Earnings call transcript Q2 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings, and welcome to the IZEA Worldwide Second Quarter 2023 Earnings 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, President and Chief Operating Officer. ahead. go Please

Ryan Schram

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

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

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

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

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

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

Peter Biere

million, $X.X of for I'll afternoon, balance prior quarter than year's and discuss June Ryan, year you, quarter lower operating XXXX second prior revenue was or everyone. XXXX, the highlights. good our the million XX, the Total sheet results the to Thank ended review XX% quarter. for compared $XX.X quarter and

the prior quarter. EBITDA was cash quarter the gain a loss for net of year Our $XXX,XXX for compared $XXX,XXX negative to or

shares. XX.X Our $X.XX our four-for-one on quarter are adjusted loss share $XXX,XXX on These million for or in split. share or of the totaled June per to XX.X per loss compared share current million counts million $X.XX $X shares XXXX a net reverse

the to XXXX second decline. customer, for refer customer we one approximately quarter, the for Managed we compared non-recurring current a quarter services the $XX,XXX second $X.X quarter. million year, ways customer. totaled this parting this million that with of announced Early and bookings are prior year's XX% million prior second I'll as from to which Bookings in year's our were quarter large totalled $X.X non-recurring the $X.X for

current and non-recurring quarter. this which current prior quarter year's customers, from the and customer customer, bookings total quarter, XX% which new $X.X both of totalled include bookings out in second total million the Stripping existing XX% bookings, in above the ongoing $X.X of represented million,

quarter Our order was was count the from average prior size the and customers XX% above these ongoing year unchanged. order

showing that grew Importantly, historic from our and strength demand well XXXX, from ongoing to core our from on customers QX we're customer. sequentially bookings the our sizable demand non-recurring way XX% also in replacing

in the the Revenue million the revenue comparative quarter, and year's explaining Managed the revenue and which for XXXX. non-recurring million XXXX, in current current $X.X the of million XX% quarter quarter quarter quarter. than million second decline services $XX.X prior of totalled customer our or the below XX% from during totalled declining more second was $X.X $X.X second

about impacted $X.X XX% customer, previous revenues non-recurring our of are average our quarter, from the ongoing margin Managed quarter, by still than six last the services second higher margins $X.X has by depressed year's million. revenue customers our mix quarters. Gross on the for the during totalled totalled X% overall million which which from

customer. related we improve to complete non-recurring We the expect next our two to this as average gross the over backlog margin quarters

has bookings about X.X quarters, seven past improved has months averaged between nine months revenues, time the currently. Delivery and to which during

that to are $XX.X in expect recognize well of and this million as XXXX. contracts represents which $X the backlog backlog, we as started amount revenue invoice, bookings this that third recent the XX, of underway, related services customer, Approximately June haven't majority is totalled the we quarter. non-recurring revenue managed of as Our on our total million for to unrecognized to

as SaaS services will grows, down of slower that in launched of quarter. cheaper, IZEA growth the new would considerably during in feature-rich second means in revenue call grow license in marketplace with subscriber the which our together pace. previously prior from transaction XX% we revenue $XXX,XXX $XX,XXX The quarter be access year with sunset which October a will platform opportunities. totalled of cost favor the base current XXXX XXXX, revenues fee is and provide that the Flex, a our platform We license announced creator XXXX, of quarter of IZEAx at

total margin quarter. of contribution a $X.X percentage but XX% or revenue, a Our higher current or non-recurring million in as of second were the mix XXXX, prior our revenue of compared in was the the revenue, to revenue fell quarter cost revenue, in margins of year from quarter. XX% Gross flat $X.X million, with of customer the

the growth. up the compensation year million quarter, X% totalled prior million due on the and by year in up million from quarter for $X.X quarter. lower in Sales X% during the spending an totalled overall costs, drive to primarily second prior cost demand quarter, offset prior second increase primarily administrative to $X.X XX% the totalled compared the second activities due fees. from quarter, of million bookings marketing $X.X Expenses professional other than during $X.X and year and the costs quarter, awareness revenue brand partly General to to generation of higher costs XXXX, down

