Annual report [Section 13 and 15(d), not S-K Item 405]

SEGMENT INFORMATION AND GEOGRAPHIC AREAS

v3.26.3
SEGMENT INFORMATION AND GEOGRAPHIC AREAS
 12 Months Ended
Jun. 30, 2026
Segment Reporting [Abstract]  
SEGMENT INFORMATION AND GEOGRAPHIC AREAS

NOTE 18 – SEGMENT INFORMATION AND GEOGRAPHIC AREAS

 

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, contract assets, 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.

 

The accounting policies of the reportable segments are the same as those described in Note 1, “Summary of Significant Accounting Policies.” Intersegment revenues are eliminated in consolidation.

 

The following tables present financial information by reportable segment for the year ended June 30, 2026:

 

SCHEDULE OF FINANCIAL INFORMATION BY REPORTABLE SEGMENT

    North America     Europe     Asia - Pacific     Total  
    For the Year Ended  
    June 30, 2026  
    North America     Europe     Asia - Pacific     Total  
Revenues                        
License   $ -     $ 181,970     $ 4,772,408     $ 4,954,378  
Subscription and support     5,486,750       5,462,370       24,850,722       35,799,842  
Services     3,568,641       8,400,105       21,648,414       33,617,160  
Intersegment revenues     -       -       3,774,495       3,774,495  
Total revenue from reportable segments   $ 9,055,391     $ 14,044,445     $ 55,046,039     $ 78,145,875  
Elimination of intersegment revenues     -        -        -        (3,774,495 )
Total consolidated revenues                           $ 74,371,380  
                                 
Revenues from reportable segments   $ 9,055,391     $ 14,044,445     $ 55,046,039     $ 78,145,875  
                                 
Salaries and consultants     1,685,067       4,021,044       19,991,225       25,697,336  
Travel     389,367       328,244       2,092,081       2,809,692  
Depreciation     -       -       783,692       783,692  
Other (a)     2,167,973       3,135,682       4,404,157       9,707,812  
Gross Profit     4,812,984       6,559,475       27,774,884       39,147,343  
                                 
Selling and marketing     2,721,440       1,522,634       7,072,530       11,316,604  
Depreciation     7,360       174,083       273,286       454,729  
General and administrative     957,047       3,487,884       9,907,783       14,352,714  
Income (loss) from operations - reportable segments   $ 1,127,137     $ 1,374,874     $ 10,521,285     $ 13,023,296  
                                 
Reconciliation:                                
Income (loss) from operations - reportable segments                           $ 13,023,296  
Corporate operating expenses                             (6,076,631 )
Interest expense                             (605,619 )
Interest income                             1,071,472  
Gain (loss) on foreign currency exchange transactions                             (389,814 )
Other income (expense)                             203,175  
Net income (loss) before income taxes                           $ 7,225,879  

 

Segment assets:   North America     Europe     Asia - Pacific     Total  
    As of  
    June 30, 2026  
Segment assets:   North America     Europe     Asia - Pacific     Total  
Cash   $ 399,011     $ 1,539,968     $ 24,997,445     $ 26,936,424  
Accounts receivable, net of allowance     930,051       1,205,268       8,151,023       10,286,342  
Contract assets, net of allowance     608,239       4,316,555       13,782,788       18,707,582  
Other segment assets (b)     162,451       1,146,259       10,767,095       12,075,805  
Total segment assets   $ 2,099,752     $ 8,208,050     $ 57,698,351     $ 68,006,153  
                                 
Asset Reconciliation                                
Total assets for reportable segments                             68,006,153  
Corporate assets                             530,372  
Goodwill not allocated to segments                             9,302,524  
Consolidated total                           $ 77,839,049  

 

    North America     Europe     Asia - Pacific     Total  
    For the Year ended June 30, 2026  
    North America     Europe     Asia - Pacific     Total  
                                 
Expenditures for property, plant and equipment   $ 21,100     $ 26,445     $ 1,959,569     $ 2,007,114  

 

 

NETSOL TECHNOLOGIES, INC.

Notes to Consolidated Financial Statements

June 30, 2026 and 2025

 

The following tables present financial information by reportable segment for the year ended June 30, 2025:

 

    North America     Europe     Asia - Pacific     Total  
    For the Year Ended  
    June 30, 2025  
    North America     Europe     Asia - Pacific     Total  
Revenues                        
License   $ -     $ 111,377     $ 487,256     $ 598,633  
Subscription and support     5,603,900       4,560,260       22,770,488       32,934,648  
Services     6,399,927       9,972,363       16,182,658       32,554,948  
Intersegment revenues                     7,000,458       7,000,458  
Total revenue from reportable segments   $ 12,003,827     $ 14,644,000     $ 46,440,860     $ 73,088,687  
Elimination of intersegment revenues     -        -        -        (7,000,458 )
Total consolidated revenues                           $ 66,088,229  
                                 
