NetSol Technologies (NTWK) Q2 2026 earnings summary

Executive summary

• Net revenues for Q2 FY26 rose 21.1% year-over-year to $18.8 million, driven by strong services and recurring subscription growth.

• Services revenues surged 40.9% due to new implementations, supporting future recurring revenue streams.

• Operating income reached $1.3 million, reversing a prior-year loss, and GAAP net income was $246,757 or $0.02 per diluted share.

• Strategic milestones included the launch of an AI-enabled credit decisioning engine and a $50 million four-year contract extension with a major auto captive.

• Leadership strengthened with a new CFO appointment and continued focus on innovation and customer expansion.

Financial highlights

• Q2 FY26 net revenues: $18.8 million, up 21.1% year-over-year; services revenues up 40.9% to $9.6 million.

• Subscription and support revenues increased 5.1% to $9.1 million; gross profit was $9.0 million (48% margin).

• Income from operations was $1.3 million, reversing a $0.5 million loss in the prior year; EBITDA reached $1.7 million from a $0.8 million loss.

• Six-month net revenues: $33.8 million, up from $30.1 million; recurring revenues up 7.2% to $18 million.

• GAAP net loss for six months: $2.1 million ($0.18/share), compared to $1.1 million loss ($0.09/share) prior year.

Outlook and guidance

• FY26 revenue growth guidance raised to nearly $73 million or better, supported by a strong pipeline and AI-enabled platform investments.

• Management expects recurring revenues to accelerate as SaaS deployments complete and margin improvement as new hires and cross-training initiatives mature.

• Focus remains on sustainable growth, expanding recurring revenue, and leveraging AI for operational efficiency.

• Positive industry trends in global automotive and finance markets are expected to support future growth.