NETSOL Technologies reported record fiscal 2026 revenue of $74.4 million, up 12.5%, exceeding its $73 million guidance as profitability, margins, cash generation, and recurring revenue improved.
Subscription and support revenue increased 8.7% to $35.8 million, representing approximately 48% of total revenue, while services revenue increased 3.3% to $33.6 million.
License fees increased sharply to $5 million from $600,000, including approximately $4.7 million associated with a renewed and amended Transcend customer agreement.
Full-year gross profit increased 20.2% to $39.1 million, while gross margin expanded to 52.6% from 49.3%.
Operating income nearly doubled to $6.9 million from $3.5 million, taking operating margin to 9.3% from 5.3%.
GAAP net income attributable to NETSOL was $2.95 million, or $0.25 per diluted share, compared with $2.9 million and $0.25 per share the previous year.
Consolidated net income increased 22.4% to $5.6 million, while consolidated adjusted EBITDA increased 68.8% to $9.15 million.
Operating cash flow reached $13.9 million, up from just $400,000, helping lift year-end cash 56.3% to $27.1 million.
NETSOL’s remaining performance obligations totaled $49.1 million, with approximately $22.5 million expected to be recognized during the next 12 months.
The company also introduced a separate measure called contracted revenue, which stood at approximately $60 million as of June 30. Management cautioned that the figure is not backlog, ARR, a GAAP measure, or a guaranteed revenue floor.
Fourth-quarter revenue increased 12.5% to a record $20.7 million, while subscription and support revenue increased 9% and services revenue grew 21.3%.
Quarterly gross margin expanded to 63.6% from 56.2%, and operating income increased 40.2% to $4.5 million.
Quarterly GAAP net income attributable to NETSOL increased 45.9% to $3.8 million, or $0.32 per diluted share, from $2.6 million, or $0.22 per share.
For fiscal 2027, NETSOL expects revenue growth of 13% to 16%, gross margin of approximately 50% or better, and consolidated adjusted EBITDA growth of 15% to 25%.
That EBITDA guidance corresponds to approximately $10.5 million to $11.4 million.
The company plans to continue expanding its Transcend platform and deploying AI across its products, operations, and delivery model.
KEY QUOTES:
“Fiscal 2026 marked a clear step forward for NETSOL. We delivered record annual revenue, expanded margins and finished the year with strong operational momentum. The rebound from our first quarter demonstrates the capability and resilience of our teams, while the continued growth of subscription and support revenue reinforces the value of our long-term customer relationships.
We enter fiscal 2027 with real momentum, with product offerings that are doing more for our customers than at any point in our history, and with the visibility to introduce full-year guidance alongside our fourth quarter results. Our focus is on making growth more predictable and on translating consolidated performance more effectively into value for NETSOL shareholders. We will do that through the Transcend platform and practical AI across our products and operations, through selective partnerships and acquisitions where we see a clear strategic and financial return, and by evaluating structural options that may reduce the economic impact of minority interests over time.”
Najeeb Ghauri, Founder And CEO Of NETSOL Technologies
