NTWK - Earnings call 2 2024 | NetSol Technologies, Inc.

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Operator

Good morning, and welcome to NetSol Technologies Second Quarter 2024 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; and Naeem Ghauri, President and Founder.

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 our 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

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

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

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

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

Najeeb Ghauri

our business began Patti, and our of in you, the Thank gross total strategy. Like model to year, the by growth we on good quarter of morning, our improved second Yes. our profitability, fiscal fiscal characterized which everyone. and was margins XXXX and increases both strength revenue, execute demonstrates ability

our grew Revenue the in driven performance once again business. solid quarter, by across

in quarter throughout continue and our hybrid a XXXX. catalyst license SaaS this to model business, and growth become we scale strong our fiscal As has for the SaaS our both

a part large Asia in license contract substantial recognized as $X with million company. a new quarter automotive fees of in We this major of

are thrilled. We

this We have highly officially the announce to a in from pool which coming win competitive weeks. distinguished expect candidates we contract, to of ourselves

is required visibility global as and on operating of by well that a both the and the major in scale. reflects reliability selection our superior performance our companies products Our recognition market as

expect license them portion revenue revenues License part fees said, are to significant key for a continue our future. to business, and the and lumpy, to That foreseeable can be major represent opportunities we a of our pipeline the consistent us licensing results already-robust on potential of to continue is build long SaaS an term. to and deliver bit a for a more focus over of

Otoz achieved growth At AppexNow. the revenues our the marketplace, support business recurring of platform first and SaaS our and our the subscription quarter. We digital in API heart are products in retail like

of and to of that We ensure are our positioned leading customers, committed improvement these AI learning demands and at industry. the offerings are meet we additional the as SaaS of to our technology to diverse the algorithms innovation continuous a such deep forefront integrating

platform offerings, MINI retail year. The platform mobility During powering the offering, quarter, Otoz we to as across nearly has XX over premier active and of MINI network lead in and Anywhere OTOZ, X/X retail June in XXXX. volume the Anywhere by vehicle platform doubled major our with USA's SaaS X.X, updates is a Supported dealership to launch implementing the Xx OTOZ phased U.S., MINI over the is MINI services, sales. USA past months expand planned enabling and enrollment increase on a now existing such digital unveiled since the next a

selection navigate configuration transaction. process, the long-term each marketplace traditional of to marketplace The technology. vehicle the our micro Otoz launch from the lease we of leasing allows to X.X with suited deal support platform options leases, is to in back-end usage with OTOZ's automotive of market witnessing vehicle is significant in ideally AutoNation that lease shift one this Mobility quarter, to by key new relationship Also clients and automotive lieu micro towards the customers our a expanded entire short-term supporting finalizing

and second excited quarter very our pleased we're results. Overall, with

As capital our North of strategy. and we to is all to business progress on North model pleased APAC. of our high-growth and ability continue a Moreover, X are like expand our demonstration strength execute I of geographic said the America, before, our and allocate growth to presence performance see both steady strategically our markets we Europe across to key markets: America, and across further invest

Given period organic XXXX fiscal into our and of strong expect recent double-digit move more to margins growth results sustainability and see a we in trajectory, we as revenue profitability. improved

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

Roger Almond

Thanks, Najeeb.

the constant with revenues Our $XX.X compared year net basis, second were a million million. period. net the in prior On for were total of $XX.X currency quarter $XX.X million total fiscal XXXX revenues

the $XX.X million XX, to revenues total $XX.X constant period. were year months compared $XX.X December currency total ended XXXX, in million. revenues basis, million net a X For prior were On the net

million. XXXX and License fees a prior in basis the a $X.X constant In of period X first fees ended in License same currency $XX,XXX year year on license fiscal for compared the with with on $X $X.X constant currency quarter fiscal prior were the the were million XXXX, $XXX,XXX compared million months fees the were period. basis.

same and Recurring XXXX revenues of a for revenues second the were quarter $X.X in constant $X.X million of year prior a million period and compared with constant fiscal year or on support the the on and X million revenues the for XXXX basis. months $XX.X compared period were prior the to same the million in currency Recurring $XX.X currency basis. fiscal subscription first

Total to $XX.X for revenue fiscal $XX.X XXXX XXXX second were million million quarter year services period a $X.X on were million compared period of Total constant the year a $X.X same fiscal first the prior and the compared million revenues of currency on the months in prior in the basis. the currency to same and X services for constant basis.

