Q1 2025 Intelligent Protection Management Corp Earnings Call
Unknown Executive: Good afternoon and welcome to the earnings results conference call for Intelligent Protection Management Corporation. First quarter ended March 31st, 2025. At this time, all participants have been placed on a listen-only mode.
Good afternoon.
And welcome to the earnings results Conference call for Intelligent Protection Management Corporation.
First quarter ended March 31, 2025.
At this time, all participants have been placed on a listen only mode.
Unknown Executive: And it is now my pleasure to turn the floor over to your hosts, Jason Katz, Chief Executive Officer of Intelligent Protection Management Corp, which we refer to as IPM, and Kara Jenny, Chief Financial Officer of IPM.
Speaker Change: And it is now my pleasure to turn the floor over to your host Jason Katz, Chief Executive Officer of Intelligent Protection Management Corp, which we refer to as P. M encourage any chief financial officer of I P. M.
Kara Jenny: Kara, the floor is yours. Hello, everyone, and welcome to the IPM Operating and Financial Results Conference call for the first quarter and in March 31st, 2025. By now, everyone should have access to the earnings results press release, which was issued earlier this afternoon at approximately 4 p.m. Eastern Time. This call is being webcast and will be available for replay.
The store is yours.
Speaker Change: Hello, everyone and welcome to the I T M operating and financial results Conference call for the first quarter ended March 31, 2025 by now everyone should have access to the earnings results press release, which was issued earlier. This afternoon at approximately four P. M. Eastern time this call is being webcast and will be.
Speaker Change: Available for replay.
Kara Jenny: In our remarks today, we 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, our relationships with our 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.
Speaker Change: In our remarks today. We 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, our relationships with our customers as well as market and potential growth opportunities in it.
Speaker Change: 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.
Speaker Change: 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 our filings with the SEC, including our annual report on Form 10-K for the year ended December 31, 2024, you should refer to and consider these back.
Kara Jenny: These expectations and beliefs may not ultimately prove to be correct.
Kara Jenny: A detailed discussion of such risks and uncertainties are contained in our filings with the SEC, including our 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 our forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by applicable law.
Speaker Change: It doesn't rely on such forward looking information company does not undertake and expressly disclaims any obligation to update or alter our forward looking statements, whether as a result of new information future events or otherwise, except as required by applicable law on this call we will refer to adjusted EBITDA a non-GAAP.
Kara Jenny: On this call, we will refer to Adjusted EBITDA, a non-GAAP measure that, when used in combination with GAAP results, provides us and our investors with additional analytical tools to understand our operations. For Adjusted EBITDA, we've provided a reconciliation to the most directly comparable GAAP financial measure in our earnings press release, which has been posted on the Investor Relations section of our website at www.ipm.com.
Speaker Change: GAAP measure that when used in combination with GAAP results provide us and in our investors with additional analytical tools to understand our operations for adjusted EBITDA. We have provided a reconciliation to the most directly comparable GAAP financial measure in our earnings press release, which has been posted on the investor.
Speaker Change: Relations section of our website at Www Dot I P M Dot com.
Jason Katz: And with that, I'd like to introduce IPM's Chief Executive Officer, Jason Katz. Thank you, Kara, and good afternoon, everyone. We greatly appreciate you taking the time to join us on today's call.
Jason Cats: And with that I'd like to introduce <unk>, Chief Executive Officer, Jason Cats.
Jason Cats: Thank you Kara and good afternoon, everyone. We greatly appreciate you taking the time to join us on today's call.
Jason Katz: previously disclosed, in January 2025, we completed our acquisition of NewTek Technology Solutions, Inc., or NTS, from NewTek1, Inc., and the sale of our 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. The first quarter of 2025 was transformational for IPM following the closing of our acquisition of NTS, which focused our business on the rapidly growing cloud infrastructure and cyber security sector. Today, more than ever, cloud infrastructure and cybersecurity are critical to protecting sensitive data, ensuring business continuity, and securing a digital economy in an era of growing cyber threats.
