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CI

Creatd, Inc. (VOCL)·Q4 2020 Earnings Summary

Executive Summary

  • FY2020 net revenue tripled year over year to $1.213M, with implied Q4 net revenue of approximately $0.172M based on FY minus 9M, while management emphasized subscription momentum and balance sheet deleveraging heading into 2021 .
  • Guidance introduced on March 31, 2021: Q1 2021 gross revenue $725k–$775k (net ~$660k), Q2 2021 net revenue ~$1.2M, and FY 2021 net revenue $5–$7M; management reiterated confidence in scaling creator subscriptions and branded content .
  • Vocal+ paid subscribers reached ~10,500 at year-end 2020 (up ~1,650% YoY), and freemium creators surpassed ~810,000; management cited reduced subscriber acquisition cost and strong credit lines to support marketing scalability .
  • Potential stock narrative catalysts: 2021 revenue guidance and subscription growth targets; strategic deleveraging and Nasdaq uplisting completed in 2H20 broadened investor visibility .

What Went Well and What Went Wrong

  • What Went Well

    • “Creatd triples revenue YoY… and provides full year guidance for 2021” reflecting traction in creator subscriptions and branded content .
    • Balance sheet repair: liabilities reduced from $15.454M (6/30/20) to $5.339M (12/31/20), approaching debt-free status post year-end .
    • Management tone on scalability and “co-opetition” strategy: “platforms can gain a unique edge by embracing a degree of co-opetition” (CEO Jeremy Frommer) .

  • What Went Wrong

    • Operating expenses elevated to $17.496M in FY2020, largely due to non-recurring uplisting and financing-related costs; base quarterly OpEx calculated at ~$3M, expected to rise with measured marketing .
    • FY comprehensive loss of $24.244M (or $5.68 per share), influenced by non-recurring, non-cash charges (debt extinguishment, option grants, legal/accounting) .
    • Implied Q4 net revenue of ~$0.172M (FY minus 9M) suggests a shortfall versus prior generic “revenues” commentary for Q4; note management’s guidance did not clearly specify net vs gross, complicating comparability .

Financial Results

  • Quarterly Revenue Comparison (net) and implied Q4 derived from FY and 9M:
MetricQ2 2020Q3 2020Q4 2020 (Implied)
Net Revenue ($USD)$322,540 $424,814 $172,374 (derived: FY $1,212,870 − 9M $1,040,496)
  • EPS and Loss (available periods):
MetricQ2 2020Q3 2020FY 2020
Basic/Diluted Loss per Share ($)N/A$(3.20) $(5.68)
Comprehensive Loss ($USD)N/A$(13,569,908) $(24,244,022)
  • Operating Expenses and Balance Sheet Highlights:
MetricQ3 2020FY 2020
Operating Expenses ($USD)$7,448,678 $17,496,205
Total Liabilities ($USD)$3,320,534 $5,339,284
Shareholders’ Equity ($USD)$2,402,394 $5,445,196
  • KPIs and Segment Indicators:
KPIQ2 2020Q3 2020Q4 2020 / YE 2020
Vocal+ Paid Subscribers (units)4,600 (6/30/20) 7,500 (9/30/20) ~10,500 (12/31/20)
Freemium Creators (units)714,165 (6/30/20) 810,000 (9/30/20) >810,000 (12/31/20)
SAC ($/subscriber)$180 (6/30/20) $170 (9/30/20) mgmt expected ~$150 by end Q4
Creator Rewards Paid ($USD, 2020)N/AN/A>$400,000 in 2020

Notes:

  • Q4 2020 net revenue is calculated from FY and nine-month totals due to lack of a separate Q4 net revenue disclosure in the FY press release; management’s prior “Q4 revenues” commentary may have referenced gross revenue .
  • Branded content and managed services contributions were detailed for Q3 (Vocal for Brands ~39% of Q3 revenue; Seller’s Choice ~$183k), but not separately disclosed for Q4 .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenuesQ4 2020$550k–$650k revenues (type unspecified) No formal update at FY release (actual FY given) N/A (prior mgmt commentary only)
Gross RevenueQ1 2021None disclosed prior$725k–$775k gross; net ≈ $660k Initiated
Net RevenueQ2 2021None disclosed prior≈ $1.2M net (subscr. ~$600k; agency $400k–$600k) Initiated
Net RevenueFY 2021None disclosed prior$5M–$7M net Initiated

