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

Rhea-AI Summary

NETSOL Technologies (Nasdaq: NTWK) reported results for the fiscal first quarter ended September 30, 2025. Total net revenues were $15.0 million, up 2.8% year‑over‑year (constant currency $15.1M). Subscription and support revenues increased 9.4% to $9.0 million, while services revenues were $6.0 million. Gross profit was $5.9 million or 39.4% margin. Loss from operations was $1.8 million, and GAAP net loss attributable to NETSOL was $2.4 million or $0.20 per diluted share. Non‑GAAP adjusted EBITDA loss was $1.9 million. Cash and cash equivalents totaled $22.7 million and stockholders’ equity was $35.8 million ($3.03 per share).

Positive

• Cash and cash equivalents $22.7M at Sept 30, 2025
• Subscription and support revenue +9.4% to $9.0M
• Stockholders' equity $35.8M ($3.03 per share)

Negative

• Gross margin down 560 bps to 39.4% in Q1 FY2026
• Operating loss widened to $1.8M in Q1 FY2026
• GAAP net loss $2.4M ($0.20 per diluted share) in Q1 FY2026
• Non‑GAAP adjusted EBITDA loss $1.9M in Q1 FY2026

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
ASSETS			September 30, 2025				June 30, 2025
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

FAQ

What did NETSOL (NTWK) report for Q1 fiscal 2026 on November 12, 2025?

NETSOL reported Q1 FY2026 revenue of $15.0M, a GAAP net loss of $2.4M and cash of $22.7M.

How much did NETSOL's subscription and support revenue change in Q1 FY2026 (NTWK)?

Subscription and support revenue rose 9.4% year‑over‑year to $9.0M in Q1 FY2026.

Why did NETSOL's gross margin and operating results weaken in Q1 FY2026 (NTWK)?

Gross margin fell to 39.4% from 45.0% and operating expenses rose, driving an operating loss of $1.8M.

What was NETSOL's non‑GAAP adjusted EBITDA in Q1 FY2026 (NTWK)?

NETSOL reported a non‑GAAP adjusted EBITDA loss of $1.9M for Q1 FY2026.

How strong is NETSOL's liquidity after Q1 FY2026 (NTWK)?

NETSOL ended Q1 FY2026 with $22.7M in cash and cash equivalents.

What did NETSOL management say about the revenue mix and outlook (NTWK)?

Management highlighted recurring revenue traction from subscription and support growth and said it will balance strategic investment with cost discipline.