IZEA - NASDAQ

Good afternoon, and welcome to I

And good afternoon, everyone. I'll review operating results for the quarter ended September 30, 2023 compared to the prior year's quarter and discuss our balance sheet highlights. Total revenue for the third quarter of 2023 was $7.9 million, 27.1%, or $2.9 million lower than the prior year quarter. Our net cash loss or EBITDA was negative $1.5 million for the quarter compared to negative $0.6 million for the prior year quarter. Our net loss for the current quarter totaled $2 million, or $0.13 per share on 15.5 million shares compared to a loss of $0.9 million, or $0.06 per share on 15.6 million shares. These share counts are adjusted for our June 2023, four for one reverse split. Managed Services bookings for the third quarter totaled $7.1 million compared to $8.2 million for the prior year's third quarter, a 14.1% decline. Earlier this year, we announced that we are parting ways with one large customer, which I'll refer to as our non-recurring customer. Net bookings from this non-recurring customer were a negative $281,000 for the current quarter, as we completed remaining contract obligations and totaled $2 million in the prior year's third quarter. Stripping out bookings from this non-recurring customer, ongoing customer bookings, including existing and new customers, totaled $7.3 million in the current quarter, 18.2% above the prior year's third quarter total of $6.2 million. Our order count from ongoing customers in the current quarter was 7% below the prior year quarter. However, the average order size increased 28%, resulting in our quarterly bookings growth. Managed services revenue totaled $7.8 million during the third quarter of 2023, which was $2.6 million, or 25.2% below the third quarter of 2022. Revenue from our non-recurring customer totaled $0.9 million in the current quarter and $3.3 million in the prior year's third quarter, declining 71.8% and explaining most of the comparative revenue decline in the current quarter. Managed services revenue from our ongoing customers totaled $6.9 million during the current quarter, 3.9% lower than the previous year's third quarter, which totaled $7.2 million. The delivery time between bookings and revenues has improved to about 7.5 months from approximately nine months to the second quarter of this year. Our managed services backlog, which represents the total of unrecognized revenue for contracts that are underway as well as recent bookings and we haven't started to invoice totaled $12 million on September 30, 2023. Backlog associated with our non-recurring customer is now less than $500,000 and will be recognized in the fourth quarter. SaaS service revenues totaled $0.1 million for the third quarter of 2023, down 83.7% from $0.4 million in the prior year third quarter. We previously announced that our I

Thanks, Peter, and hello again, everyone. I wanted to provide a series of updates covering innovation, marketing, sales and industry honors pertaining to the third quarter. First, let's start with highlighting the industry innovation brought forward by our continued investments in technology. This is best represented outward through I

Thank you, Ryan. I would like to take this opportunity to reflect on the strategic vision we set forth back in December of 2019. Before the world encountered the unprecedented challenges brought about by COVID-19. Our objective was ambitious, yet clear to achieve an average annual revenue growth of 30% aiming for a milestone of $38 million in revenue by the year 2023. Although 2019 seems like it was just yesterday, the world has experienced a myriad of significant events since then. We have navigated through a global health crisis, economic instability, and a series of geopolitical conflicts that have collectively impacted the global economic landscape. Despite these macro challenges, the most significant direct impacts on our company in 2023 have come from more tangible and immediate factors. As Ryan highlighted earlier, one of the major events for us this year was the conclusion of our partnership with a major customer. This client had a disproportionate influence on our bookings and revenue streams, albeit contributing lower margins and a slower cash flow compared to our broader customer base. While this separation had an immediate effect on our financials, it was a move towards fostering a healthier, more sustainable business model focused on customers that are better aligned with I

Thank you. Ladies and gentlemen, we will now be conducting a question-and-answer session. [Operator Instructions] Our first question is from Jon Hickman with Ladenburg. Please go ahead.

Hello. Can you elaborate on these comments about the new opportunity pipeline? How is that -- how does that work into actual bookings?

Jon, the new opportunity pipeline is the opportunities that we identified with customers where we have active proposals and dollars associated to those proposals. So it's the very top of the funnel. We have a customer that comes in as a lead. We begin working with them to put a proposal in front of them -- that's the new opportunity pipeline that Ryan was speaking about.

So theoretically, those should translate into bookings?

Yes. The -- way that, that funnel works is that the new opportunity pipeline then goes into bookings, which then translates ultimately to revenue. So the question is the close rate on the new opportunity pipeline that we have, but the past two months were records for us.

On the record for the close rate?

Records for the gross amount of the pipeline and then it takes time to work through the pipeline itself and figure out whether those deals close or not.

So can you tell us now that, that unnamed big customer is out of the picture, what's the percentage of bookings that actually get done in the quarter – once upon a time it was around, I don't know, 60%, and then it dropped a lot with every customer. What is it now?

Are you talking about the amount of time for a booking to turn into revenue?

Yes.

Peter mentioned that, I believe it's about 7.5 months now.

Okay. And… Okay. And then -- so from your comments, you've actually brought somebody on as a business development person that's their only function?

Yes. We have a team member now who is squarely focused on M&A activity.

Okay. Thanks. That's it for me.

Thank you, Jon.

As there are no further questions, I would now hand the conference over to Ryan Schram for any closing comments. Ryan?

We'd like to thank everyone for joining us this afternoon. And as a reminder, you can follow all of I

Thank you. The conference of I