Earnings release
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February 12, 2026 NETSOL Technologies reports 21% year- over-year growth in total net revenues in Q2 fiscal 2026 ENCINO, Calif., Feb. 12, 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 second fiscal quarter of 2026 and six months ended December 31, 2025. Total net revenues up 21.1% to $18.8 million Services revenues up 40.9% to $9.6 million Recurring subscription and support revenues up 5.1% to $9.1 million Gross margin expanded to 48.0% (from 44.5%) Operating income was $1.3 million (vs. loss of $0.5 million) Cash and cash equivalents up 4.0% to $18.1 million Second Quarter 2026 Financial Results Total net revenues for the second quarter of fiscal 2026 increased 21.1% to $18.8 million, compared with $15.5 million in the prior-year period, driven primarily by higher services revenues and higher subscription and support revenues. On a constant currency basis, total net revenues were $18.8 million. Recurring subscription and support revenues increased approximately 5.1% to $9.1 million compared with $8.6 million in the prior-year period. Total subscription and support revenues as percentage of total net revenues were 48.3%, compared with 55.6% in the prior-year period, reflecting higher implementation services revenues in the quarter. Total subscription and support revenues on a constant currency basis were $9.2 million. Total services revenues increased 40.9% to $9.6 million, compared with $6.8 million in the prior-year period. The increase primarily reflected implementation timing and project mix. Total services revenues on a constant currency basis were $9.6 million. Gross profit for the quarter was $9.0 million or 48.0% of net revenues, compared with $6.9 million or 44.5% of net revenues in the second quarter of fiscal 2025. On a constant currency basis, gross profit was $9.0 million or 47.8% of net revenues. Cost of sales for the quarter was $9.8 million or 52.0% of net revenues compared
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with $8.6 million or 55.5% of net revenues in the second quarter of fiscal 2025. On a constant currency basis, cost of sales was $9.8 million or 52.2% of net revenues. The increase in cost of sales primarily reflected increased salaries and travel costs. Income from operations for the quarter was $1.3 million compared with a loss from operations of $0.5 million in the second quarter of fiscal 2025. On a constant currency basis, income from operations was $1.3 million. GAAP net income attributable to NETSOL for the quarter totaled $0.2 million or $0.02 per diluted share, compared with a GAAP net loss of $1.1 million or $0.10 per diluted share in the second quarter of fiscal 2025. On a constant currency basis, GAAP net income attributable to NETSOL for the quarter totaled $0.2 million or $0.01 per diluted share. Non-GAAP EBITDA for the quarter was $1.7 million compared with a non-GAAP EBITDA loss of $0.8 million in the second quarter of fiscal 2025. (see note regarding “Use of Non-GAAP Financial Measures,” below for further discussion of this non-GAAP measure). Najeeb Ghauri, Founder and Chief Executive Officer of NETSOL Technologies Inc., commented, “NETSOL delivered a strong second quarter of fiscal 2026, with total net revenues up 21% year-over-year to $18.8 million. Services revenue grew 41%, driven by active implementations of Transcend Finance and Transcend Retail, and we view implementation momentum as an important leading indicator of future subscription scale. “Transcend Retail is gaining meaningful traction in the U.S. automotive market, with adoption by leading dealer groups and franchised dealerships. Partnerships with MINI USA, Sonic Automotive, Indigo Auto Group, and others reflect growing validation of our platform and the outcomes it enables for dealers. “While SaaS revenue growth is currently moderated by the timing of customer go-lives, we believe recurring revenues can accelerate over time as these deployments complete. “We are also