IZEA - Earnings call transcript Q2 2022

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Operator

Greetings. Welcome to IZEA Worldwide, Inc., Second Quarter 2022 Earnings Call. [Operator Instructions]. Please note this call is being recorded. I will now turn the conference over to Ryan Schram, President and Chief Operating Officer. you. Thank

begin. may You

Ryan Schram

joining and the joining I'm second Chief Peter IZEA. President everyone, IZEA call earnings Financial Chief Ryan for call and Officer, And at Officer covering quarter Operating on thanks afternoon, the us is for quarter Biere; IZEA's Schram, a Executive to me Good and of us afternoon, this today. Chief Murphy. for press with glad pertaining Officer, performance issued details release Founder, second year IZEA and to fiscal We're our Earlier the Ted Chairman XXXX. have with the company you XXXX.

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

to of We actual to begin, our and a make SEC in on and encourage advised discuss by and we harbor be management's the outlook We take these release and we cause management as the safe assumptions IZEA's during expectations and are our financial financial that the risks of detailed result expectations paragraph from and obligation information statements today. today's subject required differ law. to earnings a today's discussion contained events, for are team results Before that new included statements based uncertainties materially in current will to and risks call note except covering please mention filings forward-looking consider of disclosures undertake our no press the further These these uncertainties. you as could update statements. results beliefs company's or

in earnings filings. turn our as for things to also between Officer, as colleague today the Chief EBITDA. our and release my GAAP Financial metrics to pleased that, issued non-GAAP Biere. non-GAAP And in Our IZEA's financial our commentary earlier Peter found I'm measure Reconciliation include can available Peter? today reported be over results publicly with adjusted will and also well of

Peter Biere

run million, financial our review of like and second highlight results quarter. Revenue during the for than current which than second from more prior revenue $X.X second XX% is afternoon, won't the totaled prior operating XXXX. Services also recorded everyone. rate and QX which accomplishments growth from doubled from higher Ryan, catch-up delays. quarter the X in which contract, customer good the totaled such, quarter, from for in in quarter. for of sequential Strong I'd and, was repeat the during revenue in you, in $XX.X quarter down as $XX.X to prior the year, We quarters the prior Thank contributed quarter. offerings our quarter. year million X.X% catch-up quarter. net IZEA quarter of million isn't a SaaS Managed revenue Services following the the record and year second XXX% bookings The $XXX,XXX revenue over production $X.X XXXX, of growth the revenue, XXXX second million large to quarterly included Managed

XX% the from for about is previously large XXXX. related tend As lumpy. which orders million quarter Services sales decline QX of a measuring bookings bookings metric of totaled be cancellations key we Managed partly $X.X XXXX, of second and during refunds the bookings, announced, contract to period, net The off to

customer slowdown few a economic due a late the commitments second to in bookings experienced also quarter delayed concerns. We over

in remain, of strong we bookings quarter expect the these quarter. the third While to closed have and economic the delayed some while end of after opportunities uncertainties

begun have represents yet which recent unrecognized to bookings contracts the backlog, invoicing, well that Services million revenue are Managed Our on June for $XX XXXX. totaled as underway XX, of that as total

quarter. the of following fees, by XXXX during revenue, counts quarters. fees, during second X year spend of the on consisting declined Total revenue We $XX,XXX backlog expect to license Services of prior other fees all record license as most marketplace quarter fees the from this average self-service and was gross relatively from fell the platforms while SaaS the the marketplace spend declined in license due fees comparative revenue quarter, year XX%. fees. X% to fees decline from period the same prior that from quarter, were X%, SaaS marketplace flat Services by indicating time Gross by declined billings for lower

of prior quarter, growth compensation contractor comparatively of by costs were administrative associated XX% primarily prior of in product revenue the and year costs quarter to revenues cost quarter. due than revenue Our or $X.X to compares made costs margin XX%. in total related quarter Sales The to bookings. up higher of to year totaled in cost year XXXX. $X.X compared Accordingly, compared increase costs which the of commissions million million increased quarter, support million, of was customer was between XXXX, million were and in prior the due second sales the offset and $X.X and customer XX% contracts and large $X.X averaged million lower $X.X marketing to compared $X.X the flat, XX%, during or XXXX. $X.X the contract quarter. to in significant other million QX operations in That the the of aside, within General and driving the with second higher gross to to primarily the costs XX% in revenue that revenue. prior quarter investment. Expenses recent the payroll second cost was other with This of XX% revenue historical the cost for quarter. headcount second of current during for customer of quarter, for vary at XX% range, delivery Increased million on contract X our revenue, year

compared per net forgiveness second or on prior $X income net gain the of of Our to PPP a $XXX,XXX loss of $X.XX million 'XX, loan. a QX quarter in XXXX, of the loss $X.XX our for onetime the included quarter, $XXX,XXX the In per year also was net COVID-related share, share.

