NetSol Technologies Limited (PSX: NetSol) posted a major turnaround in its latest quarterly financial performance for 2QFY24 where it saw earnings of over half a million rupees versus a loss after tax in 2QFY23. Similarly, the company in 1HFY24 posted a PAT of over Rs800 million versus Rs29 million in 1HFY23.

The growth in the company’s earnings came from increased revenues and restricted cost of sales. The revenues grew by 48 and 40 percent year-on-year respectively, in 2QFY24 and 1HFY24 which came from strong licensing fees and increased recurring revenues. NetSol also witnessed a massive jump in gross margins with gross profits rising by 3.5 times in 2QFY24, and by 2.6 times in 1HFY24. The IT giant’s growth during the period has been due to its shift towards a hybrid license and Software-as-a-Service (SaaS) model along with continued growth in recurring subscription and support revenues.

What further helped the company was the single-digit growth in the selling and promotion expenses and administration expenses during 2QFY24 and 1HFY24. NetSol’s net margins were seen growing from one percent in 1HFY23 to 17 percent in 1HFY24 - despite a decline in other income – due to aforementioned factors.

The company has been performing extremely well over the years, contributing to the country’s IT exports. After a stellar FY22 and FY23, the company is on route to another impressive year. The management of the company has highlighted that it will continue to scale its SaaS business and that its license and SaaS model have become a major catalyst for growth. It also mentioned in its press release that it entered into a large contract in Asia with a major automotive company, which resulted in substantial license fee for the company.