Paltalk Reports $65.7 Million Jury Award in Patent Case Against Cisco
TL;DR
Paltalk, Inc. was awarded a $65.7 million final judgment in a patent infringement trial against Cisco, giving them a significant financial advantage.
Paltalk, Inc. announced key financial highlights, including a decrease in revenue and net loss, as well as operational highlights such as entering into an Agreement and Plan of Merger.
Paltalk's acquisition of Newtek Technology Solutions, Inc. and the sale of certain applications and assets mark a transformative shift in their business strategy, aiming to enhance stockholder value and focus on cybersecurity, cloud hosting, and technology solutions.
Paltalk, Inc.'s financial and operational results for the third quarter of 2024 reflect a decrease in revenue and net loss, as well as their ongoing efforts to improve user experience with ManyCam software.
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Communications software company Paltalk, Inc. (Nasdaq: PALT) reported financial results for the third quarter of 2024, highlighted by a $65.7 million jury award in its patent infringement case against Cisco Systems. However, the company also saw declining revenues and widening losses compared to the prior year period.
Paltalk reported Q3 revenue of $2.1 million, down 23.4% year-over-year, driven by a 23.9% decrease in subscription revenue. The company posted a net loss of $1.5 million for the quarter, compared to a net loss of $0.2 million in Q3 2023. Adjusted EBITDA loss widened to $1.4 million from $0.1 million last year.
The $65.7 million jury verdict against Cisco was awarded in August 2024 related to alleged patent infringement. However, Paltalk noted the final amount it receives will likely be no more than one-third of the gross award after legal expenses and is subject to potential appeals.
Paltalk also announced major strategic changes, including plans to acquire Newtek Technology Solutions in a cash and stock deal valued at up to $13 million. As part of the acquisition, Paltalk will divest its core social media applications Paltalk, Camfrog and Vumber to Meteor Mobile Holdings for $1.35 million plus potential earnouts.
CEO Jason Katz said the moves represent a "transformational shift in our business strategy" as the company pivots toward cybersecurity and cloud technology solutions. The acquisition of NTS is expected to significantly boost Paltalk's revenues once completed.
While undergoing major changes, Paltalk maintains a solid cash position of $12.1 million as of September 30, 2024. The strategic shift and potential patent award proceeds could reshape the company's financial outlook, though near-term results remain challenged as legacy businesses decline.
Curated from NewMediaWire
