Fatpipe Inc/UT (NASDAQ:FATN) Releases Quarterly Earnings Results

Fatpipe Inc/UT (NASDAQ:FATN) released its quarterly earnings results on Wednesday. The company reported $0.11 earnings per share for the quarter, reports. Fatpipe Inc/UT had a return on equity of 28.42% and a net margin of 26.87%. The business had revenue of $4.83 million for the quarter.

Here are the key takeaways from Fatpipe Inc/UT’s conference call:

• FatPipe reported Q2 revenue of $4.8 million, up 22% year over year, with net income of $1.2 million, adjusted EBITDA up 60%, and a 90% gross margin. For the first half, revenue grew 25% and net income rose 250% year over year.
• Recurring billings increased 55% year over year, with management attributing the sequential rise to new business, larger deployments, and renewals. The $7 million education contract is contributing about $300,000 per quarter at its current pace, with a higher full run rate expected.
• The company introduced Constellation, a network-monitoring product available on-premises or in the cloud, either independently or alongside FatPipe’s other offerings. Management said orders have begun and described it as an easier sale than cybersecurity products that may require customers to replace existing systems.
• Management said FatPipe broke even in October and aims to sustain positive cash flow, while noting that hardware purchases and sales-force expansion will require resources. It also refinanced an SBA loan at a lower rate and secured a $1.5 million credit line.
• Management said SATBoost has not gained traction as quickly as hoped, though it recently saw more interest from customers adding satellite service to terrestrial networks. The company plans to expand its sales force to 36 by fiscal year-end and 48 the following year; new salespeople typically take three to six months to reach break-even, and longer for larger deals.

Fatpipe Inc/UT Price Performance

Shares of FATN traded down $0.45 during trading hours on Thursday, reaching $4.65. 91,922 shares of the company traded hands, compared to its average volume of 772,175. The stock has a market capitalization of $65.70 million, a PE ratio of 11.92 and a beta of 2.92. The stock has a fifty day simple moving average of $5.44 and a 200 day simple moving average of $4.29. Fatpipe Inc/UT has a fifty-two week low of $1.31 and a fifty-two week high of $8.61. The company has a quick ratio of 3.79, a current ratio of 3.98 and a debt-to-equity ratio of 0.16.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently added to or reduced their stakes in FATN. BlackRock Inc. purchased a new position in shares of Fatpipe Inc/UT during the second quarter valued at approximately $170,000. Allworth Financial LP acquired a new position in Fatpipe Inc/UT in the 2nd quarter valued at $162,000. Finally, Grandeur Peak Global Advisors LLC purchased a new position in shares of Fatpipe Inc/UT during the 2nd quarter worth $277,000.

Analysts Set New Price Targets

Several research firms have weighed in on FATN. Weiss Ratings raised Fatpipe Inc/UT from a “sell (d)” rating to a “sell (d+)” rating in a report on Monday. Roth Capital assumed coverage on shares of Fatpipe Inc/UT in a research report on Thursday, September 10th. They issued a “buy” rating and a $8.00 price objective on the stock. Finally, Wall Street Zen raised shares of Fatpipe Inc/UT from a “hold” rating to a “buy” rating in a research note on Sunday, August 9th. Three investment analysts have rated the stock with a Buy rating and one has issued a Sell rating to the company. Based on data from MarketBeat.com, the company presently has a consensus rating of “Moderate Buy” and a consensus price target of $9.33.

Fatpipe Inc/UT Company Profile

FatPipe Inc is a Utah-based networking technology company that develops software-defined wide area networking (SD-WAN) and WAN optimization solutions. Its products are designed to help organizations improve network performance, reliability, security and connectivity across offices, data centers, cloud environments and remote locations.

The company’s offerings use multiple network connections to provide traffic management, failover and load balancing. FatPipe’s portfolio has included SD-WAN, WAN virtualization, VPN, secure connectivity and network optimization solutions intended for enterprises, service providers, government organizations and other institutions.

FatPipe serves customers through business and channel relationships in the United States and international markets.