NTWK

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.

ENCINO, Calif., May 14, 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 third quarter of fiscal 2026 and nine months ended March 31, 2026. Total net revenues up 13.0% year-over-year to $19.8 million, the highest quarterly revenue in company history Recurring subscription and support revenues up 11.7% year-over-year to $8.8 million Annualized recurring revenue forecasted up 7% year-over-year to $35 million Gross margin expanded to 55.6% from 49.8% in the prior-year period Non-GAAP EBITDA grew by 48.2% year-over-year to $3.4 million, for a 17.2% EBITDA margin compared with 13.1% in the prior-year period Reaffirmed fiscal 2026 full-year revenue guidance of $73 million Third Quarter Fiscal 2026 Financial Results Total net revenues for the third quarter of fiscal 2026 were $19.8 million, a record for the company, compared with $17.5 million in the prior-year period, an increase of 13.0%. Recurring subscription and support revenues for the third quarter were $8.8 million, an increase of 11.7%, compared with $7.9 million in the prior-year period. License fees for the third quarter were $4.7 million, compared with $1,198 in the prior-year period. The increase reflected higher license fees associated with the recognition of a one-time license investment from a four-year, $50 million contract extension with one of NETSOL’s longest-tenured tier-one global auto captive customers. Services revenues for the third quarter were $6.3 million, compared with $9.7 million in the prior-year period, primarily reflecting the timing and composition of current implementation projects, as well as a one-time approximately $2.4 million pickup in the prior-year period associated with a customer contract amendment. Gross profit for the third quarter was $11.0 million or 55.6% of net revenues, compared with $8.7 million or 49.8% of net revenues, in the prior-year period. GAAP net income attributable to NETSOL was $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. Non-GAAP EBITDA was $3.4 million, compared with $2.3 million in the prior-year period (see note regarding “Use of Non-GAAP Financial Measures,” below). Nine Months Ended March 31, 2026 Financial Results Total net revenues for the nine months ended March 31, 2026 were $53.7 million, compared with $47.7 million in the prior-year period, an increase of 12.5%. Recurring subscription and support revenues for the nine months were $26.9 million, an increase of 8.6%, compared with $24.7 million in the prior-year period. Annualized recurring revenue is forecasted to increase 7% to approximately $35 million in the third quarter, compared with approximately $32.9 million in the prior-year period. License fees for the nine months were $4.9 million, compared with $75,000 in the prior-year period. Services revenues for the nine months were $21.9 million, compared with $22.9 million in the prior-year period. Gross profit for the nine months was $26.0 million or 48.4% of net revenues, compared with $22.2 million or 46.6% of net revenues, in the prior-year period. GAAP net loss attributable to NETSOL was $0.8 million or $(0.07) per diluted share, compared with GAAP net income of $0.3 million or $0.03 per diluted share, in the prior-year period. Non-GAAP EBITDA was $3.5 million, compared with $1.9 million in the prior-year period (see note regarding “Use of Non-GAAP Financial Measures,” below). Balance Sheet Cash and cash equivalents were $14.7 million at March 31, 2026, compared with $17.4 million at June 30, 2025. The change reflects the working capital impact of the four-year, $50 million contract renewal, including the timing of collection of the related annual maintenance fee invoice issued in January 2026. Working capital was $25.3 million at March 31, 2026. NETSOL stockholders’ equity was $37.2 million or $3.14 per share at March 31, 2026. Management Commentary Najeeb Ghauri, Founder and Chief Executive Officer of NETSOL Technologies Inc., commented: “Our third quarter was a record quarter for NETSOL, with $19.8 million in total net revenues, the highest quarterly revenue in our company’s history. The performance reflects the depth of our largest customer relationships, the continued momentum we are seeing across our unified, AI-enabled Transcend Platform and the long-term value we are creating as we extend our reach across asset finance and digital retail.” “The recognition of the one-time license investment associated with our four-year, $50 million contract extension with a tier-one customer of over 30 years is a tangible demonstration of the strategic importance of our long-tenured partnerships.” “Demand for Transcend Retail, our digital retail solution for dealerships and OEMs, continues to build, and the product is becoming a meaningful contributor to our recurring revenue. In fiscal 2026, we have added new dealer group customers and we are encouraged by the