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Netsol Technologies Inc (NTWK)
NASDAQ:NTWK
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Netsol Technologies
(NASDAQ:NTWK)
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Rating:57Neutral
Price Target:
$3.00
▼(-4.76% Downside)
The score is driven primarily by strong revenue growth and acceptable profitability with low leverage, but it is meaningfully constrained by negative free cash flow and weak operating cash conversion. Technicals are neutral-to-weak with the stock below key longer-term moving averages, and valuation is a notable headwind given the very high P/E.
Positive Factors
Revenue Growth
Consistent revenue growth indicates strong market demand and effective sales strategies, supporting long-term business expansion.
Strategic Partnerships
Major contract wins enhance market position and revenue stability, fostering growth and innovation in key industry sectors.
Operational Efficiency
Improved operational efficiency boosts profitability, allowing for reinvestment in growth initiatives and competitive positioning.
Negative Factors
Cash Flow Challenges
Cash flow issues may hinder the company's ability to fund operations and growth, impacting financial flexibility and stability.
Decline in License Fees
A significant decline in license fees due to a business model shift could affect short-term revenue streams and require adaptation.
Increased Operating Expenses
Rising operating expenses can pressure margins and reduce profitability, necessitating careful cost management to sustain growth.
Netsol Technologies (NTWK) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$36.81M
Dividend YieldN/A
Average Volume (3M)86.26K
Price to Earnings (P/E)75.7
Beta (1Y)0.77
Revenue Growth7.70%
EPS Growth-36.01%
CountryUS
Employees1,569
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)-0.20
Shares Outstanding11,796,775
10 Day Avg. Volume125,116
30 Day Avg. Volume86,262
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 Cap1.28
Enterprise Value/Revenue0.71
Enterprise Value/Gross Profit1.48
Enterprise Value/Ebitda8.11
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
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 Key Performance Indicators (KPIs)
Netsol Technologies Earnings Call Summary
Earnings Call Date:Sep 29, 2025
(Q4-2025)
| % Change Since: |
Next Earnings Date:Feb 17, 2026
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 demonstrates strong revenue growth and solid profitability margins, indicating a positive trajectory in the software application industry. The balance sheet is stable with manageable debt levels, but cash flow challenges could impact liquidity. Overall, the company shows potential for growth, but attention to cash flow management is crucial to sustain long-term financial health.Income Statement
Netsol Technologies shows a strong revenue growth rate of 62.6% TTM, indicating robust expansion. The gross profit margin of 49.3% and a net profit margin of 4.4% TTM reflect solid profitability, although the net margin is relatively modest. EBIT and EBITDA margins are healthy at 10.5% and 12.7% respectively, showcasing efficient operational management. However, the company has experienced fluctuations in profitability in previous years, which could pose a risk.Balance Sheet
The balance sheet is stable with a debt-to-equity ratio of 0.24, indicating a conservative leverage position. Return on equity stands at 8.2% TTM, which is decent but leaves room for improvement. The equity ratio is not explicitly provided, but the overall financial structure suggests a balanced approach to financing. Historical data shows consistent equity growth, enhancing financial stability.Cash Flow
Cash flow analysis reveals challenges, with a negative free cash flow and a free cash flow to net income ratio of -2.09 TTM, indicating cash flow issues relative to earnings. Operating cash flow to net income ratio is low at 0.02, suggesting limited cash generation from operations. Despite a 64% growth in free cash flow TTM, the negative figures highlight potential liquidity concerns.| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 66.50M | 66.09M | 61.39M | 52.39M | 57.25M | 54.92M |
| Gross Profit | 31.92M | 32.57M | 29.28M | 16.92M | 23.74M | 26.35M |
| EBITDA | 5.81M | 4.97M | 6.09M | 791.66K | 6.27M | 7.64M |
| Net Income | 495.15K | 2.92M | 683.87K | -5.24M | -851.16K | 1.78M |
Balance Sheet | ||||||
| Total Assets | 62.63M | 62.44M | 64.19M | 58.38M | 72.61M | 86.61M |
| Cash, Cash Equivalents and Short-Term Investments | 22.69M | 17.36M | 19.13M | 15.53M | 23.96M | 33.71M |
| Total Debt | 9.17M | 9.14M | 7.67M | 7.11M | 10.04M | 13.49M |
| Total Liabilities | 22.10M | 20.18M | 24.65M | 21.60M | 21.75M | 24.74M |
| Stockholders Equity | 35.79M | 37.83M | 34.84M | 33.81M | 45.40M | 54.65M |
Cash Flow | ||||||
| Free Cash Flow | -1.53M | -935.50K | 2.39M | 370.13K | 451.42K | 13.17M |
| Operating Cash Flow | 233.08K | 447.27K | 2.91M | 2.01M | 3.06M | 15.73M |
| Investing Cash Flow | -1.61M | -1.27M | -291.54K | -1.40M | -2.26M | -2.52M |
| Financing Cash Flow | 860.91K | 822.88K | 239.55K | -718.99K | -1.38M | -1.17M |
Netsol Technologies Technical Analysis
Neutral
3.15
Price Trends
3.22
Negative
3.85
Negative
3.46
Negative
Market Momentum
-0.03
Negative
51.98
Neutral
67.59
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NTWK, the sentiment is Neutral. The current price of 3.15 is above the 20-day moving average (MA) of 3.03, below the 50-day MA of 3.22, and below the 200-day MA of 3.46, indicating a neutral trend. The MACD of -0.03 indicates Negative momentum. The RSI at 51.98 is Neutral, neither overbought nor oversold. The STOCH value of 67.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 |
|---|---|---|---|---|---|---|---|
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
60 Neutral | $58.40M | 22.13 | 27.34% | ― | -1.17% | 43.94% | |
57 Neutral | $36.81M | 75.68 | 1.40% | ― | 7.70% | -36.01% | |
48 Neutral | $41.46M | -7.35 | -18.98% | ― | 2.73% | 25.65% | |
43 Neutral | $40.17M | -3.39 | -18.69% | ― | ― | ― | |
43 Neutral | $21.05M | >-0.01 | -166.00% | ― | 347.74% | 84.88% |
* Technology Sector Average
NTWK
Netsol Technologies
3.08
0.48
18.46%
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1.97
0.35
21.60%
WFCF
Where Food Comes From
11.30
-1.39
-10.95%
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2.00
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NUKK
Nukkleus
4.25
-12.50
-74.63%
CYN
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2.56
-91.37
-97.27%
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.