Exhibit 99.1
NETSOL
Technologies reports record quarterly revenue and 13% year-over-year growth in Q3 fiscal 2026
ENCINO,
Calif., May 14, 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 third quarter of
fiscal 2026 and nine months ended March 31, 2026.
| ● | Total
net revenues up 13.0% year-over-year to $19.8 million, the highest quarterly revenue in company
history |
| | | |
| ● | Recurring
subscription and support revenues up 11.7% year-over-year to $8.8 million |
| | | |
| ● | Annualized
recurring revenue forecasted up 7% year-over-year to $35 million |
| | | |
| ● | Gross
margin expanded to 55.6% from 49.8% in the prior-year period |
| | | |
| ● | Non-GAAP
EBITDA grew by 48.2% year-over-year to $3.4 million, for a 17.2% EBITDA margin compared with
13.1% in the prior-year period |
| | | |
| ● | Reaffirmed
fiscal 2026 full-year revenue guidance of $73 million |
Third
Quarter Fiscal 2026 Financial Results
Total
net revenues for the third quarter of fiscal 2026 were $19.8 million, a record for the company, compared with $17.5 million in the prior-year
period, an increase of 13.0%.
Recurring
subscription and support revenues for the third quarter were $8.8 million, an increase of 11.7%, compared with $7.9 million in the prior-year
period.
License
fees for the third quarter were $4.7 million, compared with $1,198 in the prior-year period. The increase reflected higher license fees
associated with the recognition of a one-time license investment from a four-year, $50 million contract extension with one of NETSOL’s
longest-tenured tier-one global auto captive customers.
Services
revenues for the third quarter were $6.3 million, compared with $9.7 million in the prior-year period, primarily reflecting the timing
and composition of current implementation projects, as well as a one-time approximately $2.4 million pickup in the prior-year period
associated with a customer contract amendment.
Gross
profit for the third quarter was $11.0 million or 55.6% of net revenues, compared with $8.7 million or 49.8% of net revenues, in the
prior-year period.
GAAP
net income attributable to NETSOL was $1.3 million or $0.11 per diluted share, compared with $1.4 million or $0.12 per diluted share,
in the prior-year period.
Non-GAAP
EBITDA was $3.4 million, compared with $2.3 million in the prior-year period (see note regarding “Use of Non-GAAP Financial Measures,”
below).
Nine
Months Ended March 31, 2026 Financial Results
Total
net revenues for the nine months ended March 31, 2026 were $53.7 million, compared with $47.7 million in the prior-year period, an increase
of 12.5%.
Recurring
subscription and support revenues for the nine months were $26.9 million, an increase of 8.6%, compared with $24.7 million in the prior-year
period.
Annualized
recurring revenue is forecasted to increase 7% to approximately $35 million in the third quarter, compared with approximately $32.9 million
in the prior-year period.
License
fees for the nine months were $4.9 million, compared with $75,000 in the prior-year period.
Services
revenues for the nine months were $21.9 million, compared with $22.9 million in the prior-year period.
Gross
profit for the nine months was $26.0 million or 48.4% of net revenues, compared with $22.2 million or 46.6% of net revenues, in the prior-year
period.
GAAP
net loss attributable to NETSOL was $0.8 million or $(0.07) per diluted share, compared with GAAP net income of $0.3 million or $0.03
per diluted share, in the prior-year period.
Non-GAAP
EBITDA was $3.5 million, compared with $1.9 million in the prior-year period (see note regarding “Use of Non-GAAP Financial Measures,”
below).
Balance
Sheet
Cash
and cash equivalents were $14.7 million at March 31, 2026, compared with $17.4 million at June 30, 2025. The change reflects the working
capital impact of the four-year, $50 million contract renewal, including the timing of collection of the related annual maintenance fee
invoice issued in January 2026.
Working
capital was $25.3 million at March 31, 2026. NETSOL stockholders’ equity was $37.2 million or $3.14 per share at March 31, 2026.
