Financial Performance - NetSol Technologies reported a strong performance in the asset finance and leasing sector, serving over 30 countries with advanced AI and cloud solutions[142]. - NetSol's total net revenues for the quarter ended March 31, 2025, were $17.54 million, a 13.4% increase from $15.46 million in the same quarter of 2024[179]. - Subscription and support fees increased to $7.89 million, up 10.5% from $7.14 million year-over-year[184]. - Services income rose to $9.65 million, reflecting a 24.2% increase from $7.77 million in the prior year[185]. - Gross profit for the quarter was $8.74 million, an increase of 17.0% from $7.47 million, with a gross profit margin of 49.8% compared to 48.3% in the previous year[186]. - Net income attributable to NetSol was $1.42 million, a significant increase from $327,549 in the same quarter of 2024, representing a 335.5% year-over-year growth[179]. - Total net revenues for the nine months ended March 31, 2025, were $47,679,116, compared to $44,944,638 for the same period in 2024, an increase of 6.1%[200]. - Gross profit for the nine months ended March 31, 2025, was $22,226,226, compared to $20,812,574 for the same period in 2024, an increase of 6.8%[208]. - Net income was $1,423,968 for the three months ended March 31, 2025, compared to $327,549 for the same period in 2024, representing a significant increase of 334.5%[198]. Revenue Sources - The company’s primary revenue sources include licensing, subscriptions, and support of its Transcend™ Finance applications, which cater to blue-chip organizations and financial institutions[144]. - NetSol is committed to Tier-2 and Tier-3 banks, offering innovative cloud solutions without license fees, enabling rapid deployments and scalability[146]. - The company secured contracts expected to generate approximately $4.4 million in revenues, including $2.7 million from a Chinese leasing company and $1.7 million from a partnership with Sindbad Management SPC[175]. Operational Efficiency - The Transcend™ Platform is an AI-powered solution that automates and optimizes asset sales, financing, and leasing processes, enhancing decision-making through predictive insights[155]. - NetSol's product suite includes advanced tools for loan origination, servicing, and wholesale finance, designed to streamline operations and improve portfolio management[158][160]. - The company emphasizes the importance of hiring and retaining top talent to ensure client satisfaction and successful service delivery[147]. - NetSol's Transcend™ AI Labs focus on integrating advanced AI services into its product offerings, driving innovation in the BFSI and automotive sectors[173]. Cost Management - Salaries and consultant fees increased by $968,018, reflecting annual salary raises, with salaries as a percentage of sales rising from 37.5% to 38.6%[187]. - Travel expenses decreased to $451,895, down 43.5% from $799,560 in the previous year, indicating improved cost management[188]. - Operating expenses increased to $7,188,375 for the three months ended March 31, 2025, compared to $6,156,917 for the same period in 2024, representing a 16.7% increase[190]. - Selling expenses rose to $2,426,083 for the three months ended March 31, 2025, up from $1,830,025 in 2024, an increase of 32.6%[191]. - General and administrative expenses increased to $4,457,504 for the three months ended March 31, 2025, compared to $3,981,310 for the same period in 2024, a rise of 12.0%[193]. - Research and development costs decreased to $304,788 for the three months ended March 31, 2025, down from $345,582 in 2024, a decrease of 11.8%[194]. Cash Flow and Financial Position - Cash position was $18,774,739 at March 31, 2025, compared to $19,127,165 at June 30, 2024[229]. - Net cash provided by operating activities was $6,315 for the nine months ended March 31, 2025, compared to net cash used of $3,602,677 for the nine months ended March 31, 2024[230]. - Accounts receivable decreased from $13,049,614 at June 30, 2024 to $5,443,498 at March 31, 2025[230]. - Revenues in excess of billings increased from $13,638,547 at June 30, 2024 to $15,424,896 at March 31, 2025[230]. - Average days sales outstanding improved to 137 days for the nine months ended March 31, 2025, down from 147 days in the same period of 2024[231]. - Net cash used in investing activities was $843,044 for the nine months ended March 31, 2025, compared to $822,451 for the same period in 2024[232]. - Net cash provided by financing activities increased significantly to $866,299 for the nine months ended March 31, 2025, from $33,612 in the prior year[233]. - Cash, cash equivalents, and marketable securities totaled approximately $18.8 million as of March 31, 2025, down from $19.1 million as of June 30, 2024[234]. Strategic Initiatives - The company has a strong presence in North America, Europe, and Asia Pacific, leveraging its global operations to maintain close customer relationships and market understanding[151]. - NetSol has strategically placed offices worldwide, enhancing its ability to provide localized support and services to clients[149]. - NetSol's commitment to sustainability and ethical business practices positions it as a trusted partner for leading firms globally[143]. - Anticipated capital expenditure needs for the next 12 months are estimated at $1.5 million for new business development and infrastructure enhancements in APAC, the U.S., and Europe[236]. - The UK subsidiary, NTE, has an approved overdraft facility of £300,000 ($389,610) with specific financial covenants related to trade debtors[238]. - NetSol PK has an approved export refinance facility amounting to Rupees 1.3 billion ($4,649,333) with covenants requiring a long-term debt equity ratio of 60:40[238]. - The company is in compliance with all financial covenants associated with its borrowings as of the date of the report[239]. - There have been no significant changes to the company's accounting policies and estimates since the last annual report[240]. - No recent accounting pronouncements have had a material impact on the consolidated financial statements[241].

