ZETA - Earnings call transcript Q4 2021 | Zeta Global Holdings Corp.

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Operator

Thank you for standing by. This is the conference operator. Welcome to the Zeta Fourth Quarter 2021 Earnings Conference Call.

As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. now Head turn of would to conference I Schmitz, Scott Investor Instructions] like the to over [Operator Relations. Please go ahead.

Scott Schmitz

Thank you for quarter everyone. And for Hello, XXXX fourth year and you, Zeta’s full call. joining Operator. us conference thank

about mention to we and today’s along our Zeta’s at SEC press Before will you information on presentation www.investors.zetaglobal.com available filings, that where like Zeta. are also I would website begin, to release find with links

Chief Executive Steinberg, Joining and me Zeta’s today Chief Zeta’s David the and on Co-Founder, Officer; Financial call are Greiner, Chris Chairman Officer.

events on goals products revenues remind These other described to that forward-looking Before the about company’s and and the filings well call, uncertainties I’d and and our and financial presentation as are materially earnings speak of of and like SEC in potential we plans statements market future with in regarding statements those only of actual begin, differ everyone products, developments, to that subject date. our as including include today’s business potential contain statements competition made objectives, and strategies. outlook, release those risks this statements and and our to our uncertainties release press from cause and and may as the These the results risks other projected.

GAAP corresponding turn over appropriate that, the be other GAAP investors. should our our and I believe earnings filings discussion for business With our Reconciliations in considered with be where addition to found measures which for will We supplemental release certain the can a company’s in of to non-GAAP measures information measures, substitute financial now addition, In call useful not the financial today will to use to include they and non-GAAP non-GAAP managing David. and the provide as these in SEC. references the results. measures

David Steinberg

important generated million, for the maintaining XXXX milestones, afternoon inaugural revenue XX% by record operating conference cost XXXX In year hosting achieving to Zeta, structure. of we from discipline us. many our leverage Good was XX% year-over-year you going or a all drove up Zeta you, for Thank XXXX, filled $XXX and incredible and significant an Presidential with public, Scott. thank we Live Cycle for joining results. to adjusting

achieve Our underscore the how deliver their financial help been as in never reach brands products, reflection in strategies performance landscape, our and they a architect founding continuous we the a Zeta’s improve go-to-market value have And engage of navigate marketplace the the data relevant made we more to and identity-based customers, result is that is as our potential for our disruption accelerating measurable seek to These marketing people investments of results has marketers our initiatives. in systems vision and challenges. re customers. driven of technology and the marketing. these to full

Data this the these results the revenue the in across Marketing Zeta and last which built marketing resonating margin expansion customer its adjusted at with changes As any or The our capabilities Platform and The generate our a of ability goals our go-to-market believe of the create synthesize truly Platform channel in to marketplace. to over empower targets to and the $X return means higher presence of also third-party of of even digital Zeta individuals to platform Customer the the performance. XX billion are that CDP+ lifecycle. XXXX at in or marketers programs to of IDFA, changes purpose achieve access recent for tracking based marketers excess The The automatically. activate substantiated and was shifts is of resolves Zeta’s scale, to announcement achieve months, makes based ingest, because We identity These the app single creating our entire are our results, data to cookies marketing the sign core ZMP personalized changes, are customers Zeta. data measure through the electrified identity in as not a elimination EBITDA financial any in proprietary of our with these confidence, platform. The this such XXXX. easier at first is ecosystem, third Zeta demand long-term faster plan rely platform in XX% we which of to the of annual marketing are least elements plan. data the for the in The announcing only by a evolution parties. and that our Apple’s unaffected to proof party our better experiences set, by We in ours elimination incremental do on environment ID it Google’s investment. deliver by of by identify customers environmental independent Android are not consumer on but or

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and Delivering one deployment in industry to in replaced team’s one CDP me the heart insights rapid at our matter Let an value own all base. give example. business this with the of Zeta’s retail a players weeks, largest XX-year only began Zeta’s in Data ecosystem, is marketing sits fourth and our helping after Marketing differentiated quarter, their data strobe them on you In the client U.S. their star. Salesforce existing a north of decisions. deriving of partnership customer enriching expertise now Platform, time inform the key into to their

will We return opportunity and invest the greatest in platform of areas strengthen continue sharpen highest the our to to differentiation. and our

continue contributed years, Over to $XXX us we the performance, has got million tell invested last go-to-market where and research go. our XXXX approximately development two Zeta this that Zeta initiatives. team, all record investment to will while not I and our get And want things to into here us has

data targets. and to As profitability such, XXXX growth we continue to company our evolve as a support

the are events at leaders over industry. Zeta paired our our through awareness raising from we Live starters, brand content conference, For with the some of inaugural like incredible in X,XXX foremost with participants

