BATAVIA, Ill., May 13, 2025 (GLOBE NEWSWIRE) -- High Wire Networks, Inc. (OTCQB: HWNI), a leading global provider of managed cybersecurity, reported results for continuing operations for the three months ended March 31, 2025. All comparisons are to the same year-ago period unless otherwise noted.
The following comparative results are from continuing operations following the divestiture of the company’s technology enablement services business on June 27, 2024. The company’s current business segments include Overwatch managed cybersecurity services and SVC telecom services.
Q1 2025 Financial Highlights
- Revenue from continuing operations in the first quarter of 2025 increased 5% to a record $2.2 million.
- Overwatch revenue increased by 2%, while revenue from the Company’s SVC telecom services grew 9% over the same quarter last year.
- Secure Voice Corporation (SCV) delivered an 18% increase in gross profit and 9% revenue growth quarter-over-quarter, driven by low SG&A costs and increased transaction volume.
- Adjusted EBITDA improved by $0.1 million, or 8%, from the same quarter last year.
- While the Company increased revenues by 5%, operating expenses decreased by 3% to $3.4 million as the Company continues to streamline its operations through automation.
- Interest expense decreased $0.1 million or 34% in the first quarter of 2024.
Q1 2025 Operational Highlights
- Overwatch closed $1.7 million in total contract value (TCV) with three key existing partnerships and had better-than-expected total sales bookings overall.
- Overwatch continues to automate core cybersecurity and business processes, improving service delivery speed and partner engagement while reducing operational overhead.
- Enhanced collaboration with SentinelOne, Kaseya, Fluency, and Check Point is unlocking new efficiencies and growth potential through deeper platform integration.
- Back-office automation through ConnectBooster allows for scalable transaction processing, from thousands of monthly transactions to hundreds of thousands, while ensuring accuracy and efficiency.
Management Commentary
Mark Porter, CEO, High Wire Networks
With the new team in place, we have been able to accomplish in about six months what we have seen take upwards of two years. Beyond the headlines of the C-level executive changes on the Overwatch team, we have added engineering talent that has focused on automating every aspect of the business that can be automated. From quote to cash, we are accelerating in every way. The results are just beginning to show up and will result in profitability and cash flow generation as we scale revenue. We are now positioned to add revenue with higher gross profit margins and not add cost to the operations team. This operating leverage will be our competitive advantage as a Company. At the same time, the outcomes we are driving for our partners and their clients create a competitive advantage for them against our adversaries in the cyber realm.
“Secure Voice continues to produce profitable quarters and positive cash flow. We have focused on expanding gross margins at the transaction level. With very low SG&A costs, every additional dollar of margin falls to the bottom line, and we will see increased profitability and cash flow as we move forward. After revamping our sales efforts late last year, we are now seeing the results show up in not only the revenue and margin, but the quality of our traffic, allowing us to scale revenue without adding fixed cost to the model.”
Turning to Overwatch, the recurring revenue managed cybersecurity platform for Enterprise, Porter stated, “The fourth quarter was about laying the groundwork for 2025 with the new Overwatch leadership team in place. Exiting Q1, we are starting to see the results of material changes in strategy around the portfolio and how we manage the operations. These changes have resulted in an increased gross margin. That increase comes not just from focusing on the sales front, but a relentless focus on building off our competitive advantage, which is hyper-automation, to reduce costs as we scale and provide better outcomes for our clients. We now have both the scale and the cost structures in place to expand the business rapidly and focus on our target of profitability and cash flow this year.”
“As we enter the Agentic AI era, we have focused on how to strategically realize the full potential of our position within the Enterprise. Overwatch is at the very core of each customer we serve. We are the central nervous system of our clients’ Enterprise. In providing cybersecurity services, we are not just deploying tools or reselling them. We are taking in every digital pulse, signal, and emission from the Enterprise, or directed at the Enterprise. We bring all these signals from every system they use to conduct business, and we are determining whether those signals are good or bad and what to do next.”
“As we develop our systems and technologies to handle all this data, we are looking at ways to capitalize on this by providing cybersecurity outcomes and creating an advanced persistent defense strategy. This strategy will position us at the center of what our clients are doing and expand business opportunities based on what we see from our vantage point at the center of their universe.”
Ed Vasko, CEO, High Wire – Overwatch
“In the first quarter this year, we made significant progress in improving gross margins and positioning High Wire Overwatch for accelerated growth. Our focus on hyper-automation and the strategic application of AI is driving meaningful efficiencies across both our service delivery and business operations.”
“A key achievement this quarter was the first phase of integrating our core business systems. By automating previously manual workflows, we've enhanced the customer experience while simultaneously reducing costs. We've conducted a thorough analysis of our platforms, eliminating redundancies and streamlining operations to deliver savings directly to the bottom line.”
