacific business continued to perform, anchored by market leadership in China and expanding alongside our customers across the region. Fiscal 2026 was also the year we built the team for the next phase. Sardar Abubakr joined us as the Chief Financial Officer in January. At our annual meeting in June, shareholders elected a strengthened Board reelecting Ian Smith, the former CEO of BMW Group Financial Group for the U.S.A. and the Americas; and adding Richard Howard, the former President and CEO of Daimler Truck Financial Services for North America; and Aamir Ibrahim, the CEO of Jazz World, one of the world's biggest digital operators who earlier in his career held senior leadership roles at the Ford Motor Company and Jaguar Land Rover. The people who ran our customers' businesses now help govern ours. I can think of no stronger endorsement of what -- of where the company is headed. We're also transforming how we operate. Across Transcend Finance, we are reducing the resource intensity of our development and delivery model through AI-enabled development, automation and structural efficiencies. I want to be clear about how we think about this. It is not about reducing headcount for its own sake. It is about building a more scalable organization, one that is more nimble and faster to respond to changing market requirements where our engineering and delivery capacity can grow client impact without growing costs at the same time. As part of that, we are focusing our investment on the core Transcend platform and the adjacencies where NetSol has a defensible customer and domain advantage. Looking to fiscal 2027, our priorities are very clear. First, scale Transcend Retail across the U.S. dealer market; second, embed AI across our products and our operations; third, upgrade our legacy installed base to Transcend, with BMO in the template as a template; and fourth, grow with our customers as they expand into new markets. You saw that model this year when a leading Chinese leasing company went live on Transcend Finance in Indonesia. When our customers enter a new country, they take NetSol with them. We're also introducing full year guidance with our fourth quarter results. Sardar Abu will take you through the numbers. I will close with this. We believe the value of what we have built, the customer base, the recurring revenue, the platform is not yet reflected in our market valuation, and we see that as an opportunity. Last December, we rang the bell in Times Square New York to mark our 26th year on NASDAQ. There is no better way to honor that milestone than the strongest year in our history, and we intend to build on it. With that, I'll hand the call over to Asad Ghauri, our Global Head of Sales and Group Managing Director of Europe, to walk through the commercial and sales update. Asad? Asad Ghauri: Thank you, Najeeb, and good morning, everyone. My focus today is on what's converting into revenue for us and the pipeline behind it. But before I start, one point of context for everyone on this call is our key messaging. Our core growth engine today and going forward is Transcend Finance worldwide. And Transcend Retail is our big bet in our market in the U.S. and total focus is on the execution of that. I'll start with the go-lives this year. We've got multiple. A leading Chinese leasing company launched its Indonesian operations on Transcend Finance. Northridge Finance, a division of the Bank of Ireland went live on Transcend to support its growth strategy in the U.K. A Tier 1 U.S.-based auto captive went live on Transcend Finance in China, a deal valued at multiple millions. Toyo Leasing Thailand upgraded to the latest Wholesale Finance System on our Transcend platforms, expanding its use of our technology. These go-lives convert into recurring subscription support revenues going forward, exactly the visibility Sardar will be quantifying later in the call. We also renewed a multimillion-dollar contract with a Tier 1 multinational bank in the United Kingdom, extending that relationship for more than a decade by another 10 years and deepening our presence in the U.K. asset finance market. Let me turn to Transcend Retail, our digital retail platform for OEMs and dealer groups. The commercial progress this year was real. It's accelerating. Sonic Automotive, the Fortune 500 dealership group, is building its branded digital retail experience on our platform. Our platform is rolling out across approximately 350 franchise dealerships of a premium global OEM in North America, one of the largest digital retail deployments in the U.S. automotive market. The U.S. digital retail market remains large and underpenetrated and our combination of finance and leasing depth, fast time to go live, and a modern customer experience is winning head-to-head evaluations against well-funded competitors. We're the only vendor at the table who also runs the lender side of the transaction, and that is why we will win. We expect the Transcend Retail to be one of the most important growth stories in the company over the next several years. Alongside retail, there is a second U.S. growth motion, upgrades. Our legacy installed base is defined set of accounts where we are the incumbent relationships that, in some cases, span decades, BMO as a template, legacy to Transcend upgrades are now an active category in our pipeline and each upgrade turns a maintenance relationship into a modern subscription relationship. A word on AI. It's an area of focus for the company, and it's increasingly centered to how customers engage with us commercially. During the year, we introduced various product functionalities in the AI-enabled credit decisioning areas, automating value tasks -- manual tasks, accelerating decision time, and improving underwriting accuracy. And we deployed intelligent document processing systems with AI capability within the platform. All of these have amplified the efficiencies for our clients, and we expect to push forward with that. Another key aspect of our AI focus is our platform has become AI native. So while we focus on presenting products within our platforms, the enablement of our customers to be able to deploy their own AI functional pieces is as important. And the architecture currently of Transcend Finance and Retail supports that, and that has gained real traction for us. Finally, the pipeline remains strong, supported both by expansion within our existing customer base and by new business development. The pipeline, together with the upgrades and rollouts already signed, BMO, the OEM retail deployment, the expansion that customers are taking into new markets is what underpins the guidance Sardar will walk you through. With that, I'll hand over the call to our CFO, Sardar, to review the financial results. Sardar Abubakr: Thank you, Asad, and good morning, everyone. Fiscal 2026 was an important year for the company. We delivered double-digit revenue growth, expanded gross and operating margins, nearly doubled operating income and generated strong cash flow. Just as importantly, we are putting in place the financial discipline, operating model and performance metrics required to make this progress durable. My comments will cover 5 areas: the rebound in fourth quarter exit rate, the quality of the full year results, the strength and use of our balance sheet, the actions underway to improve earnings conversion and simplify the organization and our guidance for fiscal 2027. Before turning to the full year, I want to provide a fourth quarter perspective. Fourth quarter revenue was $20.7 million, a record quarter for us, up 12.5% year-over-year. Subscription and support revenue grew 9% to $8.9 million, while services revenue increased 21.3% to $11.7 million. Fourth quarter gross profit increased 27.3% to $13.2 million and gross margin expanded to 63.6% from 56.2%. Operating income increased 40.2% to $4.5 million, representing an operating margin of 21.6% compared with 17.4% last year. GAAP income -- net income attributable to NetSol increased 45.9% to $3.8 million or $0.32 per diluted share compared with $0.22. The exit rate is particularly important in the context of our start to the new year. In the first quarter last year, revenue was $15 million, gross margin was 39.4%, and operating loss was $1.8 million and net loss attributable to NetSol was $2.4 million. By the third quarter, however, revenue had reached a then record $19.8 million, gross margin was 55.6% and operating income was $3 million. In Q4, revenue reached $20.7 million, gross margin was 63.6% and operating income was $4.5 million. From Q1 to Q4, revenue increased by approximately 38%, gross margin expanded by more than 2,400 basis points, and the quarterly operating result improved by approximately $6.3 million. This demonstrates a meaningful rebound in execution while recognizing the timing of agreements, implementation milestones and development capitalization can create quarter-to-quarter variability. For the full year, total net revenues increased 12.5% to a record $74.4 million, above our $73 million guidance. Subscription and support revenue increased 8.7% to $35.8 million, demonstrating continued growth in the recurring foundations of the business. Services revenue increased 3.3% to $33.6 million as we progressed major implementations. License revenue was $5 million and included approximately $4.7 million associated with the renewal and amendment of an existing Transcend customer agreement. We want investors to distinguish absolute recurring revenue growth from revenue mix. Subscription and support represented 48.1% of revenue compared to 49.8% last year because license revenue increased this year. We will increasingly supplement this disclosure with consistent measures of recurring revenue, remaining performance obligations and implementation activity. We are also introducing a metric we call contracted revenue. As of June 30, 2026, contracted revenue was approximately $60 million. We define this as revenue expected under existing signed agreements plus our best estimate of change requests from those same customers and same agreements. It is not annual recurring revenue, not backlog and of course, not a guaranteed revenue floor. We will report this