Greetings. Welcome to the IZEA Worldwide, Inc. second quarter, 2026 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. Families should require operator assistance during the conference. Please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to John Francis, VP of Sales and Marketing Operations. Thank you, John. You may begin.

Good afternoon, everyone, and welcome to IZEA's Earnings Call, covering the second quarter of 2026. I'm John Francis, VP Sales and Marketing Operations at IZEA, and joining me on the call are IZEA's Chief Executive Officer, Patrick Venetucci, and IZEA's Chief Financial Officer, Peter Beery. Thank you for being with us today. Earlier this afternoon, the company issued a press release detailing IZEA's performance during Q2, 2026. If you would like to review those details, please visit our Investor Relations website at izea.com slash investors. Before we begin, please take note of the Safe Harbor paragraph included in today's press release covering IZEA's financial results, and be advised that some of the statements we make today regarding our business, operations, and financial performance may be considered forward-looking, and such statements involve a number of risks and insurgencies that could cause actual results to differ materially. We encourage you to consider the disclosures contained in our SEC filings for a detailed discussion of these factors. Our commentary today will also include the non-GAAP financial measure of adjusted EBITDA. Reconciliations between GAAP and non-GAAP metrics for our reported results can be found in our earnings release issued earlier today and in our publicly available filings. And with that, I would now like to introduce and turn the call over to IZEA's Chief Executive Officer, Patrick Venetucci.

Thank you, John, and good afternoon, everyone. The second quarter represented another important step in IZEA's transformation into a more focused enterprise business. While our financial results did not meet our original expectations, I remain confident that the strategic decisions we have made are the right ones and that the foundation we have built is positioning the company for stronger long-term growth. Our first-half performance was affected by two primary factors. First, marketers across nearly every major industry we serve became more cautious as macroeconomic uncertainty increased. Second, our transition from an SMB-focused organization to an enterprise-focused company has required operational changes that have taken longer to fully mature than we originally anticipated. Neither of these factors has changed our conviction in the opportunity ahead. Beginning with the market, many of our largest customers faced challenges that were largely outside of our control. Tariffs, consumer spending concerns, financing conditions, organizational restructurings, procurement consolidation, and delayed marketing decisions affected clients across CPG, automotive, technology, retail, and entertainment. Several large customers postponed or reduced programs, while others experienced company-specific events such as mergers, restructurings, or product timing changes. Despite those headwinds, one thing became increasingly clear during the quarter. Our relationships with enterprise customers remain exceptionally strong. In fact, many of the leading indicators that matter most to our long-term business are moving in the right direction. We continue to gain share with strategic accounts. Client engagement has reached the highest level since I've been with the company. Our executive relationships are broader and deeper than ever. and we believe that the risk levels on our enterprise accounts are at the lowest levels we've seen in years. Most importantly, our visibility into future enterprise opportunities continues to improve. Today, we have a well-defined pipeline of large, scalable enterprise opportunities, including multiple opportunities capable of generating more than $1 million in annual revenue. That gives us confidence that our investments we've made over the past two years are beginning to translate into larger and more durable revenue opportunities. Operationally, we've also made significant progress. Our sales organization is becoming increasingly aligned around the enterprise buying journey. During the quarter, we strengthened leadership, continued onboarding new sales talent, and improved the coordination between sales and account management. We also continued refining our strategic account development and the quality of our enterprise engagement. Marketing has become a much more important growth engine for the company. Our industry-specific campaigns generated meaningful awareness, high-quality enterprise leads, and increased confidence in IZEA's capabilities. We launched Zed to the market, expanded our own marketing channels, and established new relationships with many of the world's leading brands through targeted events and digital programs. On the technology front, we made substantial progress with Zed. Beyond introducing the platform to customers, we enhanced its capabilities in brand safety, analytics, creator workflows, platform intelligence, and overall stability. We believe Zed will improve operational efficiency while creating a stronger technology foundation for future innovation. Internally, we took decisive action to better align our cost structure with current market conditions while continuing to invest in the capabilities we believe will drive long-term shareholder value. We streamlined the organization, strengthening our operational leadership, and continued building a high-performance culture. Importantly, we accomplished this while maintaining exceptionally high employee engagement and extremely low voluntary turnover, an indication that our team remains highly committed to our mission and strategy. Looking ahead, I believe IZEA is emerging from this period as a stronger company. We have a more focused client portfolio than at any point in our history. We have stronger relationships with some of the world's largest brands. We have a more capable leadership team, a modernized technology platform, an increasingly sophisticated enterprise sales organization, and a growing pipeline of meaningful opportunities. In addition to investing organically, we continue to see compelling opportunities to accelerate our strategy through acquisitions. Activity across the creator economy remains robust, and we have been exceptionally active evaluating companies to acquire that could expand our capabilities, deepen our expertise, and strengthen our competitive position. Today, our acquisition pipeline is the most active it has ever been. While we remain disciplined and will pursue only transactions that create long-term shareholder value, we believe the current environment presents a unique opportunity to complement our organic growth strategy. While macroeconomic conditions remain uncertain, those conditions will eventually normalize. What will remain are the capabilities we have spent the last two years building. Our objective has never been simply to become a larger influencer marketing agency. Our objective is to build the leading enterprise creator marketing company, one that combines world-class strategy, services, technology, and long-term client relationships. Every major decision we've made has been in support of that vision. I continue to believe the creator economy is one of the most important secular shifts in marketing. Brands are allocating more attention to creator-led marketing because it delivers measurable business outcomes, and Izea is uniquely positioned to help the world's largest companies capitalize on that shift. Although the transition has taken longer than we expected, I have never been more confident in the long-term opportunity before us. We are building the right company, serving the right customers, and strengthening the capabilities that will define IZEA's next chapter. Thank you for your continued support. With that, I'll turn the call over to Peter Berry, our Chief Financial Officer, for a closer look at the financial results.

