StockNews.AI
NTWK
StockNews.AI
1 min

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

1. NTWK's Q1 2026 revenue rose 2.8% to $15 million. 2. Subscription revenues increased by 9.4%, indicating steady growth. 3. Operating loss increased to $1.8 million compared to $0.76 million last year. 4. Overall cash position improved to $22.7 million. 5. Management focuses on long-term revenue and operational efficiency.

15m saved
Insight
Article

FAQ

Why Bearish?

The increase in operational losses and lower gross profit percentage indicate potential financial instability. Future performance could be challenging despite revenue growth, impacting investor confidence as seen in similar past scenarios.

How important is it?

The article details substantial financial results that can influence investor sentiment significantly. The focus on revenue growth amid increasing losses highlights both opportunities and vulnerabilities in the current market.

Why Short Term?

The current operational challenges may affect NTWK's stock price in the near term. Investors typically react quickly to signs of financial stress, which aligns with historical trends of stock market reactions to weaker quarterly results.

Related Companies

SaaSCLOUNOW
ENCINO, Calif., Nov. 12, 2025 (GLOBE NEWSWIRE) -- NETSOL Technologies, Inc. (Nasdaq: NTWK), a provider of AI-powered solutions and services enabling OEMs, dealerships and financial institutions to sell, finance and lease assets, reported results for the fiscal first quarter of 2026 ended September 30, 2025. Fiscal First Quarter 2026 Financial Results Total net revenues for the first quarter of fiscal 2026 increased 2.8% to $15 million, compared with $14.6 million in the prior year period, driven by a 9.4% increase in subscription and support revenues. On a constant currency basis, total net revenues were $15.1 million. Total subscription (SaaS and Cloud) and support revenues increased 9.4% to $9 million compared with $8.2 million in the prior year period. Total subscription and support revenues on a constant currency basis were $9.1 million.Total services revenues were $6 million, compared with $6.4 million in the prior year period. Total services revenues on a constant currency basis were $5.9 million.License fees were $72,225 in the first quarter of FY’26. Gross profit for the first quarter of fiscal 2026 was $5.9 million or 39.4% of net revenues, compared to $6.6 million or 45% of net revenues in the first quarter of fiscal 2025. On a constant currency basis, gross profit was $5.9 million or 39.1% of net revenues as measured on a constant currency basis. Operating expenses for the first quarter of fiscal 2026 were $7.8 million or 51.6% of sales compared to $7.3 million or 50.2% of sales for the first quarter of fiscal 2025. On a constant currency basis, operating expenses were $7.8 million or 51.5% of sales on a constant currency basis. Loss from operations for the first quarter of fiscal 2026 was $1.8 million compared to a loss from operations of $0.76 million in the first quarter of fiscal 2025. GAAP net loss attributable to NETSOL for the first quarter of fiscal 2026 totaled $2.4 million or $0.20 per diluted share, compared with GAAP net income of $0.071 million or $0.006 per diluted share in the prior year period. Non-GAAP EBITDA for the first quarter of fiscal 2026 was a loss of $1.8 million, or $0.15 per diluted share, compared with non-GAAP EBITDA of $0.30 million, or $0.03 per diluted share in the first quarter of fiscal 2025 (see note regarding “Use of Non-GAAP Financial Measures” below for further discussion of this non-GAAP measure). Non-GAAP adjusted EBITDA for the first quarter of fiscal 2026 was a loss of $1.9 million, or $0.16 per diluted share, compared with non-GAAP adjusted EBITDA of $0.20 million, or $0.02 per diluted share in the prior year period (see note regarding “Use of Non-GAAP Financial Measures” below for further discussion of this non-GAAP measure). Balance Sheet and Capital Structure Cash and cash equivalents were $22.7 million as of September 30, 2025, compared with $17.4 million as of June 30, 2025. Working capital was $24.9 million as of September 30, 2025, compared with $26.6 million as of June 30, 2025. Total NETSOL stockholders’ equity at September 30, 2025, was $35.8 million or $3.03 per share. Management Commentary Commentary from Najeeb Ghauri, CEO and Chairman:“While our first quarter financial results reflect some near-term pressures, we are encouraged by the overall growth in total net revenues, which increased 2.8% year-over-year to $15 million. We experienced continued growth in our subscription and support revenues, which increased 9.4% year-over-year. This trend demonstrates that our recurring revenue model is gaining traction and provides a solid foundation for long-term stability