Q2 2023 NetSol Technologies Inc Earnings Call
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Speaker 2: Good morning. Welcome to NetSol Technologies. 2nd quarter, 2023. Arning's conference call.
Speaker 2: On the call today are Najib Gauri, Chairman and Chief Executive Officer, Roger Alman, Chief Financial Officer and Patty McLellan, General Counsel.
Speaker 2: Please note, this call is being recorded.
Speaker 2: I would now like to turn the call over to Patty McGlasson who will provide the necessary cautions regarding the forward-looking statements made by the management during this call.
Speaker 2: Please proceed.
Speaker 3: Good morning everyone, and thank you for joining us.
Speaker 3: Following your review of the company's business highlights and financial results, we will open the call for questions.
Speaker 3: I will now provide the necessary cautions regarding the forward-looking statements made by management during this call. Please note that all the information discussed on today's call is covered under the State's Harper provisions of the Private Security's litigation reform act.
Speaker 3: The company's discussion may include forward-looking statements reflecting management's current forecaps of certain aspects of the company's future, and our actual results could differ materially from those stated or implied.
Speaker 3: These four looking statements are qualified by the cautionary statements contained in net solves press releases and SEC filings, including our NW report on Form 10K and quarterly report on Form 10Q. I would also like to point out that we will be discussing certain non-GAAP measures. We will be discussing certain non-GAAP measures.
Speaker 3: The press release issued earlier today contains a reconciliation of these non- GAAP financial results to the most comparable GAAP measures .
Speaker 3: Finally, I would like to remind everyone that this call review recorded and made available for replay at www.nesteltech.com and via link available in today's press release. Now I'd like to turn the call over to the Jeep.
Speaker 4: Thank you Peri and good morning everyone.
Speaker 4: We made a lot of strategic progress this quarter which I look forward to sharing with you. That said, our second quarter of financial results were not where we wanted them to be.
Speaker 4: There were various reasons for death.
Speaker 4: Some within our control and some outside of our control.
Speaker 4: First is important to understand that in the second quarter last year we had $3.5 million in one time revenue due to one time cumulative catch up on a large contract which impacted our comparisons.
Speaker 4: Second, approximately $2 million in revenue that we expected to realize in the quarter was delayed and we expect to realize it in the third fiscal quarter.
Speaker 4: With this lower revenue, our margin and profitability would be low our expectations.
Speaker 4: As such, we have re-examined our cost structure to not only better align it with today's revenue, but also re-prioritize our capital allocation to the most attractive parts of our business with the greatest opportunity to drive sustained growth in revenue and profitability.
Speaker 4: We expect to at least $4 million in cost cut of the business by the end of the fiscal year.
Speaker 4: In short, we will be more focused company better position to achieve a return to positive cash flow for our shareholders.
Speaker 4: Before we get into the details of the quarter, let's keep a few things in mind.
Speaker 4: Number one, we have a hard fought market leading position in Asia, a growing market share in Europe , and a unique opportunity to grow in the US.
Speaker 4: Number two, the higher margin recurring revenue portion of our business is doing well, and there's opportunity for it to do better.
Speaker 4: And three, we are at the front end of some of the most innovative technology for our clients.
Speaker 4: For example, we were ahead of the curve on integrating AI and machine learning into our customer products and our laser focused on delivering this to our customers.
Speaker 4: and for our bell and sheet.
Speaker 4: is rock solid with a comparative advantage of a strong cash position.
Speaker 4: built from good old-fashioned cast generation.
Speaker 4: We have every intention to get back to positive gas generation and have a clear plan to get there.
Speaker 4: We are focused on expanding our presence in the North American market.
Speaker 4: particularly in the US.
Speaker 4: which is our most vibrant market.
Speaker 4: We are very excited about the opportunities we are seeing for our products and services in this region. For example, Autos are mobile.
