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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)