Fatpipe Inc/UT
For the period ended Sep 30, 2025. Filed Nov 3, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 3, 2025
FATN$4.38-4.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-07-30.
0001641172-25-021487
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-03.
0001493152-25-020604
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 111 previous paragraphs and 132 current paragraphs.
79 unchanged; 17 reworded; 32 added; 15 removed; 0 previous and 4 current paragraphs rearranged.
Tables are not compared: 10 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (32)
Current report
Cybersecurity software encompasses applications and integrated platforms designed to protect enterprise networks, connected devices, and cloud resources from intrusion, disruption, or data compromise. These solutions typically include functions such as next-generation firewalls, intrusion detection and prevention systems, secure web gateways, endpoint protection, and network access controls. As organizations expand the use of cloud and hybrid infrastructure, cybersecurity software increasingly emphasizes unified visibility, centralized policy enforcement, and real-time analytics across distributed environments. Recent trends show a convergence of security and networking, in which threat prevention, encryption, and traffic management capabilities operate within the same software stack. This approach enables continuous monitoring and coordinated defense across multiple network layers and access points, reflecting a broader industry shift toward software-defined, full-stack security architectures that can adapt to evolving enterprise connectivity models.
Current report
Cybersecurity. According to a report by Grand View Research, the global cybersecurity market was valued at approximately US $245.6 billion in 2024 and is projected to reach about US $500.7 billion by 2030, corresponding to an estimated compound annual growth rate (CAGR) of roughly 12.9% from 2025 to 2030. This growth is being driven by expanding cloud migration, the proliferation of Internet of Things (IoT) and edge-computing devices, increasingly complex cyber-threat landscapes and regulatory requirements, and an ongoing shift in enterprise spending toward software-defined and integrated security platforms.
Current report
*reflects a one time $1.4 MM contract
Current report
In Q2 2025, two large contracts totaling $1.4 MM was won resulting in an exceptional quarter. in Q2, 2026, the current year, ended September 30, 2025, Net revenue was $3,959,231, a decrease of $1,636,345, or 29%, from the prior period ended September 30, 2024 primarily due to the two large contracts in Q2 2025. The decrease in revenue was primarily due to a comparison against an exceptionally strong Q2 2025. FatPipe continued to execute successfully on its GTM strategy. Consulting and services revenue increased due to the timing of consulting engagements.
Current report
In the three months ended September 30, 2025, our gross profit was $3,646,327 a decrease of $1,719,934, or 32%, reflecting the effect of the two large contracts during the prior period.
Current report
In the three months ended September 30, 2025, our sales and marketing expense was $1,202,636, an increase of $283,244, or 31%, compared to the prior period. This was primarily due to an increase in salary expenses as FatPipe invested in scaling sales headcount across its sales divisions to invest in long-term growth. This use of funds was disclosed in the previously filed S-1.
Current report
In the three months ended September 30, 2025, our general and administrative expense was $1,392,675, an increase of $208,879 compared to the prior period primarily due to $625,220 in non-cash stock-based compensation expense recorded in the second quarter, offset by overall cost cutting via automation efforts in 2025. Excluding non-cash stock-based compensation, G&A decreased by 35%.
Current report
Interest income during the three months ended September 30, 2025 was $42,949 as compared to $0 in the prior fiscal year, reflecting the deposit of funds raised from the IPO.
Current report
Interest expense during the three months ended September 30, 2025 was $126,033, as compared to $86,411 in the prior fiscal year. The increase was due to higher loan amount in 2025.
Current report
For the Six Months Ended September 30, 2025 and 2024
Current report
Revenue
Current report
In the six months ended September 30, 2024, two large contracts were won totaling $1.4M in total revenue, resulting in an exceptional six months. Overall, net revenue was $7,895,154, a decrease of $1,450,741, or 16%, from the prior period ended September 30, 2024. FatPipe continued to execute successfully on its GTM strategy with sales steady YoY when excluding the large contract wins.
Current report
Cost of Revenue
Current report
In the six months ended September 30, 2025, our cost of revenue was $539,838, an increase of $26,843, or 5%, from the prior period ended September 30, 2024. Cost of revenue increased as higher costs of inputs increased due to macroeconomic factors. The cost of revenue includes costs associated with providing services to our customers, such as costs associated with hosting our cloud services.
Current report
Gross Profit and Gross Margin
Current report
In the six months ended September 30, 2025, our gross profit was $7,355,316, a decrease of $1,477,584, or 17%, from prior period. The decrease in gross profit reflects the effect of the two large contracts during the prior period.
