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OPERATING SEGMENTS | 3 Months Ended
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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: SCHEDULE OF FINANCIAL INFORMATION BY REPORTABLE SEGMENT
|  | 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)

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