NETSOL TECHNOLOGIES INC
For the period ended Dec 31, 2025. Filed Feb 12, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Dec 31, 2025 · Filed Feb 12, 2026
NTWK$6.49+0.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-12.
0001493152-25-021835
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-12-31; filed 2026-02-12.
0001493152-26-006335
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 123 previous paragraphs and 153 current paragraphs.
99 unchanged; 22 reworded; 23 added; 2 removed; 0 previous and 9 current paragraphs rearranged.
Tables are not compared: 21 previous and 17 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (23)
Current report
License fees for the three months ended December 31, 2025 were $117,482 compared to $72,688 for the three months ended December 31, 2024 reflecting an increase of $44,794 with an increase in constant currency of $43,128.
Current report
General and administrative expenses were $4,465,568 for the three months ended December 31, 2025, compared to $4,411,225 for the three months ended December 31, 2024, or an increase of $54,343 and on a constant currency basis an increase of $32,746. During the three months ended December 31, 2025, salaries increased by $289,749 and increased by $279,058 on a constant currency basis, bad debt expense decreased by $46,621 and decreased by $47,447 on a constant currency basis, and other general and administrative expenses decreased by $188,785 and decreased by $198,865 on a constant currency basis.
Current report
Six Months Ended December 31, 2025 Compared to the Six Months Ended December 31, 2024
Current report
Revenues
Current report
License fees
Current report
License fees for the six months ended December 31, 2025 were $189,707 compared to $73,917 for the six months ended December 31, 2024 reflecting an increase of $115,790 with an increase in constant currency of $111,310.
Current report
Subscription and support
Current report
Subscription and support fees for the six months ended December 31, 2025, were $18,040,338 compared to $16,835,100 for the six months ended December 31, 2024, reflecting an increase of $1,205,238 with an increase in constant currency of $1,031,209. Subscription and support fees for the six months ended December 31, 2024, included approximately $1,000,000 related to a one-time catch-up from four customers. Subscription and support fees begin once a customer has “gone live” with our product and are recurring in nature. We anticipate these fees to increase over time as we implement our Transcend TM products.
Current report
Services
Current report
Services income for the six months ended December 31, 2025, was $15,590,356 compared to $13,226,142 for the six months ended December 31, 2024, reflecting an increase of $2,364,214, with an increase in constant currency of $2,221,999. Services revenue increased primarily due to the timing and composition of the current implementation projects.
Current report
Gross Profit
Current report
The gross profit was $14,941,082 for the six months ended December 31, 2025, compared with $13,484,453 for the six months ended December 31, 2024. This is an increase of $1,456,629 with an increase in constant currency of $1,100,907. The gross profit percentage for the six months ended December 31, 2025, slightly decreased to 44.2% from 44.8% for the six months ended December 31, 2024. The cost of sales was $18,879,319 for the six months ended December 31, 2025, compared to $16,650,706 for the six months ended December 31, 2024, for an increase of $2,228,613 and on a constant currency basis an increase of $2,263,611. As a percentage of sales, cost of sales increased from 55.3% for the six months ended December 31, 2024, to 55.8% for the six months ended December 31, 2025.
Current report
Salaries and consultant fees increased by $1,129,249 from $12,918,171 for the six months ended December 31, 2024, to $14,047,420 for the six months ended December 31, 2025, and on a constant currency basis increased by $1,151,090. The increase is due to annual salary raises. As a percentage of sales, salaries and consultant expenses decreased from 42.9% for the six months ended December 31, 2024, to 41.5% for the six months ended December 31, 2025.
Current report
Travel expenses were $1,527,613 for the six months ended December 31, 2025, compared to $1,172,113 for the six months ended December 31, 2024, for an increase of $355,500 with an increase in constant currency of $353,637. As a percentage of sales, travel expense increased from 3.9% for the six months ended December 31, 2024, to 4.5% for the six months ended December 31, 2025. Travel expenses increased due to travel associated with new customer implementation projects.
Current report
Depreciation and amortization expense decreased to $398,797 compared to $466,432 for the six months ended December 31, 2024, or a decrease of $67,635 and on a constant currency basis a decrease of $61,851.
Current report
Other costs were $2,905,489 for the six months ended December 31, 2025, compared to $2,093,990 for the six months ended December 31, 2024, or an increase of $811,499 and on a constant currency basis an increase of $820,735. The increase is mainly due to an increase in third-party hardware and software costs of approximately $749,100 and hosting fees of approximately $137,169.
