IZEA Worldwide Inc.
11/12/2025 | Press release | Distributed by Public on 11/12/2025 15:05
Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Cautionary Note Regarding Forward-Looking Information
This Quarterly Report on Form 10-Q (this "Quarterly Report") contains "forward-looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact contained in this report, including those contained in Management's Discussion and Analysis of Financial Condition and Results of Operations and the notes to our consolidated financial statements, particularly those that utilize terminology such as "may," "will," "would," "can," "could," "continue," "design," "should," "expects," "aims," "anticipates," "estimates," "believes," "thinks," "intends," "likely," "projects," "plans," "pursue," "strategy," "future," "forecasts," "goal," "hopes," or the negative of these words or other words or expressions of similar meaning, are forward-looking statements. Such statements are based on currently available operating, financial and competitive information, and are subject to inherent risks, uncertainties, and changes in circumstances that are difficult to predict and many of which are outside of our control. Future events and our actual results and financial condition may differ materially from those reflected in these forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause these differences include, but are not limited to, the following:
•adverse economic or market conditions that may harm our business; including supply-chain issues, labor distribution, business closures, tariffs, and inflationary pressures;
•a few of our customers accounting for a significant portion of our gross billings and accounts receivable, and the loss of, or reduced purchases from, these or other customers having a material adverse effect on our operating results;
•any erroneous or inaccurate estimates or judgments relating to our critical accounting policies;
•our ability to raise the additional funding needed to fund our business operation in the future;
•our ability to satisfy the requirements for continued listing of our common stock on the Nasdaq Capital Market;
•our ability to maintain effective internal control over financial reporting and effective disclosure controls and procedures;
•our ability to protect our intellectual property and other proprietary rights;
•our ability to maintain and grow our business;
•results of any future litigation and costs incurred in connection with any such litigation;
•competition in the industry;
•variability of operating results;
•our ability to maintain and enhance our brand;
•accuracy of tracking the number of user accounts;
•any security breaches or other disruptions compromising our proprietary information and exposing us to liability;
•our development and introduction of new products and services;
•our reliance on, and compliance with, open-source software;
•the successful integration of acquired companies, technologies, and assets into our portfolio of software and services;
•marketing and other business development initiatives;
•general government regulation;
•dependence on key personnel;
•the ability to attract, hire, and retain personnel who possess the technical skills and experience necessary to meet the service requirements of our customers;
•the potential liability concerning actions taken by our existing and past employees;
•any losses or issues we may encounter as a consequence of accepting or holding digital assets;
•impacts of the situation in the Middle East and the military conflict between Russia and Ukraine, and the global responses to them;
•risks associated with doing business internationally; and
•the other risks and uncertainties described in the Risk Factors section of this Quarterly Report and the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on March 27, 2025.
All forward-looking statements in this document are based on current expectations, intentions, and beliefs using information available to us as of the date of this Quarterly Report; we assume no obligation to update any forward-looking statements, except as required by law. Forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results to differ materially from any future results, performance, or achievements expressed or implied by such forward-looking statements.
Company Overview
IZEA Worldwide, Inc. ("IZEA", "Company," "we", "us" or "our") is a leading innovator in the creator economy, specializing in providing value through managing custom content workflow, creator search and targeting, bidding, analytics, and payment processing. The Company's mission is to make creator economy solutions for marketers. We offer a range of solutions, from creator agency services and technologies to a marketplace connecting marketers with creators. By fostering these connections, we light up the creator economy with IZEAs - social-first content, made by creators, that are culturally relevant and move at the speed of culture, champion the creators, empowering individuals to monetize their creativity, content, and influence.
IZEA made a significant mark in the industry by launching the first influencer marketplace, PayPerPost, in 2006, setting a precedent for the evolution of digital marketing platforms. Today, the Company caters to a diverse range of clients, including independent creators and Fortune 10 brands, offering services in influencer marketing, customer-generated content, and custom content creation. IZEA provides tech-enabled managed services and self-service software tools, accommodating the varying needs of its clientele and ensuring mutually beneficial collaborations within its ecosystem.
