NETSOL TECHNOLOGIES INC

Previous wording

Our website is located athttps://netsoltech.com/, and our investor relations website is located athttps://ir.netsoltech.com. The following filings are available through our investor relations website after we file with the SEC: Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and our Proxy Statements for our annual meetings of stockholders. These filings are also available for download free of charge on our investor relations website. We also provide a link to the section of the SEC’s website atwww.sec.govthat has all of our public filings, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, all amendments to those reports, our Proxy Statements and other ownership related filings. Further, a copy of this Quarterly Report on Form 10-Q is located at the SEC’s Public Reference Room at 100 F Street, NE, Washington D.C. 20549. Information on the operation of the Public Reference Room can be obtained by calling the SEC at 1-800-SEC-0330.

Current wording

Our website is located athttps://netsoltech.com/, and our investor relations website is located athttps://ir.netsoltech.com. The following filings are available through our investor relations website after we file with the SEC: Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and our Proxy Statements for our annual meetings of stockholders. These filings are also available for download free of charge on our investor relations website. We also provide a link to the section of the SEC’s website atwww.sec.gov that has all of our public filings, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, all amendments to those reports, our Proxy Statements and other ownership related filings. Further, a copy of this Quarterly Report on Form 10-Q is located at the SEC’s Public Reference Room at 100 F Street, NE, Washington D.C. 20549. Information on the operation of the Public Reference Room can be obtained by calling the SEC at 1-800-SEC-0330.

Previous wording

We webcast our earnings calls and certain events we participate in or host with members of the investment community on our investor relations website. Additionally, we provide notifications of news or announcements regarding our financial performance, including SEC filings, investor events, press and earnings releases, and blogs as part of our investor relations website and on social media platforms linked to our corporate website. Investors and others can receive notifications of new information posted on our investor relations website by signing up for e-mail alerts. Further corporate governance information, including our committee charters and code of conduct, is also available on our investor relations website athttps://netsoltech.com/about-us. The content of our websites is not intended to be incorporated by reference into this or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only.

Current wording

We webcast our earnings calls and certain events we participate in or host with members of the investment community on our investor relations website. Additionally, we provide notifications of news or announcements regarding our financial performance, including SEC filings, investor events, press and earnings releases, and blogs as part of our investor relations website and on social media platforms linked to our corporate website. Investors and others can receive notifications of new information posted on our investor relations website by signing up for e-mail alerts. Further corporate governance information, including our committee charters and code of conduct, is also available on our investor relations website athttps://ir.netsoltech.com/all-sec-filings. The content of our websites is not intended to be incorporated by reference into this or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only.

Previous wording

Renowned for its deep industry expertise, customer-centric approach and commitment to excellence, NETSOL fosters strong partnerships with its clients, ensuring their success in an ever-evolving landscape. With a rich history of innovation, ethical business practices and a focus on sustainability, NETSOL is dedicated to empowering businesses worldwide, securing its position as the trusted partner for leading firms around the globe.

Current wording

Renowned for a deep industry expertise, customer-centric approach and commitment to excellence, NetSol seeks to foster strong partnerships with its clients, ensuring their success in an ever-evolving landscape. With a rich history of innovation, ethical business practices and a focus on sustainability, NetSol is dedicated to empowering businesses worldwide, securing its position as the trusted partner for leading firms around the globe.

Previous wording

We are also committed to serving Tier-2 and Tier-3 banks and financial institutions. We understand the unique challenges faced by these institutions, which is why we offer innovative cloud implementation solutions without any license fees, rapid deployments and the ability to scale. Further, our out-of-the-box, API-first products are designed to seamlessly integrate into existing systems, providing flexibility and scalability that smaller institutions often need. By prioritizing accessibility and ease of use, we empower smaller financial companies to enhance their service offerings and streamline operations, positioning ourselves as a trusted partner in their digital transformation journey.