Current report
Operating Expenses
Current report
Research and development cost was $462,056 for the six months ended December 31, 2025, compared to $693,618 for the six months ended December 31, 2024, for a decrease of $231,562, and on a constant currency basis a decrease of $224,604.
Current report
Income/Loss from Operations
Current report
Loss from operations was $538,974 for the six months ended December 31, 2025, compared to $1,247,108 for the six months ended December 31, 2024. This represents a decrease in loss of $708,134 with a decrease of $444,094 on a constant currency basis for the six months ended December 31, 2025, compared with the six months ended December 31, 2024. As a percentage of sales, loss from operations was 1.6% for the six months ended December 31, 2025, compared to a loss from operations of 4.1% for the six months ended December 31, 2024.
Current report
Other Income and Expense
Current report
Other expense was $20,383 for the six months ended December 31, 2025, compared to other income of $840,042 for the six months ended December 31, 2024. This represents a decrease in other income of $860,425 with a decrease of $857,790 on a constant currency basis. The decrease is primarily due to lower interest income, driven by a reduction in interest rates from approximately 15.0%-19.6% for the six months ended December 31, 2024, to approximately 8.9%-10.8% for the six months ended December 31, 2025.
Current report
Non-controlling Interest
Removed paragraphs (2)
Previous report
License fees for the three months ended September 30, 2025 were $72,225 compared to $1,229 for the three months ended September 30, 2024 reflecting an increase of $70,996 with an increase in constant currency of $68,182.
Previous report
Our UK based subsidiary, NTE, has an approved overdraft facility of £300,000 ($405,405) which requires that the aggregate amount of invoiced trade debtors (net of provisions for bad and doubtful debts and excluding intra-group debtors) of NTE, not exceeding 90 days old, will not be less than an amount equal to 200% of the facility. The Pakistani subsidiary, NetSol PK has an approved facility for export refinance from Askari Bank Limited amounting to Rupees 600 million ($2,124,495) and a running finance facility of Rupees 4.1 million ($14,344). NetSol PK has an approved facility for export refinance from Habib Metro Bank Limited amounting to Rupees 1.3 billion ($4,603,073) and another export refinance facility amounting to Rupees 400 million ($1,416,331) from Bank Al-Habib. These facilities require NetSol PK to maintain a long-term debt equity ratio of 60:40 and the current ratio of 1:1. NetSol PK also has an approved export refinance facility of Rs. 380 million ($1,345,514) from Samba Bank Limited. During the loan tenure, these two facilities require NetSol PK to maintain at a minimum a current ratio of 1:1, an interest coverage ratio of 4 times, a leverage ratio of 2 times, and a debt service coverage ratio of 4 times.
Reworded paragraphs (22)
Previous wording
Subscription and support fees for the three months ended September 30, 2025 were $8,960,555 compared to $8,192,471 for the three months ended September 30, 2024 reflecting an increase of $768,084 with an increase in constant currency of $899,515. Subscription and support fees begin once a customer has “gone live” with our product. Subscription and support fees are recurring in nature, and we anticipate these fees to gradually increase as we implement both our NFS legacy products and NFS Ascent®.
Current wording
Subscription and support fees for the three months ended December 31, 2025, were $9,079,783 compared to $8,642,629 for the three months ended December 31, 2024, reflecting an increase of $437,154 with an increase in constant currency of $515,085. Subscription and support fees for the three months ended December 31, 2024, included approximately $1,000,000 related to a one-time catch-up from four customers. Subscription and support fees begin once a customer has “gone live” with our product and are recurring in nature. We anticipate these fees to increase over time as we implement our Transcend TM products.
Previous wording
Services income for the three months ended September 30, 2025 was $5,979,143 compared to $6,404,798 for the three months ended September 30, 2024 reflecting a decrease of $425,655, with a decrease in constant currency of $479,416. Services revenue decreased compared to the prior quarter primarily due to the timing and composition of implementation projects.
Current wording
Services income for the three months ended December 31, 2025, was $9,611,213 compared to $6,821,344 for the three months ended December 31, 2024, reflecting an increase of $2,789,869, with an increase in constant currency of $2,701,415. Services revenue increased compared to the prior quarter, primarily due to the timing and composition of the current implementation projects.
