Earnings call transcript Q1 2023

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Operator

Greetings, and welcome to the IZEA Worldwide First Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Ryan Schram. ahead. go Please

Ryan Schram

And and IZEA earnings everyone, today. have I'm for us Officer, Officer, We're at joining Schram, are Murphy. the Good Chief Ted Chairman IZEA's covering thank with and the you IZEA's Financial IZEA. Officer Operating call and Biere; XXXX. to me first for us on President call and afternoon, Peter Chief you joining Founder, quarter glad Ryan Executive of Chief

a press first issued detailing this our the company Earlier afternoon, for release quarter performance the XXXX. of

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

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

available the include earlier today results as EBITDA. metrics for also our issued release can in filings. will publicly earnings financial GAAP our also well today and commentary in measure of adjusted reported non-GAAP between Our Reconciliations non-GAAP be our found as

I'm that, pleased IZEA's Financial with And Peter? introduce Peter Chief Officer, to Biere.

Peter Biere

and you, afternoon, good Ryan, everyone. Thank

Managed businesses, sheet provide I'll breakdown to balance the Services I'll our review and prior March the highlights. operating year's quarter XX, ended for license some quarter, and SaaS and compared for results then our results XXXX,

than quarter $X.X the or for the revenue million, X.X% of $XXX,XXX was quarter. prior-year lower first Total XXXX

the below quarter, Our loss, prior-year for $X.X or EBITDA, the quarter. X% net million cash was

share on in million $X.XX to XX.X compared share per net of or XX.X a $X.X loss quarter or totaled million per current $X.X million $X.XX Our loss the on shares million.

of Managed a this our Managed base on understand the customer, customers trends our XX Services to business impact this bookings with to business, and core Services given to from announcement apart January unwinding particular our useful of our non-recurring Turning the regarding references large revenue year from make to customer I'll customer. and these distinctions. use core our related to customer the it's

which bookings This past year's the which XXXX to prior million our year's the for decline. totaled and Services $XX.X for totaled first million XX% to April of Core XXXX declined we XX% customer $X.X total XX, XX% QX, a compared announced that for quarter, quarter of bookings, first represented bookings quarter for compared $X.X million quarter. Managed of the first prior the first

the par in showing about Our in quantity a with strength quarter quarter pullback quarter, fell customer approximately XXXX. and and order count relative prior-year was $XXX,XXX was size from half, by in from first order the of commitments. spending down XX% Bookings average the non-recurring on the demand, the

Approximately $X.X prior the which $XXX,XXX about quarter. customer's of year's quarter's first related than greater the revenue first million $X.X Services to million this the of quarter. the revenue Managed was prior which during is X.X% was non-recurring quarter the for revenue or above customer, XXXX, XX% year's totaled

primarily in of prior in half second bookings revenues $X Managed core from is year's these is million the lower Services XX% customer totaled related our than quarter. revenue core softer first to the which customers during decline quarter, XXXX. The the

non-recurring compared past time six nine months bookings average business quarters, during months and months seven averaged to the customer. The delivery revenues our and between this an to six over prior between with

levels revenue of decline to to We over expect course historic that the this should time our year.

have this customer historical XX% margins. of average XX% Gross and our averaged between for non-recurring margins

during run Services Managed comparative the levels. gradually anticipate short with this historical unwinding our to the blended our expect we will gross customer, while return average to in margin process So, we non-recurring bookings decline

to total which of for backlog begin backlog, XXXX. million million that we to on this $X represents impact that we invoicing, revenue contracts Services following bookings is our Managed mute yet unrecognized totaled Our recognize March well as revenue customers. higher quarters. are in this revenue $XX.X have XX, to the as of continue related loss amount margin Over non-recurring underway, the recent new this the and customer as while add top-line two somewhat non-recurring to This of expect will customer

