IZEA Worldwide, Inc. (NASDAQ: IZEA), the premier provider of
influencer marketing technology, data, and services for the Creator
Economy, reported its financial and operational results for the
first quarter ended March 31, 2024.
Q1 2024 Financial
Summary Compared to Q1 2023
- Total revenue
decreased 20.4% to $7.0 million, compared to $8.7 million
- Managed Services
revenue decreased 21.2% to $6.7 million, compared to $8.5
million
- SaaS Services
revenue increased 9.1% to $0.3 million, compared to $0.2
million
- Total costs and
expenses decreased 9.1% to $11.0 million compared to $12.1
million
- Net loss was $3.3
million compared to a net loss of $2.8 million
- Adjusted EBITDA*
for the quarter was $(2.8) million, compared to $(2.2) million
- Cash, cash
equivalents, and investments on March 31, 2024 totaled $60.8
million with no long-term debt
Q1 2024 Operational
Highlights
- IZEA wins Gold at
the 2024 Muse Creative Awards
- Released new iOS
App, bringing generative AI tools to mobile users
- CEO Ted Murphy
named among the 2024 People of the Year by Ragan
- IZEA-owned Hoozu
honored as Australia's Best Boutique Influencer Marketing Agency by
AiMCO
* Adjusted EBITDA is a non-GAAP financial
measure. Refer to the definition and reconciliation of this measure
under “Use of Key Metrics and Non-GAAP Financial Measures."
Management Commentary“We saw
strong customer demand and related bookings in Q1, though the
corresponding revenue has yet to be realized,” commented Ted
Murphy, Founder and CEO. “Revenue was lower in the quarter due to
the timing of some bookings and ongoing campaigns, which we expect
will resolve itself as the year progresses. Revenue backlog surged
by $2.6 million to $14.5 million in Q1 vs. Q4. Revenue always
trails bookings and we expect the revenue backlog to grow with
bookings growth.”
"Managed services bookings experienced a resurgence in growth
year-over-year in Q1, propelled by a robust pipeline from Q4 2023
and a new record pipeline in Q1 2024,” continued Murphy. “This
pipeline growth is not only in dollar value but also in the number
of opportunities, aligning with our strategy to diversify revenue.
While managed services continue to generate the vast majority of
our revenue, SaaS revenue is on a path to recovery. We concluded Q1
with a new all-time record number of active SaaS customers, a
positive trend that has persisted into the second quarter."
“Our marketing strategy and investment in demand generation are
having a material impact. We have seen continued year-over-year
pipeline growth in Q2, and we are off to a strong start with
bookings for the quarter,” continued Murphy.
Q1 2024 Financial
ResultsTotal revenue in the first quarter of 2024
decreased 20.4% to $7.0 million, compared to $8.7 million in the
first quarter of 2023, with revenue from Managed Services
decreasing by 21.2% to $6.7 million in the first quarter of 2024.
Excluding revenues from our non-recurring customer that we parted
ways with in 2023, Managed Services revenue increased $1.7 million
or 33.3% over the prior-year quarter. Revenue from SaaS Services
increased by 9.1% to $256,341 in the first quarter of 2024 compared
to the first quarter of 2023.
Managed Services bookings increased to $9.3
million compared to $6.1 million during the quarter as a result of
a resurgence in the sales pipeline from organic growth along with
an increase in the number of opportunities.
Revenue from SaaS Services increased by $21,373,
or 9.1%, in the first quarter of 2024 compared to the first quarter
of 2023. This was due to average licensee counts increasing at a
lower cost per license in the first quarter of 2024 over the prior
year. License fee revenue was 14% higher than the prior-year
quarter, while Marketplace Spend fees decreased 64% to $13,112 in
the first quarter of 2024, compared to $36,474 in the first quarter
of 2023.
Cost of revenue decreased to $4.0 million in the
first quarter of 2024, or 57.1% of revenue, compared to $6.0
million, or 68.2%, in the prior-year quarter. The decline in cost
of revenue attributable to our non-recurring customer was $2.8
million, which was partly offset by higher current quarter costs
that accompany ongoing customer revenue growth.
Costs and expenses other than the cost of
revenue totaled $7.0 million for the first quarter of 2024, $0.9
million or 14.4% above the prior-year quarter. Sales and marketing
costs were $3.1 million during the first quarter of 2024, $0.7
million or 27.1% higher than the prior-year quarter, primarily due
to increased spend on brand awareness and advertising to drive
revenue growth. General and administrative costs totaled $3.8
million during the quarter, $0.4 million or 11.1% higher than the
prior-year quarter, due primarily to an increase in human capital
costs.