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partnerships we will similar and to Snowflake what We with in Dun Bradstreet. our XXXX further & announced expand

will to of the continue our look next more officers, newly us the to for Revenue We drive phase appointed company. leading sales growth behind Chief to productivity

world. rules. believe become change We the is tighten opportunities we XXXX attempt to to for Zeta the marketing positioned Walled well in creating ecosystem cloud leading providers to their the disruption grip the is continue Zeta. massive and and garden plan out on accelerating to Looking

silos gone tracking Android changes from the Google mirroring marketers of idea unified cross to week, at announced is restrict last for plans of forcing mission critical. to Apple. Just on devices, from Zeta disparate the set look has modern app like enterprise. a evolved intelligence alternatives, to to of a Zeta. This A Artificial hub experimentation new has

ingesting, New ways marketers. synthesizing data, and are like for the of transformational storing CDP

we individuals, their while connected target is in such has the have of scale more the beginning fastest So deterministic its identity are marketing The our areas our such growing year. job for the Where ecosystem, this potential to of groups, And hiring our Zeta data talented and as struggled most and skilled and ability people, actually people. and the people Marketers best recently and to quadruple is market. to none health number the the expanded be paid CTV the stronger possible relevant the we our investments rapidly and and need that we not scratch acceleration driven plans and with dollar based CTV integrate where is TV and dedicated why constrained been sales major attracting making retain people valuable other just multi-billion would have in need in channels never of surface and without team. omnichannel learning the number of Zeta channels. doubled marketing attribution. to deliver impact based reward of realize and development engineering, done We marketers growing measure experiences precision exceeded last are through as holidays, addressable course, we which with channel our own benefits, of classes and wellness our for resource new our

thank on focused inclusion becoming never believe of and create future sincerely I success. of like our goals imperative and honored Diversity, to you. is conclusion, an XXXX. be more we our have and incredible Zeta to strive choice partners all. our critical positive, XXXX able long-term customers with optimistic for and would our environment I In about strategic our an our team, opportunities with significant growth am to employer inclusive a are to diverse Zeta equity We for to and a been and share Zeta I

value start we part continue are in the is, more provide on to our the the started. are than just market and getting XXXX, best in fantastic a customers, and ever to We disruption as capitalize off to we

greater Now our it Chris Chris? discuss in to off to let detail. hand me results

Chris Greiner

David, Thank afternoon, good everyone. you, and

Throughout building full second, want no of quarter path year into and QX provide executing and for I XXXX the our more first, the today’s underlying provide XXXX, business. with call; to fourth plan outline our year agenda at to items XXXX and on detail guidance. As across drivers Zeta, an our remained Zeta our David and I was on XXXX I was focused exception. will momentum highlighted, we our have deeper results; two incredible insight

four $XXX or up exceeded internal IR supplemental expectations KPIs fact, guidance XXXX deck metrics of on on our of XX% and reporting in fourth our slides year-to-year we the for the our for in XX% and six through Presidential Revenue Cycle. each which In was be million adjusting our website. quarter, found can major

quarter-to-quarter. Additionally, XX% revenue increased

core Platform, Zeta points quarter-to-quarter, were million count basis generated to up of or and by customers customer revenue in a year-to-year XX EBITDA our quarter. from XXX XX% ARPU in our quarter. each compensation. And we fourth related improvement, customer which our compensation. stock-based and was Direct points generated declined XX% Our and topline of cost basis, quarter eight year-to-year scaled quarter-to-quarter, results and On adjusted last or scaled XX% the on of by stock-based million, of year-to-year year in increased expanded $XX.X strength Marketing mix GAAP of $XX.X last of the direct revenue net Platform the revenue includes driven fourth XXX XX% our $XXX,XXX XX% XXX of drivers, basis We XX% loss the $XX.X of by million excluding

full time strong over Our the were horizon. years’ fundamentals evident

which For million, up million XXXX $XXX did the not Cycle revenue year year-to-year. full the of $XX for in year-to-year. XXXX, at XXXX, in Presidential we repeat growth XX% Normalized came revenue that of delivered XX% was

variety of coming Our a in is growth ways.

than deals industry at are to gearing up. saw sales numerous against and across We quarter, competitors factories a across with a multiyear further TCV channels. We different products number similar as a greater testament our winning of last verticals

deals to We carriers, quota Live, Zeta from from partner sales referrals. campaigns, to are areas, reps, development sourced different to many to seeing marketing

at multiyear development large partner. For example, services vertical we a was or won sourced SCR Zeta sales by contract cloud in that We the a by company sourced CDP a a contract retail an won multiyear financial reps.

existing CDP contract these internal ranging of vertical customer We customers approximately while and we new in revenue beat came from an through growth XXXX. examples half against Adobe, And compete legacy multiyear healthcare Salesforce and in also others. continue won And the our from wins, a highlight cross-sell. competitors large to Oracle,

top our total NRR with our the customer year, the once above services greater financial verticals again was healthcare verticals Including Zeta that grew of XXXX. retail, than just scaled and I XX% For referenced, NRR XXX%, in XX XXX%. seven

our broad accounts revenues. industries largest Our revenue across as a with vertical diversified, XX% only well remains of for coverage

more pricing strength and platform, basis directly our revenue revenue points and power of basis to representing an points compensation, least XXXX, Marketing by percentage significantly annual guidance XX.X% Platform. guidance points. XXX year-to-year was basis cost in points long-term of XXX XXX of our stock-based at ability Our of This driven generate basis XXXX our the Zeta or XXX on of our competitive improvement was excluding the outpacing

which goal growth the the details at rate EBITDA acquisition achieved includes of of Cash to XXXX. our for in with an ended with discipline is up was margin year-to-year. in also adjusted XXXX flow growth. Atlas. accelerated would $XX.X to net strength million, our from From For was this time. flow adjusted EBITDA basis from EBITDA With completing cash The the the translates year-to-year rate stock-based perspective in a to $XXX.X which XXXX, perspective, full same XX% excess the our revenue let free cash imply perspective, it CAGR XXXX XXXX compensation. our activities a record expanding growth year. over we XX% year plan a a $X combined into XX.X%, of me year-to-year. achieving our our million, consistent revenue XXXX backdrop, $XXX.X of $XX.X of our of and half million cash and loss by through cost as four-year three-year adjusted of by points a of period XXXX after XX% XX% growth is with GAAP P&L, $XX.X the margin XXXX, dive with billion This topline behind EBITDA From from a bottomline XX% topline adjusted and XXX was of million million. least This generation million We up XXXX $XXX with operating of balance flow CAGR