year, million the quarter-over-quarter. EBITDA Adjusted compared prior year positive negative about the So by quarter. to for for $XXX,XXX $X.X $X.X million this without onetime quarter our gain, narrowed of net this was loss second

quarter. of $XX.X down due That's we of in million negative million XX, at the As $XX.X also beginning the during to interest part, late partly $X.X June million period, due creator I of portfolio the on our should during made from including lower add XXXX, during the income of the investments quarter. in had current year, cash, the in customer but EBITDA billings we adjusted $XXX,XXX X-month ahead to the in payments, that investments quarter. made we

not our hand, may have over any to to business portfolio, should from and offer core debt and any under opportunities not vehicle to stock solid time which execute required into in on ahead. the With call strong We've place I'll to do balance time. to that our it up shares June of agreement common growth growth its turn are business sheet. cash entered With on we sold under Ryan. Lastly, at-the-market continued investment ever liquidity of in agreement. $XXX a sales company financing In XXXX, may any date an that, on a require million lay position it, we from our back in we that the

Ryan Schram

to months. organization our has optimize the another seasoned steps fortunate as who, sign navigated regard team of possible these the macroeconomic and With is continues the savings to financial if the from resources pausing both reduction, understand us. in IZEA that efforts for an core accordingly. lowering invest also IZEA. personnel for of to The last company present amidst growth not energizing can key extremely being lower our second expenses, the or as to cycle filled marketing products, and and thrive standpoint. To and continue implement certain the taken is you're launch can a advertising that to now several the to not of the Over recurring it the industry climate and why increase to cycles differentiating conversion including, unpredictability, in currently is We're operations, into facing we eminence and to disciplined actually OpEx veterans in-tune to is in time, macroeconomic and customer quarter importance moment. accentuates survive against to our financial approach serve us rapidly internally new they just time, better Needless to industry have effects with, their Peter. to, as elected industry important an new worse, attrition, proactive of cost software but world given absolute management bring contractor thoroughly prepared this to continue the but period, with execute number prudent change same we our meet the also shift also an align across change, environment numerous light through believes platforms, measures partnerships careers. They to outlay. Thanks, purchasing for interact holistically. achieving vendor rates climate and to stand revenue improve of important time cost clients acquisition say, our At by expense how the the select around limited That's but across proactive benefits we

have as the history emerge sought shown COVID us of view lines is spin as functionally. stronger that result. have our across taken can prudent important through than has our in ahead poised business to we in various history, market Through to investments back to of and this the and always serve long-term capture XX-year faster to half constantly to into clients innovate Recession times, that and particularly year we cycle own nearly ever of the a our IZEA's today, that to from are we will a times, ability better, businesses, to philosophically Consequently, to XXXX. into uncertain make. to Our challenging Great adapt both our look underscore allow best It's the one of flywheel share we every business. pandemic And

America in incremental latest matter revolutionize continuing launching this and of to fall foundation base price Managed influencer in growth, client next tools by innovation, SaaS leverage or within optionality that our helped and complete more As strategic revenue North they self-service expanding set marketplace via no choose later, before: we to share further by our his than create the engaged including personnel software our capabilities; overall point industry analytics to and IZEA positioned Ted is agencies to group, the and brands beyond actively to for our marketing need. well the will IZEA's in ever investments in IZEA's expanded customers stage planning our ecosystem offering acumen; providing of again solutions, flagship which provide diversify sources industry will keeps Services our across and ways remarks by offerings, how modern

set the initiatives. and announcements opportunities on As we firmly continue on our to keeping by afforded also future, previous our us we're focus maximizing sights to

marketplace Chinese in In a the of also that quarter, recruit we a And on put able establish shared presence, that than are team the second our news time. it not an couple our this I sale of begin actual year. but about March update, the perspective, closed into days' opportunity the Here supporting we earnings additional very entry were pipeline IZEA's closing during first less highlights. XX members, team. from last build and in To only to business into

who's how to mention difficult anyone execution the contributor For advertising ever marketing, and to and Managed believe can can in beyond from a unit Services continues. been part? know those solid or how you region not against XXXX see able as best frame. We to significant that has in be impressive momentum to that tasks time deliver the And continue be worked our demand to be, it

