Intelligent Protection (IPM) Earnings Transcript

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DATE

Tuesday, March 17, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Jason Katz
• President — Jared Mills
• Chief Financial Officer — Kara Jenny
• Investor Relations — Joe Diaz

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TAKEAWAYS

• Revenue -- $6.1 million for the quarter, down 1.7% sequentially from the preceding quarter.
• Managed IT Revenue -- $3.9 million in the quarter, with a 7% sequential increase reported for managed IT (excluding web hosting).
• Other Revenue Components -- Procurement revenue at $1.5 million, professional services at $0.4 million, and subscription revenue at $0.3 million for the quarter.
• Full-Year Revenue -- $23.6 million total, with $14.8 million from managed IT, $5.4 million from procurement, $2.3 million from professional services, and $1.1 million from subscriptions (individual components do not sum to total due to transactional differences).
• Net Loss -- $0.6 million for the quarter, a 42% reduction from the prior quarter, and $2 million for the full year.
• Operating Loss -- $0.8 million in the quarter, and $4.7 million for the year.
• Adjusted EBITDA -- Positive by $1,000 for the quarter; negative $1.1 million for the year.
• Cash Position -- $8.4 million in cash and cash equivalents (including $10 million restricted cash) at year end, with no long-term debt.
• Cash Flow from Operations -- $1.1 million provided for the full year.
• Deferred Revenue -- $3.9 million reported and to be recognized in future periods as contracts are fulfilled.
• Devices Under Management -- Over 10,000 devices managed under service agreements at year-end.
• Churn -- Near 0 churn among major managed IT clients during the year, as explicitly indicated by management.
• Data Center Agreement -- Phoenix data center license extended through August 31, 2032.
• SOC 2 Type 1 Compliance -- Achieved as a milestone in security and reliability standards.
• Corporate Transactions -- Completed acquisition of Newtek Technology Solutions Inc. and divestiture of Paltalk, Camfrog, and lumbar applications to Meteor Mobile Holdings Inc.
• Stock Repurchase Plan -- Authorization of up to $100,000 with 151,258 shares bought at a $1.99 average (no buybacks in the quarter).
• Strategic Partnerships -- Collaborative agreements established with AltiGen Technologies, MindsDB, and IT Ally for AI, analytics, and managed solutions expansion.
• Product Launches -- Introduction of the Aura AI-powered safety suite, and initiation of the Heroes discount program for specific occupational groups.
• Risk Management -- Management cited ongoing attention to cybersecurity threats, macroeconomic, and policy uncertainties, though no direct negative impacts reported for the period.

SUMMARY

Intelligent Protection Management (NASDAQ:IPM) reported quarterly revenue of $6.1 million with a sequential decline, but achieved growth in managed IT services and a significant reduction in net loss. The company closed the fiscal year with a positive adjusted EBITDA in the final quarter, no long-term debt, and a cash position of $8.4 million, including restricted funds. Strategic activities included completing a major acquisition and divestiture, extending key infrastructure agreements, achieving SOC 2 compliance, and forming multiple technology partnerships. No material risks were disclosed as directly impacting operations during the period.

• Management views client retention and personalized service as core differentiators supporting nearly nonexistent churn.
• The company anticipates continuing organic growth and exploring accretive acquisitions in future periods, with stated interest in leveraging AI for operational and customer enhancement.
• Longer-term infrastructure access is secured through the Phoenix data center agreement, cited as supporting growth flexibility and operational reliability.
• Adjusted EBITDA turned positive in the quarter, which management described as "an important milestone for the company."

INDUSTRY GLOSSARY

• SOC 2 Type 1 Compliance: An attestation standard confirming a service organization's controls relevant to security, availability, or confidentiality at a specific point in time, commonly required for cloud and data service providers.

Full Conference Call Transcript

Joe Diaz: Good afternoon, and welcome to all participating on today's call to review the financial and operating results of IPM for the fourth quarter and year ended December 31, and 2025. As the operator indicated, my name is Joe Diaz, I'm a Lytham Partners. We are the Investor Relations representative for IPM. But 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.

And including forward-looking statements about future results of operations, business strategies and plans, IPM relationships with its customers as well as market and potential growth opportunities. In addition, management may make 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 is contained in IPM filings with the SEC including its annual report on Form 10-K for the year ended December 31, 2025.

