IZEA - Earnings call transcript Q1 2018

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Operator

Greetings and welcome to the IZEA’s First Quarter 2018 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host Ryan Schram.

Ryan Schram

to XXXX welcome call. and afternoon IZEA's earnings QX Good at Chief I Schram, Officer IZEA. am Ryan Operating And joining Ted is IZEA's me today Founder, Hitchcock; Officer, Chairman and LeAnn and CEO, Murphy. IZEA's Chief Financial this Thanks for afternoon. being us with the our quarter to Yesterday, details first issued release XXXX a with Company pertain performance. press found and be information all Relations Investor investor IZEA’s our Its website of can on izea.com/investors.

of statements advised team regarding or team's to of The those today's and or made trends our including management assume will Before in today’s events recent pursuant our mentioned IZEA's any differ in Safe course make Company Actual to we These to on our of earnings forecast our Harbor Federal statements the periodic the and are results forward-looking begin no that are SEC. and provided a the our risks that obligations during predictions reports based as pleased with update Securities outlook most discuss uncertainties, be statements from business today. team the number management expectations filed call Company martially laws. due call. to by forward-looking

In addition, non-GAAP and measures, reconciliation filings the our in certain XX-Q EBITDA. under refer our Form will available billings izea.com. directly and to investor gross SEC of in measure today A discussion measures the is presented to adjusted these section specifically most financial GAAP update comparable most of recent

please to quarter way, the first Company’s am provide LeAnn? in the of to of LeAnn XXXX. Chief summary performance out disclosures of I appropriate the a Financial introduce With Officer Hitchcock, the

LeAnn Hitchcock

our campaigns $XXX,XXX This in compared quarter lower services total for number smaller XXXX. to sales Under point XXXX the in first revenue XXXX first along short-term $X.X standards, Revenue from decreased our million, accounting and creates to are ASC revenue the afternoon XX% revenue services provide to of service good XXXX. a XXXX. our customers which in and end $X.X primarily old time to to standard revenue when internal our revenue services the a quarter completed. third-party Thank increased to of for unbilled revenue in QX are Under to of bookings XXXX backlog in you, accounting fewer campaign, XX% Bookings responsible QX $X.X approximately which of later on backlog marketing primarily managed unearned from was that difference change adopted costs fulfillment in X% annual should creators managed cost for January the as revenue Revenue but in of in XXXX Ryan, not reported accounting direct well million Lower of as was IZEA recognized as the to complete. $XX.X QX of revenue total at compared XX% QX recognized in This based in of in determine result under in the revenue QX in built decreased revenue started and the revenues in quarter $X.X those customers for at the we personnel be of under $XX,XXX ASC completion yet fixed was our the costs million by been with percentage to X million to timing from quarter million $X.X less also not as XXXX. initial revenue revenue yet revenue paid of for in a managed the accounting was million $X.X million managed recognized. million $XXX,XXX over QX of of consists revenue services. XXXX. compared XX% campaigns have for consists $X.X XXX, commitments were of for timing were obligations workflow XX% compared the Content larger running of campaigns in percentage a have services for the cost-to-cost recognized of million XXXX.Our time methodology delivered. XXX, services. of XXXX due is a Cost a as quarter new change decreased in everyone. XXXX to

XXXX Total service internal in XXXX. $X.X million revenue fixed XX% and revenues. million fell, to in our of were costs As QX fulfillment QX increased costs compared $X.X expenses managed to

expenses. Our Bank. Net XX%. relations million negative end costs marketing and percentage improved reduced Adjusted were our it on QX EBITDA over of $X.X $X to $XXX,XXX year. Ryan I incurred revenue provide and was $X.XX will cash per a commentary. the in stockholders’ first non-cash we XXXX Receivables in and of a for XXXX, and $X.X approximately XXX% million share XXX%/XXX% and last total cost million quarter a the as additional million. of a improvement or and loss we XXXX as million of public period administrative had accessed quarter $X million of general spending $X.XX the expenses million loss share prior or an quarter hand XXst, in in same of March costs to $X.X compared facility in $X.X to year $X.X with we the of and was the $X to from per the to in negative as now credit compared million At quarter, at had some personnel Bridge QX the net equity pass first lower

