NetSol Technologies (NASDAQ:NTWK) outlined its growth strategy, product portfolio and financial performance at the Sidoti August Micro-Cap Virtual Conference, emphasizing its transition toward recurring software-as-a-service revenue and investments in artificial intelligence.
The company provides software for original equipment manufacturers, dealerships and financial institutions to support the sale, financing and leasing of automotive and equipment assets. Chief Marketing Officer Erik Wagner said NetSol’s addressable equipment market includes commercial trucks, tractors, construction equipment, medical laboratory equipment, boats and aircraft, in addition to vehicles.
Third-Quarter Results and Recurring Revenue
Wagner said NetSol recorded quarterly revenue of $19.8 million in the third quarter of fiscal 2026, a company record and a 13% increase from the prior-year period. He added that recurring revenue, gross margin and EBITDA also increased during the quarter, though he did not provide specific figures for each of those metrics.
Chief Accounting Officer Roger Almond said NetSol generates revenue through licenses, subscription and support arrangements, and implementation services. Under a perpetual-license structure, the company recognizes license revenue upfront and implementation revenue over the period of the implementation, he said. Subscription and support revenue is recurring and provides greater visibility into future revenue.
Almond said subscription and support revenue increased from $26 million in fiscal 2023 to $28 million in fiscal 2024 and $32 million in fiscal 2025. It stood at $26.9 million through the third quarter of fiscal 2026, and the company anticipated reaching $35 million by year-end. NetSol reaffirmed full-year fiscal 2026 revenue guidance of $73 million, following total revenue growth from $52 million in 2023 to $66 million in 2025.
The company is shifting from a primarily perpetual-license model to a subscription or SaaS model, Almond said. The change is intended to reduce the quarterly variability associated with upfront license revenue and increase recurring revenue. NetSol cited a 12.5% annual compound growth rate in recurring revenue over 15 quarters.
Geographic Strategy and Customer Expansion
Wagner described Asia-Pacific as a longstanding core market for the company, which was founded in 1997 and later expanded through acquisitions in the Americas and Europe. He said NetSol has been operating in the Americas for more than 40 years through acquired businesses and in Europe for more than 30 years.
In China, Wagner said NetSol has approximately 75% market share and is among a limited number of providers allowed to support the market. He said the company sees an opportunity to follow Chinese electric-vehicle manufacturers as they expand operations outside their domestic market. NetSol previously announced work supporting one such expansion into Indonesia, he said, while additional discussions are in its pipeline.
In Europe, Wagner said revenue grew 22.4% year over year in fiscal 2025. The company has developed broker and lender portals to support a market that relies heavily on brokers.
North America represented a major area of focus, according to Wagner. The company reported 102% year-over-year revenue growth in the region during fiscal 2025 and a 29.1% annual compound growth rate over 14 quarters. He said the market is both highly competitive and risk-averse, but NetSol expects growth from its Transcend Retail product and from migrating legacy finance customers to the newer Transcend Finance platform.
Wagner said Transcend Retail is currently marketed only in North America. He pointed to work with dealership groups and OEMs, including BMW and Mini. NetSol’s BMW and Mini digital retail platform has been built and announced and is rolling out across multiple BMW dealerships in North America, he said. Wagner estimated that BMW has about 354 dealerships that will use the platform.
Margins, Balance Sheet and AI Investment
As of March 31, 2026, NetSol had $14.7 million in cash, $25.3 million in working capital and $8.5 million in debt, Almond said. The debt was held in the company’s Pakistan entity for working-capital needs. Almond characterized the decline in cash from $17.4 million as a temporary timing issue and said cash was expected to recover by the June 30, 2026 fiscal year-end.
NetSol reported a 55.6% gross margin in the third quarter on $19.8 million in revenue. Almond said management aims to maintain gross margin above 50%, supported by revenue growth, workforce management and renegotiation of certain legacy maintenance agreements.
The company has also increased investment in its AI Labs organization. Wagner said the team is focused on internal efficiencies, faster product development, margin improvement and governance around data and AI use. NetSol has introduced AI-powered credit decisioning and intelligent document-processing capabilities within Transcend Finance to help accelerate origination and assessment of loan and lease documentation.
About NetSol Technologies (NASDAQ:NTWK)
NetSol Technologies, Inc is a publicly traded enterprise software provider specializing in asset finance and leasing solutions. Headquartered in Calabasas, California, the company was founded in 1997 by Najeeb Ghauri, who continues to serve as its chief executive officer. NetSol has built a reputation for delivering end-to-end digital solutions tailored to the finance, leasing, and rental industries, enabling clients to streamline operations, improve customer engagement, and accelerate business growth.
The company’s flagship offering, NFS Ascent, is a configurable, modular platform that supports the entire contract lifecycle—from origination and credit approval through servicing and end-of-term processing.
