IZEA - NASDAQ

Good afternoon, ladies and gentlemen and welcome to I

Good afternoon, everyone, and thanks for joining us for I

Thank you, Ryan, and good afternoon, everyone. I'd like to review operating results and provide additional context for the quarter. Revenue for the third quarter of 2022 totalled $10.8 million, 40% higher than in Q3 of 2021. Managed services revenue totalled $10.5 million during the quarter growing 44% over the prior year quarter. We recorded $350,000 in net revenue from our SaaS offerings during the current quarter down 23% from the prior year quarter. Managed services revenue grew by $3.2 million quarter-over-quarter, primarily due to revenues on one large customer contract, which grew by $2.6 million. Revenues from all other customers grew approximately 10% compared to Q3 of 2021 as previously announced, managed services bookings fell by 27% to $8.2 million in the third quarter of 2022 as we saw, the contracting process slowed down over the summer months. Bookings on our large customer contract represented 57% of the total quarter-over-quarter decline. So bookings for all other customers declined a more moderate 17% in Q3 over the prior year quarter. September bookings were strong this year delivering our second best monthly bookings total and we ended the quarter with a solid pipeline of opportunities. There is a lag between bookings and revenue recognition. Some of the slowness over the summer is reflected in the current quarter revenue total, but a higher percentage will manifest in Q4 2022 and early 2023 revenues. Our managed services backlog, which represents the total of unrecognized revenue for contracts that are underway as well as recent bookings that have yet to begin invoicing totaled $19.2 million on September 30, 2022. We expect to record most of this backlog as revenue in the following three quarters. SaaS services revenue consisting of license fees, self-service, marketplace spend fees, and other fees declined by 102,000 in the current quarter or about 23% compared to the prior year quarter. Total licensee counts on all platforms declined by 22% in the current period. Revenue from license fees declined by 10% in the comparative quarter while gross marketplace spend fees fell 82%. Gross billings for SaaS services fell by 23% quarter-over-quarter, mostly due to a sharp decline in marketplace spend, including fewer marketers and lower average spending levels. Our cost of revenue was $6.6 million in the third quarter of 2022 or 61% of revenue compared to $4 million or 52% of revenue in the prior year quarter. Accordingly, our gross margin in the third quarter averaged 39% compared to 48% in the prior year quarter. The increase in the cost of revenue is primarily due to a higher delivery cost on one large customer contract, which made up 31% of total revenues during the current quarter. This significant contract aside, the cost of revenue for our other customer contracts was within range of recent historical averages. Expenses other than the cost of revenue totaled $5.6 million for the third quarter compared to $5.1 million for the prior year quarter. Sales and marketing costs total $2.5 million during the third quarter, 261,000 or 11.7% higher quarter-over-quarter. Additional headcount and related payroll costs associated with driving customer growth were partly offset by lower sales commissions and that vary with bookings. General and administrative costs total $2.9 million during the third quarter, 256,000 or 9.7% higher quarter-over-quarter due primarily to higher professional fees associated with changing our auditor. Our net loss was $906,000 for the third quarter of 2022 or $0.01 per share compared to a net loss of $1.4 million in the prior year quarter or $0.02 per share. Adjusted EBITDA was negative $591,000 for the third quarter this year compared to a negative $926,000 for the prior year quarter. As of September 30, 2022, we had $67 million in cash and investments down from $75.4 million at the beginning of the year, lower partly due to negative $2.5 million of adjusted EBITDA for the year to day period, with the rest of the change tied up in working capital, mostly due to timing difference of payments and receipts related to our large customer contract. We made $447,000 in interest income on our investments during the quarter. As previously announced, we terminated our at the market equity offering during the quarter. We had not raised any capital through the ATM and believe that we are well capitalized for our current growth strategy. Lastly, we do not have any debt on our balance sheet. With cash on hand and liquidity from our investment portfolio as required, we are in a solid position to execute on business growth and opportunities that may lie ahead. With that, I'll turn the call back over to Ryan.

Thanks, Peter, and hello again, everyone. There's no question we're operating in an uncertain environment and that businesses across all sectors continue to get tested in new and different ways. When it comes to how I

Thank you, Ryan. We have seen a tremendous amount of market change over the past two quarters with businesses of all sizes in all sectors impacted by the slowing of the global economy. Even our largest clients are now showing signs that they are not immune to the economic fallout and there have been negative implications for I

Thanks so much Scott, and thank you to everyone joining us this afternoon. As a reminder, all of I