Intelligent Protection Management (NASDAQ:IPM) reported a 75.5% increase in third-quarter revenue, driven by a surge in procurement sales, while narrowing its quarterly loss and posting positive adjusted EBITDA.
Revenue for the quarter ended September 30, 2026, rose to $10.95 million from $6.2 million a year earlier. Procurement revenue increased 271% to $6.3 million as customers invested in infrastructure, including AI-related equipment, Chief Financial Officer Kara Jenny said. The quarter also included fulfillment of a significant customer order previously discussed in the company’s second-quarter update.
Chairman and Chief Executive Officer Jason Katz said procurement generally carries lower gross margins than the company’s managed services, cybersecurity and cloud infrastructure offerings, so profitability did not rise as quickly as revenue. He said procurement can create opportunities to sell ongoing services, although conversion is not automatic.
Managed Services Growth and Quarterly Results
Managed IT revenue increased 1.8% to $3.9 million in the third quarter. Within that category, core managed IT revenue from non-affiliated customers rose 33%. The company defines that measure as revenue from managed IT security services and managed backup and disaster recovery solutions provided to those customers.
President Jared Mills said the core growth came from new managed IT customers and from selling more services to existing customers. He said the company had seen traction earlier in the year in legal and finance, along with a pipeline across healthcare, energy, private equity, manufacturing and retail.
Professional services revenue rose 14.5% to $545,000, while subscription revenue fell 10.4% to $244,000, Jenny said.
The operating loss narrowed to $886,000 from $1.4 million a year earlier. The latest quarter included approximately $195,000 in expenses related to the planned AdTech acquisition. Net loss narrowed to $779,000 from $1.1 million.
Adjusted EBITDA, a non-GAAP measure, was positive $159,000, compared with negative $260,000 in the prior-year quarter. Katz said the company’s goal is to achieve positive adjusted EBITDA again in the fourth quarter.
Cash Flow and Nine-Month Performance
Third-quarter operating cash flow was $5.6 million, up from $133,000 a year earlier, primarily reflecting product sourcing tied to procurement activity, Jenny said. Deferred revenue totaled $4.9 million at quarter end and is expected to be recognized in future quarters as products and services are installed.
For the first nine months of 2026, revenue rose 36% to $23.8 million. Procurement revenue grew 158% to $10 million, while managed IT revenue increased 6.7% to $11.6 million.
The nine-month operating loss improved 19% to $3.2 million, but the net loss widened to $2.8 million from $1.3 million. Adjusted EBITDA improved to negative $536,000 from negative $1.1 million.
IPM ended September with $12.5 million in cash and cash equivalents, up from $7.5 million at June 30, and had no long-term debt, Jenny said.
Acquisition and Expansion Plans
After the quarter ended, IPM entered an agreement in October to acquire AdTech IT LLC, a subsidiary of Advanced Technology Distributors, through a two-step closing process. Katz described AdTech as a longstanding managed services business with recurring revenue, established customer relationships and a strong California presence.
Katz said the pending acquisition could give IPM opportunities to offer security, private cloud, backup, professional services and procurement to AdTech customers after the final closing. He cautioned that the company’s broader effort to turn infrastructure projects into recurring relationships depends on customer demand and execution.
Among other developments during the year, IPM launched its private-cloud-hosted AI assistant, IPM GO; added a sales territory covering the Phoenix metropolitan area and broader West Coast; and extended its Phoenix data center co-location agreement through August 2032, Katz said.
The company also repurchased 50,000 shares for an aggregate $83,491 during the first quarter. All shares available under the repurchase plan had been bought back as of September 30, and the plan has expired, Katz said.
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.