Management
Commentary
Najeeb
Ghauri, Founder and Chief Executive Officer of NETSOL Technologies Inc., commented:
“Our
third quarter was a record quarter for NETSOL, with $19.8 million in total net revenues, the highest quarterly revenue in our company’s
history. The performance reflects the depth of our largest customer relationships, the continued momentum we are seeing across our unified,
AI-enabled Transcend Platform and the long-term value we are creating as we extend our reach across asset finance and digital retail.”
“The
recognition of the one-time license investment associated with our four-year, $50 million contract extension with a tier-one customer
of over 30 years is a tangible demonstration of the strategic importance of our long-tenured partnerships.”
“Demand
for Transcend Retail, our digital retail solution for dealerships and OEMs, continues to build, and the product is becoming a meaningful
contributor to our recurring revenue. In fiscal 2026, we have added new dealer group customers and we are encouraged by the breadth and
quality of our pipeline.”
“On
AI, we continue to embed capabilities directly into the workflows our customers run inside the Transcend Platform. Our AI-enabled credit
decisioning module within Transcend Finance is available to customers running originations on Transcend Finance, where it uses AI reasoning
and agentic workflows to accelerate the pace of credit decisions, with consistency and human oversight built in. This is the model for
how we will continue to integrate AI inside our products to enhance existing customer workflows, tied to measurable customer outcomes.”
“Looking
ahead, we are reaffirming our full-year fiscal 2026 revenue guidance of approximately $73 million. We remain focused on extending the
depth of our largest customer relationships, continuing to expand the Transcend Platform with embedded AI capabilities and accelerating
the growth of Transcend Retail in the U.S. dealer market.”
Sardar
Abubakr, Chief Financial Officer of NETSOL Technologies Inc., commented:
“Our
third quarter results reflect continued profitable growth on a record $19.8 million in total net revenues. Recurring subscription and
support revenue grew 11.7%, gross margin expanded to 55.6% and Non-GAAP EBITDA was $3.4 million, a 17.2% increase from the prior-year
period.”
“For
the nine months ended March 31, 2026, total net revenues grew 12.5% to $53.7 million and Non-GAAP EBITDA increased to $3.5 million from
$1.9 million in the prior-year period. Our balance sheet reflects the timing of invoicing for the renewal of our largest customer contract,
with accounts receivable up to reflect the annual maintenance fee that was invoiced in January. These receivable balances have since
converted to cash in the normal course of business.”
“With
continued growth in recurring revenue, expanding gross margins and multi-year customer contracts, we remain focused on strengthening
the durability and quality of our revenue base while supporting long-term shareholder value creation.”
Conference
Call
NETSOL
Technologies management will hold a conference call on Thursday, May 14, 2026, at 9:00 am Eastern Time (6:00 am Pacific Time) to discuss
its results for the third quarter and nine months ended March 31, 2026. A question-and-answer session will follow management’s
prepared remarks.
Participant
listening: 1-877-407-0789 or 1-201-689-8562
A
live webcast of the conference call will be available here. Information about the webcast will also be available on the Investor
Relations section of NETSOL’s website at www.netsoltech.com.
Telephone
Replay
Telephone
replays will be made available approximately 3 hours after conference end time.
Replay
dial-in: 1-844-512-2921 or 1-412-317-6671
Replay
expiration: Thursday, May 28, 2026, at 11:59 PM ET
Access
ID: 13760296
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 contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding
the company’s products and services, expectations for future operations, and other statements that are not historical facts. These
forward-looking statements may be identified by terminology such as “expects,” “anticipates,” “believes,”
“intends,” “plans,” “projects,” “targets,” and similar expressions. These statements
are not guarantees of future performance and are subject to a number of risks, uncertainties, and assumptions that are difficult to predict.
Factors that could cause actual results to differ materially include, but are not limited to, the timing of customer go-lives and contract
renewals, the rate of adoption of AI-enabled product capabilities, foreign currency volatility, and other factors discussed in NETSOL’s
most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q filed with the U.S. Securities and Exchange Commission.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. NETSOL
undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events,
or otherwise.
