v3.25.2
SEGMENT INFORMATION AND GEOGRAPHIC AREAS
 12 Months Ended
Jun. 30, 2025
Segment Reporting [Abstract]  
SEGMENT INFORMATION AND GEOGRAPHIC AREAS

NOTE 17 – SEGMENT INFORMATION AND GEOGRAPHIC AREAS

 

The Company has identified three segments for its products and services: North America, Europe, and Asia-Pacific. The reportable segments are business units located in different global regions. Each business unit provides similar products and services: license fees for leasing and asset-based software, subscription and support fees, and implementation and IT consulting services. Separate management of each segment is required because each business unit is subject to different operational issues and strategies due to its particular regional location. The Company’s chief operating decision maker (“CODM”) evaluates performance and allocates resources based on gross profit and income from operations. The Company has designated its Chief Executive Officer as the CODM.

 

Segment assets include all assets attributable to operations within the respective geographic regions, including cash, accounts receivable, revenue in excess of billings, and property, plant, and equipment. Corporate assets, which primarily consist of cash and cash equivalents, goodwill, and assets associated with the Company’s corporate headquarters, are not allocated to the geographic segments and are shown separately.

 

The accounting policies of the reportable segments are the same as those described in Note 1, “Summary of Significant Accounting Policies.” Intersegment revenues are eliminated in consolidation.

 

Prior year results have been restated to conform to the current year presentation, reflecting the use of gross profit and income from operations as the measures of segment performance evaluated by the CODM.

 

 

NETSOL TECHNOLOGIES, INC.

Notes to Consolidated Financial Statements

June 30, 2025 and 2024

 

The following tables present financial information by reportable segment for the year ended June 30, 2025:

 

 SCHEDULE OF FINANCIAL INFORMATION BY REPORTABLE SEGMENT

   North America   Europe   Asia - Pacific   Total 
   For the Year Ended 
   June 30, 2025 
   North America   Europe   Asia - Pacific   Total 
Revenues                    
License  $-   $111,377   $487,256   $598,633 
Subscription and support   5,603,900    4,560,260    22,770,488    32,934,648 
Services   6,399,927    9,972,363    16,182,658    32,554,948 
Intersegment revenues   -     -    7,000,458    7,000,458 
Total revenue from reportable segments  $12,003,827   $14,644,000   $46,440,860   $73,088,687 
Elimination of intersegment revenues   -     -     -     (7,000,458)
Total consolidated revenues                 $66,088,229 
                     
Revenues from reportable segments  $12,003,827   $14,644,000   $46,440,860   $73,088,687 
                     
Salaries and consultants   2,074,573    4,607,703    19,115,189    25,797,465 
Travel   277,680    162,193    1,623,638    2,063,511 
Depreciation   -    -    952,331    952,331 
Other (a)   3,497,607    4,836,247    3,366,994    11,700,848 
Gross Profit   6,153,967    5,037,857    21,382,708    32,574,532 
                     
Selling and marketing   2,103,890    1,341,023    6,278,262    9,723,175 
Depreciation   3,167    186,927    321,358    511,452 
General and administrative   755,194    4,059,517    8,502,694    13,317,405 
Income (loss) from operations - reportable segments  $3,291,716   $(549,610)  $6,280,394   $9,022,500 
                     
Reconciliation:                    
Income (loss) from operations - reportable segments                 $9,022,500 
Corporate operating expenses                  (5,520,782)
Interest expense                  (871,355)
Interest income                  1,871,040 
Gain (loss) on foreign currency exchange transactions                  1,301,613 
Other income (expense)                  244,241 
Net income (loss) before income taxes                 $6,047,257 

 

 

NETSOL TECHNOLOGIES, INC.

