NetSol Technologies Reports Record Revenue and Net Income for Fiscal First Quarter 2008

GAAP Net Income Increased to a Record $1.8 Million, or $0.08 per Share; EBITDA Increased to a Record $2.8 Million, or $0.12 per Share; Revenue Increased 48% Year-Over-Year to a Record $8.7 Million

CALABASAS, CA -- (MARKET WIRE) -- 11/08/07 -- NetSol Technologies Inc. ("NetSol") (NASDAQ: NTWK), a multinational provider of IT services and enterprise software to the financial services industry, today announced financial results for the fiscal first quarter 2008, ended September 30, 2007.

Fiscal First Quarter 2008 Financial Highlights

--  Revenues increased 48% year-over-year to a record $8.7 million
    --  Services increased 73% year-over-year to $5.2 million
    --  License fees increased 21% year-over-year to $1.9 million
    --  Maintenance fees increased 22% year-over-year to $1.6 million
--  Gross margin increased to 61% compared to 50% in the prior year period
--  Operating income improved to $2.2 million compared to an operating loss
    of $0.2 million in the year ago period
--  GAAP net income increased to a record $1.8 million, or $0.08 per share,
    versus a loss of $1.3 million or ($0.08) per share in the year ago period
--  EBITDA increased to a record $2.8 million, or $0.12 per diluted share
--  Full year fiscal 2008 organic revenue growth forecasted to be 25
    percent to 30 percent above fiscal year 2007 levels

Najeeb Ghauri, chairman and chief executive officer of Netsol, stated, "Fiscal year 2008 begins on a strong foundation as revenue, GAAP net income and EBITDA each set new all-time record highs driven by robust double digit growth in services, license sales and maintenance fees. Growth within our IT consulting services business was especially strong as we continue to expand our range of vertical market expertise, as evidenced by our entrance into the fast growing market for Hospital Management Systems (HMS) with a new contract engagement with a major public sector hospital. While new contracts wins and expanded relationships with existing customers supported our impressive top line expansion, the results of our operating efficiency initiatives, and the leverage we are gaining internally from our offshore development resources, were equally impressive. Improved global operating efficiencies allowed us to reduce our total quarterly operating expense while driving top line revenue growth 48% over the same period. Overall, we are extremely pleased with our fiscal first quarter performance which supports our optimism for full year growth in revenues and profitability for fiscal 2008."

NetSol Technologies Inc. reported record consolidated revenues of $8.7 million for the first quarter of fiscal year 2008, a 48% increase compared to the $5.9 million in revenues reported for the same period in fiscal year 2007. Consolidated gross profit for the first quarter was approximately $5.2 million, an increase of 78% as compared to the prior year. Gross margin for the first quarter of fiscal year 2008 was 61% compared to 50% in the prior year period.

GAAP (Generally Accepted Accounting Principles) net income for the first quarter of fiscal year 2008 was a record $1.8 million, or $0.08 per basic and diluted share, compared to a GAAP net loss of $1.3 million, or ($0.08) per basic and diluted share, reported in the first quarter of fiscal year 2007. EBITDA for the first quarter was a record $2.8 million, $0.13 per basic share or $0.12 per diluted share, compared to negative EBITDA of $353 thousand, or a loss of ($0.02) per basic and diluted share, in the first quarter of fiscal year 2007.

EBITDA is defined as earnings before interest, taxes, depreciation and amortization. The Company uses EBITDA as a measure of the Company's operating trends. Investors are cautioned that EBITDA is not a measure of liquidity or of financial performance under Generally Accepted Accounting Principles (GAAP). The EBITDA numbers presented may not be comparable to similarly titled measures reported by other companies. EBITDA, while providing useful information, should not be considered in isolation or as an alternative to net income or cash flows as determined under GAAP. Consistent with the SEC Regulation G, the non-GAAP measures in this press release have been reconciled to the nearest GAAP measure, and this reconciliation is located under the financial table heading "Reconciliation to GAAP."

NetSol ended the fiscal first quarter of 2008 with approximately $4.8 million dollars in cash and cash equivalents.

