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IP

INTELLIGENT PROTECTION MANAGEMENT CORP. (IPM)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 reflected pre-transaction operations with a sharp shift in mix: continuing operations revenue grew 9.1% to $0.28M, but total revenue (including discontinued ops) fell 21% to $2.1M as legacy Paltalk/Camfrog declined; net loss widened to $5.49M and Adjusted EBITDA loss to $1.55M, driven by a $3.85M impairment tied to divested assets and higher transaction-related costs .
  • Management emphasized a strategic pivot to managed cloud infrastructure and cybersecurity post-January 2025 acquisitions/divestitures, highlighting referral potential with NewtekOne and a stronger growth opportunity set; no quantitative revenue/EPS guidance was provided .
  • A jury awarded $65.7M in the Cisco patent case (final judgment Oct 8, 2024); IPM estimates it could receive up to one-third of gross proceeds, but has not recorded a gain contingency pending appeals and deductions for legal fees—a potential upside catalyst if proceeds are realized .
  • Consensus estimates (S&P Global) for Q4 2024 were unavailable at query time; comparisons vs Street could not be made. This may limit near-term estimate-driven stock reaction, with the narrative instead anchored on the transformation to cloud/cyber and litigation outcomes .

What Went Well and What Went Wrong

What Went Well

  • Pivot to cloud/cybersecurity completed in January 2025; management sees “meaningful impact on our revenue” and strong growth/value proposition for stockholders .
  • Continuing operations revenue rose 9.1% YoY to $0.28M, supported by ManyCam sales despite legacy app declines .
  • CEO highlighted referral arrangement with NewtekOne (tens of thousands of business clients) as a customer acquisition catalyst, plus M&A opportunities to scale growth: “We believe that cybersecurity is…ripe for growth” .

What Went Wrong

  • Total revenue (including discontinued ops) fell 21% YoY to $2.1M as subscription and virtual gift revenue from Paltalk/Camfrog declined; net loss widened sharply to $5.49M .
  • Adjusted EBITDA loss increased to $1.55M from $0.22M, reflecting transformation costs and impairment; net cash used in operations rose to $1.47M .
  • Discontinued operations swung to a $4.08M loss (from $0.30M income), driven by a one-time $3.85M impairment on divested assets and lower virtual gift revenue—pressuring consolidated results .

Financial Results

MetricQ4 2023Q4 2024YoY ChangeQ3 2024Consensus (Q4 2024)
Revenue (Continuing) ($USD Millions)$0.26 $0.28 +9.1% ——
Total Revenue incl. Discontinued Ops ($USD Millions)$2.7 $2.1 -21.0% ——
Net Loss from Continuing Ops ($USD Millions)-$0.585 -$1.415 -141.8% ——
(Loss)/Income from Discontinued Ops ($USD Millions)$0.302 -$4.075 -1448.5% ——
Net Loss ($USD Millions)-$0.283 -$5.491 -1839.5% ——
Adjusted EBITDA ($USD Millions)-$0.223 -$1.549 -593.9% ——
Net Cash Used in Operating Activities ($USD Millions)-$0.099 -$1.468 -1383.1% ——

Segment/revenue mix

SegmentQ4 2023 Revenue ($USD Millions)Q4 2024 Revenue ($USD Millions)Notes
Continuing Operations (incl. ManyCam)$0.256 $0.280 Growth driven by ManyCam
Discontinued Ops (Paltalk/Camfrog/Vumber)$2.4 $1.9 Decline in subscription/virtual gifts
Total incl. Discontinued Ops$2.7 $2.1 -21% YoY

Key KPIs and balance sheet items

KPIQ4 2024Source
Cash & Equivalents$10.589M
Long-term DebtNone
Deferred Subscription Revenue$0.555M
Weighted Avg. Diluted Shares9.227M

Non-GAAP adjustments (Q4 2024)

ItemQ4 2024 Amount
Impairment (Divestiture)$3.850M add-back in Adjusted EBITDA
Depreciation & Amortization$0.205M
Stock-based Compensation$0.027M
Interest Income (net)-$0.115M
Income Tax Benefit-$0.025M

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2025Not provided Not provided Maintained (no guidance)
Adjusted EBITDAFY 2025Not provided Not provided Maintained (no guidance)
Operating ExpensesFY 2025Not provided Not provided —
OI&EFY 2025Not provided Not provided —
Tax RateFY 2025Not provided Not provided —
Segment GuidanceFY 2025Not provided Not provided —
DividendsFY 2025Not discussed Not discussed —
Earn-Out Terms (Potential Receipts)Earn-Out Periods 1–4New disclosureFormula-based payouts tied to revenue ($3.5–$4.25M @ 30%, >$4.25M excess @ 40%; and $7.0–$8.5M @ 30%, >$8.5M excess @ 40%) with periods 7/1/25–12/31/25 and calendar years 2026–2028 New item

