NTWK - Earnings call transcript Q4 2022 | NetSol Technologies, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning and welcome to NETSOL Technologies Fiscal Fourth Quarter and Full Year 2022 Earnings Conference Call.

On the call today are Najeeb Ghauri, Chairman and Chief Executive Officer; Roger Almond, Chief Financial Officer; and Patti McGlasson, General Counsel. I would now like to turn the call over to Patti McGlasson, who will provide the necessary cautions regarding the forward-looking statements made by management during this call. Please proceed.

Patti McGlasson

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

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

has accompany our Additionally, to the posted we plan call to on of investor section a remarks, presentation make the today's in website. the corporate company

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

like Now Najeeb. to Najeeb? the over call turn to I'd

Najeeb Ghauri

and our everyone. seeing the we our later sea of in Patti, half pandemic NETSOL rest micro including very and game I'm world. prospective from that increased adverse and Happily, XXXX good the of back face-to-face current business operations half Undoubtedly same to state meet return the to a pleased with and morning, moves shareholders. are global experience to Pakistan. NETSOL without this not the campus, fiscal Today in and normal. post change as clients. the you, Thank NETSOL's to calling in immune impact was the as employees, changing I'm fiscal returned challenges customers have years, to of work through the XXXX, macroeconomic faced the the [indiscernible] campus two current and normalcy from Lahore, broader past era, opportunities to during

a to The implement by employees. delivery environment every able been localized Pakistan. we received has in our of office Following the back restrictions, global return office location, the were global to Lahore, removal technology in our positively including working center

to global that pleasure, and normalcy the that majority the meaningfully Asia delivery never increasing customers America, to work. capability has our and we this region. current our to deliveries customers, While new impacted return normalcy we ability potential teams Pacific with our our to The support should and ability by has This travel to to was choose to to to our return key allowed teams remote note the Europe opportunities. sales North enabled connect travel and for compete of emphasize

meet of continues decision While to level continued field makers our has resumed enforce relationships has most opening, ability China executives requiring team the Nonetheless, Chinese days key of existing and and potential rules. all that to new visitors seven in Asia connected with new Chinese impacted Pacific The remain our local revenue quarantined market. quarantine largest customers for to full Chinese customers. and our least build at the stringent that face-to-face,

to continued teams alternate to engage outcomes. This growth. all executive virtually. use is revenue senior and best delivery tools sales Analyzing global leading our While to achieve

current year due of growth year revenue We second the revenue expected was full while This new expectation first to half XXXX pushed a this in of new the our in modestly year fiscal are that of fiscal to fiscal last months in the delays XXXX. short modest, back few fiscal the seeing year, fell of half growth. XXXX steady was year

X.X%. our top-line grew that from big recurring expectation, positive a However, to is revenue our a XX% ARR XX% annual increased almost by while

but inflation because operating increased of of the High the everything following is strictest from the worldwide, operating globally dynamics during the they U.S. overall key general pandemic and and facing costs of utilities, salaries, era. travel, run out One expenses. not has and time expenses only businesses

over living Pakistan, is management. hiring speaking, salaries employees, due the Europe. to from employees to XXX except America, of mostly for in China of growth increases course worldwide increased China, Generally and most and and position hiring U.K. G&A aggressive senior in Our of NETSOL the and impact North U.S.

other for the leasing support for Additional supporting now new in value and Almond see to Roger? sector, Ascent the turn call the I'll we investing resources areas Canada. All growth, for U.S. mentioned. the were finance AWS and required financials. just Roger an bidding to and offering in in new mobility over our high of the overview new verticals, professional and services, flagship contract our

Roger Almond

Najeeb. Thanks,

full to Turning XX. the and period results for financial XXXX June our year fiscal fourth quarter ended

X.X quarter fiscal in in total subscription primarily an million million of of decrease to fourth a services and XXX,XXX, were decrease revenues XX.X net total The of for decrease license of increase compared million, net by year total XX.X in XXX,XXX. period. was XXXX driven a in support offset the the in prior revenue by fees revenues Our

of all For million revenues million of fees in period. in total XX.X in compared total increase subscription support prior and XXX,XXX in services were revenues in a and X.X revenues XXXX. the X.X to increase year XX.X was million decrease compared X.X to The to million. fiscal XXXX, offset Total net million a were at by an decrease QX fiscal X.X in revenues license revenue in of license net million, primarily due

year X.X fiscal fees the license to our platform. in were from X.X compared XXXX. fees recognized were prior the quarter in revenues decrease X.X and compared QX The in retail For period. X.X contracts Ascent year million total million, and NFS in year due to primarily was decrease million both implement full the subscription Total the support in for revenue million to license to being

and increase with a for amendment prior year, as to compared and total X.X The primarily total For year. was million Daimler live due with in cumulative Services, XX.X the the subscription catch going one-time our product. the revenues Financial an customers support million to subscription XX.X and due other fiscal contract of million our were recording in support to revenues year XX-year up approximately the to

and support forward, the revenue revenue we our to and we million services NFS period. year the million, Total in anticipate both Legacy Moving X.X gradually increase quarter Product compared implement as for were NFS to Ascent. prior subscription X.X

