Good day. Welcome to the IZEA Worldwide, Inc. Q1 2021 Earnings Conference Call. I would now like to turn the conference over to Ryan Schram. Please go ahead.
Good afternoon, everyone. Welcome to IZEA's Q1 2021 earnings call. I'm Ryan Schram, President and Chief Operating Officer at IZEA. Joining me today is IZEA Chief Financial Officer, Peter Biere, and IZEA Chairman and Chief Executive Officer, Ted Murphy. We're glad you're here with us. Earlier today, the company issued a press release with details pertaining to our Q1 performance for 2021.
If you would to review those details, all of our 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 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. Actual events, results, or trends could differ materially from our forecasts 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 also refer to a non-GAAP financial measure, adjusted EBITDA, and key metrics, gross billings and bookings.
A detailed explanation of these measures is disclosed in our earnings release and in our most recent Form 10-K. With the appropriate disclosures out of the way, I'm now pleased to introduce my colleague and IZEA's Chief Financial Officer, Peter Biere. Peter?
Thank you, Ryan, and good afternoon, everyone. Let me begin by saying that I'm excited to have joined the IZEA team and look forward to working for you, our investors, to build enterprise value.
With that, I'd like to highlight our results for the quarter ended March 31st, 2021. For the Q1 of 2021, IZEA's total revenue was $5.4 million, a 13% increase compared to Q1 of 2020, with $4.9 million coming from our managed service business and $504,000 coming from our SaaS offerings.
Managed services revenue increased by $747,000 or 18%, while SaaS revenue declined by $135,000 or 21% in Q1 of 2021 as compared to the prior year quarter. We began to feel the impact of the COVID-19 pandemic in mid-March of 2020, resulting in lower bookings for managed services during the Q1.
We continued to see lower demand for managed services through late May, but have experienced strong growth both in order volume and average order size through the end of 2020 and the Q1 of 2021. As previously announced, managed services bookings during the Q1 of 2021 increased approximately 130% compared to the prior year quarter.
We continue to see larger customers increasing their marketing spend with us and believe that more brands are shifting a larger percentage of their marketing dollars to influencer marketing campaigns. These factors, taken together with the efforts put forth by our team to fulfill campaigns, resulted in increased managed services revenue during the current quarter.
SaaS revenues, which are comprised of license fees, self-service marketplace spend fees, and other fees, were comparatively $135,000 lower for the first quarter of 2021, due partially to lower license fees and lower fees from self-service marketplace spending.
Licensee counts are growing on all platforms. However, average license fees are lower, primarily due to competitive changes we implemented during the summer of 2020 in response to COVID-19-related churn. We also lowered our pricing on selected self-service offerings, which impacted our current quarter margins on marketplace spending.
Gross billings for marketplace spending for the Q1 of 2021 were 10% lower than the prior year quarter, leading to lower fee revenue. Our cost of revenue, exclusive of amortization, was $2.4 million in Q1 of 2021 as compared to $2.1 million in Q1 of 2020, essentially flat as a percentage of revenue.
Cost of sales increased proportionally with the higher levels of managed services revenue. Gross margin averaged 55% for both comparative periods. Our costs and expenses, which include the cost of revenue, totaled $7.4 million for the Q1 of 2021, compared with $10.9 million in Q1 of 2020.
Recall that in the Q1 of last year, we recorded a $4.3 million goodwill impairment charge. Excluding the charge, total costs and expenses were $6.6 million for Q1 of 2020, or $800,000 lower than the Q1 of this year.
The higher cost of revenue and increased levels of sales and marketing expenditures to drive growth explain the increase. Our net loss for the Q1 of 2021 totaled approximately $2 million, or - $0.04 per share, compared to a net loss of $6.2 million in the prior year quarter, or - $0.18 per share.
Before the goodwill impairment charge, our net loss for the prior year quarter was approximately $1.9 million, or - $0.05 per share. Adjusted EBITDA totaled approximately - $1.4 million for the Q1 of 2021, compared to - $1.1 million for the prior year quarter, a difference of approximately $194,000.
