What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-05-14 compared with 2026-02-12 · 403 added, 527 removed, 206 unchanged (82% of the section changed)

1 unchanged sentence

following discussion is intended to assist in an understanding of the Company’s financial position and results of operations for

the three months ended December 31, 2025.

The following discussion should be read in conjunction with the information included within

our Annual Report on Form 10-K for the year ended June 30, 2025, and the Condensed Consolidated Financial Statements and notes thereto

included elsewhere in this Quarterly Report on Form 10-Q.

the three months ended March 31, 2026.

The following discussion should be read in conjunction with the information included within our

Annual Report on Form 10-K for the year ended June 30, 2025, and the Condensed Consolidated Financial Statements and notes thereto included

elsewhere in this Quarterly Report on Form 10-Q.

website is located at https://netsoltech.com/ , and our investor relations website is located at https://ir.netsoltech.com.

39 unchanged sentences

The Company does not intend to update these forward-looking statements.

Technologies is a global business services and asset finance solutions provider.

NetSol delivers state-of-the-art solutions for the asset

finance and leasing industry, serving automotive and equipment OEMs, auto captives and financial institutions across over 30 countries.

Since its inception in 1997, NetSol has been at the cutting edge of technology, pioneering innovations with its asset finance solutions

and leveraging advanced AI and cloud services to meet the complex needs of the global market.

for its deep industry expertise, customer-centric approach and commitment to excellence, NetSol fosters strong partnerships with its

clients, ensuring their success in an ever-evolving landscape.

With a rich history of innovation, ethical business practices and a focus

on sustainability, NetSol is dedicated to empowering businesses worldwide, securing its position as the trusted partner for leading firms

around the globe.

primary sources of revenues have been licensing, subscriptions, modification, enhancement and support of our suite of financial applications,

under the brand name Transcend™ Finance (formerly called NFS Ascent ® ) for leading businesses in the global finance

and leasing space.

clients include blue chip organizations, Dow-Jones 30 Industrials, Fortune 500 manufacturers, financial institutions, global vehicle

manufacturers and enterprise technology providers, all of which are serviced by our strategically placed support and delivery locations

around the globe.

are also committed to serving Tier-2 and Tier-3 banks and financial institutions.

We understand the unique challenges faced by these

institutions, which is why we offer innovative cloud implementation solutions without any license fees, with rapid deployments and the

with ability to scale.

Further, our out-of-the-box, API-first products are designed to seamlessly integrate into existing systems, providing

flexibility and scalability that smaller institutions often need.

By prioritizing accessibility and ease of use, we empower smaller financial

companies to enhance their service offerings and streamline operations, positioning ourselves as a trusted partner in their digital transformation

in 1997, NetSol is headquartered in Encino, California.

While the Company follows a global strategy for sales and delivery of its portfolio

of solutions and services, it continues to maintain regional offices in the following locations:

California and Austin, Texas

Metropolitan area, Horsham and Flintshire

Karachi, Bangkok, Beijing, Tianjin, Jakarta and Sydney

believe that our strong technology solutions offer our customers a return on their investment and allows us to thrive in a hyper competitive

and mature global marketplace.

Our solutions are bolstered by our people.

We believe that people are the drivers of success;

we invest heavily in our hiring, training and retention of top-notch staff to ensure not only successful selling, but also the ongoing

satisfaction of our clients.

Taken together, this “selling and attentive servicing” approach creates a distinctive advantage

for us and a unique value for our customers.

We continue to underpin our proven and effective business model, which is a combination

of careful cost arbitrage, subject matter expertise, domain experience, scalability and proximity with our global and regional customers.

expertise in enterprise technology and financial application development has helped us emerge as a global player in the finance and leasing

industry and enabled us to secure a broad footprint across the major markets of North America, Asia Pacific and Europe.

The Asia Pacific

region has particularly benefitted from the organic growth in the fast-developing leasing automation industry, which is still nascent

as per Western standards.

is a dynamic leader and has been able to accumulate a wealth of experience in the global asset finance and leasing industry.

built a large knowledge base which is regularly refined and updated to ensure the most up-to-date best practices and business solutions

for the benefit of our clients and partners.

We have a strong presence in the captive asset-finance domain.

We have had continual operations

for nearly three decades in Asia Pacific and Europe and over four decades in North America.

with Global and Regional Customers

have offices across the world, located strategically to maintain close contact and proximity with our customers in various key markets.

This has not only helped us strengthen our customer relationships, but also build a deeper understanding of local market dynamics.

Simultaneously,

we can extend services and support development through a combination of onsite and offsite resources.

This approach has allowed us to

offer blended rates to our customers by employing a unique and cost-effective global development model.

our business model is built around the development, implementation and maintenance of our suite of financial applications, we employ

the same facilities and competencies to extend our services to related segments, including but not limited to:

ML and data analytics

technologies|

global operations are broken down into three primary regions:

North America, Europe and Asia Pacific.

All of the subsidiaries are seamlessly

integrated to function effectively with global delivery capabilities, cross selling to multinational asset finance companies, leveraging

the centralized marketing and pre-sales organization, and a network of employees connected across the globe to support local and global

customers and partners.

is a provider of solutions and services that enable automotive and equipment OEMs, captive finance companies, dealerships and financial

institutions to originate, service and manage finance and lease contracts across the full lifecycle.

in 1997, the Company develops and delivers enterprise software for asset finance and digital retail that supports the contract lifecycle.

The Company serves customers in more than 30 countries, with operations spanning North America, Europe and Asia-Pacific.

Company’s customer base ranges from Fortune 500 manufacturers and Dow Jones Industrial Average constituents to mid-market financial

institutions and dealerships.

The Company’s cloud-deployed, subscription-based Transcend™ Platform, built on an API-first

architecture, supports customers across this range with global delivery and support operations.

is headquartered in Encino, California.

The Company maintains regional offices in the following locations:

Encino, California and Austin, Texas, US

London, Horsham and Flintshire, UK

● Asia-Pacific:

Sydney, Australia;

Bangkok, Thailand;

Beijing and Tianjin, China;

Jakarta, Indonesia;

and Karachi, Pakistan;

Presence and Domain Expertise

and its acquired businesses have more than 40 years of operating experience in North America, 30 years in Europe and 25 years in Asia-Pacific,

with a significant concentration of business in the captive finance segment.

The Asia-Pacific business benefits from continued growth

in leasing automation adoption across developing markets in the region, while operations in North America and Europe serve more mature

Building on this foundation in automotive finance and leasing, the Company has expanded into adjacent areas, including digital

retail solutions.

Delivery Model

Company operates a blended onshore and offshore delivery model, with regional offices located near key customers and centralized development

resources supporting global product delivery.

This model enables competitive cost structures, cross-selling across regions to multinational

customers and consistent platform delivery across geographies.

PRODUCTS AND SERVICES

the complete finance and leasing lifecycle starting from quotation origination through contract settlements, our products are designed

and developed for highly flexible settings and are capable of dealing with multinational, multi-company, multi-asset, multi-lingual,

multi-distributor and multi-manufacturer environments.

Our solutions empower financial institutions to effectively manage their complex

lending portfolios, enabling them to thrive in hyper-competitive global markets.

on cutting-edge, modern technology, NetSol’s unified Transcend™ Platform is an AI-powered digital retail and asset finance

solution for automotive and equipment OEMs, auto captives, commercial lenders, dealers, brokers and financial institutions.

AND SERVICES:

TRANSCEND™ PLATFORM

Transcend™ Platform, powered by NetSol, is an AI-driven unified ecosystem that revolutionizes how assets are sold, financed and

Designed to automate and optimize every step - from sales to originations to servicing, Transcend™ leverages AI and ML

to drive predictive insights and smarter decision-making.