at level ability to go-to-market product for wanted innovation identity could be count basic broader monitor our XX% behind nine the need assumes ARPU, XXXX, in the prior customer At that most both you per new customer of level, X% annual growth our I adding found what is KPIs with our Expanding which plan annually consistent XX with to help progress. in scaled of track equates our simple achievement scaled and high in we XXX starting durable on XXXX, results. our deck. to data XXXX, While of carriers. slide initiatives, catalyst grew for a This this the scaled annual of growth the our scale direct a provide customer and Zeta and consistent sellers provide framework force supplemental customers year full ending our are our approximately attract We achieved sales year. reflects year. exceeded with plan than despite XX% X% fact This one-thirds by This count approximately expanded the of talent. with Zeta our less over with in by quota our to our least

are they our to hires of the us competitors after new from platform. Our power directly experience coming

break development major which we approximately the to continue carriers force call will sales strong approach data-driven a factories, into sales reach and to XXXX. is attributable We add sales to our with productivity, use capacity we three maintain goal to XXX disciplined quota what of A our categories. ending component

brand capabilities, the is the our factory systems the grow use focused SDR demand This our expansion sales sophistication of on the demand in build-out includes our investment team generation. generation of awareness, pipeline. to and first of The we

sizes, with along Second of factory our progress still an a focused productivity. velocity, the flow-through through our customers Snowflake, total from third good XX customer early is Bradstreet only touch And our to percentages better We target and year our of late factory deal to a sales us the here focused our which sales is put at increasing evidence and upon new will expanding stage of like ensuring addressable we win direct on believe see deals centric market. and stage on closure. pipeline strong scaled partnerships expansion per X% achievable would with companies Dun is shortly. Through penetration of force, with & I

customers, scale opportunity In customer new ARPU addition our to see large with existing to also a base. we expand

scaled insights generate with we more significant and the ability loyalty average, us customers the leading expansion. new of a strong a with those year customer to three and have than it years ARPU On valuable Zeta seen learnings, to increase over ARPU more. Xx of less One key Marketing us from the Platform in is versus time, signals, making strengths or

it attribution stickiness expansion. platform, measure and drives creates customer’s channel use from As and our case

customers was faster-growing such average that have in proof Further our is scaled more to which in growth increased X.X realize to and which per scaled customer customer of on on count channels a in In even platform XXXX ROI trailing to XXXX, platform. are experience us to customers expand then XXXX. total, evidenced, our with existing customers of this a was and approximately higher improved leverage half XXXX, or and from scaled customers super all our the XXXX, from the As customers. By to count our X.X, X.X new small customers XX% XX of X half and our existing channel our XXXX than customer from approximately multi-channel million we to started CTV. From to growth returns growth customers generate in Nearly of $X we that as approach XX-month super expect spent from customers, scaled as basis. customers. super expect expanded on

expect NRR annually, XXX% of with XXX% customer to the total to slightly in NRR scaled We be range higher. Zeta

strong to durable addition topline next In four leverage drive over expect operating growth, we to years. the

of on revenue. profile revenue times platform Platform, we directly our carries to Marketing our Specifically, integrated X expect approximately a be margin the Zeta which XX% generated about of

basis approximately per reduce our year. We cost expect mix favorable to by revenue points of XXX

achievable, last the highly drive the as Net years leverage, we operating believe the adjusted two execution approve we revenue on least worked greater infrastructure which notably drivers, over than in line, place G&A put to we requires net, We highly in our to margin expect every day. XX% is and scalable. in consistent billion most core at EBITDA also path the have expense $X to is

details XXXX. our can of for slide XX now. on found After all, XXXX the path The be of deck. details Zeta let up, Before supplemental starts wrapping guidance outlook our our me on provide to

year XXXX, XX% we year-to-year. expect up revenue full the $XXX $XXX generate For million, of to XX% to to million

for to to to representing we the of to On We an our year-over-year. revenue revenue in our XX% specifically, quarterly XX% $XXX of on basis, to a linearity, EBITDA $XX XX% XX million XXXX to expect we $XXX average million of the More generate of million, deck. which up we expect follow range expect outlined XX% increase XXXX, $XX of first adjusted generate slide quarter year-to-year. supplemental three-year million, to

expect increase to year-over-year We million generate million, EBITDA $XX the adjusted of range XX%. to in $XX.X XX% to a representing of

we execution. near- our culture cloud and our decisions map high leader. a track emerging to marketing of our summary, performance XXXX Zeta extending of terms believe record for maintaining sales typical as laid same In out full drive to to serving a goals seasonal ensure of execution expect the we product customer and of we and predictable In investment our the across long-term investment our leadership consistent QX KPIs, to the a our XXXX balance plan providing growth, north serve and from profitability. and factors scale Zeta we XX road right a XXXX, and anticipate in a star XX as but and in count are for of performance customers expect employees, year. in growth decrease the Overall, building margin growth is galvanizing QX, while

the hand to of questions. download back let our our which me all our IR to that, encourage to I supplemental presentation David plan. details With me earnings Operator you take and Finally, call for Operator? multiyear the your website, on

Operator

Capital. The Please first [Operator Baldry Instructions] ahead. question from you. is ROTH Richard go Thank from

Richard Baldry

sort like XXXX, curious a Thanks a you I accelerate was be and to quarter. balanced path would this. there’s on of feel are in approach areas there do willing to or opportunistically congrats that great you to

pace. are much most companies than grow example, in for you So, more profitable your

that right ecosystems, et the the ability to marketing So need in to salespeople stress or came does faster the support people cetera, bring would you in hire if that in them?

