IZEA Worldwide, Inc., 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 half of the year.
The financial summary for the second quarter of 2022.
- Total revenue increased 96% to $12.6 million compared to $6.4 million.
- Managed Services revenue increased 103% to $12.2 million, compared to $6.0 million.
- SaaS Services and other revenue decreased 5.6% to $0.4 million, compared to $0.4 million.
- Total costs and expenses increased 53% to $13.0 million, compared to $8.5 million.
- Net loss was $0.2 million compared to a net loss of $2.1 million.
- Adjusted EBITDA* was $0.3 million, compared to a loss of $1.5 million.
The operational highlights of q2
- Awarded first contract wins in Chinese market
- Facilitated multi-million dollar collaboration with metaverse activation
- Recognized by Comparably as a 2022 Best Company for Career Growth and Best Company Leadership
- Named a Top 100 Employer by Orlando Sentinel
A non- GAAP measure is adjusted earnings before interest, taxes, depreciation and amortization. Refer to the use of key metrics and non- GAAP financial measures for the definition and reconciliation of this measure.
Ted Murphy, IZEA's Chairman and CEO said, "We are pleased to report the highest quarter revenue in the history of our company." Over the past several years, we have invested in all areas of our business, and those investments have helped us grow. The key to sustainable profits is topline expansion. The progress we've made over the past two years has been significant.
While the near term macroeconomic outlook is something we continue to monitor, we believe there is much opportunity for growth in the influencer marketing industry. The balance sheet of IZEA is strong. As we strategically recruit new team members, we intend to use our financial strength to our advantage. Our intent is to forge ahead even though others are pulling back. Our team has been anticipating a thinner of the competitive landscape for a while, and we believe we are in a good position to take advantage of the market opportunity it presents. We will be launching new platforms to support our customers in the back half of the year.
The financial results for the second half of the year.
In the second quarter of 2022, total revenue increased to $12.6 million, compared to $6.4 million in the second quarter of 2021, with revenue from managed services increasing to $12.2 million.
Revenue from Managed Services more than doubled to a record $12.2 million in the second quarter of 2022, on the strength of revenue from one large customer contract which made up 85% of the increase from the prior year. Demand for Managed Services continues to be strong as new and existing customers shift their marketing spending towards influencer marketing campaigns.
The revenue from the services fell in the second quarter. The licensee counts on all platforms fell in the second quarter. License fee revenue was 3% below the prior-year quarter, while Marketplace spend fees declined 26%. According to the key metric of gross billings, the decline in revenue was caused by lower average fees.
The cost of revenue was $7.2 million in Q2 2022, or 57% of revenue, compared to $3.2 million, or 50%, in the prior-year quarter, higher due to higher cost deliveries on one large customer contract.
The costs and expenses other than the cost of revenue increased by 9% in the second quarter. Sales and marketing costs were $2.3 million during the quarter, 1% lower than the comparative quarter as additional headcount and related payroll costs were offset by reduced selling commission which varies with lower bookings and other spending reductions in the current quarter Higher compensation and contractor costs supported operations and IT investments during the quarter, which resulted in a 27% increase in general and administrative costs.
The net loss in the second quarter of 2020 was $169,890, or $0.00 per share, as compared to a net loss in the second quarter of 2021, based on 62.1 million and 61.2 million average shares outstanding, respectively.
In the second quarter of 2022, adjusted earnings before interest, taxes, depreciation and amortization increased by $1.7 million due to higher net income and lower depreciation expenses. In the second quarter of 2022, adjusted earnings before interest, taxes, depreciation and amortization was 2% compared to a loss of 23% in the second quarter of 2021.
We had $70.3 million in cash and investments at the end of the year. There is no debt for the company.
The conference call to discuss IZEA's second quarter results will be held on Monday, August 15, 2022, at 5:00 p.m. The time is at 10:30 pm The call will be hosted by IZEA's Chairman and CEO Ted Murphy and his team.
The time is 5:00 p.m. There is a toll-free number for international calls.
Five minutes before the start time, please call the conference number. You will be registered by an operator. On the same day through Monday, August 22nd, 2022. The time is at 10:30 pm
There is a toll-free number and a toll-free number for international replays.
