Managed Services Revenue up 7% to $5.6 Million
ORLANDO, FL (August 10, 2017) – IZEA, Inc. (NASDAQ: IZEA), operator of IZEAx, the premier online marketplace connecting brands and publishers with influential content creators, reported results for the second quarter ended June 30, 2017.
Q2 2017 Financial Highlights vs. Same Year-ago Quarter
- Revenue up 1% to $7.0 million vs. $6.9 million.
- Managed Services revenue increased 7% to $5.6 million vs. $5.2 million.
- Content Workflow revenue decreased 15% to $1.4 million vs. $1.6 million.
- Revenue backlog, which includes unbilled bookings and unearned revenue, was $11.4 million at the end of Q2 2017.
- Net bookings decreased 3% to $6.6 million compared to $6.8 million.
- Gross profit increased 1% to $3.5 million, with gross margin of 51%.
Trailing Twelve Months Financial Highlights vs. Same Year-ago TTM
- Revenue up 17% to $28.1 million vs. $24.1 million.
- Managed Services Revenue up 30% to $21.8 million vs. $16.7 million.
- Gross Profit up 29% to $13.8 million vs. $10.7 million.
- Adjusted EBITDA improved 32% to $(4.8) million vs. $(7.1) million.
“We made solid progress during the most recent quarter towards our goal of reaching profitability in the near future. Our quarterly OPEX was at its lowest point since 2015, while team productivity based on average revenue per employee reached an all-time high,” said Ted Murphy, IZEA’s Chairman and CEO. “While we are not yet where we want to be, quarterly EBDITA loss was the lowest it has been since Q1 2014. We continue to optimize operations with an eye on achieving profitability in the second half of 2018 and we remain on-track to hit that goal.”
“Our sales team delivered impressive results and overcame a meaningful deficit in Q2. While we absorbed a large $1 million cancellation from a 2016 booking this quarter, the team still delivered 7% bookings growth in our Managed Services. Exclusive of that reduction, gross bookings for Managed Services increased 24% year over year and our average deal size reached an all-time high in the quarter. This large cancellation effected both bookings and revenue in the front half of this year and we are happy to have it behind us. The back half of the year has historically been the strongest for IZEA and we are very optimistic about the road ahead.”
Q2 2017 Financial Results
Revenue in the second quarter of 2017 increased 1% to $7.0 million compared to $6.9 million in the same year-ago quarter. The increase in our Q2 2017 revenue is primarily due to organic growth in our Managed Services revenue.
Gross profit in the second quarter of 2017 increased 1% by $43,000, as compared to the second quarter of 2016. The increase in gross profit was primarily attributable to a favorable shift to higher margin Managed Services versus self-service Content Workflow.
Operating expenses in the second quarter of 2017 were $5.0 million compared to $5.1 million in the same year-ago quarter. Cash based Opex in the second quarter of 2017 was approximately $4.4 million, compared to $4.6 million in Q2 2016, a decrease of 5% year over year.
Net loss in the second quarter of 2017 was $(1.4) million, or $(0.25) per share, as compared to a net loss of $(1.6) million, or $(0.30) per share, in the same year-ago quarter. Adjusted EBITDA was a negative $840,000 compared to a negative $1.1 million during the same period last year.
Cash and cash equivalents at June 30, 2017 totaled $3.6 million. The company continues to operate debt free and has an unused $5.0 million credit line.
Management believes that spending among IZEA’s newspaper clients will continue to decline moving forward. This will result in significantly reduced revenue from Content Workflow in 2017 compared to 2016.
The company expects annual revenue in 2017 to be approximately $29-$30 million compared to $27.3 million in 2016. Gross margins are expected to range between 48% to 49% compared to 48% in 2016. Adjusted EBITDA is expected to be approximately $(4.0-4.5) million compared to $(5.2) million in 2016.
IZEA will hold a conference call to discuss its second quarter results today at 5:00 p.m. Eastern time. Management will host the call, followed by a question and answer period.
Date: Thursday, August 10, 2017
Time: 5:00 p.m. Eastern time
Toll-free dial-in number: 1-877-407-4018
International dial-in number: 1-201-689-8471
The conference call will be webcast live and available for replay via the investors section of the company’s 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. Eastern time on the same day through August 17, 2017.
Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 13667830