Greetings, and welcome to IZEA Worldwide, Inc. Fourth Quarter 2020 Earnings Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder the conference is being recorded. I will now like to turn the conference over to your host, Ryan Schram, President and Chief Operating Officer.

Good afternoon, and welcome to IZEA’s Q4, 2020 earnings call. I’m Ryan Schram, President and Chief Operating Officer at IZEA. And joining me today is IZEA’s Interim Chief Financial Officer, LeAnn Hitchcock; and IZEA’s Chairman and CEO, Ted Murphy. Thanks for being with us this afternoon. Earlier today, the company issued a press release with details pertaining to our fourth quarter performance for 2020. If you like to review those details, all of investor information can be found on our Investor Relations website at izea.com/investors. Before we begin, please take note of the Safe Harbor paragraph that appears at the end of the press release covering the company's financial results and be advised that during the course of today's earnings call, our management team will discuss IZEA's business outlook and make forward-looking statements. These statements are predictions based on our team's expectations as of today that are subject to inherent risks and uncertainties and should not be unduly relied upon. Actual events, results or trends could differ materially from our forecast due to a number of factors, including those mentioned in our most recently filed periodic reports with the SEC. The company and our management team assume no obligations to update any forward-looking statements made in today's call. In addition, our update today will refer to the key metrics regarding gross billings and the non-GAAP financial measures regarding adjusted EBITDA. A detailed explanation of these measures is disclosed in our earnings release and in our most recent Form 10-K available under SEC filings in the Investors section of izea.com. With the appropriate disclosures out of the way, I'm pleased to introduce my colleague and IZEA's Interim Chief Financial Officer, LeAnn Hitchcock. LeAnn?

Thank you, Ryan. And good afternoon everyone. For the three months ended December 31, 2020, IZEA’s total revenue was $6.4 million, a 10% increase compared to Q4 2019 with $5.9 million coming from our Managed Service business and $537,000 coming from our SaaS offerings. We saw a 17% increase totaling $842,000 in our Managed Service revenue and a $274,000 decline in our SaaS Services revenue in Q4 2020 as compared to Q4 2019. As we have previously announced, our bookings of Managed Services increased approximately 48% in Q4 2020, compared to Q4 2019. As a result, our revenue for Managed Services not only increased by 17% compared to the comparable quarterly period in 2019, it also increased by $2.3 million or nearly 67% compared to our Managed Service revenue in Q3 2020. Larger customers are increasing their marketing spend with us and more brands are shifting more of their marketing dollars to influencer marketing campaigns. For Q4 2020, our gross billings increased $8 million compared to $7.8 million in Q4 2019. This 2% increase in gross billings was primarily due to the $842,000 increase in Managed Service revenue offset by the decline in marketplace spend and license fees from SaaS customers. The reduction in SaaS gross billings due partially to customer churn, lower fees and changed spending habits due to COVID uncertainties and other factors, resulted in the $274,000 decrease in SaaS Services revenue in Q4 2020 as compared to Q4 2019. Our cost of revenue exclusive of amortization was approximately $2.7 million in both quarterly periods. But as a percentage of revenue, our cost of revenue exclusive of amortization has improved from 46% in Q4 2019 to 43% in Q4 2020, primarily due to the reduction in personnel and travel related costs on the fulfillment of our customer marketing…

Thank you, LeAnn. It's hard to reconcile the last year of our lives, both personally and professionally at times. In late March, 2020, there was unprecedented uncertainty, not just within our business and the greater Creator Economy, but of course the world at large. When we sent our team members across North America to work-from-home on Friday, March 13, we thought it would be 15 days to flatten the curve. A minor distraction to end our fiscal quarter perhaps. It's almost laughable now looking back to see how naïve we all were as a society, as we faced, what may likely be the largest global challenge of our generation. What transpired after the week of March 13 was horrifying, our clients canceled our froze campaigns. All new business activity was stopped in its tracks. And suddenly, the realization that IZEA could be highly vulnerable amidst all the broader chaos became a very real fear for us. But where other companies panicked and suffered as a result, we put our heads down and got to work. We focused on controlling the things that we could control within the dynamics of a once-in-a-lifetime pandemic, creating content, sharing thought leadership, developing new products and inspiring brand investment through a stable hand. I personally can say, I have never worked so hard while at the same time being so terrified about the unknown and much of our staff of course felt the same. And along the way, it hasn't been easy. In fact, nothing about the last 54 weeks has been easy on any of us. Our team members all took temporary pay cuts so as to avoid laying off full-time team members who needed health insurance, and income during the height of the pandemic. Some of us got sick, but thankfully recovered. Some…

