NetSol Technologies (NTWK) reported record third-quarter revenue of $19.8 million for fiscal 2026, a 13% increase from the prior-year period, as the company accelerates its shift toward a software-as-a-service model. Recurring revenue, driven by subscription and support services, reached $26.9 million, up 12.5% on a compound annual basis over 15 quarters.
Gross margin improved to 55.6%, exceeding the company’s target of maintaining levels above 50% and approaching its ideal range of 55% or higher. Management reaffirmed full-year fiscal 2026 revenue guidance of $73 million, with total revenue for the last 12 months ending March 31, 2026, recorded at $72.06 million.
As of March 31, 2026, the company held $14.7 million in cash, a decline from $17.4 million due to temporary working-capital timing, though management expects recovery by June 30. Working capital stood at $25.3 million, with debt of $8.5 million concentrated in the Pakistan entity for operational financing. The current ratio was 1.94, and the debt-to-equity ratio was 0.25.
The company’s Transcend Retail platform, currently marketed exclusively in North America, contributed to a 102% year-over-year revenue increase in the region, with a 29.1% annual compound growth rate over 14 quarters. Europe revenue grew 22.4% during the same period. NetSol holds approximately 75% market share in China’s automotive software sector, leveraging early market entry and regulatory constraints on competitors.
Management outlined plans to expand Transcend Retail beyond North America, targeting growth in regions where new original equipment manufacturers are establishing operations. The company’s AI Labs division, established five years ago and expanded over the past two years, focuses on internal efficiency and customer-facing solutions such as AI-driven credit decisioning and document processing.
NetSol Technologies was founded in 1997 and went public via acquisition in 1999. Fiscal 2023 total revenue was $52 million, rising to $66 million in fiscal 2025. Fourth-quarter and full-year fiscal 2026 results, along with the 10-K filing, are expected in September 2026.
