NTWK - Earnings call transcript Q2 2021 | NetSol Technologies, Inc.

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Operator

Good morning, and welcome to NETSOL Technologies' Fiscal Second Quarter 2021 Earnings Conference Call.

On the call today are Najeeb Ghauri, Chairman and Chief Executive Officer, Naeem Ghauri, President of NetSol Technologies Inc. and Otoz's Chief Executive Officer, Roger Almond, Chief Financial Officer and Patti McGlasson, General Counsel. I would now like to turn this call over to Patti McGlasson, who will provide the necessary cautions regarding the forward-looking statements made by management during this call. Thank you, Ms. McGlasson. ahead. go Please

Patti McGlasson

and everyone for us. joining Good thank morning, you,

the and certain company's today's and call during may covered Private financial Following of cautions questions. the actual we this point highlights Form the of regarding stated financial under reports on like by Reform issued press necessary that Act. SEC of the or we would non-GAAP our these results the review contains Annual call. results, include are to be I today Litigation XX-K Please by all current comparable most those business The earlier will out on contained Securities now qualified Form XX-Q. provide statements statements, aspects note The materially the statements Safe measures. forward-looking could management's certain from made implied. I'll the management release measures. cautionary and Harbor for discussed future information GAAP These discussion company's discussing the call releases results, is company's in forward-looking reflecting the quarterly filings, the and that provisions, the of Report differ forecasts to our open of including non-GAAP reconciliation on also forward-looking will statements press a NETSOL's

in a available available and I on Finally, link call this press our And would like to for replay made via at that be recorded release. remind will everyone, website, www.netsoltech.com. today's

Now, I Najeeb. over to Najeeb would to call like turn the

Najeeb Ghauri

you health, crisis. ongoing continue or safe health Today this from I office, I'm Lahore my listening calling Lahore global you, staying hope NETSOL Thank in good to Good as morning, office, Pakistan. and in we everyone. Patti. are

the best been from vaccine our healthcare and and closely with updated as well legislators latest team COVID-XX Our regulatory practices adhering to the has developments NETSOL as bodies. rollouts, watching,

our but XXXX, things witnessed as and our global campuses, are incrementally, and improved are that normal. return stages expand. of for hospitalizations even of at of work quarter to slowly businesses results yielded, access and the continues some the to fiscal early many rates stabilized surely, second to vaccine We business. infection returning optimistic, from Similarly, international We

On into without operating remotely, a technology still step. the most and strengths to are lean our the continued have whole, for missing we part

During $XX recurring well footprint the revenue, our several period, we subscription-based quarter a $X through the million upgrade, expanded to million close driving year-to-date. implementations, close multimillion-dollar for to our base and as large-scale as

for and focus continuing as of long-term recurring change on stability the from We current $X.X same time, also million leading we driver these are NETSOL. revenues, requests the in the of growing nearly At health to indicator recorded, the revenue of this while view fiscal in health these performance point, subscription in for serve industries our whole. data economy and streams the we QX. customers as a improving business as less predictable, And encouraging another we are

our believe appointment believe margins. significantly described. as we that Ghauri within recent company, ROI, that and increase increase NTI, Naeem revenue focus can of initiatives President of the Along our will of With I've progress accelerate on profile are working that opportunities parent we some recurring core our higher strengthen SaaS just Naeem, further with to we the the we

committed refocus newer we customers. to needs gradually opportunities, are the actively attention we As our rising our these still meeting of to

conservative Innovation investments the as during strategic making Lab. the past year, maintain helped remainder our the of the for fiscal high are value us cost-cutting have structures objectives stability that OTOZ year areas Our to maintain in such while

will In created the for role, position all from within several this domestically know press you release, myself. a key Naeem of President responsible now as appointed recently overseeing The to was both will our Naeem for as many NTI, directly our also which duties is be December Ghauri of and internationally as operations areas of business. P&L NETSOL. company oversee well with reporting As subsidiaries President newly

joined our strategy Bangkok be Naeem from investors. more reason, this call and to For today active has in role will taking communicating our a

Before the financial Roger our I'll Roger? first hand over who through us the will call for walk CFO, on, results to Naeem comes the quarter. Almond

Roger Almond

Thank you, Najeeb.