Core Viewpoint - NETSOL Technologies, Inc. reported solid performance in the third fiscal quarter of 2025, highlighting strong growth in services revenue and subscription business, driven by increasing demand for digital finance solutions [2][10]. Financial Performance - Total net revenues for Q3 FY2025 increased by 13% to $17.5 million, compared to $15.5 million in the prior year [3][10]. - Subscription and support revenues rose by 10% to $7.9 million, while services revenues increased by 24% to $9.7 million [4][5][10]. - Gross profit for the quarter was $8.7 million, representing 50% of net revenues, up from $7.5 million or 48% in Q3 FY2024 [5][10]. - Operating expenses were $7.2 million, accounting for 41% of sales, compared to $6.2 million or 40% in the prior year [6][10]. - GAAP net income attributable to NETSOL was $1.4 million, or $0.12 per diluted share, compared to $328,000, or $0.03 per diluted share in Q3 FY2024 [7][10]. - Non-GAAP EBITDA for Q3 FY2025 was $2.2 million, or $0.19 per diluted share, compared to $767,000, or $0.07 per diluted share in the prior year [8][10]. Balance Sheet and Capital Structure - As of March 31, 2025, cash and cash equivalents were $18.8 million, slightly down from $19.1 million as of June 30, 2024 [9][10]. - Working capital was $23.7 million as of March 31, 2025, compared to $23.6 million as of June 30, 2024 [9][10]. Management Commentary - Management emphasized a focus on innovation and operational efficiency, noting significant contracts signed with financial services providers in Oman and Indonesia, indicating growing client confidence [11][10]. - The company aims to continue executing its strategy for sustainable growth and product innovation while delivering long-term value to shareholders [11][10].

Core Points - NETSOL Technologies, Inc. will hold a conference call on May 14, 2025, at 9:00 AM ET to discuss its financial results for the fiscal third quarter of 2025, which ended on March 31, 2025 [1] - The conference call will include a question-and-answer session following the financial results discussion [1] - The call will be accessible via toll-free and international dial-in numbers, with a replay available approximately three hours after the call ends [2][3] Company Overview - NETSOL Technologies is a global leader in providing advanced solutions for the asset finance and leasing industry, serving clients in over 30 countries [3] - The company has been at the forefront of technology since its inception in 1996, focusing on innovations in asset finance solutions and utilizing AI and cloud services [3] - NETSOL is recognized for its industry expertise, customer-centric approach, and commitment to excellence, fostering strong partnerships with clients [3]

Core Insights - NETSOL Technologies, Inc. has signed a contract with a Chinese leasing company to support its expansion into the Indonesian market, focusing on equipment leasing, asset financing, and commercial leasing [1][7] - The agreement includes the deployment of NETSOL's Transcend Finance, which features the Omni Point of Sale (Omni POS) and Contract Management System (CMS) [2][3] - The partnership allows for a greenfield implementation, enabling a complete redesign of processes tailored to Indonesia's regulatory and operational requirements without the need for data migration [5] Company Overview - NETSOL Technologies is recognized as a global leader in providing advanced solutions for the asset finance and leasing industry, serving clients across over 30 countries [7] - The company has a history of innovation since its inception in 1996, leveraging AI and cloud services to meet complex market needs [7] - NETSOL emphasizes a customer-centric approach and strong partnerships, ensuring client success in a rapidly evolving landscape [7]

