IZEA Worldwide, Inc. Q4 FY2025 earnings call

• At end of 2025, delivered on commitment to accelerate path to profitability, broke even, increased cash, held managed services revenue relatively flat (excluding Whozoo), and grew enterprise accounts faster than market. • Achieved net profit swing of $18.9 million. • Annual revenue $31.2 million, 13% decrease due to strategic pivot and macroeconomic headwinds. • Successfully exited international markets and off-boarded lower-margin SMB accounts. • Managed services revenue, excluding HUSU, down 2% Y/Y but enterprise accounts expanded well above industry growth rates; scaled five enterprise accounts beyond million-dollar threshold. • Restructured cost base, achieving 40% reduction in total operating expenses, driving turnaround in cash operating profit to $0.7 million. • Strategy centered on building deeper vertical expertise, refocusing SMB efforts on boutique accounts, investing in high-tier talents, active in M&A discussion, and preparing to launch proprietary technology platform infused with AI.

Annual revenue was $31.2 million, a 13% decrease. Fourth quarter revenue was $6.1 million, down 45% year-over-year. Managed services revenue, excluding HUSU, remained resilient, finishing the year down a modest 2%. Successfully scaled five enterprise accounts beyond the million-dollar threshold, each delivering double or triple-digit growth. Annual revenue breakdown: strategic pivot toward long-term profitability led to 13% decrease. Fourth quarter revenue: 45% Y/Y decline due to strategic client rationalization and delayed bookings. Managed services revenue: down 2% Y/Y but enterprise accounts expanded well above industry growth rates. Revenue contribution %: Not explicitly stated in detail but overall annual revenue was $31.2M with 13% Y/Y decrease and Q4 $6.1M with 45% Y/Y decrease.

• Expect year-over-year bookings growth in early 2026. • Anticipate return to year-over-year revenue growth in second half of 2026 as revenue reflects current mix of core enterprise engagements. • Aiming for revenue growth overall as it's a growth market. • Committed to disciplined capital allocation approach, evaluating repurchase activity in light of market conditions, liquidity needs, and alternative uses of capital.

• Government-induced disruptions as DOGE and trade policies negatively impacted government and retail accounts. • Strategic client rationalization and delayed bookings in second half of year on key enterprise accounts in conservative holiday marketing environment could impact revenue. • Differences in valuation between private and public markets could affect acquisition strategy.

Q: Can you give us a little clarity on gross margins going forward?

A: Don't give specific guidance but on track, focus on growing net revenue and keeping cost structure aligned.

Q: In total, do you expect year-over-year growth in revenues?

A: Yes, aiming for growth as it's a growth market.

Q: You mentioned several times an acquisition strategy. Do you see lots of targets out there? Is it lots of sellers, or are things tight? Can you maybe elaborate on that?

A: Very high priority, spending time speaking with M&A targets, active in marketplace, tapping into personal network and working with investment bankers, seeing good deal flow.

Q: In the past, there's been a big difference between private market values and public market values? Are valuations an issue for you?

A: Agree on difference, not an issue, sees opportunity for investors, has enough cash, will be disciplined, use various valuation methodologies.

Q: So are you interested in customers or technology?

A: More customers, acquisition strategy reinforces verticalization and enterprise accounts, and increasing service offerings to sell to enterprise client base.

Q: One of the things that would be really helpful right now is an update on how clients are thinking about IZEA in terms of their overall context.

A: Massive shift in marketing with social audiences larger than television audiences, marketers struggling to be social first, IZEA helps connect brands with creators.

Q: When I looked at the enterprise value today relative to the cash, it was quite low. Is that where you look in terms of deciding when to deploy some of that buyback, given the fact that you have M&A opportunities?

A: Proponents of buybacks, believe in upside, will continue to do buybacks at right price, looking at market holistically, sees gap between private and public market valuations as opportunity for investors