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, that when used in combination with GAAP results, provides investors with additional analytical tools to understand the company's operations. or 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 Inc. or NTS from NewtekOne Incorporated. The company also divested its Paltalk, Camfrog and lumbar applications and certain assets and liabilities related to such applications to Meteor Mobile Holdings Inc. which are referred to as the transfer assets. I'm joined today by Jason Katz, IPM's Chief Executive Officer; Jared Mills, IPM's President; and Kara Jenny, IPM's CFO. After Jason's remarks, we will hear from Kara then we will conclude with investor questions that were sent in advance of today's call. At this time, I'd like to turn the call over to Jason Katz. Jason, take it away.

Jason Katz: Thanks, Joe. Good afternoon, everyone. We greatly appreciate you taking the time to join us on today's call. We completed our first year of operations following our acquisition of NTS. It was a very good first year operating as a managed technology solutions provider. During 2025, we streamlined our service operations and our technology vendor partner licensing and manufacturing cost centers. We made significant progress on a number of key metrics, including managed recurring revenue growth, expense optimization and risk management. In the fourth quarter, revenue from our core business, managed IT, excluding web hosting, increased sequentially by 7%. Net loss narrowed by 42% and adjusted EBITDA was positive.

Cash flow from operations was positive for both the quarter and the full year. And as of December 31, 2025, we had cash and cash equivalents totaling $8.4 million and no long-term debt. We have important differentiators that set us apart from our industry competitors, large and small and have significant competitive advantages of those peers that lack our level of expertise in highly regulated vertical markets, including legal, health care, finance and banking. Our success in these markets represents a large opportunity in the coming years.

From a customer service perspective, our managed clients benefit from a VIP high-touch experience with a dedicated technology manager as a single point of contact as opposed to competitors in our industry that use automated voice response to phone calls, telephonic menus and handing off service calls to agents and call centers in foreign countries all of which can be frustrating and can impact the customer experience. We don't do any of that. Our clients speak directly to their IPM account team members who deeply understand the clients' needs and business goals.

This is an important IPM customer service advantage that fuels our superior customer loyalty, so much so that in 2025, we retained all major clients while entering new markets with near 0 churn. Since the January 2025 acquisition of NTS, we have successfully integrated NTS into IPMs mission, vision and operations and service our customers without interruptions or downtime. We are well positioned to grow the company through the expansion of our service offerings to existing legacy NTS customers, new customers and our historical web hosting customer base. We continue to advance operationally with a focus on efficiency. And at the same time, we manage expense with the goal of driving value for all of our stakeholders.

For full year 2025, we extended our Phoenix data center license agreement with an industry-leading provider through August 31, 2032, reinforcing a long-standing strategic relationship supporting our continued focus on scalable, secure and highly reliable digital infrastructure. We successfully achieved SOC 2 Type 1 compliance A key milestone in our ongoing commitment to safeguard and customer data and delivering trusted cybersecurity and cloud infrastructure solutions. We announced a collaborative growth initiative with AltiGen Technologies to refer integrated communications, AI-driven analytics and managed security and hosting solutions to their respective customers. We entered into a reseller agreement with MindsDB, a leading open source AI platform to provide its current and future customers with sophisticated AI capabilities.

We initiated a collaboration with IT Ally, a trusted business 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 $100,000 of outstanding common stock, which plan expires on the 1-year anniversary of such date. Pursuant to the repurchase plan since inception, we have purchased 151,258 shares, an average price of $1.99. There were no shares repurchased in the fourth quarter of 2025. We commenced offering Aura, a leading AI-powered online safety solution for business, families and individuals designed to help me the impact of data breaches, scams and other online threats to businesses and consumers.

And finally, 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, teacher and veterinary business owners. Having our company transition to a pure play managed services technology provider over the course of the year has been gratifying. We look forward to many opportunities to dramatically expand our business in the coming years. With that, let me turn over the call to Kara Jenny, our CFO, for a summary of our financial results for the fourth quarter and full year 2025. Following Kara's remarks, we'll move into the Q&A and answer questions that were submitted by e-mail prior to this call. Kara, until yours.

Kara Jenny: Thanks, Jason. For the 3 months ended December 31, 2020, revenue totaled $6.1 million. On a sequential basis, total revenue decreased 1.7% from the third quarter of 2025. And Revenue for the full year ended December 31, 2025, totaled $23.6 million. Total revenue by revenue component for the fourth quarter and year-ended December 31, 2025, were as follows: Managed Information Technology revenue was $3.9 million and $14.8 million, respectively. Procurement revenue was $1.5 million and $5.4 million, respectively. Professional services revenue was $0.4 million and $2.3 million, respectively, and subscription revenue was $0.3 million and $1.1 million, respectively.

