IZEA - Earnings call transcript Q3 2021

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Operator

Good day. And welcome to IZEA Worldwide Incorporated Third Quarter 2021 Earnings Conference Call.

During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, today’s conference is being recorded. to conference like Schram. to now would turn over the Ryan I go Please ahead.

Ryan Schram

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

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

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

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

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

Peter Biere

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

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

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

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

and license to all may grow continue adjustment. fees, revenue, predict was health to for on consists be fees and the which comparatively used future of other Licensee platforms. quarter Services overall SaaS For not while XXXX. these of to reasons, spend subject could $XX,XXX counts the an fees business, Managed revenues of bookings, of quarterly be self-service lower third indicator marketplace our

namely license to to transparent economics first However, the are methodology, ago average pricing. improved driving made competitive primarily fees a in value lower a and due being to price mover pricing our changes in year

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

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

in by or was EBITDA will as Our the to the our negative quarter of net $X.X approximately We totaled per $X.XX end-of-year million for we Managed net third the of sequentially year negative compared approximately quarter growing during to driving the Adjusted revenue $X.XX higher a for XX%. of of quarters promotions. four that year revenue, last end QX and XXXX difference and loss or $XXX,XXX. revenues million at to million deliver of quarter over backlog seasonal outpaced over prior has a XXXX per quarter fourth third about compared prior growth negative million negative Services Bookings unearned $X anticipate our share. $XX $XXX,XXX quarter, the for $X.X the increase the loss share

As balance down debt XX, of about hand, million end QX. have the no sheet. our of of on $XX.X $XXX,XXX from had we cash XXXX, we September And on

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

Ryan Schram

Peter. strong Thanks delivering be It’s to results wonderful shareholders our for continued alike. and clients

XXXX year setting several the Managed has of from While IZEA one record shining our comes for a been Service examples fronts, group. on work

the in to of an our working. clients in the relationships platforms, delivering of and million-plus IZEA marketing our terrific last have proud of to behalf our advertising and members For but and a more should to within not the commitments, than absolute Obviously, Xx marketing trusting Managed over those unit as radio highly are the programs. influencer and not of that number concept, be, broader the in investment it shareholders, media, world-class broader dollar resulting year. and it our and you of underscores integrated unique a professionals, trends is IZEA’s highly By results. who numbers it’s exacerbated access, brands is these works while COVID-XX shift unlock more such influencer lifetime to with clients team longer established television, new incremental highly also of, by more they substantive than Service And by element the efficiencies. a is cost-effective, marketing agencies unparalleled Such budgets, technology print, effective at through strategize same their that advantage Compared are leveraging offering delivers overall. our but execute XXXX, only number both, increasing for we’ve on it were allows value bastions for $X innovative value the familiar, clients, old team this time work pandemic. strategy size marketing larger geographic with Since measurable tripled more key and of continuing

client a As to engagement opportunity new provide exciting us, campaign analytics personnel planning insight with future there’s necessarily of ways. Company’s having add pre-campaign best-in-class we having creators talented data solutions, costs. of see provide team look our across thriving technology even our at IZEA’s When entrenched beyond, the more new science toward members, XXXX and advantage mean strategic growth in performance We intersection proprietary personnel, to more and ahead types technology. from paired offering doesn’t passionate to on proportionately clients our more adding and the and mindset by of the backed to of healthy

return. enjoy to driving deal delighting more steadfastly we continue marketing process. in sales engage per of also in so Doing time increased to against. very securing across members the higher our clients, employee aspects unlocks economy seek opportunities increase lower the can the fulfillment brand opportunities consolidating both, service of and to That in spend way, and full-time increased collaboration and committed industry and that we talent will for remain believe campaign and valued an broader organizations, revenue IZEA influencer and flow enhance as with While investments retention well value team best as time automate creator diversity larger our to surprising greater our the we over

the additional to road year-to-date IZEA’s call Company, and Chairman over like as my colleague, and perspective on performance ahead CEO, for well Ted? Ted commentary Murphy. to on for some as the Founder, the I’d IZEA’s turn Now,

