NETSOL reports record $19.8m Q3 revenue with 13% growth

NETSOL Technologies has reported record quarterly revenue for the third quarter of fiscal 2026, with total net revenues rising 13% year-over-year to $19.8 million.

The company, which provides AI-enabled software and services for OEMs, dealerships and financial institutions involved in asset finance and leasing, said the result marked the highest quarterly revenue in its history.

Recurring subscription and support revenues increased 11.7% to $8.8 million during the quarter, while gross margin expanded to 55.6%, up from 49.8% in the prior-year period. Non-GAAP EBITDA rose 48.2% year-over-year to $3.4 million.

NETSOL also reaffirmed its full-year fiscal 2026 revenue guidance of approximately $73 million.

The quarter included a significant uplift in licence fee revenue, which rose to $4.7 million from just $1,198 in the same period last year. The increase was linked to the recognition of a one-time licence investment tied to a four-year, $50 million contract extension with one of the company’s long-standing tier-one global auto captive customers.

Services revenues declined to $6.3 million from $9.7 million in the prior-year period, reflecting the timing and composition of implementation projects, alongside a one-off $2.4 million revenue pickup recorded last year following a customer contract amendment.

“Our third quarter was a record quarter for NETSOL, with $19.8 million in total net revenues, the highest quarterly revenue in our company’s history,” said Ghauri.

“The performance reflects the depth of our largest customer relationships, the continued momentum we are seeing across our unified, AI-enabled Transcend Platform and the long-term value we are creating as we extend our reach across asset finance and digital retail.”

He added that the four-year contract extension with a tier-one customer of more than 30 years demonstrated the strategic value of NETSOL’s long-term client relationships.

Ghauri also highlighted growing demand for Transcend Retail, the company’s digital retail platform for dealerships and OEMs, particularly in the US dealer market.

“Demand for Transcend Retail continues to build, and the product is becoming a meaningful contributor to our recurring revenue,” he said.

The company said it continues to expand AI capabilities across the Transcend Platform, including an AI-enabled credit decisioning module within Transcend Finance designed to accelerate credit approvals using agentic workflows while maintaining human oversight.

For the nine months ended March 31, 2026, total net revenues increased 12.5% to $53.7 million, while recurring subscription and support revenues rose 8.6% to $26.9 million.

Non-GAAP EBITDA for the nine-month period increased to $3.5 million from $1.9 million in the prior-year period.

Cash and cash equivalents stood at $14.7 million at March 31, 2026, compared with $17.4 million at June 30, 2025. NETSOL said the reduction reflected working capital impacts associated with the renewal of its largest customer contract and the timing of related maintenance fee collections.

“With continued growth in recurring revenue, expanding gross margins and multi-year customer contracts, we remain focused on strengthening the durability and quality of our revenue base while supporting long-term shareholder value creation,” he said.