IZEA - Earnings call transcript Q2 2021

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Operator

Good day. Welcome to IZEA Worldwide, Inc.

Second Quarter 2021 Earnings Conference Call. [Operator Instructions]. I would now like to turn the conference over to Ryan Schram. ahead. go Please

Ryan Schram

Officer, and issued Officer, for company being Murphy. and I'm Chairman everyone, quarter release press at IZEA's XXXX Chief QX And Good Schram, with welcome President Earlier IZEA's to Ted call. afternoon, Financial performance IZEA's is Ryan me Officer our XXXX. Biere; us. second this and Thanks Executive earnings Chief and the a with joining detail afternoon, pertaining today to Peter Chief IZEA. Operating for

If those investor you Relation all information details, can izea.com/investors. Investor at to our had review of be our found website on

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

and measures XX-Q. detailed our to as these Form is billings EBITDA other such and will of addition, gross earnings in recent In our most adjusted our A bookings. business today a release disclosed non-GAAP measure, refer in financial update and metrics explanation

now Officer, care Biere. call Peter? appropriate of, turn Financial colleague my like the the With Peter and IZEA's Chief taken to disclosures to over I'd

Peter Biere

$X.X service the million quarter results you, June highlight was good higher when managed or and compared revenue the our while prior of quarter increased or offerings. with revenue X both SaaS $X.X $X.X or for second million I'd SaaS Managed of and revenue for coming quarter. $XXX,XXX afternoon, like Total from year business to the Thank $XXX,XXX our XXX%, XXXX to compared Ryan, quarter our coming million XXXX. services ended everyone. to declined XXX% XX, by XX%, XXXX, from by

partners. with together year. XX to in brands, fulfill increasing campaigns, bookings, to less As and refunds received, last also any we all-time factors, increase toward Fortune continues managed spend that marketing increase given repeat $XX as services the metric, quarter XXXX previously larger the several revenue. This XXXX. business forth added the since an topped in orders our second announced, QX period, and key with from The resulted measures of managed second IZEA, services seen cancellation which record three new or efforts sales for put Fortune represents XXX% during our quarter growth compared customers XXX during the trend trend continued taken the by of of late million we a These we've team

the we converted X-month on a over revenue completion services timing to managed greatly. reminder, on revenue to recognize vary of on over have a bookings time As can our period X Historically, delivery average. percentage contracts and

upfront, months, for which complete. turn taking to longer contracts approximately also we've complex year, in last more late the time X which delays. further since lengthened orders, to increasingly for with larger has revenue However, been contracts largest recognition can the cause more and period receiving sales takes larger Planning average even

challenges may and to faced related our these of Last number subject managed of predict a year, not used For customers while health services revenues an quarterly adjustments. to business, reasons, bookings, the be of important indicator could overall future to our COVID-XX. be

refunds the continue Total but and digits, other business on were managed services to year. since selling all cancellations seeing Since grow. refund for As rates with quarter the fees for for recovered all continues bookings marketplace have managed late has our of platforms. began jump more, is have result, License services and rate of we we only in in last managed fallen low through SaaS quarter Not X we of license last lowest fees, revenue, self-service which second lower quickly $XXX,XXX are comparatively to to spend services exceeded bookings the saw grow XXXX. of fees year, X XXXX. single a million already quarter June counts measurement of $XX.X XXXX. and comprised

competitive are average churn. response fees the However, in COVID-related during implemented last license changes lower, to to primarily summer we year due

pricing our lower selected current than our revenue. the which spend lowered prior the spending marketplace billings margins offerings, XX% for second on also impacted marketplace quarter, We the on Gross quarter. self-service quarter in leading fees to during lower were year

of larger amortization, during or quarter year $X.X or for last year costs to primarily sales compared marketing million for due current gross the totaled quarter. $X.X higher quarter lower due $X.X of associated other quarter in X in with million XX% prior compared XX% quarter the investments. Sales to heavier the that revenue which was compensation the compensation, above year and million driving administrative the margin carry was year mix prior of compared primarily higher and varies costs growth. $X.X $X.X averaged contractor $XXX,XXX to the of $X.X or Expenses costs XXXX to the due XX% Our during support bookings General year of the deals prior million overall million quarter. Accordingly, and than marketing the XX% IT operations in to margins. XX% higher or a and to and customer cost in XX% $X.X Cost totaled above revenue cost quarter, exclusive revenue expense of million of to prior with quarter, revenue, quarter. were current million

