- Recurring Revenue (Subscription and Support) of
$6.8 Million ;$6.9 Million on a Constant Currency Basis;$26 Million in Annual Recurring Revenue (Subscription and Support) Exceeded Fiscal 2023 Target of$25 Million - Net Revenue for the Quarter was
$13.8 Million ;$14.0 Million on a Constant Currency Basis - Services Revenues for the Quarter were
$7.0 million ;$7.1 Million on a Constant Currency Basis - Continued Progress Advancing Core Growth Initiatives
- Company Targeting Revenue of
$61 Million to$63 Million in Fiscal 2024; Expected increase of 16% to 20% compared to Fiscal 2023 revenue of$52.4 Million
Fiscal Fourth Quarter 2023 Operational Highlights
- Launched the
Hubex API Library , the second product offering from the Company’s AppexNow marketplace, allowing customers to standardize all API integration procedures across multiple API services through a single integration - Implemented and went live with NFS Ascent for a Swedish bank operating across the Nordic and European regions, to support the bank’s lending business via the Cloud
- Appointed
Darryll Lewis as Managing Director ofNETSOL Technologies Europe to drive business growth and innovation in this market; Hired two key sales personnel to promote expansion inthe United States - Received numerous designations and accreditations establishing
NETSOL as a premierAmazon Web Services partner committed to designing, building, and maintaining secure, reliable, and efficient cloud architectures
Fiscal Fourth Quarter 2023 Financial Results
Total net revenues for the fourth quarter of fiscal 2023 were
- Total subscription (SaaS and Cloud) and support revenues were
$6.8 million compared with$6.1 million in the prior year period. Total subscription and support revenues on a constant currency basis were$6.9 million . - Total services revenues were
$7.0 million compared with$6.5 million in the prior year period. Total services revenues on a constant currency basis were$7.1 million .
Gross profit for the fourth quarter of fiscal 2023 was
Operating expenses for the fourth quarter of fiscal 2023 were
GAAP net loss attributable to
Non-GAAP adjusted EBITDA for the fourth quarter of fiscal 2023 was a loss of
Fiscal Full Year 2023 Financial Results
Total net revenues for the full year ended
- Total subscription (SaaS and Cloud) and support revenues for the full year 2023 were
$26.0 million compared with$28.3 million in the prior year period. Total subscription and support revenues on a constant currency basis were$26.7 million . The decrease in the full year total subscription and support revenue is related to a one-time catch-up in support revenue of approximately$3.5 million in fiscal year 2022. - Total services revenues for the full year 2023 were
$24.1 million compared with$24.4 million in the prior year period. Total services revenues on a constant currency basis were$25.6 million . The increase in services revenues on a constant currency basis is primarily due to the increase in change requests, enhancements, and reimbursable costs.
Gross profit for the full year 2023 was
Operating expenses for the full year 2023 were
GAAP net loss attributable to
Non-GAAP adjusted EBITDA for the full year 2023 was a loss of
At
Management Commentary
NETSOL Co-Founder, Chairman and Chief Executive Officer
