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INTELLIGENT PROTECTION MANAGEMENT CORP. (IPM)·Q1 2025 Earnings Summary

Executive Summary

  • Transformational first quarter post-NTS acquisition: revenue reached $5.52M vs $0.27M last year; operating loss was $(1.33)M; net income was $0.81M aided by a $2.06M tax benefit . Management emphasized focus on enterprise cybersecurity and private cloud, with integration on track and no long-term debt .
  • Versus S&P Global consensus, IPM delivered an EPS beat ($0.066 vs $(0.08) est.) on a tax benefit, while revenue modestly missed ($5.52M vs $5.77M est.); adjusted EBITDA was slightly better than expected (−$0.65M vs −$0.80M est.) . Values marked with * are from S&P Global.
  • Strategic catalysts: HPE Private Cloud AI accreditation; NewtekOne referral arrangement; initiation of a $400K repurchase plan; and a $1.0M secured revolving LOC availability (no debt drawn) .
  • Key narrative: pivot to high-touch managed IT, secure private cloud, and cybersecurity with cross-sell into ManyCam/web hosting bases and NewtekOne’s client network; management flagged M&A as a potential accelerant .

What Went Well and What Went Wrong

  • What Went Well

    • Top-line step-change from NTS: revenue to $5.52M (+~20x YoY), with diversified streams (Managed IT $3.56M; Procurement $0.95M; Professional Services $0.73M; Subscription $0.28M) .
    • Capital strength and capital returns: $9.68M cash, no long-term debt; $400K repurchase authorization approved May 8, 2025; groundwork for sales/marketing systems laid .
    • Strategic positioning and partnerships: HPE Private Cloud AI accreditation; NewtekOne referral arrangement; CEO: “transformational… focused on rapidly growing cloud infrastructure and cybersecurity” .

  • What Went Wrong

    • Revenue modestly below consensus, indicating softer-than-expected contribution timing from new bookings ($5.52M vs $5.77M est.)* .
    • Operating loss widened YoY on integration/one-time costs and higher opex (operating loss $(1.33)M vs $(1.01)M YoY; ~$0.3M one-time transaction costs; $0.9M non-cash D&A and SBC) .
    • EPS beat was non-operational: $2.06M tax benefit drove net income; adjusted EBITDA remained negative (−$0.48M) .

Financial Results

MetricQ1 2024Q4 2024Q1 2025
Revenue ($USD)$0.27M $0.28M $5.52M
Operating Income (Loss) ($USD)$(1.01)M —$(1.33)M
Net Income (Loss) ($USD)$(0.49)M $(5.49)M $0.81M
Adjusted EBITDA ($USD)$(0.50)M $(1.55)M $(0.48)M
Diluted EPS – Continuing Ops ($)$(0.03) —$0.06

Q1 2025 vs S&P Global Consensus (Wall Street)

MetricQ1 2025 ConsensusQ1 2025 Actual
Revenue ($USD)$5.77M*$5.52M
Diluted EPS – Primary$(0.08)*$0.066
EBITDA ($USD)$(0.80)M*$(0.65)M

Values marked with * retrieved from S&P Global.

Segment/Revenue Stream mix

Revenue StreamQ1 2024Q1 2025
Managed Information Technologyn/a$3.56M
Procurementn/a$0.95M
Professional Servicesn/a$0.73M
Subscription$0.27M $0.28M
Total$0.27M $5.52M

Selected KPIs and Balance Sheet

KPIPrior PeriodCurrent
Cash & Equivalents$10.59M (12/31/24) $9.68M (3/31/25)
Operating Cash Flow$(0.52)M (Q1’24) $1.74M (Q1’25)
Deferred Revenue$0.56M (12/31/24) $3.68M (3/31/25)
Accounts Receivable (net)—$2.15M (3/31/25)
Adjusted EBITDA$(0.50)M (Q1’24) $(0.48)M (Q1’25)
Long-term DebtNone (12/31/24) None (3/31/25)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Company GuidanceFY/QuarterNone issuedNone issuedMaintained: No formal guidance
Capital Allocation (Buyback)12 months from 5/8/25—Up to $0.4M repurchase authorizationNew authorization
Liquidity Facility1-year—Secured $1.0M revolving LOC with Newtek Bank, N.A.New facility

