IZEA Reports Q4 2023 Revenue of $8.9 million
- Total revenue increased by 1.0% to $8.9 million in Q4 2023 compared to Q4 2022.
- Total costs and expenses increased by 8.5% to $11.1 million in Q4 2023.
- Net loss was $1.5 million in Q4 2023 compared to a net loss of $0.9 million in Q4 2022.
- Adjusted EBITDA for Q4 2023 was a loss of $1.1 million.
- Cash, cash equivalents, and investments totaled $64.2 million as of December 31, 2023, with no long-term debt.
- IZEA was named 'Best Influencer Marketing Company' in the 2023 MarTech Breakthrough Awards Program.
- Expanded sales presence into the South Korea market and launched new features in IZEA Flex and FormAI.
- FY 2023 saw a 12% decrease in total revenue to $36.2 million compared to FY 2022.
- Net loss for FY 2023 was $7.3 million, and adjusted EBITDA was a loss of $5.5 million.
- CEO Ted Murphy highlighted strategic adjustments made in 2023 to position the company for future growth and global expansion.
- Managed services bookings growth returned in Q1 2024 with a strong pipeline, and SaaS revenue rebounded after a low point in Q3 2023.
- None.
Insights
When analyzing IZEA Worldwide's financial performance, we observe a modest revenue increase in Q4 2023 juxtaposed with a significant rise in costs and expenses, leading to an enlarged net loss. This pattern suggests that while the company is managing to slightly grow its top-line figures, it is doing so inefficiently, with expenses outpacing revenues. The extended net loss and increased adjusted EBITDA loss are indicators of operational challenges.
Despite a challenging fiscal year where total revenue saw a decline, the company's strategic shifts and platform updates are intended for long-term growth. The emphasis on a pipeline of opportunities and diversification strategy, particularly in managed services and SaaS, is a positive signal for future revenue streams. However, the immediate financial health, as indicated by the net loss and negative adjusted EBITDA, raises concerns about the sustainability of current growth strategies.
The lack of long-term debt and a healthy cash reserve position the company to weather short-term volatility. Yet, investors should be attentive to how efficiently IZEA can convert its strategic adjustments into profitable growth and whether it can control costs to improve its bottom line in the long run.
IZEA's financial report indicates a company in a transitional phase, with cash reserves providing a buffer against operational losses. The revenue decline year-over-year and the widening gap in net loss highlight the need for a careful evaluation of the company's cost structure and revenue generation capabilities.
From an investment perspective, the key lies in the company's ability to leverage its strategic changes to reverse the negative trend in adjusted EBITDA. The market's reaction to these financials will likely hinge on confidence in the company's ability to execute its global expansion and the successful monetization of its SaaS offerings.
The launch of new tools and expansion into the South Korean market represent potential growth areas, but the true test will be their contribution to reversing the negative earnings trend. Investors should monitor the company's operational efficiency and the impact of its strategic initiatives on future financial performance.
IZEA's introduction of GPT-4 and AI Video Generation tools demonstrate the company's commitment to integrating advanced technologies into its platform. This is a strategic move to differentiate its offerings in the influencer marketing space, which is becoming increasingly competitive and tech-driven.
The technology adoption could potentially attract a new segment of tech-savvy users and enhance the user experience for existing customers. However, the financial implications of these tech investments are not immediately clear from the report. The long-term success of these tools will depend on their adoption rate and how effectively they can be monetized.
Furthermore, the expansion into South Korea, a market known for its digital innovation and high social media engagement, could offer new revenue streams. Yet, the costs associated with such expansion need to be justified by the revenue it generates to avoid exacerbating the company's current financial situation.
ORLANDO, Fla., April 01, 2024 (GLOBE NEWSWIRE) -- IZEA Worldwide, Inc. (NASDAQ: IZEA), a premier provider of influencer marketing technology, data, and services for the world’s leading brands, reported its financial and operational results for the fourth quarter ended December 31, 2023.