Current report
Our gross margin decreased to 93% in the six months ended September 30, 2025 from 95% in the prior period reflecting increased tariffs and transportation costs.
Current report
Sales and Marketing Expense
Current report
In the six months ended September 30, 2025, our sales and marketing expense was $2,254,301, an increase of $319,974, or 17%, compared to the prior period, primarily due to an increase in salary expenses as FatPipe invested in scaling sales headcount across its sales divisions to invest in long-term growth. This is in line with the Use of Funds guidelines disclosed in the previously filed S-1.
Current report
General and Administrative Expense
Current report
In the six months ended September 30, 2025, our general and administrative expense was $1,979,674, an increase of $214,756 compared to the prior period. General and administrative expenses increased primarily due to $625,220 in non-cash stock-based compensation expense recorded in the second quarter, offset by overall cost cutting via automation efforts in 2025. Excluding non-cash stock-based compensation, G&A decreased by 23%.
Current report
Product Development Expense
Current report
Employee Cost Expense
Current report
Depreciation and Amortization Expense
Current report
Other Income (Expense)
Current report
Interest expense during the six months ended September 30, 2025 was $195,921, as compared to $172,443 in the prior fiscal year. The increase was due to higher loan amount in 2025.
Current report
Interest expense for the three months ended September 30, 2025 and 2024 amounted to $126,033 and $86,411, respectively. Interest expense for the six months ended September 30, 2025 and 2024 amounted to $195,921 and $172,443, respectively.
Current report
Net Income for the Six Months Ended September 30, 2025 of $697,810 was lower than Net Income for the Six Months Ended September 30, 2024 of $2,236,725, primarily due to Stock-Based Compensation Expense of $625,220 recognized in the three months ended on September 30, 2025.
Current report
*lower number reflects the two large contracts in 2024
Current report
Net New Revenue Bookings and Recurring Billings
Current report
FatPipe GAAP revenue is aligned to new bookings of contracts. Billings follow customer deployments. Net new bookings has remained consistent quarter over quarter as the business scales. As booked revenue converts to billings, FatPipe has seen strong growth on billings, with monthly recurring billings up 49% YoY. As this faster-growing revenue segment scales, it represents a larger portion of FatPipe’s total revenues.
Current report
New bookings in Q2’25 were booked by 8 salespeople. As part of FatPipe’s strategy post-IPO, we’ve expanded the sales team to 25 salespeople.
Removed paragraphs (15)
Previous report
In the three months ended June 30, 2025, Product Revenue was $3.189.292 compared to $2,745,182 during the same period in 2024, representing an increase of 16.2%. Overall, net revenue was $3,935,923, an increase of $185,604, or 5%, from the prior period ended June 30, 2024. Product and service revenue increased by $372,012 over the prior period, partially offset by a decrease in consulting revenue of $186,409. The increase in product and service revenue was primarily due to increased sales of our product solutions due to the Company’s ability to fully execute on its core business following the closing of the IPO in April 2025. Consulting Services revenue decreased due to the timing of consulting engagements.
Previous report
In the three months ended June 30, 2025, our gross profit was $3,708,989, an increase of $242,350, or 7%, from prior period. The increase in gross profit reflects an increase in net revenue as well as lower cost of revenue.
Previous report
In the three months ended June 30, 2025, our sales and marketing expense was $1,051,665, an increase of $36,730, or 3.62%, compared to the prior period. This was primarily due to an increase in advertising and other promotional efforts in 2025.
Previous report
In the three months ended June 30, 2025, our general and administrative expense was $586,999, an increase of $5,877 compared to the prior period. General and administrative expenses remained consistent in both periods.
Previous report
Interest expense during the three months ended June 30, 2025 was $69,888, which was consistent with $86,032 in the prior year.
Previous report
Interest expense was $69,888 and $86,032 for the three months ended June 30, 2025 and 2024, respectively.
Previous report
Cybersecurity
Previous report
Risk Management and Strategy
Previous report
We recognize the critical importance of developing, implementing, and maintaining robust cybersecurity measures to safeguard our information systems and protect the confidentiality, integrity, and availability of our data.
Previous report
Managing Material Risks & Integrated Overall Risk Management
Previous report
We have strategically integrated cybersecurity risk management into our broader risk management framework to promote a company-wide culture of cybersecurity risk management. This integration ensures that cybersecurity considerations are an integral part of our decision-making processes at every level. Our management team continuously evaluates and addresses cybersecurity risks in alignment with our business objectives and operational needs.
