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
[email protected]
Schedule 1: Consolidated Balance Sheets As of As of ASSETSMarch 31, 2026 June 30, 2025Current 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
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
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