plan and around level increase $XXX,XXX. on COVID in impact backlog, at in compared strength was of continue per gain half forgiveness second received end $X basis, We an duration company year, a during the loss $X.XX approximately for future negative our was drive EBITDA during negative negative approximately June with In demand, will marketing $X.X net million quarters. of recent total economic an and loan, the quarter the the of in the and or increase our in to bookings strong totaled XXXX its million increase which negative by without increase debt year revenues uncertainty which second in $X.X for acquisition. continue PPP to one-time pro Even new the million of of net quarter impact compared revenue $X.X totaled $XX.X loss team notification loss share. industry. product of last of of $X.X pandemic X of quarter. of and customer to second the million net that forgiveness, quarter Our quarter the prior of of engineering to or first forma the in share. still resulted investment there's a expanding Adjusted quarter grow XXXX, spend a XX% a $XXX,XXX to the per share the million anticipate per up we million the XXXX to to On our sequentially, our $X.XX Based or approximately $X.XX for

X. million gross $XX offering had we $XX.X XXXX, XX, began $XX June of our hand, including in during from quarter offering, the million of of on This exhausted million which in cash June was of at-the-market proceeds at-the-market XXXX. As we quarter original

offer we month, company additional With to market last in under moving That hand agreement announced both in agreement The it of ahead. us company may new lie execute new strong that are that, not the and previously and front vehicle As any to over growth, potential position its agreement, the I'll a cash open turn sales on into million call our financial in entered forward. has X-year to opportunities business provides to-date. sold with a from Ryan. back common to stock on up in at-the-market of may $XXX under IZEA financing time shares the this which a place, flexibility time. With

Ryan Schram

I business Thanks, the with leadership XXXX. front units of half all Peter. we across and made the remain team in in pleased progress here The the

My improvement efficiency, only none members our strong operational invested we by As spoke support shareholders, has demonstrable would with from been that goes listening and a there creators which IZEA last gratitude clients in out IZEA and exceeded variety personal revenue happened of and when today. our within of to we towards of you work customers, themselves. without guided bookings, of including have areas, hard of the the team all by

to in This A metrics beloved e-commerce deliver matched by and IZEA's driven front professional unlock in automate FTE up serve $XX.X business technology and cycles Let's to range as more, areas the alike handsome the in quality XXX% managed revenue booking household investment high towards and of are service an both start major more and to consumer recognition, sales impress leaving to expansion salesperson unit with grow What's continues relationships we our ability a consumer our at us bookings higher These team per to offering year-over-year per also all-time including focused talented well. substantially seeing entertainment. end with technology, services packaged in existing new goods, of its front detail. efficiency looking with high-frequency is from both processes, both brands. are services of on wins those client million, QX our contributor growth, aspects client approaches revenue sectors, and same the period. those

catalyst. look remains and on intent to to XXXX, managed we the year to of growth the a services it contributor be key our for As back half for and

investments ahead. goals team become simultaneously personnel result across operations the business staff world-class plan our As in months, we coming such, and adding to broader legal for. compounding the driven strategic members IZEA experience in growth known in make new data provide that same service, has our client we'll to further while by It accommodate incremental order will

front will That creator strategy, demonstrate this important time. to IZEA's half in given in have feel can is which believe business. profile the in historical new gross in that extent Doing to over have half, those stature its conquesting service team in basis. that the margin the to expect opportunity managed time so to to averages, low-XXs both of new a that also business our ranged Another our the we downward broader of opportunistic our understand in the the unit's company to and year, in second be in circumstances, we pressure place prudent Based time seems on dynamic on leverage the impact outside improvement economy, growth percent to high-XXs while some from wins said, on particular. even

with trajectory all the of service has the XXXX growth execution QX, announced have As consumer in Fortune service social client to services including bookings, respects providing That a was of XXX to million new front with was XXXX. of marketing end, and point. the momentum, from such that variety a leading continued. our half best believe XXXX by QX for established awarded program why opportunity July a in the clients, and it the recently company. influencer Fortune contract manufacturer. honored of team IZEA in to have consumer validates its company we of long-term commitments late media history Fortune our In bookings existing When behalf a we've an in from manner, XXX creator already That's managed and press were a contract end-to-end apparel exceeded an benchmark brightest July platform, clients, to and XXXX signaled marketing from a through releases already in game. momentum economy the to an into influencer managed mid was a X-figure electronics our we hypothesis and driven services contract breathes provide XXX $X platform exclamation of a growth streaming on expansion drive adoption game align brand that best

turn year, Founder, this Chief software our our further IZEA's Chairman and Now commentary like a at to call business' the and on Officer, over to the in Ted second half closer plans I'd look Executive of Murphy. for Ted? performance