Revenues from reportable segments   $ 12,003,827     $ 14,644,000     $ 46,440,860     $ 73,088,687  
                                 
Salaries and consultants     2,074,573       4,607,703       19,115,189       25,797,465  
Travel     277,680       162,193       1,623,638       2,063,511  
Depreciation     -       -       952,331       952,331  
Other (a)     3,497,607       4,836,247       3,366,994       11,700,848  
Gross Profit     6,153,967       5,037,857       21,382,708       32,574,532  
                                 
Selling and marketing     2,103,890       1,341,023       6,278,262       9,723,175  
Depreciation     3,167       186,927       321,358       511,452  
General and administrative     755,194       4,059,517       8,502,694       13,317,405  
Income (loss) from operations - reportable segments   $ 3,291,716     $ (549,610 )   $ 6,280,394     $ 9,022,500  
                                 
Reconciliation:                                
Income (loss) from operations - reportable segments                           $ 9,022,500  
Corporate operating expenses                             (5,520,782 )
Interest expense                             (871,355 )
Interest income                             1,871,040  
Gain (loss) on foreign currency exchange transactions                             1,301,613  
Other income (expense)                             244,241  
Net income (loss) before income taxes                           $ 6,047,257  

 

Segment assets:   North America     Europe     Asia - Pacific     Total  
    As of  
    June 30, 2025  
Segment assets:   North America     Europe     Asia - Pacific     Total  
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  
Contract assets, 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 year ended June 30, 2025  
    North America     Europe     Asia - Pacific     Total  
                                 
Expenditures for property, plant and equipment   $ 17,332     $ 9,929     $ 1,355,509     $ 1,382,770  

 

(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 Consolidated Financial Statements

June 30, 2026 and 2025

 

Geographic Information

 

The following table presents geographic information for revenues and long-lived assets for the years ended June 30 2026 and 2025.

 

    June 30, 2026     June 30, 2025  
    Revenue     Long-lived Assets     Revenue     Long-lived Assets  
                         
China   $ 19,210,603     $ 963,696     $ 17,043,193     $ 108,837  
Thailand     5,427,978       216,790       2,745,299       585,401  
USA     7,912,604       171,348       10,763,285       175,247  
UK     14,044,445       681,768       14,644,000       998,465  
Pakistan & India     3,127,103       9,205,752       2,292,058       4,514,487  
Australia & New Zealand     14,653,482       9,082       8,609,997       5,923  
Mexico     1,142,788       -       1,240,542       -  
Indonesia     3,143,602       -       4,138,350       -  
South Africa     729,724       -       814,817       -  
South Korea     1,820,581       -       1,506,456       -  
Other Countries     3,158,470       426,913       2,290,232       430,622  
Total   $ 74,371,380     $ 11,675,349     $ 66,088,229     $ 6,818,982  

 

Disclosed in the table below is the geographic information of total revenues by country for the years ended June 30, 2026 and 2025.

 

                                                                         
    Revenues 2026  
    Total     China     Thailand     USA     UK    

Pakistan & India

    

Australia
& New
Zealand

     Mexico     Indonesia     South Africa     South Korea     Other Countries  
                                                                         
North America:   $ 9,055,392     $ -     $ -     $ 7,912,604     $ -     $ -     $ -     $ 1,142,788     $ -     $ -     $ -     $ -  
Europe:     14,044,445       -       -       -       14,044,445       -       -       -       -       -       -       -  
Asia-Pacific:     51,271,543       19,210,603       5,427,978       -       -       3,127,103       14,653,482       -       3,143,602       729,724       1,820,581       3,158,470  
                                                                                                 
Total   $ 74,371,380     $ 19,210,603     $ 5,427,978     $ 7,912,604     $ 14,044,445     $ 3,127,103     $ 14,653,482     $ 1,142,788     $ 3,143,602     $ 729,724     $ 1,820,581     $ 3,158,470  

 

                                                                         
    Revenues 2025  
    Total     China     Thailand     USA     UK    

Pakistan & India

    

Australia
& New Zealand

     Mexico     Indonesia     South Africa     South Korea     Other Countries  
                                                                         
North America:   $ 12,003,827     $ -     $ -     $ 10,763,285     $ -     $ -     $ -     $ 1,240,542     $ -     $ -     $ -     $ -  
Europe:     14,644,000       -       -       -       14,644,000       -       -       -       -       -       -       -  
Asia-Pacific:     39,440,402       17,043,193       2,745,299       -       -       2,292,058       8,609,997       -       4,138,350       814,817       1,506,456       2,290,232  
Total   $ 66,088,229     $ 17,043,193     $ 2,745,299     $ 10,763,285     $ 14,644,000     $ 2,292,058     $ 8,609,997     $ 1,240,542     $ 4,138,350     $ 814,817     $ 1,506,456     $ 2,290,232  

 

 

NETSOL TECHNOLOGIES, INC.

Notes to Consolidated Financial Statements

June 30, 2026 and 2025