Core Insights - FatPipe, Inc. is a pioneer in enterprise-class, application-aware, secure software-defined wide area network (SD-WAN) solutions, focusing on reliability, security, and optimization for Wide Area Networks (WANs) and cybersecurity solutions [1] Company Performance - Following a successful IPO earlier in the year, FatPipe's stock has faced downward pressure due to the expiration of the initial shareholder lockup period [1]

Core Insights - FatPipe, Inc. reported a 49% growth in Monthly Recurring Billings from Q2 FY2025 to Q2 FY2026 [1] - The company's sales headcount nearly tripled during the same period [1] Financial Performance - Total revenue for Q2 FY2026 was $4.0 million, a slight increase from $3.9 million in Q1 FY2026 [1] - The revenue includes professional services, indicating a stable growth trajectory [1]

Market Growth Projections - The SD-WAN market is estimated to be approximately $4.5 billion in 2023, projected to grow to over $17.6 billion by 2030, with a CAGR of 18% in North America and over 60% in APAC[122]. - SASE software and platform revenues are expected to grow from $6.4 billion in 2022 to $27.2 billion by 2030, resulting in a CAGR of almost 20%[123]. - The NMS market is projected to grow at a CAGR of 10% from 2022 to 2030, with total revenues estimated at $2.0 billion in 2022, growing to approximately $4.4 billion[124]. - The global cybersecurity market was valued at approximately $245.6 billion in 2024 and is projected to reach about $500.7 billion by 2030, corresponding to a CAGR of roughly 12.9%[125]. Company Strategy and Operations - The company plans to expand its presence in North America and Southeast Asia, with specific strategies for Mexico and Asian markets[117]. - FatPipe holds over a dozen software and technology patents to support its integrated suite of software solutions[116]. - The company aims to enhance its product pipeline with new SD-WAN security features and single-stack cybersecurity capabilities[126]. - FatPipe's software solutions are delivered as subscription services, with customer contracts typically ranging from 36 to 60 months[128]. Financial Performance - For the three months ended September 30, 2025, net revenue was $3,959,231, a decrease of $1,636,345, or 29%, from the prior period due to two large contracts in Q2 2025[136]. - Cost of revenue for the same period was $312,904, an increase of $83,589, or 36%, attributed to rising input costs due to macroeconomic factors[137]. - Gross profit decreased to $3,646,327, down $1,719,934, or 32%, with a gross margin of 92%, down from 96% in the prior period[138]. - Sales and marketing expenses increased to $1,202,636, an increase of $283,244, or 31%, due to scaling sales headcount for long-term growth[139]. - General and administrative expenses rose to $1,392,675, an increase of $208,879, primarily due to $625,220 in non-cash stock-based compensation[140]. - Product development expenses were $489,157, an increase of $53,755, as the company continued its development plans for cybersecurity and satellite products[141]. - For the six months ended September 30, 2025, net income attributable to stockholders was $697,808, a decrease of $1,538,917, or 69%, from the prior period[146]. - Net income for the six months ended September 30, 2025, was $697,810, a decrease of 68.8% compared to $2,236,725 for the same period in 2024[172]. - Adjusted EBITDA for the six months ended September 30, 2025, was $1,914,545, down $345,933 from $2,260,478 in the prior year, with an adjusted EBITDA margin of 24%[171]. Cash Flow and Financing - Net cash used in operating activities was $108,769 for the six months ended September 30, 2025, an improvement from $204,175 in the prior period[167]. - Net cash provided by financing activities was $3,581,185, primarily driven by $3,867,472 from the April 2025 IPO[169]. - The company expanded its sales team from 8 to 25 salespeople post-IPO to enhance its market presence[177]. - Net cash used in investing activities was $35,447, up from $12,228 in the prior period, mainly due to office improvement purchases[168]. - Cash and cash equivalents at the end of the period were $6,229,021, significantly up from $845,850 at the end of the prior period[166]. - The company reported a stock-based compensation expense of $625,220 in the three months ended September 30, 2025[172]. - The company did not have any off-balance sheet arrangements during the years presented[178]. Cost and Margin Expectations - The company expects lower gross margins in the India and South Asian markets, offset by lower costs of sales due to lower wages in those regions[161]. - Interest income was $42,949, compared to a loss of $15,576 in the prior period, reflecting funds raised from the IPO[144].

