|Bid||4.3600 x 1100|
|Ask||4.5700 x 1000|
|Day's Range||4.3600 - 4.6500|
|52 Week Range||2.0000 - 5.3000|
|Beta (5Y Monthly)||0.90|
|PE Ratio (TTM)||20.13|
|Earnings Date||May 11, 2021 - May 17, 2021|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||N/A|
Despite COVID-19 Related Challenges, Topline Improved Sequentially, Driven by Notable New Contract Signings, Ongoing Implementations Globally, Increased Demand within Existing Customer Base Steady, Double-Digit, Subscription and Support Revenue Growth from $5.1 Million to $5.7 Million Leading to $23+ Million Run Rate Over Coming Twelve Months with Opportunities for UpsideRecurring Revenue Growth Accelerated by Further Cloud Adoption and Major Go Live Events as Customers Continue to Automate And Transform Business Processes In Response to Pandemic Long-Term Growth Outlook Aided by Ongoing Financial and Operational Improvement Through the Balance of Fiscal 2021, Partnership Pilots Through Otoz Innovation Lab, Record Cash Position of $32 Million to Fund Rebooted Global Sales and Marketing Activities CALABASAS, Calif., Feb. 16, 2021 (GLOBE NEWSWIRE) -- NETSOL Technologies, Inc. (Nasdaq: NTWK), a global business services and enterprise application solutions provider, reported results for the fiscal second quarter ended December 31, 2020. Fiscal Second Quarter 2021 and Recent Operational Highlights Appointed Co-Founder, President of Global Sales and CEO of Otoz, Naeem Ghauri to serve as President of NETSOL Technologies, Inc., a newly created role that is responsible for P&L for all subsidiaries as well as developing a cohesive strategy to grow the company’s SaaS revenues and cloud offerings through digital product development and new complementary solutions to existing core offerings. Secured an agreement with an existing tier one finance customer in China to upgrade to the NFS Ascent® Retail and Wholesale platforms as part of a contract expected to generate $9.0 million over the multi-year life of the agreement.Successfully implemented the NFS Ascent® Retail Platform, including the Company’s proprietary Loan Origination System (LOS) and Contract Management System (CMS) for a tier-one German auto captive finance company in China in the second phase of a previously announced $30 million contract.Announced the successful implementation of the NFS Ascent® Retail Platform with Allica, a rapidly growing U.K. bank serving small and medium-sized enterprises, marking the first “Go Live” of a cloud-based NFS Ascent® Retail client in the region.Regarding previously announced 12-country, $110 million contract with German auto manufacturing giant, the Company made continued progress with respect to additional NFS Ascent® implementations. The Company had a successful October 2020 Go Live event in Thailand for its Retail Platform and is currently underway on implementation for the same offering in New Zealand.Signed an agreement with a renowned financial services company in the U.S. to implement the Company’s North American LeasePak Cloud offering, which is expected to generate approximately $1.0 million over the multi-year life of the contract.Subscription (SaaS and Cloud) and support revenues reached $5.7 million, a 12% increase over the prior year and a $23+ million run rate projected over the coming twelve months with opportunities for upside.Generated nearly $1.5 million by successfully implementing change requests from various customers across multiple regions during the fiscal second quarter.Introduced WRLD3D’s NXT: a COVID-aware smart workplace platform to support companies’ return to work safely.Otoz nearing completion of a pilot launch for a U.S. tier one automotive company with expected Go Live in the next few months. Backlog of potential new customers continues to grow. Fiscal Second Quarter 2021 Financial ResultsTotal net revenues for the second quarter of fiscal 2021 were $13.1 million, compared with $15.7 million in the prior year period. The decrease in total net revenues was primarily due to a decrease in total services revenues of $5.6 million, which was offset by an increase in total license fees of $2.4 