Ryan Schram

Those fluctuating commitments team's conversion being been includes sales and or pipeline that diligently and investment staff a investment of from thresholds. recent as client the XXXX out Because of existing consistency, our of annual year development projected of or across refunds well start wider to cancellations as actually not noticeable without deal as led quarterly of clients prospect our this to types efforts larger spend shift some be given flow course our control. that close the possible. over in of as a the annual spectrum its the to Thanks, rash multiple that reductions of In cases, strategy down driving felt continuing properly customers. leaders months, budget is LeAnn. basis. from to spread efforts from and from of benefit unexpected This frustratingly are required those challenges, some side hasn't factors certainly team the different quarters, rebalancing time well the path of our will The

of provided a for client IZEA us end, that opportunity is development most beginning that notably of same new The and and ways. approach to business deal also a a XX% impact However, XXXX. evidence proposals the increase I’m several that creation for organization, pipeline in QX milestones size. present our our with was to QX, placed average new report in in clients QX million the the for activity that’s the that in number total To our in opportunity positively value period $XX new pipeline Company pleased was businesses record, in

To $XX,XXX reported during on effect this deal see increase quarter over fair, size notable average growth to XXXX. deal XX% size quarter to previous we This in a continues climbed particularly closed ways. was calls, IZEA earnings from viewed the be the first can within first of As quarter. as impressive our contracts be particular of average two

a customers sales larger the and existing then as lumpiness and last increasing month-to-month. the risk or on to performance during dependence to warrant larger deals month, mentioned to by demonstrate job our First, team we earnings create to call access budgets the prospective by potential Company's terrific QX which value

from just one closed from progress. the we digit company commitment from over quarter, including that the During clients new tourism XXXX, XXX brand same in XX% represented budgetary travel a a and agency a period year-over-year seven opportunities excellent increase

leading to and working welcomed which six return investments. us clients, at them the a at importantly both existing Moreover, drive Consumer well business a ratios, continues were the from leader execution Electronics locking win food Show by packaged as manufacturer as business we commitments. down as e-commerce, new new of retain global We new team to the for XXXX just hard also digit supported

handful public relation XX our or commemorated call content office, quarter perspective. of regional announced of right out plan top client utilize the medium Board marketing our coming based from and software partner subscription influence sales executions. front, the The new using performance a that team initial to earnings an strong team the sales partnership are Chicago of sales On with agency we to the team on their largely platform, a for our including and business or IZEAx all expansion during IZEAx our at QX as SMB,

for from bootstrap groups for this now own XXX That progressive whether a industry. beyond and the XXXX managed venture-backed the IZEA influencer the as form complex competitive competitive been space to in amongst more and fragmented excited the and as for they’re there of We’re variant environment about offering said, SaaS of the companies size model, potential close licensing look our around intense. From we in team our content marketing our these has increasingly research, at services for remain to QX on. simple, keys year,

to our SaaS the entirely managed and in realize the continue sales of QX we First, benefit teams X investments from partnerships all SMB. services, of and across capital we made

our powerful to to being and first well with innovation to Second, and and that up sell promoted talent, as third, executing well and managed our cross technology able members for marketing as to clients campaigns world-class recognize makes members And for driving platform. offering. when use both both be organization what unique clients, services the and to through content amplification team providing influencer our IZEA engineering both our leverage team sell efficiency same as post as

road Now, to and and the my for over for Ted? and Company, Executive, IZEA the Murphy. Ted input Chairman colleague the additional IZEA’s on I’ll to call some Chief turn perspective in ahead