Retail (Formerly Known as Otoz®)

revolutionize auto and equipment retail with a fully digital, integrated platform that simplifies the entire customer journey.

purchasing to finance approval, Transcend™ Retail (formerly known as Otoz®) offers advanced retail and mobility solutions that

keep dealerships or OEMs at the cutting edge of consumer expectations.

Finance (Formerly Known as Ascent®)

streamline finance and leasing operations with a comprehensive solution for originations, servicing and wholesale finance.

Finance (formerly known as Ascent®) empowers automotive and equipment OEMs, auto captives, commercial lenders, dealers, brokers and

financial institutions with end-to-end visibility and control, ensuring seamless workflows and accelerated business outcomes.

streamline the entire origination process, from submission to approval, with advanced features such as real-time, AI-powered credit decisioning,

automated deal flows and more.

enable financial institutions to attain real-time insights into portfolio performance, delinquencies and losses, enabling proactive portfolio

management and strategic decision-making.

wholesale finance solution empowers customers to gain a competitive edge by automating their wholesale finance and floor planning operations

effortlessly.

Marketplace (Formerly Known as Appex Now)

Marketplace (formerly known as Appex Now) offers a suite of flexible, component-based solutions that integrate seamlessly with the customer’s

existing infrastructure.

Transcend™ Marketplace is a modular, API-first solution that addresses every aspect of finance and leasing

using tools for calculations, document generation, loan origination and lending configurations.

is an API-first, ready-to-use calculation and quotation engine.

It is a one-stop solution that guarantees precise calculations at all

stages of the contract lifecycle through various calculation types.

All the calculations are parameter-driven, which helps perform simple,

multi-dimensional or complex calculations based on the needs of a business.

Flex™ has a lightning-fast onboarding process, which

can take place in mere minutes.

is an API library that enables companies to standardize all their API integration procedures across multiple API services through a single

In addition to traditional lending companies, Hubex™ can also streamline the operations of dealerships, vendors and

With a ready-to-use service, Hubex™ makes it easy for businesses to seamlessly connect with multiple APIs and achieve

their desired outcomes.

Pre-integrated services in the Hubex™ library include, but are not limited to, payment processing, bank

account authentication, finance and insurance products, fraud check, know your customer (KYC) service, driver license verification, address

validation, vehicle valuation and notification service.

is a cloud-based parameter storage that smoothly runs all of a company’s core lending operations.

It is an accumulation of all

the master setups, including asset catalog and inventory, programs, rates, and profiles for lenders, dealers and multiple partners, in

one centralized location for all business types.

Index TM can enhance delivery efficiency and program management for easy integration

into all systems.

is an advanced document generation tool that lets a company create accurate and professional-looking documents in just seconds.

Dock TM ’s template-based configuration, a company can set up placeholders for data, essentially simplifying the document creation

process and reducing the chance of human error.

Its API-first architecture ensures scalability, making it capable of handling any document

generation task, from single documents to millions, with ease.

offers a feature-rich, end-to-end order management system for asset leasing and loans and credit companies.

Our platform covers all aspects,

from conducting end-to-end sales to performing dealer and partner-related tasks and marketing-related activities.

The system offers a

variety of dashboards that provide vital information for dealers and partners while enabling quick order management and providing a way

for users to record and submit a complete credit application for their clients.

is a purpose-built platform designed for brokers, lenders, dealers and borrowers to work seamlessly together.

With tailored solutions

that simplify applications and automate key processes, Link TM is designed to enhance customer relationships whilst making

compliance effortless.

This results in faster approvals, enriched customer experiences and stronger loyalty via elevated customer satisfaction.

and effectiveness are paramount for any broker.

Managing disparate systems and processes can be cumbersome and time-consuming, often

leading to inefficiencies and missed opportunities.

NetSol offers a solution to these challenges by consolidating disparate processes

into a single unified interface, revolutionizing the way a brokerage operates.

lender-specific portals are designed to transform the lending process by enhancing risk management and driving profitability.

tools not only streamline loan origination, but also facilitate seamless communication and collaboration with the lending ecosystem.

We empower a company’s lending process with intuitive and efficient lender portals designed for a seamless user experience.

the competitive automotive industry, dealers need efficient and comprehensive solutions to manage their operations effectively.

intermediary portals serve as digital command centers, providing dealers with a wide array of tools, resources and services to optimize

every aspect of their business, from inventory management to sales and marketing.

businesses with Transcend™ Consulting Services, we offer expert guidance across critical areas like information security, data

engineering and cloud services.

Our team partners with businesses to create tailored solutions that drive innovation, efficiency and

are leading AI-driven innovation with our Transcend™ AI Labs, integrating advanced AI services into our product suite to solve

the unique challenges of BFSI, equipment and auto OEMs and dealerships.

Our tailored solutions drive industry-specific advancements,

helping companies stay ahead in a competitive market.

below are a few of NetSol’s highlights for the quarter ended December 31, 2025:

entered into a four-year contract extension valued at approximately $50 million with a long-standing customer and strategic partner.

The extension reinforces recurring revenue through ongoing maintenance and licensing fees and expands the customer’s continued

use of the Transcend™ Finance platform across multiple countries.

launched Check AI , an AI-powered credit decisioning engine within the Transcend™ Finance platform.

The solution automates

manual credit workflows, accelerates decision-making, and enhances underwriting accuracy through improved data aggregation, document

processing, and financial analysis.

signed a contract valued at approximately $1.75 million with a provincial government entity in Pakistan, funded by the World Bank,

to support the digitization of government workflows.

The project focuses on process automation and cross-departmental system integration

to improve operational efficiency and public service delivery.

successfully went live with a China-based captive automotive finance company, deploying a localized Transcend™ Finance platform

to support dealer and customer financing operations.

The implementation enables streamlined credit workflows, regulatory compliance,

and scalable growth.

Thailand-based captive finance company of a leading Japanese automotive manufacturer went live on the upgraded Transcend™ Wholesale

platform, automating wholesale financing, inventory management, and dealer credit processes and improving operational visibility.

UK-based multi-asset finance company successfully went live on the Transcend™ Finance Wholesale platform, enabling wholesale

loan origination, servicing, and digital dealer self-service across its European operations.

leading German automotive manufacturer in North America successfully completed a dealer portal pilot, enabling enhanced dealer self-service,

real-time financing workflows, and improved digital engagement.

The pilot represents a milestone toward broader rollout.

secured a third-party support services engagement with a global automotive captive finance company in China, generating approximately

$0.8 million in annual recurring revenue.

The engagement includes ongoing platform support and operational services.

generated approximately $1.5 million in incremental revenue through the delivery of platform modifications and enhancements requested

by multiple customers across various regions.

Institute of Artificial Intelligence entered into a strategic partnership with Pakistan’s national vocational and technical

training authority to train approximately 1,600 individuals in artificial intelligence, data science, and cybersecurity.

The initiative

is expected to generate over $1 million in revenue.

has identified the following material trends affecting NetSol.

global automotive market appears to be holding steady or growing, positively affecting our customers’ potential revenues and,

accordingly their willingness to spend on technology solutions:

the volatility of the 2025 automobile market, executives still pointed to critical opportunity areas for 2026, including the demand

for Battery Electric Vehicles (BEV) and Advanced Drive Assistance Systems (ADAS) (S&P Global Mobility, January 14, 2026).

to recent forecasts, China’s auto sales in 2025 are expected to reach approximately 32.9 million units, representing a 4.7%

year-over-year increase.

