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].
NetSol(NTWK) - 2025 Q3 - Quarterly Report