- Earnings call transcript Q3 2022

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Operator

Good afternoon, ladies and gentlemen and welcome to IZEA Worldwide, Inc., Third Quarter 2022 Earnings Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator instructions] As a reminder, this conference is being recorded. I will now turn the conference over to Ryan Schram, President and Chief Operating Officer. you. Thank

begin. may You

Ryan Schram

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

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

involve today's be considered and statements may be Before financial regarding the to of could please discussion our we encourage disclosures We of make differ consider and that that and advised the financial that SEC actual begin, you performance the note risks factors. release a in results press contained uncertainties forward-looking results company's take and included of of detailed business, operations for today safe materially. in we the to some our such a filings statement covering number paragraph harbor these cause

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

Peter Biere

the million context prior revenue quarter. fell third grew QX $X.X all announced, down XX% the million. we net the $X.X results on during everyone. slowed decline. quarter from higher revenues Managed XXXX XXXX afternoon, over SaaS the represented third by approximately the $XX.X quarter quarter. quarter. recorded in year million, one XXXX. bookings to and managed We I'd months. from million the Revenue and over provide Ryan, to Bookings compared review you, Managed $XX.X as the saw, of which year total $X.X Thank primarily operating from revenue QX quarter-over-quarter, the XX% during XXXX current $XXX,XXX customer to services other XX% quarter million previously by quarter XX% large like than in growing customers totalled XX% prior XX% on grew totalled in our of revenue of contract, for large services good customer for offerings services additional the contracting as our of summer grew by down process of Revenues the contract quarter-over-quarter due to

other quarter. were for over this second quarter ended declined revenue delivering bookings and lag with the a customers bookings our monthly best in all year So prior September a pipeline moderate bookings XX% There is recognition. QX year between of total opportunities. the a more bookings strong we solid and

manifest the in reflected slowness XXXX early total, higher will QX quarter revenue a the the of Some but is in and percentage revenues. over XXXX summer current

total to yet backlog, XX, that bookings million on begin recent invoicing for contracts $XX.X underway which September of well the as are Our managed services that represents have unrecognized totaled as revenue XXXX.

Total marketers decline year of the to fees XX%. and declined quarters. license three backlog due about in quarter by quarter-over-quarter, marketplace expect by fees, XXX,XXX quarter a for compared fewer comparative by XX% spend average services prior to the XX% all and platforms license current on by spending in other mostly declined self-service, XX% fell the gross this from fees levels. counts including fell SaaS lower SaaS We the current the fees period. billings quarter. most sharp following spend record in Gross or Revenue services marketplace in to while revenue declined marketplace as spend, licensee of in fees, consisting revenue XX%

of range Expenses revenues the cost of averaged cost $X.X to the averages. totaled current XX% of the year marketing quarter. on delivery contract, the Our total XX% to in XX% our prior revenue of year $X.X the to $X compared million prior contract in in contracts third increase of of significant during the in which or the quarter. our quarter large revenue quarter year quarter. due revenue during revenue XXX,XXX cost of a the costs is customer total within margin This of XX% higher other prior aside, or million historical quarter-over-quarter. than XX% revenue up recent quarter, the cost third was customer was for million for million for million third $X.X or of higher and the made gross compared to XXXX quarter. cost revenue $X.X Accordingly, in The third the compared primarily XX.X% quarter other Sales one

bookings. auditor. the Additional costs headcount associated or higher quarter-over-quarter X.X% higher that offset administrative customer XXX,XXX commissions professional third were by with driving quarter, vary and growth and and associated costs partly General to with sales $X.X total with lower payroll related due changing fees million our primarily during

per this the per net of quarter. prior or was prior quarter $X.XX Our loss in to negative quarter $XXX,XXX third quarter Adjusted for $XXX,XXX for was of net year loss the $X.X compared million compared for XXXX or year share negative a the share. $XXX,XXX $X.XX year EBITDA a the to third

to to tied contract. timing the interest September had million to year $X.X the in the XX, we negative partly working EBITDA lower investments of XXXX, capital, in payments receipts change million difference to due customer adjusted due million $XXX,XXX our for with mostly rest up during at period, of made the the of in $XX We income the large of $XX.X investments day related on of cash year, and and As quarter. down beginning from our

we ATM and are our the through we any offering that current growth capitalized the not our for announced, believe at equity during raised market We well the capital previously strategy. had terminated As quarter.

