Exhibit
99.1
NETSOL
Technologies reports 21% year-over-year growth in total net revenues in Q2 fiscal 2026
ENCINO,
Calif., Feb. 12, 2026 (GLOBE NEWSWIRE) — NETSOL Technologies, Inc. (Nasdaq: NTWK), a provider of AI-enabled solutions and services
powering OEMs, dealerships and financial institutions to sell, finance and lease assets, reported its results for the second fiscal quarter
of 2026 and six months ended December 31, 2025.
| ● | Total
net revenues up 21.1% to $18.8 million |
| ● | Services
revenues up 40.9% to $9.6 million |
| ● | Recurring
subscription and support revenues up 5.1% to $9.1 million |
| ● | Gross
margin expanded to 48.0% (from 44.5%) |
| ● | Operating
income was $1.3 million (vs. loss of $0.5 million) |
| ● | Cash
and cash equivalents up 4.0% to $18.1 million |
Second
Quarter 2026 Financial Results
Total
net revenues for the second quarter of fiscal 2026 increased 21.1% to $18.8 million, compared with $15.5 million in the prior-year period,
driven primarily by higher services revenues and higher subscription and support revenues. On a constant currency basis, total net revenues
were $18.8 million.
| ● | Recurring
subscription and support revenues increased approximately 5.1% to $9.1 million compared with
$8.6 million in the prior-year period. Total subscription and support revenues as percentage
of total net revenues were 48.3%, compared with 55.6% in the prior-year period, reflecting
higher implementation services revenues in the quarter. Total subscription and support revenues
on a constant currency basis were $9.2 million. |
| | | |
| ● | Total
services revenues increased 40.9% to $9.6 million, compared with $6.8 million in the prior-year
period. The increase primarily reflected implementation timing and project mix. Total services
revenues on a constant currency basis were $9.6 million. |
Gross
profit for the quarter was $9.0 million or 48.0% of net revenues, compared with $6.9 million or 44.5% of net revenues in the second quarter
of fiscal 2025. On a constant currency basis, gross profit was $9.0 million or 47.8% of net revenues.
Cost
of sales for the quarter was $9.8 million or 52.0% of net revenues compared with $8.6 million or 55.5% of net revenues in the second
quarter of fiscal 2025. On a constant currency basis, cost of sales was $9.8 million or 52.2% of net revenues. The increase in cost of
sales primarily reflected increased salaries and travel costs.
Income
from operations for the quarter was $1.3 million compared with a loss from operations of $0.5 million in the second quarter of fiscal
2025. On a constant currency basis, income from operations was $1.3 million.
GAAP
net income attributable to NETSOL for the quarter totaled $0.2 million or $0.02 per diluted share, compared with a GAAP net loss of $1.1
million or $0.10 per diluted share in the second quarter of fiscal 2025. On a constant currency basis, GAAP net income attributable to
NETSOL for the quarter totaled $0.2 million or $0.01 per diluted share.
Non-GAAP
EBITDA for the quarter was $1.7 million compared with a non-GAAP EBITDA loss of $0.8 million in the second quarter of fiscal 2025. (see
note regarding “Use of Non-GAAP Financial Measures,” below for further discussion of this non-GAAP measure).
Najeeb
Ghauri, Founder and Chief Executive Officer of NETSOL Technologies Inc., commented, “NETSOL delivered a strong second quarter of
fiscal 2026, with total net revenues up 21% year-over-year to $18.8 million. Services revenue grew 41%, driven by active implementations
of Transcend Finance and Transcend Retail, and we view implementation momentum as an important leading indicator of future subscription
scale.”
“Transcend
Retail is gaining meaningful traction in the U.S. automotive market, with adoption by leading dealer groups and franchised dealerships.
Partnerships with MINI USA, Sonic Automotive, Indigo Auto Group, and others reflect growing validation of our platform and the outcomes
it enables for dealers.”
“While
SaaS revenue growth is currently moderated by the timing of customer go-lives, we believe recurring revenues can accelerate over time
as these deployments complete.
“We
are also investing in AI to extend our product roadmap, including Check, an AI-enabled credit decisioning capability built into our loan
origination system, designed to help credit and funding teams work faster and with greater precision by turning data into real-time,
actionable decisions.”
Sardar
Abubakr, Chief Financial Officer of NETSOL Technologies Inc., commented, “We delivered measurable profitability improvements in
the quarter. Gross profit increased to $9.0 million, or 48% of net revenues, up from 44.5% in the prior-year period, and delivered operating
income of $1.3 million.”
