IZEA - NASDAQ

Greetings, and welcome, everyone, to the I

Good afternoon, everyone, and welcome to I

Thank you, Ryan, and good afternoon, everyone. I'll review operating results for the quarter ended December 31, 2023, compared to the prior year's quarter and discuss certain balance sheet highlights. Total revenue for the fourth quarter of 2023 was $8.9 million, 1% higher than the prior year quarter. Managed Services revenue totaled $8.8 million during the fourth quarter of 2023, which was $0.4 million or 4.2% higher than the fourth quarter of 2022. Revenue from our nonrecurring customer totaled $0.4 million in the current quarter and $1.7 million in the prior year's fourth quarter. Revenue from our ongoing customers totaled $8.4 million during the quarter, 25.1% higher than the previous year's fourth quarter, which totaled $6.7 million. This increase came from comparatively stronger bookings from our ongoing customers in the second and third quarters of 2023. Managed Services bookings for the fourth quarter totaled $7.6 million compared to $7.9 million for the prior year's fourth quarter, a 2.8% decline. This decline was primarily due to lower bookings in the current quarter from our nonrecurring customer. Our transition away from this major customer, which we announced in early 2023 is now complete. The average delivery time between bookings and revenues stands at about 7.5 months, which has shortened from approximately nine months previously. Our Managed Services backlog, which represents the total of unrecognized revenue for contracts that are underway as well as recent bookings that we haven't started to invoice totaled $11.9 million on December 31, 2023. SaaS services revenue totaled $0.1 million in the fourth quarter of 2023, down 70% from $0.4 million in the prior year quarter. We successfully transitioned away from our I

Thanks, Peter. Over the past year, our team at I

Thank you, Ryan. In December of 2019, we embarked on an ambitious journey to significantly expand our company over a three year period. We set our sights on achieving an average annual revenue growth rate of 30%, with the objective of reaching a revenue landmark of $38 million by 2023. Our revenue for the full year of 2019 stood at $18.9 million, and our target was to double this figure within three years. We ended 2023 at $36.2 million in revenue, just shy of that $38 million goal. That said, we delivered $41 million in revenue in 2022, well above our target for that year. When measured over a three year period from 2020 to 2023, we generated $107 million in revenue versus a cumulative three year target of $87 million. Growth does not always follow a straight path, especially in an industry that is as dynamic as ours. Over any given time frame, there will undoubtedly be fluctuations. Although we track and communicate our progress in quarters and years, concentrating exclusively on these intervals may result in a narrow perspective. Over the past three years, I

[Operator Instructions] And our first question comes from the line of Jon Hickman with Ladenburg Thalmann. Please proceed.

Ted, can you hear me okay?

I sure can.

Can you elaborate a little bit on your gross margins going forward?

So, we're expecting to see those improve because we have parted ways with that one large client. However, it's important to understand that there is a mix of gross margins in the U.S. versus things that are coming out of APAC and our emerging markets team. So as those bookings and the revenue continues to increase there, it will have some impact on margins. But we don't think that they'll be as depressed as they were when we had that one large customer.

And the margins, as the SaaS revenues grow, shouldn't that help margins?

Yes. As the SaaS revenue grows, that will also contribute to more positive margins.

Okay. And could you opine a little bit about operating expenses?

You're going to see the operating expenses rise with some of the acquisitions that we've done, but we do intend those to be accretive. So we're working to optimize those, it's going to take a little bit of time to get through that. But I think in the back half, you're going to see some of those cost optimizations come to fruition.

Okay. So you are expecting revenue contributions from the two acquisitions in Q1 and beyond?

Yes. Yes. Yes. And you can see in our filings, there are some disclosures about the size of revenue from Hoozu and you can see some of the impacts on software licensing in December from

Okay. So maybe this is a question for Peter. But as I model things out, given revenues improving somewhat to the high 40% range -- I mean gross margins in the high 40% range. It would appear to me that with your current kind of operating structure. Do you need something like $47 million -- $46 million, $47 million to breakeven on an adjusted EBITDA. Does that sound feasible in the ballpark?

Well, no, I don't want to give an estimate on what our breakeven point is. That's not unreasonable view. I think you might -- depends on how fast we acquire revenue and its profitability. If we get somebody that's adding to our bottom line right away, that's good, but we still have a ways to go to be past our breakeven in the U.S. So I'm not going to -- I don't want to validate your numbers specifically, but it's within a reasonable range, maybe on the low side.

Okay. Ted, and if you hit your $76 million in three years, will there be bottom line profitability?

Our goal is to get to profitability within that three years, yes.

Okay. Thanks. That's it for me.

Thank you.

Thank you. Ladies and gentlemen, there are no further questions at this time. I'd like to hand the call back to Ryan Schram for closing remarks.

Thanks, Joe, and thanks to everyone for joining us this afternoon. And as a friendly reminder, if you like more information on I