Jason Cats: As previously disclosed in January 2025, we completed our acquisition of New Tech Technology Solutions, Inc, or N T S from New Tech One Inc.
Speaker Change: The sale of our Pal talk Cam Prague in bumper applications.
Speaker Change: Certain assets and liabilities related to such applications to media or mobile Holdings, Inc, which are referred to as the transferred assets.
The first quarter of 2025 was transformational for IP I'm. Following the closing of our acquisition of MTS would focused our business on the rapidly growing cloud infrastructure and cyber security sectors.
Today more than ever our cloud infrastructure and cyber security are critical to protecting sensitive data.
Speaker Change: During business continuity and securing a digital economy and an arrow growing cyber threats.
Jason Katz: We have an exciting opportunity to build upon NTS's historical achievements moving forward as a standalone, integrated service company.
Speaker Change: We have an exciting opportunity to build upon N. T. S has historical achievements moving forward as a stand alone and integrated service company.
Jason Katz: After my remarks, our CFO, Kara Jenny, will give a summary of our financial results for the first quarter ended March 31st, 2025. Following our prepared remarks, we'll move into the Q&A portion and answer any questions that were submitted prior to this call. Since the closing of the transactions in the beginning of the year, we have successfully integrated our operations and serviced our existing customers without an interruption. Moving forward, we believe we are now well positioned to grow the company through the expansion of our services offerings to existing legacy NTS customers, while cross selling our many camp software and varying new services to our historical web hosting customer base.
Speaker Change: After my remarks, our CFO carrier journey will give a summary of our financial results for the first quarter ended March 31 2025.
Speaker Change: Following our prepared remarks, we will move into the Q&A portion and answer any questions that were submitted prior to this call.
Speaker Change: Since the closing of the transactions in the beginning of the year, we have successfully integrated our operations and service to our existing customers without an interruption.
Speaker Change: Moving forward. We believe we are now well positioned to grow the company through the expansion of our services offerings to existing legacy N T S customers, well cross selling our medical software and varying new services to our historical Webhosting customer base.
Jason Katz: This should lead to further growth and enhancement of operational efficiencies all focused on driving stockholder value.
Speaker Change: This should lead to further growth and they've had spread of operational efficiencies all focused on driving stockholder value.
Jason Katz: I would now like to provide an overview of our IT and cloud-based solutions to give you more insight into our new business. Our managed IT security services provide clients with ongoing management and support of their IT systems and services under a subscription or contract-based model. Such services include, among other things, proactive monitoring, regular system maintenance, comprehensive cybersecurity management, data backup and disaster recovery, as well as help desk support for users. We sell and provide a range of services across five core areas.
Speaker Change: I would now like to provide an overview of our I T and cloud based solutions to give you more insight into our new business.
Speaker Change: Our managed security services provide clients with ongoing management in support of their it systems and services under a subscription or contract based model.
Speaker Change: Such services include among other things proactive monitoring regular system maintenance comprehensive cyber security management data backup and disaster recovery as well has helped us support for users we sell them provide a range of services across five core areas.
Jason Katz: professional service Our professional services include the design and implementation of a wide range of IT products and services, such as cybersecurity, software planning, IT infrastructure, data center design and configuration, designing and implementing on-premises hybrid or cloud computing solutions, website development, developing or integrating systems and software, and IT cost management. Procurement services. We offer two types of procurement services to our customers. We can either, one, obtain software and hardware products on behalf of our customers, in which case our vendors drop ship the products to our end customer, or two, obtain the hardware software on behalf of our customers and perform additional configuration and or add additional inputs to the products before the products are shipped to our customer.
Speaker Change: Professional services our professional.
Speaker Change: Services include design and implementation of a wide range of Iot products and services, such as cyber security software planning I T infrastructure data center design and configuration.
