Good morning. Welcome to NetSol Technologies Third Quarter 2023 Earnings Conference Call. On the call today are Najeeb Ghauri, Chairman and Chief Executive Officer; Roger Almond, Chief Financial Officer; and Patti McGlasson, General Counsel. Please be advised that there is a slide presentation accompanying today's call that is available as part of the webcast and also available separately on the company's website. I would now like to turn the conference over to Patti McGlasson, who will provide the necessary cautions regarding the forward-looking statements made by management during this call. Please proceed.

Good morning, everyone, and thank you for joining us. Following a review of the company's business highlights and financial results, we will open the call for questions. I'll now provide the necessary cautions regarding the forward-looking statements made by management during this call. Please note that all the information discussed on today's call is covered under the safe harbor provisions of the Private Securities Litigation Reform Act. The company's discussion including any accompanying slides may include forward-looking statements reflecting management's current forecast of certain aspects of the company's future, and our actual results may differ materially from those stated or implied. These forward-looking statements are qualified by the cautionary statements contained in NetSol's press releases and SEC filings including our annual report on Form 10-K and quarterly reports on Form 10-Q. I would also like to point out that we will be discussing certain non-GAAP measures. The press release issued earlier today contains a reconciliation of these non-GAAP financial results to their most comparable GAAP measures. Finally, I would like to remind everyone that this call will be recorded and made available for replay at www.netsoltech.com and via link available in today's press release. Now I'd like to turn the call over to Najeeb. Najeeb?