IZEA Flex is a robust suite of tools that enhance IZEA's ability to manage influencer marketing at scale. Beyond enabling seamless campaign execution, Flex empowers IZEA's internal teams to measure influencer marketing performance with precision. The platform boasts a suite of core modules, which together provide a comprehensive toolkit for optimizing influencer marketing campaigns. Flex is distinguished by its ability to quantify the ROI of marketing efforts at scale, complemented by the introduction of AI-powered tools that streamline content and creative campaign ideation.
Key Components of Results of Operations
Overall consolidated results of operations are evaluated based on Revenue, Cost of Revenue, Sales and Marketing expenses, General and Administrative expenses, Depreciation and Amortization, and Other Income (Expense), net.
Revenue
We generate revenue primarily from our managed services, which involve providing custom content, influencer
marketing, amplification, or other campaign management services to marketers (typically brands, agencies, or partners) who pay us for these services ("Managed Services").
Cost of Revenue
The Company acts as the principal in the vast majority of our contracts. Accordingly, our cost of revenue for contracts in which we act as a principal consists of costs paid to third-party creators who provide custom content, influencer marketing, or amplification services for our Managed Services customers, where we report revenue on a gross basis. It also includes internal costs for our campaign fulfillment and SaaS support departments. These costs include salaries, bonuses, commissions, stock-based compensation, employee benefit costs, and miscellaneous departmental expenses related to personnel responsible for supporting our customers and fulfilling our obligations under our contracts.
For contracts in which we act as an agent, revenue is reported on a net basis, which excludes amounts paid to third-party creators, as those costs are passed through to the customer. Cost of revenue for these contracts consists only of our internal labor and other fulfillment costs associated with arranging and managing services on behalf of our customers.
For our SaaS platform, the cost of revenue primarily includes personnel and related costs associated with customer support, platform maintenance, and other fulfillment activities directly tied to delivering our software services.
Sales and Marketing
Our sales and marketing expenses consist primarily of salaries, bonuses, commissions, stock-based compensation, employee benefit costs, travel, and miscellaneous departmental costs for our marketing, sales, and sales support personnel. They also include marketing expenses such as brand marketing, public relations events, trade shows, marketing materials, and travel expenses.
General and Administrative
Our general and administrative ("G&A") expense consists primarily of salaries, bonuses, commissions, stock-based compensation, employee benefit costs, and miscellaneous departmental costs related to our executive, finance, legal, human resources, and other administrative personnel. It also includes travel, public company, investor relations expenses, accounting, legal professional services fees, and other corporate-related expenses.
Within G&A, we incorporate technology and development costs, consisting primarily of our payroll costs for our internal engineers and contractors responsible for developing, maintaining, and improving our technology, as well as hosting and software subscription costs. These costs are expensed as incurred, except to the extent that they are associated with internal-use software that qualifies for capitalization, which is then recorded as software development costs in the consolidated balance sheet. When major software components are developed, we capitalize these as intangible assets. Depreciation and amortization related to these costs are separately stated under depreciation and amortization in our consolidated statements of operations and comprehensive loss.
G&A expenses include current period gains and losses on our acquisition costs payable and gains and losses from the sale of fixed assets. Impairments on fixed assets are included as part of G&A expenses presented separately in our consolidated statements of operations and comprehensive loss when deemed material.
Depreciation and Amortization
Depreciation and amortization expenses consists primarily of amortization of our internal-use software and acquired intangible assets from our business acquisitions. To a lesser extent, we also have depreciation and amortization on equipment used by our personnel. Costs are amortized or depreciated over the estimated useful lives of the associated assets.
Other Income (Expense)
Interest Expense. Interest expense is primarily related to the payment plans for purchasing computer equipment.
Other Income. Other income consists primarily of interest income earned on investments, as well as realized gains and losses on foreign currency exchange transactions, primarily related to the Canadian and Australian Dollar.
