• NETSOL Technologies Reports Fiscal First Quarter 2024 Results

    ソース: Nasdaq GlobeNewswire / 07 11 2023 07:30:00   America/Chicago

    • Net Revenue for the Quarter Grew 12% to $14.2 Million
    • SaaS and Annual recurring Revenues Continue to Grow Year Over Year
    • Gross Margins Increased to 43% and Company Reports Net Profit

    ENCINO, Calif., Nov. 07, 2023 (GLOBE NEWSWIRE) -- NETSOL Technologies, Inc. (Nasdaq: NTWK), a global business services and enterprise application solutions provider, reported results for the fiscal first quarter ended September 30, 2023.

    Fiscal First Quarter 2024 Financial Results

    Total net revenues for the first quarter of fiscal 2024 increased 12% to $14.2 million, compared with $12.7 million in the prior year period. On a constant currency basis, total net revenues were $14.3 million.

    • License fees were $1.3 million compared with $250,000 in the prior year period. License fees on a constant currency basis were $1.3 million.
    • Total subscription (SaaS and Cloud) and support revenues were $6.5 million compared with $6.0 million in the prior year period. Total subscription and support revenues on a constant currency basis were $6.5 million.
    • Total services revenues were $6.4 million, consistent with $6.4 million in the prior year period. Total services revenues on a constant currency basis were $6.5 million.

    Gross profit for the first quarter of fiscal 2024 was $6.2 million (or 43% of net revenues), compared to $4.3 million (or 33% of net revenues) in the first quarter of fiscal 2023. On a constant currency basis, gross profit for the first quarter of fiscal 2024 was $4.7 million (or 33% of net revenues as measured on a constant currency basis).

    Operating expenses for the first quarter of fiscal 2024 were $5.8 million (or 41% of sales) compared to $6.1 million (or 48% of sales) for the first quarter of fiscal 2023. On a constant currency basis, operating expenses for the first quarter of fiscal 2023 increased to $6.4 million (or 45% of sales on a constant currency basis).

    GAAP net income attributable to NETSOL for the first quarter of fiscal 2024 totaled $31,000 or $0.003 per diluted share, compared with GAAP net loss of $(621,000) or a loss of $(0.06) per diluted share in the first quarter of fiscal 2023. Included in GAAP net income attributable to NETSOL was a loss of $(134,000) on foreign exchange currency in the first quarter of fiscal 2024, compared to a gain of approximately $1.3 million in the prior year period. On a constant currency basis, NETSOL realized a loss of $(174,000) on foreign currency transactions.

    Non-GAAP adjusted EBITDA for the first quarter of fiscal 2024 was $466,000 or $0.04 per diluted share, compared with non-GAAP adjusted EBITDA loss of $28,000 or $(0.002) per diluted share in the first quarter of fiscal 2023 (see note regarding “Use of Non-GAAP Financial Measures,” below for further discussion of this non-GAAP measure).

    Management Commentary

    NETSOL Co-Founder, Chairman and Chief Executive Officer Najeeb Ghauri stated, “Our first quarter of 2024 was highlighted by increases in total net revenue, improved gross margins, and profitability. This quarter highlights the strength of our business model particularly when we recognize licensing fees, subscription and support revenues, and services revenues. One goal is to drive more consistent license revenue alongside our more predictable subscription and support and services revenues.

    “We also continue to drive our cost containment initiative so we can reallocate capital to growing our SaaS business and expansion into the United States market. On that front, our focus continues to be staffing our new office in Austin, Texas with the best talent available to address this largely untapped market. Moreover, our white label SaaS-based solution Otoz is now live in 60 MiniAnywhere dealerships across 37 U.S. states, demonstrating the growing demand for SaaS-based solutions in this market. Finally, we continue to evaluate strategic acquisition opportunities throughout North America.

    “We’re very pleased with our results this quarter, and we believe that our performance reflects the long-term earnings potential for NETSOL as we continue to scale our revenue. We are working diligently to build our pipeline of licensing deals, and along with our expanding SaaS offerings, we believe this will drive improved results and more consistent profitability and cash generation.”

    Conference Call

    NETSOL Technologies management will hold a conference call today (November 7, 2023) at 9:00 a.m. Eastern time (6:00 a.m. Pacific time) to discuss these financial results. A question-and-answer session will follow management's presentation.