No explicit revenue/margin/expense guidance was provided in Q1 2025 materials .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Current Period (Q1 2025)Trend
AI/Technology InitiativesPlanned to incorporate AI features into secure private cloud Accredited partner for HPE Private Cloud AI; intent to incorporate AI via third parties Improving execution/positioning
Go-to-Market & Cross-sellRe-energized post-transactions; referral with NewtekOne Hired marketing/SEO/CRM vendor; cross-selling to ManyCam/web hosting users; ~40k customer database Building pipeline
Private Cloud & Cybersecurity focusStrategic pivot rationale detailed Secure private cloud operations with Tier 3 facilities (AZ, NJ); 24/7 support; strong compliance posture Operational detail expanded
Capital AllocationCash $10.6M; no LT debt $9.7M cash; no LT debt; $0.4M buyback authorization Shareholder-friendly actions
Legal/RegulatoryCisco verdict $65.7M; estimate ≤ one-third net; no gain recorded Final judgment entered; no gain recorded; outcome subject to post-trial/appeal Status unchanged; optionality remains
M&A OptionalityM&A opportunities to scale growth Continues to see M&A potential Steady

Management Commentary

  • “The first quarter of 2025 was transformational for IPM following the closing of our acquisition of NTS… focused on the rapidly growing cloud infrastructure and cybersecurity markets.” — Jason Katz, CEO .
  • “We have successfully integrated our operations and serviced our existing customers without interruption… well-positioned to grow… through expansion to legacy NTS customers while cross-selling our ManyCam services to our historical web hosting customer base.” .
  • “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...” .
  • Product/Platform detail: managed IT/security, procurement, secure private cloud (Tier 3 AZ/NJ), managed backup/DR, and web hosting with comprehensive security stack .

Q&A Highlights

  • Sales and marketing investment: hired third-party firm for SEO/PPC/branding/email; implemented CRM to engage ~40k current and former customers and track engagement .
  • Cross-sell motion: began emailing and cross-selling managed technology offerings to ManyCam users; offering broader solutions to web hosting customers .
  • Timing/updates: management expects to report Q2 and 1H 2025 results in early-to-mid August (subsequently filed on Aug 12, 2025) .

Estimates Context

  • Q1 2025 vs S&P Global consensus: EPS beat (actual $0.066 vs $(0.08) est.), revenue miss (actual $5.52M vs $5.77M est.), EBITDA slightly better than est. (−$0.65M vs −$0.80M est.). The EPS beat was driven by a $2.06M tax benefit; core profitability remained negative on an adjusted EBITDA basis . Values marked with * retrieved from S&P Global.
  • Implications: modest top-line miss may push near-term revenue estimates slightly lower unless backlog/deferred revenue converts faster; adjusted EBITDA trajectory is improving but still negative—street may wait for sustained EBITDA breakeven before materially raising profitability estimates .

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Structural repositioning validated by revenue mix and deferred revenue build; execution focus is now on converting backlog and expanding wallet share with high-touch service model .
  • Non-operational tailwind drove EPS; underlying profitability requires further scale and cost discipline (Adjusted EBITDA −$0.48M) .
  • Commercial engine being built: NewtekOne referrals, HPE Private Cloud AI accreditation, and new marketing/CRM motion should support pipeline in coming quarters .
  • Strong liquidity with optional capital returns: $9.68M cash, no LT debt, $0.4M buyback authorization; $1.0M revolving LOC available if needed .
  • Legal optionality persists (Cisco verdict), but no gain recognized; outcome and timing remain uncertain—treat as upside optionality rather than base case .
  • Near-term trading setup: EPS beat on tax and buyback authorization are supportive; revenue miss vs consensus tempers enthusiasm until consistent sequential growth/EBITDA inflection is demonstrated .
  • Medium-term thesis: growing demand for secure private cloud/cyber services, industry credentials, and targeted M&A could accelerate scale and margin normalization over 12–24 months if execution on cross-sell and enterprise wins continues .