Q3 2024 NetSol Technologies Inc Earnings Call
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Operator: Please stand by; your program is about to begin. Good morning.
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Operator: Welcome to NetSol Technologies' third quarter 2024 earnings conference call. On the call today are Najeeb Ghauri, Chairman and Chief Executive Officer, Roger Almond, Chief Financial Officer, Patti McGlasson, General Counsel, and Naeem Ghauri, President and Founder. I would now like to turn the call over to Patti McGlasson, who will provide the necessary cautions regarding the forward-looking statements made by management during this call
Speaker Change: Good morning, welcome to <unk> Technologies' third quarter 2024 earnings conference call.
Speaker Change: On the call today are in a Jeep gory, chairman and Chief Executive Officer.
Speaker Change: Roger Almond Chief Financial Officer.
Speaker Change: My glasses.
Gori: General Counsel and I am Gori, President and founder.
Speaker Change: We'd now like to turn the call over to Pat eat My gosh.
Speaker Change: We will provide the necessary cautions regarding the forward looking statements made by management. During this call. Please proceed.
Patti L. W. McGlasson: Good morning, everyone, and thank you for joining us. Following a review of the company's business highlights and financial results, we will open the call to questions. I'll now provide the necessary cautions regarding the forward-looking statements made by management during this webinar. Please note that all the information discussed on today's call is covered under the safe harbor provisions of the Private Securities Litigation Reform Act. The company's discussion may include forward-looking statements reflecting management's current forecast of certain aspects of the company's future, and their actual results may differ materially from those stated or implied.
Speaker Change: Good morning, everyone and thank you for joining us.
Speaker Change: Following the review of the company's business highlights and financial results. We will open the call for questions I'll now provide the necessary cautions regarding the forward looking statements made by management during this call.
Speaker Change: Please note that all of the information discussed on today's call is covered under the Safe Harbor provisions of the private Securities Litigation Reform Act.
Speaker Change: The company's discussion may include forward looking statements, reflecting management's current forecast of certain aspects of the company's future and our actual results may differ materially from those stated or implied.
Patti L. W. McGlasson: These forward-looking statements are qualified by the cautionary statements contained in NetSol's press releases and SEC filings, including our annual report on Form 10-K and our quarterly reports on Form 10-Q. I would also like to point out that we will be discussing certain non-GAAP measures. The press release issued earlier today contains a reconciliation of those non-GAAP financial results to their most comparable GAAP measures. Finally, I would like to remind everyone that this call will be recorded and made available for replay at www.netsoltech.com and via a link available in today's press release. Now, I'd like to turn the call over to Najeeb. Najeeb?
Speaker Change: These forward looking statements are qualified by the cautionary statements contained in the press releases and SEC filings, including our annual report on Form 10-K, and our quarterly reports on Form 10-Q.
Speaker Change: I would also like to point out that we will be discussing certain non-GAAP measures. The press release issued earlier today contains a reconciliation of those non-GAAP financial results to their most comparable GAAP measures. Finally, I would like to remind everyone that this call will be recorded and made available for replay at www Dot and that's all tech dot com and via a link available.
Speaker Change: On today's press release, now I'd like to turn the call over to new Jeep.
Najeeb Ullah Ghauri: Thank you, Patti, and good morning, everyone. The third quarter of 2024 was another very strong quarter for our business, highlighted by revenue growth and our third consecutive quarter of profitability. In this quarter, we demonstrated NetSol's ability to deliver profitable results without the recognition of material license fees. We reported strong services revenues and consistent subscription and support revenues, which contributed to us achieving earnings per share of 3 cents for the quarter. Our ability to achieve profitability without significant license fees showcases the enhanced strength and reliability of our model as we continue to win new customers on a global scale.
Speaker Change: Jeep.
Speaker Change: Thank you Patti and good morning, everyone.
Jeep: The third quarter of 'twenty 'twenty four was another very strong quarter for our business highlighted by revenue growth and our third.
Jeep: Consecutive quarter of profitability.
Jeep: And this quarter, we demonstrated <unk> ability to deliver profitable results without the recognition of material license fees.
Jeep: We reported strong services revenues and cause some consistent subscription.
Jeep: And support revenues, which contributed to us achieving our.
Jeep: Earnings per share of three cents for the quarter.
Jeep: Our ability to achieve profitability without significant license fees showcases the enhanced strength and reliability of our model.
Jeep: As you continue to win new customers on a global scale.
Najeeb Ullah Ghauri: And these past several quarters, in particular, are an excellent example of our hybrid license and SaaS model at work. In the first and second quarters of fiscal 24, we recognized substantial license fees, which translated to consecutively profitable quarters to start the year.
