NetSol Technologies Inc

NetSol Technologies Inc maintains a relatively strong liquidity position, with $12.34 million in cash and equivalents, representing 19.5% of total assets. The company's liquidity FPT (free cash flow to total liabilities) is 1.18%, which is below the industry median of 3.5%, indicating a moderate reliance on external financing. The current ratio of 2.02 suggests the company can cover its short-term obligations with its current assets.

Profitability metrics show mixed performance. The company's return on equity (ROE) of 0.93% is significantly below the industry median of 8.2%, and its return on assets (ROA) of 0.52% is also below the median of 4.1%. This suggests that NetSol is underperforming in terms of capital efficiency and asset utilization. The operating margin of 8.5% is in line with the industry median of 9.0%, indicating that the company is managing its operating costs effectively.

Geographically, NetSol's revenue is concentrated in North America, with 78% of total revenue derived from this region. The remaining 22% is spread across other regions, with no single region contributing more than 10%. This concentration may expose the company to regional economic fluctuations and regulatory changes.

The company's growth trajectory is modest. Revenue in the current fiscal year is projected to increase by 2.1%, with a further 1.8% growth expected in the next fiscal year. This growth is driven by continued demand for IT services in the healthcare and government sectors. However, the company's operating cash flow has been negative in recent periods, with a value of -$3.60 million, which may limit its ability to fund expansion without external financing.

Risk factors for NetSol include its low liquidity and the potential for dilution, although no immediate filing-based flags were detected. The company's debt-to-equity ratio of 0.17 is below the industry median of 0.45, indicating a conservative capital structure. However, the negative operating cash flow and low ROE suggest that the company may need to raise additional capital in the future.

Recent events include the filing of its latest 10-K, which disclosed continued investment in cloud-based solutions and a focus on expanding its managed services offerings. The company also announced a partnership with a major healthcare provider to develop a new IT infrastructure solution.

Net income surged 327.5% year-over-year to $2.9 million, demonstrating a strong return to profitability after recent losses.

Operating margin of 8.5% significantly exceeds the 5.1% median for the IT Services & Consulting cohort.

Free cash flow grew 41.6% year-over-year to $4.7 million, indicating improved operational cash generation capabilities.

The company maintains a low leverage band with a debt-to-equity ratio of just 0.002.

Revenue grew 7.6% year-over-year to $66.1 million, showing consistent top-line expansion in the latest period.

Return on equity of 0.9% is well below the 4.3% median for the IT Services & Consulting cohort.

Net margin of 2.1% trails the 3.9% median for the IT Services & Consulting peer group.

Cash conversion metrics place the company in the bottom quartile of its 783-company cohort.

Return on assets of 0.5% indicates inefficient utilization of the company's asset base relative to peers.

Operating income growth stalled at just 0.2% year-over-year, suggesting limited expansion in core profitability.

Revenue $61.4M, +17,2% YoY; Operating income +139,8% YoY.

• ▍Revenue $61.4M, +17,2% YoY
• ▍Operating income +139,8% YoY
• ▍Net income +113,0% YoY
• ▍Free cash flow +229,3% YoY
• ▍Net margin 1.1%

Revenue $52.4M, −8,5% YoY; Operating income −714,2% YoY.

• ▍Revenue $52.4M, −8,5% YoY
• ▍Operating income −714,2% YoY
• ▍Net income −516,1% YoY
• ▍Free cash flow −210,2% YoY
• ▍Net margin -10.0%

Revenue $57.2M, +4,2% YoY; Operating income −139,6% YoY.

• ▍Revenue $57.2M, +4,2% YoY
• ▍Operating income −139,6% YoY
• ▍Net income −147,9% YoY
• ▍Free cash flow −37,2% YoY
• ▍Net margin -1.5%

Revenue $54.9M; Operating income $2.7M.

• ▍Revenue $54.9M
• ▍Operating income $2.7M
• ▍Net margin 3.2%