XXXX year million of a cost million fiscal compared for million. second Total fiscal the currency cost to On the revenues $X.X total revenues quarter of quarter was $X.X in basis, were of XXXX. second constant $X.X

Gross fiscal $X.X of net prior $X.X fiscal second gross $X.X the profit of XXXX was revenues in of quarter for X million. the million for compared of year X profit XX% XX% XXXX XX% prior for million or the or year constant or XXXX, period. compared revenues of net million period. in currency to $X.X profit the basis, currency million. or a was On net profit basis, ended December revenues On months million gross revenues months XX% a the Gross with $XX.X was net of constant $XX.X was XX,

last of Operating quarter sales. $X.X sales were $X.X XX% expenses expenses currency $X.X million the for XX% in the million months $XX or a the second $XX.X XX% $XX.X sales basis, the period On of XX% operating Operating of On of first a XXXX currency or were year second period. fiscal million of compared fiscal December operating of sales prior for constant XX, XXXX million same for X million ended X of months in were year. with expenses of or basis, expenses the XXXX, sales. XX% compared the or to or quarter million constant were for XX% sales or

fiscal share or fiscal a year compared net quarter $X.X profitability per $XXX,XXX a second in with diluted months income per NetSol $XXX,XXX for XXXX net a the per Turning $X.XX our of net diluted loss $X.X $X.XX to million XXXX. fiscal or $X.XX compared totaled second loss metrics. GAAP of share GAAP million to loss diluted or GAAP -- share net in the loss of of of a per net attributable NetSol a GAAP to of diluted the with quarter income prior for totaled $X.XX of share XXXX or attributable first X the period.

on to was foreign a currency of exchange the basis, of ended Included net of December constant of fiscal income of on currency transactions $XXX,XXX $X to this year on loss realized currency in XXXX, a exchange the On loss in a loss exchange second in on gain prior Included $XX,XXX foreign foreign currency XX, foreign loss constant currency we transactions XXXX. income realized a a the compared $XX,XXX our for compared exchange we transactions. months $XXX,XXX transactions. in net quarter a million our a X gain basis, period. of On of was a currency quarter $XXX,XXX

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

metrics. non-GAAP our to Moving

diluted the adjusted of share loss fiscal Non-GAAP EBITDA million with per in for EBITDA fiscal year. quarter a was diluted X prior or XXXX $XXX,XXX per non-GAAP was or loss per per $X.XX diluted $X.XX for adjusted million compared previous adjusted non-GAAP months adjusted first of fiscal in $X.X of the of the with share Our second the second or non-GAAP $X.XX of $X.X the a million share diluted $X.XX EBITDA the second XXXX $X.X quarter quarter of or share fiscal year. EBITDA compared

release XX, Please EBITDA adjusted in XXXX. reconciliation XXXX revised the December see the for quarters and our our earnings ended schedules contained of for calculations

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

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

Najeeb Ghauri

very the growth we look journey a We're and to continue positioned Roger. execute half the XXXX. in for quarter to on you, excellent excited This for on Thank was path are believe value profitability, later shareholders for of progress we driving NetSol. our growth sustainable and ahead. optimistic by are we our well We our forward and strategy as an towards that

turn over questions. that, I'd the to like now to for operator With call

Is there? she [Technical Operator? Difficulty]

Operator

with question you we again, coming [ is Instructions] Eric patience. Management ]. first the once gentlemen, Buttress and of ] for [Operator line from Our Green your thank [ Ladies

Unknown Analyst

more to how learning you're algorithms enhance algorithms Could into that technology. mentioned your product offerings? elaborate little kind your AI integrating on you those AI You leveraging of deep a and

Najeeb Ghauri

that you jump you to in? Thank question. would want Naeem, for

Naeem Ghauri

Yes. Sure, Najeeb.

