NETSOL TECHNOLOGIES INC Segments Disclosure
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:
| 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
| 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 | ||||||||||||||
| 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:
| 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
| 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 | ||||||||||||||
| 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.
| 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 | ||||||||||||||||||||||||
| 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
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Sep 29, 2025 | Showing above |
| 2024 | Sep 30, 2024 | |
| 2022 | Sep 27, 2022 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.