IZEA Reports Q1 2021 Financial Results

ORLANDO, FL (May 13, 2021) – IZEA Worldwide, Inc. (NASDAQ: IZEA), the premier provider of influencer marketing technology, data, and services for the world’s leading brands, reported its financial and operational results for the first quarter ended March 31, 2021.

Q1 2021 Financial Summary Compared to Q1 2020

• Total revenue increased 13% to $5.4 million, compared to $4.8 million.
• Managed Services unit revenue increased 18% to $4.9 million, compared to $4.1 million.
• SaaS Services unit revenue decreased 21% to $504,000, compared to $639,000.
• Total costs and expenses decreased 32% to $7.4 million, compared to $10.9 million.
• Net loss was $2.0 million, compared to a net loss of $6.2 million.
• Adjusted EBITDA* decreased to $(1.4) million, compared to $(1.2) million.

Q1 2021 Operational Highlights

• Delivered all-time record Q1 Managed Services Bookings.
• Hit all-time record count of customers licensing IZEA SaaS products.
• BrandGraph reached 10 Million influencers analyzed
• Launched the IZEA Partner Program
• Introduced the Shake Parade of Stars
• Added 3 partners to Influence+ United
• Added social audio support in Shake

* Adjusted EBITDA is a non-GAAP financial measure. Refer to the definition and reconciliation of this measure under “Use of Key Metrics and Non-GAAP Financial Measures”.

Management Commentary

“The first quarter was a continuation of the strong sales momentum we saw at the end of 2020,” said Ted Murphy, IZEA’s Chairman and CEO. “Managed Services Bookings growth in Q1 was remarkable, with a 130% YoY increase over the same period in 2020. At $6.4M in bookings, it is the best Q1 we have ever had for Managed Services, and a material increase from the $2.8M in bookings in Q1 of last year. The increase in both Q4 2020 and Q1 2021 bookings have yet to fully hit the revenue line, as many of the campaigns we are signing right now are large in scope and duration. We expect the lion’s share of those bookings to be recognized by the back half of this year.”

“We saw our SaaS licensing revenue stabilize and grow slightly this quarter vs. Q4 of 2020,” continued Murphy. “While we are still making our way through the SaaS pricing transition, we continue to see growth in our active customer base at our lower price points, particularly with our self-service offerings. We onboarded a record number of new IZEAx customers in Q1 2021, and despite the year over year decreases in overall SaaS Services revenue, our count of active SaaS customers continues to grow and hit an all-time high again at the end of the quarter.”

“As we look to Q2, we are off to a phenomenal start,” Murphy said. “Managed Services bookings have topped $7M for the quarter, already making Q2 the best quarter we have ever had – and we have half the quarter remaining. SaaS customer counts hit another record in April, and we are on the cusp of releasing meaningful improvements to our software platforms this quarter which should positively impact the acquisition of additional customers moving forward.”

Q1 2021 Financial Results

Total revenue in the first quarter of 2021 increased 13% to $5.4 million, compared to $4.8 million in the first quarter of 2020, with revenue from Managed Services increasing by $747,000, or 18%, to $4.9 million in the first quarter of 2020 compared to the first quarter of 2020 and revenue from SaaS Services decreasing by $135,000, or 21%, to $504,000 in the first quarter of 2021 compared to the first quarter of 2020.

Revenue from managed services improved on the strength of recent prior quarter bookings growth; demand for managed services is increasing as many customers are shifting more of their marketing spend to influencer marketing campaigns.

Revenue from SaaS Services decreased primarily due to lower license fees and lower margins on self-service marketplace spending. Licensee counts on all platforms are growing, however average license fees are lower due to competitive changes we implemented in the summer of 2020 in response to COVID-related churn.  We also lowered our pricing on selected self-service offerings, which impacted our current quarter margins on marketplace spending.  Gross billings (a key metric, as further defined below) for SaaS Services decreased 11% to $1.7 million in Q1 2021, compared to $2.0 million in Q1 2020. Certain of our SaaS marketers decreased their spend levels as they transitioned from the TapInfluence platform to IZEAx and curtailed spending throughout 2020. The reduction in these gross billings resulted in the $135,000 decrease in SaaS Services revenue in the first quarter of 2021 compared to the first quarter of 2020.

Total costs and expenses decreased 32% in the first quarter of 2021 to $7.4 million compared to $10.9 million in the corresponding quarter of 2020. This decrease was primarily due to a $4.3 million impairment of goodwill that was recognized in Q1 2020, partially offset by increased sales and marketing expenditures during the first quarter of 2021.

Net loss in the first quarter of 2021 was $2.0 million, or $(0.04) per share, as compared to a net loss of $6.2 million, or $(0.18) per share, in the first quarter of 2020, based on 56.3 million and 34.7 million average shares outstanding, respectively.

Adjusted EBITDA (a non-GAAP measure management uses as a proxy for operating cash flow, as defined below) declined 16%, or $194,000, to ($1.4) million in the first quarter of 2021 compared to ($1.2) million in the first quarter of 2020. Adjusted EBITDA as a percentage of revenue in the first quarter of 2021 was negative twenty-six percent (26%) compared to negative twenty-five percent (25%) in the first quarter of 2020.

We raised $34.4 million from sale of securities through our at-the-market offering (the “ATM”) in Q1 2021 and our cash balance as of March 31, 2021 was $65.5 million. From June 2020 to April 2021, we raised $75.0 million in gross proceeds through the ATM.

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