IZEA Worldwide Inc (IZEA) 2019 Q1 法說會逐字稿

Greetings. Welcome to the IZEA Worldwide, Inc. First Quarter 2019 Earnings Conference Call. (Operator Instructions) Please note this conference is being recorded. I will now turn the conference over to your host, Ryan Schram, Chief Operating Officer. Mr. Schram, you may begin.

Good afternoon, and welcome to IZEA's Q1 2019 earnings call. I'm Ryan Schram, Chief Operating Officer at IZEA, and joining me today is IZEA's Chief Financial Officer, Troy Vanke; and IZEA's Chairman and Chief Executive Officer, Ted Murphy. Thanks for being us with us this afternoon.

Earlier today, the company issued a press release with details pertaining to our first quarter performance for 2019. If you'd like to review those details, all of IZEA's investor information can be found in our Investor Relations website, izea.com/investors.

Before we begin, please take note of the safe harbor paragraph that appears at the end of the press release covering the company's financial results, and be advised that during the course of today's earnings call, our management team will discuss IZEA's business outlook and make forward-looking statements. These statements are predictions based on our team's expectations as of today that are subject to inherent risks and uncertainties and should not be unduly relied upon. Actual events, results or trends could differ materially from our forecast due to a number of factors, including those mentioned in our most recently filed periodic reports with the SEC. The company and our management team assume no obligations to update forward-looking statements made in today's call.

In addition, our update today refers to certain non-GAAP financial measures, specifically gross billings and adjusted EBITDA. A reconciliation of these measures to the most directly comparable GAAP measure is presented in our earnings release with additional discussion of both of these measures available on our most recent Form 10-K and our forthcoming 10-Q available under SEC filings in the Investors section of IZEA.com.

With the appropriate disclosures out of the way, I'm pleased to introduce my colleague and IZEA's Chief Financial Officer, Troy Vanke. Troy?

Thank you, Ryan, and good afternoon, everyone. I'm pleased to recap with you our results for the first quarter of 2019.

As mentioned in our prior public releases, we acquired TapInfluence in July 2018. This acquisition, combined with strong organic growth of IZEAx, has driven a significant increase in revenue from our software-as-a-service or SaaS offerings when comparing first quarter 2019 against 2018. We expect to see a similar comparison next quarter until the acquisition annualizes on itself in Q3 of this year. From that point forward, we believe our SaaS growth will primarily come from IZEAx.

The April 2019 launch of IZEAx 3.0 was a key milestone in integrating many of the features and functionality of the TapInfluence platform into IZEAx, and we believe this launch will be a catalyst for the successful migration of the TapInfluence customer base into IZEAx.

For the first quarter 2019, IZEA reported total revenues of almost $4.8 million, with almost $3.9 million coming from our Managed Services business and about $900,000 coming for our SaaS offerings. This compares with Q1 2018 revenues of almost $3.8 million for Managed Services and less than $100,000 for our SaaS offerings.

For our Managed Services business, where revenues are recognized on a gross basis, our gross billings equal our recognized revenues. For our SaaS services, where revenues are recognized on a net basis, the gross billings for the first quarter of 2019 were just over $900,000 compared to gross billings of under $100,000 for the first quarter 2018.

Our cost of revenue exclusive of amortization was about $2.1 million in Q1 2019 as compared to just under $2.2 million in Q1 2018. As a percentage of revenue, our cost of revenues exclusive of amortization has improved from 55.5% in Q1 2018 to 43.8% in Q1 2019 or an improvement of over 1,100 basis points. This improvement is consistent with what we would expect to see as our balance of revenue derived from our SaaS offerings continues to increase.

Our total cost and expenses were $6.5 million for Q1 2019 compared with $5.8 million for Q1 2018. This comparison includes 2 onetime nonoperating items, both of which contribute to the comparative increase. In Q1 2018, our total cost and expenses are lower partly because we recorded a gain of just over $300,000 associated with adjusting our accrued acquisition cost to fair value. In Q1 2019, our total cost and expenses are partly higher because we recorded a loss of $190,000 associated with our 2019 settlement of a portion of our accrued acquisition costs.

Our net loss for Q1 2019 was $1,830,000 compared to $2,045,000 for Q1 2018. Adjusted EBITDA for Q1 2019 was a loss of $873,000 compared to a loss of $1,850,000 in Q1 2018 or an improvement of about $975,000. As a reminder, a reconciliation of adjusted EBITDA to net income is presented in our earnings release.