Fiscal First Quarter 2008 Business Highlights

--  Appointed Mitch Van Wye vice president of development and chief
    operating officer for NetSol North America and Alexa Bradley as head of
    U.S. sales for NetSol North America

--  Restructures management team in UK operation

--  Global NetSol corporate rebranding initiative completed among key
    geographic regions: NetSol Asia Pacific, NetSol North America and NetSol
    EMEA

--  IT services contract win from a major public sector hospital
    highlights NetSol's penetration into Hospital Management Systems (HMS)

--  NetSol awarded the contract for the implementation of the Motor
    Vehicle Registration System (MVRS) for all the 34 districts of the province
    on Punjab, Pakistan

--  Blue-chip motor finance company in Australia licenses LeaseSoft's
    Retail Finance Solution

--  BMW financial services CEC Finance Hong Kong division went live with
    NetSol's LeaseSoft Retail solution

--  Latest edition of LeasePak 6.0 released for general availability

--  Signed a LeasePak contract with a multinational construction equipment
    manufacturer's finance captive in the U.S. for rollout of the company's
    equipment and vehicle dealership leasing worldwide

--  Signed a new software license and system implementation contract with
    a Fortune 50 blue-chip worldwide IT provider to support the company's
    equipment leasing operations globally

--  Expanded client relationships with Key Bank, Yamaha Motor Finance,
    Pentech Finance and a major equipment company

--  Established an ISV partnership with a global Fortune 50 IT provider
    

The Company's subsidiary, NetSol Technologies, Ltd, a Pakistani company listed on the Karachi Stock Exchange (Symbol: NETSOL), released its September 30, 2007 fiscal first quarter 2008 results on October 31, 2007. These results may be found on the Karachi Stock Exchange website www.kse.com.pk. The subsidiary's results represent only a portion of the Company-wide results.

Conference Call Information

NetSol Technologies will host a conference call at 11:00 a.m. ET (8:00 a.m. PT) today to review these results. The conference call will be web cast live and will be accompanied by a PowerPoint presentation, both may be accessed online at: http://www.netsoltek.com/investors/investor_relations.htm. To access the live teleconference investors and analysts in North America may dial +1 (877) 407-8033 or when calling internationally dial +1 (201) 689-8033.

An audio replay of the conference call will be available approximately one hour following the conclusion of the call and will be available for 30 days. To access the replay in North America dial +1 (877) 660-6853 or when calling internationally dial +1 (201) 612-7415, using replay account code # 286 and conference ID # 258104. An archived replay of the conference webcast will also be available on the NetSol Technologies web site at http://www.netsoltek.com/investors/investor_relations.htm.

About NetSol Technologies

NetSol Technologies (NASDAQ: NTWK) is a multinational provider of IT services and enterprise solutions to the financial services industry. By utilizing its worldwide IT design, development, quality assurance (QA), and project management resources, NetSol delivers high-quality, cost-effective portfolio management solutions for equipment and vehicle finance, as well as IT services ranging from consulting and application development to systems integration and development outsourcing. NetSol's commitment to quality is demonstrated by its achievement of both the ISO 9001 and SEI (Software Engineering Institute) CMMi (Capability Maturity Model) Level 5 assessments, a distinction shared by fewer than 100 companies worldwide. NetSol Technologies' clients include Fortune 50 manufacturers, global automakers, financial institutions, technology providers, and governmental agencies. Headquartered in Calabasas, California, NetSol Technologies has operations and/or offices in London, San Francisco, Adelaide, Beijing, Bangkok and Lahore, Pakistan.

To learn more about NetSol Technologies Inc., visit www.netsoltek.com.

Forward-Looking Statements

This press release may contain forward-looking statements relating to the development of the Company's products and services and future operation results, including statements regarding the Company that are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. The words "believe," "expect," "anticipate," "intend," variations of such words, and similar expressions, identify forward looking statements, but their absence does not mean that the statement is not forward-looking. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Factors that could affect the Company's actual results include the progress and costs of the development of products and services and the timing of the market acceptance.

