Professional Diversity Network(IPDN) - 2025 Q2 - Quarterly Results

Executive Summary Q2 2025 Performance Highlights H1 2025 net loss per share decreased 49% to $0.62; Q2 revenues declined 2.9% due to recruitment slowdown, offset by software development growth - Net loss per share for the six months ended June 30, 2025, was approximately $0.62, a reduction of approximately 49% compared to the same period in the prior year[7] - The consolidated net loss from continuing operations for the six months ended June 30, 2025, decreased approximately $160,000 or 11.5%, compared to the same period in the prior year[7] Total Revenues (Three Months Ended June 30) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (Dollars) | Change (Percent) | | :---------------- | :--------------------- | :--------------------- | :--------------- | :--------------- | | Total revenues | $1,641 | $1,690 | $(49) | (2.9)% | Management Commentary & Strategic Focus CEO Xun Wu outlined a strategy for AI integration and revenue diversification; CFO Bella Gu emphasized cost control and new product investment - CEO Xun Wu stated the company will focus on advancing the transformation of its platform's technological infrastructure through AI integration and strategic revenue diversification[2] - CFO Bella Gu noted effective cost control through streamlined operations and a future focus on operational automation to enhance efficiency[2] - The company is investing in new product development to drive revenue growth[2] Financial Results Overview Three Months Ended June 30, 2025 Q2 2025 revenues declined 2.9% to $1.64 million, with recruitment down and software development up, leading to a 16.0% improvement in net loss Revenue Breakdown Revenues (Three Months Ended June 30) | Revenue Category | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (Dollars) | Change (Percent) | | :-------------------------------- | :--------------------- | :--------------------- | :--------------- | :--------------- | | Membership fees and related services | $86 | $109 | $(23) | (21.1)% | | Recruitment services | $881 | $1,145 | $(264) | (23.1)% | | Contracted software development | $668 | $429 | $239 | 55.7% | | Consumer advertising and marketing solutions | $6 | $7 | $(1) | (14.3)% | | Total revenues | $1,641 | $1,690 | $(49) | (2.9)% | - The decrease in recruitment services was predominantly driven by a slowdown in corporate spending on diversity, equity, and inclusion ("DEI") initiatives, influenced by a shifting political and legal landscape[3] - RemoteMore revenue increased by 55.7% due to increased demand for qualified, remote software developers and focused sales and marketing efforts[6] Costs and Expenses Costs and Expenses (Three Months Ended June 30) | Expense Category | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (Dollars) | Change (Percent) | | :---------------------- | :--------------------- | :--------------------- | :--------------- | :--------------- | | Cost of revenues | $929 | $626 | $303 | 48.4% | | Sales and marketing | $494 | $772 | $(278) | (36.0)% | | General and administrative | $674 | $819 | $(145) | (17.7)% | | Depreciation and amortization | $41 | $55 | $(14) | (25.5)% | | Total pre-tax cost and expenses | $2,138 | $2,272 | $(134) | (5.9)% | - The increase in cost of revenues was predominantly due to a $232,000 increase in RemoteMore's contract costs, directly correlated with the segment's significant revenue growth[8] - Sales and marketing expense decreased due to reduced payroll, commission-related costs, and marketing consulting/software costs[9] Net Loss from Continuing Operations Net Loss from Continuing Operations (Three Months Ended June 30) | Metric | Q2 2025 | Q2 2024 | Change (Dollars) | Change (Percent) | | :------------------------------------------ | :------ | :------ | :--------------- | :--------------- | | Consolidated net loss from continuing operations, net of tax | $(492) | $(586) | $94 | 16.0% | | Basic and diluted loss per share | $(0.23) | $(0.50) | | | Six Months Ended June 30, 2025 H1 2025 revenues declined 7.9% to $3.15 million, with recruitment down and software development up, leading to an 11.5% reduction in net loss Revenue Breakdown Revenues (Six Months Ended June 30) | Revenue Category | YTD 2025 (in thousands) | YTD 2024 (in thousands) | Change (Dollars) | Change (Percent) | | :-------------------------------- | :---------------------- | :---------------------- | :--------------- | :--------------- | | Membership fees and related services | $182 | $236 | $(54) | (22.9)% | | Recruitment services | $1,797 | $2,249 | $(452) | (20.1)% | | Contracted software development | $1,156 | $914 | $242 | 26.5% | | Consumer advertising and marketing solutions | $11 | $18 | $(7) | (38.9)% | | Total revenues | $3,146 | $3,417 | $(271) | (7.9)% | Costs and Expenses Costs and Expenses (Six Months Ended June 30) | Expense Category | YTD 2025 (in thousands) | YTD 2024 (in thousands) | Change (Dollars) | Change (Percent) | | :---------------------- | :---------------------- | :---------------------- | :--------------- | :--------------- | | Cost of revenues | $1,648 | $1,279 | $369 | 28.9% | | Sales and marketing | $1,065 | $1,602 | $(537) | (33.5)% | | General and administrative | $1,553 | $1,814 | $(261) | (14.4)% | | Depreciation and amortization | $82 | $107 | $(25) | (23.4)% | | Total pre-tax cost and expenses | $4,348 | $4,802 | $(454) | (9.5)% | Net Loss from Continuing Operations Net Loss from Continuing Operations (Six Months Ended June 30) | Metric | YTD 2025 | YTD 2024 | Change (Dollars) | Change (Percent) | | :------------------------------------------ | :------- | :------- | :--------------- | :--------------- | | Consolidated net loss from continuing operations, net of tax | $(1,233) | $(1,393) | $160 | 11.5% | | Basic and diluted loss per share | $(0.62) | $(1.21) | | | Consolidated Financial Statements Summary of Financial Position (Balance Sheet) Total assets decreased to $7.33 million from $7.98 million at year-end 2024, driven by reduced cash; liabilities increased, and equity declined Summary of Financial Position (in thousands) | Balance Sheet Item | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :---------------- | | Cash and cash equivalents | $125 | $1,731 | | Other current assets | $1,310 | $1,496 | | Total current assets | $1,435 | $3,227 | | Long-term assets | $5,896 | $4,755 | | Total Assets | $7,331 | $7,982 | | Total current liabilities | $3,354 | $2,956 | | Total long-term liabilities | $135 | $185 | | Total liabilities | $3,489 | $3,141 | | Total stockholders' equity | $4,475 | $5,322 | | Total stockholders' equity – non