IZEA - Earnings call transcript Q3 2019

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Operator

Greetings and welcome to the IZEA Third Quarter 2019 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce Ryan Schram, Chief Operating Officer. Thank you. Please begin.

Ryan Schram

to XXXX welcome call. and afternoon IZEA's earnings QX Good at Chief I Schram, Officer IZEA. am Ryan Operating And joining Officer, is IZEA me today Chairman Andrews Officer, and and Justin Chief Executive Ted IZEA's Murphy. Chief Financial with us Thanks for this being afternoon.

today, details to with XXXX. our press for pertaining performance the company quarter Earlier a release issued third

on those website Relations izea.com/investors.com. to If of investor Investor you review had information our IZEA's all details can be found

our events, the to not release safe no uncertainties of inherent upon. end Before expectations the The call. our of filed harbor team the that SEC. call, due outlook we note to assume made and management be forward-looking These business a forward-looking team's begin, and update the press in please our and relied company reports and IZEA's mentioned appears during of statements. results from statements most as of with forecast financial statements of the that the covering factors, results on those today's risks that take any company's at trends today subject management advised our and obligations predictions or today's number unduly are our discuss make paragraph be will course earnings team are should including to periodic to materially differ recently Actual based

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

my of I'm out Officer, disclosures colleague Andrews. Justin the introduce way, appropriate IZEA's Chief the Financial and to pleased With

Justin Andrews

everyone. afternoon good and Ryan, you, Thank

recap results XX, pleased ending I'm September quarter for XXXX. the our to

from our and total for third Managed million coming QX software-as-a-service for approximately revenues about with $X.X from coming offering. This Services $X.X Service revenues Managed business IZEA a million, the SaaS of about and For compares our offerings. with XXXX, reported XXXX quarter about SaaS $XXX,XXX million $X.X of or $XXX,XXX

business, trailing primarily decreased, in the revenue. revenues Service due recognition and our Managed to headcount of sales direct our team For reduced have overall

up are Managed recognized was over the quarter, month these bookings nine While XX% months to for in Services typically bookings six period.

efforts just Ryan a in area discuss will bit detail our in more few a minute. this in

large recognized of XXXX. in in of is XX.X% XX.X% percentage a in exclusive amortization to due QX revenue, As of This quarter. our QX cost has the being increased client XXXX projects a few primarily revenue to from

$X.X gain in Our and XXXX with associated the total acquisition were comparison of costs expenses compared with associated million includes of the payment for ZenContent. This settlement XXXX. $XX,XXX acquisition settlement payment $XXX,XXX for million with the final for Tap and the QX gain QX $X

our stock lower, used Due number the average price the settlement. weighted to time liability payment, of stock price at to for the of being shares XX-day then the determine

million for loss was QX million for $X.X net QX, compared with Our $X.X XXXX. XXXX

for $XXX,XXX was of for with XXXX. QX QX, a loss million $X.X a XXXX compared Adjusted of EBITDA loss

$X.X the Our of ending credit our and was balance as XXXX cash balance at remains approximately XX, September zero. on line of bank million

since our cost payable. payable settled during settled third of acquisition vast And quarter. remaining The obligations the the company majority cost have acquisition the

with $X in we investment future Now continuing operations line can is a which obligations balance our million of our core technology fund and settled from credit that up, sheet are platform. healthy those our paid and

Ryan. to turn I would now over the call like to

Ryan Schram

the to And Justin. Thanks welcome team.

winning attendees, distinct the front sharing economy state-of-the-creator in and branded conference keynote study Angeles. Cantor. providing Expo as front in third research brain and Marketing In XXXX was our top The of all quarter of of agency award Influencer facets consumer our and in opening had at the business. right of the multiple from privilege We July and well the productive IZEA personnel started Los industry creators. as insights Conference

IZEA's same of a marketing IZEA measure month to InfluenceImpact, that the to we Later announced that sales. clients influencer IRI to on joined retail with impact offering new forces launch

the of to of you familiar, their those big help that forward-looking analytics businesses. For not and IRI predictive CPG leading is provider insights companies data grow

awareness, goods influencer trillion relatively much it's and it one the consumer impact difficult marketing to measure more of sales Packaged in offline $X impact track at annual and a North that's for is to physical attribute while largest America, sectors easy online in spending and retailers location. is

providing influencer customers, marketing to for analysis measurement enables of impact next campaign of the CPG through level to packaged InfluenceImpact purchase good. any uplift sales market positively mass offer sales sales in-store data IZEA our how track lift

marketing Lastly, having surprise summer, placements, capital and IZEA raised analyst and focused of on the These from and team the a work in awareness small, increasing we investments putting to to May throughout at this big areas brand offline. also lead on online and strategy. run delight coverage our both in form the awareness generation gamut, comprehensive

the the of competitive credibility differentiation and company's focused increasingly All Influencer the content efforts bolstering and marketing in on are sectors.