Bookings is a measure of all sales orders less any known cancellation or refund within a period. While bookings can be a strong revenue indicator, revenue recognition occurs over time and is subject to future adjustment.
Our bookings cancellation rate, which is normally in the low single digits, jumped in the Q2 of last year as customers pulled back at the beginning of the pandemic, but since that time has returned to historic levels. Managed services bookings are typically recognized over a six-month period.
We're beginning to see larger customers committing to longer-term contracts. For instance, the 7-figure contract booking we recently announced is delivered unevenly over a 12-month period, so we expect the average revenue recognition period for managed services bookings will increase over time with larger engagements.
Even with recent strength in demand, there is still a level of uncertainty around the duration and total economic impact of the COVID-19 pandemic on our industry in the future. Based on strong bookings during the start of 2021 and an increasing revenue backlog, which was $11.8 million at the end of the Q1 , up 11% from the beginning of the year, we anticipate revenues will grow in 2021.
We plan to increase the level of product investment by expanding our engineering team and continuing to increase our marketing spend to drive new customer acquisition. As of March 31st, 2021, we had cash on hand of $65.5 million as we raised gross proceeds of about $34.4 million from our at-the-market offering in the Q1 of 2021. As announced, the offering was recently completed in April.
From June of 2020 to date, we've raised $75 million in gross proceeds through the ATM offering, leaving us in a very strong position to invest in growth. With that, I'll turn the call back over to Ryan.
Thanks, Peter, on behalf of everyone here at Team IZEA, welcome to the company. We're delighted to have you and are excited to benefit from your valuable business experience. As we reflect on the Q1 of this year, the team and I are pleased with the continued progress IZEA is making financially, client-wise, and product-wise.
As we look to the future, we recognize now more than ever that the inches are all around us to take the company and the industry we helped to create to its next level of success by harnessing every bit of the opportunity laid out in front of us. Much of 2021 plays into our team's obsession with finding a better way, improving upon every process, every product, and every client that entrusts us with their business.
I love hearing team members in our internal meetings seize this moment with the spirit of, "If it's good, let's make it great. If it's great, let's put it into an even higher gear." It's never been clearer to me that this organization won't settle for less. In fact, we won't settle at all. I'd like to begin by sharing a few ways IZEA is actively growing forward from the things we've done so far this year in Q1 to the things we look to do in the quarters ahead.
First, let's talk about a key decision made in the future of work at IZEA, what we're calling the plan for the company's elastic workplace. High unemployment rates from the COVID-19 pandemic have not created the talent surplus some predicted in the knowledge economy.
Instead, the market efficiency of work from anywhere has driven up talent expenses domestically by creating shortages in critical functions. As a result, competition for personnel has become even more heated in conjunction with changing expectations on workplace locale.
When vying for top talent in the post-pandemic landscape, it's clear to IZEA management that flexibility will become the primary currency for attracting and retaining the best people. By 2025, Gen Y and Gen Z employees, now in their late 30s and late 20s respectively, will grow to represent 75% of the overall workforce. For these emerging generations, work-life fit is valued at or more important than compensation growth or skill development.
Combining these macroeconomic trends with quantitative and qualitative feedback gathered from our valued team members regarding their personal preferences, IZEA has elected to lean into a virtual-only elastic model in perpetuity and embrace the spectrum of business benefits that come from a modern remote workforce.
The last 14 months have provided us with a real-life learning laboratory to prove that this strategy can be both feasible and productive for the company. By separating the where of work from the how, IZEA is deliberately choosing to empower our team members to decide where they will do their best work. It's fair to point out that a remote workplace is also a more economical workplace.
With less reliance on large-scale offices, IZEA can save hundreds of thousands of dollars in real estate and office maintenance costs, not to mention access a prospective larger talent pool to work with, as we'll no longer be confined to hiring employees in specific geographical regions, but rather can choose acceptable states and provinces where IZEA makes the business decision to operate.
