IZEA Worldwide, Inc. (NASDAQ: IZEA), the premier provider of
influencer marketing technology, data, and services for the world’s
leading brands, reported its financial and operational results for
the second quarter ended June 30, 2021.
Q2 2021 Financial Summary Compared to Q2
2020
- Total revenue increased 109% to $6.5 million, compared to $3.1
million.
- Managed Services unit revenue increased 146% to $6.1 million,
compared to $2.5 million.
- SaaS Services unit revenue decreased 34% to $425,000, compared
to $645,000.
- Total costs and expenses increased 74% to $8.6 million,
compared to $4.9 million.
- Net loss was $0.1 million, compared to a net loss of $1.8
million.
- Adjusted EBITDA* decreased to $(1.4) million, compared to
$(1.3) million.
Q2 2021 Operational Highlights
- Managed Services bookings reached 187% year over year growth in
Q2 to hit an all-time record of $11.1 million.
- Hit all-time record count of customers licensing IZEA SaaS
products.
- Company joined Russell Microcap® Index.
- Unveiled next generation of IZEAx® Unity Suite.
- Announced BrandGraph Compare, Themes, and TikTok Support.
- Added four partners to IZEA’s Talent Partner Program.
- Completed sale of $35 Million of common stock through its ATM
offering at an average of $4.98 per share.
* Adjusted EBITDA is a non-GAAP financial measure. Refer to the
definition and reconciliation of this measure under “Use of Key
Metrics and Non-GAAP Financial Measures”.
Management Commentary
“The second quarter was a continuation and acceleration of the
strong sales momentum we first started to see at the end of 2020,”
said Ted Murphy, IZEA’s Chairman and CEO. “The record $11.1 million
in Managed Services bookings we saw in this quarter will have a
positive impact on revenue this year and carry over into early
2022.”
“On our first quarter investor call I shared that our goal was
to deliver at least 30% annual revenue growth per year for each of
the next three years, or a 30% compound annual growth rate,”
continued Murphy. “That remains our longer term goal, but based on
current bookings and first half revenue numbers it is clear that we
will far exceed this goal in 2021. As of July, Managed Services
bookings for 2021 have already exceeded all that of 2020. We will
likely exceed 30% year over year bookings growth again in Q3. Our
pipeline remains very strong and we have been building on the
success and momentum with expansion of key accounts as well as new
customer acquisition.”
“We saw record customer counts for software licenses once again
this quarter, driven by increases for Unity Suite, BrandGraph, and
IZEAx Discovery. We are still in the midst of absorbing the pricing
and overall strategic change we made with Unity Suite last year,
but we did see 130% bookings growth in combined Unity Suite and
BrandGraph licensing YoY, with nearly two-thirds coming from new
customers. We will continue to see some lumpiness with licensing
revenue until we get fully through the pricing transition but
expect to see some normalization and revenue growth that reflects
the steady climb in software customer counts on the other side of
this year.”
Q2 2021 Financial Results
Total revenue in the second quarter of 2021 increased 109% to
$6.5 million, compared to $3.1 million in the second quarter of
2020, with revenue from Managed Services increasing by $3.6
million, or 146%, to $6.1 million in the second quarter of 2021
compared to the second quarter of 2020 and revenue from SaaS
Services decreasing by $220,000, or 34%, to $424,920 in the second
quarter of 2021 compared to the second quarter of 2020.
Revenue from managed services improved on the strength of recent
prior quarter bookings growth and an increase in completed
campaigns during the quarter; demand for managed services continues
to increase as many customers are shifting more of their marketing
spend to influencer marketing campaigns.
Revenue from SaaS Services decreased primarily as a result of
lower license fees and lower margins on self-service marketplace
spending. Licensee counts on all platforms are growing, however
average license fees are lower due to competitive changes we
implemented in the summer of 2020 in response to COVID-related
churn. We also lowered our pricing on selected self-service
offerings during the third quarter of 2020, which impacted our
current quarter margins on marketplace spending. Gross billings (a
key metric, as further defined below) for SaaS Services decreased
42% to $1.2 million in Q2 2021, compared to $2.0 million in Q2
2020. Certain of our SaaS marketers decreased their spend levels as
they transitioned from the TapInfluence platform to IZEAx and
curtailed spending throughout 2020.
