GlobeNewswire Inc | Aug 12, 2021 04:01PM EDT

August 12, 2021

ORLANDO, Fla., Aug. 12, 2021 (GLOBE NEWSWIRE) -- IZEA Worldwide, Inc. (NASDAQ: IZEA), the premier provider of influencer marketing technology, data, and services for the worlds leading brands, reported its financial and operational results for the second quarter ended June30, 2021.

Q2 2021 Financial Summary Compared to Q2 2020

-- Total revenue increased 109% to $6.5 million, compared to $3.1 million. -- Managed Services unit revenue increased 146% to $6.1 million, compared to $2.5 million. -- SaaS Services unit revenue decreased 34% to $425,000, compared to $645,000. -- Total costs and expenses increased 74% to $8.6 million, compared to $4.9 million. -- Net loss was $0.1 million, compared to a net loss of $1.8 million. -- Adjusted EBITDA* decreased to $(1.4) million, compared to $(1.3) million.

Q2 2021 Operational Highlights

-- Managed Services bookings reached 187% year over year growth in Q2 to hit an all-time record of $11.1 million. -- Hit all-time record count of customers licensing IZEA SaaS products. -- Company joined Russell Microcap Index. -- Unveiled next generation of IZEAx Unity Suite. -- Announced BrandGraph Compare, Themes, and TikTok Support. -- Added four partners to IZEAs Talent Partner Program. -- Completed sale of $35 Million of common stock through its ATM offering at an average of $4.98 per share.

* 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 second quarter was a continuation and acceleration of the strong sales momentum we first started to see at the end of 2020, said Ted Murphy, IZEAs Chairman and CEO. The record $11.1 million in Managed Services bookings we saw in this quarter will have a positive impact on revenue this year and carry over into early 2022.

On our first quarter investor call I shared that our goal was 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. That remains our longer term goal, but based on current bookings and first half revenue numbers it is clear that we will far exceed this goal in 2021. As of July, Managed Services bookings for 2021 have already exceeded all that of 2020. We will likely exceed 30% year over year bookings growth again in Q3. Our pipeline remains very strong and we have been building on the success and momentum with expansion of key accounts as well as new customer acquisition.

We saw record customer counts for software licenses once again this quarter, driven by increases for Unity Suite, BrandGraph, and IZEAx Discovery. We are still in the midst of absorbing the pricing and overall strategic change we made with Unity Suite last year, but we did see 130% bookings growth in combined Unity Suite and BrandGraph licensing YoY, with nearly two-thirds coming from new customers. We will continue to see some lumpiness with licensing revenue until we get fully through the pricing transition but expect to see some normalization and revenue growth that reflects the steady climb in software customer counts on the other side of this year.

Q2 2021 Financial Results

Total revenue in the second quarter of 2021 increased 109% to $6.5 million, compared to $3.1 million in the second quarter of 2020, with revenue from Managed Services increasing by $3.6 million, or 146%, to $6.1 million in the second quarter of 2021 compared to the second quarter of 2020 and revenue from SaaS Services decreasing by $220,000, or 34%, to $424,920 in the second quarter of 2021 compared to the second 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 42% to $1.2 million in Q2 2021, compared to $2.0 million in Q2 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 $3.3 million in Q2 2021, or 50% of Revenue, compared to $1.4 million, or 45% 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 $5.3 million for the current quarter compared to $3.5 million for the prior year quarter. Sales and marketing costs were $2.3 million during the quarter, $1.1 million or 87% 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, $739,086 or 38% above the prior year quarter, due primarily to higher compensation and contractor costs to support operations and IT investments.

Net loss in the second quarter of 2021 was $0.1 million, or $0.00 per share, as compared to a net loss of $1.8 million, or $(0.05) per share in the second quarter of 2020, based on 61.4 million and 36.1 million average shares outstanding, respectively.

Adjusted EBITDA (a non-GAAP measure management uses as a proxy for operating cash flow, as defined below) declined 12%, or $154,072, to $(1.4) million in the second quarter of 2021 compared to $(1.3) million in the second quarter of 2020. Adjusted EBITDA as a percentage of revenue in the second quarter of 2021 was negative (22)% compared to negative (40)% in the second quarter of 2020.

We raised $12.2 million from sale of securities through our at-the-market offering in Q2 2021 and our cash balance as of June30, 2021 was $75.0 million. From June 2020 to July 2021, we have raised total gross proceeds of $75.0 million through at-the-market offerings.

Conference Call

IZEA will hold a conference call to discuss its second quarter 2021 results on Thursday, August 12th at 5:00 p.m. Eastern Daylight 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: Thursday, August 12, 2021Time: 5:00 p.m. Eastern Daylight TimeToll-free dial-in number: 1-800-786-6705International dial-in number: 1-212-231-2931

The conference call will be webcast live and available for replay via the investors section of our 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. EDT on the same day through August 19, 2021.

