Good morning and welcome to the NetSol Technologies fiscal third quarter 2020 earnings conference call. On the call today are Najeeb Ghauri, Chairman and Chief Executive Officer; Roger Almond, Chief Financial Officer; Asad Ghauri, Head of Global Sales and Group Managing Director of NetSol Europe; and Patti McGlasson, General Counsel. I’d now like to turn the call 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. 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. This call may contain forward-looking statements relating to the development of the company’s products and services and future operations results, including statements regarding the company that are subject to certain risks and uncertainties, such as the effect of stay-at-home orders and social distancing imposed by COVID-19 and its resultant impacts on our financials and the global economy that could cause actual results to differ materially from those projected. The words expects, anticipates, and variations of such words and similar expressions identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, but their absence does not mean that the statement is not forward-looking. These statements are not guarantees of future performance and [indiscernible] actual results, including the progress and cost of the development of products and services and the timing of market acceptance, as well as a delay in recovery or the prolonged economic downturn that affects our company, our customers, and the world economy. The subject company expressly disclaims any obligation or undertaking to update or revise any forward-looking statements contained herein to reflect any change in the company’s expectations with regards thereto or any changes in events, conditions or circumstances upon which any statement is based. 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 on our website at www.netsoltech.com and via a link today available in today’s press release. Now I would like to turn the call over to Najeeb. Najeeb?

Thank you Patti, and good morning everyone, and thank you for joining us today. I’m calling in today from our offices in Lahore in Pakistan. To be honest, it is a bit of a weird feeling to be here right now. Our NetSol Technologies campus is usually so full of life and activity, and right now it is largely empty. These are, no question, most unprecedented times for us. It is truly a unique occurrence to have one event affect nearly all members of our global community in such a meaningful way. My condolences go out to those affected by the pandemic directly or indirectly and I extend my deepest thanks to those who continue to work the frontlines keeping us safe and healthy through these trying times. As an international organization, NetSol directly witnessed the influence of COVID-19 as it quickly spread through many of our operations around the world, impacting families, our employees, communities, and the global economy of course. During this period of increased uncertainty, we have acted with clarity and judgment. Our people come first. As initial reports of the virus circulated earlier in the year, we acted swiftly in restricting all non-essential travel indefinitely and instituting a mandatory work from home policy. At present, any employees who are displaying flu-like symptoms or experiencing onset of a potential sickness are being highly encouraged to seek medical attention to ensure their health and safety first and foremost. At the same time, we are closely monitoring the evolving situation through all available information channels, including the latest news reports as well as updates from the CDC, the World Health Organization, and other regulatory authorities. The start of the calendar year has been a challenging time for many. Our operations in the fiscal third quarter were meaningfully impacted by…

Thanks Najeeb. Turning to our fiscal third quarter 2020 financial results for the period ended March 31, our total net revenues for the third quarter were $13.5 million compared to $17.1 million in the prior year period. The decrease in total net revenues was primarily due to a decrease in total license fees of $2.2 million and a decrease in services revenue of $2.6 million, which was offset by an increase in total maintenance fees of $1.2 million. Total license fees in Q3 were $312,000 compared to $2.5 million in the prior year period. The decrease in license fees for the quarter was primarily due to the absence of meaningful contributions from our 12-country, $110 million contract which had a more pronounced contribution in the prior year period. Total maintenance fees in Q3 were $4.9 million compared to $2.7 million in the prior year period. The increase in total maintenance fees for the quarter was due to additional markets going live with NFS Ascent as part of the multi-country contract just mentioned. Maintenance fees begin once a customer has gone live with our product. We anticipate maintenance fees to gradually increase as we implement both our legacy products and NFS Ascent. Total services revenue for the quarter were $8.3 million compared to $10.9 million in the prior year period. The decrease in services revenue was due to a decrease in services revenues associated with new implementations for two major contracts and change requests. Services revenues derive 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 $7.5 million for the third quarter, a decrease of $1.1 million from $8.6 million in the third quarter of fiscal 2019. The decrease in cost of revenues was…

