EX-99.1 2 ex99-1.htm EX-99.1

 

Exhibit 99.1

 

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

 

Cloud and SaaS revenue increased 9.4% compared with the prior year period, reflecting a continued shift toward recurring, platform-based offerings

 

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 Statements

 

This 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 Measures

 

The 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) 222-9195
investors@netsoltech.com

 

 
 

 

NETSOL Technologies, Inc. and Subsidiaries
Schedule 1: Consolidated Balance Sheets

 

   As of   As of 
  September 30, 2025   June 30, 2025 
ASSETS          
Current 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 Subsidiaries
Schedule 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 Subsidiaries
Schedule 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 Subsidiaries
Schedule 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