million and an increase in total subscription and support revenues of $620,000. Total license fees were $2.6 million, compared with $177,000 in the prior year period.Total subscription (SaaS and Cloud) and support revenues were $5.7 million, compared with $5.1 million in the prior year period.Total services revenues were $4.8 million, compared with $10.4 million in the prior year period. Gross profit for the second quarter of fiscal 2021 was $6.0 million (or 46.0% of net revenues), compared to $7.8 million (or 49.7% of net revenues) in the second quarter of fiscal 2020. The decreases in gross profit and gross profit as a percentage of revenue were primarily due to a decrease in net revenue, offset by a decrease in cost of sales. The decrease in cost of sales was primarily due to a decrease in travel expense of $1.4 million, which was offset by an increase in salaries and consultant fees of $669,000. Operating expenses for the second quarter of fiscal 2021 decreased 16.1% to $6.0 million (or 45.4% of net revenues) from $7.1 million (or 45.2% of net revenues) for the second quarter of fiscal 2020. The decrease in operating expenses was primarily due to decreases in selling and marketing expenses, professional services, research and development and general and administrative expenses. GAAP net loss attributable to NETSOL for the second quarter of fiscal 2021 totaled $(242,000) or $(0.02) per diluted share, compared with GAAP net income of $586,000 or $0.05 per diluted share in the second quarter of fiscal 2020. GAAP net loss attributable to NETSOL included a $14,000 gain on foreign currency exchange transactions in the second quarter of fiscal 2021, which was a decrease from a gain of $61,000 in the prior year period. Non-GAAP adjusted EBITDA for the second quarter of fiscal 2021 totaled $617,000 or $0.05 per diluted share, compared with non-GAAP adjusted EBITDA of $1.6 million or $0.13 per diluted share in the second quarter of fiscal 2020 (see note regarding “Use of Non-GAAP Financial Measures,” below for further discussion of this non-GAAP measure). At December 31, 2020, cash and cash equivalents were $32.0 million, an increase from $20.2 million at June 30, 2020. Stock Repurchase Program On July 30, 2020, NETSOL’s Board of Directors approved a stock repurchase program that authorized potential repurchases of up to $2 million of its common stock over a six-month period. After the expiry of the original program, the Company’s Board of Directors approved the extension of the repurchase program through June 28, 2021. Under the program, the Company may repurchase its common stock in the open market from time-to-time, in amounts, at prices, and at such times as the Company deems appropriate, subject to market conditions and federal and state laws governing such transactions. NETSOL expects to fund the repurchase with its existing cash balance and cash generated from operations. As of December 31, 2020, the Company had repurchased 446,996 shares of its common stock at an aggregate value of $1,392,671. Management Commentary "Fiscal Q2 yielded incrementally improved results for our global business as we saw the early stages of return to work thanks to the initial rollout of COVID-19 vaccine treatments at the end of 2020,” said NETSOL Co-Founder, Chairman and Chief Executive Officer Najeeb Ghauri. “We have continued to lean into our technology strengths and are still operating remotely for the most part without missing a step. During the period we expanded our SaaS-based footprint through a multi-million-dollar upgrade as well as several large-scale implementations, driving our recurring revenue base close to $6 million for the quarter, nearly $11 million year to date. We also recorded nearly $1.5 million in change requests from current customers, another encouraging data point for the improving health of the industries we serve and the economy as a whole. “Operationally, our recent appointment of Naeem Ghauri to President of NTI should allow us to accelerate progress within our core initiatives, namely driving more consistent topline growth through an increased focused on