Preheat your oven to 375°F (190°C) and grease a muffin tin with cooking spray or olive oil.
In a large microwave-safe bowl, combine 1 cup of mozzarella cheese and softened cream cheese. Microwave for about 30-45 seconds until melted and gooey. Stir until well combined.
Add almond flour, egg, baking powder, Italian seasoning, and garlic powder to the melted cheese mixture. Mix until a dough forms.
Divide the dough into 12 equal portions and press each portion into the bottom and sides of the muffin cups to form a crust.
Bake the crusts in the preheated oven for 8-10 minutes or until they are slightly golden and firm.
Remove the muffin tin from the oven and spoon about 1 tablespoon of pizza sauce into each cup.
Place a few slices of pepperoni on top of the sauce in each cup, followed by a sprinkle of shredded mozzarella cheese.
Return the muffin tin to the oven and bake for an additional 5-7 minutes, or until the cheese is bubbling and slightly browned.
Once done, let the pizza cups cool for a few minutes before removing them from the muffin tin.
Garnish with fresh basil leaves if desired, and serve warm.