Being that all of our existing facility leases concluded by mid-year last year, we were in the ideal situation to evaluate all of our options in concert with our team's desires without having the bias of an existing long-term office commitment swaying our judgment.
The leadership and I are excited to continue to receive the productivity, morale, and economic benefits that come from a full-scale commitment to remote work and how that aligns with IZEA's company culture and belief system.
One of the key lessons we learned over the last year is that sitting in the same building does not make a culture. It's the people who have and always will drive it forward. With that imperative top of mind, we've used the last several quarters to shape the next chapter of internal collaboration and advancement at IZEA.
From creating ways to keep the team connected in person via signature events and ad hoc work group gatherings, to new platforms to actively manage performance and provide ongoing education, to identifying novel approaches to foster continuous improvement. We've been relentless in delivering means to further cultivate the IZEA way.
To that end, I'm proud to announce we've created and successfully hired for a completely new position at IZEA, our Head of Workplace Culture and Internal Communications, who begins with us next week.
This role will direct a slew of critical initiatives, from human capital expansion and team member recognition, to inclusion and diversity celebration, to talent-focused content marketing oversight. We realized that core components of the IZEA way were not just "HR duties" or talent acquisition niceties.
Rather, they were a matrix list of priorities that are core to driving already unusually high team member retention to new heights, and therefore justify a new way of looking at committing resources to nurture the growth of these foundational aspects of the company's culture, not only for our current employee base, but for those to come. Speaking of those to come, never in the history of IZEA have we sought to hire so many positions across virtually every department in the company.
Given our emphasis on enterprise software platforms like IZEAx Unity Suite and self-service solutions such as Shake, our product and engineering organization is on pace to more than double in size by this time next year, along with all sorts of other new additions across the company, including groups like brand marketing, demand generation, client service, finance and accounting, legal, and business operations.
If you have career experience in any of those categories or have friends or family that do, please send them our way. We're always looking for top talent at izea.com/careers. A shameless plug, we've been named a top place to work for four years running. Team member growth is fantastic, but to be clear, throwing people at a problem often doesn't solve it, nor does it build towards the operative goals we have in place for IZEA's future.
That's why we've been laser-focused on developing proprietary technologies that increase team member efficiency internally while also having a positive effect for our clients and customers seeking to do the same.
For example, through continuous feature and functionality improvements to IZEAx Unity Suite, which is utilized by our managed service team and licensed by our enterprise SaaS customers alike, we were able to drive a 25% increase in revenue per campaign manager year-over-year in the Q1 .
That increase in productivity is the result of the perfect marriage between enhanced technologies and human process improvement. Investments in new product features often result in noted efficiency echo, meaning the things we build positively impacting multiple constituencies who utilize them.
For example, when we upgrade BrandGraph's benchmarking capabilities, it not only makes our client-facing team members' proposals more insightful and compelling, but it also makes our enterprise SaaS licensees' lives more productive, while at the same time making IZEAx Discovery's self-service search capabilities smarter and smarter.
Innovation as an annuity is something that we believe has prolific and positive consequence across all lines of our business, from managed services to enterprise SaaS to self-service solutions.
Ultimately drives more revenue per employee and higher customer satisfaction. Before I turn the call over to Ted, I lastly want to touch on an important but often overlooked topic related to the expansion of our go-to-market strategy over the last year and the massive opportunity it unlocks for IZEA long term. Roughly two years ago, we had a problem on our hands.
Every day, IZEA would receive client leads requesting solutions we simply didn't have available to offer. Because back then, if it wasn't a managed services opportunity or a brand looking to sign up for an annual license for Unity Suite, that lead and all the potential revenue associated with it was thrown away as waste, as those were the only two offerings IZEA had available at the time.
Often, these prospective customers were looking for portions of our larger solutions, like the discovery module of Unity Suite or the ability to buy individual posts or assets from influencers as a one-off without having to be burdened with the cost of a license at all. As a result, we realized quickly that the demand for our products and services were even larger than the universe of Fortune 500 clients we had secured up to that point.