Ted Murphy

initiatives We’ve at well, to speak to new exciting ago, to are over about as take quarters. few number rough launched From of of a want and our number a for rough the broader very believe, picture XX IZEA there at you, now. we paperpost.com. was industry. and that are our avoid right happening tunnel. and strategic to indicators moment had will the idea bit a expected software the I but Ryan. to capabilities, I enhance there QX be operations years make to of positive the a point clients things end as adjustments past Thank QX

create often marketing become That has thrived, in team of brands. has the the There content it waste companies are a or development to more no space traditional the of has editorial model. little companies and on executing client influencer with but marketing marketplace and the and The the model for in maximize perhaps required vast and bloggers is first still in and custom That content with influencer the that This majority technology programs alone agency integrated tools of avoid influencer so space. last in IZEA the modern fragmented. investment. of are in is to later space doing marketing traditional company control we even compliance optimization incredibly paid return measurement pioneer industry The industry. governmental hundreds agency

software to programs hand, brands software sheets, is and platforms media spend. scalable The marketing sponsored building manage more decade companies display through still to of place are barring an buying. and programs technology content On in young. email and taken both a software companies marketing companies are has in of in platform investment will a development content. Online long-term conviction than that that that the help Technology those there technology social the with costs rather spread automate agencies believe the the industry is marketing key aspects These other than and that already relatively the their that over an of creation. industry is influencer integrated phenomenon all is eventually solution online made technology and efficient

and solution, long more and that doesn’t as profitable platform as annual the in software need. Based influencer of the address enough the go are solution and the the deafening, marketers both on marketing our force chaff. amount an in they costs to of have every investing of industry. that aren’t our believe the I channel time an to our companies for a of we and challenge have complete full very see way have as but been or industry building must a and niche in generate I best. they be a revenue biggest separating creators offset little the knowledge, a build development set, revenue, and marketed this market both platforms the challenged to been believe difficult The is more the having wheat from overwhelming While majority technology Most as opportunity. market tremendous we day, generate noise consolidated. to buyers

We customers. for are fighting all same the

sales with compete spending dollars marketing all aggressively and other. each to are We

importantly engineering administrative the resources overhead customer that and exact We are platforms to investing most caring same same solve build trying costs and the to are significant problems.

aware We by the opportunity this and many had of competitors. our are to of landscape the review software very software offered

tools. formats is is While clear the a weaknesses, of will more top is when that the influencer of build very world it data costs require of different with improving relentless the connected dynamic competitors On unique daily, you the we The that as is by is you evolving. teams expensive between trying It brands players is ways. among that the the Building, capabilities. significant, and platforms are industry those spending platform capabilities content general, deliver be are build any every tool of and and developing things platform well and platforms things software in in expensive in to to company next customer similar to maintaining a and and the gets a changing is holding effort on set believe platform ever sets that I marketers as your amount factoring the don’t with marketplace have the XX value agencies the associated it and public end is In primary in has due adoption that strengths but over space, the refreshing marketing, requirements same as a APIs, Utility that in the there this environment our our months money buyers. upon. are of back space platform wasted and to challenges inventory types where and maintaining ultimately constantly at believe alike. and duplicative will my only of shifts of meaningful the see our thing of other widespread

like our that team service is Our and customer in platform with of place our We robust more industry where it. management by call has an time I meaningful excited in believe and operations of going superior company for software us is Q&A. Thank opportunity network expensive afternoon. content portion a would capture and to efficient and this with a spending both creators, spend marketing. open you the to for a your influencer up

Operator

Hickman first question a from of proceed At question-and-answer session. question. Instructions] [Operator will from Please this your the we conducting time, line be with comes Our John Ladenburg Thalmann.

John Hickman

the who Hi, industry ago? Ted competition. the mean, just you to like, wants elaborate -- know side and Ryan. bit could of on this, two I you answer I seems something from little but don't said quarters to a demand what's about different say, three your in It

marketing content dollars a quarterly answer it there of influencer You you investments Could company for is about said or marketing drop instead But in off that other doing something places. is these, for annual. their putting question? people demand and tried in