Core Insights - NETSOL Technologies, Inc. has appointed Dario Morelli as Vice President of Artificial Intelligence to lead its new innovation hub, Transcend AI Labs, emphasizing the company's commitment to an AI-first strategy in the asset finance and leasing sector [1][5] Group 1: Leadership Appointment - Dario Morelli brings over 15 years of experience in data, analytics, and AI from various industries, including fintech and insurance, enhancing NETSOL's capabilities in AI [2] - Morelli previously led multi-million-dollar AI initiatives at Admiral Group, improving operational efficiency across multiple countries [2] - His experience includes establishing a data analytics team at TrueLayer, which played a crucial role in the company's payments strategy and regulatory compliance [3] Group 2: Strategic Vision - The appointment of Morelli is seen as pivotal for advancing NETSOL's AI-first strategy and reinforcing its innovative position in the industry [5] - Morelli expressed enthusiasm about shaping the future of AI in asset finance, focusing on delivering AI-powered solutions that enhance internal operations and client value [5] - The company aims to leverage AI for transformative changes in operational efficiency and client experiences [5] Group 3: Company Overview - NETSOL Technologies is a global leader in asset finance and leasing solutions, serving clients in over 30 countries since its inception in 1996 [6] - The company is recognized for its technological innovations and commitment to customer success, fostering strong partnerships in a dynamic market [6] - NETSOL emphasizes ethical business practices and sustainability, positioning itself as a trusted partner for leading firms worldwide [6]

Core Insights - NETSOL Technologies, Inc. has launched Transcend AI Labs, an AI innovation hub aimed at enhancing efficiencies and decision-making for automotive and equipment OEMs, dealerships, and financiers [1][6] - The launch includes an interactive AI Assistant and Intelligent Document Processing (IDP) capabilities, which can be utilized as standalone tools or integrated within the Transcend platform [2][4] Group 1: AI Solutions - The AI Assistant supports the asset finance lifecycle by providing instant responses, process guidance, and intelligent recommendations, thereby improving operational efficiency and customer experience [3] - Intelligent Document Processing (IDP) automates data extraction, classification, and validation from financial and legal documents, enhancing accuracy and decision-making across various business functions [4] Group 2: RoleFit AI - RoleFit AI, a product of Transcend AI Labs, is an AI-powered resume grader that can auto-generate job descriptions and grade resumes in bulk, significantly reducing recruitment time [5] Group 3: Consulting Services - NETSOL has expanded its team to provide advanced AI consulting services, helping organizations innovate and automate using advanced technology across various industries, including finance, banking, fintech, and insurance [6][8] Group 4: Future Developments - Additional independent AI solutions are in development, aimed at providing businesses with more advanced and customizable tools to address a wide range of challenges [7]

Company Overview - NETSOL Technologies, Inc. is a global leader in providing advanced solutions for the asset finance and leasing industry, serving automotive and equipment OEMs, auto captives, and financial institutions across over 30 countries [5] - The company has been at the forefront of technology since its inception in 1996, focusing on innovations in asset finance solutions and utilizing advanced AI and cloud services to meet global market needs [5] Recent Developments - NETSOL has signed a contract with Sindbad Management SPC, a major asset financing and leasing company based in Muscat, Oman, marking a significant entry into the Middle East market [1][4] - The agreement involves the deployment of NETSOL's Transcend Finance, which encompasses Point-of-Sale, Credit Underwriting, and Contract Management for end-to-end operations [2] Strategic Insights - The customer opted for a scalable pricing model that aligns with their business growth, ensuring flexibility and cost efficiency as operations expand into multiple countries [3] - The CEO of NETSOL emphasized that this strategic agreement reflects the increasing demand for innovative technology in the asset finance and leasing sector, aiming to enhance operational efficiency and customer service for Sindbad Management SPC [4]