Sales of New Energy Vehicles (NEV) account for 48.7% of all new car sales in China.

(China Automobile Manufacturers

Association).

China’s sales target for NEVs in 2025 is projected to reach 15.5 million units, amounting to a 20% rise over

2024 figures (Fastmarkets, September 19, 2025).

OEMs have rapidly scaled exports globally, notably to Europe and emerging economies, selling approximately three million vehicles

per year to major regions since 2020.

Chinese vehicles provide significant cost advantages stemming from integrated supply chains,

innovative battery chemistries, concentrated mineral refining capabilities, advancements in local engineering capabilities, and high

competition among the rapidly expanding base of legacy and emerging OEMs (PWC, January 30, 2026).

forecasts project North American vehicle production volumes will return to mid-2019 levels by 2030, driven by capacity expansions

and reallocation toward BEV and HEV (Hybrid Electric Vehicle) vehicles.

Global players are investing heavily in expanding facilities

in North America, while others are repurposing BEV capacity for flexible manufacturing lines that can adapt to evolving demand (PWC,

January 30, 2026).

exports have grown rapidly, with Chinese manufacturers penetrating nearly all major global regions except the US—adding approximately

three million vehicles in exports since 2020.

This export surge targets primarily Europe, Latin America, and parts of Southeast Asia,

where Chinese OEMs such as BYD and Chery offer quality vehicles at low cost.

Localized production strategies and expanding EU dealerships

support this growth (PWC, January 30, 2026).

overall size of the mobility market in Europe and the United States is projected to increase to over $425 billion combined by 2035

or a compound CAGR of 5% from 2022 (Deloitte Global Automotive Mobility Market Simulation Tool).

global automotive finance market size was valued at approximately $295.13 billion in 2024 and is projected to reach $451.71 billion

by 2030, representing a compound annual growth rate (CAGR) of 7.4% from 2025 through 2030 (Grandview

conflict in Gaza has disrupted the entire Middle East region since October 7, 2023.

The conflict has expanded to neighboring nations

such as Syria, Lebanon, and Iran.

The unrest and turmoil in the region are viewed unfavorably by the regional business community.

While recent ceasefire efforts may signal a positive change to the volatility in the region, there is no guarantee that the ceasefire

will hold or that any outcome of the conflict will positively affect the region.

Gulf markets remain cautious due to ongoing uncertainties

(CEO Today, October 10, 2025;

Reuters, December 17, 2025).

new-vehicle sales pace in the U.S.

in 2026 will decline to 15.8 million from 16.3 million in 2025.

Slower economic growth, softer

job creation, and the loss of EV tax incentives are all expected to weigh on demand (Cox Automotive, January 27, 2026).

economic conditions in our geographic markets, inflation, economic uncertainty, and increased operational costs are pressuring margins

and leading companies to prioritize critical investment and control spending.

cybersecurity faces unprecedented challenges as companies increasingly migrate critical functions to cloud platforms.

Proliferation

of AI tools within these platforms has created additional attack vectors that require specialized security approaches beyond legacy

protections (JOSYS.COM).

imposition of tariffs on China and on other US trading partners may affect the price of consumer goods, including vehicles, amongst

others, negatively affecting the profitability of many of our customers.

products and services enable automotive and equipment OEMs, captive finance companies, dealerships and financial institutions to sell,

finance and lease assets.

The Company’s offerings support the full contract lifecycle from origination through end-of-term, including

credit decisioning, contract servicing, collections and remarketing, for customers operating across multiple entities, currencies, languages

and asset classes.

delivers these capabilities through the Transcend™ Platform, the Company’s unified product offering.

Transcend is delivered

as a suite of integrated modules, cloud-deployed and subscription-based, built on an API-first architecture for integration with existing

The platform incorporates embedded AI capabilities to support credit decisioning and other use cases.

Retail is an omnichannel digital retail platform for automotive OEMs and dealerships that supports the vehicle sales process across online

and in-store channels.

Capabilities span lead management, deal structuring, credit applications, finance and insurance (F&I) workflows

and contracting, with integration to dealer management systems, CRM platforms and lender networks.

Finance manages retail finance and leasing contracts, as well as wholesale finance and dealer floor planning operations, for automotive

and equipment OEMs, captive finance companies, commercial lenders and financial institutions.

The platform supports the full lifecycle

from origination through end-of-term, including AI-assisted credit decisioning, funding, contract management, servicing, collections

and remarketing.

on open APIs and microservices, Transcend™ Marketplace provides modular components that extend platform capabilities across origination,

servicing, contract management, document handling and related workflows.

The Marketplace enables automotive and equipment OEMs, captive

finance companies, commercial lenders and financial institutions to add functionality and integrate third-party services without replacing

existing core systems.

on decades of domain experience and ISO-certified processes, the Company provides consulting services to automotive and equipment OEMs,

captive finance companies, dealerships and financial institutions to support operations improvement and digital transformation.

include advisory and implementation support across cloud, data, AI and cybersecurity.

Transcend™ AI Labs, the Company integrates AI capabilities into its product suite to address use cases for automotive and equipment

OEMs, captive finance companies, dealerships and financial institutions.

AI Labs focuses on product enhancements and AI consulting services.

below are a few of NetSol’s highlights for the quarter ended March 31, 2026:

entered into a multi-million dollar extension agreement with an existing customer to provide

continued support for our legacy product platform.

● Customer-requested

platform modifications and enhancements across multiple regions generated approximately $1.5

million in revenue during the quarter, primarily driven by customization services and change

order requests from the Company’s existing client base.

the quarter, NETSOL signed several direct-to-distributor agreements with an aggregate five-year

total contract value of approximately $786,000.

Company executed multiple statements of work totaling approximately $400,000 with a long-standing

Transcend TM consultancy customer.

entered into an agreement with a Chinese captive auto finance company to deploy the Transcend TM

Finance wholesale lending system.

The agreement has a total contract value of approximately

$732,000, including implementation and integration services.

Trends Affecting Our Business

believes the following trends and uncertainties may have a material, favorable or unfavorable impact on the Company’s business.

rate environment and credit conditions

rate levels and broader monetary policy conditions continue to influence borrowing costs, credit availability and financing activity

across consumer and commercial lending markets, including automotive finance.

Sustained elevated rates may temper near-term financing

volumes among customers, while creating demand for technology investments that support operational efficiency and risk management.

of Governors of the Federal Reserve System, Monetary Policy Report , 2025.

Electrification

of the automotive industry

automotive industry continues its transition toward electrified vehicles, supported by regulatory developments and long-term manufacturer

Chinese automotive manufacturers have become significant participants in the electric vehicle segment, intensifying competition

across the global automotive landscape.

The Company’s established presence and customer base in China may support participation

in this growth, while shifts in market share among traditional automotive OEMs could affect technology investment patterns across the

Company’s broader customer base.

International

Energy Agency (IEA), Global EV Outlook 2025 .

and omnichannel automotive retail

and dealers continue to adopt digital tools and omnichannel retail approaches, integrating online and physical channels across vehicle

research, configuration and transaction processes.

Continued investment in digital retail capabilities by automotive OEMs and dealerships

may support demand for the Company’s Transcend Retail platform, although adoption pace and implementation timing vary across customers

& Company, Automotive & Assembly Insights (2024–2025 publications).

transformation in financial services

institutions and captive finance companies continue to invest in digital transformation initiatives, including cloud adoption, data infrastructure

modernization and automation of operational processes.

Continued investment in these areas may support demand for the Company’s

Transcend Platform, including its consulting and AI offerings.

The pace and scale of customer transformation initiatives vary based on

internal priorities, budget cycles and the complexity of replacing or integrating with existing core systems.