“Our
priority is to scale efficiently by maintaining cost discipline while investing in the areas that expand long-term earnings quality,
including subscription growth and strategic services that support customer adoption. We believe our balance of revenue growth, margin
improvement, and targeted investment positions NETSOL to build sustainable shareholder value.”
Six
Months Ended December 31, 2025, Financial Results
Total
net revenues for the six months ended December 31, 2025, were $33.8 million, compared with $30.1 million in the prior-year period. On
a constant currency basis, total net revenues were $33.5 million.
| ● | Recurring
subscription and support revenues for the six months ended December 31, 2025, increased 7.2%
to $18.0 million from $16.8 million in the prior-year period. Total subscription and support
revenues on a constant currency basis were $17.9 million. |
| | | |
| ● | Total
services revenues increased 17.9% to $15.6 million from $13.2 million in the prior-year period.
Total services revenues on a constant currency basis were $15.5 million. The increase in
total services revenues during this period primarily reflected increased implementation services
for Transcend Retail and Transcend Finance. |
Gross
profit for the six months ended December 31, 2025, was $14.9 million or 44.2% of net revenues, compared with $13.5 million or 44.8% of
net revenues in the prior-year period. On a constant currency basis, gross profit for the six months ended December 31, 2025, was $14.6
million or 43.5% of net revenues as measured on a constant currency basis.
Cost
of sales for the six months ended December 31, 2025 was $18.9 million or 55.8% of net revenues compared with $16.7 million or 55.3% of
net revenues in the prior-year period. On a constant currency basis, cost of sales was $18.9 million or 56.5% of net revenues.
Loss
from operations for the six months ended December 31, 2025 was $0.5 million compared with a loss from operations of $1.2 million in the
prior-year period. On a constant currency basis, loss from operations was $0.8 million.
GAAP
net loss attributable to NETSOL for the six months ended December 31, 2025, totaled $2.1 million or $0.18 per diluted share, compared
with GAAP net loss of $1.1 million or $0.09 per diluted share in the prior-year period. On a constant currency basis, GAAP net loss attributable
to NETSOL for the first six months of fiscal 2026 totaled $2.5 million or $0.21 per diluted share.
Non-GAAP
EBITDA for the six months ended December 31, 2025, was a loss of $0.1 million compared with non-GAAP EBITDA loss of $0.5 million 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 $18.1 million as of December 31, 2025, compared with $17.4 million as of June 30, 2025. Working capital was
$26.4 million as of December 31, 2025, compared with $26.6 million as of June 30, 2025. Total NETSOL stockholders’ equity at December
31, 2025, was $35.9 million or $3.04 per diluted share.
Conference
Call
NETSOL
Technologies management will hold a conference call on Thursday, February 12, 2026, at 9:00 am Eastern Time (6:00 am Pacific Time) to
discuss its financial results to discuss these financial results. A question-and-answer session will follow management’s presentation.
Participant
listening: 1-877-407-0789 or 1-201-689-8562
The
conference call will also be broadcast live and available for replay here, along with additional replay access being provided
through the company information section of NETSOL’s website.
Telephone
replays will be made available approximately 3 hours after conference end time.
Telephone
replay
Replay
dial-in: 1-844-512-2921 or 1-412-317-6671
Replay
expiration: Thursday, February 26, 2026 at 11:59 PM ET
