Paradium AI (PAAI) Q3 2026 Earnings Call Transcript

DATE

Mon., Nov. 9, 2026

CALL PARTICIPANTS

• Investor Relations and Social Media - Morgan Fitzgerald
• Chief Executive Officer - Paul Taylor Edmondson
• Principal Financial Officer - Geoffrey Wait

TAKEAWAYS

• Revenue -- $20.5 million, a 31.2% decline from $29.8 million, reflecting lower referral traffic from sources such as Google Discover.
• Net Loss -- $3.8 million, compared to net income of $6.9 million, driven by reduced advertising revenue and one-off tax credit adjustments.
• Adjusted EBITDA -- $2.4 million, down from $11.9 million, resulting in an adjusted EBITDA margin of 11.7%.
• Gross Margin -- 31.7%, compared to 50.0%, due to margin compression as platform costs remained largely fixed despite lower top-line revenue.
• Cash Position -- $10.1 million as of Sept. 30, 2026, maintained at levels consistent with the end of 2025.
• Blended RPM -- 99 in September 2026, representing a 15% month-over-month increase following monetization experiments conducted earlier in the year.
• Article Production -- Increased 15% over Q2 2026, with volume expanding sequentially each month during the third quarter.
• Evergreen Content Performance -- Updated articles generated approximately 50% more pageviews within three weeks of being revised in the company CMS.
• Content Review Volume -- Words reviewed and edited per update more than doubled following an upgrade to the CMS in October.
• Agentic Buying Efficiency -- Campaign trafficking time was reduced by up to 78%, dropping from a manual range of 2 to 3 business days to 5 hours and 37 minutes.
• Tax Credit Reversal -- $1.3 million negative impact resulting from a disallowed employee retention tax credit asset.
• Incentive Compensation -- $1.0 million expense related to the timing of annual incentive compensation recognition.
• Term Debt -- $96.4 million as of quarter end, with the company noting that operations continue to cover debt service requirements.
• Current Liabilities -- Totaled $13.6 million, including $1.0 million for the current portion of term debt.
• Operating Loss -- $930,000, compared to operating income of $9.5 million in the prior-year period.
• Selling and Marketing Expenses -- $2.2 million, up from $1.3 million, as the company scaled AI-driven initiatives.
• General and Administrative Expenses -- $4.3 million, up from $3.2 million, impacted by compensation timing.
• Interest Expense -- $2.5 million for the quarter, compared to $2.9 million.
• Liquidated Damages Payable -- $3.8 million, relating to registration rights agreements from prior private placement offerings.
• Total Assets -- $102.7 million as of Sept. 30, 2026, down from $112.6 million at the end of 2025.

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RISKS

• Wait stated, "We have not seen any material recovery of traffic and it continues to be a volatile and challenging referral traffic environment that we are facing here," regarding distribution headwinds.
• Wait noted the quarterly loss included a "reversal of an employee retention tax credit asset in the amount of $1.3 million that was disallowed," which the company plans to appeal.

SUMMARY

Paradium AI, Inc. (NYSEMKT:PAAI) reported a 31.2% year-over-year revenue decline, which management attributed to a volatile distribution environment and reduced referral traffic from platforms such as Google Discover. The company stated it is transitioning from a traditional publishing model to a diversified technology platform focused on AI-powered content creation and SaaS-based revenue streams. Management indicated that this shift is intended to reduce reliance on third-party traffic sources while improving operational efficiency through proprietary tools. During the quarter, the company implemented monetization experiments and expanded its AI capabilities through the acquisition of InfoSentience and the launch of Cutter Studios.

• CEO Edmondson stated, "Cutter Studios has gone from a concept to producing hundreds of pieces of content in roughly 4 months."
• Management reported that the volume of words reviewed and edited per update more than doubled following an October upgrade to the company CMS.
• PFO Wait indicated that an August extension of the debt facility maturity provides adequate runway for the company to execute its strategic transition.
• The company announced a collaboration with Cesar Millan and Xcel Brands for a retail launch targeted for 2027.
• Management plans to launch an alpha version of Tabulation, an enterprise-focused AI task management system, in the fourth quarter.
• The company reported that updated evergreen articles generate roughly 50% more pageviews within three weeks of revision.

INDUSTRY GLOSSARY

• RPM: Revenue per thousand pageviews, a metric used to measure the efficiency of advertising monetization.
• CMS: Content Management System, the software platform used to create and manage digital content.
• Adjusted EBITDA: A non-GAAP financial measure that excludes interest, taxes, depreciation, and amortization, along with certain non-cash or one-time items.
• Agentic Buying: An automated advertising strategy that uses AI agents to tailor campaigns to specific brand audiences and environments.
• Google Discover: A mobile feed used by Google to deliver personalized content to users, serving as a primary traffic source for publishers.
• Cutter Studios: An AI-powered technology used to convert long-form content into shoppable videos and articles.
• InfoSentience: An AI technology acquired by the company to automate and scale content production.
• Tabulation: An AI task management system designed for editorial, development, and content management workflows.

