NETSOL Technologies Reports First Quarter Fiscal 2026 Results; Revenue Up 2.8% Year-Over-Year

Core Insights - NETSOL Technologies, Inc. reported a total net revenue increase of 2.8% year-over-year to $15 million for the fiscal first quarter of 2026, driven by a 9.4% rise in subscription and support revenues [2][9] - The company experienced a GAAP net loss of $2.4 million or $0.20 per diluted share, compared to a net income of $0.071 million or $0.006 per diluted share in the prior year period [5][9] - Management expressed optimism regarding the growth in subscription and support revenues, indicating a solid foundation for long-term stability and profitability despite near-term pressures [9][11] Financial Performance - Total net revenues for Q1 FY2026 were $15 million, up from $14.6 million in the same period last year, with subscription and support revenues reaching $9 million, a 9.4% increase from $8.2 million [2][10] - Gross profit for the quarter was $5.9 million, representing 39.4% of net revenues, down from 45% in the prior year [3] - Operating expenses increased to $7.8 million, or 51.6% of sales, compared to $7.3 million or 50.2% of sales in Q1 FY2025 [4] Losses and Adjusted Metrics - The company reported a loss from operations of $1.8 million for Q1 FY2026, compared to a loss of $0.76 million in the same quarter of the previous year [4] - Non-GAAP EBITDA for the quarter was a loss of $1.8 million, compared to a positive EBITDA of $0.30 million in Q1 FY2025 [6][7] - Non-GAAP adjusted EBITDA also showed a loss of $1.9 million, down from a gain of $0.20 million in the prior year [7] Balance Sheet and Liquidity - As of September 30, 2025, cash and cash equivalents stood at $22.7 million, an increase from $17.4 million as of June 30, 2025 [8] - Working capital decreased to $24.9 million from $26.6 million over the same period [8] - Total stockholders' equity was reported at $35.8 million, or $3.03 per share [8] Management Commentary - CEO Najeeb Ghauri highlighted the growth in total net revenues and subscription revenues as a positive indicator of the company's recurring revenue model gaining traction [9] - CFO Roger Almond emphasized the importance of balancing strategic investments with cost discipline, noting the company's strong cash position to support growth initiatives [11]