due ended our fiscal in compared in and $X.X million to support an The and upgrade QX $XX.X in with new million, to compared results our and total retail Tier second in for period. the $X.X the which decrease year million, increase second in to related prior services $X.X wholesale finance Ascent $XXX,XXX. net in company The of platforms. XXXX financial the revenue Total Turning was fees to quarter total total $XX.X in in of net a decrease the increase to quarter to period. XX, agreement in were was China revenues million subscription total year revenues increase an primarily our license fees X total revenues prior period million, existing by December an for license were was license of primarily fees NFS a $XXX,XXX to offset

are a and formerly of a separate to maintenance as referred As line item as was subscription revenues now what revenues. support included place revenue reminder, in

software-as-a-service platform. recurring In SaaS the are this flagship we support anticipate cloud-based our our addition and Subscription nature NFS these of NFS from both fees revenues we Ascent. implement gradually Ascent in support, and post-contract NFS fees products to from traditional metric offerings increase and also as maintenance subscription legacy our version to includes or revenues customer including

revenue recurring to research of to XX% compared the comparable total was a as decrease in results performance to to XX.X% in profit revenue a fiscal the a were of just our decrease primarily revenues the sales the of expenses well and The went fees expenses. Gross second sales live from profit increase believe offset the $X The of prior of derived or million, the $X.X was due product in $X or of revenue from both million, XX.X% Operating services for for who was provided basis. in XXXX. of development Total $X.X $X.X year subscription and to prior to The million support category to decrease decrease revenue customers in second by of and quarter XXXX. by derived which quarter from and last period period. the primarily of net revenues in make ongoing from consultant cost from customers of support revenues to million due net performance decrease $X.X over with better portion of in subscription percentage and offerings. marketing part gross primarily million services as an this revenues was of $X.X well period period. The quarter, as As the process. well gross was for the million for adjusted second customers in expenses XX.X% operating and decrease The for agreements services in $X.X decreased year-over-year have $XX.X current become in million a services, of was to Total in revenues of due to is second profit The XX.X% of quarter decrease Total start subscription-based or due million quarter general expense a second in in million year products. fees revenues primarily associated in QX cost impactful services salaries in fiscal way of live revenue a sales. net recurring and or revenue for revenues to quarter quarter the was will were decrease to revenue new decreases administrative we our $X.X predominantly due revenues year. offset gone quarter driven as to million the selling in that compared XXXX with cost this same on year net as of in by $XXX,XXX. travel $XXX,XXX million the was professional customers and our the have expenses, decrease overall travel for increase in new was compared $X.X Services implementation implementation new with prior cost expenses. of our a a who as net provided our as decrease more to grow time, continue as judge we of business, the

Income operations $XX,XXX in QX profitability from second to for income was metrics. Turning compared of to operations the quarter last our $XXX,XXX from year.

rate $X.XX $X.XX per Our the to of decrease primarily compares cost and than diluted GAAP NETSOL in of in net income last totaled in fiscal net diluted to quarter quarter second loss GAAP decrease or per share $XXX,XXX This at to share. a related mentioned expenses. with greater year. revenues decrease of of due in income or net previously the net total the $XXX,XXX NETSOL for The the revenues GAAP operating XXXX total second was attributable attributable

Similarly in it gains the expenses currencies As the on was exchange than revenues, calls, to also expenses of it compared Because I've dollar. our also than the that gain compared $XX,XXX this in increasing rates decrease point but US gain our in US currency previous important regions, US dollar. it's dollar. $XX,XXX currency rates the of in QX out conducted our several dollar significant to reduces has strength quarter business exchange of in included US relative operate a as transactions revenues, currencies to tends income denominated foreign than net our in effected foreign generally portion a to value other the geographical of currencies US our the to dollar on in currency other mentioned year. denominated increases but exchange foreign A it reduce last we a other our of is

compared non-GAAP I'm adjusted adjusted XXXX of or quarter $XXX,XXX our million million totaled to adjusted contained the per or Please of sorry for $X.XX of see quarter our reconciliation EBITDA per non-GAAP Moving diluted XXst, year. second the $XXX,XXX fiscal last with share schedules fiscal quarter second for ended -- share $X.XX $X.X Non-GAAP the December in EBITDA of metrics. revised in [ph] diluted XXXX. earnings our calculations release for EBITDA the second

of December Naeem? its shares market up NETSOL end. XX, and repurchase I final sheet. state value approximately That common potential XXXX. June aggregate of approximately Board may per Directors end, has Under aggregate company stock Board July equivalents at laws common After common of its prices company's to this additional the of at of the open from $XXX,XXX such governing up and Turning to over Directors of deems $X.XX million XXX,XXX the approved appropriate, to XXXX, my the concludes at million or transactions. per June repurchase such existing and NETSOL's times $X six-month the hand which federal or $XX million diluted call in period. cash had expects before a an time over at shares was repurchase to At cash its market that repurchased time cash of balance program XX, through prepared stock turn now company over stock common in program, to the amounts call fund cash subject the with we note, a $XX.X original $X.XX purchased Naeem. XX, to operations. from its remarks. quarter On repurchases and at generated XX, program of our common One XXXX. of an extension the XXXX, stock the and Through the from approved an Naeem. conditions as of company balance $X,XXX,XXX, program, authorized an XX,XXX repurchases quarter share diluted to I'll share, value and approximately since expiry