Net loss in the first quarter of 2024 was $3.3
million, or $(0.20) per share, as compared to a net loss of $2.8
million, or $(0.18) per share in the first quarter of 2023, based
on 16.3 million and 15.6 million average shares outstanding,
respectively.
Adjusted EBITDA (as defined below, a non-GAAP
measure management uses as a proxy for operating cash flow) totaled
a loss of $2.8 million in the first quarter of 2024, compared with
a loss of $2.2 million in the comparative period, increasing $0.6
million due primarily to lower revenues. Adjusted EBITDA as a
percentage of revenue in the first quarter of 2024 was a loss of
39.6% compared to a loss of 25.0% in the first quarter of 2023.
As of March 31, 2024, our cash and
investments totaled $60.8 million. The company has no long-term
debt borrowings outstanding.
Conference CallIZEA will hold a
conference call to discuss its first quarter 2024 results on
Wednesday, May 15, 2024, at 5:00 p.m. EDT. IZEA's Chairman and CEO
Ted Murphy, CFO Peter Biere, and COO Ryan Schram will host the
call, followed by a question and answer period.
Date: Wednesday, May 15,
2024Time: 5:00 p.m. EDTToll-free dial-in
number: 1-877-407-4018International dial-in
number: 1-201-689-8471
Please call the conference telephone number five
(5) minutes before the start time. An operator will register your
name and organization. A call replay will be made available
approximately 3 hours after the conference ends until Wednesday,
May 22, 2024, at 11:59 p.m. EDT.
Toll-free replay number:
1-844-512-2921International replay number:
1-412-317-6671Replay ID: 13746140
About IZEA Worldwide, Inc.IZEA
Worldwide, Inc. (“IZEA”), is a marketing technology company
providing software and professional services that enable brands to
collaborate and transact with the full spectrum of today’s top
social influencers and content creators. The company serves as a
champion for the growing Creator Economy, enabling individuals to
monetize their content, creativity, and influence. IZEA launched
the industry’s first-ever influencer marketing platform in 2006 and
has since facilitated nearly 4 million transactions between online
buyers and sellers. Leading brands and agencies partner with IZEA
to increase digital engagement, diversify brand voice, scale
content production, and drive a measurable return on
investment.
Use of Key Metrics and Non-GAAP
Financial Measures Managed Services bookings measure all
sales orders received during a period less cancellations received
or refunds given during the same period. Sales order contracts vary
in complexity with each customer and range from custom content
delivery to integrated marketing services; our contracts generally
run from several months for smaller contracts to twelve months for
larger contracts. We recognize revenue from our Managed Services
contracts based on a percentage of completion basis as we deliver
the content or services over time, which can vary greatly from a
few weeks to a year. For this reason, Managed Services bookings,
while an overall indicator of the health of our business, may not
be used to predict quarterly revenues and could be subject to
future adjustments.
Managed Services bookings is a useful metric as
it reflects the amount of orders received in one period, even
though revenue may be reflected over time. Management uses the
Managed Services bookings metric to plan its operating staff,
identify key customer group trends, enlighten go-to-market
activities, and inform its product development efforts.
"Adjusted EBITDA" is a non-GAAP financial
measure under the Securities and Exchange Commission rules. EBITDA
is commonly defined as "earnings before interest, taxes,
depreciation, and amortization." IZEA defines “Adjusted EBITDA” as
earnings or loss before interest, taxes, depreciation and
amortization, non-cash stock-based compensation, gain or loss on
asset disposals or impairment, and certain other unusual or
non-cash income and expense items such as gains or losses on
settlement of liabilities and exchanges, and changes in the fair
value of derivatives, if applicable.
We believe that Adjusted EBITDA provides useful
information to investors as it primarily excludes non-cash
transactions, and it provides consistency to facilitate
period-to-period comparisons.
All companies do not calculate bookings, and
Adjusted EBITDA in the same manner. These metrics and financial
measures, as presented by IZEA, may not be comparable to those
presented by other companies. Moreover, these metrics and financial
measures have limitations as analytical tools. You should not
consider them in isolation or as a substitute for an analysis of
our results of operations as reported under GAAP. A reconciliation
of adjusted EBITDA to the most directly comparable GAAP measure is
presented in the financial tables included in this press
release.
