Release Date: May 14, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Intelligent Protection Management Corp (NASDAQ:IPM) completed the acquisition of Newtek Technology Solutions, Inc., which has expanded their focus on the rapidly growing cloud infrastructure and cybersecurity sectors.
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The company reported a significant increase in total revenue for Q1 2025, reaching $5.5 million compared to $0.3 million in Q1 2024, primarily driven by new revenue streams from the acquisition.
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IPM has a strong balance sheet with $9.7 million in cash and cash equivalents and no long-term debt, positioning them well for future growth and business plan execution.
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The company has initiated a stock repurchase plan for up to $400,000 of its outstanding common stock, indicating confidence in its financial health and future prospects.
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IPM has successfully integrated operations post-acquisition, maintaining service continuity for existing customers and positioning itself for growth through expanded service offerings and cross-selling opportunities.
Negative Points
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Despite the revenue increase, IPM reported a loss from continuing operations of $1.3 million for Q1 2025, up from a loss of $1.0 million in Q1 2024.
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The company incurred approximately $0.3 million in one-time expenses related to the acquisition, impacting their financial results.
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Adjusted EBITDA remained negative at $0.5 million for both Q1 2025 and Q1 2024, indicating ongoing operational challenges.
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The net income for Q1 2025 was positively impacted by a $2.1 million tax benefit, which may not be a recurring advantage in future quarters.
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The potential financial gain from a $65.7 million jury award in a patent litigation case is uncertain, as significant litigation-related expenses and potential appeals could reduce the actual proceeds received.
Q & A Highlights
Q: Since you have now owned this business for 4-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? A: Jason Katz, CEO: We hired a company specializing in marketing, search engine optimization, pay-per-click advertising, branding, and email marketing management. Additionally, 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 responses.
Q: 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? A: Jason Katz, CEO: Yes, we have started to email and cross-sell our managed technology offerings to the minicam user base as well as offering our web hosting customers all of our additional solutions.