Full Conference Call Transcript

Operator: Good afternoon, ladies and gentlemen, and thank you for joining us today. Welcome to Parade Technologies, Inc.'s Third Quarter 2026 Earnings Conference Call. I would now like to turn the conference over to Morgan Fitzgerald, Investor Relations and Social Media. Ms. Fitzgerald, you may begin the conference.

Morgan Fitzgerald: Thank you, and good afternoon. Hosting the call today are Paul Taylor Edmondson, Chief Executive Officer and Geoffrey Wait, Principal Financial Officer. Before we begin, I would like to note that some of the comments made during this call may include forward-looking statements. All statements other than statements of historical fact are statements that could be deemed forward-looking statements.

Forward-looking statements relate to the future events or future performance and include, without limitation, statements concerning the company's business strategy, including our artificial intelligence strategy, and the anticipated benefits of our rebranding as Pareteum AI, future revenues, and income from continuing operations, anticipated audience reach, yield growth, and monetization improvements, cost reductions, market growth, liquidity, capital requirements, product introductions, and technological capabilities, search engine optimization, and expansion plans. As disclosed in our annual report on Form 10-K for the year ended 12/31/2025, filed with the SEC on March 16, 2026. The 2025 Form 10-K, And in our other SEC filings and publicly available documents.

The company cautions investors that any forward-looking statements made in this call or that the company may make orally or in writing from time to time are based on the beliefs and assumptions made by and information currently available to the company. Such statements are based on assumptions, and the actual outcome will be affected by known and unknown trends, uncertainties, and factors that are beyond the company's control or ability to predict. Accordingly, investors should use caution in relying on forward-looking statements, which are based only on known results and trends at the time they are made, to anticipate future results or trends. Certain risks are discussed in the company's filings with the SEC.

The company disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements whether because of new information, future events or otherwise. In addition, reference will be made to the non-GAAP financial measure, adjusted EBITDA. Information regarding reconciliation of this non-GAAP measure to the closest GAAP measure, can be found in the press release that was issued this afternoon and can also be found on the Investor Relations page of our website at investors.parade.com. With that, I will turn it over to CEO, Paul Taylor Edmondson.

Paul Taylor Edmondson: Thank you for joining us today. To discuss our Q3 2026 results. This quarterly call marks our first as Parade Technologies, Inc. and signifies a new era for our business, While the publishing industry as a whole continues to endure 1 of the most volatile and rapidly changing traffic environments that I have seen through my 20 plus years in the industry. We have been focused on executing and creating across the company. And applying AI across our teams, products, and workflows.

Last quarter, we announced the acquisition of InfoSentience, along with the launch of Cutter Studios, These AI technologies as well as Encore, our proprietary data and monetization engine, have been catalysts for continued innovation including a new AI task management product we will be launching in Q4. More on that in a moment. Cutter Studios has gone from a concept to producing hundreds of pieces of content in roughly 4 months. This capability continues to show steady progress. Our team is working hard to fine tune the technology's capabilities, and we anticipate it along with InfoSentience will grow significantly throughout Q4.

Our brand licensing team also continues to make strides We recently announced the launch of collaboration between PetHelpful and Trust Respect Love, by Cesar Milan. This co brand combines the credibility of celebrity experts Cesar Milan and the backing of Xcel Brands. With the audience engine of PetHelpful, Parade, and Millan's personal platforms, We are thrilled by this opportunity to extend PetHelpful off the page and into tangible experiences for audiences to connect with. Cutter Studios, will also be used to drive reach, by turning long form content into engaging, shoppable videos and articles. This co brand is targeted for 2027 retail launch, and we are excited to update you along the way.

The through line of all this is our continuing commitment to reducing our dependency on referral traffic and capitalizing on the opportunity that AI creates for improving efficiencies and developing products. We are innovating across the organization. We are improving monetization. Increasing content output, expanding avenues for revenue as we move through the remainder of the year. Now I will pass it to Jeff to share the financial results for the quarter.

Geoffrey Wait: Thanks, Paul, and good afternoon, everyone. Revenue for Q3 2026 was $20.5 million down 31% compared to $29.8 million in Q3 2025. We reported a GAAP net loss of $3.8 million in Q3 2026 compared to net income of $6.9 million in the same period a year ago. These results were impacted by the reversal of an employee retention tax credit asset in the amount of $1.3 million that was disallowed a decision we plan to appeal. These results were also impacted by the timing of recognition of annual incentive compensation expenses of $1 million Adjusted EBITDA was $2.4 million in Q3 2026, versus $11.9 million in Q3 2025. As a reminder, adjusted EBITDA is a non-GAAP measure.