Naeem Ghauri

joining all Thank you, Roger. I'm first call be my as for to you today President. really excited

great over my strategy a way, we cohesive finance forward to my involvement do the Najeeb as business all looking technology opportunity In As both the be an on confidence opportunity same company to the I'm to market, our levels. innovative well online for new a few XX a solution oversee global provide saw and from including minutes P&L leading and appreciate leadership increase vote subsidiaries new domestically I years our the core economy. same our market mobility internationally, we now for team, ago this Board will to to believe opportunity nascent and and highlighted new as NETSOL in operations ago, the operations, of responsibility I for solutions. to have auto developing the

we will we work focus innovative business. maintain the using be Otoz, the to of at competencies addition next continue build with main phase NETSOL In my international do both industry continuing to strongest of to Leveraging some blue-chip these are relationships our as we of its organizations core growth. for

continue are story to revenues, coming grow to segment. growth our my is emerging subscription to revenues, clear, would lead which innovation SaaS the be be our One To with to line biggest in goal top should initiatives, already together increased as our the exciting is drive growth, of consistent immediate most targets which profitability. quarters.

footholds As in our focus expect APAC, America, markets, we success look of in penetrating offerings initiatives. all already expand namely we've progress our increasing Europe, bodes growth North the outside well our and future Early we the subscription also cloud and key to in regions and for to initial seen. geographies these accelerate on

multi-country accurately year-over-year, stream the our have segment our stable, support quarters. going equates well as more and an nature further reporting the outline the for German We map. ARR previously well we the where into for fiscal operational get grown overview in value our revenue we ways highlighting million the in efforts of XX-country, reported to Live quarter. in focusing following that this completion double-digit Services updates begun Financial $XX the the As noted to manufacturing over Go of or exclusive to our $XXX recurring now this annual that revenues. a to because we our growing added look a make forward. recurring in predictable QX fiscal are revenues basis, events made to represent this of of our have Starting with year to progress of forward year-to-date, considerable APAC, the for our and multi-year, maintain with agreements. announced will subscription rate. maintenance business giant business new implementation million In previously we pending these to that's On We potential auto I and of cloud annualized at lieu continued call, as other Daimler remaining intrinsic contract coming revenues in we road revenues in our the completed, along last change With be

had fashion XX To-date, some we Live now a within making was in to and quarter, towards accomplished Thailand, working the remaining part are Go large remote we This due the XX in progress our are which successful live flexible countries event in be implemented New architecture. immediate an additional with our and deliverables timelines. our Live -- event in an be already accordance have term, additional most customer's Go In wholesale we will near where the for auditor dealer will finance in access Zealand the module and solutions. of

We provide updates make further to will progress. continue as we

and switch services from development center a transition in excellence teams where whole second to support the long platforms, of our ability project. APAC we without to sources we platform. the proud the process, in this Tier a phases built on BMW environment of year, in conducts mention an call the have the we in our in components, services remote in were official very selected NETSOL's with coming a and and at of NETSOL was loans, the announced over is evaluation work Financial next-generation contract Services phase contract includes this to our domestically am NFS X of forced the upgrade business Platform the the will made Ascent Retail choice further today won't which the for carried as time NFS home deployment process. our both NETSOL implementation contract. Lahore To be multi-year the world-class the will in we we during vendor purely revenues the credit the be China into -- China. life I will announced of agreement teams quarter to data The additional to be system and calendar of captive subsidies we time system after and by As This over the as of issue. expedite we which announced able in Late last that the signed ton well $X middle China. deployment spend and recognized $XX region. of customer Ascent from the auto respectively million months again, loans, legacy teams third-party last legacy million our launch our NFS previously The our platform next-gen extensive and architecture across data on licensing three to installment mainly automotive highest as flexible our our and out migrate integrate Thanks other interest current new provides into valuable and with global

areas a pricing we And North in NTA more Moving push being of annual expand way will flexible of offerings. and Subscription-based next big has us. focus cloud-based a as for made America major region before believe footprint. our European this been be monthly, Europe offered many initial new our and mention or operations on or as are and times already NTE. well to us our have to great call European is we the a quarterly on basis pricing option for this

