Company: NTWK
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001493152-25-015950
Chunk: 2104

Company: NETSOL TECHNOLOGIES INC
Filing Date: 2025-09-29
Form: 10-K
Item: Item 11
Chunk 2104
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NEARNED REVENUE RECONCILIATION

    Unearned
    Revenue 

    Balance at June 30, 2023 
    $7,932,306 
  
    Invoiced 
     24,039,382 
  
    Revenue Recognized 
     (23,216,573)
  
    Adjustments 
     (2,962)
  
    Balance at June 30, 2024 
    $8,752,153 
  
    Invoiced 
     23,567,456 
  
    Revenue Recognized 
     (29,201,839)
  
    Adjustments 
     (87,920)
  
    Balance
    at June 30, 2025 
    $3,029,850 

During
the year ended June 30, 2025, the Company recognized revenue of $8,450,000, which was included in the unearned revenue balance at
the beginning of the period. All other activity in unearned revenue is due to the timing of invoicing in relation to the timing of revenue
recognition.

Revenue
allocated to remaining performance obligations represents the transaction price allocated to the performance obligations that are unsatisfied,
or partially unsatisfied, which includes unearned revenue and amounts that will be invoiced and recognized as revenue in future periods.
Contracted but unsatisfied performance obligations were approximately $21,759,000 as of June 30, 2025, of which the Company estimates
to recognize approximately $15,877,000 in revenue over the next 12 months and the remainder over an estimated 3 years thereafter. Actual
revenue recognition depends in part on the timing of software modules installed at various customer sites. Accordingly, some factors
that affect the Company’s revenue, such as the availability and demand for modules within customer geographic locations, is not
entirely within the Company’s control.  In instances where the timing of revenue recognition differs from the timing of invoicing,
the Company has determined that its contracts generally do not include a significant financing component. The primary purpose
of invoicing terms is to provide customers with simplified and predictable ways of purchasing the Company’s products and services,
and not to facilitate financing arrangements.

Unearned
Revenue

The
Company typically invoices its customers for subscription and support fees in advance on a quarterly or annual basis, with payment due
at the start of the subscription or support term. Unpaid invoice amounts