FatPipe (FATN) Q3 2026 earnings summary

Executive summary

• Revenue grew 30% year-over-year to $4.1 million, driven by strong adoption of subscription and recurring revenue models, and supported by multiple large SD-WAN deployments across education, financial, and enterprise sectors.

• Monthly recurring billings increased 48% year-over-year, reflecting robust growth in recurring revenue streams.

• Total quarterly billings rose 27% year-over-year, supported by expansion in sales and channel partnerships.

• Net income for the quarter was $310,662, up from $84,372 last year, reflecting higher revenues and improved operating performance.

• The company expanded its sales organization and partner channels, aiming to increase sales headcount and support pipeline activity.

Financial highlights

• Adjusted EBITDA for the quarter was $0.59 million (14% margin), up from $0.57 million last year, but down from 18% in the previous year due to increased growth investments.

• Nine-month EBITDA margin was 21%, down from 31% year-over-year, reflecting higher investment in growth.

• Cash and cash equivalents stood at $6.2 million as of December 31, 2025, supporting ongoing growth initiatives.

• Operating cash flow for the nine months was $132,132, a turnaround from negative $314,150 in the prior year.

• Gross margin remained strong at 88% for the quarter and 91% for the nine months.

Outlook and guidance

• Management is confident in meeting growth targets, citing a strong order pipeline, productive new hires, and continued expansion in North America and Southeast Asia.

• The focus for the next quarter is on executing existing orders, driving new product sales, and expanding into Mexico and Asia.

• Sufficient liquidity is expected for the next 12 months and longer term, supported by operating cash flow and IPO proceeds.

• Emphasis remains on balancing growth investment with maintaining cash flow break-even.

• Management anticipates lower gross margins in cost-sensitive regions, offset by lower wage costs.