Jeep: And these past several quarters in particular are an excellent example of all the hybrid license and SaaS model at work.
Jeep: And the first and second quarters of fiscal 'twenty for.
Jeep: We recognized substantial license fees, which translated to consecutively profitable quarters to start the year as.
Najeeb Ullah Ghauri: As we continue to build our customer base, these new contracts are now generating services revenues for our business, with services revenues in the third quarter of fiscal 2024 increasing approximately 60% compared to the third quarter of fiscal 2023. This is an encouraging development as we have traditionally needed to recognize licensees in a given quarter to achieve profitability. We have a healthy sales pipeline of both license and SaaS deals in our established market.
Jeep: As we continue to build our customer base. These new contracts are now generating services revenues for our business with the services revenues in the third quarter of fiscal 'twenty 'twenty, four increasing approximately 60% compared to the third quarter of fiscal <unk>.
Jeep: 23.
Jeep: This is an encouraging development.
Jeep: We have traditionally needed to recognized license fees in a given quarter to achieve profitability.
We have a healthy sales pipeline of both license and SaaS deals.
Jeep: Published markets.
Najeeb Ullah Ghauri: And we are intently focused on building similar pipelines in our more nascent markets, specifically the United States. We're also very excited by the progress we're making advancing our initiatives in the U.S. market. We're noticing strong interest from U.S.-based customers, specifically in the professional services segment of our AWS cloud services, Data Analytics, and AI-based products.
Jeep: And we are intently focused on building similar pipelines in our more nascent markets specifically the United States.
Jeep: We're also very excited by the progress, we're making advancing our initiatives in the U S market.
Jeep: And then noticing strong interest from the USPS customers specifically in the professional services segment of our AWS cloud services there.
Jeep: They've done the analytics and AI based products, we anticipate to leverage the phone service in North America and create additional revenue stream.
Najeeb Ullah Ghauri: We anticipate leveraging the foreign service talent in North America and creating additional revenue streams. We believe that there is tremendous potential for growth in this market, and we are strategically allocating capital to make sure they are ideally positioned to capture our SaaS offerings in particular and gaining some strong early traction in this region, with our Autos Digital Retail and Mobility platform currently live in 58 Mini USA dealerships across the US and with AutoNation powering the back end of their recently launched micro-lease marketplace.
Jeep: We believe that there is tremendous potential for growth in this market.
Jeep: And we are strategically allocating capital to make sure they are ideally positioned to capture.
Jeep: Our SaaS offering in particular.
Speaker Change: I'm getting some strong early traction in this region.
Speaker Change: With all the autos digital retail and mobility platform currently live in 58 mini USA dealerships across the U S and with auto nation powering the back end of their recently launched micro leave marketplace. Our successful successful journey with me.
Najeeb Ullah Ghauri: Our successful journey with Mini Anywhere and AutoNation Mobility has opened new opportunities in the retail and mobility sector in the US. The US market is home to thousands of major auto franchise dealerships across the country looking to adopt omni-channel digital retail solutions and modernize their vehicle sales and purchase processes.
Speaker Change: Anywhere and Autonation mobility has opened new opportunities in the retail and mobility sector in the U S.
Speaker Change: The U S market is home to thousands of major auto franchise dealerships across the country looking to adopt omnichannel digital retail solution and modernize.
Speaker Change: But he can sales and purchase process.
Najeeb Ullah Ghauri: This interest has resulted in strong pipeline activity with OEMs and dealer groups of various sizes, demonstrating interest in our Autos product. With our visibility today, we believe that we will be able to achieve at least $28 million in subscription and support revenues for the full fiscal year 2024. We are intently focused on the continuous innovation and improvement of our products and offerings to meet the diverse demands of our customers. To that end, we have begun leveraging deep learning AI algorithms into our business processes and have launched a company-wide AI initiative to both reduce internal costs and enhance external quality improvement.
Speaker Change: This interest has resulted in strong pipeline activity with OEM and dealer groups of various sizes demonstrating interest in our auto products.
Speaker Change: With our visibility today, we believe that we will be able to achieve at least $28 million in subscription and support revenues with a full fiscal year 2024.
Speaker Change: We are intently focused on the continuous innovation and improvement of our products and offerings to meet the diverse demand of our customers.
Did that and we have begun leveraging deep learning algorithms into our business processes and have launched a companywide.
Speaker Change: Our initiative to both reduce internal cost and enhance external quality improvements.