A reconciliation of this non-GAAP measure to the closest GAAP measure, can be found in the press release that was issued this afternoon and can also be found on our Investor Relations website at investors.parade.com. Our cash position remains steady at $10 million at quarter end, consistent with year end 2025 levels. We believe the August extension of the maturity for our debt facility provides adequate runway to execute our strategic transition. Baseline operations continue to cover our debt service requirements, and we greatly value the continued partnership with our lender as we scale our new products. Our AI initiatives are generating early positive momentum.

As we shared in our Q1 and Q2 earnings calls, we deliberately implemented monetization experiments earlier this year and the findings from those experiments yielded results in September. With blended RPM rising 15% month over month to 99. Further, content production expanded sequentially each month during the third quarter. up 15% over Q2 2026. This growth was fueled by the rollout of InfoSentience and Cutter Studios. Our priority is to aggressively scale these new AI driven products. Now I will turn the call back over to Paul for a strategic update.

Paul Taylor Edmondson: Thanks, Jeff. Moving into Q4, we are continuing to accelerate our AI vision specifically outlined in our transition to Pareteum AI, and away from a publishing only company. The Pareteum vision focused on empowering creators and media entrepreneurs and creating efficiencies within traditional publishing workflows has already begun to take root with actionable products developed. As we roll out Cutter Studios and InfoSentience, with more products in the pipeline, we are evolving beyond our roots as a traditional media company and engineering something fundamentally bigger. We are building a diversified platform with the ability to create value across a much broader range of markets.

Including SaaS, subscriptions, ecommerce, and b to b services that will change how we build and grow our business. By developing our own products and commercial relationships, we can reduce our reliance on third party referral traffic, while creating new, more sustainable revenue opportunities. In October, we upgraded our CMS with purpose built AI tools for content creation, editing, and management. In the months following launch, the volume of words reviewed and edited per update more than doubled. Reflecting deeper, more substantive refreshes to evergreen content. These updated articles are generating roughly 50% more pageviews within 3 weeks of being revised. Our newest product, Tabulation, is an AI task management system. Built for development and content management.

Tabulation's initial use case was to streamline content management for our editorial teams. But we recognize that it is much more broadly applicable than that. And can be used across sales, development, and much more. This is our first application that is geared toward enterprise, we expect to launch the alpha version in Q4. We continue our efforts to optimize traffic levels, we are expanding for the future. The ecosystem as a whole continues to evolve as a rapid pace with AI, and we intend to get ahead of what is next for creators and publishers. This quarter did not come without challenges.

But the energy and determination of our team and the groundwork that we have been building coming together, with improvements in our monetization, Infosynthience, and Cutter Studios beginning to take off and Tabulation's launch on the horizon, we are excited to report back with continued updates on our initiatives and progress in our evolution as Pareteum AI. Thank you all for your continued interest in Pareteum. And for your time today. I will turn it back to the operator now to begin the Q and A session.

Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press 1 on your telephone keypad. Before pressing the star keys. 1 moment please while we poll for questions. Our first question is from Ryan Meyers with Lake Street Capital. Please proceed with your question.

Ryan Mayers: Hey, guys. Thanks for taking my questions. First 1 for me, if we think about the sequential gross margin decline, can you just remind us what the factors of that were? How much of that was just fixed as it relates to lower traffic that is the lower margin came in versus how much of that was just other items.

Geoffrey Wait: Hey, Ryan. Thanks for the question. So a couple of things that I do wanna make mention of. As I said on the call, we did have 1 off items that impacted the quarter. 1 was the write off of a tax credit asset that was disallowed, which we plan to appeal. And the other was some out of period compensation expenses that we recognized The total impact of those was $2.3 million Aside from that, we did see some margin compression with our declining ad revenue as well. So it is a combination of both of those 2 factors that kind of leads us to the margin profile. Of the third quarter.

Ryan Mayers: Okay. And then using that, you know, if we think about what you guys have seen so far early on in the fourth quarter, have you seen margins rebound a little bit? And then maybe just also just an update on traffic, if you have seen that sort of stabilize and, you know, coincidentally, what that margin impact will look like here in the fourth quarter.

Geoffrey Wait: I would expect the margin profile in the fourth quarter to show a small bit of improvement as we will have improved monetization in the fourth quarter compared to the third. But we have not seen any material recovery of traffic and it continues to be a volatile and challenging referral traffic environment that we are facing here. So we have continued headwinds. But we are aggressively scaling our new products, Cutter and InfoSentience, our goal. Is to have both of those products contributing materially by the end of the year. Okay. Got it. Good to know.

Ryan Mayers: Thanks for taking my question.

Operator: Once again, we have reached the end of the question and answer session. I would like to turn the floor back over to Paul Edmonson for closing comments.

Paul Taylor Edmondson: Thank you for joining our call today. And that concludes our call. Thank you.

Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

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