license quarter. by compared XX% self-service, fees XX% quarter marketplace license spend the from by while quarter, IZEAx believe or transition platform The the it to self-service lower other in our away Service will XX%. SaaS by of from revenue, prior-year the adoption Revenue customers, consisting to $XXX,XXX about spend we fees, and fees, legacy marketplace declined declined revenue with brings prior-year model from net over which Flex for fees time. a declined increase fees

to of range The in first compared was current in quarter. of quarter XX% cost million our of Our of averages. in revenue first quarter Accordingly, or our total cost revenues total including revenue historical core costs, customers margin, the revenue the quarter. recent the labor was quarter. revenue of XX% internal on increase in of of costs our primarily non-recurring customer, averaged XX% the made revenue XX% XXXX within $X delivery which to higher cost up The prior-year $X.X gross during was prior-year due the in to the for XX% the or of million compared

first X% $X.X to during Expenses performance. quarter costs, tied payroll due the the increase X% quarter totaled prior-year quarter, during prior-year other lower fees. administrative primarily quarter, General $X.X due are million of marketing audit-related periods. overall the first revenue both than $X.X to first reduced million for costs down in the of comparative the from from million and to Sales that down partly and totaled an cost the totaled by costs primarily offset quarter, professional costs compensation

of quarter first compared for $X.X negative $X.XX of in the or $X.X $X.XX share. per million XXXX quarter Our the prior-year loss million or a net per share, net negative loss was to

in the $X.X Adjusted dollars, million operating The cash the lower offset prior-year to quarter. higher XXXX for primarily mostly margin by for negative costs our EBITDA was from to portfolio. investment quarter $X.X interest EBITDA gross change due and of first was lower million income compared negative

quarter. XXXX, on negative As any we we million the on had opportunities business of we $XX.X March lastly, of the in during cash that in may believe $XXX,XXX $X.X as and interest We our balance to in the are primarily hand on With XX, and investments, to earned and at than we lower due our solid beginning on million investments ahead. first And position quarter, growth from lay execute do not have portfolio required, that sheet. debt our investment cash liquidity EBITDA. a

call the Ryan. to With back over that, I'll turn

Ryan Schram

Thanks, Peter, everyone. again, and hello

updates. last strategies line ago, our previous call shared six in has with our XXXX roughly management continued plan team in against the Since to weeks execute operating our

While it's our likely surprise I overall quarter wanted that number to share. economic that there no company turbulent, the highlights to climate from remains a first anyone of were

First, official Flex, off new XX, kicked our IZEA on we marketing the January platform. the influencer year launch next-generation with of

never time a mission to to marketers exciting at bit, barrier At fall, that for the time, in before. of to influencer value down Superchanged IZEA's announced during directly product more event continues share on saving to the First about last the ways for track Flex marketing introduced sales same the Ted we In available impact Flex enterprise marketers customer an critical. when all entry progress software a is the to allows price and streaming money equally will level attractive little make. lowered

growing Within our our with our market Managed opportunistic remains forward mindset. Service the we business in base, group, control: client innovation whenever driving an that things share and competitive the and highly directly our focus thoughtfully wherever category, on can possible expanding

it clients client saw top in compared meaningful quarters we recognized to last relationships, from was winning yield surge in fact, was broader ahead, prior agencies that which, expect opportunity absolute deals experience [got] the alike. and award and thanks the brands opportunity an increase During quarters half. three and a by (ph) quarters; our to provide we to increase the driven net a one to new of those the expand we QX, to IZEA, a The additional the of from revenue service to two of year the in number won standpoint,

event to even fiscal investment our new a IZEA in heavily in change. the in as which Everywhere. something unexpectedly refer our This handful quarter year of is expands. we of net dynamics that positive serve time That these were impact continued activities, from a part business to boost therefore, internally sought due clients also clients as to on central and overly a diversify base, our overall goal uncertainty, client to a we being In as of larger the the dependent that was base generation or business transition risk demand could to a

