Professional Diversity Network(IPDN) - 2024 Q4 - Annual Results

Executive Summary Professional Diversity Network significantly reduced operating losses by 41% in 2024, improving segment performance and focusing on strategic growth and shareholder value Overall Performance and Strategic Initiatives Professional Diversity Network significantly reduced operating losses by 41% in 2024, improving segment performance and focusing on strategic growth and shareholder value - Total operating losses reduced by 41% from $4.4 million to $2.6 million in 2024[2] - TalentAlly experienced only a 5% revenue decline in 2024 despite industry declines of 10-27%, with an 84% reduction in net operating loss and a 10% increase in renewal rate[2] - RemoteMore's revenue declined by 25% but costs were reduced by 21%, with new products launched in Q1 2025[2] - NAPW reduced its net operating loss by 65% and aims to reach breakeven in 2025[2] Fourth Quarter Financial Highlights Fourth quarter 2024 saw a 14.5% consolidated revenue decline, alongside varied cost changes and an increased net loss, while cash balances improved significantly Revenue Performance (Q4 2024) Consolidated revenues for Q4 2024 decreased by 14.5% year-over-year, with declines across all segments including TalentAlly, NAPW, and RemoteMore Q4 2024 Revenue Performance by Segment (YoY) | Segment | Q4 2024 Revenue | Q4 2023 Revenue | Change (Dollars) | Change (Percent) | | :-------------------------------- | :-------------- | :-------------- | :--------------- | :--------------- | | TalentAlly Network (Recruitment services) | $1,002,000 | $1,233,000 | $(231,000) | (18.7)% | | NAPW Network (Membership fees) | $92,000 | $131,000 | $(39,000) | (29.8)% | | RemoteMore (Contracted software development) | $526,000 | $530,000 | $(4,000) | (0.8)% | | Total Consolidated Revenues | $1,620,000 | $1,894,000 | $(274,000) | (14.5)% | Costs and Expenses (Q4 2024) Cost of revenues decreased by 4.0% in Q4 2024, while general and administrative expenses increased by 23.3% and sales and marketing expenses decreased by 39.4% Q4 2024 Costs and Expenses (YoY) | Expense Category | Q4 2024 (in thousands) | Q4 2023 (in thousands) | Change (Dollars) | Change (Percent) | | :---------------------- | :--------------------- | :--------------------- | :--------------- | :--------------- | | Cost of revenues | $670 | $698 | $(28) | (4.0)% | | Sales and marketing | $516 | $851 | $(335) | (39.4)% | | General and administrative | $989 | $802 | $187 | 23.3% | | Depreciation and amortization | $41 | $195 | $(236) | (121.0)% | | Total pre-tax cost and expenses | $2,216 | $2,546 | $(330) | (13.0)% | Net Loss from Continuing Operations (Q4 2024) The net loss from continuing operations increased by 48.6% to approximately $780,000 in Q4 2024 compared to the prior year Q4 2024 Net Loss from Continuing Operations (YoY) | Metric | Q4 2024 (in thousands) | Q4 2023 (in thousands) | Change (Dollars) | Change (Percent) | | :------------------------------------ | :--------------------- | :--------------------- | :--------------- | :--------------- | | Net Loss from Continuing Operations | $(780) | $(525) | $(255) | 48.6% | Balance Sheet Highlights and Strategic Financial Activities (Q4 2024) Cash balances and working capital significantly improved in Q4 2024, supported by strategic financing activities and an increased stake in QBSG Limited Key Balance Sheet Metrics (as of Dec 31) | Metric | Dec 31, 2024 (approx.) | Dec 31, 2023 (approx.) | | :-------------- | :--------------------- | :--------------------- | | Cash balances | $1,731,000 | $628,000 | | Working capital | $271,000 | $(1,107,000) | - Entered a Stock Purchase Agreement in November 2024 for 140,000 shares and 110,000 pre-funded warrants at $8.00/$7.90, generating $1,989,000 gross proceeds[5] - Acquired an additional 6% entitlement in QBSG Limited for $1,200,000 (comprising $700,000 cash and $500,000 in common stock) in December 2024, increasing total entitlement to 15%[5] - Entered a Stock Purchase Agreement in December 2024 for 250,000 shares at $6.00 per share, generating $1.5 million gross proceeds, with an option for an additional 100,000 shares[5] Financial Results for the Year Ended December 31, 2024 Fiscal year 2024 saw a 12.6% revenue decline, but significant cost reductions led to a 40.8% decrease in net loss from continuing operations Revenue Performance (FY 2024) Total revenues