Use
of Non-GAAP Financial Measures
This
press release includes references to Non-GAAP EBITDA, which is a non-GAAP financial measure. A reconciliation of Non-GAAP EBITDA to net
income attributable to NETSOL, the most directly comparable GAAP measure, together with an explanation of how management uses these measures,
is provided in Schedule 4 of the financial tables that follow.
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 | |
| |
March 31, 2026 | | |
June 30, 2025 | |
| ASSETS | |
| | |
| |
| Current assets: | |
| | | |
| | |
| Cash and cash equivalents | |
$ | 14,744,392 | | |
$ | 17,357,944 | |
| Accounts receivable, net of allowance of $92,025 and $355,464 | |
| 16,646,299 | | |
| 7,527,572 | |
| Revenues in excess of billings, net of allowance of $256,812 and $34,496 | |
| 18,163,507 | | |
| 18,230,619 | |
| Other current assets | |
| 2,767,578 | | |
| 3,203,468 | |
| Total current assets | |
| 52,321,776 | | |
| 46,319,603 | |
| Revenues in excess of billings, net - long term | |
| 2,824,298 | | |
| 903,766 | |
| Property and equipment, net | |
| 5,558,409 | | |
| 5,073,372 | |
| Right of use assets - operating leases | |
| 869,191 | | |
| 809,513 | |
| Other assets | |
| 7,189 | | |
| 32,331 | |
| Intangible assets, net | |
| 1,039,989 | | |
| - | |
| Goodwill | |
| 9,302,524 | | |
| 9,302,524 | |
| Total assets | |
$ | 71,923,376 | | |
$ | 62,441,109 | |
| | |
| | | |
| | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |
| | | |
| | |
| Current liabilities: | |
| | | |
| | |
| Accounts payable and accrued expenses | |
$ | 8,132,384 | | |
$ | 8,010,844 | |
| Current portion of loans and obligations under finance leases | |
| 8,241,584 | | |
| 8,240,061 | |
| Current portion of operating lease obligations | |
| 479,751 | | |
| 433,242 | |
| Unearned revenue | |
| 10,184,195 | | |
| 3,029,850 | |
| Total current liabilities | |
| 27,037,914 | | |
| 19,713,997 | |
| Loans and obligations under finance leases; less current maturities | |
| 249,799 | | |
| 134,608 | |
| Operating lease obligations; less current maturities | |
| 363,430 | | |
| 333,374 | |
| Total liabilities | |
| 27,651,143 | | |
| 20,181,979 | |
| | |
| | | |
| | |
| Stockholders’ equity: | |
| | | |
| | |
| Preferred stock, $.01 par value; 500,000 shares authorized; | |
| - | | |
| - | |
| Common stock, $.01 par value; 18,000,000 shares authorized; 12,785,940 shares issued and 11,846,909
outstanding as of March 31, 2026 , 12,700,465 shares issued and 11,761,434 outstanding as of June 30, 2025 | |
| 127,862 | | |
| 127,008 | |
| Additional paid-in-capital | |
| 129,631,529 | | |
| 129,529,901 | |
| Treasury stock (at cost, 939,031 shares as of March 31, 2026 and June 30, 2025) | |
| (3,920,856 | ) | |
| (3,920,856 | ) |
| Accumulated deficit | |
| (42,098,647 | ) | |
| (41,289,080 | ) |
| Other comprehensive loss | |
| (46,563,902 | ) | |
| (46,613,208 | ) |
| Total NetSol stockholders’ equity | |