Edward Murphy

at XX% On last for remains deliver annual next least revenue X Ryan. to per growth call, years That year or our you, I Thank investor of our a XX% the shared our compound growth each goal. annual that rate. longer-term goal was

believe goal we on based for XX% bookings to the current this materially exceed we services, revenue numbers and managed year. going However, particular, in that are

in of growth July, again have exceeded likely of services QX. As And managed bookings year-over-year we XXXX. bookings already exceed XX% that all will of

in months we in in on in begin revenue revenue revenue building actual take both events completion the to the we Our delay of some of as been pipeline and strong, have about has of back as predict XX% can recognized outside in of success That also will XXXX. marketers based average. will control timing do new The increase services will remains well excess acquisition. execution annual based half. momentum be goal is as recognizes be to the be of Even on on basis, to by of customer bookings The QX managed on a significant revenue recognition, increases and our the difficult said, expansion on which which move in revenue accounts IZEA very creators. recognition with key percentage world saw we been growth believe we now X revenue campaigns, with often XX QX, to QX, of over and the past exact as months. is bookings recognized. time it be Timing impacted believe that our and well

historical spike a anticipate may In the assist managed what that included latest revenue. our order press we've in bookings, QX be illustrates between chart revenue bookings difficult to the investors like a earnings to it look from services perspective. Given release for in and investors, can correlation

has over to bookings refer the that trend been you see there few lines the quarters. divergence the you from If past and will chart, a revenue

trend you has the line see bookings line. that trend Specifically, outpaced far the will revenue

we trend saw that of over And revenue QX. line in some bookings We time. catch expect indeed, to up the to

move Let's BrandGraph, most software. counts IZEAx Suite, that software notably, services to we Unity from saw our I pleased Discovery, share record quarter, driven again once for and on to increases on am for and self-service customer managed licenses this offering. by

BrandGraph pricing made went into QX absorbing last of and all and Despite combined smaller XXXX. we introduced and growth midst tiers still are That brands year-over-year quarter, change on bookings that with this overall X/X year, pricing licensing saw appeal from customers. We to in lowered change agencies. we Unity a starter change, effect nearly when coming Suite in XXX% with the new Unity Suite the strategic in to and of we tier

the While schedule new the are old majority of clients our the their some to there have pricing renews. pricing, on remain until transitioned that still contract

climb publicly sizes. in get but some of revenue year. see lumpiness revenue year. see brands accessible software will affordable marketing We making reflects our made with we for some steady on publishing process, and to the side through our in all agencies that We that the accounts licensing continue influencer in pricing of decision this and of to growth software of until fully expect We to other with customer of May so begin did normalization the objective for all this the

We and out months feedback are points change, options this customer has only a been price few pricing, but our flexibility from software and service transparent of positive. to

platform. software very phases and monetization. early is of development our to still Shake, attention newest our Shake the Turning in

At of have and create new approval process We end had refine users the on and and building sell creation updates to that a for more to devised moment, out and both material Shake been more phase the it to Shake observing at are simply, of to issues to had create and want rolled daily improve making it inventory that buyers. team. experience Shakes. QX, approach we people is since experience. sellers. easier Shakes dramatically focus our rates. buyers the more by of first the the our need primary Shakes for on the the the inventory approved experience get constant to impact We listing the launch We've in their three-phase meet We the Put a has needs make to

review creators getting rates. IZEA purchases. first submitted Shake impacted For January this of published team members XX%, change of submission. are That in Shakes and approved context, are of creation in improvement July, percentage without time That their number XX% but In success much the Shake year, initial a time Shake means spending requests were only submit. not they after less massive that in a only higher change was

overall very small spend create highest the XXX% number today, count from While and even two our make easier. with of the business dollar X the of We phases more Shake July it to and increase in we purchases and process of a remain phase to part a saw to-date. since improve value of transactions June have still releasing development research

second out should be month, The phase the roll in XX next production days. and the in XXX should phase to this third

purchase redesign a process learned We we've based are launch. Shake working complete the what of the on since also on

be and we improvements make Apple options such and experience iterate. yet to it user include constant will want to we sell to we easier want are Shake, to The as additional so, Pay. on bottom be, we'll mobile-friendly to that streamlining to and is aren't but more we make We buy where it continue and line making do checkout

Software needs is and is which it to meet user, never brings done, resourcing the to engineering. me the evolving constantly of

our We opportunity challenge of the areas have and software identified on front.

