IZEA Worldwide, Inc. (IZEA) Q4 2021 Earnings Report, Transcript and Summary

00:04 Greetings, and welcome to IZEA Worldwide, Inc. Fourth Quarter 2021 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] Please note this conference is being recorded. 00:24 I will now turn the conference over to Ryan Schram, President and Chief Operating Officer. Thank you. You may begin.

00:32 Good afternoon and welcome to IZEA's Q4 2021 earnings call. I’m Ryan Schram, President and Chief Operating Officer at IZEA. And joining me today is IZEA’s Chief Financial Officer, Peter Biere; and IZEA’s Founder, Chairman and CEO, Ted Murphy. Thanks for being with us. 00:52 Earlier this afternoon, the company issued a press release with details pertaining to our fourth quarter and full-year performance for 2021. If you like to review those details, all of investor information can be found on IZEA’s Investor Relations website at izea.com/investors. 01:18 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 during 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. 01:45 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. 02:02 In addition, our update today will refer to a certain non-GAAP financial measure, adjusted EBITDA and other key financial metrics such as gross billings and bookings. A detailed explanation of these measures is included in our earnings release and in our most recent Form 10-K. 02:20 With the appropriate disclosures taken care of, I'd now like to turn the call over to my colleague and IZEA's Chief Financial Officer, Peter Biere. Peter?

02:30 Thank you, Ryan and good afternoon, everyone. Before I review our fourth quarter results, I'd like to refer you to our Form 10-K for the year ended December 31, 2021. For detailed disclosures of adjustments made in previously issued financial statements, which impacted certain liabilities, costs and related revenues associated with our managed services business. In the Form 10-K, we restated previously issued interim financial statements, which were included in our quarterly reports on Form 10-Q for the periods ended March 31, June 30, and September 30, all in 2020. 03:08 Previously issued financial statements for the fourth quarter and full year end December 31, 2020 and all interim periods for 2021 were not materially impacted and did not require restatement. It is essential to note that these adjustments did not affect the total cost of revenues to be recognized the only alter the timing. The aggregate adjustments, reduced gross revenues by 362,000 or less than 2% of revenue for the year ended December 31, 2020 and the total impact of the adjustments on 2021 gross revenues was a positive 157,000. All comparisons in our earnings release for the fourth quarter of 2021 are made on an as adjusted basis. 03:55 Now I'll turn to our operating results for the quarter. Total revenue for the quarter of 2021 was $10.3 million or 62% higher when compared to Q4 of 2020, with $9.9 million coming from our Managed Services business and $449,000 coming from our SaaS offerings. Managed Services revenue increased by $4 million or 69%, while SaaS revenue declined by $89,000 or 17%, both compared to the prior year quarter. 