Thank you, Patti, and good morning, everyone. It was a busy quarter here at NetSol, one in which we made a lot of progress, driving key new initiatives. First, we are expanding our customer base with a focus on SaaS. Second, we're expanding in North America, which is a key new market focus for us that offers considerable opportunity to leverage our success in Asia and Europe. And third, we are driving efficiencies in the business. In the third quarter, we expanded our already robust customer base that includes some of the most recognizable names in the global leasing and finance industry, and we continue to strategically partner with entities that help us to better support our customers and accelerate our organic growth. We signed a multi-million-dollar agreement with Kubota, a Japanese company relating to its operation in Australia. Third agreement, we will deploy our NFS Ascent retail platform, which consists of the Ascent Omni point-of-sale and Ascent contract management system, as well as selected NFS digital touch points, including self point-of-sale, mobile point-of-sale and mobile account. Also in the third quarter, we went live with Flex, our API first and cloud-based calculation engine for Haydock Finance, a business finance provider in the United States. We are especially excited about this agreement as Flex is the first product that we've launched as a part of NetSol's new Epix Now marketplace, specifically targeting the global credit, finance in this industry, so we are encouraged to see this product gaining some early traction. On the partnership side, we extended our partnership with Amazon Web Services, or AWS, and became an API gateway delivery partner, allowing us to provide more robust and reliable solutions to our clients by enabling us to build, secure and scale APIs like Flex. We also signed a teaming agreement with Digital Intelligence systems, allowing us to leverage their expertise and large resource pool of over 5,000 U.S.-based engineers to augment and complement our growing U.S. presence and jointly undertake large enterprise grade programs for existing and new U.S. clients. Partnerships like these are crucial part of our business and allow us to offer better products and more efficient service to our customers. At the center of our agreements and partnerships is our suite of industry-leading product offerings. Our core products consist of the next-generation NFS Ascent platform, a highly adaptive retail and whole field platform with the global finance and leasing industry available on the cloud via SaaS subscription-based pricing. NFS Digital is a combination of our core strengths, domain and technology, providing digital transformation solutions like self-point-of-sale and mobile point-of-sale to augment and enhance our customers' ecosystems. Autos is a fully digital white label platform for lease, finance and cash transactions that delivers a frictionless customer experience. In addition to these products, we recently launched Epix Now, the first marketplace offering solution built on API first strategy developed specifically for the global credit finance and leasing industry. Our first product to be launched as a part of this marketplace Flex is an instant cloud-based calculation engine for accurate contract life cycle calculations. Subsequent to the quarter, we also launched Hubex, an API library that enables companies to standardize all their API integration procedures across multiple API services through a single integration and we are actively developing new products for launch under the Epix Now umbrella. Finally, in October 2022, we entered a partnership with Amazon Web Services, or AWS, to offer our customers innovative cloud solution services at scale with the highly skilled AWS resources. In the third quarter, we extended our partnership with AWS to include our designation as an API gateway partner, which will support the development and implementation of products in our Epix Now marketplace. Our products are the driving force behind our growth into a global company with a robust geographic presence and deep experience in our field. Over the course of 40-years, NetSol has established a strong global presence, particularly in APAC and Europe. We have become synonymous with innovative, state-of-the-art business services and enterprise solutions that support the everyday operations of some of the largest and most recognizable companies in the world. While we are well-known in our established markets, North America remains largely untapped for NetSol. The U.S. represents a very exciting opportunity for us, and we are taking steps to position NetSol as a leading provider of leasing and finance software solution in this region. Already, we managed to achieve a year-over-year sales growth driven by a multi-million dollar contract with a Tier 1 automotive provider AutoNation and our autos platform is currently live in 53 mini anywhere dealerships across the U.S., demonstrating strong early traction for our products. As I mentioned last quarter, we are also making good progress establishing a client support facility in Austin, Texas, which will accommodate all our sales and support staff based in North America and facilitate a growing customer base, and we are actively identifying and evaluating M&A opportunities in this region to further accelerate our organic growth. We believe the U.S. and North America represents a tremendous opportunity for NetSol especially as it pertains to our SaaS and cloud-based offerings that generate valuable and reliable recurring revenues for our business, and we are intently focused on building our presence in this region going forward. Speaking more on our SaaS and cloud-based offerings, we are currently in a very exciting part of our growth as we evolve towards a SaaS-based model established NetSol as a SaaS and fintech IT company. Recurring revenue is a very attractive and reliable model for our business with sequential growth over the past three quarters, indicating a shift in demand for subscription-based products in place of our traditional licensing model. The benefits of shifting to a SaaS model are plentiful, both for the customer and for NetSol. As I mentioned, SaaS and cloud-based products drive high-margin recurring revenue for our business and shifting to a SaaS model also increases our customers' access to industry-specific generative AI or artificial intelligence learning technology through our partnership with AWS and others like it. Consequently, we are implementing more and more out-of-the-box products on a pure SaaS model and deployed over the cloud. We are projecting over $25 million in subscription and support revenue for the full fiscal year 2023, and we expect the number to increase both as we continue our evolution to a SaaS model and as demand process and cloud-based products continues to grow. Because of this shift to a pure SaaS model, our products and services will require significantly less manpower to deliver the same superior customer support and customization that we are known for, and we are adjusting our business accordingly. Last quarter, we announced cost reduction initiatives, which we estimated would generate more than $4 million in savings across our business. To-date, we have reduced our headcount by 10%, and we are targeting a total headcount reduction of up to 25% with significant total savings that we expect to have a positive material impact on our revenue per employee, net profit and EBITDA. Overall, we now expect to reduce our total costs by over $7 million, and our plan is to allocate more capital to our most attractive growth markets, namely our expansion into the North American market and the development of additional SaaS and cloud-based products that further strengthen our already robust offerings. This is an exciting time for NetSol as we significantly shift our business model and tap into new markets that provide us with a tremendous opportunity to exponentially grow our business. I will now turn the call over to Roger Almond, our CFO, who will walk us through our financials for the quarter. Go ahead, Roger.