Current wording

We are also committed to serving Tier-2 and Tier-3 banks and financial institutions. We understand the unique challenges faced by these institutions, which is why we offer innovative cloud implementation solutions without any license fees, with rapid deployments and with the ability to scale. Further, our out-of-the-box, API-first products are designed to seamlessly integrate into existing systems, providing flexibility and scalability that smaller institutions often need. By prioritizing accessibility and ease of use, we empower smaller financial companies to enhance their service offerings and streamline operations, positioning ourselves as a trusted partner in their digital transformation journey.

Previous wording

License fees for the three months ended December 31, 2024 were $72,688 compared to $2,990,453 for the three months ended December 31, 2023 reflecting a decrease of $2,917,765 with a decrease in constant currency of $2,920,457. During the three months ended December 31, 2023, we recognized approximately $2,800,000 related to the sale of our NFS Ascent® CMS software to a renowned US auto manufacturer based in China.

Current wording

License fees for the three months ended March 31, 2025 were $1,198 compared to $558,340 for the three months ended March 31, 2024 reflecting a decrease of $557,142 with a decrease in constant currency of $557,142. During the three months ended March 31, 2024, we recognized approximately $465,000 related to the additional sale of our NFS Ascent® CMS software to a renowned German auto manufacturer based in China.

Previous wording

Subscription and support fees for the three months ended December 31, 2024 were $8,642,629 compared to $6,827,781 for the three months ended December 31, 2023 reflecting an increase of $1,814,848 with an increase in constant currency of $1,746,037. The increase includes a one-time catch up of approximately $1,000,000 from four of our customers. 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 March 31, 2025 were $7,888,360 compared to $7,140,358 for the three months ended March 31, 2024 reflecting an increase of $748,002 with an increase in constant currency of $768,805. 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®.

Previous wording

Services income for the three months ended December 31, 2024 was $6,821,344 compared to $5,419,707 for the three months ended December 31, 2023 reflecting an increase of $1,401,637 with an increase in constant currency of $1,286,921. The increase is mainly due to implementation services in US and Europe.

Current wording

Services income for the three months ended March 31, 2025 was $9,654,399 compared to $7,765,818 for the three months ended March 31, 2024 reflecting an increase of $1,888,581, with an increase in constant currency of $1,863,412. The increase is mainly due to implementation services in the U.S. and Europe.

Previous wording

The gross profit was $6,920,341, for the three months ended December 31, 2024 compared with $7,175,737 for the three months ended December 31, 2023. This is a decrease of $255,396 with a decrease in constant currency of $275,703. The gross profit percentage for the three months ended December 31, 2024 also decreased to 44.5% from 47.1% for the three months ended December 31, 2023. The cost of sales was $8,616,320 for the three months ended December 31, 2024 compared to $8,062,204 for the three months ended December 31, 2023 for an increase of $554,116 and on a constant currency basis an increase of $412,633. As a percentage of sales, cost of sales increased from 52.9% for the three months ended December 31, 2023 to 55.5% for the three months ended December 31, 2024.

Current wording

The gross profit was $8,741,773, for the three months ended March 31, 2025 compared with $7,474,820 for the three months ended March 31, 2024. This is an increase of $1,266,953 with an increase in constant currency of $1,268,499. The gross profit percentage for the three months ended March 31, 2025 also increased to 49.8% from 48.3% for the three months ended March 31, 2024. The cost of sales was $8,802,184 for the three months ended March 31, 2025 compared to $7,989,696 for the three months ended March 31, 2024 for an increase of $812,488 and on a constant currency basis an increase of $829,393. As a percentage of sales, cost of sales decreased from 51.7% for the three months ended March 31, 2024 to 50.2% for the three months ended March 31, 2025.

Previous wording

Salaries and consultant fees increased by $811,075 from $5,903,362 for the three months ended December 31, 2023 to $6,714,437 for the three months ended December 31, 2024 and on a constant currency basis increased by $701,239. The increase is due to annual salary raises. As a percentage of sales, salaries and consultant expense increased from 38.7% for the three months ended December 31, 2023 to 43.2% for the three months ended December 31, 2024.