Results of Operations for the Three Months Ended September 30, 2025 and 2024
The following table sets forth a summary of our consolidated statements of operations and the change between the periods:
| Three Months Ended September 30, | ||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | |||||||||||||||||
| Revenue | $ | 8,072,380 | $ | 8,831,794 | $ | (759,414) | (9) | % | ||||||||||||
| Costs and expenses: | ||||||||||||||||||||
| Cost of revenue | 4,152,375 | 5,210,104 | (1,057,729) | (20) | % | |||||||||||||||
| Sales and marketing | 1,095,363 | 2,879,320 | (1,783,957) | (62) | % | |||||||||||||||
| General and administrative | 3,004,321 | 5,840,027 | (2,835,706) | (49) | % | |||||||||||||||
| Impairment of goodwill | - | 4,016,722 | (4,016,722) | (100) | % | |||||||||||||||
| Depreciation and amortization | 150,740 | 239,849 | (89,109) | (37) | % | |||||||||||||||
| Total costs and expenses | 8,402,799 | 18,186,022 | (9,783,223) | (54) | % | |||||||||||||||
| Loss from operations | (330,419) | (9,354,228) | 9,023,809 | (96) | % | |||||||||||||||
| Other income (expense): | ||||||||||||||||||||
| Change in the fair value of digital assets | - | (51,702) | 51,702 | (100) | % | |||||||||||||||
| Interest Expense | (1,654) | (1,654) | - | - | % | |||||||||||||||
| Other income (expense), net | 479,818 | 605,644 | (125,826) | (21) | % | |||||||||||||||
| Total other income (expense), net | 478,164 | 552,288 | (74,124) | (13) | % | |||||||||||||||
| Net income (loss) before income taxes | 147,745 | (8,801,940) | 8,949,685 | 102 | % | |||||||||||||||
| Tax benefit | - | 33,621 | (33,621) | (100) | % | |||||||||||||||
| Net income (loss) | $ | 147,745 | $ | (8,768,319) | $ | 8,916,064 | 102 | % | ||||||||||||
Revenue
Revenue during the three months ended September 30, 2025 decreased by $0.8 million, or 9% from the prior year's quarter. The three months ended September 30, 2024 total included $1.0 million of revenue from Hoozu that was divested in December 2024. Excluding the revenue from Hoozu, revenue grew $0.2 million, or 2.48% during the quarter ended September 30, 2025. As a result of our shift in focus to expanding our core enterprise customer base, Managed Services revenue increased quarter over quarter. This increase was driven by strong double-digit growth among large enterprise customers, partially offset by a decline in revenue from non-core, less profitable customers from the prior-year quarter.
Cost of Revenue
For the three months ended September 30, 2025, the cost of revenue declined by $1.1 million compared to the same period in the prior year, primarily due to the absence of Hoozu-related costs, which were included in the prior year period. Excluding Hoozu, the cost of revenue increased by 5.3% year-over-year.
Sales and Marketing
Sales and marketing expense for the three months ended September 30, 2025 decreased by $1.8 million, or approximately 62%, compared to the same period in 2024. This decrease is primarily due to lower payroll and related costs, following our December 2024 targeted workforce reduction, a pause in current period advertising and promotional spending, and decreased general contractor fees.
General and Administrative
General and administrative expense for the three months ended September 30, 2025 decreased by $2.8 million, or approximately 49%, compared to the same period in 2024. The decrease is primarily due to lower employee-related costs following our December 2024 targeted workforce reduction, reduced use of external contractors, decreased professional service fees, and lower software licensing expenses.
Impairment of Goodwill
In September 2024, following an interim assessment of goodwill in the Company's IZEA reporting segment, we determined that the carrying value of the Company's IZEA reporting segment as of September 30, 2024, exceeded the fair value. As a result of the valuation, the Company recorded a $4.0 million full impairment of goodwill related to prior IZEA acquisitions in the nine months ended September 30, 2024.
