Paradium.AI Q3 2026 Earnings Call Transcript

Paradium.AI (AMEX:PAAI) reported third-quarter financial results on Monday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

Paradium.AI reported Q3 2026 revenue of $20.5 million, a decrease of 31% from $29.8 million in Q3 2025, with a GAAP net loss of $3.8 million compared to a net income of $6.9 million in the same quarter last year.

The company is focusing on AI-driven initiatives, including Tutor Studios and Info Sentience, which have led to a 15% increase in blended RPM and a 15% increase in content production over Q2 2026.

Strategic moves include the launch of a new AI task management product called Tablation, aimed at enterprise use, and a co-branding collaboration involving PetHelpful and Cesar Millan, targeted for a 2027 retail launch.

Paradigm shift to AI is aimed at reducing dependency on referral traffic and creating sustainable revenue streams across SaaS, subscriptions, e-commerce, and B2B services.

Despite financial setbacks, including a disallowed tax credit and timing of compensation expenses, the company maintains a steady cash position over $10 million and has extended its debt facility maturity.

Full Transcript

OPERATOR

Thank you and good afternoon. Hosting the call today are Paul Edmondson, Chief Executive Officer, and Jeffrey Wright, Principal Financial Officer. Before we begin, I’d 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 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 Paradium.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 December 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 of, 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 risks, 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 Paradium.AI. With that, I’ll turn to CEO Paul Edmondson. Paul, the call is yours.

Paul Edmondson (President and CEO)

Thank you for joining us today to discuss our Q3 2026 results. This quarter’s call marks our first as Paradium.AI and signifies a new era for our business. While the publishing industry as a whole continues to endure one of the most volatile and rapidly changing traffic environments that I’ve seen through my 20-plus years in the industry, we’ve 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 Info Sentience along with the launch of Tutor Studios. These AI technologies, as well as Encore, our proprietary data and monetization engine, have been catalysts for continued innovation, including that a new AI task management product will be launching in Q4. More on that in a moment. Tutor Studios has gone from a concept to producing hundreds of pieces of content in roughly four 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 Info Sentience, will grow significantly throughout Q4. Our brand licensing team also continues to make strides. We recently announced the launch of a collaboration between PetHelpful and Trust Respect Love by Cesar Millan. This co-brand combines the credibility of celebrity expert Cesar Millan and the backing of Xcel Brands with the audience engine of PetHelpful, Parade, and Millan’s personal platforms. We’re thrilled by this opportunity to extend PetHelpful off the page and into tangible experiences for audiences to connect with.

Tutor 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 a 2027 retail launch, and we’re excited to update you along the way. The through line of this is all 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’re innovating across the organization; we’re improving monetization, increasing content output, and expanding avenues for revenue as we move through the remainder of the year. Now I’ll pass it to Jeff to share the financial results for the quarter.

Jeffrey Wright (Principal Financial Officer)

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 Paradium.AI. Our cash position remains steady at over $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 2899. Further, content production expanded sequentially each month during the third quarter, up 15% over Q2 2026. This growth was fueled by the rollout of Info Sentience and Tutor Studios.

Our priority is to aggressively scale these new AI-driven products. Now I’ll turn the call back over to Paul for a strategic update.

Paul Edmondson (President and CEO)

Thanks, Jeff. Moving into Q4, we’re continuing to accelerate our AI vision, specifically outlined in our transition to Paradium.AI and away from a publishing-only company. The Paradium 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 Tutor Studios and Info Sentience. With more products in the pipeline, we’re evolving beyond our roots as a traditional media company and engineering something fundamentally bigger.

We’re building a diversified platform with the ability to create value across a much broader range of markets, including SaaS, subscriptions, e-commerce, and B2B 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 page views within three weeks of being revised.

Our newest product, Tablation, is an AI task management system built for development and content management. Tablation’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, and we expect to launch the alpha version in Q4. We continue our efforts to optimize traffic levels, and we’re expanding for the future. The ecosystem as a whole continues to evolve at a rapid pace with AI, and we intend to get ahead of what’s next for creators and publishers. This quarter didn’t come without challenges, but the energy and determination of our team and the groundwork that we’ve been building are coming together. With improvements in our monetization, Info Sentience and Tutor Studios beginning to take off, and Tablation’s launch on the horizon, we’re excited to report back with continued updates on our initiatives and progress in our evolution as Paradium.AI.

Thank you all for your continued interest in Paradium.AI, and for your time today. I’ll turn it back to the operator now to begin the Q&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 star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions.

Our first question is from Brian Mayers with Lake Street Capital. Please proceed with your question.

Brian Mayers (Analyst)

Hey guys, thanks for taking my question. First one 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’s where the lower margin came in—versus how much of that was just other items?

Jeffrey Wright (Principal Financial Officer)

Hey Brian, thanks for the question. So, a couple things that I do want to make mention of. As I said on the call, we did have two one-off items that impacted the quarter. One 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’s a combination of both of those two factors that kind of leads us to the margin profile of the third quarter.

Brian Mayers (Analyst)

Okay. And then using that, 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 an update on traffic—if you’ve seen that sort of stabilize and, coincidentally, what that margin impact will look like here in the fourth quarter.

Jeffrey Wright (Principal Financial Officer)

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’re facing here. So we have continued headwinds, but we are aggressively scaling our new products, Tutor Studios and Info Sentience, and our goal is to have both of those products contributing materially by the end of the year.

Brian Mayers (Analyst)

Okay, got it. Good to know. Thanks for taking my question.

OPERATOR

Once again, if you would like to ask a question, please press star one on your telephone keypad. We have reached the end of the question-and-answer session. I would like to turn the floor back over to Paul Edmondson for closing comments.

Paul Edmondson (President and CEO)

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.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.