high-margin, SaaS opportunities which should also lead to sustained profitability. While the broader market cautiously begins to pick up in waves, we are continuing to execute against our near-term pipeline and current implementation schedule. We are being conservative in our cost structures, managing the business as owners, and will opportunistically look to deploy additional resources to high-value areas such as our Otoz Innovation Lab. We remain optimistic for the remainder of the year and even more bullish on the years ahead.” Otoz Update “Otoz is nearing completion of a pilot launch to fully digitize a U.S. tier one automotive company,” said Naeem Ghauri, President of NETSOL Technologies, Inc. and Otoz CEO. “This project has allowed us to create an amazing digital auto buying experience through a state-of-the-art app. Overall, this pilot is a door opener for Otoz to penetrate the rapidly growing digital mobility platform movement. Based on the sizeable prospect pipeline we have today, we are well on track to continue grow the Otoz client list by at least another few tier one mobility customers over the next twelve months.” Conference CallNETSOL Technologies management will hold a conference call today (February 16, 2021) at 9:00 a.m. Eastern time (6:00 a.m. Pacific time) to discuss these financial results. A question and answer session will follow management's presentation. U.S. dial-in: 1-877-407-0789International dial-in: 1-201-689-8562 Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Investor Relations at 1-949-574-3860. The conference call will be broadcasted live and available for replay here and via the Investor Relations section of NETSOL’s website. A replay of the conference call will be available after 12:00 p.m. Eastern time on the same day through March 2, 2021. Toll-free replay number: 1-844-512-2921International replay number: 1-412-317-6671Replay ID: 13715527 About NETSOL TechnologiesNETSOL Technologies, Inc. (Nasdaq: NTWK) is a worldwide provider of IT and enterprise software solutions primarily serving the global leasing and finance industry. The Company’s suite of applications is backed by 40 years of domain expertise and supported by a committed team of more than 1300 professionals placed in eight strategically located support and delivery centers throughout the world. NFS, LeasePak, LeaseSoft or NFS Ascent® – help companies transform their Finance and Leasing operations, providing a fully automated asset-based finance solution covering the complete finance and leasing lifecycle. About OtozOtoz provides business-to-business, white-label technology solutions for new mobility. Our suite of agile and customizable mobility solutions ranges from car sharing and subscription products to AI-enabled chatbots, allowing businesses to engage consumers and facilitate the complete transaction lifecycle intelligently and digitally. Otoz technologies empower automotive companies and start-ups to launch new mobility models quickly and efficiently. The technology Otoz has developed is cloud-native and supported by artificial intelligence (AI), machine learning (ML), internet of things (IoT) and blockchain. Our technology drives utilization, while supporting robust and efficient operations. Forward-Looking StatementsThis 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 such as the effect of stay at home orders and social distancing imposed by COVID-19 and its resultant impact on our financials and the world economy 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 MeasuresThe 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: Matt Glover and Tom ColtonGateway Investor Relations1firstname.lastname@example.org NETSOL Technologies, Inc. and SubsidiariesSchedule 1: Consolidated Balance Sheets As of As of ASSETSDecember 31, 2020 June 30, 2020Current assets: Cash and cash equivalents$32,003,647 $20,166,830 Accounts receivable, net of allowance of $308,236 and $435,611 5,213,604 10,131,752 Accounts receivable - related party, net of allowance of $1,373,099 and $90,594 - 1,282,505 Revenues in excess of billings, net of allowance of $153,650 and $188,914 13,290,010 17,198,281 Revenues in excess of billings - related party, net of allowance of $8,163 and $0 - 8,163 Other current assets, net of allowance of $1,243,633 and $0 2,395,985 3,108,180 Total current assets 52,903,246 51,895,711 Revenues in excess of billings, net - long term 356,059 1,300,289 Convertible note receivable - related party, net of allowance of $4,250,000 and $0 - 4,250,000 Property and equipment, net 12,209,500 11,329,631 Right of use of assets - operating leases 1,937,907 2,360,129 Long term investment 3,734,907 2,387,692 Other assets 47,190 41,992 Intangible assets, net 4,753,543 5,391,077 Goodwill 9,516,568 9,516,568 Total assets$85,458,920 $88,473,089 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued expenses$6,327,192 $5,680,837 Current portion of loans and obligations under finance leases 10,383,572 9,139,561 Current portion of operating lease obligations 1,169,960 1,111,912 Unearned revenues 3,753,781 4,095,472 Common stock to be issued 88,324 88,324 Total current liabilities 21,722,829 20,116,106 Loans and obligations under finance leases; less current maturities 1,554,317 1,539,975 Operating lease obligations; less current maturities 962,724 1,339,965 Total liabilities 24,239,870 22,996,046 Commitments and contingencies Stockholders' equity: Preferred stock, $.01 par value; 500,000 shares authorized; - - Common stock, $.01 par value; 14,500,000 shares authorized; 12,147,458 shares issued and 11,452,959 outstanding as of December 31, 2020 and 12,122,149 shares issued and 11,874,646 outstanding as of June 30, 2020 121,476 121,222 Additional paid-in-capital 128,823,181 128,677,754 Treasury stock (at cost, 694,499 shares and 247,503 shares as of December 31, 2020 and June 30, 2020, respectively) (2,848,640) (1,455,969) Accumulated deficit (40,104,089) (34,269,817) Other comprehensive loss (32,060,151) (34,085,047) Total NetSol stockholders' equity 53,931,777 58,988,143 Non-controlling interest 7,287,273 6,488,900 Total stockholders' equity 61,219,050 65,477,043 Total liabilities and stockholders' equity$85,458,920 $88,473,089 NETSOL Technologies, Inc. and SubsidiariesSchedule 2: Consolidated Statement of Operations For the Three Months For the Six Months Ended December 31, Ended December 31, 2020 2019 2020 2019 Net Revenues: License fees$2,586,504 $176,706 $2,589,979 $2,640,922 Subscription and support 5,724,802 5,104,736 10,896,665 9,711,112 Services 4,810,154 10,351,153 12,282,194 16,770,044 Services - related party - 57,424 - 140,357 Total net revenues 13,121,460 15,690,019 25,768,838 29,262,435 Cost of revenues: Salaries and consultants 5,294,662 4,625,872 9,821,311 9,080,836 Travel 159,174 1,572,923 262,926 2,915,558 Depreciation and amortization 713,749 734,352 1,420,998 1,454,017 Other 911,566 954,912 1,839,719 1,899,436 Total cost of revenues 7,079,151 7,888,059 13,344,954 15,349,847 Gross profit 6,042,309 7,801,960 12,423,884 13,912,588 Operating expenses: Selling and marketing 1,558,027 1,858,096 3,167,631 3,601,964 Depreciation and amortization 221,572 215,479 443,362 417,866 General and administrative 4,065,788 4,568,790 7,493,424 8,487,403 Research and development cost 110,419 454,605 196,408 1,127,575 Total operating expenses 5,955,806 7,096,970 11,300,825 13,634,808 Income from operations 86,503 704,990 1,123,059 277,780 Other income and (expenses) Gain (loss) on sale of assets (52,531) 528 (74,273) 239 Interest expense (94,241) (88,006) (197,568) (151,669) Interest income 210,854 435,682 411,675 834,911 Gain (loss) on foreign currency exchange transactions 13,981 61,061 310,022 (1,699,129) Share of net loss from equity investment (43,685) (164,796) (151,535) (354,020) Other income 45,365 207,987 132,637 226,313 Total other income (expenses) 79,743 452,456 430,958 (1,143,355) Net income (loss) before income taxes 166,246 1,157,446 1,554,017 (865,575)Income tax provision (245,434) (610,510) (509,728) (848,748)Net income (loss) (79,188) 546,936 1,044,289 (1,714,323) Non-controlling interest (162,916) 39,039 (568,839) 472,351 Net income (loss) attributable to NetSol$(242,104) $585,975 $475,450 $(1,241,972) Net