Speaker 4: AI and machine learning based solution has emerged as a very attractive product in this market. And we continue to develop and evolve our product range to specifically target not American customers.
Speaker 4: We also growing our partnership with consultant system integrators and tech partners including Amazon Web Services and a Tier 1 automotive company through autos that will further help.
Speaker 4: to scale our notavital operations.
Speaker 4: During this quarter, we went live with our 37th dealer and we now have dealers in 16 states.
Speaker 4: Our sales pipeline remains strong and increased to $250 million in the second quarter.
Speaker 4: The sales cycles can be very long in our business, particularly for some of the larger deals.
Speaker 4: But we are enhancing our positioning to compete for some of these larger deals and quite optimistic about many of the opportunities we are pursuing.
Speaker 4: Before I provide more in-depth overview of our business,
Speaker 4: I first like to turn the call over to Roger Armand or CFO who will walk you through our financials for the quarter. Go ahead Roger.
Speaker 5: involved politics this is an
Speaker 6: Turning to our fiscal second quarter 2023 financial results for the period ended December 31st 2002.
Speaker 6: Our total net revenues for the second quarter of fiscal 2020 were $12.4 million compared with $15.5 million in the prior year period.
Speaker 6: On a constant currency basis, net revenues are 14.6 million.
Speaker 6: License fees were 15,900 compared with 1.9 million in a prior year period and were 16,200 on a constant currency basis.
Speaker 6: Recurring revenue or subscription to port revenues were 6.5 million compared with 9.4 million in the prior year period.
Speaker 6: The decrease in total subscription and support revenues for the second quarter of 2023 was primarily due to the recording of approximately 3.5 million as at one time. Humanizou catch up in the second quarter of 2022 due to our amendment to our Kenyra contract with direct financial services.
Speaker 6: On a normalized basis, excluding the one-time cumulative catch-up in the same quarter last year, we actually saw an increase in our total subscription and support revenue for the quarter on both a gap and a constant currency basis.
Speaker 6: Total services revenues were $5.9 million compared with $4.1 million in the prior year period. On a constant currency basis, total services revenues were $6.9 million.
Speaker 6: Services revenues derived from services provided to both current customers as well as services provided to new customers as part of the implementation process.
Speaker 6: Total cost of revenues was $9.3 million for the second quarter, an increase of $1.4 million from the second quarter of fiscal year 2022. On a constant currency basis, total cost of revenues was $11.3 million.
Speaker 6: Growth profit for the second quarter of physical 2023 was 2.1 million or 25.4% of net revenues compared to 7.6 million or 49.4% of net revenues in the second quarter of physical 2022. Alegant and currency basis, Growth profit was 2.3 million.
Speaker 6: Operating expenses for the second quarter were 6.2 million or 50% of sales compared to 6 million or 38.7% of sales in the same period last year.
Speaker 6: On a constant currency basis operating expenses for the second quarter were 7.2 million or 49.4% of sales.
Speaker 6: So, to enter a profitability metrics for the second quarter of fiscal 2023, we had a net loss from operations of 3 million compared to net income from operations of 1.7 million in the prior year period.
Speaker 6: On a content currency basis, the net loss from operations with 2.9 million.
Speaker 6: Our GapNet loss to tribute voltage net sold for the second quarter fiscal 2023 total 2.1 million or 19 cents per day needed share. Compared with GapNet income of 1.4 million or 13 cents per day needed share in the second quarter of last year.
Speaker 6: On a constant currency basis, our net loss of tribute will to net sold total 2.7 million or 24 cents per diluted share.
Speaker 6: As always, it's important to point out that included in our net loss this quarter was a gain of $657,000 on foreign currency exchange transactions compared to a gain of $901,000 out in Q2 of last year.
Speaker 6: On a constant currency basis, we realize you gain of 827,000 on foreign currency exchange transactions.
Speaker 6: Because we operate in several geographical regions, a significant portion of our business is conducted in currencies other than the US dollar.