breadth and quality of our pipeline.” “On AI, we continue to embed capabilities directly into the workflows our customers run inside the Transcend Platform. Our AI-enabled credit decisioning module within Transcend Finance is available to customers running originations on Transcend Finance, where it uses AI reasoning and agentic workflows to accelerate the pace of credit decisions, with consistency and human oversight built in. This is the model for how we will continue to integrate AI inside our products to enhance existing customer workflows, tied to measurable customer outcomes.” “Looking ahead, we are reaffirming our full-year fiscal 2026 revenue guidance of approximately $73 million. We remain focused on extending the depth of our largest customer relationships, continuing to expand the Transcend Platform with embedded AI capabilities and accelerating the growth of Transcend Retail in the U.S. dealer market.” Sardar Abubakr, Chief Financial Officer of NETSOL Technologies Inc., commented: “Our third quarter results reflect continued profitable growth on a record $19.8 million in total net revenues. Recurring subscription and support revenue grew 11.7%, gross margin expanded to 55.6% and Non-GAAP EBITDA was $3.4 million, a 17.2% increase from the prior-year period.” “For the nine months ended March 31, 2026, total net revenues grew 12.5% to $53.7 million and Non-GAAP EBITDA increased to $3.5 million from $1.9 million in the prior-year period. Our balance sheet reflects the timing of invoicing for the renewal of our largest customer contract, with accounts receivable up to reflect the annual maintenance fee that was invoiced in January. These receivable balances have since converted to cash in the normal course of business.” “With continued growth in recurring revenue, expanding gross margins and multi-year customer contracts, we remain focused on strengthening the durability and quality of our revenue base while supporting long-term shareholder value creation.” Conference Call NETSOL Technologies management will hold a conference call on Thursday, May 14, 2026, at 9:00 am Eastern Time (6:00 am Pacific Time) to discuss its results for the third quarter and nine months ended March 31, 2026. A question-and-answer session will follow management’s prepared remarks. Participant listening: 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: Thursday, May 28, 2026, at 11:59 PM ET Access ID: 13760296 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 1996, 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 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, 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. Use of Non-GAAP Financial Measures This press release includes references to Non-GAAP EBITDA, which is a non-GAAP financial measure. A reconciliation of Non-GAAP EBITDA to net income attributable to NETSOL, the most directly comparable GAAP measure, together with an explanation of how management uses these measures, is provided in Schedule 4 of the financial tables that follow. Investor Relations Contact: Investor Relations (818) 222-9195 [email protected]

ENCINO, Calif., May 06, 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 Thursday, May 14, 2026, at 9:00 am Eastern Time (6:00 am Pacific Time) to discuss its financial results for the fiscal third quarter of 2026 ended March 31, 2026. Following the call, management will host a question-and-answer session. Date: Thursday, May 14, 2026 Time: 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 replay Replay dial-in: 1-844-512-2921 or 1-412-317-6671 Replay expiration: Thursday, May 28, 2026 at 11:59 PM ET Access ID: 13760296 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 1996, 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 Statements This press release may contain forward-looking statements relating to the development of the Company's products and services and future operation results, including statements regarding the Company that are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. The words “expects,” “anticipates,” variations of such words, and similar expressions, identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, but their absence does not mean that the statement is not forward-looking. These statements are not guarantees of future performance and are subject to certain risks, uncertainties, and assumptions that are difficult to predict. Factors that could affect the Company's actual results include the progress and costs of the development of products and services and the timing of the market acceptance. The subject Companies expressly disclaim any obligation or undertaking to update or revise any forward-looking statement contained herein to reflect any change in the company's expectations with regard thereto or any change in events, conditions or circumstances upon which any statement is based. Investor Relations Contact: Investor Relations (818) 222-9195 [email protected]

