Quarterly report [Sections 13 or 15(d)]

OPERATING SEGMENTS

v3.25.3
OPERATING SEGMENTS
 3 Months Ended
Sep. 30, 2025
Segment Reporting [Abstract]  
OPERATING SEGMENTS

NOTE 15– OPERATING SEGMENTS

 

The Company has identified three segments for its products and services: North America, Europe, and Asia-Pacific. The reportable segments are business units located in different global regions. Each business unit provides similar products and services: license fees for leasing and asset-based software, subscription and support fees, and implementation and IT consulting services. Separate management of each segment is required because each business unit is subject to different operational issues and strategies due to its particular regional location. The Company’s chief operating decision maker (“CODM”) evaluates performance and allocates resources based on gross profit and income from operations. The Company has designated its Chief Executive Officer as the CODM.

 

Segment assets include all assets attributable to operations within the respective geographic regions, including cash, accounts receivable, revenue in excess of billings, and property, plant, and equipment. Corporate assets, which primarily consist of cash and cash equivalents, goodwill, and assets associated with the Company’s corporate headquarters, are not allocated to the geographic segments and are shown separately.

 

Prior year results have been restated to conform to the current year presentation, reflecting the use of gross profit and income from operations as the measures of segment performance evaluated by the CODM.

 

 

NETSOL TECHNOLOGIES, INC.

Notes to Condensed Consolidated Financial Statements

September 30, 2025

(Unaudited)

 

The following tables present financial information by reportable segment for the three months ended September 30, 2025:

 

    North America     Europe     Asia - Pacific     Total  
    For the Three Months Ended September 30, 2025  
    North America     Europe     Asia - Pacific     Total  
Revenues                          
License   $ -     $ 72,225     $ -     $ 72,225  
Subscription and support     1,486,397       1,484,646       5,989,512       8,960,555  
Services     621,966       1,747,446       3,609,731       5,979,143  
Intersegment revenues     -       -       1,061,771       1,061,771  
Total revenue from reportable segments     2,108,363       3,304,317       10,661,014       16,073,694  
Elimination of intersegment revenues     -       -       -       (1,061,771 )
Total consolidated revenues                           $ 15,011,923  
                                 
Revenues from reportable segments     2,108,363       3,304,317       10,661,014       16,073,694  
                                 
Salaries and consultants     492,636       1,133,001       5,338,889       6,964,526  
Travel     53,734       67,360       377,078       498,172  
Depreciation     -       -       208,731       208,731  
Other (a)     501,302       918,027       1,070,946       2,490,275  
Gross Profit     1,060,691       1,185,929       3,665,370       5,911,990  
                                 
Selling and marketing     637,561       395,008       1,907,598       2,940,167  
Depreciation     1,594       44,608       69,673       115,875  
General and administrative     299,026       889,577       2,272,570       3,461,173  
Income (loss) from operations - reportable segments   $ 122,510     $ (143,264 )   $ (584,471 )   $ (605,225 )
                                 
Reconciliation:                                
Income (loss) from operations - reportable segments                           $ (605,225 )
Corporate operating expenses                             (1,233,481 )
Interest expense                             (174,611 )
Interest income                             280,974  
Gain (loss) on foreign currency exchange transactions                             (286,917 )
Other income (expense)                             17,670  
Net income (loss) before income taxes                           $ (2,001,590 )

 

    North America     Europe     Asia - Pacific     Total
    As of  
    September 30, 2025  
    North America     Europe     Asia - Pacific     Total
Segment assets:                                
Cash   $ 194,594     $ 937,579     $ 21,035,388     $ 22,167,561  
Accounts receivable, net of allowance     827,171       1,996,084       3,497,733       6,320,988  
Revenue in excess of billings, net of allowance     1,547,541       3,137,993       10,190,170       14,875,704  
Other segment assets (b)     281,641       1,406,229       7,629,704       9,317,574  
Total segment assets   $ 2,850,947     $ 7,477,885     $ 42,352,995     $ 52,681,827  
                                 
Asset Reconciliation                                
Total assets for reportable segments                             52,681,827  
Corporate assets                             641,163  
Goodwill not allocated to segments                             9,302,524  
Consolidated total                           $ 62,625,514  

 

    North America     Europe     Asia - Pacific     Total  
    For the Three Months ended September 30, 2025  
    North America     Europe     Asia - Pacific     Total  
Expenditures for property, plant and equipment   $ 21,099     $ 38,187     $ 425,995     $ 485,281  

 

 

NETSOL TECHNOLOGIES, INC.