| 37,175,986 | | |
| 37,833,765 | |
| Non-controlling interest | |
| 7,096,247 | | |
| 4,425,365 | |
| Total stockholders’ equity | |
| 44,272,233 | | |
| 42,259,130 | |
| Total liabilities and stockholders’ equity | |
$ | 71,923,376 | | |
$ | 62,441,109 | |
Schedule
2: Consolidated Statements of Operations
| | |
For the Three Months | | |
For the Nine Months | |
| | |
Ended March 31, | | |
Ended March 31, | |
| | |
2026 | | |
2025 | | |
2026 | | |
2025 | |
| Net Revenues: | |
| | | |
| | | |
| | | |
| | |
| License fees | |
$ | 4,728,411 | | |
$ | 1,198 | | |
$ | 4,918,118 | | |
$ | 75,115 | |
| Subscription and support | |
| 8,810,115 | | |
| 7,888,360 | | |
| 26,850,453 | | |
| 24,723,460 | |
| Services | |
| 6,294,117 | | |
| 9,654,399 | | |
| 21,884,473 | | |
| 22,880,541 | |
| Total net revenues | |
| 19,832,643 | | |
| 17,543,957 | | |
| 53,653,044 | | |
| 47,679,116 | |
| | |
| | | |
| | | |
| | | |
| | |
| Cost of revenues | |
| 8,804,001 | | |
| 8,802,184 | | |
| 27,683,320 | | |
| 25,452,890 | |
| Gross profit | |
| 11,028,642 | | |
| 8,741,773 | | |
| 25,969,724 | | |
| 22,226,226 | |
| | |
| | | |
| | | |
| | | |
| | |
| Operating expenses: | |
| | | |
| | | |
| | | |
| | |
| Selling, general and administrative | |
| 7,856,107 | | |
| 6,883,587 | | |
| 22,874,107 | | |
| 20,921,530 | |
| Research and development cost | |
| 166,384 | | |
| 304,788 | | |
| 628,440 | | |
| 998,406 | |
| Total operating expenses | |
| 8,022,491 | | |
| 7,188,375 | | |
| 23,502,547 | | |
| 21,919,936 | |
| | |
| | | |
| | | |
| | | |
| | |
| Income from operations | |
| 3,006,151 | | |
| 1,553,398 | | |
| 2,467,177 | | |
| 306,290 | |
| | |
| | | |
| | | |
| | | |
| | |
| Other income and (expenses) | |
| | | |
| | | |
| | | |
| | |
| Interest expense | |
| (151,537 | ) | |
| (194,742 | ) | |
| (502,421 | ) | |
| (689,347 | ) |
| Interest income | |
| 208,232 | | |
| 294,655 | | |
| 697,981 | | |
| 1,593,594 | |
| Gain (loss) on foreign currency exchange transactions | |
| (76,178 | ) | |
| 321,622 | | |
| (317,021 | ) | |
| 165,741 | |
| Other income | |
| 109,203 | | |
| 10,831 | | |
| 190,798 | | |
| 202,420 | |
| Total other income (expenses) | |
| 89,720 | | |
| 432,366 | | |
| 69,337 | | |
| 1,272,408 | |
| Net income before income taxes | |
| 3,095,871 | | |
| 1,985,764 | | |
| 2,536,514 | | |
| 1,578,698 | |
| Income tax provision | |
| (781,243 | ) | |
| (151,334 | ) | |
| (1,477,212 | ) | |
| (712,765 | ) |
| Net income (loss) | |
| 2,314,628 | | |
| 1,834,430 | | |
| 1,059,302 | | |
| 865,933 | |
| Non-controlling interest | |
| (1,013,664 | ) | |
| (410,462 | ) | |
| (1,868,869 | ) | |
| (518,212 | ) |
| Net income (loss) attributable to NetSol | |
$ | 1,300,964 | | |
$ | 1,423,968 | | |
$ | (809,567 | ) | |
$ | 347,721 | |
| | |
| | | |
| | | |
| | | |
| | |
| Net income (loss) per share: | |
| | | |
| | | |
| | | |
| | |
| Net income (loss) per common share | |
