Release Date: March 24, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Intelligent Protection Management Corp (IPM, Financial) completed the acquisition of Newtek Technology Solutions, moving into the cloud infrastructure and cybersecurity sectors, which is expected to significantly impact revenue and growth opportunities.
- The company successfully defended its intellectual property, resulting in a $65.7 million jury award in a patent infringement lawsuit against Cisco, although the net proceeds will be reduced by litigation expenses.
- IPM has a strong cash position with $10.6 million in cash and no long-term debt as of December 31, 2024, providing financial stability.
- The company has established a referral arrangement with NewtekOne, which could help in acquiring new customers and expanding its market reach.
- IPM is focused on expanding its managed technology solutions business, particularly in the high-growth areas of cloud infrastructure and cybersecurity, with plans for potential mergers and acquisitions to scale growth.
Negative Points
- Revenue from continuing operations showed only a modest increase of 9.1% for the quarter, and overall revenue decreased by 17% for the year due to declines in subscription and virtual gift revenue.
- Net loss from continuing operations increased significantly by 142% for the quarter and 59% for the year, driven by increased professional fees and public company expenses related to recent transactions.
- Loss from discontinued operations increased dramatically by 1,449% for the quarter and 357% for the year, primarily due to a one-time impairment loss on divested assets.
- Adjusted EBITDA loss increased substantially by 594% for the quarter and 338% for the year, indicating challenges in achieving profitability.
- The company faces challenges in the cybersecurity and cloud infrastructure business, particularly in delivering secure and compliant technology amidst evolving cyber threats and regulatory requirements.
Q & A Highlights
Q: Should we expect to see additional patent infringement lawsuits filed by you?
A: Intellectual property is a very important asset for the company, and we continuously review our patent portfolio in order to protect our intellectual property. - Jason Katz, CEO
Q: Since you've now owned the cybersecurity and cloud infrastructure business for more than two months, are you more or less enthusiastic about its growth prospects?
A: I remain very enthusiastic about the managed hosted cloud and managed cybersecurity businesses and its prospects for growth. Cybersecurity is essential for all businesses, large and small, and truly a necessity in today's world. - Jason Katz, CEO
Q: What are the biggest challenges with the cybersecurity and cloud infrastructure business?
A: One of our main priorities is to deliver secure, compliant, and resilient technology to customers in highly regulated industries. With the growth of AI and increased sophistication of cyber threats, our greatest challenge is remaining proactive and responsive in fortifying our infrastructure against evolving risks. - Jason Katz, CEO
Q: Do you disclose any significant customers by name? And can you be more specific about what you do for your customers within cybersecurity or cloud infrastructure?
A: NewtekOne is currently our largest customer. We serve a diverse customer base across various industries, providing managed IT security services, professional services, secure private cloud hosting, managed backup and disaster recovery, and web hosting. - Jason Katz, CEO
Q: Are there opportunities to further expand and grow with existing customers?
A: We see numerous opportunities to expand with both existing and new customers. Our sales force is focused on expanding the number of solutions our customers purchase by introducing them to additional solutions. We plan to incorporate AI features into our secure private cloud offerings to expand our service offerings. - Jason Katz, CEO
Q: Can you discuss your product suite in a little more detail?
A: IPM provides managed hosting, managed cybersecurity, backup and disaster recovery, procurement, and web hosting. We differentiate ourselves with our expert IT staff and technical capability, aiming to provide the most reliable secure environment possible for our customers. - Jason Katz, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