Global Financial Services Industry Insights (Technology and Transformation publications, 2024–2025).

regulatory and compliance environment

institutions continue to operate within an evolving global regulatory environment, including banking supervision and capital adequacy

frameworks, which may influence compliance requirements and operational processes.

The Company’s platform supports risk management,

audit and compliance reporting workflows that may help customers address evolving requirements.

At the same time, regulatory uncertainty

and compliance-related investment may extend customer decision-making timelines or shift technology priorities toward maintenance and

remediation initiatives.

for International Settlements (BIS), Basel Committee on Banking Supervision Annual Report , 2024.

IN FINANCIAL CONDITION

Ended December 31, 2025 Compared to the Quarter Ended December 31, 2024

following table sets forth the items in our unaudited condensed consolidated statement of operations for the three months ended December

Ended March 31, 2026 Compared to the Quarter Ended March 31, 2025

following table sets forth the items in our unaudited condensed consolidated statement of operations for the three months ended March

31, 2026 and 2025 as a percentage of revenues.

For the Three Months

Ended December 31,

Net Revenues:

Subscription and support

Total net revenues

Cost of revenues

the Three Months

general and administrative

and development cost

operating expenses

Selling, general and administrative

Research and development cost

Total operating expenses

Income (loss) from operations

Other income and (expenses)

Interest expense

Interest income

Gain (loss) on foreign currency exchange transactions

Total other income (expenses)

Net income (loss) before income taxes

Income tax provision

Net income (loss)

Non-controlling interest

Net income (loss) attributable to NetSol

$ (1,147,042 )

Net income (loss) per share:

Net income (loss) per common share

Weighted average number of shares outstanding

from operations

income and (expenses)

(loss) on foreign currency exchange transactions

other income (expenses)

income before income taxes

tax provision

income (loss)

Non-controlling

income (loss) attributable to NetSol

income (loss) per share:

income (loss) per common share

average number of shares outstanding

significant portion of our business is conducted in currencies other than the U.S.

17 unchanged sentences

currency and in constant currency.

For the Three Months

Favorable (Unfavorable) Change in

Favorable (Unfavorable) Change due to

Total Favorable (Unfavorable)

Ended December 31,

Net Revenues:

Cost of revenues:

Operating expenses:

Income (loss) from operations

revenues for the three months ended December 31, 2025 and 2024 are broken out among the segments as follows:

North America

fees for the three months ended December 31, 2025 were $117,482 compared to $72,688 for the three months ended December 31, 2024 reflecting

an increase of $44,794 with an increase in constant currency of $43,128.

and support fees for the three months ended December 31, 2025, were $9,079,783 compared to $8,642,629 for the three months ended December

31, 2024, reflecting an increase of $437,154 with an increase in constant currency of $515,085.

Subscription and support fees for the

three months ended December 31, 2024, included approximately $1,000,000 related to a one-time catch-up from four customers.

and support fees begin once a customer has “gone live” with our product and are recurring in nature.

We anticipate these

fees to increase over time as we implement our Transcend TM products.

income for the three months ended December 31, 2025, was $9,611,213 compared to $6,821,344 for the three months ended December 31, 2024,

(Unfavorable)

the Three Months

(Unfavorable)

(loss) from operations

revenues for the three months ended March 31, 2026 and 2025 are broken out among the segments as follows:

fees for the three months ended March 31, 2026 were $4,728,411 compared to $1,198 for the three months ended March 31, 2025, reflecting

an increase of $4,727,213 or $4,722,857 on a constant currency basis.

During the three months ended March 31, 2026, we recognized approximately

$4,656,000 of software license revenue associated with the renewal and amendment of an existing customer agreement for our Transcend TM

software platform.

The license revenue relates to additional license consideration associated with expanded portfolio usage under the

customer arrangement.

Revenue associated with maintenance and support services under the arrangement will continue to be recognized over

the contractual service period.

and support fees for the three months ended March 31, 2026, were $8,810,115 compared to $7,888,360 for the three months ended March 31,

2025, reflecting an increase of $921,755 with an increase in constant currency of $876,274.

Services revenue increased compared to the

prior quarter, primarily due to the timing and composition of the current implementation projects.

gross profit was $9,029,092 for the three months ended December 31, 2025, compared with $6,920,341 for the three months ended December

Subscription and support fees begin once

a customer has “gone live” with our product and are recurring in nature.

We anticipate these fees to increase over time as

we implement our Transcend TM products.

income for the three months ended March 31, 2026, was $6,294,117 compared to $9,654,399 for the three months ended March 31, 2025, reflecting

a decrease of $3,360,282, with a decrease in constant currency of $3,590,398.

Services revenue decreased compared to the prior quarter,

primarily due to the timing and composition of the current implementation projects.

gross profit was $11,028,642 for the three months ended March 31, 2026, compared with $8,741,773 for the three months ended March 31,

This is an increase of $2,286,869 with an increase in constant currency of $2,107,482.

The gross profit percentage for the

three months ended December 31, 2025, also increased to 48.0% from 44.5% for the three months ended December 31, 2024.

The cost of sales

was $9,779,386 for the three months ended December 31, 2025, compared to $8,616,320 for the three months ended December 31, 2024, for

an increase of $1,163,066 and on a constant currency basis an increase of $1,201,747.

As a percentage of sales, cost of sales decreased

from 55.5% for the three months ended December 31, 2024, to 52.0% for the three months ended December 31, 2025.

and consultant fees increased by $368,457 from $6,714,437 for the three months ended December 31, 2024, to $7,082,894 for the three months

ended December 31, 2025, and on a constant currency basis increased by $361,926.

The increase is due to annual salary raises.

As a percentage

of sales, salaries, and consultant expenses decreased from 43.2% for the three months ended December 31, 2024, to 37.7% for the three

months ended December 31, 2025.

expenses were $1,029,441 for the three months ended December 31, 2025, compared to $601,251 for the three months ended December 31, 2024,

for an increase of $428,190 with an increase in constant currency of $425,180.

The gross profit percentage for the three

months ended March 31, 2026, also increased to 55.6% from 49.8% for the three months ended March 31, 2025.

The cost of sales was $8,804,001

for the three months ended March 31, 2026, compared to $8,802,184 for the three months ended March 31, 2025, for an increase of $1,817

and on a constant currency basis a decrease of $99,947.

As a percentage of sales, cost of sales decreased from 50.2% for the three months

ended March 31, 2025, to 44.4% for the three months ended March 31, 2026.

and consultant fees decreased by $437,279 from $6,771,928 for the three months ended March 31, 2025, to $6,334,649 for the three months

ended March 31, 2026, and on a constant currency basis decreased by $557,248.

The decrease is due to capitalization of internally developed

As a percentage of sales, salaries, and consultant expenses decreased from 38.6% for the three months ended March 31, 2025,

to 31.9% for the three months ended March 31, 2026.

expenses were $814,581 for the three months ended March 31, 2026, compared to $451,895 for the three months ended March 31, 2025, for

an increase of $362,686 with an increase in constant currency of $354,510.

As a percentage of sales, travel expense increased from 2.6%

3.9% for the three months ended December 31, 2024, to 5.5% for the three months ended December 31, 2025.

Travel expenses increased due

to travel associated with new customer implementation projects.

and amortization expense decreased to $190,066 compared to $237,882 for the three months ended December 31, 2024, or a decrease of $47,816

for the three months ended March 31, 2025, to 4.1% for the three months ended March 31, 2026.

