IZEA Is Making Moves With Share Buyback, Acquisition And 40% Managed Services Growth
Detroit, Michigan
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July 11, 2024 08:40 AM Eastern Daylight Time
By James Blacker, Benzinga
IZEA Worldwide (NASDAQ: IZEA), the influencer marketing pioneer helping lead the world into the creator economy era, recently made two pivotal announcements that highlight the company’s strategic moves to improve its market position and deliver value to its shareholders: the launch of a $5 million share repurchase program and the acquisition of 26 Talent by its subsidiary Hoozu. The company also recently announced Managed Services contract bookings of $10.3 million in the second quarter of 2024 – representing year-over-year growth of 40%.
Expanding Reach In APAC With 26 Talent Acquisition
According to Cognitive Market Research, the Asia-Pacific (APAC) influencer marketing market is currently worth $3.18 billion and accounts for around 23% of the global market. This market size is set to grow at a compound annual growth rate of 40% from 2024 to 2031, driven by a huge population coupled with growing internet penetration and social media usage.
To take advantage of this massive market opportunity and continue its global M&A strategy, IZEA, through its recent subsidiary Hoozu, acquired Australian talent management agency 26 Talent on 1 July for an undisclosed sum. The company not only expands Hoozu’s talent pool with its portfolio of top-tier influencers and creators but also broadens its service offerings with innovative marketing solutions.
Using 26 Talent’s expertise and network, the acquisition is set to boost Hoozu’s capability to drive impactful campaigns across the APAC region, catering to the growing demand for localized, authentic content that resonates with regional audiences.
“[26 Talent’s] impressive roster of talent and innovative approach to influencer marketing perfectly aligns with our mission to lead the industry in APAC,” said Hoozu CEO Natalie Giddings.
Boosting Shareholder Value: IZEA's $5 Million Stock Buyback
In a move that underscores IZEA’s financial health and confidence in its long-term growth prospects, the company also announced on 28 June that its Board of Directors authorized a share repurchase program.
The program allows IZEA to buy back up to $5 million of its common stock from time to time, subject to market conditions. The move is aimed at capitalizing on what IZEA perceives as a market undervaluation of the company. For shareholders, reducing the number of outstanding shares is expected to increase the earnings per share, making each share more valuable.
“We are encouraged by the year-over-year growth in bookings and substantial increases in our pipeline, which have not yet been reflected in our stock price. IZEA’s Board of Directors and management team firmly believe that the market currently undervalues our core business, technology assets, and cash reserves. This share repurchase program grants us the flexibility to buy back stock over time, provided market conditions remain favorable,” stated IZEA Chairman and CEO Ted Murphy.
Growing Demand: Managed Services Bookings Hit $10.3 Million In Q2
In another sign that the future could be bright for IZEA, the company announced on July 8 that its Managed Services team secured contract bookings of $10.3 million in the second quarter of 2024, a year-over-year increase of 40% from $7.3 million in the same period of 2023. In the first half of the year, Managed Services bookings grew 46% to reach $19.6 million.
“While we benefited from some of our acquisitions in the quarter, more than 90% of these bookings were generated organically, underscoring the underlying strength of IZEA’s core offering,” said Murphy, adding that second half financial performance is expected to improve as the benefits of these bookings begin to materialize.
“Our pipeline remains strong, with the addition of multiple new managed services clients, including a new Fortune 50 customer,” he said. Murphy also pointed out that while Managed Services make up the majority of IZEA’s revenue, the company is also seeing continued growth in its SaaS customer base, particularly with its FormAI software, and saw a record number of active SaaS customers at the end of the second quarter.
IZEA’s stock buyback and the acquisition of 26 Talent are key components of the company’s overall strategy – demonstrating a commitment to expanding its market presence and boosting shareholder value. The strong growth in Managed Services bookings shows that it has a robust core product and highlights the effectiveness of its acquisitions. This positive momentum, along with a growing SaaS customer base and a strong pipeline for the rest of the year, is an indication of IZEA’s long-term growth potential.
The company was founded in 2006 as one of the first influencer marketing platforms and has now grown to more than 150 team members in 13 countries worldwide. It has completed nearly 4 million transactions between marketers and brands and currently processes tens of millions of dollars to creators each year.
To learn more about IZEA's services, visit the company's website.
Featured photo by Diggity Marketing on Unsplash.
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