Cost of revenue exclusive of amortization was $3.3 million in Q2
2021, or 50% of Revenue, compared to $1.4 million, or 45% in the
prior year quarter, higher primarily due to a heavier mix of larger
deals that carry lower overall margins. Costs and expenses other
than cost of revenue totaled $5.3 million for the current quarter
compared to $3.5 million for the prior year quarter. Sales and
marketing costs were $2.3 million during the quarter, $1.1 million
or 87% above the comparative quarter due to sales compensation,
which varies with higher bookings and marketing costs associated
with driving customer growth. General and administrative costs
totaled $2.7 million during the quarter, $739,086 or 38% above the
prior year quarter, due primarily to higher compensation and
contractor costs to support operations and IT investments.
Net loss in the second quarter of 2021 was $0.1 million, or
$0.00 per share, as compared to a net loss of $1.8 million, or
$(0.05) per share in the second quarter of 2020, based on 61.4
million and 36.1 million average shares outstanding,
respectively.
Adjusted EBITDA (a non-GAAP measure management uses as a proxy
for operating cash flow, as defined below) declined 12%, or
$154,072, to $(1.4) million in the second quarter of 2021 compared
to $(1.3) million in the second quarter of 2020. Adjusted EBITDA as
a percentage of revenue in the second quarter of 2021 was negative
(22)% compared to negative (40)% in the second quarter of 2020.
We raised $12.2 million from sale of securities through our
at-the-market offering in Q2 2021 and our cash balance as of
June 30, 2021 was $75.0 million. From June 2020 to July 2021,
we have raised total gross proceeds of $75.0 million through
at-the-market offerings.
Conference Call
IZEA will hold a conference call to discuss its second quarter
2021 results on Thursday, August 12th at 5:00 p.m. Eastern Daylight
Time. IZEA's Chairman and CEO Ted Murphy, CFO Peter Biere, and COO
Ryan Schram will host the call, followed by a question and answer
period.
Date: Thursday, August 12, 2021Time: 5:00 p.m. Eastern Daylight
TimeToll-free dial-in number: 1-800-786-6705International dial-in
number: 1-212-231-2931
The conference call will be webcast live and available for
replay via the investors section of our website at
https://izea.com/. Please call the conference telephone number five
minutes prior to the start time. An operator will register your
name and organization. A replay of the call will be available after
8:00 p.m. EDT on the same day through August 19, 2021.
Toll-free replay number: 1-844-512-2921International replay
number: 1-412-317-6671Replay ID: 21996359
About IZEA Worldwide, Inc.
IZEA Worldwide, Inc. (“IZEA”) is a marketing technology company
providing software and professional services that enable brands to
collaborate and transact with the full spectrum of today’s top
social influencers and content creators. The company serves as a
champion for the growing Creator Economy, enabling individuals to
monetize their content, creativity, and influence. IZEA launched
the industry’s first-ever influencer marketing platform in 2006 and
has since facilitated nearly 4 million transactions between online
buyers and sellers. Leading brands and agencies partner with IZEA
to increase digital engagement, diversify brand voice, scale
content production, and drive measurable return on investment.
Use of Key Metrics and Non-GAAP Financial
Measures
We define gross billings, a key metric, as the total dollar
value of the amounts earned from our customers for the services we
performed, or the amounts billed to our customers for their
self-service purchase of goods and services on our platforms. Gross
billings for Marketplace Spend are the amounts of our reported
revenue plus the cost of payments we made to third-party creators
providing the content or sponsorship services, which are netted
against revenue for generally accepted accounting principles in the
United States (“GAAP”) reporting purposes. Gross billings for all
other revenue types equals the revenue reported in our consolidated
statements of operations.