income (loss) per share: Net income (loss) per common share Basic$(0.02) $0.05 $0.04 $(0.11) Diluted$(0.02) $0.05 $0.04 $(0.11) Weighted average number of shares outstanding Basic 11,580,030 11,724,606 11,683,631 11,694,423 Diluted 11,580,030 11,724,606 11,683,631 11,694,423 NETSOL Technologies, Inc. and SubsidiariesSchedule 3: Consolidated Statement of Cash Flows For the Six Months Ended December 31, 2020 2019 Cash flows from operating activities: Net income (loss)$1,044,289 $(1,714,323) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 1,864,360 1,871,883 Provision for bad debts (175,575) (20,699) Share of net loss from investment under equity method 151,535 354,020 Loss on sale of assets 74,273 (239) Stock based compensation 165,164 328,585 Changes in operating assets and liabilities: Accounts receivable 5,479,516 4,554,558 Accounts receivable - related party - 2,229,695 Revenues in excess of billing 4,540,271 (1,088,693) Revenues in excess of billing - related party - 14,823 Other current assets (252,781) (208,065) Accounts payable and accrued expenses 313,869 490,875 Unearned revenue (554,077) (3,019,493) Net cash provided by operating activities 12,650,844 3,792,927 Cash flows from investing activities: Purchases of property and equipment (1,249,895) (785,999) Sales of property and equipment 123,194 32,524 Convertible note receivable - related party - (535,000) Investment in associates (93,000) - Net cash used in investing activities (1,219,701) (1,288,475) Cash flows from financing activities: Proceeds from exercise of subsidiary options - 11,621 Purchase of treasury stock (1,392,671) - Dividend paid by subsidiary to non-controlling interest - (1,920,618) Proceeds from bank loans 705,338 2,074,341 Payments on finance lease obligations and loans - net (175,352) (102,499) Net cash provided by (used in) financing activities (862,685) 62,845 Effect of exchange rate changes 1,268,359 2,149,923 Net increase in cash and cash equivalents 11,836,817 4,717,220 Cash and cash equivalents at beginning of the period 20,166,830 17,366,364 Cash and cash equivalents at end of period$32,003,647 $22,083,584 NETSOL Technologies, Inc. and SubsidiariesSchedule 4: Reconciliation to GAAP For the Three Months Ended For the Three Months Ended For the Six Months Ended For the Six Months Ended December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019 Net Income (loss) attributable to NetSol$(242,104) $585,975 $475,450 $(1,241,972)Non-controlling interest 162,916 (39,039) 568,839 (472,351)Income taxes 245,434 610,510 509,728 848,748 Depreciation and amortization 935,321 949,831 1,864,360 1,871,883 Interest expense 94,241 88,006 197,568 151,669 Interest (income) (210,854) (435,682) (411,675) (834,911)EBITDA$984,954 $1,759,601 $3,204,270 $323,066 Add back: Non-cash stock-based compensation 74,169 164,292 165,164 328,585 Adjusted EBITDA, gross$1,059,123 $1,923,893 $3,369,434 $651,651 Less non-controlling interest (a) (441,853) (346,644) (1,140,697) (155,409)Adjusted EBITDA, net$617,270 $1,577,249 $2,228,737 $496,242 Weighted Average number of shares outstanding Basic 11,580,030 11,724,606 11,683,631 11,694,423 Diluted 11,580,030 11,724,606 11,683,631 11,694,423 Basic adjusted EBITDA$0.05 $0.13 $0.19 $0.04 Diluted adjusted EBITDA$0.05 $0.13 $0.19 $0.04 (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$162,916 $(39,039) $568,839 $(472,351)Income Taxes 44,233 190,292 92,882 243,627 Depreciation and amortization 264,535 270,003 529,100 529,638 Interest expense 28,824 25,491 60,344 44,532 Interest (income) (67,207) (115,670) (133,164) (221,171)EBITDA$433,301 $331,077 $1,118,001 $124,275 Add back: Non-cash stock-based compensation 8,552 15,567 22,696 31,134 Adjusted EBITDA of non-controlling interest$441,853 $346,644 $1,140,697 $155,409
NEW YORK, NY / ACCESSWIRE / February 16, 2021 / NetSol Technologies, Inc. (NASDAQ:NTWK) will be discussing their earnings results in their 2021 Second Quarter Earnings call to be held on February 16, 2021 at 9:00 AM Eastern Time.
NetSol Technologies (NASDAQ:NTWK) has had a great run on the share market with its stock up by a significant 86% over...