Travel expenses increased due to travel

associated with new customer implementation projects.

and amortization expense decreased to $192,897 compared to $240,444 for the three months ended March 31, 2025, or a decrease of $47,547

and on a constant currency basis a decrease of $47,876.

costs were $1,476,985 for the three months ended December 31, 2025, compared to $1,062,750 for the three months ended December 31, 2024,

or an increase of $414,235, and on a constant currency basis an increase of $460,215.

The increase is mainly due to an increase in third-party

hardware and software costs of approximately $377,698 and hosting fees of approximately $79,881.

expenses were $7,729,360 for the three months ended December 31, 2025, compared to $7,407,291, for the three months ended December 31,

costs were $1,461,874 for the three months ended March 31, 2026, compared to $1,337,917 for the three months ended March 31, 2025, or

an increase of $123,957, and on a constant currency basis, an increase of $150,667.

expenses were $8,022,491 for the three months ended March 31, 2026, compared to $7,188,375 for the three months ended March 31, 2025,

for an increase of $834,116 and on a constant currency basis an increase of $710,620.

As a percentage of sales, it decreased from

47.7% to 41.1%.

The increase in operating expenses was primarily due to increases in selling and marketing expenses, salaries and wages,

offset by a decrease in other general and administrative expenses and the provision for doubtful accounts.

and marketing expenses were $3,016,079 for the three months ended December 31, 2025, compared to $2,662,397 for the three months ended

December 31, 2024, for an increase of $353,682 and on a constant currency basis an increase of $356,319.

The increase is mainly due to

increases in salaries and consultants of approximately $167,714, due to annual raises and the hiring of additional marketing personnel.

Other marketing expenses increased by approximately $138,702 due to the increase in advertising and marketing events.

and administrative expenses were $4,465,568 for the three months ended December 31, 2025, compared to $4,411,225 for the three months

ended December 31, 2024, or an increase of $54,343 and on a constant currency basis an increase of $32,746.

During the three months ended

December 31, 2025, salaries increased by $289,749 and increased by $279,058 on a constant currency basis, bad debt expense decreased

by $46,621 and decreased by $47,447 on a constant currency basis, and other general and administrative expenses decreased by $188,785

and decreased by $198,865 on a constant currency basis.

and development cost was $247,713 for the three months ended December 31, 2025, compared to $333,669 for the three months ended December

As a percentage of sales, it slightly decreased

from 41.0% for the three months ended March 31, 2025 to 40.5% at March 31, 2026.

The increase in operating expenses was primarily due

to increases in selling and marketing expenses, salaries and wages, other general and administrative expenses, offset by a decrease in

the provision for doubtful accounts.

and marketing expenses were $2,907,171 for the three months ended March 31, 2026, compared to $2,426,083 for the three months ended March

31, 2025, for an increase of $481,088 and on a constant currency basis an increase of $459,942.

The increase is mainly due to increases

in salaries and consultants of approximately $359,048, due to annual raises and commission.

Other marketing expenses increased by approximately

$115,876 due to the increase in advertising and marketing events.

and administrative expenses were $4,948,936 for the three months ended March 31, 2026, compared to $4,457,504 for the three months ended

March 31, 2025, or an increase of $491,432 and on a constant currency basis an increase of $388,850.

During the three months ended March

31, 2026, salaries increased by $707,692 and increased by $652,345 on a constant currency basis, bad debt expense decreased by $340,312

and decreased by $351,095 on a constant currency basis, and other general and administrative expenses increased by $124,052 and increased

by $87,600 on a constant currency basis.

and development cost was $166,384 for the three months ended March 31, 2026, compared to $304,788 for the three months ended March 31,

2025, for a decrease of $138,404 and on a constant currency basis a decrease of $138,172.

from Operations

from operations was $1,299,732 for the three months ended December 31, 2025, compared to a loss from operations of $486,950 for the three

months ended December 31, 2024.

This represents an increase in income of $1,786,682 with an increase of $1,751,617 on a constant currency

basis for the three months ended December 31, 2025, compared with the three months ended December 31, 2024.

As a percentage of sales,

income from operations was 6.9% for the three months ended December 31, 2025, compared to a loss from operations of 3.1% for the three

months ended December 31, 2024.

from operations was $3,006,151 for the three months ended March 31, 2026, compared to $1,553,398 for the three months ended March 31,

This represents an increase in income of $1,452,753 with an increase of $1,396,862 on a constant currency basis for the three months

ended March 31, 2026, compared with the three months ended March 31, 2025.

As a percentage of sales, income from operations was 15.1%

for the three months ended March 31, 2026, compared to 8.9% for the three months ended March 31, 2025.

Income and Expense

income was $142,501 for the three months ended December 31, 2025, compared to other loss of $367,642 for the three months ended December

This represents an increase in other income of $510,143 with an increase of $513,784 on a constant currency basis.

is primarily due to the foreign currency exchange transactions.

income was $89,720 for the three months ended March 31, 2026, compared to $432,366 for the three months ended March 31, 2025.

This represents

a decrease in other income of $342,646 with a decrease of $340,497 on a constant currency basis.

The decrease is primarily due to the

foreign currency exchange transactions.

The majority of the contracts with NetSol PK are either in U.S.

therefore, the currency fluctuations will lead to foreign currency exchange gains or losses depending on the value of the PKR

compared to the U.S.

dollars or Euros;

the currency fluctuations will lead to foreign currency exchange gains or losses depending on the value of the PKR compared to the U.S.

dollar and the Euro.

During the three months ended December 31, 2025, we recognized a gain of $46,074 in foreign

currency exchange transactions compared to a loss of $698,426 for the three months ended December 31, 2024.

During the three months ended

December 31, 2025, the value of the U.S.

During the three months ended March 31, 2026, we recognized a loss of $76,178 in foreign currency exchange transactions

compared to a gain of $321,622 for the three months ended March 31, 2025.

During the three months ended March 31, 2026, the value of

dollar decreased 0.3% and the Euro decreased 2.4%, compared to the PKR.

During the three months

ended December 31, 2024, the value of the U.S.

dollar increased 0.4% and the Euro decreased 6.6%, compared to the PKR.

During the three months ended March 31, 2025, the value

dollar increased 0.3% and the Euro increased 4.5%, compared to the PKR.

Non-controlling

the three months ended December 31, 2025, the net income attributable to non-controlling interest was $715,282, compared to the net loss

attributable to non-controlling interest of $39,164 for the three months ended December 31, 2024.

the three months ended March 31, 2026, the net income attributable to non-controlling interest was $1,013,664, compared to $410,462 for

the three months ended March 31, 2025.

The increase is mainly due to the increase in net income of NetSol PK.

income (loss) attributable to NetSol

net income was $246,757 for the three months ended December 31, 2025, compared to a net loss of $1,147,042 for the three months ended

December 31, 2024.

This is an increase of $1,393,799 with an increase of $1,314,986 on a constant currency basis, compared to the prior

For the three months ended December 31, 2025, net income per share was $0.02 for basic and diluted shares compared to a net loss

per share of $0.10 for basic and diluted shares for the three months ended December 31, 2024.

Months Ended December 31, 2025 Compared to the Six Months Ended December 31, 2024

following table sets forth the items in our unaudited condensed consolidated statement of operations for the six months ended December

net income was $1,300,964 for the three months ended March 31, 2026, compared to $1,423,968 for the three months ended March 31, 2025.

This is a decrease of $123,004 with a decrease of $98,830 on a constant currency basis, compared to the prior year.

For the three months

ended March 31, 2026, net income per share was $0.11 for basic and diluted shares compared to a net income per share of $0.12 for basic

and diluted shares for the three months ended March 31, 2025.