the As do more will and order so, our faster In to we each to product order between move talented product we recruit an need in and our organization, of competitive to on onboard us organization. to put set. distance want people lines throughout

moving We have relationship onboarded partners speed process forward. talent our dedicated team talent and expanded part technical our to recruiter with engineering as a of this

ambitious, on goals multiple steady fronts. we but progress Our making are are

year back a We IZEAx. of refinements the this variety and will and to are half touch release BrandGraph expecting features Shake, in of that new

In services, and core we You open raised haven't benefiting more $XXX last accessed to see products another for an enhancements greater will million. other we which have the with yet these we million, ecosystem. ATM, IZEA ATM, in continue our between $XX integrations

more market for or created. This asked Some what the we This to reborn our not growth And investors the is in we share fuel in and industry to the invest invest. and of are marketing, in an in going following company people, answer was this. plan of the do have the XXXX XXXX. me effort Invest in that invest with is IZEA we jugular technology, capture XXXX, competition.

spend in no will predicted are offer they We would In or in industry. needs, meet grow XXXX. June year, and influencer where XX% their meet customer this eMarketer of to XX.X% solutions matter marketing their size the XXXX and that

this in XXXX and services rates of time have QX growth that IZEA's far booking both industry. been last more year. year, our managed customers So number has triple for QX from licensing software our this than doubled the projected of The

working. customers investments more board expanding growth all are is biggest relationships is yielding And across their remember, us. of customer this across The and sizes, customers with Our our strategy are organic the all conversions growth. rapidly

with pace haven't made years. conquest just We going we don't in advertiser to those establish We fair acquisition in keep growth appropriate. We to relationships when in spend the customer want than and more spend are an our want industry. and our aggressively X to share,

additional timing In could the time million, to any the capital We loan under access our determined. do conditions remains for favorable an to be $XXX immediate terms that but for of today, need company. have not at

seen greater to and opportunity steadfast is in in team IZEA, Our our grow a have our industry. we commitment never

all with for season holiday The about corner. I up around the phenomenal half Thank start, will of today. now XXXX year to we joining for us this optimistic back-to-school is call and of right first balance and are you Q&A. the open off a the

Operator

Instructions]. [Operator

have of from Jon question line Hickman the from Ladenburg. We a

Jon Hickman

about -- comment comment you me or you about Ted, I a wondering, somebody hear was a can made okay? -- made

Edward Murphy

Yes.

hear Okay. you. We can

Jon Hickman

Okay.

counts talk the are about comment even that? a Can marketplace being made spend customer about lower up. you Someone though

Edward Murphy

Yes.

platforms. year-over-year. customers customers a have Disco are component up counts smaller continued just customer have are our increase. or have in typically does either They're the -- have you that product to We less spending that But you XXX% in not marketplace those have who

Jon Hickman

going services. managed of in So of opposite the that's on what's kind

but So is their own, why you are giving there the a people doing reason work?

Edward Murphy

is manage them. basically they're having work -- us It that for

they software have marketing have previously those of organization. managed made in over customers that were to moved changes customers some services And their as

been have from but So relationships, we've they SaaS customer retain able services. switched to those to they -- managed

Jon Hickman

that Or why for -- And is a do can happening? reason like, new? Is there you that's that? completely comment on you

Edward Murphy

larger but brands, resources a I Yes. of for many there to in comes mean, it trend expertise. and is housing really down

software component there would though use, our human of that. even So same that is use the we customers a

everybody absolutely like is Just if that of the there's have run software, goes the somebody execution of into and using the success the a to campaign were same the campaign. human going Adwords, you aspect a with but strategy Google

Jon Hickman

influencer -- too, so add engineering? to So like, and you -- you how marketing there don't need people

Edward Murphy

allows been adding although software have some We well. scale our there, really staff pretty us to

they you load historically. able So is than on to a our if a know I team to handle little comment larger much And don't want that. have Ryan, more

Ryan Schram

really. deliver to average X the years Yes. One or mean, our cycles Jon, meaning or our I by hypothesis. human to engineering it is that which ago and we is, less takes able two of our to be that X that did ago, here supplemented thoughts a capacity year the a be aligns technological really business staff innovation are promising X entire seeing is campaign investments, certainly of just or on

clients customers to do and to question agencies, lose -- your change be and think there but other as brands markets we we be and as and lines happen in their to But that IZEA then those real duality increase. circumstances opportunity the support Ted could our regard. be I software think brands what mature, this if ample either also There's able and doesn't like is, larger to answer business. business, think of to Secondarily, the agencies will was smaller-sized of want to will there's for especially that saying, both going related mid also road themselves, we value those execution and out to and down investments inevitably for

Jon Hickman

that the that to question, near probably that maybe Is improving using going the you but And be margins or were numbers Okay. lower last seems to in then year? without gross it then were back trying say? indicating this early term, you to year, late -- in were next me my what

Ryan Schram

Yes, I my comments. mentioned Yes. in that

we business the As think order back we margins We of you initially the size implications. in our that do secure impact will we the that that business, to business many new have have here have, on to half. on find in in conquest Jon, cases, lower that an us depending

also, back as inch to leverage look economy. We opportunity that up, to margin able we think power real us that future, as we're creator the particularly, there's pricing the and for broader buying to in use our

Jon Hickman

would I if to margins you're trying than So you do QX me? use that to were expect here, what be in tell numbers -- to Is you QX? lower

Ryan Schram

We would.