Core Insights - FatPipe, Inc. has successfully completed a significant SD-WAN rollout for a large U.S. school district, encompassing over 210 sites under a contract valued at $1.4 million [1] Company Summary - The project integrates all campuses, administrative offices, and data centers into a unified FatPipe SD-WAN architecture [1] - The SD-WAN design aims to ensure reliable connectivity for various functions including instruction, testing, voice, and video [1]

Core Insights - The article discusses the successful deployment of a 108-site SD-WAN by FatPipe for a large regional bank, aimed at enhancing connectivity and performance across its branches and data centers [2]. Group 1: Deployment Details - The SD-WAN deployment integrates the bank's branches, data centers, and remote offices into a unified FatPipe SD-WAN architecture [2]. - The initiative is designed to improve reliability, simplify operations, and enhance the end-user experience across critical banking applications [2]. Group 2: Company Impact - FatPipe's technology aims to provide higher uptime and consistent application performance for the bank [1].

Core Insights - FatPipe, Inc. is hosting a webinar for investors on October 15, 2025, at 4:15 p.m. ET [1] - The event will feature insights from FatPipe's Chairman and CEO, Dr. Ragula Bhaskar [1] Company Overview - FatPipe, Inc. specializes in enterprise-class, application-aware, secure software-defined wide area network (SD-WAN) solutions [1] - The company focuses on providing high levels of reliability, security, and optimization for Wide Area Networks (WANs) [1]

Core Insights - Premarket trading is showing notable activity with significant price movements indicating potential trading opportunities before the market opens [1] Premarket Gainers - AgriFORCE Growing Systems Ltd. (AGRI) has increased by 263% to $8.73 [3] - Qualigen Therapeutics, Inc. (QLGN) has risen by 212% to $8.87 [3] - Flora Growth Corp. (FLGC) is up 103% at $55.36 [3] - Boxlight Corporation (BOXL) has gained 102% to $3.16 [3] - Platinum Analytics Cayman Limited (PLTS) is up 96% at $14.00 [3] - Metsera, Inc. (MTSR) has increased by 59% to $52.99 [3] - Anywhere Real Estate Inc. (HOUS) is up 51% at $10.72 [3] - Fold Holdings, Inc. (FLD) has risen by 30% to $5.93 [3] - ARB IOT Group Limited (ARBB) is up 28% at $8.02 [3] - MBX Biosciences, Inc. (MBX) has increased by 26% to $12.64 [3] Premarket Losers - AlphaVest Acquisition Corp (ATMV) has decreased by 27% to $15.99 [4] - Helius Medical Technologies, Inc. (HSDT) is down 17% at $20.00 [4] - CEA Industries Inc. (BNC) has fallen by 15% to $8.20 [4] - Simpple Ltd. (SPPL) is down 13% at $5.00 [4] - FatPipe, Inc. (FATN) has decreased by 11% to $7.87 [4] - Tharimmune, Inc. (THAR) is down 11% at $3.20 [4] - Yueda Digital Holding (YDKG) has fallen by 11% to $2.98 [4] - American Battery Technology Company (ABAT) is down 10% at $2.94 [4] - AGM Group Holdings Inc. (AGMH) has decreased by 9% to $9.36 [4] - Antelope Enterprise Holdings Limited (AEHL) is down 5% at $3.38 [4]

Core Insights - FatPipe, Inc. is hosting a webinar on August 7, 2025, to discuss its leadership in the software-defined networking market and its high-margin subscription-based business model [1][2][3] - The company has over 2,500 enterprise customers across various sectors, including government, healthcare, and finance, and offers patented technology for secure connectivity [3] - FatPipe's financial performance includes a gross margin of over 90% and a net margin of 24.4% for fiscal 2024, indicating strong profitability and capital efficiency [3] Company Overview - FatPipe, Inc. is a pioneer in software-defined wide area networking (SD-WAN) and has introduced Total Security 360, a comprehensive cybersecurity and network security solution [6] - The company holds 12 U.S. patents related to multipath, software-defined networking and has a global presence with over 200 resellers [6] - The SD-WAN market is projected to exceed $49 billion by 2030, positioning FatPipe for significant growth opportunities [3]