Thank you, Ryan. Before I begin, I would like to share a heartfelt thanks to LeAnn for her years of service to IZEA. As previously announced tomorrow is LeAnn’s last day serving as Interim CFO. She has been an incredible CFO for this company and is one of the most amazing human beings I've ever had the pleasure to work alongside. You will be greatly missed, and we appreciate all that you have done for this organization and our shareholders. Speaking of our shareholders, I want to thank you as well without your support and belief in this team and our company, we would not be in the position we are today, 2020 was no doubt the most challenging year in the history of our company, but it was also among the most rewarding and transformational periods we've ever experienced. Last year in the middle of the pandemic, we launched two new products, BrandGraph and Shake. At a time where many companies were laying off staff, shutting down new initiatives and retreating the safety. Instead of pulling back on research and development, we increased the size of our engineering team, dramatically reduced our licensing fees and got much more aggressive with our marketing initiatives to build back our sales momentum. IZEA’s vision has always been to connect the buyers and sellers who drive the Creator Economy forward. Our goal is for both parties to financially benefit by transacting and collaborating with each other. Our intent is to make IZEA’s technology platforms available and affordable for the broadest base of customers possible. The introduction of IZEAx Discovery, lower pricing tiers in IZEAx Unity Suite and of course the introduction of Shake are all part of that vision, but we are still in the early days of what we believe is a…

[Operator Instructions] And our first question is from Jon Hickman with Ladenburg Thalmann. Please proceed.

Can I just ask a couple of clarifications? Hello?

Go ahead.

Okay. just a couple of clarification questions first. So, bookings in Q4 were $8 million total?

They were $8.3 million in total.

$8.3 million. Okay. And did you break out and managed services in that or not?

Managed Services was $6.6 million of that.

Okay. Thank you. And then can you maybe this is a question for LeAnn. What's the share count now with the $33 million – $34.3 million raise in the last couple of months?

We are at 59 million shares outstanding currently.

59 million, okay. And then as you said you're going to spend 3x in marketing from last year. Is that what you meant to say?

Yes, correct. [indiscernible] sales and marketing that is just marketing. And that's correct. That's going to ramp up over time. So, it's not the entire sales and marketing line.

So, do you have a, like a target for like how much of sales are you going to spend in operating? And then….

We haven't set a specific target for that now.

Okay. So then elaborate a little more, you're going to – you're introducing a new version of Discovery?

Correct, correct.

We'll be launching a new version of Discovery that will bring in aspects of Shake and of BrandGraph into that Discovery experience.

Okay. And what about like an overhaul of like as – are we looking forward to IZEAx 4.0?

That will be kind of part of a larger initiative around idea IZEAx 4.0. We're going to be breaking those out into different releases over the course of the year. So, we're focusing first on the Discovery component, which touches BrandGraph, Shake, IZEAx Discovery and it's also part of IZEAx Unity Suite. And then we'll have subsequent releases that are dealing more on the workflow side that will give some peaks into in this quarter.

Okay. And then just from a modeling standpoint, LeAnn said that you are looking forward to increased revenues from 2020, any help with like percentages or sequential, quarterly increases, anything else you can touch?

We're not really giving guidance. If you look at the release that we put out yesterday, we are now past a 100% growth in bookings for Managed Services here in Q1. Our Q2 pipeline looks very strong as well. But we're still, very much aware that we're in the middle of a pandemic and we're taking each quarter as it comes right now.

And then so do you think you have enough capital to do what you want to do?

I think that we've got a pretty strong balance sheet right now. Yes.

Okay. I will leave someone to ask questions.

Thank you, Jon.

And our next question is from Sean Gibney with Alliant, please proceed.

