NETSOL TECHNOLOGIES INC

Previous wording

Founded in 1997, NetSol is headquartered in Encino, California. While the Company follows a global strategy for sales and delivery of its portfolio of solutions and services, it continues to maintain regional offices in the following locations:

Current wording

NetSol is headquartered in Encino, California. The Company maintains regional offices in the following locations:

Previous 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.

Current wording

Subscription and support fees for the three months ended March 31, 2026, were $8,810,115 compared to $7,888,360 for the three months ended March 31, 2025, reflecting an increase of $921,755 with an increase in constant currency of $876,274. 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 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.

Current wording

Services income for the three months ended March 31, 2026, was $6,294,117 compared to $9,654,399 for the three months ended March 31, 2025, reflecting a decrease of $3,360,282, with a decrease in constant currency of $3,590,398. Services revenue decreased compared to the prior quarter, primarily due to the timing and composition of the current implementation projects.

Previous 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.

Current wording

The gross profit was $11,028,642 for the three months ended March 31, 2026, compared with $8,741,773 for the three months ended March 31, 2025. This is an increase of $2,286,869 with an increase in constant currency of $2,107,482. The gross profit percentage for the three months ended March 31, 2026, also increased to 55.6% from 49.8% for the three months ended March 31, 2025. The cost of sales was $8,804,001 for the three months ended March 31, 2026, compared to $8,802,184 for the three months ended March 31, 2025, for an increase of $1,817 and on a constant currency basis a decrease of $99,947. As a percentage of sales, cost of sales decreased from 50.2% for the three months ended March 31, 2025, to 44.4% for the three months ended March 31, 2026.

Previous wording

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 wording

Salaries and consultant fees decreased by $437,279 from $6,771,928 for the three months ended March 31, 2025, to $6,334,649 for the three months ended March 31, 2026, and on a constant currency basis decreased by $557,248. The decrease is due to capitalization of internally developed software. As a percentage of sales, salaries, and consultant expenses decreased from 38.6% for the three months ended March 31, 2025, to 31.9% for the three months ended March 31, 2026.

Previous 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.

Current wording

Travel expenses were $814,581 for the three months ended March 31, 2026, compared to $451,895 for the three months ended March 31, 2025, for an increase of $362,686 with an increase in constant currency of $354,510. As a percentage of sales, travel expense increased from 2.6% for the three months ended March 31, 2025, to 4.1% for the three months ended March 31, 2026. Travel expenses increased due to travel associated with new customer implementation projects.

Previous 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.

Current wording

Depreciation and amortization expense decreased to $192,897 compared to $240,444 for the three months ended March 31, 2025, or a decrease of $47,547 and on a constant currency basis a decrease of $47,876.

Previous wording

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 wording

Operating expenses were $8,022,491 for the three months ended March 31, 2026, compared to $7,188,375 for the three months ended March 31, 2025, for an increase of $834,116 and on a constant currency basis an increase of $710,620. As a percentage of sales, it slightly decreased from 41.0% for the three months ended March 31, 2025 to 40.5% at March 31, 2026. The increase in operating expenses was primarily due to increases in selling and marketing expenses, salaries and wages, other general and administrative expenses, offset by a decrease in the provision for doubtful accounts.

Previous 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.

Current wording

Selling and marketing expenses were $2,907,171 for the three months ended March 31, 2026, compared to $2,426,083 for the three months ended March 31, 2025, for an increase of $481,088 and on a constant currency basis an increase of $459,942. The increase is mainly due to increases in salaries and consultants of approximately $359,048, due to annual raises and commission. Other marketing expenses increased by approximately $115,876 due to the increase in advertising and marketing events.

Previous wording

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 wording

General and administrative expenses were $4,948,936 for the three months ended March 31, 2026, compared to $4,457,504 for the three months ended March 31, 2025, or an increase of $491,432 and on a constant currency basis an increase of $388,850. During the three months ended March 31, 2026, salaries increased by $707,692 and increased by $652,345 on a constant currency basis, bad debt expense decreased by $340,312 and decreased by $351,095 on a constant currency basis, and other general and administrative expenses increased by $124,052 and increased by $87,600 on a constant currency basis.

Previous 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.

Current wording

Research and development cost was $166,384 for the three months ended March 31, 2026, compared to $304,788 for the three months ended March 31, 2025, for a decrease of $138,404 and on a constant currency basis a decrease of $138,172.

Previous 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.

Current wording

Income from operations was $3,006,151 for the three months ended March 31, 2026, compared to $1,553,398 for the three months ended March 31, 2025. This represents an increase in income of $1,452,753 with an increase of $1,396,862 on a constant currency basis for the three months ended March 31, 2026, compared with the three months ended March 31, 2025. As a percentage of sales, income from operations was 15.1% for the three months ended March 31, 2026, compared to 8.9% for the three months ended March 31, 2025.

Previous 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.