NETSOL Technologies NTWK reported a solid second-quarter fiscal 2026, highlighted by double-digit year-over-year revenue growth, improved margins and a return to operating profitability. Strength in implementation activity and steady subscription growth drove the results, while management raised its full-year revenue outlook. Total net revenues for the fiscal second quarter ended Dec. 31, 2025, rose 21.1% to $18.8 million from $15.5 million in the prior-year period. The rally was primarily fueled by service revenues, which jumped 40.9% to $9.6 million, reflecting active implementations and project timing. Recurring subscription and support revenues increased 5.1% to $9.1 million. Subscription and support revenues accounted for 48.3% of the total revenues in the quarter compared with 55.6% in the prior year, as services made up a larger portion of the revenue mix. Gross profit improved to $9 million, representing 48% of net revenues, from 44.5% in the year-ago quarter. Cost of sales increased to $9.8 million, primarily reflecting higher salaries and travel expenses, but operating leverage more than offset the higher cost base. Income from operations totaled $1.3 million against a loss of $0.5 million in the prior-year quarter. On the bottom line, GAAP net income attributable to NETSOL was $0.2 million, or 2 cents per diluted share, against a loss of $1.1 million, or 10 cents per diluted share, a year ago. Non-GAAP EBITDA improved to $1.7 million from a loss of $0.8 million in the prior-year period. For the six months ended Dec. 31, 2025, total net revenues rose to $33.8 million from $30.1 million in the prior-year period. Recurring subscription and support revenues increased 7.2% year over year to $18 million, while service revenues climbed 17.9% to $15.6 million. Gross profit for the first half was $14.9 million, or 44.2% of revenues. Despite improved operating trends, GAAP net loss attributable to NETSOL widened to $2.1 million, or 18 cents per diluted share, from a loss of $1.1 million, or 9 cents per diluted share, in the prior-year period. NETSOL ended the quarter with cash and cash equivalents of $18.1 million, up from $17.4 million at June 30, 2025. Working capital stood at $26.4 million, while total stockholders’ equity was $35.9 million, or $3.04 per diluted share. Management highlighted a current ratio of 2.3, underscoring balance sheet strength and liquidity flexibility. Management emphasized implementation activity as a leading indicator of future recurring revenue growth. In the quarter, the company launched “Check,” an AI-enabled credit decisioning engine embedded within its loan origination platform. NETSOL also secured a $50-million, four-year contract extension with a Tier 1 global auto captive, reinforcing long-term revenue visibility. Executives stated that AI investments are being deployed both within the product portfolio and across internal operations to enhance efficiency and scalability. Encouraged by first-half execution and pipeline visibility, management raised its fiscal 2026 revenue guidance to $73 million or better. Leadership cited multi-year contracts, recurring revenue base expansion and continued investment in its AI-enabled Transcend platform as key drivers supporting the upgraded outlook. NETSOL’s second-quarter fiscal 2026 reflected a meaningful shift toward operating profitability, supported by strong services growth and an improved gross margin. While subscription growth was more moderate, implementation momentum, AI-driven product expansion and a strengthened revenue outlook suggest management is positioning the company for sustained top-line expansion and margin improvement in the second half of fiscal 2026. 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

This article first appeared on GuruFocus. Total Net Revenues: Increased 21.1% to $18.8 million compared with $15.5 million in the prior year period. Services Revenue: Increased 40.9% to $9.6 million compared with $6.8 million in the prior year period. Subscription and Support Revenues: Increased approximately 5.1% to $9.1 million compared with $8.6 million in the prior year period. Gross Profit: $9 million or 48% of net revenues. Cost of Sales: $9.8 million or 52% of net revenues. Income from Operations: $1.3 million compared with a loss from operations of $0.5 million in the prior year period. EBITDA: $1.7 million compared with a loss of $0.8 million in the prior year period. Cash and Cash Equivalents: $18.1 million at December 31, 2025. Working Capital: $26.4 million. NetSol Stockholders' Equity: $35.9 million or $3.04 per share. Warning! GuruFocus has detected 3 Warning Signs with BOM:544296. Is NTWK fairly valued? Test your thesis with our free DCF calculator. Release Date: February 12, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Total net revenues increased by 21% year-over-year to $18.5 million, driven by higher services