Access
ID: 13758657
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 today leverages 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 | |
December
31, 2025 | | |
June
30, 2025 | |
| | |
| | |
| |
| Cash and cash
equivalents | |
$ | 18,132,086 | | |
$ | 17,357,944 | |
| Accounts receivable, net
of allowance of $401,507 and $355,464 | |
| 7,776,096 | | |
| 7,527,572 | |
| Revenues in excess of billings,
net of allowance of $84,882 and $34,496 | |
| 17,080,695 | | |
| 18,230,619 | |
| Other current assets | |
| 3,423,634 | | |
| 3,203,468 | |
| Total
current assets | |
| 46,412,511 | | |
| 46,319,603 | |
| | |
| 763,396 | | |
| 903,766 | |
| | |
| 5,185,764 | | |
| 5,073,372 | |
| | |
| 1,015,011 | | |
| 809,513 | |
| | |
| 6,941 | | |
| 32,331 | |
| | |
| 9,302,524 | | |
| 9,302,524 | |
| Total
assets | |
$ | 62,686,147 | | |
$ | 62,441,109 | |
| | |
| | | |
| | |
| LIABILITIES AND STOCKHOLDERS’
EQUITY | |
| | | |
| | |
| | |
| | | |
| | |
| Accounts payable and accrued expenses | |
$ | 8,059,205 | | |
$ | 8,010,844 | |
| Current portion of loans and obligations under
finance leases | |
| 8,509,841 | | |
| 8,240,061 | |
| Current portion of operating lease obligations | |
| 542,022 | | |
| 433,242 | |
| Unearned revenue | |
| 2,884,757 | | |
| 3,029,850 | |
| Total
current liabilities | |
| 19,995,825 | | |
| 19,713,997 | |
| | |
| 337,028 | | |
| 134,608 | |
| | |
| 414,725 | | |
| 333,374 | |
| Total
liabilities | |
| 20,747,578 | | |
| 20,181,979 | |
| | |
| | | |
| | |
| Preferred stock, $.01 par value; 500,000 shares authorized; | |
| - | | |
| - | |
| Common stock, $.01 par value; 18,000,000
shares authorized; 12,753,209 shares issued and 11,814,178 outstanding as of December 31, 2025 , 12,700,465
shares issued and 11,761,434 outstanding as of June 30, 2025 | |
| 127,535 | | |
| 127,008 | |
| Additional paid-in-capital | |
| 129,545,854 | | |
| 129,529,901 | |
| Treasury stock (at cost, 939,031 shares as
of December 31, 2025 and June 30, 2025) | |
| (3,920,856 | ) | |
| (3,920,856 | ) |
| Accumulated deficit | |
| (43,399,611 | ) | |
| (41,289,080 | ) |
| Other comprehensive loss | |
| (46,413,009 | ) | |
| (46,613,208 | ) |
| Total
NETSOL stockholders’ equity | |
| 35,939,913 | | |
| 37,833,765 | |
| Non-controlling interest | |
| 5,998,656 | | |
| 4,425,365 | |
| Total
stockholders’ equity | |
| 41,938,569 | | |
| 42,259,130 | |
| Total
liabilities and stockholders’ equity | |
$ | 62,686,147 | | |
$ | 62,441,109 | |
NETSOL
Technologies, Inc. and Subsidiaries
Schedule
2: Consolidated Statement of Operations
| | |
For the Three Months | | |
For the Six Months | |
| | |
Ended
December 31, | | |
Ended
December 31, | |
| | |
2025 | | |
2024 | | |
2025 | | |
2024 | |
| Net Revenues: | |
| | | |
| | | |
| | | |
| | |
| License fees | |
$ | 117,482 | | |
$ | 72,688 | | |
$ | 189,707 | | |
$ | 73,917 | |
| Subscription and support | |
| 9,079,783 | | |
| 8,642,629 | | |
| 18,040,338 | | |
| 16,835,100 | |
| Services | |
| 9,611,213 | | |
| 6,821,344 | | |
| 15,590,356 | | |
| 13,226,142 | |
| Total net revenues | |
| 18,808,478 | | |
| 15,536,661 | | |
| 33,820,401 | | |
| 30,135,159 | |
| | |
| | | |
| | | |
| | | |
| | |
| Cost of revenues | |
| 9,779,386 | | |
| 8,616,320 | | |
| 18,879,319 | | |
| 16,650,706 | |
| Gross profit | |
| 9,029,092 | | |
| 6,920,341 | | |
| 14,941,082 | | |
| 13,484,453 | |
| | |
| | | |
| | | |
| | | |
| | |
| Operating expenses: | |
| | | |
| | | |
| | | |
| | |
| Selling, general and administrative | |
| 7,481,647 | | |
| 7,073,622 | | |
| 15,018,000 | | |
| 14,037,943 | |
| Research and development
cost | |
| 247,713 | | |
| 333,669 | | |
| 462,056 | | |