Current wording

Salaries and consultant fees increased by $968,018 from $5,803,910 for the three months ended March 31, 2024 to $6,771,928 for the three months ended March 31, 2025 and on a constant currency basis increased by $982,985. The increase is due to annual salary raises. As a percentage of sales, salaries and consultant expense increased from 37.5% for the three months ended March 31, 2024 to 38.6% for the three months ended March 31, 2025.

Previous wording

Travel expenses were $601,251 for the three months ended December 31, 2024 compared to $748,072 for the three months ended December 31, 2023 for a decrease of $146,821 with a decrease in constant currency of $155,834. As a percentage of sales, travel expense decreased from 4.9% for the three months ended December 31, 2023 to 3.9% for the three months ended December 31, 2024.

Current wording

Travel expenses were $451,895 for the three months ended March 31, 2025 compared to $799,560 for the three months ended March 31, 2024 for a decrease of $347,665 with a decrease in constant currency of $346,479. As a percentage of sales, travel expense decreased from 5.2% for the three months ended March 31, 2024 to 2.6% for the three months ended March 31, 2025.

Previous wording

Depreciation and amortization expense decreased to $237,882 compared to $264,374 for the three months ended December 31, 2023 or a decrease of $26,492 and on a constant currency basis a decrease of $30,214.

Current wording

Depreciation and amortization expense decreased to $240,444 compared to $250,126 for the three months ended March 31, 2024 or a decrease of $9,682 and on a constant currency basis a decrease of $9,512.

Previous wording

Operating expenses were $14,731,561 for the six months ended December 31, 2024 compared to $11,960,293, for the six months ended December 31, 2023 for an increase of $2,771,268 and on a constant currency basis an increase of $2,435,341. As a percentage of sales, it increased from 40.6% to 48.9%. The increase in operating expenses was primarily due to increases in selling and marketing expenses, salaries and wages, provision for doubtful accounts, and other general and administrative expenses.

Current wording

Operating expenses were $7,188,375 for the three months ended March 31, 2025 compared to $6,156,917, for the three months ended March 31, 2024 for an increase of $1,031,458 and on a constant currency basis an increase of $1,038,277. As a percentage of sales, it increased from 39.8% to 41.0%. The increase in operating expenses was primarily due to increases in selling and marketing expenses, salaries and wages and provision for doubtful accounts off set by decrease in other general and administrative expenses.

Previous wording

Selling expenses were $2,662,397 for the three months ended December 31, 2024 compared to $1,784,510, for the three months ended December 31, 2023 for an increase of $877,887 and on a constant currency basis an increase of $831,571. The increase is mainly due to increases is salaries and consultants of approximately $586,000, due to annual raises and the hiring of additional marketing personnel. Other marketing expenses increased by approximately $108,000 due to the increase in marketing events.

Current wording

Selling expenses were $2,426,083 for the three months ended March 31, 2025 compared to $1,830,025, for the three months ended March 31, 2024 for an increase of $596,058 and on a constant currency basis an increase of $585,484. The increase is mainly due to increases is salaries and consultants of approximately $427,000, due to annual raises and the hiring of additional marketing personnel. Other marketing expenses increased by approximately $130,000 due to the increase in advertising and marketing events.

Previous wording

General and administrative expenses were $4,411,225 for the three months ended December 31, 2024 compared to $4,022,984 for the three months ended December 31, 2023 or an increase of $388,241 and on a constant currency basis an increase of $321,393. During the three months ended December 31, 2024, salaries increased by $123,788 and increased $86,685 on a constant currency basis, bad debt expense increased $117,355 and increased $114,936 on a constant currency basis, and other general and administrative expenses increased $147,098 or increased by $119,772 on a constant currency basis.

Current wording

General and administrative expenses were $4,457,504 for the three months ended March 31, 2025 compared to $3,981,310 for the three months ended March 31, 2024 or an increase of $476,194 and on a constant currency basis an increase of $493,629. During the three months ended March 31, 2025, salaries increased by $14,558 and increased $21,091 on a constant currency basis, bad debt expense increased $606,795 and increased $616,360 on a constant currency basis, and other general and administrative expenses decreased $145,149 and decreased by $143,822 on a constant currency basis.

