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1. Company Snapshot

1.a. Company Description

NetSol Technologies, Inc.designs, develops, markets, and exports software products to the automobile financing and leasing, banking, and financial services industries worldwide.The company offers NFS Ascent, a suite of financial applications for businesses in the finance and leasing industry.


Its NFS Ascent constituent applications include Omni Point of Sale, a web-based application; Contract Management System (CMS), an application for managing and maintaining credit contracts; Wholesale Finance System (WFS), a system for automating and managing the lifecycle of wholesale finance; Dealer Auditor Access System, a web-based solution that could be used in conjunction with WFS or any third-party wholesale finance system; NFS Ascent On The Cloud, a cloud-version of NFS Ascent; and NFS Digital solutions covering Self Point of Sale, Mobile Account, Mobile Point of Sale, Mobile Dealer, Mobile Auditor, Mobile Collector, and Mobile Field Investigator.The company also provides Otoz Digital Auto-Retail, a white-labelled SaaS platform; Otoz Ecosystem, an API-based architecture; and Otoz Platform, a white label platform, which includes Dealer Tool and Customer App portals.In addition, it offers system integration, consulting, and IT products and services.


It serves blue chip organizations, Dow-Jones 30 Industrials, Fortune 500 manufacturers and financial institutions, vehicle manufacturers, and enterprise technology providers.The company was incorporated in 1997 and is headquartered in Calabasas, California.

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1.b. Last Insights on NTWK

The recent 3-month performance of NetSol Technologies, Inc. was negatively impacted by a net loss of $1.1 million in Q2, despite a 2% year-over-year revenue growth. Rising expenses and a decline in profitability weighed heavily on the company's financials. Additionally, the company's investments in AI, such as the launch of Transcend AI Labs, have yet to yield significant returns. Furthermore, the company's Transcend Finance platform, which has seen several recent implementations, has not yet translated into substantial revenue growth.

1.c. Company Highlights

2. NetSol Technologies Fiscal Second Quarter 2025 Earnings Conference

NetSol Technologies reported a solid fiscal second quarter 2025, with total net revenues of $15.5 million, driven by a 27% increase in recurring revenues to $8.6 million. The growth in recurring revenue is in line with the company's long-term strategy, aiming for enhanced predictability and profitability. However, the company's profitability metrics showed a GAAP net loss of $1.1 million, or a loss of $0.10 per diluted share, compared to a GAAP net income of $408,000 in the prior year period. Non-GAAP EBITDA for the second quarter of fiscal 2025 was a loss of $775,000, or $0.07 per diluted share.

Publication Date: Feb -28

📋 Highlights
  • Recurring Revenue Growth: NetSol's recurring revenues increased by 27% to $8.6 million, driven by a double-digit percentage increase and a 26% increase in services revenues compared to the second quarter of fiscal 2024.
  • AI Investments and Enhancements: The company has made considerable investments in AI, launching Transcend AI Labs, and has introduced two key enhancements: intelligent document processing and an interactive AI assistant, to enhance its products and provide specialized AI consulting solutions.
  • Geographic Revenue Mix: Approximately 70-75% of NetSol's revenue comes from the APAC region, with 12.5% from Europe and 12.5% from the Americas, and the company expects North America to be a key growth market in the future.
  • Contractual Revenue Growth: The company has a sizable contract with AutoNation, with reported income of approximately $18 million since signing the contract, and expects to receive millions of dollars from AutoNation if it grows to $50 billion in revenue.

AI Investments and Growth Strategy

The company made significant investments in AI, launching Transcend AI Labs, a dedicated AI innovation company, in 2024. The company is building out its internal capacity and understanding of AI, leveraging AI expertise to enhance its products, and providing specialized AI consulting solutions. Two key enhancements include intelligent document processing, which transforms multi-document verification, data extraction, and classification, and an interactive AI assistant, providing real-time support throughout the asset finance lifecycle. This strategic investment is expected to position the company for long-term sustained value.

Geographic Performance and Growth Opportunities

Approximately 70-75% of the company's revenue comes from the APAC region, with 12.5% from Europe and 12.5% from the Americas. CEO Najeeb Ghauri expects North America to be a key growth market in the future, with the company hiring new talents in the Austin office and seeing strong growth potential in the retail digital retail side. The company's sizable contract with AutoNation, with reported income of approximately $18 million since signing the contract, is also expected to drive growth.

Pricing Power and Subsidiary Strategy

When asked about potential price increases, Najeeb Ghauri stated, "We'll consider price increases, especially for long-term customers like our large client in China. We're exploring ways to maintain relationships and grow revenue within existing customers, rather than solely relying on price hikes." Regarding the company's subsidiary in NetSol Pakistan, Ghauri mentioned that the goal is to strengthen the parent company's financials and balance sheet by maximizing ownership through share buybacks.