| 693,618 | |
| Total operating expenses | |
| 7,729,360 | | |
| 7,407,291 | | |
| 15,480,056 | | |
| 14,731,561 | |
| | |
| | | |
| | | |
| | | |
| | |
| Income (loss) from operations | |
| 1,299,732 | | |
| (486,950 | ) | |
| (538,974 | ) | |
| (1,247,108 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Other income and (expenses) | |
| | | |
| | | |
| | | |
| | |
| Interest expense | |
| (176,273 | ) | |
| (236,386 | ) | |
| (350,884 | ) | |
| (494,605 | ) |
| Interest income | |
| 208,775 | | |
| 529,072 | | |
| 489,749 | | |
| 1,298,939 | |
| Gain (loss) on foreign
currency exchange transactions | |
| 46,074 | | |
| (698,426 | ) | |
| (240,843 | ) | |
| (155,881 | ) |
| Other income | |
| 63,925 | | |
| 38,098 | | |
| 81,595 | | |
| 191,589 | |
| Total other income (expenses) | |
| 142,501 | | |
| (367,642 | ) | |
| (20,383 | ) | |
| 840,042 | |
| | |
| | | |
| | | |
| | | |
| | |
| Net income (loss) before
income taxes | |
| 1,442,233 | | |
| (854,592 | ) | |
| (559,357 | ) | |
| (407,066 | ) |
| Income tax provision | |
| (480,194 | ) | |
| (331,614 | ) | |
| (695,969 | ) | |
| (561,431 | ) |
| Net income (loss) | |
| 962,039 | | |
| (1,186,206 | ) | |
| (1,255,326 | ) | |
| (968,497 | ) |
| Non-controlling
interest | |
| (715,282 | ) | |
| 39,164 | | |
| (855,205 | ) | |
| (107,750 | ) |
| Net income (loss) attributable
to NetSol | |
$ | 246,757 | | |
$ | (1,147,042 | ) | |
$ | (2,110,531 | ) | |
$ | (1,076,247 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Net income (loss) per share: | |
| | | |
| | | |
| | | |
| | |
| Net income (loss) per common
share | |
| | | |
| | | |
| | | |
| | |
| Basic | |
$ | 0.02 | | |
$ | (0.10 | ) | |
$ | (0.18 | ) | |
$ | (0.09 | ) |
| Diluted | |
$ | 0.02 | | |
$ | (0.10 | ) | |
$ | (0.18 | ) | |
$ | (0.09 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Weighted average number of shares outstanding | |
| | | |
| | | |
| | | |
| | |
| Basic | |
| 11,797,068 | | |
| 11,484,298 | | |
| 11,782,439 | | |
| 11,456,996 | |
| Diluted | |
| 11,812,098 | | |
| 11,484,298 | | |
| 11,782,439 | | |
| 11,456,996 | |
NETSOL
Technologies, Inc. and Subsidiaries
Schedule
3: Consolidated Statement of Cash Flows
| | |
For the Six Months | |
| | |
Ended
December 31, | |
| | |
2025 | | |
2024 | |
| Cash flows from operating
activities: | |
| | | |
| | |
| Net loss | |
$ | (1,255,326 | ) | |
$ | (968,497 | ) |
| Adjustments to reconcile net loss to net cash
provided by operating activities: | |
| | | |
| | |
| | |
| | | |
| | |
| Depreciation and amortization | |
| 624,352 | | |
| 738,582 | |
| Provision for bad debts | |
| 90,462 | | |
| 475,172 | |
| Gain on sale of assets | |
| (79,325 | ) | |
| (25,084 | ) |
| Stock based compensation | |
| 206,400 | | |
| 95,134 | |
| Changes in operating assets
and liabilities: | |
| | | |
| | |
| Accounts receivable | |
| (275,785 | ) | |
| 4,405,610 | |
| Revenues in excess of billing | |
| 1,468,463 | | |
| 2,688,774 | |
| Other current assets | |
| 401,208 | | |
| (170,856 | ) |
| Accounts payable and accrued
expenses | |
| 5,092 | | |
| (878,148 | ) |
| Unearned revenue | |
| (630,660 | ) | |
| (5,990,971 | ) |
| Net cash provided by operating
activities | |
| 554,881 | | |
| 369,716 | |
| | |
| | | |
| | |
| Cash flows from investing
activities: | |
| | | |
| | |
| Purchases of property and equipment | |
| (856,330 | ) | |
| (568,134 | ) |
| Sales of property and equipment | |
| 77,522 | | |
| 45,535 | |
| Investment in associates | |
| 25,396 | | |
| - | |
| Purchase of subsidiary shares | |
| - | | |
| (8,878 | ) |
| Net cash used in investing
activities | |
| (753,412 | ) | |
| (531,477 | ) |
| | |
| | | |
| | |
| Cash flows from financing