Speaker Change: Signing and implementing on premises hybrid or cloud computing solutions website development, developing or integrating systems and software and I T cost management.
Speaker Change: Procurement services, we offer two types of procurement services to our customers. We can either one obtain software and hardware products on behalf of our customers in which case, our vendors drop ship the products to our end customer or to obtain the hardware software on behalf of our customers and <unk>.
Speaker Change: A form additional configuration and or add additional inputs to the products before the products are shipped to our customer.
Jason Katz: In the instance where we sell hardware and software products as a solution bundled with services, we typically obtain the products or software from our vendors, add the additional input configuration as detailed in the customer contract, and then ship the products to the end customer.
Speaker Change: In the instance, where we sell hardware and software products as a solution bundled with services. We typically obtained the products of software from our vendors.
Speaker Change: The additional input configuration as detailed in the customer contract and then ship the products to the end customer.
Jason Katz: Secure Private Cloud Host. Our Secure Private Cloud hosting offerings include a digital infrastructure which consists of dedicated and fully isolated cloud environments designed to deliver security, control and compliance for the business critical applications and client data. We operate a Secure Private Cloud from private suites and completely isolated areas that are leased within two Tier 3 data center facilities located in Phoenix, Arizona and Edison, New Although we do not own or operate the data centers, we aim to use the high-level operations and standards provided by the data centers through our license agreements to provide our customers with secure and flexible cloud services.
Speaker Change: Secure private cloud hosting.
Speaker Change: Our secure private cloud hosting offerings include digital infrastructure, which consists of dedicated and fully isolated in cloud environments designed to deliver security control and compliance for the business critical applications and client data.
Speaker Change: We operate a secure private cloud from private suites and completely isolated areas that are leased within two tier three data center facilities located in Phoenix, Arizona, and Edison, New Jersey pursuant to license agreements that extend until 2027 and 2026, respectively.
Speaker Change: Although we do not own or operate the data centers, we aim to use the high level operations instead as provided by the data centers through our license agreements to provide our customers with secure and flexible cloud services.
Jason Katz: We leverage state-of-the-art security measures including data encryption, network segmentation, advanced firewalls, multi-factor authentication, and continuous monitoring to safeguard against unauthorized access and cyber threats. We believe our secure private cloud hosting provides our clients with strong availability, data integrity, and reliable performance while meeting stringent compliance requirements. Our private cloud hosting solutions are backed by 24-7 support from our expert team with the goal of delivering secure, flexible, and resilient infrastructure tailored to each client's unique business needs. In the future, we plan to make arrangements with third parties to incorporate AI features into our secure private cloud offering.
Speaker Change: We leverage state of the art security measures, including data encryption network segmentation advanced firewalls, multifactor authentication and commute continuous monitoring to safeguard against unauthorized access and cyber threats.
Speaker Change: We believe our secure private cloud hosting provides our clients with strong availability data integrity and reliable performance, while meeting stringent compliance requirements.
Speaker Change: Our private cloud hosting solutions are backed by 24 seven support from our expert team with the goal of delivering secure flexible and resilient infrastructure and tell them to each client's unique business needs.
Speaker Change: In the future we plan to make arrangements with third parties to incorporate AI features into a secure private cloud offerings.
Jason Katz: Managed backup and disaster recovery solutions provide comprehensive protection for customers' critical data and IT infrastructure, which is intended to ensure business continuity and rapid recovery in the event of data loss, cyber attacks, or system failure. We utilize advanced backup technologies with automated, regular data backups, offsite replication, and secure storage to prevent data corruption or loss.
Speaker Change: Managed backup and disaster recovery or manage backup and disaster recovery solutions provide comprehensive protection for customers critical data in it infrastructure, which is intended to ensure business continuity and rapid recovery and they've been up data loss cyber attacks or system failures.
Speaker Change: We utilize advanced backup technologies with automated regular data backups off site replication and secure storage to prevent data corruption or loss.
