NETSOL Technologies, Inc. reported results for its fiscal first quarter ended September 30, 2026, filing an -K with the SEC on November 12, 2026. The company announced total net revenues of $16.4 million for the quarter, representing a 9.3% increase compared to the prior-year period of $15.0 million. On a constant currency basis, revenue was $16.5 million.
Revenue performance was driven by increases in both subscription and support services, which rose 6.1% to $9.5 million, and services revenue, which increased 6.3% to $6.4 million. The company noted that both revenue and gross margin were the highest for a first quarter in the past five fiscal years.
Gross margin expanded significantly during the quarter, growing by more than 1,100 basis points to 50.5% from 39.4% in the prior year. This improvement was attributed to revenue mix and the capitalization of approximately $1.0 million in software development costs, compared to none in the prior-year period. Gross profit totaled $8.3 million.
As a result of these improvements, the company reported income from operations of $0.4 million, compared to an operating loss of $1.8 million in the prior year. GAAP net income attributable to NETSOL was $0.16 million, or $0.01 per diluted share, compared to a net loss of $2.36 million, or $0.21 per diluted share, in the prior year. Adjusted EBITDA attributable to NETSOL was $0.48 million, compared to negative $1.66 million in the prior year.
Cash and cash equivalents stood at $19.7 million as of September 30, 2026. Net cash used in operating activities was $5.6 million, primarily due to changes in working capital. The company also invested approximately $2.0 million in property, equipment, and capitalized software development.
Separately, NETSOL Technologies Limited, the company's majority-owned subsidiary listed on the Pakistan Stock Exchange, recommended a share buy-back of up to 4,000,000 shares, or approximately 4.45% of its issued capital, subject to shareholder approval on December 3, 2026. Additionally, the Board of NETSOL Technologies Europe Limited began evaluating strategic alternatives for its subsidiary Virtual Lease Services Limited (VLS), including a potential sale or wind-down, though no plan has been approved.