| | | |
| | | |
| | | |
| | |
| Basic | |
$ | 0.11 | | |
$ | 0.12 | | |
$ | (0.07 | ) | |
$ | 0.03 | |
| Diluted | |
$ | 0.11 | | |
$ | 0.12 | | |
$ | (0.07 | ) | |
$ | 0.03 | |
| | |
| | | |
| | | |
| | | |
| | |
| Weighted average number of shares outstanding | |
| | | |
| | | |
| | | |
| | |
| Basic | |
| 11,823,170 | | |
| 11,683,408 | | |
| 11,795,818 | | |
| 11,531,365 | |
| Diluted | |
| 11,836,930 | | |
| 11,683,408 | | |
| 11,795,818 | | |
| 11,531,365 | |
Schedule
3: Consolidated Statements of Cash Flows
| | |
For the Nine Months | |
| | |
Ended March 31, | |
| | |
2026 | | |
2025 | |
| Cash flows from operating activities: | |
| | | |
| | |
| Net income | |
$ | 1,059,302 | | |
$ | 865,933 | |
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |
| | | |
| | |
| Depreciation and amortization | |
| 931,771 | | |
| 1,102,085 | |
| Provision for bad debts | |
| 337,493 | | |
| 1,062,515 | |
| Gain on sale of assets | |
| (87,463 | ) | |
| (28,320 | ) |
| Stock based compensation | |
| 267,400 | | |
| 134,884 | |
| Changes in operating assets and liabilities: | |
| | | |
| | |
| Accounts receivable | |
| (9,180,034 | ) | |
| 6,408,397 | |
| Revenues in excess of billing | |
| (1,611,662 | ) | |
| (1,411,983 | ) |
| Other current assets | |
| 936,453 | | |
| (344,493 | ) |
| Accounts payable and accrued expenses | |
| 123,872 | | |
| (1,136,533 | ) |
| Unearned revenue | |
| 6,437,518 | | |
| (6,646,170 | ) |
| Net cash provided by (used in) operating activities | |
| (785,350 | ) | |
| 6,315 | |
| | |
| | | |
| | |
| Cash flows from investing activities: | |
| | | |
| | |
| Purchases of property and equipment | |
| (1,379,262 | ) | |
| (897,743 | ) |
| Sales of property and equipment | |
| 85,851 | | |
| 63,577 | |
| Investment in associates | |
| 25,396 | | |
| - | |
| Purchase of subsidiary shares | |
| - | | |
| (8,878 | ) |
| Increase in intangible assets | |
| (1,039,989 | ) | |
| - | |
| Net cash used in investing activities | |
| (2,308,004 | ) | |
| (843,044 | ) |
| | |
| | | |
| | |
| Cash flows from financing activities: | |
| | | |
| | |
| Proceeds from the exercise of stock options and warrants | |
| - | | |
| 473,000 | |
| Proceeds from exercise of subsidiary options | |
| 387,200 | | |
| - | |
| Dividend paid by subsidiary to non-controlling interest | |
| - | | |
| (306,799 | ) |
| Purchase of subsidiary treasury stock | |
| - | | |
| (1,503,662 | ) |
| Proceeds from bank loans | |
| 1,076,226 | | |
| 2,451,256 | |
| Payments on finance lease obligations and loans - net | |
| (1,093,671 | ) | |
| (247,496 | ) |
| Net cash provided by financing activities | |
| 369,755 | | |
| 866,299 | |
| Effect of exchange rate changes | |
| 110,047 | | |
| (381,996 | ) |
| Net increase (decrease) in cash and cash equivalents | |
| (2,613,552 | ) | |
| (352,426 | ) |
| Cash and cash equivalents at beginning of the period | |
| 17,357,944 | | |
