Company: NTWK
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001493152-25-015950
Chunk: 751

Company: NETSOL TECHNOLOGIES INC
Filing Date: 2025-09-29
Form: 10-K
Item: Item 3
Chunk 751
---

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.

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, maintenance releases 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, a majority
of 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 data conversion and building non-complex interfaces to allow the software to operate in integrated environments. The Company recognizes
revenue for time-and-materials arrangements as the services are performed. In fixed fee arrangements, revenue is recognized as services
are performed as measured by costs incurred to date, compared to total estimated costs to complete the services project. Management applies
judgment when estimating project status and the costs necessary to complete the services projects. A number of internal and external
factors can affect these estimates, including labor rates, utilization and efficiency variances and specification and testing requirement
changes. Services are generally invoiced upon milestones in the contract or upon consumption of the hourly resources and payments are
typically due 30 days after invoice.

BPO
and Internet Services

Revenue
from BPO services is recognized based on the stage of completion which is measured by reference to labor hours incurred to date as a
percentage of total estimated labor hours for each contract. Internet services are invoiced either monthly, quarterly or half yearly
in advance to the customers and revenue is recognized ratably overtime on a monthly basis.

Significant
Judgments

More
judgments and estimates are required under Topic 606 than were required under Topic 605. Due to the complexity of certain contracts,
the actual revenue recognition treatment required under Topic 606 for the Company’s arrangements may be dependent on contract-specific
terms and may vary in some instances.