each quarter on a consistent basis, and our objective is to grow well above it through Transcend deployments, expansion within existing customers, selected new customers and partnerships. Turning to gross profit. Gross profit increased 20.2% to $39.1 million and gross margin expanded 330 basis points to 52.6%. Operating income increased 98.4% to $6.9 million, with operating margin increasing from 5.3% to 9.3%. These are the clearest indicators of improved execution. The results benefited from revenue mix, delivery leverage and the capitalization of qualifying software development costs. We will provide investors with clearer visibility into total product development investment so that the underlying trend remains transparent. Non-GAAP EBITDA grew 22.8% to $8 million. Consolidated adjusted EBITDA increased 68.8% to $9.15 million compared to $5.42 million. Adjusted EBITDA attributable to NetSol increased 61% to approximately $6.01 million compared with $3.73 million. The prior year comparison has been recast to exclude foreign exchange gains and losses on a consistent basis. Reconciliations of all non-GAAP measures are included in today's earnings release. Net income attributable to NetSol was $2.95 million or $0.25 per diluted share, consistent with the prior year. This should be considered in the context of 2 significant movements. First, fiscal 2025 included a foreign exchange gain of $1.3 million and interest and investment income of $1.87 million. In fiscal 2026, we recorded a foreign exchange loss of $0.39 million and interest income of $1.07 million. Total other income was therefore approximately $2.27 million lower year-over-year. Second, income attributable to noncontrolling interests increased by approximately $1 million to $2.65 million. Despite those headwinds below operating income level, consolidated net income increased 22.4% to $5.6 million. We believe that this bridge demonstrates that the underlying operating business improved materially this year, even though the improvement was not yet fully reflected in earnings attributable to NetSol shareholders. Turning to net cash. Net cash provided by operating activities was $13.9 million compared with $0.4 million last year, and cash increased 56.3% to $27.1 million. As we indicated in our third quarter call, the working capital timing that reduced cash at March 31 reversed in the fourth quarter. This is a meaningful improvement in financial capacity. Contract liabilities contributed approximately $6.5 million to operating cash flow, reflecting advanced billings and customer commitments. We do not assume that this working capital benefit will repeat, of course, at the same level year-over-year. During the year, we invested approximately $2 million in property and equipment and $2.7 million in capitalized software development. After these investments, the business still generated approximately $9.8 million of cash. We will remain disciplined in balancing product investment, liquidity potential strategic transactions and shareholder value. Supporting the 4 strategic priorities Najeeb outlined, our financial agenda for fiscal 2027 is quite straightforward: grow recurring revenue and its visibility, protect and improve margins, apply AI in practical and measurable ways, focus the portfolio on our highest return opportunities and strengthen the conversion of consolidated profit into value for NetSol shareholders. We will apply AI where the outcomes are measurable, faster development and testing, less implementation effort, better support resolution and automated back-office processes. That is part of a broader efficiency program that will continue through fiscal 2027. As of June 30, 2026, we employed approximately 1,370 people compared with approximately 1,460 a year earlier, while revenue grew 12.5%. We are reviewing workforce structure, utilization, location strategy and the skills and AI embedded delivery model requires. This is not a headcount reduction exercise. It is a disciplined review of how we deploy people and direct capacity towards product innovation, customer delivery and growth. We are also reviewing our portfolio for simplification. This includes assessing products, legal entities and activities against strategic fit, growth potential, margin, cash requirements and management complexity. Capital will be directed to the core asset finance platform and close to core adjacencies where NetSol has a defensible customer and domain advantage. A further strategic priority for us is evaluating minority interest in Pakistan. The Pakistan business is a major contributor to the company, but the increasing allocation of earnings to noncontrolling interest does reduce how much of our consolidated performance reaches NetSol shareholders. As we have said before, we are actively evaluating structural options to address this over time, subject to valuation, funding, regulatory and tax considerations and the rights of minority shareholders. Please note that no transaction has been approved, and we cannot guarantee that our objectives will be achieved in the near long term, and we will communicate when a specific course of action is sufficiently developed. Our growth strategy combines organic execution and selective strategic partnerships, JVs and acquisitions in core and close to core adjacencies. We will apply a strict criteria, product and customer fit, recurring revenue quality, margin and cash profile, integration complexity and a clear return above our cost of capital. We will not pursue scale for its own sake. For fiscal 2027, NetSol currently expects net revenues to grow 13% to 16% over fiscal 2026. Gross margin of approximately 50% or better, consolidated adjusted EBITDA growth of 15% to 25%, corresponding to approximately $10.5 million to $11.4 million. This guidance assumes continued subscription growth, execution of contracted implementations, disciplined cost management and no material acquisitions. While it's important to note that the timing of agreements, implementation milestones, foreign exchange, customer decisions and advanced billings can create variability between quarters, our focus will be on full year execution and the quality of growth. In summary, fiscal 2026 demonstrated that NetSol can grow while expanding margins and generating cash. The next phase is to make that performance more predictable, more transparent and more valuable to NetSol shareholders. We will do that through recurring growth, disciplined execution, practical AI adoption, portfolio simplification, thoughtful structural action and rigorous capital allocation. With that, operator, please open the line for questions. Operator: [Operator Instructions] Our first question is from Greg Burns with Sidoti & Company. Gregory Burns: Just wanted to first touch on the '27 guidance for gross margins. I guess it's implying down a little bit year-over-year. Is there going to be a shift in mix? Or what is driving that outlook for a little bit reduction in gross margin? Najeeb Ghauri: Thank you for the question. Abu, do you want to jump in? Go ahead, Abu. Sardar Abubakr: Yes. Yes, Naj. So I'll take this. So thank you for the question. We are optimistic of our gross margin forecast. We believe that the guidance that we have given of 50% is a stable guidance. It is a guidance that wherever we go into new agreements and also review existing agreements, we do expect more than 50% gross margin in our business. You saw in the numbers that I quoted that we closed at a higher rate. We expect no reasons why we would not be able to achieve growth in this. But the staple guidance that we would like to give the market today is that we will be at least 50% or better. And as we progress quarter-over-quarter, we will continue to monitor and upgrade that guidance as needed. Gregory Burns: Okay. And then with the transition from LeasePak to Transcend with BMO that you announced, when you do a transition like that, I know you mentioned you're moving from a maintenance to a subscription revenue. But is there any like revenue uplift or margin benefit? What are the additional benefits to transitioning from that legacy platform to Transcend for you? Najeeb Ghauri: I'll let Asad answer that question. Asad Ghauri: Thanks, Najeeb. So I think it provides a huge uplift to our subscription revenue. Implementation, again, is dependent on how we structure the upgrade with the client, but definite bump up for us overall in our subscription revenue as we move forward with them, which is our primary focus. Gregory Burns: Okay. How big is your LeasePak installed base maybe from a number of customer... Asad Ghauri: Yes, LeasePak. So it's about 7 customers currently. Najeeb Ghauri: All U.S. based. Gregory Burns: Okay. All right. And then the Transcend Retail in the U.S., can you just give us a little bit more color on the pipeline and opportunity? And I know you announced 3 dealers that launched maybe earlier this quarter. But could you just talk about the pipeline and why you won there and what benefits you're bringing to the auto dealer market in the U.S.? Asad Ghauri: So I mean, we've got the digital retail space divided into 2 areas. The 3 dealers that you referred to are part of bigger dealer groups. So they all carry more than 15 dealerships within the group. So our primary port of call is to ensure that we get the initiation right in these 3 dealers. And with that, it opens up the other dealerships within the group. So I said we have 2 focuses. One is Tier 1 OEMs, which we're doing a rollout for, which is the 350 could potentially turn out to be more. So that's a space that we have great engagement in. And lastly, on the D2G side, which is where we define dealership groups, that's where we're seeing the traction and you see those 3 dealers. You'll see more coming on as we move forward in the year with the potential of adding 20 -- 15 to 20 dealers average based on that go-live of that customer. Does that make sense? Gregory Burns: Yes, that does. So when we look across the 3 geographies that you're in, where do you expect the most growth, to see the most growth? Is it in the U.S. with the retail part of the business or... Asad Ghauri: So for me, I think there's great momentum for us in all 3 