Speaker 6: A decrease in the value of the US dollar compared to the foreign currency exchange rates generally has the effect of increasing our revenues, but it also increases our expenses, denominated in currencies other than the US dollar.
Speaker 6: Similarly, as the US dollar gains tranquillism to form current exchange rates, it tends to reduce our revenues, but it also reduces our expenses, denominations, and currencies other than the US dollar.
Speaker 6: We plan our business accordingly by deploying additional resources areas of expansion, while continuing to monitor our overall expenditure as given economic and certain needs of our target markets.
Speaker 6: Moving to our non-GAAP metrics, non-GAAP adjusted EBITDA for the second quarter of fiscal 2023 was a loss of $1.3 million or $0.12 per diluted share compared with non-GAAP adjusted EBITDA of $2.1 million or $0.19 per diluted share in the second quarter of last year.
Speaker 6: So you see the reconciliation schedules contained in our earnings release for our revised calculations of a Justin E. Bidoff for the quarter-gen to December 31, 2022 and 2021.
Speaker 6: Turning to our balance sheet, at the quarter end we had casting cast equivalence of approximately 21 million or approximately $1.86 per diluted common share. The net sold technology, the net sold stockholders equity at December 31, 2022 is 44.4 million.
Speaker 6: or $3.93 per share. That concludes my prepared remarks. Now I'll turn this time back over to Najib for an overview of our business updates. Najib?
Speaker 4: Thank you Roger.
Speaker 4: As I mentioned earlier, we are implementing COS Reduction Initiatives that we believe will drive efficiency and better align our resources.
Speaker 4: We expect that our efficiency measures, that at least will add at least $4 million in EBITDA in the next fiscal year.
Speaker 4: and accelerate our path to return to profitability.
Speaker 4: Perhaps the most exciting component in our growth strategy right now is our expansion into the North American market.
Speaker 4: This market represents a robust growth opportunity for our business, particularly as we exit the coronavirus pandemic which created accelerated demands for modernization and digitalization in the industry. Specifically we are seeing demand related to
Speaker 4: customers that required a digital entry point to their financial services provider, and employees who were suddenly shifted to remote work and required the ability to digitally provide financial services to customers.
Speaker 4: As a result, our core customers, financial institutions, automotive and equipment OEMs, and automotive dealers realize that their IT infrastructure needed to adapt to these changes and our products are ideally suited to meet their needs.
Speaker 4: Moreover, the increased demand for cloud-based services has positioned our Nefzul Cloud Services division to capture increased market share as we support both new and existing customers in modernizing their IT infrastructures.
Speaker 4: To that end, Otto's offerings continue to see excellent traction in the United States, which illustrates the power of Nessel's commitment to innovation.
Speaker 4: Since last quarter, autos have expanded its US presence to include 37 dealers across the 16 states.
Speaker 4: showcasing the healthy and growing demand for SAS and AI-based platform in this region.
Speaker 4: Additionally, in the second quarter of fiscal 2023, we enter into a new multi-million dollar agreement with a tier one automotive company in the United States, which will implement and license our auto mobility solution to manage back office operations for vehicle subscriptions.
Speaker 4: Autos penetration in the US has been an excellent catalyst for our growth in this market and we are further accelerating our expansion by investing in our partnerships with consultants, system integrators and other technology partners.
Speaker 4: In the second quarter, we were pleased to expand our partnership with Amazon Web Services or AWS and became an API gate with delivery partner. We expect this partnership to position nest souls to expand our cloud capabilities by providing us with a fully managed service with developers to create.
Speaker 4: publish, maintain, monitor and secure application programming interfaces at any scale.
Speaker 4: Finally, we are making good progress establishing a support and delivery system center in Austin, Texas.
Speaker 4: which is quickly becoming a hotspot for tech businesses in the US.
Speaker 4: This planned location is expected to accommodate a sale of the support staff.