Months Ended March 31, 2026 Compared to the Nine Months Ended March 31, 2025

following table sets forth the items in our unaudited condensed consolidated statement of operations for the nine months ended March

31, 2026 and 2025 as a percentage of revenues.

For the Six Months

Ended December 31,

Net Revenues:

Subscription and support

Total net revenues

Cost of revenues

the Nine Months

general and administrative

and development cost

operating expenses

Selling, general and administrative

Research and development cost

Total operating expenses

Income (loss) from operations

Other income and (expenses)

Interest expense

Interest income

Gain (loss) on foreign currency exchange transactions

Total other income (expenses)

Net income (loss) before income taxes

Income tax provision

Net income (loss)

Non-controlling interest

Net income (loss) attributable to NetSol

$ (2,110,531 )

$ (1,076,247 )

Net income (loss) per share:

Net income (loss) per common share

Weighted average number of shares outstanding

from operations

income and (expenses)

(loss) on foreign currency exchange transactions

other income (expenses)

income before income taxes

tax provision

income (loss)

Non-controlling

income (loss) attributable to NetSol

income (loss) per share:

income (loss) per common share

average number of shares outstanding

significant portion of our business is conducted in currencies other than the U.S.

17 unchanged sentences

currency and in constant currency.

For the Six Months

Favorable (Unfavorable) Change in

Favorable (Unfavorable) Change due to

Total Favorable (Unfavorable)

Ended December 31,

Net Revenues:

Cost of revenues:

Operating expenses:

Income (loss) from operations

$ (1,247,108 )

revenues for the six months ended December 31, 2025 and 2024 are broken out among the segments as follows:

North America

fees for the six months ended December 31, 2025 were $189,707 compared to $73,917 for the six months ended December 31, 2024 reflecting

(Unfavorable)

the Nine Months

(Unfavorable)

(loss) from operations

revenues for the nine months ended March 31, 2026 and 2025 are broken out among the segments as follows:

fees for the nine months ended March 31, 2026, were $4,918,118 compared to $75,115 for the nine months ended March 31, 2025 reflecting

an increase of $4,843,003 with an increase in constant currency of $4,832,969.

and support fees for the six months ended December 31, 2025, were $18,040,338 compared to $16,835,100 for the six months ended December

31, 2024, reflecting an increase of $1,205,238 with an increase in constant currency of $1,031,209.

Subscription and support fees for

the six months ended December 31, 2024, included approximately $1,000,000 related to a one-time catch-up from four customers.

and support fees begin once a customer has “gone live” with our product and are recurring in nature.

We anticipate these

fees to increase over time as we implement our Transcend TM products.

income for the six months ended December 31, 2025, was $15,590,356 compared to $13,226,142 for the six months ended December 31, 2024,

During the nine months ended March 31, 2026, we recognized

approximately $4,656,000 of software license revenue associated with the renewal and amendment of an existing customer agreement for

our Transcend TM software platform.

The license revenue relates to additional license consideration associated with expanded

portfolio usage under the customer arrangement.

Revenue associated with maintenance and support services under the arrangement will continue

to be recognized over the contractual service period.

and support fees for the nine months ended March 31, 2026, were $26,850,453 compared to $24,723,460 for the nine months ended March 31,

2025, reflecting an increase of $2,126,993 with an increase in constant currency of $1,728,674.

Services revenue increased primarily due to

the timing and composition of the current implementation projects.

gross profit was $14,941,082 for the six months ended December 31, 2025, compared with $13,484,453 for the six months ended December

Subscription and support fees begin once

a customer has “gone live” with our product and are recurring in nature.

We anticipate these fees to increase over time as

we implement our Transcend TM products.

income for the nine months ended March 31, 2026, was $21,884,473 compared to $22,880,541 for the nine months ended March 31, 2025, reflecting

a decrease of $996,068, with a decrease in constant currency of $1,368,399.

Services revenue decreased primarily due to the timing and

composition of the current implementation projects.

gross profit was $25,969,724 for the nine months ended March 31, 2026, compared with $22,226,226 for the nine months ended March 31,

This is an increase of $3,743,498 with an increase in constant currency of $3,073,176.

The gross profit percentage for the

six months ended December 31, 2025, slightly decreased to 44.2% from 44.8% for the six months ended December 31, 2024.

The cost of sales

was $18,879,319 for the six months ended December 31, 2025, compared to $16,650,706 for the six months ended December 31, 2024, for an

increase of $2,228,613 and on a constant currency basis an increase of $2,263,611.

As a percentage of sales, cost of sales increased

from 55.3% for the six months ended December 31, 2024, to 55.8% for the six months ended December 31, 2025.

and consultant fees increased by $1,129,249 from $12,918,171 for the six months ended December 31, 2024, to $14,047,420 for the six months

ended December 31, 2025, and on a constant currency basis increased by $1,151,090.

The gross profit percentage for the nine

months ended March 31, 2026, increased to 48.4% from 46.6% for the nine months ended March 31, 2025.

The cost of sales was $27,683,320

for the nine months ended March 31, 2026, compared to $25,452,890 for the nine months ended March 31, 2025, for an increase of $2,230,430

and on a constant currency basis an increase of $2,120,068.

As a percentage of sales, cost of sales decreased from 53.4% for the nine

months ended March 31, 2025, to 51.6% for the nine months ended March 31, 2026.

and consultant fees increased by $691,970 from $19,690,099 for the nine months ended March 31, 2025, to $20,382,069 for the nine months

ended March 31, 2026, and on a constant currency basis increased by $593,842.

The increase is due to annual salary raises.

percentage of sales, salaries and consultant expenses decreased from 42.9% for the six months ended December 31, 2024, to 41.5% for the

six months ended December 31, 2025.

expenses were $1,527,613 for the six months ended December 31, 2025, compared to $1,172,113 for the six months ended December 31, 2024,

for an increase of $355,500 with an increase in constant currency of $353,637.

As a percentage

of sales, salaries and consultant expenses decreased from 41.3% for the nine months ended March 31, 2025, to 38.0% for the nine months

ended March 31, 2026.

expenses were $2,342,194 for the nine months ended March 31, 2026, compared to $1,624,008 for the nine months ended March 31, 2025, for

an increase of $718,186 with an increase in constant currency of $708,147.

As a percentage of sales, travel expense increased from 3.4%

3.9% for the six months ended December 31, 2024, to 4.5% for the six months ended December 31, 2025.

Travel expenses increased due to

travel associated with new customer implementation projects.

and amortization expense decreased to $398,797 compared to $466,432 for the six months ended December 31, 2024, or a decrease of $67,635

for the nine months ended March 31, 2025, to 4.4% for the nine months ended March 31, 2026.

Travel expenses increased due to travel associated

with new customer implementation projects.

and amortization expense decreased to $591,694 compared to $706,876 for the nine months ended March 31, 2025, or a decrease of $115,182

and on a constant currency basis a decrease of $109,727.

costs were $2,905,489 for the six months ended December 31, 2025, compared to $2,093,990 for the six months ended December 31, 2024,

or an increase of $811,499 and on a constant currency basis an increase of $820,735.

costs were $4,367,363 for the nine months ended March 31, 2026, compared to $3,431,907 for the nine months ended March 31, 2025, or an

increase of $935,456 and on a constant currency basis an increase of $927,806.

The increase is mainly due to an increase in third-party

hardware and software costs of approximately $749,100 and hosting fees of approximately $137,169.

expenses were $15,480,056 for the six months ended December 31, 2025, compared to $14,731,561, for the six months ended December 31,

hardware and software costs of approximately $960,840 and hosting fees of approximately $197,606, offset by a reduction in other cost

of approximately 222,990.

expenses were $23,502,547 for the nine months ended March 31, 2026, compared to $21,919,936, for the nine months ended March 31, 2025,

for an increase of $1,582,611 and on a constant currency basis an increase of $1,320,500.