| 19,127,165 | |
| Cash and cash equivalents at end of period | |
$ | 14,744,392 | | |
$ | 18,774,739 | |
Schedule
4: Reconciliation of GAAP Net Income (Loss) to Non-GAAP EBITDA
| | |
For the Three Months | | |
For the Nine Months | |
| | |
Ended March 31, | | |
Ended March 31, | |
| | |
2026 | | |
2025 | | |
2026 | | |
2025 | |
| | |
| | |
| | |
| | |
| |
| Net Income (loss) attributable to NetSol | |
$ | 1,300,964 | | |
$ | 1,423,968 | | |
$ | (809,567 | ) | |
$ | 347,721 | |
| Non-controlling interest | |
| 1,013,664 | | |
| 410,462 | | |
| 1,868,869 | | |
| 518,212 | |
| Income taxes | |
| 781,243 | | |
| 151,334 | | |
| 1,477,212 | | |
| 712,765 | |
| Depreciation and amortization | |
| 307,419 | | |
| 363,503 | | |
| 931,771 | | |
| 1,102,085 | |
| Interest expense | |
| 151,537 | | |
| 194,742 | | |
| 502,421 | | |
| 689,347 | |
| Interest (income) | |
| (208,232 | ) | |
| (294,655 | ) | |
| (697,981 | ) | |
| (1,593,594 | ) |
| EBITDA | |
$ | 3,346,595 | | |
$ | 2,249,354 | | |
$ | 3,272,725 | | |
$ | 1,776,536 | |
| Add back: | |
| | | |
| | | |
| | | |
| | |
| Non-cash stock-based compensation | |
| 61,000 | | |
| 39,750 | | |
| 267,400 | | |
| 134,884 | |
| Adjusted EBITDA, gross | |
$ | 3,407,595 | | |
$ | 2,289,104 | | |
$ | 3,540,125 | | |
$ | 1,911,420 | |
| Less non-controlling interest (a) | |
| (1,202,196 | ) | |
| (510,908 | ) | |
| (2,294,175 | ) | |
| (718,218 | ) |
| Adjusted EBITDA, net | |
$ | 2,205,399 | | |
$ | 1,778,196 | | |
$ | 1,245,950 | | |
$ | 1,193,202 | |
| | |
| | | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | | |
| | |
| Weighted Average number of shares outstanding | |
| | | |
| | | |
| | | |
| | |
| Basic | |
| 11,823,170 | | |
| 11,683,408 | | |
| 11,795,818 | | |
| 11,531,365 | |
| Diluted | |
| 11,836,930 | | |
| 11,683,408 | | |
| 11,809,578 | | |
| 11,531,365 | |
| | |
| | | |
| | | |
| | | |
| | |
| Basic adjusted EBITDA | |
$ | 0.19 | | |
$ | 0.15 | | |
$ | 0.11 | | |
$ | 0.10 | |
| Diluted adjusted EBITDA | |
$ | 0.19 | | |
$ | 0.15 | | |
$ | 0.11 | | |
$ | 0.10 | |
| | |
| | | |
| | | |
| | | |
| | |
| (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 | |
$ | 1,013,664 | | |
$ | 410,462 | | |
$ | 1,868,869 | | |
$ | 518,212 | |
| Income Taxes | |
| 139,102 | | |
| 41,891 | | |
| 274,702 | | |
| 214,892 | |
| Depreciation and amortization | |
| 70,107 | | |
| 87,504 | | |
| 214,969 | | |
| 269,185 | |
| Interest expense | |
| 43,604 | | |
| 54,461 | | |
| 143,512 | | |
| 202,289 | |
| Interest (income) | |
| (64,281 | ) | |
| (83,410 | ) | |
| (207,877 | ) | |
| (491,422 | ) |
| EBITDA | |
$ | 1,202,196 | | |
$ | 510,908 | | |
$ | 2,294,175 | | |
$ | 713,156 | |
| Add back: | |
| | | |
| | | |
| | | |
| | |
| Non-cash stock-based compensation | |
| - | | |
| - | | |
| - | | |
| 5,062 | |
| Adjusted EBITDA of non-controlling interest | |
$ | 1,202,196 | | |
$ | 510,908 | | |
$ | 2,294,175 | | |
$ | 718,218 | |