Core Viewpoint - NetSol Technologies, Inc. has experienced a decline in stock price despite reporting revenue growth for the second quarter of fiscal 2025, indicating potential concerns regarding profitability and market performance [1][3]. Revenue & Earnings Performance - For Q2 fiscal 2025, NetSol reported total net revenues of $15.5 million, a 2% increase from $15.2 million year-over-year, driven by a 27% rise in subscription and support revenues to $8.6 million [2] - License fees significantly decreased to $73,000 from $3 million in the prior-year quarter, while service revenues increased by 26% to $6.8 million from $5.4 million [2] Profitability Metrics - The company reported a GAAP net loss of $1.1 million, or 10 cents per diluted share, compared to a net income of $408,000, or 4 cents per diluted share, in the prior-year period [3] - Gross margin declined to 45% from 47% a year ago, and operating expenses rose to 48% of sales from 40%, reflecting increased investments in sales, marketing, and AI initiatives [3] Recurring Revenue Growth & Strategic Investments - Subscription and support revenues accounted for 56% of total sales, up from 45% in the previous year, with a one-time revenue catch-up of $1 million included; excluding this, growth would have been 12% [4] - The company is investing in AI-driven solutions, launching "Transcend AI Labs" to enhance product efficiency and customer interactions [5] Market Expansion & Key Customer Agreements - NetSol's Transcend Retail platform is gaining traction, now being integrated with BMW USA in addition to its existing use by MINI Anywhere USA [6] - The company secured a multi-million-dollar expansion agreement with a customer in China and expanded a deal with a Japanese equipment finance company, highlighting growing demand in the U.S., Europe, and Asia-Pacific [7] Balance Sheet & Cash Position - As of the end of the quarter, NetSol had $21.3 million in cash and cash equivalents, an increase from $19.1 million as of June 30, 2024, with working capital at $23 million [8] Other Developments - NetSol Pakistan approved a buyback of 10 million shares to increase the parent company's ownership, with 2.4 million shares repurchased for $1.3 million as of the earnings call [9] Outlook - Management is optimistic about long-term growth, focusing on recurring revenue and AI-driven enhancements, although near-term profitability is under pressure due to increased investments and fluctuations in license revenues [11]