Speaker 4: which will accommodate.
Speaker 4: a number of people.
Speaker 4: in the coming months.
Speaker 4: Now let me finally talk about APEC in Europe region. Our business in the Asia Pacific and European markets continue to provide stable and reliable revenues.
Speaker 4: In APEC, our revenues decrease compared to the second quarter of 2022. However, this is our largest and most established market and with the progress that we continue to make on our multi-year multi-country implementation roadmap, we are confident that we are positioned
Speaker 4: with sustainable positive results in this region. Our European operation provides us with more growth opportunities as compared to AIPAC.
Speaker 4: where we are already established as the leading provider of finance, leading software in the region, our cloud-based and SaaS offering continue to gain traction in the European market.
Speaker 4: Contributing to our recurring subscription and support-based revenues, which we believe represent a very attractive opportunity for next-sold going forward. Our second quarter revenues in the European market increased slightly compared to the Bay Attention Services of improved standard management act without no any feedback.
Speaker 4: We anticipate that through a combination of our cloud-based and sales offering and implementation of NFS ascend for a major Scandinavian bank across four countries in 2024, we are well positioned to deliver improved results.
Speaker 4: In summary, while our second quarter results were not where we wanted to be, we are enthusiastic about the value driving initiatives underway.
Speaker 4: We are making significant progress executing our strategy to grow in the US.
Speaker 4: We are initiating a cost reduction plan that will cut over four million dollars out of the business while not impacting key growth areas such as the US. Our technology partnerships and technology offerings continue to grow and finally with strong market share and a healthy balance sheet we have a very strong foundation upon which we wish to build on.
Speaker 4: And with that we can open the call for questions operator.
Speaker 2: Thank you.
Speaker 2: Ladies and Chairman, at this time we will be conducting a question and answer session.
Speaker 2: If you would like to ask a question, please press star 1 on the telephone keypad.
Speaker 2: A confirmation tone will indicate your line is in the question queue.
Speaker 2: You may press star 2 if you would like to remove your question from the queue.
Speaker 2: For parts spin using speaker equipment it may be necessary to pick up your handset before pressing the stock keys.
Speaker 2: Ladies and gentlemen, we will wait for a moment while we poll for questions.
Speaker 2: Our first question comes from the line of Todd Felt from Aged Financial Services.
Speaker 7: Thank you. Good morning. A few times during the call you referred to your market leading position in Europe . I was wondering if you could give us kind of a estimate of your percentage market share in Europe , Asia Pacific region, and the North America.
Speaker 4: Okay, thank you for asking this question Todd. As you know, this market is very fragmented in all the three regions.
Speaker 4: And it's very difficult to, there's no, I think, any kind of monitoring or gauge to see exactly the market position. Nevertheless, we will look at it. We've been in Europe since 2005, with office and Horsham by Getveg. We have a sizable team there.
Speaker 4: We've been securing new contracts like the one we announced recently about a Scandinavian bank. This is a new account and there were many other progress in this area. I believe
Speaker 4: In Europe , we are growing our market share because we can see the number of companies operating as a competitor and we have been invited in most of all the opportunities and we are participating in a lot of different new bits in the European market.
Speaker 4: APEC in China, we are the leading company still maintaining our leadership position. The way you look at it in the OEM multinationals and leading finance companies, according to CBRC which is the regulatory authority in Beijing China.
Speaker 4: We've been the leading company with a number of contracts we have. So by far we are in a very strong position in China. Overall in APAC we still believe we're still in a leading position. Again, it's very hard to say what the percentage is, but our position in Japan and China and...
Speaker 4: Australia, New Zealand and other markets in the APEC is very strong. So we are pretty comfortable and as I mentioned in my comments that a channel market will continue to ramp up exactly because we have added a new vertical indicator to the local Chinese market which we call it professional services. And our head of the operational model Lee.
