IZEA Worldwide, Inc. Q2 FY2026 earnings call

Strategic Transformation Progress

• The company is undergoing a transformation from a small and medium business (SMB) focused organization to an enterprise focused creator marketing business, which has taken longer to fully mature than originally expected.
• The transition away from legacy non-core SMB customers is now substantially complete, leaving IZEA with a more focused enterprise client portfolio than at any prior point in its history.

Customer and Pipeline Development

• Despite macroeconomic headwinds causing delayed marketing decisions and reduced/postponed programs from large clients, relationships with enterprise customers remain exceptionally strong.
• Client engagement is at the highest level since CEO Patrick Venetucci joined the company, with broader and deeper executive relationships and lower account risk than seen in years.
• The company now holds a well-defined pipeline of large scalable enterprise opportunities, including multiple opportunities projected to generate over $1 million in annual revenue each, with improving visibility into future deals.

Operational and Technology Improvements

• The sales organization has been realigned to match the enterprise buying journey, with strengthened leadership, new talent onboarding, and improved coordination between sales and account management.
• Marketing has become a more impactful growth engine, with industry-specific campaigns generating high-quality enterprise leads and expanded brand awareness for IZEA's capabilities, including the public launch of ZEA.
• Substantial progress was made on the new ZED technology platform, with enhanced capabilities added for brand safety, analytics, creator workflows, platform intelligence, and overall platform stability, creating a stronger foundation for future innovation.
• The company streamlined its organizational cost structure to align with current market conditions, while maintaining high employee engagement and extremely low voluntary turnover.

Acquisition Strategy

• IZEA continues to evaluate acquisition opportunities to accelerate its enterprise strategy, expand capabilities, and strengthen competitive positioning in the creator economy.
• The company's current acquisition pipeline is the most active it has ever been, with management remaining disciplined and only pursuing transactions that deliver long-term shareholder value.

IZEA only discloses results for its single core managed services segment for the creator marketing business in this call. Managed services bookings for Q2 2026 totaled $4.5 million, representing a 19% decline year-over-year, accounting for 100% of the firm's disclosed booked revenue. Managed services revenue for the quarter was $5.8 million, a 36% decrease from the $9.1 million reported in the prior year quarter. Gross margins remained relatively consistent with the prior year period despite the lower revenue level. Operating expenses for the entire company (aligned to the single core segment) were $3.3 million, an 18% decline year-over-year. Adjusted EBITDA for the segment (and company) was negative $0.4 million, down from positive $1.3 million in the prior year quarter.

Management expects improving business activity in the second half of 2026, supported by encouraging contract award activity received in July 2026 after the end of Q2. Softened bookings in Q2 2026 are expected to impact near-term revenue trends due to the average 7-month lag between contract signing and full revenue recognition, while benefits of the improving July booking activity will likely be recognized gradually over multiple quarters as campaigns launch. The company maintains confidence in its long-term growth trajectory as a leading enterprise creator marketing company, once macroeconomic conditions eventually normalize. No formal full-year 2026 financial guidance was explicitly reaffirmed or revised from prior periods in this call.

• Macroeconomic uncertainty has increased caution among enterprise marketers across all major industries IZEA serves, leading to delayed contracting, postponed or reduced marketing programs, and uneven customer commitment pacing.
• The ongoing strategic transition from an SMB-focused to enterprise-focused business required operational changes that have taken longer to fully mature than originally anticipated, which negatively impacted Q2 2026 financial results that missed original internal expectations.
• A range of external client-specific factors, including mergers, organizational restructurings, product timing shifts, procurement consolidation, and tighter financing conditions, have negatively impacted near-term revenue and booking performance, which are largely outside of IZEA's control.
• All forward-looking statements about long-term growth, acquisition opportunities, and market traction are subject to inherent uncertainties, with detailed risk factors disclosed in IZEA's regular SEC filings.

There were no participant questions submitted during the open Q&A session of this call, so no exchanges are summarized.