Current wording

Other income was $89,720 for the three months ended March 31, 2026, compared to $432,366 for the three months ended March 31, 2025. This represents a decrease in other income of $342,646 with a decrease of $340,497 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 March 31, 2026, we recognized a loss of $76,178 in foreign currency exchange transactions compared to a gain of $321,622 for the three months ended March 31, 2025. During the three months ended March 31, 2026, the value of the U.S. dollar decreased 0.3% and the Euro decreased 2.4%, compared to the PKR. During the three months ended March 31, 2025, the value of the U.S. dollar increased 0.3% and the Euro increased 4.5%, compared to the PKR.

Previous wording

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 wording

For the three months ended March 31, 2026, the net income attributable to non-controlling interest was $1,013,664, compared to $410,462 for the three months ended March 31, 2025. The increase is mainly due to the increase in net income of NetSol PK.

Previous 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.

Current wording

The net income was $1,300,964 for the three months ended March 31, 2026, compared to $1,423,968 for the three months ended March 31, 2025. This is a decrease of $123,004 with a decrease of $98,830 on a constant currency basis, compared to the prior year. For the three months ended March 31, 2026, net income per share was $0.11 for basic and diluted shares compared to a net income per share of $0.12 for basic and diluted shares for the three months ended March 31, 2025.

Previous wording

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 wording

The following table sets forth the items in our unaudited condensed consolidated statement of operations for the nine months ended March 31, 2026 and 2025 as a percentage of revenues.

Previous wording

Net revenues for the six months ended December 31, 2025 and 2024 are broken out among the segments as follows:

Current wording

Net revenues for the nine months ended March 31, 2026 and 2025 are broken out among the segments as follows:

Previous wording

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 wording

Subscription and support fees for the nine months ended March 31, 2026, were $26,850,453 compared to $24,723,460 for the nine months ended March 31, 2025, reflecting an increase of $2,126,993 with an increase in constant currency of $1,728,674. 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 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 wording

Services income for the nine months ended March 31, 2026, was $21,884,473 compared to $22,880,541 for the nine months ended March 31, 2025, reflecting a decrease of $996,068, with a decrease in constant currency of $1,368,399. Services revenue decreased primarily due to the timing and composition of the current implementation projects.

Previous wording

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 wording

The gross profit was $25,969,724 for the nine months ended March 31, 2026, compared with $22,226,226 for the nine months ended March 31, 2025. This is an increase of $3,743,498 with an increase in constant currency of $3,073,176. The gross profit percentage for the nine months ended March 31, 2026, increased to 48.4% from 46.6% for the nine months ended March 31, 2025. The cost of sales was $27,683,320 for the nine months ended March 31, 2026, compared to $25,452,890 for the nine months ended March 31, 2025, for an increase of $2,230,430 and on a constant currency basis an increase of $2,120,068. As a percentage of sales, cost of sales decreased from 53.4% for the nine months ended March 31, 2025, to 51.6% for the nine months ended March 31, 2026.

Previous 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.

Current wording

Salaries and consultant fees increased by $691,970 from $19,690,099 for the nine months ended March 31, 2025, to $20,382,069 for the nine months ended March 31, 2026, and on a constant currency basis increased by $593,842. The increase is due to annual salary raises. As a percentage of sales, salaries and consultant expenses decreased from 41.3% for the nine months ended March 31, 2025, to 38.0% for the nine months ended March 31, 2026.

Previous wording

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 wording

Travel expenses were $2,342,194 for the nine months ended March 31, 2026, compared to $1,624,008 for the nine months ended March 31, 2025, for an increase of $718,186 with an increase in constant currency of $708,147. As a percentage of sales, travel expense increased from 3.4% for the nine months ended March 31, 2025, to 4.4% for the nine months ended March 31, 2026. Travel expenses increased due to travel associated with new customer implementation projects.

Previous wording

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 wording

Depreciation and amortization expense decreased to $591,694 compared to $706,876 for the nine months ended March 31, 2025, or a decrease of $115,182 and on a constant currency basis a decrease of $109,727.

Previous 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.

Current wording

Other costs were $4,367,363 for the nine months ended March 31, 2026, compared to $3,431,907 for the nine months ended March 31, 2025, or an increase of $935,456 and on a constant currency basis an increase of $927,806. The increase is mainly due to an increase in third-party hardware and software costs of approximately $960,840 and hosting fees of approximately $197,606, offset by a reduction in other cost of approximately 222,990.

Previous 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.

Current wording

Operating expenses were $23,502,547 for the nine months ended March 31, 2026, compared to $21,919,936, for the nine months ended March 31, 2025, for an increase of $1,582,611 and on a constant currency basis an increase of $1,320,500. As a percentage of sales, it decreased from 46.0% to 43.8%. 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.

Previous wording

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 wording

Selling and marketing expenses were $9,040,203 for the nine months ended March 31, 2026, compared to $7,380,679, for the nine months ended March 31, 2025, for an increase of $1,659,524 and on a constant currency basis an increase of $1,524,489. The increase is mainly due to increases in salaries and consultants of approximately $1,190,301, due to annual raises and commissions. Other marketing expenses increased by approximately $436,001 due to the increase in advertising and marketing events.