Core Viewpoint - FatPipe, Inc. has reported solid financial performance in its first quarter as a public company, highlighting growth in product revenue and a strong business model that positions the company for future success [3][4]. Q1 Highlights - The first quarter of fiscal year 2026 marked a pivotal moment for FatPipe as it was the company's first quarter post-IPO, showcasing strong execution and growth [3]. - The company experienced a 16.2% increase in total product revenue compared to the same quarter in fiscal 2025 [4][8]. - Total revenue, including professional services, reached $3.9 million, reflecting a 5% increase from $3.8 million in the same period last year [4][8]. - Gross margin improved to 94%, up from 92% in Q1 FY25, attributed to customer contract extensions [4]. Financial Performance - Net income for the quarter was $0.7 million, a 22% increase from $0.6 million in Q1 FY25, driven by strong top-line growth [5]. - Adjusted EBITDA was reported at $1.1 million, a 10% increase from $1.0 million in Q1 FY25 [5]. - Cash and cash equivalents stood at $5.9 million as of June 30, 2025, significantly up from $2.9 million on March 31, 2025, due to IPO proceeds [5]. Strategic Developments - FatPipe completed a significant deployment of 252 sites for a large customer, enhancing its presence in critical infrastructure sectors and high-growth verticals [3]. - The company has made strategic investments in expanding its sales organization and enhancing its cybersecurity offerings [3]. - FatPipe was added to the Russell 3000E and Russell Microcap Indexes, indicating its growing market presence [8]. - The company appointed key sales Vice Presidents and a CFO with extensive experience in networking technology, cybersecurity, sales, and finance [8]. Awards and Recognition - FatPipe received the 2025 MSP Today Product of the Year Award for its Total Security 360 cybersecurity product, underscoring its commitment to innovation and excellence in the cybersecurity space [8].