Thank you Roger. I’ll begin my remarks, as we always do, by recapping some of the major operational highlights from the period. Starting in Asia Pacific region, with our previously announced 12-country, $110 million contract with a German auto manufacturing giant, we continue to make considerable progress along our multi-year, multi-country implementation road map. More specifically, just last week we achieved a successful go-live in Malaysia. As part of the go-live, we implemented our full suite NFS Ascent retail platform, which includes our Omni point-of-sale and contract management system, and separately the wholesale finance system of our wholesale platform. Delivering all modules on time in the face of the current environment is a real achievement by our team. It is worth noting that this latest go-live represents the first remote implementation we have ever attempted. Based on this successful rollout, we are increasingly confident in our ability to continue executing through the latter stages of this multi-country deployment in the coming months. Moving forward, the next near term go-live events to come will be in Singapore and Thailand. We have additional deployments scheduled for new territories beyond these and we also have more go-live events further on the horizon for areas where we are currently partially operational, but we expect those announcements to be made in subsequent calendar years. In all, we are continuing to proceed under budget and on schedule. Switching to other ongoing event projects, in March we delivered Ascent regional platform to the captive auto finance company of a notable Japanese equipment manufacturer in Australia and New Zealand. Because of complications related to COVID-19, the go-live date has been temporarily paused, but we are looking forward to resuming operations as soon as conditions permit in those countries. This quarter, we also implemented our i-operations system for the leading captive finance company of a notable Japanese bank in Indonesia, allowing their call center workforce to contact prospects and act as an additional channel for lead generation. At this point, I’d like to introduce Asad Ghauri, who is the Global Head of Sales and our Group Managing Director of our European operation for NetSol. He is [indiscernible]. He’ll give you our strategy and an outlook update. Asad?

Thank you Najeeb. Good morning everyone. Excited to be on this call for the first time and presenting to you guys. I’ll start off by covering the European operations. As you might know, the European operations are now based on two product offerings. One is the old generation product that we have, and one is the Ascent side, which we are pushing and focused on. I’m happy to report that on the previous generation product, the customer engagement is quite strong and stable, and we expect an uptick based on the COVID-19 situation with services and other development tasks that are required by our client. With that, I move onto Ascent, which is where we’re focused as an organization. As you might know, recently in the news we had disclosed that we were able to sign a contract with a leading U.K. bank. This is on our SaaS and cloud model that we have made the market aware of. We see it tracking really well with further opportunities of engagement with the clients as we move along. This project as a whole is due to be delivered in six months and is tracking well, which has probably not been accomplished in the industry before. Usually these projects are long and they have their own timelines, so we were able to structure it in a way based on the Ascent platform where we provided prebuilt interfacing regulatory frameworks and other preset business configurations that allow us to offer this to our customers, so they can implement it quickly and start their operations. It’s been a great win for us and we see momentum because of that with other prospects engaging with us. SaaS, as you know, is something we’ve made everyone aware of and we’ve seen on the other side other…

Thank you Asad. I want to add in my closing remarks, while our team under the leadership of Naeem Ghauri, Asad Ghauri and many other people in sales all over the world are working very hard to bring and close new revenues, we on the management side are very focused on cost control efficiency. We are following closely on the key metrics like EBITDA and gross margin and operating income. We believe those are very important numbers for us to stay strong on the sales side and at the same time stay more lean and nimble. I’d like to take this time to publicly thank our employees, global employees, partners, customers, investors, and other key stakeholders for their continued support of NetSol through this very difficult period especially. For everyone listening today, I hope you and your families remain safe and healthy during this challenging time. At this time, I’ll ask the operator to open up for the Q&A. Operator, please?

[Operator instructions] Our first question comes from the line of Anja Soderstrom with Sidoti. Please proceed with your question.

Hi gentlemen, thank you for taking my question. It seems like you’re moving along nicely despite the challenging environment, and I hope you’re all staying safe. Can you just give me some more color on the pipeline, and especially how that is trending in SaaS versus the licensing opportunities?

Anja, Asad Ghauri will handle that. He is the master of pipelines.

