Good afternoon, ladies and gentlemen and welcome to IZEA Worldwide, Inc., Third Quarter 2022 Earnings 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, this conference is being recorded. I will now turn the conference over to Ryan Schram, President and Chief Operating Officer. Thank you. You may begin.

Good afternoon, everyone, and thanks for joining us for IZEA's earnings call covering the third quarter of 2022. I'm Ryan Schram, President and Chief Operating Officer at IZEA. And joining me on the call are IZEA Chief Financial Officer, Peter Biere; and IZEA Founder, Chairman and Chief Executive Officer, Ted Murphy. We're glad to have you with us today. Earlier this afternoon, the company issued a press release detailing our pertaining to our third quarter of 2022. If you'd like to review those details, all of our investor information can be found online on our Investor Relations website, at izea.com/investors. Before we begin, please take note of the safe harbor paragraph included in today's press release covering the company's financial results and be advised that some of the statement that we make today regarding our business, operations and financial performance may be considered forward-looking and such statements involve a number of risks and uncertainties that could cause actual results to differ materially. We encourage you to consider the disclosures contained in our SEC filings for a detailed discussion of these factors. Our commentary today will also include the non-GAAP financial measure of adjusted EBITDA. Reconciliation between GAAP and non-GAAP metrics for our reported results can also be found in our earnings release issued earlier today as well as in our publicly available filings. And with that, I'm pleased to introduce IZEA's Chief Financial Officer, Peter Biere. Peter?

Thank you, Ryan, and good afternoon, everyone. I'd like to review operating results and provide additional context for the quarter. Revenue for the third quarter of 2022 totalled $10.8 million, 40% higher than in Q3 of 2021. Managed services revenue totalled $10.5 million during the quarter growing 44% over the prior year quarter. We recorded $350,000 in net revenue from our SaaS offerings during the current quarter down 23% from the prior year quarter. Managed services revenue grew by $3.2 million quarter-over-quarter, primarily due to revenues on one large customer contract, which grew by $2.6 million. Revenues from all other customers grew approximately 10% compared to Q3 of 2021 as previously announced, managed services bookings fell by 27% to $8.2 million in the third quarter of 2022 as we saw, the contracting process slowed down over the summer months. Bookings on our large customer contract represented 57% of the total quarter-over-quarter decline. So bookings for all other customers declined a more moderate 17% in Q3 over the prior year quarter. September bookings were strong this year delivering our second best monthly bookings total and we ended the quarter with a solid pipeline of opportunities. There is a lag between bookings and revenue recognition. Some of the slowness over the summer is reflected in the current quarter revenue total, but a higher percentage will manifest in Q4 2022 and early 2023 revenues. Our managed services backlog, which represents the total of unrecognized revenue for contracts that are underway as well as recent bookings that have yet to begin invoicing totaled $19.2 million on September 30, 2022. We expect to record most of this backlog as revenue in the following three quarters. SaaS services revenue consisting of license fees, self-service, marketplace spend fees, and other fees declined by 102,000 in the current…

Thanks, Peter, and hello again, everyone. There's no question we're operating in an uncertain environment and that businesses across all sectors continue to get tested in new and different ways. When it comes to how IZEA is helping brands and agencies navigate the sweeping changes in the advertising industry while also further embracing the creator economy. Our mission remains unchanged. As I mentioned in our Q2 call, we are continuing to sharpen our focus on a clear set of product and business priorities. The product and expansion announcements we've made in just the last quarter alone have demonstrated that very clearly, including significant improvements to our creator marketplace on IZEA.com by launching next generation enterprise software solution Flex and the continued growth of geographic markets around the world where we can serve managed service clients in a differentiated and compelling manner. These will all drive value for marketers, creators and our business simultaneously. We have also worked throughout the year to drive efficiency by realigning internal resources to invest in our biggest growth opportunities for 2023 and beyond. Shareholders can expect as we plan for the fiscal year ahead, IZEA is committed to making important offs where needed and will moderate operating losses prudently due to the current macroeconomic climate. For those of you who turned into our live streaming event on September 21, you saw the result of many quarters of investment and hard work finally unveiled to the public. The all new creator marketplace on IZEA.com is geared towards bespoke influencer marketing initiatives and transactional engagements. It's quick, easy, and simple to use and is perfect for small campaigns and projects that need fast turnarounds and upfront pricing. Best of all, it builds off of all the marketplace findings. Our team learned from the launch of Shake in…

Thank you, Ryan. We have seen a tremendous amount of market change over the past two quarters with businesses of all sizes in all sectors impacted by the slowing of the global economy. Even our largest clients are now showing signs that they are not immune to the economic fallout and there have been negative implications for IZEA's overall momentum as a result. Bookings in Q3 were not as strong as we had projected they would be based on the robust performance we delivered in the front half of this year. Customer contracting throughout the quarter was slower than we expected, particularly for net new clients. As the quarter progressed, we concluded with a strong September, the second best month that we've had so far this year, but that did not make up for the slower proceeding months. We saw our new opportunity pipeline for managed services hitting all-time high in Q3 of 2022, up 40% from the new opportunity pipeline that we delivered a year ago in Q3 of 2021. We've also seen this trend continue in October, which was our best month ever for new opportunity pipeline generated. New opportunity pipeline for managed services is the strongest it has ever been, but we remain cautious on the forward projection of close rates as we look to Q4 and beyond. Our opportunities continued to progress at a slower pace than we would like, and we believe that this is the result of a moral wearing economic outlook adopted by current and prospective clients. This is negatively impacted close rates in the back half of this year, though they are still well above our historical averages. We have made great strides improving our average close rates, but we are expecting a bit of a pullback in the coming year, which…

Thanks so much Scott, and thank you to everyone joining us this afternoon. As a reminder, all of IZEA's investor information can be found online at IZEA.com/investors. To our team members, investors and analysts affected by the hurricane in Florida today, please stay safe and thank you again for joining us this afternoon. Take care.

That concludes the call for today. We thank you for your participation. Please disconnect your line.