- Strong licensing fees and increased recurring revenues
- 2Q ‘24 Gross Margins of 47% up from 25% in 2Q’ 23
- Company on track for strong double digit organic revenue growth and profitability in fiscal 2024
Fiscal Second Quarter 2024 Financial Results
Total net revenues for the second quarter of fiscal 2024 increased 23% to
- License fees were
$3.0 million compared with$16,000 in the prior year period. License fees on a constant currency basis were$3.1 million . - Total subscription (SaaS and Cloud) and support revenues were
$6.8 million compared with$6.5 million in the prior year period. Total subscription and support revenues on a constant currency basis were$6.8 million . - Total services revenues were
$5.4 million , compared with$5.9 million in the prior year period. Total services revenues on a constant currency basis were$5.4 million .
Gross profit for the second quarter of fiscal 2024 was
Operating expenses for the second quarter of fiscal 2024 were
GAAP net income attributable to
Non-GAAP adjusted EBITDA for the second quarter of fiscal 2024 was
Six Months Ended
Total net revenues for the six months ended
- License fees were
$4.3 million compared with$266,000 in the prior year period. License fees on a constant currency basis were$4.3 million . - Total subscription (SaaS and Cloud) and support revenues for the six months ended
December 31, 2023 , were$13.3 million compared with$12.5 million in the prior year period. Total subscription and support revenues on a constant currency basis were$13.3 million . - Total services revenues were
$11.9 million compared with$12.3 million in the prior year period. Total services revenues on a constant currency basis were$11.9 million .
Gross profit for the six months ended
Operating expenses for the six months ended
GAAP net income attributable to
Non-GAAP adjusted EBITDA for the six months ended
At
Management Commentary
NETSOL Co-Founder, Chairman and Chief Executive Officer
“While we continue to scale our SaaS business, our hybrid license and SaaS model has become a major catalyst for our growth. We recognized substantial license fees in this quarter as part of a large new contract in
“We are very pleased with our second quarter results and continue to strategically invest and allocate capital to further expand our presence across key, high growth markets like
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About
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:
IMS Investor Relations
netsol@imsinvestorrelations.com
+1 203-972-9200
Schedule 1: Consolidated Balance Sheets | |||||||||
As of | As of | ||||||||
ASSETS | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 15,659,516 | $ | 15,533,254 | |||||
Accounts receivable, net of allowance of | 5,975,716 | 11,714,422 | |||||||
Revenues in excess of billings, net of allowance of | 16,299,287 | 12,377,677 | |||||||
Other current assets | 2,142,487 | 1,978,514 | |||||||
Total current assets | 40,077,006 | 41,603,867 | |||||||
Revenues in excess of billings, net - long term | 734,397 | - | |||||||
Property and equipment, net | 5,665,699 | 6,161,186 | |||||||
Right of use assets - operating leases | 1,659,622 | 1,151,575 | |||||||
Other assets | 32,338 | 32,327 | |||||||
Intangible assets, net | - | 127,931 | |||||||
9,302,524 | 9,302,524 | ||||||||
Total assets | $ | 57,471,586 | $ | 58,379,410 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||
Current liabilities: | |||||||||
Accounts payable and accrued expenses | $ | 6,713,920 | $ | 6,552,181 | |||||
Current portion of loans and obligations under finance leases | 5,982,466 | 5,779,510 | |||||||
Current portion of operating lease obligations | 689,770 | 505,237 | |||||||
Unearned revenue | 4,426,008 | 7,932,306 | |||||||
Total current liabilities | 17,812,164 | 20,769,234 | |||||||
Loans and obligations under finance leases; less current maturities | 99,527 | 176,229 | |||||||