Notes to Consolidated Financial Statements

June 30, 2025 and 2024

 

Segment assets:  North America   Europe   Asia - Pacific   Total 
   As of 
   June 30, 2025 
Segment assets:  North America   Europe   Asia - Pacific   Total 
Cash  $387,955   $1,138,048   $15,248,031   $16,774,034 
Accounts receivable, net of allowance   581,872    1,084,418    5,861,282    7,527,572 
Revenue in excess of billings, net of allowance   1,967,757    3,178,780    13,987,848    19,134,385 
Other segment assets (b)   243,550    1,580,534    7,066,725    8,890,809 
Total segment assets  $3,181,134   $6,981,780   $42,163,886   $52,326,800 
                     
Asset Reconciliation                    
Total assets for reportable segments                 $52,326,800 
Corporate assets                  811,785 
Goodwill not allocated to segments                  9,302,524 
Consolidated total                 $62,441,109 

 

   North America   Europe   Asia - Pacific   Total 
   For the year ended June 30, 2025 
   North America   Europe   Asia - Pacific   Total 
Expenditures for property, plant and equipment  $17,332   $9,929   $1,355,509   $1,382,770 

 

 

NETSOL TECHNOLOGIES, INC.

Notes to Consolidated Financial Statements

June 30, 2025 and 2024

 

The following tables present financial information by reportable segment for the year ended June 30, 2024:

 

   North America   Europe   Asia - Pacific   Total 
   For the Year Ended 
   June 30, 2024 
   North America   Europe   Asia - Pacific   Total 
Revenues                    
License  $-   $112,524   $5,337,467   $5,449,991 
Subscription and support   4,693,618    3,383,312    19,875,838    27,952,768 
Services   1,240,179    8,471,966    18,278,187    27,990,332 
Intersegment revenues   -     -     3,061,465    3,061,465 
Total revenue from reportable segments  $5,933,797   $11,967,802   $46,552,957   $64,454,556 
Elimination of intersegment revenues   -     -     -     (3,061,465)
Total consolidated revenues                 $61,393,091 
                     
Revenues from reportable segments  $5,933,797   $11,967,802   $46,552,957   $64,454,556 
                     
Salaries and consultants   1,658,561    3,734,833    18,229,513    23,622,907 
Travel   23,890    191,306    2,728,246    2,943,442 
Depreciation   -    -    1,144,809    1,144,809 
Other (a)   1,550,465    2,911,441    2,996,622    7,458,528 
Gross Profit   2,700,881    5,130,222    21,453,767    29,284,870 
                     
Selling and marketing   1,395,827    933,203    4,833,083    7,162,113 
Depreciation   1,712    231,018    344,261    576,991 
General and administrative   690,194    4,063,242    7,746,462    12,499,898 
Income (loss) from operations - reportable segments  $613,148   $(97,241)  $8,529,961   $9,045,868 
                     
Reconciliation:                    
 Income (loss) from operations - reportable segments                 $9,045,868 
Corporate operating expenses                  (5,552,313)
Interest expense                  (1,142,166)
Interest income                  1,911,258 
 Gain (loss) on foreign currency exchange transactions                  (1,187,320)
Other income (expense)                  148,120 
Net income (loss) before income taxes                 $3,223,447 

 

 

NETSOL TECHNOLOGIES, INC.

Notes to Consolidated Financial Statements

June 30, 2025 and 2024

 

Segment assets:  North America   Europe   Asia - Pacific   Total 
   As of 
   June 30, 2024 
Segment assets:  North America   Europe   Asia - Pacific   Total 
Cash  $435,995   $955,707   $17,226,295   $18,617,997 
Accounts receivable, net of allowance   511,816    2,433,951    10,103,847    13,049,614 
Revenue in excess of billings, net of allowance   131,461    1,091,941    12,415,145    13,638,547 
Other segment assets (b)   370,770    1,456,685    6,941,920    8,769,375 
Total segment assets  $1,450,042   $5,938,284   $46,687,207   $54,075,533 
                     
Asset Reconciliation                    
Total assets for reportable segments                  54,075,533 
Corporate assets                  808,385 
Goodwill not allocated to segments                  9,302,524 
Consolidated total                 $64,186,442 

 

   North America   Europe   Asia - Pacific   Total 
   For the year ended June 30, 2024 
   North America   Europe   Asia - Pacific   Total 
Expenditures for property, plant and equipment  $-   $179,102   $336,302   $515,404 

 

(a)Other costs of goods sold include computer costs, third-party hardware and software costs, repair and maintenance, insurance, utilities, and communication expenses.