                NETSOL TECHNOLOGIES, INC. AND SUBSIDIARIES
        CONSOLIDATED STATEMENT OF OPERATIONS -- SEPTEMBER 30, 2007

                                                    For the Three Months
                                                     Ended September 30,
                                                      2007         2006
                                                  -----------  -----------
Net Revenues:
   Licence fees                                   $ 1,903,552  $ 1,578,412
   Maintenance fees                                 1,583,420    1,294,964
   Services                                         5,166,265    2,989,184
                                                  -----------  -----------
     Total revenues                                 8,653,237    5,862,560
Cost of revenues:
   Salaries and consultants                         2,321,030    1,932,073
   Travel and entertainment                           266,828      315,683
   Communication                                       32,795       42,065
   Depreciation and amortization                      258,907      193,097
   Other                                              507,895      426,620
                                                  -----------  -----------
     Total cost of revenues                         3,387,455    2,909,538
                                                  -----------  -----------
Gross profit                                        5,265,782    2,953,022
Operating expenses:
   Selling and marketing                              832,493      518,044
   Depreciation and amortization                      464,647      449,374
   Bad debt expense                                     2,439       65,808
   Salaries and wages                                 907,879      998,391
   Professional services, including non-cash
    compensation                                      160,050      260,870
   General and adminstrative                          678,573      820,086
                                                  -----------  -----------
     Total operating expenses                       3,046,081    3,112,573
                                                  -----------  -----------
Income (loss) from operations                       2,219,701     (159,551)
Other income and (expenses)
   Loss on sale of assets                             (32,223)     (12,280)
   Amortization of debt discount and capitalized
    cost of debt                                            -     (734,659)
   Interest expense                                  (233,804)    (247,908)
   Interest income                                     33,863       90,746
   Other income                                       111,947       67,785
                                                  -----------  -----------
     Total other expenses                            (120,217)    (836,316)
                                                  -----------  -----------
Net income (loss) before minority interest in
 subsidiary                                         2,099,484     (995,867)
Minority interest in subsidiary                      (274,919)    (247,273)
Income taxes                                          (32,441)     (52,824)
                                                  -----------  -----------
Net income (loss)                                   1,792,124   (1,295,964)
Dividend required for preferred stockholders          (71,157)           -
Subsidiary dividend (minority holders portion)       (817,173)           -
                                                  -----------  -----------
Net income (loss) applicable to common
 shareholders                                         903,794   (1,295,964)
Other comprehensive income (loss):
   Translation adjustment                             162,403      (73,490)
                                                  -----------  -----------
Comprehensive income (loss)                       $ 1,969,991  $(2,665,418)
                                                  ===========  ===========

Net income (loss) per share:
   Basic                                          $      0.08  $     (0.08)
                                                  ===========  ===========
   Diluted                                        $      0.08  $     (0.08)
                                                  ===========  ===========
Weighted average number of shares outstanding
   Basic                                           21,425,235   17,046,715
   Diluted                                         22,844,361   17,046,715





                NETSOL TECHNOLOGIES, INC. AND SUBSIDIARIES
           CONSOLIDATED BALANCE SHEET – AS OF SEPTEMBER 30, 2007
                                (AUDITED)

                      ASSETS
Current assets:
  Cash and cash equivalents                       $ 4,837,241
  Accounts receivable, net of allowance for
   doubtful accounts of $170,087                    9,302,976
  Revenues in excess of billings                    9,597,690
  Other current assets                              2,322,668
                                                  -----------
    Total current assets                                         26,060,575
Property and equipment, net of accumulated
 depreciation                                                     7,932,816
Other assets, long-term                                             504,514
Intangibles:
  Product licenses, renewals, enhancements,
   copyrights, trademarks, and tradenames, net      8,446,650
  Customer lists, net                               2,253,744
  Goodwill                                          7,708,501
                                                  -----------
    Total intangibles                                            18,408,895
                                                               ------------
    Total assets                                               $ 52,906,800
                                                               ============

       LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable and accrued expenses           $ 3,181,625
  Current portion of loans and obligations under
   capitalized leases                               3,145,437
  Other payables - acquisitions                        83,399
  Unearned revenues                                 2,494,833
  Due to officers                                     184,328
  Dividend to preferred stockholders payable           71,157
  Subsidiary dividend payable                         816,098
  Loans payable, bank                               1,979,218
                                                  -----------
    Total current liabilities                                    11,956,095
Obligations under capitalized leases, less
 current maturities                                                 282,156
Long term loans; less current maturities                            680,398
                                                               ------------
    Total liabilities                                            12,918,649
Minority interest                                                 3,827,554
Commitments and contingencies