Jason Katz: web hosting. Our web hosting services consist of several advanced security measures, including secure sockets, layer and transport layer security, SSL slash TLS, encryption, firewall, distributed denial of service protection, malware scanning, and secure server configuration. Our web hosting services include features such as regular data backups, web application firewalls, strict access control policies, and continuous monitoring and expert support, all of which are intended to ensure our customers' compliance with industry standards and provide a reliable and secure environment for our customers' online presence. We are very excited with the prospect of expanding our managed technology solutions business, particularly in the cloud infrastructure and cybersecurity sectors.
Speaker Change: Webhosting.
Speaker Change: Our web hosting services consist of several advanced security measures, including secure sockets layer and transport layer security SSL Slash T. L. S encryption firewalls distributed denial of service protection malware scanning and secure server configurations.
Speaker Change: Our web hosting services include features such as regular data backups web application firewalls strict access control policies.
Speaker Change: And continuous monitoring and expert support all of which are intended to ensure our customers' compliance with industry standards and provide a reliable and secure environment for our customers online presence.
Speaker Change: We are very excited with the prospect of expanding our managed technology solutions business, particularly in the cloud infrastructure and cyber security sectors.
Jason Katz: We expect that the recently announced referral arrangement with NewTek One, a current client and a financial holding company with tens of thousands of its own business clients, has great potential to help us find new customers. We believe that cybersecurity is a technology area that is top of mind for all companies, small and large, and ripe for growth. Additionally, we believe there is potential for merger and acquisition opportunities to further scale our growth. We look forward to growing the business and building a healthy pipeline of perspective and new customers.
Speaker Change: We expect that the recently announced referral arrangement with new Tech won a current client and a financial holding company with tens of thousands of its own business clients has great potential to help us find new customers.
Speaker Change: We believe that cyber security is a technology area that is top of mind for all companies small and large and ripe for growth.
Speaker Change: Additionally, we believe there is potential for merger and acquisition opportunities to further scale our growth.
Speaker Change: We look forward to growing the business and building a healthy pipeline of prospective new customers.
Jason Katz: We enter this new chapter for IPM with a strong balance sheet. highlighted by $9.7 million in cash and cash equivalents and no long-term debt, which when coupled with the potential earn out from the sale of transferred assets puts us in a strong position to execute on our business plans and further transform IPM.
Speaker Change: We enter this new chapter for I P M with a strong balance sheet.
Speaker Change: Highlighted by $9 $7 million in cash and cash equivalents and no long term debt, which when coupled with the potential earn out from the sale of the transferred assets puts us in a strong position to execute on our business plans and further transform my P. M.
Jason Katz: Additionally, effective May 8, 2025, our Board of Directors approved a stock repurchase plan for up to $400,000 of the company's outstanding common stock, which plan expires on the one-year anniversary of such date. Shares may be repurchased from time to time in open market transactions at prevailing market prices, in privately negotiated transactions, or by other means in accordance with the Federal Securities Laws, including Rule 10b-5-1 programs, and the stock repurchase plan may be suspended or discontinued at any time. The actual timing number and value of shares repurchased will be determined by a committee of the Board of Directors at its discretion and will depend on a number of factors, including the market price of the company's common stock, general market and economic conditions, alternative investment opportunities, and other corporate considerations.
Speaker Change: Additionally, effective may eight 2025, our board of directors approved the stock repurchase plan for up to $400000 of the company's outstanding common stock, which plan expires on the one year anniversary of such date.
Speaker Change: Shares may be repurchased from time to time in open market transactions at prevailing market prices and privately negotiated transactions or by other means in accordance with the federal securities laws, including rule 10, B five one programs.
Speaker Change: On the stock repurchase plan may be suspended or discontinued at any time.