04:20 As we previously announced Managed Services bookings, the key metric measuring sales orders we received less any cancellations or refunds given during the period, totaled $10.6 million for the fourth quarter of 2021, an increase of 164% compared to Q4 of 2020. The trend toward larger brands increasing their marketing spend with IZEA also continued during the fourth quarter as we added several new Fortune 500 customers alongside repeat business from three Fortune 10 partners. These factors taken together with efforts put forth by our team to fulfill campaigns by the end of the year, resulted in the increased Managed Services revenue. 05:12 We recognized revenue on most of our Managed Services contracts over time based on the completion percentage and delivery timing can vary greatly. We are winning larger contracts with new and repeat customers and these contracts take longer to complete. This is lengthened the average period for revenue recognition from six to seven months a year ago to approximately nine months currently. 05:36 SaaS revenue, which consists of license fees, self-service marketplace spend fees and other fees were $89,000 lower for the fourth quarter of 2021 compared to Q4 of 2020. While overall licensee count continues to grow every quarter, total license fees declined year-over-year due to lower competitive pricing that we introduced in the summer of 2020. We also lowered our pricing on select self-service offerings, which impacted our margins on marketplace spending during the quarter. 06:09 Gross billings for marketplace spend in the fourth quarter were 53% lower than the prior year quarter, leading to the lower revenue -- fee revenue. Our cost of revenue was $4.8 million in Q4 of 2021 or 46% of revenue compared to $2.8 million or 44% in the prior year quarter. Accordingly, gross margin in the current quarter averaged 54% compared to 56% in the prior year quarter. Expenses other than the cost of revenue totaled $5.5 million for the current quarter compared to $4.7 million for the prior year quarter. 06:47 Sales and marketing costs were $2.2 million during the quarter, $328,000 or 18% above the comparative quarter, due primarily the sales compensation which varies with higher bookings and increased marketing costs associated with driving customer growth. General and administrative costs totaled $3.2 million during the quarter, $723,000 or 30% above the prior year quarter due primarily to higher compensation and contractor costs to support operations and IT investments. 07:21 We generated $312,000 in net income for the fourth quarter of 2021 or $0.01 per share compared to a net loss of $1.1 million in the prior-year quarter or negative $0.02 per share. Adjusted EBITDA was positive $549,000 for the fourth quarter compared to a negative $512,000 for the prior year quarter, an improvement of approximately $1.1 million. As of December 31, 2021, we had $75.4 million cash on hand, up about $1 million from the end of quarter three, partly due to positive EBITDA during the quarter and cash advances from Managed Services customers ahead of payment to creators. We do not have any debt on our balance sheet. 08:10 As previously announced in June 2021, the company entered into a new two-year at the market sales agreement under which it may offer up to $100 million of its common stock from time to time, that agreement provides IZEA with financial flexibility moving forward. The company has not sold any shares to-date under that agreement. With cash on hand and continued strong growth in our core business and a financing vehicle in place should we require it, we're in a solid position to execute on business growth and opportunities that may lay ahead. 08:44 With that, I will turn the call back over to Ryan.