Managed Services Bookings is a measure of all sales orders
received during a time period less any cancellations received, or
refunds given during the same time period. Sales order contracts
vary in complexity with each customer and range from custom content
delivery to integrated marketing services; our contracts generally
run from several months for smaller contracts up to twelve months
for larger contracts. We recognize revenue from our Managed
Services contracts based on a percentage of completion basis as we
deliver the content or services over time, which can vary greatly.
Historically, bookings have converted to revenues over a 6-month
period on average. However, since late 2020, we have received
increasingly larger and more complex sales orders which, in turn,
has lengthened the average revenue period to approximately 9
months, with the largest contracts taking longer to complete. For
this reason, Managed Services Bookings, while an overall indicator
of the health of our business, may not be used to predict quarterly
revenues, and could be subject to future adjustment.
Managed Services Bookings is useful information as it reflects
the amount of orders received in one period, even though revenue
from those orders may be reflected over varying amounts of time.
Management uses the Managed Services Bookings metric to plan its
operating staff, to identify key customer group trends to enlighten
go-to-market activities, and to inform its product development
efforts.
"Adjusted EBITDA" is a non-GAAP financial measure under the
rules of the Securities and Exchange Commission. EBITDA is commonly
defined as "earnings before interest, taxes, depreciation and
amortization." IZEA defines “Adjusted EBITDA” as earnings or loss
before interest, taxes, depreciation and amortization, non-cash
stock-based compensation, gain or loss on asset disposals or
impairment, and certain other unusual or non-cash income and
expense items such as gains or losses on settlement of liabilities
and exchanges, and changes in the fair value of derivatives, if
applicable.
We believe that Adjusted EBITDA provides useful information to
investors as it primarily excludes non-cash transactions, and it
provides consistency to facilitate period-to-period
comparisons.
All companies do not calculate gross billings, bookings and
Adjusted EBITDA in the same manner. These metrics as presented by
IZEA may not be comparable to those presented by other companies.
Moreover, these metrics have limitations as analytical tools, and
you should not consider them in isolation or as a substitute for an
analysis of our results of operations as reported under GAAP. A
reconciliation of GAAP to non-GAAP results is presented in the
financial tables included in this press release.
Safe Harbor Statement
All statements in this release that are not based on historical
fact are “forward-looking statements” intended to qualify for the
safe harbor from liability established by the Private Securities
Litigation Reform Act of 1995. Forward-looking statements, which
are based on certain assumptions and describe our future plans,
strategies and expectations, can generally be identified by the use
of forward-looking terms such as “may,” “will,” “would,” “could,”
“should,” “expect,” “anticipate,” “hope,” “estimate,” “believe,”
“intend,” “likely,” “projects,” “plans,” “pursue,” “strategy” or
“future,” or the negative of these words or other words or
expressions of similar meaning. Examples of forward-looking
statements include, among others, statements we make regarding
performance under customer contracts, expectations of operating
results that remain subject to completion of financial closing
procedures, IZEA’s ability to increase revenue and bookings, growth
or maintenance of customer relationships, and expectations
concerning industry trends or IZEA’s business strategy.
Forward-looking statements involve inherent risks and uncertainties
which could cause actual results to differ materially from those in
the forward-looking statements, as a result of various factors
including, among others, the following: competitive conditions in
the content and social sponsorship segment in which IZEA operates;
failure to popularize one or more of the marketplace platforms of
IZEA; our ability to establish effective disclosure controls and
procedures and internal control over financial reporting; our
ability to satisfy the requirements for continued listing of our
common stock on the Nasdaq Capital Market; changing economic
conditions that are less favorable than expected; and other risks
and uncertainties described in IZEA’s periodic reports filed with
the Securities and Exchange Commission. The forward-looking
statements made in this release speak only as of the date of this
release, and IZEA assumes no obligation to update any such
forward-looking statements to reflect actual results or changes in
expectations, except as otherwise required by law.