Previous report
Oversee Third-party Risk
Previous report
Because we are aware of the risks associated with third-party service providers, we have implemented stringent processes to oversee and manage these risks. We conduct thorough security assessments of all third-party providers before engagement and maintain ongoing monitoring to ensure compliance with our cybersecurity standards. The monitoring includes annual assessments of the SOC reports of our providers and implementing complementary controls. This approach is designed to mitigate risks related to data breaches or other security incidents originating from third parties.
Previous report
Risks from Cybersecurity Threats
Previous report
We have not encountered cybersecurity challenges that have materially impaired our operations or financial standing.
Reworded paragraphs (17)
Previous wording
You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes appearing elsewhere in this Quarterly Report. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. See “Cautionary Note Regarding Forward-Looking Statements” below. We have no obligation to update any of these forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements due to many factors, including, but not limited to, those set forth under the heading “Risk Factors” in this Quarterly Report. Factors that could cause or contribute to such differences include, but are not limited to, capital expenditures, economic and competitive conditions, regulatory changes and other uncertainties, as well as those factors discussed below and elsewhere in this Quarterly Report.
Current wording
You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes appearing elsewhere in this Quarterly Report. This discussion and analysis contain forward-looking statements that involve risks, uncertainties and assumptions. See “Cautionary Note Regarding Forward-Looking Statements” below. We have no obligation to update any of these forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements due to many factors, including, but not limited to, those set forth under the heading “Risk Factors” in this Quarterly Report. Factors that could cause or contribute to such differences include, but are not limited to, capital expenditures, economic and competitive conditions, regulatory changes and other uncertainties, as well as those factors discussed below and elsewhere in this Quarterly Report.
Previous wording
FatPipe is a pioneer in enterprise-class, application-aware, secure SD-WAN solutions for organizations, including enterprises, communication service providers, security service providers, government organizations, and other middle-market companies.
Current wording
FatPipe is a pioneer in enterprise-class, application-aware, secure SD-WAN and cybersecurity solutions for organizations, including enterprises, communication service providers, security service providers, government organizations, and other middle-market companies.
Previous wording
We strive to be the global leader in delivering leading-edge enterprise-class networking software technology. We are dedicated to continually improving the way organizations connect, ensuring their networks are secure, reliable, and supporting their continued success. Our commitment lies in empowering our customers with a seamless and dependable connectivity infrastructure that safeguards their critical data and fosters business continuity. We further aim to ensure our customers have unparalleled insights into their network operations.
Current wording
We strive to be the global leader in delivering leading-edge enterprise-class networking and cybersecurity software technology. We are dedicated to continually improving the way organizations connect, ensuring their networks are secure, reliable, and supporting their continued success. Our commitment lies in empowering our customers with a seamless and dependable connectivity infrastructure that safeguards their critical data and fosters business continuity. We further aim to ensure our customers have unparalleled insights into their network operations and to ensure our customers have greater control of security in their network operations through our full cybersecurity offering suite.
Previous wording
To deliver on this vision, we hold over a dozen software and technology patents, which we leverage through an integrated suite of software solutions to offer our customers a reliable and secure platform to support mission-critical applications running on cloud, hybrid cloud and on-premise networks. Our core offerings include SD-WAN, SASE, and NMS software solutions, each of which is typically offered to our customers as a subscription service. These solutions address a broad set of network management needs and include an integrated set of capabilities designed to manage multi-line network traffic and routing. When customers have multiple data lines, and one of the lines fails, FatPipe automatically and dynamically transfers network traffic from one data line to another (failover) without disconnecting the application session. When all lines are functional, FatPipe is able to improve data traffic speed and optimize bandwidth.
Current wording
To deliver on this vision, we hold over a dozen software and technology patents, which we leverage through an integrated suite of software solutions to offer our customers a reliable and secure platform to support mission-critical applications running on cloud, hybrid cloud and on-premise networks. Our core offerings include SD-WAN, SASE, NMS, and single-stack Cybersecurity software solutions, each of which is typically offered to our customers as a subscription service. These network solutions address a broad set of network management needs and include an integrated set of capabilities designed to manage multi-line network traffic and routing. When customers have multiple data lines, and one of the lines fails, FatPipe automatically and dynamically transfers network traffic from one data line to another (failover) without disconnecting the application session. When all lines are functional, FatPipe is able to improve data traffic speed and optimize bandwidth. Our cybersecurity solutions address a broad set of cybersecurity management needs and include integrated software functions such as firewalling, intrusion detection and prevention, content filtering, and secure VPN connectivity. These tools are designed to protect network traffic traversing across multiple WAN links and cloud environments, providing consistent security enforcement at the edge and core of the network. By combining these capabilities within the same software stack as its network management offerings, FatPipe enables enterprises to monitor, control, and secure data flows across hybrid infrastructures, supporting continuous protection of applications and users while maintaining network performance and reliability.