Previous wording
The gross profit was $5,911,990 for the three months ended September 30, 2025 compared with $6,564,112 for the three months ended September 30, 2024. This is a decrease of $652,122 with a decrease in constant currency of $669,534. The gross profit percentage for the three months ended September 30, 2025 also decreased to 39.4% from 45.0% for the three months ended September 30, 2024. The cost of sales was $9,099,933 for the three months ended September 30, 2025 compared to $8,034,386 for the three months ended September 30, 2024 for an increase of $1,065,547 and on a constant currency basis an increase of $1,157,815. As a percentage of sales, cost of sales increased from 55.0% for the three months ended September 30, 2024 to 60.6% for the three months ended September 30, 2025.
Current wording
The gross profit was $9,029,092 for the three months ended December 31, 2025, compared with $6,920,341 for the three months ended December 31, 2024. This is an increase of $2,108,751 with an increase in constant currency of $2,057,881. The gross profit percentage for the three months ended December 31, 2025, also increased to 48.0% from 44.5% for the three months ended December 31, 2024. The cost of sales was $9,779,386 for the three months ended December 31, 2025, compared to $8,616,320 for the three months ended December 31, 2024, for an increase of $1,163,066 and on a constant currency basis an increase of $1,201,747. As a percentage of sales, cost of sales decreased from 55.5% for the three months ended December 31, 2024, to 52.0% for the three months ended December 31, 2025.
Previous wording
Salaries and consultant fees increased by $760,792 from $6,203,734 for the three months ended September 30, 2024 to $6,964,526 for the three months ended September 30, 2025 and on a constant currency basis increased by $789,164. The increase is due to annual salary raises. As a percentage of sales, salaries and consultant expense increased from 42.5% for the three months ended September 30, 2024 to 46.4% for the three months ended September 30, 2025.
Current wording
Salaries and consultant fees increased by $368,457 from $6,714,437 for the three months ended December 31, 2024, to $7,082,894 for the three months ended December 31, 2025, and on a constant currency basis increased by $361,926. The increase is due to annual salary raises. As a percentage of sales, salaries, and consultant expenses decreased from 43.2% for the three months ended December 31, 2024, to 37.7% for the three months ended December 31, 2025.
Previous wording
Travel expenses were $498,172 for the three months ended September 30, 2025 compared to $570,862 for the three months ended September 30, 2024 for a decrease of $72,690 with a decrease in constant currency of $71,543. As a percentage of sales, travel expense decreased from 3.9% for the three months ended September 30, 2024 to 3.3% for the three months ended September 30, 2025.
Current wording
Travel expenses were $1,029,441 for the three months ended December 31, 2025, compared to $601,251 for the three months ended December 31, 2024, for an increase of $428,190 with an increase in constant currency of $425,180. As a percentage of sales, travel expense increased from 3.9% for the three months ended December 31, 2024, to 5.5% for the three months ended December 31, 2025. Travel expenses increased due to travel associated with new customer implementation projects.
Previous wording
Depreciation and amortization expense decreased to $208,731 compared to $228,550 for the three months ended September 30, 2024 or a decrease of $19,819 and on a constant currency basis a decrease of $16,277.
Current wording
Depreciation and amortization expense decreased to $190,066 compared to $237,882 for the three months ended December 31, 2024, or a decrease of $47,816 and on a constant currency basis a decrease of $45,574.
Previous wording
Other costs were $1,428,504 for the three months ended September 30, 2025 compared to $1,031,240 for the three months ended September 30, 2024 or an increase of $397,264 and on a constant currency basis an increase of $456,471. The increase is mainly due to an increase in third-party hardware and software costs of approximately $380,000 and hosting fees of approximately $57,000.
Current wording
Other costs were $1,476,985 for the three months ended December 31, 2025, compared to $1,062,750 for the three months ended December 31, 2024, or an increase of $414,235, and on a constant currency basis an increase of $460,215. The increase is mainly due to an increase in third-party hardware and software costs of approximately $377,698 and hosting fees of approximately $79,881.
Previous wording
Operating expenses were $7,750,696 for the three months ended September 30, 2025 compared to $7,324,270, for the three months ended September 30, 2024 for an increase of $426,426 and on a constant currency basis an increase of $445,820. As a percentage of sales, it increased from 50.2% to 51.6%. The increase in operating expenses was primarily due to increases in selling and marketing expenses, salaries and wages, offset by a decrease in other general and administrative expenses and the provision for doubtful accounts.
