NetSol(NTWK) - 2022 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total net revenues for Q2 2022 were $15.5 million, an 18% increase from $13.1 million in the prior year period, driven by a $3.6 million increase in subscription and support revenues [10][11] - Gross profit for Q2 2022 was $7.6 million, representing 49.4% of net revenues, compared to $6 million or 46% in Q2 2021 [14] - GAAP net income attributable to NETSOL for Q2 2022 was $1.4 million or $0.13 per diluted share, compared to a net loss of $242,000 or $0.02 per diluted share in the same period last year [16] Business Line Data and Key Metrics Changes - Subscription and support revenues in Q2 were $9.4 million, up from $5.7 million in the prior year, with a significant one-time catch-up of approximately $3.5 million due to a contract amendment with Daimler Financial Services [10][11] - Total services revenue decreased to $4.1 million from $4.8 million in the prior year, primarily due to a decrease in implementation services [12] Market Data and Key Metrics Changes - The company reported strong momentum in European and North American markets, with a robust pipeline of opportunities [6] - The OTOZ digital platform rollout has seen early success, with 12 dealerships subscribed, primarily in California and Texas [7][25] Company Strategy and Development Direction - The company aims to achieve at least 10% revenue growth and over 20% growth in subscription and support revenues for the fiscal year ending June 30, 2022 [20][23] - NETSOL is focusing on innovation and partnerships, particularly through the Otoz Innovation Lab, to enhance customer experience and drive growth [24][29] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to drive additional contract signings in the coming months, supported by a strong cash position and returning employees to on-site work [6][23] - The company anticipates continued growth trends, particularly in SaaS and support revenues, which are expected to reach an annualized run rate of nearly $25 million [21][22] Other Important Information - The company has increased its headcount by nearly 70 employees to support implementation work and innovation initiatives [9] - A significant gain of $901,000 on foreign currency exchange transactions was included in the net income for the quarter [17] Q&A Session Summary - The call concluded without specific questions being recorded, indicating a wrap-up of the conference [42][43]