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Intelligent Protection Management (IPM) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Information Technology· Aug 11, 2026

Source: earnings call transcript

Executive summary

Intelligent Protection Management Corp. Q2 FY26 — Supply Chain Delays Impact Revenue Recognition Amidst Strong Demand

Intelligent Protection Management Corp. reported solid top-line growth in Q2 FY26, driven by strong demand for managed IT and AI-related procurement, despite supply chain constraints delaying revenue recognition. The company is strategically evolving towards higher-value enterprise infrastructure, focusing on recurring managed services, cybersecurity, and cloud. While profitability was impacted by an unusual margin event and related-party revenue decline, IPM maintains a strong balance sheet and aims for positive adjusted EBITDA by Q4 FY26.

Highlights

5

  • Total revenue increased by 13% to $6.5 million in Q2 FY26, driven by new customers and expanded services.

  • Managed IT revenue grew more than 8% year-over-year, forming the foundation of recurring revenue.

  • Procurement revenue increased 64% in Q2 FY26 and 70% in H1 FY26, primarily from AI-related equipment sales.

  • Deferred revenue increased by $0.6 million to $4.5 million as of June 30, 2026, indicating strong bookings.

  • Ended the quarter with $7.5 million in cash and no long-term debt, providing financial flexibility.

Concerns

5

  • Net loss for Q2 FY26 totaled $1.4 million, compared to $1.1 million in Q2 FY25.

  • Adjusted EBITDA for Q2 FY26 was negative $0.6 million, compared to negative $0.4 million in Q2 FY25.

  • A significant customer order resulted in a loss due to higher component and freight costs, impacting Q2 FY26 margins.

  • Professional services revenue decreased 47.3% in Q2 FY26 due to customer timing and resource constraints.

  • Revenue from related party NewtekOne decreased due to their IT spending reduction initiatives.

Guidance & targets

CategoryTargetConfidence
Adjusted EBITDA
positive
high materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Managed IT Technology
Revenue from managed IT security services, backup/disaster solutions, and web hosting. Grew more than 8% year-over-year. The stated increase of $8.4 million from Q2 2025 is an ASR error.
Q2 FY26 Revenue: $3.8 millionQ2 FY26 YoY Growth: >8%
$3.8 million>8%——
Procurement
Revenue related to the sale of AI-related equipment to customers. Impacted by supply chain constraints and an unusual margin event on one large order.
Q2 FY26 Revenue: $2 millionQ2 FY26 YoY Growth: 64%
$2 million64%——
Professional Services
Decline attributed to customer timing and resource constraints, not structural issues. Bookings are strong, and timing issues are expected to ease.
Q2 FY26 Revenue: $363,000Q2 FY26 YoY Decrease: 47.3%
$363,000-47.3%——
Subscription
Experienced a decrease in revenue.
Q2 FY26 Revenue: $249,000Q2 FY26 YoY Decrease: 10.5%
$249,000-10.5%——

Orderbook & backlog

Deferred revenue $4.5 million June 30, 2026

increase of $0.6 million or $600,000 over December 31, 2025

Will be recognized as revenue in future quarters as products and/or services are installed.

Booked orders significant Q2 FY26

A portion remained unrecognized as revenue due to supply chain constraints, expected to be recognized in future quarters.

Deals & partnerships

Phoenix data center Extension of data center agreement through 2032

Extended agreement for the Tier 3 certified data center, providing 100% uptime guarantee. Supports steady customer growth in private cloud, dedicated private cloud, private cloud AI, and managed backup/DR segments.

Risks & headwinds

Supply chain constraints Q2 FY26, ongoing into Q3

Delayed revenue recognition for booked orders; higher component and freight costs on one large customer order resulting in a loss.

Mitigation:Broadening supplier ecosystem, expanding relationships with distributors and manufacturers, improving procurement flexibility.

Unusual margin impact from large customer order Q2 FY26 (isolated operational event)

Combined order resulted in a loss, negatively impacted Q2 FY26 results.