Previous wording

Research and development cost was $333,669 for the three months ended December 31, 2024 compared to $341,411, for the three months ended December 31, 2023 for a decrease of $7,742 and on a constant currency basis a decrease of $13,015.

Current wording

Research and development cost was $304,788 for the three months ended March 31, 2025 compared to $345,582, for the three months ended March 31, 2024 for a decrease of $40,794 and on a constant currency basis a decrease of $40,836.

Previous wording

Loss from operations was $486,950 for the three months ended December 31, 2024 compared to income from operations of $1,026,832 for the three months ended December 31, 2023. This represents an increase in loss of $1,513,782 with an increase in loss of $1,415,652 on a constant currency basis for the three months ended December 31, 2024 compared with the three months ended December 31, 2023. As a percentage of sales, loss from operations was 3.1% for the three months ended December 31, 2024 compared to income from operations of 6.7% for the three months ended December 31, 2023.

Current wording

Income from operations was $1,553,398 for the three months ended March 31, 2025 compared to $1,317,903 for the three months ended March 31, 2024. This represents an increase of $235,495 with an increase of $230,222 on a constant currency basis for the three months ended March 31, 2025 compared with the three months ended March 31, 2024. As a percentage of sales, income from operations was 8.9% for the three months ended March 31, 2025 compared to 8.5% for the three months ended March 31, 2024.

Previous wording

Other expense was $367,642 for the three months ended December 31, 2024 compared to other income of $106,036 for the three months ended December 31, 2023. This represents an increase in other expense of $473,678 with an increase of $457,864 on a constant currency basis. The increase is primarily due to the foreign currency exchange transactions and interest income. 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, 2024, we recognized a loss of $698,392 in foreign currency exchange transactions compared to a loss of $14,617 for the three months ended December 31, 2023. 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. During the three months ended December 31, 2023, the value of the U.S. dollar decreased 2.8% and the Euro increased 1.5%, compared to the PKR.

Current wording

Other income was $432,366 for the three months ended March 31, 2025 compared to other expense of $855,464 for the three months ended March 31, 2024. This represents an increase in other income of $1,287,830 with an increase of $1,286,923 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 March 31, 2025, we recognized a gain of $321,622 in foreign currency exchange transactions compared to a loss of $963,887 for the three months ended March 31, 2024. 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. During the three months ended March 31, 2024, the value of the U.S. dollar and the Euro decreased 0.6% and 2.8%, compared to the PKR.

Previous wording

For the three months ended December 31, 2024, the net loss attributable to non-controlling interest was $39,164, compared to net income of $574,499 for the three months ended December 31, 2023. The decrease in non-controlling interest is primarily due to the increase in net loss of NetSol PK and NetSol Innovation.

Current wording

For the three months ended March 31, 2025, the net income attributable to non-controlling interest was $410,462, compared to net income of $11,679 for the three months ended March 31, 2024. The increase in non-controlling interest is primarily due to the increase in net income of NetSol PK.

Previous wording

The net loss was $1,147,042 for the three months ended December 31, 2024 compared to net income of $408,316 for the three months ended December 31, 2023. This is an increase in loss of $1,555,358 with an increase of net loss of $1,520,406 on a constant currency basis, compared to the prior year. For the three months ended December 31, 2024, net loss per share was $0.10 for basic and diluted shares compared to net income per share of $0.04 for basic and diluted shares for the three months ended December 31, 2023.

Current wording

The net income was $1,423,968 for the three months ended March 31, 2025 compared to $327,549 for the three months ended March 31, 2024. This is an increase of $1,096,419 with an increase of $1,039,042 on a constant currency basis, compared to the prior year. For the three months ended March 31, 2025, net income per share was $0.12 for basic and diluted shares compared to net income per share of $0.03 for basic and diluted shares for the three months ended March 31, 2024.