investing in AI to extend our product roadmap, including Check, an AI-enabled credit decisioning capability built into our loan origination system, designed to help credit and funding teams work faster and with greater precision by turning data into real-time, actionable decisions.” Sardar Abubakr, Chief Financial Officer of NETSOL Technologies Inc., commented, “We delivered measurable profitability improvements in the quarter. Gross profit increased to $9.0 million, or 48% of net revenues, up from 44.5% in the prior-year period, and delivered operating income of $1.3 million. “Our priority is to scale efficiently by maintaining cost discipline while investing in the areas that expand long-term earnings quality, including subscription growth and strategic services that support customer adoption. We believe our balance of revenue growth, margin improvement, and targeted investment positions NETSOL to build sustainable shareholder value.” Six Months Ended December 31, 2025, Financial Results
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Total net revenues for the six months ended December 31, 2025, were $33.8 million, compared with $30.1 million in the prior-year period. On a constant currency basis, total net revenues were $33.5 million. Recurring subscription and support revenues for the six months ended December 31, 2025, increased 7.2% to $18.0 million from $16.8 million in the prior-year period. Total subscription and support revenues on a constant currency basis were $17.9 million. Total services revenues increased 17.9% to $15.6 million from $13.2 million in the prior-year period. Total services revenues on a constant currency basis were $15.5 million. The increase in total services revenues during this period primarily reflected increased implementation services for Transcend Retail and Transcend Finance . Gross profit for the six months ended December 31, 2025, was $14.9 million or 44.2% of net revenues, compared with $13.5 million or 44.8% of net revenues in the prior-year period. On a constant currency basis, gross profit for the six months ended December 31, 2025, was $14.6 million or 43.5% of net revenues as measured on a constant currency basis. Cost of sales for the six months ended December 31, 2025 was $18.9 million or 55.8% of net revenues compared with $16.7 million or 55.3% of net revenues in the prior-year period. On a constant currency basis, cost of sales was $18.9 million or 56.5% of net revenues. Loss from operations for the six months ended December 31, 2025 was $0.5 million compared with a loss from operations of $1.2 million in the prior-year period. On a constant currency basis, loss from operations was $0.8 million. GAAP net loss attributable to NETSOL for the six months ended December 31, 2025, totaled $2.1 million or $0.18 per diluted share, compared with GAAP net loss of $1.1 million or $0.09 per diluted share in the prior-year period. On a constant currency basis, GAAP net loss attributable to NETSOL for the first six months of fiscal 2026 totaled $2.5 million or $0.21 per diluted share. Non-GAAP EBITDA for the six months ended December 31, 2025, was a loss of $0.1 million compared with non-GAAP EBITDA loss of $0.5 million in the prior-year period (see note regarding “Use of Non-GAAP Financial Measures,” below for further discussion of this non- GAAP measure). Balance Sheet and Capital Structure Cash and cash equivalents were $18.1 million as of December 31, 2025, compared with $17.4 million as of June 30, 2025. Working capital was $26.4 million as of December 31, 2025, compared with $26.6 million as of June 30, 2025. Total NETSOL stockholders’ equity at December 31, 2025, was $35.9 million or $3.04 per diluted share. Conference Call NETSOL Technologies management will hold a conference call on Thursday, February 12, 2026, at 9:00 am Eastern Time (6:00 am Pacific Time) to discuss its financial results to discuss these financial results. A question-and-answer session will follow management's
