NETSOL Technologies, Inc. reported its financial results for the three months ended September 30, 2024, showing a modest increase in net revenues to $14.6 million, up from $14.2 million in the same period of 2023. This growth was primarily driven by a significant rise in subscription and support revenues, which increased to $8.2 million from $6.5 million year-over-year, reflecting a one-time catch-up of approximately $639,000 from a new contract in China.

Despite the revenue growth, the company experienced a loss from operations of $760,158, a decline from an operating income of $350,629 in the prior year. Total operating expenses rose sharply to $7.3 million, compared to $5.8 million in Q3 2023, largely due to increased salaries and hiring of additional marketing personnel. The gross profit for the quarter improved to $6.6 million, representing a gross margin of 45%, up from 43.3% in the previous year.

Net income for the quarter was reported at $217,709, down from $291,063 in Q3 2023. However, net income attributable to NETSOL increased to $70,795 from $30,890, reflecting improved performance in this area. The basic earnings per share rose to $0.006 from $0.003 in the same quarter last year.

On the balance sheet, total assets decreased to $62.8 million from $64.2 million as of June 30, 2024. Cash and cash equivalents saw a notable increase, rising to $24.5 million from $19.1 million. Accounts receivable significantly dropped to $5.9 million from $13.0 million, while total current liabilities also decreased to $22.4 million from $23.9 million.

Strategically, NETSOL has made several key developments, including the renewal of a support contract in China expected to generate over $30 million in revenues over five years. The company also signed a contract with a UK finance company projected to yield approximately $600,000 in revenues over five years. Additionally, NETSOL launched a new corporate website aimed at enhancing customer engagement and unified product offerings.

The company continues to navigate a challenging economic environment, with external factors such as inflation and geopolitical tensions impacting profitability. Despite these challenges, NETSOL remains focused on growth opportunities, particularly in the Asia-Pacific region, where it is benefiting from the organic growth in the leasing automation industry.