Cuộc họp công bố kết quả kinh doanh Quý 4 và FY2026 của NetSol Technologies (NTWK): Doanh thu kỷ lục, Dự báo FY2027

Các điểm chính

• NetSol Technologies đã công bố doanh thu thuần kỷ lục trong năm tài chính 2026 đạt 74,4 triệu USD, tăng 12,5% so với cùng kỳ năm ngoái và vượt kế hoạch 73 triệu USD của ban lãnh đạo.
• Doanh thu quý 4 đạt mức kỷ lục 20,7 triệu USD. Biên lợi nhuận gộp mở rộng lên 63,6%, trong khi lợi nhuận hoạt động tăng 40,2% lên 4,5 triệu USD.
• Doanh thu từ dịch vụ đăng ký và hỗ trợ cả năm tăng 8,7% lên 35,8 triệu USD, chiếm 48,1% tổng doanh thu. Doanh thu theo hợp đồng đạt khoảng 60 triệu USD tính đến ngày 30 tháng 6 năm 2026.
• Dòng tiền từ hoạt động kinh doanh cải thiện lên 13,9 triệu USD từ mức 0,4 triệu USD, và lượng tiền mặt cuối năm tăng 56,3% lên 27,1 triệu USD.
• Ban lãnh đạo kỳ vọng tăng trưởng doanh thu năm tài chính 2027 đạt từ 13% đến 16%, biên lợi nhuận gộp đạt khoảng 50% hoặc cao hơn, và EBITDA hợp nhất đã điều chỉnh đạt từ 10,5 triệu đến 11,4 triệu USD.
• Các ưu tiên tăng trưởng bao gồm mở rộng Transcend Retail tại Mỹ, nâng cấp các khách hàng hiện hữu dùng hệ thống cũ lên Transcend Finance, tích hợp AI vào toàn bộ sản phẩm và hoạt động vận hành, đồng thời hỗ trợ khách hàng tiến vào các thị trường mới.

Kết quả tài chính chính

Kết quả hoạt động hàng quý của NetSol đã tăng trưởng mạnh mẽ trong suốt năm tài chính 2026. Từ quý 1 đến quý 4, doanh thu tăng khoảng 38%, biên lợi nhuận gộp mở rộng hơn 2.400 điểm cơ bản và kết quả hoạt động hàng quý đã cải thiện khoảng 6,3 triệu USD.

Lợi nhuận ròng hợp nhất cả năm tăng 22,4% lên 5,6 triệu USD. Tuy nhiên, lợi nhuận ròng thuộc về NetSol vẫn ở mức 2,95 triệu USD, một phần do thu nhập từ tỷ giá hối đoái và lãi tiền gửi giảm, cùng với mức tăng khoảng 1 triệu USD lợi nhuận thuộc về cổ đông không kiểm soát.

Kết quả kinh doanh và hoạt động vận hành

NetSol tiếp tục chuyển dịch từ mô hình dịch vụ và bản quyền sang doanh thu nền tảng định kỳ. Doanh thu dịch vụ đăng ký và hỗ trợ chiếm gần một nửa doanh thu năm tài chính 2026, mặc dù tỷ trọng trên tổng doanh số giảm so với mức 49,8% do doanh thu bản quyền tăng.

Thỏa thuận với BMO cung cấp một mô hình mẫu cho việc nâng cấp các khách hàng hiện hữu dùng hệ thống cũ lên Transcend Finance. Ban lãnh đạo cho biết công ty có khoảng 7 khách hàng LeasePak cũ, đều có trụ sở tại Mỹ. Những đợt nâng cấp như vậy sẽ chuyển khách hàng từ các thỏa thuận bảo trì sang quan hệ hợp tác thuê bao hiện đại và dự kiến sẽ làm tăng doanh thu đăng ký.

Transcend Retail đang trở thành một sáng kiến tăng trưởng trọng tâm tại Mỹ. Nền tảng này đang được triển khai trên khoảng 350 đại lý nhượng quyền cho một hãng OEM toàn cầu thuộc phân khúc cao cấp tại Bắc Mỹ. NetSol cũng đã triển khai thành công tại 3 đại lý thuộc các tập đoàn đại lý lớn hơn, mỗi tập đoàn vận hành hơn 15 đại lý, tạo tiềm năng triển khai diện rộng hơn nếu các đợt triển khai ban đầu đạt kết quả tốt.