revenues and growth in recurring subscription and support revenues. Services revenue grew by 41%, primarily from new implementations from major customers. The company launched 'Check', an AI-enabled credit decisioning engine, which is expected to modernize credit underwriting and expand long-term revenue opportunities. A $50 million 4-year contract extension with a Tier 1 global auto captive was secured, reinforcing customer trust and providing meaningful revenue visibility. The company reported a strong balance sheet with a current ratio of 2.3, reflecting strong liquidity and substantial flexibility for growth initiatives. Cost of sales increased to $9.8 million, reflecting increased salaries and travel costs, although the margin has improved. GAAP net loss attributable to NetSol for the six months totaled $2.1 million, compared to a GAAP net loss of $1.1 million in the prior year period. Non-GAAP EBITDA for the six months ended December 31, 2025, was a loss of $0.1 million, indicating ongoing challenges in achieving profitability. The company faces macroeconomic and currency dynamics that remain a consideration for future performance. Non-controlling interest took a significant chunk out of earnings per share, impacting overall profitability. Q: Congratulations on a great quarter. I wanted to ask about your margins. Do you expect continued margin improvement, and where do you think your margins will stabilize?A: Najeeb Ghauri, CEO: We anticipate improving margins in the coming quarters and the next fiscal year. We are continuously investing in our growth strategy, which includes travel, new employees, and building new platforms. Naeem Ghauri, President, added that new hires are primarily in AI teams, and there is an aggressive plan to cross-train the existing workforce across all departments. Q: I wanted to ask about the noncontrolling interest and how that is computed. It took a big chunk out of our earnings per share this quarter.A: Sardar Abubakr, CFO: We follow standard GAAP definitions for noncontrolling interest. The Pakistani subsidiary is majority-owned, but there is a 30% minority interest. Roger Almond, Chief Accounting Officer, added that 30% of the subsidiary's profit is allocated to the noncontrolling interest, following GAAP processes. Q: Have you thought about allocating some of the $18 million in cash to either a stock buyback or a small dividend?A: Roger Almond, Chief Accounting Officer: We did a buyback a couple of years ago and are open to the same approach. Any decision will be made with the Board, and we will update accordingly. Q: Can you provide more details on the strategic progress made during the quarter?A: Najeeb Ghauri, CEO: We launched our AI-enabled credit decisioning engine, Check, and extended a $50 million 4-year contract with a Tier 1 global auto captive. We also gained traction in the US market with Transcend Retail, signing new dealer groups and franchised dealerships. Q: How is AI being integrated into your operations and products?A: Naeem Ghauri, President: AI is embedded across the Transcend platform and internal operations. We have built a shared AI layer with reusable components and governance, allowing consistent deployment across products. AI is integrated into our product development lifecycle, supported by dedicated teams and shared tooling. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Shares of NetSol Technologies, Inc. NTWK have declined 1.8% since reporting results for the second quarter of fiscal 2026. This compares with the S&P 500 index’s 1.5% dip over the same time frame. Over the past month, the stock has lost 15% compared with the S&P 500’s 1.9% fall. NetSol reported second-quarter fiscal 2026 total net revenues of $18.8 million, up 21.1% from $15.5 million in the prior-year period. Higher services and recurring subscription revenues drove the rise. Recurring subscription and support revenues increased 5.1% year over year to $9.1 million from $8.6 million, while services revenues climbed 40.9% to $9.6 million from $6.8 million. Gross profit rose to $9 million, representing 48% of net revenues, compared with $6.9 million, or 44.5%, a year earlier. Operating income totaled $1.3 million against an operating loss of $0.5 million in the prior-year quarter. On the bottom line, GAAP net income attributable to NetSol was $0.2 million, or 2 cents per diluted share, against a net loss of $1.1 million, or 10 cents per diluted share, in the year-ago period. NetSol Technologies Inc. price-consensus-eps-surprise-chart | NetSol Technologies Inc. Quote The company’s revenue mix shifted during the quarter. Subscription and support revenues accounted for 48.3% of total net revenues, down from 55.6% in the prior-year period, reflecting a higher contribution from implementation services. For the first half of fiscal 2026, total net revenues rose to $33.8 million from $30.1 million a year earlier, with recurring