Current wording
Operating expenses were $7,729,360 for the three months ended December 31, 2025, compared to $7,407,291, for the three months ended December 31, 2024, for an increase of $322,069 and on a constant currency basis an increase of $306,264. As a percentage of sales, it decreased from 47.7% to 41.1%. The increase in operating expenses was primarily due to increases in selling and marketing expenses, salaries and wages, offset by a decrease in other general and administrative expenses and the provision for doubtful accounts.
Previous wording
Selling and marketing expenses were $3,116,953 for the three months ended September 30, 2025 compared to $2,292,199, for the three months ended September 30, 2024 for an increase of $824,754 and on a constant currency basis an increase of $847,959. The increase is mainly due to increases in salaries and consultants of approximately $663,739, due to annual raises and the hiring of additional marketing personnel. Other marketing expenses increased by approximately $151,836 due to the increase in advertising and marketing events.
Current wording
Selling and marketing expenses were $3,016,079 for the three months ended December 31, 2025, compared to $2,662,397 for the three months ended December 31, 2024, for an increase of $353,682 and on a constant currency basis an increase of $356,319. The increase is mainly due to increases in salaries and consultants of approximately $167,714, due to annual raises and the hiring of additional marketing personnel. Other marketing expenses increased by approximately $138,702 due to the increase in advertising and marketing events.
Previous wording
Research and development cost was $214,343 for the three months ended September 30, 2025 compared to $359,949, for the three months ended September 30, 2024 for a decrease of $145,606 and on a constant currency basis a decrease of $141,803.
Current wording
Research and development cost was $247,713 for the three months ended December 31, 2025, compared to $333,669 for the three months ended December 31, 2024, for a decrease of $85,956 and on a constant currency basis a decrease of $82,801.
Previous wording
Loss from operations was $1,838,706 for the three months ended September 30, 2025 compared to $760,158 for the three months ended September 30, 2024. This represents an increase in loss of $1,078,548 with an increase of $1,115,354 on a constant currency basis for the three months ended September 30, 2025 compared with the three months ended September 30, 2024. As a percentage of sales, loss from operations was 12.3% for the three months ended September 30, 2025 compared to a loss from operations of 5.2% for the three months ended September 30, 2024.
Current wording
Income from operations was $1,299,732 for the three months ended December 31, 2025, compared to a loss from operations of $486,950 for the three months ended December 31, 2024. This represents an increase in income of $1,786,682 with an increase of $1,751,617 on a constant currency basis for the three months ended December 31, 2025, compared with the three months ended December 31, 2024. As a percentage of sales, income from operations was 6.9% for the three months ended December 31, 2025, compared to a loss from operations of 3.1% for the three months ended December 31, 2024.
Previous wording
Other expense was $162,884 for the three months ended September 30, 2025 compared to other income of $1,207,684 for the three months ended September 30, 2024. This represents a decrease in other income of $1,370,568 with a decrease of $1,371,569 on a constant currency basis. The decrease is primarily due to the foreign currency exchange transactions. The majority of the contracts with NetSol PK are either in U.S. dollars or Euros; therefore, the currency fluctuations will lead to foreign currency exchange gains or losses depending on the value of the PKR compared to the U.S. dollar and the Euro. During the three months ended September 30, 2025, we recognized a loss of $286,917 in foreign currency exchange transactions compared to a gain of $542,545 for the three months ended September 30, 2024. During the three months ended September 30, 2025, the value of the U.S. dollar decreased 0.6% and the Euro decreased 0.7%, compared to the PKR. During the three months ended September 30, 2024, the value of the U.S. dollar decreased 0.2% and the Euro increased 3.9%, compared to the PKR.
Current wording
Other income was $142,501 for the three months ended December 31, 2025, compared to other loss of $367,642 for the three months ended December 31, 2024. This represents an increase in other income of $510,143 with an increase of $513,784 on a constant currency basis. The increase is primarily due to the foreign currency exchange transactions. The majority of the contracts with NetSol PK are either in U.S. dollars or Euros; therefore, the currency fluctuations will lead to foreign currency exchange gains or losses depending on the value of the PKR compared to the U.S. dollar and the Euro. During the three months ended December 31, 2025, we recognized a gain of $46,074 in foreign currency exchange transactions compared to a loss of $698,426 for the three months ended December 31, 2024. During the three months ended December 31, 2025, the value of the U.S. dollar decreased 0.7% and the Euro decreased 0.7%, compared to the PKR. During the three months ended December 31, 2024, the value of the U.S. dollar increased 0.4% and the Euro decreased 6.6%, compared to the PKR.