“These improvements are already visible in the rollout of our new quote-to-cash automations, partner invoicing and payment portals, and upgraded partner ecosystem tracking tools. Together, these systems elevate our partner experience and strengthen the operational backbone supporting our growth.”
About the Use of Non-GAAP Measures
The company believes that the use of adjusted earnings before interest, taxes, depreciation and amortization, or Adjusted EBITDA, is helpful for an investor to assess the performance of the company. The company defines Adjusted EBITDA as income (loss) before interest, taxes, depreciation, amortization, acquisition expenses, impairment of long-lived assets, gain/loss on change of fair value of derivatives, amortization of discounts on debt, financing costs, fair value adjustments from purchase accounting, stock-based compensation expense, liquidity damages related to escrow shares and expenses related to discontinued operations.
Adjusted EBITDA is not a measurement of financial performance under generally accepted accounting principles in the United States, or GAAP. Because of varying available valuation methodologies, subjective assumptions and the variety of equity instruments that can impact a company’s non-cash operating expenses, the company believes that providing a non-GAAP financial measure that excludes non-cash and non-recurring expenses allows for meaningful comparisons between its core business operating results and those of other companies, as well as providing the company with an important tool for financial and operational decision making and for evaluating its own core business operating results over different periods of time.
The company’s Adjusted EBITDA measure may not provide information that is directly comparable to that provided by other companies in its industry, as other companies in the company’s industry may calculate non-GAAP financial results differently, particularly related to non-recurring, unusual items. The company’s Adjusted EBITDA is not a measurement of financial performance under GAAP and should not be considered as an alternative to operating income or as an indication of operating performance or any other measure of performance derived in accordance with GAAP. The company does not consider Adjusted EBITDA to be a substitute for, or superior to, the information provided by GAAP financial results.
| High Wire Networks, Inc. Condensed consolidated statements of operations (Unaudited) | ||||||||
| For the three months ended | ||||||||
| March 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenue | $ | 2,171,626 | $ | 2,061,503 | ||||
| Operating expenses: | ||||||||
| Cost of revenue | 1,410,054 | 1,122,018 | ||||||
| Depreciation and amortization | 184,214 | 188,338 | ||||||
| Salaries and wages | 1,018,609 | 1,320,219 | ||||||
| General and administrative | 880,262 | 958,253 | ||||||
| Total operating expenses | 3,493,139 | 3,588,828 | ||||||
| Loss from operations | (1,321,513 | ) | (1,527,325 | ) | ||||
| Other income (expense): | ||||||||
| Interest expense | (160,585 | ) | (243,036 | ) | ||||
| Amortization of debt discounts | (671,228 | ) | (432,934 | ) | ||||
| Warrant expense | - | (214,737 | ) | |||||
| Gain on change in fair value of warrant liabilities | 7,320 | 241,993 | ||||||
| Exchange loss | - | (14,888 | ) | |||||
| Termination and penalty fee | (410,571 | ) | (100,000 | ) | ||||
| Total other (expense) | (1,235,064 | ) | (763,602 | ) | ||||
| Net loss from continuing operations before income taxes | (2,556,577 | ) | (2,290,927 | ) | ||||
| Provision for income taxes | - | - | ||||||
| Net loss from continuing operations | (2,556,577 | ) | (2,290,927 | ) | ||||
| Net income from discontinued operations, net of tax | - | 1,876,489 | ||||||
| Net loss attributable to High Wire Networks, Inc. common shareholders | $ | (2,556,577 | ) | $ | (414,438 | ) | ||
| Income (loss) per share attributable to High Wire Networks, Inc. common shareholders, basic and diluted: | ||||||||
| Net loss from continuing operations | $ | (2.62 | ) | $ | (2.38 | ) | ||
| Net income from discontinued operations, net of taxes | $ | - | $ | 1.95 | ||||
| Net loss per share | $ | (2.62 | ) | $ | (0.43 | ) | ||
| Weighted average common shares outstanding basic and diluted | 977,270 | 962,155 | ||||||
| High Wire Networks, Inc. Condensed consolidated balance sheets | ||||||||
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | 163,896 | $ | 220,824 | ||||
| Accounts receivable, net of allowances of $184,344 and $171,444, respectively, and unbilled revenue of $4,786 and $7,845, respectively | 974,839 | 830,261 | ||||||
| Prepaid expenses and other current assets | 233,632 | 212,660 | ||||||
| Total current assets | 1,372,367 | 1,263,745 | ||||||
| Property and equipment, net of accumulated depreciation of $794,507 and $732,804, respectively | 723,535 | 785,238 | ||||||
| Goodwill | 605,584 | 605,584 | ||||||
