NetSol’s earnings halve in 1QFY26

MG News | October 30, 2025 at 04:58 PM GMT+05:00

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October 30, 2025 (MLN): NetSol Technologies Limited (PSX: NETSOL) reported a profit after tax (PAT) of Rs74.7 million for the quarter ended September 30, 2025, down 47% from Rs141.3 million in the same period last year.

The company’s net revenue rose 32% year-on-year to Rs2.54 billion, driven by new project implementations and expansion in global contracts.

However, rising costs trimmed profitability as the cost of revenue grew 19% to Rs 1.56 billion, while selling and administrative expenses increased 32% to Rs756 million combined.

Even so, gross profit surged 60% to Rs 979 million, pushing the gross profit margin up to 38.5% from 31.8% a year earlier, indicating improved operational efficiency.

Operating profit climbed to Rs222 million, up from Rs26 million, but a steep 79% drop in other income to Rs79 million from Rs381 million significantly impacted pre-tax earnings.

After accounting for final levies of Rs37 million, NetSol’s net profit margin narrowed to 2.9%, compared to 7.3% in the same quarter last year. Earnings per share stood at Rs 0.88, versus Rs 1.61 previously.

Statement of the profit/ loss for the quarter ended on September 30, 2025 (Rs ‘000)
Particulars	2025	2024	% Change
Revenue from Contracts with Customers - Net	2,542,625	1,925,898	+32.0%
Cost of Revenue	(1,563,851)	(1,313,924)	+19.0%
Gross Profit	978,774	611,974	+59.9%
Selling and Promotional Expenses	(296,307)	(206,491)	+43.5%
Administrative Expenses	(460,078)	(379,790)	+21.1%
Operating Profit	222,389	25,693	+765.7%
Other Operating Expenses	(142,814)	(136,156)	+4.9%
Finance Cost	(47,040)	(68,907)	–31.7%
Other Income	79,207	381,360	–79.2%
Profit Before Final Taxes and Income Tax	111,742	201,990	–44.7%
Final Tax / Levies	(37,008)	(60,693)	–39.0%
Profit Before Income Tax	74,734	141,297	–47.1%
Profit After Taxation (PAT)	74,734	141,297	–47.1%
Earnings Per Share (EPS) – Basic (Rupees)	0.88	1.61	–45.3%
Earnings Per Share (EPS) – Diluted (Rupees)	0.86	1.59	–45.9%

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