Speaker Change: The actual timing number and value of shares repurchased will be determined by a committee of the board of directors at its discretion and will depend on a number of factors, including the market price of the company's common stock general market and economic conditions alternative investment opportunities and other corporate considerations.
Jason Katz: In regards to our patent litigation, on August 29, 2024, jury awarded us $65.7 million in a jury verdict in connection with the lawsuit against Webex Communications, Cisco Webex LLC, 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 appeal. 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.
Speaker Change: In regards to our patent litigation on August 29th 'twenty, 'twenty, four jury awarded us $65 $7 million in the jury verdict in connection with the lawsuit against Webex Communications, Cisco Webex, LLC and Cisco systems in the U S District Court for the Western District of Texas.
Speaker Change: On October 8th 'twenty, 'twenty, four and order granting emotion final judgment was entered into by the court in connection with the lawsuit the.
Speaker Change: The final judgment was entered in our favor and the amount of the award and started the time for filing any post trial motions or appeal.
Speaker Change: 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.
Jason Katz: Consequently, we estimate that we would receive no more than one-third of the gross proceeds in connection with the award subject to post-trial proceedings, including any potential appellate proceedings by Cisco. We have not recorded any game contingency in connection with the award.
Speaker Change: Consequently, we estimate that we would receive no more than one third of the gross proceeds in connection with the award subject to post trial proceedings, including any potential appellate proceedings by Cisco.
Speaker Change: We have not recorded any game contingency in connection with the award.
Kara Jenny: Now I'd like to pass it to Kara for a financial summary of the first quarter ended March 31st, 2025. Thank you, Jason. Total revenue for the three months ended March 31, 2025, was $5.5 million compared to $0.3 million for the three months ended March 31, 2024. This increase was primarily driven by new revenue streams as a result of the acquisition of NTF, which closed on January 2, 2025. Loss from continuing operations for the three months ended March 31, 2025, was $1.3 compared to a loss from continuing operations of $1.0 million for the three months ended March 31, 2024.
Cara: I'd like to pass it to Cara for a financial summary of the first quarter ended March 31 2025.
Cara: Thank you Jason.
Cara: Total revenue for the three months ended March 31st 2025, it's $5 5 million compared to <unk> 3 million for the three months ended March 31st 2024. This increase was primarily driven by new revenue streams. As a result of the acquisition of MTS, which closed on January 2nd 2025 loss from continue.
Cara: Operations for the three months ended March 31, 2025, it was $1 3 million compared to a loss from continuing operations of 1.1 million for the.
Cara: Three months ended March 31st 2024.
Kara Jenny: During the first quarter of 2025, the company incurred approximately $0.3 million of one-time expenses in connection with the transactions. The loss from continuing operations for the three months ended March 31, 2025, also included $0.9 million of non-cash expense consisting of amortization and depreciation of $0.7 million, $0.4 million of which represents amortization on newly acquired intangible assets, as well as $0.2 million of non-cash share-based compensation. The loss from continuing operations for the three months ended March 31, 2024, included subscription sales from our ManyCam software, as well as all general and administrative expenses for the company, which included all professional fees and public company expenses.
Cara: During the first quarter of 2025, the company incurred approximately <unk> three.
Cara: $3 million of one time expenses in connection with the transaction the loss from continuing operations for the three months ended March 31, 2025 also included <unk> nine.
Cara: 9 million of non cash expense consisting of amortization and depreciation.
Cara: 7 million <unk> 4 million of which represents amortization of newly acquired intangible assets as well as point 2 million of noncash share based compensation.
Cara: Loss from continuing operations for the three months ended March 31, 'twenty 'twenty four included subscription sales for mini cans software as well as all general and administrative expenses for the company, which included professional fees and public company expenses.