Press Contact
Martin SmithIZEA Worldwide, Inc.Phone: 407-674-6911Email:
ir@izea.com
IZEA Worldwide,
Inc.Consolidated Balance Sheets
|
June 30,2021 |
|
December 31,2020 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
74,989,876 |
|
|
$ |
33,045,225 |
|
Accounts receivable, net |
6,132,949 |
|
|
5,207,205 |
|
Prepaid expenses |
1,006,643 |
|
|
199,294 |
|
Other current assets |
62,694 |
|
|
74,467 |
|
Total current assets |
82,192,162 |
|
|
38,526,191 |
|
|
|
|
|
Property and equipment, net |
193,786 |
|
|
230,918 |
|
Goodwill |
4,016,722 |
|
|
4,016,722 |
|
Intangible assets, net |
72,222 |
|
|
505,556 |
|
Software development costs, net |
1,242,252 |
|
|
1,472,684 |
|
Total assets |
$ |
87,717,144 |
|
|
$ |
44,752,071 |
|
|
|
|
|
Liabilities and Stockholders’ Equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
1,624,725 |
|
|
$ |
1,880,144 |
|
Accrued expenses |
2,097,474 |
|
|
1,924,973 |
|
Contract liabilities |
8,654,765 |
|
|
7,180,264 |
|
Current portion of notes payable |
— |
|
|
1,477,139 |
|
Total current liabilities |
12,376,964 |
|
|
12,462,520 |
|
|
|
|
|
Finance obligation, less
current portion |
34,292 |
|
|
43,808 |
|
Notes payable, less current
portion |
32,255 |
|
|
459,383 |
|
Total liabilities |
12,443,511 |
|
|
12,965,711 |
|
|
|
|
|
Commitments and
Contingencies |
— |
|
|
— |
|
|
|
|
|
Stockholders’ equity: |
|
|
|
Preferred stock; $.0001 par value; 10,000,000 shares authorized; no
shares issued andoutstanding |
— |
|
|
— |
|
Common stock; $.0001 par value; 200,000,000 shares authorized;
61,809,573 and50,050,167, respectively, issued and outstanding |
6,181 |
|
|
5,005 |
|
Additional paid-in capital |
148,006,352 |
|
|
102,416,131 |
|
Accumulated deficit |
(72,738,900 |
) |
|
(70,634,776 |
) |
Total stockholders’ equity |
75,273,633 |
|
|
31,786,360 |
|
|
|
|
|
Total liabilities and stockholders’ equity |
$ |
87,717,144 |
|
|
$ |
44,752,071 |
|
IZEA Worldwide,
Inc.Consolidated Statements of Operations and
Comprehensive Loss
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Revenue |
$ |
6,538,739 |
|
|
$ |
3,135,039 |
|
|
$ |
11,914,371 |
|
|
$ |
7,898,707 |
|
|
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
|
|
Cost of revenue (exclusive of amortization) |
3,284,259 |
|
|
1,414,249 |
|
|
5,689,011 |
|
|
3,554,766 |
|
Sales and marketing |
2,302,869 |
|
|
1,228,691 |
|
|
4,381,192 |
|
|
2,751,834 |
|
General and administrative |
2,659,578 |
|
|
1,920,492 |
|
|
5,194,725 |
|
|
4,338,330 |
|
Impairment of goodwill |
— |
|
|
— |
|
|
— |
|
|
4,300,000 |
|
Depreciation and amortization |
363,924 |
|
|
377,107 |
|
|
729,453 |
|
|
878,376 |
|