IZEA is a marketing technology company that provides software and professional services that enable brands to collaborate and transact with the full spectrum of today's top social commentators. The company is a champion for the growing Creator Economy. IZEA launched the industry's first-ever influencer marketing platform in 2006 and has since processed over four million transactions. IZEA has partnerships with leading brands and agencies to increase digital engagement, increase brand voice, scale content production, and drive a measurable return on investment.
Gross billings is the total dollar value of the amounts earned from our customers for the services we performed or the amount billed to our customers for their self-service purchase of goods and services on our platforms. The amount of 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, are referred to as gross billings. The revenue reported in our statements of operations include gross billings.
All sales orders received during a period are measured by managed services bookings. Sales order contracts vary in complexity with each customer and range from custom content delivery to integrated marketing services; our contracts usually run from several months for smaller contracts to 12 months for larger contracts. Revenue from our Managed Services contracts is based on a percentage of completion as we deliver the content or services over time, which can vary from a few weeks to a year. While an overall indicator of the health of our business, managed services bookings, may not be used to predict quarterly revenues and could be subject to future adjustment.
Even though revenue may be reflected over time, managed services bookings are useful information. The managed services bookings metric is used by management to plan its staff, identify key customer group trends, and inform its product development efforts.
The Securities and Exchange Commission uses a non-GAAP financial measure called adjusted earnings before interest, taxes, depreciation and amortization. Earnings before interest, taxes, depreciation, and amortization is known as EBITDA. IZEA defines adjustedEBITDA 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
As it excludes non-cash transactions, and provides consistency to facilitate period-to-period comparisons, we believe that AdjustedEBITDA is useful to investors.
All companies don't calculate gross billings in the same way. The metrics presented by IZEA may be different from those presented by other companies. These metrics don't have a lot to offer as analytical tools. They should not be considered as a substitute for an analysis of our results of operations. The financial tables included in the press release show a reconciliation of GAAP to non- GAAP results.
The safe harbor from liability established by the Private Securities Litigation Reform Act of 1995 applies to all statements in this release. The forward-looking statements are based on certain assumptions and are subject to a number of risks and uncertainties. Expectations concerning IZEA's ability to increase revenue and bookings, growth or maintenance of customer relationships, and expectations concerning IZEA's business strategy are examples of forward-looking statements. There are a number of factors that could cause actual results to differ from those in the forward-looking statements. 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.
Email: ir@izea.com was used for the press contact.
The consolidated balance sheets of IZEA Worldwide, Inc.
| June 30, 2022 | December 31, 2021 | |||
| Assets | ||||
| Current assets: | ||||
| Cash and cash equivalents | $ | 11,347,070 | $ | 75,433,295 |
| Accounts receivable, net | 7,578,983 | 7,599,103 | ||
| Prepaid expenses | 2,879,569 | 2,257,382 | ||
| Short term investments | 33,069,694 | — | ||
| Other current assets | 17,976 | 100,522 | ||
| Total current assets | 54,893,292 | 85,390,302 | ||
| Property and equipment, net | 92,067 | 155,185 | ||
| Goodwill | 4,016,722 | 4,016,722 | ||
| Intangible assets, net | 72,536 | 213,263 | ||
| Software development costs, net | 1,085,177 | 1,019,600 | ||
| Long term investments | 25,854,040 | — | ||
| Total assets | $ | 86,013,834 | $ | 90,795,072 |
| Liabilities and Stockholders’ Equity | ||||
| Current liabilities: | ||||
| Accounts payable | $ | 1,801,973 | $ | 2,086,892 |
| Accrued expenses | 2,421,462 | 2,502,882 | ||
| Contract liabilities | 9,531,237 | 11,338,095 | ||
| Current portion of notes payable | 31,068 | — | ||
| Total current liabilities | 13,785,740 | 15,927,869 | ||
| Finance obligation, less current portion | — | 10,420 | ||
| Notes payable, less current portion | — | 31,648 | ||
| Total liabilities | 13,785,740 | 15,969,937 | ||
| Commitments and Contingencies | — | — | ||
| Stockholders’ equity: | ||||
| Preferred stock; $.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding | — | — | ||
| Common stock; $.0001 par value; 200,000,000 shares authorized; 62,206,467 and 62,044,883, respectively, issued, and outstanding | 6,221 | 6,205 | ||
| Additional paid-in capital | 148,769,056 | 148,452,498 | ||
| Accumulated deficit | (76,279,701 | ) | (73,633,568 | ) |
| Accumulated other comprehensive income | (267,482 | ) | — | |
| Total stockholders’ equity | 72,228,094 | 74,825,135 | ||
| Total liabilities and stockholders’ equity | $ | 86,013,834 | $ | 90,795,072 |
IZEA Worldwide has consolidated statements of operations.