Depreciation and Amortization
Depreciation and amortization expense for the three months ended September 30, 2025 decreased by $89,109, or approximately 37%, compared to the same period in 2024, due primarily to Intangible Assets becoming fully amortized in 2024.
Other Income (Expense)
Interest expense totaled $1,654 during the three months ended September 30, 2025, compared to $1,654 in the prior year period.
Other income, net, totaled $0.5 million during the three months ended September 30, 2025, a decrease of $0.1 million compared to the same period in 2024, primarily from lower investment portfolio interest income.
Net Income (Loss)
Net income for the three months ended September 30, 2025 was $0.1 million, compared to the net loss of $8.8 million for the same period in 2024.
Results of Operations for the Nine Months Ended September 30, 2025 and 2024
The following table sets forth a summary of our consolidated statements of operations and the change between the periods:
| Nine Months Ended September 30, | ||||||||||||||||||||
| 2025 | 2024 | $ Change | % Change | |||||||||||||||||
| Revenue | $ | 25,173,975 | $ | 24,878,493 | $ | 295,482 | 1 | % | ||||||||||||
| Costs and expenses: | ||||||||||||||||||||
| Cost of revenue | 12,940,561 | 14,355,679 | (1,415,118) | (10) | % | |||||||||||||||
| Sales and marketing | 3,179,162 | 9,142,590 | (5,963,428) | (65) | % | |||||||||||||||
| General and administrative | 8,842,379 | 12,995,910 | (4,153,531) | (32) | % | |||||||||||||||
| Impairment of goodwill | - | 4,016,722 | (4,016,722) | (100) | % | |||||||||||||||
| Depreciation and amortization | 460,334 | 669,783 | (209,449) | (31) | % | |||||||||||||||
| Total costs and expenses | 25,422,436 | 41,180,684 | (15,758,248) | (38) | % | |||||||||||||||
| Loss from operations | (248,461) | (16,302,191) | 16,053,730 | 98 | % | |||||||||||||||
| Other income (expense): | ||||||||||||||||||||
| Change in the fair value of digital assets | - | 28,414 | (28,414) | (100) | % | |||||||||||||||
| Interest Expense | (5,092) | (5,654) | 562 | (10) | % | |||||||||||||||
| Other income (expense), net | 1,463,566 | 1,909,735 | (446,169) | (23) | % | |||||||||||||||
| Total other income (expense), net | 1,458,474 | 1,932,495 | (474,021) | (25) | % | |||||||||||||||
| Net income (loss) before income taxes | 1,210,013 | (14,369,696) | 15,579,709 | 108 | % | |||||||||||||||
| Tax benefit | - | 140,699 | (140,699) | (100) | % | |||||||||||||||
| Net income (loss) | $ | 1,210,013 | $ | (14,228,997) | $ | 15,439,010 | 109 | % | ||||||||||||
Revenue
Revenue during the nine months ended September 30, 2025, increased by $0.3 million, or 1%, from the same period in 2024, which included $2.3 million from Hoozu, which was divested in December 2024. Excluding Hoozu, revenue increased $2.6 million, or 11%, during the nine months ended September 30, 2025. As a result of our shift in focus to expanding our core enterprise customer base, revenue from Managed Services increased quarter over quarter. This increase was driven by strong double-digit growth among large enterprise customers, partially offset by a decline in revenue from non-core, less profitable customers from the prior-year period.
Cost of Revenue
For the nine months ended September 30, 2025, the cost of revenue declined by $1.4 million compared to the same period in the prior year, primarily due to the absence of costs related to Hoozu, which was included in the prior year period. Excluding Hoozu, the cost of revenue increased by 5.2% year-over-year.
Sales and Marketing
Sales and marketing expense for the nine months ended September 30, 2025, decreased by $6.0 million, or approximately 65%, compared to the same period in 2024. Advertising expenses decreased due to lower payroll and related costs, following our December 2024 targeted workforce reduction, a pause in current period advertising and promotional spending, and decreased general contractor fees.