“Our ongoing transition to SaaS based pricing has also allowed us to implement significant cost reduction strategies across our business including the reduction of our head count by what we expect to be approximately 300 after a period of severance required by local laws that extend into the first and second quarters of fiscal 2024. As we continue to drive these initiatives, we expect to be able to better allocate capital to the growing, higher margin part of our business to drive profitability. Additionally, we continue to make strides on our expansion strategy into the North American markets. As previously mentioned, we have established a facility in
“Our established markets throughout the
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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 operating 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, as well as the delay in recovery or a prolonged economic downturn that effects our Company, our customers and the world economy. 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 | $ | 15,533,254 | $ | 23,963,797 | |||||
Accounts receivable, net of allowance of | 11,714,422 | 8,669,202 | |||||||
Revenues in excess of billings, net of allowance of | 12,377,677 | 14,571,776 | |||||||
Other current assets | 1,978,514 | 2,223,361 | |||||||
Total current assets | 41,603,867 | 49,428,136 | |||||||
Revenues in excess of billings, net - long term | - | 853,601 | |||||||
Property and equipment, net | 6,161,186 | 9,382,624 | |||||||
Right of use assets - operating leases | 1,151,575 | 969,163 | |||||||
Long term investment | 25,396 | 1,059,368 | |||||||
Other assets | 6,931 | 25,546 | |||||||
Intangible assets, net | 127,931 | 1,587,670 | |||||||
9,302,524 | 9,302,524 | ||||||||
Total assets | $ | 58,379,410 | $ | 72,608,632 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||
Current liabilities: | |||||||||
Accounts payable and accrued expenses | $ | 6,552,181 | $ | 6,813,541 | |||||
Current portion of loans and obligations under finance leases | 5,779,510 | 8,567,145 | |||||||
Current portion of operating lease obligations | 505,237 | 548,678 | |||||||
Unearned revenue | 7,932,306 | 4,901,562 | |||||||
Total current liabilities | 20,769,234 | 20,830,926 | |||||||
Loans and obligations under finance leases; less current maturities | 176,229 | 476,223 | |||||||
Operating lease obligations; less current maturities | 652,194 | 447,260 | |||||||
Total liabilities | 21,597,657 | 21,754,409 | |||||||
Stockholders' equity: | |||||||||
Preferred stock, | - | - | |||||||
Common stock, | |||||||||
12,284,887 shares issued and 11,345,856 outstanding as of | |||||||||
12,196,570 shares issued and 11,257,539 outstanding as of | 122,850 | 121,966 | |||||||
Additional paid-in-capital | 128,476,048 | 128,218,247 | |||||||
as of | (3,920,856 | ) | (3,920,856 | ) | |||||
Accumulated deficit | (44,896,186 | ) | (39,652,438 | ) | |||||
Other comprehensive loss | (45,975,156 | ) | (39,363,085 | ) | |||||
Total | 33,806,700 | 45,403,834 | |||||||
Non-controlling interest | 2,975,053 | 5,450,389 | |||||||
Total stockholders' equity | 36,781,753 | 50,854,223 | |||||||
Total liabilities and stockholders' equity | $ | 58,379,410 | $ | 72,608,632 | |||||
Schedule 2: Consolidated Statement of Operations | |||||||||||||||||
For the Three Months | For the Years | ||||||||||||||||
Ended | Ended | ||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||
Net Revenues: | |||||||||||||||||
License fees | $ | 20,735 | $ | 952,386 | $ | 2,269,564 | $ | 4,539,260 | |||||||||
Subscription and support | 6,805,076 | 6,124,961 | 25,980,661 | 28,284,759 | |||||||||||||