cash our our not call Lastly, that, hand do that and solid any turn I'll to growth liquidity opportunities With over investment a the to may we are on and With business we portfolio have debt ahead. from lie required, sheet. on back in position execute as balance Ryan. on

Ryan Schram

comes Peter, and navigate across is economy. embracing Thanks, new an and to question the industry how everyone. get helping ways. businesses also in advertising and sectors hello tested brands When further while There's we're and no that continue IZEA changes the operating again, uncertain in environment sweeping in it creator agencies to different the all

Our unchanged. mission remains

markets generation call, are can continuing drive solution sharpen of service quarter and product on Flex These of and and have including announcements our continued will QX compelling for that creators geographic business product our very just a marketers, in a where by software clear last alone focus to we expansion next and on made the mentioned marketplace the we I clearly, IZEA.com the serve in value managed significant all manner. As enterprise and The growth to set demonstrated improvements simultaneously. around our world launching our clients priorities. in differentiated business we've creator

for resources offs ahead, where IZEA operating internal growth fiscal due moderate making macroeconomic climate. worked can throughout as Shareholders plan by committed and important year XXXX expect we losses opportunities the to invest is to and realigning the also year needed have our in beyond. to for efficiency current will drive prudently We biggest the to

influencer to geared finally you upfront into investment unveiled quarters many all, and For bespoke and transactional all live builds pricing. of engagements. all and Best you of creator event work of XX, streaming who fast marketing campaigns it marketplace those towards the use off hard simple September small perfect is The marketplace new of and saw It's quick, the to is IZEA.com easy, turned our for on need the findings. result on of turnarounds and that public. projects initiatives and

Our of the the bilateral Shake marketing, all influencer marketplace in designed and launch just to XXXX but it expands a interactions, encompass casting was that things beginning. upon with team creator from are reimagined calls including learned

working measurement. entirely announced Our way gamut new within influencer process the of enterprise spans team software; introduction an marketing of complexity, Flex. IZEA and also the Modern of

budget, brands multiple with influencers executing platforms, are a quick Some content others celebrities. a want modest nano to need multi-year across post ambassadorships on from everything complex and while

legacy at business more Suite, enterprise designed structured and the benefits to current workflows as defined be but the as process, our has to the price strategy agencies, so Flex's for solution, bringing customers. work gap clearly the be to ground able customers, to the it powerful. respectively. There's and best about to tools possible market marketing of more that a the they're points Izea's in to come using excels small, provide up through Unity $XXX power at to solutions. inferior, software brands future and so marketers enterprise make lowering needs per From IZEAx to as the both but and freaks central We in sellers entry from as $XXX Our too There a our new a power competitively. barrier and its get in expanded needs buyers to for share value addressable and if industry is built and completely providing to is of and the allows accommodate our flexible Flex's both the new board price much is and switch for the have big software annual users for across to the this industry, here affordable feeling how influencer their would organization as extremely month plans starter want of many platform currently try expensive

Kingdom. IZEA least, Last of our brought and the as is press the archive services American advertising the partner North managed Having Chinese official you, Flex. model by reputation or company's October underpinned super trusted technology of event built linked platforms into If the not on center. about the flexible one XXth, markets, change IZEA let's world's to launch in itself. online United our but company's more on our a announced powerful strategic the learn IZEA.com An we new of a streaming epicenters has

market extensive our which strategy, top the conducted we world, understooded corners the that growth due potential, of part and competitive of UK, brands. client the required has innovation As experience diligence, and by many broader but like emerging lacks tremendous

faced or lasting our Across the dominate all of market focused. directly economy hourly the or currently As and IZEA have spending alongside brands remain clients a IZEA filling lines what our create these initiatives remains uncertain best-in-class services sector. that to products focus down experience best all working business, double gap the long-term concentrated by tend partner as the an while only volatility, across down, way be customers they both with and agencies efforts and value, believe mandatory believe that a unexpected of retainers partner, about reliable battle-tested dispensing and on holistically, shareholders. on the Thinking driving customers and team in and clients delivering a for billing when companies will customer is value our other with significant is where heads we that first fantastic experience putting to lasting of the

For colleague and CEO our how turn additional third to the our Isaiah, road thoughts like over Ted? at ahead the chairman and now and looking Murphy. we my are on call Ted I'd quarter for to

