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].
FatPipe Inc(FATN) - 2026 Q2 - Quarterly Report