Flash forward to today, we're now meeting clients and customers where they are and actively capturing more and more opportunity in doing so. For modern brands and agencies, the flexibility of IZEA's solutions and technologies unlock incredible value for their organizations while unearthing newfound lines of revenue potential that are highly scalable on a go-forward basis for the company.
Whether it's world-class consultative services powered by IZEA platforms, award-winning enterprise SaaS solutions leveraged by influential corporations, or a small business owner looking for a boost to their bottom line from an ad hoc TikTok post via Shake.
Never before in IZEA's history have we had such a complete set of offerings to take advantage of the tidal wave of money pouring into the broader creator economy. The universe of current and prospective customers is large, and it continues to expand in nearly every measure.
The best part, while IZEA's well-positioned as the market leader to take full advantage of these trends, we are just getting started on articulating the entirety of our strategy to capitalize on this tectonic shift in the broader advertising and marketing ecosystems.
To share more about that vision and the waypoints to achieve it, I'd now like to introduce my colleague and IZEA's founder, Chairman, and Chief Executive Officer, Ted Murphy. Ted?
Thank you, Ryan. Before I begin, I would like to welcome Peter to the team. We are very excited to have him on board, and I look forward to taking IZEA to the next level together. When I first planted the initial seeds for our company, one of the platforms we focused on was Myspace, the hottest social network at the time. Back in 2006, people were also buzzing about LiveJournal and Blogger, fast-growing startups, which we also supported.
In fact, there was a time when we supported Vine, Foursquare, Google+, and Flickr, all platforms that no longer exist or are no longer relevant in our space. During my time at IZEA, I have seen Yik Yak, Friendster, Meerkat, Google Wave, Google Buzz, Dodgeball by Google, Orkut by Google, iTunes Ping, FriendFeed, DailyBooth, and most recently, Mixer by Microsoft.
All of these have come and gone, leaving behind them a trail of both creators and brands that have invested countless hours building their audience on these platforms. The decision to be platform-agnostic was one of the most important and fundamental strategies we adopted when we started this company. It was underpinned by the development of IZEAx as we sought to serve as a bridge between multiple platforms simultaneously.
We didn't want to play favorites or tie our fate to any one partner. Rather, we wanted IZEA to be an independent facilitator, connecting brands and creators. Since the day we started, there has always been a question of what happens if the social networks themselves enter into the influencer marketing space. What few realize is that it has already happened multiple times, and the impact thus far has been negligible at best.
We saw Twitter enter the influencer space with Niche, and YouTube enter the influencer space with FameBit. Since then, FameBit has been completely shuttered, and attempting to log into Niche results in a 500 error.
The influencer platforms that YouTube and Twitter operated are no longer options for brands or creators, but IZEA continues to execute influencer marketing on Twitter and YouTube, just as we did when these platforms were operational. We love YouTube and Twitter, and we welcome the creators who make their home there, both big and small.
Recently, Facebook announced that they will offer new influencer marketing tools, and TikTok already does. We will continue to support both of these platforms, just as we did when Twitter and YouTube entered our space. At our core, we believe that the best influencer marketing campaigns are multi-platform, as are the software solutions and marketplaces that make them possible.
Not all social networks drive the same type of outcomes or are right for all types of businesses. That does not mean that these platforms aren't great in their own right, but an influencer strategy to promote a movie is different than an influencer strategy to sell pasta, as they should be. Most IZEA campaigns touch more than one social network by design.
Our platform independence allows us to guide our customers towards the right activations based on their objectives. Sometimes that means more YouTube, sometimes that means more blogs, sometimes that means more TikTok or Instagram, and sometimes there's no social channel involved at all.
Brands are using influencer content to distribute on their owned and operated sites. We are even seeing influencer content being used in retail in-store television networks.
