IZEA Reports Q1 2019 Financial Results

Q1 Revenue Up 23% Year over Year, Gross Billings Up 66%, 53% Adjusted EBITDA Improvement

ORLANDO, Fla., May 13, 2019 (GLOBE NEWSWIRE) — 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 first quarter ended March 31, 2019.

Q1 2019 Financial Summary Compared to Q1 2018

• Total revenue up 23% to $4.8 million, compared to $3.9 million.
• Managed Services revenue increased 2% to $3.9 million, compared to $3.8 million.
• SaaS Services revenue increased 1,089% to $913,000, compared to $77,000.
• Gross billings* up 66% to $7.8 million, compared to $4.7 million.
• Total costs and expenses were $6.5 million, compared to $5.8 million.
• Net loss was $1.8 million compared to a net loss of $2.0 million an improvement of $215,000, or 10%.
• Adjusted EBITDA* was ($874,000), compared to ($1.9 million), an improvement of $975,000, or 53%.

Q1 2019 Operational Highlights

• Launched PayPop at CES 2019.
• Launched IZEAx Discovery self-service offering.
• Appointed Chris Staymates as Chief Technology Officer.
• Appointed Troy Vanke as Chief Financial Officer.
• Announced a variety of Fortune 500 new customer wins and relationship expansions.

* – 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

“IZEA kicked off 2019 with a strong Q1,” said Ted Murphy, IZEA’s Chairman and CEO. “The significant top-line and bottom-line improvements reflect a concentrated effort to drive growth while increasing operational leverage and efficiency throughout the organization. Our focus on SaaS licensing and marketplace fees have had a dramatic positive impact on the organization. We have seen significant growth of IZEAx licensing revenue in particular and believe the recent release of IZEAx 3.0 will further bolster our sales efforts throughout the year. At the end of Q1 our total SaaS licensing fees under contract for all platforms in 2019 have already exceeded total SaaS licensing revenues for 2018.”

“While we are pleased with our revenue growth and margin improvements in the quarter, we believe we can grow faster and gain more leverage,” continued Murphy. “The completion of our recent $10 million common stock offering will enable us to make strategic investments in areas of the organization where we see opportunities to drive meaningful topline growth and operational efficiencies, particularly with our SaaS revenue lines. While we remain focused on responsibly balancing investment with profitability, we believe there is a large addressable market for our services and we seek to gain a larger share of that market. IZEA will be investing in increased marketing activities, sales staff, and engineers to further increase our leadership position in the influencer marketing space. We are actively pursuing several of these investments and expect to begin to see the benefits of those investments later this year, particularly during the holiday season.”

Q1 2019 Financial Results

Revenue in the first quarter of 2019 increased 23% to $4.8 million compared to $3.9 million in the corresponding quarter of 2018. The increase was due to by revenue growth in our license fees and marketplace spend, both of which stem from our 2018 acquisition of TapInfluence.

Total costs and expenses in the first quarter of 2019 were $6.5 million compared to $5.8 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 Q1 2018, we recorded a gain of just over $300 thousand associated with adjusting our accrued acquisition costs to fair value, and in Q1 2019, we recorded a loss of $190 thousand, associated with our 2019 settlement of a portion of our accrued acquisition costs. Excluding these one-time items, our total costs and expenses increased primarily due to increased depreciation and amortization expense.

Net loss in the first quarter of 2019 was $1.8 million or $(0.15) per share, as compared to a net loss of $2.0 million or $(0.35) per share in the corresponding quarter of 2018, based on 12,602,437 and 5,802,099 shares outstanding, respectively.

Adjusted EBITDA (a non-GAAP measure management uses as a proxy for operating cash flow, as defined below) in the first quarter of 2019 was $(874,000) compared to $(1,850,000) in the corresponding quarter of 2018.

Cash and cash equivalents at March 31, 2019 totaled $2.3 million. At the end of the quarter the Company had accessed approximately $1.3 million of its $5.0 million credit line.

IZEA completed a $10 million public offering on May 10. The net proceeds, after the underwriting discount, but before estimated expenses of the offering payable by IZEA, are $9.4 million.

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