Previous wording
The net loss was $2,357,288 for the three months ended September 30, 2025 compared to net income of $70,795 for the three months ended September 30, 2024. This is a decrease of $2,428,083 with a decrease of $2,509,233 on a constant currency basis, compared to the prior year. For the three months ended September 30, 2025, net loss per share was $0.20 for basic and diluted shares compared to net income per share of $0.006 for basic and diluted shares for the three months ended September 30, 2024.
Current wording
The net income was $246,757 for the three months ended December 31, 2025, compared to a net loss of $1,147,042 for the three months ended December 31, 2024. This is an increase of $1,393,799 with an increase of $1,314,986 on a constant currency basis, compared to the prior year. For the three months ended December 31, 2025, net income per share was $0.02 for basic and diluted shares compared to a net loss per share of $0.10 for basic and diluted shares for the three months ended December 31, 2024.
Previous wording
General and administrative expenses were $4,419,400 for the three months ended September 30, 2025 compared to $4,672,122 for the three months ended September 30, 2024 or a decrease of $252,722 and on a constant currency basis a decrease of $260,336. During the three months ended September 30, 2025, salaries increased by $144,888 and increased $144,575 on a constant currency basis, bad debt expense decreased $338,089 and decreased $338,062 on a constant currency basis, and other general and administrative expenses decreased $59,521 and decreased by $66,849 on a constant currency basis.
Current wording
General and administrative expenses were $8,884,968 for the six months ended December 31, 2025, compared to $9,083,347 for the six months ended December 31, 2024, or a decrease of $198,379 and on a constant currency basis a decrease of $229,340. During the six months ended December 31, 2025, salaries increased by $434,637 and increased by $423,633 on a constant currency basis, bad debt expense decreased by $384,710 and decreased by $385,509 on a constant currency basis, and other general and administrative expenses decreased by $248,306 and decreased by $267,464 on a constant currency basis.
Previous wording
For the three months ended September 30, 2025, the net income attributable to non-controlling interest was $139,923, compared to $146,914 for the three months ended September 30, 2024.
Current wording
For the six months ended December 31, 2025, the net income attributable to non-controlling interest was $855,205, compared to $107,750 for the six months ended December 31, 2024.
Previous wording
Our reconciliation of the non-GAAP financial measures of adjusted EBITDA and non-GAAP earnings per basic and diluted share to the most comparable GAAP measures for the three months ended September 30, 2025 and 2024 are as follows:
Current wording
Our reconciliation of the non-GAAP financial measures of adjusted EBITDA and non-GAAP earnings per basic and diluted share to the most comparable GAAP measures for the three and six months ended December 31, 2025 and 2024 are as follows:
Previous wording
Our cash position was $22,690,618 at September 30, 2025, compared to $17,357,944 at June 30, 2025.
Current wording
Our cash position was $18,132,086 at December 31, 2025, compared to $17,357,944 at June 30, 2025.
Previous wording
Net cash provided by operating activities was $5,303,561 for the three months ended September 30, 2025 compared to $5,517,745 for the three months ended September 30, 2024. At September 30, 2025, we had current assets of $46,592,989 and current liabilities of $21,659,278. We had accounts receivable of $6,320,988 at September 30, 2025 compared to $7,527,572 at June 30, 2025. We had revenues in excess of billings of $14,875,704 at September 30, 2025 compared to $19,134,385 at June 30, 2025 of which $881,053 and $903,766 is shown as long-term as of September 30, 2025 and June 30, 2025, respectively. The long-term portion was discounted by $183,137 and $208,037 at September 30, 2025 and June 30, 2025, respectively, using the discounted cash flow method with interest rates ranging from 4.2% to 17.5%. During the three months ended September 30, 2025, our revenues in excess of billings were reclassified to accounts receivable pursuant to billing requirements detailed in each contract. The combined totals for accounts receivable and revenues in excess of billings decreased by $5,465,265 from $26,661,957 at June 30, 2025 to $21,196,692 at September 30, 2025. Accounts payable and accrued expenses, and current portions of loans and lease obligations amounted to $9,191,552 and $8,330,243, respectively, at September 30, 2025. Accounts payable and accrued expenses, and current portions of loans and lease obligations amounted to $8,010,844 and $8,240,061, respectively, at June 30, 2025.
