NetSol Technologies (NTWK) investor relations material

Executive summary

• Net revenues for Q1 FY2026 rose 2.8% year-over-year to $15 million, driven by a 9.4% increase in subscription and support revenues, but offset by lower services revenue and minimal license fees.

• Major product launches included CheckAI, an AI-powered credit decisioning engine, and strategic partnerships supported expansion in the U.S. and Asia-Pacific.

• Strengthened position in digital automotive retail and asset finance, with new engagements and go-lives in China and Indonesia.

• The quarter saw a net loss attributable to shareholders of $2.4 million ($0.20 per diluted share), compared to net income of $71,000 ($0.006 per share) last year, primarily due to increased costs and unfavorable foreign currency impacts.

• Faced a challenging operating environment with increased investments, macroeconomic headwinds, and foreign exchange volatility impacting profitability.

Financial highlights

• Total net revenues were $15 million, up from $14.6 million in the prior year period.

• Subscription and support revenues increased 9.4% year-over-year to $9 million, while services revenue declined to $6 million from $6.4 million.

• Gross profit was $5.9 million (39.4% margin), down from $6.6 million (45% margin) year-over-year.

• Operating expenses increased to $7.8 million (51.6% of sales), up from $7.3 million (50.2%).

• GAAP net loss was $2.4 million ($0.20 per diluted share), compared to net income of $71,000 ($0.006 per share) last year.

• Non-GAAP EBITDA loss was $1.8 million, versus positive $301,000 in the prior year.

Outlook and guidance

• Targeting full-year revenue growth of 5-7%, above last year's level, supported by a strong sales pipeline and recent investments.

• Management expects recurring subscription and support fees to gradually increase as more customers go live on the platform.

• The company anticipates $1.5 million in capital expenditures over the next 12 months for business development and infrastructure enhancements in APAC, the US, and Europe.

• Expecting higher recurring revenue and improved predictability as SaaS transition continues.

• Management remains focused on long-term profitability and shareholder value, prioritizing investments in recurring revenue streams and scalable digital solutions.