Najeeb Ullah Ghauri: As a longstanding global business services and asset finance solution provider, we have nearly 27 years of internal program management data, which we intend to use to train our AI use cases and further enhance efficiencies for both us and our customers. We're also in the process of creating industry-leading AI use cases for our clients to help improve their business metrics with the anticipated launch of several new AI-based offerings in the calendar year, which is something that we are very excited about and will keep you apprised as we continue to progress this initiative.
Speaker Change: As a long standing global business services and asset finance solution providers, we have nearly 27 years of internal program management data, which we intend to use to train our AI use cases, and further enhance efficiencies for both us and our customers.
Speaker Change: You also in the process of creating industry, leading AI use cases for our clients to help improve their business metrics with an anticipated launch of several new yeah. Your best offerings in the calendar year.
Speaker Change: But it's something that we're very excited about and we'll keep you apprised as you continue to progress this initiative.
Najeeb Ullah Ghauri: Overall, we are very pleased with our results in both the third quarter and the fiscal year-to-date. We are beginning to realize the strengths of our business model, as exemplified by consistent revenue improvement and three straight quarters of profitability. Given our results, we remain confident in our expectations of double-digit organic revenue growth and improved margins, and we are on pace to reach our target revenue range of between $60 to $61 million for the full fiscal year of 2024. I now turn the call over to Raj Almond, our CFO, to go over our financials for this quarter. Roger.
Speaker Change: Overall, we are very pleased with our results in both the third quarter and the fiscal year to date.
Speaker Change: We are beginning to realize the strengths of our business model exemplified by consistent revenue improvement and three straight quarters of profitability.
Speaker Change: Given our results we remain confident in our expectations of double digit organic revenue growth and improved margins and we are on pace to reach our target revenue range of between $60 million to $61 million with a full fiscal year of 2024.
Speaker Change: I now turn the call over to Roger Almond, our CFO to go over our financials from this quarter Roger.
Roger Kent Almond: Before I go over our financial results, I would like to provide some additional information on the selection of our new auditor, Fortune CPA. On May 6, 2024, BF Borgers was dismissed as the Independent Public Accounting Firm of NetSol Technology as a result of BF Forger's well-publicized suspension from appearing and practicing before the FCC, which affected hundreds of public companies.
Roger Kent Almond: Thanks, Jim.
Roger Kent Almond: Four I go over our financial results I would like to provide some additional information on the selection of our new Auditor Fortune CPA.
Roger Kent Almond: On May six 2020 for VF Forgers was dismissed as the independent public accounting firm Radnet cell technologies as a result of beer forgers, well publicized suspension peering and practicing before the FCC, which affected hundreds of public companies. The audit Committee and the board of directors mobilized quickly.
Roger Kent Almond: The Audit Committee and the Board of Directors mobilized quickly to approve this dismissal and appointment of Fortune CPA to serve as the company's independent registered public accounting firm for both the quarter-ended March 31, 2024, and the year-ended June 30, 2024. We believe that Fortune CPA is well suited to assist us in our auditing responsibilities, and we look forward to working with them going forward. With that, I will now go over our financial results.
Roger Kent Almond: Proving this dismissal and appointment at Fortune CPA to serve as the company's independent registered public accounting firm for both the quarter ended March 31st 2024, and the year ended June 32024.
Roger Kent Almond: We believe the unfortunate CPA is well suited to assist us in our auditing responsibilities and we look forward to working with them going forward.
Roger Kent Almond: Our total net revenues for the third quarter of fiscal 2024 were $15.5 million, compared with $13.5 million in the prior year period. On a constant currency basis, total net revenues were $15.6 million. License fees for the third quarter of fiscal 2024 were $558,000, compared with $2 million in the prior year period. License fees, on a constant currency basis, were $577,000.
Roger Kent Almond: With that I will now go over our financial results.
Roger Kent Almond: Recurring revenues, or subscription and support revenues, for the third quarter of fiscal 2024 were $7.1 million compared to $6.7 million in the prior year period. Subscription and support revenues on a constant currency basis were $7.2 million. Total services revenue for the third quarter of fiscal 2024 were $7.8 million, compared to $4.9 million in the prior year period. Total services revenue for the third quarter of 2024 on a constant currency basis were $7.8 million.
Roger Kent Almond: Our total net revenues for the third quarter of fiscal 2024 were $15 5 million compared with $13 5 million in the prior year period on.
Roger Kent Almond: On a constant currency basis total net revenues were $15 6 million.
Speaker Change: I can see for the third quarter of fiscal 2024 over 558000, compared with 2 million in the prior year period.
