NETSOL Technologies, Inc. have reported results for the fiscal fourth quarter and year ended June 30, 2023.
Total net revenues for the fourth quarter of fiscal 2023 were US$13.8m, compared with US$13.5m in the prior year period, with US$4.8m in gross profit (or 35.0% of net revenues), consistent with US$4.8m in the fourth quarter of fiscal 2022.
Total subscription (SaaS and Cloud) and support revenues were US$6.8m compared with US$6.1m in the prior year period, with US$7.0m in total services revenues.
In the fiscal fourth quarter, NETSOL Technologies launched the Hubex API Library, the second product offering from the company’s AppexNow marketplace, allowing customers to standardise all API integration procedures across multiple API services through a single integration.
The company implemented and went live with NFS Ascent for a Swedish bank operating across the Nordic and European regions, to support the bank’s lending business via the Cloud, and received numerous designations and accreditations establishing NETSOL as a premier Amazon Web Services partner committed to designing, building, and maintaining secure, reliable, and efficient cloud architectures.
Darryll Lewis was appointed as Managing Director of NETSOL Technologies Europe to drive business growth and innovation in this market.
Fiscal full year 2023 financial results
Total net revenues for the full year ended June 30, 2023, were US$52.4m, compared to US$57.3m in the prior year period, with US$16.9m (or 32.3% of net revenues) gross profit compared with US$23.7m in 2022.
Total subscription and support revenues for 2023 were US$26.0m compared with US$28.3m in the prior year period. The decrease in the full year total subscription and support revenue is related to a one-time catch-up in support revenue of approximately US$3.5m in fiscal year 2022. Total services revenues for the full year 2023 were US$24.1m compared with US$24.4m in the prior year period.
NETSOL Co-Founder, Chairman and Chief Executive Officer Najeeb Ghauri (pictured) stated, “From a financial perspective, our fourth quarter results fell short of our goals and expectations. However, this past quarter and full fiscal year was characterised by progress advancing our three core growth drivers that we believe will give current and prospective shareholders reason to be optimistic about what’s on the horizon for NETSOL.
“We continue to drive our transition to SaaS-based, recurring revenue and we’re seeing positive sequential and year-over-year growth, highlighted by our full-year subscription and support revenues exceeding our stated target of $25 million. As we seek interest from existing customers in converting to SaaS pricing and with new clients purchasing SaaS and cloud-based solutions, we expect our subscription and support revenues to be positioned for continued growth.
“Our ongoing transition to SaaS based pricing has also allowed us to implement significant cost reduction strategies across our business including the reduction of our head count by what we expect to be approximately 300 after a period of severance required by local laws that extend into the first and second quarters of fiscal 2024.
“As we continue to drive these initiatives, we expect to be able to better allocate capital to the growing, higher margin part of our business to drive profitability. Additionally, we continue to make strides on our expansion strategy into the North American markets.
“Our established markets throughout the Asia-Pacific region and Europe remain strong, and our pipeline continues to be active with several potential licensing deals in the works. We believe that we have the pieces in place to generate long-term growth for our business, and given our healthy pipeline, we are targeting US$61 million to US$63 million in revenue for the full fiscal year 2024, or 16% to 20% revenue growth.
“We are not satisfied with our current results, but we have a strategy in place that we are focusing our time, energy, and patience on executing, and we believe that this will yield long-term, sustainable growth and positive results for NETSOL.”