Speaker 4: has a very bullish program planned to promote this new offering which means we hired about 45, 47 new employees in China in the last six months all Chinese local to go towards a local Chinese company than whether they're an auto sector or truck sector or whatever.
Speaker 4: There is an opportunity for us to grow in the professional services on a very impressive daily rate.
Speaker 4: Now coming to your question on the North America, North America is the most exciting thing happening for us and simply because yes, we have not seen the results as a discotter but the reality is this we are now over a year and a half we brought in a few very senior executives into this market.
Speaker 4: including Peter Minshal and few others. What are we noticing here? In our core business, which is a cent, flagship a cent, and mobility, we have signed one major contract. I'll share the name, automation, household name. We just announced that about a couple months ago.
Speaker 4: In addition to that, we are pretty much in all the major opportunities RFPs.
Speaker 4: We mentioned a quarter billion dollar sales pipeline. It's mostly in the United States.
Speaker 4: Now the US strategy is by design we are now investing.
Speaker 4: because we realized that we've done enough in the APEC market and we don't want to invest too much more other than one time investment in China. But in the US, this is the time.
Speaker 4: Despite the fact other economies are struggling, US economy is still strong. So we are investing in a new office in Austin, Texas.
Speaker 4: That will be our hope for the US customers in the US market. I believe given the activities for life.
Speaker 4: 12 months. Yes, sales cycle is very long but at the same time the values are also pretty attractive.
Speaker 4: So we believe this second half, we are pretty confident, there will be good progress, I can give you the timeline and as you know how our business is.
Speaker 4: lumpy and you cannot guarantee the results. We are leading candidates in a couple of major opportunities, maybe the top two now. So we are excited, we are fully committed about the US market and we believe this is the market which will change the total landscape of this company in the coming quarter and coming years.
Speaker 7: So we're investing in this market and we believe this is the right thing to do. Okay, thanks for the color of that. I mean, when I look at the 30,000-foot view, I see that we've hired on over 500 employees the last few quarters. You know, our revenue has decreased the last few quarters, but our sales pipeline has gone
Speaker 7: You know, I remember it was under 200 million. Now we're at, you know, 250 million. So when we do finally have this breakthrough, do you expect the revenues to jump from, you know, 12 million? Are we going to start having 20, $25 million quarters given that our pipeline is 250 million and...
Speaker 7: you know, it's, you know, when can we see this occur? It's just a little frustrating that, you know, salaries and consultant expenses have now grown to over 50% of revenue. So we've got all these new employees on and we're kind of hoping that the, you know, the dam breaks, so to speak, and we see this jump in revenues and I was hoping you could kind of add some color to that.
Speaker 4: Todd, I really understand your frustration. I think I recognize, not just you, but all the investors, they really want to me that they should see the real results and you can have an impressive ROI eventually at some point.
Speaker 4: The color on the US are the hiding of the people. I think I'll give you three categories. And look, in the covert period, think of it really tough. You know the story, everybody was going the same thing. And now we are way over here, beyond the covert pandemic. And what we have done is, the three key areas that we added as a...
Speaker 4: new additional verticals to grow revenue. We don't want it depends completely on the flagship ascent. It is a long field cycle. We want to go into some more digital mobility platform where you have more sales opportunities, higher sales volumes.
Speaker 4: Now AWS is one area. We hired almost 75 or 80 people in last 9 months and we are investing them in their certification and the training and there is doors opening up and that's a brand new investment within like 6 or 9 months.
Speaker 4: So we hope to see some results and there is a lot of activity going on. The second area is the professional services.
Speaker 4: China is the key right now where we reinvested in, we've never invested so much in the local Chinese sales force or team specialized in the professional services.
Speaker 4: What it does is that this is the time I believe to invest in growing the business in different verticals, which is linked to fintechs in our core business. So China is another place we're investing. And of course in the US, we will continue to bring people from across our company globally and higher local. You can imagine.
Speaker 4: the magnitude and the size of the US market.