8:46 Thanks, Peter. 2021 was truly our breakout year as a company. All in all, we set new records in nearly every measurable facet and it served as a positive stepping stone towards IZEA's broader growth strategy shared in previous earnings calls. From our best quarter of bookings ever to delivering an all-time full year revenue record, it's clear that IZEA's investments of time, capital and talent are providing demonstrable results for our shareholders. 09:21 I'd like to share some insight on how we continue to build positive momentum during fiscal year 2021, while also further establishing the foundation for the future of things to come. First, let's start with IZEA's go-to-market strategy. During the course of 2021, we saw a variety of sectors driving IZEA's growth, some of which began invest in influencer marketing more notably due to factors created by the pandemic and have since carried forward as a force multiplier as the world begins to reopen. 09:59 The new to us of our business is Fortune 10 to Fortune 500 brands across five core segments: consumer electronics, entertainment and media, consumer packaged goods, retail and grocery, and social media platforms. We're very proud to be the partner of choice for household name companies, who entrust our Managed Service team, and who license our software products to develop innovative campaigns across the creator economy. When we win or expand business with these types of customers, many of whom conduct extensive competitive reviews and vetting we believe and not only emphasizes IZEA's value proposition, but it validates our distinct market strategy long-term as we seek to consolidate market share. 10:51 To that end, when you read press releases or hear commentary during this call, regarding clients of our Managed Service practice or SaaS customers, who license IZEAx Unity Suite. We intentionally refer to these wins by sector and rank instead of brand or corporation name due to industry standard confidentiality clauses unless we have permission to disclose from those clients. Don't get us wrong, we love the shout these names from the hilltop, but in an effort to provide visibility around momentum to our shareholders, we feel it's important to highlight particularly notable commitments and as detail of a manner as possible, whilst protecting our clients' confidentiality in a public setting. 11:37 As you've likely read in our various press releases throughout the last year, IZEA is actively expanding its new geographies, new sectors and entirely new types of clients. Thanks to the hard work of new and existing team members alike. We are assertively yet prudently investing in a combination of personnel, performance marketing and technology research and development to drive our growth, both near term and long. Many of these initiatives will be 2023 and beyond story lines, but with a critical foundation having been established during 2021 and throughout this year in 2022. 12:20 Well, we don't have time to recap everything today, I would like to take this opportunity to remind shareholders that all of our exciting news can be found on izea.com/investors including the opportunity to subscribe to automated email alerts whenever we make important announcements that you may be interested in. That being said, plan on hearing more from us and many of these exciting initiatives that are actively underway, whether as part of our emerging market strategy that has IZEA entering the Chinese market for the first time to our new MetaMod offering that brings our 15 years of experience, relationships and technology to the Metaverse in order to embrace the full promise of Web 3. 13:06 To the continued expansion of our solution partner program and industry leading coalition of technology and service providers that enhance the campaigns that we build for our clients. It's a tremendously exciting time to be at IZEA, but it all starts and ends with our premise of involving cutting-edge technologies in every aspect of our business. IZEA created the influencer marketing industry in 2006 by launching the very first platform to pay influencers, and we haven't stopped innovating fence. To that end, we are actively building the next generation of our enterprise software, while simultaneously bringing our marketplace efforts aligned to shake front and center in the coming months. 13:57 We also believe there might be entirely new ways to serve the creator economy given the continued large amounts of money flowing into the space globally, particularly given that there are simply more prospective customers who are creators on an absolute count basis, then the brand marketing ecosystem itself. Putting both universes under our proverbial roof creates limitless potential. These investments have multi-business unit impact for IZEA and that they drive software and transactional revenue while also working to lower the cost basis of our Managed Service business unit by increasing operational leverage. 14:41 Lastly, I wanted to share some insight on our point of view regarding organic versus inorganic growth. Well, IZEA has been acquisitive historically, the lion share of our growth in recent years has been driven solely by organic means. Therefore, our philosophy remains to be primarily focused on ourselves, while also being opportunistic to strategic inbound M&A given our unique status of being the only public company dedicated to influencer marketing. Ultimately, it's our belief that consolidation on a multi-continent and our global basis is inevitable and we feel that IZEA is well positioned to lead not follow that reality. 15:29 One of the key ingredients of our success in recent years has been our role in the war on talent. IZEA aspires to be the singular player in the trader economy where our industry's best talent lives and thrives from client facing positions to those in our technology work groups, we have greatly benefited from the net gain of talented individuals seeking to showcase themselves on a bigger stage and abandon their previous roles at competing smaller startups. Their decision to join team IZEA is due in part to our financial stability, our access to resources, the company's continued positive performance and most importantly our growth potential in the years ahead. We're so glad to have them here and as active co-owners of the company through our compelling team member equity program. 16:26 For some closing remarks on 2021 and a forward-looking view at our business through his eyes, I would now like to turn the call over to my colleague and IZEA's Founder, Chairman and CEO, Ted Murphy. Ted?