our but goal able the of influencer front recruit to these best proven and center within from secure the they're capital. for industry's presents base Now company previous opportunity creates to seen client pioneer, agencies to brands let's fragmented grow reactions our its ever, we've leading real-life best both quality and in company about to of we and This talent ability to case is revenue XXXX IZEA, where balanced addition under All employees in companies XXXX human to so downsize the a all based certain talent due being IZEA's offerings from execution more marketing. of Knee-jerk the our that's nature in world-class to in particular, and term. lives, not challenging access declining awards the as in work-life competitors relationships workplace. spurned balance. career proven to to agencies IZEA's for the being and with bring honors capital. of Last, company is least, Comparably the and long market to has for to go award capability. These our What company one to that's have to and being central IZEA that to a A company why told, client flexible economic performers just not been talent commitment for across industry addition have More a growth than by belief consolidate proud Company That's perspective, lack share a we accompany recognized a for a near has compelling to is advertising. term, from to believe return. top technology tenet technology given company and able ambition be in reduce topic Therefore, makes In been approach. for or a brands a to opportunity who And that involving being greatest or success best meaningful Best beginning and benchmarked our client our unique particularly opportunity substantially services leadership. of ratings on that our the previously with us are partners partner diversification, the being asymmetrical XXXX the senior-level experience, their it's and mid- that to industries, so and times growth best provides not with for call spend an class. against where to roof. uncertainty

strategy current software will in are expense prospective Services where continually by dutifully solutions revenue consistent of of and one complementary, of to are another, concepts grow we while deliver array While us second expect they be out a to service Therefore, core of an to that record-setting we meeting the born largely from risk customers also are by our and cannibalization our that more continue They providing to Managed us from to and our innovation, quarter They now creator detriment. This our and recognize continue to over pivotal like business. on that to and these allow to perspective be thrilled competitive, multiplier hear in why out just are growth our by offering the success Founder, profile, to commentary force more underpinned solutions performance, us success. having of Chairman come. managing business to IZEA's from our and to what's equation. and differentiation proprietary see on facet Murphy. taking economy myopically and the contributor as infrastructure, important CEO, the Ted? investments focused not dimension of scalability an in his perspective not for flexibility weeks is future company Ted And call second months additional speaking its of our our to turn each around on to come, quarter IZEA's one are a I'd the of technology the some to

Edward Murphy

Ryan. you, Thank

by ever Before full past. to it on year million. look the been, revenue was moment we I was the when our measured company like $XX largest the to has to count, employee reflect would In future, take a our XXXX,

measure: largest are ever a been we Here in different by revenue. have we XXXX, the

achieved have compared full-time revenue done the in made have in the of we the the million efficiencies have of to am positive proud the forced been over peak. our reimagine XX% so and company. I The of our We with year operational particular. half team $XX.X the effect for less our about we X have COVID-XX past employees gained of and our net years, business, changes in to remarkably advent first

and technology of more FTE people strong advances Our productive. make all-time that in this driven combination by quarter, per an high a our revenue hit management our

and landscape. investments software time only foreseeable amid we we profitable to is a is are cost is continue a of licenses sustainable, best to revenue It From shortages fees, actively is our I want an from on of we to for costs will and expect willing to control these increasing industry my While we future. be us the we ever-changing must incumbent the company, full we record water team seen certainly In a accounting the increase can, history operations it that still our success. of we belief we their labor place the a way, to for must If path and outpace challenging make are meaningful that long-term know the we inflation, must costs, talent pace to growth it continue that baseline get potential. the line far ongoing to to commend of clear come growth, long and have rise will to at haven't efforts. in continue But our to it.

you is to grow. outcomes. current would strategic I of called we as that We people you written that trading the deliver is fond believe, you evolve address and what "When in We opportunities, have ripe, substantially of rot." me, to a to same same and enterprise you our to or you When are value. I are at do. reality in continue that recognize expect things stock the shares saying, and and price and we many investments We will As and when my regarding stock must are father discount like IZEA's undervalued. where continue to products is make can't do who cash. ways our do green, better see

has less a want dividend, buyback special to micro especially with for or the impact, be execute to its positive leave with sheet shareholders that to have cash and such plans stock and lasting buybacks but rarely suggested caps, company no for the a potential IZEA action. Some I balance grow. the on current clear Stock

current great as magnitude of determined, price stock with want increasingly should of our Our The sheet enterprise hit of to is uncertainty. will revenue in the financial believe balance growth is that financial we begin and of importance slowdown grow macroeconomic that financial to to prove yet investments length customers and business, focus courting a We our long-term in we remain the The succeed. be to to is ability and which need our targets. in future. be make underestimated number can't in strength that important reflect the to we our the value, one increasing times position larger we're strength

talent positions. strength financial precarious that in helps in recruiting are our financial Additionally, competitors from

capital side million $XXX the markets On of ATM. coin the is other our

plans price it do our leave from Zero demonstrated will financial to flexibility. the in assured, put have past as nearly year the XXXX, revenue have levels, our I we a a as full market We We case. we current into rest during any needed the X-year from sold place. since that at ATM At of complete sell that start growth on open provide is have shares to not each believe year But was been team our XXXX deliver shares ahead to the this plan the still to shared year. is ATM rate XXXX. XX%