Previous wording

The following table sets forth the items in our unaudited condensed consolidated statement of operations for the six months ended December 31, 2024 and 2023 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, 2025 and 2024 as a percentage of revenues.

Previous wording

Net revenues for the six months ended December 31, 2024 and 2023 are broken out among the segments as follows:

Current wording

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

Previous wording

License fees for the six months ended December 31, 2024 were $73,917 compared to $4,270,902 for the six months ended December 31, 2023 reflecting a decrease of $4,196,985 with a decrease in constant currency of $4,199,708. During the six months ended December 31, 2023, we recognized approximately $2,800,000 related to the sale of our NFS Ascent® CMS software to a renowned US auto manufacturer based in China and we recognized approximately $1,142,000 related to the license renewal with an existing customer.

Current wording

License fees for the nine months ended March 31, 2025 were $75,115 compared to $4,829,242 for the nine months ended March 31, 2024 reflecting a decrease of $4,754,127 with a decrease in constant currency of $4,756,850. During the nine months ended March 31, 2024, we recognized approximately $2,800,000 related to the sale of our NFS Ascent® CMS software to a renowned U.S. auto manufacturer based in China and we recognized approximately $1,142,000 related to the license renewal with an existing customer, and we recognized approximately $465,000 related to the additional sale of our NFS Ascent® CMS software to a renowned German auto manufacturer based in China.

Previous wording

Subscription and support fees for the six months ended December 31, 2024 were $16,835,100 compared to $13,340,024 for the six months ended December 31, 2023 reflecting an increase of $3,495,076 with an increase in constant currency of $3,371,069. The increase includes a one-time catch up of approximately $1,693,000 from five of our customers. 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 nine months ended March 31, 2025 were $24,723,460 compared to $20,480,382 for the nine months ended March 31, 2024 reflecting an increase of $4,243,078 with an increase in constant currency of $4,139,874. The increase includes a one-time catch up of approximately $1,693,000 from five of our customers. 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®.

Previous wording

Services income for the six months ended December 31, 2024 was $13,226,142 compared to $11,869,196 for the six months ended December 31, 2023 reflecting an increase of $1,356,946 with an increase in constant currency of $1,139,746. The increase is mainly due to implementation services in US and Europe.

Current wording

Services income for the nine months ended March 31, 2025 was $22,880,541 compared to $19,635,014 for the nine months ended March 31, 2024 reflecting an increase of $3,245,527 with an increase in constant currency of $3,003,158. The increase is mainly due to implementation services in the U.S. and Europe.

Previous wording

The gross profit was $13,484,453, for the six months ended December 31, 2024 compared with $13,337,754 for the six months ended December 31, 2023. This is an increase of $146,699 with an increase in constant currency of $248,051. The gross profit percentage for the six months ended December 31, 2024 decreased to 44.8% from 45.2% for the six months ended December 31, 2023. The cost of sales was $16,650,706 for the six months ended December 31, 2024 compared to $16,142,368 for the six months ended December 31, 2023 for an increase of $508,338 and on a constant currency basis an increase of $109,219. As a percentage of sales, cost of sales increased from 54.8% for the six months ended December 31, 2023 to 55.3% for the six months ended December 31, 2024.

Current wording

The gross profit was $22,226,226, for the nine months ended March 31, 2025 compared with $20,812,574 for the nine months ended March 31, 2024. This is an increase of $1,413,652 with an increase in constant currency of $1,516,550. The gross profit percentage for the nine months ended March 31, 2025 slightly increased to 46.6% from 46.3% for the nine months ended March 31, 2024. The cost of sales was $25,452,890 for the nine months ended March 31, 2025 compared to $24,132,064 for the nine months ended March 31, 2024 for an increase of $1,320,826 and on a constant currency basis an increase of $938,612. As a percentage of sales, cost of sales slightly decreased from 53.7% for the nine months ended March 31, 2024 to 53.4% for the nine months ended March 31, 2025.