economy the decided expand topical once platform, IZEA's analyst to named to To our commitment influential towards contributing marketing from only intellectual media industry that a geared continue, year of alike. end, highly state members scale to and historical large but per practitioners, we've study capital monthly of insights, not probably

in risen post first analysis industry last $X,XXX.XX sponsored of XX in marketing the XXXX increase an average marketplace spanning of the creator life XXX influencer A $X.XX these observed points released the years. of filings XXXX, of just Key in the to of last these has from the times. a batch our blog with price online headline, We cost week

in Services side both rebuilding the this decline QX year, company, early sales significant acquisition in leading XXXX. our And momentum following units, of TapInfluence. our had conclusion provide into On positive to a of which of the at SaaS Managed the up headcounts of both and and

overarching direct team at QX to as setting ourselves personnel program force our experience fund stage to is early XXXX. with begun have the date during top for up rebound the to members. an And trifled, focus in from efforts rates. of our of side future headcount sales selling Our bottom a building recruiting breakout category for other been have presence a create team professional solid talent, The and our in-house May retaining

The early returns to Justice is approach as modeled. working

of to to While in during third bookings the units, and XX% both revenue was the million the down the increased was third in million quarter with fewer in quarter $X.X Managed XX% quarter in that Service personnel XXXX, $X.X before. year compared

but of to since add to team saw absolute pleased time the have activity then. to members. salespeople in a the will While new We've increase we're headcount take headcount those and two an quarter from XXXX. These we continued seller early pipeline top three development successes with down solar quarter XX% was on of year-over-year, sales some of impact line, XXXX

unit, licensing XXXX. varied, compared positive. XXX% addition hit our outlook Monthly quarter. but record was That and to for new SaaS In were a news our of absolute is to up energy during the the IZEAx record a SaaS high hitting fees suite QX an as the in QX customers count

our through methodology. see to of investments focus continue challenges needed re-factoring pricing we legacy base growing staff and customers and to customer our and on churn TapInfluence incremental sales the with However,

TapInfluence we terms modification demand, that with market joined impact a our This the our QX proactive pricing revenue SaaS opportunities adjustment in on near-term quarter, During customers the based to recognition. QX Suite and for us acquisition. and impact and IZEAx packages in experience Unity will had made licensing of

for SaaS enabling create customer our on that provide will foundation We sales and customer the forward rightsizing moving more we ultimately a right by brand proactively allow agency solution to legacy focus to the team our by IZEA stable partners. customer success to contracts delivering

Ted? road for the on perspective call colleague the company, on IZEA's and and Chief to and the Executive For IZEA's additional over ahead turn I'll quarter some Ted commentary Officer, Chairman my for third now Murphy.

Ted Murphy

you, Ryan. Thank

offering In company capital completed provide the million forward. ongoing operations investment moving May, as a IZEA for in public strategy growth the company's the $XX as for the well needed to

in we've of platforms. our to strategic the Ryan using technology those marketing been and advancement resources our sales As mentioned, initiatives team, invest expanding

our our diversifying IZEA Services combination of investments of all our customer And streams sizes revenue customers that get Managed return and both It we Services more the is success. to sustainable look that will to for belief to to that key belief SaaS as allow will SaaS and from future. a also base is quickly. is these yield Managed It profitability long-term

final Much of the product we weeks heightened the the development. XXXX, excitement on excitement As XXXX out pipeline the finish of that do has excitement new past. But quarters. sales towards coming looking future from another with anticipation moving to are part for and is with and that the of for we

six platforms. the next legacy shutter the TapInfluence months, Over and Ebyline will we

sun we setting and parity been, integration call has Our plus. these goal the always for of what platforms

make they systems to do moving have parts that Before did wanted customers much now and believe We plus much, sure grafted platform we more. of they we them best could extracted in the IZEAx. onto each previous over, the everything

top exist have We not Platform platforms, added which did capabilities many to in IZEAx from these new that asks of also significant were users.

