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Netsol Technologies Inc (NTWK)
NASDAQ:NTWK
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Netsol Technologies
(NASDAQ:NTWK)
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Rating:69Neutral
Price Target:
$5.00
▲(11.11% Upside)
Netsol Technologies' overall score is driven by strong earnings call highlights and positive technical indicators. Financial performance is solid but hampered by cash flow issues. Valuation is fair, but the lack of a dividend yield is a downside.
Netsol Technologies (NTWK) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$53.27M
Dividend YieldN/A
Average Volume (3M)179.66K
Price to Earnings (P/E)18.2
Beta (1Y)0.72
Revenue Growth7.65%
EPS Growth311.31%
CountryUS
Employees1,569
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.22
Shares Outstanding11,785,540
10 Day Avg. Volume84,535
30 Day Avg. Volume179,659
Financial Highlights & Ratios
PEG Ratio0.04
Price to Book (P/B)0.95
Price to Sales (P/S)0.54
P/FCF Ratio-38.48
Enterprise Value/Market Cap0.62
Enterprise Value/Revenue0.50
Enterprise Value/Gross Profit1.01
Enterprise Value/Ebitda3.91
Forecast
1Y Price Target
$5.00Price Target Upside11.11% Upside
Rating ConsensusHold
Number of Analyst Covering1
Netsol Technologies Business Overview & Revenue Model
Company DescriptionNetSol Technologies, Inc. designs, develops, markets, and exports software products to the automobile financing and leasing, banking, and financial services industries worldwide. The company offers NFS Ascent, a suite of financial applications for businesses in the finance and leasing industry. Its NFS Ascent constituent applications include Omni Point of Sale, a web-based application; Contract Management System (CMS), an application for managing and maintaining credit contracts; Wholesale Finance System (WFS), a system for automating and managing the lifecycle of wholesale finance; Dealer Auditor Access System, a web-based solution that could be used in conjunction with WFS or any third-party wholesale finance system; NFS Ascent On The Cloud, a cloud-version of NFS Ascent; and NFS Digital solutions covering Self Point of Sale, Mobile Account, Mobile Point of Sale, Mobile Dealer, Mobile Auditor, Mobile Collector, and Mobile Field Investigator. The company also provides Otoz Digital Auto-Retail, a white-labelled SaaS platform; Otoz Ecosystem, an API-based architecture; and Otoz Platform, a white label platform, which includes Dealer Tool and Customer App portals. In addition, it offers system integration, consulting, and IT products and services. It serves blue chip organizations, Dow-Jones 30 Industrials, Fortune 500 manufacturers and financial institutions, vehicle manufacturers, and enterprise technology providers. The company was incorporated in 1997 and is headquartered in Calabasas, California.
How the Company Makes MoneyNetsol Technologies generates revenue through multiple streams, primarily focusing on software licensing and implementation services for its proprietary platforms like LeasePak and LeaseSoft. The company also earns income from ongoing maintenance and support contracts, ensuring clients receive continuous updates and assistance. Additionally, Netsol engages in consulting services that help businesses optimize their processes and integrate software solutions effectively. Strategic partnerships with financial institutions and technology providers further enhance its market reach and revenue potential, allowing the company to leverage collaborative opportunities for growth and innovation.
Netsol Technologies Earnings Call Summary
Earnings Call Date:Sep 29, 2025
(Q4-2025)
| % Change Since: |
Next Earnings Date:Nov 06, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong positive momentum with significant revenue growth, new strategic partnerships, and operational improvements. However, there were challenges with the decline in license fees and increased operating expenses due to strategic investments.Q4-2025 Updates
Positive Updates
Strong Revenue Growth
Total net revenues for the fourth quarter increased 11.9% to $18.4 million, compared with $16.4 million in the prior year period. Fiscal 2025 total net revenues were $66.1 million, up from $61.4 million in fiscal 2024.
Increase in Subscription and Support Revenues
Subscription and support revenues grew 9.9% in Q4 to $8.2 million from $7.5 million in the same period last year. Full year subscription and support revenues were $32.9 million, up from $28 million in the previous year.
Significant Contract Wins
Secured a $16 million, five-year contract with a major US automaker and a multi-million dollar deal with a major Chinese automotive finance company. Entered the Middle East with a deal in Oman.
Operational Efficiency Improvements
Gross profit for the quarter was $10.3 million, representing a 56% gross margin, up from 52% in the prior year quarter. Operating expenses decreased to 39% of sales from 47%.
Leadership Strengthening
Added Richard Howard as an advisory board member and Ian Smith to the Board of Directors, both with extensive experience in the automotive and financial services sectors.
Negative Updates
Decline in License Fees
License fees for the year were $0.6 million, compared to $5.4 million in the prior year, reflecting a significant decline due to the transition to a subscription-first model.
Increased Operating Expenses
Operating expenses totaled $29.1 million for fiscal 2025, up from $25.8 million last year, due to investments in growth areas and global delivery capabilities.