No matter the platform, creator, distribution, or objective, we intend to continue to be agnostic and support the activations that are most relevant to our buyers and sellers at the time. What the entry of social networks like YouTube and Twitter into influencer marketing does tell you is that even if their influencer marketing platforms are ultimately unsuccessful, the influencer marketing space is large and real.
There is plenty of demand. It is a multi-billion-dollar industry that is ripe for consolidation and market share expansion. That is our focus, growth. Not just in the short term, but a multi-year strategy to deliver consistent, meaningful growth while keeping operational efficiency in mind.
Late last year, our leadership team set forth a series of company-wide objectives that I would like to share outwardly with our investors for the first time. These objectives will serve as our guideposts over the next three years.
They are as follows. One, high growth rate. We aim to drive average revenue growth of no less than 30% per year for the next three years. At a 30% growth rate, our company would double revenue size in about three years. Two, diversify our customer base. We want to grow active monthly customer counts by 8x between now and December 2023.
Three, increase efficiency. We want to grow our annual revenue per employee by 45% from 2020- 2023. These are the baseline objectives. Of course, our team will do our best to eclipse them, but these are the building blocks we are constructing our internal models from. So far, we are pacing well ahead of plan to exceed our objectives for this fiscal year.
While Q1 revenues were only up 13% from the prior year quarter, Q1 managed services bookings, which serve as a leading indicator for our future revenues, were up 130% in Q1. We expect that the lion's share of these bookings will be recognized this year, and the revenue impact will be more pronounced in the second half of this year.
Q1 was fantastic, and Q2 sales are off to a stellar start. We previously announced that April was our best month ever for total bookings, inclusive of managed services and SaaS. This was a meaningful milestone for us, but we have now set a different record. We are only halfway through Q2, and it is already the best quarter we have ever had for managed services bookings at more than $7 million through today.
Managed services bookings for the quarter are already up 75% year-over-year, with half the quarter remaining and a strong pipeline for future sales. This is a multi-billion-dollar market. We don't intend to be a $20 million or $30 million revenue company for long. The opportunity is simply too big to set our sights that low. We have our eyes gazing towards the sky and a focus on much more ambitious goals.
We don't expect to get there overnight. We are putting the underlying pieces in place to enable rapid expansion, which we believe can accelerate as our infrastructure strengthens and investments are made. Today, we filed for a $100 million shelf registration. Once effective, it could be used over the next three years to fuel the next stage of expansion.
While we are currently focused on strong organic growth and have not identified any targets at this time, there may also be opportunities for acquisitions in the future. There continues to be a compelling argument for consolidation within the creator economy, and there are a variety of software services that complement our offerings.
We believe that with consistent execution, we can build our organization and technology to become the titan of the influencer marketing industry. The next leap forward for us happens later this quarter during our Disco Streaming event. Look for an official announcement next week.
Thank you all for your support. I would now like to open up the call for Q&A.
Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. The first question will come from John Hickman with Ladenburg. Please go ahead.
Hey, John.
Hello. A couple questions for you. Can you hear me okay?
Sure can.
Okay. Can you elaborate a little bit more on this discrepancy between the 100 and some odd % growth in bookings and 18% growth in revenues?
Yeah.
I mean, plus add in the bookings were really good for Q4 too.
Yes. We had a number of campaigns in Q4 that were actually recognized relatively quickly. They were Christmas campaigns, or holiday campaigns. We are seeing that now we're getting a lot of larger commitments from customers that are spanning longer than our average commitments than we've historically seen.
Historically we've looked at about a six-month average period from bookings to revenue recognition. It's looking a little bit more like eight to nine months at this point, because we're seeing customers come in with larger campaigns, that are annual campaigns.
Okay. Didn't you say something about the back half of the year having these campaigns show up then? Is that?
Yeah.
The recommendation?
To give you some context, only 5% of the Q1 bookings actually converted into Q1 revenue.
Historically, hasn't that been about 30%?
Yeah, it's been historically much higher.
Wow.
We're seeing these larger campaigns that are spread over longer periods of time, and frankly, longer lead times on starting the campaigns themselves.