Kara Jenny: Net income for the three months ended March 31st, 2025 was $0.8 million compared to a net loss of $0.5 million for the three months ended March 31st, 2024. Net income included a tax benefit of $2.1 million in connection with the recognition of tax benefits recorded in connection with the transactions to the three months ended March 31st, 2025. Adjusted EBITDA remain relatively unchanged at negative $0.5 million for the three months ended March 31st, 2025 and 2024 respectively. Net cash generated from operating activities for the quarter was $1.7 million. Cash and cash equivalents totaled $9.7 million at March 31, 2025, a decrease of $0.9 million compared to $10.6 million at December 31, 2024, as a result of $4 million cash payment as part of the acquisition of NTS, partially offset by $1.4 million of cash inflow from the divestiture of the transferred assets and cash flow from operations of $1.7 million.
Cara: Net income for the three months ended March 31st 2025, with <unk> 8 million compared to a net loss.
Cara: <unk> 5 million for the three months ended March 31st 2024, net income included a tax benefit of $2 1 million in connection with the recognition of tax benefits recorded in connection with the transactions for the three months ended March 31st 2025, adjusted EBITDA remain well.
Cara: Eloquently unchanged at negative <unk> 5 million for the three months ended March 31, 2025, and 2024, respectively.
Cara: Net cash generated from operating activities for the quarter was one 7 million.
Cara: Cash and cash equivalents totaled $9 7 million at March 31, 2025, a decrease point 9 million compared to $10 6 million at December 31, 2024, as a result of $4 million cash payment as part of the acquisition of MTS, partially offset.
Cara: By $1.4 million of cash inflow from the divestiture of the transferred assets and cash flow from operations of 1.7 million. The company reported no long term debt on its balance sheet as of March 31st 2025.
Kara Jenny: The company reported no long-term debt on its balance sheet as of March 31, 2025.
Unknown Executive: We will now move on to questions.
Cara: We will now move on to questions.
Kara Jenny: Since you have now owned this business for four plus months, can you discuss what you have done or put in place to grow and expand this business? Have you made additional sales and marketing hires? Sure. We hired a company that focuses on marketing, search engine optimization, pay-per-click advertising, branding, and email marketing management. In addition, we have allocated marketing spend to enable a CRM system that allows us to email our customer database of approximately 40,000 current and former customers and track their open rates and response to our emails.
Speaker Change: Since you have now on this business for four plus months can you discuss what you have done a put in place to grow and expand this business have you made additional sales and marketing hires.
Speaker Change: Sure we hired a company that focuses on marketing search engine optimization pay per click advertising branding and email marketing management and.
Speaker Change: In addition, we have allocated marketing spend to enable a CRM system that allows us to email our customer database of approximately 40000 current and former customers and track their open rates.
Speaker Change: Our response to our email.
Kara Jenny: Next question. Can you tell us roughly how many of your clients currently utilize just one of your managed technology offerings? And as a follow on to that, have you begun to cross sell additional offerings to your clients?
Speaker Change: Next question can you tell us roughly how many of your clients currently utilized just one of your managed technology offerings.
Speaker Change: And as a follow on to that have you begun to cross sell additional offerings to our clients.
Kara Jenny: We have started to email and cross-sell our managed technology offerings to the ManyCam user base, as well as offering our web hosting customers all of our additional solutions. Great.
Speaker Change: Yeah, we have started to email and cross sell our managed technology offerings to the many camera user base as well as offering our web hosting customers all of our additional solutions.
Jason Katz: Jason, back to you to close out the presentation. 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 as we continue to execute on our business plan.
Jason Cats: Hey, Jason back to you to close out the presentation.
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 as we continue to execute on our business plan. We expect to report our second quarter and first half 2025 results in early to mid August I have a great day.
Jason Katz: We expect to report our second quarter and first half 2025 results in early to mid-August. Have a great day. Thank you.
Jason: Thank you ladies and gentlemen, this does conclude today's call you may disconnect. Your lines at this time and we thank you for your participation.
Unknown Executive: Ladies and gentlemen, this does conclude today's call. You may disconnect your lines at this time and we thank you for your participation.