some is Google IZEA seen whether shareholder, display even these have IZEA a As paid ad through organic, searches, both of programmatic and in efforts you or recently, we're ranking targeting, digital on may highly major it receive airports. message. can are out-of-home that to creators and markets in is and every positioner that on influencer where in places we emphasize taking marketing and opportunity alike and clients act

company industry leading marketers, first matter sponsorship. through and South These at profile client Shoptalk activations Marketing and time round Vegas, most high Consumer in in shows to Influencer the showcase up spend front We proud Diego, San Southwest quarter, center with our tables at the the events. other Tech our World Electronics thought spaces key Show allow while the IZEA's Austin, during partners team Best Women wrapped in events. in-person places to Also by conference quality Marketing leadership Las and in placing our that keynotes, in and Social Media in were and

lookout only believe the for business, create our that drive we but in meaningful way visibility to and months persistent as diversified is differentiator long-term key growth. a quarters the on not Be elsewhere outcomes the ahead a for IZEA

Earnings. the as and frequently initiative least, trade and Chuck deliver Todd State These Insights even focused NBC's and wide, not the Last certainly economy, of first our places IZEA creator blogs The from two remarkable were by which on during eMarketer other Equality studies The XXXX to Meet Press but such cited research are of the in to findings in marketing far recently. unveiled State Influencer of quarter: Influencer publications continues

most marketing not trusted gain, pride, experienced, totality business see Our only expanding and not research we the while point It's credibility the a most as leveraging to is. mention innovative marketing equates leading corporate directly and brands company talent. and it investment thoughtfully agencies influencer our the to underscores there most IZEA our from of in, of

the With that over quarter now IZEA's Murphy, in Chairman to and and on like perspective ahead. to share CEO, to Ted? I'd Ted the call his turn road mind, Founder, our

Ted Murphy

Ryan. you, Thank

remarks in just concise given our recent quarter most weeks be ago. this was six my I'll call

the Flex and track pleased IZEA Creator We IZEAx lead support shutdown company of continue the focus we us on by that to the Marketplace. will platforms share cost our for Once our are our infrastructure legacy efforts engineering I'm The to for quarter. fully future. significant to on savings of process to platform complete, of technology product, transition the from end and the fully this shutter allow use IZEAx, platform, and to this customer

have migrated of the XXX,XXX the into log next create will IZEAx creator These make end have to and from We users by accounts accounts Flex. to completed migration of listings to marketplace brands. approximately marketer The to pitches month. ability be the

quarterly customer impacted to QX sequential we when will stabilize revenue are and counts optimistic transition until and has not SaaS this growth. that can we quarter likely return The

significantly lower, points our with acquisition and enjoy indications rates both saw that Flex and While customer IZEAx. than are churn early we costs Marketplace the lower are price

SaaS our today. only accounts revenue of for a small portion

the want the not We is in but creators marketing marketers offering Our by a desire price software diverse that SaaS space. best as influencer broad base of value and change well. to to to customer have only for

that, and not more pricing, for salesperson, to paying other do through a no knowing before exact our a software. quick "try a same customers to you're contract model need with altered transparent path go-to-market To demo to if negotiations, speak book the we've you contract-free buy," strategy, than go a or

martech broader cost with inevitably seat, HubSpot, industry the for landscape land: painful user. solutions large. If It going and marketing is price sales arduous be this is Salesforce the where low to going you pricing to at processes. force software to Influencer high a markets mature models delivered value be software from to software beyond at look per high reckoning evolve is opaque per

sustainable a chosen to grow. by have can We lead building now base that

transition around is operations. Flex is our new the operating to That new the our for practices becoming sooner can legal, accounting, sales near platform. we the optimize sooner And Managed technology Flex, service we move our core completion. and Services