Operating lease obligations; less current maturities | 1,022,361 | 652,194 | |||||||
Total liabilities | 18,934,052 | 21,597,657 | |||||||
Stockholders' equity: | |||||||||
Preferred stock, | - | - | |||||||
Common stock, | |||||||||
12,329,919 shares issued and 11,390,888 outstanding as of | |||||||||
12,284,887 shares issued and 11,345,856 outstanding as of | 123,301 | 122,850 | |||||||
Additional paid-in-capital | 128,587,384 | 128,476,048 | |||||||
as of | (3,920,856 | ) | (3,920,856 | ) | |||||
Accumulated deficit | (44,456,980 | ) | (44,896,186 | ) | |||||
Other comprehensive loss | (45,870,309 | ) | (45,975,156 | ) | |||||
Total | 34,462,540 | 33,806,700 | |||||||
Non-controlling interest | 4,074,994 | 2,975,053 | |||||||
Total stockholders' equity | 38,537,534 | 36,781,753 | |||||||
Total liabilities and stockholders' equity | $ | 57,471,586 | $ | 58,379,410 |
Schedule 2: Consolidated Statement of Operations | |||||||||||||||||
For the Three Months | For the Six Months | ||||||||||||||||
Ended | Ended | ||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||
Net Revenues: | |||||||||||||||||
License fees | $ | 2,990,453 | $ | 15,884 | $ | 4,270,902 | $ | 265,844 | |||||||||
Subscription and support | 6,827,781 | 6,502,669 | 13,340,024 | 12,519,503 | |||||||||||||
Services | 5,419,707 | 5,871,805 | 11,869,196 | 12,311,130 | |||||||||||||
Total net revenues | 15,237,941 | 12,390,358 | 29,480,122 | 25,096,477 | |||||||||||||
Cost of revenues | 8,062,204 | 9,247,895 | 16,142,368 | 17,702,017 | |||||||||||||
Gross profit | 7,175,737 | 3,142,463 | 13,337,754 | 7,394,460 | |||||||||||||
Operating expenses: | |||||||||||||||||
Selling, general and administrative | 5,807,494 | 5,716,073 | 11,240,463 | 11,394,634 | |||||||||||||
Research and development cost | 341,411 | 472,904 | 719,830 | 942,531 | |||||||||||||
Total operating expenses | 6,148,905 | 6,188,977 | 11,960,293 | 12,337,165 | |||||||||||||
Income (loss) from operations | 1,026,832 | (3,046,514 | ) | 1,377,461 | (4,942,705 | ) | |||||||||||
Other income and (expenses) | |||||||||||||||||
Interest expense | (290,322 | ) | (202,363 | ) | (566,339 | ) | (323,973 | ) | |||||||||
Interest income | 468,280 | 309,906 | 882,998 | 741,763 | |||||||||||||
Gain (loss) on foreign currency exchange transactions | (14,617 | ) | 657,223 | (148,870 | ) | 1,972,928 | |||||||||||
Share of net loss from equity investment | - | 5,133 | - | 5,133 | |||||||||||||
Other income (expense) | (57,305 | ) | 94,708 | 576 | 120,324 | ||||||||||||
Total other income (expenses) | 106,036 | 864,607 | 168,365 | 2,516,175 | |||||||||||||
Net income (loss) before income taxes | 1,132,868 | (2,181,907 | ) | 1,545,826 | (2,426,530 | ) | |||||||||||
Income tax provision | (150,053 | ) | (220,056 | ) | (271,948 | ) | (413,404 | ) | |||||||||
Net income (loss) | 982,815 | (2,401,963 | ) | 1,273,878 | (2,839,934 | ) | |||||||||||
Non-controlling interest | (574,499 | ) | 309,037 | (834,672 | ) | 126,279 | |||||||||||
Net income (loss) attributable to | $ | 408,316 | $ | (2,092,926 | ) | $ | 439,206 | $ | (2,713,655 | ) | |||||||
Net income (loss) per share: | |||||||||||||||||
Net income (loss) per common share | |||||||||||||||||
Basic | $ | 0.04 | $ | (0.19 | ) | $ | 0.04 | $ | (0.24 | ) | |||||||
Diluted | $ | 0.04 | $ | (0.19 | ) | $ | 0.04 | $ | (0.24 | ) | |||||||
Weighted average number of shares outstanding | |||||||||||||||||
Basic | 11,372,819 | 11,270,199 | 11,359,338 | 11,263,869 | |||||||||||||
Diluted | 11,372,819 | 11,270,199 | 11,359,338 | 11,263,869 |
Schedule 3: Consolidated Statement of Cash Flows | ||||||||||
For the Six Months | ||||||||||
Ended | ||||||||||
2023 | 2022 | |||||||||
Cash flows from operating activities: | ||||||||||
Net income (loss) | $ | 1,273,878 | $ | (2,839,934 | ) | |||||
Adjustments to reconcile net income (loss) to net cash | ||||||||||
provided by operating activities: | ||||||||||
Depreciation and amortization | 959,949 | 1,736,503 | ||||||||
