ORLANDO, Fla., Nov. 14, 2024 (GLOBE NEWSWIRE) -- IZEA Worldwide, Inc. (NASDAQ: IZEA), a premier provider of influencer marketing technology, data, and services for the Creator Economy, reported its financial and operational results for the third quarter ended September 30, 2024.
Q3 2024 Financial Summary Compared to Q3 2023
- Total revenue increased 12% to $8.8 million, compared to $7.9 million
- Managed Services bookings increased 11% to $7.9 million, compared to $7.1 million
- Managed Services revenue increased 10% to $8.6 million, compared to $7.8 million
- Total costs and expenses increased 73% to $18.2 million, including a $4.0 million non-cash charge for goodwill impairment, compared to $10.5 million
- Net loss was $8.8 million compared to a net loss of 2.0 million
- Adjusted EBITDA* for the quarter was $(2.8) million, compared to $(1.5) million
- Cash, cash equivalents, and investments on September 30, 2024 totaled $54.4 million
Q3 2024 Operational Highlights
- IZEA’s work for the Barbie movie won 2024 Global Influencer Marketing Awards, The Global Agency Awards, and Global Digital Excellence Awards
- IZEA Flex named Best Influencer Marketing Platform in 2024 MarTech Breakthrough Awards
- Earned multiple Comparably Awards for Benefits, Work-Life Balance, and Employee Happiness
- IZZY, a groundbreaking AI assistant is now available to users of IZEA Flex
* 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
“We saw another healthy increase in managed services bookings and revenue in Q3,” commented Patrick Venetucci, CEO. “With the effect of the non-recurring customer fully behind us, we expect to report year-over-year growth in the last quarter. We won new business from Nestlé, Danone, Coursera, and NHTSA. We produced exciting new work for one of the largest auto manufacturers, and our vibrant work launching the Barbie movie won numerous awards. We advanced our tech product by launching IZZY, a cutting-edge AI assistant for marketers making creator campaigns. And IZEA continued to be recognized as being a great place to work.”
Q3 2024 Financial Results
Total revenue in the third quarter of 2024 increased 12% to $8.8 million, compared to $7.9 million in the third quarter of 2023, with revenue from Managed Services increasing by 10% to $8.6 million in the third quarter of 2024. Excluding revenues from our non-recurring customer that we parted ways with in 2023, Managed Services revenue increased $1.7 million or 25% over the prior-year quarter. Revenue from SaaS Services increased by 260% to $205,870 in the third quarter of 2024 compared to the third quarter of 2023.
Revenue from SaaS Services increased by $148,694, or 260%, in the third quarter of 2024 compared to the third quarter of 2023, with most of these customers actively utilizing IZEA's AI tools.
Cost of revenue increased to $5.2 million in the third quarter of 2024, or 59% of revenue, compared to $4.7 million, or 59%, in the prior-year quarter. The percentage cost decline represents improved margins from our ongoing customer base.
Costs and expenses other than the cost of revenue totaled $13.0 million for the third quarter of 2024, $7.1 million or 122% above the prior-year quarter. Sales and marketing costs were $2.9 million during the third quarter of 2024, $0.2 million or 7% higher than the prior-year quarter, primarily due to higher costs for compensation offset by a decrease in spending on demand generation activities. General and administrative costs totaled $5.8 million during the quarter, $2.8 million or 93% higher than the prior-year quarter. The rise in expenses this quarter was largely due to increased human capital costs, primarily from accrued severance expenses related to the departure of two company executives. The company also experienced higher costs from professional fees related to the management transition and cooperation agreement with GP Investments, along with additional contractor expenses. We determined that goodwill related to a 2019 acquisition was impaired, leading to a $4.0 million non-cash charge in the current quarter.
Net loss in the third quarter of 2024 was $8.8 million, or $(0.52) per share, as compared to a net loss of $2.0 million, or $(0.13) per share in the third quarter of 2023, based on 17.0 million and 15.5 million average shares outstanding, respectively.