16:40 Thank you, Ryan. At the end of 2020, our team set forth the goal to deliver at least 30% annual revenue growth per year for each of the next three years or a 30% compound annual growth rate. Revenues in 2020 were approximately $18 million, based on that rate of 30% growth per year, our goal was to achieve revenues of approximately $23.8 million in 2021 and $31 million in 2022. I shared this goal with our investors in Q1 of 2021, at a time, when many were still wearing masks and COVID-19 vaccine distribution was limited. 17:27 There were a variety of macroeconomic unknowns at that time, much like there are today, but we still put forth a bold target. A target that would require our entire team to work together and execute on a level we never had before. Not only did we hit our 2021 goal, we significantly beat it with organic annual revenue growth of 67% compared to 2020. We are nearly a full year ahead on the three-year revenue growth plan I outlined this time last year. And as a result, we were able to deliver a profitable Q4 and smaller loss for the full year. 18:11 During our all company meetings, I often talk about the concept of invisible lines. Invisible lines of the unseen barriers that seen difficult, sometimes impossible to cross. They keep us confined to a box down by what we know to be true or possible. At one-time $5 million in revenue was an invisible line for IZEA, then $10 million, then $25 million. Last year, we smashed through the $25 million revenue line then continued on to smash $30 million. 2021 set a new standard for IZEA. A new norm for what we know is possible, along with creating the infrastructure and people to support that level of revenue. Yes, we are well ahead of our three-year plan, but we have zero intention of slowing down, quite the opposite. We have begun to demonstrate what we can accomplish when meaningful investments are made and our intent is to get even more aggressive with further strategic spending as the year progresses. That means expenses will grow in 2022, just as they did last year. 19:30 We will spend more in sales, marketing and technology. The areas that give us operational leverage. We have $75 million in cash and we intend to put a portion of that to work in 2022. New markets will take time to mature as well new products and we expect that we will be investing ahead of their contribution. Despite the significantly tougher annual comparison and higher baseline revenue, we are still targeting 30% annual revenue growth in 2022, which translates to a $39 million target this year. This target is aligned with our goal to continue gaining share in the influencer marketing industry, which eMarketer predicts will grow by 11% in the U.S. in 2022. 20:24 While there are unprecedented global financial and political factors we must continue to monitor and adapt to, we believe IZEA is well positioned to deliver on our revenue growth goals this year, given the strong bookings throughout last year and record-breaking Q1 bookings to start 2022. The best is yet to come. We believe that we are nowhere near our full revenue potential. We are in a growing industry that will expand as new platforms and the next generation of creators is born. We forget that over 40% of the global population still isn’t on social media. Each progressive generation of children will drive further adoption of social media platforms of all types and each platform brings a new crop of influencers who are coveted by brand. 21:23 IZEA reward out of the gates in Q1. It is not only the best Q1 Managed Services bookings in company history. It is the best quarterly bookings ever in a quarter that has historically been our lowest bookings quarter of the year. Last week, we announced that Managed Services bookings for the quarter has surpassed $11.5 million compared to $6.4 million in 2021, an increase of over 80% year-over-year. We will release the final Managed Services bookings number next week. 22:02 While 2022 bookings are off to a tremendous start. We have yet to fully recognize the efforts from last year's contracts. Unearned revenue at year-end was $11.3 million, up 71% from $6.6 million at the end of 2020. The unearned revenue from 2021 should be recognized over the coming quarters in 2022 and the fast start and current pipeline gives us confidence in our ability to grow revenue in 2022. Last year, our goal was to stabilize SaaS licensing revenue after making sweeping changes in Q3 of 2020 and lowering our pricing plans across the board. We were able to do that at back half of 2021. And in the process, we increased the number of SaaS customers that we are serving to record heights. 23:01 We believe that the addressable market for influencer marketing software and services is broad and our intent is to diversify our customer base as much as possible. We intend to do so at both ends of the spectrum from enterprise Fortune 500 clients, with the entire team is focused on influencer marketing, to small startups who just need an easy way to get their first campaign up and running. This year is going to be a big one for IZEA on the technology front and that starts this week with the release of a completely redesigned checkout experience in Shake. We have made it easier than ever to find and hire an influencer on the class I and we are continually refining the offering. 23:50 In a few more weeks, we will deliver a massive improvement to Shake Bot, which will further guide people through the entire order process. These changes are in advance of much larger fundamental shifts to the Shape platform, including the introduction of a subscription model for both creators and marketers as well as an iOS app in the back half of this year. 24:14 IZEAx is also getting some upgrades. Later this quarter, we will unveil a new discovery experience in IZEAx that takes advantage of the growing capabilities of BrandGraph. And later this year, we will release an entirely new enterprise influencer marketing platform. We are building a revolutionary application for the next generation of influencer activations, a platform with flexibility to accommodate all that Web 3.0 will become -- with a focus on social commerce and measuring influencer ROI. It is a radical departure from both IZEAx and Shake and something our entire team is incredibly excited about. 25:01 As transformational as 2021 was, 2022 is shaping up to be an even more monumental year for our company. Our leadership team remains committed to growth, innovation and expansion of our geographic footprint. This mindset has served us well over the past year and we will continue making investments in building our future. We are gainful for your support in 2021 and look forward to reaching new heights in 2022 and beyond. 25:35 Thank you all for joining us today. I will now open up the call for Q&A.

