FatPipe Inc. Reports 30% Revenue Growth for Three Months, Net Income Decline for Nine Months

FatPipe Inc. reported its financial results for the three and nine months ended December 31, 2025, revealing a significant increase in revenue and a notable shift in profitability compared to the previous fiscal period. The company generated revenues of $4.1 million for the three months, marking a 30% increase from $3.1 million in the same period last year. For the nine-month period, revenues totaled $12 million, a decrease of 4% from $12.5 million in the prior year. The decline in nine-month revenue was attributed to a tough comparison against a strong prior year, which included two large contracts that significantly boosted sales.

In terms of profitability, FatPipe reported a net income of $310,662 for the three months ended December 31, 2025, compared to $84,372 in the same period last year. However, for the nine-month period, net income fell to $1 million from $2.3 million in the previous year, primarily due to a stock-based compensation expense of $625,220 recognized in the latest quarter. The company's gross profit for the three months was $3.6 million, reflecting a gross margin of 88%, consistent with the prior year.

Operationally, FatPipe has made strategic investments in its sales and marketing efforts, resulting in a 44% increase in sales and marketing expenses to $1.3 million for the three months ended December 31, 2025. This increase is part of the company's strategy to scale its sales force post-IPO, which was completed in April 2025. The company also reported a significant rise in cash reserves, ending the period with $6.2 million in cash, up from $2.9 million at the end of the previous fiscal year.

FatPipe's customer base remains concentrated, with three major partners accounting for approximately 47.18% of total revenues for the nine months ended December 31, 2025. The company continues to expand its geographic footprint, particularly in North America and parts of Southeast Asia, and is exploring partnerships to offer region-specific software bundles. The company’s product offerings, which include SD-WAN and cybersecurity solutions, are expected to benefit from the growing demand in these markets.

Looking ahead, FatPipe anticipates continued growth driven by its strategic initiatives and market expansion efforts. The company is focused on enhancing its product offerings and improving customer engagement, which it believes will support revenue growth in the coming quarters. However, it also acknowledges potential challenges, including macroeconomic factors that could impact input costs and overall market conditions.