Toll-free replay number: 1-844-512-2921International replay number: 1-412-317-6671Replay ID: 21996359

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 todays 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 industrys 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 measurable return on investment.

Use of Key Metrics and Non-GAAP Financial Measures

We define gross billings, a key metric, as the total dollar value of the amounts earned from our customers for the services we performed, or the amounts billed to our customers for their self-service purchase of goods and services on our platforms. Gross billings for Marketplace Spend are the amounts of our reported revenue plus the cost of payments we made to third-party creators providing the content or sponsorship services, which are netted against revenue for generally accepted accounting principles in the United States (GAAP) reporting purposes. Gross billings for all other revenue types equals the revenue reported in our consolidated statements of operations.

Managed Services Bookings is a measure of all sales orders received during a time period less any cancellations received, or refunds given during the same time 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 up 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. Historically, bookings have converted to revenues over a 6-month period on average. However, since late 2020, we have received increasingly larger and more complex sales orders which, in turn, has lengthened the average revenue period to approximately 9 months, with the largest contracts taking longer to complete. 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 adjustment.

Managed Services Bookings is useful information as it reflects the amount of orders received in one period, even though revenue from those orders may be reflected over varying amounts of time. Management uses the Managed Services Bookings metric to plan its operating staff, to identify key customer group trends to enlighten go-to-market activities, and to inform its product development efforts.

"Adjusted EBITDA" is a non-GAAP financial measure under the rules of the Securities and Exchange Commission. EBITDA is 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 it provides consistency to facilitate period-to-period comparisons.

All companies do not calculate gross billings, bookings and Adjusted EBITDA in the same manner. These metrics as presented by IZEA may not be comparable to those presented by other companies. Moreover, these metrics have limitations as analytical tools, and you should not consider them in isolation or as a substitute for an analysis of our results of operations as reported under GAAP. A reconciliation of GAAP to non-GAAP results is presented in the financial tables included in this press release.

Safe Harbor Statement

All statements in this release that are not based on historical fact are forward-looking statements 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, believe, intend, 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 performance under customer contracts, expectations of operating results that remain subject to completion of financial closing procedures, IZEAs ability to increase revenue and bookings, growth or maintenance of customer relationships, and expectations concerning industry trends or IZEAs 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 establish effective 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 IZEAs 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

Martin SmithIZEA Worldwide, Inc.Phone: 407-674-6911Email: ir@izea.com

IZEA Worldwide, Inc.Consolidated Balance Sheets

June 30, December 31, 2021 2020Assets Current assets: Cash and cash equivalents $ 74,989,876 $ 33,045,225 Accounts receivable, net 6,132,949 5,207,205 Prepaid expenses 1,006,643 199,294 Other current assets 62,694 74,467 Total current assets 82,192,162 38,526,191 Property and equipment, net 193,786 230,918 Goodwill 4,016,722 4,016,722 Intangible assets, net 72,222 505,556 Software development costs, net 1,242,252 1,472,684 Total assets $ 87,717,144 $ 44,752,071 Liabilities and Stockholders? Equity Current liabilities: Accounts payable $ 1,624,725 $ 1,880,144 Accrued expenses 2,097,474 1,924,973 Contract liabilities 8,654,765 7,180,264 Current portion of notes payable ? 1,477,139 Total current liabilities 12,376,964 12,462,520 Finance obligation, less current portion 34,292 43,808 Notes payable, less current portion 32,255 459,383 Total liabilities 12,443,511 12,965,711 Commitments and Contingencies ? ? Stockholders? equity: Preferred stock; $.0001 par value; 10,000,000shares authorized; no shares issued and ? ? outstandingCommon stock; $.0001 par value; 200,000,000shares authorized; 61,809,573 and 6,181 5,005 50,050,167, respectively, issued andoutstandingAdditional paid-in capital 148,006,352 102,416,131 Accumulated deficit (72,738,900 ) (70,634,776 )Total stockholders? equity 75,273,633 31,786,360 Total liabilities and stockholders? equity $ 87,717,144 $ 44,752,071

