NetSol(US:NTWK)2021-11-12 03:43Financial Data and Key Metrics Changes - Total net revenues for Q1 2022 were $13.4 million, an increase from $12.6 million in the prior-year period, primarily driven by a $1.1 million increase in subscription and support revenues [12] - Total subscription and support revenues in Q1 were $6.2 million compared to $5.2 million in the prior-year period, with expectations for gradual increases as new products are implemented [13] - Total services revenue for the quarter was $7.2 million, down from $7.5 million in the prior year, attributed to completed implementations [14] - Gross profit for Q1 2022 was $5.4 million, or 40.6% of net revenues, down from $6.4 million or 50.5% in Q1 2021, due to increased costs [16] - Operating expenses increased by 13.8% to $6.1 million, representing 45.3% of sales, up from 42.3% in the same period last year [17] - GAAP net income for Q1 2022 was $188,000 or $0.02 per diluted share, compared to $718,000 or $0.06 per diluted share in the prior year [18] - Non-GAAP adjusted EBITDA for Q1 2022 totaled $770,000 or $0.07 per diluted share, down from $1.6 million or $0.14 per diluted share in the prior year [21] - Cash and cash equivalents at quarter-end were approximately $27 million, down from $33.7 million at June 30, 2021 [22] Business Line Data and Key Metrics Changes - The company reported a 10% sequential increase in recurring revenues and a 20% increase over the prior year, equating to a nearly $25 million annualized run rate [27] - The rollout of the auto digital platform in partnership with MINI Anywhere has seen early success, with 10 dealerships subscribed [9][32] Market Data and Key Metrics Changes - The company is experiencing strong momentum in European and North American markets, with a robust pipeline of opportunities [8] - In the APAC region, significant progress is being made on a $110 million contract with Daimler Financial Services, with implementations ongoing in multiple countries [37] Company Strategy and Development Direction - The company aims to return to meaningful growth through investments in leadership, workforce, technology, and expanded sales efforts [12] - The strategy includes innovating in new areas and creating partnerships, particularly through the OTOZ Innovation Lab [29] - The company is exploring inorganic opportunities that are highly accretive and complementary to its business [36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving growth goals for fiscal 2022, with expectations for total revenues to increase by at least 10% and subscription revenues by at least 20% [26] - The management highlighted the importance of monitoring expenditures due to economic uncertainties in target markets [20] Other Important Information - The company has repurchased 691,528 shares of its common stock at an aggregate value of $2,464,887 as of September 30, 2021 [25] - The partnership with CGI aims to enhance the delivery of the NFS Ascent platform, leveraging CGI's expertise in IT solutions [45] Q&A Session Summary Question: What is the outlook for revenue growth? - The company expects total revenues to increase by at least 10% and subscription revenues to increase by at least 20% for the fiscal year [26] Question: How is the MINI Anywhere platform performing? - The platform has captured 50% of all California MINI dealerships and is expanding to other states, with a strong lead conversion ratio of approximately 1:6 [32] Question: What are the company's plans for strategic partnerships? - The company is actively seeking partnerships that can enhance its offerings and support growth, particularly in the OTOZ Innovation Lab [30]