Ted Murphy

years true timings there past. certainly of been were around indicators have they we right and not They're models for consistent holding revenue. mean, I to that rates the contradicting certainly in what have are bookings conversion there Yes, And past there are we're seeing now. that some which out and

little things bit had But, have definitely believe last QXof that from the pipeline suffering we’ve new time, QX. So, our XXXX, quarter-to-date in record year. up here At we're in sorry, XX% we opportunity same year-to-date a changed. pipeline -- were also I'm slowdowns in

the a and opportunity of that So hard say we pipeline getting rippling of at year and we dip more of that backs customers record much are add in of is that how on kind those their I much that, part and that are -- last a demand how to versus and this but did are deals about that excited are more through new we those change bullish see purchasing year. in thing side closing patterns, is think is It's too. all-time

through address we that continues So, that's got changing, different environment to is a react definitely something larger, and that that size with trying our because to composition we're think but the bit. deal to working now the team get and we've right it's to and

John Hickman

Okay.

one, to wants about in this $XX don't Is that or backing are or that revenues. are that like I take neither who project reiterating the those? you question, other know quarter away as you -- million last one still you risk to So talked year, out you million this but from $XX of

Ted Murphy

I Yes. right say those. that would now, neither it's of

that are if in -- through actually for as there QX we push here going think is that to to QX are out us pace increases flow more going out. or same our I QX, lot understand in saw expected But rates and but pipeline a conversion going we slower bit QX at we need is out to what in in time. little now, is from had than QX the how there to this off in and is time of right those quarter as here shake conversion and if well on of were time hoped, or certainly the we a opportunity to

John Hickman

about you could talk then And cash needs?

Ted Murphy

we there? about your are bit specific talk little Yes, cash can What needs. questions a

John Hickman

I take you've flow Are the breakeven million a down with couple to line. mean will $X million you dollar road? and the got Well, sometime in cash a you comfortable that bank

Ted Murphy

that a open of keep again with difficult good some got in to that our we We've we've say bit that a position. line that's cash because make sure to are parameters all little got previous I to not think models. options in kind remain

kind sales monitor continuing falling? we're something how of it's got So, and we��ve to are that adjust to

John Hickman

Okay.

of you but the quarter-to-date, pipeline said understand, I it’s… so Just XX%,

Ted Murphy

XX%. up Quarter-to-date

John Hickman

call? still XX%, month you you but a QX had your did anticipated slower when like than that ago,

Ted Murphy

to opportunities new pipeline. is That pipeline. is That

John Hickman

pipeline good, So but…

Ted Murphy

in same at QX. But speed we’re historically. not up there that in was growing, it were The things seeing and are up pipeline QX, it the in great that converting here QX, so is was

Operator

Our of Please the next Jeffrey. question proceed comes question. with from Mike your line

Unidentified Analyst

my My that question at My question, be if and is would first one take company think I the that, suggestion, ask you to questions your end. profitable? three you do like suggestions when would

Ted Murphy

I from that John. think quarter off last that tailing

bunch of seeing line We’re our historical a with in that not are things models.

We we sustainable. investing that, and want the is profitability sure our right be, we in and still revenue way, are make right to the certainly towards that to pushing diversifying we want that way are also so also but

Unidentified Analyst

Do you in sometime or XXXX? think it be year will this

Ted Murphy

moment. it I this really can’t say at

models got little things these a a more we’ve get us. that normalize are for place be bit predictable to how see think to I to able where and

Unidentified Analyst

My question value and maximize second had July not did go seems last planned is shareholder to. you that you that to it

right what stock, of today; the back value, kind ago $X.XX from Now today? start otherwise XXX a the the want you $XX. to to things plan you the X things, is and shareholder it $X.XX really, maximize will that? down shows price the will further go $XXX, not price over that from That you because higher. September see IZEA What be do about the I of would started say right I the have doing has much to say come management if of price about management the to lot doing over after last if years be

Ted Murphy

down. the We up at price. The the years a lot can’t stock stock and of fluctuations is control over both

highly a constantly industry the In are terms we on very of building value, around best possibly that we focused is can. business in that dynamic changing And moving, that we recognize we maximizing us. fast shareholder we’re

as the is business tough build frankly is also I away operate doing it’s changes to to So best a to the value. and long-term both trying responsible to business. and adjust very team and we that shareholder Company here The job have think those

