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INTELLIGENT PROTECTION MANAGEMENT CORP. (IPM)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 revenue was $6.24M, up 9% sequentially and far above Q3 2024’s $0.28M; gross margin was ~50.7% and operating loss was $1.44M as integration continues .
  • IPM delivered a revenue beat versus S&P Global consensus ($6.24M vs $5.84M*) and Primary EPS beat on normalized basis (actual -$0.048* vs -$0.07*), while GAAP diluted EPS was -$0.08 .
  • Adjusted EBITDA loss improved materially to -$0.26M from -$0.38M in Q2 and -$1.45M in the prior-year quarter; beginning Q3, litigation expenses related to Cisco ManyCam are excluded from Adjusted EBITDA (methodology change) .
  • Cash and equivalents were $7.32M ($8.35M including restricted cash), with no long-term debt; deferred revenue was $3.50M and devices under management exceeded 9,000—supporting near-term visibility .
  • Management emphasized private-cloud resilience amid AWS outages, a high-touch service model, and AI partnerships (MindsDB, Aura); potential bolt-on MSP acquisitions could expand recurring revenue, a likely stock narrative catalyst .

Note: Estimates marked with * are Values retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • Sequential revenue growth of 9% to $6.24M, with strong contribution from Managed IT ($3.79M) and Procurement ($1.70M) .
  • Adjusted EBITDA improved to -$0.26M, with a 31% sequential improvement in Adjusted EBITDA loss; new methodology excluding litigation expenses enhances visibility into core operations .
  • Private-cloud and private data center architecture mitigated customer impact from recent AWS outages; “we don’t just try harder, we protect smarter” (CEO) .

What Went Wrong

  • GAAP diluted EPS was -$0.08, as operating loss remained elevated at -$1.44M, reflecting integration costs and higher G&A .
  • Costs and expenses totaled $7.67M, including $0.51M litigation expenses; operating margin remained negative (-23.0%) despite improving revenue .
  • YoY comparisons remain distorted by the business transition; management noted GAAP comparability will normalize starting Q1 2026, limiting clean trend analysis in the interim .

Financial Results

Quarterly P&L vs Prior Quarters (USD)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($)$5,518,038 $5,722,599 $6,238,019
Cost of Revenue ($)$2,464,663 $2,857,449 $3,076,333
Gross Profit ($)$3,053,375 (derived from )$2,865,150 (derived from )$3,161,686 (derived from )
Gross Margin (%)55.3% (derived from )50.0% (derived from )50.7% (derived from )
Operating Income (Loss) ($)$(1,333,927) $(1,129,699) $(1,435,762)
EBIT Margin %-24.2% (derived from )-19.7% (derived from )-23.0% (derived from )
Net Income (Loss) ($)$808,530 $(1,050,028) $(1,083,070)
Diluted EPS ($)$0.06 $(0.08) $(0.08)
Adjusted EBITDA ($)$(482,255) $(378,289) $(260,121)

YoY Comparison (Q3 2025 vs Q3 2024)

MetricQ3 2024Q3 2025
Revenue ($)$275,420 $6,238,019
Diluted EPS ($)$(0.16) $(0.08)
Operating Income (Loss) ($)$(1,487,374) $(1,435,762)
Adjusted EBITDA ($)$(1,449,381) $(260,121)

Q3 2025 Actual vs S&P Global Consensus

MetricConsensusActual
Revenue ($)$5,839,800*$6,238,019
Primary EPS ($)$(0.07)*$(0.048)*
EBITDA ($)$(272,500)*$(304,037)*

Note: Estimates marked with * are Values retrieved from S&P Global.

Segment Revenue Breakdown (USD)

SegmentQ1 2025Q2 2025Q3 2025
Managed Information Technology$3,558,833 $3,506,754 $3,791,746
Procurement$951,379 $1,248,401 $1,697,854
Professional Services$726,607 $688,815 $476,198
Subscription$281,219 $278,629 $272,221
Total$5,518,038 $5,722,599 $6,238,019

KPIs and Balance Sheet Highlights

KPI / MetricQ1 2025Q2 2025Q3 2025
Devices under Management——>9,000
Deferred Revenue ($)$3,678,592 $3,856,401 $3,496,847
Cash & Equivalents ($)$9,683,317 $7,286,978 $7,321,303
Restricted Cash ($)—$1,014,714 $1,025,176
Long-Term DebtNone None None
Cash from Ops (period) ($)$1,744,783 $856,105 (1H) $989,142 (9M)
Share Repurchase (shares/$)Plan approved $400,000 104,600 shares 46,658 shares / $88,250