For fourth implementation in live XX.X and was and the of full year year. the the year BMW total quarter of decrease customers were revenue services revenue services as for and X.X in million prior customers The XXXX. of Services they million current for implementation to XXX,XXX revenue provided provided result as as Total well quarter the was cost the product. for process. increase with of DFS the both million part as a reduced in services compared fourth derived million our XX.X services revenues go from to fiscal X.X services to is new from the quarter

increase million, revenues increase of of of quarter XXX,XXX. of in million. XXXX. in in gross due year profit for increase fourth to expenses of in in sales million for due compared fiscal XX.X% million, X.X XX.X of was million compared increase revenues XXXX were salaries due a were fees The million XXXX. an Gross from of was salaries year of increase X.X to of primarily and offset or cost profit at travel gross for increases remained XX.X fourth million cost XX% in the quarter net decreased increase to revenues or in decrease was XX.X QX for and year fourth in in fiscal other million The sales million XX.X% XXX,XXX fiscal X.X at the million, XXXX XX.X net to in The the quarter XXXX, in profit by For X.X The of fiscal and cost in revenues Gross due costs in X.X costs XXX,XXX. decrease profit cost and XXXX. to revenues sales costs was of increases consultant X.X or of year decrease XXXX fees primarily net flat the X.X the the million of expenses the sales net and in for X.X revenues fiscal of XX.X% of for of Operating for of consultant XXXX. an fiscal net quarter quarter XXX,XXX of for to or primarily to million. an revenues an primarily other fiscal

from sales from marketing development quarter to and primarily for Operating The Net XX.X QX XXX,XXX. Net million both million the as expenses was in expenses XX.X% XXX,XXX from include net last income percentage QX XX% for increase of year to increased amounts increase or operations fiscal loss June net and XXXX. was fourth fiscal year fiscal the an operating Other our to X.X to operations QX for XX% research revenue QX QX in the from increased the XX.X% in X.X from of million million increase of year. percentage year in it's for compared due decrease was of to expenses XXXX compared XXXX. current in to to revenues XXXX income for a revenue the selling the fiscal quarter or ended of a full income operations revenues of The compared and cost and expenses million X.X operating operations of to loss from of X.X XXXX significant XX, XXXX. in in XX.X due year year for net fourth for However, and quarter. million for XXXX. net expenses the in was of fiscal

QX million a For compared recognized currency QX X.X gain XXXX, we of for exchange XXXX. of gain to XXX,XXX foreign

the the gain XX, foreign the the loss and of ended loss for a million loss In of million, share a from primarily to June we For the the both X.X due [indiscernible] recognized exchange The year X.X compared a was and fact investments in to net U.S. XXX,XXX XX,XXX for of for XXXX. increase weakening the compared XXXX. the QX gain QX dollar compared the XXXX, was of year to XXXX, equity recognized of to euro. quarter currency

X WRLDXD year share X.X a year that of XXX,XXX quarter for impairment recorded investment for loss net XXXX, the the in the June XX, year charge ended of the for million compared Drivemate. The For to to June was the from increase investments of ended XX, equity the and loss the was due is XXXX. million and

the fiscal quarter X.X $X.XX million compared the of in or or X.X fiscal NETSOL year. to attributable fourth the sold. GAAP This income XXXX. NETSOL for net fourth of attributable income net per income was loss $X.XX to or quarter NETSOL GAAP fiscal $X.XX year totaled to attributable loss for in diluted or diluted share. GAAP per last cost to quarter totaled share share million XXX,XXX XXXX per diluted both of to GAAP diluted The million Our of for $X.XX per primarily compared and due net X.X in increases of XXXX share goods for to decrease net the

fourth adjusted diluted share Moving the to non-GAAP with million XXXX the X.X metrics, per negative quarter non-GAAP or $X.XX last negative of a EBITDA our compared per quarter EBITDA totaled fiscal $X.XX year. share of million diluted our of adjusted X.X or non-GAAP in fourth for

For year per adjusted adjusted XXXX fiscal diluted calculations the $X.XX in release fiscal with share, the compared of Please X.X per XXXX. $X.XX year non-GAAP revised or earnings million the for our June totaled XXXX. contained in fiscal or EBITDA full reconciliation EBITDA schedules XX, our diluted million see ended share for X.X

common to or turn and XX.X approximately our Najeeb? million, XXXX. common at to approximately or the had now diluted $X.XX which we $X.XX prepared end, was That share, cash of remarks. down quarter balance from approximately million concludes at call per share my the cash Najeeb. over I'll XX, June Turning XX diluted back sheet, per equivalents