Business Focus and Strategy - NETSOL Technologies reported a significant focus on AI and cloud services to meet the complex needs of the global asset finance and leasing market[140] - The company serves over 30 countries, providing solutions for automotive and equipment OEMs, auto captives, and financial institutions[140] - NETSOL's primary revenue sources include licensing, subscriptions, and support of its financial applications under the Transcend™ Finance brand[142] - The company emphasizes its commitment to Tier-2 and Tier-3 banks by offering innovative cloud solutions without license fees, enabling rapid deployments[144] - The Transcend™ Platform is an AI-powered solution designed to automate and optimize asset financing processes, enhancing decision-making capabilities[152][153] - NETSOL's product suite includes advanced tools for origination, servicing, and wholesale finance, aimed at improving operational efficiency for financial institutions[156][159] - NETSOL's Transcend™ AI Labs focus on integrating advanced AI services into its product offerings, driving innovation in the BFSI sector[172] - The company has identified material trends affecting its operations, indicating a proactive approach to market dynamics[174] Financial Performance - Total net revenues for the three months ended December 31, 2024, were $15,536,661, a slight increase from $15,237,941 in 2023[179] - Subscription and support fees increased to $8,642,629 for the three months ended December 31, 2024, reflecting a 26.6% increase from $6,827,781 in the same period of 2023[184] - Services income rose to $6,821,344 for the three months ended December 31, 2024, marking a 25.8% increase from $5,419,707 in the prior year[185] - The gross profit decreased to $6,920,341 for the three months ended December 31, 2024, down from $7,175,737 in the same period of 2023, resulting in a gross profit margin decline from 47.1% to 44.5%[186] - Operating expenses increased to $7,407,291 for the three months ended December 31, 2024, compared to $6,148,905 in 2023, representing an increase of 20.5%[190] - The company reported a net loss attributable to NETSOL of $1,147,042 for the three months ended December 31, 2024, compared to a net income of $408,316 in the same period of 2023[179] - Total net revenues for the six months ended December 31, 2024, were $30,135,159, a slight increase from $29,480,122 in the same period of 2023, representing a growth of 2.2%[200] - Subscription and support fees increased to $16,835,100 for the six months ended December 31, 2024, up from $13,340,024 in the same period of 2023, reflecting an increase of 26.2%[206] - Gross profit for the six months ended December 31, 2024, was $13,484,453, compared to $13,337,754 for the same period in 2023, an increase of 1.1%[208] - Loss from operations was $1,247,108 for the six months ended December 31, 2024, compared to income from operations of $1,377,461 in 2023, representing an increase in loss of 90.6%[216] - Net loss attributable to NetSol was $1,076,247 for the six months ended December 31, 2024, compared to net income of $439,206 in 2023, an increase in loss of 244%[219] Expenses and Costs - Selling expenses increased to $2,662,397 for the three months ended December 31, 2024, up from $1,784,510 in the same period of 2023, representing an increase of 49.2%[191] - General and administrative expenses rose to $4,411,225 for the three months ended December 31, 2024, compared to $4,022,984 for the same period in 2023, marking an increase of 9.6%[193] - Research and development costs decreased slightly to $333,669 for the three months ended December 31, 2024, down from $341,411 in the same period of 2023, a decrease of 2.3%[194] - Other expenses totaled $367,642 for the three months ended December 31, 2024, compared to other income of $106,036 in the same period of 2023, reflecting an increase in other expenses of $473,678[196] - Salaries and consultant fees increased to $12,918,171 for the six months ended December 31, 2024, from $11,861,505 in the same period of 2023, an increase of 8.9%[209] - Operating expenses increased to $14,731,561 for the six months ended December 31, 2024, compared to $11,960,293 for the same period in 2023, an increase of 23.2%[212] - Selling expenses rose to $4,954,596 for the six months ended December 31, 2024, up from $3,493,375 in 2023, marking an increase of 41.8%[213] - General and administrative expenses increased to $9,083,347 for the six months ended December 31, 2024, compared to $7,747,088 in 2023, an increase of 17.2%[215] Cash Position and Financing - Cash position improved to $21,270,642 at December 31, 2024, compared to $19,127,165 at June 30, 2024, an increase of 11.2%[228] - Net cash provided by operating activities was $369,716 for the six months ended December 31, 2024, down from $604,684 in 2023, a decrease of 38.8%[229] - Net cash provided by financing activities was $2,637,763 for the six months ended December 31, 2024, compared to net cash used of $27,359 for the same period in 2023[232] - As of December 31, 2024, the company had approximately $21.3 million in cash, cash equivalents, and marketable securities, with about $20 million held by foreign subsidiaries[233] - For the next 12 months, the company anticipates needing $2.5 million for new business development activities and infrastructure enhancements in APAC, U.S., and Europe[235] - The UK subsidiary, NTE, has an approved overdraft facility of £300,000 ($375,000) requiring trade debtors to be at least 200% of the facility amount[237] - NetSol PK has an approved export refinance facility amounting to Rupees 1.3 billion ($4,664,180) and must maintain a long-term debt equity ratio of 60:40[237] - The company is in compliance with all financial covenants associated with its borrowings as of the report date[238] - The company aims to improve cash reserves internally and reduce reliance on external capital raises[234] Employee and Stock Activity - Employees exercised 200,000 options of common stock for $430,000 during the reporting period[232] - The company received bank proceeds of $2,676,932 for the six months ended December 31, 2024, compared to $135,123 in the same period of 2023[232] - NetSol PK paid a dividend of $306,799 to the non-controlling interest during the reporting period[232] Market Trends - The global automotive finance market accounted for $245 billion in 2022 and is expected to more than double by 2035 at a CAGR of 7.4%[175] - The U.S. inflation rate was reported at 2.89% as of January 15, 2025, lower than the long-term average of 3.28%[175] - The company plans to continue investing in building local teams for its core offerings in the strong and resilient U.S. market[175] - Average days sales outstanding decreased from 147 days in 2023 to 140 days in 2024, indicating improved collection efficiency[230]

NetSol Technologies, Inc. (NASDAQ:NTWK) Q2 2025 Earnings Conference Call February 13, 2025 9:00 AM ET Company Participants Patti McGlasson - General Counsel Najeeb Ghauri - Co-Founder, Chief Executive Officer & Chairman Erik Wagner - Chief Marketing Officer Roger Almond - Chief Financial Officer Conference Call Participants Operator Good morning. Welcome to NetSol Technologies Fiscal Second Quarter 2025 Earnings Conference. On the call today are Najeeb Ghauri, cofounder, chief executive officer, and chairma ...