Hi Anja. So as we said, we’ve got a core competency that you all know, which is our Tier 1 big deals like the $110 million deal that we refer to quite often, so that business is looking strong. But if you specifically talk about the SaaS, you see great traction with the way we’ve converted customers in Europe - and SCI, for example. We launched about eight to nine months ago. In our space, if you understand the depth and breadth of our product offering, it is a little bit different to package it under SaaS and the model that we’re employing. Now, the validation of that is coming from having a bank come in and start utilizing our platform, even though their preference was going on a traditional model, so SaaS for us is tracking really, really well. We’ve got multiple engagements in Europe and the U.S. which have picked up significantly over the last three months, so very, very bullish in terms of conversion as we move forward. I can’t give you specific names, but I can say to you that the engagements are in the dozens currently and at advanced stages.

Would you say that--it sort of sounded a little bit on the call that the current environment is sort of helping your case, since your technology is helping the companies to stay relevant. Is that how it goes, or is it more taking a longer time because of the--

Yes, I don’t want to be insensitive to the situation, but it has opened up a lot of opportunities for us. As I said previously, our platform allows us to be a lot more open to integrating with other systems, which allows customers to be flexible in terms of location and how they operate. They can take our business processes and they can expose them through digital apps and others, so because of that positioning which wasn’t obviously for COVID, it was just how we’ve built the application, it’s allowed us to gain a lot of traction. Obviously the situation has made companies think about how they need to react to this environment. As much as we want to go back to being normal, I don’t see that happening anytime soon, but life has to go on. Things will change, so the platform is allowing us to provide that change easily. That is why we’re very bullish.

Okay, and how do you compare, then, to your competition in terms of that? What’s your competitive edge?

If I’m being honest, I think our competition struggles there with some of the concepts. This is validated through our customer engagements, the wins that we’ve had over the last couple of months in Europe. We’ve had strong competition from our big competitors on price, on others, but we’ve come out ahead, so that’s validation for us.

Can I add one more point here, Anja? Without naming the name of our very large customer, who had just complemented NetSol as the only vendor who is delivering in this environment, so that to me as a CEO was a big boost to our employees who are without fail--actually, their productivity has gone up because they’re sitting home and working and working and working.

There’s nothing else to do, right?

Their families [indiscernible].

Yes, yes. Then the SaaS revenue that you’re generating, that’s included in the services fees line, right?

If you heard Roger earlier, the SaaS model is a monthly fee that comes in, and Roger can explain more; but if you see we’ve taken a hit on the licensing side, as Roger explained, that is because of us converting customers on the SaaS side, which is a monthly payment that they make rather than a lumpy payment they used to make for us, and that used to reflect automatically as soon as they came in.

Okay, thank you. Then in terms of the 12-country contract, how many countries do you have left there to implement?

We have four countries left, so we’ve done four of the major ones. We’ve done two of the smaller ones, Malaysia being the one that went live recently. We’ve got ongoing projects with two other smaller ones, which you should be hearing news of going live in the next two months, and then you’ve got four of the bigger ones left, like Australia, Japan and other markets, where we are already starting work remotely obviously, which is the new reality, so that’s ongoing. We will have--we’ve crossed the halfway mark successfully. Now we will be taking some of the smaller ones live imminently and the bigger ones will then be following what we did in China and others.

Okay, thank you. Thank you, that was all from me.

Thank you.

Thank you. [Operator Instructions]. We’ll pause a moment to allow for more questions. Thank you. At this time, this concludes our question and answer session. IF your question was not addressed during the Q&A session, please contact NetSol’s Investor Relations team by emailing them at investorse@netsoltech.com, or by calling them at 949-574-3860. Now I’d like to turn the call back over to Mr. Ghauri for his closing remarks.

Thank you for joining us today. I especially want to thank our investors for their continuous support, our loyal customers, and our dedicated employees for their ongoing contributions. I wish you safety and well for all of you. We look forward to updating you on our next call. Thank you.

Thank you. This concludes today’s call. Thank you for joining NetSol’s fiscal third quarter 2020 earnings call. You may now disconnect your lines.