Only 5% of Q1 bookings translated into Q1 revenues.
Yes.
How's a guy like me supposed to model that? Huh? Any idea?
It's really interesting because what we're seeing is a pretty big shift from what we saw at the height of COVID-19. A lot of the things that we were seeing during COVID-19 were actually pretty fast turns, where a customer would come in, and it was kind of late, last minute, and they needed to go immediately and execute. We're seeing almost the exact opposite now, where the deal sizes are increasing.
Customers are looking for longer term commitments. Ultimately that's a very positive thing, but it does impact the near term bookings to revenue conversion. One of the things that's super exciting right now is if you look at Q1 bookings at $6.4 million for the entire quarter for managed services, we're already sitting at greater than $7 million here, halfway through Q2.
Again, a lot of those are large commitments that will ultimately stretch into the Q1 or potentially even the Q2 of next year.
Okay. Two more questions real quick. Were any of the other revenues Shake revenues?
Yes, some of the revenues were Shake revenues. Those revenues are still small. They did grow from Q4 to Q1. We're still working on building out the inventory there, and having more Shakes available for advertisers, but they grew from Q4 to now.
Okay. I'm going to ask you to pontificate a little bit. This influencer marketing has been a big market for many years now, according to the studies and stuff. It seems like you're getting a new level of interest at IZEA with advertisers.
Yeah.
Is this a general pickup in the whole marketplace, or wasn't the market as big as people said before? Or are you just doing something different to get more share?
Well, I think we're definitely getting more share. I don't think the entire space is growing at triple digits. We also know that there's a number of competitors that are frankly, struggling and seeing the exact opposite of what we've seen on our side. I think part of that has to do with our investment in marketing and continuing to build out the sales team.
Are you still doing your build-it-yourself sales team stuff?
You talking about the PSP program? Professional Sellers Program?
Yeah.
Yes, we are still doing that. We're continuing to graduate classes and build out the next generation of IZEA sellers. We've also added a handful of sellers from competitors. We're going to continue to do that as well.
How many sales guys do you have now? People, salespeople.
I believe that we are in the mid-30s right now.
How many would you want to have? By the year-end, how many do you want to have?
I don't have that number in front of me. We're always hiring sales people.
Okay.
We're always looking to add qualified people.
Okay, thanks.
Thank you.
The next question will come from Kevin Kelly with Private Investor. Please go ahead.
Hi, gentlemen. I just wanted to say, what a great presentation that was delivered here today. I really appreciate everything that was said. As a young professional, like myself, who loves IZEA, who's a millennial, who follows influencer culture, I was very excited about the possibility we're hearing that IZEA is looking to incorporate more remote work and looking to hire somebody as well, to deal with the Excuse me, I'm losing my words here.
The clear culture of the office, I think that's wonderful. My question more so has to do with reaching out to influencers themselves and working with influencers. What exactly, how exactly does IZEA, for example, determine who is a legit influencer and is a credible influencer to work with in terms of their social media? Just out of curiosity.
Yeah, a lot of that is going to be based on the data that we're able to gather through our platform. We are ingesting the influencer content. We are scoring the influencer content. We're benchmarking the content against the entire network, both the Optinetwork and as well as our Discovery's network.
We're able to look at a influencer both for their content, as well as the data that we get in terms of engagement, authenticity, and how influential they are, not just based on their followers, but how often they're being mentioned by other people, for example.
Okay. That sounds wonderful. Just a final question I would have here, too, is when exactly is IZEA planning to do the next round of hiring for young professionals, millennials, Gen Z'ers, Y's like myself, for marketing, for sales? What timeline would you put on that?
There are a number of jobs that are already posted on IZEA's website, specifically for sales. I believe that our next Professional Sellers Program starts in about three months. That is for younger people that may not have as much job experience, but that are excited about the influencer marketing space and a sales career. We are going to be hiring pretty heavily in marketing in particular.