Speaker Change: And fees on a constant currency basis were 577000.
Speaker Change: Recurring revenues or subscription and support revenues for the third quarter fiscal 2024 was $7 1 million compared with $6 7 million in the prior year period.
Speaker Change: Gibson and support revenues on a constant currency basis were $7 2 million.
Speaker Change: Total services revenue for the third quarter of fiscal 2024 was $7 8 million compared with $4 9 million in the prior year period total services revenue for the third quarter of 2024 on a constant currency basis were $7 8 million.
Roger Kent Almond: Total Cost of revenues was $8 million for the third quarter of fiscal 2024 compared to $8.8 million in the third quarter of fiscal year 2023. Gross profit for the third quarter of fiscal 2024 was $7.5 million or 48% of net revenues compared with $4.7 million or 35% of net revenues in the prior year period. Gross profit was $7.2 million, or 46% of net revenues on a constant currency basis. Operating expenses for the third quarter of fiscal 2024 were 6.2 million, or 40 percent of sales compared to 5.6 million, or 42 percent of sales in the same period last year.
Speaker Change: Total cost of revenues.
Speaker Change: It was 8 million for the third quarter of fiscal 2024 compared to $8 8 million in the third quarter of fiscal year 2023.
Speaker Change: Gross profit for the third quarter fiscal 2024, or $7 5 million or 48% of net revenues compared with $4 7 million or 35% of net revenues in the prior year period gross profit was $7 2 million or 46% of net revenues on a constant currency basis.
Speaker Change: Operating expenses for the third quarter of fiscal 2024 were $6 2 million or 40% of sales compared to $5 6 million or 42% itself in the same period last year.
Roger Kent Almond: On a constant currency basis, operating expenses for the third quarter were $6.3 million, or 41% of sales. Turning to our profitability metrics, Gap Net Income, Attributed Role to NetSol for the 3rd Quarter of Fiscal 2024 Total $328,000 or $0.03 per diluted share, compared with a gap net income of $2.5 million or $0.23 per diluted share in the third quarter of fiscal 2023. Included in our net income in the quarter was a loss of $964,000 on foreign currency exchange transactions, compared to a gain of $5.4 million in the third quarter of 2023.
Speaker Change: On a constant currency basis operating expenses for the third quarter were $6 3 million.
Speaker Change: 41% of sales.
Speaker Change: Turning to our profitability metrics.
Speaker Change: GAAP net income attributable to that so for the third quarter of fiscal 2024 totaled 328000 or three cents per diluted share.
Speaker Change: Compared with a GAAP net income of $2 5 million or 23 cents per diluted share in the third quarter of fiscal 2023.
Speaker Change: Included in our net income in the quarter was a loss of $964000 foreign currency exchange transactions.
Speaker Change: Compared to a gain of $5 4 million in the third quarter of 2023.
Roger Kent Almond: Because we operate in several geographical regions, a significant portion of our business is conducted in currencies other than the U.S. dollar, which causes a decrease in the value of the U.S. dollar compared to foreign currency exchange rates. General has the effect of increasing our revenues, but it also increases our expenses denominated in currencies other than the U.S. dollar. Similarly, as the U.S. dollar gains strength relative to the foreign currency exchange rate, it tends to reduce our revenues, but it also reduces our expenses denominated in currencies other than the U.S. dollar.
Speaker Change: Because we operate in several geographical regions a significant portion of our business is conducted in currencies other than the U S. Dollar.
Speaker Change: A decrease in the value of the U S dollar compared to foreign currency exchange rates generally has the effect of increasing our revenues, but it also increases our expenses denominated in currencies other than the U S dollar.
Lee: Hello, Lee as the U S dollar gained strength relative to foreign currency exchange rate it tends to reduce our revenues, but it also reduces our expenses denominated in currencies other than U S. Dollar.
Roger Kent Almond: Moving to our non-GAAP metrics, non-GAAP-adjusted EBITDA for the third quarter of fiscal 2024 was $810,000, or $0.07 per diluted share, compared with non-GAAP-adjusted EBITDA of $3.3 million, or $0.29 per diluted share, in the third quarter of the previous fiscal year. Please see the reconciliation schedules contained in our earnings release for our revised calculations of adjusted EBIT Turning to our balance sheet, at quarter end, we had cash and cash equivalents of approximately $12.3 million, or approximately $1.08 per diluted common share. Total stockholders' equity, total NetSol stockholders' equity at March 31, 2024, was $35.3 million or $3.10 per share. That concludes my prepared remarks. I'll now turn the call back over to Najeeb.