Ted Murphy

million. of our the forth or XXXX, deliver At end Ryan. annual achieve in growth XXXX goal in the you, of XX% XXXX. XX% XXXX in per year, million Based revenue growth a year per Revenues at revenues each approximately compound to to three years of our Thank rate goal $XX a least $XX.X rate. set growth annual $XX.X that for XX% of million on next team and were is

goal We beat significantly revenue XXXX. our on are in to pace

last far the a Services increase. have targets. XXXX our period bookings, year, bookings million XXX% million $XX.X in versus for same is exceeded Managed initial $XX.X in Our QX-to-date

our $XX.X of IZEA We to Year-to-date in are strong As in which year for QX, a look investors, year-over-year may earnings To already bookings revenue totals release QX a bookings result of historically QX, in the going have what growth correlation quarter anticipate included revenue to revenue recognition. Managed a strong heading it can bookings large QX materially in and chart this assist Services historical like year, investors we through we a between XX% and QX, perspective. this exceed revenue. a for bookings, latest make spike our from saw difficult revenue and target press illustrates into million, XXXX. that we are and

trend If quarters. best the past from over line there is gap and awarded that line you refer will our for larger has far has see backlog, chart, contracts That revenue the past that span quarters, the quarter. to bookings the revenue as grew the million revenue IZEA been in unearned bookings been reflected to outpaced $XX a this in three which greater lines divergence trend has periods. you few The trend

recognized bookings We from anticipate sequential catch from growth up to the bookings prior over time line as are to and expect QX revenue revenue holiday season. quarters to QX, in the

XXXX. is is off October the impacted in best QX, will a quarters. ways. the pandemic the the months, that customers range our variety a shortages supply for many recognize Managed closing current note. strong is global However, team though of quarter is in bookings. our that We the cross Services have of momentum And IZEA some recognition previous that we it of QX, we XXXX in and chain was to of October have on with had period on still our amid ever Team a remain labor to focused in nine revenue QX a start into great in average bookings over important note continuing and

they those far in today pre-COVID from incredibly overall operations, when those With of XXXX fully Some or outlook are positive. customers, the travel recover. and is that particularly it said, industry, for is still if will unclear our

are growth, We some of larger based the indications from renewals on our clients. of on early continued bullish

that share move customer I from IZEAx increases self-service and onto we Let’s to again Managed licenses software offering. software. this driven pleased on once quarter, Services primarily counts record saw by Discovery, am for our for

coupled with a May. as we new launched Finding increased demand generation record and we key Suite, customers, rewarded new influencer Unity customer saw with in and influencers discovery any wins starts features the and vetting new for campaign. step also launched renewals. result We customer investment of influencer with resonating features our The existing both in is improvements being And large are customer a small. discovery are

will working experience are We on we already iterate continue better. even next the the and to of to discovery make generation

We when to and absorbing overall we made all pricing change smaller introduced year, with a to appeal still last the starter on strategic Unity agencies. and tiers Suite are and tier lowered pricing brands we

some set in While been and counts to old We overall until of spoke last SaaS reflects remain in licensing see revenue steady software challenges opportunities side but other that of the newest the platform. have about on on associated customers. the transitioned growth we new are get some revenue On as the I majority with our pricing, the fully year. last of some fluctuation adjustment QX, renews. and pricing with that our pricing grew revenue our see that the of expect this Shake, customer we normalization some call, still should QX climb clients through QX the from their to to SaaS structure there contract and

We rates and platform the continue changes success to make our to impact for sellers. buyers

front, increase approval Shake dramatic the we in time On seen first rates. a positive have

our January rates made to initial submitted of team was that In in of in requests, improve testament context, the a year, XX.XX%, For change has approved only Shakes success October, effort the without a this improvement process. to XX% number massive and were submission. after

We coming of a XXx large in traffic Shake, search seen to organic have to compared September in increase September of also year, increase year. a this last

our search alongside expect As continue could we know too We listed the in process buying Shakes be to have we still we to increase the and add listings, marketplace, better. organic few traffic more far it.

on. focused we’re opportunities are these So,

in conference Phase X had expect create the Phase for X some faster, to we problem. roll During that make shared Phase Shake the X three-phase rolled integrations of will on that August I call, year. our approach Instagram creators with end and particularly process to we out QX inventory our this a address by focused out has IZEAx even and technology TikTok.

of based able to of Shake Shake the is be what complete purchase a with we inside will clicks You create working team The two process, IZEAx. Shake from on on a redesign is need traffic sell launch. to Shake since learned have and in the to buy but The bottom increase easier make we line rates on creation it is success encouraging, and Shake.

ways I platform where evaluate be continue improve to us revenue. the We aren’t conversion want yet, and increase transform to and to and to rates

