NetSol Technologies, Inc., a U.S. corporation providing global business services and enterprise application solutions to private and public sector organizations worldwide, today reported its second quarter financial results for fiscal year 2010, for the period ended December 31, 2009.
Financial highlights for the quarter include:
• $9.5 million in revenues, up 81% year-over-year and 25% sequentially
• Substantial improvement in gross margin to 62% compared to 27% a year earlier
• Operating income of $1.7 million compared to an operating loss of $2.8 million in the same period a year ago
• GAAP net loss applicable to common shareholders of only $0.4 million compared to GAAP net loss of $3.3 million in the year ago period
• EBITDA totaled $0.9 million, or $0.03 per diluted share, versus an EBITDA loss of $1.9 million, or a loss of $0.07 per diluted share, in the same period a year ago
In the press release, NetSol reiterated its guidance for fiscal year 2010 projecting revenues in the range of $33.0 million and $35.0 million, representing full year revenue growth of between 25% and 32% when compared to fiscal year 2009. The company also anticipates a return to GAAP net income for fiscal year 2010, versus a GAAP net loss of $0.30 per diluted share for fiscal year 2009. License revenues for fiscal year 2010 are expected to increase more than 100% versus fiscal year 2009.
Najeeb Ghauri, NetSol Technologies chairman and chief executive officer, stated, “Our fiscal second quarter 2010 financial results marked our third consecutive quarter of double-digit sequential revenue growth, highlighted by an 81% increase in sales versus the year ago period. NetSol also delivered material improvements in gross margin, operating income, GAAP net income, and EBITDA results versus the year ago period. These performance gains highlight the significant improvement in NetSol’s core business as we continue to successfully convert our business pipeline to customer wins.”
He added, “Revenues from license fees resumed a pre-recession trajectory growing over 400% year-over-year as global customers began to further unlock spending and resume the purchase of large strategic software solutions, particularly in the automotive and financial sectors. Additionally, we continue to implement efficiency measures aimed at increasing our long-term profitability. Our efforts to continuously rationalize operating expenses included the relocation of our global and operating headquarters in the U.S., now under the leadership of Mr. Imran Haider, the recently appointed Chief Operating Officer of NetSol North America, Inc., to Alameda which is expected to save the company an estimated $5 million over a 5 year period.”
“As NetSol continued to invest in its core NetSol Financial Suite (NFS)(TM) throughout the global economic downturn the company is well positioned to leverage the upturn in customer activity we continue to see, particularly in China, as NetSol begins the second half of its fiscal year 2010 with continued positive momentum. We are continuing to see increased interest among major customers as well as potential partners in the sector and see excellent opportunities for collaboration and strategic initiatives as we look ahead to the second half of our fiscal year 2010,” concluded Mr. Ghauri.
Business highlights for the quarter include:
• Relocation of global and U.S. operating headquarters which will save approximately $5 million over a five year period
• Mr. Imran Haider appointed as the new Chief Operating Officer of NetSol North America, Inc. bringing 8 years of product and sales expertise from NetSol Asia Pacific
• Toyota Motor Finance China upgrades to a NetSol Financial Suite(TM) license
• A major Chinese automotive finance company awarded NetSol a $2 million contract
• Expanded sales and delivery capabilities in China, leveraging fast growing Chinese consumer and asset finance market
• NetSol secured a major Information Security contract in the mobile telecommunications sector
• BMW Group Financial Services awarded NetSol additional services contract
• NetSol awarded IT Services contract in Saudi Arabia, further expanding presence in the Middle East market
• United Kingdom based bank awarded NetSol a $1 million major software and IT services contract
• NetSol IT Business Services awarded Information Security contract to implement a data center security project in conjunction with a leading solution integrator in Pakistan
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