Previous wording

Salaries and consultant fees increased by $1,056,666 from $11,861,505 for the six months ended December 31, 2023 to $12,918,171 for the six months ended December 31, 2024 and on a constant currency basis increased by $749,645. The increase is due to annual salary raises. As a percentage of sales, salaries and consultant expense increased from 40.2% for the six months ended December 31, 2023 to 42.9% for the six months ended December 31, 2024.

Current wording

Salaries and consultant fees increased by $2,024,684 from $17,665,415 for the nine months ended March 31, 2024 to $19,690,099 for the nine months ended March 31, 2025 and on a constant currency basis increased by $1,732,630. The increase is due to annual salary raises. As a percentage of sales, salaries and consultant expense increased from 39.3% for the nine months ended March 31, 2024 to 41.3% for the nine months ended March 31, 2025.

Previous wording

Travel expenses were $1,172,113 for the six months ended December 31, 2024 compared to $1,408,439 for the six months ended December 31, 2023 for a decrease of $236,326 with a decrease in constant currency of $260,082. As a percentage of sales, travel expense decreased from 4.8% for the six months ended December 31, 2023 to 3.9% for the six months ended December 31, 2024.

Current wording

Travel expenses were $1,624,008 for the nine months ended March 31, 2025 compared to $2,207,999 for the nine months ended March 31, 2024 for a decrease of $583,991 with a decrease in constant currency of $606,561. As a percentage of sales, travel expense decreased from 4.9% for the nine months ended March 31, 2024 to 3.4% for the nine months ended March 31, 2025.

Previous wording

Depreciation and amortization expense decreased to $466,432 compared to $657,357 for the six months ended December 31, 2023 or a decrease of $190,925 and on a constant currency basis a decrease of $204,128.

Current wording

Depreciation and amortization expense decreased to $706,876 compared to $907,483 for the nine months ended March 31, 2024 or a decrease of $200,607 and on a constant currency basis a decrease of $213,640.

Previous wording

Operating expenses were $7,407,291 for the three months ended December 31, 2024 compared to $6,148,905, for the three months ended December 31, 2023 for an increase of $1,258,386 and on a constant currency basis an increase of $1,139,949. As a percentage of sales, it increased from 40.4% to 47.7%. The increase in operating expenses was primarily due to increases in selling and marketing expenses, salaries and wages, provision for doubtful accounts, and other general and administrative expenses.

Current wording

Operating expenses were $21,919,936 for the nine months ended March 31, 2025 compared to $18,117,210, for the nine months ended March 31, 2024 for an increase of $3,802,726 and on a constant currency basis an increase of $3,473,618. As a percentage of sales, it increased from 40.3% to 46.0%. The increase in operating expenses was primarily due to increases in selling and marketing expenses, salaries and wages, provision for doubtful accounts, and other general and administrative expenses.

Previous wording

Selling expenses were $4,954,596 for the six months ended December 31, 2024 compared to $3,493,375, for the six months ended December 31, 2023 for an increase of $1,461,221 and on a constant currency basis an increase of $1,367,174. The increase is mainly due to increases is salaries and consultants of approximately $1,021,000, due to annual raises and the hiring of additional marketing personnel. Other marketing expenses increased by approximately $443,000 due to the increase in marketing events.

Current wording

Selling expenses were $7,380,679 for the nine months ended March 31, 2025 compared to $5,323,400, for the nine months ended March 31, 2024 for an increase of $2,057,279 and on a constant currency basis an increase of $1,952,658. The increase is mainly due to increases is salaries and consultants of approximately $1,447,000, due to annual raises and the hiring of additional marketing personnel. Travel expenses increased by approximately $274,000. Other marketing expenses increased by approximately $345,000 due to the increase in marketing events.

Previous wording

General and administrative expenses were $9,083,347 for the six months ended December 31, 2024 compared to $7,747,088 for the six months ended December 31, 2023 or an increase of $1,336,259 and on a constant currency basis an increase of $1,114,972. During the six months ended December 31, 2024, salaries increased by approximately $562,832 and increased $472,349 on a constant currency basis, bad debt expense increased $445,981 and $430,243 on a constant currency basis, and other general and administrative expenses increased approximately $327,446 or increased by $212,380 on a constant currency basis.

