Intelligent Protection Management (NASDAQ:IPM) reported higher first-quarter revenue as growth in managed IT services and procurement helped narrow its operating loss, while management highlighted opportunities in regulated industries and artificial intelligence-related services.
On the company’s conference call for the quarter ended March 31, 2026, Chief Executive Officer Jason Katz said IPM was “off to a good start in 2026,” citing total revenue growth of more than 15%. Revenue increased to $6.4 million from $5.5 million in the prior-year period, according to Chief Financial Officer Kara Jenny.
Managed IT and Procurement Drive Revenue Growth
Jenny said core managed information technology revenue, which includes managed IT security services and managed backup and disaster recovery solutions, totaled $3.4 million in the first quarter, up 19% from the same period in 2025. Procurement revenue rose 78.4% to $1.7 million.
Katz noted that procurement revenue can be uneven during the year because it depends on customers replacing existing hardware or buying new hardware tied to projects. He said those projects are often connected to customer budgets that are higher early in the calendar year.
Other revenue categories declined. Professional services revenue was $483,000, down 33.5% from the prior-year quarter, while subscription revenue was $254,000, down 9.7%.
Operating Loss Narrows, Net Loss Reflects Tax Benefit Comparison
IPM reported a loss from operations of $0.8 million for the quarter, compared with a $1.3 million operating loss a year earlier. Jenny said the 2026 operating loss included $0.5 million of non-cash expense, primarily amortization and depreciation, compared with $0.9 million of non-cash expense in the first quarter of 2025.
The company posted a net loss of $0.7 million, compared with net income of $0.8 million in the year-ago period. Jenny said net income in the prior-year quarter was attributable to an income tax benefit of approximately $2.1 million recorded in connection with transactions.
Katz said the year-over-year change from net income to net loss was “primarily driven by the absence of a non-recurring tax benefit recognized in the prior year period.” He also said adjusted EBITDA improved year over year by more than 65%, due to stronger revenue and operational efficiencies.
Adjusted EBITDA was negative $0.2 million for the first quarter, compared with negative $0.5 million at March 31, 2025.
Balance Sheet and Repurchase Update
As of March 31, IPM had $8.1 million in cash and cash equivalents, including $1.0 million of restricted cash, and no long-term debt. The company used $0.2 million of cash in operations during the first quarter, compared with $1.7 million of cash provided by operations in the same period last year.
Deferred revenue was $4.7 million at quarter-end, which Jenny said will be recognized in future quarters as products and services are installed.
During the first quarter, IPM repurchased the final 50,000 shares designated under its May 8, 2025 stock repurchase plan for $83,491. Jenny said that, as of March 31, all shares of common stock available for repurchase under the plan had been repurchased.
Management Highlights Regulated Markets and AI Partnerships
Katz said IPM is gaining traction in business development as it focuses on highly regulated businesses, particularly healthcare, legal, finance and banking markets, where management believes the company has competitive advantages.
In response to an investor-submitted question, President Jared Mills said IPM’s background as the technology division of a bank shaped its approach to regulated industries. He said the company’s managed security service provider and virtual chief information security officer offerings provide 24/7 security coverage with teams experienced in those environments.
Mills also pointed to the company’s secure managed private hosting capabilities, saying they give customers greater control around data privacy. He noted that IPM announced in January that it had achieved SOC 2 Type 1 compliance, which he called a milestone in safeguarding customer data and delivering cybersecurity and cloud infrastructure solutions.
Katz said the company is continuing to integrate its portfolio of IT solutions, including managed IT security services, secure private cloud hosting, managed backup and disaster recovery, professional services, web hosting and other managed services.
He also highlighted strategic partnerships intended to expand AI-related functionality. Katz said IPM is collaborating with third parties to integrate artificial intelligence and predictive analytics capabilities into its platform, enabling customers to use AI-driven insights within existing data environments.
The company also entered into a strategic partnership with MASORI Therapeutics during the quarter. Katz said the partnership is designed to support advanced AI by reducing costs, complexity and time for small and medium AI models, while enhancing automation and system integration capabilities.
Outlook Focuses on Execution and Strategic Opportunities
Looking ahead, Katz said IPM’s focus in the second half of the year will shift toward execution after evaluating AI technologies and partners earlier in the year. He said the company plans to expand its AI solutions through additional strategic partnerships and work with customers to adopt those tools, including through its AI data readiness service.
Katz said IPM is also continuing to enhance its core managed services and hosting platforms as customers’ technology needs grow more complex.
Asked about new versus existing customer contributions, Katz said IPM remains focused on adding new customers in regulated industries such as legal, finance, healthcare, manufacturing and energy. He said the company is also working to sell additional managed service and security-related solutions into its existing customer base, and that customer response in the first quarter contributed to managed services revenue growth.
In other first-quarter developments, Katz said IPM extended its Phoenix data center colocation license agreement with an industry-leading data center provider through August 2032. He also said the company will continue to explore strategic opportunities, including potential mergers or acquisitions of entities or assets that are synergistic with its business.
About Intelligent Protection Management (NASDAQ:IPM)
Intelligent Protection Management Corp. engages in the development of communications software to enhance security and privacy solutions for multimedia communication and data transmission. Its solutions include blockchain strategy consulting, blockchain implementation, white label video solutions, and technology licensing. The firm’s product portfolio includes Paltalk and Camfrog. The company was founded by Clifford Lerner and Darrell Lerner on July 19, 2005 and is headquartered in Jericho, NY.