Previous 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.

Current wording

General and administrative expenses were $13,833,904 for the nine months ended March 31, 2026, compared to $13,540,851 for the nine months ended March 31, 2025, or an increase of $293,053 and on a constant currency basis, an increase of $158,787. During the nine months ended March 31, 2026, salaries increased by $1,142,329 and increased by $1,075,978 on a constant currency basis, bad debt expense decreased by $725,022 and decreased by $736,604 on a constant currency basis, and other general and administrative expenses decreased by $124,254 and decreased by $180,587 on a constant currency basis.

Previous wording

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 wording

Research and development cost was $628,440 for the nine months ended March 31, 2026, compared to $998,406 for the nine months ended March 31, 2025, for a decrease of $369,966, and on a constant currency basis a decrease of $253,716.

Previous 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.

Current wording

For the nine months ended March 31, 2026, the net income attributable to non-controlling interest was $1,868,869, compared to $518,212 for the nine months ended March 31, 2025. The increase is mainly due to an increase in the net income of NetSol PK and NAMECET.

Previous wording

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 wording

The net loss was $809,567 for the nine months ended March 31, 2026, compared to net income of $347,721 for the nine months ended March 31, 2025. This is an increase in net loss of $1,157,288 with an increase of $1,572,734 on a constant currency basis, compared to the prior year. For the nine months ended March 31, 2026, net loss per share was $0.07 for basic and diluted shares compared to net income per share of $0.03 for basic and diluted shares for the nine months ended March 31, 2025.

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 and six months ended December 31, 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 nine months ended March 31, 2026 and 2025 are as follows:

Previous wording

Our cash position was $18,132,086 at December 31, 2025, compared to $17,357,944 at June 30, 2025.

Current wording

Our cash position was $14,744,392 at March 31, 2026, compared to $17,357,944 at June 30, 2025.

Previous 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.

Current wording

Net cash used in operating activities was $785,350 for the nine months ended March 31, 2026 compared to net cash provided by operating activities of $6,315 for the nine months ended March 31, 2025. As of March 31, 2026, we had current assets of $52,321,776 and current liabilities of $27,037,914. We had accounts receivable of $16,646,299 at March 31, 2026 compared to $7,527,572 at June 30, 2025. We had revenues in excess of billings of $20,987,818 at March 31, 2026 compared to $19,134,385 at June 30, 2025 of which $2,824,298 and $903,766 is shown as long-term as of March 31, 2026 and June 30, 2025, respectively. The long-term portion was discounted by $420,429 and $208,037 at March 31, 2026 and June 30, 2025, respectively, using the discounted cash flow method with interest rates ranging from 4.5% to 6.6%, for the period ended March 31, 2026, and interest rates ranging from 4.2% to 17.5%, for the period ended June 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 increased by $10,972,147 from $26,661,957 at June 30, 2025 to $37,634,104 at March 31, 2026. Accounts payable and accrued expenses, and current portions of loans and lease obligations, amounted to $8,132,384 and $8,241,584, respectively, at March 31, 2026. 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. Unearned revenue amounted to $10,184,195, at March 31, 2026 compared to $3,029,850 at June 30, 2025.

Previous 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.

Current wording

The average days sales outstanding for the nine months ended March 31, 2026 and 2025 were 147 and 137 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 $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.

Current wording

Net cash used in investing activities was $2,308,004 for the nine months ended March 31, 2026, compared to $843,044 for the nine months ended March 31, 2025. We had purchases of property and equipment of $1,379,262 compared to $897,743 for the nine months ended March 31, 2025. During the nine months ended March 31, 2026, we capitalized $1,039,989 for product development.

Previous 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.

Current wording

Net cash provided by financing activities was $369,755 for the nine months ended March 31, 2026, compared to $866,299 for the nine months ended March 31, 2025. During the nine months ended March 31, 2026, we received bank proceeds of $1,076,226 compared to $2,451,256 during the nine months ended March 31, 2025. During the nine months ended March 31, 2026, we had net payments for bank loans and finance leases of $1,093,671 compared to $247,496 for the nine months ended March 31, 2025. Employees of the Company exercised 220,00 options of common stock for $473,000, during the nine months ended March 31, 2025. Employees of our subsidiary, NetSol PK, exercised 1,443,874 options of common stock for $399,620, of which $387,200 was received during the nine months ended March 31, 2026 and $12,420 was received during the fiscal year ended June 30, 2025. NetSol PK, a subsidiary of the Company, paid a dividend of $306,799 to the non-controlling shareholders during the nine months ended March 31, 2025. NetSol PK purchased 2,690,251 shares of its common stock from the open market for $1,503,662 during nine months ended March 31, 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 13 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 the respective Company’s 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 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.

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 March 31, 2026, we had approximately $14.7 million of cash, cash equivalents and marketable securities, of which approximately $14.2 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.