As of March 31, 2019, we had cash on hand of just over $2.3 million with an outstanding balance on our line of credit of just over $1.3 million. We closed on our secondary equity offering on Friday of last week, which has further increased our cash reserves by approximately $9.3 million. Despite the increase in our cash position, we still are likely to issue equity under our effective shelf registration for the payment due in July 2019 for the TapInfluence acquisition, although the final form for this payment will be determined closer to the time the payment is due.

With that, I'll turn the call back over to Ted.

Thank you, Troy. We are going to keep things relatively short today as we had an extensive call just 6 weeks ago.

IZEA kicked off 2019 with a strong Q1. The significant top line and bottom line improvements reflect a concentrated effort to drive growth while increasing operational leverage and efficiency throughout the organization. The focus on SaaS licensing and marketplace fees has had dramatic positive impact on the company. We have seen significant growth of IZEAx licensing revenue in particular and believe the recent release of IZEAx 3.0 will further bolster our sales efforts throughout the year. At the end of Q1, our total SaaS licensing fees under contract in 2019 has already exceeded total SaaS licensing revenues for 2018.

While we are pleased with our revenue growth and margin improvements in the quarter, we believe we can grow faster and gain more leverage. The completion of our recent $10 million common stock offering will enable us to make strategic investments in areas of the organization where we see opportunities to drive meaningful top line growth and margin expansion, particularly with our SaaS revenue lines.

We decided to raise this round of financing for 4 main reasons. One, this is a $2 billion market and growing. After 13 years of pioneering this space, we believe that the demand for an enterprise-class influencer marketing platform is finally here. This is evidenced by the budget and personnel now in place at both brands and agencies. Brands now have multimillion dollar influencer marketing budgets, along with VP and director level staff that have influencer marketing in their title. Just as these organizations have come to rely on software to manage their display ad spend and other marketing efforts, these same organizations need an enterprise-class platform to manage their influencer marketing programs, which have gotten more complicated and sophisticated over time.

Two, we have the best platform for large enterprises. With the release of IZEAx 3.0, we are extremely confident that we have a best-in-class platform for enterprise customers. These large companies are our target market, and we are uniquely equipped to serve these customers. The Unity Suite has a comprehensive features set that is unlike anything in the space. This has been validated by multiple takeoffs and wins with Fortune 500 brands and the world's largest agencies.

Three, financial strength matters. It is critical that we have a strong balance sheet as a public company. It impacts our ability to win business, recruit and retain talent and make the right long-term investments. Our balance sheet is particularly important when approaching large customers that have well-defined procurement processes and in-depth vendor reviews. The public nature of our company provides our customers with full financial transparency, and $2 million in cash on the balance sheet simply isn't adequate when customers are considering a multimillion-dollar spend. We cannot allow our balance sheet to be a deterrent for customers.

Number four, and most importantly, we believe the timing is finally right to aggressively grow our SaaS business. With a large customer budget in place, an incredible technology platform and a strong balance sheet, there's an opportunity for significant growth of high-quality revenue. We believe that this investment will provide the resources we need to not only increase our overall rate of growth but help us capture more dollars from high-margin recurring revenue streams.

While we remain focused on responsibly balancing investment with profitability, we believe that there is a large addressable market for our services, and we seek to gain a larger share of that market. IZEA will be investing in increased marketing activities, sales staff and engineers to further increase our leadership position in the influencer marketing space. We expect to begin to see the benefits of those investments later this year, particularly during the holiday season when our customers have historically spent the most.

We are incredibly excited by the opportunity at hand. Our team has waited a very long time for this market to be where it is. Our patient (sic) [patience], perseverance and vision has positioned us well, and I am thankful for our team, our customers and our investors. We look forward to the next chapter of IZEA and intend to capitalize on the market that we pioneered.

Thank you for spending time for this, this afternoon. I would now like to open the call for Q&A.

(Operator Instructions) Our first question comes from the line of Mike Malouf from Craig-Hallum Capital Group.

I'm wondering -- with the 3.0 now out now, I'd love some color on how the initial go-to-market is going. Any color on how long you think it'll take before you introduce a large consumer company to the platform until they sign up for a license and how that sales pipeline is going?

Yes. Thank you. So we had a couple of customers that were introduced in the platform before it launched. We had actually made some announcements about those customers. One of those was a top 5 global PR firm. Another one was a Fortune 200 company. Those companies are up and running inside of the platform right now. We are in the process of doing demos for new customers and existing Tap customers, and we hope to start moving those customers over into IZEAx 3.0 over the coming months. But the platform is actually being used on both sides from a sales perspective. Our SaaS team is actively pitching those to the platform to new customers, and we've actually seen our Managed Services team using it in their sales pitches as well.