Safe Harbor StatementAll
statements in this release that are not based on historical fact
are “forward-looking statements” intended to qualify for the safe
harbor from liability established by the Private Securities
Litigation Reform Act of 1995. Forward-looking statements, which
are based on certain assumptions and describe our future plans,
strategies, and expectations, can generally be identified by the
use of forward-looking terms such as “may,” “will,” “would,”
“could,” “should,” “expect,” “anticipate,” “hope,” “estimate,”
“optimistic,” “believe,” “intend,” “ought to,” "likely,"
"projects," “plans,” "pursue," "strategy" or "future," or the
negative of these words or other words or expressions of similar
meaning. Examples of forward-looking statements include, among
others, statements we make regarding expectations concerning
product development and platform launches, future financial
performance and operating results, including regarding recognition
of bookings as revenues, the share repurchase authorization and any
use of such authorization, growth, or maintenance of customer
relationships, and expectations concerning IZEA’s business
strategy. Forward-looking statements involve inherent risks and
uncertainties which could cause actual results to differ materially
from those in the forward-looking statements as a result of various
factors, including, among others, the following: competitive
conditions in the content and social sponsorship segment in which
IZEA operates; failure to popularize one or more of the marketplace
platforms of IZEA; our ability to maintain disclosure controls and
procedures and internal control over financial reporting; our
ability to satisfy the requirements for continued listing of our
common stock on the Nasdaq Capital Market; changing economic
conditions that are less favorable than expected; and other risks
and uncertainties described in IZEA’s periodic reports filed with
the Securities and Exchange Commission. The forward-looking
statements made in this release speak only as of the date of this
release, and IZEA assumes no obligation to update any such
forward-looking statements to reflect actual results or changes in
expectations, except as otherwise required by law.
Press ContactNicole O'HaraIZEA
Worldwide, Inc.Phone: 407-674-6911Email: ir@izea.com
IZEA Worldwide, Inc.Unaudited Consolidated
Balance Sheets |
|
March 31,2024 |
|
December 31,2023 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
39,035,332 |
|
|
$ |
37,446,728 |
|
Accounts receivable, net |
|
4,798,692 |
|
|
|
5,012,373 |
|
Prepaid expenses |
|
989,737 |
|
|
|
739,988 |
|
Short term investments |
|
17,034,673 |
|
|
|
17,126,057 |
|
Other current assets |
|
20,496 |
|
|
|
26,257 |
|
Total current assets |
|
61,878,930 |
|
|
|
60,351,403 |
|
|
|
|
|
Property and equipment, net of accumulated depreciation |
|
178,446 |
|
|
|
205,377 |
|
Goodwill |
|
5,285,293 |
|
|
|
5,280,372 |
|
Intangible assets, net of accumulated depreciation |
|
1,704,437 |
|
|
|
1,749,441 |
|
Digital assets |
|
269,064 |
|
|
|
162,905 |
|
Software development costs, net of accumulated amortization |
|
2,002,307 |
|
|
|
2,056,972 |
|
Long term investments |
|
4,708,910 |
|
|
|
9,618,996 |
|
Total assets |
$ |
76,027,387 |
|
|
$ |
79,425,466 |
|
|
|
|
|
Liabilities and Stockholders’ Equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
|
1,156,495 |
|
|
|
1,504,348 |
|
Accrued expenses |
|
2,935,278 |
|
|
|
3,083,460 |
|
Contract liabilities |
|
8,833,084 |
|
|
|
8,891,205 |
|
Contingent liability |
|
114,400 |
|
|
|
114,400 |
|
Total current liabilities |
|
13,039,257 |
|
|
|
13,593,413 |
|
|
|
|
|
Finance obligation, less
current portion |
|
48,573 |
|
|
|
63,419 |
|
Deferred purchase price, less
current portion |
|
60,600 |
|
|
|
60,600 |
|
Deferred tax liability |
|
377,110 |
|
|
|
394,646 |
|
Total liabilities |
|
13,525,540 |
|
|
|
14,112,078 |
|
|
|
|
|
Commitments and
Contingencies |
|
— |
|
|
|
— |