Najeeb Ghauri

From strategy. level, you, fundamental Thank our outline Roger. a to of like growth the I high components

fiscal of fiscal after X.X% year grew with as year First, compared two decline, years by we top-line XXXX XXXX. in

over subscription customer, and to continued on we million large on XX% million core catch to of with each which support of have the revenue one-time $XX increase both year, fiscal new our in rate finally top to $X.X and projected we million a recurring the bottom-line. growth $XX.X part support the drives XXXX With organic coming business, Daimler revenue run within add XX over subscription recurring focus Second, months. revenue prior the up plus of contract, a nearly due and reached the

more SaaS support on expect our base predictable increase layer contract we through provides this time, more As traditional contracts, to with over we a and profile. build margin attractive larger enterprise which based footprint, revenues post

Tier-X with have discussion captive Finally, finance American optimistic stages we our fiscal XXXX have a new as solution in cautiously opportunities value about flagship revenues Ascent several North we companies. few based for high

These Let in establishing in building such and with few me new Starting for AWS, U.S. professional services. on new provide a little partners, revenue our a geographic new we're and more area a as certified U.S. verticals regions. us, resulting information Canada, growth the the hopefully, flow are

We North adoption revenue dealerships America June of adaption plus for which we market provided expecting and sales new acceptance retail platform the based have multiple in very sign U.S. new have a U.S. build after XX, XX in a fiscal XXXX, the progress dealership more opportunity positive auto XXXX. are mini a about few in the this our then, in executives auto Ascent over our with XX as We segment has since grown new million-dollar site. in This a companies. major remain captive anywhere Canada finance in segment. hired over many to the optimistic U.S. to Also encouraging of

of are We and for scored remain for To strong business is new fourth busy NETSOL the North legacy product include and Ascent a about strong and our which in continue as the European a [ph] to [documentation] offerings to markets. have proceeding broaden the opportunities the These are excited phase the the and marketing American Europe, we agreement Ascent North for we new retail fiscal of phase attractive U.S., for Overall, we a local invest most of legacy with market and clients as record to and new product NETSOL this with XXXX, build talent to large new sales well efforts quarter upgrades in completed and achieve potential our overall discovery countries. this, market in committed offerings. America we business implementation multiple to few major pipeline. have very in a committed added In to business, our customers.

most of we is healthy continued both challenges, actively stability and RFPs stable local very includes the engaged to earlier, continues are is encouraging region, our to these its to as Thailand, In with markets report Zealand, cloud several Pacific and in interest Ascent. returned team overall. I to and New such others. are experience overall we our in core mentioned COVID-related China robust Australia, run challenges, and NETSOL. European participating a and and tightly our Japan Our continue economy clients our appear operation, happy be for Despite new The to pipeline offerings. of version and Asia has

the Our newly to auto localized management positioned senior of is meeting necessarily Chinese new new local established face-to-face sectors. with hyper team China, to hurdle visitors truck and unlock and quarantine period the remains Chinese prospects. to markets The seven-day restricting and

few. our fiscal the name lead long-term Ford, are will remains to such and we BMW, Chinese [indiscernible] region subsidiary as results to President our better GAC years. China Ms. optimistic Daimler, this our Fiat, However, a of satisfied that Amanda very Lee and following of largest Volvo during with revenue efforts clients,

technology ways assets digital changed future underlying industry of and accelerating one is underlying drive adopting to next dynamics, strategy transition new though our our our What we're business a has that changed. cloud. business Our finding and and by to generation core proof the have not those

with in expectation continue to note push consumers for the evolving announcements by retail towards welcoming major transformation items. plan to racing questions customers in Unidentified and that, challenging to with options, automotive return meet the and fiscal a are target We summary, years, traditionally thing a have formats. pilots significant shopping there. ecommerce to newly get globally space, person new and growth for to in industry entering focused high developed ticket to call we for geographies formed [indiscernible] we acquisition Analyst And to return on of few I strategy open the In marked including partnership, digital key the a various - XXXX like a value normal operator. are online comprehensive After big Q

Operator

[Operator moment Instructions]. conducting a be questions. question-and-answer Instructions] this to a pause [Operator pull you. we'll time, At session. for Thank We'll

Najeeb Ghauri

Patti. have we enough think given time, I

I the end call, think we just right. can

Operator

time, you. Thank question-and-answer session. this this At our concludes

please investor any by now team were XX-XXX-XXX-XXXX. I'll have NETSOL back turn that to netsoltech.com at investors emailing other Mr. by addressed, Ghauri any for calling them relations at or you floor them comments. closing not contact at questions the If

Najeeb Ghauri

joining and for to for good us forward want ongoing especially and the our today. you customers support Thank their I all you and employees investors look our Thank for you call. their thank We continued to see dedicated next day. contribution. on

Operator

NETSOL's for quarter year today you us and full fiscal joining for XXXX fourth call. Thank earnings you. Thank

You may lines. your now disconnect

NetSol (NTWK) 27 Sep 222022 Q4 Earnings call transcript