Speaker 4: We believe the reason we are late in the market because we have now enough implementation to invent the slippery chain way of doing them or dropping out from them.
Speaker 4: particularly in China and the coal markets of Asia Pacific and some now in the Europe .
Speaker 4: What it does is it has given us a much better ability to position ourselves on a multi-million dollar projects because we have experience in the Chinese market with large OEM like BMW and down-referential services. These are top-notch names and these are great reference points.
Speaker 4: to position ourselves to bid for the local US customers. In addition to not just this co-business that we're trying to position ourselves and be where the pipeline is, we want cloud building a SaaS revenue mobility. So there's a lot of action in the lot of front and you see the number, you're right, we have added
Speaker 4: 450 to 500 people. By the same time, this exercise, I'm in actually lower right now for last two weeks.
Speaker 4: We started this exercise a few weeks earlier before the Scotter ended is to find ways to be more efficient company To be more leaner to be more productive and the reason is we had to put a lot of bench I mean the number that just mentioned this is the largest bench we have ever had in our history is simply decal
Speaker 4: These are new opportunistic verticals. And we believe strongly about that we can really do a good job. Given our experience as a IT company, and now we think that we have the ability to reach out to larger customers and show them that we can build a new opportunity in the US market, not just our main business, but the new opportunity.
Speaker 4: AWS and professional services and so forth. So I think these are investment driven stuff. We watch a cash very carefully. We watch a hiring and now we are in the process aggressively to at least take out 20% of the headcount and be more efficient company. The number that you mentioned.
Speaker 4: My goal is to at least have $4 million improved bottom line in EBITDA and in the net income.
Speaker 4: So these are hard decisions but they are tough decisions. Given the environment we are in, there is inflation everywhere, there are issues everywhere. You mentioned rightly this. We have to maintain our
Speaker 4: the core team in Lahore and other offices around the world to make sure that we don't lose them because of high inflation. Everybody is middle class and they are suffering.
Speaker 4: So whatever takes to not lose our good employees, bring fresh new people to build investment in the future in the US. I think these are all right points for our data point to make sure that not only we grow the revenue in the coming course but also become very profitable, gross profit and the net income. Okay.
Speaker 7: If I was trying to model this out, given the $250 million backlog, given the long sell cycle, and also given all the exciting opportunities you just discussed, I mean a year from now, are we hoping to be doing 20 to 25 million in revenue a quarter, or is that too optimistic? Or is it growth going to be?
Speaker 4: You know, no it's not too optimistic. You're right in the money, it's not too optimistic. It's actually our own wish and goals to achieve those double the numbers. And I think when we talk about these high pipeline, look, I'm sure you're familiar. I know how much you understand how long the sea of psychology and our kind of business.
Speaker 4: We're not all the shell company which has already made these customers spend days, weeks, months
Speaker 4: narrowing shortlisting from 10 to 5 to 3 to now 2. I am giving just a generic example. And now some of them want to visit Lahore which is a very good sign.
Speaker 4: One of these deals or two of these deals in the next six months can hit the number that you're talking about. I'm pretty confident.
Speaker 4: One way to look at it is our current revenue is pretty stable.
Speaker 4: Because this quarter you didn't see any growth and we obviously could not recognize at least $2 million in Q2 because the timeline but the deal was signed and it is based in Australia and I think we can recognize that in Q3. But the real real ethnic excitement is the big deal we are working towards.
Speaker 4: day and night i mean peries follow through these customers and go through all these details the agreement so that means there across the
Speaker 4: US people sitting in Lahore doing the calls day and night with these customers, 30-40 at a time from the side and our side. So it is a very very active office in Lahore right now.
Speaker 4: I'm here and I can see that.
Speaker 4: So, and then we need some good luck also. But we are excited. We are not missing any opportunity and we like it on the corner. We know we have disappointed the market.
Speaker 4: I admit that, but you know sometimes.
