• Revenue: $61.4 million for the full fiscal year 2024, a 17% increase from $52.4 million in 2023.
• Fourth Quarter Revenue: $16.5 million, up from $13.8 million in the prior year period.
• License Fees: $5.5 million for fiscal year 2024, compared to $2.3 million in 2023.
• Recurring Revenues: $28 million for fiscal year 2024, up from $26 million in 2023.
• Total Services Revenue: $28 million for fiscal year 2024, compared to $24.1 million in 2023.
• Gross Profit: $29.3 million for fiscal year 2024, representing 48% of net revenues, compared to $16.9 million or 32% of net revenues in 2023.
• Operating Expenses: $25.8 million for fiscal year 2024, compared to $25.7 million in 2023.
• Income from Operations: $3.5 million for fiscal year 2024, compared to a loss of $8.8 million in 2023.
• GAAP Net Income: $684,000 for fiscal year 2024, or $0.06 per diluted share, compared to a net loss of $5.2 million or $0.46 per diluted share in 2023.
• Non-GAAP EBITDA: $4.2 million for fiscal year 2024, or $0.37 per diluted share, compared to a loss of $426,000 or $0.04 per diluted share in 2023.
• Cash and Cash Equivalents: $19.1 million at year-end, up from $15.5 million at June 30, 2023.
• Stockholders' Equity: $34.8 million at June 30, 2024, or $3.05 per share.

• Warning! GuruFocus has detected 6 Warning Signs with NTWK.

Release Date: October 01, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• NETSOL Technologies Inc (NASDAQ:NTWK) reported a 17% increase in revenue for the full fiscal year 2024, reaching $61.4 million, exceeding their target.
• The company achieved full-year profitability with earnings per share of $0.06.
• NETSOL Technologies Inc (NASDAQ:NTWK) signed a $15 million five-year deal with BMW in the US, marking their largest deal to date in the region.
• The company has a strong customer retention rate, increasing from approximately 90% in 2021 to just below 95% in 2024.
• NETSOL Technologies Inc (NASDAQ:NTWK) has a dominant market share in the Asia Pacific region, particularly in China, with 85% market share in their specific space.

Negative Points

• Despite the positive earnings, the company reported a GAAP net loss of $83,000 for the fourth quarter of fiscal 2024.
• Operating expenses remained high at $7.7 million for the fourth quarter of fiscal 2024, consistent with the same period last year.
• The company did not provide specific earnings per share guidance for the next fiscal year, indicating uncertainty.
• NETSOL Technologies Inc (NASDAQ:NTWK) has significant cash deployed in various countries, which may not be optimized for short-term returns.
• The company is heavily investing in new markets and technology, which could strain cash reserves and impact short-term profitability.

Q & A Highlights

Q: AI clearly continues to be a key focus. Can you share any specific updates that you're especially excited about? A: Najeeb Ghauri, CEO: We are particularly excited about the early adoption of AI within our organization, which positions us for a strong competitive advantage. We are enhancing customer experiences through personalization, automation, and predictive analytics. Internally, we are focusing on training employees to leverage AI tools, improving efficiency, reducing manual effort, and boosting productivity.

Q: You mentioned renewed demand in your existing markets, especially Asia Pacific. Can you expand on the trends you're seeing there? A: Najeeb Ghauri, CEO: We have a dominant position in China, our biggest market, with 85% market share. Our flagship Ascent product continues to see strong adoption. Major customers like BMW and Daimler-Benz are driving demand. We have established a strong reputation over the last 20 years, and the market in China looks promising.

Q: Do you have any updated guidance for revenue and earnings for the next fiscal year? A: Najeeb Ghauri, CEO: We are looking at double-digit growth for the next fiscal year. Specific guidance ranges will be provided in Q1 for better clarity. We aim to maintain or improve our gross margin trend of 47%-48%.

Q: Are you using any of your cash to invest in short-term treasuries to get some return while it's sitting around? A: Najeeb Ghauri, CEO: We are primarily investing our cash in technology, people, and new markets like North America. We have set up an office in Austin and are building new verticals. Our focus is on growing the business rather than stock buybacks at this time.

Q: Can you provide more details on the $15 million five-year deal with BMW in the US? A: Najeeb Ghauri, CEO: This deal includes the customization, implementation, deployment, and ongoing SaaS subscription of our OTOZ platform. It is the largest deal to date by dollar value for NETSOL in the US and represents a significant opportunity for our business.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.