Great. And then just as it relates to Managed Services, how much impact will IZEA 3.0 have on Managed Services? Or are your internal employees basically so good at using the old platform that this isn't that big of a help for them or maybe it is a big help for them? I'd love some color on that.

Sure, Mike. It's Ryan. What I'd say to that is we consider ourselves one of our own customers, right? So our team has been just as much excited about the release as our external customers are because, frankly, the kinds of duties that are related to execution of an influencer marketing campaign are quite common, whether it happens to be our customer using the software or ourselves. So any efficiencies that are brought to bear at either side of that ledger tend to be beneficial for both parties.

What I would say, though, is that, to Ted's point before, we're seeing a really interesting nuance in the market that there are customers who firmly want to make a SaaS investment, firmly want to make a Managed Service investment, but some want to be able to do both. So the ability for us to work off of a singular infrastructure and have that be a leverageable asset for both sides of our business, we think, is really unique and going to be long-term beneficial.

I'd also suggest that the process of being able to do things like discover influencers more effectively, collaborating on content, monitoring performance, those are also things that affect not only just SaaS customers but Managed customers as well. And so it's a great way of being able to involve technology in what would otherwise be a very high-touch consultative process.

That's really helpful. And then just one last question from me. As you look out into the industry, if one does just a little bit of research, they see a pretty bifurcated and fragmented market. And I'm just wondering, Ted, if you could just give a comment or 2 on that fragmentation and whether or not now after you've bolstered up the balance sheet that this could give you an opportunity to participate on the consolidation side.

Yes. The market is absolutely fragmented. There are players of all shapes and sizes and geographies all around the world. We continue to have discussions with various companies. We do believe that there is an opportunity for consolidation, but we also want to make sure that we're looking at companies that are going to be a right cultural fit for us and a right operational fit for us as well. So we're certainly keeping our eyes open and having discussions, but nothing else to report at this time.

Our next question comes from the line of [R. A. Cole] from Cole Capital.

A question about marketing to potential customers. As you know, there are third-party services out there like Forrester, Gartner, et cetera. A lot of them have a number of your competitors' products ranked more highly than yours, but then again they're looking at your older products. My question is this, with IZEAx, how rapidly do you think you're going to be able to get some of these opinion shapers to evaluate your product and actually confirm, as you've said earlier, that your product really is as good as it is so that you end up having more of a positive buzz rather than just word-of-mouth from a handful of companies?

That's a great question. We've been in talks with many of the leading third-party research companies, whether it's Frost & Sullivan, Gartner, Forrester and the like. I think that the important thing for investors to recognize is that there are multiple portions of those businesses as well. There are the third-party research portions. There are also the pay-to-play research portions, where frankly you hire those organizations to be able to certify whatever you like to certify. So yes it's a little bit of a caveat emptor in those situations to realize the difference in those situations. At the same time, we also recognize that there is an increasing focus on more self-reported review platforms, whether it happens to be a G2 review or similar that are equally important in being able to drive credibility from a SaaS perspective.

So part of our broader marketing strategy as we look to the back half of this year and into 2020 is really to focus on, I think, what you're getting at, which is differentiation awareness, not just brand awareness.

We're quite comfortable with the IZEA brand. We've been around now for 13 years, and we did a high degree of regard for that. But frankly, one of the things that we see often times, given even the startup space and the fragmented space of startups trying to get into this, is that they can go ahead and say pretty much whatever they want about our product and [some may exist in thin air], where we have to stand behind it down to the audit level and what it's supposed to do and what it actually does do. And so when we released things like IZEAx 3.0, that's software that actually exists, not just smoke and mirrors or hopes and dreams.

Great. And just a follow-up regarding your sales effort. Could you explain how you're organized today in terms of how many quota-carrying salespeople you have offering the Managed Services and the SaaS platforms? And are they doing it together or separately in terms of selling it?

And then moving forward, with this $10 million you have, what are your aspirations in terms of how this manpower number on quota-carrying people will change over the next 12 months or so?

Yes. I'll start with the second part of the question first. Our intent as we look to the back half of the year and into 2020 is to use some of these proceeds to bolster our sales and marketing efforts.