Lee: Moving to our non-GAAP metrics non-GAAP adjusted EBITDA for the third quarter of fiscal 2024 was 810000 or seven cents per diluted share compared with non-GAAP adjusted EBITDA of $2 3 million or 29 cents per diluted share in the third quarter of the previous fiscal year.
Lee: Please see the reconciliation schedules contained in our earnings release for our revised calculations of adjusted EBITDA for the quarters ended March 31, 2024 and 2023.
Lee: Turning to our balance sheet at quarter end, we had cash and cash equivalents of approximately $12 3 million or approximately $8 eight per diluted common share total stockholders' equity totaled net stockholders equity at March 31, 2024 was $35 3 million or $3.
Lee: And 10 cents per share.
Speaker Change: That concludes my prepared remarks, I'll now turn the call back over to new Jeep.
Speaker Change: Thank you Roger.
Najeeb Ullah Ghauri: Thank you, Roger. We are very pleased to have delivered another strong quarter for our business and remain committed to driving continued growth of value for our shareholders in the fourth quarter as we close out the fiscal year. With that, I'd like to turn it over to the operator for any questions or Q&A.
Speaker Change: We are very pleased to have delivered another strong quarter for our business and remain committed to driving continued growth of <unk>.
Speaker Change: Value for our shareholders in the fourth quarter as you close out the fiscal year that I like to turn the call over to the operator for any questions or Q&A.
Speaker Change: Peter.
Operator: And at this time, if you would like to ask a question, please press the star and 1 on your telephone keypad. You may withdraw your question by pressing star 2. Once again, to ask a question, please press the star and 1 on your telephone keypad. We'll pause for a moment to allow questions to queue. We'll take our first question from Todd Felte with AD Financial Services. Please go ahead.
Speaker Change: And at this time, if you would like to ask a question. Please press the star one on your telephone keypad.
Speaker Change: We draw your question by pressing star two.
Speaker Change: Once again to ask a question. Please press star one on your telephone keypad will pause a moment to allow questions to queue.
Speaker Change: We'll take our first question from Todd Fowler with.
Speaker Change: Financial services. Please go ahead.
Todd Felte: Hey, congratulations on a solid quarter and really nice to see the growth in recurring revenues and improvement in margins. So just kind of breaking it down, every year since 2015, our annual revenue has been kind of stuck in the range of $51 million on the low side and $61 million on the high side. And we've been hearing about our healthy pipeline and sales for many quarters with tremendous potential for growth. So do you think that fiscal year 2025 is a year that we can break out of this revenue range that we've been in the last 10 years?
Todd Fowler: Hey, congratulations on a solid quarter and a really nice to see the growth and the reoccurring revenues and improvement in margins. So just kind of breaking it down every year since 2015, our annual revenue has been kind of stuck in the range of $51 million on the low side and 61 million on the high side.
Speaker Change: And we've been hearing about our healthy pipeline and sales for many quarters with tremendous potential for growth. So do you think that our fiscal year 2025 is a year that we can break out of this revenue range that we've been in the last 10 years.
Najeeb Ullah Ghauri: First of all, thank you so much for your comment, Todd. I appreciate your comments. Absolutely. I'll have Naeem also jump in in a minute.
First of all thank you so much for your comments Todd I. Appreciate your comments absolutely I have the name of the jump in in a minute look we are very confident we have turned the corner. This fiscal year as it's proof Ah three quarters continuously yes, we've gone through very difficult time covert posco.
Najeeb Ullah Ghauri: Look, we are very confident that we have turned the corner. This fiscal year is proof of three quarters continuously. Yes, we've gone through a very difficult time, COVID, and post-COVID, and many other challenges. But our business is really picking up in the sense that customers keep calling us, the current customers, whether they're in APAC or China or North America or even Europe, to continue to do business with us in new markets and new locations.
Speaker Change: And many other challenges, but our business is really picking up and in a sense that customers keep calling of the current customers that it didn't it back with China or North America or in Europe to continue to do business with us the new markets, our new location. So there's a lot of exciting.
Najeeb Ullah Ghauri: There's a lot of excitement in the company, Todd, because there are new things opening up for our company, and this is why we feel that... next fiscal year could be our strongest fiscal year, absolutely, and there's a very positive response from new prospects, and the pipeline is healthy, the U.S. market is strong for us, and we're making good progress in the U.S. on some new developments, and they will be shared with you Let me have Naeem jump in here to give his color. Naeem, go ahead.
And the company Todd because there's.
Speaker Change: New things opening up for our company and this is why you feel that now.