David Steinberg

reps I all. profitability, Thank would on And because will cases, motion, in our $XXX in have years and us. development of that starting become are over great and in hear with first we even the few have frankly, I many of last work you. within Rich, strategy. our our to that, we sales So, stated seeing with invested of go-to-market quite new profitable publicly Always from million six say, jump we sales research over with, you. months

Zeta Meaning, reason I see our it could parallel. that we growth, to So have and bring don’t not people, profitability. on that the absolutely not any would Marketing accelerate could in the two absolutely current we run more hurt Platform

a It are it. plan benchmark in helped just and plan out we want to Gerber XXXX. I do In budgeting to to there’s Steve to fact, bring in are if by to to are us room, the to put want quite launched team year And interesting that started an The give to there. ourselves we not to thing all And internal want in because an real no know, going get billion do so have nothing. a an to opportunity do XXXX. say opportunity Meaning, we faster, potentially great you frankly, trying we growth, is grow Chris is to it. accelerate there’s we it. $X and to If that people, we XXXX is, this slow

you, I we where of point we will at ahead XXXX. we when expected started to tell Although, in this be are Chris?

Chris Greiner

Yeah.

mindful -- we wanted think, of very supplemental all to Rich, investment sales deck different laid the tied a we capacity. is were one that’s to I those around key the be of our very, as provided out, we KPIs

to roughly averaged by XXXX couple XX% whereas it XX%. go last of a quota So over have if that imply we XXXX, we would on the XXX years, are look right end around of XXX you the the what at we of counting carriers north to from CAGR, ended

of executed to innovation continue and invest in sales and said, we room ourselves our leave get versus in to cost the we But invest we as to G&A can in David have efficient what’s marketing, as upon. trying metrics on as So believe all our well line. revenue from line, traditionally relied what

Richard Baldry

Thanks. Great.

Operator

is question next from… The

David Steinberg

Thanks, Rich.

Operator

from Hynes ahead, DJ DJ. … Canaccord Genuity. go Please

DJ Hynes

strong results and data there, guys. Thanks super here drivers the Congrats on Zeta XXXX and all Chris. color helpful Hi. with the the

for agency how that. I So with ask may doing are kind and seeing one David, your model? you to partners just reach thanks you, in go-to-market they what of for about influence kind of want opportunities the

David Steinberg

start DJ, quite thanks. would to Well, saying as I was that really XX ago, we wrong. had the happen thesis building as today, to we very of ecosystem, one that the years what many I a and right, Zeta on a very, were going what by was formation we agency when frankly, called poorly put that together called for things was

invested. get the we have We of help have ultimately working look to with lot holding people is it’s agency holding data, really grow what to of I my now still the they our you software just a with problems, time disproportionate percentage we a rates can’t companies is And interesting, are spending heavily growing. trying say am because found our are when would personal to solving and the I them. do the at which companies what at

use together of such do one to versus competitors. saying, if in it Marketing all going alternative Zeta platform place XX% effective an to So are stepping an we able Cloud, our of efficient listen, to way, they and in it the operate less the Platform the one are Zeta using you platforms put requires are not people only with Data some we now, in we are are to and

some So we to traction meaningful are there. starting see

of seeing I And great saw material thing the quarter. think, fourth sizable reasons you are reduction. it quite a is, the was beat you frankly, one in simultaneously the the pretty

basis in cost down the goods XXX the sold of think I quarter. in percentage exact points was

business as are faster businesses software platform to on business other the you businesses right the now. go cylinders So saw are seeing firing and platform all XX% from on growing on the platform. you XX% than And

very really where rapidly in starting working holding agency to the an environment goods are sold are even companies. go of cost see growing down closely and we You with the

DJ Hynes

follow-up, then targets, Yeah. for of I XXXX Yeah. ton you do guys But M&A, Chris. That that makes better efforts, the kind I thinking just how organically, of clearly, sense. you, if know gave pretty about mean, And maybe mean, think turbocharging get have it’s you acquisitive. a those or you a been David maybe us about there but I historically, the can underpinnings you don’t

of So think would get a about high you level philosophy love how just to I like kind that? on

Chris Greiner

Yeah. will DJ, and just company’s the I it on certainly add take expertise can historical David given it. color,

So, is certainly, an plan. it organic

is us small talent, which focus any nothing great continuing data, stretch types sales XXXX in XXXX could great new guidance. model Our to identify or Aqua assumed of great transformational first-party engineers, by lead to on type tuck-in hire scenarios, but our

David Steinberg

that think done have, Yeah. frankly, I And to quite I as we like XX years. joke, we have XX in deals

as they product size really do the only transform ecosystems into seen deals But will a perspective, and we you we are have services are data rapidly businesses they we that probable small, customers. them existing doing, from a are grow believe can highly it’s think XX. our I for or we not

do type really the get lost, to we I M&A don’t of at. we organic plan. the good been we that feel do to would again, continue positioned is I we $X sooner. in But like deals were have do we it want well XXXX So say continue to want If really revenue because to to are plan be to an billion

DJ Hynes

guys. you Thanks Congrats. Understood.