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2)Previous Mentions (Q-1)Current PeriodTrend
Transformation to Cloud/CyberCisco verdict Aug 2024; focus on defending IP —Company transitioned post-Jan 2025 acquisitions/divestitures; expects revenue impact and growth opportunity Shift to managed services model
AI initiatives——Plans to incorporate AI features into secure private cloud to expand offerings with existing customers Emerging
Customer acquisition (NewtekOne referral)——Referral arrangement with NewtekOne expected to help find new customers Positive
Regulatory/legal (Cisco litigation)Jury award $65.7M (Aug 2024); final judgment Oct 8, 2024 —Estimates receiving up to one-third of gross award; no gain booked pending post-trial proceedings Potential upside; timing uncertain
Product performance (ManyCam)——ManyCam supported continuing ops revenue growth Stabilizing within continuing ops
Security posture and threats——Emphasis on proactively fortifying infrastructure amid AI-driven threat sophistication Risk management priority

Management Commentary

  • “We have officially moved our Company into the cloud infrastructure and cybersecurity sectors. We believe these transformational Transactions will have a meaningful impact on our revenue…” — Jason Katz, CEO .
  • “We are very excited with the prospect of expanding our managed technology solutions business… referral arrangement with NewtekOne… has great potential to help us find new customers.” — Jason Katz .
  • On challenges: “With the growth of AI and increased sophistication of cyber-related threats, one of our greatest challenges is remaining proactive and responsive and fortifying our infrastructure…” — Jason Katz .
  • On customers/services: NewtekOne is currently largest customer; IPM provides managed IT, security services, secure private cloud hosting, backup & disaster recovery, and more .

Q&A Highlights

  • IP litigation strategy: “Intellectual property is a very important asset… we continuously review our patent portfolio.” — CEO .
  • Growth outlook: CEO remains “very enthusiastic” about managed hosted cloud and managed cybersecurity prospects; necessity for all businesses .
  • Key challenges: Delivering secure, compliant, resilient tech to regulated sectors; staying ahead of AI-driven threat sophistication .
  • Customer/cross-sell: Focus on expanding solutions purchased by existing customers; plans to incorporate AI features into secure private cloud to deepen adoption .
  • Largest customer disclosure: NewtekOne identified as largest; diversified customer base across finance, legal, healthcare, manufacturing .

Estimates Context

  • Consensus estimates for Q4 2024 EPS and revenue via S&P Global were unavailable at query time due to access limits; therefore, comparisons vs Street were not possible at this time .
  • Without Street comparisons, investor focus should center on the magnitude of the impairment and transaction-related expenses, the pivot to cloud/cyber, and potential upside from litigation proceeds .

Key Takeaways for Investors

  • Transformation narrative: IPM’s pivot to managed cloud/cyber is the core driver going forward; near-term revenue comps reflect legacy products but management expects new-sector growth supported by NewtekOne referrals and potential M&A scale-up .
  • Earnings optics: Q4 headline losses were inflated by a one-time $3.85M impairment in discontinued ops and higher transaction-related costs; Adjusted EBITDA loss of $1.55M strips out the impairment but still reflects transition friction .
  • Liquidity: Year-end cash of $10.59M and no long-term debt provide flexibility to integrate NTS and invest in go-to-market and security infrastructure .
  • Legal optionality: The $65.7M Cisco award (final judgment) represents contingent upside; management guides to potentially receiving up to one-third of gross proceeds after expenses and appeals, with no gain recognized yet—monitor appellate developments .
  • Customer concentration/opportunity: With NewtekOne as largest customer and a diversified base in regulated sectors, cross-sell plus AI-enhanced offerings could drive ARPU and retention in 2025+ .
  • Watch catalysts: First full quarter as transformed IPM (early-to-mid May) should provide initial cloud/cyber revenue trajectory; any disclosure on AI feature rollout, pipeline wins, or earn-out realizations may shift narrative .
  • Risk factors: Competitive intensity in managed services, evolving cyber threats, and reliance on limited customers necessitate disciplined execution and security investments; non-GAAP add-backs highlight sensitivity to one-time items .

Notes on document coverage and availability:

  • Read in full: Q4 2024 earnings call transcript and 8-K press release with Exhibit 99.1 .
  • No separate Q4 press releases beyond Exhibit 99.1 were available; prior Q2/Q3 2024 earnings documents were not found in the repository at query time; trend analysis leverages YoY comparisons and annual disclosures within the 8-K .