    U.S. dial-in: 877-407-0789
    International dial-in: 201-689-8562

    Please call the conference telephone number 5-10 minutes prior to the start time or use this link for telephone access to the call via your web browser. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Investor Relations at 818-222-9195.

    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.

    A telephone replay of the conference call will be available approximately three hours after the call concludes through Tuesday, November 21, 2023.

    Toll-free replay number: 844-512-2921
    International replay number: 412-317-6671
    Replay ID: 13742018

    About NETSOL Technologies
    NETSOL Technologies, Inc. (Nasdaq: NTWK) is a worldwide provider of IT and enterprise software solutions primarily serving the global leasing and finance industry. The Company’s suite of applications is backed by 40 years of domain expertise and supported by a committed team in eight strategically located support and delivery centers throughout the world. NFS, LeasePak, LeaseSoft or NFS Ascent® – help companies transform their Finance and Leasing operations, providing a fully automated asset-based finance solution covering the complete finance and leasing lifecycle.

    Forward-Looking Statements
    This press release may contain forward-looking statements relating to the development of the Company's products and services and future operating 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, as well as the delay in recovery or a prolonged economic downturn that effects our Company, our customers and the world economy. 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:

    IMS Investor Relations
    netsol@imsinvestorrelations.com
    +1 203-972-9200


    NETSOL Technologies, Inc. and Subsidiaries
    Schedule 1: Consolidated Balance Sheets
     
       As of As of
     ASSETSSeptember 30, 2023 June 30, 2023
    Current assets:   
     Cash and cash equivalents$16,551,677  $15,533,254 
     Accounts receivable, net of allowance of $416,435 and $420,354 6,870,956   11,714,422 
     Revenues in excess of billings, net of allowance of $116,425 and $1,380,141 13,008,285   12,377,677 
     Other current assets 2,244,490   1,978,514 
      Total current assets 38,675,408   41,603,867 
    Revenues in excess of billings, net - long term 724,875   - 
    Property and equipment, net 5,770,794   6,161,186 
    Right of use assets - operating leases 1,359,106   1,151,575 
    Other assets 32,326   32,327 
    Intangible assets, net -   127,931 
    Goodwill 9,302,524   9,302,524 
      Total assets$55,865,033  $58,379,410 
          
     LIABILITIES AND STOCKHOLDERS' EQUITY   
    Current liabilities:   
     Accounts payable and accrued expenses$6,802,879  $6,552,181 
     Current portion of loans and obligations under finance leases 5,756,553   5,779,510 
     Current portion of operating lease obligations 538,363   505,237 
     Unearned revenue 5,170,335   7,932,306 
      Total current liabilities 18,268,130   20,769,234 
    Loans and obligations under finance leases; less current maturities 137,847   176,229 
    Operating lease obligations; less current maturities 795,935   652,194 
      Total liabilities 19,201,912   21,597,657 
          
    Stockholders' equity:   
     Preferred stock, $.01 par value; 500,000 shares authorized; -   - 
     Common stock, $.01 par value; 14,500,000 shares authorized;   
      12,311,850 shares issued and 11,372,819 outstanding as of September 30, 2023   
      12,284,887 shares issued and 11,345,856 outstanding as of June 30, 2023 123,120   122,850 
     Additional paid-in-capital 128,536,132   128,476,048 
     Treasury stock (at cost, 939,031 shares   
     as of September 30, 2023 and June 30, 2023) (3,920,856)  (3,920,856)
     Accumulated deficit (44,865,296)  (44,896,186)
     Other comprehensive loss (46,411,702)  (45,975,156)
      Total NetSol stockholders' equity 33,461,398   33,806,700 
     Non-controlling interest 3,201,723   2,975,053 
      Total stockholders' equity 36,663,121   36,781,753 
      Total liabilities and stockholders' equity$55,865,033  $58,379,410 
       


    NETSOL Technologies, Inc. and Subsidiaries
    Schedule 2: Consolidated Statement of Operations
     
       For the Three Months
       Ended September 30,
        2023   2022 
    Net Revenues:   
     License fees$1,280,449  $   249,960 
     Subscription and support           6,512,243                   6,016,834 
     Services           6,449,489                     6,439,325 
      Total net revenues            14,242,181                    12,706,119 
          
    Cost of revenues            8,080,164                   8,454,122 
    Gross profit           6,162,017                     4,251,997 
          