Thank you, Najeeb. Our total net revenues for the third quarter of fiscal 2023 were $13.5 million compared with $14.8 million in the prior year period. On a constant currency basis, net revenues were $14.1 million. License fees were $2 million compared with $1.6 million in the prior year period and were $2.1 million on a constant currency basis. Recurring revenue or subscription and support revenues were $6.7 million, compared with $6.6 million in the prior year period. On a constant currency basis, recurring revenues were $6.8 million. Total services revenue were $4.9 million compared with $6.6 million in the prior year period. The decrease in services revenue is related to an overall decrease in services provided for ongoing implementations and additional change requests. On a constant currency basis, total services revenue were $5.2 million. Services revenue is derived from services provided to both current customers as well as services provided to new customers as part of the implementation process. Total cost of revenues was $8.8 million for the third quarter compared to $8.9 million in the third quarter of fiscal year 2022. On a constant currency basis, total cost of revenues was $11.7 million. Gross profit for the third quarter of fiscal 2023 was $4.7 million or 34.8% of net revenues, compared to $5.8 million or 39.4% of net revenues in the third quarter of fiscal 2022. On a constant currency basis, gross profit was $2.4 million. Operating expenses for the third quarter were $5.6 million or 41.7% of sales compared to $6.4 million or 43% of sales in the same period last year. On a constant currency basis, operating expense for the third quarter were $6.9 million or 48.7% of sales. Turning to our profitability metrics. Our GAAP net income attributable to NetSol for the third quarter fiscal 2023 totaled $2.5 million or $0.23 per diluted share compared with a GAAP net loss of $278,000 or a loss of $0.02 per diluted share in the third quarter of last year. On a constant currency basis, our total net income attributable to NetSol totaled $1.2 million or $0.11 per diluted share. As always, it's important to point out that included in our net income this quarter was a large gain of $5.4 million on foreign currency exchange transactions compared to a gain of approximately $500,000 in the third quarter of last year. On a constant currency basis, we realized a gain of $7.9 million on foreign currency exchange transactions. Because we operate in several geographical regions, a significant portion of our business is conducted in currencies other than the U.S. dollar. A decrease in the value of the U.S. dollar compared to foreign currency exchange rates generally has the effect of increasing our revenues, but it also increases our expenses denominated in currencies other than the U.S. dollar. Similarly, as the U.S. dollar gains strength relative to foreign currency exchange rates, it tends to reduce our revenues, but it also reduces our expenses denominated in currencies other than the U.S. dollar. We plan our business accordingly by deploying additional resources to areas of expansion while continuing to monitor our overall expenditures, given the economic uncertainties of our target markets. Moving to our non-GAAP metrics. Our non-GAAP adjusted EBITDA for the third quarter of fiscal 2023 was $3.3 million or $0.29 per diluted share compared with non-GAAP adjusted EBITDA of $359,000 or $0.03 per diluted share in the third quarter of last year. Please see the reconciliation schedules contained in our earnings release for our revised calculations of adjusted EBITDA for the quarters ended March 31, 2023 and 2022. Turning to our balance sheet. At quarter end, we had cash and cash equivalents of approximately $15.3 million or approximately $1.35 per diluted common share. Total stockholders' equity at March 31, 2023, was $41 million or $3.63 per share. That concludes my prepared remarks. I'll now turn the call back over to Najeeb.

Thank you, Roger. In summary, we have a lot to be excited about for this business. We are expanding into perhaps the most vibrant and untapped market in the world in North America and specifically in the United States. We're also evolving towards a pure SaaS model that allows us to generate higher margin recurring revenues with less manpower and more support and customization for our customers. And we are strategically reducing our costs so that we can allocate capital to the parts of our business that make all of our -- these opportunities possible. I'm very encouraged of what we are seeing on the horizon for NetSol, and I look forward to keeping you apprised as we continue to drive growth and value for our shareholders. With that, I'd like to now open the call for questions. Operator?

Thank you. We will now begin the question-and-answer session. [Operator Instructions] The first question comes from the line of Todd Felte from AGES Financial Services. Please go ahead.

Well, hi, Najeeb, Roger, great to see the progress on the quarter. Nice to see the improvements there. Just had a couple of questions. I know in the last two years, we've announced contracts with Yamaha North America, BMW, Mini Cooper, AutoNation, IKEA and a lot of these other household names we haven't really gotten, kind of, a ballpark revenue range on these contracts. Are these contracts with these household names, do they produce over $1 million in revenue for us each year? Or is it smaller? Or can you kind of give us some color to what these contracts provide revenue-wise?

Yes. Thank you, Todd. You're right. These contracts, including AutoNation, Yamaha, they're at least $1 million trajectory revenue each year. And of course, these are on, as you know, very prominent name -- household names. We believe there's a bigger opportunity to grow with them as our history with some previous names or bigger names in the auto sector. We've done so well similar. But I believe in the U.S., these names are perfect for our pivot in the SaaS and cloud and mobility. So I'm pretty confident that the relationships will improve and grow as we continue to deliver the first phases of our contracts.

Okay. And also in the past, you would always give kind of a range of the backlog. I think we are up to over $200 million, maybe even $250 million in backlog that you had announced on the last quarterly call. Can you give us a ballpark range of our backlog now?

The reason, Todd, we chose not to give a specific number is because this industry has changed a lot in last -- even recently a few months, I won't talk about years, but in the last few months, I have been different. The world has changed a lot in many, many ways, given all the macro challenges and the customers or potential new customers tend to take much longer time to make a decision. So, we chose to focus on the strategy, which is the areas we are now entering, particularly our aim to become a much stronger player in the U.S. market. So I think what is important is each quarter, what we deliver, what we report and it creates more anxiety for the management if we give them backlog number, and then we can close them in the respective quarter, it creates more pressure, I think, unnecessary. So I believe it is still a healthy backlog. We have lots of deals in the play in China and U.S. and Europe. I believe you know we don't wait one minute when we have announce and [Indiscernible] new contract. But more importantly, the company is really transforming, becoming a fintech and really focused on SaaS, cloud, mobility, and I believe the U.S. is the market for these new direction for the company, I think I'm pretty confident, I'm very excited and optimistic about our future, especially in the U.S., because that's where we are very low in our market penetration. So compared to our presence in APAC or China or Europe. The U.S. is a very big field for us, wide open to grab a bigger market share in the coming years.

