Intelligent Protection Management Corp. Q2 FY2025 earnings call

• On January 2, 2025, completed acquisition of Newtek Technology Solutions, Inc. (NTS) and divested certain assets. Rebranded to Intelligent Protection Management Corp. (IPM).
• Successfully integrated operations since January. Focus on growing through expanding services to NTS customers and cross-selling ManyCam software and new services to web hosting customer base.
• Selected by Hewlett Packard Enterprise as accredited partner for HPE Private Cloud AI solution. Collaborated with IT Ally. Board approved stock repurchase plan for up to $400,000 of common stock. Commenced offering Aura, an AI-powered online safety solution.
• Jury awarded $65.7 million in patent litigation against WebEx Communications, etc. Final judgment in favor, but exact proceeds subject to factors including litigation expenses.

For the 3 months ended June 30, 2025, revenue totaled $5.7 million. By revenue stream: Managed Information Technology revenue was $3.5 million; Procurement revenue was $1.2 million; Professional services revenue was $0.7 million; Subscription revenue was $0.3 million. For the 6 months ended June 30, 2025, revenue totaled $11.2 million. Managed Information Technology revenue was $7.1 million; Procurement revenue was $2.2 million; Professional services revenue was $1.4 million; Subscription revenue was $0.6 million.

• Aim to continue increasing top line consecutive growth and improve adjusted EBITDA, targeting adjusted EBITDA positive by early 2026.
• Expect to report third quarter and 9 months 2025 results in early to mid-November.

• Uncertainty around the exact amount of proceeds from patent litigation award, as it will reflect deduction of significant litigation-related expenses, including legal fees.

Q: Help us understand the $1.0 million in restricted cash. Are the funds prepayments by customers or tied to any specific obligations or covenants? Why is it classified as restricted cash?

A: It's a credit agreement with an affiliate of NewtekOne, Inc. providing a secured revolving line of credit collateralized by a CD in the amount of $1 million, so classified as restricted cash.

Q: Can you discuss which activity you might expect to generate the most traction for the remainder of the year?

A: Excited about the referral program in place, as word of mouth is an easy, cost-effective way to promote products and services.

Q: How should we think about growth and margin improvement over the next 6 to 12 months? What do you think provides the best way for an outsider to judge the company's progress?

A: Aim to continue increasing top line consecutive growth and improve adjusted EBITDA, with goal towards adjusted EBITDA positive by early 2026; outsider can judge by tracking consecutive top line growth and adjusted EBITDA progress.

Q: What effect, if any, could the current proposed tariff increases have on IPM's business?

A: Evaluated customer base and services, do not anticipate material impact on business in fiscal 2025; will stay on top of the issue and reassess as landscape changes.