25:42 Thank you. [Operator Instructions] Our first question is from Jon Hickman with Ladenburg Thalmann. Please proceed.

26:22 Hey. Thanks for taking my question. Ted or I don't know who wants to take this, but could you elaborate a little bit on your expectations for up or rating expense growth. Last year was up like I don't know 10% to 15%. Does that -- what do you expect I mean can you give us a little more guidance there?

26:56 Yeah. We were not providing any formal guidance on expense growth, but if you look at the trailing four quarters and how that has progressed over time, I would expect that it's going to continue along a similar path. We're not expecting any massive increases, but more of a steady progression as we continue to build out our team and invest in marketing.

27:26 Can you tell us how many sales guys of now -- sales personnel?

27:34 I'm going to toss it over to Ryan.

27:36 Yeah. I mean the -- we don't really disclose the exact number, but just say around 30 right now, Jon.

27:44 Okay. And that's up 10 or so from last year?

27:51 We've had different change-outs, but yeah, by and large directionally the staff is slightly larger than it was this time last year. The biggest difference could be entirely candid is that we're seeing a lot of top performers join us to carry larger size quotas than we've had historically before. And so therefore we can also look to achieve more on a per-person basis going forward.

28:18 Okay. Thanks. That's it from me.

28:25 Our next question is from Elliot Shaw, Elliot & Elvida (ph). Please proceed.

28:32 Just to elaborate on that, Ryan, question for you. Per person revenue, do you guys have a goal that you've set for sales associate on the 30, that you want to meet?

28:46 Hey, Elliot. Nice to meet. We actually have a very unique system at IZEA that allows sales professionals to join us and have quotas that are directly tied to a transparent compensation system. So on average, there is no set number per se per-person. It allows us to get people a variety of points in their careers. And therefore also adjust our cost and risk structure proportionately to that owned individual. So we have some people that will contribute millions or low 10s of millions and we have individuals that will contribute less, but our cost structures are tied proportionally to that contribution sort of allows us to have a much more diverse risk pool than you normally see in a traditional organization.

29:43 Okay. One more question on that. Do you guys have any kind of an in-house like you call them super influencers?

29:55 I like to think that our very own Ted Murphy having won so many award last year is quite the influencer having pull to the industry, but I’ll say this, one of the things that we are seeing that you may have noticed, if you are searching for different terms about IZEA or influencer or content marketing on Google or Bing, is that the amount of thought leadership content and research that we're creating each and every single day is really starting to dominate the organic search landscape for us. So our TOP process there is that you can shape influence in a variety of ways, not the least of which is top of wide awareness, but also on keywords that are deeper for what our customers, our brands and our agency clients are looking for and be able to be first on -- in the line to be able to serve that need for them and be a potential partner.

30:59 Okay. Excellent. You're an excellent speaker, and back to one more question, when you had your initial opening speech, you mentioned Metamod and Metaverse. Are those trademark names that you're looking at, have you trademark those through IZEA?

31:18 So I wish we did own the Metaverse. We do own Metamod. And you actually can go to metamod.com and see specifically the offering that we're putting out there. The idea really is, is an extension of the IZEA brand. We look at the perspective of that we've done this now literally 4 million times in terms of collaborations. So we can bring all of that expertise and look at it from a strategic and an execution in a measurement perspective for that next generation of influencer activation that Ted was talking about.

31:56 Okay. Now I want to ask Mr. Murphy, a couple of questions. Thank you, Ryan.

32:02 You're welcome.

32:04 And just to clarify on Metamod that application is in progress and under review.

32:11 Okay. And then congratulations on an excellent quarter and the one coming up.

32:17 Thank you. I appreciate that.

32:19 Yes. And congratulations on the, your initial remarks when you spoke here a few minutes ago. On the all-company meeting you said invisible lines, you guys are more aggressive now. How often do you have those team meetings?

32:35 We typically have those about every six weeks.

32:40 Okay. And here is getting in the more of the meet of the whole company, you announced probably, I'm going from memory, six months ago that you had an ATM shelf offering. Is there any plans to pull that shelf offering or lower the share account, but you are initially made public that makes general nervous, like myself.

33:15 There is no current plans or announcement regarding the shelf itself. Although, as Peter mentioned in his remarks, we have not yet touched that shelf at all. So that is out there to provide some flexibility for us. We have now sold a single share off of that shelf and we currently intend for that to remain out there and had that provides flexibility for us, if we should need in the future, but we are being judicious in the way that we are looking at potentially accessing that capital.

33:58 Okay. And the last call that I had with you, you turn it over to the CFO, what is the share count as of today?

34:08 This is a perfect question for the CFO?

34:12 Yes.

34:11 Peter, are you there?

34:14 Yeah. It's $60 million to $176 million.

34:22 Okay. Very much consistent with the last quarter. Okay. One more question for you Mr. Murphy. Do you remember the old good year blimp?

34:33 I do.

34:37 Are you guys still there?

34:41 I'm here.

34:42 Yeah. So do you remember the old Goodyear blimp?

34:45 I said, yes, I do.

