|NetSol Technologies Inc. (NTWK) Thrives Despite Economic Turbulence|
When NetSol Technologies announced recently that it had secured $3 million from a major international automotive maker’s captive finance company in the Asia-Pacific region, it was just one more reflection of the very real difference between NetSol and so many other companies in the enterprise software business. In the midst of the most challenging period in that industry, perhaps since its inception, NetSol has been able to leverage its unsurpassed reputation for quality, its strong relationship with SAP technology, and its expanding worldwide connections to survive and grow. It’s this very unusual mix of strengths that make NetSol such an important investment consideration.
NetSol is a global provider of financial and other enterprise software solutions and business services to a variety of industries, including financial, healthcare, insurance, energy, and technology markets. It is one of only about 100 companies in the world to achieve ISO 9001, ISO 27001, and SEI (Software Engineering Institute) CMMI (Capability Maturity Model) Maturity Level 5 assessments. In other words, it has a major certification of quality and trust every time it walks in the door. In an industry that is all too often known for its history of customer complaints, this is a critical and hard-won badge, especially in global environments that base relationships on personal integrity and reputation.
NetSol’s signing of a combined $3 million Asia-Pacific agreement comes on the heels of an agreement with a Chinese finance company partnered with a major European bank and a multi-billion dollar Chinese financial services group. NetSol’s global perspective, including growing contacts in Asia and the Middle East, has allowed it to weather regional storms, taking advantage of stronger world opportunities. It has also worked to develop a number of strategic global alliances, such as the recent Atheeb NetSol venture with the Atheeb Group of Saudi Arabia. It’s a fundamental strategy that allows the company to better penetrate new geographical markets and industries, and to grow technologically.
As parts of the world economy start to improve, NetSol’s well planned and long cultivated mix of attributes, the same qualities that have kept it going while so many others have been buried by the recession, should allow it to flourish.
All of this is backed up by the most recent financial results, covering the company’s third quarter ended March 31, 2010. Quarterly revenues were reported as $8.9 million, up 77.8% from the $5 million reported for the same period last year, headed by a 100% sequential growth in core NetSol Financial Suite (NFS) TM license sales. Total net revenue from license fees was $3.64 million, an increase of 1,022% over the same period last year. Operating income increased to $2.58 million, compared to an operating loss of $4.26 million for the same period last year. EBITA totaled $1.9 million, or $.05 per diluted share, versus an EBITA loss of $3.5 million, or a loss of ($.013) per diluted share for the same period last year. Net income per share totaled $.02, versus a loss ($.19) for the same period a year ago. In addition, revenues for the nine months ended March 31, 2010, were up 33%, to $26.1 million, over the same nine-month period last year.
NetSol Chairman and CEO, Najeeb Ghauri, commented on the impressive numbers. “We are very pleased with our performance in the third fiscal quarter, highlighted by a 78% increase in our sales versus the same period a year ago and a return to quarterly profitability for the first time in six quarters. It is our aim to finish the year completely profitable on the fiscal year analysis. Our financial results continue to deliver material improvements in every major metric of financial health, and we are optimistic about future outlook.”
He concluded, “Our efforts to invest in our core NetSol Financial Suite (NFS)TM throughout the global economic downturn has well positioned the company to leverage the upturn in customer activity that we continue to see, particularly in China and APAC region in general. We enter the end of our fiscal year 2010 with the most positive momentum in the company’s recent history and we see increased interest among our major customers as well as new potential partners in the sector. Additionally, we see excellent opportunities for collaboration and strategic initiatives as we head to the conclusion of the fiscal year 2010.”
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