• Total net revenues increase 4.2% to $57.2 million in FY 2022
  • Annual recurring revenue (SaaS and Support) increased to $28.3 million, up by 27.6%

CALABASAS, Calif., Sept. 27, 2022 (GLOBE NEWSWIRE) — NETSOL Technologies, Inc. (Nasdaq: NTWK), a global business services and enterprise application solutions provider, reported results for the fiscal fourth quarter and full year ended June 30, 2022.

Fiscal Fourth Quarter 2022 and Recent Operational Highlights

  • NETSOL signed a contract with a notable Swedish bank to implement NFS Ascent® in Sweden, Norway, Denmark and Finland with an estimated value of $5 million over the five-year contract period.
  • NETSOL was awarded a contract by the Government of Khyber Pakhtunkhwa under the World Bank Funded “Khyber Pakhtunkhwa Revenue Mobilization and Public Resource Management Program” to provide a document management system. The contract is valued at approximately $2.2 million.
  • We successfully went live with our cloud-based NFS Ascent® Retail Platform for a bank in the United Kingdom. The Retail Platform constitutes both NFS Ascent® Omni Point of Sale and NFS Ascent® Contract Management System. This contract will provide additional subscription fees of approximately $1 million over the coming 5 years.
  • We went live with NFS Ascent® and NFS Ascent® Digital in New Zealand for a leading Japanese equipment manufacturer and in addition signed a statement of work which will generate approximately $1 million.
  • We onboarded another 7 dealers of a leading German Auto Manufacturer in the U.S. on our digital retailing solution OtozTM bringing the total to 24 at June 30, 2022.

Fiscal Fourth Quarter 2022 Financial Results

Total net revenues for the fourth quarter of fiscal 2022 were $13.5 million, compared with $15.4 million in the prior year period. The decrease in total net revenues was primarily driven by decreases in license revenue of $0.6 million and services revenue of $1.7 million, offset by an increase in subscription and support revenue of $0.5 million.

  • Total license fees were $0.95 million, compared with $1.5 million in the prior year period.
  • Total subscription (SaaS and Cloud) and support revenues were $6.1 million, compared with $5.6 million in the prior year period.
  • Total services revenues were $6.5 million, compared with $8.2 million in the prior year period.

Gross profit for the fourth quarter of fiscal 2022 was $4.8 million (or 36% of net revenues), compared to $7.5 million (or 49% of net revenues) in the fourth quarter of fiscal 2021. The decrease in gross profit was primarily due to a decrease in revenues of $1.8 million and an increase in cost of sales of $0.9 million driven by increases in salaries and consulting costs of $0.7 million.

Operating expenses for the fourth quarter of fiscal 2022 were $6.4 million (or 47% of sales), compared to $6.4 million (or 41% of sales) for the fourth quarter of fiscal 2021. Operating expenses remained flat as the increase in research and development costs of $0.3 million was offset by the decrease in salaries and wages of $0.3 million.

GAAP net loss attributable to NETSOL for the fourth quarter of fiscal 2022 totaled $2.2 million or $0.19 per diluted share, compared with GAAP net income of $1.9 million or $0.17 per diluted share in the fourth quarter of fiscal 2021.

Non-GAAP adjusted EBITDA for the fourth quarter of fiscal 2022 totaled $(1.4) million or $0.12 per diluted share, compared with non-GAAP adjusted EBITDA of $2.9 million or $0.26 per diluted share in the fourth quarter of fiscal 2021 (see note regarding “Use of Non-GAAP Financial Measures,” below for further discussion of this non-GAAP measure).

At June 30, 2022, cash and cash equivalents were $24 million, a decrease from $33.7 million at June 30, 2021.

Management Commentary

“We returned to revenue growth for fiscal 2022 increasing 4.2% after two years of revenue decline in fiscal years 2020 and 2021,” said NETSOL Co-Founder, Chairman and Chief Executive Officer Najeeb Ghauri. “We believe we have robust traction in the current pipeline for fiscal 2023 as we aim for double digit revenue growth. Our pipeline in the North American market is healthy and strong. We are working on potential projects for both multinational and US based major Tier 1 captive finance companies. Our Flagship NFS Ascent offering is in a strong position as we are gaining momentum both for SaaS and license offerings. Additionally, we have a robust pipeline in the European markets as our team in the UK are working diligently to secure new customers in the retail sector. We have also signed up a few more Otoz digital platforms through MINI Anywhere across the US to a total of 30 dealerships to date.”

Company CFO Roger Almond added: “Our subscription and support segment were a key growth driver during the year. As our workforce continues to return to the office across our global footprint, we expect growth will accelerate in the quarters ahead, which will require a related increase in expenses to support our increased business activity moving forward. Our cash position remains strong, providing the resources to support our core business growth as well as strategic investments in high-return, long-term opportunities, such as the promising work of the Otoz Innovation Lab.”

Conference Call

NETSOL Technologies management will hold a conference call today (September 27, 2022) 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: 877-407-0789International Dial-In: 201-689-8562

Please call the conference telephone number 10 minutes prior to the start time. An operator will register your name and organization.

The conference call will be webcast live and available for replay here and via the Investor Relations section of NETSOL’s website.

For interested individuals unable to join the conference call, a dial-in replay of the call will be available until October 11, 2022.

Toll-free replay number: 844-512-2921International replay number: 412-317-6671Replay ID: 13732869

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 of more than 1750 professionals placed 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.

About Otoz

Otoz, a division of NETSOL Technologies Inc. (Nasdaq: NTWK), provides business-to-business, white-label technology solutions for new mobility. The Otoz suite of agile and customizable mobility solutions ranges from car sharing and subscription products to AI-enabled chatbots, allowing businesses to engage consumers and facilitate the complete transaction lifecycle intelligently and digitally. Otoz technologies empower automotive companies and start-ups to launch digital retailing and new mobility models quickly and efficiently. The technology Otoz has developed is cloud-native and supported by artificial intelligence (AI), machine learning (ML), internet of things (IoT) and blockchain. Otoz technology drives utilization, while supporting robust and efficient operations.

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 such as the effect of disparate stay at home orders and social distancing requirements imposed internationally by COVID-19 and its resultant impact on our financials and the world economy 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:

NetSol Technologies Investor Relations818-222-9195

[email protected]

NETSOL Technologies, Inc. and SubsidiariesSchedule 1: Consolidated Balance Sheets

NETSOL Technologies, Inc. and SubsidiariesSchedule 2: Consolidated Statement of Operations

NETSOL Technologies, Inc. and SubsidiariesSchedule 3: Consolidated Statement of Cash Flows

NETSOL Technologies, Inc. and SubsidiariesSchedule 4: Reconciliation to GAAP

Disclaimer: The above press release comes to you under an arrangement with GlobeNewswire. TheTechOutlook.com takes no editorial responsibility for the same.