General and Administrative
General and administrative expense for the nine months ended September 30, 2025, decreased by $4.2 million, or approximately 32%, compared to the same period in 2024. The decrease is primarily due to lower employee-related costs following our December 2024 targeted workforce reduction, reduced use of external contractors, decreased professional service fees, and lower software licensing expenses.
Impairment of Goodwill
In September 2024, following an interim assessment of goodwill in the Company's IZEA reporting segment, we determined that the carrying value of the Company's IZEA reporting segment as of September 30, 2024, exceeded the fair value. As a result of the valuation, the Company recorded a $4.0 million full impairment of goodwill related to prior IZEA acquisitions in the nine months ended September 30, 2024.
Depreciation and Amortization
Depreciation and amortization expense for the nine months ended September 30, 2025, decreased by $209,449, or approximately 31%, compared to the same period in 2024, due primarily to Intangible Assets becoming fully amortized in 2024.
Other Income (Expense)
Interest expense totaled $5,092 during the nine months ended September 30, 2025, compared to $5,654 in the prior year period.
Other income, net totaled $1.5 million for the nine months ended September 30, 2025, compared to $1.9 million in the prior year period, primarily from lower investment portfolio interest income.
Net Income (Loss) from Operations
Net income (loss) from operations for the nine months ended September 30, 2025 was $1.2 million, a $15.4 million increase from the net loss of $14.2 million for the same period in 2024. The increase in net income was primarily the result of decreased operating costs in the current year period.
Key Metrics
We review the information provided by our key financial metrics, Managed Services Bookings, and gross billings, to assess the progress of our business and make decisions on where to allocate our resources. As our business evolves, we may change the key financial metrics in future periods.
Managed Services Bookings
Managed Services bookings represent total sales orders received during a period, net of cancellations and refunds. Contracts vary by customer and scope, ranging from custom content projects to integrated marketing campaigns, and generally extend from several months up to a year. Managed Services bookings provide a useful measure of overall demand but are not necessarily predictive of quarterly revenue, as the timing of revenue recognition varies with contract size, complexity, and customer arrangements. Certain customers enter into annual spend commitments that establish a defined budget for services to be performed throughout the year, while others engage the Company for specific campaigns or deliverables. These differing contract structures may influence the timing and distribution of bookings and related revenue. The Company uses this metric to evaluate customer and market trends, to plan operational staffing, and to inform product development initiatives.
Managed Services bookings totaled $3.6 million and $7.9 million for the three months ended September 30, 2025 and 2024, respectively, and $16.7 million and $27.4 million for the nine-month periods then ended. Excluding Hoozu, which the Company divested in December 2024, bookings for the three and nine-month periods in 2024 totaled $6.4 million and $27.4 million, respectively. The decline in bookings for both periods primarily reflects the Company's strategic shift away from smaller, less strategic customers, which tend to be lower-value, project-based, and generate limited repeat business.
Non-GAAP Financial Measure
Adjusted EBITDA
Adjusted EBITDA is a "non-GAAP financial measure" under the rules of the Securities and Exchange Commission (the "SEC"). We define Adjusted EBITDA as operating income (or loss) from operations before depreciation and amortization, non-cash stock-based compensation, and other operating adjustments that are non-recurring or unusual to our core ongoing operations.
We use Adjusted EBITDA as a measure of operating performance, for planning purposes, to allocate resources to enhance the financial performance of our business and in communications with our Board of Directors regarding our financial performance. We believe that Adjusted EBITDA also provides valuable information to investors as it excludes non-cash transactions, and it provides consistency to facilitate period-to-period comparisons.
You should not consider Adjusted EBITDA in isolation or as a substitute for an analysis of our results of operations as under GAAP. Not all companies calculate Adjusted EBITDA similarly, limiting its usefulness as a comparative measure. Moreover, Adjusted EBITDA has limitations as an analytical tool, including that Adjusted EBITDA:
•does not include stock-based compensation expense, which is a non-cash expense, but has been, and will continue to be for the foreseeable future, a significant recurring expense for our business and an essential part of our compensation strategy;
•does not include stock issued for payment of services, which is a non-cash expense, but has been, and is expected to be for the foreseeable future, an important means for us to compensate our directors, vendors, and other parties who provide us with services;
•does not include depreciation and intangible assets amortization expense, impairment charges, and gains or losses on disposal of equipment, which is not always a current period cash expense, but the assets being depreciated and amortized may have to be replaced in the future; and
•does not include non-operating activity, such as interest income and other gains, losses, and expenses that we believe are not indicative of our ongoing core operating results, but these items may represent a reduction or increase in cash available to us.