Currently, we run the enterprise SaaS team, sales team separate from that of the Managed Service team. However, there are circumstances not only on an internal referral basis where the 2 will collaborate with customers who want to be able to pursue both avenues. But we also are running trials to see for select sellers on both the SaaS as well as managed service side of our business to be able to cross-sell those to large Fortune 100 brands as well as within agencies knowing that there are circumstances where there's a desire to have both be purchased by the same customer.

So in terms of head count , are you comfortable at all talking about where you are today and where you'd like to be in terms of the quota-carrying reps at the company?

We don't talk about the exact number of sellers, but our growth goal would be to go handsomely in terms of being able to grow that team upwards of 25% to 50% in an ideal world. It's a competitive landscape that I'm sure you're aware right now, and for us, we're looking to avoid warm body syndrome. We really want people who are going to give us a good chunk of their career and for us to reciprocate and give them a wonderful opportunity to partner with brands and agencies.

(Operator Instructions) Our next question comes from the line of [John Bisson] from -- a private investor.

So I've got a couple of questions for you. I guess the first question I have is, what do you guys see as your biggest hurdle in your space to really increase in sales? We talked about the sales team. If you could kind of expand as far as what you think the biggest hurdle is. You've mentioned in previous calls just a lack of education in the market, understanding that influencer space. So if you can address that, that would be great.

Yes. No. I think that is certainly one of the aspects of -- just like you'd probably expect, there's no one silver bullet. I think differentiation as the previous investor asked a question on is one of those things that we always can do a better job at. We're really proud of what we've built here, both from a services mindset, just as much as a technological one. And we feel like that's a huge opportunity for us to really double down and be able to communicate to prospective and current customers alike that, that is something truly unique to IZEA.

Secondarily, and this is starting to shake out, is that fragmented landscape that several people have discussed on this call is filled with many early-stage startups, who frankly create a lot of noise in the channel and are not necessarily running sustainable businesses long term but that can cause interference for credible businesses like IZEA in the short term. So we've done a number of different things strategically to overcome those challenges optically as much as functionally, and we're confident that we're well positioned to be the long-term player, not just the opportunistic short-term player.

Third, I would say that there is always an opportunity to be able to do more nuanced forms of marketing acquisition and differentiation awareness building. We're happy with what we've done so far today, especially in recent years, but we know that interest in both influencer marketing and custom content are at an all-time high. Marketers are expressing through third-party research that the effectiveness of those mediums are also at all-time highs. So for us, we really feel like the opportunity is in front of us, not behind us. So we're going to capitalize on that in the second half and onwards this year.

Are you guys finding a lot of repeat customers?

We're fortunate, both parts of the business, we've benefited in being able to see renewals be strong just as much as return business, especially on the brand side. To be entirely candid, one of the challenges right now on the broader marketing ecosystem irrespective to IZEA is that traditional agencies are going through challenges of their own, transforming from retainers to projects, for example. And as a result, the way that you would evaluate existing business coming from agency customers is a little bit different because they may in fact move the account but we might win it from the agency who wins the business next or the brand itself. It just depends on the circumstance.

And that, frankly, is one of the inherent challenges when you run a managed service business, is you have to be agile enough to accommodate that, which is why the predictability and the recurring nature of the SaaS model really balances out our risk profile long term. When you're having companies sign 1-, 2-, 3-year contracts and then giving you marketplace spend on top of that beyond the licensing commitment, that really gives you a linear line of sight to be able to say, "Here's where we're going to be 2 years from now, not just 2 quarters from now."

Right, right. Okay. Good. And then what are you guys doing as a company just to target small organizations? I hear a lot of talk about Fortune 500, Fortune 200, top 5 companies within the space. But what are you guys doing to really target these small organizations, which really makes up the bulk of the companies out there that could really, I think, use your platforms?

Yes. From a sales perspective, our focus really is on those larger companies, specifically those large agencies, those top brands because that's where our platform really shines. We have built things from the ground up to service enterprise customers. A lot of what makes our product unique is around the underlying structure, the way that permissions work, the way that accounts work, the way that even finances work. And so that is one of the reasons that we target those large customers.

At the same time, we did launch our discovery product in January, which is our $149 a month self-service product. People can come in. They can just sign up with a credit card and start using that platform. We do intend to announce other parts of that platform that are going to be geared more towards smaller companies over time, but we really put our focus from a sales perspective on those larger organizations. It's -- the people that come in and sign up self-serve are not the primary focus, at least today.

Okay. Would it be fair to say that there will be an opportunity to, and as far as the growth opportunity goes, to really -- to target small organizations at some point?

