NetSol Technologies 2026 Q4 Earnings Call

Good morning, everyone, and thank you for joining us today. After we review the company's business highlights and financial results for the fourth quarter and full fiscal year ended June 30, 2026, we will open the call for questions. Before we begin, I would like to remind you that our remarks today will include forward-looking statements within the meaning of the federal securities laws, including the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include our fiscal 2027 guidance, reflect management's current expectations, and are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied. We encourage you to review the cautionary statements and risk factors contained in NetSol's press release issued earlier today, as well as our filings with the Securities and Exchange Commission, including our most recent Form 10-K and quarterly reports on Form 10-Q.

I would also like to note that today's discussion will include certain non-GAAP financial measures. A reconciliation of these measures to their most direct comparable GAAP figure can be found in the press release issued earlier today. A supplemental investor presentation is available through the webcast link and in the investor relations sections of our website at ir.netsoltech.com, and has been furnished as an exhibit to the Form 8-K we will file with our press release issued this morning. Lastly, please remember that this call is being recorded and will be available for replay on our website at ir.netsoltech.com, and through a link included in today's press release. At this time, all participants are in listen-only mode. I will now hand the call over to our Founder and CEO, Najeeb Ghauri.

Go ahead, Najeeb. Thank you, Patti.

Good morning, everyone, and thank you for joining our call today to review our results for the fourth quarter and full fiscal year ended June 30, 2026. Fiscal 2026 was the strongest financial year in NetSol history. Total net revenues were $74.4 million, up 12.5% year-over-year basis and over in our $73 million guidance. Non-GAAP EBITDA grew almost 23%, and income from operations nearly doubled. The growth reached the bottom line this year. These results reflect a company in the middle of a deliberate transformation from a services and license business and a platform business. Recurring subscription and support revenue now represents approximately half of our total revenue. Later in the call, Sardar Abu, our CFO, will walk you through remaining performance obligations and the measures we will report each quarter so you can track the durability of this base.

In June, NetSol returned to the Russell Indexes, added to six benchmarks, including the Russell 3000E and the Russell Microcap Index. Index membership matters for a company our size. It makes NetSol eligible for the many institutional mandates that are limited to index constituents, and it puts us back in the universe where institutional investors screen. Let me talk about the business behind these numbers. Fiscal 2026 gave us the proof points across every part of our strategy. Earlier this month, we announced that BMO has signed a contract to upgrade from our legacy platform to Transcend Finance. BMO is one of the largest banks in North America, and this agreement is the clearest validation yet of our upgrade strategy. We have customers across North America who have run our acquired legacy software for decades.

Each of them now has a modern path forward, and BMO shows what that path looks like. A long-tenured customer chosen to deepen the relationship with NetSol on our newest technology. Across the rest of the business, the platform continued to deliver. In December, we signed one of the largest Transcend Finance contract extensions in our history with a tier 1 global auto captive customer. Transcend Retail became a growth engine in the U.S., and Asad Ghauri will take you through the momentum in detail. Our Asia Pacific business continued to perform, anchored by market leadership in China and expanding alongside our customers across the region. Fiscal 2026 was also the year we built the team for the next phase. Sardar Abubakr joined us as Chief Financial Officer in January.

At our annual meeting in June, shareholders elected a strengthened board. Re-electing Ian Smith, the former CEO of BMW Group Financial Services, Region Americas, and adding Richard Howard, the former President and CEO of Daimler Truck Financial Services for North America, and Aamir Ibrahim, the CEO of Jazz, one of the world's biggest digital operators, who earlier in his career held senior leadership roles at the Ford Motor Company and Jaguar Land Rover. The people who ran our customers' businesses now help govern ours. I can think of no stronger endorsement of where the company is headed. We are also transforming how we operate. Across Transcend Finance, we are reducing the resource intensity of our development and delivery model through AI-enabled development, automation, and structural efficiencies. I want to be clear about how we think about this.

It is not about reducing headcount for its own sake. It is about building a more scalable organization, one that is more nimble and faster to respond to changing market requirements, where our engineering and delivery capacity can grow client impact without growing costs at the same time. As part of that, we are focusing our investment on the core Transcend platform and the adjacencies where NetSol has a defensible customer and domain advantage. Looking to fiscal 2027, our priorities are very clear. First, scale Transcend Retail across the U.S. dealer market. Second, embed AI across our products and our operations. Third, upgrade our legacy install base to Transcend, the BMO as a template. And fourth, grow with our customers as they expand into new markets. You saw that model this year when a leading Chinese leasing company went live on Transcend Finance in Indonesia.

When our customers enter a new country, they take NetSol with them. We are also introducing full-year guidance with our fourth quarter results. Sardar Abubakr will take you through the numbers. I will close with this. We believe the value of what we have built, the customer base, the recurring revenue, the platform, is not yet reflected in our market valuation, and we see that as an opportunity. Last December, we rang the bell in Times Square, New York, to mark our 26th year on Nasdaq. There is no better way to honor that milestone than the strongest year in our history, and we intend to build on it. With that, I will hand the call over to Asad Ghauri, our Global Head of Sales and Group Managing Director of Europe, to walk through the commercials and sales update.

Asad. Thank you, Najeeb Ghauri, and good morning, everyone.

My focus today is on what is converting into revenue for us and the pipeline behind it. Before I start, one point of context for everyone on this call is our key messaging. Our core growth engine today and going forward is Transcend Finance worldwide, and Transcend Retail is our big bet in our home market in the U.S., and total focus is on the execution of that. I will start with the go-lives this year. We have had multiple. A leading Chinese leasing company launched its Indonesian operations on Transcend Finance. Northridge Finance, a division of the Bank of Ireland, went live on Transcend to support its growth strategy in the U.K. A tier 1 U.S.-based auto captive went live on Transcend Finance in China, a deal valued at multiple millions.

Toyota Leasing Thailand upgraded to the latest wholesale finance system on our Transcend platforms, expanding its use of our technology. These go-lives convert into recurring subscription support revenues going forward, exactly the visibility Sardar will be quantifying later in the call. We also renewed a multimillion-dollar contract with a tier 1 multinational bank in the United Kingdom, extending that relationship of more than a decade by another 10 years and deepening our presence in the U.K. asset finance market. Let me turn to Transcend Retail, our digital retail platform for OEMs and dealer groups. The commercial progress this year was real. It is accelerating. Sonic Automotive, the Fortune 500 dealership group, is building its branded digital retail experience on our platform. Our platform is rolling out across approximately 350 franchised dealerships of a premium global OEM in North America, one of the largest digital retail deployments in the U.S. automotive market.

The U.S. digital retail market remained large and under-penetrated, and our combination of finance and leasing, fast times go live, and a modern customer experience is winning head-to-head evaluations against well-funded competitors. We are the only vendor at the table who also runs the lender side of the transaction, and that is why we will win. We expect Transcend Retail to be one of the most important growth stories in the company over the next several years. Alongside retail, there is a second U.S. growth motion, upgrades. Our legacy install base is defined set of accounts where we are the incumbents with relationships that, in some cases, span decades. BMO is a template. Legacy to Transcend upgrades are now an active category in our pipeline, and each upgrade turns a maintenance relationship into a modern subscription relationship. A word on AI. It's an area of focus for the company, and it's increasingly central to how customers engage with us commercially.