Total costs and expenses |
8,610,630 |
|
|
4,940,539 |
|
|
15,994,381 |
|
|
15,823,306 |
|
|
|
|
|
|
|
|
|
Loss from operations |
(2,071,891 |
) |
|
(1,805,500 |
) |
|
(4,080,010 |
) |
|
(7,924,599 |
) |
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
Interest expense |
(8,739 |
) |
|
(19,476 |
) |
|
(22,532 |
) |
|
(26,094 |
) |
Other income (expense), net |
1,968,944 |
|
|
33,834 |
|
|
1,998,418 |
|
|
(3,910 |
) |
Total other income (expense), net |
1,960,205 |
|
|
14,358 |
|
|
1,975,886 |
|
|
(30,004 |
) |
|
|
|
|
|
|
|
|
Net loss |
$ |
(111,686 |
) |
|
$ |
(1,791,142 |
) |
|
$ |
(2,104,124 |
) |
|
$ |
(7,954,603 |
) |
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding –basic and diluted |
61,386,913 |
|
|
36,108,073 |
|
|
58,874,526 |
|
|
35,394,639 |
|
Basic and diluted loss per
common share |
$ |
— |
|
|
$ |
(0.05 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.22 |
) |
Revenue by type:
|
Three Months Ended June 30, |
|
|
|
|
2021 |
|
|
|
|
2020 |
|
|
|
|
$ Change |
% Change |
Managed Services Revenue |
$ |
6,113,819 |
|
94 |
% |
|
$ |
2,490,343 |
|
79 |
% |
|
$ |
3,623,476 |
|
|
146 |
|
% |
|
|
|
|
|
|
|
|
|
Marketplace Spend Fees |
71,167 |
|
1 |
% |
|
195,894 |
|
6 |
% |
|
(124,727 |
) |
|
(64 |
) |
% |
License Fees |
344,843 |
|
5 |
% |
|
442,905 |
|
14 |
% |
|
(98,062 |
) |
|
(22 |
) |
% |
Other Fees |
8,910 |
|
— |
% |
|
5,897 |
|
— |
% |
|
3,013 |
|
|
51 |
|
% |
SaaS Services Revenue |
424,920 |
|
6 |
% |
|
644,696 |
|
21 |
% |
|
(219,776 |
) |
|
(34 |
) |
% |
|
|
|
|
|
|
|
|
|
Total Revenue |
$ |
6,538,739 |
|
100 |
% |
|
$ |
3,135,039 |
|
100 |
% |
|
$ |
3,403,700 |
|
|
109 |
|
% |
|
Six Months Ended June 30, |
|
YTD |
YTD |
|
2021 |
|
|
|
|
2020 |
|
|
|
|
$ Change |
% Change |
Managed Services Revenue |
$ |
10,985,853 |
|
92 |
% |
|
$ |
6,615,404 |
|
84 |
% |
|
$ |
4,370,449 |
|
|
66 |
|
% |
|
|
|
|
|
|
|
|
|
Marketplace Spend Fees |
179,964 |
|
2 |
% |
|
362,187 |
|
5 |
% |
|
(182,223 |
) |
|
(50 |
) |
% |
License Fees |
727,884 |
|
6 |
% |
|
894,453 |
|
11 |
% |
|
(166,569 |
) |
|
(19 |
) |
% |
Other Fees |
20,670 |
|
— |
% |
|
26,663 |
|
— |
% |
|
(5,993 |
) |
|
(22 |
) |
% |
SaaS Services Revenue |
928,518 |
|
8 |
% |
|
1,283,303 |
|
16 |
% |
|
(354,785 |
) |
|
(28 |
) |
% |
|
|
|
|
|
|
|
|
|
Total Revenue |
$ |
11,914,371 |
|
100 |
% |
|
$ |
7,898,707 |
|
100 |
% |
|
$ |
4,015,664 |
|
|
51 |
|
% |
Gross billings by revenue type:
|
Three Months Ended June 30, |
|
YTD |
YTD |
|
2021 |
|
|
|
|
2020 |
|
|
|
|
$ Change |
% Change |
Managed Services Gross Billings |
$ |
6,113,819 |
|
84 |
% |
|
$ |
2,490,343 |
|
55 |
% |
|
$ |
3,623,476 |
|
|
146 |
|