Hi everyone. And thanks for taking my question here and Ted congratulations on the extreme growth and with you and the team, obviously very impressive. Kind of one, and I definitely wanted to touch on a couple of the items that the previous individual spoke to, but I think one of the kind of questions I've had for a while is, does any of that marketing spend for Shake going to be spent on Shake as to say, are you going to target those influencers that are on Shake to target than other influencers using your platform?

So that marketing spend is spread across Shake, BrandGraph and IZEAx Discovery. And we're using that on both sides of the Shake marketplace, both to attract new creators to sign up to the platform as well as driving marketers to hire those creators. I think one of the things that's really unique about Shake and what we can do with it is that we can actually use the influencers themselves in our marketing. So, in a lot of the paid media that you see through social channels, we are actually featuring the individual creators and driving traffic to specific shake listings.

Got it. And I guess, it's really starting to just ramp up now where you're seeing sort of some – a lot of revenue come from Shake. But has there been any pushback from any individuals signing up for shake any of the individual influencers on sort of the spread? I think – or can you comment on sort of what you guys are taking for post, I think I had read 15%?

Yes. Our fee is 15% inclusive of the credit card fees, which is significantly less than what you see on other competing platforms.

Got it. I’ll let another individual jump on here. Thank you very much Ted.

Thank you.

And our next question is from [indiscernible] who is a private investor.

Good evening everyone. Great information, Ted and team. I was here for the last four years as an individual investor. So, one thing which I want to ask is pretty layman question, and I keep wondering, the competition with Fiverr, how IZEA stands out with Fiverr? And with respect to the stock price difference, how do you plan to take over the stock price to that level?

Thank you. If you look at the type of inventory that is in a platform like Fiverr versus what's in Shake, I think one of the things that you'll see right away is that the quality of the inventory, the associated pricing with that inventory is just dramatically different. We have people in there that are listing Shakes for thousands to tens of thousands of dollars that have millions or tens of millions of followers. And that is just not something that you see inside of the Fiverr platform.

So, you are counting on Shake to take IZEA to that next level?

No, it's really a combination of all of the platforms, and that's one of the things that I'm most excited about is that all of these are working together. The people that are in Shake are also largely in IZEAx. The type of advertiser that might sign up to license our enterprise platform may also want to hire somebody that they could find in Shake or we may have an advertiser who can't afford an enterprise license for IZEAx Unity Suite and May just want to do a $100 shake or license IZEAx discovery. So, the real goal here is to be able to have an offering for the entire spectrum of potential buyers, whether that's one of our Fortune 10 customers down to the very small agencies, and businesses that are going to hopefully be much larger agencies and businesses in the future.

Sure. Sure, thank you. Thank you, Ted.

Thank you.

And we have a follow-up question from Jon Hickman with Ladenburg Thalmann.

Ted, I want to put you on the spot here, but could you comment on kind of the emerging markets for NFTs and if Shake has a place in that world?

So, I have certainly been following the developments around NFTs and have sold an FTA myself. I think that it is a very interesting space that has a lot of potential opportunity around it, but also a lot of lot of questions right now, and I think a lot of inefficiencies. I sold my NFT for, I think, $120, and it cost me $160 in gas. So wasn't such a great experience as a creator, and it would be hard to look at that and say that, that would be a win for creators right now, just given the way that a lot of those things are structured. I do think that assets, digital assets and digital collectibles could certainly have a future inside of shake and/or another platform. And assets in general, have been part of the greater vision of IZEA for some time now. So, I don't know that, that will be specifically NFTs or not, but, I think, that the idea that somebody could sell a digital asset, be that a photo, an illustration, a font, video will be something that you potentially see from IZEA in the future.

Thanks. I appreciate that.

Thank you.

All right, thank you. Ladies and gentlemen, we have reached the end of the question-and-answer session, and I’d like to turn call back over to Ryan Schram for closing remarks.

Thanks, Omar. And we'd like to thank all of our passionate and loyal investors for joining us this afternoon. And as a reminder, all of our Investor Relations information can be found online on the IZEA website, which is izea.com/investors. Stay safe, be well, and we'll talk to you all soon.

This concludes this evening’s conference. You may disconnect you lines at this time. Thank you for your participation and have a great day everyone.