$NTWK: NetSol Technologies Reports Sharply Higher Fiscal 2016 Second-Quarter Results; Issues Fiscal 2016 Guidance
-- Total Q2 revenue rose 31% to $16.2 million
-- Records positive Q2 GAAP EPS of $0.08 per diluted share, versus a net loss of $(0.14) per share last year
-- Adjusted EPS increases to $0.32 per diluted share in the quarter, and adjusted EPS of $0.46 per diluted share for the first six months of 2016
-- Expects minimum total net revenue of $62 million for fiscal 2016, GAAP profitability and adjusted EPS growth for the fiscal year
- Conference Call Scheduled Today at 9 a.m. ET (6 a.m. PT) -
NetSol Technologies, Inc. (Nasdaq:NTWK), a global business services and enterprise application solutions provider, today announced results for its fiscal 2016 second quarter ended December 31, 2015.
Total net revenues for the 2016 second quarter rose 31% to $16.2 million from $12.4 million in the same period last year. The increase reflected strength in total services revenue, which includes growing services delivered to major clients as well as our joint-venture companies, rising to $12.2 million from $6.9 million last year. License fees were approximately $710,000, compared with $2.1 million last year, with the year-over-year difference relating to sales mix. Total maintenance fees, which include related-party (joint-venture) maintenance fees, remained consistent at $3.3 million for both 2015 and 2014.
On a GAAP basis, net income for the second quarter improved to $875,000, or $0.08 per diluted share, as compared with a net loss of $1.4 million, or $(0.14) per share, in the second quarter of 2015.
Non-GAAP Adjusted EBITDA (which adds back stock-based compensation expense) for the second quarter of 2016 was $3.3 million, or adjusted EPS of $0.32 per diluted share, as compared with adjusted EBITDA of $1.4 million, or adjusted EPS of $0.14 per diluted share, in the second quarter of 2015.
The reconciliation of adjusted EBITDA to net income, the most comparable financial measure based upon GAAP, as well as a further explanation of adjusted EBITDA, is included in the financial tables at the end of this press release.
Following is additional detail for the quarter:
-- As a percentage of total revenue, total cost of revenue for the second quarter of 2016 decreased to 50% from 60% of total revenues for the same period last year;
-- Gross profit rose to $8.0 million from $5.0 million last year; and
-- Operational expenses were nearly flat year-over-year, with an increase in selling and marketing expenses related to new business efforts, offset by a decrease in general and administrative expenses as a result of cost rationalization initiatives.
"NetSol is at an important inflection point, with leverage continuing to build in our business model as a result of multiple large contracts underway," said Najeeb Ghauri, CEO of NetSol. "As we implement agreements already signed in Europe, along with the recently announced 12-country NFS Ascent implementation, we anticipate a strong year ahead."
Naeem Ghauri, president and head of global sales, commenting on the recent contract valued at more than $100 million said, "The new contract is just beginning to contribute revenue to our overall revenue mix, and is expected to ramp up steadily in the fiscal 2016 third and fourth quarter, and then sharply in fiscal 2017. Additionally, our sales pipeline is robust, benefitting from recent wins that provide strong reference points to leverage in our marketing efforts."
For the first six months of fiscal 2016, total revenue advanced to $29.5 million from $22.6 million for the same period one year ago. The company reported GAAP net income of $464,000, or $0.04 per diluted share, for the first six months of fiscal 2016, versus a net loss of $3.2 million, or $(0.34) per diluted share, for the same period last year. Non-GAAP adjusted EBITDA rose to $4.8 million, or adjusted EPS of $0.46 per diluted share for the first six months of fiscal 2016, from $2.4 million, or adjusted EPS of $0.26 per diluted share, for the same period in fiscal 2015.
At December 31, 2015, cash and cash equivalents were approximately $14.0 million, versus $14.2 million at June 30, 2015. Accounts receivable and accounts receivable, net-related party combined were $11.8 million, up from approximately $10 million at June 30, 2015. The quality of receivables remains strong.
Fiscal 2016 Business Outlook
The company currently expects minimum revenue of $62 million for fiscal 2016, with positive GAAP earnings per share and continued adjusted EPS growth. NetSol is currently conducting its mid-year budget review, and will provide further detail at the appropriate time.
<span data-mce-style="text-decoration: underline;" style="text-decoration: underline;">Fiscal 2016 Second Quarter Conference Call</span>
When: Thursday, February 11, 2016
Time: 9:00 a.m. Eastern Time
Phone: 1-844-868-9327 (domestic)
1-412-317-6595 (international)
Note: Once connected, please ask to be joined into the NetSol Technologies call.
A live webcast will be available online within the investor relations section of NetSol's website at http://www.netsoltech.com . A replay of the webcast will be available one hour following conclusion of the live call, and will be archived for one year.
About NetSol Technologies
NetSol Technologies, Inc. (Nasdaq:NTWK) is a worldwide provider of IT and enterprise software solutions primarily serving the global leasing and financing industry. The Company's suite of applications are backed by 40 years of domain expertise and supported by a committed team of more than 1000 professionals placed in eight strategically located support and delivery centers throughout the world.