Valuation Metrics

With a price-to-sales ratio of 0.47, the company's stock appears to be relatively undervalued. Additionally, the enterprise value to EBITDA ratio of 4.84 suggests that the market is pricing in moderate growth expectations. However, the company's return on equity (ROE) of -2.4% and return on invested capital (ROIC) of -0.23% indicate that there is still room for improvement in terms of profitability and capital allocation. Analyst estimates next year's revenue growth at 6.4%, which may be priced in with the current valuation metrics.

3. NewsRoom

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Comparing SMS Alternatives (OTCMKTS:CICN) & NetSol Technologies (NASDAQ:NTWK)

Dec -07

Source: defenseworld.net

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NETSOL's Transcend Retail signs two US dealer groups

Nov -21

Source: globenewswire.com

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NetSol Technologies Slides After Q1 Loss Despite Revenue Growth

Nov -18

Source: zacks.com

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NetSol Technologies, Inc. (NTWK) Q1 2026 Earnings Call Prepared Remarks Transcript

Nov -12

Source: seekingalpha.com

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NETSOL Technologies Reports First Quarter Fiscal 2026 Results; Revenue Up 2.8% Year-Over-Year

Nov -12

Source: globenewswire.com

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NETSOL Technologies Sets Fiscal First Quarter 2026 Conference Call for Wednesday, November 12, 2025, at 9:00 AM ET

Nov -06

Source: globenewswire.com

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NetSol Technologies Inc. (NASDAQ:NTWK) Short Interest Up 61.3% in October

Nov -02

Source: defenseworld.net

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NetSol Technologies (NASDAQ:NTWK) and Global Interactive Technologies (NASDAQ:GITS) Financial Review

Oct -26

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (11.30%)

6. Segments

Subscription and Support

Expected Growth: 10.2%

Growing demand for cloud-based software, increasing adoption of digital transformation, and rising need for timely technical assistance drive the growth of NetSol Technologies' Subscription and Support services.

Services

Expected Growth: 12.4%

Growing demand for digital transformation in finance, healthcare, and government sectors, coupled with increasing adoption of outsourcing and cloud-based services, drives NetSol's growth.

License Fees

Expected Growth: 12.5%

Growing demand for digital transformation in the automotive and financial industries, increasing adoption of cloud-based solutions, and expansion into new markets drive the growth of license fees from NetSol Technologies, Inc.

7. Detailed Products

NFS Ascent

A cloud-based, omnichannel leasing and loan management platform designed for the automotive and equipment finance industries.

NFS Go

A cloud-based, mobile-first platform designed for the automotive and equipment finance industries, providing a digital marketplace for customers to browse and purchase vehicles and equipment.

NFS Ascent Retail

A cloud-based, point-of-sale and inventory management platform designed for dealerships and retailers in the automotive and equipment industries.

NFS Digital Retail

A cloud-based, digital retail platform designed for the automotive and equipment industries, providing customers with a seamless, online-to-offline buying experience.

NFS Analytics

A cloud-based, business intelligence and analytics platform designed for the automotive and equipment finance industries.

8. NetSol Technologies, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for NetSol Technologies, Inc. is medium due to the presence of alternative software solutions in the market.

Bargaining Power Of Customers

The bargaining power of customers is high due to the availability of multiple software solutions, giving customers the power to negotiate prices and services.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low due to the presence of multiple suppliers in the market, reducing their negotiating power.

Threat Of New Entrants

The threat of new entrants is medium due to the presence of barriers to entry, such as high capital requirements and technological expertise.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of multiple players in the market, leading to intense competition and pricing pressures.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 17.38%
Debt Cost 8.35%
Equity Weight 82.62%
Equity Cost 9.51%
WACC 9.31%
Leverage 21.04%

11. Quality Control: NetSol Technologies, Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Domo

A-Score: 5.1/10

Value: 9.2

Growth: 4.9

Quality: 5.1

Yield: 0.0

Momentum: 9.5

Volatility: 2.0

1-Year Total Return ->

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NetSol Technologies

A-Score: 4.9/10

Value: 7.7

Growth: 4.2

Quality: 5.7

Yield: 0.0

Momentum: 9.0

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
MoneyLion

A-Score: 4.8/10

Value: 4.0

Growth: 6.2

Quality: 6.3

Yield: 0.0

Momentum: 9.0

Volatility: 3.3

1-Year Total Return ->

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Amplitude

A-Score: 4.2/10

Value: 4.8

Growth: 5.4

Quality: 4.5

Yield: 0.0

Momentum: 6.5

Volatility: 3.7

1-Year Total Return ->

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Stock-Card
Weave Communications

A-Score: 3.1/10

Value: 5.5

Growth: 5.9

Quality: 4.0

Yield: 0.0

Momentum: 0.5

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
Creative Realities

A-Score: 3.0/10

Value: 9.0

Growth: 2.8

Quality: 4.8

Yield: 0.0

Momentum: 0.5

Volatility: 1.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

2.9$

Current Price

2.9$

Potential

-0.00%

Expected Cash-Flows