We are finishing new platform. run out Flex within old campaigns, campaigns are being and all the

central and view, top in contracts and features In releasing location built edit, other will creators Last of provides we and for coming Flex, month, which making our all store the and to a related marketers module be sign faster additional it generative Flex. be contracts on in both the agreements. of to campaign users the months, and for It released transact. AI, Marketplace each and find some will easier we

indicates Our images; be using that uses capitalize to we to recent daily willing AI. more product of for are AI would on: are XX% and groundswells of pay three in to AI influencers or seek XX% research a their using XX% service life; generate influencers

said, momentum be recent broader we've positive the especially Looking continues at to marketplace, for team. Services of past That environment some our seen two the to when macroeconomic challenging, years. our compared how Managed indications economy impacts the

XXXX, early level clients. a that brand both agency significant impacted faced layoffs uncertainty, the of and market to In leading

progress in and surge However, noticeable of believe now customers behavior. of levels, year, We into being which as displaying staffing translating determining middle a the are is commitments in that we the is into there their made. greater budgets a customer confidence shift

improvements this our team year, has so the year. out this Managed been responsiveness. far bookings client And in turned Services successful market conditions and for observing April Services gradual most Throughout to month Managed be

During last approved conference that I our $X plan. share million repurchase announced of Directors our had call, Board

information. open to the trading without ends business XX. you do, undervalued, and plan only made that We at IZEA's company be significantly are in during the repurchases believes, are possession non-public is IZEA our blackout move that at and credit May less only prepared will we of when with windows soon many Board material period after cash on times not as of is building. trading Any value for than forward

today. community. the your I all open us now Q&A and support will Thank you for for for joining call up the analyst from

Operator

you. Thank

[Operator be Jon ahead. Instructions] go now a Ladenburg. session. Hickman question-and-answer will conducting Please We First with question,

Jon Hickman

Ted, Hi. can hear you okay? me

Ted Murphy

sure I can.

Jon Hickman

Okay.

make customer basically was questions. named, next Is sure to the two that I two that Just wondering, be will that -- relationship want their over be in what... quarters. just I shall the not significant

Ted Murphy

Yes.

Jon Hickman

[indiscernible]

Ted Murphy

coming There's still in, intent down. the in small that have it winding next we're Yes, wound are but quarters. completely is some down bookings that the to two

Jon Hickman

on line do you to business in other do ways? with future customers, in your different parting So, more them you are expect just the a with or

Ted Murphy

Right now, ways. we are just parting

Jon Hickman

as April second question to so my on seem year April is, the then the of has business indicate and year. that And well, Okay. you best -- has the was the month gotten moved better

said? You said that last in best or what and year you it second was half, the the is month best the also a month

Ted Murphy

month I best said don't was I year. so believe far the that. this It

Jon Hickman

maybe... something But or Ryan said it about too

Ryan Schram

opportunities a Jon, year two basis, Yes, and me. of number last our it's of one yes, was On it over half. of the best months

Jon Hickman

Okay.

Ted Murphy

Yes, count that's opportunities. count -- the of

Jon Hickman

The okay. opportunities, count of

about possible you I Are with intrigued One anything anything? say you -- acquisition you can looking still? So targets? follow-up, is okay. guess, Are

Ted Murphy

company. shifted has couple in past right at that that of we're There attractive, to variety position we from the will that now. the anything right to not still are years. are for there I more the on M&A fit the have targets market of comment a find a made I out size, have varying economics definitely the but say think but

Jon Hickman

it That's Thanks. Okay. for me.

Ted Murphy

Thank you.

Operator

like of to reached to for Thank session. you. remarks. the turn We've over closing the Ryan I end Q&A call would the

Ryan Schram

you this Thank you, afternoon. Stacy, for joining and thank everyone us

found online again releases talk Thanks and Relations joining reminder, a Investor and can press IZEA's you we'll investor on at website us, soon. for of As to information all our be izea.com/investors.

Operator

This teleconference. concludes today's

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

IZEA Worldwide (IZEA) 15 May 232023 Q1 Earnings call transcript