NETSOL TECHNOLOGIES INC Q1 FY2025 earnings call

• Najeeb is traveling in China meeting clients. - In Q1 2025, the company achieved profitability with a 3% growth in total net revenues, driven by a 26% increase in recurring subscription support revenues, shifting the revenue mix to more predictable SaaS products. - Strategic initiatives include AI integration into the product suite and geographic expansion. - Announced the Transcend platform, an AI-powered digital retail and asset finance solution. - Secured a 5-year $16 million contract in the US and saw a 33% conversion rate increase with MINI USA. - Signed an expansion agreement in China with an automaker, increasing the total contract value to over $30 million. - Customer retention rate improved from ~90% in 2021 to below 95% in 2024. - Enhanced balance sheet with cash and cash equivalents at $24.5 million as of September 30, 2024.

In the first quarter of fiscal 2025, total net revenues increased 3% to $14.6 million. Recurring subscription support revenues grew 26% to $8.2 million, making up 56% of total net revenues. Services revenue was $6.4 million, consistent with the prior year. Gross profit was $6.6 million, or 45% of net revenues. Operating expenses were $7.3 million, or 50% of sales. GAAP net income attributable to NETSOL was $71,000, or $0.06 per diluted share. Non-GAAP adjusted EBITDA for the first quarter of fiscal 2025 was $204,000, or $0.02 per diluted share.

• Targets double-digit revenue growth in fiscal 2025 driven by geographic expansion, enhanced sales performance, and market recognition of products and services.

Q: Can you provide any additional color on how your AI initiatives are progressing?

A: It is very much a key strategic initiative for us. We are focusing on internal efficiencies and product innovation through AI, and also providing thought leadership to clients on their AI plans and strategy.