Adjusted EBITDA (as defined below, a non-GAAP measure management uses as a proxy for operating cash flow) totaled a loss of $2.8 million in the third quarter of 2024, compared with a loss of $1.5 million in the comparative period, decreasing $1.3 million due primarily to lower revenues. Adjusted EBITDA as a percentage of revenue in the third quarter of 2024 was a loss of 32% compared to a loss of 20% in the third quarter of 2023.
We previously announced our commitment to buy $10.0 million of our stock in the open market, subject to some restrictions. On September 30, 2024, we adopted a safe-harbor 10b5-1 plan to purchase the shares without restrictions related to our periodic insider restrictive window, which became active on November 1, 2024, following the required quiet period. As of November 11, 2024, we have purchased 51,503 shares at an average share price of $2.74 under our program for an aggregate investment of $142,273.
As of September 30, 2024, our cash, cash equivalents, and investments totaled $54.4 million. The company has no outstanding long-term debt.
Conference Call
IZEA will hold a conference call to discuss its third quarter 2024 results on Thursday, November 14, 2024, at 5:00 p.m. EST. IZEA's CEO Patrick Venetucci and CFO Peter Biere will host the call, followed by a question and answer period.
Date: Thursday, November 14, 2024
Time: 5:00 p.m. EST
Toll-free dial-in number: 1-877-407-4018
International dial-in number: 1-201-689-8471
Please call the conference telephone number five (5) minutes before the start time. An operator will register your name and organization. A call replay will be made available approximately 3 hours after the conference ends until Thursday, November 21, 2024, at 11:59 p.m. EST.
Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 13749635
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 a measurable return on investment.
Use of Key Metrics and Non-GAAP Financial Measures
Managed Services bookings measure all sales orders received during a period less cancellations received, or refunds given during the same 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 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 from a few weeks to a year. 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 adjustments.
Managed Services bookings is a useful metric as it reflects the amount of orders received in one period, even though revenue may be reflected over time. Management uses the Managed Services bookings metric to plan its operating staff, identify key customer group trends, enlighten go-to-market activities, and inform its product development efforts.
"Adjusted EBITDA" is a non-GAAP financial measure under the Securities and Exchange Commission rules. 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 bookings and Adjusted EBITDA in the same manner. These metrics and financial measures, as presented by IZEA, may not be comparable to those presented by other companies. Moreover, these metrics and financial measures have limitations as analytical tools. 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 adjusted EBITDA to the most directly comparable GAAP measure 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,” “optimistic,” “believe,” “intend,” “ought to,” "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 expectations concerning product development and platform launches, future financial performance and operating results, including regarding recognition of bookings as revenues, the share repurchase authorization and any use of such authorization, growth, or maintenance of customer relationships, and expectations concerning 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 maintain 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
Nicole O'Hara
IZEA Worldwide, Inc.
