IZEA Reports Record Fourth Quarter and Full Year 2015 Results
Q4 Revenue up 154% to $6.3 Million; Full Year Revenue up 146% to $20.5 Million
/EINPresswire.com/ -- ORLANDO, FL--(Marketwired - March 29, 2016) - IZEA, Inc. (NASDAQ: IZEA), operators of IZEAx, the premier online marketplace connecting brands and publishers with influential content creators, reported record results for the fourth quarter and year ended December 31, 2015.
Fourth Quarter Financial Highlights vs. the Year-Ago Quarter
- Revenue increased 154% to a record $6.3 million, driven by Sponsored Social revenue up 84% to $4.0 million and Content revenue of $2.3 million.
- Bookings up 167% to a record $7.3 million, with the majority of bookings representing repeat customers.
- New opportunity pipeline, a representation of new client proposals generated within the quarter, increased 55% to $24.8 million.
2015 Financial Highlights
- Revenue increased 146% to a record $20.5 million compared to 2014.
- Organic growth of Sponsored Social revenue increased 92% to a record $12.3 million vs. 2014.
- Content revenue of $8.0 million added in 2015 as a result of the Ebyline acquisition.
- Bookings increased 171% to a record $24.5 million compared to 2014.
- Completed a $12.9 million warrant conversion with 81.5% participation.
- Cash at December 31, 2015 was $11.6 million, receivables totaled $3.9 million and unused credit line of $5.0 million.
2015 Operational Highlights
- Acquired Ebyline, a virtual newsroom platform for freelance journalists and news publishers, adding a network of more than 12,000 professional writers and journalists to the IZEA ecosystem.
- Began sales operations in Canada in September. In March of 2016, IZEA formed IZEA Canada, Inc, a wholly owned subsidiary based in Toronto, to expand the company's footprint in the region.
- Grew the IZEA staff from 94 to 121 full time team members. Added senior team members in sales and leadership including Chris Staymates, VP of Engineering and Sandra Carbone, General Counsel.
- Secured IZEAx licensing agreements with partners including a global top-10 media company and a multinational advertising agency in the fourth quarter.
- Launched IZEA Score Suite Beta, Content Profiles, IZEA for iOS, and SocialLinks Beta with eBay partnership and technology integration.
- Grew IZEAx network to 629,000 user connections, reaching 3.5 billion aggregate fans and followers.
- Began the Nasdaq uplisting process. The company began trading on Nasdaq in February 2016.
- Signed first individual customer contract in excess of $1 million.
Management Commentary
"2015 was a transformational year with record topline revenue driven by strong organic growth of Sponsored Social revenue, the acquisition of Ebyline, continued technology innovation and increased efficiency throughout the organization," said Ted Murphy, IZEA's Chairman and CEO. "These operational and financial developments strengthened our position as a market leader."
"Looking ahead, we will continue to invest in growing our sales organization and augmenting our engineering team. In addition, we are actively pursuing accretive acquisition opportunities that can both grow revenue and increase our penetration in niche markets. We remain on track to achieve $100 million in annual bookings by the end of 2018."
2015 Financial Results
Revenue in 2015 increased 146% to $20.5 million compared to $8.3 million in 2014. The increase is primarily attributable to organic growth of Sponsored Social revenue, up 92% to $12.3 million.
Gross profit in 2015 increased 50% to $8.2 million versus $5.5 million in 2014. The increase in gross profit is due to the increase in revenue.
Operating expenses in 2015 were $15.5 million, compared to $10.1 million in 2014. The increase in operating expenses were due to increased investments in sales, marketing and engineering, as well as increased expenses associated with the acquisition of Ebyline.
Net loss in 2015 was $11.3 million or $3.03 per diluted share, as compared to a net income of $3.2 million or $1.00 per diluted share in 2014. The net loss is primarily due to the difference in the change in fair value of derivatives of $11.8 million between 2014 and 2015.
Adjusted EBITDA (a non-GAAP metric defined below) was a loss of $7.1 million compared to adjusted EBITDA loss of $3.7 million in 2014. The change in adjusted EBITDA was primarily due to investments in incremental human capital and marketing, as well as legal fees and settlement costs. Adjusted EBITDA as a percentage of revenue in 2015 improved to negative 35% from negative 45% in 2014.
Cash and cash equivalents at December 31, 2015 totaled $11.6 million compared to $6.5 million at December 31, 2014. The increase in cash was primarily due to warrant conversions, with net proceeds to the company of $12.9 million, completed in the third quarter of 2015.
Conference Call
IZEA will hold a conference call to discuss its fourth quarter and full year results today at 5:00 p.m. Eastern time. Management will host the presentation, followed by a question and answer period.
Date: Tuesday, March 29, 2016
Time: 5:00 p.m. Eastern time (2:00 p.m. Pacific time)
Dial-in number: 1-201-689-8471
Conference ID: 13633328
Webcast: http://public.viavid.com/index.php?id=118768
Please call the conference telephone number five minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios Group at 1-949-574-3860.
A replay of the call will be available after 8:00 p.m. Eastern time on the same day through April 5, 2016.
Replay number: 1-858-384-5517
Replay ID: 13633328
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 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 revenues, gross profit margin and net operating loss for the 2015 fiscal year. These forward-looking statements are based largely on IZEA's 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 content and social sponsorship segment in which IZEA operates, failure to popularize one or more of the marketplace platforms of IZEA, inability to obtain additional capital, 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 respect will in fact occur. Please read the full statement and disclosures here: http://corp.izea.com/safe-harbor-statement.
IZEA, Inc.
Consolidated Balance Sheets
December 31, December 31,
2015 2014
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Assets
Current:
Cash and cash equivalents $ 11,608,452 $ 6,521,930
Accounts receivable, net of allowance for
doubtful accounts of $139,000 and $0 3,917,925 2,156,378
Prepaid expenses 193,455 190,604
Other current assets 16,853 61,424
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Total current assets 15,736,685 8,930,336
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Property and equipment, net of accumulated
depreciation of $445,971 and $239,521 596,008 588,919
Goodwill 2,468,289 -
Intangible assets, net of accumulated
amortization of $730,278 and $0 1,806,191 -
Software development costs, net of accumulated
amortization of $207,514 and $85,331 813,932 483,544
Security deposits 117,946 100,641
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Total assets $ 21,539,051 $ 10,103,440
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Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 995,275 $ 310,611
Accrued expenses 908,519 394,617
Unearned revenue 3,584,527 1,767,074
Current portion of deferred rent 14,662 -
Current portion of capital lease obligations 7,291 54,376
Current portion of acquisition costs payable 844,931 -
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Total current liabilities 6,355,205 2,526,678
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Deferred rent, less current portion 102,665 106,531
Capital lease obligations, less current portion - 7,291
Acquisition costs payable, less current portion 889,080 -
Warrant liability 5,060 3,203,465
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Total liabilities 7,352,010 5,843,965
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Stockholders' equity:
Common stock, $.0001 par value; 200,000,000
shares authorized; 5,222,951 and 2,885,424,
respectively, issued and outstanding 522 289
Additional paid-in capital 48,436,040 27,200,536
Accumulated deficit (34,249,521) (22,941,350)
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Total stockholders' equity 14,187,041 4,259,475
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Total liabilities and stockholders' equity $ 21,539,051 $ 10,103,440
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IZEA, Inc.
Consolidated Statements of Operations
Three Months Ended Twelve Months Ended
December 31, December 31,
----------------------------------------------------
2015 2014 2015 2014
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Revenue $ 6,262,233 $ 2,464,328 $ 20,467,926 $ 8,322,274
Cost of sales 3,587,608 847,427 12,236,916 2,845,833
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Gross profit 2,674,625 1,616,901 8,231,010 5,476,441
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Operating expenses:
General and
administrative 2,435,748 1,317,576 7,517,115 4,918,197
Sales and marketing 2,626,091 1,478,077 7,936,215 5,204,447
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Total operating
expenses 5,061,839 2,795,653 15,453,330 10,122,644
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Loss from operations (2,387,214) (1,178,752) (7,222,320) (4,646,203)
Other income (expense):
Interest expense (29,507) (4,788) (115,861) (25,375)
Loss on exchange of
warrants - - (1,845,810) -
Change in fair value
of derivatives, net 5,720 2,219,659 (2,133,820) 7,845,214
Other income, net 4,120 2,751 9,640 10,428
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Total other income
(expense) (19,667) 2,217,622 (4,085,851) 7,830,267
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Net income (loss) $(2,406,881) $ 1,038,870 $(11,308,171) $ 3,184,064
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Weighted average common
shares outstanding -
basic 5,118,139 2,874,882 3,737,897 2,616,354
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Basic income (loss) per
common share $ (0.47) $ 0.36 $ (3.03) $ 1.22
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Weighted average common
shares outstanding -
diluted 5,118,139 3,058,992 3,737,897 3,170,003
============================================================================
Diluted income (loss)
per common share $ (0.47) $ 0.34 $ (3.03) $ 1.00
============================================================================
IZEA, Inc.
Consolidated Statements of Cash Flows
Twelve Months Ended
December 31,
---------------------------
2015 2014
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Cash flows from operating activities:
Net income (loss) $(11,308,171) $ 3,184,064
Adjustments to reconcile net income (loss) to net
cash used for operating activities:
Depreciation 206,670 109,823
Amortization of software development costs
and other intangible assets 852,461 95,548
Loss on disposal of equipment 595 16,192
Provision for losses on accounts receivable 163,535 -
Stock-based compensation 705,466 538,263
Value of stock and warrants issued or to be
issued for payment of services 177,842 166,610
Gain on change in value of contingent
acquisition costs payable (1,834,300) -
Loss on exchange of warrants 1,845,810 -
Change in fair value of derivatives, net 2,133,820 (7,845,214)
Changes in operating assets and liabilities, net
of effects of business acquired:
Accounts receivable (1,608,561) (496,576)
Prepaid expenses and other current assets 83,244 (72,299)
Accounts payable 141,325 (506,446)
Accrued expenses 582,851 29,163
Unearned revenue 1,783,559 474,846
Deferred rent 896 92,352
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Net cash used for operating activities (6,072,958) (4,213,674)
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Cash flows from investing activities:
Purchase of equipment (187,160) (517,113)
Increase in software development costs (452,571) (206,529)
Acquisition, net of cash acquired (1,072,055) -
Security deposits 1,248 (54,067)
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Net cash used for investing activities (1,710,538) (777,709)
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Cash flows from financing activities:
Proceeds from issuance of common stock and
warrants, net - 12,001,810
Proceeds from exercise of options & warrants 12,937,327 112,800
Stock issuance costs (12,933) (1,067,812)
Payments on notes payable and capital leases (54,376) (63,537)
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Net cash provided by financing activities 12,870,018 10,983,261
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Net increase in cash and cash equivalents 5,086,522 5,991,878
Cash and cash equivalents, beginning of year 6,521,930 530,052
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Cash and cash equivalents, end of year $ 11,608,452 $ 6,521,930
============================================================================
IZEA, Inc.
Reconciliation of GAAP to Non-GAAP Adjusted EBITDA
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
----------------------------------------------------
2015 2014 2015 2014
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Net income (loss) $(2,406,881) $ 1,038,870 $(11,308,171) $ 3,184,064
Non-cash stock-based
compensation 194,264 149,261 705,466 538,263
Non-cash stock issued
for payment of
services 41,250 18,750 177,842 166,610
Change in the fair
value of derivatives (5,720) (2,219,659) 2,133,820 (7,845,214)
Loss on exchange of
warrants - - 1,845,810 -
Loss on disposal of
equipment - - 595 16,192
Gain on change in value
of contingent
acquisition costs
payable (100,000) - (1,834,300) -
Interest expense 29,507 4,788 115,861 25,375
Depreciation &
amortization 428,071 34,659 1,059,131 195,154
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Adjusted EBITDA (1,819,509) (973,331) (7,103,946) (3,719,556)
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Investor Relations for IZEA:
Ronald A. Both
Liolios Investor Relations
(949) 574-3860
Email contact
Media Relations for IZEA:
Brent Diggins
Allison+Partners
(623) 201-5554
Email contact
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