Jon Hickman

gets better? And it then later on,

Ryan Schram

That intent, winning, were the growth. now, still that would process right given be of we're all having the in the although clients

to sight over So of things wins. and timing we have of depending it's then line on necessarily time win campaign hard what direct a those the and now between

trying provide do commitments implication well. sometimes longer shorter time saying, guidance margin tables, which that why gross recognition the for on to campaign revenue to your or tables and would we're have then time As larger average have is was Peter timing as duration

Jon Hickman

So doing what you competing else in-house I publicly I mean, people? know anybody you don't who are that's do. with,

Ryan Schram

some from companies circumstances, we need their offering is to as services at form of are large in that influencer even somewhere is marketing. that us be our departments order in no influencer agency for ad to the professional a There are, do The even are companies in those there marketing ranges what traded to some opportunity competition Jon. publicly holding they'll organizations, to point. companies that perhaps else. that to knowledge, software see other try venture-backed pure-play world-class campaigns execute able But Chances

type opportunity an presents that different of with customer. a So us for

Operator

at to time, like Investor to the I'd Relations And questions turn on Ted Murphy submitted website. it that over this to any review were

Edward Murphy

a to on retail Thank up website a answer some ask going questions. to those investors now. form our of few to I'm questions you. We opened

answer point. app do and Shake create there at to The The first mobile is a one will asked a from some we he is Shake be yes, Sean, app. intend if

before an mobile iPhone what to likely He working said to today's from I or achieved want on how And them IZEA web one its perfect will commented the that still position? to mimic we of and call. We bit call, offered going the if The bring app. on own question the has social we is Tier flows, its during will agnostic choose protect one to that when networks even reasons asked user Xs as provider, believe far, is that our of marketing so with an I'm little brands this the I as continue We tech last us is big have their positioned start But next some answer app. really a in what through on influencer we're done solutions a SMR. of the IZEA past. and IZEA earlier the

our the no there's value social marketing growth a that influencer clients. platforms multiple believe to of is doubt their the of And companies a across managed really of asked, software. the grow existing of that retailers the growth the services more that sets and last We expansion IZEA. since of CPG put bookings which in who to we apart, to growth choose services from existing is organization the and believe result going in continue this December the the to there here these that more us invest the Edward our the why one to but leaders of back be platforms trust of software combination And for an new base. team that, we industry. question that What going the campaigns just activity, pace awarded think customers big proprietary in but industry the provide. we ensure is part contract and the X that and of in our to say just keep efforts There's been and be confluence responsibilities order continue continuing to specific based it's would of it to data making to and many is and across company. organic? the from growth? see the for we've being more the both of has to the and years? stepping is throughout with in behalf believe big where not up customer about, lead are Jayashri. to that's not media one execute organization. on or space to we're continued themselves the IZEA spoke activity, half Ryan on outlook outlook that testament that we're but we're from competition take company A done headcount on to year, to next heading is investments As continued And providers fuel the small, from is been effort unique positive continued We're I going the of I adding very What and the that is purely

an is our to pursue of part intend world's has further. going the to showing the same software company. first with over for important I Ryan. back larger year, and even managed and play at in this time, growth our unprecedented be foundation future, And business seen services been a offerings the expanding we've would the Software to for sales that to marketing is the to amazing, say, are and questions. business going we're brands that role biggest efforts for creating our increasingly licensing by of And much the our line the and aggressively things we demand I'm turn it

Ryan Schram

Investor And that's so information this like thank a everyone to our QX to Ted, as of and joining website, on view for reminder, afternoon for izea.com/investors. investor our you all our we'd welcome us Relations and you're at Thank earnings call. much,

to of future earnings here us questions and IZEA, thanks behalf welcome site Until joining other calls to be at for well, on as us. for well. next all also safe, on time, stay of submit us team that again You're

Operator

That does you your your you thank for conclude for lines. now the today. and participation, conference call We disconnect can

IZEA Worldwide (IZEA) 13 Aug 212021 Q2 Earnings call transcript