Phone: 407-674-6911
Email: ir@izea.com
| IZEA Worldwide, Inc. Unaudited Consolidated Balance Sheets | |||||||
| September 30, 2024 | December 31, 2023 | ||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 45,958,100 | $ | 37,446,728 | |||
| Accounts receivable, net | 6,488,379 | 5,012,373 | |||||
| Prepaid expenses | 1,640,517 | 739,988 | |||||
| Short term investments | 8,419,252 | 17,126,057 | |||||
| Other current assets | 212,526 | 26,257 | |||||
| Total current assets | 62,718,774 | 60,351,403 | |||||
| Property and equipment, net of accumulated depreciation | 136,923 | 205,377 | |||||
| Goodwill | 1,263,337 | 5,280,372 | |||||
| Intangible assets, net of accumulated depreciation | 1,654,958 | 1,749,441 | |||||
| Digital assets | — | 162,905 | |||||
| Software development costs, net of accumulated amortization | 2,361,896 | 2,056,972 | |||||
| Long term investments | — | 9,618,996 | |||||
| Total assets | $ | 68,135,888 | $ | 79,425,466 | |||
| Liabilities and Stockholders’ Equity | |||||||
| Current liabilities: | |||||||
| Accounts payable | 1,276,088 | 1,504,348 | |||||
| Accrued expenses | 4,074,480 | 3,083,460 | |||||
| Contract liabilities | 9,119,560 | 8,891,205 | |||||
| Contingent liability | 41,012 | 114,400 | |||||
| Total current liabilities | 14,511,140 | 13,593,413 | |||||
| Finance obligation, less current portion | 18,881 | 63,419 | |||||
| Deferred purchase price, less current portion | 51,015 | 60,600 | |||||
| Deferred tax liability | 265,962 | 394,646 | |||||
| Total liabilities | 14,846,998 | 14,112,078 | |||||
| Commitments and Contingencies | — | — | |||||
| Stockholders’ equity: | |||||||
| Preferred stock; $.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding | — | — | |||||
| Common stock; $0.0001 par value; $50,000,000 shares authorized; shares issued: $17,310,106 and $16,602,155, respectively, shares outstanding: $16,922,268 and $16,236,300, respectively. | 1,731 | 1,660 | |||||
| Treasury stock at cost: 387,838 and 365,855 shares at September 30, 2024 and December 31, 2023, respectively | (1,077,568 | ) | (1,019,997 | ) | |||
| Additional paid-in capital | 154,159,944 | 152,027,110 | |||||
| Accumulated deficit | (99,673,791 | ) | (85,444,794 | ) | |||
| Accumulated other comprehensive income (loss) | (121,426 | ) | (250,591 | ) | |||
| Total stockholders’ equity | 53,288,890 | 65,313,388 | |||||
| Total liabilities and stockholders’ equity | $ | 68,135,888 | $ | 79,425,466 | |||
| IZEA Worldwide, Inc. Unaudited Consolidated Statements of Operations | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Revenue | $ | 8,831,794 | $ | 7,894,901 | $ | 24,878,493 | $ | 27,321,682 | |||||||
| Costs and expenses: | |||||||||||||||
| Cost of revenue | 5,210,104 | 4,685,437 | 14,355,679 | 16,900,116 | |||||||||||
| Sales and marketing | 2,879,320 | 2,700,301 | 9,142,590 | 7,936,801 | |||||||||||
| General and administrative | 5,840,027 | 3,032,759 | 12,995,910 | 9,604,308 | |||||||||||
| Impairment of goodwill | 4,016,722 | — | 4,016,722 | — | |||||||||||
| Depreciation and amortization | 239,849 | 117,544 | 669,783 | 574,238 | |||||||||||
| Total costs and expenses | 18,186,022 | 10,536,041 | 41,180,684 | 35,015,463 | |||||||||||
| Loss from operations | (9,354,228 | ) | (2,641,140 | ) | (16,302,191 | ) | (7,693,781 | ) | |||||||
| Other income (expense): | |||||||||||||||
| Change in the fair value of digital assets | (51,702 | ) | — | 28,414 | — | ||||||||||
| Interest expense | (1,654 | ) | (1,654 | ) | (5,654 | ) | (6,373 | ) | |||||||