Operating loss from continuing operations for the fourth quarter ended December 31, 2025, totaled $0.8 million, operating loss from continuing operations for the full year ended December 31, 2025, totaled $4.7 million. Net loss for the 3 months ended December 31, 2025, totaled $0.6 million. Net loss for the full year ended December 31, 2025, totaled $2 million. We recorded an income tax benefit during the first quarter of 2025 of approximately $2.1 million in connection with our acquisition of NTS and the divestiture of our Auto, Camfrog and umber applications. Adjusted EBITDA for the 3 months ended December 31, 2025, was positive by $1,000. Adjusted EBITDA for the full year ended December 31, 2025, was negative $1.1 million.

As of December 31, 2025, IPM had no long-term debt and cash and cash equivalents totaled $8.4 million, which included $10 million of restricted cash. Cash provided by continuing operations for the full year ended December 31, 2025, was $1.1 million. We reported deferred revenue of $3.9 million for the full year ended December 31, 2025, which will be recognized as revenue in future quarters as products and/or services are installed. We had more than 10,000 devices under management at December 31, 2025, representing the number of endpoints, servers and network devices that are outsourced to us under managed service agreements. That concludes my comments, and we will now move on to addressing online submitted questions.

Joe Diaz: Jason, this is a great first year for IPM as a managed technology solutions provider. What did you consider the highlights of the year? What were your biggest challenges? And what are your expectations for 2026 and 2027.

Jason Katz: As I mentioned, we're very pleased with our performance in our first full year as a managed technology solutions provider following the acquisition. Some of the highlights include the continued growth in the managed IT portion of our business a meaningful reduction in our net loss and the progress we've made at the EBITDA line. Notably, we reported positive adjusted EBITDA in the fourth quarter of 2025, which we view as an important milestone for the company. In terms of challenges, much of the uncertainty facing our industry comes from the evolving threat landscape and broader macroeconomic factors.

Cybersecurity threats from bad actors overseas continue to target trickle infrastructure, and there are also uncertainties around issues such as tariffs and other policy developments. While we have not been directly impacted by these factors, our team remains very focused on proactively managing risk and ensuring that we are all well positioned to respond to potential changes in the operating environment. Looking ahead to 2026 and 2027, our team is highly focused on continuing to grow the business, both organically and where appropriate, through strategic acquisitions that we believe will be accretive to our long-term growth strategy. We are also very excited about the opportunities to incorporate various aspects of AI into our operations and product offerings.

We believe these technologies will allow us to deliver greater value to our customers by helping them operate more efficiently, accelerate their growth and stay ahead in an increasingly dynamic technology landscape.

Joe Diaz: Jared as President of the company, IPM customer churn is nearly nonexistent. How does IPM do that?

Jared Mills: This is a great question because it speaks to the heart of who IPM is as a company. We're just as passionate about customer service and the overall customer experience as we are about reliability and security. It's what made this company great and it's our David and Goliath story. Not as a small American microcap public company earned a business we earn and keep the business we keep. It's good old-fashioned customer service. We invest heavily into the idea that people want to talk to people and ideally the same people they talked to yesterday. That means we build relationships, and that means we're high touch.

And the result of that is a white glove VIP experience that, quite frankly, you can't get anywhere else. We care about the customer more than the technology here. And for that reason, our churn is nearly nonexistent.

Joe Diaz: Jason, can you give us an update on how you think about the company's excess lease data center capacity and how best to exploit it.

Jason Katz: Sure. We're very pleased to have renewed our lease agreement with one of the premier data center partners in the country, extending that relationship through 2032. That long-term partnership gives us the stability and capacity we need to support our growth plans. Their state-of-the-art facility not only enables us to scale our infrastructure as demand increases, but it also allows us to leverage their operational expertise and reliability in servicing our customers. From a strategic standpoint, this capacity gives us flexibility to support both organic growth and new opportunities within our managed services offerings. Overall, we believe the partnership positions us very well to deliver continued value to our customers while supporting sustainable growth for the business.

Joe Diaz: Okay. That concludes our Q&A session. Let me turn the call over to Jason for closing remarks. Jason?

Jason Katz: Thanks, everyone, for your support and for joining us today. We're 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 will talk with you again to review our 20,261st quarter results. Have a great day.

Operator: This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.

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