Company: NTWK
Filing Date: 2025-02-13
Form Type: 10-Q
Source: 0001493152-25-006348
Chunk: 17

Company: NETSOL TECHNOLOGIES INC
Filing Date: 2025-02-13
Form: 10-Q
Item: Part I, Item 1
Chunk 17
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 the promised good or service to the customer. The Company identifies and tracks the performance obligations
at contract inception so that the Company can monitor and account for the performance obligations over the life of the contract.

The Company’s
contracts which contain multiple performance obligations generally consist of the initial purchase of subscription or licenses and a
professional services engagement. License purchases generally have multiple performance obligations as customers purchase post contract
support and services in addition to the licenses. The Company’s single performance obligation arrangements are typically post contract
support renewals, subscription renewals and services engagements.

    Page 13

NETSOL
TECHNOLOGIES, INC. 

Notes
to Condensed Consolidated Financial Statements 

December
31, 2024 

(Unaudited)

For contracts
with multiple performance obligations where the contracted price differs from the standalone selling price (“SSP”) for any
distinct good or service, the Company may be required to allocate the contract’s transaction price to each performance obligation
using its best estimate for the SSP.

Software Licenses

Transfer
of control for software is considered to have occurred upon delivery of the product to the customer. The Company’s typical payment
terms tend to vary by region, but its standard payment terms are within 30 days of invoice.

Subscription

Subscription
revenue is recognized ratably over the initial subscription period committed to by the customer commencing when the product is made available
to the customer. The initial subscription period is typically 12 to 60 months. The Company generally invoices its customers in advance
in quarterly or annual installments and typical payment terms provide that customers make payment within 30 days of invoice.

Post
Contract Support

Revenue
from support services and product updates, referred to as subscription and support revenue, is recognized ratably over the term of the
maintenance period, which in most instances is one year. Software license updates provide customers with rights to unspecified software
product updates and patches released during the term of the support period on a when-and-if available basis. The Company’s customers
purchase both product support and license updates when they acquire new software licenses. In addition, most customers renew their support
services contracts annually and typical payment terms provide that customers make payment within 30 days of invoice.

Professional
Services

Revenue
from professional services is typically comprised of implementation, development, data migration, training, or other consulting services.
Consulting services are generally sold on a time-and-materials or fixed fee basis and can include services ranging from software installation
to