| Other income (expense), net | 605,644 | 659,856 | 1,909,735 | 1,877,451 | |||||||||||
| Total other income (expense), net | 552,288 | 658,202 | 1,932,495 | 1,871,078 | |||||||||||
| Net loss before income taxes | $ | (8,801,940 | ) | $ | (1,982,938 | ) | $ | (14,369,696 | ) | $ | (5,822,703 | ) | |||
| Tax benefit | 33,621 | — | 140,699 | — | |||||||||||
| Net loss | (8,768,319 | ) | (1,982,938 | ) | (14,228,997 | ) | (5,822,703 | ) | |||||||
| Weighted average common shares outstanding – basic and diluted | 16,956,497 | 15,463,334 | 17,024,645 | 15,525,636 | |||||||||||
| Basic and diluted loss per common share | $ | (0.52 | ) | $ | (0.13 | ) | $ | (0.84 | ) | $ | (0.38 | ) | |||
| IZEA Worldwide, Inc. Unaudited Consolidated Statements of Comprehensive Loss | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Net loss | $ | (8,768,319 | ) | $ | (1,982,938 | ) | $ | (14,228,997 | ) | $ | (5,822,703 | ) | |||
| Other comprehensive income | |||||||||||||||
| Unrealized (gain) loss on securities held | (84,855 | ) | (131,198 | ) | (235,662 | ) | (267,478 | ) | |||||||
| Unrealized (gain) loss on currency translation | 94,195 | — | 106,497 | — | |||||||||||
| Total other comprehensive income (loss) | 9,340 | (131,198 | ) | (129,165 | ) | (267,478 | ) | ||||||||
| Total comprehensive income (loss) | $ | (8,777,659 | ) | $ | (1,851,740 | ) | $ | (14,099,832 | ) | $ | (5,555,225 | ) | |||
| IZEA Worldwide, Inc. Revenue Details | |||||||||||||||||||||||
| Revenue details by type: | |||||||||||||||||||||||
| Three Months Ended September 30, | |||||||||||||||||||||||
| 2024 | 2023 | $ Change | % Change | ||||||||||||||||||||
| Managed Services Revenue | $ | 8,625,924 | 98 | % | $ | 7,837,725 | 99 | % | $ | 788,199 | 10 | % | |||||||||||
| SaaS Services Revenue | 205,870 | 2 | % | 57,176 | 1 | % | 148,694 | 260 | % | ||||||||||||||
| Total Revenue | $ | 8,831,794 | 100 | % | $ | 7,894,901 | 100 | % | $ | 936,893 | 12 | % | |||||||||||
| Nine Months Ended September 30, | |||||||||||||||||||||||
| 2024 | 2023 | $ Change | % Change | ||||||||||||||||||||
| Managed Services Revenue | $ | 24,172,929 | 97 | % | $ | 26,958,860 | 99 | % | $ | (2,785,931 | ) | (10 | )% | ||||||||||
| SaaS Services Revenue | 705,564 | 3 | % | 362,822 | 1 | % | 342,742 | 94 | % | ||||||||||||||
| Total Revenue | $ | 24,878,493 | 100 | % | $ | 27,321,682 | 100 | % | $ | (2,443,189 | ) | (9 | )% | ||||||||||
| IZEA Worldwide, Inc. Reconciliation of GAAP Net loss to Non-GAAP Adjusted EBITDA | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Net loss | $ | (8,768,319 | ) | $ | (1,982,938 | ) | $ | (14,228,997 | ) | $ | (5,822,703 | ) | |||
| Impairment of goodwill and intangible assets | 4,016,722 | — | 4,016,722 | — | |||||||||||
| Adjustment to fair market value of digital assets | 51,702 | — | (28,413 | ) | — | ||||||||||
| Non-cash stock-based compensation | 1,579,236 | 239,353 | 2,328,356 | 642,752 | |||||||||||
| Non-cash stock issued for payment of services | 79,057 | 75,003 | 229,063 | 225,012 | |||||||||||
| Interest expense | 1,654 | 1,654 | 5,654 | 6,373 | |||||||||||
| Depreciation and amortization | 239,849 | 117,544 | 669,783 | 574,238 | |||||||||||
| Other non-cash items | $ | — | $ | 304 | $ | — | $ | 304 | |||||||
| Tax benefit | $ | (33,621 | ) | $ | — | $ | (140,699 | ) | $ | — | |||||
| Adjusted EBITDA | $ | (2,833,720 | ) | $ | (1,549,080 | ) | $ | (7,148,531 | ) | $ | (4,374,024 | ) | |||
| Revenue | $ | 8,831,794 | $ | 7,894,901 | $ | 24,878,493 | $ | 27,321,682 | |||||||
| Adjusted EBITDA as a % of Revenue | (32 | )% | (20 | )% | (29 | )% | (16 | )% | |||||||