Provision for bad debts | 29,191 | (67,176 | ) | |||||||
Share of net (gain) loss from investment under equity method | - | (5,133 | ) | |||||||
Gain on sale of assets | (98 | ) | (28,344 | ) | ||||||
Stock based compensation | 111,787 | 146,167 | ||||||||
Changes in operating assets and liabilities: | ||||||||||
Accounts receivable | 5,722,791 | 3,772,091 | ||||||||
Revenues in excess of billing | (4,239,762 | ) | (702,812 | ) | ||||||
Other current assets | 329,171 | (529,579 | ) | |||||||
Accounts payable and accrued expenses | 72,501 | 904,731 | ||||||||
Unearned revenue | (3,654,724 | ) | (696,971 | ) | ||||||
Net cash provided by operating activities | 604,684 | 1,689,543 | ||||||||
Cash flows from investing activities: | ||||||||||
Purchases of property and equipment | (570,584 | ) | (1,252,325 | ) | ||||||
Sales of property and equipment | 1,248 | 70,283 | ||||||||
Net cash used in investing activities | (569,336 | ) | (1,182,042 | ) | ||||||
Cash flows from financing activities: | ||||||||||
Proceeds from bank loans | 135,123 | |||||||||
Payments on finance lease obligations and loans - net | (162,482 | ) | (537,180 | ) | ||||||
Net cash used in financing activities | (27,359 | ) | (537,180 | ) | ||||||
Effect of exchange rate changes | 118,273 | (2,987,396 | ) | |||||||
Net increase (decrease) in cash and cash equivalents | 126,262 | (3,017,075 | ) | |||||||
Cash and cash equivalents at beginning of the period | 15,533,254 | 23,963,797 | ||||||||
Cash and cash equivalents at end of period | $ | 15,659,516 | $ | 20,946,722 |
Schedule 4: Reconciliation to GAAP | |||||||||||||||
For the Three Months | For the Six Months | ||||||||||||||
Ended | Ended | ||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
Net Income (loss) attributable to | $ | 408,316 | $ | (2,092,926 | ) | $ | 439,206 | $ | (2,713,655 | ) | |||||
Non-controlling interest | 574,499 | (309,037 | ) | 834,672 | (126,279 | ) | |||||||||
Income taxes | 150,053 | 220,056 | 271,948 | 413,404 | |||||||||||
Depreciation and amortization | 429,163 | 891,500 | 959,949 | 1,736,503 | |||||||||||
Interest expense | 290,322 | 202,363 | 566,339 | 323,973 | |||||||||||
Interest (income) | (468,280 | ) | (309,906 | ) | (882,998 | ) | (741,763 | ) | |||||||
EBITDA | $ | 1,384,073 | $ | (1,397,950 | ) | $ | 2,189,116 | $ | (1,107,817 | ) | |||||
Add back: | |||||||||||||||
Non-cash stock-based compensation | 51,433 | 64,333 | 111,787 | 146,167 | |||||||||||
Adjusted EBITDA, gross | $ | 1,435,506 | $ | (1,333,617 | ) | $ | 2,300,903 | $ | (961,650 | ) | |||||
Less non-controlling interest (a) | (710,154 | ) | 7,363 | (1,109,577 | ) | (392,172 | ) | ||||||||
Adjusted EBITDA, net | $ | 725,352 | $ | (1,326,254 | ) | $ | 1,191,326 | $ | (1,353,822 | ) | |||||
Weighted Average number of shares outstanding | |||||||||||||||
Basic | 11,372,819 | 11,270,199 | 11,359,338 | 11,263,869 | |||||||||||
Diluted | 11,372,819 | 11,270,199 | 11,359,338 | 11,263,869 | |||||||||||
Basic adjusted EBITDA | $ | 0.06 | $ | (0.12 | ) | $ | 0.10 | $ | (0.12 | ) | |||||
Diluted adjusted EBITDA | $ | 0.06 | $ | (0.12 | ) | $ | 0.10 | $ | (0.12 | ) | |||||
(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 | $ | 574,499 | $ | (309,037 | ) | $ | 834,672 | $ | (126,279 | ) | |||||
Income Taxes | 75,407 | 68,406 | 111,784 | 128,316 | |||||||||||
Depreciation and amortization | 109,748 | 255,584 | 251,082 | 493,917 | |||||||||||
Interest expense | 91,295 | 62,736 | 177,184 | 100,132 | |||||||||||
Interest (income) | (144,578 | ) | (93,012 | ) | (272,669 | ) | (225,501 | ) | |||||||
EBITDA | $ | 706,371 | $ | (15,323 | ) | $ | 1,102,053 | $ | 370,585 | ||||||
Add back: | |||||||||||||||
Non-cash stock-based compensation | 3,783 | 7,960 | 7,524 | 21,587 | |||||||||||
Adjusted EBITDA of non-controlling interest | $ | 710,154 | $ | (7,363 | ) | $ | 1,109,577 | $ | 392,172 |
Source:
2024 GlobeNewswire, Inc., source