Current wording

General and administrative expenses were $13,540,851 for the nine months ended March 31, 2025 compared to $11,728,398 for the nine months ended March 31, 2024 or an increase of $1,812,453 and on a constant currency basis, an increase of $1,608,601. During the nine months ended March 31, 2025, salaries increased by approximately $577,390 and increased $493,440 on a constant currency basis, bad debt expense increased $1,052,776 and $1,046,603 on a constant currency basis, and other general and administrative expenses increased approximately $182,287 or increased by $68,558 on a constant currency basis.

Previous wording

Research and development cost was $693,618 for the six months ended December 31, 2024 compared to $719,830, for the six months ended December 31, 2023 for a decrease of $26,212 and on a constant currency basis a decrease of $46,805.

Current wording

Research and development cost was $998,406 for the nine months ended March 31, 2025 compared to $1,065,412, for the nine months ended March 31, 2024 for a decrease of $67,006 and on a constant currency basis, a decrease of $87,641.

Previous wording

Loss from operations was $1,247,108 for the six months ended December 31, 2024 compared to income from operations of $1,377,461 for the six months ended December 31, 2023. This represents an increase in loss of $2,624,569 with an increase in loss of $2,187,290 on a constant currency basis for the six months ended December 31, 2024 compared with the six months ended December 31, 2023. As a percentage of sales, loss from operations was 4.1% for the six months ended December 31, 2024 compared to income from operations of 4.7% for the six months ended December 31, 2023.

Current wording

Income from operations was $306,290 for the nine months ended March 31, 2025 compared to $2,695,364 for the nine months ended March 31, 2024. This represents a decrease of $2,389,074 with a decrease of $1,957,068 on a constant currency basis for the nine months ended March 31, 2025 compared with the nine months ended March 31, 2024. As a percentage of sales, income from operations was 0.6% for the nine months ended March 31, 2025 compared to 6.0% for the nine months ended March 31, 2024.

Previous wording

Other income was $840,042 for the six months ended December 31, 2024 compared to $168,365 for the six months ended December 31, 2023. This represents an increase of $671,677 with an increase of $638,009 on a constant currency basis. The increase is primarily due to the foreign currency exchange transactions and interest income. 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 six months ended December 31, 2024, we recognized a loss of $155,847 in foreign currency exchange transactions compared to $148,870 for the six months ended December 31, 2023. During the six months ended December 31, 2024, the value of the U.S. dollar increased 0.2% and the Euro decreased 2.9%, compared to the PKR. During the six months ended December 31, 2023, the value of the U.S. dollar and the Euro decreased 2.6% and 1.2%, respectively, compared to the PKR. During the six months ended December 31, 2024, interest income was $1,298,939 compared to $882,998 for the six months ended December 31, 2023, for an increase of $415,941 and on constant currency basis an increase of $374,167. The increase in interest income was driven by a higher balance of interest-bearing funds during the period.

Current wording

Other income was $1,272,408 for the nine months ended March 31, 2025 compared to other expense of $687,099 for the nine months ended March 31, 2024. This represents an increase in other income of $1,959,507 with an increase of $1,924,932 on a constant currency basis. The increase is primarily due to the foreign currency exchange transactions and interest income. 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 nine months ended March 31, 2025, we recognized a gain of $165,775 in foreign currency exchange transactions compared to a loss of $1,112,757 for the nine months ended March 31, 2024. During the nine months ended March 31, 2025, the value of the U.S. dollar increased 0.5% and the Euro increased 1.5%, compared to the PKR. During the nine months ended March 31, 2024, the value of the U.S. dollar and the Euro decreased 3.2% and 4.0%, respectively, compared to the PKR. During the nine months ended March 31, 2025, interest income was $1,593,594 compared to $1,259,464 for the nine months ended March 31, 2024, for an increase of $334,130 and on constant currency basis an increase of $291,791. The increase in interest income was driven by a higher balance of interest-bearing funds during the period.