Services | 6,964,538 | 6,467,083 | 24,142,990 | 24,423,960 | |||||||||||||
Total net revenues | 13,790,349 | 13,544,430 | 52,393,215 | 57,247,979 | |||||||||||||
Cost of revenues | 8,974,275 | 8,727,436 | 35,477,652 | 33,510,805 | |||||||||||||
Gross profit | 4,816,074 | 4,816,994 | 16,915,563 | 23,737,174 | |||||||||||||
Operating expenses: | |||||||||||||||||
Selling, general and administrative | 7,366,072 | 5,789,737 | 24,093,908 | 23,473,343 | |||||||||||||
Research and development cost | 356,820 | 580,533 | 1,601,613 | 1,342,154 | |||||||||||||
Total operating expenses | 7,722,892 | 6,370,270 | 25,695,521 | 24,815,497 | |||||||||||||
Loss from operations | (2,906,818 | ) | (1,553,276 | ) | (8,779,958 | ) | (1,078,323 | ) | |||||||||
Other income and (expenses) | |||||||||||||||||
Interest expense | (252,920 | ) | (92,064 | ) | (765,030 | ) | (369,801 | ) | |||||||||
Interest income | 212,293 | 532,336 | 1,217,850 | 1,655,883 | |||||||||||||
Gain on foreign currency exchange transactions | (610,481 | ) | 1,642,910 | 6,748,038 | 4,327,590 | ||||||||||||
Share of net loss from equity investment | (1,040,753 | ) | (1,703,899 | ) | (1,033,243 | ) | (2,021,480 | ) | |||||||||
Other income (expense) | (662,953 | ) | (234,574 | ) | (605,570 | ) | (424,128 | ) | |||||||||
Total other income (expenses) | (2,354,814 | ) | 144,709 | 5,562,045 | 3,168,064 | ||||||||||||
Net income (loss) before income taxes | (5,261,632 | ) | (1,408,567 | ) | (3,217,913 | ) | 2,089,741 | ||||||||||
Income tax provision | (285,438 | ) | (462,201 | ) | (926,560 | ) | (988,938 | ) | |||||||||
Net income (loss) | (5,547,070 | ) | (1,870,768 | ) | (4,144,473 | ) | 1,100,803 | ||||||||||
Non-controlling interest | 472,354 | (296,672 | ) | (1,099,275 | ) | (1,951,959 | ) | ||||||||||
Net income (loss) attributable to | $ | (5,074,716 | ) | $ | (2,167,440 | ) | $ | (5,243,748 | ) | $ | (851,156 | ) | |||||
Net income (loss) per share: | |||||||||||||||||
Net income (loss) per common share | |||||||||||||||||
Basic | $ | (0.45 | ) | $ | (0.19 | ) | $ | (0.46 | ) | $ | (0.08 | ) | |||||
Diluted | $ | (0.45 | ) | $ | (0.19 | ) | $ | (0.46 | ) | $ | (0.08 | ) | |||||
Weighted average number of shares outstanding | |||||||||||||||||
Basic | 11,308,571 | 11,252,539 | 11,279,966 | 11,250,219 | |||||||||||||
Diluted | 11,308,571 | 1,252,539 | 11,279,966 | 11,250,219 | |||||||||||||
Schedule 3: Consolidated Statement of Cash Flows | |||||||||
For the Years | |||||||||
Ended | |||||||||
2023 | 2022 | ||||||||
Cash flows from operating activities: | |||||||||
Net income (loss) | $ | (4,144,473 | ) | $ | 1,100,803 | ||||
Adjustments to reconcile net income (loss) to net cash | |||||||||
provided by operating activities: | |||||||||
Depreciation and amortization | 3,244,538 | 3,812,273 | |||||||
Provision for bad debts | 1,702,744 | 23,388 | |||||||
- | 214,044 | ||||||||
Impairment and share of net loss from investment under equity method | 2,113,430 | 2,021,480 | |||||||
Loss on sale of assets | 19,721 | 205,288 | |||||||
Stock based compensation | 317,451 | 104,347 | |||||||
Changes in operating assets and liabilities: | |||||||||
Accounts receivable | (6,860,983 | ) | (5,669,262 | ) | |||||
Revenues in excess of billing | 1,514,305 | (1,273,693 | ) | ||||||
Other current assets | (131,108 | ) | 469,194 | ||||||
Accounts payable and accrued expenses | 709,758 | 1,121,308 | |||||||
Unearned revenue | 3,524,188 | 931,452 | |||||||