second year primarily $XXX,XXX EBITDA positive in prior The gross compared XXXX, of the negative of quarter lower margin Adjusted dollars. negative was the for Our in due the quarter a change to net EBITDA compared of or loss was for for or $XXX,XXX million $XXX,XXX per quarter. negative a share, XXXX, to the year $X second $X.XX prior quarter, was loss share. per net $X.XX to

and share buyback, had million and cash than in in we to quarter, the during $X.X on EBITDA. lower our XX, capital, primarily additions $XX.X investments. $XXX,XXX quarter. of to million our a June beginning negative interest due working at second We earned the investments That's the of As XXXX,

not on portfolio to on our any our sheet. required, and on business we Lastly, believe and execute as position that cash liquidity debt did from in we solid have hand balance opportunities ahead. investment With we're growth may lie a

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

Ryan Schram

our Thanks, we and control our could challenges. earnings macroeconomic brand Peter, understandably keeping was hello on faced things are focused I again, shared signals the surrounding that organization our In advertising same industry contradictory two that being finding management our indicators, and and many of last the amidst noise who for updates, from broader accountable the distracted team squarely everyone. with clients

or paused were and shifted factors unexpectedly timelines budgets by on initiatives, these challenged overall. certain Yes,

with meet in However, resolve their has the state our long-term view clients respective with paired the of need to our XXXX. unmatched of on at meaningful value, flexibility our creator front and level half an economy, difference a made

the in team drive logo to our utilized first particular. managed service year of two the business quarters Our new for acquisition

back. footprint, breadth IZEA with year, categorical the believed activities, Said advantage coming was our added opportunity with leadership geographic to concentration sales These for in our our expand generation simply, fiscal and earnings last personnel, efforts which were took when our recruiting and prudently not risk others of along client higher-profile depth we call. and included there we if in our invest to team, we sales XXXX many out demand greater senior-level investment in our of were pulling highlighted satisfied space

pipeline, clientele produced seeing that the results pleased size that from also period. total year-over-year with for dollar proposals an same first month projects setting value all-time and XX% of doubling increase an increase with of clients, pipeline XXXX, creation we're May placed in first-time from our the the XX% half new initial of front growth year-over-year, in for an in of IZEA record We're nearly with in the half sales nearly deal business. of average the front or in bookings

improve that overall. and the showing spend which are of historically year, overall, business relevant moving right analysts second-quarter industry the economy advertising leading second investment largely is in over indicator been advertising now a growth underscored half that that data increased X%, will this direction the spending with of in GDP data Various has optimistic

expectation the opportunities on or be that of factors company-specific will of mindful need it's to IZEA front order there our highly to sector-specific capitalize that in in will be and Still, us. proactive against

improved such or as in seeing OEM For that instance, and packaged compared media there's landscape. the contrast spending we're sectors challenges to categories as technology in goods such consumer in consumer XXXX, to broader the automotive

through offerings portfolio Looking diverse we're strategies. IZEA's on focused delivering and ahead, growth of

it example, the our today business UK. robust North we as managed in and China, America, know For service

approach our differentiated where expansion via and be Second, identifies the markets can company's emerging influencer continued opportunities and IZEA in whereby growth, markets both marketing scalable. investment to

creator buyer's competitive to acquisitions right as through ago. marketplace economy not turned an and creator from within businesses; compared one and being for last in space. we buyer IZEA perspective opportunities innovative the market our tide remains and Third, opportunistic that this the believe but and affordable has scenarios, growth the for two interested SaaS inorganic least, to to years a

of and will few of marketing success. Speaking those brand, keenly with Edward and of digital the Choi to We're extremely lead years IZEA exciting had announcement a emerging Korea ago joining XX-plus Korean be our efforts believe the days fortunate launch us beneficial in market. another we across product to to into markets, have roles South his experience

If its our at you'd like free offering, to kr.izea.com. to feel website. visit more It's about Korean learn

on I'd his the Ted like And as on to our for quarter, commentary over of for additional to next now Ted. half to CEO, share and back Chairman well the IZEA's turn XXXX, Murphy. second perspective call as what's

Ted Murphy

lay you, near-term profitable In our fronts involving transition in trade-offs and for growth a the year, counts first more and of on on growth. long-term. order XXXX half strategic to the of a as we continues decision sustainable, regarding of be to this Thank multiple foundation focus period we diversified next phase customer made revenue Ryan.