subscription and support revenues up 7.2% to $18 million and services revenues up 17.9% to $15.6 million. For the first half of fiscal 2026, gross profit was $14.9 million, or 44.2% of net revenues, compared with $13.5 million, or 44.8%, in the prior-year period. The GAAP net loss attributable to NetSol for the six months widened to $2.1 million, or 18 cents per diluted share, from $1.1 million, or 9 cents per diluted share, a year ago. NetSol ended the quarter with cash and cash equivalents of $18.1 million, up from $17.4 million at June 30, 2025. Working capital was $26.4 million, and total stockholders’ equity stood at $35.9 million, or $3.04 per diluted share, underscoring a stable liquidity position. Chief executive officer Najeeb Ghauri characterized the quarter as strong, highlighting 21% revenue growth and a 41% service revenue increase, driven by the active implementations of the company’s Transcend Finance and Transcend Retail platforms. He noted that implementation momentum is viewed as a leading indicator of future subscription scale. Management pointed to traction in the U.S. automotive market for Transcend Retail, with adoption by dealer groups and franchised dealerships, and emphasized ongoing investments in AI-enabled capabilities, such as “Check,” an AI-powered credit decisioning tool integrated into its loan origination system. During the earnings call, management reiterated confidence in margin improvement and operating leverage as investments in AI and new hires begin to scale. Executives also discussed the impacts of non-controlling interest from the Pakistani subsidiary, where approximately 30% of subsidiary earnings are allocated to minority shareholders under GAAP consolidation rules. Revenue growth was largely influenced by the implementation timing and project mix, particularly in services. The increase in cost of sales, which rose to $9.8 million from $8.6 million year over year, primarily reflected higher salaries and travel expenses. Despite these cost pressures, the gross margin expanded by 350 basis points to 48%, reflecting improved operating efficiency and scale. Foreign currency movements contributed a modest gain in the quarter compared with a loss in the prior-year period, according to management commentary. Non-GAAP EBITDA improved to $1.7 million from a loss of $0.8 million a year earlier, indicating strengthened operating performance. Management raised its fiscal 2026 revenue growth guidance to nearly $73 million or better, supported by its current pipeline and ongoing investment in go-to-market initiatives and its AI-enabled Transcend platform. While acknowledging macroeconomic and currency considerations, leadership expressed confidence in achieving full-year objectives based on recurring revenues and multi-year contracts. In the second quarter of fiscal 2026, NetSol announced a leadership transition, appointing Sardar Abubakr as the chief financial officer, with Roger Almond transitioning to the chief accounting officer. Management described the changes as part of strengthening governance and financial oversight to support the company’s next phase of growth. 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

Revenue growth of 21% was primarily catalyzed by a 41% surge in services revenue, stemming from new implementations for major global customers. Management views current service implementations as a pipeline for future high-margin recurring subscription and support revenue as clients transition to go-live phases. The company secured a $50,000,000 four-year contract extension with a global tier-one auto captive, providing significant long-term revenue visibility and validating platform scalability. Strategic expansion in the U.S. market is gaining momentum through the Transcend Retail platform, specifically targeting new dealer groups and franchised dealerships. Operational focus has shifted toward embedding AI horizontally across the Transcend platform to drive measurable ROI through intelligent automation and agentic workflows. The launch of 'Check,' an AI-enabled credit decisioning engine, represents a move toward high-margin product extensions that modernize traditional underwriting processes. Profitability improvements were supported by enhanced operating leverage and gross margin expansion, despite increased investments in human capital and travel. Full-year fiscal 2026 revenue guidance has been increased to nearly $73,000,000 or better, supported by a robust pipeline and unified AI-enabled platform investments. Management anticipates continued margin improvement in upcoming quarters as new hires reach full productivity and internal AI-driven efficiencies materialize. The company is executing an aggressive six-month plan to cross-train the entire global workforce in AI capabilities to drive a total organizational transformation. Future pricing strategies may include value-based models for specific AI-enabled