Edward Murphy

you, Ryan. Thank

year. were to the as the two and front for delivered the for have immune they We as of we now in largest throughout our that a would been the slowing as change we over half past negative showing sectors of had signs of they net contracting be implications clients. overall the Even have all tremendous impacted new quarters expected, fallout QX performance quarter are all Bookings not by Customer economy. result. on sizes the projected a in in market with robust was than this seen clients slower there we IZEA's businesses are amount based of not economic momentum strong particularly global the

services XXXX, that make slower we As best XX% new progressed, best September, pipeline we delivered QX this year we've saw managed a months. up trend high new the ago new quarter was We've for in XXXX. our We year, not QX up in from ever proceeding continue for but so seen opportunity month second did the all-time with opportunity pipeline a that this October, of had generated. also opportunity the in pipeline of which the hitting strong for concluded that month our far

the New forward the is strongest we close been, rates to it on QX remain ever has opportunity and pipeline for of services beyond. we look cautious managed but projection as

current a still continued averages. moral close is back opportunities is and pace at Our this adopted prospective slower of half negatively though like, progress believe year, would our than well in wearing above of to and they outlook a clients. are we by impacted result economic that the we rates the this This historical

a We have a pullback improving ever. generate need of made we'll than coming rates, we average close to pipeline great expecting which but our the bit are strides year, means in more

it customer While of the many more more navigate ahead through environment. a expectations picture elevated. remain aspects be is are harder, economic of clear Sales a entering that hazy, fierce, growth and the global year will competition, combination challenging we will IZEA efficiency efforts. and macro

single expense is Our talent. biggest

the past we the and organization. team Over expanding have throughout two been needed years, our roles filling

Markets to markets quickly be filling relentlessly While we to the and are have have costs departments some the There pace pragmatic members lean and approach. full-time we sales the hiring not the slowed near at escape more not flat in streamlining to decision. Despite impacting our labor XX% benefiting continue forward. employees that peak over term, inflation We everything salaries costs, been is were new faster on revenue we no to In costs Counteract changed intend XXXX, deliver XXXX, backfills, team critical help. past all-out compared we quarter we to roles, tied we years. our from reorganized costs rate plan more in were We the staffing and of have XXXX, keep implemented the hiring, two still did do to reserved now they relatively generation. our go at to mentality headcount already insurance rising in a products related QX, forward. for team have Throughout we optimize that this to of rise we further about have to adjustments from moving spree essential expect less efficiency from to larger and only are rising moving chose directly XXXX. of climbing. than we an onset those to product to and keep when innovative our though hiring in have

IZEA shutter streamlining We have in member. effective the with with umbrella. under and organization market marketplace shuttered graphs hand of can the expensive globalization in along facing of run seen costs people product team of in legacy a the we of associated late services IZEA brand in XXXX us This software help hand platform IZEA we into with marketing XXXX, that goes consolidation user rolled The small Shake we that late of ecosystem to In per will come. lower products smart multitude incredibly cohesive our all decision teams will October, the customer that has to are and spend the organization IZEAx Brand in eventually favor for will and will software a the Flex be under be maintain. years and the more experience services. the IZEA of resulted create consolidate in and product

MVP We the in IZEAx and this begin holidays we'll of in customers expect Isaiah quarter after Flex the to transition QX. reach

side XXXX. to equation, a of benefit growth been the of catalysts number from ourselves working On to have we in the position

seen the cycles this to new services We pipeline and ahead. year platforms and continue and efforts. the by pipeline with China capitalize we as the with quarters back opportunities support will given close to environment half of some schedule, UK. software will opportunities, demand production initiatives us IZEA this year. presence have macro early longer two marketing, require these on has close along aggressive of well from intend these in the enter an on We're we in in build managed sales including must sales a generation the excited as increased rate of but The indications that event strong with the content impacts to efforts

Thank waters there joining navigate the open equipped will we lie up is today. for you this them. I strength denying community. a are of our and no While for to that call is economic financial now position all the from well analyst choppy some path, and team Q&A in in us experienced

Ryan Schram

everyone joining Thanks afternoon. so Scott, to this us you thank and much

all stay care. investors the our Take for investor can affected reminder, a IZEA.com/investors. and analysts hurricane joining online Florida IZEA's today, As us and thank safe this by be at To members, please again you team found of in information afternoon.

Operator

That Please thank call for concludes participation. the disconnect your We you for line. today. your

IZEA Worldwide (IZEA) 11 Nov 222022 Q3 Earnings call transcript