IZEA Reports Record Third Quarter Revenue, Up 182%
All Time Record Bookings, Up 230%
/EINPresswire.com/ -- ORLANDO, FL--(Marketwired - November 16, 2015) - IZEA, Inc. (OTCQB: IZEA), operator of the premier online marketplace that connects brands and publishers with influential content creators, today announced record results for its third quarter ended September 30, 2015.
Third Quarter Financial Highlights:
- Closed on $12.9 Million Warrant Conversion with 81.5% participation.
- Revenue for the quarter increased 182% to a record $5.4 million compared to Q3 2014, the highest quarterly revenue in company history.
- Bookings for the quarter grew over 230% year-over-year to a record $6.7 million, up from $2.0 million in Q3 2014.
- Sponsored Social revenue for the quarter grew 80% year-over-year to $3.2 million, up from $1.8 million; Content revenue was $2.2 in Q3 2015.
- New opportunity pipeline, a representation of new client proposals generated within the quarter, grew to $36.2 million, up from $16.4 million in Q3 2014, an increase of 120%.
- Gross profit was 40% in Q3 2015.
Third Quarter Operational Highlights:
- IZEAx aggregate network reach increased to 3.18 billion fans and followers at the end of the quarter, up 7% compared to Q2 2015 and 240% year-over-year.
- IZEAx registered users increased 13% to 583,000 in Q3 2015 compared to Q2 2015, and increased 507% from Q3 2014.
- Settled patent dispute with Blue Calypso.
IZEA ended the quarter with cash and cash equivalents of $13.3 million, receivables of $3.0 million and an untapped $5 million credit facility with Bridge Bank. The company had unearned revenue of $2.4 million, with an additional $3.3 million of booked business not yet billed. Total stockholders' equity was $16.2 million at the end of the quarter.
"In the third quarter, we saw exceptional bookings growth of both Sponsored Social and Content. Not only did we set an all time quarterly bookings record for the quarter, we also received the largest single booking in the history of the company with a top five ecommerce company. In September 2015, we delivered our first month in excess of $3 million in bookings, another milestone for our growing sales team," commented Ted Murphy, IZEA Chairman and Chief Executive Officer.
"In addition to top line bookings and revenue growth, we are becoming more efficient and effective in our sales operations. Our nine-month average bookings per salesperson through the end of Q3 2015 has increased 106% over our Q3 2014 nine month average. As a company, we are executing against a three-year vision to grow our annual bookings to $100 million by the end of 2018. Our leadership team is building the foundation required in order to achieve that goal, while continuing to discover operational efficiencies and software automation opportunities," said Murphy.
Third Quarter 2015 Results:
Revenue for the third quarter of 2015 was $5,442,457 compared to $1,931,671 for the third quarter of 2014, an increase of 182% due to increases in Sponsored Social and Content revenue. Gross profit for the quarter was $2,152,000, up from $1,239,454 during the same period in 2014, an increase of 74%.
Operating expense for the third quarter of 2015 was $3,038,561, compared to $2,802,187 during the same period in 2014. Operating expenses increased primarily as a result of increases in the number and cost of personnel related expenses as the Company continues to invest in additional sales and engineering staff. Additionally, the Company incurred higher legal fees during the quarter in its defense and settlement of its only outstanding patent litigation for $390,506.
Operating EBITDA was $(2,167,433) for the quarter compared to $(1,309,551) during the same period last year. The decrease in EBITDA is primarily due to the legal settlement and continued investments in new hires and technology in 2015. Net loss for the quarter was $(2,645,087) compared to net income of $685,370 during the same period last year, primarily due to a $2,134,440 difference in the gain on the change in the fair value of derivatives between periods and the increase in legal settlements in 2015. Cash used for operating activities was $2,025,290 during the three months ended September 30, 2015.
Basic and diluted loss per common share for the quarter was $(.03), compared to basic and diluted income per common share of $.01 for the third quarter of 2014.
Investor Conference Call
The Company will host a conference call today at 4:30 p.m. ET, during which IZEA management will discuss the financial results and be available to answer any questions from investors.
Conference Date: 11/16/15 Conference Start Time: 4:30 p.m. Eastern Dial-In Number: (201) 689-8472
Electronic replay of the conference call will be available through November 23, 2015 by dialing 1-858-384-5517 and entering PIN number 13624690. IZEA will also post a downloadable file onto the Investor Relations area of http://corp.izea.com.
About IZEA
IZEA operates the premier online marketplace that connects brands with influential content creators. IZEA creators range from leading bloggers and social media personalities to A-List celebrities and professional journalists. Creators are compensated for developing and distributing unique content on behalf of brands including long form text, videos, photos and status updates. Brands receive influential consumer content and engaging, shareable stories that drive awareness. For more information about IZEA, visit http://corp.izea.com.