capabilities to capture a share of the operational impact delivered to clients. Guidance assumes a stable demand environment for digital automotive retail solutions, though management remains cautious regarding macroeconomic and currency volatility. The company maintains a strong liquidity position with a current ratio of 2.3, providing flexibility for future growth initiatives and potential capital allocation. A significant portion of net income is allocated to non-controlling interests due to the 70/30 ownership structure of the highly profitable Pakistan subsidiary. Recent increases in cost of sales were attributed to strategic investments in specialized AI talent and increased travel for global customer engagement. Management is evaluating potential capital return strategies, such as stock buybacks or dividends, subject to board approval and growth investment requirements. 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. Management expects gross and net margins to continue improving as recent investments in AI teams and global travel begin to yield operational leverage. The company is currently in 'phase one' of a major internal transformation aimed at improving productivity across every department through AI integration. The $715,000 impact this quarter reflects the 30% profit share of the Pakistan subsidiary held by minority interests under GAAP consolidation rules. While the subsidiary's high profitability increases total consolidated revenue, it also results in a larger bottom-line deduction for the minority share. Management acknowledged the stock is trading near book value and stated they are open to repeating past buyback approaches. Any decision regarding dividends or buybacks remains a matter for board discussion, balancing shareholder returns with growth investments. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here.

ENCINO, Calif., Feb. 12, 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 second fiscal quarter of 2026 and six months ended December 31, 2025. Total net revenues up 21.1% to $18.8 million Services revenues up 40.9% to $9.6 million Recurring subscription and support revenues up 5.1% to $9.1 million Gross margin expanded to 48.0% (from 44.5%) Operating income was $1.3 million (vs. loss of $0.5 million) Cash and cash equivalents up 4.0% to $18.1 million Second Quarter 2026 Financial Results Total net revenues for the second quarter of fiscal 2026 increased 21.1% to $18.8 million, compared with $15.5 million in the prior-year period, driven primarily by higher services revenues and higher subscription and support revenues. On a constant currency basis, total net revenues were $18.8 million. Recurring subscription and support revenues increased approximately 5.1% to $9.1 million compared with $8.6 million in the prior-year period. Total subscription and support revenues as percentage of total net revenues were 48.3%, compared with 55.6% in the prior-year period, reflecting higher implementation services revenues in the quarter. Total subscription and support revenues on a constant currency basis were $9.2 million. Total services revenues increased 40.9% to $9.6 million, compared with $6.8 million in the prior-year period. The increase primarily reflected implementation timing and project mix. Total services revenues on a constant currency basis were $9.6 million. Gross profit for the quarter was $9.0 million or 48.0% of net revenues, compared with $6.9 million or 44.5% of net revenues in the second quarter of fiscal 2025. On a constant currency basis, gross profit was $9.0 million or 47.8% of net revenues. Cost of sales for the quarter was $9.8 million or 52.0% of net revenues compared with $8.6 million or 55.5% of net revenues in the second quarter of fiscal 2025. On a constant currency basis, cost of sales was $9.8 million or 52.2% of net revenues. The increase in cost of sales primarily reflected increased salaries and travel costs. Income from operations for the quarter was $1.3 million compared with a loss from operations of $0.5 million in the second quarter of fiscal 2025. On a constant currency basis, income from operations was $1.3 million. GAAP net income attributable to NETSOL for the quarter totaled $0.2 million or $0.02 per diluted share, compared with a GAAP net loss of $1.1 million or $0.10 per diluted share in the second quarter of fiscal 2025. On a constant currency basis, GAAP net income attributable to NETSOL for the quarter totaled $0.2 million or $0.01 per diluted share. Non-GAAP EBITDA for the quarter was $1.7 million compared with a non-GAAP EBITDA loss of $0.8 million in the second quarter of fiscal 2025. (see note regarding “Use of Non-GAAP Financial Measures,” below for further discussion of this non-GAAP measure). Najeeb Ghauri, Founder and Chief Executive Officer of NETSOL Technologies Inc., commented, “NETSOL delivered a strong second quarter of fiscal 2026, with total net revenues up 