Because of these limitations, Adjusted EBITDA should not be considered a measure of discretionary cash available to us to invest in the operation and growth of our business or as a measure of cash that will be available to us to meet our obligations. You should compensate for these limitations by relying primarily on our GAAP results and using these non-GAAP financial measures as supplements. In evaluating this non-GAAP financial measure, you should be aware that in the future, we may incur expenses similar to those for which adjustments are made in calculating Adjusted EBITDA. Our presentation of this non-GAAP financial measure should also not be construed to infer that our future results will be unaffected by unusual or non-recurring items.
The following table sets forth a reconciliation from the GAAP measurement of net income (loss) to our non-GAAP financial measure of Adjusted EBITDA for the three and nine months ended September 30, 2025, and 2024:
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Net income (loss) from operations | $ | 147,745 | $ | (8,768,319) | $ | 1,210,013 | $ | (14,228,997) | |||||||||||||||
| Impairment of goodwill and intangible assets | - | 4,016,722 | - | 4,016,722 | |||||||||||||||||||
| Adjustment to the fair market value of digital assets | - | 51,702 | - | (28,414) | |||||||||||||||||||
| Non-cash stock-based compensation | 445,643 | 1,579,236 | 1,086,489 | 2,328,356 | |||||||||||||||||||
| Non-cash stock issued for payment of services | 89,995 | 79,057 | 269,991 | 229,063 | |||||||||||||||||||
| Depreciation and amortization | 150,740 | 239,849 | 460,334 | 669,783 | |||||||||||||||||||
| Interest expense | 1,654 | 1,654 | 5,092 | 5,654 | |||||||||||||||||||
| Interest income | (482,760) | (607,712) | (1,429,292) | (1,908,729) | |||||||||||||||||||
| Tax benefit | $ | - | $ | (33,621) | - | (140,699) | |||||||||||||||||
|
Adjusted EBITDA (1)
|
$ | 353,017 | $ | (3,441,432) | $ | 1,602,627 | $ | (9,057,261) | |||||||||||||||
| Revenue | $ | 8,072,380 | $ | 8,831,794 | $ | 25,173,975 | $ | 24,878,493 | |||||||||||||||
| Adjusted EBITDA as a % of Revenue | 4.4 | % | (39.0) | % | 6.4 | % | (36.4) | % | |||||||||||||||
(1) The 2024 measure excludes interest income to ensure comparability with the Company's revised definition of the metric, which no longer includes interest income beginning in 2025.
Liquidity and Capital Resources
Near-Term Liquidity and Capital Resources
The Company's cash requirements have historically included funding the development and integration of our technology platforms, marketing initiatives, and general and administrative expenses, such as salaries, bonuses, and commissions. The Company has incurred losses and negative cash flow from operations for most periods since inception, primarily the result of costs associated with third-party creators, personnel expenses (including salaries, bonuses and stock-based compensation), and other general and administrative expenses, including technology and development costs, which have exceeded revenue. As a result, the Company had an accumulated deficit of $103.1 million as of September 30, 2025, which has been funded through the issuance of public equity.