Q4 2023 Financial Summary Compared to Q4 2022
- Total revenue increased
1.0% to$8.9 million , compared to$8.8 million - Total costs and expenses increased
8.5% to$11.1 million , compared to$10.2 million - Net loss was
$1.5 million , compared to a net loss of$0.9 million - Adjusted EBITDA* for the quarter was a loss of
$1.1 million , compared to a loss of$0.3 million - Cash, cash equivalents and investments as of December 31, 2023 totaled
$64.2 million with no long-term debt
Q4 2023 Operational Highlights
- IZEA named "Best Influencer Marketing Company" in 2023 MarTech Breakthrough Awards Program
- Expanded sales presence into the South Korea market
- Launched Offers, Creator Experience, and Offer Negotiation in IZEA Flex
- Launched GPT-4 and AI Video Generation Tool in FormAI in IZEA's Creator Marketplace
FY 2023 Financial Summary Compared to FY 2022
- Total revenue decreased
12% to$36.2 million , compared to$41.1 million - Net loss was
$7.3 million , compared to a net loss of$4.5 million - Adjusted EBITDA* was a loss of
$5.5 million , compared to a loss of$2.8 million
* Adjusted EBITDA is a non-GAAP financial measure. For the definition and reconciliation of this measure, refer to “Use of Key Metrics and Non-GAAP Financial Measures.”
Management Commentary
“Last year we made comprehensive strategic adjustments to better position ourselves for 2024 and beyond,” commented Ted Murphy, Founder and CEO of IZEA. “This included shifts in organizational frameworks, as well as updates to our platforms and pricing strategies. We made these challenging yet necessary transitions to improve our operations, setting the stage for an upcoming era of ambitious global expansion through both organic and inorganic initiatives. I'm happy to report that we are beginning to see the positive outcomes of these changes in the first quarter of this year.”
“Year-over-year managed services bookings growth has returned in Q1 of 2024, fueled by a strong pipeline in Q4 of 2023, and an all-time record breaking pipeline in Q1 of 2024. Not only have we seen a pipeline record in terms of dollar value, we have also seen a jump in terms of number of opportunities, which is core to our revenue diversification strategy moving forward. While Managed Services represents the overwhelming majority of revenue, SaaS revenue has begun to rebound after hitting a low point in Q3 of 2023. We ended 2023 with a record count of active SaaS customers, and that trend has continued into the first quarter.”
“We are excited and optimistic about the years ahead, and believe that IZEA is well positioned to capitalize on global opportunities in the creator economy.”
Q4 2023 Financial Results
Total revenue in the fourth quarter of 2023 increased
Managed Services bookings totaled
Revenue from SaaS Services decreased by
Cost of revenue decreased to
Costs and expenses other than the cost of revenue totaled
Net loss in the fourth quarter of 2023 was
Adjusted EBITDA (as defined below, a non-GAAP measure management uses as a proxy for operating cash flow) totaled a loss of
As of December 31, 2023, our cash and investments totaled
Conference Call
IZEA will hold a conference call to discuss its fourth quarter 2023 results on Monday, April 1, 2024, at 5:00 p.m. EDT. 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: Monday, April 1, 2024
Time: 5:00 p.m. EDT
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 prior to the start time. An operator will register your name and organization. A replay of the call will be made available approximately 3 hours after the conference ends until Monday, April 8, 2024, at 11:59 p.m. EDT.
Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 13744273
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, 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.
EBITDA is a non-GAAP financial measure under the Securities and Exchange Commission rules 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 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 be different from 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. The financial tables included in this press release present a reconciliation of adjusted EBITDA to the most directly comparable GAAP measure.