David Steinberg

Thanks, DJ.

Operator

MacDonald ahead. The next from question is Please go Needham. from Ryan

Ryan MacDonald

Bradstreet and great David, you Zeta perhaps, around you and improving am & the really marketing curious to about, just rates and how improvements IPO into for talked and sort how first the to since seen? on of I visibility, for that’s sort more taking congrats Platform some the partners, report. what the of Hi. functionality, Dun these I deal is this partnerships the Thanks win added you, with getting and of one a translating of and the with my have historically translating for the since questions help had increased have Forrester versus guess, partnership Snowflake, quarter. and market awareness you

David Steinberg

Hi.

and by comfortable the really you weren’t. good really and the you of thank out felt fourth that, handed that’s all, is putting the of reality quarter and XXXX the the beat not a really reasons one increased others First we saw that amount plan. question, But XXXX such

transformational, If whether and you last initial we we outcome the IPO our the Zeta Live brand our was like transformational moves brand, transformational, to thought to up. not, big leaders had look at or as X,XXX was it the show clients related year, where

I to and What major the that were. it than & we with We these RFPs in marketplace. We of have later was, revenue I to RFPs In rather get XX% quite would a frankly, year and more ever going said fourth be we Zeta have Snowflake, invited ago, into the really and are Bradstreet you any -- a sales liked are than at more twice none to lot bigger. partnerships in the the a planning we of we that, got tell would where this I’d we close of we XX% quarter. of we publicly saw moves we by translated Dun quarter, from ever think it’s couple even seen in perspective. already quarter Live for XX% in substantially Signing engagements of believe over closed participate that quarters just

all like numbers I the guidance. feel and once Chris? to the events have So again, the we transformational think, these of results led and

Chris Greiner

Nothing here. No.

David Steinberg

Yeah.

Ryan MacDonald

and a in for expansion XXXX follow-up for about margins, really gross we of how guidance Awesome. strong XXXX. in obviously, should think And you, then, year of terms a maybe Chris,

basis achievable of about had of think of to talked something Is on cadence XXX as think think previously improvement that the I is trying XXXX year. guidance you a it you each points you here? focus

Chris Greiner

on at Ryan. line, well that even do to farther exceeded XXX going The a think, basis We in even XX-ish of it’s that COGS out XXXX. imply least model the obviously, would certainly we to And slightly, sticking points right Yeah. around I expansion. XXXX

very still the to that to much a mix to committed continuing XXX to positive drive mentioned, points, continuing to So basis Direct tied be shift the David Platform.

on with front. the So, just pleased really that progress

Ryan MacDonald

Okay. Thanks. Congrats again.

Chris Greiner

Ryan. Thanks,

Operator

The ahead. next go Arjun from William Please Bhatia from Blair. is question

Arjun Bhatia

large M&A, necessarily question pieces How be but needed you that to how we looks confident might just feel in for or changes a at Chris, CAGRs earlier that additional not congrats and we is much you innovation, there XXXX the changes feel vision, very have billion and the we $X maybe think great growth maybe product -- assume that changes, the additional not are a you later low a to to get want be you platform, get tack pay follow-up maybe but what you Do and are you on? you minor or place on to guys. should to about Thank all going XXs I like on linearity in Platform Zeta And that? XXXX? to XXXX upfront on structural that maybe looking you the to DJ’s then, the closer have? quarter, should do there higher to around, with

David Steinberg

Do you want part the to first? take second

Chris Greiner

No…

David Steinberg

the Should I take first first? part

Chris Greiner

Yeah. Yeah.

David Steinberg

So part for the…

Chris Greiner

true. than I is am you. That older

David Steinberg

scalable category the Arjun, five heart is platform It rolled laggard Platform. Forrester, Marketing I re-architected, could moved artificial and I that you an data the would we fully the and built. as years, over put absolute Zeta the to that lag leader you Marketing Zeta in leader joke the know, infinitely category revenue -- week. last of the at would $XX to intelligence with Platform as in sort putting native this the have really out And we we tell the billion through from

is beauty platform that Now activation is the the agnostic. of itself it

again, from want methodologies, you Once from saw As activation we XX% rollout XX% only new us perspective. on criteria a on platform to our them keep go to platform platform. we is on margin

to is way as are new cookie marketing, begins another next. to reality. might blockchain or Platform dependent to comes really created, Marketing because Chris? we want tweaks how Internet, chose and Apple’s why stay fully Marketing Platform be which a there But over not on play company. make tokenization agnostic It’s And we reality, the question little begin another, have to to to XX%. for to gamification, and we turn not to a chose the marketing could is we the augmented use to that we reality, ultimately happen built mature. third-party ready change activation completely given platform or to the long-term operate, or But when identify of virtual people virtual is one already integrate was IDFA didn’t And to what as methodologies bet market that reality, how or operate guidance that Zeta and you our think an into the the that get incorporate is into measure not to platform be campaigns upwards the decision ecosystem blockchain of made how really use made bets one them, I I the company all-in which to marketing gamification on not will to re-architect say to why on we Zeta does today, the never augmented crypto. I have tell