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presentation. Participant listening: 1-877-407-0789 or 1-201-689-8562 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 . Telephone replays will be made available approximately 3 hours after conference end time. Telephone replay Replay dial-in: 1-844-512-2921 or 1-412-317-6671 Replay expiration: Thursday, February 26, 2026 at 11:59 PM ET Access ID: 13758657 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 may contain forward-looking statements relating to the development of the Company's products and services and future operation 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. 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:
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Investor Relations (818) 222-9195 investors@netsoltech.com NETSOL Technologies, Inc. and Subsidiaries Schedule 1: Consolidated Balance Sheets As of As of ASSETS December 31, 2025 June 30, 2025 Cash and cash equivalents $ 18,132,086 $ 17,357,944 Accounts receivable, net of allowance of $401,507 and $355,464 7,776,096 7,527,572 Revenues in excess of billings, net of allowance of $84,882 and $34,496 17,080,695 18,230,619 Other current assets 3,423,634 3,203,468 Total current assets 46,412,511 46,319,603 763,396 903,766 5,185,764 5,073,372 1,015,011 809,513 6,941 32,331 9,302,524 9,302,524 Total assets $ 62,686,147 $ 62,441,109 LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable and accrued expenses $ 8,059,205 $ 8,010,844 Current portion of loans and obligations under finance leases 8,509,841 8,240,061 Current portion of operating lease obligations 542,022 433,242 Unearned revenue 2,884,757 3,029,850 Total current liabilities 19,995,825 19,713,997 337,028 134,608 414,725 333,374 Total liabilities 20,747,578 20,181,979 Preferred stock, $.01 par value; 500,000 shares authorized; - - Common stock, $.01 par value; 18,000,000 shares authorized; 12,753,209 shares issued and 11,814,178 outstanding as of December 31, 2025 , 12,700,465 shares issued and 11,761,434 outstanding as of June 30, 2025 127,535 127,008 Additional paid-in-capital 129,545,854 129,529,901 Treasury stock (at cost, 939,031 shares as of December 31, 2025 and June 30, 2025) (3,920,856 ) (3,920,856 ) Accumulated deficit (43,399,611 ) (41,289,080 ) Other comprehensive loss (46,413,009 ) (46,613,208 ) Total NETSOL stockholders' equity 35,939,913 37,833,765 Non-controlling interest 5,998,656 4,425,365 Total stockholders' equity 41,938,569 42,259,130 Total liabilities and stockholders' equity $ 62,686,147 $ 62,441,109 NETSOL Technologies, Inc. and Subsidiaries Schedule 2: Consolidated Statement of Operations For the Three Months For the Six Months Ended December 31, Ended December 31, 2025 2024 2025 2024 Net Revenues:
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License fees $ 117,482 $ 72,688 $ 189,707 $ 73,917 Subscription and support 9,079,783 8,642,629 18,040,338 16,835,100 Services 9,611,213 6,821,344 15,590,356 13,226,142 Total net revenues 18,808,478 15,536,661 33,820,401 30,135,159 Cost of revenues 9,779,386 8,616,320 18,879,319 16,650,706 Gross profit 9,029,092 6,920,341 14,941,082 13,484,453 Operating expenses: Selling, general and administrative 7,481,647 7,073,622 15,018,000 14,037,943 Research and development cost 247,713 333,669 462,056 693,618 Total operating expenses 7,729,360 7,407,291 15,480,056 14,731,561 Income (loss) from operations 1,299,732 (486,950 ) (538,974 ) (1,247,108 ) Other income and (expenses) Interest expense (176,273 ) (236,386 ) (350,884 ) (494,605 ) Interest income 208,775 529,072 489,749 1,298,939 Gain (loss) on foreign currency exchange transactions 46,074 (698,426 ) (240,843 ) (155,881 ) Other income 63,925 38,098 81,595 191,589 Total other income (expenses) 142,501 (367,642 ) (20,383 ) 840,042 Net income (loss) before income taxes 1,442,233 (854,592 ) (559,357 ) (407,066 ) Income tax provision (480,194 ) (331,614 ) (695,969 ) (561,431 ) Net income (loss) 962,039 (1,186,206 ) (1,255,326 ) (968,497 ) Non-controlling interest (715,282 ) 39,164 (855,205 ) (107,750 ) Net income (loss) attributable to NetSol $ 246,757 $ (1,147,042 ) $ (2,110,531 ) $ (1,076,247 ) Net income (loss) per share: Net income (loss) per common share Basic $ 0.02 $ (0.10 ) $ (0.18 ) $ (0.09 ) Diluted $ 0.02 $ (0.10 ) $ (0.18 ) $ (0.09 ) Weighted average number of shares outstanding Basic 11,797,068 11,484,298 11,782,439 11,456,996 Diluted 11,812,098 11,484,298 11,782,439 11,456,996 NETSOL Technologies, Inc. and Subsidiaries Schedule 3: Consolidated Statement of Cash Flows For the Six Months Ended December 31, 2025 2024 Cash flows from operating activities: Net loss $ (1,255,326 ) $ (968,497 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 624,352 738,582 Provision for bad debts 90,462 475,172 Gain on sale of assets (79,325 ) (25,084 ) Stock based compensation 206,400 95,134 Changes in operating assets and liabilities: Accounts receivable (275,785 ) 4,405,610 Revenues in excess of billing 1,468,463 2,688,774
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Other current assets 401,208 (170,856 ) Accounts payable and accrued expenses 5,092 (878,148 ) Unearned revenue (630,660 ) (5,990,971 ) Net cash provided by operating activities 554,881 369,716 Cash flows from investing activities: Purchases of property and equipment (856,330 ) (568,134 ) Sales of property and equipment 77,522 45,535 Investment in associates 25,396 - Purchase of subsidiary shares - (8,878 ) Net cash used in investing activities (753,412 ) (531,477 ) Cash flows from financing activities: Proceeds from the exercise of stock options and warrants - 430,000 Proceeds from exercise of subsidiary options 358,133 - Dividend paid by subsidiary to non-controlling interest - (306,799 ) Proceeds from bank loans 792,484 2,676,932 Payments on finance lease obligations and loans - net (425,764 ) (162,370 ) Net cash provided by financing activities 724,853 2,637,763 Effect of exchange rate changes 247,820 (332,525 ) Net increase (decrease) in cash and cash equivalents 774,142 2,143,477 Cash and cash equivalents at beginning of the period 17,357,944 19,127,165 Cash and cash equivalents at end of period $ 18,132,086 $ 21,270,642 NETSOL Technologies, Inc. and Subsidiaries Schedule 4: Reconciliation to GAAP For the Three Months For the Six Months Ended December 31, Ended December 31, 2025 2024 2025 2024 Net Income (loss) attributable to NetSol $ 246,757 $ (1,147,042 ) $ (2,110,531 ) $ (1,076,247 ) Non-controlling interest 715,282 (39,164 ) 855,205 107,750 Income taxes 480,194 331,614 695,969 561,431 Depreciation and amortization 299,746 372,585 624,352 738,582 Interest expense 176,273 236,386 350,884 494,605 Interest (income) (208,775 ) (529,072 ) (489,749 ) (1,298,939 ) EBITDA $ 1,709,477 $ (774,693 ) $ (73,870 ) $ (472,818 ) Add back: Non-cash stock-based compensation 61,000 47,355 - 206,400 95,134 Adjusted EBITDA, gross $ 1,770,477 $ (727,338 ) $ 132,530 $ (377,684 ) Less non-controlling interest (a) (868,111 ) (61,529 ) (1,092,059 ) (207,310 ) Adjusted EBITDA, net $ 902,366 $ (788,867 ) $ (959,529 ) $ (584,994 ) Weighted Average number of shares outstanding Basic 11,797,068 11,484,298 11,782,439 11,456,996 Diluted 11,812,098 11,484,298 11,782,439 11,456,996 Basic adjusted EBITDA $ 0.08 $ (0.07 ) $ (0.08 ) $ (0.05 ) Diluted adjusted EBITDA $ 0.08 $ (0.07 ) $ (0.08 ) $ (0.05 ) (a)The reconciliation of adjusted EBITDA of non-controlling interest to net income attributable to non-controlling interest is as follows
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Net Income (loss) attributable to non-controlling interest $ 715,282 $ (39,164 ) $ 855,205 $ 107,750 Income Taxes 95,791 102,414 135,583 173,001 Depreciation and amortization 69,777 92,546 144,862 181,681 Interest expense 51,081 68,636 99,908 147,828 Interest (income) (63,820 ) (165,365 ) (143,499 ) (408,012 ) EBITDA $ 868,111 $ 59,067 $ 1,092,059 $ 202,248 Add back: Non-cash stock-based compensation - 2,462 - 5,062 Adjusted EBITDA of non-controlling interest $ 868,111 $ 61,529 $ 1,092,059 $ 207,310 Source: NETSOL Technologies Inc.