| Intangible assets, net of accumulated amortization of $1,604,418 and $1,481,907, respectively | 2,835,328 | 2,957,839 | ||||||
| Operating lease right-of-use assets | 147,704 | 174,365 | ||||||
| Total assets | $ | 5,684,518 | $ | 5,786,771 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued liabilities | $ | 4,671,179 | $ | 4,272,058 | ||||
| Contract liabilities | 5,208 | 25,144 | ||||||
| Current portion of loans payable to related parties | 370,029 | 358,557 | ||||||
| Current portion of loans payable, net of debt discount of $47,053 and $46,969, respectively | 1,575,093 | 1,297,602 | ||||||
| Current portion of convertible debentures, net of debt discount of $129,197 and $58,459, respectively | 1,967,453 | 838,192 | ||||||
| Warrant liabilities | 73,200 | 80,520 | ||||||
| Operating lease liabilities, current portion | 113,598 | 110,856 | ||||||
| Current liabilities of discontinued operations | 505,782 | 505,782 | ||||||
| Total current liabilities | 9,281,542 | 7,488,711 | ||||||
| Loans payable, net of current portion | 70,100 | 78,125 | ||||||
| Operating lease liabilities, net of current portion | 39,713 | 69,094 | ||||||
| Total liabilities | 9,391,355 | 7,635,930 | ||||||
| Commitments and contingencies (Note 14) | ||||||||
| Series B preferred stock; $3,500 stated value; 1,000 shares authorized; 1,000 issued and outstanding as of March 31, 2025 and December 31, 2024 | - | - | ||||||
| Total mezzanine equity | - | - | ||||||
| Stockholders’ equity (deficit): | ||||||||
| Common stock; $0.00001 par value; 1,000,000,000 shares authorized; 1,004,605 and 970,319 issued and outstanding as of March 31, 2025 and December 31, 2024, respectively | 10 | 10 | ||||||
| Series D preferred stock; $10,000 stated value; 1,590 shares authorized; 943 issued and outstanding as of March 31, 2025 and December 31, 2024 | 7,745,643 | 7,745,643 | ||||||
| Series E preferred stock; $10,000 stated value; 650 shares authorized; 311 issued and outstanding as of March 31, 2025 and December 31, 2024 | 4,869,434 | 4,869,434 | ||||||
| Series F preferred stock; $1,000 stated value; 120 shares authorized; 90 and 0 issued and outstanding as of March 31, 2025 and December 31, 2024 | 331,439 | - | ||||||
| Additional paid-in capital | 32,833,510 | 32,466,050 | ||||||
| Accumulated deficit | (49,486,873 | ) | (46,930,296 | ) | ||||
| Total stockholders’ equity (deficit) | (3,706,837 | ) | (1,849,159 | ) | ||||
| Total liabilities and stockholders’ equity (deficit) | $ | 5,684,518 | $ | 5,786,771 | ||||
About High Wire Networks
High Wire Networks, Inc. (OTCQB: HWNI) is a fast-growing, award-winning global provider of managed cybersecurity. Through over 200 channel partners, it delivers trusted managed services for more than 1,100 managed security customers worldwide. End customers include Fortune 500 companies and many of the nation’s largest government agencies. Its U.S.-based 24/7 Network Operations Center and Security Operations Center is located in Chicago, Illinois.
High Wire was ranked by Frost & Sullivan as a Top 15 Managed Security Service Provider in the Americas for 2024. It was also named to CRN’s MSP 500 and Elite 150 lists of the nation’s top IT managed service providers for 2023 and 2024.
Learn more at HighWireNetworks.com. Follow the company on X, view its extensive video series on YouTube or connect on LinkedIn.
Forward-Looking Statements
The above news release contains forward-looking statements. The statements contained in this document that are not statements of historical fact, including but not limited to, statements identified by the use of terms such as "anticipate," "appear," "believe," "could," "estimate," "expect," "hope," "indicate," "intend," "likely," "may," "might," "plan," "potential," "project," "seek," "should," "will," "would," and other variations or negative expressions of these terms, including statements related to expected market trends and the Company's performance, are all "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties. These statements are based on assumptions that management believes are reasonable based on currently available information, and include statements regarding the intent, belief or current expectations of the Company and its management. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performances and are subject to a wide range of external factors, uncertainties, business risks, and other risks identified in filings made by the company with the Securities and Exchange Commission. Actual results may differ materially from those indicated by such forward-looking statements. The Company expressly disclaims any obligation or undertaking to update or revise any forward-looking statement contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances upon which any statement is based except as required by applicable law and regulations.
Company Contact
Mark Porter
Chief Executive Officer
High Wire Networks
Tel +1 (952) 974-4000
Media Contact
CORE IR
media@highwirenetworks.com
Investor Relations
CORE IR
investors@highwirenetworks.com