Chris Greiner

on website in-year the supplemental upon chance most yet, you actually had average. we our to the slide immediate XX, expected Arjun linearity a download for the if point, three-year of on XXXX, provide linearity in so the on based the IR term, haven’t historical revenue

for Now which zooming of your question an of purposes was have around rate growth right even our out, model XX%. we assumed

So topline XXXX, our CAGR was look at XXXX if at XX%. to right from you it

are from We twice higher XXXX on drive for out XXXX while wanting than actually to the around have as through of are to beginning same of but the have for what we And assuming XXXX. to bottomline, got growth out years margin enjoyed we in rate and XX% to make the we from growth, that in XXXX expansion. XXXX sure goes committed was are through modeled still investing questions back we innovation, to the investing able Rich

Arjun Bhatia

the especially mentioned details David, and been the ecosystem, with of quick the those and Walled Gardens, conversations in customer any like I to on that’s Zeta efficacy marketing look a not relying am as they to platform that’s what you changes can, very for broader appreciate Chris. up reason that I targeting? and follow-up, third-party all of Perfect. That’s cookies, in coming And curious a in slide, to if level obviously, there’s helpful lot customer one

David Steinberg

own too what able us to will that fairly trend sort the it’s doing, get say large where are you, all, talked about they very existing that’s platforms to are to but don’t that at customers, where safe the do per puck it every you think a know they going because open think client we this look they of continue. but interesting to work revenue customer ARPU is first tech and begins are would I if of are I focused the talks that that me it. at on is focuses customer you seeing and Listen, on every we Internet I want Every clients. fully scaled I to in moving, XXX to story, really their begin spent point. way, as And have from question, they the going companies another, margin every part of controlled not that’s player not other that the marketplaces. one have really consolidate, the by about very are we with per marketers the consolidating our we an from additional engagement opportunity up to the by what or scale think with intuitive to really and I involves suck RFP XXX submit, want which then conversation is to tell And conversation

us our other marketers. ability So excited really working upwards XX% they the not marketing ability by about to to manage of talking only at are their versus with our clients to do this, efficiency

we we many to the well, as of able web, most us quite is not. and and with that like the are work we work because and in cooperate as lot able Walled Gardens open of as of we So them a often frankly, do in directly, are to

Arjun Bhatia

helpful… very That’s

Chris Greiner

Thank you, Arjun.

Arjun Bhatia

again. … and congrats

David Steinberg

Arjun. you. Thank

Operator

The go question from Stan Zlotsky is Morgan from next Please Stanley. ahead.

Unidentified Analyst

a on XXX fiscal had about XXX sales about for fiscal Congrats XXXX, with year this the plan person implies on heads when The [ph] is implies Hi. XXXX XXXX Stan. This customers to accounts and on fast Elizabeth the scaled we per plan. question X.X. X.X in quarter. the forward I

So requiring sort heads that complexity level to is my a in contraction, is of question that is, increased just of sales it conservatism? any drives support customers or what more

David Steinberg

customer you Elizabeth, is have which ever poor we a this closed every pretty with Well, assuming we are assumption. year,

has customer the for So us tenure, three customer when you the average average with look been years. at over

then So you divide can’t screenshot we our that extrapolate the reps number doubled out just year. would number by the sales it throughout I also of and point of take reps. and sales it one

raise we continue conservatism we that out results we as able and it be to that as contraction. frankly, see at quite will strategy from. a don’t I model we I putting of look can So as, see that we then the believe our it and feel beat fully

Chris Greiner

to perspective, assume to and could take into from mix important just I sellers and of out about XXXX a today that going half similar Elizabeth, it’s hunters think, you consideration farmers. model are our a

are excelled charged at materials, a growing is and farmer company since transcript customers. So, think, obviously, I bigger. look the the has a is to or ones put through customers supplemental starting are getting had you large and dig areas the that with some kind the hunter of going one of earnings those closing are of it’s the hunters focus scaled we the of chance that new that the out that farmers And the if and small

XX customers a for call increase we revenue $X example, So, doing growing with over in per. year channels now per mentioned number up in That’s XX% the manifestation of scaled of the us. the million to

at So end we now have XXXX X.X. the of gone from to X.X X.X to

you channel. fact, using even deeper In that XXXX, if our scaled of look were metric, in within customers XX% one

We about have down now to half. gotten that

So all to XXXX. I growth, the think, leading other is of ARPU is, of this the part which Zeta the

we been while are over next we So four a X% on driving. years, XX% below about CAGR assuming CAGR what the the assumes have a count both ARPU, about

way, he David’s true last execution. for kind That to with, also to for the our closed So building XXXX, back consistent that be look, conservative. model. point of by that true, want holds we record of holds track It

David Steinberg

Elizabeth. you Thank

Next question, please.

Operator

from Ikeda of Next America. ahead. from question Bank Koji is go Please

Koji Ikeda

on question. sort in the for here? ARPU wanted is billion Yeah. you of I I that XXX are big another ask Thanks question confidence in here, pretty doing taking a rev guys. target, $X guess today. annual from my guess, the to XXXX that ARPU the what ARPU. we the million math, customers, I $X.X gives expand in from increase I where annual mean, the Hey,

Chris Greiner

Yeah.

ARPU out, the to million at $X.X at today. at XXXX, would growth, we So look are you if compared you as rate So pointed right? X.X the of we in per be

So that’s about CAGR. a XX%

We on a of the -- from basis last years. almost have over CAGR grown north a XX% of couple

of we ourselves the So to scale continuing channels number see customer. drive used per

are at X.X about We today.