3 unchanged sentences

offset by a decrease in other general and administrative expenses and the provision for doubtful accounts.

and marketing expenses were $6,133,032 for the six months ended December 31, 2025, compared to $4,954,596, for the six months ended December

and marketing expenses were $9,040,203 for the nine months ended March 31, 2026, compared to $7,380,679, for the nine months ended March

31, 2025, for an increase of $1,659,524 and on a constant currency basis an increase of $1,524,489.

The increase is mainly due to increases

in salaries and consultants of approximately $831,253, due to annual raises and the hiring of additional marketing personnel.

Other marketing

expenses increased by approximately $290,538 due to the increase in advertising and marketing events.

and administrative expenses were $8,884,968 for the six months ended December 31, 2025, compared to $9,083,347 for the six months ended

December 31, 2024, or a decrease of $198,379 and on a constant currency basis a decrease of $229,340.

During the six months ended December

in salaries and consultants of approximately $1,190,301, due to annual raises and commissions.

Other marketing expenses increased by

approximately $436,001 due to the increase in advertising and marketing events.

and administrative expenses were $13,833,904 for the nine months ended March 31, 2026, compared to $13,540,851 for the nine months ended

March 31, 2025, or an increase of $293,053 and on a constant currency basis, an increase of $158,787.

During the nine months ended March

31, 2026, salaries increased by $1,142,329 and increased by $1,075,978 on a constant currency basis, bad debt expense decreased by $725,022

1 unchanged sentence

by $180,587 on a constant currency basis.

and development cost was $462,056 for the six months ended December 31, 2025, compared to $693,618 for the six months ended December

and development cost was $628,440 for the nine months ended March 31, 2026, compared to $998,406 for the nine months ended March 31,

2025, for a decrease of $369,966, and on a constant currency basis a decrease of $253,716.

from Operations

from operations was $538,974 for the six months ended December 31, 2025, compared to $1,247,108 for the six months ended December 31,

This represents a decrease in loss of $708,134 with a decrease of $444,094 on a constant currency basis for the six months ended

December 31, 2025, compared with the six months ended December 31, 2024.

As a percentage of sales, loss from operations was 1.6% for

the six months ended December 31, 2025, compared to a loss from operations of 4.1% for the six months ended December 31, 2024.

from operations was $2,467,177 for the nine months ended March 31, 2026, compared to $306,290 for the nine months ended March 31, 2025.

This represents an increase in income of $2,160,887 with an increase of $1,752,676 on a constant currency basis for the nine months ended

March 31, 2026, compared with the nine months ended March 31, 2025.

As a percentage of sales, income from operations was 4.6% for the

nine months ended March 31, 2026, compared to 0.6% for the nine months ended March 31, 2025.

Income and Expense

expense was $20,383 for the six months ended December 31, 2025, compared to other income of $840,042 for the six months ended December

This represents a decrease in other income of $860,425 with a decrease of $857,790 on a constant currency basis.

is primarily due to lower interest income, driven by a reduction in interest rates from approximately 15.0%-19.6% for the six months

ended December 31, 2024, to approximately 8.9%-10.8% for the six months ended December 31, 2025.

income was $69,337 for the nine months ended March 31, 2026, compared to $1,272,408 for the nine months ended March 31, 2025.

This represents

a decrease in other income of $1,203,071 with a decrease of $1,198,290 on a constant currency basis.

The decrease is primarily due to

lower interest income, driven by a reduction in interest rates from approximately 10.0%-19.5% for the nine months ended March 31, 2025,

to approximately 8.9% to 10.8% for the nine months ended March 31, 2026.

The decrease is also due to the foreign currency exchange transactions.

The majority of the contracts with NetSol PK are either in U.S.

dollars or Euros;

therefore, the currency fluctuations will lead to foreign

currency exchange gains or losses depending on the value of the PKR compared to the U.S.

dollar and the Euro.

During the nine months

ended March 31, 2026, we recognized a loss of $317,021 in foreign currency exchange transactions compared to a gain of $165,741 for the

nine months ended March 31, 2025.

During the nine months ended March 31, 2026, the value of the U.S.

dollar decreased 1.6% and the Euro

decreased 3.7%, compared to the PKR.

During the nine months ended March 31, 2025, the value of the U.S.

dollar increased 0.5% and the

Euro increased 1.5%, compared to the PKR.

Non-controlling

the six months ended December 31, 2025, the net income attributable to non-controlling interest was $855,205, compared to $107,750 for

the six months ended December 31, 2024.

the nine months ended March 31, 2026, the net income attributable to non-controlling interest was $1,868,869, compared to $518,212 for

the nine months ended March 31, 2025.

The increase is mainly due to an increase in the net income of NetSol PK and NAMECET.

income (loss) attributable to NetSol

net loss was $2,110,531 for the six months ended December 31, 2025, compared to $1,076,247 for the six months ended December 31,

This is an increase in net loss of $1,034,284 with an increase of $1,386,421 on a constant currency basis, compared to the

For the six months ended December 31, 2025, net loss per share was $0.18 for basic and diluted shares compared to net

loss per share of $0.09 for basic and diluted shares for the six months ended December 31, 2024.

net loss was $809,567 for the nine months ended March 31, 2026, compared to net income of $347,721 for the nine months ended March 31,

This is an increase in net loss of $1,157,288 with an increase of $1,572,734 on a constant currency basis, compared to the prior

For the nine months ended March 31, 2026, net loss per share was $0.07 for basic and diluted shares compared to net income per

share of $0.03 for basic and diluted shares for the nine months ended March 31, 2025.

Financial Measures

4 unchanged sentences

define the non-GAAP measures as follows:

EBITDA is GAAP net income or loss before net interest expense,

income tax expense, depreciation and amortization.

Non-GAAP adjusted EBITDA is EBITDA plus stock-based compensation

Adjusted EBITDA per basic and diluted share – Adjusted

EBITDA allocated to common stock divided by the weighted average shares outstanding and diluted shares outstanding.

is GAAP net income or loss before net interest expense, income tax expense, depreciation and amortization.

adjusted EBITDA is EBITDA plus stock-based compensation expense.

EBITDA per basic and diluted share – Adjusted EBITDA allocated to common stock divided by the weighted average shares outstanding

and diluted shares outstanding.

use non-GAAP measures internally to evaluate the business and believe that presenting non-GAAP measures provides useful information to

21 unchanged sentences

reconciliation of the non-GAAP financial measures of adjusted EBITDA and non-GAAP earnings per basic and diluted share to the most comparable

GAAP measures for the three and six months ended December 31, 2025 and 2024 are as follows:

For the Three Months

For the Six Months

Ended December 31,

Net Income (loss) attributable to NetSol

$ (1,147,042 )

$ (2,110,531 )

$ (1,076,247 )

Non-controlling interest

Depreciation and amortization

Interest expense

Interest (income)

Non-cash stock-based compensation

Adjusted EBITDA, gross

Less non-controlling interest (a)

Adjusted EBITDA, net

Weighted Average number of shares outstanding

Basic adjusted EBITDA

Diluted adjusted EBITDA

(a)The reconciliation of adjusted EBITDA of non-controlling interest to net income attributable to non-controlling interest is as follows

Net Income (loss) attributable to non-controlling interest

Depreciation and amortization

Interest expense

Interest (income)

Non-cash stock-based compensation

Adjusted EBITDA of non-controlling interest

GAAP measures for the three and nine months ended March 31, 2026 and 2025 are as follows:

the Three Months

the Nine Months

Income (loss) attributable to NetSol

Non-controlling

and amortization

stock-based compensation

EBITDA, gross

non-controlling interest (a)

Average number of shares outstanding

adjusted EBITDA

reconciliation of adjusted EBITDA of non-controlling interest

net income attributable to non-controlling interest is as follows

Income (loss) attributable to non-controlling interest

and amortization

stock-based compensation

EBITDA of non-controlling interest

AND CAPITAL RESOURCES

cash position was $18,132,086 at December 31, 2025, compared to $17,357,944 at June 30, 2025.

cash provided by operating activities was $554,881 for the six months ended December 31, 2025 compared to $369,716 for the six months

ended December 31, 2024.

