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Global IT Solutions Provider NetSol Technologies Returns to Profitability! recent Large insider Buying

|Includes: NetSol Technologies Inc. (NTWK)
NetSol Technologies (Nasdaq:NTWK) (Nasdaq Dubai:NTWK), a U.S. corporation providing global business services and enterprise application solutions to private and public sector organizations worldwide, recently announced strong results for their third quarter fiscal year 2010 marked by a significant increase in sales and a return to profitability.

NetSol projects revenues in the range of $33.0 million and $35.0 million for fiscal year 2010, representing 25% to 32% year-over-year growth. The Company anticipates a return to GAAP net income for fiscal year 2010, versus a GAAP net loss of $0.30 per diluted share for fiscal year 2009. License revenues are projected to increase more than 100% over fiscal year 2009. NetSol’s third-quarter growth was attributed to new contracts in China and Thailand, rising demand in emerging markets, and a growing number of multi-national blue chip customers seeking global software solutions to meet their financing needs.  The Company is optimistic that it will achieve profitability for the fiscal year 2010.

Financial highlights from the third quarter fiscal year 2010 include:

  • Revenues of $8.9 million, an increase of 77.8% from the same period last year.
  • Net income per share totaled $0.02 versus a loss $0.19 for the same year-ago period.
  • Gross margin increased to 61.3% compared to 10.7% in the same period a year ago.
  • 100% sequential growth in net revenues from license fees.
  • Net revenues from license fees totaled $3.64 million, a 1,022% increase year-over-year.

NetSol offers high-quality software solutions specialized by industry. Among its blue-chip client base are Fortune 500 manufacturers, global automakers, financial institutions, utilities, technology providers, and government agencies. NetSol’s products and service offerings include credit and finance portfolio management systems; custom solutions for credit, lease and loan accounting, fleet management, and wholesale finance; SAP consulting and services; custom development; systems integration; and technical services. The Company has achieved the designation of ISO 9001, ISO 27001, and SEI (Software Engineering Institute) CMMI (Capability Maturity Model) Maturity Level 5 assessments, a distinction shared by fewer than 100 companies worldwide. 

The Company’s multi-currency, multi-lingual IT solutions can be scaled from a core platform to maximize flexibility and affordability. Many companies are struggling with outmoded IT solutions which increasingly cannot handle the volume and complexity of their finance needs. These solutions cannot be updated, and therefore need to be replaced. NetSol is able to design, implement and support a new end-to-end solution in a short period of time. These solutions typically have longer life spans, with recurring revenues generated by service, support, and license upgrades. China, in particular, is a major growth driver of NetSol’s business. The Company has invested in China to increase local resources, allowing NetSol to further capitalize on the vast opportunities available there.

Joint ventures are another key driver of NetSol’s business growth, allowing the Company to expand into new global markets with local partners. The Company’s joint venture with the Innovation Group continues to perform well and offer promising growth opportunities. In addition, NetSol has seen growing sales activity with its Atheeb NetSol joint venture in Saudi Arabia. Launched in April 2009, the joint venture was formed to capitalize upon the rapidly growing Middle East market for IT services and software development.

NetSol’s proven IT enterprise solutions, combined with its global strategy and successful joint ventures, have positioned the Company to take advantage of the remarkable growth opportunities available in the worldwide applications software sector.

Disclosure: The subject security is a client of RedChip Companies, Inc. RedChip Companies, Inc., employees and affiliates may have positions and affect transactions in the securities or options of the issuers mentioned herein. For full financial disclosures for all RedChip clients, please visit

Disclosure: We Are Long