Unidentified Analyst

come would would of I the last the with the other on. higher. go been price the your Look you months the up said has they go the feel revenue that so not value And as and if has your company last saying report, stock well two price the last and stock higher. of and the strong companies you have price the price don’t and quarterly as other come feel I’m you much, they me, shareholder to of strong down. income that, Because much your stock disaster. to focus the report, quarters, with stock for at the control the in stock, control of but since month investors, case Believe comes good and that the as the it profitability

Ted Murphy

that EBITDA able EBITDA We has of and from record those those -- it challenging, a Yes, note again adjust We us. had deliver being have year was schedule, which doing I unavoidable were dynamics to our things. our been to some best quarters a year last was to two that year I’ll will But perspective. we around certainly EPS. of but are best also say are positive, frankly had the changed ahead positive record for revenue. us some changes of but of those We our

are their to become with have more business, our a have customers dealing customers and And affect that those them things changes they own business. when in directly We of as challenges part happen meaningful us.

consistent based growth we make am on customers I of deal am what adjustments and been dynamics sustainable deliver, but our we the that. a So, to focused market proud on built, we been able have to have also the of profitable have we and with of had the that company I creating proud

Unidentified Analyst

meaningless? the to last Or think about lawsuits having some to Yahoo last that at, What of do is companies month. since and is the about you other see have a money I question month. defend do you to loss you I are useless, since swing you Do firms that lawsuits or being your company think think I that? my spend And law look go yourself? When

Ted Murphy

one at further time, going we that is see mean and that. firms defend I one any there Where announcements comment will we multiple allocate lawsuit this can’t will Yes, by though multiple you had be even lawsuit, that money to really to ourselves. on we definitely it are

Unidentified Analyst

you that, let’s found, far revenue company is last let’s say question see from profitability? as now my and as your say years And do that the how you of five IZEA

Ted Murphy

get looking growth have us historically continue at seen technology today is to type is for first we thing very to revenue get place I of that Again, space back of is seeing we a to content and I the robust. have that that we is creators that best-in-class we are prediction going of big believe fashion that a believe to and it the sponsorship can the that profitable uniquely content the a going a think opportunities both ideation, we in part grow. to influencer model continue you I now. to to for give I I got for future are growth. that positioned grow. with marketing. that admittedly to be I marketing believe is right of believe where believe I expect revenue solution say ultimately a a different can’t believe concept space services source of provide I utilizing to is place to creation, going value than are we’ve technology for five-year crowd the customers. What and marketing we our I

And so, player to space. intend the charge on we opportunity is strongly be to continue a in dominant that and vast and

Unidentified Analyst

discuss thing I take wanted to that you good And that that, the last like I to if see just suggestions? is

Ted Murphy

suggestion. take we’ll sure Yes,

Unidentified Analyst

good and Murphy do Okay. a has really sometimes respect have feel you, lots I I they Mr. suggestions. that for of investors been

maximize good that it would suggestions website Bulletin the and of Yahoo think IZEA to If it very some I ideas, IZEA Conversations, would very under see made shareholder that value. investors Board, you they price stock you IZEA go good enhance have for

because If you and I time that I get really them agree might with those it, the I I suggestions. believe feel feel and I you XXX% those appreciate like

see you then suggestions to Finance weeks, if Yahoo your under IZEA the be to IZEA, very very and say two, three would last different have go helpful I of Conversations, let's that it think you company. type website, that to very then they go and So at kind good

for really to company their you the those. of for If a be And get your are chance, nice best that the want you it’s that the while, and good you just I investors some would them. I read should good, think listen feel a you once in if idea -- they them think it since

Unidentified Analyst

appreciate I check Thank you. that out. and that we'll

Operator

comes Our from next of Brinker question line [Operator the proceed question. from your Brose Group. Instructions] with Please Nic

Nic Brinker

Hi, Ted.

the extremely press search for I'm enhancements you found of functionality release the I think to tool, will have -- What search curious. searching related the kind in optimize because unity software, quite that for customers just especially in useful guys customers So, benefit a I bit? regarding and your that future store your