and profitability.” Commentary from Roger Almond, CFO:“From a financial perspective, while the first quarter reflects a higher operating expense ratio and a temporary compression in gross margins, we remain committed to balancing strategic investment with cost discipline. Our cash position of $22.7 million provides ample liquidity to support ongoing growth initiatives and we continue to prioritize investments that enhance recurring revenue streams and scalable digital solutions. The progress in subscription and support revenues underscores the resilience of our business model and we are taking proactive steps to optimize operational efficiency as we navigate short-term headwinds, keeping our focus squarely on long-term profitability and shareholder value creation.” About NETSOL Technologies NETSOL Technologies delivers state-of-the-art solutions for the asset finance and leasing industry, serving automotive and equipment OEMs, auto captives and financial institutions across over 30 countries. Since its inception in 1996, NETSOL has been at the cutting edge of technology, pioneering innovations with its asset finance solutions and leveraging advanced AI and cloud services to meet the complex needs of the global market. Renowned for its deep industry expertise, customer-centric approach and commitment to excellence, NETSOL fosters strong partnerships with its clients, ensuring their success in an ever-evolving landscape. With a rich history of innovation, ethical business practices and a focus on sustainability, NETSOL is dedicated to empowering businesses worldwide, securing its position as the trusted partner for leading firms around the globe.  Forward-Looking StatementsThis press release may contain forward-looking statements relating to the development of the Company's products and services and future operation results, including statements regarding the Company that are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. The words “expects,” “anticipates,” variations of such words, and similar expressions, identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, but their absence does not mean that the statement is not forward-looking. These statements are not guarantees of future performance and are subject to certain risks, uncertainties, and assumptions that are difficult to predict. Factors that could affect the Company's actual results include the progress and costs of the development of products and services and the timing of the market acceptance. The subject Companies expressly disclaim any obligation or undertaking to update or revise any forward-looking statement contained herein to reflect any change in the company's expectations with regard thereto or any change in events, conditions or circumstances upon which any statement is based. Use of Non-GAAP Financial MeasuresThe reconciliation of Adjusted EBITDA to net income, the most comparable financial measure based upon GAAP, as well as a further explanation of adjusted EBITDA, is included in the financial tables in Schedule 4 of this press release. Investor Relations Contact:Investor Relations(818) 222-9195investors@netsoltech.com NETSOL Technologies, Inc. and SubsidiariesSchedule 1: Consolidated Balance Sheets  As of As ofASSETSSeptember 30, 2025 June 30, 2025Current assets:   Cash and cash equivalents$22,690,618  $17,357,944 Accounts receivable, net of allowance of $359,088 and $355,464 6,320,988   7,527,572 Revenues in excess of billings, net of allowance of $31,662 and $34,496 13,994,651   18,230,619 Other current assets 3,586,732   3,203,468 Total current assets 46,592,989   46,319,603 Revenues in excess of billings, net - long term 881,053   903,766 Property and equipment, net 5,188,592   5,073,372 Right of use assets - operating leases 653,418   809,513 Other assets 6,938   32,331 Goodwill 9,302,524   9,302,524 Total assets$62,625,514  $62,441,109     LIABILITIES AND STOCKHOLDERS' EQUITY       Current liabilities:   Accounts payable and accrued expenses$9,191,552  $8,010,844 Current portion of loans and obligations under finance leases 8,330,243   8,240,061 Current portion of operating lease obligations 401,655   433,242 Unearned revenue 3,735,828   3,029,850 Total current liabilities 21,659,278   19,713,997 Loans and obligations under finance leases; less current maturities 218,170   134,608 Operating lease obligations; less current maturities 224,417   333,374 Total liabilities 22,101,865   20,181,979     Stockholders' equity:   Preferred stock, $.01 par value; 500,000 shares authorized; -   - Common stock, $.01 par value; 18,000,000 shares authorized;   12,733,907 shares issued and 11,794,876 outstanding as of September 30, 2025,   12,700,465 shares issued and 11,761,434 outstanding as of June 30, 2025 127,342   127,008 Additional paid-in-capital 129,636,251   129,529,901 