FatPipe Reports First Quarter Fiscal Year 2026 Results

Rhea-AI Summary

FatPipe (NASDAQ: FATN), a provider of SD-WAN solutions, reported strong Q1 FY2026 results following its successful IPO. The company achieved total revenue of $3.9 million, representing a 5% year-over-year increase, with product revenue growing 16.2%. Notable financial metrics include a gross margin expansion to 94%, net income of $0.7 million (up 22%), and Adjusted EBITDA of $1.1 million (up 10%).

The quarter was marked by significant milestones including the company's addition to Russell 3000E and Russell Microcap Indexes, key leadership appointments, and recognition with the 2025 MSP Today Product of the Year Award. FatPipe also completed a notable 252-site deployment for a large customer, demonstrating its operational capabilities in critical infrastructure sectors.

Positive

• Product revenue growth of 16.2% year-over-year
• Gross margin expanded to 94% from 92% in Q1 FY25
• Net income increased 22% to $0.7 million
• Cash position strengthened to $5.9 million from $2.9 million due to IPO proceeds
• Successful completion of 252-site deployment for large customer

Negative

• Overall revenue growth of 5% shows slower growth in professional services segment
• Heavy operational demands from IPO process could impact near-term execution

Insights

Financial Analyst

FatPipe shows solid post-IPO performance with 16.2% product revenue growth and improved profitability metrics in Q1 FY26.

FatPipe's Q1 FY26 results demonstrate encouraging financial momentum following their recent IPO. Product revenue grew 16.2% year-over-year, while total revenue increased 5% to $3.9 million. This revenue growth differential suggests their core product business is outpacing professional services, indicating healthy demand for their SD-WAN technology solutions.

Particularly noteworthy is the gross margin expansion to 94% from 92% in the year-ago quarter, driven by customer contract extensions. This exceptional margin level reflects the company's software-centric business model and suggests strong pricing power and limited cost pressure.

Profitability metrics show meaningful improvement, with net income increasing 22% to $0.7 million and Adjusted EBITDA growing 10% to $1.1 million. The company's ability to grow bottom-line results faster than revenue indicates effective operational leverage and cost management during their transition to public company status.

The cash position doubled from $2.9 million to $5.9 million quarter-over-quarter, bolstered by IPO proceeds. This strengthened balance sheet provides financial flexibility to execute on their growth strategies, particularly the expansion of their sales organization mentioned in management commentary.

While the absolute revenue figure of $3.9 million reveals FatPipe's relatively small size as a public company, their inclusion in the Russell indexes and their focus on high-growth verticals like critical infrastructure position them strategically in the competitive SD-WAN market. The successful 252-site deployment mentioned by the CTO demonstrates enterprise-level scalability, which could serve as a reference point for future large customer acquisitions.

SALT LAKE CITY, July 30, 2025 /PRNewswire/ -- FatPipe, Inc. (NASDAQ: FATN) ("FatPipe" or the "Company"), a pioneer in enterprise-class, application-aware, secure software-defined wide area network ("SD-WAN") solutions that provide the highest levels of reliability, security, and optimization for Wide Area Networks (WANs), today announced its first quarter fiscal year 2026 results for the period ended June 30, 2025.

Q1 Highlights

• Successfully completed initial public offering on the Nasdaq Capital Market
• Total product revenue grew 16.2% compared to the first quarter of fiscal 2025. Total revenue, including professional services, was $3.9 million, a 5% increase, compared to $3.8 million in the first quarter of fiscal 2025.
• FatPipe added to Russell 3000E and Russell Microcap Indexes
• Appointed key sales Vice Presidents to leadership team, adding decades of combined experience in networking technology, cybersecurity, sales, and finance
• Appointed CFO with finance and audit experience
• Received 2025 MSP Today Product of the Year Award for the Company's Total Security 360 cybersecurity product

"This has been a pivotal quarter for FatPipe, our first as a public company, and I'm incredibly proud of the team's execution during this transformational period," said Dr. Ragula Bhaskar, CEO of FatPipe. "Despite the operational demands of our IPO, we delivered solid top-line growth and saw meaningful traction in our recurring revenue streams, demonstrating the strength and resilience of our business model. As we scale our sales organization and capitalize on renewed interest from enterprises seeking secure, high-performance SD-WAN alternatives to legacy vendors, we are well-positioned for accelerated momentum. With our strategic investments in go-to-market expansion and our award-winning cybersecurity offerings, we are committed to delivering long-term value for our shareholders."