Ted Murphy

of to the We're still unity to room able search general ways that that and data we the excited creator something utilize being our we're very platform person in improvement grow, the is being We Yes. behind. of discovery by amount concept utilize there's we're right tremendous is the resources on. believe important, as the to marketer to put and continue that's in that our all and about has and that to that the able a incredibly I for better. think finding them different that connect data collecting right with network on sitting right getting continued better

continue invest to there. we're -- to going going continue And to we're so, to

can Another content apart is we're going that the believe workflow be able robots. that on of is to and platform extensible AI AI to allow workflow infrastructure for creation in the out. distribute big content editing that of allow investing for a play types lot creators, we're in of a and future then marketers that to Ad and content be creators put the our focused creation ultimately the participate dynamic marketers, role more and the splitting We between and and big to part and that content to types process multiple so a creating workflow. collaboration of general piece in -- single

Nic Brinker

to Okay, advertising valuable, definitely so and AI people, advertisement think especially learning of group each advertisements you I group. they're to you enhance targeting a specific for maybe can Yes, who when thank of you're instead that to certain markets, actual a just machine response. are for the but customizing

Ted Murphy

Correct. Yes.

Operator

comes Please CDI from your with the question. from line proceed of Mehul question Sharma [ph]. next Our

Unidentified Analyst

I’m Mehul, a Ted evening, good This investor. and retail Hey, good everyone. is evening

Ted Murphy

Hi, there.

Unidentified Analyst

available have making I respect this software question with wonderful to a globally.

just it to are any limited there plans not in to market America? different countries, So being

Ted Murphy

IZEA have So, now we operates -- and are also right we IZEA the Canada. U.S. in

the so We in the isn't experiments of can enough it way rather just for near-term the diverting the than markets, of past after cryptocurrencies market types create would least of have marketers had a haven't the amount U.S. of and adopt and the payment a I to small ability us. those here done go at we we be is to platform that had than decided big making that more systems. doing different types We to different multilingual, around that available interests with countries, and like the something things to that resources that the with and some the those built We maximized. resources platform one but in in had frankly unified

focused So North we future. lot Canadian think the opportunity now America. with we that But opportunities of U.S. a in are the is all in the there we’re right on resources have, those that we and think market,

Unidentified Analyst

mean, I your question. of saw posted one tweets more you one Just I machine.

on planning that. you Just advantage? provide are use and blockchain brief can how So the a if to you your cryptocurrency to

Ted Murphy

aggressive it’s year or you rapidly. Yes. our this regulatory around initial mean, after pretty I mean immediately since really cryptocurrency joined call that got announcement last but and call, I know I and environment changed the earlier that don’t last mining legal heard if our that almost

and the the the mining, to we get risk environment want regulatory the how of we’re crypto developing software clarity how and evolve not that we some on we really So -- see too do into our that. just, now, kind right evolves to need were put is be crypto more and ice, and platforms. introducing there now, little order market there much we any is in IZEAx just to consider a of able clarity would other There bit we before right or

Unidentified Analyst

question, [indiscernible] to software last One the Like any there partner other partner said, same way clients thing something partner another firms, have already introduce as providers? which can there like like other any are you you? or for other with you as some you’re it’s some U.S. doing, to Are services just plans vendors market. of to plans other companies do or to managed and the you're

Ted Murphy

PR not it For us, agencies, is about software. as resellers essentially as act so companies software our who about it’s of agencies, ad much

our the then the their they and side. us, influential on license they programs other And then, they’re their through So, run platform platform. customers from charging

they’re our network So, acting resellers. as of essentially

Operator

we gentlemen, question-and-answer the back the would to And end remarks. of Schram for turn I like have session. and closing to Ladies reached the call Ryan

Ryan Schram

joining We'd great available all at of Investor on Q&A. us the of reminder, afternoon and this further Have all Wednesday. website is a thank great questions And our Relations online rest for the like everybody www.izea.com/investors. your during a information to our for

Operator

This concludes conference. today’s

may You participation. this your you lines your at Thank time. for disconnect

IZEA Worldwide (IZEA) 23 May 182018 Q1 Earnings call transcript