Current wording
Net cash provided by operating activities was $554,881 for the six months ended December 31, 2025 compared to $369,716 for the six months ended December 31, 2024. At December 31, 2025, we had current assets of $46,412,511 and current liabilities of $19,995,825. We had accounts receivable of $7,776,096 at December 31, 2025 compared to $7,527,572 at June 30, 2025. We had revenues in excess of billings of $17,844,091 at December 31, 2025 compared to $19,134,385 at June 30, 2025 of which $763,396 and $903,766 is shown as long-term as of December 31, 2025 and June 30, 2025, respectively. The long-term portion was discounted by $170,629 and $208,037 at December 31, 2025 and June 30, 2025, respectively, using the discounted cash flow method with interest rates ranging from 4.2% to 17.5%. During the six months ended December 31, 2025, our revenues in excess of billings were reclassified to accounts receivable pursuant to billing requirements detailed in each contract. The combined totals for accounts receivable and revenues in excess of billings decreased by $1,041,770 from $26,661,957 at June 30, 2025 to $25,620,187 at December 31, 2025. Accounts payable and accrued expenses, and current portions of loans and lease obligations amounted to $8,059,205 and $8,509,841, respectively, at December 31, 2025. Accounts payable and accrued expenses, and current portions of loans and lease obligations amounted to $8,010,844 and $8,240,061, respectively, at June 30, 2025.
Previous wording
The average days sales outstanding for the three months ended September 30, 2025 and 2024 were 147 and 150 days, respectively. The days sales outstanding have been calculated by taking into consideration the average combined balances of accounts receivable and revenues in excess of billings.
Current wording
The average days sales outstanding for the six months ended December 31, 2025 and 2024 were 142 and 140 days, respectively. The days sales outstanding have been calculated by taking into consideration the average combined balances of accounts receivable and revenues in excess of billings.
Previous wording
Net cash used in investing activities was $443,198 for the three months ended September 30, 2025, compared to $108,632 for the three months ended September 30, 2024. We had purchases of property and equipment of $485,281 compared to $100,737 for the three months ended September 30, 2024.
Current wording
Net cash used in investing activities was $753,412 for the six months ended December 31, 2025, compared to $531,477 for the six months ended December 31, 2024. We had purchases of property and equipment of $856,330 compared to $568,134 for the six months ended December 31, 2024.
Previous wording
Net cash provided by financing activities was $191,218 for the three months ended September 30, 2025, compared to $153,189 for the three months ended September 30, 2024. During the three months ended September 30, 2025, we received bank proceeds of $242,421 compared to $250,000 during the three months ended September 30, 2024. During the three months ended September 30, 2025, we had net payments for bank loans and finance leases of $115,350 compared to $118,311 for the three months ended September 30, 2024. Employees of our subsidiary, NetSol PK, exercised 278,455 options of common stock for $76,567, of which $64,147 was received during the quarter ended September 30, 2025 and $12,420 was received during the fiscal year ended June 30, 2025. We are operating in various geographical regions of the world through our various subsidiaries. Those subsidiaries have financial arrangements with various financial institutions to meet both their short and long-term funding requirements. These loans will become due at different maturity dates as described in Note 12 of the financial statements. We are in compliance with the covenants of the financial arrangements and there is no default, which may lead to early payment of these obligations. We anticipate paying back all these obligations on their respective due dates from its own sources.
Current wording
Net cash provided by financing activities was $724,853 for the six months ended December 31, 2025, compared to $2,637,763 for the six months ended December 31, 2024. During the six months ended December 31, 2025, we received bank proceeds of $792,484 compared to $2,676,932 during the six months ended December 31, 2024. During the six months ended December 31, 2025, we had net payments for bank loans and finance leases of $425,764 compared to $162,370 for the six months ended December 31, 2024. Employees of our subsidiary, NetSol PK, exercised 1,346,330 options of common stock for $370,553, of which $358,133 was received during the six months ended December 31, 2025 and $12,420 was received during the fiscal year ended June 30, 2025. We are operating in various geographical regions of the world through our various subsidiaries. Those subsidiaries have financial arrangements with various financial institutions to meet both their short and long-term funding requirements. These loans will become due at different maturity dates as described in Note 12 of the financial statements. We are in compliance with the covenants of the financial arrangements and there is no default, which may lead to early payment of these obligations. We anticipate paying back all these obligations on their respective due dates from its own sources.
