NETSOL Technologies reports record quarterly revenue and 13% year-over-year growth in Q3 fiscal 2026
Rhea-AI Summary
NETSOL Technologies (Nasdaq: NTWK) reported record Q3 FY 2026 net revenues of $19.8 million, up 13.0% year-over-year, the highest quarterly revenue in its history.
Recurring subscription and support revenue rose 11.7% to $8.8 million, gross margin expanded to 55.6%, Non-GAAP EBITDA reached $3.4 million, and revenue guidance of approximately $73 million for fiscal 2026 was reaffirmed.
For the nine months, revenue grew 12.5% to $53.7 million, while GAAP results moved to a $0.8 million net loss.
AI-generated analysis. Not financial advice.
Positive
- Record Q3 FY 2026 revenue of $19.8 million, up 13.0% YoY
- Recurring subscription and support revenue up 11.7% YoY to $8.8 million
- Gross margin increased to 55.6% from 49.8% year-over-year
- Q3 Non-GAAP EBITDA rose to $3.4 million from $2.3 million
- Nine-month Non-GAAP EBITDA increased to $3.5 million from $1.9 million
- Four-year $50 million contract extension with long-tenured tier-one customer
- Fiscal 2026 revenue guidance reaffirmed at approximately $73 million
Negative
- Q3 GAAP net income declined to $1.3 million from $1.4 million
- Nine-month GAAP results swung to $0.8 million net loss from $0.3 million income
- Q3 services revenue decreased to $6.3 million from $9.7 million year-over-year
- Nine-month services revenue fell to $21.9 million from $22.9 million
- Cash and cash equivalents declined to $14.7 million from $17.4 million
News Market Reaction – NTWK
On the day this news was published, NTWK declined 6.53%, reflecting a notable negative market reaction. Argus tracked a trough of -4.3% from its starting point during tracking. Our momentum scanner triggered 10 alerts that day, indicating notable trading interest and price volatility. This price movement removed approximately $3M from the company's valuation, bringing the market cap to $49.58M at that time.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Market Reality Check
Peers on Argus
Peers showed mixed moves: PHUN up 11.52% and INLX up 8.95%, while HKIT, MFI, and YXT declined. With NTWK up 3.26% and no momentum-cluster flags, trading appears more stock-specific than sector-driven.
Historical Context
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| May 12 | Conference appearance | Neutral | -0.2% | Announcement of LD Micro Invitational XVI presentation by senior executives. |
| May 06 | Earnings call notice | Neutral | +10.3% | Scheduling details for fiscal Q3 2026 results conference call and replay. |
| Apr 09 | Contract renewal | Positive | -4.3% | Multi-million-dollar renewal with tier-one UK bank on finance platform. |
| Apr 07 | Platform upgrade | Positive | +1.8% | Toyota Leasing Thailand upgrade to latest AI-enabled Wholesale Finance System. |
| Mar 11 | New large contract | Positive | -0.3% | >$10M Transcend Finance deal and go-live for tier-one U.S. auto captive in China. |
Operational wins and contract announcements have not consistently produced positive price reactions, with several positive headlines followed by flat or negative moves.
Over the past few months, NETSOL has announced multiple commercial and platform milestones, including a >$10 million Transcend Finance deployment in China on Mar 11, a Toyota Leasing Thailand upgrade on Apr 7, and a multi‑million‑dollar UK bank renewal on Apr 9. A conference call for fiscal Q3 results was set on May 6, and an LD Micro presentation was disclosed on May 12. Against this backdrop of expanding AI-enabled Transcend deployments and long-tenured customer renewals, today’s record‑revenue quarter extends the same growth narrative.
Market Pulse Summary
The stock moved -6.5% in the session following this news. A negative reaction despite record $19.8 million revenue and a stronger 55.6% gross margin would fit past instances where positive operational news did not reliably translate into price gains. Some traders might focus on GAAP net income fluctuations or cash trends despite reaffirmed $73 million revenue guidance. Historically, several large contracts and renewals saw limited follow-through, so skepticism around sustainability or one-time license contributions could influence sentiment.
Key Terms
non-gaap financial
ebitda financial
annualized recurring revenue financial
AI-generated analysis. Not financial advice.
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% from49.8% in the prior-year period - Non-GAAP EBITDA grew by
48.2% year-over-year to$3.4 million , for a17.2% EBITDA margin compared with13.1% 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
Recurring subscription and support revenues for the third quarter were
License fees for the third quarter were
Services revenues for the third quarter were
Gross profit for the third quarter was
GAAP net income attributable to NETSOL was
Non-GAAP EBITDA was
Nine Months Ended March 31, 2026 Financial Results
Total net revenues for the nine months ended March 31, 2026 were
Recurring subscription and support revenues for the nine months were
Annualized recurring revenue is forecasted to increase
License fees for the nine months were
Services revenues for the nine months were
Gross profit for the nine months was
GAAP net loss attributable to NETSOL was
Non-GAAP EBITDA was
Balance Sheet
Cash and cash equivalents were
Working capital was
Management Commentary
Najeeb Ghauri, Founder and Chief Executive Officer of NETSOL Technologies Inc., commented:
“Our third quarter was a record quarter for NETSOL, with
“The recognition of the one-time license investment associated with our four-year,
“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
Sardar Abubakr, Chief Financial Officer of NETSOL Technologies Inc., commented:
“Our third quarter results reflect continued profitable growth on a record
“For the nine months ended March 31, 2026, total net revenues grew
“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 | 16,646,299 | 7,527,572 | |||||||
| Revenues in excess of billings, net of allowance of | 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 | |||||||
