NetSol Technologies (NASDAQ:NTWK) shares fell close to 8% in Friday premarket trading after the company reported a significantly wider-than-expected fourth-quarter loss.
The company admitted in a statement that its financial performance “fell short of our goals and expectations.”
Still, the company noted that it made progress with its three core growth drivers that it believes will give investors reason to be optimistic about what’s on the horizon.
NetSol said it has seen positive growth in software-as-a-service (SaaS)-based recurring revenues, with full-year subscription and support revenues exceeding its $25 million target. It expects continued growth as it shifts more customers to SaaS pricing and cloud-based solutions.
This has also enabled it to implement significant cost-reduction strategies across its business, including cutting employee numbers. It expects to reduce its headcount by around 300 during the first and second quarters of its 2024 financial year.
“We believe that we have the pieces in place to generate long-term growth for our business, and given our healthy pipeline, we are targeting $61 million to $63 million in revenue for the full fiscal year 2024, or 16% to 20% revenue growth,” the company’s co-founder and CEO Najeeb Ghauri commented.
“We are not satisfied with our current results, but we have a strategy in place that we are focusing our time, energy, and patience on executing, and we believe that this will yield long-term, sustainable growth and positive results for NETSOL.”
For the quarter to June 30, 2023, the company reported a 2.2% rise in sales to $13.79 million, while its adjusted loss per share widened to $0.37 from $0.23 in 4Q 2022.
Its shares were down 7.8% at $2.12 ahead of the opening bell.
Contact the author at stephen.gunnion@proactiveinvestors.com