Previous wording

For the six months ended December 31, 2024, the net income attributable to non-controlling interest was $107,750, compared to $834,672 for the six months ended December 31, 2023. The decrease in non-controlling interest is primarily due to the increase in net loss of NetSol PK and NetSol Innovation.

Current wording

For the nine months ended March 31, 2025, the net income attributable to non-controlling interest was $518,212, compared to $822,993 for the nine months ended March 31, 2024. The decrease in non-controlling interest is primarily due to the decrease in net income of NetSol PK.

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, 2024 and 2023 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, 2025 and 2024 are as follows:

Previous wording

Our cash position was $21,270,642 at December 31, 2024, compared to $19,127,165 at June 30, 2024.

Current wording

Our cash position was $18,774,739 at March 31, 2025, compared to $19,127,165 at June 30, 2024.

Previous wording

Net cash provided by operating activities was $369,716 for the six months ended December 31, 2024 compared to $604,684 for the six months ended December 31, 2023. At December 31, 2024, we had current assets of $42,953,392 and current liabilities of $19,955,153. We had accounts receivable of $7,829,823 at December 31, 2024 compared to $13,049,614 at June 30, 2024. We had revenues in excess of billings of $11,438,977 at December 31, 2024 compared to $13,638,547 at June 30, 2024 of which $777,428 and $954,029 is shown as long term as of December 31, 2024 and June 30, 2024, respectively. The long-term portion was discounted by $115,126 and $152,446 at December 31, 2024 and June 30, 2024, respectively, using the discounted cash flow method with interest rates ranging from 7.3% to 17.5%. During the six months ended December 31, 2024, 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 $4,508,691 from $26,688,161 at June 30, 2024 to $19,268,800 at December 31, 2024. Accounts payable and accrued expenses, and current portions of loans and lease obligations amounted to $7,332,560 and $8,784,232, respectively at December 31, 2024. Accounts payable and accrued expenses, and current portions of loans and lease obligations amounted to $8,232,342 and $6,276,125, respectively, at June 30, 2024.

Current wording

Net cash provided by operating activities was $6,315 for the nine months ended March 31, 2025 compared to net cash used in operating activities of $3,602,677 for the nine months ended March 31, 2024. At March 31, 2025, we had current assets of $42,411,540 and current liabilities of $18,738,636. We had accounts receivable of $5,443,498 at March 31, 2025 compared to $13,049,614 at June 30, 2024. We had revenues in excess of billings of $15,424,896 at March 31, 2025 compared to $13,638,547 at June 30, 2024 of which $697,486 and $954,029 is shown as long-term as of March 31, 2025 and June 30, 2024, respectively. The long-term portion was discounted by $97,285 and $152,446 at March 31, 2025 and June 30, 2024, respectively, using the discounted cash flow method with interest rates ranging from 7.3% to 17.5%. During the nine months ended March 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 $5,819,767 from $26,688,161 at June 30, 2024 to $20,868,394 at March 31, 2025. At March 31, 2025 and June 30, 2024, accounts payable and accrued expenses were $7,097,343 and $8,232,842, respectively. At March 31 2025 and June 30, 2024 the current portions of loans and lease obligations were $8,459,991 and $6,276,125, respectively.

Previous wording

The average days sales outstanding for the six months ended December 31, 2024 and 2023 were 140 and 147 days, respectively, for each period. 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, 2025 and 2024 were 137 and 147 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 $531,477 for the six months ended December 31, 2024, compared to $569,336 for the six months ended December 31, 2023. We had purchases of property and equipment of $568,134 compared to $570,584 for the six months ended December 31, 2023.

Current wording

Net cash used in investing activities was $843,044 for the nine months ended March 31, 2025, compared to $822,451 for the nine months ended March 31, 2024. We had purchases of property and equipment of $897,743 compared to $948,337 for the nine months ended March 31, 2024.