Financial Methodology & Related Disclosures
"EBITDA" is a non-GAAP financial measure within the meaning of Regulation G promulgated by the Securities and Exchange Commission. EBITDA is commonly defined as "earnings before interest, taxes, depreciation and amortization." We believe that EBITDA provides useful information to investors as it excludes transactions not related to the core cash operating business activities including non-cash transactions.
We believe that excluding these transactions allows investors to meaningfully trend and analyze the performance of our core cash operations. All companies do not calculate EBITDA in the same manner, and EBITDA as presented by IZEA may not be comparable to EBITDA presented by other companies. IZEA defines EBITDA as earnings or loss before interest, taxes, depreciation and amortization, non-cash stock related compensation, gain or loss on asset disposals, changes in contingent acquisition costs or impairment and all other income and expense items such as loss on exchanges and changes in fair value of derivatives, if applicable.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Statements in this press release that are forward-looking include the company's estimated levels of bookings and revenues for the 2015 fiscal year. These forward-looking statements are based largely on IZEA's current expectations and are subject to a number of risks and uncertainties, certain of which are beyond IZEA's control. Actual results could differ materially from these forward-looking statements as a result of, among other factors, competitive conditions in the social sponsorship segment in which IZEA operates, failure to popularize one or more of the marketplace platforms of IZEA, inability to obtain additional capital on a timely basis, difficulties in integrating Ebyline's platforms and operations and achieving the expected benefits from the acquisition, and changing economic conditions that are less favorable than expected. In light of these risks and uncertainties, there can be no assurance that the forward-looking information contained in this press release will in fact occur. Please read the full statement and disclosures here: http://corp.izea.com/safe-harbor-statement.
IZEA, Inc.
Consolidated Balance Sheets
September 30, December 31,
2015 2014
----------------------------------------------------------------------------
(Unaudited)
Assets
Current:
Cash and cash equivalents $ 13,273,048 $ 6,521,930
Accounts receivable, net 3,048,299 2,156,378
Prepaid expenses 745,426 190,604
Other current assets 13,317 61,424
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Total current assets 17,080,090 8,930,336
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Property and equipment, net of accumulated
depreciation of $389,174 and $239,521 595,549 588,919
Goodwill 2,468,289 -
Intangible assets, net of accumulated
amortization of $395,333 and $0 1,974,667 -
Software development costs, net of accumulated
amortization of $171,185 and $85,331 413,365 483,544
Security deposits 119,671 100,641
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Total assets $ 22,651,631 $ 10,103,440
============================================================================
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 940,993 $ 310,611
Accrued expenses 1,151,468 394,617
Unearned revenue 2,358,895 1,767,074
Current portion of deferred rent 10,772 -
Current portion of capital lease obligations 15,602 54,376
Current portion of acquisition costs payable 833,227 -
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Total current liabilities 5,310,957 2,526,678
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Deferred rent, less current portion 107,303 106,531
Capital lease obligations, less current
portion - 7,291
Acquisition costs payable, less current
portion 977,669 -
Warrant liability 10,780 3,203,465
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Total liabilities 6,406,709 5,843,965
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Stockholders' equity:
Common stock, $.0001 par value; 200,000,000
shares authorized; 104,002,308 and
57,697,666, respectively, issued and
outstanding 10,400 5,770
Additional paid-in capital 48,077,162 27,195,055
Accumulated deficit (31,842,640) (22,941,350)
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Total stockholders' equity 16,244,922 4,259,475
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Total liabilities and stockholders'
equity $ 22,651,631 $ 10,103,440
============================================================================
IZEA, Inc.