Company Guidance
During the fiscal year 2025 earnings call, NetSol Technologies provided guidance focused on growth, innovation, and operational efficiency. The company reported a significant shift towards a subscription-based revenue model, with subscription and support revenues increasing by 9.9% to $8.2 million in Q4. This contributed to a total net revenue increase of 11.9% for the quarter, amounting to $18.4 million, and a full-year revenue of $66.1 million, up from $61.4 million in the previous year. NetSol highlighted the success of its AI-powered Transcend platform, which secured a $16 million, five-year contract with a major US automaker, and a multi-million dollar deal with a Chinese automotive finance company. The company also reported improvements in gross profit margin, rising to 56% in Q4, and a substantial increase in non-GAAP EBITDA to $4.7 million. While specific guidance for fiscal 2026 was not provided, the company expressed optimism about sustaining growth and continuing its strategic focus on expanding its SaaS offerings, driving innovation, and improving operational leverage.Netsol Technologies Financial Statement Overview
Summary
Netsol Technologies shows solid revenue growth and a strong balance sheet with effective cost management. However, profitability and cash flow management are concerns, with low net profit margins and negative free cash flow growth.Income Statement
Netsol Technologies has shown consistent revenue growth over the years, with a recent increase of 3.06% in 2025. The gross profit margin has improved to 49.29% in 2025, indicating efficient cost management. However, the net profit margin remains relatively low at 4.42%, suggesting room for improvement in profitability. The EBIT and EBITDA margins have decreased compared to previous years, which could indicate rising operational costs.65
Positive
Balance Sheet
The company maintains a healthy debt-to-equity ratio of 0.24, reflecting a balanced approach to leveraging. Return on equity has improved to 7.73% in 2025, showing better utilization of shareholder funds. The equity ratio stands at 60.57%, indicating a strong equity position relative to total assets. Overall, the balance sheet reflects stability and prudent financial management.70
Positive
Cash Flow
Netsol Technologies faces challenges in cash flow management, with a significant decline in free cash flow growth by -115.45% in 2025. The operating cash flow to net income ratio is low at 0.02, indicating potential issues in converting income into cash. The negative free cash flow to net income ratio suggests that the company is not generating sufficient free cash flow relative to its net income.50
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 66.09M | 66.09M | 61.39M | 52.39M | 57.25M | 54.92M |
| Gross Profit | 32.57M | 32.57M | 29.28M | 16.92M | 23.74M | 25.39M |
| EBITDA | 8.38M | 4.97M | 6.09M | 791.66K | 6.27M | 7.64M |
| Net Income | 2.92M | 2.92M | 683.87K | -5.24M | -851.16K | 1.78M |
Balance Sheet | ||||||
| Total Assets | 62.44M | 62.44M | 64.19M | 58.38M | 72.61M | 86.61M |
| Cash, Cash Equivalents and Short-Term Investments | 17.36M | 17.36M | 19.13M | 15.53M | 23.96M | 33.71M |
| Total Debt | 9.14M | 9.14M | 7.67M | 7.11M | 10.04M | 13.49M |
| Total Liabilities | 20.18M | 20.18M | 24.65M | 21.60M | 21.75M | 24.74M |
| Stockholders Equity | 37.83M | 37.83M | 34.84M | 33.81M | 45.40M | 54.65M |
Cash Flow | ||||||
| Free Cash Flow | -935.50K | -935.50K | 2.39M | 370.13K | 451.42K | 13.17M |
| Operating Cash Flow | 447.27K | 447.27K | 2.91M | 2.01M | 3.06M | 15.73M |
| Investing Cash Flow | -1.27M | -1.27M | -291.54K | -1.40M | -2.26M | -2.52M |
| Financing Cash Flow | 822.88K | 822.88K | 239.55K | -718.99K | -1.38M | -1.17M |
Netsol Technologies Technical Analysis
Positive
4.50
Price Trends
4.43
Positive
3.93
Positive
3.22
Positive
Market Momentum
>-0.01
Positive
48.21
Neutral
36.73
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NTWK, the sentiment is Positive. The current price of 4.5 is below the 20-day moving average (MA) of 4.65, above the 50-day MA of 4.43, and above the 200-day MA of 3.22, indicating a neutral trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 48.21 is Neutral, neither overbought nor oversold. The STOCH value of 36.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NTWK.
Netsol Technologies Risk Analysis
Netsol Technologies disclosed 3 risk factors in its most recent earnings report. Netsol Technologies reported the most risks in the "Macro & Political" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 1 New Risks
Netsol Technologies Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $66.93M | 33.18 | 20.82% | ― | -0.45% | -1.40% | |
69 Neutral | $53.27M | 18.20 | 8.04% | ― | 7.65% | 311.31% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
48 Neutral | $47.32M | ― | -18.88% | ― | -17.18% | -9.69% | |
45 Neutral | $34.07M | ― | -108.13% | ― | 445.29% | 87.35% | |
37 Underperform | $55.11M | ― | -21.38% | ― | ― | ― |
* Technology Sector Average
NTWK
Netsol Technologies
4.50
1.40
45.16%
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17.09%
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Where Food Comes From
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PHUN
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2.69
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NUKK
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10.84
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CYN
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4.89
-527.61
-99.08%
Netsol Technologies Corporate Events
Executive/Board ChangesShareholder MeetingsBusiness Operations and Strategy
NetSol Technologies Approves Key Proposals at Shareholder Meeting
Neutral
Jun 25, 2025
On June 24, 2025, NetSol Technologies held its annual meeting of shareholders, where several key proposals were voted upon. The shareholders elected directors, approved executive compensation, ratified the appointment of Fortune CPA, Inc. as auditors, and approved amendments to increase the number of authorized shares. Additionally, the adoption of the 2025 Equity Incentive Plan was narrowly approved. These decisions are pivotal for the company’s governance and future strategic initiatives.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.