We're looking to add five people in the marketing department. We've got one of those jobs already posted for an affiliate marketing manager. We're going to be really spending a fair amount of effort in building out that affiliate program, both for Shake as well as for IZEAx Discovery, and so we see that as a key hire. We're also going to be hiring additional designers, people in SEO, additional people to help with our social presence.
We think that there's a great opportunity to generate more revenue through our marketing efforts. That is a team that has historically been pretty small here and something that we're looking to expand.
That sounds great. Yeah. I was excited for the call and just looking at the copy. I'm more excited about what you guys are doing now. Thank you for taking my questions.
Thank you.
As a reminder, if you would like to ask a question, please press star and then one. The next question will come from Ed Dank, Investor. Please go ahead.
Yeah, thank you. Do you have any visibility as to when the EBITDA will be positive? I mean, you actually showed a decrease in EBITDA despite the huge increase in bookings, in Q4 and Q1.
Yeah. Right now, the focus is really more on growth than EBITDA. Our guideposts are to get that 30% revenue growth and at the same time be very aware of what our revenue contribution per employee is.
We're kind of using those two things to guide us moving forward. The money that we raised through the $75 million ATM was really designed to invest in this next stage of growth, not to rush to profitability here at a company that did less than $20 million in revenue last year.
Okay. Fair enough. Let's talk growth. You've had some press releases about three-figure increases in bookings, and yet you're only projecting 30% increases in revenues over the next three years. How do you reconcile the two?
What I had said was that 30% revenue increase was what we had set out as a goal, and that was the goal that we had set out at the end of last year. I had commented that we're looking to exceed those in any way that we can, and we're certainly on a trajectory right now to far surpass those.
Those bookings do take some time to be recognized as revenue. It won't likely be till the back half of this year that you start to see the types of increases in revenue that correspond to the bookings increases.
You're saying right now, you expect to be well over 30% this year, because your bookings are up triple digits.
Yeah. The bookings are up triple digits. We had set out those goals at the end of last year, and that still remains our guideposts. Look, we're trying to grow as fast as we possibly can. The 30% is kind of our baseline, and we're going to push that as much as our sales team can.
Why wouldn't you revise that upward? It seems like a three-foot high jump. I mean, anybody can do it, and nobody wants to see it. I mean, come on. We're in May, we're pushing June. You can laugh. We're in May. We're pushing June. You've got these triple-digit bookings.
You're saying most of them are going to be realized between now and the end of the year. And you're still saying within 30% increase this year. That seems rather low to me, and I would respectfully suggest you revise them upward, if you think you're going to realize the bookings.
We're going to focus on exceeding those numbers the best we can. We're not putting out any sort of additional guidance on top of that right now.
You've got all these big bookings. What scenario would cause you to only come in at 30%? Would that have to be a large amount of cancellations, or?
Yeah. There would have to be, I think, a significant amount of cancellations.
Okay.
You'd have to see some sort of world event that would drive that, would be my guess. We also have to recognize we are still very much so in a pandemic, and the world is a crazy place right now. We are focusing on controlling what we can control and to the extent that we can continue this pace, we are absolutely focused on doing that.
Are you saying now you're not confident that these bookings will result in the recognition of revenue?
No, I didn't say that.
Okay. We'll clarify.
There is always the chance that the world can change between us booking something and the revenue being recognized and the campaign being run, and we are not able to recognize the revenue until the campaign runs.
Okay. Your projections are based upon some sort of worldwide catastrophic event. Is that fair?
We've laid out kind of what that three-year vision is. I can't really expand upon that any further. We know where we are for Q1 with our bookings. We've had strong bookings here in Q2. The expectation as of right now is that those will be recognized in the back half of this year.
Okay. Thank you.
This will conclude today's question and answer session. I would now like to turn the conference back over to Ted Murphy for any closing remarks.
Thank you all for joining us today. This conference call will ultimately be posted on izea.com, and we appreciate you all being investors.
The conference has now concluded. Thank you for attending today's presentation, and you may now disconnect.