Các dự án vận hành thực tế (go-live) quốc tế bao gồm một công ty cho thuê tài chính Trung Quốc ra mắt tại Indonesia, Northridge Finance triển khai Transcend tại Anh, một công ty tài chính ô tô trực thuộc hãng xe hàng đầu có trụ sở tại Mỹ đi vào vận hành tại Trung Quốc, và việc triển khai hệ thống tài chính bán buôn mới nhất tại Thái Lan. Các dự án triển khai này dự kiến sẽ tạo ra doanh thu đăng ký và hỗ trợ định kỳ.

NetSol cũng đã gia hạn một thỏa thuận trị giá hàng triệu USD với một ngân hàng đa quốc gia hàng đầu tại Anh, kéo dài mối quan hệ hợp tác thêm 10 năm nữa. Ngoài ra, một thỏa thuận gia hạn hợp đồng Transcend Finance lớn đã được ký kết với một khách hàng tài chính ô tô trực thuộc hãng xe hàng đầu toàn cầu.

Các sáng kiến AI bao gồm ra quyết định tín dụng tích hợp AI, xử lý tài liệu thông minh, tự động hóa phát triển và kiểm thử, giải quyết hỗ trợ kỹ thuật và tự động hóa bộ phận hậu cần (back-office). Ban lãnh đạo cho biết mục tiêu là cải thiện khả năng mở rộng và năng lực cung cấp dịch vụ thay vì cắt giảm nhân sự. NetSol sử dụng khoảng 1.370 nhân sự vào cuối năm, so với khoảng 1.460 nhân sự vào một năm trước đó, trong khi doanh thu tăng 12,5%.

Triển vọng của ban lãnh đạo

Trong năm tài chính 2027, ban lãnh đạo dự báo:

• Tăng trưởng doanh thu thuần từ 13% đến 16% so với năm tài chính 2026.
• Biên lợi nhuận gộp đạt khoảng 50% hoặc cao hơn.
• Tăng trưởng EBITDA hợp nhất đã điều chỉnh từ 15% đến 25%.
• EBITDA hợp nhất đã điều chỉnh đạt khoảng 10,5 triệu đến 11,4 triệu USD.

Triển vọng này dựa trên giả định doanh thu đăng ký tiếp tục tăng trưởng, thực thi tốt các hợp đồng triển khai, quản lý chi phí kỷ luật và không có các thương vụ thâu tóm lớn.

Các ưu tiên của ban lãnh đạo trong năm tài chính 2027 là mở rộng Transcend Retail tại Mỹ, tích hợp AI vào sản phẩm và hoạt động vận hành, nâng cấp khách hàng dùng hệ thống cũ lên Transcend Finance, và mở rộng song hành cùng các khách hàng tiến vào thị trường mới.

Rủi ro và yếu tố cần theo dõi

• Thời điểm ký hợp đồng, các mốc triển khai, quyết định của khách hàng, biến động tỷ giá hối đoái, việc vốn hóa chi phí phát triển và hóa đơn thanh toán trước có thể tạo ra sự biến động theo quý.
• Khoảng 60 triệu USD doanh thu theo hợp đồng không phải là doanh thu định kỳ hàng năm, giá trị hợp đồng tồn đọng (backlog) hay mức doanh thu sàn được đảm bảo. Số tiền này bao gồm doanh thu dự kiến từ các thỏa thuận đã ký cộng với ước tính của ban lãnh đạo về các yêu cầu thay đổi từ chính các khách hàng và thỏa thuận đó.
• Nợ hợp đồng đã đóng góp khoảng 6,5 triệu USD vào dòng tiền từ hoạt động kinh doanh trong năm tài chính 2026. Ban lãnh đạo không kỳ vọng lợi ích vốn lưu động này sẽ tái diễn ở mức độ tương tự.
• Kết quả kinh doanh được hưởng lợi từ việc vốn hóa chi phí phát triển phần mềm đủ điều kiện. Ban lãnh đạo dự kiến cung cấp công bố thông tin rõ ràng hơn về tổng khoản đầu tư phát triển sản phẩm.
• Lợi nhuận thuộc về cổ đông không kiểm soát gia tăng làm hạn chế lượng lợi nhuận hợp nhất chuyển về cho các cổ đông của NetSol. Công ty đang đánh giá các phương án cấu trúc liên quan đến lợi ích cổ đông thiểu số tại Pakistan, nhưng chưa có giao dịch nào được phê duyệt.

Điểm nổi bật trong phần Q&A với chuyên viên phân tích

Khi được hỏi lý do tại sao dự báo biên lợi nhuận gộp năm tài chính 2027 lại thấp hơn mức đạt được vào cuối quý 4, ban lãnh đạo mô tả mức 50% hoặc tốt hơn là mốc cơ sở ổn định. Công ty kỳ vọng các thỏa thuận mới và các thỏa thuận được xem xét lại sẽ hỗ trợ biên lợi nhuận trên 50% và có thể cập nhật dự báo khi năm tài chính tiến triển.