transferred our of will follow are customers already Across been execute and taken has begun be team QX. have and the by to and great smooth the to to move we those teams the be of be and both TapInfluence to mid-year. full platforms by a with plans. this trained make completed expected transition early events complete course possible. expect will from Our QX end have as transitions thereafter as first, the year, Ebyline These against care transition platform meaningful shortly

modernize marketing hosting The other brands particular. to significantly significant support for elimination reduce these value search and freeing and of IZEA engine as websites in to intends expense. optimization the work up these to experience, platforms and our us and streamline keep initiatives alive customer allow will engineering hold on they staff

sites, However, for using moving these be someone they forward. platform powering when will the up signs IZEAx underlying

of also creators. customer get revenue the past, to our take self-service in us advantage our we we intends streams IZEA future. are complement both of creating and marketers additional and IZEAx base that develop As

creator data, tremendous in assets have our We software services. network, and

solutions, incremental offering asset software new is to base, ways. leveraging our goal the Our in new upon unlock them by existing build that completely value

beta with week, associate by new classifies Earlier we competitive information announced the content for hierarchy launch service brands corporation landscapes. a that provide their brand to the BrandGraph maps marketers and aggregates easily across multi-platform this social relationships is BrandGraph, IZEA's intelligence It category. and to social of of insights complex software.

of discovery integrated tool. through influencer IZEAx The our with BrandGraph beta VizSearch already version is

of process content QX. a in hundreds new addition currently end BrandGraph to and standalone We to intend are insights. incredibly corporations to launch brand offer Data as by to them. should the is product of valuable it integrations serve pieces tool IZEAx, that of inside agencies SaaS We that of using millions extract self-service that to of the

of end own year, the to creators previously IZEA Gigs. contract to storefront. services digital referred launch online also expect allows Before Shake, through as list this Shake for we freelance Alpha their to sale,

the launch, their will building Alpha creators in to begin the allow select IZEA platform marketplace. At listings

We Bot, powered by Shake platform expect be chat the purchases in first experience. to shake the for public e-commerce a will half also of self-service XXXX. XXX% bot activate Shake our for

In by Unity platforms, virtue addition these ongoing of our to upgrades new IZEAx major receive continues technology. to Suite in investment

very announce XXXX. we on plan half IZEAx in that has busy enhancements launch of to for created some for been X.X team Our designed have the first IZEAx and infrastructure the X.X, incredible the they expanding we

year of our and the solution will set building our team company. for with Our growth will IZEA XXXX, biggest best expect And be since that headcount adding year was fund team down we massive team has raise. infrastructure we've XXXX that big And with technology been a new which since and year armed sales had. platform the the be to our enter ever for company. out a heads

growing Our coming the of with is this half self-service monetization online year. small, business but front additional in opportunities

capture with 'XXs free this era platforms and and golden of significant our associated maintaining have our will is pricing old positioned win Our well of engineering space and a more we better with We our will be portion partner believe be right team burden IZEA market. to sized growing methodology the customers for to business. the

us now Thank open would this Q&A. I for call the with to afternoon. up time for spending you like

Operator

Please proceed. [Operator Our Craig-Hallum. first with question from Instructions] the of comes line Mike Malouf

Mike Malouf

early Can impact If any maybe talk can that implemented? InfluenceImpact off like we about really bit data some with provide. interesting little just especially sales given uplift how that's that the that sounds of a could just you with start you and just a offering, been indications

Ryan Schram

are early process. - we still we Yes in are that

of You the the sales know, a we that side long cycle pitched but business. have is relatively here, Services specifically Managed being on

got also in that And and it's well received. retail so space. We've about very fair a been excitement amount far of press the

that a our store important the at we lot are is It's they for get lifts So customers CPG a up about something able the justify seeing specifically spend. really end to track being asked incredibly that helps actually customers. the measurement physical location to

we're is going Services lot a be will be So to standardized forward. that Managed is on lot confident packages this to and going be a something is that moving that these of something there likely of uptake in

Mike Malouf

should TapInfluence. about as least a to little SaaS or we the you quantify bit license you're - wondering kind of through start on can up in down in offset we if December, from we wondering a side sort to churn. some the look one churn into then growth on side, see December see you us pick I'm of into to have And bit or the still sequentially going growth a obviously business sequential of that just at churn with the some and are we the going go process? give little where on And other. as are sense You

