NETSOL Technologies posts record $74.4m revenue in fiscal 2026
NETSOL Technologies has reported full-year revenue of $74.4 million for the fiscal year ended 30 June 2026, a 12.5% increase on the prior year and a new annual record for the Encino, California-based company. The result exceeded management's own guidance of $73 million, and marks a year in which both profitability and cash generation improved substantially.
Operating income for the year nearly doubled, rising 98.4% to $6.9 million, with the operating margin widening 400 basis points to 9.3%. Full-year gross margin improved 330 basis points to 52.6%. Adjusted EBITDA on a consolidated basis increased 68.8% to $9.15 million. Operating cash flow surged from $0.4 million to $13.9 million, and the company ended the year with $27.1 million in cash, up 56.3% year on year.
Subscription and support revenue, which NETSOL treats as its recurring revenue base, grew 8.7% to $35.8 million and represented approximately 48% of total revenues. A notable uplift came from licence fees, which jumped from $0.6 million to $5.0 million, with around $4.7 million of that figure tied to the renewal and amendment of an existing Transcend platform customer agreement. Services revenue grew a more modest 3.3% to $33.6 million.
Customer wins and platform momentum
Asad Ghauri, Global Head of Sales and Group Managing Director of Europe, pointed to several significant commercial milestones during the year. The company signed a $50 million contract extension with a tier-one global automotive captive described as a partner of three decades. BMO Equipment Finance in the United States migrated from a legacy platform to Transcend Finance. Toyota Leasing Thailand upgraded its platform, and a tier-one multinational bank in the United Kingdom renewed its agreement.
Remaining performance obligations stood at $49.1 million at 30 June 2026, with approximately $22.5 million expected to be recognised within the next 12 months. NETSOL also introduced a new non-GAAP metric it calls contracted revenue, which it defines as revenue expected under existing signed agreements plus management estimates of change requests; that figure was approximately $60 million at year-end.
Guidance and competitive context
For fiscal 2027, NETSOL is guiding for total net revenue growth of 13% to 16%, a gross margin of approximately 50% or better, and consolidated adjusted EBITDA growth of 15% to 25%, corresponding to roughly $10.5 million to $11.4 million.
Chief financial officer Sardar Abubakr noted that the quality of the fiscal 2026 result was supported by underlying operational improvement rather than one-off items, pointing out that fiscal 2025 had benefited from a $1.30 million foreign exchange gain and higher interest income, whereas fiscal 2026 absorbed a $0.39 million currency loss and lower interest income. Despite that headwind, consolidated net income rose 22.4% to $5.6 million.
NETSOL operates in the specialised niche of asset-finance and leasing software, serving automotive OEMs, auto captives and equipment-finance businesses across more than 30 countries. Its primary platform, Transcend, competes with a small number of global specialist vendors and the in-house systems of large captive finance arms. The company's geographic footprint, with delivery centres in Pakistan and other lower-cost markets, provides a structural cost advantage that is increasingly being tested by AI-assisted implementation and delivery models adopted more broadly across the enterprise-software sector.
The workforce review noted by Abubakr is also worth watching. NETSOL employed approximately 1,370 people at year-end, down from around 1,460 a year earlier, while revenue grew 12.5%. Management framed this as a utilisation and skills-mix review rather than a headcount-reduction programme, citing the requirements of an AI-enabled delivery model. How effectively the company can convert AI productivity gains into margin improvement beyond the current 9.3% operating margin will be a key metric for investors tracking the fiscal 2027 guidance range.