Intelligent Protection Management Corp (IPM) 2025 Q3 法說會逐字稿

Good afternoon. Welcome to the Q3 2025 Financial Results Conference Call for Intelligent Protection Management Corporation, better known as IPM for the quarter ended on September 30, 2025. (Operator Instructions) Let me turn the floor over to Joe Diaz of Lytham Partners. Joe, please proceed.

Good afternoon, and welcome to all participating on today's call to review the financial and operating results of IPM for the third quarter ended September 30, 2025. As the operator indicated, my name is Joe Diaz. I'm with Lytham Partners. We are the Investor Relations representative for IPM. By now, everyone should have access to the earnings results press release, which was issued after the close of market today. This call is being webcast and will be available for replay.

During the course of this call, management will include statements that are considered forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995, including forward-looking statements about future results of operations, business strategies and plans, IPM's relationship with its customers as well as market and potential growth opportunities. In addition, management may make additional forward-looking statements in response to your questions. Forward-looking statements are based on management's current knowledge and expectations as of today, and are subject to certain risks, uncertainties and assumptions related to factors that may cause actual results to differ materially from those anticipated in the forward-looking statements.

These expectations and beliefs may not ultimately prove to be correct. A detailed discussion of such risks and uncertainties are contained in IPM's filings with the SEC, including its annual report on Form 10-K for the year ended December 31, 2024. You should refer to and consider these factors when relying on such forward-looking information. The company does not undertake and expressly disclaims any obligation to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

On this call, management will refer to adjusted EBITDA, a non-GAAP measure when used in combination with GAAP results, provides investors with additional analytical tools to understand the company's operations. For adjusted EBITDA, management has provided a reconciliation to the most directly comparable GAAP financial measure in the earnings press release, which has been posted on the Investor Relations section of the company's website at www.ipm.com.

As previously disclosed on January 2, 2025, IPM completed its acquisition of Newtek Technology Solutions from NewtekOne, Inc. The company also divested its Paltalk Camfrog and Vumber applications and certain assets and liabilities related to such applications to Meteor Mobile Holdings, Inc., which are referred to as the transferred assets.

At this time, I'd like to turn the call over to IPM's Chief Executive Officer, Jason Katz. After Jason's remarks, we will hear from IPM's CFO, Kara Jenny, and we will conclude with investor questions that were sent via e-mail. Jason, take it away.

Thanks, Joe, and good afternoon, everyone. We greatly appreciate you taking the time to join us on today's call. We are pleased with the sequential progress made during our first three operational quarters after the acquisition of Newtek Technology Solutions and our successful rebranding to Intelligent Protection Management Solutions or IPM. We continue to advance all components of the company from sales, marketing, accounting and human capital. We have clearly stated that our focus is to position IPM to be consistently performing company for the benefit of our customers, employees and shareholders.

Since the January 2 transactions, we have successfully integrated our operations and serviced our existing customers without interruption and downtime. Looking ahead, we are well positioned to grow the company through the expansion of our service offerings to existing legacy MTS customers while cross-selling our ManyCam software and varying new services to our historical web hosting customer base.

Operational efficiencies continue to be advanced and expenses optimized with the goal of driving value for all our stakeholders. Cybersecurity and cloud infrastructure are even more critical to protecting sensitive data, ensuring business continuity and securing a digital economy in an era of growing cyber threats. We are dedicated to becoming one of the leading managed technology solutions providers with a focus on cybersecurity and cloud infrastructure.

As we see it, our job is to protect the heart and soul as it were of virtually all businesses today, their data, client information, intellectual property and financial data, among other things. There are a load of bad players out there, individual hackers, organizations and even governments looking to attack corporations as well as American citizens.

I've spent the better part of my career in the technology services business and some of the rest of the IPM senior management team. That deep industry experience has led us to provide a white-glove high-touch service to our clients. Every one of our clients has a dedicated technology manager as a single point of contact. We do not use voice response, telephonic menus or hand-off service calls to agents and call centers in foreign countries.

Our clients speak directly to their IPM account team in the United States, people that are familiar with their needs of their business and the history of their account. This is an important IPM advantage. We have significant technological expertise, and we operate in large and growing markets where IPM is industry certified in critically important markets, including legal, health care and finance, giving us another significant competitive advantage versus our peers. Those advantages will become more apparent in the quarters and years to come.

For the nine months, IPM entered into a reseller agreement with MindsDB, a leading open source AI platform to provide to its current and future customers sophisticated AI capabilities. We initiated a collaboration with IT Ally, a trusted business and technology services provider focused on lower middle market private equity firms and their portfolio companies. In May 2025, our Board of Directors approved a stock repurchase plan for up to 400,000 of our existing common stock, which plan expires on the 1-year anniversary of such date.

Pursuant to the repurchase plan, we purchased 46,658 shares of common stock during the third quarter of 2025 for an aggregate amount of $88,250. From inception, we have purchased 151,258 shares at an average price of $1.99. We also commenced offering Aura, a leading AI-powered online safety tool for individuals and families designed to help minimize the impact of data breaches, scams and other online threats to consumers.

Subsequent to the end of the quarter, we initiated our Heroes program to provide a 10% discount on all IPM products and services to all existing and future military first responder, health care, teachers and veterinary business owners. Regarding our patent litigation, on August 29, 2024, the jury awarded the company $65.7 million in a jury verdict in connection with the lawsuit against WebEx Communications, Cisco WebEx and Cisco Systems in the U.S. District Court for the Western District of Texas.