Speaker Change: Next fiscal year will be could be our strongest fiscal year, absolutely and there's there's a very positive.
named: Response from new prospects and pipeline is healthy U S market is strong for us and we're making good progress in the U S. On some new development then there will be shared with you when they become material. Let me have named jump in hate to give his color named go ahead.
Naeem Ullah Ghauri: I think you are right about just the last four to five years in terms of not getting above this ceiling we have, about 60 million, and I think there are two very specific reasons for this. One was a product transition from our previous generation to Ascent that disrupted some sales by the time we hit inflection. In a sense, we were hit by COVID. And then during COVID, we also made a decision to start changing our financial model in terms of replacing SAS, sorry, replacing licensed income with SAS. So these three periods had an impact. I really strongly believe now that we're out of them. [inaudible]
Speaker Change: Hi, Todd.
Todd Fowler: I think we you are right about just the last four to five years.
Speaker Change: Getting above this.
Speaker Change: We have about $60 million.
Speaker Change: It's true it's for very specific reasons for this one was a product transition from our previous generation to assign that disrupted some sales and by the time, we hit infection.
Speaker Change: In a sense, we were hit by Covid.
Speaker Change: And then you're in Covid. We have also been made a decision to start changing our credential.
Speaker Change: Model and Hamzah I'll, replacing sauce.
Speaker Change:
Speaker Change: I'm, sorry, because the licensing process. So these three are periods had an impact.
Speaker Change: I really strongly believe now there were articles.
Speaker Change: Or times of transition and we are going to hit a tipping point.
Speaker Change: Where we were a breakout of the 60 million fatalities.
Najeeb Ullah Ghauri: I want to add one more thing for Todd and for all of the listeners. We've been focusing on organic growth and the new thing that Naeem just mentioned in the innovation, and so forth. So we've not done any M&A for many, many years by choice, we believe. Gradually, surely building organic business with amazing customer global references, and NetSol is the most well-liked company in terms of our delivery record. Even our competitors frequently compliment Naeem on his work in the different locations.
Speaker Change: Oh, and I had one more thing for Todd and for the all of the listeners we've been focusing on organic growth and the new thing that name you just mentioned and the innovation and so forth and so we've.
Speaker Change: Not done any of them in there for many many years buys choice we believe.
Speaker Change: Gradually.
Speaker Change: Surely building organic business with amazing customer global references.
Speaker Change: And that's all is most of our life company in terms of our delivery record.
Speaker Change: And our competitors are going to complement named frequently and the different locations. So I think there's a record on trajectory I think we are in the right try it of natural growth and right now we are focusing on doing things organically and when the time comes and when we're ready.
Najeeb Ullah Ghauri: So, based on our record and trajectory, I think we are on the right track of natural growth, and right now, we're focusing on doing things organically. And when the time comes, when we are ready in terms of balance sheet, then we will look into M&A opportunities. But for right now, organic growth will be, and we're pretty confident next fiscal year will be a record year for us.
Speaker Change: Balance sheet, and we looked into and then the opportunity but for right now are getting to be growing and we're pretty confident next fiscal year.
Speaker Change: He is a record year for us.
Todd Felte: That's great to hear. And just to clarify, I'd said the revenue range was, I think, $51 to $68 million. And I think that $67.8 million was our high in revenue for the last 10 years. And I look forward to us getting in the 70s, 80s, and hopefully above 100 in the next few years. So just a follow-up question, now that we're seemingly showing and forecasting consistent profitability moving forward, at least that's what I'm interpreting.
Speaker Change: That's great to hear and just to clarify I've said the revenue range was I think 51 to 68 million and I think that's I think $67 8 million was our high on revenue. The last 10 years and I look forward to us getting in the seventies eighties, and hopefully you know above 100.
And the next few years. So just a follow up question now that we're seemingly on you know showing in forecasting consistent profitability.
Speaker Change: Moving forward at least that's what I'm interpreting them why do you think our stock trade significantly below our book value, which is now over $3 a share while other companies that you know also kind of use and develop AI and I know, we're moving into that area. These other companies, especially the profitable ones are trading at <unk>.
Todd Felte: Why do you think our stock trades significantly below our book value, which is now over $3 a share, while other companies that, you know, also kind of use and develop AI, and I know we're moving into that area, these other companies, especially the profitable ones, are trading at multiples higher?
Multiples higher.
Najeeb Ullah Ghauri: Well, I can say what I feel and so can Naeem, and I'll ask you what you think is the reason, coming from an outsider who can see the market differently than we do. But look. Yes, it is.
Speaker Change: Well.