Safe Harbor Statement
All statements in this release that are not based on historical fact are “forward-looking” and 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, 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 | |||||||
| December 31, 2023 | December 31, 2022 | ||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 37,446,728 | $ | 24,600,960 | |||
| Accounts receivable, net | 5,012,373 | 5,664,727 | |||||
| Prepaid expenses | 739,988 | 3,927,453 | |||||
| Short term investments | 17,126,057 | 16,106,758 | |||||
| Other current assets | 26,257 | 66,441 | |||||
| Total current assets | 60,351,403 | 50,366,339 | |||||
| Property and equipment, net of accumulated depreciation | 205,377 | 156,774 | |||||
| Goodwill | 5,280,372 | 4,016,722 | |||||
| Intangible assets, net | 1,749,441 | — | |||||
| Digital assets | 162,905 | 64,953 | |||||
| Software development costs, net | 2,056,972 | 1,774,033 | |||||
| Long term investments | 9,618,996 | 29,296,069 | |||||
| Total assets | $ | 79,425,466 | $ | 85,674,890 | |||
| Liabilities and Stockholders’ Equity | |||||||
| Current liabilities: | |||||||
| Accounts payable | 1,504,348 | 1,968,322 | |||||
| Accrued expenses | 3,083,460 | 2,130,702 | |||||
| Contract liabilities | 8,891,205 | 11,247,746 | |||||
| Contingent liability | 114,400 | — | |||||
| Total current liabilities | 13,593,413 | 15,346,770 | |||||
| Finance obligation, less current portion | 63,419 | 62,173 | |||||
| Deferred purchase price, less current portion | 60,600 | — | |||||
| Deferred Tax Liability | 394,646 | — | |||||
| Total liabilities | 14,112,078 | 15,408,943 | |||||
| Commitments and Contingencies | |||||||
| Stockholders’ equity: | |||||||
| Preferred stock; $.0001 par value; 2,500,000 shares authorized; no shares issued and outstanding | — | — | |||||
| Common stock; | 1,660 | 1,560 | |||||
| Treasury stock at cost: 365,855 and 0 shares at December 31, 2023 and December 31, 2022, respectively | (1,019,997 | ) | — | ||||
| Additional paid-in capital | 152,027,110 | 149,148,248 | |||||
| Accumulated deficit | (85,444,794 | ) | (78,103,066 | ) | |||
| Accumulated other comprehensive income (loss) | (250,591 | ) | (780,795 | ) | |||
| Total stockholders’ equity | 65,313,388 | 70,265,947 | |||||
| Total liabilities and stockholders’ equity | $ | 79,425,466 | $ | 85,674,890 | |||
| IZEA Worldwide, Inc. Unaudited Consolidated Statements of Operations | |||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Revenue | $ | 8,892,916 | $ | 8,802,255 | $ | 36,214,598 | $ | 41,095,937 | |||||||
| Costs and expenses: | |||||||||||||||
| Cost of revenue | 4,721,329 | 5,748,623 | 21,621,445 | 24,737,699 | |||||||||||
| Sales and marketing | 2,610,521 | 2,211,654 | 10,547,322 | 9,523,894 | |||||||||||
| General and administrative | 3,610,670 | 1,826,942 | 13,214,978 | 11,637,044 | |||||||||||
| Depreciation and amortization | 138,897 | 423,305 | 713,135 | 828,161 | |||||||||||
| Total costs and expenses | 11,081,417 | 10,210,524 | 46,096,880 | 46,726,798 | |||||||||||
| Loss from operations | (2,188,501 | ) | (1,408,269 | ) | (9,882,282 | ) | (5,630,861 | ) | |||||||
| Other income (expense): | |||||||||||||||
| Interest expense | (1,853 | ) | 1,795 | (8,226 | ) | (799 | ) | ||||||||
| Other income (expense), net | 657,593 | 489,341 | 2,535,044 | 1,162,162 | |||||||||||
| Deferred tax benefit | 6,104 | — | 6,104 | — | |||||||||||
| Total other income (expense), net | 661,844 | 491,136 | 2,532,922 | 1,161,363 | |||||||||||
| Net loss | $ | (1,526,657 | ) | $ | (917,133 | ) | $ | (7,349,360 | ) | $ | (4,469,498 | ) | |||
| Weighted average common shares outstanding – basic and diluted | 16,368,216 | 15,549,845 | 16,368,216 | 15,549,845 | |||||||||||