Unaudited Consolidated Statements of Operations
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------------- ---------------------------
2015 2014 2015 2014
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Revenue $ 5,442,457 $ 1,931,671 $ 14,205,693 $ 5,857,946
Cost of sales 3,290,457 692,217 8,649,308 1,998,406
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Gross profit 2,152,000 1,239,454 5,556,385 3,859,540
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Operating expenses:
General and
administrative 1,056,473 1,287,048 5,081,367 3,600,621
Sales and marketing 1,982,088 1,515,139 5,310,124 3,726,370
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Total operating
expenses 3,038,561 2,802,187 10,391,491 7,326,991
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Loss from operations (886,561) (1,562,733) (4,835,106) (3,467,451)
Other income
(expense):
Interest expense (31,191) (5,519) (86,354) (20,587)
Loss on exchange of
warrants (1,845,810) - (1,845,810) -
Change in fair value
of derivatives, net 115,904 2,250,344 (2,139,540) 5,625,555
Other income, net 2,571 3,278 5,520 7,677
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Total other
income (expense) (1,758,526) 2,248,103 (4,066,184) 5,612,645
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Net income (loss) $ (2,645,087) $ 685,370 $ (8,901,290) $ 2,145,194
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Weighted average
common shares
outstanding - basic 81,512,092 57,350,743 65,728,626 50,584,635
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Basic income (loss)
per common share $ (0.03) $ 0.01 $ (0.14) $ 0.04
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Weighted average
common shares
outstanding -
diluted 81,512,092 69,428,993 65,728,626 63,663,192
============================================================================
Diluted income (loss)
per common share $ (0.03) $ 0.01 $ (0.14) $ 0.03
============================================================================
IZEA, Inc.
Unaudited Consolidated Statements of Cash Flows
Nine Months Ended
September 30,
---------------------------
2015 2014
----------------------------------------------------------------------------
Cash flows from operating activities:
Net income (loss) $ (8,901,290) $ 2,145,194
Adjustments to reconcile net income (loss) to
net cash used for operating activities:
Depreciation 149,873 65,683
Amortization of software development costs
and other intangible assets 481,187 103,529
Loss on disposal of equipment 595 16,192
Provision for losses on accounts receivable 36,000 -
Stock-based compensation 511,202 389,002
Value of stock and warrants issued or to be
issued for payment of services 136,592 147,860
Gain on change in value of contingent
acquisition costs payable (1,734,300) -
Loss on exchange of warrants 1,845,810 -
Change in fair value of derivatives, net 2,139,540 (5,625,555)
Cash provided by (used for):
Accounts receivable (611,400) 183,968
Prepaid expenses and other current assets (465,191) (454,839)
Accounts payable 87,043 (174,386)
Accrued expenses 726,643 30,326
Unearned revenue 557,927 (156,156)
Deferred rent 1,644 60,508
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Net cash used for operating activities (5,038,125) (3,268,674)
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Cash flows from investing activities:
Purchase of equipment (145,579) (159,974)
Increase in software development costs - (206,529)
Acquisition, net of cash acquired (905,586) -
Security deposits (477) (11,067)
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Net cash used for investing activities (1,051,642) (377,570)
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Cash flows from financing activities:
Proceeds from issuance of common stock and
warrants, net - 10,932,912
Proceeds from exercise of options & warrants 12,886,950 112,800
Payments on notes payable and capital leases (46,065) (49,602)
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Net cash provided by financing activities 12,840,885 10,996,110
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Net increase in cash and cash equivalents 6,751,118 7,349,866
Cash and cash equivalents, beginning of year 6,521,930 530,052
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Cash and cash equivalents, end of period $ 13,273,048 $ 7,879,918
============================================================================
Supplemental cash flow information:
-------------------------------------------------
Cash paid during period for interest $ 5,805 $ 11,870
Non-cash financing and investing activities:
-------------------------------------------------
Fair value of warrants issued $ 51,950 $ 12,382,216
Acquisition costs payable for assets acquired $ 3,942,639 $ -
Acquisition costs paid through issuance of
common stock $ 250,000 $ -
Fair value of warrants reclassified from
liability to equity $ 6,530,046 $ 3,166,482
Acquisition of assets through capital lease $ - $ 41,339
IZEA, Inc.
Reconciliation of GAAP to Non-GAAP Operating EBITDA
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------------- ---------------------------
2015 2014 2015 2014
----------------------------------------------------------------------------
Net income (loss) $ (2,645,087) $ 685,370 $ (8,901,290) $ 2,145,194
Non-cash stock-based
compensation 188,458 142,252 511,202 389,002
Non-cash stock issued
for payment of
services 31,251 18,750 136,592 147,860
Change in the fair
value of derivatives (115,904) (2,250,344) 2,139,540 (5,625,555)
Loss on exchange of
warrants 1,845,810 - 1,845,810 -
Loss on disposal of
equipment 595 16,593 595 16,192
Gain on change in
value of contingent
acquisition costs
payable (1,734,300) - (1,734,300) -
Interest expense 31,191 5,519 86,354 20,587
Depreciation &
amortization 230,553 72,309 631,060 160,495
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Operating EBITDA (2,167,433) (1,309,551) (5,284,437) (2,746,225)
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IZEA Investor Relations
Budd Zuckerman
Genesis Select
(303) 415-0200
Email contact
IZEA Media Relations
Brent Diggins
Allison+Partners
(623) 201-5554
Email contact
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