IZEA Worldwide, Inc.Consolidated Statements of Operations and Comprehensive Loss

Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020Revenue $ 6,538,739 $ 3,135,039 $ 11,914,371 $ 7,898,707 Costs and expenses:Cost ofrevenue 3,284,259 1,414,249 5,689,011 3,554,766 (exclusive ofamortization)Sales and 2,302,869 1,228,691 4,381,192 2,751,834 marketingGeneral and 2,659,578 1,920,492 5,194,725 4,338,330 administrativeImpairment of ? ? ? 4,300,000 goodwillDepreciationand 363,924 377,107 729,453 878,376 amortizationTotal costs 8,610,630 4,940,539 15,994,381 15,823,306 and expenses Loss from (2,071,891 ) (1,805,500 ) (4,080,010 ) (7,924,599 )operations Other income (expense):Interest (8,739 ) (19,476 ) (22,532 ) (26,094 )expenseOther income 1,968,944 33,834 1,998,418 (3,910 )(expense), netTotal otherincome 1,960,205 14,358 1,975,886 (30,004 )(expense), net Net loss $ (111,686 ) $ (1,791,142 ) $ (2,104,124 ) $ (7,954,603 ) Weightedaverage commonshares 61,386,913 36,108,073 58,874,526 35,394,639 outstanding ?basic anddilutedBasic anddiluted loss $ ? $ (0.05 ) $ (0.04 ) $ (0.22 )per commonshare

Revenue by type:

Three Months Ended June 30, 2021 2020 $ Change % ChangeManagedServices $ 6,113,819 94 % $ 2,490,343 79 % $ 3,623,476 146 %Revenue Marketplace 71,167 1 % 195,894 6 % (124,727 ) (64 ) %Spend FeesLicense 344,843 5 % 442,905 14 % (98,062 ) (22 ) %FeesOther Fees 8,910 ? % 5,897 ? % 3,013 51 %SaaSServices 424,920 6 % 644,696 21 % (219,776 ) (34 ) %Revenue Total $ 6,538,739 100 % $ 3,135,039 100 % $ 3,403,700 109 %Revenue

Six Months Ended June 30, YTD YTD 2021 2020 $ Change % ChangeManagedServices $ 10,985,853 92 % $ 6,615,404 84 % $ 4,370,449 66 %Revenue Marketplace 179,964 2 % 362,187 5 % (182,223 ) (50 ) %Spend FeesLicense 727,884 6 % 894,453 11 % (166,569 ) (19 ) %FeesOther Fees 20,670 ? % 26,663 ? % (5,993 ) (22 ) %SaaSServices 928,518 8 % 1,283,303 16 % (354,785 ) (28 ) %Revenue Total $ 11,914,371 100 % $ 7,898,707 100 % $ 4,015,664 51 %Revenue

Gross billings by revenue type:

Three Months Ended June 30, YTD YTD 2021 2020 $ Change % ChangeManagedServices $ 6,113,819 84 % $ 2,490,343 55 % $ 3,623,476 146 %GrossBillings Marketplace 838,343 11 % 1,596,880 35 % (758,537 ) (48 ) %Spend FeesLicense 344,843 5 % 442,905 10 % (98,062 ) (22 ) %FeesOther Fees 8,910 ? % 5,897 ? % 3,013 51 %SaaSServices 1,192,096 16 % 2,045,682 45 % (853,586 ) (42 ) %GrossBillings Total Gross $ 7,305,915 100 % $ 4,536,025 100 % $ 2,769,890 61 %Billings

Six Months Ended June 30, YTD YTD 2021 2020 $ Change % ChangeManagedServices $ 10,985,853 79 % $ 6,615,404 62 % $ 4,370,449 66 %GrossBillings Marketplace 2,189,935 16 % 3,096,654 29 % (906,719 ) (29 ) %Spend FeesLicense 727,884 5 % 894,453 8 % (166,569 ) (19 ) %FeesOther Fees 20,670 ? % 26,663 ? % (5,993 ) (22 ) %SaaSServices 2,938,489 21 % 4,017,770 38 % (1,079,281 ) (27 ) %GrossBillings Total Gross $ 13,924,342 100 % $ 10,633,174 100 % $ 3,291,168 31 %Billings

IZEA Worldwide, Inc.Reconciliation of GAAP Net loss to Non-GAAP Adjusted EBITDA

Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Net loss $ (111,686 ) $ (1,791,142 ) $ (2,104,124 ) $ (7,954,603 ) Gain on theforgiveness (1,927,220 ) ? (1,927,220 ) ? of debtNon-cashstock-based 206,194 118,707 404,180 248,278 compensationNon-cashstock issued 37,544 31,249 72,240 62,499 for paymentof servicesInterest 8,739 19,476 22,532 26,094 expenseDepreciationand 363,924 377,107 729,453 878,376 amortizationImpairment ? ? ? 4,300,000 of goodwillOthernon-cash 124 (23,706 ) (7,790 ) (23,706 ) itemsAdjusted $ (1,422,381 ) $ (1,268,309 ) $ (2,810,729 ) $ (2,463,062 ) EBITDA Revenue $ 6,538,739 $ 3,135,039 $ 11,914,371 $ 7,898,707 Adjusted ) ) ) )EBITDA as a (22 % (40 % (24 % (31 %% of Revenue

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/c7258438-8ea9-484b-bbe2-0c31e4339cfc