Previous wording
We typically fund the cash requirements for our operations in the U.S. through our license, services, and subscription and support agreements, intercompany charges for corporate services, and through the exercise of options and warrants. As of September 30, 2025, we had approximately $22.7 million of cash, cash equivalents and marketable securities of which approximately $22 million is held by our foreign subsidiaries. As of June 30, 2025, we had approximately $17.4 million of cash, cash equivalents and marketable securities of which approximately $16.4 million is held by our foreign subsidiaries.
Current wording
We typically fund the cash requirements for our operations in the U.S. through our license, services, and subscription and support agreements, intercompany charges for corporate services, and through the exercise of options and warrants. As of December 31, 2025, we had approximately $18.1 million of cash, cash equivalents and marketable securities of which approximately $17.3 million is held by our foreign subsidiaries. As of June 30, 2025, we had approximately $17.4 million of cash, cash equivalents and marketable securities of which approximately $16.4 million is held by our foreign subsidiaries.
Rearranged current paragraphs (9)
Current report — wording carried from elsewhere
For the three months ended December 31, 2025, the net income attributable to non-controlling interest was $715,282, compared to the net loss attributable to non-controlling interest of $39,164 for the three months ended December 31, 2024.
Current report — wording carried from elsewhere
The following table sets forth the items in our unaudited condensed consolidated statement of operations for the six months ended December 31, 2025 and 2024 as a percentage of revenues.
Current report — wording carried from elsewhere
A significant portion of our business is conducted in currencies other than the U.S. dollar. We operate in several geographical regions as described in Note 15 “Operating Segments” within the Notes to the Condensed Consolidated Financial Statements. Weakening of the value of the U.S. dollar compared to foreign currency exchange rates generally has the effect of increasing our revenues but also increasing our expenses denominated in currencies other than the U.S. dollar. Similarly, strengthening of the U.S. dollar compared to foreign currency exchange rates generally has the effect of reducing our revenues but also reducing our expenses denominated in currencies other than the U.S. dollar. We plan our business accordingly by deploying additional resources to areas of expansion, while continuing to monitor our overall expenditures given the economic uncertainties of our target markets. In order to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency fluctuations, we compare the changes in results from one period to another period using constant currency. In order to calculate our constant currency results, we apply the current period results to the prior period foreign currency exchange rates. In the table below, we present the change based on actual results in reported currency and in constant currency.
Current report — wording carried from elsewhere
Net revenues for the six months ended December 31, 2025 and 2024 are broken out among the segments as follows:
Current report — wording carried from elsewhere
Operating expenses were $15,480,056 for the six months ended December 31, 2025, compared to $14,731,561, for the six months ended December 31, 2024, for an increase of $748,495 and on a constant currency basis an increase of $656,813. As a percentage of sales, it decreased from 48.9% to 45.8%. The increase in operating expenses was primarily due to increases in selling and marketing expenses, salaries and wages, offset by a decrease in other general and administrative expenses and the provision for doubtful accounts.
Current report — wording carried from elsewhere
Selling and marketing expenses were $6,133,032 for the six months ended December 31, 2025, compared to $4,954,596, for the six months ended December 31, 2024, for an increase of $1,178,436 and on a constant currency basis an increase of $1,110,757. The increase is mainly due to increases in salaries and consultants of approximately $831,253, due to annual raises and the hiring of additional marketing personnel. Other marketing expenses increased by approximately $290,538 due to the increase in advertising and marketing events.
Current report — wording carried from elsewhere
Net income (loss) attributable to NetSol
Current report — wording carried from elsewhere
The net loss was $2,110,531 for the six months ended December 31, 2025, compared to $1,076,247 for the six months ended December 31, 2024. This is an increase in net loss of $1,034,284 with an increase of $1,386,421 on a constant currency basis, compared to the prior year. For the six months ended December 31, 2025, net loss per share was $0.18 for basic and diluted shares compared to net loss per share of $0.09 for basic and diluted shares for the six months ended December 31, 2024.
Current report — wording carried from elsewhere
The following tables present financial covenants associated with our borrowings.