FatPipe Inc. Reports 29% Revenue Decline in Q3 2025, Net Loss of $43,387

FatPipe Inc. reported its financial results for the three and six months ended September 30, 2025, revealing a significant decline in revenue and profitability compared to the same period last year. The company generated revenues of $3.96 million for the quarter, a decrease of 29% from $5.60 million in the prior year, and $7.90 million for the six months, down 16% from $9.35 million. The decline is attributed to the absence of large contracts that had boosted revenues in the previous fiscal period, specifically two contracts totaling $1.4 million that were recognized in Q2 2024.

Despite the drop in revenue, FatPipe's gross profit for the quarter was $3.65 million, reflecting a gross margin of 92%, down from 96% in the prior year. The increase in cost of revenues, which rose to $312,904 from $229,315, was driven by higher input costs due to macroeconomic factors. For the six-month period, gross profit was $7.36 million, with a gross margin of 93%, down from 95% in the previous year. The company’s operating expenses increased to $3.65 million for the quarter, up 18% year-over-year, primarily due to higher sales and marketing expenses as FatPipe expanded its sales team.

Operationally, FatPipe has made strategic moves to enhance its market position, including an initial public offering (IPO) in April 2025, which raised approximately $3.87 million in net proceeds. The company has also expanded its sales force from 8 to 25 salespeople as part of its growth strategy. As of September 30, 2025, FatPipe reported a total of 13,924,468 shares outstanding, reflecting an increase from the previous period due to the IPO and additional shares issued for services.

In terms of cash flow, FatPipe ended the reporting period with $6.23 million in cash and cash equivalents, a significant increase from $2.92 million at the end of the previous fiscal period. The company reported net cash used in operating activities of $108,769, an improvement from $204,175 in the prior year, indicating better management of cash flows despite lower net income. The company’s net income for the quarter was a loss of $43,387, compared to a profit of $1.63 million in the same quarter last year, while for the six months, net income was $697,808, down from $2.24 million.

Looking ahead, FatPipe aims to continue its expansion in North America and Southeast Asia, with plans to introduce geography-specific software license bundles. The company anticipates that its growth strategy, combined with the recent increase in sales personnel and the successful execution of its go-to-market strategy, will help stabilize revenues and improve profitability in the coming quarters. However, the company acknowledges that market conditions and competition will play a significant role in its future performance.