Mitigation:Viewed as isolated, not a structural change; actions taken to diversify suppliers should help prevent recurrence.

Decrease in revenue from related party NewtekOne Q2 FY26, potentially ongoing

Revenue decreased for the quarter.

Mitigation:NewtekOne is one piece of the business; IPM is growing overall business with other clients and expanding service contracts.

Decline in professional services revenue Q2 FY26, expected to ease after summer months

Decreased 47.3% from Q2 FY25.

Mitigation:Bookings are strong; issue is timing-related due to customer and resource constraints; significant pipeline.

What to watch in Q3 FY26

Adjusted EBITDA

Q4 FY26
Current negative $0.6 million (Q2 FY26)
Target positive

Why it matters

Achieving positive adjusted EBITDA is a key financial goal for the company and indicates improving operational efficiency and profitability.

Based on our current outlook and the execution plan we laid out at the start of the year, our goal remains to be positive adjusted EBITDA for the fourth quarter.

Find out whether IPM delivers this. Inve re-checks your case every morning.

Q&A highlights

Can you provide more detail on the types of customers driving growth and traction in highly regulated industries like legal and healthcare?

IPM is leveraging existing customer relationships and case studies to acquire new clients in highly regulated industries. They saw specific success in legal and finance during the quarter and have a strong pipeline in healthcare, energy, private equity, manufacturing, and retail.

“We are continuing our successful efforts of leveraging a customer we have to acquire customers. With our strength in highly regulated industries and our current reporter of customers, we've leveraged customer case studies and referrals to go after additional accounts in each vertical area.”

asked by Joe Diaz · answered by Jared Mills

2 min read 6 chapters

Detailed narrative

Evolution to High-Value Enterprise Infrastructure

IPM is transitioning to a higher-value enterprise infrastructure company, focusing on recurring managed services, enterprise cybersecurity, and cloud infrastructure. This strategy addresses the critical technology priorities of cybersecurity, cloud migration, and AI integration, positioning the company for long-term growth. The company operates at the intersection of these three transformational technology priorities.

Impact of Supply Chain Constraints

The quarter's results were affected by temporary supply chain disruptions, particularly for memory, CPU, and GPU components, which delayed revenue recognition for booked orders. A large customer order also incurred higher costs due to these constraints, resulting in a loss on that portion and impacting Q2 margins. Management has responded by diversifying suppliers and expanding relationships to mitigate future risks and ensure fulfillment of pipeline revenues.

Strategic Growth Drivers

The company emphasizes that its managed IT business, which grew over 8% year-over-year, generates predictable cash flows and opportunities for wallet share expansion. Procurement revenue, up 64% in Q2, serves as an entry point for long-term managed service relationships, as infrastructure deployments frequently become tomorrow's recurring revenue customer, requiring ongoing cybersecurity and IT support.

Financial Flexibility and Capital Allocation

IPM ended Q2 with $7.5 million in cash and no long-term debt, providing significant financial flexibility. Capital allocation priorities include investing in initiatives that expand recurring revenue and increase customer lifetime value, pursuing strategic acquisitions to strengthen technology platforms, and maintaining a conservative balance sheet. The company views itself as a potential consolidator in the fragmented managed services market.

Highly Regulated Industry Focus

IPM is leveraging its expertise and customer base in highly regulated industries like legal and finance to acquire new accounts. The company reported specific success in these sectors during the quarter and has a strong pipeline in healthcare, energy, private equity, manufacturing, and retail, indicating a targeted growth strategy. This approach utilizes customer case studies and referrals to expand its reach.

Phoenix Data Center Capacity

The Phoenix data center agreement, extended through 2032, provides significant Tier 3 certified capacity with a 100% uptime guarantee. IPM has negotiated a heavily discounted rate and is seeing steady customer growth in private cloud, dedicated private cloud, private cloud AI, and managed backup and DR segments. The company leverages hyperconverged assets to maximize power and space utilization for future client onboardings.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.