Treasury stock (at cost, 939,031 shares   as of September 30, 2025, and June 30, 2025) (3,920,856)  (3,920,856)Accumulated deficit (43,646,368)  (41,289,080)Other comprehensive loss (46,402,374)  (46,613,208)Total NetSol stockholders' equity 35,793,995   37,833,765 Non-controlling interest 4,729,654   4,425,365 Total stockholders' equity 40,523,649   42,259,130 Total liabilities and stockholders' equity$62,625,514  $62,441,109       NETSOL Technologies, Inc. and SubsidiariesSchedule 2: Consolidated Statement of Operations  For the Three Months Ended September 30,  2025   2024 Net Revenues:   License fees$72,225  $1,229 Subscription and support 8,960,555   8,192,471 Services 5,979,143   6,404,798 Total net revenues 15,011,923   14,598,498     Cost of revenues 9,099,933   8,034,386 Gross profit 5,911,990   6,564,112     Operating expenses:   Selling, general and administrative 7,536,353   6,964,321 Research and development cost 214,343   359,949 Total operating expenses 7,750,696   7,324,270     Income (loss) from operations (1,838,706)  (760,158)    Other income and (expenses)   Interest expense (174,611)  (258,219)Interest income 280,974   769,867 Gain (loss) on foreign currency exchange transactions (286,917)  542,545 Other income 17,670   153,491 Total other income (expenses) (162,884)  1,207,684     Net income before income taxes (2,001,590)  447,526 Income tax provision (215,775)  (229,817)Net income (2,217,365)  217,709 Non-controlling interest (139,923)  (146,914)Net income attributable to NetSol$(2,357,288) $70,795         Net income per share:   Net income per common share   Basic$(0.20) $0.006 Diluted$(0.20) $0.006     Weighted average number of shares outstanding   Basic 11,767,811   11,429,695 Diluted 11,767,811   11,482,754      NETSOL Technologies, Inc. and SubsidiariesSchedule 3: Consolidated Statement of Cash Flows  For the Three Months Ended September 30,  2025   2024 Cash flows from operating activities:   Net income (loss)$(2,217,365) $217,709 Adjustments to reconcile net income (loss) to net cash   provided by operating activities:   Depreciation and amortization 324,606   365,997 Provision for bad debts (1,583)  336,506 Gain on sale of assets (16,613)  - Stock based compensation 145,400   47,779 Changes in operating assets and liabilities:   Accounts receivable 1,218,992   6,738,384 Revenues in excess of billing 4,282,495   836,403 Other current assets (323,491)  (222,359)Accounts payable and accrued expenses 1,176,241   10,546 Unearned revenue 714,879   (2,813,220)Net cash provided by operating activities 5,303,561   5,517,745     Cash flows from investing activities:   Purchases of property and equipment (485,281)  (100,737)Sales of property and equipment 16,687   - Investment in associates 25,396   - Purchase of subsidiary shares -   (7,895)Net cash used in investing activities (443,198)  (108,632)    Cash flows from financing activities:   Proceeds from the exercise of stock options and warrants -   21,500 Proceeds from exercise of subsidiary options 64,147   - Proceeds from bank loans 242,421   250,000 Payments on finance lease obligations and loans - net (115,350)  (118,311)Net cash provided by financing activities 191,218   153,189 Effect of exchange rate changes 281,093   (163,511)Net increase (decrease) in cash and cash equivalents 5,332,674   5,398,791 Cash and cash equivalents at beginning of the period 17,357,944   19,127,165 Cash and cash equivalents at end of period$22,690,618  $24,525,956   NETSOL Technologies, Inc. and SubsidiariesSchedule 4: Reconciliation to GAAP  For the Three Months Ended September 30,  2025   2024     Net Income (loss) attributable to NetSol$(2,357,288) $70,795 Non-controlling interest 139,923   146,914 Income taxes 215,775   229,817 Depreciation and amortization 324,606   365,997 Interest expense 174,611   258,219 Interest (income) (280,974)  (769,867)EBITDA$(1,783,347) $301,875 Add back:   Non-cash stock-based compensation 145,400   47,779 Adjusted EBITDA, gross$(1,637,947) $349,654 Less non-controlling interest (a) (223,948)  (145,781)Adjusted EBITDA, net$(1,861,895) $203,873         Weighted Average number of shares outstanding   Basic 11,767,811   11,429,695 Diluted 11,767,811   11,482,754     Basic adjusted EBITDA$(0.16) $0.02 Diluted adjusted EBITDA$(0.16) $0.02         (a)The reconciliation of adjusted EBITDA of non-controlling interest  to net income attributable to non-controlling interest is as follows       Net Income (loss) attributable to non-controlling interest$139,923  $146,914 Income Taxes 39,792   70,587 Depreciation and amortization 75,085   89,135 Interest expense 48,827   79,192 Interest (income) (79,679)  (242,647)EBITDA$223,948  $143,181 Add back:   Non-cash stock-based compensation -   2,600 Adjusted EBITDA of non-controlling interest$223,948  $145,781     

Related News