Earnings Alert: NetSol Technologies Inc. (NASDAQ: NTWK)

NETSOL Technologies, Inc. (NASDAQ: NTWK), a global business services and enterprise application solutions provider, stated results for the fiscal fourth quarter and full year ended June 30, 2018.

Fiscal Fourth Quarter 2018 Financial Results:

Total net revenues for the fourth quarter of fiscal 2018 were $16.60M, contrast with $14.50M in the prior year period. The increase in total net revenues was mainly because of a boost in total license fees of $122.0K, a boost in total maintenance fees of $206.0K and a boost in total services revenues of $1.80M.

  • Total license fees were $3.40M, contrast with $3.30M in the prior year period.
  • Total maintenance fees were $3.80M, contrast with $3.60M in the prior year period.
  • Total services revenues were $9.40M, contrast with $7.60M in the prior year period.

Gross profit for the fourth quarter of fiscal 2018 was $8.50M (or 51.2% of net revenues), contrast to $4.60M (or 31.7% of net revenues) in the fourth quarter of fiscal 2017. The increase in gross profit as a percentage of net revenues was mainly because of a decrease in costs of revenues of $1.80M.

Operating expenses for the fourth quarter of fiscal 2018 reduced 6% to $7.40M (or 44.6% of net revenues) from $7.90M (or 54.7% of net revenues) for the fourth quarter of fiscal 2017. The decrease in operating expenses was mainly because of a decrease in provision for bad debts, which was offset by a boost in general and administrative expenses as well as research and development expenses.

GAAP net income attributable to NETSOL for the fourth quarter of fiscal 2018 totaled $1.20M or $0.10 per diluted share, an improvement from net loss of $3.10M or $(0.28) per diluted share in the fourth quarter of fiscal 2017.

Non-GAAP adjusted EBITDA for the fourth quarter of fiscal 2018 totaled $2.90M or $0.26 per diluted share, an improvement from a loss of $851.0K or $(0.08) per diluted share in the fourth quarter of fiscal 2017.

At June 30, 2018, cash and cash equivalents were $22.10M, a boost from $14.20M at June 30, 2017.

Full Year Fiscal 2018 Financial Results:

Total net revenues for fiscal 2018 were $60.90M, contrast to $65.40M in fiscal 2017. The decrease in total net revenues was mainly because of a decrease in total license fees of $11.60M, which was offset by a boost in total maintenance fees of $332.0K and a boost in total services revenues of $6.80M.

  • Total license fees were $6.90M, contrast with $18.50M in the prior fiscal year.
  • Total maintenance fees were $14.80M, contrast with $14.50M in the prior fiscal year.
  • Total services revenues were $39.30M, contrast with $32.40M in the prior fiscal year.

Gross profit for fiscal 2018 increased to $29.20M (or 47.9% of net revenues) from $28.40M (or 43.5% of net revenues) for fiscal 2017. The increase in gross profit as a percentage of net revenues was mainly because of a decrease in costs of revenues of $5.20M.

Operating expenses for fiscal 2018 reduced to $26.20M (or 42.9% of net revenues) from $29.40M (or 45.0% of net revenues) for fiscal 2017. The decrease in operating expenses was mainly because of decreases in selling and marketing expenses and provision for bad debts, which was offset by a boost in research and development expenses.

GAAP net income attributable to NETSOL for fiscal 2018 totaled $4.30M or $0.38 per diluted share, an improvement from net loss of $5.00M or $(0.46) per diluted share for fiscal 2017.

Non-GAAP adjusted EBITDA for fiscal 2018 totaled $10.30M or $0.92 per diluted share, contrast with $2.80M or $0.26 per diluted share in fiscal 2017.

NTWK has a market value of $99.47M while its EPS was booked as $0.38 in the last 12 months. The stock has 13.14M shares outstanding. In the profitability analysis, the company has gross profit margin of 47.90% while net profit margin was 7.10%. Beta value of the company was 0.21; beta is used to measure riskiness of the security. Analyst recommendation for this stock stands at 2.00.

Bobbie Collins

Bobbie Collins gives us an insight into the most recent news hitting the Technology Sector in Wall Street. He has been an independent financial adviser for over 10 years in the city and in recent years turned his experience in finance and passion for journalism into a full time role. He performs analysis of Companies and publicizes valuable information for shareholder community. Collins is an accomplished journalist who has a passion for travel. His desire to see the world has taken him to countries around the world and given him the opportunity to report for some of the top news organizations.

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