NetSol(NTWK) - 2024 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total net revenues for Q3 fiscal 2024 were $15.5 million, up from$13.5 million in the prior year period, representing a growth of approximately 15% [27] - Services revenue increased approximately 60% compared to Q3 fiscal 2023, indicating strong demand for service offerings [19] - GAAP net income for Q3 fiscal 2024 was $328,000 or$0.03 per diluted share, down from $2.5 million or$0.23 per diluted share in Q3 fiscal 2023 [36] - Non-GAAP adjusted EBITDA for Q3 fiscal 2024 was $810,000 or$0.07 per diluted share, compared to $3.3 million or$0.29 per diluted share in the same quarter of the previous fiscal year [39] Business Line Data and Key Metrics Changes - Recurring revenues (subscription and support) for Q3 fiscal 2024 were $7.1 million, compared to$6.7 million in the prior year period [34] - Total services revenue for Q3 fiscal 2024 was $7.8 million, up from$4.9 million in the prior year period [28] Market Data and Key Metrics Changes - The U.S. market is showing strong interest in the company's Professional Services segment, particularly in AWS cloud services, data analytics, and AI-based products [29] - The company has successfully launched its auto digital, retail, and mobility platform in 58 MINI USA dealerships, indicating progress in the U.S. market [21] Company Strategy and Development Direction - The company aims to be recognized as an AI-first company, integrating AI modules into its products to enhance efficiency and reduce operational costs [7][31] - There is a focus on organic growth and innovation, with no recent mergers and acquisitions, as the company builds its business through existing customer relationships [51][52] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in breaking out of the historical revenue range of $51 million to$61 million, anticipating fiscal year 2025 to be a strong year [46][50] - The company is optimistic about achieving at least $28 million in subscription and support revenues for the full fiscal year 2024 [22] Other Important Information - The company appointed Fortune CPA as its new independent registered public accounting firm following the dismissal of BF Borgers due to regulatory issues [26][32] - A loss of$964,000 on foreign currency exchange transactions was reported for the quarter, contrasting with a gain of $5.4 million in the same quarter of the previous year [37] Q&A Session Summary Question: Can fiscal year 2025 be a breakout year for revenue? - Management is confident that fiscal year 2025 could be the strongest year, citing a healthy sales pipeline and positive customer engagement [46][48] Question: Why does the stock trade below book value despite profitability? - Management acknowledged the discrepancy and indicated plans to increase visibility and communicate the company's story more effectively to the market [54][56] Question: How is AI enhancing the company's products? - The company is taking a holistic approach to AI, focusing on internal efficiencies and developing AI applications that improve delivery processes [62]