IZEA Worldwide, Inc. , the premier provider of influencer marketing technology, data, and services for the world’s leading brands, reported its financial and operational results for the third quarter ended September 30, 2021.
Q3 2021 Financial Summary Compared to Q3 2020
- Total revenue increased 88% to an all-time record $7.6 million, compared to $4.0 million.
- Managed Services unit revenue increased 104% to $7.2 million, compared to $3.5 million.
- SaaS Services unit revenue decreased 13% to $454,000, compared to $522,000.
- Total costs and expenses increased 72% to $9.1 million, compared to $5.3 million.
- Net loss was $1.5 million, compared to a net loss of $1.3 million.
- Adjusted EBITDA* decreased to $(1.0) million, compared to $(0.7) million.
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Q3 2021 Operational Highlights
- Hit all-time record count of customers licensing IZEA SaaS products.
- Managed Services bookings reached 181% year over year growth in Q3 to hit an all-time record of $11.3 million.
- Announced Partnership with Multicart to Power Social Commerce
- Added The Cut to IZEA’s Talent Partner Program.
* 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”.
“IZEA’s strong sales momentum in Q3 was a continuation and acceleration of what we have delivered throughout 2021,” said Ted Murphy, IZEA’s Chairman and CEO. “Investment in sales and marketing resulted in more than double the new managed service customers added in the quarter vs. the same quarter last year. Those new customers, combined with increases from existing customers, led to all-time record bookings and revenue in the quarter.”
“At the end of 2020 our team set forth a goal to deliver at least 30% annual revenue growth per year for each of the next three years, or a 30% compound annual growth rate,” continued Murphy. “Based on that rate of 30% growth per year, our goal was to achieve revenues of approximately $23.8 million in 2021, and $31 million in 2022. We are on pace to beat our revenue goal for 2021 and are well positioned to do the same in 2022. Year to date revenue through Q3 of this year already totals $19.5M, and we are heading into a historically strong quarter for IZEA bookings and revenue recognition.”
“Team IZEA is off to a great start in Q4 with the wind at our back from previous quarters. October was the best October we have ever had for Managed Services bookings and our team is focused on closing out 2021 on a strong note,” continued Murphy. “We recognize that we remain in the midst of a global pandemic, with supply chain and labor shortages that have impacted many of our customers in a variety of ways. Some of those customers, particularly those in the travel industry, are still far from pre-covid operations and it is unclear if or when they will fully recover. With that said, our overall outlook for 2022 today is incredibly positive. We are bullish on continued growth based on the early indications of renewals from some of our larger clients.”
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Q3 2021 Financial Results
Total revenue in the third quarter of 2021 increased 88% to $7.6 million, compared to $4.0 million in the third quarter of 2020, with revenue from Managed Services increasing by $3.6 million, or 104%, to $7.2 million in the third quarter of 2021 compared to the third quarter of 2020 and revenue from SaaS Services decreasing by $68,000, or 13%, to $454,029 in the third quarter of 2021 compared to the third quarter of 2020.
Revenue from Managed Services improved on the strength of recent prior quarter bookings growth and an increase in completed campaigns during the quarter; demand for Managed Services continues to increase as many customers are shifting more of their marketing spend to influencer marketing campaigns.
Revenue from SaaS Services decreased primarily as a result of 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 during the third quarter of 2020, which impacted our current quarter margins on marketplace spending. Gross billings (a key metric, as further defined below) for SaaS Services decreased 27% to $1.5 million in Q3 2021, compared to $2.0 million in Q3 2020. Certain of our SaaS marketers decreased their spend levels as they transitioned from the TapInfluence platform to IZEAx and curtailed spending throughout 2020.
Cost of revenue exclusive of amortization was $4.0 million in Q3 2021, or 52% of Revenue, compared to $1.7 million, or 42% in the prior year quarter, higher primarily due to a heavier mix of larger deals that carry lower overall margins. Costs and expenses other than cost of revenue totaled $5.1 million for the current quarter compared to $3.6 million for the prior year quarter. Sales and marketing costs were $2.2 million during the quarter, $0.8 million or 60% above the comparative quarter due to sales compensation, which varies with higher bookings and marketing costs associated with driving customer growth. General and administrative costs totaled $2.7 million during the quarter, $843,518 or 46% above the prior year quarter, due primarily to higher compensation and contractor costs to support operations and IT investments.
Net loss in the third quarter of 2021 was $1.5 million, or $(0.02) per share, as compared to a net loss of $1.3 million, or $(0.03) per share in the third quarter of 2020, based on 61.9 million and 45.8 million average shares outstanding, respectively.
Adjusted EBITDA (a non-GAAP measure management uses as a proxy for operating cash flow, as defined below) declined 39%, or $281,127, to $(1.0) million in the third quarter of 2021 compared to $(0.7) million in the third quarter of 2020. Adjusted EBITDA as a percentage of revenue in the third quarter of 2021 was negative (13)% compared to negative (18)% in the third quarter of 2020.
Our cash balance as of September 30, 2021 was $74.5 million. The Company has no long-term debt.
IZEA will hold a conference call to discuss its third quarter 2021 results on Wednesday, November 10th at 5:00 p.m. Eastern Standard Time. 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: Wednesday, November 10, 2021
Time: 5:00 p.m. Eastern Standard Time
Toll-free dial-in number: 1-800-786-8691
International dial-in number: 1-416-981-9029
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