for fiscal year 2024 decreased by 12.6% to approximately $6.731 million, with declines across TalentAlly, NAPW, and RemoteMore segments FY 2024 Revenue Performance by Segment (YoY) | Segment | FY 2024 Revenue | FY 2023 Revenue | Change (Dollars) | Change (Percent) | | :------------------------------------- | :-------------- | :-------------- | :--------------- | :--------------- | | TalentAlly Network (Recruitment services) | $4,472,000 | $4,731,000 | $(259,000) | (5.5)% | | NAPW Network (Membership fees) | $429,000 | $531,000 | $(102,000) | (19.2)% | | RemoteMore (Contracted software development) | $1,830,000 | $2,437,000 | $(607,000) | (24.9)% | | Total Revenues | $6,731,000 | $7,699,000 | $(968,000) | (12.6)% | Costs and Expenses (FY 2024) Cost of revenues decreased significantly by 23.5% in FY 2024, alongside substantial reductions in general and administrative, and sales and marketing expenses FY 2024 Costs and Expenses (YoY) | Expense Category | FY 2024 (in thousands) | FY 2023 (in thousands) | Change (Dollars) | Change (Percent) | | :---------------------- | :--------------------- | :--------------------- | :--------------- | :--------------- | | Cost of revenues | $2,646 | $3,461 | $(815) | (23.5)% | | Sales and marketing | $2,752 | $3,701 | $(949) | (25.6)% | | General and administrative | $3,534 | $4,452 | $(918) | (20.6)% | | Depreciation and amortization | $204 | $624 | $(420) | (67.3)% | | Total pre-tax cost and expenses | $9,136 | $12,238 | $(3,102) | (25.3)% | Net Loss from Continuing Operations (FY 2024) The net loss from continuing operations decreased significantly by 40.8% to approximately $2.595 million in FY 2024, reflecting improved financial performance FY 2024 Net Loss from Continuing Operations (YoY) | Metric | FY 2024 (in thousands) | FY 2023 (in thousands) | Change (Dollars) | Change (Percent) | | :------------------------------------ | :--------------------- | :--------------------- | :--------------- | :--------------- | | Net Loss from Continuing Operations | $(2,595) | $(4,386) | $1,791 | 40.8% | Summary Financial Statements The company's financial statements for 2024 show improved financial position, detailed operational results, and a positive shift in cash flows from continuing operations Summary of Financial Position As of December 31, 2024, total assets increased to $7.982 million, total liabilities decreased, and total stockholders' equity substantially increased Summary of Financial Position (in thousands) | Metric | December 31, 2024 | December 31, 2023 | | :---------------------------- | :---------------- | :---------------- | | Cash and cash equivalents | $1,731 | $628 | | Total current assets | $3,227 | $2,368 | | Total Assets | $7,982 | $6,327 | | Total current liabilities | $2,956 | $3,475 | | Total liabilities | $3,141 | $3,758 | | Total stockholders' equity | $5,322 | $3,048 | Summary of Financial Operations The summary of financial operations details revenue and expense breakdowns for both the full year and Q4 2024, showing overall revenue declines but reduced net loss for the full year Summary of Financial Operations - Year Ended December 31 (in thousands) | Category | 2024 | 2023 | Change (Dollars) | Change (Percent) | | :---------------------------- | :------ | :------ | :--------------- | :--------------- | | Revenues: | | | | | | Membership fees and related services | $429 | $531 | $(102) | (19.2)% | | Recruitment services | $4,434 | $4,640 | $(206) | (4.4)% | | Contracted software development | $1,830 | $2,437 | $(607) | (24.9)% | | Consumer advertising and marketing solutions | $38 | $91 | $(53) | (58.1)% | | Total revenues | $6,731| $7,699| $(968) | (12.6)% | | Cost and expenses: | | | | | | Cost of revenues | $2,646 | $3,461 | $(815) | (23.5)% | | Sales and marketing | $2,752 | $3,701 | $(949) | (25.6)% | | General and administrative | $3,534 | $4,452 | $(918) | (20.6)% | | Depreciation and amortization | $204 | $624 | $(420) | (67.3)% | | Total pre-tax cost and expenses: | $9,136| $12,238| $(3,102) | (25.3)% | | Loss from continuing operations, net of tax | $(2,595) | $(4,386) | $1,791 | 40.8% | | Basic and diluted loss per share (Continuing operations) | $(2.07) | $(4.27) | | | Summary of Financial Operations - Three Months Ended December 31 (in thousands) | Category | 2024 | 2023 | Change (Dollars) | Change (Percent) | | :---------------------------- | :------ | :------ | :--------------- | :--------------- | | Revenues: | | | | | | Membership fees and related services | $92 | $131 | $(39) | (29.8)% | | Recruitment services | $994 | $1,218 | $(224) | (18.4)% | | Contracted software development | $526 | $530 | $(4) | (0.8)% | | Consumer advertising and marketing solutions | $8 | $15 | $(7) | (46.7)% | | Total revenues | $1,620| $1,894| $(274) | (14.5)% | | Cost and expenses: | | | | | | Cost of revenues | $670 | $698 | $(28) | (4.0)% | | Sales and marketing | $516 | $851 | $(335) | (39.4)% | | General and administrative | $989 | $802 | $187 | 23.3% | | Depreciation and amortization | $41 | $195 | $(236) | (121.0)% | | Total pre-tax cost and expenses: | $2,216| $2,546| $(330) | (13.0)% | | Loss from continuing operations, net of tax | $(780) | $(525) | $(255) | 48.6% | | Basic and diluted loss per share (Continuing operations) | $(0.55) | $(0.47) | | | Summary of Cash Flows from Continuing Operations In 2024, the company experienced a net increase in cash and cash equivalents from continuing operations of $1.104 million, a significant improvement driven by financing activities Summary of Cash Flows from Continuing Operations (in thousands) | Cash Flow Category | 2024 | 2023 | | :------------------------------------------------ | :------ | :------ | | Operating activities | $(2,501)| $(3,009)| | Investing activities | $(963) | $(947) | | Financing activities | $4,568 | $3,364 | | Net increase in cash and cash equivalents from continuing operations | $1,104 | $(592) | Non-GAAP Financial Measures Non-GAAP financial measures, specifically Adjusted EBITDA, are presented to offer a clearer view of the company's underlying operating performance Adjusted EBITDA Reconciliation Adjusted EBITDA, a non-GAAP measure, improved for FY 2024 to a loss of $1.942 million, providing a clearer view of operating performance - Adjusted EBITDA is used to measure operating performance and provides additional meaningful comparisons between current and prior period results[17] Adjusted EBITDA Reconciliation (in thousands) | Metric | Q4 2024 | Q4 2023 | FY 2024 | FY 2023 | | :---------------------------- | :------ | :------ | :------ | :------ | | Loss from Continuing Operations | $(781) | $(525) | $(2,595)| $(4,386)| | Stock-based compensation | $37 | $38 | $175 | $300 | | Loss attributable to noncontrolling interest | $19 | $12 | $84 | $103 | | Depreciation and amortization | $41 | $195 | $204 | $624 | | Other (expense) income, net | $185 | $(4) | $184 | $(13) | | Income tax expense (benefit) | $- | $(122) | $6 | $(139) | | Adjusted EBITDA | $(499)| $(406)| $(1,942)| $(3,511)| About Professional Diversity Network Professional Diversity Network is a global operator of online and in-person networks dedicated to providing diverse professionals with networking, training, and employment opportunities Company Profile and Mission Professional Diversity Network (IPDN) operates global online and in-person networks, including NAPW and IAW, to empower diverse professionals and assist employers with talent acquisition and compliance - Professional Diversity Network (IPDN) operates online and in-person networks for diverse professionals, offering networking, training, education, and employment opportunities[21] - Key subsidiaries include National Association of Professional Women (NAPW) and International Association of Women (IAW), recognized networking organizations for professional women[21] - The company's mission is to set the standard in business diversity recruiting, networking, and professional development for various diverse groups globally, aiding employers in acquiring diverse talent and complying with OFCCP[21] Forward-Looking Statements This section provides a disclaimer regarding forward-looking statements, highlighting inherent risks and uncertainties that may cause actual results to differ materially Disclaimer and Risk Factors This press release contains forward-looking statements subject to risks and uncertainties, with actual results potentially differing materially as disclosed in SEC filings - The press release contains forward-looking statements subject to risks and uncertainties, and actual results may differ materially[22] - Risk factors are disclosed in the company's most recently filed Annual Report on Form 10-K and subsequent SEC filings[22] - The company assumes no obligation to update the information in the press release[22]