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY/Q4 2025None providedNone providedMaintained no formal guidance
Margins (EBIT/Adj. EBITDA)FY/Q4 2025None providedNone provided; Adj. EBITDA methodology updated to exclude Cisco litigation as of Q3Methodology change
OpExFY/Q4 2025None providedNone providedMaintained
OI&EFY/Q4 2025None providedNone providedMaintained
Tax RateFY/Q4 2025None providedNone provided; tax benefit influenced 2025 YTDMaintained
Capital ReturnFY 2025$400,000 repurchase authorizationProgram active; repurchases in Q2/Q3Maintained
DividendsFY 2025NoneNoneMaintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1/Q2)Current Period (Q3)Trend
Private Cloud ResilienceHPE Private Cloud AI partnership; integration focus Customers largely unaffected by AWS outages due to private cloud/data centers; “protect smarter” Strengthening differentiation
AI PartnershipsHPE accreditation (Q2) Reseller agreement with MindsDB; Aura consumer safety offering Expanding AI ecosystem
Customer Experience“White glove, high touch” service emphasized Reinforced dedicated Technology Managers; no IVR/foreign call centers Consistent messaging
M&A StrategyEarn-out from asset sale; building platform Considering bolt-on MSP acquisitions with attractive EBITDA multiples Increasing focus
Litigation (Cisco ManyCam)Jury award, final judgment noted in late 2024 Adjusted EBITDA now excludes litigation expenses; no gain recorded Methodology clarified
Financial ComparabilityTransition period post-NTS deal GAAP comparability expected starting Q1 2026 Normalization ahead

Management Commentary

  • “Total revenues for Q3 2025 increased 9% to $6.2 million… we saw a 31% improvement in Adjusted EBITDA loss compared to the second quarter” (CEO) .
  • “Our use of private data centers and private cloud means that our customers were generally not affected by the recent AWS outages” (CEO) .
  • “We are well positioned to grow… through expansion of our service offerings to legacy NTS customers while cross-selling ManyCam” (CEO) .
  • “IPM financials will become comparable on a GAAP basis as of the first quarter of 2026” (CFO) .
  • “Adjusted EBITDA… beginning with the fiscal quarter ended September 30, 2025, litigation expenses related to the Cisco ManyCam Litigation are now excluded” .

Q&A Highlights

  • Bolt-on acquisitions: Management is evaluating MSP targets with term customer contracts to add devices under management and recurring revenue; near-term focus remains organic growth leveraging existing infrastructure .
  • AWS outages: IPM highlighted mitigation via private data centers/private cloud architecture, reinforcing reliability compared to public cloud peers .
  • Capital structure and financing: Sufficient cash for at least the next 12 months; would consider financing for accretive acquisitions .
  • Closing tone: Continued execution with plans to update on Q4 and full-year in Q1 2026 .

Estimates Context

  • Q3 revenue beat: $6.24M actual vs $5.84M* consensus; strong Managed IT and Procurement contributions drove the upside .
  • EPS: S&P “Primary EPS” showed a narrower loss (-$0.048* vs -$0.07* consensus), signaling an estimates beat; GAAP diluted EPS was -$0.08, reflecting ongoing integration and expense profile .
  • EBITDA: Slightly worse than consensus on S&P’s EBITDA (-$304k* vs -$272k*), though Adjusted EBITDA improved sequentially under the updated methodology .

Note: Estimates marked with * are Values retrieved from S&P Global.

Key Takeaways for Investors

  • Revenue trajectory is positive (Q1→Q2→Q3: $5.52M → $5.72M → $6.24M), with a Q3 revenue beat versus consensus; watch for continued Managed IT and Procurement momentum into Q4 .
  • Adjusted EBITDA is narrowing (Q3: -$0.26M), aided by methodology updates and scale; monitor operating leverage as integration and expense optimization progress .
  • Private-cloud positioning is a differentiator amid hyperscaler outages; this reliability could become a commercial tailwind and a narrative catalyst for the stock .
  • Balance sheet remains clean (no long-term debt) with adequate liquidity; deferred revenue ($3.50M) and >9,000 devices under management support near-term visibility .
  • M&A optionality (bolt-on MSPs) could accelerate recurring revenue growth and device footprint; near-term focus is organic growth leveraging existing infrastructure .
  • Expect GAAP comparability normalization by Q1 2026; near-term modeling should rely on segment and KPI trajectories alongside non-GAAP trends .
  • Litigation cost exclusion in Adjusted EBITDA clarifies core performance; track any updates to Cisco award realization, noting no gain contingency recorded yet .