34:48 Okay. I didn't hear that. I'm kind of in a concrete structure here. I was wondering, if we could like have some -- because it's awful expensive to copy. I think you said it was $5 or something that a Super Bowl ad here not last year, but the year before, maybe do a good year maybe do a blip with the IZEA streamer are some small planes with some IZEA streamers to get our name out there.

35:13 I appreciate [Multiple Speakers] with that.

35:21 I'm driving you guys crazy there.

35:25 Look, in all seriousness, that is a big part of our strategy moving forward is just getting much more aggressive on the marketing front. So we about building out our marketing team. We are not necessarily looking at Bloom says the most cost effective marketing vehicle for us. We're really focused more on performance marketing and drive our cost per active customer acquisition down. But we are going to be investing more heavily in paid media and to Ryan's point, we're investing significantly more in content production. We've been building out an entire content marketing team. Those guys are creating some fantastic content every single day and we're going to continue to invest money there because we've seen that that is driving results for us.

36:20 Okay. So I'm going to leave it on this. One more little deal for you guys, when you have the next six-week team meeting maybe we can get an artist on board, somebody like one of the artist, one of the, one of the song writers and get an IZEA theme song going. I'm really thrilled -- I'm prone it out there for you guys.

36:43 We hired a creator from Shade to do the backing music track to our Discovery launch last year, Elliot. So we do that stuff all the time. We love to feature our creators wherever we can.

36:58 Okay. I'm not a social media guy and I never will be, but you guys are doing a beautiful job. And it's been a great conference. Thank you very much for taking my questions and put me at ease a little bit.

37:11 Well, if you know anybody, you get [Multiple Speakers] discounted blimp let us know.

37:19 Okay. All right. Thank you very much for the time today.

37:26 Thanks, Elliot.

37:28 Our next question is from Sean Gibney with Alliant. Please proceed. Sean? We have lost, Sean. So we will move onto the next question and that is from Pablo Baroda (ph), Private Investor. Please proceed.

37:47 Hi. Thank you for taking my questions and good quarter. As I’m fully going to appreciate your business. I was wondering what is the average spend by brands on your typical campaign. Are we talking about $10,000, $20,000 or maybe it's $100,000 or more thousand?

38:10 We have certainly moved up over time. I believe that we are currently closer to the $100,000 mark than the $20,000 mark. But that changes from quarter-to-quarter depending on the size deals that come in from any given customer. On our platforms like shape, the spend is much smaller, you are typically talking hundreds or low thousands of dollars in terms of the spend there. But for our Managed Services customers, they are committing hundreds of thousands to millions of dollars with us typically on a campaign.

38:54 Got it. And as far as that typical campaign, how many -- what is your typical number of influencer there involved? Is that more like a couple or is it like a dozen or more?

39:07 It is certainly more than a dozen. Some campaigns are much larger, where they're using smaller influencers to produce more content and others are more focused on, so webs or webs, webs but even then, it's typically not just like one or two people that they are engaging many people in that campaign.

39:29 That's helpful. Thank you. And I know in prior quarters you've provided this kind of mix. What is your revenue mix in terms of new versus repeat business? In fact, I think at the start, you mentioned that’s been the case. So I'm just kind of curious what that mix level is?

39:50 Yeah. That also kind of changes from quarter-to-quarter. I believe right now, it covers about 60-40. Ryan, do you want to chime in on this?

40:00 No, that's spot on, Ted. And what I would say is that from quarter-to-quarter, the effect is really a variance of 20 points either way, with some quarters being more emphasized on new and others emphasized on existing Pablo. And what I will say is that we're really happy on the absolute count basis that we've seen really nice influx of net new customers overall across all of our lines of business during 2021 that would be inclusive of our Managed Service unit, as well as our various software offerings.

40:35 Got it. And that for example, that 60% is that referenced to new or to repeat?

40:39 That would be referenced to new.

40:44 Okay. Very good. And I know that with the Shape you've mentioned earlier that it sounds like there's quite a bit of investment is going on in there related to the interface, the iOS later this year. But I also know from your prior quarters you've mentioned that you had an inventory challenges. So I'm curious, is there a sense of, of what the plan is with that as far as profitability because I assume that's not profitable yet? Is that correct?

