NetSol Technologies at Micro-Cap Virtual Conference: SaaS shift gains pace

On Thursday, August 20, 2026, NetSol Technologies (NTWK) addressed the Micro-Cap Virtual Conference to reveal a business undergoing transformation. The firm highlighted its shift from a services and license-based strategy to a recurring software revenue model, while concurrently expanding in North America and bolstering its global asset-finance presence.

Management expressed optimism regarding growth, margins, and customer retention, yet acknowledged persistent competition in key markets and the time required for new wins to generate revenue.

In Q3 fiscal 2026, NetSol reported a record revenue of $19.8 million, a 13% increase from the previous year. Gross margin improved to 55.6%, while recurring revenue continued to grow as the company transitions towards a SaaS model. North America serves as the primary growth engine, fueled by the Transcend Retail product and the scheduled migration of legacy customers to Transcend Finance.

AI is becoming increasingly integral to the business, enhancing internal efficiency and introducing new features for customers. Management reaffirmed fiscal 2026 revenue guidance of $73 million and stated that subscription and support revenue should reach $35 million by year-end. Q3 fiscal 2026 revenue reached a record $19.8 million, demonstrating ongoing operating leverage with gross margin rising to 55.6%.

The company's revenue grew from $52 million in fiscal 2023 to $66 million in fiscal 2025, with an aim to achieve $73 million in fiscal 2026. Management outlined this trend as part of a broader shift from upfront license sales to stable annual subscription income. NetSol reported $14.7 million in cash as of March 31, 2026, down from $17.4 million, but expects cash levels to return to prior or improved levels by June 30, 2026.

The company holds $25.3 million in working capital and $8.5 million in debt, concentrated in the Pakistan entity.

Roger Almond, chief accounting officer, stated the company aims to maintain a gross margin above 50%, ideally around 55% or more as revenue scales. Almond emphasized the importance of managing workforce costs, with a strong workforce in Pakistan being utilized for implementations, development, and support. Erik Wagner, chief marketing officer, explained that NetSol is a provider of AI-enabled solutions and services, enabling OEMs, dealerships, and financial institutions to sell, finance, and lease assets.

The company is transitioning from a services and license-based business to a stable, recurring revenue, SaaS model.

In APAC, NetSol holds about 75% market share in China, benefiting from early market entry and government restrictions limiting competitors. The business now supports multiple tier 1 automotive OEMs and captive finance companies, including Chinese electric-vehicle manufacturers expanding globally. In Europe, revenue grew 22.4% in fiscal 2025, relying heavily on broker channels, with NetSol developing both a broker portal and a lender portal to facilitate transactions more efficiently.

North America remains the company's largest growth opportunity, with revenue rising 102% in fiscal 2025 and a 29.1% annual compound growth rate over 14 quarters. The Transcend Retail product is currently marketed and sold exclusively within North America, playing a crucial role in the company's growth strategy.