Speaker 4: you don't have a lot of control. You do your best and you think you're gonna make it and then it's gonna get delayed or something else happens.
Speaker 4: We are very confident we will get some new contract in the coming months. That will change our numbers dramatically.
Speaker 7: Okay, well that's great to hear on the potential upcoming revenue growth. I hope you keep us all informed and announced some of these contracts and revenues that come in and I'll get off the call. I've taken enough of your time and I thank you for answering the questions. You're always welcome, Todd. Thank you and have a good day.
Speaker 2: Thank you.
Speaker 2: Ladies and Gentlemen if you wish to ask a question please press star 1.
Speaker 2: Our next question comes from the line of Nick Weber from Swift Rock Capital. Please go ahead.
Speaker 8: Hey guys, thanks for taking my questions. First one, could you just provide a little more insight concerning the timing of the implementation of the four million in cost reductions? Will this be immediate or implemented over the balance of the year? We have started the process.
Speaker 4: a few weeks ago and really working progress with our HR and our each head of departments have been given the target to implement these across their division and department in the companies. So I think the timeline is you'll see some value, a tangible value.
Speaker 4: If not in the third, in the fourth quarter by time, you have some severances, the timeline, all that happen. But the real I think benefit will be in the first quarter, 2024, beginning of 2020, which is about two quarters from now.
Speaker 8: Got it. Okay. And then just to make sure I'm understanding, so will the efficiency measures impact your strategic investment in the U.S. or are they mostly focused on other parts of your business?
Speaker 4: Now you are the one we are investing actually.
Speaker 4: We are very lean, both in my US operation and TA in North America, and our corporate team is very lean. Actually, we are also downsizing our US corporate offices to a bit more lean in investing in the business side of it. Now, we will be investing in people.
Speaker 4: infrastructure travel back and forth so that is really I see and everybody knows the and my team and the port this is where the big opportunities the US market and I'm very very bullish on the US simply because I know what is happening here of this struggling a lot more
Speaker 4: US has the ability to control the inflation. They can control inflation in the European market.
Speaker 4: China is a bit better but other parts of A-Pack are really struggling.
Speaker 4: The part of that I believe the US is the only place we feel it is the market for us and we'll put all our best talents just more energy and financial investment to
Speaker 4: get some penetration in this market and see some real results that we have been working for many many years.
Speaker 4: The US will continue investing and nothing will affect the UX of the investment continuum.
Speaker 8: Okay, great, thank you. And then just my last question. So you mentioned AI machine learning in your offerings. Just wondering if you provide a little more color around how this technology is implemented into your solutions.
Speaker 4: Well, you know, AI is very popular worldwide, as you know, and in our business, customers are benefiting from our different modules of implemented AI in machine learning into our offerings on a case-by-case basis.
depending on the needs, the customers, our algorithm is capable of identifying risk on application during the evaluation process for diesel loan, and to that end, we are able to train our people and specific data provided by the bank or financing companies and so forth. So I think there's lots going on in this new tool that is becoming one of the hottest tools right now.
So customer are going to benefit.
very aggressively because we are in it, we've hired some couple of MIT.
PhDs and we brought them to our facility in Lahore and they're playing a big part in building for our customers.
Okay, great, thanks. Yeah, that's it for me. Thanks for taking my questions.
Thank you.
Thank you.
At this time, this concludes our question and answer session.
If your question was not addressed during the Q&A session, please contact the NetSOL Investor Relations team by emailing them at investors at netsoltech.com or by calling them at 949-574-3860.
I did now like to turn the call back over to Mr. Gauri for his closing remarks.
Thank you for joining us today. I especially want to thank our investors for their continued support of loyal customers.
and are most dedicated employees for their ongoing contributions.
We look forward to building you on our next call. A better.
Thank you for joining us today for NetSol's fiscal second quarter, 2023 earnings call. You may now disconnect your lines. Thanks.