Notes to Condensed Consolidated Financial Statements

September 30, 2025

(Unaudited)

 

The following tables present financial information by reportable segment for the three months ended September 30, 2024:

 

    North America     Europe     Asia - Pacific     Total  
    For the Three Months Ended September 30, 2024  
    North America     Europe     Asia - Pacific     Total  
Revenues                        
License   $ -     $ 1,229     $ -     $ 1,229  
Subscription and support     1,262,645       892,772       6,037,054       8,192,471  
Services     1,606,016       1,601,285       3,197,497       6,404,798  
Intersegment revenues     -       -       621,392       621,392  
Total revenue from reportable segments     2,868,661       2,495,286       9,855,943       15,219,890  
Elimination of intersegment revenues     -       -       -       (621,392 )
Total consolidated revenues                           $ 14,598,498  
                                 
Revenues from reportable segments     2,868,661       2,495,286       9,855,943       15,219,890  
                                 
Salaries and consultants     483,609       1,001,075       4,719,050       6,203,734  
Travel     139,775       14,730       416,357       570,862  
Depreciation     -       -       228,550       228,550  
Other (a)     260,445       645,924       746,263       1,652,632  
Gross Profit     1,984,832       833,557       3,745,723       6,564,112  
                                 
Selling and marketing     548,099       273,368       1,400,888       2,222,355  
Depreciation     471       59,680       77,296       137,447  
General and administrative     221,426       927,202       2,359,305       3,507,933  
Income (loss) from operations - reportable segments   $ 1,214,836     $ (426,693 )   $ (91,766 )   $ 696,377  
                                 
Reconciliation:                                
Income (loss) from operations - reportable segments                           $ 696,377  
Corporate operating expenses                             (1,456,535 )
Interest expense                             (258,219 )
Interest income                             769,867  
Gain (loss) on foreign currency exchange transactions                             542,545  
Other income (expense)                             153,491  
Net income (loss) before income taxes                           $ 447,526  

 

  North America     Europe     Asia - Pacific     Total  
    As of  
    June 30, 2025  
  North America     Europe     Asia - Pacific     Total  
Segment assets:                        
Cash   $ 387,955     $ 1,138,048     $ 15,248,031     $ 16,774,034  
Accounts receivable, net of allowance     581,872       1,084,418       5,861,282       7,527,572  
Revenue in excess of billings, net of allowance     1,967,757       3,178,780       13,987,848       19,134,385  
Other segment assets (b)     243,550       1,580,534       7,066,725       8,890,809  
Total segment assets   $ 3,181,134     $ 6,981,780     $ 42,163,886     $ 52,326,800  
                                 
Asset Reconciliation                                
Total assets for reportable segments                             52,326,800  
Corporate assets                             811,785  
Goodwill not allocated to segments                             9,302,524  
Consolidated total                           $ 62,441,109  

 

    North America     Europe     Asia - Pacific     Total  
    For the Three Months ended September 30, 2024  
    North America     Europe     Asia - Pacific     Total  
Expenditures for property, plant and equipment   $ 3,841     $ 37,494     $ 59,402     $ 100,737  

 

(a) Other costs of goods sold include computer costs, third-party hardware and software costs, repair and maintenance, insurance, utilities, and communication expenses.

 

(b) Other assets include property and equipment, right of use of assets, advances, deposits, and prepayments.

 

 

NETSOL TECHNOLOGIES, INC.

Notes to Condensed Consolidated Financial Statements

September 30, 2025

(Unaudited)