Over new overdrive, team kicked our company to the scale help has several efforts the our their months, it recruiting level. next take us talent IZEAans into past and

we investment on well the the both customer grow We we product The product in and have base as continue level personnel into execution. added marketing director in and beyond, XXXX as engineers multiple marketing, to and and as specialists focus leadership serve. and implementation supporting will and strategic company

paid paid recently market our as generation in from capture program marketing social benefit and content sponsorship industry IZEA well efforts rate that grow more creation, XXXX affiliate will allocations Our in a investments and and more through launched at share media. also additional exceeds aggressive seek make we also media, will automation, averages. demand to

noticed have publishing. likely already increased in the cadence You

we’ve of to marketing building our as communication been months, team several Over as past customers, a investors. well steady ensure stream the out our our with

these in with to in digits growth XXXX. that the of growth influencer predicting continues eMarketer marketing in spend an expand double robust We strategic industry-wide each are making tailwind year, in investments industry XX.X%

years of and to next opportunity industry digital believe platforms influencer we growing, adoption metaverse. with opportunities XX and about we operate to for ecosystem the does. to as particularly on IZEA industry continue over will intend evolve, its nascency. X persistently global The XXXX, will as types still excited perpetuates. in The I’m is of the the lifestyles the serve new pioneer emerging Beyond long-term is the that collaborations it I develop in we

the exciting, tomorrow party. cryptocurrencies, will an In future is a executed. future brand is virtual industry a flexible collaboration experiences intend While when and is as is for I already alter our XXXX, web spaceship the a Data, year reflective own, universes Instagram built allow could of Nike creators exclusive And we coming than us. we types and are virtual sneaker exciting, built share will but the for the future The how by vast transporting videos the the that virtual argue it but and same of their happen of the think technology fair Imagine, to go and world. become well. a strategy and fundamentally XXXX photos worlds today. Facebook’s that of today to believe it intelligence, year. virtual influencer’s around more build interconnected we see future. Sponsorship pivotal artificial will important paid is far will followers beyond mainstream, virtual a to worlds alternative influencer become. The to are itself. creators see is worlds brands activations in the captured world. announcement what the in shape a a growth, in within is we do in us present that to where virtual certainly as being TikTok was an become for as of what our of the we potential brand is those workflow future increasingly certainly and One of

the of plenty been our We mention counts $XX tools continued We enable Fortune fresh we’ve whole of software adding addition making. new investments in million and the and in customer capital XXX explosive balance of a saw to sheet room to new to of for for our bookings. not to with growth all release customers, set see growth, clients of the

in aggressive and efforts, We new and software through customers. marketing, sales XXXX will continue acquisition and customer drum and beating the growth development delight services to of our with the surprise

in greater committed growth, we team Our never a and opportunity our leadership seen to remains have industry.

As we now to for weeks XXXX the all will I over beyond. for of look reaching you past Thank joining into enter heights are new your year the for thankful call and we the and today. in up forward final us open XXXX, Q&A. support

Operator

Instructions] [Operator you. right. All Thank

from the from Hickman coming is Ladenburg. question first line of Jon Our

You may now proceed.

Jon Hickman

Can Hello? me? you hear

Ryan Schram

Yes.

Jon Hickman

Hey. Okay.

So, of not spending last your fast P&L marketing it talk as on you’re money look stuff had couple quarters at about you appears for Can that? that as my the you from and quite anticipated.

Ted Murphy

to Yes. aggressive really more place. spend. result just past in of a taking in two but hadn’t have to team. out That honestly right building of the joined months. us still that people with effectively spend, to those that actually people We longer three we is get the onboarding the team time are And marketing that being anticipated manage it’s a many And

think So, next to on manage it that I that you’re board next definitely and people see to accelerate effectively spend accelerate that going spending that year, spend to we’re properly going dollars. have the year. we see And now that you’re those make sure

Jon Hickman

That’s Thanks. me. it for Okay.

Ted Murphy

you. Thank

Operator

Okay. Instructions] [Operator

from line question next Elliot Our from is of Shaw. coming the Shaw

proceed. You may now

Unidentified Analyst

the share that something internet Got count. shares. for today? is It on a count XX you of as as under What share million point actual question the the shows

Ted Murphy

to that that. will answer over to Peter I hand

Peter Biere

it but at my Unfortunately, fingertips, XX to want have continue? in number I’ll the if seconds, I have you don’t

Unidentified Analyst

number. the know to like I’d question. my That’s Yes.

Peter Biere

Okay. One moment.

XXX. XX,XXX, Okay.

Unidentified Analyst

there. doing recruit a Mr. job to the to employees be got Murphy, glean over seem I for And are guys guys company? from They to you Are question anybody? trying Okay. outstanding you Fiverr an any trying

Ted Murphy

You’re referring to Fiverr?

Unidentified Analyst

Yes.

Ted Murphy

Yes.

openly looking are We all applicants. at

background space. particular and company, any people targeting in but looking not certainly have for experience our We’re that

Unidentified Analyst

any more the Okay. of and pans? And plan do you pots then,

Ted Murphy

to high type a on comment certainly of events have continue moving level here. to -- going of really forward. can’t excitement are I we’re But, we what have

Unidentified Analyst

of Purple Nike’s of Yes. maybe Okay. they’ll of a like a of put little And Pumas of bit better Nike’s, a then, something, pair put kind maybe a the state on foot forward, pair and maybe. or

Ted Murphy

Yes. Nike’s Nike’s. in I I like run too.

Unidentified Analyst

you. Okay. Thank

Operator

All right, everybody.

of Bill question We the Capital. New from Musser coming Frontier a line from have

You may now proceed.

Unidentified Analyst

this Can the in base year a of three from for base question. we years revenues you expect I So, have the to grow revenues a XX% next year? -- of earnings the or

Ted Murphy

out year not revisiting next numbers. giving We We finish any to quite and be are that to those XXXX, and want year. updating will come we yet next

Unidentified Analyst

be providing guidance? will some you But

Ted Murphy

Yes. it process our reflective budgeting We’ll finish this and year. be those updating as will that be goals, of we

Unidentified Analyst

of as words, then, really And prior really comment my the of their this give business, you’re know you of I observation growth but influencer observation? And seems advertising off you’re heads my seeing for in extraordinary kind brands’ to growth relative do changed willingness where is really at other to is just time sort that influencer you question improved the product, in were relates is me taking the sort on, second to way. major it that so something sort the the marketing seeing, some a that first marketing to the pandemic. in it is Could of on to that is color

Ted Murphy

Yes.

I right. think that you’re

We’re seeing the certainly have across And allocations investment we heavily we’ve customers that jump increased board. larger the on customers seen. are not marketing, invested than board have influencer seeing in from with previously historically we that just

large now of ago with the a million-dollar And on customers years initial seeing investments, larger us. spending XXXX Brian a that that are count with couple of So, customers more are that customers than higher pre-pandemic. spoke seeing are in of materially we’re bit little to ours. And those we our sums end,

Unidentified Analyst

would the that to to the lot? product environmental fact attribute And improved a you shift of or sort you’ve

Ted Murphy

is team credit who’s both space, years becoming I very the really to and of that as technology only this same don’t create give its At the being strategy. been the leaders, can to taken our is stride past and budgets that think, for in working in line on us really seriously. we combination not I but things. XX think time, a fact established our item client’s it’s to itself I marketing ignore something a that started hit influencer and has those

a this IZEA. and feels it very of but result like decade behalf of hard is work of of all the team half quickly, it’s on a happening So,

Unidentified Analyst

are, a you fast growing or that have a sense? general of we share we as are gaining sense Do as market the in is competition

Ted Murphy

I believe the in market we’re gaining general share sense.

inbound in and life some that you’re out growing I I had say on fizzled seeing we that we that also to capital are space and lot sell the because are that people think a And to this seeing deal support. the we’ve a forward than companies and flow would have seen looking frankly, that are have ability compete lot they moving of don’t past. in is more of resources. in terms

Unidentified Analyst

And people, salespeople terms just not? How are finally, in hiring of people? about available or technical

Ted Murphy

it is we way in at there’s One we are a truly is everybody of a we had market, able now outward, and workforce. the to mean, of that two so parts a Orlando time, global tight look now labor are same that. never else. is I outside and that pre-pandemic, definitely But,

as it’s team engineering of future the still where a hiring probably it’s those It’s continue the employer product seekers. a lines as as lot lot well. blurred us a for will as well up an realistically, team it’s talent. And them foreseeable us we’re that to both terms And of are of in happy, say people teams. our on for our for tough to opened taken be kind so, onboarding opportunities going that I new job longer to to we’re of point get and

Unidentified Analyst

that question, that’s long of think Just in want, going to shaped terms getting you do of performance the how another you level to final up take?

Ted Murphy

at get board as dovetails ability getting still year to of a getting is, into of what clip And people. like. the Part before we really Yes. that going small get That But, accomplished. on very just done get to actually we major would would that of is talking we things to is that some better. that be are it’s team moving want our to we a move members the team would next into that That we to. as impacts certainly fast about like

Unidentified Analyst

you. Thank you. Got

Ted Murphy

Thank you.

Operator

are There no a further call right. I’ll in back queue. remarks. All for questions over the Ryan turn closing Schram to

Ryan Schram

for Dave. Thanks call. afternoon And joining everyone you this our earnings thank QX for us

be Relations at talk of and As you evening, safe Have investor website, and IZEA’s on Thank soon. Investor information again a for joining you reminder, we’ll our a can all that’s us. found online to izea.com/investors.

Operator

And ladies conference your call today. for Thank for will and gentlemen, that you the conclude participation. much very

lines. You disconnect may now your

IZEA Worldwide (IZEA) 11 Nov 212021 Q3 Earnings call transcript