Ryan Schram

relationships. our influencer that the to they of licensing from that fees largely down to comes well, to We themselves, from get you're some they frankly were coming the still able large to see to Yes, offset get actually were the churn that where and some majority paying spend being QX customers for very they in that - the Tap allocated customers overcharged those legacy, going dollars marketing, have return. influencers be the the towards so large want

we we full than been be proactively, effects of the of those adding, more fees expect to some the will we period. are the have. impact end to - be adding one had some customers but be at that churn the licensing QX, now customers beyond of the any year those cycle don't we in the So of QX. some contracts, through with at We'll end modifying there we And adjustments feel TapInfluence or and and that sort expect of

Mike Malouf

good. Okay,

of sort QX. on So back growth to

Ryan Schram

so. believe We

Mike Malouf

it into again, should that as as have kind help some to seasonality well. do spend these weakness just we as customers SaaS relates have saw there of December, marketplace churning then then you. And of we wondering some the some side, you we off. I'm go But

number? you sort can of of at So sense you give looking us a how this

Ryan Schram

be in that certainly to tell that specific churned also due that marketplace customers just give churned some the December. of own can't I into I insight those but have can haven't some you due that will organizations. experiencing spend less their challenges to customers - are

year. two So they're their own We've with that throughout we have with the those dealing those customers feeling challenges been challenges. in particular customers large are just

like We impact spending rebound, have an just some and have will they seen that used not but QX. in to they're

Mike Malouf

Yes.

as of stay expecting done go look you Great. sort just right. maybe tick down. G&A a really G&A that of question, And you Justin, into as just going great all in next wondering couple I'm Are to to here? of from Okay, quarters. is kind Or you that expense, of flat the keeping then a we for job the up? through

Justin Andrews

But into to what's with G&A. kind on new exactly know don't we much to decide go it's real We Potentially and could don't what do go give that. with - lines up investment whether going right really insight. depending like way, no or to either can't too it we down. stuff We of going insight happen revenue now,

Operator

Our Please next Hickman Ladenburg proceed. the from line Jon question comes with of Thalmann.

Jon Hickman

the want I question SaaS about up on follow So Mike's to business.

SaaS of level? number at the record that is on us telling that the Is platform customers you're true? a So

Ryan Schram

yes. Yes,

Jon Hickman

true that you it? That's of every a recurring because number revenues, month licensing customers they're paying is - statement. the So

Ted Murphy

Yes, are have customers you well different licensing have in that modes. two - you

that signing customers Unity customers customers. the long XX have enterprise of that You term are Suite licenses months or IZEAx are

self-service customers no in We that also are have with their have customers contracts. credit that the are cards coming long-term that

But renew monthly automatically.

the would contracts discovery. book - on when So do we that - Unity for but customers total from like commitment bookings a any not SaaS, assume Suite, forward of don't we we SaaS are we amount license for book we talk on about

Jon Hickman

then coming the spend the and marketplace they right? through so, the licensees network, do transactions as is And from

Ted Murphy

correct. Correct,

Jon Hickman

the number customers up as marketplace the up. goes spend of So go should

Ted Murphy

customers have different have of you - Well, type. you

have marketplace. not on to but that We tend that spend are Suite spend marketplace, that customers in all them Unity realize in of

them promo providing sort any code that platform sell. Some that of card they gift because are of to or that product product our of compensation of instead they type payments a want supports whether any or be provide

And then we the they're and to the offering, licensing and going are spend access pro - They Those pay are customers creator through never base you just of that get the kind to to a a group have platform. discovery is the more provide. to which money not insights fee to recently discovery license tool. discovery going the us

Jon Hickman

little to you the for What's going year. bit QX. talked - putting your - growth every in say start - you're the So get to churn X like Services we're about you the Managed counting the end of

a kind see So still give it can down numbers going you of flat us we are on facts? of or - to sense is

Ryan Schram

and/or I from you're I seeing the mean and because that fee tens that's that replace customers we're dollars is adjusted thousands down see somebody more is QX it turned of people those what if their a you're some of smaller into of paying to numbers customer. what rightsizing multiple who for appropriate think contracts, of probably much to going one licensing takes spend level in for still QX that

QX. So you will feel the effects in of that

team moved and think we is what size and Services best the broader as who including was we're organization team sales as we've excited to SaaS about the that nice people SaaS our Managed and team really got we've he has of the a that sellers on upside sales out side, the building is now I of of potential Services there the a lot over Managed one been there. would say that well SaaS speaking one

So, churn come that and the those of to I work QX, - that kind pricing to think through our got to we we'll we've feel benefits really adjustments but we've start got that made. way

Jon Hickman

is burn Justin, in all there of mean like going - sounds is there of give with it forward basis. And then payments, sense are quarterly on one-time of there some a lot cash - there stuff the on lot QX now, us was going for I you could a a