As our on of to today, hit target XXXX trajectory. track of we revenue our $XX are on based current million

award with influencer many for their an scope with in U.S. military spend XXXX notable in from client While our amongst was economic win an consecutive the we year-over-year. quarters, few our momentum past A have invest by the and commitments continue third have them robust from Those affected year, the marketing, seen pipeline again XXXX. building largest customers delays remains clients. versus and over recent expansion is slowdown in to increasing some the least been of

see impacts larger basis. onset software slower cancellations month-to-month in quarter. in XXXX. Discovery. pattern similar with our some seem a saw product brands product at QX, of COVID-XX and who well Managed with at are a IZEAx we is the and insulated, to IZEAx in the targeted small an the saw using in to While business conversions increase We particularly We Services on our did That agencies clients primarily be

Software all-time licenses to pulled back record rebounded counts. customer and

we multi-pronged right in to say here. expect launching transform time, business. We catalyst effort Actually, we a SaaS are corner. line the the pattern to around should similar But the have see a this catalysts. of benefit I the because a

to some As I Influencer Marketing is platform expect to now. the the beginning. been prior on That each call, day, platform alluded that end the time on of we enterprise to production-ready working is Platform it we've and just our launch for new year. last to closer getting But a

lines among inclusive accelerate at signing we the competitive Supporting abroad. SaaS their focused unlike networking of share and our will be the when We advertising, another are of support to online tent-pole also be continue order ever we in sellers of top pushes more recruiting we've launch seasoned competitors and intend anything marketing the launch weeks, X also on from broad-based at will to in supercharge revenue. growth We help IZEA. anticipate a in will targeted are in on tandem, IZEA past before our to we front year-end. capture particular, events initiatives at platform At most trajectory awareness new set, push ramp-up invest home made developing We've beyond. executed in and XXXX pullback these seeing spearheaded sellers. a broad-scale aggressively our in time gaining which progress It are by a tremendous sales and and marketing

is the what prospects, incredibly the will been for now on. our today. I Thank us to community. open all from working call and Q&A we've share by team you for excited wait joining analyst Our can't future I

Operator

Instructions]. [Operator

Jon question with from Hickman, is Our first Ladenburg Thalmann.

Jon Hickman

Okay.

just and million was have First recognized of revenue kind the all, been catch-up this that I customer would QX? over go of and Theoretically, $X large in that revenue? can QX maybe

Edward Murphy

Yes, spread those over quarters.

Jon Hickman

okay. recurring it from and -- not this all in are then got revenues And QX? you But recurring. that's -- so customer But Okay. large

Edward Murphy

revenue question Yes, with that It's just is how of customer a continues recognized. that spend to us.

time time [indiscernible] on of from influencers influencers activated, So initiatives that the and can on to depending a the customer. is actually that lot of based when and are change

Jon Hickman

[indiscernible] or money, just not fact affect margins? was this It million you recognized Okay. that of this And the itself and in general? campaign, that the $X the did extra in catch-up

Edward Murphy

Peter. -- does go ahead, That

Peter Biere

the the thing only that concentration. affected the Jon, was Sorry. margin

catch-up from adjustment, revenue that's only the but reason. of had this then customer the because we more So lower-margin

Jon Hickman

let's see. Then Okay.

going to indicated guys. be comments, sounds Ted, tell you like you've said that your -- to sales seasoned then you your with it OpEx, trying you're from Ryan just some judicious hired So Can us -- many? but to how I'm your recently

Edward Murphy

not specific headcount, personnel, there. continuing is than we but in numbers not We're increase where about invest a to particular. giving necessarily are sales XX. in We're in about huge talking lower overall It's talking

So when we're look be at more where the a we not of attrition, really those many hiring other in parts at likely if aggressively backfilling roles. will we organization, too people but there's now point

Jon Hickman

you've then going in do the platform, but the But And not talked Okay. past that about going what's the new it status you're [indiscernible]? What's for call other that. platform? IZEAx to to you

Edward Murphy

there platforms to year-end. prior Yes, be going are two to that launching are

on have to announcement wait here what the prior they to to we launched do, those those terms You the expect see both and of year-end. be in but will of for

Operator

the of to end back remarks. would question-and-answer We Ryan over session. have our closing for reached like I turn conference to the

Ryan Schram

releases the you And afternoon. you, us of a and friendly this on latest investor joining information and at related reminder, all for to talk press Sherry, everyone, IZEA's available website, we'll izea.com/investors. our thank company's and for again us, soon. Thanks and joining as Thanks, are news

Operator

This today's you. conclude Thank conference. does

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

IZEA Worldwide (IZEA) 16 Aug 222022 Q2 Earnings call transcript