Thank you, Patrick, and good afternoon, everyone. Earlier today, we reported our second quarter 2026 results and filed our Form 10-Q with the SEC. I'll begin with our operating results for the quarter, then discuss our liquidity and capital position before turning the callback for questions. Managed services bookings during the quarter totaled $4.5 million, down 19% from the prior year quarter. We saw a softer demand across our enterprise portfolio as customers navigated economic uncertainty and reassessed their marketing spend. Delayed contracting and campaign timing also affected a number of enterprise accounts, including one large customer we discussed last quarter. While we've seen encouraging progress through contract awards received in July, the pace of customer commitments remains uneven. As a reminder, revenue from managed services bookings is recognized over the life of the underlying contract, with the period from contract signing to final revenue recognition averaging approximately seven months. As a result, the softer bookings environment in the second quarter is expected to be reflected in near-term revenue trends, while the benefit of improving booking activity is more likely to be recognized over several quarters as campaigns move into execution. Managed services revenue was $5.8 million, down 36% from $9.1 million in the prior year period. The majority of the decline reflected runoff from legacy non-core customers, a transition that is now substantially complete. The remaining revenue decline was due in part to soft market demand, and timing across several enterprise accounts related to campaign launch schedules. Customer engagement across our enterprise portfolio remains strong, and we're encouraged by the level of contract awards we've seen in July. While this supports our expectation for improving activity in the second half of the year, the timing of campaign launches will determine when the activity is reflected in reported revenue. Cost of revenue, which includes direct production costs, direct labor, and allocated overhead, produced gross margins that were relatively consistent with the prior year period despite lower revenue. Operating expenses were $3.3 million for the quarter, down 18% year-over-year. Sales and marketing costs declined due to lower commission expense and headcount costs. G&A decreased approximately 20% over the prior year period, driven primarily by lower payroll and related costs. Overall, we believe our cost structure is well aligned with our current operating model, and we expect operating expenses to remain relatively stable through the balance of the year. For the quarter, we reported a net loss of $0.7 million or negative $0.04 per share on 17.5 million shares outstanding, compared to net income of $1.2 million in the prior year period or $0.07 per share on 16.9 million fully diluted shares. The year-over-year change reflects lower revenue in the quarter, partially offset by the benefits of our reduced cost structure. Adjusted EBITDA for the second quarter was negative $0.4 million compared to positive $1.3 million in the prior year quarter. A reconciliation of adjusted EBITDA to net income is included in our earnings release. As of June 30, 2026, we had $46.6 million in cash and cash equivalents, a decrease of $4.3 million from the beginning of the year. The change in cash reflects our EBITDA loss, normal changes in working capital, and other investing and financing activities. We're well capitalized, with no debt on our balance sheet. Turning to our share repurchase activity, the Board authorized a $10 million share repurchase program in the fall of 2024. To date, we have repurchased approximately 658,000 shares, investing $1.8 million. primarily under our various Rule 10b-5-1 trading plans, including approximately 135,000 shares for $0.5 million since our current plan was adopted in May. We believe our strong balance sheet positions us well to support organic growth initiatives and pursue strategic acquisition opportunities. Thank you for your time today. We'll now open the call for questions.

Thank you. We will now be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. Confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. We've reached the end of the question and answer session. I'd like to turn the floor back over to John Francis for closing comments.

Thanks so much, Max, and thank you, everyone, for joining us this afternoon. As a reminder, a replay of today's call will be available shortly on our website, isea.com slash investors. We appreciate your continued interest and support and hope you'll join us for our next conference call to discuss our third quarter 2026 results.

Thank you.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.