Part I. Financial Information [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The company's financial statements for the quarter ended June 30, 2025, reflect significant changes primarily due to its April 2025 IPO, boosting assets and equity [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to $32.0 million, driven by a doubling of cash post-IPO, while equity grew significantly Consolidated Balance Sheet Highlights (Unaudited) | Account | June 30, 2025 (USD) | March 31, 2025 (USD) | | :--- | :--- | :--- | | **Assets** | | | | Cash | $5,906,988 | $2,920,550 | | Total current assets | $16,337,553 | $12,962,684 | | Total assets | $32,018,369 | $28,287,769 | | **Liabilities & Equity** | | | | Total current liabilities | $6,303,286 | $6,489,080 | | Total liabilities | $11,623,144 | $12,362,452 | | Total stockholders' equity | $20,395,225 | $15,925,317 | | Total liabilities and stockholders' equity | $32,018,369 | $28,287,769 | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) For the three months ended June 30, 2025, the company reported a 5.0% increase in revenues to $3.94 million and a 7.0% growth in gross profit Consolidated Statements of Operations Highlights (Unaudited) | Metric | Three Months Ended June 30, 2025 (USD) | Three Months Ended June 30, 2024 (USD) | | :--- | :--- | :--- | | Revenues | $3,935,923 | $3,750,319 | | Gross Profit | $3,708,989 | $3,466,639 | | Income from Operations | $1,002,677 | $859,843 | | Net Income Attributable to Stockholders | $741,195 | $625,493 | | Net Income per Common Share (basic and diluted) | $0.05 | $0.05 | [Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Stockholders%27%20Equity) Total stockholders' equity increased to $20.4 million, primarily driven by the April 2025 IPO and the period's net income - The company's Initial Public Offering in April 2025 resulted in the issuance of **800,004 shares**, generating proceeds of **$3,935,522** and significantly increasing additional paid-in capital[18](index=18&type=chunk) - As of June 30, 2025, the company had **13,826,468 shares** of common stock issued and outstanding, an increase from 13,026,464 at the end of the previous quarter[18](index=18&type=chunk)[93](index=93&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the three months ended June 30, 2025, the company experienced negative operating cash flow but a significant net increase in cash due to IPO proceeds Consolidated Statements of Cash Flows Highlights (Unaudited) | Cash Flow Activity | Three Months Ended June 30, 2025 (USD) | Three Months Ended June 30, 2024 (USD) | | :--- | :--- | :--- | | Net cash used in operating activities | ($508,604) | ($252,465) | | Net cash used in investing activities | ($42,449) | ($4,955) | | Net cash provided by financing activities | $3,593,250 | $0 | | Net change in cash and cash equivalents | $2,986,438 | ($344,676) | | Cash and cash equivalents, end of period | $5,906,988 | $767,843 | - The company received **$3,784,472** in cash from its initial public offering during the quarter[20](index=20&type=chunk) [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies, the April 2025 IPO, debt structure, and significant customer concentration - The company is a developer of software-defined wide area network (SD-WAN) solutions, holding **thirteen patents**, with core offerings including SD-WAN, SASE, and NMS software solutions[22](index=22&type=chunk)[23](index=23&type=chunk) - The company closed its IPO on April 9, 2025, selling **791,024 shares** and receiving net proceeds of approximately **$3.7 million**, with stock trading on The Nasdaq Capital Market under "FATN"[26](index=26&type=chunk)[27](index=27&type=chunk) Disaggregated Revenue (Three Months Ended June 30) | Revenue Type | 2025 (USD) | 2024 (USD) | | :--- | :--- | :--- | | Product revenue | $2,392,303 | $2,105,347 | | Service revenue | $953,287 | $868,231 | | Consulting revenue | $590,333 | $776,742 | | **Total** | **$3,935,923** | **$3,750,319** | - In March 2025, the company obtained a new **$5 million term loan** from Fortis Bank, with an interest rate of Prime Rate plus 1% (**8.75%** at reporting date)[86](index=86&type=chunk) - The company has significant customer concentration, with three major partners accounting for **43.51%** of consolidated revenues for the three months ended June 30, 2025, down from 54.11% in the same period of 2024[78](index=78&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's performance, highlighting a 5% year-over-year revenue increase to $3.9 million, improved gross margin, and strengthened liquidity post-IPO [Results of Operations](index=28&type=section&id=Results%20of%20Operations) For the quarter ended June 30, 2025, revenue increased 5% YoY to $3.9 million, driven by product sales, with gross margin expanding to 94% - Net revenue increased by **$185,604 (5%)** YoY, driven by a **$372,012** increase in product and service revenue attributed to core business execution post-IPO[132](index=132&type=chunk) - Gross margin improved to **94%** from 92% in the prior-year period, reflecting higher net revenue and a **20% decrease** in the cost of revenue due to lower hardware costs[133](index=133&type=chunk)[134](index=134&type=chunk)[135](index=135&type=chunk) - Product development expenses increased by **$50,957** YoY as the company ramped up development for its cybersecurity products following the IPO[138](index=138&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity was significantly boosted by the April 2025 IPO and a new $5 million term loan, despite negative operating cash flow - The company believes cash generated by operations and cash raised from the IPO are sufficient to meet business requirements for the next **12 months**[144](index=144&type=chunk) - Net cash used in operating activities was **$508,604** for the quarter, an increase from $252,465 in the prior year, partly due to NASDAQ listing fees and related expenses[152](index=152&type=chunk) - Net cash provided by financing activities was **$3,593,250**, consisting of **$3,784,472** in IPO proceeds offset by **$191,222** in debt repayment[154](index=154&type=chunk) [Critical Accounting Policies and Estimates](index=33&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) The company identifies critical accounting policies and estimates related to intangible assets and deferred taxes, requiring significant judgment - The valuation and amortization of IP-related intangible assets, primarily patents, involve significant judgments regarding projected cash flows and estimated useful lives[161](index=161&type=chunk) - The company continually assesses the need for a valuation allowance against deferred tax assets based on a 'more likely than not' realization threshold, considering forecasts of profitability and other factors[163](index=163&type=chunk)[164](index=164&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a "smaller reporting company," FatPipe, Inc. is not required to provide quantitative and qualitative disclosures about market risk - The Company is a "smaller reporting company" and is not required to provide the information for this item[174](index=174&type=chunk) [Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[177](index=177&type=chunk) - There have been no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[178](index=178&type=chunk) Part II. Other Information [Legal Proceedings](index=38&type=section&id=Item%201%20Legal%20Proceedings) The company reported no legal proceedings during the period - None[184](index=184&type=chunk) [Risk Factors](index=38&type=section&id=Item%201A%20Risk%20Factors) There were no material changes to the risk factors previously disclosed, except concerning ongoing liquidity needs - No material changes in risk factors were disclosed since the Annual Report on Form 10-K filed on June 30, 2025, except concerning on-going liquidity needs[185](index=185&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities and confirmed the closing of its April 2025 IPO, which raised approximately $3.7 million net proceeds - The company reported no unregistered sales of equity securities for the period[186](index=186&type=chunk) - The company closed its IPO on April 9, 2025, receiving net proceeds of approximately **$3.7 million** from the sale of **791,024 shares** of common stock[188](index=188&type=chunk) [Other Information](index=38&type=section&id=Item%205%20Other%20Information) The company reported no other information for the period - None[194](index=194&type=chunk) [Exhibits](index=39&type=section&id=Item%206%20Exhibits) This section lists the exhibits filed as part of the Quarterly Report, including underwriting agreements, articles of incorporation, bylaws, and various certifications - A list of exhibits filed with the report is provided, including governance documents, material contracts, and certifications by the CEO and CFO[196](index=196&type=chunk)