NETSOL Technologies reports 21% revenue growth in Q2 FY2026

NETSOL Technologies has reported a 21.1% year-on-year increase in total net revenues for the second quarter of fiscal 2026, driven by strong growth in services and continued momentum in its AI-enabled finance and retail platforms.

The company posted Q2 revenues of $18.8 million, up from $15.5 million a year earlier, with services revenues rising 40.9% to $9.6 million. Recurring subscription and support revenues increased 5.1% to $9.1 million, reflecting ongoing customer deployments of NETSOL’s Transcend Finance and Transcend Retail platforms.

Profitability also improved, with gross margin expanding to 48.0% from 44.5% in the prior-year period, while operating income reached $1.3 million, compared with an operating loss of $0.5 million a year earlier. Cash and cash equivalents increased 4% to $18.1 million.

Founder and CEO Najeeb Ghauri said: “NETSOL delivered a strong second quarter of fiscal 2026, with total net revenues up 21% year-over-year to $18.8 million.

“Services revenue grew 41%, driven by active implementations of Transcend Finance and Transcend Retail, and we view implementation momentum as an important leading indicator of future subscription scale.

“Transcend Retail is gaining meaningful traction in the US automotive market, with adoption by leading dealer groups and franchised dealerships. Partnerships with MINI USA, Sonic Automotive, Indigo Auto Group, and others reflect growing validation of our platform and the outcomes it enables for dealers.

“While SaaS revenue growth is currently moderated by the timing of customer go-lives, we believe recurring revenues can accelerate over time as these deployments complete.

“We are also investing in AI to extend our product roadmap, including Check, an AI-enabled credit decisioning capability built into our loan origination system, designed to help credit and funding teams work faster and with greater precision by turning data into real-time, actionable decisions.”

Chief financial officer Sardar Abubakr said the company delivered “measurable profitability improvements in the quarter.”

He noted that: “Our priority is to scale efficiently by maintaining cost discipline while investing in the areas that expand long-term earnings quality, including subscription growth and strategic services that support customer adoption. We believe our balance of revenue growth, margin improvement, and targeted investment positions NETSOL to build sustainable shareholder value.”