21% year-over-year to $18.8 million. Services revenue grew 41%, driven by active implementations of Transcend Finance and Transcend Retail, and we view implementation momentum as an important leading indicator of future subscription scale. “Transcend Retail is gaining meaningful traction in the U.S. automotive market, with adoption by leading dealer groups and franchised dealerships. Partnerships with MINI USA, Sonic Automotive, Indigo Auto Group, and others reflect growing validation of our platform and the outcomes it enables for dealers. “While SaaS revenue growth is currently moderated by the timing of customer go-lives, we believe recurring revenues can accelerate over time as these deployments complete. “We are also investing in AI to extend our product roadmap, including Check, an AI-enabled credit decisioning capability built into our loan origination system, designed to help credit and funding teams work faster and with greater precision by turning data into real-time, actionable decisions.” Sardar Abubakr, Chief Financial Officer of NETSOL Technologies Inc., commented, “We delivered measurable profitability improvements in the quarter. Gross profit increased to $9.0 million, or 48% of net revenues, up from 44.5% in the prior-year period, and delivered operating income of $1.3 million. “Our priority is to scale efficiently by maintaining cost discipline while investing in the areas that expand long-term earnings quality, including subscription growth and strategic services that support customer adoption. We believe our balance of revenue growth, margin improvement, and targeted investment positions NETSOL to build sustainable shareholder value.” Six Months Ended December 31, 2025, Financial Results Total net revenues for the six months ended December 31, 2025, were $33.8 million, compared with $30.1 million in the prior-year period. On a constant currency basis, total net revenues were $33.5 million. Recurring subscription and support revenues for the six months ended December 31, 2025, increased 7.2% to $18.0 million from $16.8 million in the prior-year period. Total subscription and support revenues on a constant currency basis were $17.9 million. Total services revenues increased 17.9% to $15.6 million from $13.2 million in the prior-year period. Total services revenues on a constant currency basis were $15.5 million. The increase in total services revenues during this period primarily reflected increased implementation services for Transcend Retail and Transcend Finance. Gross profit for the six months ended December 31, 2025, was $14.9 million or 44.2% of net revenues, compared with $13.5 million or 44.8% of net revenues in the prior-year period. On a constant currency basis, gross profit for the six months ended December 31, 2025, was $14.6 million or 43.5% of net revenues as measured on a constant currency basis. Cost of sales for the six months ended December 31, 2025 was $18.9 million or 55.8% of net revenues compared with $16.7 million or 55.3% of net revenues in the prior-year period. On a constant currency basis, cost of sales was $18.9 million or 56.5% of net revenues. Loss from operations for the six months ended December 31, 2025 was $0.5 million compared with a loss from operations of $1.2 million in the prior-year period. On a constant currency basis, loss from operations was $0.8 million. GAAP net loss attributable to NETSOL for the six months ended December 31, 2025, totaled $2.1 million or $0.18 per diluted share, compared with GAAP net loss of $1.1 million or $0.09 per diluted share in the prior-year period. On a constant currency basis, GAAP net loss attributable to NETSOL for the first six months of fiscal 2026 totaled $2.5 million or $0.21 per diluted share. Non-GAAP EBITDA for the six months ended December 31, 2025, was a loss of $0.1 million compared with non-GAAP EBITDA loss of $0.5 million in the prior-year period (see note regarding “Use of Non-GAAP Financial Measures,” below for further discussion of this non-GAAP measure). Balance Sheet and Capital Structure Cash and cash equivalents were $18.1 million as of December 31, 2025, compared with $17.4 million as of June 30, 2025. Working capital was $26.4 million as of December 31, 2025, compared with $26.6 million as of June 30, 2025. Total NETSOL stockholders’ equity at December 31, 2025, was $35.9 million or $3.04 per diluted share. Conference Call NETSOL Technologies management will hold a conference call on Thursday, February 12, 2026, at 9:00 am Eastern Time (6:00 am Pacific Time) to discuss its financial results to discuss these financial results. A question-and-answer session will follow management's presentation. Participant listening: 1-877-407-0789 or 1-201-689-8562 The conference call will also be broadcast live and available for replay here, 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 replay Replay dial-in: 1-844-512-2921 or 1-412-317-6671 Replay