On October 8, 2024, an order granting a motion for final judgment was entered into by the court in connection with the lawsuit. The final judgment was entered in our favor in the amount of the award and started the time for filing any post-trial motions or appeals. The exact amount of the award proceeds to be received by us will be determined based on a number of factors and will reflect the deduction of significant litigation-related expenses, including legal fees.

As we previously indicated, we estimate that we would receive no more than 1/3 of the gross proceeds in connection with the awards, subject to post-trial proceedings, including any potential appellate proceedings by Cisco. We have not recorded any gain contingency in connection with the award.

Having our NTS assets transition from being a division of a larger banking company to an independent publicly traded managed services technology company over the course of the first nine months of 2025 has been gratifying. We look forward to many opportunities to dramatically expand our business in the coming years.

With that, let me turn the call over to Kara Jenny, our CFO, for a summary of our financial results for the third quarter and the nine months. Following Kara's remarks, we'll move into the Q&A portion and answer questions that were submitted by e-mail prior to this call. Kara?

Thank you, Jason. As Jason indicated, we acquired the operations of NTS on January 2, 2025, and rebranded the operations to Intelligent Protection Management Corp., or IPM. The quarterly financial comparisons of IPM and the former NTS as a division of NewtekOne are not comparable from a GAAP perspective. IPM financials will become comparable on a GAAP basis as of the first quarter of 2026.

For the three months ended September 30, 2025, revenue totaled $6.2 million compared to $0.3 million for the prior year period. On a sequential basis, revenue increased 9% from the second quarter of 2025. Revenue for the nine months totaled $17.5 million compared to $0.8 million in the prior year period.

Revenue by product for the three and nine months period ended September 30, 2025, was as follows: Managed Information Technology revenue was $3.8 million and $10.9 million, respectively. Procurement revenue was $1.7 million and $3.9 million, respectively. Professional services revenue was $0.5 million and $1.9 million, respectively. Subscription revenue was $0.3 million and $0.8 million, respectively.

Operating loss from continuing operations for the three months ended September 30, 2025, totaled $1.4 million compared to an operating loss from continuing operations of $1.5 million for the three months ended September 30, 2024. Operating loss from continuing operations for the nine months ended September 30, 2025, totaled $3.9 million compared to operating loss from continuing operations of $3.5 million for the prior nine months ended September 30, 2024.

Net loss for the three months ended September 30, 2025, totaled $1.1 million compared to a net loss of $1.5 million for the three months ended September 30, 2024. Net loss for the nine months ended September 30 totaled $1.3 million compared to a net loss of $2.9 million for the nine months ended September 30, 2024. The reduction in net loss was attributed to IPM recording an income tax benefit during the first quarter of approximately $2.1 million in connection with the transaction.

Adjusted EBITDA for the three months ended September 30, 2025, was negative $0.3 million compared to negative $1.5 million for the three months ended September 30, 2024. Adjusted EBITDA for the nine months ended September 30, 2025, was negative $1.1 million compared to negative $2.9 million for the nine months ended September 30, 2024.

As of September 30, 2025, we had no long-term debt and cash and cash equivalents totaled $8.3 million, which included $1.0 million of restricted cash. Cash provided by continuing operations for the nine months ended September 30, 2025, was $1.0 million compared to cash used in continuing operations for the nine months ended September 30, 2024, of $0.9 million.

IPM reported deferred revenue of $3.5 million for Q3 2025, which will be recognized as revenue in future quarters as products and/or services are installed. The company had over 9,000 devices under management at September 30, 2025, representing the number of endpoints, servers and network devices that are outsourced to the company under managed service agreements.

That completes my comments, and we'll now move on to addressing online submitted questions.

Okay. Thank you, Kara. We will now move into the question-and-answer section. One question submitted by investors was, are there any bolt-on acquisitions that would make sense to expand the business or new service offerings that you would like to see added to IPM in the coming years?

Sure. Acquiring sole proprietor or lifestyle-type managed service provider businesses with attractive EBITDA multiples would be strategic and that we would be acquiring customer contracts with term agreements. This has the potential of immediately adding devices under management and monthly recurring revenue and would offer upside potential in other service lines. So in the short term, our focus would be to grow our existing customer base with more of the same types of services so that we leverage our existing infrastructure.

Another question is, can you comment briefly on the recent AWS outages? What does IPM bring to the table that others can't?

That's a great question. We offer potential solutions that mitigate the recent public cloud outages. IPM's use of private data centers and private cloud means that our customers were generally not affected by the recent AWS outages, which impacted many public cloud users. We like to say that at IPM, we don't just try harder, we protect smarter.

Can you please comment on the capital structure of the company right now? Will there be a need to raise additional capital in the next couple of years? 2026 or 2027 going forward?

We have a very clean capital structure and sufficient cash to run our business for at least the next 12 months. If we found an acquisition that was accretive and required financing, we would definitely consider doing that.

All right. Thank you, Jason, and that concludes the Q&A section. Let me turn the call back over to Jason for closing remarks. Jason?

Thanks, everyone, for your support and for joining us today. We are very grateful for your interest in our business. We look forward to updating the market on our progress, and we continue to execute on our business plan. We will talk with you again to review our fourth quarter and full year financial results in the first quarter of 2026. Have a great day.

Thank you. Ladies and gentlemen, this does conclude today's conference call. You may disconnect your lines at this time, and thank you for your participation.