activities: | |
| | | |
| | |
| Proceeds from the exercise of stock options
and warrants | |
| - | | |
| 430,000 | |
| Proceeds from exercise of subsidiary options | |
| 358,133 | | |
| - | |
| Dividend paid by subsidiary to non-controlling
interest | |
| - | | |
| (306,799 | ) |
| Proceeds from bank loans | |
| 792,484 | | |
| 2,676,932 | |
| Payments on finance lease obligations and loans
- net | |
| (425,764 | ) | |
| (162,370 | ) |
| Net cash provided by financing
activities | |
| 724,853 | | |
| 2,637,763 | |
| Effect of exchange rate
changes | |
| 247,820 | | |
| (332,525 | ) |
| Net increase (decrease)
in cash and cash equivalents | |
| 774,142 | | |
| 2,143,477 | |
| Cash and cash equivalents at beginning of the
period | |
| 17,357,944 | | |
| 19,127,165 | |
| Cash and cash equivalents
at end of period | |
$ | 18,132,086 | | |
$ | 21,270,642 | |
NETSOL
Technologies, Inc. and Subsidiaries
Schedule
4: Reconciliation to GAAP
| | |
For the Three Months | | |
For the Six Months | |
| | |
Ended December 31, | | |
Ended December 31, | |
| | |
2025 | | |
2024 | | |
2025 | | |
2024 | |
| | |
| | |
| | |
| | |
| |
| Net Income (loss) attributable to NetSol | |
$ | 246,757 | | |
$ | (1,147,042 | ) | |
$ | (2,110,531 | ) | |
$ | (1,076,247 | ) |
| Non-controlling interest | |
| 715,282 | | |
| (39,164 | ) | |
| 855,205 | | |
| 107,750 | |
| Income taxes | |
| 480,194 | | |
| 331,614 | | |
| 695,969 | | |
| 561,431 | |
| Depreciation and amortization | |
| 299,746 | | |
| 372,585 | | |
| 624,352 | | |
| 738,582 | |
| Interest expense | |
| 176,273 | | |
| 236,386 | | |
| 350,884 | | |
| 494,605 | |
| Interest (income) | |
| (208,775 | ) | |
| (529,072 | ) | |
| (489,749 | ) | |
| (1,298,939 | ) |
| EBITDA | |
$ | 1,709,477 | | |
$ | (774,693 | ) | |
$ | (73,870 | ) | |
$ | (472,818 | ) |
| Add back: | |
| | | |
| | | |
| | | |
| | |
| Non-cash stock-based compensation | |
| 61,000 | | |
| 47,355 | | |
| 206,400 | | |
| 95,134 | |
| Adjusted EBITDA, gross | |
$ | 1,770,477 | | |
$ | (727,338 | ) | |
$ | 132,530 | | |
$ | (377,684 | ) |
| Less non-controlling interest (a) | |
| (868,111 | ) | |
| (61,529 | ) | |
| (1,092,059 | ) | |
| (207,310 | ) |
| Adjusted EBITDA, net | |
$ | 902,366 | | |
$ | (788,867 | ) | |
$ | (959,529 | ) | |
$ | (584,994 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Weighted Average number of shares outstanding | |
| | | |
| | | |
| | | |
| | |
| Basic | |
| 11,797,068 | | |
| 11,484,298 | | |
| 11,782,439 | | |
| 11,456,996 | |
| Diluted | |
| 11,812,098 | | |
| 11,484,298 | | |
| 11,782,439 | | |
| 11,456,996 | |
| | |
| | | |
| | | |
| | | |
| | |
| Basic adjusted EBITDA | |
$ | 0.08 | | |
$ | (0.07 | ) | |
$ | (0.08 | ) | |
$ | (0.05 | ) |
| Diluted adjusted EBITDA | |
$ | 0.08 | | |
$ | (0.07 | ) | |
$ | (0.08 | ) | |
$ | (0.05 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| (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 | |
$ | 715,282 | | |
$ | (39,164 | ) | |
$ | 855,205 | | |
$ | 107,750 | |
| Income Taxes | |
| 95,791 | | |
| 102,414 | | |
| 135,583 | | |
| 173,001 | |
| Depreciation and amortization | |
| 69,777 | | |
| 92,546 | | |
| 144,862 | | |
| 181,681 | |
| Interest expense | |
| 51,081 | | |
| 68,636 | | |
| 99,908 | | |
| 147,828 | |
| Interest (income) | |
| (63,820 | ) | |
| (165,365 | ) | |
| (143,499 | ) | |
| (408,012 | ) |
| EBITDA | |
$ | 868,111 | | |
$ | 59,067 | | |
$ | 1,092,059 | | |
$ | 202,248 | |
| Add back: | |
| | | |
| | | |
| | | |
| | |
| Non-cash stock-based compensation | |
| - | | |
| 2,462 | | |
| - | | |
| 5,062 | |
| Adjusted EBITDA of non-controlling interest | |
$ | 868,111 | | |
$ | 61,529 | | |
$ | 1,092,059 | | |
$ | 207,310 | |