expiration: Thursday, February 26, 2026 at 11:59 PM ET Access ID: 13758657 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 1996, 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 Statements This press release may contain forward-looking statements relating to the development of the Company's products and services and future operation results, including statements regarding the Company that are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. The words “expects,” “anticipates,” variations of such words, and similar expressions, identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, but their absence does not mean that the statement is not forward-looking. These statements are not guarantees of future performance and are subject to certain risks, uncertainties, and assumptions that are difficult to predict. Factors that could affect the Company's actual results include the progress and costs of the development of products and services and the timing of the market acceptance. The subject Companies expressly disclaim any obligation or undertaking to update or revise any forward-looking statement contained herein to reflect any change in the company's expectations with regard thereto or any change in events, conditions or circumstances upon which any statement is based. Use of Non-GAAP Financial Measures The reconciliation of Adjusted EBITDA to net income, the most comparable financial measure based upon GAAP, as well as a further explanation of adjusted EBITDA, is included in the financial tables in Schedule 4 of this press release. Investor Relations Contact: Investor Relations (818) 222-9195 [email protected]

Revenue growth of 21% was primarily fueled by a 41% surge in services revenue, driven by large-scale implementations for major customers. Management views current implementation activity as a precursor to long-term recurring revenue, as these projects transition into go-live and expansion phases. The launch of 'Check,' an AI-enabled credit decisioning engine, represents a strategic shift toward high-margin, intelligent automation products within the Transcend platform. A $50 million, 4-year contract extension with a Tier 1 global auto captive provides significant revenue visibility and validates the scalability of the core platform. The company is successfully expanding its U.S. footprint through Transcend Retail, securing new dealer groups and franchised dealerships amid strong demand for digital automotive solutions. Operational improvements led to a return to operating income, supported by gross margin expansion and enhanced operating leverage despite higher salary and travel costs. Full year fiscal 2026 revenue guidance has been increased to nearly $73 million or better, supported by a robust sales pipeline and unified AI platform investments. Management expects continued margin improvement in upcoming quarters as new hires reach full productivity and internal AI-driven efficiencies take hold. The company is executing a major internal transformation phase over the next six months, focusing on cross-training the entire workforce in AI capabilities. Strategic focus remains on transitioning the business model toward higher-margin recurring subscription and support revenues through global scaling. Future growth plans include exploring value-based pricing models for specific AI-enabled capabilities to better capture the ROI delivered to customers. The company maintains a strong liquidity position with a current ratio of 2.3 and $18.1 million in cash, providing flexibility for future growth investments. Leadership transitions included the appointment of Sardar Abubakr as CFO, with former CFO Roger Almond moving to the Chief Accounting Officer role to strengthen governance. Macroeconomic factors and currency dynamics are noted as ongoing considerations that could impact financial results despite the diversified business model. 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. Management confirmed expectations for continued margin expansion, noting that recent cost increases were strategic investments in AI teams and travel for growth. Gross profit margin improved to 48% this quarter from 44.5% in the preceding quarter, signaling positive operating leverage. Management explained that the Pakistani subsidiary is 70% owned by NetSol, meaning 30% of its profits are allocated to minority interests under GAAP. While the subsidiary's high profitability increases consolidated revenue, it also results in a larger noncontrolling interest deduction on the bottom line. In response to a shareholder noting the stock is trading barely above book value, Roger Almond stated the Board is open to considering buybacks or dividends, similar to actions taken a couple of years ago. No definitive commitment was made, but management indicated they would evaluate these options alongside growth investments. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here.