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2020)Previous Mentions (Q3 2020)Current Period (Q4 2020)Trend
Balance Sheet & UplistingReverse split to enable Nasdaq uplisting Nasdaq uplist completed; liabilities cut to $3.3M; equity raise $7.8M FY press release: liabilities reduced to $5.339M; near debt-free status post YE Improving
Subscription Growth (Vocal+)Revenue growth driven by Vocal+; Q2 revenue $322,540 Vocal+ 7,500 subs; SAC $170; guidance to 10k by YE YE 2020 ~10,500 subs; 1,650% YoY growth Strong positive
Marketing & Sales ScalingN/ASales team expansion; pipeline building; branded content price increases 2021 guidance predicated on subscription and agency scaling Positive
Cost Structure & Non-Recurring ChargesN/AQ3 OpEx $7.4M; significant non-cash/non-recurring charges FY OpEx $17.496M; base quarterly OpEx ~$3M Normalizing post one-offs
Creator Economy & Co-opetitionN/APrepared remarks on platform value, moderation, monetization CEO emphasizes “co-opetition” as strategic edge Strategic consistency

Management Commentary

  • CEO Jeremy Frommer on co-opetition: “Platforms can gain a unique edge by embracing a degree of co-opetition… align resources with industry peers to expand one another’s strengths…” .
  • CFO Chelsea Pullano on Q3 loss drivers: “Comprehensive loss… inclusive of approximately $11 million of non-cash charges… the majority of which are non-recurring” .
  • COO Laurie Weisberg on scaling revenue: “I have quadrupled the Sales Team… shifting focus to higher margin opportunities… expanding to larger companies” .
  • FY positioning: “2020 was… a positioning year… We right-sized our balance sheet… expanded and improved our technology footprint” .

Q&A Highlights

  • Subscription momentum: Management highlighted broader consumer shift to subscriptions and Vocal+ churn stability (10%–15%), with tools and challenges enhancing monetization .
  • Pipeline and client mix: Move toward larger advertisers (e.g., P&G/Mars-type budgets), with Vocal for Brands positioned as non-interruptive branded content .
  • Warrants/options: Catch-up management options at $8.55 strike; warrants first significant exercise level $4.50; average option strike $23.67, warrants $5.63 .
  • Guidance disputes: CEO refuted third-party estimates; reiterated Q4 2020 revenue targets and FY 2021 guidance while noting non-recurring adjustments impact on reported loss .

Estimates Context

  • S&P Global consensus estimates for VOCL were unavailable due to missing Capital IQ mapping; therefore, no Wall Street consensus revenue or EPS comparisons can be presented for Q4 2020, Q3 2020, or Q2 2020 [SpgiEstimatesError: Missing CIQ mapping for 'VOCL'].
  • Implications: With no consensus baseline, investor focus should shift to internal guidance versus realized results and subscription KPIs; any future mapping update would enable formal beat/miss tracking relative to street expectations .

Key Takeaways for Investors

  • Subscription engine is intact: YE2020 ~10.5k Vocal+ subs and reduced SAC underpin 2021 net revenue guidance of $5–$7M; watch conversion pace and churn .
  • Balance sheet reset completed: Liabilities cut materially, equity base positive; enhances flexibility for marketing spend and potential M&A later in 2021 .
  • Q4 2020 net revenue implied ~$0.17M; reconcile against prior “revenues” commentary that was likely gross—monitor consistency of gross vs net reporting going forward .
  • Operational normalization: Expect OpEx to revert toward ~$3M/quarter base after 2020’s non-recurring charges; operating leverage depends on subscription scale and branded content mix .
  • 2021 catalysts: Q1 gross revenue $725k–$775k (net ~$660k) and Q2 net ~$1.2M guidance—near-term print/watch items for momentum confirmation .
  • Brand-side growth: Vocal for Brands pricing power and Seller’s Choice client wins can diversify revenue; track average contract values and agency contribution .
  • Data-driven moat: Moderation, creator rewards, and platform UX highlighted as differentiators; creator payouts of >$400k in 2020 support ecosystem engagement .

Additional Source Documents Reviewed

  • FY2020 8-K with press release and financial statements (March 31, 2021) .
  • Q3 2020 8-K with press release and financial statements (November 16, 2020) .
  • Q3 2020 8-K with earnings call script and shareholder letter (November 19, 2020) .
  • Q2 2020 8-K press release (August 17, 2020) .
  • Year-End Review press release (December 23, 2020) .

Notes:

  • The Q4 2020 earnings call transcript (Document ID: 1) could not be retrieved due to an internal database inconsistency; the company confirmed the webcast and transcript availability in the FY press release .