Okay, that's great to hear. And I know that you had talked about during the last quarterly call via a lot of these headcount reductions and cost savings really taking effect into the latter part of this year to where we might turn profitable from an operating standpoint. I know we had a large currency gain, which is great to see. Is there any update on if we can achieve the operating profitability in the latter half of this year?

Yes, Todd. This transformation to SaaS and cloud and mobility has really given us some new light end of the tunnel. And that is, don't rely too much on the license transaction, which obviously takes a lot of support in the back office. Yes, we make money while they're very long-term decision-making cycles with the customer, but also it takes a lot of manpower to support them. So we have come to a conclusion, a resolution rather to cut down the headcount by at least 25% in totality. So we started with 10% in this current quarter. We believe in at least the next couple or three months, we must have achieved 25% total headcount. That would bring a substantial reduction of overhead, because now we're focusing on quick play at a SaaS model solution, which is ready to go. It won't require too much of the back office personnel engineers, but these flex products and the new solution or mobility, for example, you can see we are up to 53 dealership in Mini anywhere. And what kind of starts to get into BMW in the U.S. They have 400 dealerships. So those kind of verticals and the new areas will keep the cost much lower than what we've been doing, because we've been supporting large implementation all these years, Daimler and BMW, as you know all the names. But we have pivoted and that where we will have a leaner organization, much lower expenses, operating expenses and of course, improve our operating profit and net income and of course, cash flow.

Okay. That's great to hear. And then my final question, I can hop back in the queue, is just it was nice to see the revenues even before the currency adjustment. They were the highest since June of last year. It looks like the subscription model is kicking in. Do we expect to see a continued smooth curve up with revenues increasing every quarter? Or is it going to be lumpy with ups and downs?

I think this is the whole idea, Todd, is to award lumpiness in our quarter sales by getting into size and mobility and solution, which is really easy to implement and predictable. So I'm very confident that we can show quarterly growth from quarter-to-quarter and sequentially, as well as the year-to-year. So I'm pretty positive that there's so much happening here and all the new things we talked about in our prepared remarks that I think the direction is clear. So we have to -- I mean, we did very well with the license model. We need to continue to get the RFPs working on the license deal. But the focus really is the U.S. market, organic growth, some partnership relationships, lots going on now than until the six months ago. So I'm optimistic about the continuous growth sequentially and year-over-year.

Okay. Well, congratulations on a good quarter. I look forward to future announcements and to showcase the success of your company and thank you very much for taking my questions.

Thank you, Todd.

The next question comes from the line of Karl Brookes with Pine Creek Capital. Please go ahead.

Yes, thanks for taking my question. Just have a quick one here. Can you provide a bit more color around your market share in Asia and Europe?

Yes. Asia, if I focus just in China, which is our biggest market in terms of revenue, we are by far, the majority leader in terms of market share in China, because we boast the maximum number of customers in our space. Competitors are few, but they have a Chinese share compared to us, so we could be 70%, 80% in this space, leading the finance base in China. Overall, APAC is still a leader, because our dominance is in China, Japan, Australia, New Zealand, Thailand, almost 12 countries. So we believe we have a again, overall effect, so market share is the majority. Europe, we do quite well, started to see some traction in the recent months and quarters. There are a few companies, handful companies in our business, which is, as you know, very niche business. In Europe, we're doing quite stable. But in the U.S., we have the biggest opportunity to grow bigger share in the coming years.

Got it, great. Thanks, guys.

Thank you.

[Operator Instructions] At this time, this concludes our question-and-answer session. If your question was not addressed during the Q&A session, please contact NetSol Investor Relations team by emailing them at netsol@imsinvestorrelations.com or by calling them at 949-574-3860. I would now like to turn the conference back over to Mr. Ghauri for his closing remarks. Please go ahead.

Thank you for joining us today. I especially like to thank our investors for their continued support, our loyal customers and our dedicated employees worldwide for their ongoing contributions. We look forward to updating you on our next call. Thank you.

Thank you for joining us today for NetSol's fiscal third quarter 2023 earnings call. You may now disconnect. Goodbye.