that to We are bear pipeline fruit, growth, particularly seeing half year-over-year are growing we our back managed the going early have of Ryan but changes optimism are large where year, services, mentioned. as in the into

drives nearly what is all today. for Services the company of revenue our Managed

benchmarking in continue is U.S. markets business We making to but results, make workgroup. to brands influencers from unit campaigns, do managed our well managed our opportunities via to our team services our and only investments payments of powers global for to we our emerging as will success, be growth in measuring the and not services see technology identifying intend the and IZEA. team our Foundational that significant significant

so from this to decision long the with for view of we managed which Earlier team the XXXX. was our we and the accelerate for strength an returned services mind. be IZEAx this was originally downturn, in and economic the SaaS it managed of our end on challenges of decision could deal year, customers, unencumbered end IZEAx customer this in slated market. our transition The the made decided impact services a transition period SaaS with QX, to had We to quarter. SaaS It the revenue when at completed outsized and

drop of who combination are licensing made but SaaS was has variety materially the a a refunds it. customers for we a customers the in to for transition reasons. been us, transition of as customers licensing through to the who challenging into had due It now lower agreements transition, as The churned IZEAx in for revenue future, fees well who

SaaS engineering XXXX. headcount product by reduced our have December XX% of support and since group We sales,

the SaaS more grow. leaner innovation. team, take be the will will running base QX, grow delivering will back revenue this we more sustainable time a hit we levels, run. to revenue SaaS are some bottom expect this in which up much long believe to We that and It but base to while valuable customer product We in believe time at after same previous

there's FormAI launched overall as positive had as increased Traffic signups, inbound we that managed a in impact very the July has to versus of It and halo on marketplace. May. effect well. XX% leads been mid-June, In IZEA.com a has services user has part traffic, increased

has increased XXX% the importantly, IZEA.com period. monthly signups user same for during More

and traffic seeing record organic more paid direct traffic, are traffic for We acquisition search traffic. costs lower with site more

overwhelming credit creators allow to these We FormAI majority plans on based freemium in of and today. is on are marketers the with a various free The come features users play AI system. subscription. new without a model and a

designed rates increase out new features and are both rolling functionality to forward. We conversion moving FormAI

teams, combined something will only software with these This open paid to passionate all with is own features create powerful. product being of new variety users. our be of unique accomplished Some a and available software small, leveraging to source

the through sponsored where to brands future work AI. IZEA and content influencers together magic create will of new

we and sponsorships calling building those We practice this are now. for are sponsorships the generative foundational experience

of our have technology base content marketers the tools AI as we creators all all of create So catches for and sponsored platforms. built-in types to AI using both up, a

on The positive. I speed within Based with I generative largely to AI improvement the will off impacts next XX of and marketing believe to material AI, months be way sponsorships a XX the profound, take influencer see beginning on of months. in

our market the price August the After QX on our in of million our share. announced rules repurchase quarter prepared million the call, period cash shares per to at blackout open after with buying we $X repurchase, conference ended. $X that $XX move During equivalents. plan repurchase average share and we cash completed million share $X.XX an I with XX ended and forward with We market in accordance were share the in began

EBITDA investments that meaningfully IZEA. increase and ways now in revenue are can We to near-term capital that for deploy evaluating

that as our M&A. seeking initiatives, inorganic new expansion South of are will but investments growth from into we such come organic growth recent Korea, Part in also through

intention to meaningful catalyze top-line the team growth new and pursue is transition opportunities. revenue behind the throughout are us that our a profitability It sustainable to these With company. members a to IZEAx aggressive ready is more for leadership to paramount public and believe now org, curve achieve we and positions

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

Operator

over turn I for would like to to closing Ryan the remarks. floor

Ryan Schram

of and IZEA's us to on reminder, as information Have you website. like That's nice can investor a Investor all our thank this of Relations you online would find for We at evening. IZEA.com/investors. friendly a each afternoon, joining

Operator

This concludes today's teleconference.

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

IZEA Worldwide (IZEA) 14 Aug 232023 Q2 Earnings call transcript