NetSol Technologies (NTWK) Q3 2026 earnings summary

Executive summary

• Achieved record quarterly net revenues of $19.8 million in Q3 fiscal 2026, up 13% year-over-year, driven by a surge in license fees from a $50 million contract extension and strong recurring subscription and support revenue growth of 11.7% to $8.8 million.

• Gross profit margin improved to 55.6% from 49.8% year-over-year, reflecting higher license revenue and cost control.

• Net income attributable to shareholders was $1.3 million, or $0.11 per diluted share, while nine-month net revenues reached $53.7 million, up 12.5% year-over-year.

• Signed several new agreements, including a multi-million dollar extension with a major auto captive, new contracts in China, and expanded U.S. digital retail presence, especially with BMW dealerships.

• For the nine months ended March 31, 2026, GAAP net loss was $0.8 million compared to net income of $0.3 million in the prior year.

Financial highlights

• Q3 net revenues were $19.8 million (up 13% year-over-year); recurring subscription and support revenues were $8.8 million in Q3 (up 11.7%) and $26.9 million for nine months (up 8.6%).

• License fees surged to $4.7 million in Q3 (from just over $1,000 prior year), mainly due to a major customer renewal and expansion.

• Services revenues declined to $6.3 million from $9.7 million, reflecting timing and a prior year one-time pickup.

• Gross profit margin for Q3 was 55.6%; for nine months, 48.4%.

• Non-GAAP EBITDA for Q3 was $3.4 million (margin 17.2%), up 47.8% year-over-year; adjusted EBITDA for Q3 was $2.2 million.

Outlook and guidance

• Reaffirmed full-year fiscal 2026 revenue guidance of $73–$74 million, with annualized recurring revenue forecasted at $35 million exiting Q3, up 7% year-over-year.

• Focus remains on expanding AI-enabled Transcend Platform, growing U.S. digital retail, and deepening customer relationships.

• Management expects continued double-digit organic growth and is open to M&A opportunities, especially in the U.S.

• Ongoing investment in business development and infrastructure, with $1.5 million planned for the next 12 months.