There is an opportunity there, absolutely. What we have found with those smaller organizations is a lot of the transactions that they're doing or engagements with influencers are not cash-based. Or if they are, they're much smaller dollar amounts. So when we are looking at really trying to grow the top line and be able to have people who are spending tens of thousands or hundreds of thousands of dollars through our marketplace, where we're getting an additional take rate on every dollar they spend, looking at those smaller businesses today with our platform doesn't make as much financial sense.

Okay. Good deal. And just one final question, guys. Any update on FLUVIP? Is that something you guys are still considering or looking into? Or...

That is an ongoing process for us. We are still very much so in financial diligence. No real further update at this point.

And our next question comes from the line of Jon Hickman from Ladenburg Thalmann.

Can you hear me?

Hi, Jon.

All right. So Troy, can you tell us so we're all in the same page how many shares are outstanding now?

It's -- yes, we did. It was like 12.8 million was what was outstanding before the deal and we issued 14.7 million. So it's 27.5 million.

Okay. And then I have a question for, I guess, both Ryan and Ted. So how -- first of all, how is Pay Pop doing? And then can you tell me which of the new features in IZEA 3.0 that you're most excited about?

Yes. So Pay Pop is small but growing. Up until at this point, it's only been made available to a select group of people inside of IZEAx. The majority of the marketplace spend that is currently happening is still happening through TapInfluence, and so we believe that we'll see more uptake on Pay Pop as people move over into IZEAx, and we see more marketplace spend there. We also now will feel a bit more comfortable opening that up to more people now that we have an improved balance sheet because we're essentially providing cash to people in advance of us getting paid. And if there was a large amount of people that participated in that, that could be problematic for us.

One of the things that we did do effective May 1 was we have moved the payments for creators from 30 days from the initial post to 45 days from the initial post to get paid. That'll actually have a small impact on revenue here in this quarter because we do not recognize the revenue until the post is validated. But ultimately, that's going to have a really positive impact on our cash flow and, we believe, will also have a positive impact on Pay Pop as we open that up to more people.

Okay. Now you're most excited about which features?

There's been a lot of enthusiasm. I don't know if you had a chance to join our live webcast a few weeks ago, Jon, but we had, at one point, several thousand concurrent users. It was awesome to watch, and the feedback from both current and prospective customers alike has been very enthusiastic.

I'll give you an anecdote that just last week, late last week, we had one of our customers with an expansion opportunity who really was excited about this search, the ability to not only discover influencers and creators for attributes related to who they are, who their audience is, but to turn on its head and do it off of what their content is or has been is not only an industry-first but something that really opens up eyes when you're doing live demos. You can type in brand X, and suddenly have a stream populated with thousands of results of that very thing.

So that initiatives that we made and the investments that we talked about not only in the webcast a few weeks ago but truly over the last 18 to 24 months and things like our Vortex data link are the investments that we believe help not only differentiate us but really drive that long-term customer value.

So you said there were several thousand people on the webinar?

So in terms of the actual people who've watched in totality, yes.

Yes. Okay. Cool. Okay Ted, your turn.

My turn? What am I most excited about? It's hard to say. I mean one of the things that is really special about what we've built is the way that all these features work together. And that, to me, is really where the rubber meets the road. It's what allows our customers to be more efficient in everything that they're doing.

But I would say that the new workflow is what I am most excited about, the way that it will allow our customers to engage in very, very complex influencer marketing programs, what it is going to allow us to do with content and the ability to plug in robots and automation in any part of that process. What Chris and his team done -- have done in terms of building foundation there has been incredible. So I'm most excited about that. And we've got our first opportunities that have been coming in through that workflow, and it's been exciting to see these programs start to come together.

Okay. So one last question. On the -- when you did this latest offering, did you bring in some new shareholders? Or was that primarily existing?

We had a mix of new shareholders and existing shareholders. One of the things that was important to us in this process was to get some great, new institutions in on the company and get some more institutional support in general, and we're really happy with the results of that effort.

Our next question comes from the line of Alex Silverman from Special Situations Fund.

Wondering if you could spend a minute on the top 5 PR firms. Wondering, given that they're paying you is fairly substantial annual SaaS license, if you have any sense of, A, what -- how many different firms they've worked with over the years; and B, what their gross spend might be; and C, if there's any reason you could think of why they would continue to use those relationships as opposed to utilizing the IZEAx platform.

