NetSol(US:NTWK)2020-11-16 15:02Financial Performance - Total net revenues for the three months ended September 30, 2020, were $12,647,378, a decrease of 6.8% from $13,572,416 in the same period of 2019[171]. - Subscription and support fees increased by 12.3% to $5,171,863 for the three months ended September 30, 2020, compared to $4,606,376 in 2019[175]. - Services income rose by 16.4% to $7,472,040 for the three months ended September 30, 2020, compared to $6,418,891 in 2019[176]. - Gross profit increased to $6,381,575, representing a gross profit margin of 50.5%, up from 45.0% in the prior year[178]. - Operating expenses decreased by 18.2% to $5,345,019 for the three months ended September 30, 2020, compared to $6,537,838 in 2019[182]. - Income from operations was $1,036,556 for the three months ended September 30, 2020, compared to a loss of $427,210 in the same period of 2019[185]. - Other income for the three months ended September 30, 2020, was $351,215, a significant increase from an expense of $1,595,811 in 2019[186]. - Net income attributable to NetSol for the three months ended September 30, 2020, was $717,554, compared to a loss of $1,827,947 in 2019[187]. - The company experienced a foreign currency exchange gain of $296,041 in the three months ended September 30, 2020, compared to a loss of $1,760,190 in the same period of 2019[186]. - Non-controlling interest net income was $405,923 for the three months ended September 30, 2020, compared to a loss of $433,312 in 2019[187]. - Net income for the three months ended September 30, 2020, was $717,554, a significant increase of $2,545,501 compared to a net loss of $1,827,947 for the same period in 2019[188]. - Adjusted EBITDA for the three months ended September 30, 2020, was $1,611,467, compared to a loss of $1,081,007 for the same period in 2019[196]. Cash Flow and Position - Cash position increased to $24,885,365 at September 30, 2020, up from $20,166,830 at June 30, 2020[197]. - Net cash provided by operating activities was $4,711,604 for the three months ended September 30, 2020, compared to $266,080 for the same period in 2019[198]. - Net cash used in investing activities was $517,116 for the three months ended September 30, 2020, compared to $755,167 for the same period in 2019[200]. - The average days sales outstanding decreased slightly to 200 days for the three months ended September 30, 2020, compared to 205 days for the same period in 2019[199]. - The company had current assets of $52,665,475 and current liabilities of $19,713,157 at September 30, 2020[198]. Business Development and Market Trends - NetSol Technologies generated approximately $1.3 million from successfully implementing change requests from various customers across multiple regions[168]. - NFS Ascent SaaS offering is gaining traction in mid-size auto captives in North America and Europe[169]. - A leading captive finance company of a notable U.S. based auto manufacturer went live with LeasePak cloud[168]. - Daimler Financial Services went live with NFS Ascent Retail Platform in Singapore, involving a multi-tenancy setup[168]. - Otoz platform is showing positive interest from existing and new auto leasing and Tier 1 companies in markets including China, the US, and Europe[169]. - The company has identified both positive trends, such as increased demand for cloud solutions, and negative trends, including a major slowdown in the auto sector due to lockdowns[169]. - COVID-19 has created new opportunities for R&D teams to expand and monetize mobile and digital solutions[169]. - The global outlook for the auto sector remains uncertain due to the recessionary impact of COVID-19[169]. - Capital expenditure needs for the next 12 months are anticipated to be $2 million for new business development activities and infrastructure enhancements[204]. - The company remains open to strategic relationships that would provide value-added benefits while focusing on improving cash reserves internally[203]. - The China Pakistan Economic Corridor (CPEC) investment has exceeded $62 billion, boosting confidence in trade relations[169]. Compliance and Financial Health - The company is in compliance with all financial covenants associated with its borrowings as of the date of the report[207].