NETSOL Technologies Reports Q2 Fiscal 2024 Results with Net Loss of $1.15 Million

NETSOL Technologies Inc. reported its financial results for the second quarter of fiscal year 2024, revealing a net loss of $1.15 million, or $0.10 per share, compared to a net income of $408,316, or $0.04 per share, in the same period last year. The company's total net revenues for the quarter reached $15.54 million, a slight increase from $15.24 million in the prior year. For the six months ended December 31, 2024, total net revenues were $30.14 million, up from $29.48 million in the same period of 2023. The increase in revenue was primarily driven by a rise in subscription and support fees, which grew to $8.64 million from $6.83 million year-over-year.

The financial performance reflects significant changes compared to the previous fiscal period, particularly in the license fees segment, which saw a sharp decline from $2.99 million to $72,688. This decrease was attributed to the absence of a major software sale that occurred in the prior year. In contrast, subscription and support revenues increased due to a one-time catch-up payment from several customers. The company's gross profit for the quarter was $6.92 million, down from $7.18 million, resulting in a gross profit margin of 44.5%, compared to 47.1% in the previous year.

Operationally, NETSOL Technologies has made strides in expanding its customer base and enhancing its service offerings. The company reported a decrease in accounts receivable to $7.83 million from $13.05 million, indicating improved cash flow management. Additionally, the company has been actively pursuing strategic partnerships, including a recent agreement with a UK-based financial services provider for subscription services valued at $250,000. The company also reported a significant increase in its employee headcount, reflecting its commitment to growth and service delivery.

Looking ahead, NETSOL Technologies remains optimistic about its future performance, citing positive trends in the automotive finance market and ongoing investments in technology and infrastructure. The company anticipates continued growth in subscription and support revenues as it implements its legacy products and the NFS Ascent® platform. However, it also acknowledges potential challenges, including geopolitical tensions and economic uncertainties that could impact its operations in various regions.

In summary, while NETSOL Technologies faced a challenging quarter with a net loss, it demonstrated resilience through revenue growth in key areas and strategic developments aimed at enhancing its market position. The company is focused on leveraging its technological capabilities and expanding its customer base to drive future profitability.