We had cash and cash equivalents of $51.4 million as of September 30, 2025, as compared to $44.6 million as of December 31, 2024. This $6.7 million increase is the result of the maturation of certain investments, supplemented by cash generated from operating activities.
| Nine Months Ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Net cash (used for)/provided by: | |||||||||||
| Operating activities | $ | 2,435,965 | $ | (8,657,588) | |||||||
| Investing activities | 5,827,477 | 17,690,148 | |||||||||
| Financing activities | (1,361,474) | (538,643) | |||||||||
| Effect of exchange rates on cash | (155,552) | 17,455 | |||||||||
| Net increase in cash and cash equivalents | $ | 6,746,416 | $ | 8,511,372 | |||||||
Net cash provided by operating activities was $2.4 million during the nine months ended September 30, 2025, primarily driven by net income of $1.2 million and strong accounts receivable collections partially offset by reductions in accrued expenses and deferred revenue. Net cash provided by investing activities was $5.8 million during the nine months ended September 30, 2025, primarily due to the maturity of marketable securities. Net cash used for financing activities during the nine months ended September 30, 2025 was $1.4 million, primarily due to payments for shares withheld for taxes and the repurchase of treasury stock.
Financial Condition and Outlook
Beginning early in 2025, we implemented a new account management model, redirecting our focus and resources primarily toward larger, more valuable recurring accounts - our core enterprise customers - while reducing the selling and delivery resources previously devoted to cost-intensive, lower-value, project-based accounts with limited repeat business. This strategic realignment resulted in a reduction in current-year contract bookings, while significantly improving profitability and strengthening our foundation for sustainable growth. We are initiating a structured transition for our non-enterprise customers into a new small and mid-sized business ("SMB") service model; this targeted approach will allow us to serve a narrower set of these customers profitably, while maintaining strategic alignment with our enterprise objectives.
Managed Services bookings, excluding Hoozu, declined 26.3% to $18.2 million for the nine months ended September 30, 2025, compared to the prior-year period, and contract backlog declined from $15.5 million at the beginning of the year to $7.1 million at quarter-end. The decline primarily reflects the Company's strategic focus on higher-quality, recurring accounts, along with more cautious marketing spend among certain enterprise and agency clients amid broader economic uncertainty, including tariff impacts.
Revenue from Managed Services, excluding Hoozu, increased 14% for the nine months ended September 30, 2025, compared to the prior-year period, while overall growth slowed to 5% in the quarter. Growth was driven by expansion within enterprise customers, partly offset by a reduction was concentrated in smaller in non-strategic accounts we intentionally deemphasized.
We implemented significant cost savings beginning in December 2024 and continuing into 2025 to align operating expenses with anticipated revenue and accelerate our path to profitability. These actions have been effective, resulting in a $10.7 million improvement in EBITDA during the first nine months of 2025, improving from a $9.1 million loss in 2024 to a $1.6 million profit in 2025.
We expect growth opportunities in our core enterprise accounts, along with other business development activities, to support profitable organic growth over the next twelve months, albeit from a lower, but more profitable revenue base in 2025. While revenue is expected to increase over time, such growth may not occur consistently each quarter. Operating expenses are expected to increase gradually as we invest in expansion; however, we believe our current cost structure is better aligned to scale efficiently, limiting the recurrence of historical cash losses and reducing the strain on working capital as the business grows.
We believe our cash and cash equivalents are sufficient to fund planned growth initiatives over the next twelve months. If additional capital is needed, we expect to obtain it primarily through equity, equity-linked, or debt financing until our operations generate sufficient profitability to meet ongoing capital requirements
Off-Balance Sheet Arrangements
The Company did not engage in any "off-balance sheet arrangements" (as that term is defined in Item 303(a)(4)(ii) of Regulation S-K) as of September 30, 2025.
Critical Accounting Policies and Use of Estimates
There have been no material changes to our critical accounting policies as set forth in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," included in our Annual Report on Form 10-K for the year ended December 31, 2024. For a summary of our significant accounting policies, please refer to "Note 1 - Company and Summary of Significant Accounting Policies" included in Item 1 of this Quarterly Report.
Recent Accounting Pronouncements
See "Note 1 - Company and Summary of Significant Accounting Policies," under Part I, Item 1 of this Quarterly Report for information on additional recent pronouncements.
IZEA Worldwide Inc. published this content on November 12, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on November 12, 2025 at 21:08 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]