Speaker Change: I can say, what I feel and talking to them and then I'll ask you. What do you think is the reason coming from outside of who can see market differently than we do but look.
Najeeb Ullah Ghauri: We don't like it. This has been a company listed for many, many years on NASDAQ, and we remain focused. We don't go out the extra mile other than our program we have, the IMS. They're doing a good job, but we don't go out of our way to do conferences because we've been really focused on managing our business effectively and costs also efficiently. So there will be activities in the coming month where we can really start talking this talk at conferences.
Dana: Yes. It is we don't like it this is dana can be lifted but many many years on NASDAQ and we remain focus we don't go out extra money other than other programs, we have diverse they're doing good job, but we don't go out of extra.
Dana: Extra mile to do Congresses, and because we've been really focused on managing our business effectively.
Speaker Change: And cost also efficiently. So there will be activities in the coming months that we can really start talking the stock and Congresses, and John and Walter I'm, putting a program together for the company over the next few months. Then now you feel comfortable confident that we can go and tell the story again, so hopefully they'll have a bunch of impasse.
Najeeb Ullah Ghauri: And John and Walter are putting a program together for the next few months. Now we feel comfortable, confident that we can go and tell the story again. So hopefully, that will have a positive impact.
Correct.
Todd Felte: Okay, that's great to hear. You know, that kind of emulates my thoughts.
Speaker Change: Okay. That's that's great to hear and you know that that kind of emulates my thoughts and you know I think that will change and I think the market will fairly valued US you know once we can hit you know if we can hit a $20 million quarter. You know I don't think we've we've done that in quite some time.
Najeeb Ullah Ghauri: And, you know, I think that'll change. And I think the market will fairly value us once we can hit, you know, if we can hit a $20 million quarter. You know, I don't think we've done that in quite some time. If a lot of these other AI companies are having success, that's why they trade at these multiples, because they expect revenue growth. So hopefully, we're trending in that direction, and we can see the hockey stick growth. Absolutely not.
Speaker Change: Sure.
Speaker Change: There's a lot of these other companies.
Speaker Change: Companies are having and Thats why they trade at these multiples because they expect the revenue growth. So hopefully we're trending that direction and we can see the hockey stick growth.
Najeeb Ullah Ghauri: Absolutely, absolutely.
Speaker Change: Absolutely absolutely.
Todd Felte: Thank you, Doc. I'll fall back in the queue. Thank you. Thank you. And as a reminder, it is star and one on your telephone.
Josh: Thank you Josh I'll fall back in the queue. Thank you.
Operator: Thank you. And as a reminder, it is star and one on your telephone keypad. If you would like to join the queue, press star and one. We will move next with Christopher Vesali from Vesali Career Partners. Please go ahead.
Speaker Change: Thank you and as a reminder, it is star one on your telephone keypad, if you would like to join the queue and.
Speaker Change: One we've almost next well go to Christopher the Sally Weird for Sally came about partners. Please go ahead.
Christopher Sally: Hey, guys. Thanks for taking the question provided a bit of color on this on the call, but did you provide any additional context in detail.
Speaker Change: Just how AI is particularly interacting with and enhancing your products.
Christopher Vesali: Yeah, Naeem is a champion of AI and the whole company, and there's a lot going on, and we'll give you some color where we are. Naeem, go ahead, please. Yeah, hi, Chris. We plan to handle AI very holistically.
Yeah name as a champion of AI and the whole company and there's lots going on and who gave you. Some color. Whoever you are named go ahead. Please.
Naeem Ullah Ghauri: Hi Chris, we would like to handle AI very holistically. I think there's a lot of hype that's been created by a lot of companies. I think we looked at it totally differently, and we've been working on it quietly for some time now.
Chris: Yeah, Hi, Chris well, what kind of handle it very holistically.
Speaker Change: I think there's a lot of hype.
Speaker Change: We get hit by a lot of companies.
Speaker Change: Ah I think when we looked at a totally different thing have you been working on it quite busy for some time now so our approach is a crystal ball to have.
Naeem Ullah Ghauri: So our approach is, first of all, have a Center of Excellence and an AI lab internally because internally, we could benefit from building apps and products which will create efficiencies in our own internal delivery process, from project management to software testing, automated testing, software engineering, human resources, project planning, resource management. There are so many different horizontal areas for them to build their own POCs and use cases using our expertise and teaching leadership. So our practice will leverage the relationships we've built over the last 30 plus years.
Speaker Change: A center of excellence and an AI lab entirely.
Speaker Change: Because internally we benefit.
Speaker Change: Problem building.