regions right now. As we explained earlier and I presented that our core focus in the U.S. besides Transcend Finance, is retail, and we would like to execute there before moving on to other regions. But Transcend Finance, on the other hand, is tracking really well, and you'll see that in the coming weeks with some of the announcements that we made. Operator: Our next question is from Todd Felte with StoneX. Todd Felte: Congratulations on a great quarter. Nice to see the growth in revenues, margins and earnings. I wanted to touch on the cash position. I saw it grown to a little over $27 million. And in the past, you had talked about some M&A activity or possibly buying a full ownership of NetSol PK. I was just wondering if you could kind of update us on that as well as if any share buybacks are going on. Najeeb Ghauri: I think I can add a point then Abu will come in. Absolutely, we are very pleased with our cash position, and the company is very conscious of opportunities, particularly in the U.S. market because we see a lot of opportunities, whether they're M&A or just new relationship. But I think Asad can give you some more color about exactly how else he's thinking about really using this cash. Well, Asad and Abu? Asad Ghauri: Yes. I think I'll leave the cash part to our experts, Abubakr that is. But on the M&A side, I think there's definite interest. We are well positioned, and we will keep the market informed as we see traction and positivity in those engagements. But it is ongoing. Abubakr, do you want to take the cash, please? Sardar Abubakr: Sure. Sure. Sure. So thank you for the question, Todd. Two aspects, one that I covered in my script, we are actively evaluating structural options when it comes to NetSol Pakistan. So that's number one. Number two, as I also mentioned in my script, we are evaluating what we call core or close to core adjacencies. U.S. is our home market. We are committed to growing the U.S. market at a significant rate, both through our flagship Transcend Finance platform, as you saw with the BMO deal, but also our big bet, which is Transcend Retail. In addition, given we also operate in Europe and APAC, we are selectively evaluating potential close to core adjacencies through partnerships and potential future acquisitions. As those discussions develop, we will consistently and transparently update the market. But rest assured, the cash position that you see will be used for growing our existing core business, investing in product innovation, becoming a nimble AI organization, but also inorganic opportunities as we see best interest so. Todd Felte: Okay. That's great to hear. Really appreciate the color on all that. And then finally, I just wanted to maybe get an update on Investor Relations. I know you've been doing some conferences. Is there any plans to have analyst coverage in the near future? I don't see any analyst reports out there as of now. Sardar Abubakr: Sure. So I'll take that, Naj, and Asad. We will be updating the market soon. We fully recognize that NetSol as a stock must have more consistent analyst coverage and not even one. Ideally, we should have coverage by more than one analyst. We are -- have now finalized discussions with a research -- a reputed research analyst firm, and that coverage will start after this earnings call and the process of that will complete. However, we are not stopping there. We believe, as I said, that multiple analyst coverage is the way to go to get our story out there. I think I'll leave you with one thing on this furthermore, Todd, and this is towards everyone who has dialed in. I encourage everyone to compare NetSol's stock performance this year versus NASDAQ, NASDAQ Composite, the software industry and also our peers. And I believe, as Naj stated in his opening note, that this is a story that we will get out there more, and you should start to see analyst coverage in the quarters ahead. Todd Felte: Okay. That's very helpful. I know when I look at the enterprise value of the company, I mean, you just seem so ridiculously undervalued that I'm hoping that will change in the near future. But I appreciate you taking my congratulations again to you and your team on such a good job. Najeeb Ghauri: I want to add, Todd. I think for the audience, this company is in a different direction in a very exciting way. What we have seen in the last 2 years, and our results delivered today is it shows that the company sees a very big opportunity, particularly in the U.S., whether it's the retail digital retail or main platform. It's a growing market for us, and we're just about to grab a few new contracts, and we mentioned about it. We were in a roadshow for BMO. And I think our team is very excited about getting new investors. 3, 4 of them are going to New York and a couple other places to meet a lot of new potential bankers and investors. So you'll see increased interest in the stock because now we feel the company has the right trajectory to really make sure that the investors who come in, they'll have a good ROI in the short to long term. So we're really excited about it. And in the closing, I thank everyone for your questions. We remain focused on executing against our strategic priorities and building on the momentum across our business, and we look forward to reporting our progress against the guidance we introduced today. Before we go, I want to thank all of our colleagues around the world who work very hard to make who we are today. They delivered the strongest year in our history. And thank you for all of your time today and... Asad Ghauri: I think there's some questions outstanding. Najeeb Ghauri: Are there any questions outstanding? Asad Ghauri: Yes, I think there's some people waiting to ask more questions. Najeeb Ghauri: Go ahead, take it. Sorry. Operator: [Operator Instructions] Our next question is from Peter Sidoti with Sidoti & Company. Peter Sidoti: I'm sorry, I'm running on the name. The release didn't include financials, and I don't think the 10-K has been filed. Can you just give me a handle on when the actual numbers will be available? Sardar Abubakr: I'll take that. I think the -- sure. So the press release should be available, and the 10-K should be available later today. Operator: There are no further questions at this time. Najeeb, would you like to continue your closing remarks? Najeeb Ghauri: Yes. So I think before we go, I want to thank our colleagues around the world who delivered these very strong numbers today in our history. And I thank all our shareholders who are committed long term, and they look to this company at a possibility for us to really create not just the ROI, but also excitement in the company because we are very excited for our future. We believe that we will really turn the corner. We already have turned the corner this year. Thank you all for your time today and your continued interest in NetSol. We appreciate you being part of this journey with us. Thank you, and have a good day. Asad Ghauri: Thank you. Operator: Thank you. This will conclude today's conference. You may disconnect at this time, and thank you for your participation. Najeeb Ghauri: Thank you for your help, operator. Operator: Thank you. Before you buy stock in NetSol Technologies, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and NetSol Technologies wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $383,680!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,382,954!* Now, it's worth noting Stock Advisor's total average return is 937% — a market-crushing outperformance compared to 214% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of September 29, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. NetSol (NTWK) Q4 2026 Earnings Call Transcript was originally published by The Motley Fool

Full-year revenue rises 12.5% to a record $74.4 million as operating income nearly doubles YoY and cash reaches $27.1 million; Company introduces fiscal 2027 guidance. ENCINO, Calif., Sept. 28, 2026 (GLOBE NEWSWIRE) -- NETSOL Technologies, Inc. (Nasdaq: NTWK), a provider of AI-enabled solutions and services powering OEMs, dealerships and financial institutions to sell, finance and lease assets, reported its results for the fourth quarter of fiscal 2026 and full year ended June 30, 2026. - Full-year revenue increased 12.5% to a record $74.4 million, exceeding guidance of $73 million; subscription and support revenue increased 8.7% to $35.8 million. - Full-year gross margin increased 330 basis points to 52.6%; operating income nearly doubled to $6.9 million, with operating margin up 400 basis points to 9.3%. - Full-year GAAP net income attributable to NETSOL was $2.95 million, or $0.25 per diluted share; consolidated net income increased 22.4% to $5.6 million. - Full-year adjusted EBITDA increased 68.8% to $9.15 million on a consolidated basis and 61.0% to $6.01 million attributable to NETSOL shareholders. - Full-year operating cash flow increased to $13.9 million from $0.4 million; year-end cash increased 56.3% to $27.1 million. - Fourth-quarter revenue increased 12.5% to a record $20.7 million; subscription and support revenue increased 9.0% and services revenue increased 21.3%; gross margin expanded to 63.6% from 56.2%; operating income increased 40.2% to $4.5 million. - Fiscal 2027 guidance: revenue growth of 13% to 16%; gross margin of approximately 50% or better; and consolidated adjusted EBITDA growth of 15% to 25%. Fourth quarter fiscal 2026 financial results Total net revenues for the fourth quarter of fiscal 2026 were $20.7 million, a quarterly record, compared with $18.4 million in the prior-year period, an increase of 12.5%. Total net revenues were $19.9 million on a constant currency basis. Total subscription (SaaS and Cloud) and support revenues for the fourth quarter were $8.9 million, an increase of 9.0%, compared with $8.2 million in the prior-year period. Total subscription and support revenues on a constant currency basis were $8.2 million. Services revenues for the fourth quarter were $11.7 million, an increase of 21.3%, compared with $9.7 million in the prior-year period. Services revenues on a constant currency basis were $11.6 million. Gross profit for the fourth quarter was $13.2 million or 63.6% of