% |
|
|
|
|
|
|
|
|
|
Marketplace Spend Fees |
838,343 |
|
11 |
% |
|
1,596,880 |
|
35 |
% |
|
(758,537 |
) |
|
(48 |
) |
% |
License Fees |
344,843 |
|
5 |
% |
|
442,905 |
|
10 |
% |
|
(98,062 |
) |
|
(22 |
) |
% |
Other Fees |
8,910 |
|
— |
% |
|
5,897 |
|
— |
% |
|
3,013 |
|
|
51 |
|
% |
SaaS Services Gross Billings |
1,192,096 |
|
16 |
% |
|
2,045,682 |
|
45 |
% |
|
(853,586 |
) |
|
(42 |
) |
% |
|
|
|
|
|
|
|
|
|
Total Gross Billings |
$ |
7,305,915 |
|
100 |
% |
|
$ |
4,536,025 |
|
100 |
% |
|
$ |
2,769,890 |
|
|
61 |
|
% |
|
Six Months Ended June 30, |
|
YTD |
YTD |
|
2021 |
|
|
|
|
2020 |
|
|
|
|
$ Change |
% Change |
Managed Services Gross Billings |
$ |
10,985,853 |
|
79 |
% |
|
$ |
6,615,404 |
|
62 |
% |
|
$ |
4,370,449 |
|
|
66 |
|
% |
|
|
|
|
|
|
|
|
|
Marketplace Spend Fees |
2,189,935 |
|
16 |
% |
|
3,096,654 |
|
29 |
% |
|
(906,719 |
) |
|
(29 |
) |
% |
License Fees |
727,884 |
|
5 |
% |
|
894,453 |
|
8 |
% |
|
(166,569 |
) |
|
(19 |
) |
% |
Other Fees |
20,670 |
|
— |
% |
|
26,663 |
|
— |
% |
|
(5,993 |
) |
|
(22 |
) |
% |
SaaS Services Gross Billings |
2,938,489 |
|
21 |
% |
|
4,017,770 |
|
38 |
% |
|
(1,079,281 |
) |
|
(27 |
) |
% |
|
|
|
|
|
|
|
|
|
Total Gross Billings |
$ |
13,924,342 |
|
100 |
% |
|
$ |
10,633,174 |
|
100 |
% |
|
$ |
3,291,168 |
|
|
31 |
|
% |
IZEA Worldwide,
Inc.Reconciliation of GAAP Net loss to Non-GAAP
Adjusted EBITDA
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
Net loss |
$ |
(111,686 |
) |
|
|
$ |
(1,791,142 |
) |
|
|
$ |
(2,104,124 |
) |
|
|
$ |
(7,954,603 |
) |
|
Gain on the forgiveness of debt |
(1,927,220 |
) |
|
|
— |
|
|
|
(1,927,220 |
) |
|
|
— |
|
|
Non-cash stock-based compensation |
206,194 |
|
|
|
118,707 |
|
|
|
404,180 |
|
|
|
248,278 |
|
|
Non-cash stock issued for payment of services |
37,544 |
|
|
|
31,249 |
|
|
|
72,240 |
|
|
|
62,499 |
|
|
Interest expense |
8,739 |
|
|
|
19,476 |
|
|
|
22,532 |
|
|
|
26,094 |
|
|
Depreciation and amortization |
363,924 |
|
|
|
377,107 |
|
|
|
729,453 |
|
|
|
878,376 |
|
|
Impairment of goodwill |
— |
|
|
|
— |
|
|
|
— |
|
|
|
4,300,000 |
|
|
Other non-cash items |
124 |
|
|
|
(23,706 |
) |
|
|
(7,790 |
) |
|
|
(23,706 |
) |
|
Adjusted EBITDA |
$ |
(1,422,381 |
) |
|
|
$ |
(1,268,309 |
) |
|
|
$ |
(2,810,729 |
) |
|
|
$ |
(2,463,062 |
) |
|
|
|
|
|
|
|
|
|
Revenue |
$ |
6,538,739 |
|
|
|
$ |
3,135,039 |
|
|
|
$ |
11,914,371 |
|
|
|
$ |
7,898,707 |
|
|
Adjusted EBITDA as a % of Revenue |
(22 |
)% |
|
(40 |
)% |
|
(24 |
)% |
|
(31 |
)% |
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/c7258438-8ea9-484b-bbe2-0c31e4339cfc
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