Speaker Change: Apps and products.
Speaker Change: To create efficiencies.
Speaker Change: In our own in Panama.
Speaker Change: Delivery process from project management to software testing automation automated testing our software engineering.
Speaker Change: Human Resources Park project planning resource planning windows at so many different horizontal are areas that we can process within the company. So that's a benefit.
Speaker Change: Leveraging or on our business.
Speaker Change: Secondly, as.
Speaker Change: Within the AI lab reworked provide a service to.
Speaker Change: All of Us I'm sure.
Speaker Change: To build their own U S citizen, who use cases, using our expertise and thought leadership.
Speaker Change: So our practice.
Speaker Change: We'll leverage the relationships built over the last year.
Naeem Ullah Ghauri: So instead of our clients investing in their own AI initiatives organically, we are able to provide that service to them. So we will be reaching out to our clients in the course of the next quarter or two with our offering. And last but not least, within our lab, we're also building use cases that will have a direct impact on our clients' businesses and improve their business efficiencies, and so on.
Speaker Change: Yes.
Speaker Change: So we set up our clients investing into their own Ah yeah initiatives.
Speaker Change: Organically, we were able to provide that service to them. So we wouldn't be reaching out to our minds.
Speaker Change: And in the course of the next corporate true with our offering and last not least.
Speaker Change: Within all of that we're also building use cases are products that would have a direct impact on our clients' businesses and improving their business efficiencies and so on so these are complementary products.
Naeem Ullah Ghauri: So these are complementary products that stand next to Ascent and Autos. These could be within our API-first approach where we plug and play them into the infrastructure, and we also want to be known as an AI-first company, where Ascent and Autos have inbuilt AI modules that allow the customer to do so much more with less people as opposed to what they do now. So I think we are doing a very comprehensive program, trying to build AI into our product set, also into our [inaudible]. At some point, you'll start to see an impact of us selling products to our clients in addition to our traditional products.
Speaker Change: Let's turn next to a center in autos.
Speaker Change: This could be.
Speaker Change: I first approach, where we do have.
Speaker Change: Our plug and play them into their infrastructure.
Speaker Change: And we also want to be known as a.
Speaker Change: Company, where our sense in autos have inbuilt modules that allow.
Speaker Change: Allow the customers to do so much more with less people as opposed to doing now so I think.
Speaker Change: We are doing a very comprehensive.
Speaker Change: Program are trying to build AI into all.
Speaker Change: Our product set.
Speaker Change: So until our.
Speaker Change: Business and how we deliver.
Speaker Change: I think you'll start to see those impacts and how our operating cost that was affected.
Speaker Change: By being more efficient.
Speaker Change: Uh huh certain delivery high.
Speaker Change: Quality and then.
Speaker Change: At some point, you'll start to see an impact of course.
Speaker Change: Selling products to our clients in addition to our traditional products.
Speaker Change: Got it got it okay. That's good to know thank you that's all for me.
Speaker Change: Thank you.
Operator: 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 NetSol's Investor Relations team by emailing them at NetSol@imsinvestorrelations.com or by calling them at 949-574-0099. I would now like to turn the call over to Mr. Ghauri for his closing remarks.
Speaker Change: Thank you.
Speaker Change: This concludes our question and answer session. If your question was not addressed during the Q&A session.
Speaker Change: <unk> Investor relations team by E mailing them at Nashville at I M S Investor relations dot com or by calling them at <unk>.
Speaker Change: <unk> 49.
Speaker Change: 574380.
Speaker Change: Now I'd like to turn the call over to.
Mr Gori: Mr Gori.
Mr Gori: His closing remarks.
Najeeb Ullah Ghauri: Thank you for joining us today. I'm especially excited to see our global team executing on every front as it reflects in our quarterly performance and the future direction. I want to thank our investors for their continued support, our very loyal customers, and, of course, our dedicated employees worldwide for their ongoing contribution. I look forward to updating you on our next call. Thank you, and have a good day.
Mr Gori: Thank you for joining us today, I'm, especially more excited to see our global team executing and every friend as it reflects in our quarterly performance and the future direction.
Mr Gori: I, thank our investors for their continued support.
Mr Gori: Very loyal customers and of course, our dedicated employees worldwide for their ongoing contributions I look forward to updating you in our next call.
Mr Gori: And have a good day.
Operator: Thank you for joining us today for NetSol's Fiscal Third Quarter 2024 Earnings Call. You may now disconnect.
Speaker Change: Thank you for joining us today for Nitzel fiscal third quarter 2024 earnings call you may now disconnect.
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