Stockholders' equity:
  Preferred stock, 5,000,000 shares authorized;
   3,800 issued and outstanding                     3,800,000
  Common stock, $.001 par value; 45,000,000
   shares authorized; 22,033,851 issued and
   outstanding                                         22,034
  Additional paid-in-capital                       69,562,129
  Treasury stock                                      (10,194)
  Accumulated deficit                             (36,228,549)
  Stock subscription receivable                      (751,407)
  Common stock to be issued                            79,612
  Other comprehensive loss                           (313,028)
                                                  -----------
    Total stockholders' equity                                   36,160,597
                                                               ------------
    Total liabilities and stockholders' equity                 $ 52,906,800
                                                               ============




                NETSOL TECHNOLOGIES, INC. AND SUBSIDIARIES
                        STATEMENTS OF CASH FLOWS
                               (AUDITED)



                                            For the Three Months
                                                Ended Sept 30,
                                             2007          2006
                                         ------------  ------------
 Cash flows from operating activities:
    Net income (loss) from continuing
     operations                          $    903,794  $ (1,295,964)
    Adjustments to reconcile net loss
     to net cash (used in)/provided by
     operating activities:
    Depreciation and amortization             723,554       651,161
    Provision for uncollectible
     accounts                                       -        65,808
    Loss on sale of assets                     32,223        12,280
    Minority interest in subsidiary           274,919       247,273
    Stock issued for services                       -        30,600
    Stock issued for dividends payable
     to preferred stockholders                 77,640             -
    Fair market value of warrants and
     stock options granted                     24,320             -
    Amortization of capitalized cost
     of debt                                        -       734,659
    Changes in operating assets and
     liabilities:
      Increase in accounts receivable        (353,500)     (250,489)
      Increase in other current assets     (1,080,375)     (354,871)
      Decrease in accounts payable and
       accrued expenses                    (1,129,263)     (520,473)
                                         ------------  ------------
    Net cash (used in)/provided by
     operating activities                    (526,688)     (680,016)
 Cash flows from investing activities:
    Purchases of property and
     equipment                               (745,901)     (238,323)
    Sales of property and equipment            85,076        24,553
    Proceeds from sale of certificates
     of deposit                                     -     1,739,851
    Payments of acquisition payable          (879,007)   (4,025,567)
    Increase in intangible assets            (841,312)     (585,631)
                                         ------------  ------------
    Net cash used in investing
     activities                            (2,381,144)   (3,085,117)
 Cash flows from financing activities:
    Proceeds from sale of common stock        250,000             -
    Proceeds from the exercise of
     stock options and warrants               903,499             -
    Dividend payable to preferred
     shareholders                              (6,482)            -
    Dividend payable by subsidary
     (minority interest portion)              816,098             -
    Reduction of restricted cash                    -     4,533,555
    Proceeds from convertible notes
     payable                                        -       167,489
    Proceeds from loans from officers               -       165,000
    Proceeds from bank loans                2,444,291             -
    Payments on bank loans                    (25,110)            -
    Payments on capital lease
     obligations & loans - net               (692,353)      237,702
                                         ------------  ------------
    Net cash provided by financing
     activities                             3,689,943     5,103,746
 Effect of exchange rate changes in
  cash                                         44,966        (9,961)
                                         ------------  ------------
 Net increase in cash and cash
  equivalents                                 827,077     1,328,652
 Cash and cash equivalents, beginning
  of year                                   4,010,164     2,493,768
                                         ------------  ------------
 Cash and cash equivalents, end of
  year                                   $  4,837,241  $  3,822,420
                                         ============  ============




               NETSOL TECHNOLOGIES, INC. AND SUBSIDIARIES
                        RECONCILIATION TO GAAP
                             (UNAUDITED)


                                            For the Three Months
                                                   Ended
                                               Sept. 30, 2007
                                                 -----------

Net income per GAAP                              $ 1,792,124
  Income taxes                                        32,441
  Depreciaiton and amortization                      723,554
  Interest expense                                   233,804

                                                 -----------
EBITDA income                                    $ 2,781,923
                                                 ===========

Weighted average number of shares outstanding
  Basic                                           21,425,235
  Diluted                                         22,844,361

                                                 -----------
Basic EBITDA EPS                                 $      0.13
                                                 ===========
Diluted EBITDA EPS                               $      0.12
                                                 ===========

Contacts:

NetSol Technologies Inc.
Tina Gilger
Chief Financial Officer
Tel: +1 818-222-9195, x112

Investor Relations
Christopher Chu
The Global Consulting Group
Tel: +1-646-284-9426
Email: cchu@hfgcg.com