"Our technology roadmap continues to deliver for customers at scale," added Sanchaita Datta, President and CTO of FatPipe. "During the fiscal first quarter we completed a 252 site deployment for a large customer in record time. This implementation not only reinforces our commitment to critical infrastructure sectors, but it also expands our footprint in high-growth verticals where secure connectivity is essential. As demand for robust, scalable networking solutions continues to grow, FatPipe is poised to lead with innovation and operational excellence."

Q1 Financial Results:

Total product revenue grew 16.2% compared to the first quarter of fiscal 2025. Total revenue, including professional services, was $3.9 million, a 5% increase, compared to $3.8 million in the first quarter of fiscal 2025, driven by customer retention and additional focus on sales efforts.

Gross margin expanded to 94%, compared to 92% in Q1 FY25, driven by customer contract extensions.

Net income was $0.7 million, up 22% from net income of $0.6 million in Q1 FY25 driven by strong topline growth.

Adjusted EBITDA totaled $1.1 million, up 10% from $1.0 million in Q1 FY25.

Cash and cash equivalents were $5.9 million as of June 30, 2025, up from $2.9 on March 31, 2025 as a result of IPO proceeds.

About FatPipe, Inc.

FatPipe pioneered the concept of software-defined wide area networking (SD-WAN) and hybrid WANs that eliminate the need for hardware and software or cooperation from ISPs and allows companies and service providers to control multi-link network traffic. Fatpipe introduced a full single stack cybersecurity solution designed to be sold to the same customer profile, and Buyer as FatPipe. Fatpipe currently has 12 U.S. patents related to multipath, software-defined networking. FatPipe products are sold by 200+ resellers worldwide. For more information, visit www.fatpipe.com. Follow us on X @FatPipe_Inc.

Forward-Looking Statements

Certain statements contained in this press release, including statements relating to the Company's expectations regarding the completion, timing and size of its proposed public offering and listing may constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as "may," "will," "expect," "intend," "anticipate," "estimate," "believe," "continue," or other similar words. Readers are cautioned not to place undue reliance on these forward-looking statements, which are based on management's current expectations and are inherently subject to various risks, uncertainties, assumptions, or changes in circumstances that are difficult to predict or quantify. These risks and uncertainties include, but are not limited to, risks and uncertainties associated with the consummation of the offering and other risks described in FatPipe's registration statement on Form S-1, as it may be amended from time to time. Except as required by law, FatPipe expressly disclaims a duty to provide updates to forward-looking statements, whether as a result of new information, future events or other occurrences.

Company Contact Info

IR.Press@fatpipeinc.com  Please contact the company through this email, for scheduling a conversation with senior management. Responses will be provided within 24 business hours.

Investor Contact

Dave Gentry, CEO
RedChip Companies, Inc.
1.800.RED.CHIP (733-2447)
FATN@redchip.com   

 

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SOURCE FatPipe Networks

FAQ

What were FatPipe's (FATN) Q1 2026 earnings results?

FatPipe reported total revenue of $3.9 million (up 5% YoY), with product revenue growing 16.2%. Net income reached $0.7 million (up 22%), and Adjusted EBITDA was $1.1 million (up 10%).

How much did FatPipe's gross margin improve in Q1 2026?

FatPipe's gross margin expanded to 94% compared to 92% in Q1 FY25, driven by customer contract extensions.

What was FatPipe's cash position after its IPO?

FatPipe reported cash and cash equivalents of $5.9 million as of June 30, 2025, up from $2.9 million on March 31, 2025, due to IPO proceeds.

What major achievements did FatPipe (FATN) announce in Q1 2026?

FatPipe completed its initial public offering, was added to the Russell 3000E and Russell Microcap Indexes, appointed key executives, and received the 2025 MSP Today Product of the Year Award.

What significant customer deployment did FatPipe complete in Q1 2026?

FatPipe completed a 252-site deployment for a large customer in record time, demonstrating their capabilities in critical infrastructure sectors.