Previous wording
Our objective is to offer a suite of solutions to ensure our customers can securely support their networks in this cloud-first world. We are committed to driving a trusted customer experience through innovation and a diverse set of capabilities. Our core offerings are based on a complete, integrated suite of software solutions, including SD-WAN, SASE, and NMS capabilities, each of which can be individually licensed to create an experience tailored to a customer’s needs and network configuration. Additionally, all of our technologies are available for commercial sale. Further, our product pipeline consists of new SD-WAN security features and enhancements to the NMS.
Current wording
Our objective is to offer a suite of solutions to ensure our customers can securely support their networks in this cloud-first world. We are committed to driving a trusted customer experience through innovation and a diverse set of capabilities. Our core offerings are based on a complete, integrated suite of software solutions, including SD-WAN, SASE, NMS, and Cybersecurity capabilities, each of which can be individually licensed to create an experience tailored to a customer’s needs and network configuration. Additionally, all of our technologies are available for commercial sale. Further, our product pipeline consists of new SD-WAN security features and enhancements to the NMS as well as single-stack cybersecurity features to serve all a customer’s cybersecurity requirements from a single vendor.
Previous wording
In the three months ended June 30, 2025, our cost of revenue was $226,934, a decrease of $56,746, or 20%, from the prior period ended June 30, 2024. Cost of revenue decreased as hardware product costs were lower. The cost of revenue includes costs associated with providing services to our customers, such as costs associated with hosting our cloud services.
Current wording
In the three months ended September 30, 2025, our cost of revenue was $312,904, an increase of $83,589, or 36%, from the prior period ended September 30, 2024. Cost of revenue increased as costs of inputs increased due to macroeconomic factors. The cost of revenue includes costs associated with providing services to our customers, such as costs associated with hosting our cloud services.
Previous wording
Our gross margin increase to 94% in the three months ended June 30, 2025 from 92% in the prior period.
Current wording
Our gross margin decreased to 92% in the three months ended September 30, 2025 from 96% in the prior period reflecting increased tariffs and transportation costs.
Previous wording
Product development expense in the three months ended June 30, 2025 was $474,457, an increase of $50,957 compared to the prior period, as the Company continued its development plans for its cybersecurity products. The Company has ramped up its product development in early 2025 following its April 2025 IPO.
Current wording
Product development expense in the three months ended September 30, 2025 was $489,157, an increase of $53,755 compared to the prior period, as the Company continued its development plans for its cybersecurity and satellite products. The Company has ramped up its product development in early 2025 following its April 2025 IPO.
Previous wording
Depreciation and amortization expense in the three months ended June 30, 2025 was $91,957, a decrease of $41,588, compared to the prior period. These expenses are categorized under general and administrative expenses.
Current wording
Depreciation and amortization expense in the three months ended September 30, 2025 was $691, a decrease of $7,405, compared to the prior period. These expenses are categorized under general and administrative expenses.
Previous wording
Employee cost expenses in the three months ended June 30, 2025 were $593,191, an increase of $5,952, compared to the prior period. The increase in employee cost expense is attributable to the increase in professional services revenues.
Current wording
Employee cost expenses in the six months ended September 30, 2025 were $1,155,843, an increase of $4,306, compared to the prior period. The increase in employee cost expense is attributable to the increase in professional services revenues.
Previous wording
Interest income during the three months ended June 30, 2025 was $5,799 as compared to $26,090 in the prior fiscal year. The decrease was due to lower interest rates from prior year.
Current wording
Interest income during the six months ended September 30, 2025 was $48,748 as compared to $10,514 in the prior fiscal year. The increase was due to interest on larger cash reserves.
Previous wording
In March 2025, the Company obtained a $5 million term loan from Fortis Bank, of which $3 million was used to repay an outstanding loan from the bank loan noted above. The Fortis Bank loan is repayable in 120 equal monthly installments commencing from March 1, 2025 and the interest is charged at the Prime Rate plus 1%. The “Prime Rate” is the Prime Rate in effect on the first business day of the month (as published in the Wall Street Journal newspaper) in which SBA received the application, or the first day of the month in which any interest rate change occurs. The interest rate will be adjusted every calendar quarter (the “change period”) beginning April 1, 2025 (date of first rate adjustment). The interest rate works out to 8.75% as on the reporting date. The loan is secured by substantially all assets of the Company, certain personal properties of Directors of the Company, along with a personal guarantee given by them and a Trust, where the directors are trustees. During the three months ended June 30, 2025, the Company made principal payments totaling $57,570.