-- Total Q2 revenue rose 31% to $16.2 million
-- Records positive Q2 GAAP EPS of $0.08 per diluted share, versus a net loss of $(0.14) per share last year
-- Adjusted EPS increases to $0.32 per diluted share in the quarter, and adjusted EPS of $0.46 per diluted share for the first six months of 2016
-- Expects minimum total net revenue of $62 million for fiscal 2016, GAAP profitability and adjusted EPS growth for the fiscal year
- Conference Call Scheduled Today at 9 a.m. ET (6 a.m. PT) -
NetSol Technologies, Inc. (Nasdaq:NTWK), a global business services and enterprise application solutions provider, today announced results for its fiscal 2016 second quarter ended December 31, 2015.
Total net revenues for the 2016 second quarter rose 31% to $16.2 million from $12.4 million in the same period last year. The increase reflected strength in total services revenue, which includes growing services delivered to major clients as well as our joint-venture companies, rising to $12.2 million from $6.9 million last year. License fees were approximately $710,000, compared with $2.1 million last year, with the year-over-year difference relating to sales mix. Total maintenance fees, which include related-party (joint-venture) maintenance fees, remained consistent at $3.3 million for both 2015 and 2014.
On a GAAP basis, net income for the second quarter improved to $875,000, or $0.08 per diluted share, as compared with a net loss of $1.4 million, or $(0.14) per share, in the second quarter of 2015.
Non-GAAP Adjusted EBITDA (which adds back stock-based compensation expense) for the second quarter of 2016 was $3.3 million, or adjusted EPS of $0.32 per diluted share, as compared with adjusted EBITDA of $1.4 million, or adjusted EPS of $0.14 per diluted share, in the second quarter of 2015.
The reconciliation of adjusted EBITDA to net income, the most comparable financial measure based upon GAAP, as well as a further explanation of adjusted EBITDA, is included in the financial tables at the end of this press release.
Following is additional detail for the quarter:
-- As a percentage of total revenue, total cost of revenue for the second quarter of 2016 decreased to 50% from 60% of total revenues for the same period last year;
-- Gross profit rose to $8.0 million from $5.0 million last year; and
-- Operational expenses were nearly flat year-over-year, with an increase in selling and marketing expenses related to new business efforts, offset by a decrease in general and administrative expenses as a result of cost rationalization initiatives.
"NetSol is at an important inflection point, with leverage continuing to build in our business model as a result of multiple large contracts underway," said Najeeb Ghauri, CEO of NetSol. "As we implement agreements already signed in Europe, along with the recently announced 12-country NFS Ascent implementation, we anticipate a strong year ahead."
Naeem Ghauri, president and head of global sales, commenting on the recent contract valued at more than $100 million said, "The new contract is just beginning to contribute revenue to our overall revenue mix, and is expected to ramp up steadily in the fiscal 2016 third and fourth quarter, and then sharply in fiscal 2017. Additionally, our sales pipeline is robust, benefitting from recent wins that provide strong reference points to leverage in our marketing efforts."
For the first six months of fiscal 2016, total revenue advanced to $29.5 million from $22.6 million for the same period one year ago. The company reported GAAP net income of $464,000, or $0.04 per diluted share, for the first six months of fiscal 2016, versus a net loss of $3.2 million, or $(0.34) per diluted share, for the same period last year. Non-GAAP adjusted EBITDA rose to $4.8 million, or adjusted EPS of $0.46 per diluted share for the first six months of fiscal 2016, from $2.4 million, or adjusted EPS of $0.26 per diluted share, for the same period in fiscal 2015.
At December 31, 2015, cash and cash equivalents were approximately $14.0 million, versus $14.2 million at June 30, 2015. Accounts receivable and accounts receivable, net-related party combined were $11.8 million, up from approximately $10 million at June 30, 2015. The quality of receivables remains strong.
Fiscal 2016 Business Outlook
The company currently expects minimum revenue of $62 million for fiscal 2016, with positive GAAP earnings per share and continued adjusted EPS growth. NetSol is currently conducting its mid-year budget review, and will provide further detail at the appropriate time.
<span data-mce-style="text-decoration: underline;" style="text-decoration: underline;">Fiscal 2016 Second Quarter Conference Call</span>
When: Thursday, February 11, 2016
Time: 9:00 a.m. Eastern Time
Phone: 1-844-868-9327 (domestic)
1-412-317-6595 (international)
Note: Once connected, please ask to be joined into the NetSol Technologies call.
A live webcast will be available online within the investor relations section of NetSol's website at http://www.netsoltech.com . A replay of the webcast will be available one hour following conclusion of the live call, and will be archived for one year.
About NetSol Technologies
NetSol Technologies, Inc. (Nasdaq:NTWK) is a worldwide provider of IT and enterprise software solutions primarily serving the global leasing and financing industry. The Company's suite of applications are backed by 40 years of domain expertise and supported by a committed team of more than 1000 professionals placed in eight strategically located support and delivery centers throughout the world.