    Operating expenses:   
     Selling, general and administrative             5,432,969                     5,678,561 
     Research and development cost                  378,419                       469,627 
      Total operating expenses             5,811,388                      6,148,188 
          
    Income (loss) from operations                  350,629                    (1,896,191)
          
    Other income and (expenses)   
     Interest expense             (276,017)                     (121,610)
     Interest income                  414,718                      431,857 
     Gain (loss) on foreign currency exchange transactions              (134,253)                    1,315,705 
     Other income (expense)                   57,881                      25,616 
      Total other income (expenses)                62,329                    1,651,568 
          
    Net income (loss) before income taxes               412,958                     (244,623)
    Income tax provision               (121,895)                       (193,348)
    Net income (loss)                  291,063                        (437,971)
     Non-controlling interest              (260,173)                     (182,758)
    Net income (loss) attributable to NetSol$30,890  $   (620,729)
          
          
    Net income (loss) per share:   
     Net income (loss) per common share   
      Basic$   0.003  $    (0.06)
      Diluted$   0.003  $    (0.06)
          
    Weighted average number of shares outstanding   
     Basic            11,345,856                  11,257,539 
     Diluted          11,345,856                    11,257,539 
     


    NETSOL Technologies, Inc. and Subsidiaries
    Schedule 3: Consolidated Statement of Cash Flows
     
        Ended September 30,
         2023   2022 
    Cash flows from operating activities:    
     Net income (loss)$291,063  $(437,971)
     Adjustments to reconcile net income (loss) to net cash   
      provided by operating activities:   
     Depreciation and amortization 530,786   845,003 
     Amortization of right of use of assets -   - 
     Provision for bad debts 7,880   (47,479)
     Gain on sale of assets (98)  (23,296)
     Stock based compensation 60,354   81,834 
      Changes in operating assets and liabilities:    
      Accounts receivable 4,608,881   815,132 
      Revenues in excess of billing (1,478,386)  337,996 
      Other current assets 92,686   (340,390)
      Accounts payable and accrued expenses 341,722   687,453 
      Unearned revenue (2,791,269)  (619,425)
      Net cash provided by operating activities  1,663,619   1,298,857 
           
    Cash flows from investing activities:    
     Purchases of property and equipment (371,630)  (1,347,601)
     Sales of property and equipment 1,230   453,607 
      Net cash used in investing activities  (370,400)  (893,994)
           
    Cash flows from financing activities:    
     Payments on finance lease obligations and loans - net (44,474)  (445,737)
      Net cash used in financing activities  (44,474)  (445,737)
    Effect of exchange rate changes  (230,322)  (2,999,975)
    Net decrease in cash and cash equivalents  1,018,423   (3,040,849)
    Cash and cash equivalents at beginning of the period 15,533,254   23,963,797 
    Cash and cash equivalents at end of period $16,551,677  $20,922,948 
     


    NETSOL Technologies, Inc. and Subsidiaries
    Schedule 4: Reconciliation to GAAP
     
     For the Three Months
     Ended September 30,
      2023   2022 
        
    Net Income (loss) attributable to NetSol$         30,890  $        (620,729)
    Non-controlling interest                           260,173                              182,758 
    Income taxes                           121,895                            193,348 
    Depreciation and amortization                         530,786                            845,003 
    Interest expense                           276,017                            121,610 
    Interest (income)                          (414,718)                         (431,857)
    EBITDA$        805,043  $         290,133 
    Add back:   
    Non-cash stock-based compensation                            60,354                            81,834 
    Adjusted EBITDA, gross$           865,397  $         371,967 
    Less non-controlling interest (a)                       (399,423)                           (399,535)
    Adjusted EBITDA, net$          465,974  $         (27,568)
        
    Weighted Average number of shares outstanding   
    Basic                      11,345,856                       11,257,539 
    Diluted                      11,345,856                        11,257,539 
        
    Basic adjusted EBITDA$         0.04  $         (0.002)
    Diluted adjusted EBITDA$         0.04  $         (0.002)
        
        
    (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$        260,173  $         182,758 
    Income Taxes                           36,377                                59,910 
    Depreciation and amortization                           141,334                        238,333 
    Interest expense                           85,889                           37,396 
    Interest (income)                        (128,091)                          (132,489)
    EBITDA$        395,682  $         385,908 
    Add back:   
    Non-cash stock-based compensation                          3,741                              13,627 
    Adjusted EBITDA of non-controlling interest$        399,423  $         399,535 
     


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