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
	ASSETS		March 31, 2026				June 30, 2025
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