that's our is and from the across if dealers. like, globe data you of So lot build, from warehouse of a coming And based run markets. thousands we a we on then data, what coming we of our access actually and metadata, do that are installations different we have to algorithms that

determine what sold on able another, risk, underwriting, example, are to credit are we as market cars, and residual values behavior on, they're patterns moving. trends are how to what and type opposed credit products one of for So in

in really on worth globe. billion across So $XXX a data about run we -- terms is the of like, treasure trove portfolios you of that assets if our

that on on that can And on So who presents consumer we large a for understand that you get. is then data, conversation can well our imagine that risk amount generative with directly -- any of data somebody's going are based itself. which able generate based be actually pretty on primarily build how quickly models, can can that the is used algorithms and build dealers we language our are accessing credit we systems our X-way platforms, as to data data as how AI,

at into forward, more of which amount for literally just being we of more And down modules more you our so sold, and, are the data of a cars in hearing much discrete going are value deploy to the manipulating behavioral more credit type iceberg, we specialized like, about really, can what So AI modules data and will down exploiting if patterns risk the to stack. we just and lot terms markets. on how tip the add to based be that information to have tech of fact, you in we -- even have on color, and what that much

getting So rest time the -- you and that that into question. building in to very of iteration exciting answers now us AI, if really more for use like, we your generation data of it's terms are a cases Hopefully, the have.

Operator

from the line Todd AGES [Operator coming Financial. with Instructions] question next Felte is of Our

Todd Felte

there. Congratulations to improvement. great quarter a see on Nice the

here. questions quick few a had Just

for I deals now. you dealerships XX in the you much we're think, that guys? or and I on a if XX Cooper MINI produces revenue with as to remember On basis AutoNation, correctly, yearly how quantify Can

Najeeb Ghauri

we for dealerships almost you Todd. question, Roger is far. that and so Thank may onboarded help, this Both Yes. this XX-plus but have Naeem

the revenue? Roger, for you right, annual specific have numbers,

Roger Almond

with the Yes. Currently, dealers, $XXX,XXX in $X.X so we that's a Najeeb with month, year said, XX dealers. and about brings million which year dealers, it is a sorry, $XXX,XXX the as a have, XX XX currently --

Todd Felte

is AutoNation for fiscal growing you're And there. the I much How know Okay. And now? project That's great would contributing to the hear. you really AutoNation, year? on current revenue fast what

Najeeb Ghauri

in? AutoNation to Naeem, champion want a you of Naeem please. products. Mobility is ahead, Naeem, Go jump

Naeem Ghauri

pick can that I up.

different a are doing many to is this we many, Todd, digital So -- case use for retail.

subscription. they've use already launched And the million a their of is launch. AutoNation, doing did have generated is just done But For for case. what terms soft of product subscription implementation terms we're in and just we platform in have that that $X over they the tailoring the revenue

Going of this in could at hitting subscription on grow. to certain the terms they they hit to big, If we're bigger least, based tiers be then with tiers. starts targets, or forward, those if revenue subject if is doing we the what believe not the them MINI, big than targets because usage, as hit

ceiling they when -- marketing they do can or planning. it's grow, grow really win-win. where because them. the there's if model they it no grow product could we with grow, with a right limit an So exciting to the the revenue upper grow And it's and If

Todd Felte

assume hear. it's Okay. now extremely for AutoNation That's great up, to set that high And up, margins since on set are business, is the that I you? everything that

Naeem Ghauri

set It's all -- I'm the yes. up sorry, what's question?