| Basic and diluted loss per common share | $ | (0.09 | ) | $ | (0.06 | ) | $ | (0.45 | ) | $ | (0.29 | ) | |||
| IZEA Worldwide, Inc. Unaudited Consolidated Statements of Comprehensive Loss | |||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Net loss | $ | (1,526,657 | ) | $ | (917,133 | ) | $ | (7,349,360 | ) | $ | (4,469,498 | ) | |||
| Other comprehensive income | |||||||||||||||
| Unrealized (gain) loss on securities held | (262,726 | ) | (83,800 | ) | (530,204 | ) | 780,795 | ||||||||
| Total other comprehensive income (loss) | (262,726 | ) | (83,800 | ) | (530,204 | ) | 780,795 | ||||||||
| Total comprehensive income (loss) | $ | (1,263,931 | ) | $ | (833,333 | ) | $ | (6,819,156 | ) | $ | (5,250,293 | ) | |||
| IZEA Worldwide, Inc. Revenue Details | ||||||||||||||||||
| Revenue details by type: | ||||||||||||||||||
| Three Months Ended December 31, | ||||||||||||||||||
| 2023 | 2022 | $ Change | % Change | |||||||||||||||
| Managed Services Revenue | $ | 8,781,826 | 98.8 | % | $ | 8,431,636 | 95.8 | % | $ | 350,190 | 4.2 | % | ||||||
| Marketplace Spend Fees | 4,812 | 0.1 | % | 83,566 | 0.9 | % | (78,754 | ) | (94.2 | )% | ||||||||
| License Fees | 99,687 | 1.1 | % | 270,480 | 3.1 | % | (170,793 | ) | (63.1 | )% | ||||||||
| Other Fees | 6,592 | 0.1 | % | 16,573 | 0.2 | % | (9,981 | ) | (60.2 | )% | ||||||||
| SaaS Services Revenue | 111,091 | 1.2 | % | 370,619 | 4.2 | % | (259,528 | ) | (70.0 | )% | ||||||||
| Total Revenue | $ | 8,892,917 | 100.0 | % | $ | 8,802,255 | 100.0 | % | $ | 90,662 | 1.0 | % | ||||||
| Twelve Months Ended December 31, | ||||||||||||||||||
| 2023 | 2022 | $ Change | % Change | |||||||||||||||
| Managed Services Revenue | $ | 35,740,685 | 98.7 | % | $ | 39,456,986 | 96.0 | % | $ | (3,716,301 | ) | (9.4 | )% | |||||
| Marketplace Spend Fees | 44,985 | 0.1 | % | 205,809 | 0.5 | % | (160,824 | ) | (78.1 | )% | ||||||||
| License Fees | 404,625 | 1.1 | % | 1,301,198 | 3.2 | % | (896,573 | ) | (68.9 | )% | ||||||||
| Other Fees | 24,303 | 0.1 | % | 131,944 | 0.3 | % | (107,641 | ) | (81.6 | )% | ||||||||
| SaaS Services Revenue | 473,913 | 1.3 | % | 1,638,951 | 4.0 | % | (1,165,038 | ) | (71.1 | )% | ||||||||
| Total Revenue | $ | 36,214,598 | 100.0 | % | $ | 41,095,937 | 100.0 | % | $ | (4,881,339 | ) | (11.9 | )% | |||||
| IZEA Worldwide, Inc. Reconciliation of GAAP Net loss to Non-GAAP Adjusted EBITDA | |||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Net loss | $ | (1,526,657 | ) | $ | (917,133 | ) | $ | (7,349,360 | ) | $ | (4,469,498 | ) | |||
| Impairment of digital assets | — | 6,502 | — | 148,310 | |||||||||||
| Adjustment to fair value of digital assets | (90,320 | ) | — | (90,320 | ) | — | |||||||||
| Non-cash stock-based compensation | 308,017 | 182,759 | 950,769 | 610,772 | |||||||||||
| Non-cash stock issued for payment of services | 75,003 | 31,258 | 300,015 | 125,000 | |||||||||||
| Interest expense | 1,853 | (1,795 | ) | 8,226 | 799 | ||||||||||
| Deferred tax liability | (6,104 | ) | — | (6,104 | ) | — | |||||||||
| Depreciation and amortization | 138,897 | 423,305 | 713,135 | 828,161 | |||||||||||
| Other non-cash items | (4,809 | ) | (26,229 | ) | (4,505 | ) | (7,674 | ) | |||||||
| Adjusted EBITDA | $ | (1,104,120 | ) | $ | (301,333 | ) | $ | (5,478,144 | ) | $ | (2,764,130 | ) | |||
| Revenue | $ | 8,892,916 | $ | 8,802,255 | $ | 36,214,598 | $ | 41,095,937 | |||||||
| Adjusted EBITDA as a % of Revenue | (12.4 | )% | (3.4 | )% | (15.1 | )% | (6.7 | )% | |||||||
FAQ
What was the total revenue increase in Q4 2023 compared to Q4 2022?
What was the net loss in Q4 2023?
What were the operational highlights in Q4 2023?
How did the total revenue in FY 2023 compare to FY 2022?
What strategic adjustments did CEO Ted Murphy mention?