|
|
|
|
|
Stockholders’ equity: |
|
|
|
Preferred stock; $.0001 par value; 10,000,000 shares authorized; no
shares issued and outstanding |
|
— |
|
|
|
— |
|
Common stock; $0.0001 par value; 50,000,000 shares authorized;
shares issued: 16,666,513 and 16,602,155, respectively; shares
outstanding: 16,300,658 and 16,236,300, respectively |
|
1,667 |
|
|
|
1,660 |
|
Treasury stock at cost: 365,855 and 365,855 shares at March 31,
2024 and December 31, 2023, respectively |
|
(1,019,997 |
) |
|
|
(1,019,997 |
) |
Additional paid-in capital |
|
152,419,065 |
|
|
|
152,027,110 |
|
Accumulated deficit |
|
(88,710,644 |
) |
|
|
(85,444,794 |
) |
Accumulated other comprehensive income (loss) |
|
(188,244 |
) |
|
|
(250,591 |
) |
Total stockholders’ equity |
|
62,501,847 |
|
|
|
65,313,388 |
|
Total liabilities and stockholders’ equity |
$ |
76,027,387 |
|
|
$ |
79,425,466 |
|
IZEA Worldwide, Inc.Unaudited Consolidated
Statements of Operations |
|
Three Months Ended March 31, |
|
|
2024 |
|
|
|
2023 |
|
Revenue |
$ |
6,952,883 |
|
|
$ |
8,737,722 |
|
|
|
|
|
Costs and expenses: |
|
|
|
Cost of revenue |
|
3,967,975 |
|
|
|
5,960,162 |
|
Sales and marketing |
|
3,056,291 |
|
|
|
2,404,551 |
|
General and administrative |
|
3,783,086 |
|
|
|
3,403,608 |
|
Depreciation and amortization |
|
204,186 |
|
|
|
346,262 |
|
Total costs and expenses |
|
11,011,538 |
|
|
|
12,114,583 |
|
|
|
|
|
Loss from operations |
|
(4,058,655 |
) |
|
|
(3,376,861 |
) |
|
|
|
|
Other income (expense): |
|
|
|
Change in the fair value of digital assets |
|
106,159 |
|
|
|
— |
|
Interest expense |
|
(2,001 |
) |
|
|
(1,564 |
) |
Other income (expense), net |
|
669,865 |
|
|
|
572,086 |
|
Total other income (expense), net |
|
774,023 |
|
|
|
570,522 |
|
|
|
|
|
Net loss before income
taxes |
$ |
(3,284,632 |
) |
|
$ |
(2,806,339 |
) |
Tax benefit |
|
18,782 |
|
|
|
— |
|
Net loss |
|
(3,265,850 |
) |
|
|
(2,806,339 |
) |
|
|
|
|
Weighted average common shares
outstanding – basic and diluted |
|
16,333,415 |
|
|
|
15,611,885 |
|
Basic and diluted loss per
common share |
$ |
(0.20 |
) |
|
$ |
(0.18 |
) |
IZEA Worldwide, Inc.Unaudited Consolidated
Statements of Comprehensive Loss |
|
Three Months Ended March 31, |
|
|
2024 |
|
|
|
2023 |
|
Net loss |
$ |
(3,265,850 |
) |
|
$ |
(2,806,339 |
) |
|
|
|
|
Other comprehensive
income |
|
|
|
Unrealized (gain) loss on securities held |
|
(58,177 |
) |
|
|
(126,180 |
) |
Unrealized (gain) loss on currency translation |
|
(4,170 |
) |
|
|
— |
|
Total other comprehensive
income (loss) |
|
(62,347 |
) |
|
|
(126,180 |
) |
|
|
|
|
Total comprehensive income
(loss) |
$ |
(3,203,503 |
) |
|
$ |
(2,680,159 |
) |
IZEA Worldwide, Inc.Revenue
Details |
Revenue
details by type: |
|
Three Months Ended March 31, |
|
|
|
2024 |
|
|
|
2023 |
|
|
$ Change |
|
% Change |
Managed Services Revenue |
$ |
6,696,542 |
96.3 |
% |
$ |
|
8,502,754 |
97.3 |
% |
$ |
|
(1,806,212 |
) |
|
|
(21.2) |
% |
SaaS Services
Revenue |
|
256,341 |
3.7 |
% |
|
|
234,968 |
2.7 |
% |
|
|
21,373 |
|
|
|
9.1 |
% |
|
|
|
|
|
|
|
|
Total
Revenue |
$ |
6,952,883 |
100.0 |
% |
$ |
|
8,737,722 |
100.0 |
% |
$ |
|
(1,784,839 |
) |
|
|
(20.4) |
% |
IZEA Worldwide, Inc.Reconciliation of GAAP
Net loss to Non-GAAP Adjusted EBITDA |
|
Three Months Ended March 31, |
|
|
2024 |
|
|
|
2023 |
|
Net loss |
$ |
(3,265,850 |
) |
|
$ |
(2,806,339 |
) |
Adjustment to fair market value of digital assets |
|
(106,159 |
) |
|
|
— |
|
Non-cash stock-based compensation |
|
354,189 |
|
|
|
195,524 |
|
Non-cash stock issued for payment of services |
|
75,006 |
|
|
|
75,000 |
|
Tax benefit |
|
(18,782 |
) |
|
|
— |
|
Interest expense |
|
2,001 |
|
|
|
1,564 |
|
Depreciation and amortization |
|
204,186 |
|
|
|
346,262 |
|
Adjusted EBITDA |
$ |
(2,755,409 |
) |
|
$ |
(2,187,989 |
) |
|
|
|
|
Revenue |
$ |
6,952,883 |
|
|
$ |
8,737,722 |
|
Adjusted EBITDA as a % of Revenue |
|
(39.6 |
)% |
|
|
(25.0 |
)% |
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