EL7.AI
StocksMedium•12 November 2026•
2 min read

NETSOL Raises First-Quarter Revenue 9.3% to $16.4 Million as Margins Improve

Key Facts

1First-quarter fiscal 2027 revenue rose 9.3% to $16.4 million, from $15.0 million a year earlier.
2Gross margin increased to 50.5% from 39.4%, and operating income swung to $0.4 million from a loss of $1.8 million.
3Net income attributable to NETSOL was about $0.16 million, or $0.01 per diluted share, compared with a loss of $2.36 million, or $0.21 per share, a year earlier.
4For fiscal 2027, the company expects revenue growth of 13% to 16% and gross margin of about 50% or higher.

NETSOL Technologies reported on Nov. 12 that revenue for the first quarter of fiscal 2027 rose 9.3% to $16.4 million, compared with $15.0 million in the year-earlier period. Gross margin increased to 50.5% from 39.4% a year earlier. The company swung to operating income of $0.4 million from an operating loss of $1.8 million in the comparable period. Net income attributable to the company was $0.16 million, or $0.01 per diluted share, compared with a net loss of $2.36 million, or $0.21 per diluted share, a year earlier.

Revenue growth included both the subscription and support and services segments, with subscription and support revenue rising 6.1% to $9.5 million. Services revenue increased 6.3% to $6.4 million year over year. The company attributed part of the improvement in gross margin to revenue mix and the capitalization of about $1.0 million in software development costs during the quarter. The company had not capitalized software development costs in the year-earlier period. The higher margin coincided with the swing to operating income, while revenue grew in both of the segments mentioned.

The quarterly results follow NETSOL’s fiscal 2026, which ended with record annual revenue of $74.4 million, up 12.5% from the prior year. Gross margin for that year was 52.6%. In its fiscal 2027 outlook, the company said it expects revenue growth of 13% to 16%. It also expects gross margin of about 50% or higher and growth in adjusted consolidated earnings before interest, taxes, depreciation and amortization of 15% to 25%. The outlook places first-quarter results within the full-year path announced by the company, with guidance remaining on a full-year basis.

Commenting on operating cash outflow during the quarter, the chief financial officer said most of it reflected work the company had invoiced and collected payment for in the previous fourth quarter. He added: "In the fourth quarter, we invoiced and collected payments before delivery, and in the first quarter we delivered work that had already been invoiced; this explains most of the operating cash outflow." He said liquidity was sufficient to fund the company’s operations during the year. The company had scheduled a results discussion call for Nov. 12, 2026, at 9:00 a.m. Eastern Time, with a question-and-answer session to follow management’s remarks. NTWK shares closed at $6.89 in the Nov. 11 session, the session before the results announcement.

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