$X customers, and are $X getting million. we million $X greater super are of north see already than Our those scaled that that million, to

farmers, continuing be of we I the adding Zeta using using offer of to of our one larger of customers still only use are And of to scaled way, able channels. the So for three cases XX% combination by more the of customers think number our more drive scaled today.

the have of on deals, even the of So space but a also signing a channels gate larger existing set. we at in have more top significant on average coming amount That multiyear that dimension customer newest a combination been the them been much That’s white from revenue platform. growing selling of per. our being out of of deals

Koji Ikeda

the Got it. on Got a it. here. Chris. one to question then Thanks previous kind on adding follow-up, QBRs just of And

sales do the why really over to the of many going guys X maybe many get and increasing not reps, from years. X.X to sales to customers, times right? billion motion but understanding you that target, here XXX need here to sales and next times new so It’s few XXX but maybe add So kind scaled help plus understand reps $X the us that

So they need only here? many -- us help reps? you so do many kind you could of farmers so what customers add or reps to understand just from XXX mostly Are why here why

David Steinberg

XX I want add are scale where them of many on as get say, as we can that, want so first we we in more to can, rep to But all months we customers months, to even we to just business we and sales are possibly to first I a add a now the as going break if lot fast want are can. page. six as in the all, to the of a we Well, than position same think, we

We lot to more But of and in to place. it I margin adding I lot invest. increase a our believe yes, that, operating grow, is customers. to are lot of margin have good the So want investment is, right think and enterprise the we it hit continue can what we paper, in a customers on bodies of But a reality I headcount with ARPU a amount it’s to Chris? see to think plans you not expansion the I think got looks going with think we similar do probably this are like now, we to a add that. specifically

Chris Greiner

demand continue very thing that driven to not be incremental other to why right? in investment in more add been only in life only investing have are our been want to the pipeline adding believe sales very transparent it we significantly quota to Koji of we to more because is been, which be But awareness, I’d investing need of to like have in carriers kind development our we capacity, we continued not rep The the data sales function. productivity our We brand metrics, are we have generation, we have bring sales strong. just

per XX roughly at way individual time. you too if carrying are That’s deals pipeline their zoom That’s just too So in deals same today. our the out many one many. chase hunters to for

have pipeline. carriers not in of strike to that go the we I making that balance versus quota to want can sure get amount of, a good everything So think they again, their but close profitability investment, opportunities our right

David Steinberg

Koji. Thank you,

Koji Ikeda

Got it.

David Steinberg

please. question Next

Koji Ikeda

Thank you.

Chris Greiner

Thanks, Koji.

Operator

question Winslow is from from ahead. next Please go Credit The Phil Suisse.

Phil Winslow

the Thanks on scaled focus just Congrats customer. quarter. to per Hey. the I channels taking wanted on question. my for

path up ago. you to a then, of from from us or couple is X.X you are sort what’s As just obviously, feedback of it Can and customers, sense years getting XXXX gave give X. that a the what’s approximately mentioned, X.X the just went you you inflecting,

inflecting been and context about that you in XXXX? how thinking Just are kind what’s the of of help then us

Chris Greiner

to Yeah. Great question, from you. Good Phil. hear

channels. look at by of revenue growth major For us kind the

and the programmatic with and we it optimization, the be the double about that digits following I growing been universe, very all What TV social, could is major channel, CTV, it’s could it’s in So display site digits. channel it’s double think have quickly, on leading email, but it’s video. successful messaging, have growing the first at with something been connected

from to kind the going to and a growth accelerated our have time think back fast have ability work our then the sales attribute the to very seen. and the first we ROI motion channel an And for We of follow. I

see year, are revenue per the $XXX,XXX. at look you average still those that first that in supplemental, you an that If around with in customers us the there’s slide

that, Xx Our revenue of ability are scaled that or X.X. to more those average them out years have in the if three per customer get you kind with to zoom universe us an

are doing that’s sales motion, better all getting just the can the So are great. to farming we I We think channels hone upselling and think But do continuing even and we cross-selling, to the resonating well. X. which

to second I the time in think a it show more points back to the on ROI follow very fast the sale.

Phil Winslow

sort as the in you -- just on, different you like, with customers? Zeta efficacy of then that to recent that in And Just seeing offers just there changes Got the pretty mentioned The variability with point to that of are you are cetera, one just you surveys, it. resonate today, been that Gartner about some different channels. distinct et shifts follow-up fact just your as marketing can hear have that efficacy IDFA, consolidate from of channels? starting multiple in fact, one that, and you

David Steinberg

as digital. can just to identify any make is -- analog an of some Phil, Yeah. the Zeta on clients coming in are you the clear, the going across number the is I to want more. what changes couldn’t think it and from But focus it agree on it move what’s ID some efficiency of is that that I channel. I ecosystem, some is digital with really wider It’s individual of

XXXX without level online reasons a mobile, goes So ability comfortable goals messaging, saw felt and one entire to is, our fourth video, methodology. addressable and it have we the raising the for the quarter TV, perform over across social, in you question, out. CTV, high of of efficiency display, And us the why in

point, your becoming to a whereas conversation. was table years or ago, two it it’s just years becoming think three stakes, I

the wants time. everybody and talk is at it’s Now and to it is puck where it’s really the about It’s where going. the puck same almost

So it’s very impactful been our business. to

Chris Greiner

Phil. Thanks,

Phil Winslow

Thank appreciate it. you. I

David Steinberg

Thanks.

