ORLANDO, FL (August 13, 2019)IZEA Worldwide, Inc. (NASDAQ: IZEA), operator of IZEAx, the premier online marketplace connecting brands and publishers with influential content creators, reported its financial and operational results for the second quarter ended June 30, 2019.

Q2 2019 Financial Summary Compared to Q2 2018

  • Total revenue down 4.7% to $3.9 million, compared to $4.1 million.
  • Gross billings* up 35% to $6.6 million, compared to $4.9 million.
  • SaaS unit revenue increased 789% to $907,000, compared to $102,000.
  • Managed Service unit revenue decreased 25.3% to $3.0 million, compared to $4.0 million.
  • Total costs and expenses were $5.86 million, compared to $5.85 million.
  • Net loss was $2.0 million compared to a net loss of $1.6 million.
  • Adjusted EBITDA* was ($1.3 million), compared to ($1.5 million), an improvement of $244,000, or 16%.

1H 2019 Financial Summary Compared to 1H 2018

  • Total revenue up 8.7% to $8.7 million, compared to $8.0 million.
  • Gross billings* up 50.4% to $14.5 million, compared to $9.6 million.
  • SaaS unit revenue increased 917% to $1.8 million, compared to $179,000.
  • Managed Service unit revenue decreased 12.1% to $6.9 million, compared to $7.8 million.
  • Total costs and expenses were $12.4 million, compared to $11.6 million.
  • Net loss was $3.8 million compared to a net loss of $3.7 million.
  • Adjusted EBITDA* was ($2.1 million), compared to ($3.4 million), an improvement of $1.2 million, or 36%.

Q2 2019 Operational Highlights

  • Completed $10 million public stock offering
  • Launched IZEAx 3.0 Unity Suite
  • Launched Sponsored Instagram Stories in Unity Suite
  • Twitch Connections Support in IZEAx 3.0
  • VizSearch Location, Pinterest and YouTube Support
  • Secured SaaS Contracts with marquee customers: a Fortune 200 Company and Global Top 5 PR Firm

* – Gross billings and Adjusted EBITDA are non-GAAP financial measures. Refer to the definitions and reconciliations of these measures under “Use of Non-GAAP Financial Measures”.

Management Commentary

“We continue to see progress against our goal of having SaaS represent a more meaningful percentage of our customer billings and revenue,” said Ted Murphy, IZEA’s Chairman and CEO. “During the first half of 2018, Managed Services accounted for 81% of our Gross Billings. That number dropped to 49% in the first half of 2019 – with SaaS Services now representing the majority of our customer billings. Gross billings for our SaaS Services segment were $7.6 million for the first half of the year, an increase of $5.8 million compared to the same period in 2018. While our overall revenues was up slightly year over year for the first half, higher margin SaaS revenue grew 917% during the same period.” 

Q2 2019 Financial Results

Revenue in the second quarter of 2019 was $3.9 million compared to $4.1 million in the corresponding quarter of 2018. Revenue from managed services declined due to the decreased investment in the sales team for that unit, while revenues from our Software-as-a-Service (SaaS) offerings increased due to our 2018 acquisition of TapInfluence.

Total costs and expenses in the second quarter of 2019 were $5.86 million compared to $5.85 million in the corresponding quarter of 2018. This comparison includes two one-time non-operating items, both of which contribute to the comparative increase. In Q2 2018, we recorded a gain about $230 thousand associated with adjusting our accrued acquisition costs to fair value, and a gain of about $114 thousand to adjust derivatives to fair value. Excluding these one-time items, our total costs and expenses decreased primarily due to lower personnel related costs, which were partially offset by increased depreciation and amortization expense.

Net loss in the second quarter of 2019 was $2.0 million or $(0.09) per share, as compared to a net loss of $1.6 million or $(0.28) per share in the corresponding quarter of 2018, based on 22,277,677 and 5,837,476 weighted-average shares outstanding, respectively.

Adjusted EBITDA (a non-GAAP measure management uses as a proxy for operating cash flow, as defined below) in the second quarter of 2019 was $(1.3 million) compared to $(1.5 million) in the corresponding quarter of 2018.

Cash and cash equivalents at June 30, 2019 totaled $9.3 million. At the end of the quarter the Company had accessed approximately $280 thousand of its $5.0 million credit line. This balance was paid off in July 2019, subsequent to the end of the second quarter.

IZEA completed a $10 million public offering on May 10. The net proceeds of the offering were approximately $9.2 million.

Conference Call

IZEA will hold a conference call to discuss its second quarter 2019 results on Tuesday, August 13 at 5:00 p.m. Eastern time. Management will host the call, followed by a question and answer period.

Date: Tuesday, August 13, 2019

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 20, 2019.

Toll-free replay number: 1-844-512-2921

International replay number: 1-412-317-6671
Replay ID: 13693377

View Q2 2019 Financials (PDF)

 

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