Company: NTCL
Filing Date: 2025-10-20
Form Type: F-1
Source: 0001104659-25-100526
Chunk: 126

Company: NetClass Technology Inc
Filing Date: 2025-10-20
Form: F-1
Chunk 126
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31, 2024, which was an increase of approximately $0.1 million or 2.3%. The increase in application development service revenue was mainly attributed to the increase of revenue in Singapore, which was established in May 2024. Certain application development service contracts contain a significant financing component, which is a financial obligation to the customers. In these cases, after deducting the standalone selling price of the financial service, which is calculated using the Chinese Central Bank’s suggested bank loan interest rate for the duration similar to the credit period granted to the customers, the remaining amount of the contract consideration is allocated to the equipment and the application development services based on their relative standalone prices. The financial income revenue is recognized over the credit period granted to the customers. There are no significant returns, refund and other similar obligations during each reporting period. The financial income during the six months ended March 31, 2025 and 2024 was $nil and $6,678, respectively, included in revenue from application development services. Revenue from subscription services Revenue from subscription services is comprised of subscription fees from customers accessing the Company’s software-as-a-service applications. The Company’s monthly or quarterly billing to customer is based on the number of uses or the actual usage by the customers. The subscription services contracts typically include a single performance obligation. The revenue from subscription services is recognized over the contract term on a straight-line basis or based on the actual usage as customers receive and consume benefits of such services. Our subscription service revenue decreased approximately $0.2 million, or 12.6%, from approximately $1.3 million for the six months ended March 31, 2024 to approximately $1.1 million for the six months ended March 31, 2025. In prior years, customers benefited from certain government grants during the COVID outbreak for remote trainings. Since the related government incentive policy stopped after COVID in fiscal 2023, some of these customers switched to training packages with lower fees after the expiration of the original service contracts or stopped services. This was not anticipated in our original plan for developing SaaS subscription services. To mitigate the impact from reduced subscription service customer base, the Company made a lot of new efforts to expand its oversea business for application development services in the second half of fiscal 2023. The trend of decreasing demand of SaaS services extended into fiscal 2025, which resulted in the decrease in revenue of SaaS services. Cost of Revenues Our cost of revenues mainly consists of compensation for our professionals, material and