Ban lãnh đạo cho biết việc chuyển BMO từ nền tảng cũ sang Transcend Finance sẽ tạo ra mức tăng đáng kể trong doanh thu đăng ký. Cơ cấu doanh thu từ triển khai sẽ phụ thuộc vào cách cấu trúc quá trình nâng cấp.

Về phân bổ vốn, ban lãnh đạo cho biết lượng tiền mặt 27,1 triệu USD sẽ hỗ trợ hoạt động kinh doanh cốt lõi, đổi mới sản phẩm, hiệu quả tổ chức, quan hệ đối tác và các thương vụ M&A có chọn lọc trong các lĩnh vực cốt lõi hoặc liên quan chặt chẽ. Công ty cũng đang đánh giá các phương án cấu trúc liên quan đến NetSol Pakistan.

Ban lãnh đạo cho biết họ đã hoàn tất các cuộc thảo luận với một công ty nghiên cứu và kỳ vọng các báo cáo phân tích đầu tiên sẽ bắt đầu sau cuộc họp công bố kết quả kinh doanh. Công ty cũng có kế hoạch tìm kiếm sự theo dõi phân tích từ các đơn vị bổ sung.

Toàn văn cuộc họp công bố kết quả kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

Operator

Good morning and welcome to NetSol Technologies Fourth Quarter and Full Fiscal Year ended June 30, 2026 Earnings Conference Call. On the call today are Founder and Chief Executive Officer of NetSol Technologies Inc., Najeeb Ghauri, Global Head of Sales and Group Managing Director of Europe, Asad Ghauri; Chief Financial Officer, Sardar Abubakr; and Senior Vice President and Corporate of Legal Affairs, General Counsel and Corporate Secretary, Patti McGlasson. Also available for the Q&A portion, our Chief Accounting Officer, Roger Almond, and Chief Marketing Officer, Erik Wagner.

I will now turn the call over to Patti, who will provide the necessary disclaimer regarding the forward-looking statements made during today's call. Patti, please go ahead.

Patti McGlasson

Thank you. Good morning, everyone, and thank you for joining us today. After we review the company's business highlights and financial results for the fourth quarter and full fiscal year ended June 30, 2026. We will open the call for questions. .

Before we begin, I'd like to remind you that our remarks today will include forward-looking statements within the meaning of the federal securities laws, including the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include our fiscal 2027 guidance reflect management's current expectations and are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied. We encourage you to review the cautionary statements and risk factors contained in NetSol's press release issued earlier today as well as our filings with the Securities and Exchange Commission, including our most recent Form 10-K and quarterly reports on Form 10-Q.

I'd also like to note that today's discussion will include certain non-GAAP financial measures. A reconciliation of these measures to their most direct comparable GAAP figures can be found in the press release issued earlier today. A supplemental investor presentation is available through the webcast link and in the Investor Relations section of our website at irnetsoltech.com and has been furnished as an exhibit to the Form 8-K we will file with our press release issued this morning.

Lastly, please remember that this call is being recorded and will be available for replay on our website at ir.netsoltech.com and through a link included in today's press release. [Operator Instructions]

I will now hand the call over to our Founder and CEO, Najeeb Ghauri. Go ahead, Najeeb.

Najeeb Ghauri

Thank you, Patti. Good morning, everyone, and thank you for joining our call today to review our results for the fourth quarter and full fiscal year ended June 30, 2026. Fiscal '26 was the strongest financial year in NetSol's history. Total net revenues were $74.4 million, up 12.5% year-over-year basis and over -- and our $73 million guidance.

Non-GAAP EBITDA grew almost 23% and income from operations had nearly doubled. The growth reached the bottom line this year. These results reflect the company in the middle of a deliberate transformation from a services and license business and our platform business, recurring subscription and support revenue now represents approximately half of our total revenue. Later in the call, Sardar Abu, our CFO, will walk you through remaining performance obligations and the measures we will report each quarter so you can track the durability of this base.

In June, NetSol returned to the Russell Indexes added to 6 benchmarks, including the Russell 3000 and the Russell Microcap Index. Index membership matters for a company our size. It makes NetSol eligible with the many institutional mandates that are limited to index constituents, and it puts us back in the universes where institutional investors screen. Let me talk about the business behind these numbers. Fiscal 2026 gave us the proof points across every part of our strategy. Earlier this month, we announced that has signed a contract to upgrade from our legacy platform to Transcend Finance. BMO is one of the largest banks in North America, and this agreement is clearest validation yet of our upgrade strategy.

We have customers across North America, we have run our acquired legacy soft for decades. Each of them now has a modern path forward, and BMO shows what that path looks like. Long tenured customer chosen to deepen the relationship with NetSol on our newest technology. Across the rest of the business, the platform continued to deliver. In December, we signed one of the largest Transcend Finance contract extension in our history with a Tier 1 global auto captive customer. Transcend retail became a growth engine in the U.S. and Asad Ghauri will take you through the momentum in detail.

Our Asia Pacific business continued to perform, anchored by market leadership in China and expanding alongside our customers across the region. Fiscal 2026 was also the year we build the team for the next phase. Sardar Abubakr has joined us as a Chief Financial Officer in January. At our annual meeting in June, shareholders elected a strengthened Board reelecting Ian Smith, the former CEO of BMW Group, Financial Group for the U.S.A. and Americas, and adding Richard Howard, the former President and CEO of Daimler Truck Financial Services for North America; and Aamir Ibrahim, the CEO of Jazz World, one of the world's biggest digital operators, who earlier in his career, held senior leadership roles at the Ford Motor Company and Jaguar Land Rover. The people who ran our customers' business now help govern ours. I can think of no stronger endorsement of where the company is headed.

We're also transforming how we operate. Across Transcend Finance, we are reducing the resource intensity of our development and delivery model through AI-enabled development, automation and structural efficiencies. I want to be clear about how we think about this. It is not about reducing headcount, but its own say, it is about building a more scalable organization, one that is more nimble and faster to respond to changing market requirements, where our engineering and delivery capacity and grow client impact without growing costs at the same time. As part of that, we are focusing our investment on the core transplant platform and the adjacencies where NetSol has a defensible customer and domain advantage.

Looking to fiscal 2027, our priorities are very clear. First, scale, transcend retail across the U.S. dealer market; second, embed AI across our products and our operations; third, upgrade our legacy installed base to transcend the BMO in the template as a template. And fourth, grow with our customers as they expand into new markets. You saw that model this year when a leading Chinese leasing company went live on Transcend Finance in Indonesia. When our customers enter a new country, they take desal with them. We're also introducing full year guidance with our fourth quarter results, Sardar Abu will take you through the numbers.

I will close with this. We believe the value of what we have built the customer base, the recurring revenue, the platform is not yet reflected in our market valuation. And we see that as an opportunity. Last December, we rang the bell in Times Square, New York to mark our 26th year on NASDAQ. There is no better way to honor that milestone than the strongest year in our history, and we intend to build on it.

With that, I'll hand the call over to Asad Ghauri, our Global Head of Sales and Group Managing Director of Europe to walk through the commercial and sales update. Asad?

Asad Ghauri

Thank you, Najeeb, and good morning, everyone. My focus today is on what's converting to revenue for us and the pipeline behind it. But before I start, one point of context for everyone on this call is our key messaging. Our core growth is in today and going over this Transcend Finance worldwide, and Transcend retail is our big bet in our home market in the U.S., and total focus is on the execution of that.

I'll start with the go-lives this year. We've had multiple A leading Chinese leasing company launched its Indonesian operations on Transcend finance. Northridge Finance Division of the Bank of Ireland when dive on Transcend to support its growth strategy in the U.K. a Tier 1 U.S.-based auto captive went live on Transcend Finance in China, a deal valued at multiple millions leasing Thailand with the latest wholesale finance system on our Transcend platform, expanding its use of analogy. These go live convert into recurring subscription support revenue going forward exactly the visibility. So that will be quantified in the call.

We also renewed a multimillion dollar contract with a Tier 1 multinational bank in the United Kingdom, extending that relationship for more than a decade by another 10 years and deepening our president in the U.K. asset finance market. Let me go to transcend retail, our digital retail platform for OEMs and dealers. The commercial progress this year was real. It's accelerating [indiscernible] automotive, the Fortune 500 leadership group is building its branded digital retail experience on our platform. Our platform is rolling out across approximately 350 franchise dealerships of a premium global OEM in North America, one of the largest digital retail deployments in the U.S. automotive market.

The U.S. digital retail market remained large and underpenetrated and our combination of finance and leasing them fast time to go live and a modern customer experience is winning head-to-head evaluations against well-funded competitors. We're the only vendor at the table who also runs the lender side of the transaction, and that is why we will win. We expect that Transcend retail to be one of the most important growth stories in the company over the next several years.

Alongside retail, there is a second U.S. growth motion upgrades, our legacy installed base is defined set of accounts where we are the incumbent relationships that, in some cases, spend decades. BMO is a template, legacy to transfer upgrades are now an active category in our pipeline and each updates the maintenance relationship into a modern subscription relationship.

A word on AI. It's it's an area of focus for the company, and it's increasingly center to how customers engage with us commercially. During the year, we introduced various product functionalities in the AI-enabled credit decisioning areas, automating manual task, manual task accelerating decision time and the improving underwriting accuracy. And we deployed intelligent document processing systems with AI capability within the platform. All of these have amplified the efficiencies for our clients, and we expect to push forward with that. Another key aspect of our AI focus is our platform has become AI native. So while we focus on presenting products within our platforms, the enablement of our customers to be able to deploy their own AI functional pieces is as important.

And the architecture currently of Transcend Finance and retail supports that. and that has been real traction for the pipeline remains strong, supported both by expansion within our existing customer base and by new business development. The pipeline, together with the upgrades and rollouts already signed, BMO, the OEM retail deployment and the extension -- expansion of the customers are taking into new markets is what underpins the guidance Sardar will walk you through.

With that, I'll hand over the call to our CFO, Sardar to review the financial results.

Sardar Abubakr

Thank you, Asad, and good morning, everyone. Fiscal 2026 was an important year for the company. We delivered double-digit revenue growth, expanded gross and operating margins, nearly doubled operating income and generated strong cash flow. Just as importantly, we are putting in place the financial discipline, operating model and performance metric required to make this progress durable.

My comments will cover 5 areas: the rebound and fourth quarter exit rate, the quality of the full year results, the strength and use of our balance sheet, the actions underway to improve earnings conversion and simplify the organization, and our guidance for fiscal 2027. Before turning to the full year, I want to provide a fourth quarter perspective. Fourth quarter revenue was $20.7 million, a record quarter for us, up 12.5% year-over-year. Subscription and support revenue grew 9% to $8.9 million, while services revenue increased 21.3% to $11.7 million. Fourth quarter gross profit increased 27.3% to $13.2 million and gross margin expanded to 63.6% from 56.2%.

Operating income increased 40.2% to $4.5 million, representing an operating margin of 21.6% compared with 17.4% last year. GAAP income, net income attributable to NetSol increased 45.9% to $3.8 million or $0.32 per diluted share compared with $0.22. The exit rate is particularly important in the context of our start to the new year. In the first quarter, last year, revenue was $15 million, gross margin was 39.4%, and operating loss was $1.8 million and net add loss attributable to net sold was $2.4 million. By the third quarter, however, revenue had reached a then record $19.8 million, gross margin was 55.6% and operating income was $3 million. In Q4, revenue reached $20.7 million, gross margin was 63.6%, and operating income was $4.5 million.

From Q1 to Q4, revenue increased by approximately 38%, gross margin expanded by more than 2,400 basis points and the quarterly operating result improved by approximately $6.3 million. This demonstrates a meaningful rebound in execution while recognizing that time of agreements, implementation milestones and development capitalization can create quarter-to-quarter variability. For the full year, total net revenues increased 12.5% to a record $74.4 million, above our $73 million guidance. Subscription and support revenue increased 8.7% to $35.8 million, demonstrating continued growth in the recurring foundations of the business.

Services revenue increased 3.3% to $33.6 million as we progressed major implementation. License revenue was $5 million and included approximately $4.7 million associated with the renewal and amendment of an existing Transcend customer agreement. We want investors to distinguish absolute recurring revenue growth from revenue mix. Subscription and support represented 48.1% of revenue compared to 49.8% last year because license revenue increased this year. We will increasingly supplement disclosure with consistent measures of recurring revenue remain performance obligations and implementation activity.

We are also introducing a metric we call contracted revenue. As of June 30, 2026, contracted revenue was approximately $60 million. We define this as revenue expected under existing signed agreements plus our best estimate of change requests from those same customers and same agreements. It is not annual recurring revenue, not backlog and of course, not a guaranteed revenue floor. We will report this each quarter on a consistent basis, and our objective is to grow well above it through transcend deployments, expansion within existing customers, selected new customers and partnerships.

Turning to gross profit. Gross profit increased 20.2% to $39.1 million and gross margin expanded 330 basis points to 52.6%. Operating income increased 98.4% to $6.9 million, with operating margin increasing from 5.3% to 9.3%. These are the clearest indicators of improved execution. The results benefited from revenue mix, delivery leverage and the capitalization of qualifying software development costs. We will provide investors with clearer visibility into total product development investment so that the underlying trend remains transparent.

Non-GAAP EBITDA grew 22.8% to $8 million. Consolidated adjusted EBITDA increased 68.8% to $9.15 million compared to $5.42 million. Adjusted EBITDA attributable to net sold increased 61% to approximately $6.01 million compared with $3.73 million. The prior year comparison has been recast to exclude foreign exchange gains and losses on a consistent basis. Reconciliations of all non-GAAP measures are included in today's earnings release. Net income attributable to net sold was $2.95 million or $0.25 per diluted share consistent with the prior year. This should be considered in the context of 2 significant movements. First, fiscal 2025 included a foreign exchange gain of $1.3 million and interest and investment income of $1.87 million.

In fiscal 2026, we recorded a foreign exchange loss of $0.39 million and interest income of $1.07 million. Total other income was therefore approximately $2.27 million lower year-over-year. Second, income attributable to noncontrolling interests increased by approximately $1 million to $2.65 million. Despite those headwinds below operating income level, consolidated net income increased 22.4% to $5.6 million. We believe that this bridge demonstrates that the underlying operating business improved materially this year, even though the improvement was not yet fully reflected in earnings attributable to NetSol shareholders.

Turning to net cash. Net cash provided by operating activities was $13.9 million compared with $0.4 million last year, and cash increased 56.3% to $27.1 million. As we indicated in our third quarter call, the working capital timing that reduced cash at March 31 reversed in the fourth quarter. This is a meaningful improvement in financial capacity. Contract liabilities contributed approximately $6.5 million to operating cash flow, reflecting advanced billings and customer commitments. We do not assume that this working capital benefit will repeat, of course, at the same level year-over-year.

During the year, we invested approximately $2 million in property and equipment and $2.7 million in capitalized software development. After these investments, the business still generated approximately $9.8 million of cash. We will remain disciplined in balancing product investment, liquidity, potential strategic transactions and shareholder value. Supporting the 4 strategic priorities Najeeb outlined, our financial agenda for fiscal 2027 is quite straightforward: grow recurring revenue and its visibility, protect and improve margins. apply AI in practical and measurable ways, focus the portfolio on our highest return opportunities and strengthen the conversion of consolidated profit into value for NetSol shareholders.

We will apply AI where the outcomes of manageable, faster development and testing less implementation effort, better support resolution and automated back-office processes. That is part of a broader efficiency program that will continue through fiscal 2027. As of June 30, 2026, we employed approximately 1,370 people compared with approximately 1,460 a year earlier, while revenue grew 12.5%. We are reviewing workforce structure utilization location strategy and skills and AI embedded delivery model requires. This is not a head count reduction exercise. It is a disciplined review of how we deploy people and direct capacity towards product innovation, customer delivery and growth.

We are also reviewing our portfolio for simplification. This includes assessing products, legal entities, activities against strategic fit, growth potential, margin, cash requirements and management complexity. Capital will be directed to the core asset finance platform and close to core adjacencies where NetSol has a defensible customer and domain advantage. A further strategic priority for us is evaluating minority interest in Pakistan. The Pakistan business is a major contributor to the company, but the increasing allocation of our to noncontrolling interest does reduce how much of our consolidated performance reaches NetSol shareholders.

As we have said before, we are actively evaluating structural options to address this over time, subject to valuation funding, regulatory and tax considerations and the rights of minority shareholders. Please note that no transaction has been approved, and we cannot guarantee that our objectives will be achieved in the near long term, and we will communicate when a specific course of action is sufficiently developed. Our growth strategy combines organic execution and selective strategic partnerships, JVs and acquisitions in core and close to core adjacencies. We will apply a strict criteria, product and customer fit, recurring revenue quality, margin and cash profile, integration complexity and a clear return above our cost of capital. We will not pursue scale for its own sake.

For fiscal 2027, NetSol currently expects net revenues to grow 13% to 16% over fiscal 2026, gross margin of approximately 50% or better, consolidated adjusted EBITDA growth of 15% to 25%, corresponding to approximately $10.5 million to $11.4 million. This guidance assumes continued subscription growth execution of contracted implementations, disciplined cost management and no material acquisitions. While it's important to note that the timing of agreements, implementation milestones, foreign exchange, customer decisions and advanced billings can create variability between quarters. Our focus will be on full year execution and the quality of growth.

In summary, fiscal 2026 demonstrated that NetSol can grow while expanding margins and generating cash. The next phase is to make that performance more predictable, more transparent and more valuable to NetSol shareholders. We will do that through recurring growth, disciplined execution, practical AI adoption, portfolio simplification, thoughtful structural action and rigorous capital allocation.

With that, operator, please open the line for questions.

Operator

[Operator Instructions] Our first question is from Greg Burns with Sidoti & Company.

Phần hỏi đáp

Unknown Analyst

Just wanted to first touch on the '27 guidance for gross margins, I guess, it's implying down a little bit year-over-year. Is there going to be a shift in mix? Or what is driving that outlook for a little bit reduction in gross margin?

Najeeb Ghauri

Thank you for the question. Abu, want to jump in?

Sardar Abubakr

Yes. Yes. So I'll take this. So thank you for the question. We are optimistic of our gross margin forecast. We believe that the guidance that we have given of 50% is a stable guidance. It is a guidance that wherever we go into new agreements and also review existing agreements, we do expect a more than 50% gross margin in our business. You saw in the numbers that I quoted that we closed at a higher rate. We expect no reasons why we would not be able to achieve growth in this. But the staple guidance that we like to give the market today is that we will be at least 50% or better. And as we progress quarter-over-quarter, we will continue to monitor and upgrade that guidance as needed.

Unknown Analyst

Okay. And then with the transition from lease peak to Transcend with BMO that you announced. When you do a transition like that, I know you mentioned you're moving from a maintenance to a subscription revenue, but is there any like revenue uplift or margin benefit? What are the additional benefits to transitioning from that legacy platform to Transcend for you?

Najeeb Ghauri

I mean I'll let Asad answer the question. .

Asad Ghauri

Yes. Thanks, Najeeb. So I think it provides a huge uplift to our subscription revenue. Implementation again, is dependent on how we structure the upgrade with the client. But definite bump up for us overall in our subscription revenue as we move forward with them, which is our primary focus.

Unknown Analyst

Okay. How big is your lease peak installed base maybe from a number of customers?

Asad Ghauri

Yes, lease tax. So it's about 7 customers currently.

Najeeb Ghauri

All U.S. based.

Unknown Analyst

Okay. All right. And then the Transcend retail in the U.S., can you just give us a little bit more color on the pipeline opportunity. I know you announced 3 dealers that launched maybe earlier this quarter. But could you just talk about the pipeline and why you won there and what benefits you're bringing to the auto dealer market in the U.S.

Asad Ghauri

So -- so I mean, we've got the digital retail space divided into 2 areas. The 3 dealers that you refer to are part of bigger dealer groups. So they all carry more than 15 dealerships within the group. So our primary protocol is to ensure that we get the initiation right in these 3 dealers. And with that, it opens up the other dealerships within the group. So I said we have 2 focuses. One is Tier 1 OEMs, we're doing a rollout for, which is the 350 could potentially turn out to BMO. So that's a space that we have great engagements in.

And lastly, on the DGG side, which is where we define dealership groups that we're seeing the traction and you see those 3 dealers, you'll see more coming on as we move forward in the year over the potential of adding 20 -- 15 to 20 dealers average based on the go live of that customer, if that makes sense.

Unknown Analyst

Yes, that does. So when we look across the 3 geographies that you're in, where do you expect the most growth to see the most growth? Is it in the U.S. with the retail part of the business or...

Asad Ghauri

So for me, I think they made momentum for us in all 3 regions right now. As we explained earlier and I presented that our core focus in the U.S. besides Transcend Finance is retail, and we would like to execute there before moving on to other regions. But Transcend Finance, on the other hand, is tracking really well, and you'll see that in the coming weeks, some of the announcements that we make.

Operator

Our next question is from Todd Felte with StoneX.

Todd Felte

Congratulations on a great quarter. Nice to see the growth in revenues, margins and earnings. I wanted to touch on the cash position. I saw it grown to a little over $27 million. And in the past, you had talked about some M&A activity or possibly buying a full ownership of NetSol PK. Was just wondering if you can kind of update us on that as well as if any share buybacks are going on.

Najeeb Ghauri

I think I can add a point that Asad will come in. Absolutely, we are very pleased with our cash position and company's very conscious opportunities, particularly in the U.S. market because we see a lot of opportunities, whether they're M&A or just new relationships. But I think Asad can give you some more color about that how LG is thinking about really using the cash. Well, Asad and Abu? .

Asad Ghauri

I think I'll leave the cash part to our experts, Abubakr that is. But on the M&A side, I think there's definite interest. We are well positioned, and we will keep the market informed as we see traction and positivity in those increments. But they are down going. Abubakr, you want to take the cash, please?

Sardar Abubakr

Sure. Sure. Sure. So thank you for the question, Todd. Two aspects. One that I covered in my script. We are actively evaluating structural options when it comes to NetSol Pakistan. So that's number one. Number two, as I also mentioned in my script, we are evaluating what we call core pros to core adjacencies. U.S. is our home market, we are committed to growing the U.S. market at a significant rate, both through our flagship Transcend Finance platform, as you saw with BMO deal, but also our big bet, which is Transcend retail.

In addition, given we also operate in Europe and APAC, we are selectively evaluating potential close to core adjacencies, partnerships and potential future acquisitions. As those discussions develop, we will consistently and transparently update the market. But rest assured, the cash position that you see will be used for growing our existing core business, invest in product innovation, becoming a nimble organization, but also inorganic opportunities as we see [indiscernible] NetSol.

Todd Felte

Okay. That's great to hear. Really appreciate the color on all that. And then finally, I just wanted to maybe get an update on Investor Relations. I know you've been doing some conferences. Is there any plans to have analyst coverage in the near future? I don't see any analyst reports out there as of now. .

Sardar Abubakr

Sure. So I'll take that, Najeeb and Asad. We will be updating the market soon. We fully recognize that NetSol as a stock must have more consistent analyst coverage and not even one. Ideally, we should have coverage by more than one analyst. We are -- have now finalized discussions with research -- a reputed research analyst firm and that coverage will start after this earnings call and the process of that will complete. However, we are not stopping there. We believe, as I said, that multiple analyst coverage is a way to go to get our story out there. I think I'll leave you with one thing on this furthermore Todd, and this is towards everyone who has dialed in. I encourage everyone to compare NetSol's stock performance this year versus NASDAQ, NASDAQ composite the software industry and also our peers. And I believe, as Naj stated in his opening note that this is a story that we will get out there more, and you should start to see analyst coverage in the quarters ahead.

Todd Felte

Okay. That's very helpful. I know when I look at the enterprise value of the company, I mean, you just seem so ridiculously undervalued that I'm hoping that will change in the near future. But I appreciate you taking my questions, and congratulations again to you and your team on such a good job.

Najeeb Ghauri

I want to add, Todd, I think for the audience, this company was in a different direction in a very exciting way. What we have seen in the last 2 years and our results delivered today is -- shows that the company sees a very big opportunity, particularly in the U.S., whether it's a retail, digital retailer, our main platform. It's a growing market for us, and we're just about to could have a few new contracts, and we mentioned about it. We were in the road show and DMO. And I think our team is very excited about getting new investors 3, 4 of them are going to New York and cover the places to meet with a lot of new potential bankers, investors, you'll see increased interest in the stroke because now we feel the company has the right trajectory to really make sure that an investor who comes in, they'll have a good ROI in the short to long term. So we're really excited about it.

And in the closing, I thank everyone for your questions. We remain focused on executing against our strategic priorities and building on the momentum across our business, and we look forward to reporting our progress against the guidance we introduced today. Before we go, I want to thank all of our colleagues around the world who was very hard to make who we are today. They delivered the strongest year in our history. And thank you for all of your time today. And you [indiscernible].

Asad Ghauri

I think there will be some questions outstanding

Najeeb Ghauri

Are there any questions outstanding?

Asad Ghauri

Yes, I think there's some people waiting to ask some more questions.

Najeeb Ghauri

Go ahead. Take it.

Operator

[Operator Instructions] Our next question is from Peter Sidoti with Sidoti.

Unknown Analyst

I'm sorry, I'm still learning on the name. The release didn't include financials, and I don't think the 10-K has been filed. Can you just give me a handle on when the actual numbers will be available?

Najeeb Ghauri

Asad, [indiscernible] not today?

Asad Ghauri

Sure. So the press release should be available and the 10-K should be available later today.

Operator

There are no further questions at this time. Najeeb, would you like to continue your closing remarks?

Najeeb Ghauri

Yes. So I think before we go, I want to thank our colleagues around the world who delivered these very strong numbers today in our history. And I thank all our shareholders we're committed long term and they look for this company at a possibility for us to really create not just the ROI, but also excitement in the company because we are very excited for our future, and we believe that we will really turn the corner. We already have turned the corner for this year. Thank you for your time today and your continued interest in NetSol. We appreciate you being a part of this journey with us. Thank you, and have a good day.

Asad Ghauri

Thank you.

Operator

Thank you. This will conclude today's conference. You may disconnect at this time, and thank you for your participation.