Current wording
In March 2025, the Company obtained a $5 million term loan from Fortis Bank, of which $3 million was used to repay an outstanding loan from the bank loan noted above. The Fortis Bank loan is repayable in 120 equal monthly installments commencing from March 1, 2025 and the interest is charged at the Prime Rate plus 1%. The “Prime Rate” is the Prime Rate in effect on the first business day of the month (as published in the Wall Street Journal newspaper) in which SBA received the application, or the first day of the month in which any interest rate change occurs. The interest rate will be adjusted every calendar quarter (the “change period”) beginning April 1, 2025 (date of first rate adjustment). The interest rate works out to 8.75% as on the reporting date. The loan is secured by substantially all assets of the Company, certain personal properties of Directors of the Company, along with a personal guarantee given by them and a Trust, where the directors are trustees. During the six months ended September 30, 2025, the Company made principal payments totaling $152,635.
Previous wording
On June 15, 2023, the company received an interest free loan for $120,000 from Stay in Business Inc., repayable on demand. During the year ended March 31, 2025, the Company received an additional $13,652 under the same arrangement During the three months ended June 30, 2025, the Company repaid the entire outstanding balance of the loan.
Current wording
On June 15, 2023, the company received an interest free loan for $120,000 from Stay in Business Inc., repayable on demand. During the year ended March 31, 2025, the Company received an additional $13,652 under the same arrangement During the six months ended September 30, 2025, the Company repaid the entire outstanding balance of the loan.
Previous wording
Net cash used in operating activities in the three months ended June 30, 2025 was $508,604 compared to $252,465 in the prior period. The increase in cash used in operating activities was primarily due to $331,088 in additional cash used in operating assets and liabilities, partially offset by higher net income in 2025 of $132,118. This also includes NASDAQ listing fees and related expenses.
Current wording
Net cash used in operating activities in the six months ended September 30, 2025 was $108,769 compared to $204,175 in the prior period. The increase in cash used in operating activities was primarily due to a lower net income in 2025.
Previous wording
Net cash used in investing activities in the three months ended June 30, 2025 was $42,449 as compared to $4,955 in the prior period. Cash used in investing activities was primarily due to the purchase of equipment.
Current wording
Net cash used in investing activities in the six months ended September 30, 2025 was $35,447 as compared to $12,228 in the prior period. Cash used in investing activities was primarily due to the purchase of furniture for office improvement.
Previous wording
Net cash provided by financing activities in the three months ended June 30, 2025 was $3,593,250. Cash provided by financing activities included $3,784,472 in proceeds from the Company’s April 2025 IPO, partially offset by $191,222 in repayment of debt. There was no cash provided by or used in financing activities for the three months ended June 30, 2024.
Current wording
Net cash provided by financing activities in the six months ended September 30, 2025 was $3,581,185. Cash provided by financing activities included $3,867,472 in proceeds from the Company’s April 2025 IPO and proceeds from issue of share to consultant, partially offset by $286,287 in net repayments of debt. Net cash used in financing activities in the six months ended September 30, 2024 was $87,424. Cash used in financing activities included $87,424 in repayment of financing obligation of lease.
Previous wording
In the three months ended June 30, 2025, our adjusted EBITDA increased by $101,245 compared to the prior fiscal year, primarily due to an increase in operating income as a result of higher revenues.
Current wording
In the six months ended September 30, 2025, our adjusted EBITDA decreased by $345,933 compared to the prior fiscal year, primarily due to a decrease in operating income as a result of lower revenues. Adjusted EBITDA margin for the six months ended September 30, 2025 was 24%, vs 24% for the 6 months ended September 30, 2024.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
Employee cost expenses in the three months ended September 30, 2025 were $562,652, a decrease of $1,646, compared to the prior period.
Current report — wording carried from elsewhere
Product development expense in the six months ended September 30, 2025 was $963,614, an increase of $104,712 compared to the prior period, as the Company continued its development plans for its cybersecurity and satellite products. The Company has ramped up its product development in early 2025 following its April 2025 IPO.
Current report — wording carried from elsewhere
Depreciation and amortization expense in the six months ended September 30, 2025 was $196,064, a decrease of $70,629, compared to the prior period. These expenses are categorized under general and administrative expenses.
Current report — wording carried from elsewhere
The foreign exchange gain/(loss) results from currency conversion from U.S. dollars to Indian rupees.