Operator

Please go Next Barclays. question is from ahead. MacWilliams from Ryan

Ryan MacWilliams

happy strong question XXXX. the to the through EBITDA taking about for Thanks and margin hear guidance

think now with message ever. profitability-focused growth than I resonate is that of more investors

growth the You Chris, your the this guide? going elections year-over-year called in for kind for Election. rates just in out baked of mid-term your guidance, anything just forward against Presidential year’s revenue

Chris Greiner

Yeah.

in. We And of are you year. it to -- September we we heavy October again think this is that and of would in of how it being around part in of in of expect XX% XX% we kind a XXXX, have what saw factored

David Steinberg

But a mid-terms almost It’s the not just I like want customers. be extra to near anywhere are clear, adding as few impactful.

Ryan MacWilliams

strong some with of know mentioned seeing to product? wins contact Explorer. there every year. you Excellent. Anything in initial customer out come David, expect will last you you And quarter, hold momentum we next with I to that quarter. continued that you then, close Opportunity into that to you a or Maybe But are call

David Steinberg

Yeah.

publicly that So that greater I is initiatives than over close don’t in. half were I am announced quarter. would last say disappointed, we had two that quarters closed you ago we we would to of I I tell true. Ryan, we is What if pitch. invited I That even be everybody closed the

that? So to a disbelief. look like do when the was we really could back we about questions, earlier would used we sort how one talk would you at see of messaging do, us starting the of to are of to be people what There it can bit

I very that. X%. successful they what look trotted a stake there’s has entrepreneurial-led are to plus are out that never a reality of and occasionally see I to the built shift they driving the we out logos involved. that that, a have sales really need of somebody X% see tell rewarding and on hear close scenes, Stock associated makes getting what the we in less as Exchange use closed I wine, business Chris the they are years when normally I more what the and with, Now But and the of was would am you. of the the to do if factories touch it publicly it’s Gerber an doing, they lot from doing with like a that the factories of $X is positioned better XXX lot motion, like and a people to revenue XX% it’s because quarter, easier sales the New being traded you as we been close have that, to motion a Steve York of deals incredibly Zeta us themselves really three even that billion revenue, when is our made of Greiner are last to are channel. of feel so see sales XX% -- and interesting, I company There’s factory-driven actually Fortune lot they our deal are I to tell the that am to I done that work joke, am I through and would I behind than and we been proud that today the sales it a

Chris Greiner

has new, not, But think, quarter, which we last out effective often been Opportunity a called seven-figure and the and and deals we something with continue it hold a we being closed tool, continues the be customers. that OE, balance be a more process. very in land in pilot. cross-sell but of the was Opportunity held I them of sales being a fact one-thirds Explorer of to that new than about can Ryan, That, Explorer to typically that to upsell, to true has leader through addition is from

to So true those highlighted true and we next continue over quarter would continue to to last years. be we hold several data expect the points and quarters that

Ryan MacWilliams

Okay.

David Steinberg

you, Ryan. Thank

Ryan MacWilliams

Got it.

David Steinberg

have for, I Operator, have for we I question. one more think time time sorry, we think

Operator

question The Brian Please from next is -- Schwartz ahead. question Oppenheimer. last from go Certainly. the

Ari Friedman

was bit coming you quarter. is you into for ever and question the a wondering Ari XXXX, Schwartz. taking vendors subbing seen go on This I little landscape Thank have what Thanks. and see Brian experienced you if Friedman out my if and competitive you in Hi. for the RFP? for when about talk management congrats you could

David Steinberg

thanks Well, for Ari. joining,

XXX% in beat say, Salesforce, Epsilon. like So of as or we quarter, last had I wins or we Oracle, to Adobe either displaced the

position the landscape. So our we competitive feel about in pretty good

companies, Now these are large products. they have very have teams they core formidable incredible and

products. to that container of trying reality the they have marketing really HR sort sales their businesses the is But that four have accounting clouds, well, silo. they into -- legal, to as they and container, of In them that fact, have built are consolidate core a and putting the been four more different where all three top of effectively of

platform, we are market note to can over say, fully participate important we artificial win today for bespoke half that invited reason I the think, of really do which win. we RFPs none also and of companies it’s of. It’s in As to the that to we have to gone what an the most out XX competitors intelligence average marketing of data our with cloud independent as largest the there native

not are one we So two. like against it’s up going or

experienced to Oracle, being software, the really we a are out relates really more cloud. marketing bump focused are Adobe, selling to others in it Salesforce, of into heavily bump on don’t that we Epsilon marketing we sort As there still automation them, and managers, and because Chris? have

Chris Greiner

David. you, Thank

Laguna, in And with XXth will to meeting we be Conference Morgan in Just we as two would on quarter. March will attending On really San be California. this is XXth, are over so We Francisco. we appreciate here Zeta with ROTH and past about then everybody’s wrap be excited up, March time, patience. I attending the know the we folks. Stanley love conferences Xth,

to and you. Thank and look that, forward to questions as grateful the So everyone. with and looking time touch always, very for staying forward in your

Operator

concludes conference call. This today’s

lines. You and you for participating day. may disconnect your a Thank pleasant have

Zeta Global (ZETA) 24 Feb 222021 Q4 Earnings call transcript