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||
| Revenue | $ | 12,577,011 | $ | 6,416,451 | $ | 21,467,347 | $ | 11,944,617 | ||||
| Costs and expenses: | ||||||||||||
| Cost of revenue | 7,211,922 | 3,208,690 | 12,391,646 | 5,666,475 | ||||||||
| Sales and marketing | 2,289,769 | 2,302,869 | 4,810,112 | 4,381,192 | ||||||||
| General and administrative | 3,378,988 | 2,659,578 | 6,881,423 | 5,194,725 | ||||||||
| Depreciation and amortization | 138,492 | 363,924 | 277,321 | 729,453 | ||||||||
| Total costs and expenses | 13,019,171 | 8,535,061 | 24,360,502 | 15,971,845 | ||||||||
| Loss from operations | (442,160 | ) | (2,118,610 | ) | (2,893,155 | ) | (4,027,228 | ) | ||||
| Other income (expense): | ||||||||||||
| Interest expense | (815 | ) | (8,739 | ) | (1,780 | ) | (22,532 | ) | ||||
| Other income (expense), net | 273,085 | 1,968,944 | 248,802 | 1,998,418 | ||||||||
| Total other income (expense), net | 272,270 | 1,960,205 | 247,022 | 1,975,886 | ||||||||
| Net Loss | $ | (169,890 | ) | $ | (158,405 | ) | $ | (2,646,133 | ) | $ | (2,051,342 | ) |
| Other comprehensive income | ||||||||||||
| Unrealized (gain)/loss on securities held | 267,482 | — | 267,482 | — | ||||||||
| Total other comprehensive income | 267,482 | — | 267,482 | — | ||||||||
| Total comprehensive income/loss | $ | (437,372 | ) | $ | (158,405 | ) | $ | (2,913,615 | ) | $ | (2,051,342 | ) |
| Weighted average common shares outstanding – basic and diluted | 62,206,467 | 61,386,913 | 62,158,650 | 58,874,526 | ||||||||
| Basic and diluted loss per common share | $ | — | $ | — | $ | (0.04 | ) | $ | (0.03 | ) |
There are revenue details.
IZEA Worldwide, Inc. has gross billings
Revenue type is what determines gross billings.
IZEA Worldwide has a GAAP net loss.
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||
| Net loss | $ | (169,890 | ) | $ | (158,405 | ) | $ | (2,646,133 | ) | $ | (2,051,342 | ) |
| Gain on the forgiveness of debt | — | (1,927,220 | ) | — | (1,927,220 | ) | ||||||
| Non-cash stock-based compensation | 156,706 | 206,194 | 273,898 | 404,180 | ||||||||
| Non-cash stock issued for payment of services | 31,259 | 37,544 | 62,482 | 72,240 | ||||||||
| Write down of digital assets | 77,751 | — | 140,727 | — | ||||||||
| Interest expense | 815 | 8,739 | 1,780 | 22,532 | ||||||||
| Depreciation and amortization | 138,492 | 363,924 | 277,321 | 729,453 | ||||||||
| Other non-cash items | 19,218 | 124 | 18,555 | (7,790 | ) | |||||||
| Adjusted EBITDA | $ | 254,351 | $ | (1,469,100 | ) | $ | (1,871,370 | ) | $ | (2,757,947 | ) | |
| Revenue | $ | 12,577,011 | $ | 6,416,451 | $ | 21,467,347 | $ | 11,944,617 | ||||
| Adjusted EBITDA as a % of Revenue | 2.0 | % | (22.9 | )% | (9 | )% | (23 | )% |
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