net revenues, an increase of 27.3%, compared with $10.3 million or 56.2% of net revenues in the prior-year period. Gross profit for the fourth quarter was $12.5 million or 63.0% of net revenues as measured on a constant currency basis. Income from operations for the fourth quarter was $4.5 million, an increase of 40.2%, compared with $3.2 million in the prior-year period, representing an operating margin of 21.6% compared with 17.4%. Income from operations for the fourth quarter was $4.1 million on a constant currency basis. GAAP net income attributable to NETSOL was $3.8 million or $0.32 per diluted share, an increase of 45.9%, compared with $2.6 million or $0.22 per diluted share in the prior-year period. Non-GAAP EBITDA was $4.7 million, compared with $4.7 million in the prior-year period (see note regarding "Use of Non-GAAP Financial Measures," below). Full fiscal year ended June 30, 2026 financial results Total net revenues for the full fiscal year ended June 30, 2026, were $74.4 million, an increase of 12.5%, compared with $66.1 million in the prior year. Total net revenues were $73.4 million on a constant currency basis. Total subscription (SaaS and Cloud) and support revenues for the full fiscal year were $35.8 million, an increase of 8.7%, compared with $32.9 million in the prior year, and represented approximately 48% of total net revenues. Total subscription and support revenues on a constant currency basis were $35.3 million. Total services revenues were $33.6 million compared with $32.6 million in the prior year, representing a 3.3% increase, as the Company progressed major implementations. Total services revenues on a constant currency basis were $33.2 million. Total license fees were $5.0 million compared with $0.6 million in the prior year, and included approximately $4.7 million associated with the renewal and amendment of an existing Transcend customer agreement. Total license fees on a constant currency basis were $4.9 million. Gross profit for the full fiscal year was $39.1 million or 52.6% of net revenues, an increase of 20.2%, compared with $32.6 million or 49.3% of net revenues in the prior year. Gross profit was $38.2 million or 52.1% of net revenues as measured on a constant currency basis. Income from operations for the full fiscal year was $6.9 million, an increase of 98.4%, compared with $3.5 million in the prior year, representing an operating margin of 9.3% compared with 5.3%. Income from operations was $6.4 million on a constant currency basis. GAAP net income attributable to NETSOL for the full fiscal year totaled $2.95 million or $0.25 per diluted share, compared with $2.9 million or $0.25 per diluted share in the prior year. Fiscal 2025 included a $1.30 million gain on foreign currency exchange transactions and $1.87 million of interest income, while fiscal 2026 included a $0.39 million foreign currency exchange loss and $1.07 million of interest income; net income attributable to non-controlling interests increased to $2.65 million from $1.65 million. Consolidated net income increased 22.4% to $5.6 million. On a constant currency basis, GAAP net income attributable to NETSOL totaled $2.4 million or $0.21 per diluted share. Non-GAAP EBITDA for the full fiscal year was $8.0 million, an increase of 22.8%, compared with $6.5 million in the prior year. Consolidated adjusted EBITDA was $9.15 million, an increase of 68.8%, compared with $5.42 million, and adjusted EBITDA attributable to NETSOL was $6.01 million, an increase of 61.0%, compared with $3.73 million in the prior year (see note regarding "Use of Non-GAAP Financial Measures," below and Schedule 4). Remaining performance obligations were $49.1 million at June 30, 2026, of which approximately $22.5 million is expected to be recognized as revenue within the next 12 months. Cash flow and balance sheet Net cash provided by operating activities for the full fiscal year was $13.9 million, compared with $0.4 million in the prior year. The increase included approximately $6.5 million contributed by contract liabilities reflecting advance billings. The Company invested $2.0 million in property and equipment and $2.7 million in capitalized software development during the year. Cash and cash equivalents were $27.1 million at June 30, 2026, an increase of 56.3%, compared with $17.4 million at June 30, 2025. Working capital was $29.2 million at June 30, 2026. NETSOL stockholders' equity was $41.6 million or $3.50 per share at June 30, 2026. Total debt and finance lease obligations were $8.4 million, with $0.21 million in long-term maturities. Management commentary Najeeb Ghauri, Founder and Chief Executive Officer of NETSOL Technologies, Inc., commented: "Fiscal 2026 marked a clear step forward for NETSOL. We delivered record annual revenue, expanded margins and finished the year with strong operational momentum. The rebound from our first quarter demonstrates the capability and resilience of our teams, while the continued growth of subscription and support revenue reinforces the value of our long-term customer relationships." "We enter fiscal 2027 with real momentum, with product offerings that are doing more for our customers than at any point in our history, and with the visibility to introduce full-year guidance alongside our fourth quarter results. Our focus is on making growth more predictable and on translating consolidated performance more effectively into value for NETSOL shareholders. We will do that through the Transcend platform and practical AI across our products and operations, through selective partnerships and acquisitions where we see a clear strategic and financial return, and by evaluating structural options that may reduce the economic impact of minority interests over time." Asad Ghauri, Global Head of Sales and Group Managing Director of Europe at NETSOL Technologies, Inc., commented: "Customer engagement remained strong across our established markets during the year, with growing demand for modern cloud platforms, AI-enabled finance solutions and digital retail. We expanded relationships for Transcend Finance with a number of existing customers, including a tier-one global auto captive, a long-standing customer and strategic partner of three decades, with whom we signed a $50 million contract extension; a tier-one U.S.-based auto captive that went live in China; Toyota Leasing Thailand, which upgraded its platform; a tier-one multinational bank in the United Kingdom that renewed its agreement; and most recently, BMO Equipment Finance in the United States, which moved from its legacy platform to Transcend Finance." "We progressed major implementations and developed new opportunities across automotive finance, equipment finance and digital retail on the Transcend platform. Our commercial priorities are disciplined conversion of a qualified pipeline, expansion within our installed base and partnerships that extend our reach without compromising execution quality." Sardar Abubakr, Chief Financial Officer of NETSOL Technologies, Inc., commented: "Fiscal 2026 produced the strongest operating performance in several years. Revenue increased 12.5%, operating income nearly doubled and operating cash flow reached $13.9 million. The quality of the result is also important: fiscal 2025 included a $1.30 million foreign exchange gain and $1.87 million of interest and investment income, while fiscal 2026 included a $0.39 million foreign exchange loss and lower interest income. Despite that year-over-year headwind and a higher allocation to non-controlling interests, consolidated net income increased 22.4%." "We ended the year with $27.1 million in cash and greater capacity to invest in products, customer delivery and selected strategic opportunities. Our efficiency program will continue through fiscal 2027. As of June 30, we employed approximately 1,370 people, compared with approximately 1,460 a year earlier, while revenue grew 12.5%. We are reviewing workforce structure, utilization, location strategy and the skills an AI-enabled delivery model requires. This is not a headcount-reduction exercise; it is a disciplined review of how we deploy people and direct capacity toward product innovation, customer delivery and growth." "For fiscal 2027, NETSOL currently expects total net revenue growth of 13% to 16% over fiscal 2026; gross margin of approximately 50% or better; and consolidated adjusted EBITDA growth of 15% to 25%, corresponding to approximately $10.5 million to $11.4 million. Our financial agenda for fiscal 2027 is straightforward: grow recurring revenue and its visibility, protect and improve margins, apply AI in practical and measurable ways, focus the portfolio on our highest-return opportunities, and strengthen the conversion of consolidated profit into value for NETSOL shareholders." Beginning with fiscal 2026 results, the Company is reporting contracted revenue, which it defines as revenue expected under existing signed agreements plus management's best estimate of change requests from those customers. Contracted revenue was approximately $60 million at June 30, 2026. Contracted revenue differs from remaining performance obligations, which include only amounts contracted under applicable accounting standards; it is not a GAAP measure, annual recurring revenue, backlog or a guaranteed revenue floor. The Company intends to report contracted revenue each quarter and to grow above it through Transcend deployments, expansion within existing customers, new customers and partnerships. Conference call NETSOL Technologies management will hold a conference call Monday, September 28, 2026, at 9:00 am Eastern Time (6:00 am Pacific Time) to discuss its results for the fourth quarter and full year ended June 30, 2026. A question-and-answer session will follow management's prepared remarks. Participant dial-in: 1-877-407-0789 or 1-201-689-8562 A live webcast of the conference call will be available here. Information about the webcast will also be available on the Investor Relations section of NETSOL's website at www.netsoltech.com. Telephone replay: Telephone replays will be made available approximately 3 hours after conference end time. Replay dial-in: 1-844-512-2921 or 1-412-317-6671. Replay expiration: Monday, October 12, 2026 at 11:59 PM ET. Access ID: 13762610. About NETSOL Technologies NETSOL Technologies delivers state-of-the-art solutions for the asset finance and leasing industry, serving automotive and equipment OEMs, auto captives and financial institutions across over 30 countries. Since its inception in 1997, NETSOL has been at the cutting edge of technology, pioneering innovations with its asset finance solutions, and today leverages advanced AI and cloud services to meet the complex needs of the global market. Renowned for its deep industry expertise, customer-centric approach and commitment to excellence, NETSOL fosters strong partnerships with its customers, ensuring their success in an ever-evolving landscape. With a rich history of innovation, ethical business practices and a focus on sustainability, NETSOL is dedicated to empowering businesses worldwide, securing its position as the trusted partner for leading firms around the globe. Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the company's products and services, expectations for future operations, fiscal 2027 guidance for revenues, gross margin and adjusted EBITDA, contracted revenue, remaining performance obligations and revenue visibility, AI-enabled products and productivity initiatives, the Company's efficiency program, capital allocation, potential strategic partnerships and acquisitions, potential structural actions concerning non-controlling interests, and other statements that are not historical facts. These forward-looking statements may be identified by terminology such as "expects," "anticipates," "believes," "intends," "plans," "projects," "targets," "guidance," "assumes," and similar expressions. These statements are not guarantees of future performance and are subject to a number of risks, uncertainties, and assumptions that are difficult to predict. The fiscal 2027 outlook assumes continued subscription growth, execution of contracted implementations, disciplined cost management and no material acquisitions. Factors that could cause actual results to differ materially include, but are not limited to, the timing of customer agreements, go-lives, contract signings and renewals, implementation milestones, the rate of adoption of AI-enabled product capabilities, foreign currency volatility, customer concentration and customer decisions, the timing of advance billings and collections, investment levels, competition, geopolitical and macroeconomic conditions, and other factors discussed in NETSOL's most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q filed with the U.S. Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. NETSOL undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law. Use of Non-GAAP financial measures This press release includes references to non-GAAP EBITDA, non-GAAP adjusted EBITDA, gross, and non-GAAP adjusted EBITDA, net, which are non-GAAP financial measures. Non-GAAP EBITDA is net income before non-controlling interest, income taxes, depreciation and amortization, interest expense and interest income. Non-GAAP adjusted EBITDA, gross, further excludes foreign currency exchange gains and losses and non-cash stock-based compensation; non-GAAP adjusted EBITDA, net, further deducts the adjusted EBITDA attributable to non-controlling interests. Management believes these measures assist investors in evaluating operating performance and comparing results across periods. Non-GAAP measures should be considered in addition to, and not as substitutes for, the most directly comparable GAAP measures. Reconciliations of these measures to net income attributable to NETSOL, the most directly comparable GAAP measure, together with an explanation of how management uses these measures, are provided in Schedule 4 of the financial tables that follow. Investor Relations Contact: Investor Relations (818) 222-9195 [email protected]

This article first appeared on GuruFocus. - Total Net Revenues: Record $74.4 million for fiscal 2026, up 12.5% year-over-year, exceeding $73 million guidance. - Q4 Revenue: Record $20.7 million, up 12.5% year-over-year. - Subscription and Support Revenue: $35.8 million for fiscal 2026, up 8.7%; Q4 up 9% to $8.9 million; ~48.1% of total revenue. - Services Revenue: $33.6 million for fiscal 2026, up 3.3%; Q4 up 21.3% to $11.7 million. - License Revenue: $5 million for fiscal 2026, including ~$4.7 million from renewal and amendment of an existing Transcend customer agreement. - Gross Profit: $39.1 million for fiscal 2026, up 20.2%; Q4 up 27.3% to $13.2 million. - Gross Margin: 52.6% for fiscal 2026, up 330 basis points; Q4 expanded to 63.6% from 56.2%. - Operating Income: $6.9 million for fiscal 2026, up 98.4%; Q4 up 40.2% to $4.5 million. - Operating Margin: 9.3% for fiscal 2026, up from 5.3%; Q4 at 21.6% vs. 17.4%. - Non-GAAP EBITDA: Grew 22.8% to $8 million. - Consolidated Adjusted EBITDA: Up 68.8% to $9.15 million vs. $5.42 million. - Adjusted EBITDA Attributable to NetSol: Up 61% to ~$6.01 million vs. $3.73 million. - Net Income Attributable to NetSol: $2.95 million, or $0.25 per diluted share, consistent with prior year; Q4 up 45.9% to $3.8 million, or $0.32 per diluted share vs. $0.22. - Consolidated Net Income: Up 22.4% to $5.6 million. - Net Cash from Operating Activities: $13.9 million vs. $0.4 million last year. - Cash: Increased 56.3% to $27.1 million. - Contracted Revenue: ~$60 million as of June 30, 2026. - Capitalized Software Development: $2.7 million invested during the year. - Property and Equipment Investment: ~$2 million during the year. - Headcount: ~1,370 employees as of June 30, 2026, vs. ~1,460 a year earlier, while revenue grew 12.5%. - Fiscal 2027 Guidance: Net revenues to grow 13%16% over fiscal 2026; gross margin ~50% or better; consolidated adjusted EBITDA growth of 15%25%, corresponding to ~$10.5 million$11.4 million. - Warning! GuruFocus has detected 8 Warning Sign with NTWK. - Is NTWK fairly valued? Test your thesis with our free DCF calculator. Release Date: September 28, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. - Fiscal 2026 was the strongest financial year in NETSOL Technologies Inc (NASDAQ:NTWK)'s history, with total net revenues of $74.4 million, up 12.5% year-over-year and exceeding guidance of $73 million. - Non-GAAP EBITDA grew almost 23% and income from operations nearly doubled, demonstrating significant operational leverage and improved profitability. - Recurring subscription and support revenue now represents approximately half of total revenue, providing a durable and predictable revenue base. - The company returned to the Russell Indexes, added to six benchmarks including the Russell 3000 and Russell Microcap Index, increasing institutional visibility and eligibility for index-based mandates. - NETSOL Technologies Inc (NASDAQ:NTWK) signed a landmark contract with BMO, one of North America's largest banks, to upgrade from legacy platform to Transcend Finance, validating the upgrade strategy and opening a pipeline of similar legacy-to-modern transitions. - Transcend Retail gained commercial traction with a rollout across approximately 350 franchise dealerships of a premium global OEM in North America, positioning the company in the large and underpenetrated US digital retail market. - The company generated strong operating cash flow of $13.9 million, a significant improvement from $0.4 million last year, and increased cash to $27.1 million, up 56.3%. - NETSOL Technologies Inc (NASDAQ:NTWK) provided fiscal 2027 guidance of 13-16% revenue growth and 15-25% consolidated adjusted EBITDA growth, reflecting confidence in continued momentum. - The company is embedding AI across products and operations to improve efficiency, with AI-enabled credit decisioning and intelligent document processing already deployed, enhancing client value and internal scalability. - A strengthened board was elected, including former BMW and Daimler Truck executives, bringing deep industry expertise and strong governance to support future growth. - Fiscal 2027 gross margin guidance of approximately 50% or better implies a potential decline from fiscal 2026's 52.6%, raising concerns about revenue mix or pricing pressure. - Net income attributable to NETSOL Technologies Inc (NASDAQ:NTWK) was flat at $2.95 million or $0.25 per diluted share, despite strong operating income growth, due to lower other income and higher noncontrolling interests. - The company faces headwinds from foreign exchange losses and reduced interest income, which decreased total other income by approximately $2.27 million year-over-year. - Income attributable to noncontrolling interests increased by approximately $1 million to $2.65 million, reducing the portion of consolidated profits reaching NETSOL Technologies Inc (NASDAQ:NTWK) shareholders. - The legacy LeasePak installed base is limited to about seven customers, constraining the near-term opportunity for upgrade-driven subscription revenue growth. - Quarter-to-quarter variability remains due to timing of agreements, implementation milestones, and development capitalization, which can create unpredictability in financial results. - The company has no analyst coverage currently, which may limit investor awareness and stock liquidity until coverage is initiated. - NETSOL Technologies Inc (NASDAQ:NTWK) is actively evaluating structural options for its Pakistan minority interest, but no transaction has been approved, and there is no guarantee of achieving objectives, creating uncertainty. - The workforce reduction from approximately 1,460 to 1,370 employees, while part of efficiency efforts, may pose execution risks if not managed carefully. - The company's market valuation is not yet reflecting its improved financial performance, and management acknowledges the stock remains undervalued, which could persist without increased investor engagement. Q: Fiscal 2027 guidance implies gross margin down slightly year over year. Is there a shift in mix driving that outlook?A: CFO Sardar Abubakr said the 50% gross margin guidance is a "staple" floor rather than a ceiling, noting the company closed fiscal 2026 at a higher rate and expects to exceed 50% as new and existing agreements are reviewed. He said management will monitor and upgrade