UK's services As platform, publication we with in us monumental Flow, of the region. see operations or has with American In road this the from are bank This North to live allows for to obvious NTA. the we benefits our services in US in is our successful an announce management a partner. continue NETSOL's a $X Corp, mandate speed a we're quarter. contract The our sorry with in cloud like of After for in to to this, offering. to excess this LeasePak life. the a Trade with Cloud as looked went April traction subscription million expected its America other our -- Ascent million Though which and XXXX, over is put the Finishing completing company our early collaborative year first and looking $XXX particular work, that that of brokers have one subscription-based our Allica, our months After solution map. shown the implementation to announce implement Lease and contract They're to at included for as initial progress a on lightning Innovation in for real of technological a to in us deployment with we Otoz generate a the and a approximately realize an digital North called we lend Allica sales for at proud the marks brief our that Ascent implementation with stage reported that as renowned pricing, our UK of is this respect to the take products. the cloud-based signed SCI first deployment leading signed In recently of agreement have multiyear year point-of-sale £XXX million With words, August expansion, growing. an we last paperless we Lab. to portal access. moment contract develop systems. financial moved are retail update XX/X these banks NFS American the North customers pleased and newest NETSOL on successful industry I'll it further a bank still now is market demand provide within log-in

As things busy. remained have quite usual,

rapid AI this of auto and upfront this facilitates manufacturers', owners on in customizing which Otoz platform as learning, the Otoz development I'm label NETSOL machine cloud-native to and has a and space investments. is launch fully without and comprises addition fast, also that subsidiary cost. The is size orchestrate enables sold captives', technology built the as and no that Otoz For of deployment any need for companies IT be and heavy is my start-ups as and white cutting-edge auto deploy scale technology APIs. stack mobility software purely operations upfront those itself in evolving helps out-of-the-box, licensing microservices, fleet that It operators familiar, duties to CEO a business firmly architecture a SaaS initiative. blockchain, a positioned cloud-native mobility to of platform businesses. platform a solutions with quickly of President, you to product digital less and in

to digital pilot call, US This are a to a pilot is As digitize digital to sizable we growing on fully the of an project for to movement. one today Otoz platform state-of-the-art are we app. penetrate today's completion Otoz company. months. Tier launch Overall over another a one mobility XX customers Otoz's door amazing few create has mobility list continue client through the with the next on auto prospect at buying we rapidly us nearing opener have allowed automotive experience Based least well pipeline, of to by Tier this track a grow

and opportunities with is making very of looking platform, that been announcements forward are in early real-time at Otoz In are its against June to continuing which with entering sensors, Drivemate IoT at partner workplace mature has one organization's has to it employees on enabled flexible the management to headquarter to client over before to is market Obviously we to sales we're and we an into now indoor Tier Thailand implementation leading WRLDXD broader schedule. datasets, bring pipeline the turn use with efficiently. waves, and companies a headquarters execute intelligence. HR pick our our to York through final these a socially in as work and update We begins in Otoz assign a create systems smart workplace work as occupancy December fully of productivity In first some us COVID-aware last real-time, distancing enabled we exciting couldn't and since NXT as this wellness the current that more Through in Twin be – formal to and while introduce workspaces number media a space XXXX. company evaluating book has provides year, organizations cautiously office. and and back to near-term timelier while team employees platform to its such Digital office for and live initiatives New NETSOL's building us safely. well workplace support and The up partnership financials help of within NXT interfaces and the return summary, a solution, NXT the technology to its are IoT meetings a questions. The operation soon. to provide announced positioning One time helps

We cost conservative are opportunistically bullish remain as Otoz being years deploy with owners high-value ahead. call to areas the as for resources that, look Innovation even the the will in and and And such Lab. optimistic managing remainder Operator? structures our more can additional our to for We the business of year we open the on questions.

Operator

I will closing call Ghauri now turn the remarks. his to Najeeb over for

Najeeb Ghauri

our joining Thank thank today. updating our us next and look continued very We investors ongoing their to especially contributions. support, for worldwide our call. customers, to their Operator? you and I forward employees you for loyal in dedicated our for want you Thank goodbye.

Operator

for conference. on earnings quarter fiscal us you second Thank XXXX NETSOL's joining

lines, your have wonderful disconnect now a may You day. and

NetSol (NTWK) 16 Feb 212021 Q2 Earnings call transcript