Net cash provided by operating activities | 2,009,571 | 3,060,622 | |||||||
Cash flows from investing activities: | |||||||||
Purchases of property and equipment | (1,639,438 | ) | (2,609,205 | ) | |||||
Sales of property and equipment | 240,207 | 349,058 | |||||||
Net cash used in investing activities | (1,399,231 | ) | (2,260,147 | ) | |||||
Cash flows from financing activities: | |||||||||
Purchase of treasury stock | - | (100,106 | ) | ||||||
Purchase of subsidiary treasury stock | (61,124 | ) | (950,352 | ) | |||||
Proceeds from bank loans | 270,292 | 941,841 | |||||||
Payments on finance lease obligations and loans - net | (928,160 | ) | (1,270,104 | ) | |||||
Net cash used in financing activities | (718,992 | ) | (1,378,721 | ) | |||||
Effect of exchange rate changes | (8,321,891 | ) | (9,163,111 | ) | |||||
Net decrease in cash and cash equivalents | (8,430,543 | ) | (9,741,357 | ) | |||||
Cash and cash equivalents at beginning of the period | 23,963,797 | 33,705,154 | |||||||
Cash and cash equivalents at end of period | $ | 15,533,254 | $ | 23,963,797 | |||||
Schedule 4: Reconciliation to GAAP | ||||||||||||||||
For the Three Months | For the Years | |||||||||||||||
Ended | Ended | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Net Income (loss) attributable to | $ | (5,074,716 | ) | $ | (2,167,440 | ) | $ | (5,243,748 | ) | $ | (851,156 | ) | ||||
Non-controlling interest | (472,354 | ) | 296,672 | 1,099,275 | 1,951,959 | |||||||||||
Income taxes | 285,438 | 462,201 | 926,560 | 988,938 | ||||||||||||
Depreciation and amortization | 725,069 | 942,602 | 3,244,538 | 3,812,273 | ||||||||||||
Interest expense | 252,920 | 92,064 | 765,030 | 369,801 | ||||||||||||
Interest (income) | (212,293 | ) | (532,336 | ) | (1,217,850 | ) | (1,655,883 | ) | ||||||||
EBITDA | $ | (4,495,936 | ) | $ | (906,237 | ) | $ | (426,195 | ) | $ | 4,615,932 | |||||
Add back: | ||||||||||||||||
Non-cash stock-based compensation | 118,892 | 26,122 | 317,451 | 104,347 | ||||||||||||
Adjusted EBITDA, gross | $ | (4,377,044 | ) | $ | (880,115 | ) | $ | (108,744 | ) | $ | 4,720,279 | |||||
Less non-controlling interest (a) | 208,924 | (520,736 | ) | (2,154,850 | ) | (2,903,457 | ) | |||||||||
Adjusted EBITDA, net | $ | (4,168,120 | ) | $ | (1,400,851 | ) | $ | (2,263,594 | ) | $ | 1,816,822 | |||||
Weighted Average number of shares outstanding | ||||||||||||||||
Basic | 11,308,571 | 11,252,539 | 11,279,966 | 11,250,219 | ||||||||||||
Diluted | 11,308,571 | 11,252,539 | 11,279,966 | 11,250,219 | ||||||||||||
Basic adjusted EBITDA | $ | (0.37 | ) | $ | (0.12 | ) | $ | (0.20 | ) | $ | 0.16 | |||||
Diluted adjusted EBITDA | $ | (0.37 | ) | $ | (0.12 | ) | $ | (0.20 | ) | $ | 0.16 | |||||
(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 | $ | (472,354 | ) | $ | 296,672 | $ | 1,099,275 | $ | 1,951,959 | |||||||
Income Taxes | 54,809 | 98,614 | 253,158 | 258,468 | ||||||||||||
Depreciation and amortization | 191,326 | 256,201 | 905,002 | 1,096,709 | ||||||||||||
Interest expense | 79,233 | 27,515 | 237,162 | 109,361 | ||||||||||||
Interest (income) | (65,708 | ) | (164,421 | ) | (369,197 | ) | (526,567 | ) | ||||||||
EBITDA | $ | (212,694 | ) | $ | 514,581 | $ | 2,125,400 | $ | 2,889,930 | |||||||
Add back: | ||||||||||||||||
Non-cash stock-based compensation | 3,770 | 6,155 | 29,450 | 13,527 | ||||||||||||
Adjusted EBITDA of non-controlling interest | $ | (208,924 | ) | $ | 520,736 | $ | 2,154,850 | $ | 2,903,457 |
Source:
2023 GlobeNewswire, Inc., source