41:15 Yes. That is correct. I mean, right now, Shape does not have much of a material impact on revenue and we're continuing to have some work to do there. I think that much of that comes down to the friction between buyers and sellers at various stages of the purchasing process. So the new checkout that we just launched today should help to reduce some of that friction as well as the updates to Shake Bot that we're going to be releasing next week. As we look to the back half of this year, Shake is going to play a bigger role in our future and we are going to bring it into more of a spotlight in terms of the way that we market ourselves and what people see when they come to izea.com.

42:03 Got it. Last question and hats off to the team for the positive EBITDA this quarter. But I know they’re just looking back at the number that is the negative EBITDA for some time now and it's been unprofitable on annual basis as well. So I'm curious what the plan is going forward, and the timeline for profitability on an annual basis?

42:29 Yes. So on profitability, we delivered profitability clearly in Q4, but that was not the guiding light to focus of the team was really on growth and expansion of the customer base and profitability was a byproduct of the team over delivering on that growth. So we made investments last year, we're going to continue to make more aggressive investments this year to capture more share and that includes expanding our presence in China -- in Canada, launching in China and expanding to other geographies, as well as the launch of a new platform and major upgrades to our existing platforms like Shake so responsible growth is going to continue to be the priority. But I would say that to the extent that we continue to outperform and will lessen our losses or lead to profitability quicker.

43:28 Got it. And one more Ted and I apologize in that speak, in the prior response to the gentlemen you mentioned, how you'll be focusing on content production. Can you give us a sense of what the kind of what the returns are in that new revenue line and what -- how that differ versus your other business?

43:54 I think, well, I was actually referencing content production for IZEA. So we produce content every day as part of our organic search strategy and that is really to come back what we see is ongoing increases and cost per click for page served on marketing.

44:14 I see booking we’re referring too. Okay. Very good. Thank you for the response. I appreciate it.

44:22 My pleasure.

44:23 Our next question is from George Cafaro (ph), who is a Private Investor. Please proceed.

44:32 Hey guys, long time. Congratulations on a great quarter.

44:38 Oh my gosh [indiscernible]. Hello, George.

44:42 Yeah. Great job to the team and give congratulations to everybody. I've just got a couple of super things if I could, about the revenue and the bookings. How do you see the distribution of revenues by quarter this year? I mean it's been typically 22%, 24%, 26, 28% in that range. How do you see panning out this year?

45:13 A lot of that really comes down to the timing of individual contracts and when that work is scheduled and done. I don't know, if you saw the press release that we provided today. We also provided a chart there that shows the relationship between bookings and revenue and there is a pretty wide gap still between the revenue line and the bookings line. We expect that to begin to catch up a bit, but we are also continuing to grow bookings, so that's going to have an impact on that lag moving forward.

45:57 So how should we think about the breakdown by quarter. Is it just, what kind of ranges do you guys think about there?

46:08 In terms of the -- we're not providing any sort of guidance on a quarter-by-quarter basis. We are more looking at this on an annual basis and part of that is, is because of that lag time and unpredictability of certain campaigns.

46:32 Right. So let me ask you mentioned in your prepared remarks, the revenue goal for 2022 was that the revenues goal or bookings goal, you mentioned as you goal?

46:47 The $39 million number.

46:50 Yeah.

46:51 That is a revenue goal.

46:54 Okay. And I just want to validate one more thing, in your opening comments you said Q1 is the best managed services number, bookings in the history or across the board in numbers in history?

47:12 Both, that's Q1 ever and best quarter ever.

47:17 Okay.

47:24 Did I lose either?

47:24 Well, if you allow me sort of poetic license on that run rate, you're going to cross $39 million all day long.

47:35 Recognize yes, there is a lag to those bookings. But yes, if we continue that rate, they would -- we would likely cross that number yes.

47:54 All right. Congratulations, say, hi to everybody, especially to the family and your dad. Well done. Good job.

48:02 Thank you. Appreciate it.

48:04 We have reached the end of our question-and-answer session. I would like to turn the conference back over to Ryan for closing comments.

48:11 Thank you, Sherry and thank you everyone for joining us this afternoon for your continued support of IZEA and I'd like to take the opportunity to remind everyone that you're welcome to subscribe to our email newsletter for investors that’s available for you at izea.com/investors. Until next time be well and we will talk to you soon.

48:34 Thank you. This does conclude today's conference. You may disconnect your lines at this time and thank you for your participation.