NTWK - Earnings call 1 2024 | NetSol Technologies, Inc.

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Operator

Greetings, and welcome to the NETSOL Technologies First Quarter 2024 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Patti McGlasson, General Counsel. Thank you, Patti.

You may begin.

Patti McGlasson

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

company's and call financial a questions. review we highlights the of the Following results, business will for open

certain current I statements the the from all Reform discussion the and forward-looking actual stated discussed regarding Securities on XX-Q. Form during statements will Litigation of is necessary of press Act. results reflecting SEC including provisions could cautionary or information forward-looking releases our forecast call. made may future, and NETSOL's covered filings, of call under the Private this that by our aspects company's company's management These harbor contained reports include by differ now those the are XX-K note Please management's annual quarterly on today's in and Form the safe statements forward-looking report provide materially The qualified statements cautions the implied. on

be point reconciliation I non-GAAP of to a their would financial press also these contains measures. most like we non-GAAP out measures. results discussing issued today GAAP The to certain release earlier comparable will that

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

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

Najeeb Ghauri

and revenue the in performance our X in net grew of revenues, total due meaningfully. Patti, had streams a margin which increases by profitability. our contributed strong quarter everyone. Revenue across you, good Thank We Each to XXXX, improved morning, highlighted first complementary quarter business. was of first and solid gross

based Motors, $X.X from approximately million revenues recognized Isuzu Importantly, a manufacturer multinational auto Japan. licensing in we in

revenue can consistent find forward deals more going so license that is drive we quarter-to-quarter. licensing Our to more from goal

is subscription the licensing which SaaS-based support or our after from is signed. as and fees, to a In recognition services deal addition well we revenue, as generated licensing consistent revenue continue revenue see also to

across most our was our and the market. remains the we the cost freeing to of impact opportunities: priority the organization. growth as on display of discipline focus of X containment a vibrant increased business penetration allocate this the U.S. Also quarter SaaS on growth Cost to capital

on Our to office best expansion Texas new we Austin, in talent focus in U.S. the our with available. progress staffing as continues the

Our aggressively the goal is with States, facility for largely NETSOL is to into untapped this a United expand us. which market

live in organic this market. carefully addition In platform, white the North evaluate U.S. we our label SaaS-based SaaS solutions retail mobility in growth the XX and long-term, opportunities dealership to providing of now MINI to demonstrating across Anywhere strategic products model with continue U.S., America. in We're our XX in acquisition Otoz, also on-demand demand states,

very focused On the potential to business this with we are building development a delivered and In of pleased activity summary, on deals. we continue see results strong the quarter. front, we remain licensing pipeline

Our as scale the the potential revenue. performance reflects earnings we of NETSOL business model

working are consistent SaaS generation. improved licensing with diligently to continued which We drive offerings, drive profitability revenue we will and predictable of our deals additional more cash believe expansion and and more

Chief Financial our to financials this Roger? the I'll from Officer, quarter. Almond, now over over call turn go Roger to our

Roger Almond

Najeeb. Thanks,

and net in total with $X.X basis. a million approximately period million the $XX.X are net were License Our the fiscal of fees the prior with first constant year a same currency currency revenues the period. XXXX $XX.X million prior in constant for on quarter year basis, compared million. compared $XXX,XXX were On $XX.X revenues

million revenues quarter compared with in for the period currency quarter was $X.X compared million $X.X were and the revenues revenues were Recurring million. million $X were of period basis. first the constant compared for prior same quarter year basis. million revenue Total the prior million quarter and first currency cost or the the constant $X.X basis, $X.X $X.X on revenues Total million on subscription of constant with support first a total XXXX. in cost in first year a currency $X.X of fiscal $X.X On and to services million the a year for

XXXX the same to period $X.X the million first XX% sales sales for compared in million net XX% prior $X.X of million million of revenues for net of On sales. operating profit XX% million revenues first or expenses were $X.X was basis, constant Gross first the XX% quarter or of Operating for gross currency in currency a expenses a $X.X or fiscal basis, last compared On or quarter $X.X were profit year. XX% quarter the $X.X period. or year the of with was constant million.

to profitability metrics. Turning our

$XXX,XXX Our GAAP in of the the a compared foreign first gain exchange XXXX On totaled on a quarter our for year. transactions diluted currency $XX,XXX $X.X realized of diluted constant net compared the quarter NETSOL loss net $XXX,XXX loss was fiscal last per we or net of income with per loss $X.XXX a of basis, foreign of last a $XXX,XXX million share first on transactions. quarter of approximately Included or GAAP quarter currency $X.XX in attributable exchange to year. share to of this a income loss in first a currency of

our dollar. it business the revenues, of in than currencies has a our other the foreign currencies strength the currency our to as to revenues, it gains U.S. other U.S. the several it A rates, than dollar. also value Likewise, denominated our reduces in increasing currencies expenses in dollar. rates than foreign but denominated to currency also effect expenses geographical exchange increases U.S. the but portion the relative Because U.S. U.S. compared conducted dollar other our we of dollar regions, is in significant tends reduce the exchange in decrease operate of generally

of Please the for fiscal with September adjusted our reconciliation adjusted to or compared quarters XXXX EBITDA the Moving of per loss year. the or our was release see non-GAAP for non-GAAP $XXX,XXX of schedules adjusted contained last $XX,XXX per revised EBITDA earnings share $X.XXX our first diluted ended and first $X.XX quarter XXXX. XX, share of in metrics. quarter in a the diluted EBITDA XXXX calculations for Non-GAAP

At quarter Turning $X.XX end, share. cash approximately was approximately to million common $XX.X share. diluted stockholders' XX, diluted or balance of million our $XX.X had cash equity or XXXX equivalents and Total at $X.XX we per per sheet. September

That to concludes my prepared remarks. turn I'll now Najeeb? call Najeeb. back the over

Najeeb Ghauri

Roger. quarter you, This Thank was an for us. excellent

drive for shareholders. on and penetrate business more Our company solid is cost focus the SaaS strategy maintaining value build and U.S. our discipline how the market. is the consistently on revenue growth, delivering executing to long-term our This across we

the questions. like I'd that, for call to With open Operator?

Operator

from with ]. is ] StoneWorks [ [Operator Instructions] Our Brewer Tyler first Capital question [

Unknown Analyst

the just little U.S. you strategy about you was market a talk could replicate I the wondering, you can whether So long-term overseas? some of and more you had for success think the

Najeeb Ghauri

Yes.

it's is, of a question. are think twofold course, we what short I doing One now term.

pipeline we focused pretty you on from strong in very presentation, business As heard the are driving our across globe. the

deals close you these win if high know, but deal. we As value in take this license time are to they also

an So relation think, impressive mobility In SaaS process. ongoing we to the at business, our that, for it. is look way that is us, quite, I

market business. to also and our believe, America, not market, think, I long term which it's feel, an but The continue resilient is only untapped for we invest North very our, in a I strong

markets Given and the our there I the our met just very globe, very U.S. for and challenges was still us. environment across employees, customers recently the company. the I both with all feel is robust and all personally strong for and China are

activities There's long So I quite America, -- U.S. in our and that U.S. come the think Canada feel will the growth office. given term, going north we new the from on

new will continue We to in invest talent. the

U.S. people some have solid in a need key so to and traveling positions all we level lot assembling been different from We countries. regularly I think, market our business, scale not locally the for more name new to position people on are that because have good dependent make in us, we a executive the to

now up with investing Austin, our right and building So marketing sales, we are relations. in Texas talent and both the client office the

is customers amazing technology bigger our site, capability worldwide That our state miss that dependency once a in scale have our new knows, of prospects, our it Because delivery and the we never which to me, campus is Pakistan art, supports is and on our the and commitment. future. Lahore, on everyone customers really,

future we're China because growth outlook U.S. China looking long also which in and at lot for America, our and we and have term a continues, investment the many customers pretty of combined Mexico, in in with the North U.S., course, confident So markets, other of Canada.

So the about I it, outlook. quite feel about future good

Operator

Felte Our is from question AGES with next Financial. Todd

Todd Felte

profitability. to return the on Congratulations

Najeeb Ghauri

you. Thank

Todd Felte

a few here. had Just

still you the this by, somewhere believe I First was Are standing margins conference still year you to do at quarterly revenues $XX last continue? be expect had standing million the you of $XX million. are you by estimated and And that? to all, it for would call, profitability

Najeeb Ghauri

Yes.

X, time formally are second which is. position or a we'll So And even in update to as be better far, the to we guidance. leaving best half be update be and the in the that improve quarter, would will

I I feel So it, yes. about strong pretty now think

the function And essentially a revenue. profitability is of

XX% margins this almost quarter Our versus previous quarter. XX% to improved

sign a becoming that it's efficient. So we are

metrics. the We're course, focus the in growth talent. and, #X is investing people, We have of our company. key cut down costs right right all And across revenue the the

course, line, gross grow the we bit fast bottom revenue of how Of the little a and result margins. the

Todd Felte

a of customers, great of customers question, for you you but would as And on a what you for you're more general land? software project to actually do new hear. this is say bidding bid that That's percent

Najeeb Ghauri

unique a Well, companies other. some very with who are are a following niche good that's question. listeners business. of very in us or our investors Few have time, think even we -- been I some a for a or business It's competing each

in are Some are, very we America we're as scale or same Asia. some Europe North are or about big, whether

the is pipeline. don't -- the we think I mention pipeline

We have pretty size. a large pipeline, robust

Some X can if time. have a say, XX near -- achieve we will that successes them, and will a the the be it are because Because in it's for some very we companies. there is few and If some of tough -- a believe bit competition deals take future, great we niche company. close out I we more

working we U.S. to the think our stronger only get Secondly, capability in then, diligently I get that better. and in our improve which definitely win as will chances U.S., the we are to U.S., scale business

Todd Felte

Okay.

X? why out you you're of Or the other XX you land about the on, is improving don't you bid land what think areas if so do X on? reason are contracts of what those the #X you And

Najeeb Ghauri

sure. diligently. on I capabilities, work or know I strength our incredible the our think, Todd, And one most have, us said, also we challenging market to that opportunities we U.S. our our are working the but customers or most it for and long-term who investor market whether in. Like well, thing funds is

the U.S. at we Oftentimes, And the here. in them. and In large X these U.S. on company shortlisted. sometimes become most look is that a companies, to and RFP prefer contracts local. X has compete the top then which we in want really X, that the they going happens least And invited, share we strong are shortlisted. understand to for very value, at size we every I'm do There's What to cases, XX,XXX we get example. employees, then company to presence. not with have depend name customers because become

beaten they over we in sometimes over In have times them many contracts. them, major Sometimes us. win win China, we

in I them. companies us. midsized, we spot companies But win there are for So which scale, think is most company, our And mid-tier look capability. right which are for cases,

big it's think the and guy. stronger be able for us. is Competition So thing. us better compete it I to makes to good a with mixed

mean, strong We in have were space. the SAP times them one China company -- #X ago I years in still because of this beaten China, so we China many in in is

U.S. big a very is market.

information the in I'm way to coming get liberty the do in X because joint And well positioning the lots partners, that the ventures. is of not X on, they're public years, some will there's sharing right We we going people, not and yet.

we'll become market. share course, the with of and As disclose material, they

So overall, about bullish excited market. I'm the very and U.S.

Todd Felte

question the that's investments. you Great. noticed X.X Can or I've $X and then That's own cost last over a breaking which million. your last improvement company seems kind profitability. think dramatic But a I your plans of of XX% you interest the about Because lot that's that like looking And And into of. money what are? Pakistan, years, it interest at now the just my I helpful. over is, you minority been that's NETSOL discuss to noncontrolling in

Najeeb Ghauri

Look, good company owns NETSOL this NTI, parent Okay. question. company, of Very XX% Pakistan. the

I which is some think interest So minority not which of is XX%, much. institutions, about are ownership, fund that mostly family

We have the more company, than ownership parent NTI.

and you because think, is, important as other our AI know, investing that new AWS yes, mobility new we Secondly, been it good we've I these is quarter. areas a was investing. a and Continuously, platform, revolution, X in are what happens Lahore very are some

develop PhD specialists. We helping They're AI and hired some us solutions. MIT some

built to in have and of some We eventually some because will AI and in Pakistan up provide and customer U.S. AI the Lahore, embrace tools customers, proactively part our in tools scale to more side the the because technology. we want adopt AI every

So ahead -- because as we left small be we as we to are, still don't are behind. company curve of the we're want

investing in are areas. those we So

And course, in invest then, in platform. the programming, some mobility retired. all generation bringing new fresh of equipment, to continue are new the digital we being younger, new blood because tools, We're

in there's the but curve. vision has company also last it company, This the be left we a to behind So technology on. is thing want lots going only And innovation. not the a for is

takes the headcount but are investment and the streamlining over the right all that completely is This And in making in Pakistan. just of And investment. always curve, -- place. our globe, not company cash the ahead we

feel So about strategy. all, in all I our comfortable very

We year and in promised will coming we stronger execute we'll what stronger this get years. and

Operator

further back to over Thank Najeeb time. you. Ghauri I'd are questions There this closing like any the at comments. hand to floor for no

Najeeb Ghauri

loyal especially you employees to continued dedicated for their us our contributions. our thank for ongoing most their investors want today. for and Thank I worldwide our support, joining customers

earnings forward look updating to call our very call. Thank will you We next much.

Operator

today's concludes This conference.

you You time. this disconnect your your at may participation. lines Thank for

NetSol (NTWK) 7 Nov 232024 Q1 Earnings call transcript