 

(b)Other assets include property and equipment, right of use of assets, advances, deposits, and prepayments.

 

 

NETSOL TECHNOLOGIES, INC.

Notes to Consolidated Financial Statements

June 30, 2025 and 2024

 

Geographic Information

 

Disclosed in the table below is geographic information for each country that comprised greater than five percent of total revenues for the years ended June 30, 2025 and 2024.

 

   June 30, 2025   June 30, 2024 
   Revenue   Long-lived Assets   Revenue   Long-lived Assets 
                 
China  $17,043,193   $108,837   $20,747,744   $354,122 
Thailand   2,745,299    585,401    3,636,153    929,651 
USA   10,763,285    175,247    4,853,541    337,427 
UK   14,644,000    998,465    11,967,802    983,126 
Pakistan & India   2,292,058    4,514,487    2,229,067    4,621,210 
Australia & New Zealand   8,609,997    5,923    5,454,383    7,168 
Mexico   1,240,542    -    1,080,256    - 
Indonesia   4,138,350    -    4,475,356    189,131 
South Africa   814,817    -    857,218    - 
South Korea   1,506,456    -    2,491,606    -  
Other Countries   2,290,232    430,622    3,599,965    - 
Total  $66,088,229   $6,818,982   $61,393,091   $7,421,835 

 

Disclosed in the table below is the geographic information of total revenues by country for the years ended June 30, 2025 and 2024.

 

   Total   China   Thailand   USA   UK   Pakistan & India   Australia & New Zealand   Mexico   Indonesia   South Africa   South Korea   Other Countries 
   Revenues 2025 
   Total   China   Thailand   USA   UK   Pakistan & India   Australia & New Zealand   Mexico   Indonesia   South Africa   South Korea   Other Countries 
                                                 
North America:  $12,003,827   $-   $-   $10,763,285   $-   $-   $-   $1,240,542   $-   $-   $-   $- 
Europe:   14,644,000    -    -    -    14,644,000    -    -    -    -    -    -    - 
Asia-Pacific:   39,440,402    17,043,193    2,745,299    -    -    2,292,058    8,609,997    -    4,138,350    814,817    1,506,456    2,290,232 
                                                             
Total  $66,088,229   $17,043,193   $2,745,299   $10,763,285   $14,644,000   $2,292,058   $8,609,997   $1,240,542   $4,138,350   $814,817   $1,506,456   $2,290,232 

 

   Total   China   Thailand   USA   UK   Pakistan & India   Australia & New Zealand   Mexico   Indonesia   South Africa   South Korea   Other Countries 
   Revenues 2024 
   Total   China   Thailand   USA   UK   Pakistan & India   Australia & New Zealand   Mexico   Indonesia   South Africa   South Korea   Other Countries 
                                                 
North America:  $5,933,797   $-   $-   $4,853,541   $-   $-   $-   $1,080,256   $-   $-   $-   $- 
Europe:   11,967,802    -    -    -    11,967,802    -    -    -    -    -    -    - 
Asia-Pacific:   43,491,492    20,747,744    3,636,153    -    -    2,229,067    5,454,383    -    4,475,356    857,218    2,491,606    3,599,965 
                                                             
Total  $61,393,091   $20,747,744   $3,636,153   $4,853,541   $11,967,802   $2,229,067   $5,454,383   $1,080,256   $4,475,356   $857,218   $2,491,606   $3,599,965 

 

 

NETSOL TECHNOLOGIES, INC.

Notes to Consolidated Financial Statements

June 30, 2025 and 2024