Todd Felte

Yes.

the AutoNation grow? on high to margins as continues So it be very that should

Naeem Ghauri

happens for. it's and on is which deployed is there cloud, very cost, that our scalable. is pays what product client a setup Well, the the very, And

could Xx, we it's grow on by revenue So fivefold, impact a like major without OTOZ's the having cost.

we amount already adoption. the in MINI the we and cost the margins we run adoption, in are or it's from do a the have platform, really, to and terms AutoNation. what faster fixed So profit of because better the bigger bring The of

So we're the already in black.

we And would rapidly. grow as bidding have they scale, margins customers, However, and quite happens, customers they are the so a grow additional that and scale as get we profit of for. with we pipeline new

Todd Felte

have agreement I the you're point will That's all where project know and license quarter positive or forward? that able to comfortable can every your currency can Or net But are currency you and know great gains affect happen? reached to your the losses lumpy, hear. be exchanges I that income. income operating you yet thinking going

Naeem Ghauri

just it give I'll leave Then to I'll you. up take. my

Najeeb Ghauri

Go Naeem. ahead,

Naeem Ghauri

that, the we lumpy, future X SaaS. model we where is that us ago, My license were And are -- but hybrid is attractive. completely on from operating although take, Todd, good it's where is X, we're still years for ultimately, is And a very on news depending license.

annual a large revenue to Now within ARR, revenue, the we of recurring revenue. are is as lumpy opposed offsetting our which portion license

as or, to any a revenue So don't continue even you if license are we get we at a a big where win, pace like, even profitable our SaaS we have without get point, we'll position point at decent tipping revenue if that, will company. to income, some grow license a we a a so where

Najeeb Ghauri

a flagship add X it's markets. model for me our Also, to our told, demand have Naeem. in much Ascent of, iteration. a is let course, for a more a But revenue it license one amazing Todd, think, pretty cycle. Naeem Then through which The of model, with beauty like growing that I SaaS, the is point, it's a longer of and us. we do -- goes lot hybrid sales then, good is the trajectory with combination all Yes,

in all, all in a good believe are So we position. I

license for really, XX look amazing I think company has at the which years. such sales you history an If these all you see competitor, a in

well in year. in and we're the will is effectively, positive remarks both coming we quite managing and hopefully as -- I quite eventually, the Now prepared and my following sides said continue growth believe, quarters

just income. SaaS, company all gross And way margin a it's and in quarters. coming more affects I good of a metrics efficient bit has whether leaner. be all to the job to impact net our the or, license overall, think and That So done it more the higher course, revenue, the will

Todd Felte

That's this that that? any need to you Naeem achieve that won't expect that an even were happen next point great. Or there agreements spoke sort [indiscernible] you And would year? tipping licensing or of is about profit, operating on year to

Najeeb Ghauri

because I believe the we're trajectory more next is year here. probably sales building still

to is a but think, way So next better at year look margins. question, on to it, your I the specifically Naeem,

Naeem Ghauri

Look, predict don't that, when I tipping in think that I point terms of could I but think it's imminent. think is, we

If a has far like, subscription can't see millions you if you in quarter see exactly or from we relatively point how you which a, short to a -- which revenue on growth we're very single-digit flag if we're I don't a I off. but soon. I and month, are think not grown put where time, I think reaching that

Todd Felte

had know And the hear. to my you've several I final in question going. then share great That's past, Okay. buybacks is,

stock the at look You now.

I think you over value, $X you in and share plan a around share Or in announce the to do now? share book any have near buybacks we're Do a on $X sales. right going any we're doing in future?

Najeeb Ghauri

we Well, at of also, and because, mentioned, new we'll regions, investing business are lot other appropriate I some the which in North and whether in markets America immediately we activities short time. stage, some the there's in don't new key it's this run, have markets, with as the share market plan simply the any opportunities, in a

not done right, So open in have obviously, about a point. but do made very And but that, you're it times it, is very attractive we we past. at are this few to price the a the we buybacks decision have

Todd Felte

a Okay. quarter. And fantastic congratulations on

Operator

our question-and-answer We have the reached of session. end

closing to I'd management floor pass the So to remarks. back any additional like for

Najeeb Ghauri

joining Q&A. the for you this do little the today, beginning us apologize glitch Thank I in for and of

contributions. ongoing you. And next forward want -- of updating and investors, continued for employees our our customers on call. loyal our our all I we most to you our thank for their to support, Thank suppose their worldwide I dedicated look

Operator

for disconnect your conclude this Once time. you you does again, we lines at your and gentlemen, participation, teleconference. may and this thank today's Ladies

NetSol (NTWK) 13 Feb 242024 Q2 Earnings call transcript