At December 31, 2025, we had current assets of $46,412,511 and current liabilities of $19,995,825.

We had accounts

receivable of $7,776,096 at December 31, 2025 compared to $7,527,572 at June 30, 2025.

We had revenues in excess of billings of $17,844,091

at December 31, 2025 compared to $19,134,385 at June 30, 2025 of which $763,396 and $903,766 is shown as long-term as of December 31,

2025 and June 30, 2025, respectively.

The long-term portion was discounted by $170,629 and $208,037 at December 31, 2025 and June 30,

2025, respectively, using the discounted cash flow method with interest rates ranging from 4.2% to 17.5%.

During the six months ended

December 31, 2025, our revenues in excess of billings were reclassified to accounts receivable pursuant to billing requirements detailed

in each contract.

The combined totals for accounts receivable and revenues in excess of billings decreased by $1,041,770 from $26,661,957

at June 30, 2025 to $25,620,187 at December 31, 2025.

Accounts payable and accrued expenses, and current portions of loans and lease

obligations amounted to $8,059,205 and $8,509,841, respectively, at December 31, 2025.

Accounts payable and accrued expenses, and current

portions of loans and lease obligations amounted to $8,010,844 and $8,240,061, respectively, at June 30, 2025.

average days sales outstanding for the six months ended December 31, 2025 and 2024 were 142 and 140 days, respectively.

cash position was $14,744,392 at March 31, 2026, compared to $17,357,944 at June 30, 2025.

cash used in operating activities was $785,350 for the nine months ended March 31, 2026 compared to net cash provided by operating activities

of $6,315 for the nine months ended March 31, 2025.

As of March 31, 2026, we had current assets of $52,321,776 and current liabilities

of $27,037,914.

We had accounts receivable of $16,646,299 at March 31, 2026 compared to $7,527,572 at June 30, 2025.

We had revenues

in excess of billings of $20,987,818 at March 31, 2026 compared to $19,134,385 at June 30, 2025 of which $2,824,298 and $903,766 is shown

as long-term as of March 31, 2026 and June 30, 2025, respectively.

The long-term portion was discounted by $420,429 and $208,037 at March

31, 2026 and June 30, 2025, respectively, using the discounted cash flow method with interest rates ranging from 4.5% to 6.6%, for the

period ended March 31, 2026, and interest rates ranging from 4.2% to 17.5%, for the period ended June 30, 2025, our revenues in excess

of billings were reclassified to accounts receivable pursuant to billing requirements detailed in each contract.

The combined totals

for accounts receivable and revenues in excess of billings increased by $10,972,147 from $26,661,957 at June 30, 2025 to $37,634,104

at March 31, 2026.

Accounts payable and accrued expenses, and current portions of loans and lease obligations, amounted to $8,132,384

and $8,241,584, respectively, at March 31, 2026.

Accounts payable and accrued expenses, and current portions of loans and lease obligations,

amounted to $8,010,844 and $8,240,061, respectively, at June 30, 2025.

Unearned revenue amounted to $10,184,195, at March 31, 2026 compared

to $3,029,850 at June 30, 2025.

average days sales outstanding for the nine months ended March 31, 2026 and 2025 were 147 and 137 days, respectively.

The days sales

outstanding have been calculated by taking into consideration the average combined balances of accounts receivable and revenues in excess

cash used in investing activities was $753,412 for the six months ended December 31, 2025, compared to $531,477 for the six months ended

December 31, 2024.

We had purchases of property and equipment of $856,330 compared to $568,134 for the six months ended December 31,

cash provided by financing activities was $724,853 for the six months ended December 31, 2025, compared to $2,637,763 for the six months

ended December 31, 2024.

During the six months ended December 31, 2025, we received bank proceeds of $792,484 compared to $2,676,932

during the six months ended December 31, 2024.

During the six months ended December 31, 2025, we had net payments for bank loans and

finance leases of $425,764 compared to $162,370 for the six months ended December 31, 2024.

Employees of our subsidiary, NetSol PK, exercised

1,346,330 options of common stock for $370,553, of which $358,133 was received during the six months ended December 31, 2025 and $12,420

was received during the fiscal year ended June 30, 2025.

We are operating in various geographical regions of the world through our various

subsidiaries.

Those subsidiaries have financial arrangements with various financial institutions to meet both their short and long-term

funding requirements.

cash used in investing activities was $2,308,004 for the nine months ended March 31, 2026, compared to $843,044 for the nine months ended

March 31, 2025.

We had purchases of property and equipment of $1,379,262 compared to $897,743 for the nine months ended March 31, 2025.

During the nine months ended March 31, 2026, we capitalized $1,039,989 for product development.

cash provided by financing activities was $369,755 for the nine months ended March 31, 2026, compared to $866,299 for the nine months

ended March 31, 2025.

During the nine months ended March 31, 2026, we received bank proceeds of $1,076,226 compared to $2,451,256 during

the nine months ended March 31, 2025.

During the nine months ended March 31, 2026, we had net payments for bank loans and finance leases

of $1,093,671 compared to $247,496 for the nine months ended March 31, 2025.

Employees of the Company exercised 220,00 options of common

stock for $473,000, during the nine months ended March 31, 2025.

Employees of our subsidiary, NetSol PK, exercised 1,443,874 options

of common stock for $399,620, of which $387,200 was received during the nine months ended March 31, 2026 and $12,420 was received during

the fiscal year ended June 30, 2025.

NetSol PK, a subsidiary of the Company, paid a dividend of $306,799 to the non-controlling shareholders

during the nine months ended March 31, 2025.

NetSol PK purchased 2,690,251 shares of its common stock from the open market for $1,503,662

during nine months ended March 31, 2025.

We are operating in various geographical regions of the world through our various subsidiaries.

Those subsidiaries have financial arrangements with various financial institutions to meet both their short and long-term funding requirements.

These loans will become due at different maturity dates as described in Note 13 of the financial statements.

are in compliance with the covenants of the financial arrangements and there is no default, which may lead to early payment of these

We anticipate paying back all these obligations on their respective due dates from its own sources.

We are in compliance with

the covenants of the financial arrangements and there is no default, which may lead to early payment of these obligations.

We anticipate

paying back all these obligations on their respective due dates from the respective Company’s own sources.

typically fund the cash requirements for our operations in the U.S.

1 unchanged sentence

intercompany charges for corporate services, and through the exercise of options and warrants.

As of December 31, 2025, we had approximately

As of March 31, 2026, we had approximately

$14.7 million of cash, cash equivalents and marketable securities, of which approximately $14.2 million is held by our foreign subsidiaries.

13 unchanged sentences

600 million ($2,148,382)

debt-to-equity ratio of 60:40;

Current ratio of at least 1:1

Bank – Running finance

4.1 million ($14,505)

debt-to-equity ratio of 60:40;

Metro – Export refinance

1.3 billion ($4,654,827)

ratio of at least 1:1

Al-Habib – Export refinance

28 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis