IZEA(IZEA) - 2025 Q2 - Quarterly Results

Q2 2025 Earnings Overview Key Financial Highlights IZEA achieved its first-ever profitability in Q2 2025, with positive net income and operating cash flow, driven by strategic transformation and significant reductions in operating costs - The company achieved its first-ever profitability in Q2 2025, both from an operational and net income perspective[3] Q2 2025 Key Financial Data | Metric | Q2 2025 | Q2 2024 | | :----------------------------- | :------------- | :------------- | | Net Income | $1.2 million | $(2.2) million | | Earnings Per Share (EPS) | $0.07 | $(0.13) | | Adjusted EBITDA | $1.3 million | $(2.2) million | | Total Revenue | $9.1 million | $9.1 million | | Revenue from On-Going Operations (Excluding Hoozu) | 11% Growth | - | - Positive cash flow generated from operating activities[1][6] - Total costs and expenses decreased by 30% year-over-year to $8.4 million[6] Management Commentary CEO Patrick Venetucci highlighted Q2 2025 as another exceptional quarter for IZEA, achieving the company's first-ever profitability due to 11% growth in continuing operations, strong margins, and reduced operating costs, successfully transitioning to larger, more profitable, and recurring clients, and building a strong business pipeline for future profitable growth - Q2 was another exceptional quarter for IZEA, with 11% growth in continuing operations, strong margins, and reduced operating costs[3] - The company achieved its first-ever quarter of both operational and net income profitability[3] - Executed a strategic shift towards larger, more profitable, and recurring clients, while reducing smaller, lower-margin projects[3] - Possesses a strong and growing business pipeline expected to support profitable growth over the next twelve months[3] Detailed Financial Results Revenue Performance Total revenue for Q2 2025 was $9.1 million, a slight year-over-year increase of 0.4%, with revenue from continuing operations growing 11% after excluding the Hoozu business divested in December 2024, driven by a 13% increase in managed services revenue from continuing operations, while SaaS services revenue significantly decreased by 67% Q2 2025 Revenue Performance | Metric | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :----------------------------- | :---------- | :---------- | :--------- | :--------- | | Total Revenue | $9,133,232 | $9,093,816 | $39,416 | 0% | | Managed Services Revenue from On-Going Operations | $9,053,031 | $8,019,123 | $1,033,908 | 13% | | Hoozu Revenue | — | $831,340 | $(831,340) | (100)% | | SaaS Services Revenue | $80,201 | $243,353 | $(163,152) | (67)% | Cost and Expense Management The company demonstrated strong cost control in Q2 2025, with total costs and expenses decreasing by 30% year-over-year, primarily due to significant reductions in sales and marketing costs (down 70%) and general and administrative costs (down 14%), resulting from targeted layoffs, paused advertising, and reduced contractor fees Q2 2025 Costs and Expenses | Expense Category | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :----------------------- | :---------- | :---------- | :--------- | :--------- | | Total Costs and Expenses | $8,395,422 | $11,983,124 | $(3,587,702) | (30)% | | Cost of Revenue | $4,386,612 | $5,177,600 | $(790,988) | (15)% | | Sales and Marketing | $962,017 | $3,206,979 | $(2,244,962) | (70)% | | General and Administrative | $2,897,551 | $3,372,797 | $(475,246) | (14)% | - Sales and marketing costs decreased primarily due to targeted layoffs, a temporary pause in advertising spending, and lower overall contractor fees[5] - General and administrative expenses decreased mainly due to reduced employee costs associated with layoffs, decreased use of external contractors, and lower spending on professional services and software licenses[5] Profitability Metrics IZEA achieved significant improvement in profitability in Q2 2025, with net income reaching $1.2 million and Adjusted EBITDA at $1.3 million, marking a substantial turnaround from a loss in the prior year period and the company's first-ever profitability Q2 2025 Profitability | Metric | Q2 2025 | Q2 2024 | Change ($) | | :-------------------- | :---------- | :---------- | :--------- | | Net Income (Loss) | $1,205,068 | $(2,194,828) | $3,399,896 | | Basic EPS | $0.07 | $(0.13) | $0.20 | | Diluted EPS | $0.07 | $(0.13) | $0.20 | | Adjusted EBITDA | $1,326,460 | $(2,194,167) | $3,520,627 | Balance Sheet and Cash Position As of June 30, 2025, IZEA maintained strong liquidity with $50.6 million in cash and equivalents and no long-term debt, also achieving positive cash flow from operating activities during the quarter Key Balance Sheet Data | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Cash and Cash Equivalents | $50,643,015 | $44,644,468 | | Accounts Receivable, Net | $6,177,880 | $7,781,824 | | Short-Term Investments | — | $6,427,488 | | Total Current Assets | $57,389,059 | $60,030,040 | | Total Assets | $59,630,190 | $62,220,274 | | Total Current Liabilities | $10,250,106 | $13,434,521 | | Total Liabilities | $10,250,106 | $13,438,555 | | Total Stockholders' Equity | $49,380,084 | $48,781,719 | - Total cash, cash equivalents, and investments were $50.6 million as of June 30, 2025[7] - The company has no outstanding long-term debt[7] - Positive cash flow generated from operating activities[6] Operational Achievements IZEA achieved several operational milestones in Q2 2025, including winning new clients like T. Marzetti, Corona, and Kellogg's, producing new work for projects such as 'Minecraft The Movie' and 'F1: The Movie', enhancing its technology platform with improved workflows, analytics, and TikTok API, and recruiting Cecilia Peralta as VP of Talent Acquisition to attract top talent - Secured new business with T. Marzetti, Shampoo Hotel, Corona, Revry, Kellogg's, and Nestlé[6] - Produced new work for 'Minecraft The Movie', 'F1: The Movie', Jeep, and Acer[6] - Enhanced its technology platform with improved workflows, analytics, and TikTok API[6] - Recruited Cecilia Peralta as Vice President of Talent Acquisition to attract top talent and elevate the brand[6] Capital Allocation Strategy IZEA continued to return value to shareholders through its stock repurchase program, repurchasing 121,788 shares for a total investment of $0.3 million in Q2 2025 - Committed to repurchasing up to $10 million of its common stock in the open market[8] - Repurchased 121,788 shares at an average price of $2.29 per share for a total investment of $0.3 million in Q2 2025[8] - As of August 8, 2025, 523,268 shares have been repurchased for an investment of $1.3 million[8] About IZEA Worldwide, Inc. IZEA Worldwide, Inc. is a leading influencer marketing company providing creator economy solutions for marketers, having facilitated nearly 4 million collaborations between brands and creators since launching the industry's first influencer marketing platform in 2006 - IZEA Worldwide, Inc. is an influencer marketing company dedicated to providing creator economy solutions for marketers[10] - Since launching the industry's first influencer marketing platform in 2006, it has facilitated nearly 4 million collaborations between brands and creators[10] Use of Key Metrics and Non-GAAP Financial Measures Managed Services Bookings Managed Services Bookings measure all sales orders received in a period, net of cancellations and refunds, serving as a general indicator of business health, and while useful for operational planning and client trend analysis, it may not directly predict quarterly revenue due to contract complexities and varying revenue recognition timelines - Managed Services Bookings measure all sales orders received in a specific period, net of cancellations and refunds[11] - This metric is a general indicator of business health, used by management to plan operational staffing, identify trends in key client groups, and guide marketing activities and product development[11][12] - Due to contract complexities and varying revenue recognition timelines, this metric may not be used to predict quarterly revenue and may be subject to future adjustments[11] - Managed Services Bookings were $5.6 million in Q2 2025, compared to $10.3 million in the prior year period[6] Adjusted EBITDA Adjusted EBITDA is a non-GAAP financial measure defined as earnings or loss before interest, taxes, depreciation, amortization, non-cash stock-based compensation, gain or loss on asset disposals, and other non-recurring non-cash items, used by management as a proxy for operating cash flow and providing useful information to investors for period-over-period comparisons by excluding non-cash and non-operating transactions - Adjusted EBITDA is a non-GAAP financial measure defined in accordance with SEC rules[13] - Defined as earnings or loss before interest expense, interest income, taxes, depreciation and amortization, non-cash stock-based compensation, gain or loss on disposal or impairment of assets, and certain other non-recurring or non-cash income and expense items such as gain or loss on settlement of liabilities and transactions, and changes in fair value of derivatives[13] - This metric provides useful information to investors by primarily excluding non-cash and non-operating transactions, and facilitates consistent period-over-period comparisons[14][15] - Adjusted EBITDA was $1.3 million in Q2 2025, compared to negative $2.2 million in the prior year period[6][7][28] Revenue from On-Going Operations Revenue from On-Going Operations is a key metric that excludes revenue from the Hoozu business, which was divested in December 2024, aiming to provide investors with more accurate period-over-period comparisons of the core business - Revenue from On-Going Operations excludes revenue from Hoozu in the prior year period[15] - Hoozu was divested by the company in December 2024[15] - This metric is useful to investors and facilitates period-over-period comparisons[15] - Revenue from On-Going Operations increased by 11% year-over-year in Q2 2025[3][4][6] Unaudited Consolidated Financial Statements Consolidated Balance Sheets The Consolidated Balance Sheets show total assets decreased from $62.2 million as of December 31, 2024, to $59.6 million as of June 30, 2025, with a decline in current assets primarily due to reduced short-term investments and accounts receivable, but an increase in cash and cash equivalents, while total liabilities also significantly decreased Consolidated Balance Sheet Highlights | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Cash and Cash Equivalents | $50,643,015 | $44,644,468 | | Accounts Receivable, Net | $6,177,880 | $7,781,824 | | Short-Term Investments | — | $6,427,488 | | Total Current Assets | $57,389,059 | $60,030,040 | | Total Assets | $59,630,190 | $62,220,274 | | Total Current Liabilities | $10,250,106 | $13,434,521 | | Total Liabilities | $10,250,106 | $13,438,555 | | Total Stockholders' Equity | $49,380,084 | $48,781,719 | Consolidated Statements of Operations The Consolidated Statements of Operations reflect a significant turnaround, with IZEA achieving a net income of $1.2 million in Q2 2025, compared to a net loss of $2.2 million in Q2 2024, driven by stable revenue and a substantial reduction in total costs and expenses Consolidated Statements of Operations Highlights (Three Months Ended June 30) | Metric | 2025 | 2024 | | :-------------------------- | :---------- | :---------- | | Revenue | $9,133,232 | $9,093,816 | | Total Costs and Expenses | $8,395,422 | $11,983,124 | | Operating Income (Loss) | $737,810 | $(2,889,308) | | Net Income (Loss) Before Taxes | $1,205,068 | $(2,283,124) | | Net Income (Loss) | $1,205,068 | $(2,194,828) | | Basic EPS | $0.07 | $(0.13) | | Diluted EPS | $0.07 | $(0.13) | Consolidated Statements of Comprehensive Income (Loss) The Consolidated Statements of Comprehensive Income (Loss) show total comprehensive income of $1.17 million in Q2 2025, a significant improvement from a comprehensive loss of $2.12 million in Q2 2024, primarily attributed to the reported net income despite some unrealized losses from currency translation Consolidated Statements of Comprehensive Income (Loss) Highlights (Three Months Ended June 30) | Metric | 2025 | 2024 | | :-------------------------------- | :---------- | :---------- | | Net Income (Loss) | $1,205,068 | $(2,194,828) | | Unrealized Gain (Loss) on Securities Held | $1,694 | $92,630 | | Unrealized Gain (Loss) on Currency Translation | $(34,932) | $(16,472) | | Total Other Comprehensive Income (Loss) | $(33,238) | $76,158 | | Total Comprehensive Income (Loss) | $1,171,830 | $(2,118,670) | Revenue Details by Type Revenue details indicate that managed services revenue from continuing operations was the primary growth driver, increasing by 13% in Q2 2025, while the divestiture of Hoozu led to a 100% decrease in its revenue contribution, and SaaS services revenue significantly declined by 67% Q2 2025 Revenue Details by Type | Revenue Type | Q2 2025 | Percentage of Total Revenue (2025) | Q2 2024 | Percentage of Total Revenue (2024) | Change ($) | Change (%) | | :----------------------------- | :---------- | :---------------- | :---------- | :---------------- | :--------- | :--------- | | Managed Services Revenue from On-Going Operations | $9,053,031 | 99% | $8,019,123 | 88% | $1,033,908 | 13% | | Hoozu | — | 0% | $831,340 | 9% | $(831,340) | (100)% | | Total Managed Services Revenue | $9,053,031 | 99% | $8,850,463 | 97% | $202,568 | 2% | | SaaS Services Revenue | $80,201 | 1% | $243,353 | 3% | $(163,152) | (67)% | | Total Revenue | $9,133,232 | 100% | $9,093,816 | 100% | $39,416 | 0% | Reconciliation of GAAP Net Income (Loss) to Non-GAAP Adjusted EBITDA The reconciliation table shows IZEA's Adjusted EBITDA was $1.33 million in Q2 2025, a significant improvement from negative $2.19 million in Q2 2024, with key adjustments from net income (loss) to Adjusted EBITDA including non-cash stock-based compensation, non-cash stock for services, depreciation and amortization, and interest income Reconciliation of GAAP Net Income (Loss) to Non-GAAP Adjusted EBITDA (Three Months Ended June 30) | Metric | 2025 | 2024 | | :------------------------------------------ | :---------- | :---------- | | Operating Net Income (Loss) | $1,205,068 | $(2,194,828) | | Fair Value Adjustment of Digital Assets | — | $26,044 | | Non-Cash Stock-Based Compensation | $355,714 | $394,931 | | Non-Cash Stock for Services | $89,994 | $75,000 | | Depreciation and Amortization | $149,242 | $225,748 | | Interest Expense | $1,784 | $1,999 | | Interest Income | $(475,342) | $(634,765) | | Adjusted EBITDA | $1,326,460 | $(2,194,167) | Additional Information Conference Call Details IZEA will host a conference call on Tuesday, August 12, 2025, at 5:00 PM ET to discuss its Q2 2025 results, led by CEO Patrick Venetucci and CFO Peter Biere, with replay information available after the call - Conference call date: Tuesday, August 12, 2025[9] - Time: 5:00 PM ET[9] - Webcast link: https://viavid.webcasts.com/starthere.jsp?ei=1727723&tp_key=0f55fcfc8d[9](index=9&type=chunk) - Replay will be available approximately 3 hours after the call until 11:59 PM ET on Tuesday, August 19, 2025[9] Safe Harbor Statement This press release contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially, based on certain assumptions and describing future plans, strategies, and expectations, with IZEA undertaking no obligation to update these statements unless required by law - All statements in this press release that are not historical facts are 'forward-looking statements' intended to qualify for the safe harbor provisions established by the Private Securities Litigation Reform Act of 1995[17] - Forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially, including factors such as competitive conditions, failure of platform adoption, ability to maintain disclosure controls and internal controls, Nasdaq listing requirements, and adverse economic conditions[17] - IZEA undertakes no obligation to update any such forward-looking statements to reflect actual results or changes in expectations, except as required by law[17] Press Contact For media inquiries, please contact Matt Gray at IZEA Worldwide, Inc - Contact: Matt Gray[18] - Phone: 407-674-6911[18] - Email: ir@izea.com[18]