the guidance quarter over quarter as warranted. Q: When transitioning a legacy LeasePak customer like BMO to Transcend, is there a revenue uplift or margin benefit?A: Director Asad Ghauri said the upgrade provides a "huge uplift" to subscription revenue, with implementation revenue depending on how the upgrade is structured with the client. He emphasized the subscription bump is the primary focus of these legacy-to-Transcend conversions. Q: How big is the LeasePak install base in terms of customer count?A: Director Asad Ghauri said the legacy LeasePak install base is approximately seven customers, each of which represents a potential upgrade opportunity to the Transcend platform. Q: Can you give more color on the Transcend Retail pipeline in the US and why NetSol is winning deals?A: Director Asad Ghauri said the three launched dealers are part of larger dealer groups carrying more than 15 dealerships each, so successful initial deployments open up the rest of each group. He cited two focus areas: Tier 1 OEM rollouts (including a ~350-franchise-dealership deployment that could grow) and dealer groups, where he expects to add roughly 15 to 20 dealers on average following each go-live. Q: Across North America, Europe and Asia Pacific, where do you expect the most growth?A: Director Asad Ghauri said there is strong momentum in all three regions, but the US is the priority, with Transcend Retail the key focus alongside Transcend Finance. He said Transcend Finance is tracking well and teased upcoming announcements in the coming weeks. Q: With cash growing to over $27 million, can you update us on M&A, a possible buyout of NetSol Pakistan minority interests, and share buybacks?A: CFO Sardar Abubakr said the company is actively evaluating structural options for NetSol Pakistan and assessing core or close-to-core adjacencies, with the US as its home market priority. He said cash will fund the existing core business, product innovation, becoming a "nimble AI organization," and inorganic opportunities, with updates to the market as discussions develop. Director Asad Ghauri added that M&A interest is definite and engagements are ongoing. Q: Is there any plan to add analyst coverage in the near future?A: CFO Sardar Abubakr said NetSol has finalized discussions with a reputed research analyst firm, with coverage to begin after this earnings call. He said the company wants coverage from more than one analyst and encouraged investors to compare NetSol's stock performance against the Nasdaq Composite, the software industry and peers. Q: When will the actual financials and the 10-K be available?A: CFO Sardar Abubakr said the press release should be available and the 10-K should be filed later today. Q: What drove the record fourth-quarter results and the full-year margin expansion?A: CFO Sardar Abubakr reported Q4 revenue of $20.7 million, up 12.5% year over year, with gross margin expanding to 63.6% from 56.2% and operating income up 40.2% to $4.5 million. For the full year, revenue rose 12.5% to a record $74.4 million, gross margin expanded 330 basis points to 52.6%, and operating income nearly doubled to $6.9 million, helped by revenue mix, delivery leverage and capitalization of qualifying software development costs. Q: Why did net income attributable to NetSol stay flat despite stronger operations?A: CFO Sardar Abubakr attributed the flat $2.95 million net income to two factors: fiscal 2025 included a $1.3 million FX gain and $1.87 million of interest and investment income, versus a $0.39 million FX loss and $1.07 million of interest income in fiscal 2026, a roughly $2.27 million swing; and income attributable to noncontrolling interests rose about $1 million to $2.65 million. Consolidated net income still rose 22.4% to $5.6 million. Q: What is the new "contracted revenue" metric and how should investors use it?A: CFO Sardar Abubakr said contracted revenue was approximately $60 million as of June 30, 2026, defined as revenue expected under existing signed agreements plus best-estimate change requests from those same customers. He stressed it is not annual recurring revenue, not backlog and not a guaranteed revenue floor, and said it will be reported each quarter with the objective of growing well above it. Q: What is the fiscal 2027 guidance and what assumptions underpin it?A: CFO Sardar Abubakr guided to net revenue growth of 13% to 16% over fiscal 2026, gross margin of approximately 50% or better, and consolidated adjusted EBITDA growth of 15% to 25%, or roughly $10.5 million to $11.4 million. The guidance assumes continued subscription growth, execution of contracted implementations, disciplined cost management and no material acquisitions, with quarter-to-quarter variability possible from deal timing, implementation milestones, FX and advanced billings. Q: What is the status of the workforce and efficiency program?A: CFO Sardar Abubakr said headcount was approximately 1,370 as of June 30, 2026, down from about 1,460 a year earlier, while revenue grew 12.5%. He said this is not a headcount reduction exercise but a disciplined review of workforce structure, utilization, location strategy and skills for an AI-embedded delivery model, with AI applied to faster development and testing, less implementation effort, better support resolution and automated back-office processes. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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Tap here. - Management characterized fiscal 2026 as a deliberate transformation from a services and license-based business to a platform-centric model, with recurring subscription and support revenue now comprising approximately half of total revenue. - The BMO contract upgrade serves as the primary validation of the company's 'legacy-to-Transcend' strategy, providing a template for transitioning long-tenured North American customers to modern subscription-based technology. - Performance was bolstered by market leadership in China and the Asia Pacific region, where NetSol is expanding alongside existing customers as they enter new markets like Indonesia. - The company is implementing AI-enabled development and automation to reduce resource intensity and build a more scalable organization, focusing on growing client impact without a linear increase in costs. - Strategic board appointments of former executives from BMW, Daimler Truck, and Ford were highlighted as a 'strong endorsement' of the company's direction, effectively bringing the voice of the customer into corporate governance. - Management noted that while revenue grew 12.5%, headcount decreased from approximately 1.46 thousand to 1.37 thousand, reflecting a disciplined review of workforce structure and AI-embedded delivery efficiency. - Fiscal 2027 priorities are centered on scaling Transcend Retail in the U.S. dealer market, embedding AI across operations, and upgrading the legacy install base of approximately seven LeasePak customers. - Guidance for fiscal 2027 assumes net revenue growth of 13% to 16% and consolidated adjusted EBITDA between $10.5 million and $11.4 million, predicated on continued subscription growth and disciplined cost management. - Management expects gross margins to remain stable at 50% or better, viewing this as a sustainable floor even as they monitor potential upgrades to guidance based on new agreement structures. - The company is actively evaluating structural options to address the minority interest in its Pakistan business to improve the conversion of consolidated earnings into value for NetSol shareholders. - Future growth will be supported by a 'strict criteria' for M&A, focusing on close-to-core adjacencies that offer recurring revenue quality and clear returns above the cost of capital. - Net income attributable to NetSol was impacted by a $2.27 million year-over-year swing in other income, primarily due to foreign exchange losses and lower interest income compared to fiscal 2025. - The company reported a significant improvement in financial capacity, with net cash from operating activities rising to $13.9 million, though management cautioned that working capital benefits from advanced billings may not repeat at the same level. - License revenue of $5 million included a specific $4.7 million contribution from the renewal and amendment of an existing Transcend customer agreement, which impacted the year-over-year revenue mix. - Management introduced a new 'contracted revenue' metric, totaling approximately $6 million as of June 30, 2026, to provide a baseline for tracking existing signed agreements and estimated change requests. - Management clarified that the 50% gross margin guidance is intended as a stable, conservative floor for new and existing agreements. - While the fourth quarter exited at a higher rate, the full-year guidance reflects a sustainable baseline that they intend to monitor and potentially upgrade as the year progresses. 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Tap here. - Upgrading the approximately seven remaining LeasePak customers provides a significant 'uplift' by converting maintenance relationships into modern subscription revenue. - The BMO deal serves as the proof point for this motion, though the specific revenue bump depends on how each individual upgrade is structured with the client. - The U.S. digital retail strategy is bifurcated between tier-1 OEMs (such as a 350-dealership rollout) and larger dealer groups. - Management expects to win by being the only vendor that manages both the dealer-facing retail side and the lender-facing finance side of the transaction. - The $27.1 million cash position is earmarked for product innovation, AI integration, and potential inorganic opportunities in the U.S. market. - Management is actively evaluating structural options for the Pakistan subsidiary to reduce earnings leakage to non-controlling interests, though no transaction has been approved yet. - NetSol has finalized discussions with a research firm to initiate coverage following the earnings call to address the company's perceived undervaluation. - The recent return to the Russell 3000 and Microcap indexes is expected to increase eligibility for institutional mandates and improve screening visibility.

- Interested in NetSol Technologies Inc.? Here are five stocks we like better. - Record fiscal 2026 performance: NetSol reported $74.4 million in annual revenue, up 4.5%, while operating income nearly doubled to $6.9 million. Fourth-quarter revenue rose 12.5% to $20.7 million, aided by higher services and subscription revenue. - Improved cash generation and recurring revenue focus: Operating cash flow surged to $13.9 million, and subscription and support revenue grew 8.7% to $35.8 million, representing roughly half of annual revenue. The company reported approximately $60 million in contracted revenue but cautioned that the measure is not guaranteed backlog or annual recurring revenue. - Positive fiscal 2027 outlook: Management expects revenue growth of 13%–16%, adjusted EBITDA growth of 15%–25%, and gross margins of about 50% or better. Key priorities include expanding Transcend Retail, migrating legacy customers, embedding AI, and supporting international customer growth. - These 3 Micro-Cap Stocks Are Making A Buzz NetSol Technologies (NASDAQ:NTWK) reported record fourth-quarter and fiscal 2026 revenue, with management highlighting subscription growth, margin expansion, operating cash flow and new customer deployments as the company pursues a transition toward a more recurring-revenue-focused platform business. Founder and Chief Executive Officer Najeeb Ghauri called fiscal 2026 "the strongest financial year in NetSol history," pointing to $74.4 million in total net revenue, growth in non-GAAP EBITDA and a near doubling of operating income. He said recurring subscription and support revenue represented approximately half of total revenue during the year. → 3 Defense Stocks Riding Nuclear, Missile, and Aerospace Demand Chief Financial Officer Sardar Abubakr said fourth-quarter revenue reached a record $20.7 million, up 12.5% year over year. Subscription and support revenue rose 9% to $8.9 million, while services revenue increased 21.3% to $11.7 million. Fourth-quarter gross profit increased 27.3% to $13.2 million, producing a gross margin of 63.6%, compared with 56.2% a year earlier. Operating income rose 40.2% to $4.5 million, or 21.6% of revenue. Net income attributable to NetSol was $3.8 million, or $0.32 per diluted share, compared with $0.22 per diluted share in the prior-year quarter. → Best Buy Is Turning Amazon Fire TV Into a New Advertising Opportunity For the full fiscal year ended June 30, the company reported total net revenue of $74.4 million, which Abubakr said was a 4.5% increase and above NetSol's prior $73 million guidance. Subscription and support revenue rose 8.7% to $35.8 million, while services revenue increased 3.3% to $33.6 million. License revenue totaled $5 million, including about $4.7 million related to the renewal and amendment of an existing Transcend customer agreement. Full-year gross profit increased 20.2% to $39.1 million, while gross margin expanded 330 basis points to 52.6%. Operating income increased 98.4% to $6.9 million, and operating margin rose to 9.3% from 5.3%. → These 3 Overlooked Stocks Have Big Money Behind Them Non-GAAP EBITDA grew 22.8% to $8 million. Consolidated adjusted EBITDA increased 68.8% to $9.15 million, while adjusted EBITDA attributable to NetSol rose 61% to about $6.01 million. Net income attributable to NetSol was $2.95 million, or $0.25 per diluted share, unchanged from the prior year. Abubakr said results below the operating-income line were affected by a shift from a $1.3 million foreign-exchange gain in fiscal 2025 to a $0.39 million foreign-exchange loss in fiscal 2026, as well as lower interest and investment income. Income attributable to non-controlling interests also increased to $2.65 million. Net cash provided by operating activities increased to $13.9 million from $0.4 million in the prior year, and cash increased 56.3% to $27.1 million. Contract liabilities contributed about $6.5 million to operating cash flow, reflecting advanced customer billings and commitments, though Abubakr said the company does not expect that working-capital benefit necessarily to recur at the same level. NetSol invested approximately $2 million in property and equipment and $2.7 million in capitalized software development during the year. After those investments, the business generated approximately $9.8 million in cash, according to the CFO. The company also introduced a new measure, "contracted revenue," which stood at approximately $60 million as of June 30. NetSol defines the metric as expected revenue under signed agreements plus its estimate of change requests from the same customers and agreements. Abubakr emphasized that it is not annual recurring revenue, backlog or a guaranteed revenue floor. NetSol ended the fiscal year with approximately 1,370 employees, compared with about 1,460 a year earlier, while revenue increased. Management said it is reviewing workforce structure, utilization, location strategy and the skills needed for an AI-embedded delivery model, while stressing that the effort is not solely a headcount-reduction initiative. Management cited several customer deployments and renewals during the year. A Chinese leasing company launched Indonesian operations using Transcend Finance, while Northridge Finance, a Bank of Ireland division, went live on Transcend in the United Kingdom. A Tier 1 U.S. auto captive launched Transcend Finance in China, and Toyota Leasing Thailand upgraded to the latest wholesale finance system on the platform. NetSol also renewed a multimillion-dollar contract with a Tier 1 multinational bank in the United Kingdom for another 10 years. Earlier in the month, the company announced that BMO signed an agreement to upgrade from NetSol's legacy platform to Transcend Finance. Global Head of Sales and Group Managing Director of Europe Asad Ghauri said the BMO agreement provides an expected increase in subscription revenue as customers migrate from legacy maintenance arrangements to modern subscription relationships. He said NetSol has approximately seven LeasePak customers, all based in the United States. In Transcend Retail, NetSol said Sonic Automotive is building a branded digital retail experience on its platform. The company is also rolling out the platform across approximately 350 franchised dealerships for a premium global OEM in North America. Ghauri said the company is targeting both major OEMs and dealership groups, with existing dealer launches potentially opening broader deployments within those groups. For fiscal 2027, NetSol expects revenue growth of 13% to 16% over fiscal 2026, gross margin of approximately 50% or better, and consolidated adjusted EBITDA growth of 15% to 25%, equivalent to approximately $10.5 million to $11.4 million. The outlook assumes continued subscription growth, execution on contracted implementations, disciplined cost management and no material acquisitions. Management said quarterly results may vary due to agreement timing, implementation milestones, foreign exchange, customer decisions and advanced billings. NetSol said its priorities include scaling Transcend Retail in the U.S., embedding AI across products and operations, upgrading its legacy customer base to Transcend and expanding alongside customers entering new markets. The company is also evaluating strategic options related to minority interests in its Pakistan business, though Abubakr said no transaction has been approved and no outcome can be assured. NetSol Technologies, Inc is a global provider of enterprise software and technology services for the asset finance and leasing industry. The company develops solutions that help banks, manufacturers, equipment lessors and other finance companies manage leasing and lending operations, including contract administration, credit and risk processes, asset management, billing, collections and reporting. Its product portfolio includes the NFS Ascent platform, a configurable solution designed to support the full lifecycle of asset finance and leasing transactions. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "What NetSol Technologies (NTWK) Said on Its Q4 Earnings Call" was originally published by MarketBeat. View MarketBeat's top stocks for September 2026.

ENCINO, Calif., Sept. 18, 2026 (GLOBE NEWSWIRE) -- NETSOL Technologies, Inc. (Nasdaq: NTWK), a provider of AI-enabled solutions and services powering OEMs, dealerships and financial institutions to sell, finance and lease assets, will hold a conference call on Monday, September 28, 2026, at 9:00 am Eastern Time (6:00 am Pacific Time) to discuss its financial results for the fourth quarter and full fiscal year ended June 30, 2026. A question-and-answer session will follow management's prepared remarks. Date: Monday, September 28, 2026Time: 9:00 am Eastern Time (6:00 am Pacific Time)Participant listening: 1-877-407-0789 or 1-201-689-8562 The conference call will also be broadcast live and available for replay here (the link will be made active 15 minutes prior to scheduled start time), along with additional replay access being provided through the company information section of NETSOL’s website. Telephone replays will be made available approximately 3 hours after conference end time. Telephone replayReplay dial-In: 1-844-512-2921 or 1-412-317-6671Replay expiration: Monday, October 12, 2026 at 11:59 PM ETAccess ID: 13762610 About NETSOL Technologies NETSOL Technologies delivers state-of-the-art solutions for the asset finance and leasing industry, serving automotive and equipment OEMs, auto captives and financial institutions across over 30 countries. Since its inception in 1997, NETSOL has been at the cutting edge of technology, pioneering innovations with its asset finance solutions, and today leverages advanced AI and cloud services to meet the complex needs of the global market. Renowned for its deep industry expertise, customer-centric approach and commitment to excellence, NETSOL fosters strong partnerships with its clients, ensuring their success in an ever-evolving landscape. With a rich history of innovation, ethical business practices and a focus on sustainability, NETSOL is dedicated to empowering businesses worldwide, securing its position as the trusted partner for leading firms around the globe. Forward-Looking StatementsThis press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the company’s products and services, expectations for future operations, and other statements that are not historical facts. These forward-looking statements may be identified by terminology such as “expects,” “anticipates,” “believes,” “intends,” “plans,” “projects,” “targets,” and similar expressions. These statements are not guarantees of future performance and are subject to a number of risks, uncertainties, and assumptions that are difficult to predict. Factors that could cause actual results to differ materially include, but are not limited to, the timing of customer go-lives and contract renewals, the rate of adoption of AI-enabled product capabilities, foreign currency volatility, and other factors discussed in NETSOL’s most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q filed with the U.S. Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. NETSOL undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. Investor Relations Contact:Investor Relations(818) [email protected]

Shares of NETSOL Technologies, Inc. NTWK have declined 7.4% since the company reported its earnings for the third quarter of fiscal 2026. This compares with the S&P 500 Index’s 0.4% decline over the same time frame. Over the past month, the stock has gained 17.4% compared with the S&P 500’s 5.1% rise. NETSOL reported record third-quarter fiscal 2026 revenues of $19.8 million, up 13% year over year from $17.5 million. Recurring subscription and support revenues increased 11.7% to $8.8 million. In comparison, license fee revenues surged to $4.7 million from just $1,198 in the prior-year quarter, driven by the recognition of a one-time license investment tied to a four-year, $50 million contract extension with a major automotive finance customer. Services revenues declined to $6.3 million from $9.7 million due to project timing and a one-time customer contract amendment benefit recorded in the year-ago quarter. Gross profit rose to $11 million from $8.7 million, with gross margin expanding to 55.6% from 49.8%. GAAP net income attributable to NETSOL slipped slightly to $1.3 million, or 11 cents per diluted share, from $1.4 million, or 12 cents per share, a year earlier. NetSol Technologies Inc. price-consensus-eps-surprise-chart | NetSol Technologies Inc. Quote Management attributed the quarter’s record performance to continued momentum across its Transcend Platform and the strengthening of long-standing customer relationships. The company highlighted the importance of a recently renewed four-year, $50 million contract extension with a tier-one global auto captive customer, identified during the earnings call as Mercedes-Benz. The company said that the renewal provided greater multiyear revenue visibility across subscription, support and services revenue streams. During the quarter, NETSOL also renewed a multimillion-dollar agreement with Investec Bank in the United Kingdom and achieved implementation milestones with customers, including Northridge Finance, a division of Bank of Ireland U.K., and Ford China, both of which went live on the company’s Transcend Finance platform. Subscription and support revenue growth continued to be aided by customer go-lives and contract expansions. Management noted that services revenues moderated because elevated implementation activity from prior periods transitioned into recurring revenue streams. For the first nine months of fiscal 2026, total revenues increased 12.5% year over year to $53.7 million. Recurring subscription and support revenues grew 8.6% to $26.9 million, while license fees climbed to $4.9 million from $75,000 in the prior-year period. Non-GAAP EBITDA for the nine-month period rose to $3.5 million from $1.9 million a year earlier. NETSOL continued to emphasize artificial intelligence integration across its products. Management said that the company’s AI-enabled credit decisioning engine within the Transcend Finance platform allows customers to accelerate credit approvals using AI reasoning and agentic workflows while maintaining human oversight. The company also introduced an AI-native intelligent document processing solution combining optical character recognition and large language model technology to automate extraction and analysis of financial documents. In digital retail, management pointed to increasing adoption of Transcend Retail among BMW dealerships in the United States. The company said that it sees the opportunity to deploy the platform across nearly 350 BMW dealership locations over a two-year period and described the current dealer pipeline as robust. NETSOL posted notable profitability improvements during the quarter. Non-GAAP EBITDA increased 48.2% year over year to $3.4 million, while EBITDA margin expanded to 17.2% from 13.1%. Chief financial officer Sardar Abubakr said that margin gains reflected the company’s focus on profitable growth and a higher mix of recurring revenues. He also disclosed that the company recorded a one-time $0.4 million charge related to Pakistan’s super tax regime following retrospective tax adjudication developments. Cash and cash equivalents totaled $14.7 million as of March 31, 2026, down from $17.4 million as of June 30, 2025. Accounts receivable rose sharply to $16.6 million from $7.5 million, largely due to billing timing associated with the major customer contract renewal. Management said those receivables have since converted to cash in the normal course of business. NETSOL reaffirmed its fiscal 2026 revenue guidance of approximately $73 million, with management later narrowing the range to $73-$74 million during the earnings call. The company forecast annualized recurring revenues exiting the third quarter at approximately $35 million, up 7% from the prior-year period. Management said that its outlook continues to be supported by long-term customer relationships, growth in recurring revenues and expansion of embedded AI capabilities across the Transcend platform. During the earnings call, management indicated that NETSOL remains interested in acquiring the remaining minority stake in its Pakistani subsidiary, which currently contributes non-controlling interest adjustments to earnings. CEO Najeeb Ghauri said that the company considers a full acquisition a “top priority” but is still evaluating financing options. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NetSol Technologies Inc. (NTWK) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). 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This article first appeared on GuruFocus. Total Net Revenues (Q3 2026): $19.8 million, highest quarterly revenue in company history, up from $17.5 million in the prior year period. Recurring Subscription and Support Revenue (Q3 2026): $8.8 million, an increase of approximately 11.7% year-over-year. License Fees (Q3 2026): $4.7 million, compared with just over $1,000 in the prior year period. Services Revenues (Q3 2026): $6.3 million, down from $9.7 million in the prior year period. Gross Profit (Q3 2026): $11 million or 55.6% of net revenues, compared with $8.7 million or 49.8% in the prior year period. Non-GAAP Adjusted EBITDA (Q3 2026): $3.4 million, up from $2.3 million in the prior year period. GAAP Net Income (Q3 2026): $1.3 million, or $0.11 per diluted share, compared with $1.4 million, or $0.12 per diluted share, in the prior year period. Total Net Revenues (Nine Months Ended March 31, 2026): $53.7 million, an increase of 12.5% over the prior year period. Cash and Cash Equivalents (March 31, 2026): $14.7 million, compared with $17.4 million at June 30, 2025. Full-Year Fiscal 2026 Revenue Guidance: Approximately $73 million to $74 million. Warning! GuruFocus has detected 3 Warning Sign with SBC. Is NTWK fairly valued? Test your thesis with our free DCF calculator. Release Date: May 14, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. NETSOL Technologies Inc (NASDAQ:NTWK) reported record quarterly revenue of $19.8 million, marking the highest in the company's history. Recurring subscription and support revenue grew by approximately 11.7% year-over-year, indicating strong ongoing demand. The company executed a $50 million four-year contract extension with Mercedes-Benz, reinforcing long-term customer relationships. Successful go-lives with Northridge Finance and Ford China on the Transcend Finance platform demonstrate the scalability and geographic reach of their solutions. The introduction of AI-enabled credit decisioning and intelligent document processing solutions highlights NETSOL's commitment to integrating advanced technologies into their offerings. Services revenue decreased to $6.3 million from $9.7 million in the prior year period, primarily due to the timing and composition of current implementation projects. A one-time impact related to Pakistan's super tax regime resulted in a charge of approximately $0.4 million, affecting net income. Foreign currency movements resulted in a loss of approximately $0.1 million in the quarter, compared to a gain in the prior year period. Cash and cash equivalents decreased to $14.7 million from $17.4 million at the end of June 2025, due to changes in working capital. The company faces macroeconomic and currency dynamics that could impact future performance, although they remain confident in their diversified business model. Q: Congratulations on a great quarter. Is the revenue and margin growth sustainable, or was it mainly due to the one-time license fee collected this quarter? A: Najeeb Ghauri, CEO, responded that the growth is sustainable due to a strong and healthy pipeline, with interest from both new and existing customers. Q: Your Pakistani subsidiary had a strong quarter. Are there any discussions about fully acquiring them? A: Najeeb Ghauri, CEO, confirmed that acquiring the remaining 30% of the Pakistani subsidiary is a top priority, which would strengthen NetSol's financials. Q: How exposed is NetSol to the China auto finance weakness and global auto sales trends? A: Najeeb Ghauri, CEO, stated that NetSol is not significantly exposed due to a solid customer base and strong teams in Beijing and Tianjin, supported by back offices in Lahore, Pakistan. Q: Are there verticals outside of automotive that could significantly impact NetSol in the coming years? A: Najeeb Ghauri, CEO, mentioned the potential for double-digit organic growth and the exploration of M&A opportunities, particularly in the US market, to expand their footprint. Q: Can you provide more details on the AI initiatives and their impact on NetSol's offerings? A: Najeeb Ghauri, CEO, explained that AI is embedded into workflows, such as the AI-enabled credit decisioning engine, which accelerates credit decisions and improves underwriting throughput. They are also working on AI-native intelligent document processing solutions. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Achieved record quarterly revenue of $19.8 million, attributed to the successful unification of products under the Transcend platform and deepening customer relationships. Growth in recurring subscription and support revenue, which rose approximately 11.7%, was bolstered by successful go-lives with Northridge Finance in the UK and Ford China. The Transcend Retail solution is seeing strong demand in the US BMW dealership market, with management targeting expansion to approximately 350 locations over a two-year timeframe. Strategic differentiation is being driven by embedding AI directly into existing workflows, such as the AI-enabled credit decisioning engine, rather than offering standalone features. Services revenue experienced a moderation compared to the prior year due to the transition of implementation projects into recurring revenue streams and the absence of a one-time prior-year contract amendment. Management attributes improved gross margins of 55.6% to a higher mix of license fees and the continued scaling of the subscription-based model. Reaffirmed full-year fiscal 2026 revenue guidance of approximately $73 million to $74 million based on current pipeline visibility. Anticipates continued double-digit organic growth by focusing on the US dealer market and expanding the unified Transcend platform's AI capabilities. Management is actively evaluating M&A opportunities as a secondary lever to specifically accelerate the growth of the US business footprint. The company expects the current pattern of revenue and margin improvement to persist, supported by a healthy pipeline and interest from both new and existing customers. Recognized a one-time $400,000 charge related to a retrospective adjudication of the Pakistan super tax regime, which impacted net income but not core operations. Working capital movements and a decrease in cash were primarily driven by the timing of annual maintenance billings and large customer collection cycles. Management noted that while macroeconomic and currency dynamics remain a consideration, the diversified global model provides a hedge against regional volatility. A significant portion of the quarter's revenue spike was driven by a $50 million, four-year renewal with a Tier 1 auto captive client. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management believes the growth pattern is sustainable and not just a result of one-time fees, citing a very healthy pipeline and strong interest from new customers. Acquiring the remaining 30% of the Pakistani subsidiary is a top priority for management to strengthen the parent company's top and bottom lines. The timing of the buyout is dependent on managing financing to complete the transaction. Management expressed confidence despite macro headwinds, stating that customers are highly dependent on NetSol's products and services. Operations in China are supported by local teams in Beijing and Tianjin, with back-office support from Pakistan, mitigating regional operational risks. Beyond automotive, the company is looking at impressive double-digit organic growth and is open to M&A to expand its US footprint. Specific new vertical ideas exist but were not disclosed during the call for competitive reasons.