Yes. I mean for a lot of these, we have several top 5 PR firms that we work with now. We actually have 5 out of the top 10 that we work with, 3 of those 5 are SaaS customers. Most of these companies have evaluated other platforms at some point and have ultimately settled on working with us and choosing our platform ahead of those competitive companies. I think that partially has to do with providing the best technology. I also think that part of that has to do with providing a great support mechanism on top of that and having great customer service and being set up to be able to work with those large organizations and meet their unique requirements.

In terms of why IZEA over those companies in particular, it would come down to a case-by-case basis for them. What I can tell you is that those companies will do different types of activations, some on platform and some off platform. And part of what we're trying to do right now is to create tools to make sure that they can keep all of those things managed inside of IZEAx. Even if they have a one-off activation that is just not right for a platform, they can get -- they can still get benefits by kind of doing a hybrid approach.

And do you foresee them continuing to use managed service for certain applications and doing it themselves on the platform for others?

Yes. I mean we're seeing that quite frequently now, not just with the agencies but with the brands. They'll be managing the majority of their campaigns themselves, and then they might have some sort of special execution that they need extra hands, either because it's overly complicated for them or they just don't have the resources at that particular time. And we think that being able to provide those -- when they're in the SaaS model, we call it SaaS plus. Being able to provide that SaaS plus service layer is going to be important for us and, I think, another differentiator.

Our next question comes from the line of [Mike Jeffrey], a private investor.

I have a few questions for you. My first question is that last year in August, you indicated that the first half of 2019 is IZEA would be EBITDA positive. Do you still expect the same thing the first half?

We provided an update on that at our -- for our annual call. We are not really providing any additional guidance beyond that. We were EBITDA positive actually in Q4, and we've been EBITDA positive 3 out of the last 6 quarters.

With this new round of financing, we do intend to invest in growth. So there is going to be some larger expenses near term as we onboard people and spend money on marketing, and then it's going to take some time to recognize the benefits of those investments.

Okay. My next question is about 15 months ago, you wanted to get into blockchain or cryptocurrency. Do you still have that on the table? Or that is history?

We are not actively exploring that. We still do have some small mining operations, but it is not something that we're actively exploring right now. I think that there's still a bunch of regulatory hurdles that have to be overcome before we'd have any interest in exploring that further.

Okay. And my next question is that last year, you purchased about 100,000 shares of IZEA stock, I believe, at $1. Have you purchased anything more since that time? Or have you sold anything since that time?

I made a -- we filed form 4s on all of those, but I made an additional purchase of $4,500 later last year and then just most recently made a purchase of $15,000 as part of this offering. And no, I have not sold any stock.

Okay. Very good. And my last question is that about 15 months ago, IZEA's stock was over $7. Last year at this time, it was over $2, and now it's about $0.66. I wanted to see that if -- or when you are going to do something so that the stock would go up because the management could do a lot of things so the stock would go up. It seems that for the last 15 months, the stock has gone down from $7 to $0.66. Do you have any comments on that one?

Yes. We are focused on operating the business and trying to do our best to execute. We do not have control on the day-to-day or month-to-month fluctuations in the stock. We believe that the company is incredibly undervalued where it is today, and our hope is that the broader investor base understands that and recognizes that and that we see some appreciation in the stock moving forward.

And my last question is that is it possible that IZEA would be profitable, let's say, in the next 2 years?

Again, we're not going to provide any sort of guidance on that right now.

Our next question comes from the line of [R. A. Cole] from Cole Capital.

So 2 questions. Regarding your influencers, could you just kind of comment on how you're being more effective maybe to grow the number of high-quality influencers you have?

And then #2, these influencers clearly can be free agents in that they can go to another platform outside of IZEA. How do you retain them?

Yes. It's actually a great question. We do not spend a lot of money today recruiting influencers. The influencer base kind of grows on its own, largely through referrals from other influencers or word-of-mouth. When we talk about going after the largest brands and the most prestigious brands, that really ties into the overall ecosystem and attracting and retaining the influencers that are in our platform. And we found that offering high-quality opportunities to the influencers to work with the brands that they really love. That's one of the most important things to the influencers themselves.

So we're not the company that's peddling in diet pills or credit card offers or things like that. We're giving them the marquee brands that they're truly excited about and they want to -- that they want to promote to their audience.

We have reached the end of the question-and-answer session, and I will now turn the call back to management for closing remarks.

We want to thank everybody for joining us this afternoon. And as a reminder, all of our investor information can be found online on our Investor Relations website at izea.com/investors. Have a wonderful evening.

This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.