NetSol Technologies (NTWK) Q2 2026 earnings summary

Executive summary

• Achieved 21% year-over-year revenue growth in Q2 FY26, reaching $18.8 million, driven by strong services and recurring subscription revenues.

• Operating income reached $1.3 million, reversing a prior-year loss, and GAAP net income was $246,757 or $0.02 per diluted share.

• Launched AI-enabled credit decisioning engine, "Check," and secured a $50 million, four-year contract extension with a major auto captive.

• Strengthened leadership with a new CFO and Chief Accounting Officer to support global scaling and governance.

• Multiple successful platform go-lives in China, Thailand, UK, and North America, and expanded partnerships with major dealer groups and OEMs.

Financial highlights

• Q2 FY26 net revenues rose to $18.8 million from $15.5 million in the prior year period.

• Service revenues increased 40.9% to $9.6 million; subscription and support revenues up 5.1% to $9.1 million.

• Gross profit was $9 million (48% margin), up from $6.9 million (44.5% margin) in Q2 FY25.

• Income from operations was $1.3 million, reversing a $0.5 million loss year-over-year.

• Adjusted EBITDA for the quarter was $1.77 million, compared to a loss of $0.8 million in the prior year.

• Six-month net revenues were $33.8 million, up from $30.1 million; recurring revenues grew 7.2% to $18 million.

• Six-month GAAP net loss was $2.1 million ($0.18/share), compared to $1.1 million loss ($0.09/share) prior year.

• Cash and equivalents at $18.1 million; working capital at $26.4 million; equity at $35.9 million ($3.04/share).

Outlook and guidance

• Raised full-year FY26 revenue guidance to nearly $73 million or better, citing a strong pipeline and continued investment in AI-enabled platforms.

• Management expects recurring revenues to accelerate as SaaS deployments complete and margin improvement as new hires and cross-training initiatives mature.

• Positive industry trends in global automotive and finance markets are expected to support future growth.