Justin Andrews

really burn, should be our on would projections in much you everything Yes, pretty cash with growth but we with give any can't sales. again expect of forward line what in

Ryan Schram

Yes, to - the to overall for I of the bookings on as the and idea and better burn those those take people but to for we coming is time the to sales Managed that. that The would going contributor margins the that gross to should over are a is flow side, on major for people effect see sales the to add Services revenue. starting have that full online a and start the benefit the to rebound taper which company to time, contribute it's some through

were though the to year-over-year, to those So that with are six you had up next QX as it even over revenue bookings going smaller nine call months. bookings sales recognized months be team

Jon Hickman

full you again have guys, how And many tell so, do us time. That now? sales are

Ted Murphy

were was end the What us of I'm XXXX SaaS which significant Managed of that sorry, the - this have we us. for to that and are level. get back expect growth will XX we our And end - Services, just year really XXXX - levels. to sales year people, at not the and in under we by When a bring both XXXX, will of to that

our doing. on that's capital really the been on to aggressive what we focused So front has round to be get team raise able really of sales and again this

Operator

of Van Our next Group. Hill Please the question line from comes with Everest proceed. Curt

Curt Van Hill

you Good. give of comparison Justin Question X.X me of bit the for maybe accounts liabilities, guys I to contract color little a think. Can receivable. on in

Justin Andrews

Okay.

me Let --.

Ryan Schram

those to to of the be going our creators that are due Curt, payments network. the are majority in

Curt Van Hill

network. Creators in your

accounts in reserved receivable cash your So, or it's anywhere? not

Justin Andrews

from pay Well, our due accounts that payments have we to to pay us have would creators. customers - are and then liabilities the to no, their we receivable the

Curt Van Hill

Right.

are - these the So okay.

So out? have how those long paid

Justin Andrews

our that XX paid way complete. get are work The work the is after payments creators days their

rolling So that's for number us. kind a always of

Operator

Please line next comes the Our of Shamil from question with [Nadhil proceed. CDI].

Unidentified Analyst

buyback My was question program. a like there is there like share million it is a program, was completed dollar

is buyback that I think completed? million share something,

Ryan Schram

the I think at is referring share through what the year That of of and the is authorization you're end that authorization the that Board. buyback. goes of No, to next the discretion

So at buyback of sort that announced date on do to can authorization. Board any of to time. any choose executing But in the terms that we haven't share

We by like same as are windows restricted management be. a purchase the would blackout stock

certain So it has windows. to happen within

Unidentified Analyst

expecting great been kind more years, talking so question, greatly similar after was a if XXXX about of one so like Just have you you and year four a are growth.

opportunities there Will of kind which there challenges, any or XXXX? which which can offset challenges the you not opportunities not in or what be were there there, XXXX? there XXXX were and see not in So XXXX in were which in

Ryan Schram

I'm The sales difference XXXX, is was XXXX as - in sales overall to also we sales team that a I in not our had and sorry sales larger in much was would equipped sell team structure our today. between well organization as now say XXXX, but biggest

that believe most lot you're and seeing recent education a that invested more I onboarding sales of training and continual and bookings. have in team the We in reflected

results team XX% a have You delivering year-over-year. smaller that's XX% better

of So steadily sales as than person. couple more we've seeing team the increase sales been the kind efficiency that that years over is years past in and previous per pretty effective of

lot certainly I today that think noise is dollars is there lot the a go marketing, There fragmentation more more the influencer in lot more around. but in are XXXX between certainly a at same a to that a difference is and time channel. there

of that not business continue able to that also, they've Fortune the based confident corporations people, be be investment but is types and gives with with those show customers us to a directly able think we've more team. it and been that's the in this been to made they've they've grow story based more to productivity in team, getting and on to just I front our sales form relationships particularly lot out can that relationships that in and bats, and XX to we of IZEA in on gains XXX about just to the grow feel able them at platform growing of Fortune just able our that had, that why more XXXX tell

Operator

Thank you.

We have the end our to the Allow question-and-answer management reached floor over for hand closing session. to of me remarks. back

Ted Murphy

joining Thank of all A site. call will be the this today. out recap on check you available for our press us IZEA.com financials and on can you and release

Operator

This you. conclude Thank today’s will teleconference.

at You and a your may lines day. wonderful disconnect time, this have

IZEA Worldwide (IZEA) 14 Nov 192019 Q3 Earnings call transcript