Professional Diversity Network, Inc. — Second Quarter 2026 Earnings Summary

Financial Performance

• Total revenues for the three months ended June 30, 2026, decreased 28% year-over-year to approximately $1,181,000, down from $1,641,000 in the prior year period.
• Total revenues for the six months ended June 30, 2026, decreased 13.2% year-over-year to $2,730,000, compared to $3,146,000 in the prior year period.
• Net loss from continuing operations for the three months ended June 30, 2026, was $1,716,000, an increase of $1,224,000 compared to a net loss of $492,000 in the prior year period.
• Net loss from continuing operations for the six months ended June 30, 2026, was $3,572,000, compared to a net loss of $1,233,000 in the prior year period.
• Loss per share (basic and diluted) for the three months ended June 30, 2026, was $0.15, compared to $0.23 in the prior year period.
• Loss per share (basic and diluted) for the six months ended June 30, 2026, was $0.34, compared to $0.62 in the prior year period.
• Cost of revenues for the three months ended June 30, 2026, decreased 22.6% to $719,000 from $929,000 in the prior year period.
• Sales and marketing expenses for the three months ended June 30, 2026, decreased 31.4% to $339,000 from $494,000 in the prior year period; for the six-month period, they decreased 28.7% to $759,000 from $1,065,000.
• General and administrative expenses for the three months ended June 30, 2026, decreased 0.4% to $671,000 from $674,000 in the prior year period; for the six-month period, they decreased 7.0% to $1,444,000 from $1,553,000.
• Depreciation and amortization expense for the three months ended June 30, 2026, increased 2,809.8% to $1,193,000 from $41,000 in the prior year period, primarily due to the amortization of acquired musical works copyrights.
• Adjusted EBITDA for the three months ended June 30, 2026, was a loss of $511,000, compared to a loss of $454,000 in the prior year period.
• Adjusted EBITDA for the six months ended June 30, 2026, was a loss of $1,137,000, compared to a loss of $1,063,000 in the prior year period.
• Working capital deficit from continuing operations decreased to approximately $0.9 million as of June 30, 2026, from approximately $4.0 million at year-end 2025.
• Cash, cash equivalents, and restricted cash increased to $2,637,000 as of June 30, 2026, from $1,467,000 as of December 31, 2025.
• Net increase in cash from continuing operations for the six months ended June 30, 2026, was $1,170,000, compared to a net decrease of $1,606,000 in the prior year period.
• Total liabilities decreased to $4,405,000 as of June 30, 2026, from $6,685,000 as of December 31, 2025.

Business Segments and Product Lines

• The TalentAlly Network segment generated $587,000 in revenue for the three months ended June 30, 2026, a 33.8% decrease from $887,000 in the prior year period, driven by reduced demand for online recruitment solutions and deferred spending on diversity, equity, and inclusion initiatives.
• The NAPW Network segment generated $68,000 in revenue for the three months ended June 30, 2026, a 20.9% decrease from $86,000 in the prior year period, driven by reduced demand for membership-based professional networking and limited access to funding for entrepreneurs.
• The RemoteMore segment generated $526,000 in revenue for the three months ended June 30, 2026, a 21.3% decrease from $668,000 in the prior year period, due to reduced demand for outsourced software development and technical staffing services as customers exercised caution in technology spending and utilized AI-driven tools.
• Recruitment services revenue decreased by $300,000 for the quarter, while contracted software development revenue decreased by $142,000, and membership and related services revenue decreased by $18,000.
• Contracted software development revenue increased 17.8% to $1,362,000 for the six-month period, contrasting with the quarterly decline.
• The Company acquired copyrights to 28 original musical works as of September 2025; as of June 30, 2026, these assets had not generated revenue and are being amortized over an estimated 18-month useful life.
• The Company completed the divestiture of NAPW Network and IAW, Inc. in July 2026 to focus on core business operations.
• The Company operates two business units: TalentAlly, LLC, and RemoteMore USA, Inc., and is executing a strategic expansion toward a global Real World Asset (RWA) Exchange.

Market and Competitive Landscape

• Broader market conditions affecting the talent acquisition industry have led to reduced demand for online recruitment and hiring solutions.
• Employers have moderated or deferred spending on diversity, equity, and inclusion-focused initiatives.
• Shifts in market preferences have reduced demand for membership-based professional networking organizations.
• Reduced access to funding and capital for entrepreneurs, including women entrepreneurs, has impacted their ability to participate in fee-based membership programs.
• Customers have exercised greater caution in technology spending, and advancements in AI-driven development tools have enabled organizations to perform development functions with fewer external resources.
• The RWA Exchange initiative faces risks from intense competition from established financial institutions and other technology companies.

Risks and Challenges

• The Company faces risks related to its ability to secure sufficient capital to fund the development and launch of the Real World Asset Exchange platform.
• Significant technological challenges exist in building a secure and scalable exchange.
• The regulatory landscape for digital assets and RWAs is highly uncertain and evolving.
• There is a risk that the new strategic direction regarding the RWA Exchange may not be successful or generate expected returns.
• The Company continues to monitor market trends and will adjust its operating strategy accordingly.

Management Commentary and Tone

• CEO Xun Wu stated the company continued to streamline operations and sharpen strategic focus, noting the divestiture of NAPW and IAW, Inc. reflects efforts to focus resources on core businesses.
• CEO Xun Wu expressed a focus on pursuing opportunities that support sustainable growth and long-term shareholder value.
• CFO Bella Gu highlighted disciplined cost management and working capital improvements, noting a reduction in sales and marketing and general and administrative expenses compared to the prior-year period.
• CFO Bella Gu confirmed the working capital deficit decreased from year-end 2025 and stated the company will continue to carefully manage its cost structure and capital resources.

Other Key Points

• The Company acquired 28 original musical works in September 2025, with commercialization strategies for licensing and promotion currently in development.
• The Company owns 84.58% of RemoteMore USA as of June 30, 2026.
• The Company operates affinity job seeker groups for various demographics including Women, Hispanic-Americans, African-Americans, Asian-Americans, persons with disabilities, Military Professionals, and LGBTQ+.
• The Company manages job seeker websites and career fairs for prominent diverse membership-based organizations including the NAACP, National Urban League, and Kappa Alpha Psi.
• The Company is a holding company with a strategic expansion plan to complement human capital services with a global Real World Asset (RWA) Exchange.