- Earnings call transcript Q3 2022

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Operator

Thank you for standing by. This is the conference operator. Welcome to the Zeta Third Quarter 2022 Conference Call.

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

Scott Schmitz

Thank thank and Zeta's conference Hello, joining operator. call. for XXXX third you us quarter you, for everyone,

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

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

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

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

David Steinberg

for you and Good you, Scott. everyone, joining us Thank thank afternoon, today.

results Our celebrate way XX-year quarter an were incredible to our anniversary. third

$XXX growth which XX% million up revenue in year-over-year or million, free EBITDA $X.X to flow, year-over-year. adjusted XXX% year-over-year, XX% cash $XX.X from up year-over-year. XX% with Our We in generated cash million million of rate $XX.X further up operations with accelerated was

improve for addressable even where both value and that we why investment digital data the to believe closer environment momentum, again full generation further enterprises where and scrutiny shines. in shortly. market quarter adjusted spot, driving more year enterprises one we invest this to of tied out, first-party That emerge back CDPs. to at question invest crisis, return discuss sweet shifted better objectives more On the to grow, is our primary our objective. to pressure of In That enterprises will transformation. invest is wasting return which why requirements a ability EBITDA precision In Zooming savings. measurable platforms of is The in cost cost with uncertainty more spend the efficient many delivers fourth for continue once ever. a the effective is more revenue a which retain has and on data increasing acquire, verifiable no to continue and make and marketing we measurable Marketing that moving continue simple why short, or greater value. from solution never creating are to the there their XXXX is macro with customer and and more That Chris how And and to enterprises and customers revenue CMOs investment, Zeta and are proposition because a now strong that enterprises is in invest. a accountable delivers. guidance, spirit the on lower and outcomes on than methodologies greater detail address to Zeta’s in sophisticated looking deliver is

little continued bringing with over in have marketers By AI Zeta marketing a tech enterprises most array numbers knowledge we a RFP data XX identity measurement. activity. resolving with or looking We're The of waste, improve has this a when an month to replacing in-person theme evidenced record of our growth And rate reduce of by solutions unlock of uncertainty we partners, our built customers a uncover City Zeta implementation raise the efficacy, our front competitors. and and business around strengthen only of the event their approach opportunities. by brands record growth their to improved we were of Fortune a a leveraging ago reducing attendance marketing. activation sales new other for also to XX-plus wrap over and reduce cutting-edge days We driving the technology In cut to to data, York By market and has and XXX the us Marketing to bring existing With as basis diverse holding even company Our relationships, own as to accelerate. prospects land virtual the and were speakers form more single weeks and environment help added advantage Platform scalable, incumbents leaders enable combined multiple enriching ZMP customers, as to insights people cloud, were The benefits and of at personalization adapt and guest daily and represent. people. representing conversations viewers enterprises stack on can world-renowned allows of new over many generate further X X,XXX purpose are broader the Zeta capabilities and marketing new simplify scaled we entrepreneurs, our costs. platform, brand's well as had establishing bring profile. expand unique new over platform point or of enterprises motion. our marketers excited over the events we was an a through continue women with and to and to many precision New new is leaders. of in that consolidate generated conference, to their efficiency time that to Live center the and segments was back quarter The This half broad as the times to they X,XXX flexible, modular the exceptional largest and also of multiple brands panelists as color, were with companies of they on agency not into their

our began which its you this strides which are available one significant media remarkable the replay quarter our of and understand largest CDP reliance panels, consumer of identify goods customers any example miss would to better website to you the of a If existing enterprise paid and the content, channels. view A an good reduce was on companies, using made @zetaglobal.com. on that their encourage I of

Our experiences sharp This understanding and with Agile insights greater relationships consolidating is creating better investment. revenue action sticky of ultimately and two vendors results time realization on our degree case by starts and then Intelligence product of enterprise's channels them highlights This smarter to certainty, and delivered to a study themes; their with customer driving what return which the our visibility. personalized and This our platform. accelerated is more better customers a continue an is activation to makes help AI to and get with better. across platform we're measure continuously high makes and able ROI more

more mission-critical results the more CDP, example, we more cases virtuous This a activation which against is as expects to us One was Live, were of through leading and is spend of in Zeta using by to Through CDP channels. put audio their see. one largest the into another recently which growth we use deliver customer reasons than business plan, Fortune in retention XXX it our to the the a also quarter, according highlights impressions rate their and saw as the one better platform, same the IDC. partner of our marketing able fastest-growing marketing, and the CDPs CTV we automotive measure the was CTV acquisition CTV same execute allocate of power in-store aftermarket and and identified launching CDP, year. our and to data they evidenced a already audio identified of with customers efficacy Zeta’s Zeta's XXX% online That sales. marketing stated the this during we next This platform, extended for cycle Zeta the and of more and retailer,

we remarks, to We with celebrated As day this company, a our as in of the give across our opening look company. service my I anniversary to past XXth was mentioned a back communities. as month

footprint. this begun of course taking towards steps reducing carbon also we Over have the our year,

am partners business cloud virtues achieve I our announce embraced with carbon am Zeta of adhere sustainability pleased in and our make neutrality to working net are We track of GHG and built incredibly and technology to I by we the proud the we business for that to to goal people. a have standards incredibly XXXX. are on imperative.

support we data and current of vision say to And their like Zeta I vision. deliver our customers, to our we in true have our a started. founding efficient sincerely getting and are way, Zeta, team, our our at more of substantially for the like software ever all while we marketing as and to a range Our of using environment. than more better come ongoing thank long just platform would partners shareholders

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

Chris Greiner

of everyone. very Thank you, of David, results, all detail. will we and more good themes another into strong dive highlight Three afternoon, set which

of revenue track generation. First, execution increasing profitability record and growth and with cash our we beat extended raise and accelerating

KPIs, broad-based and we're ability well third for XX% of our as And at our value can increasing. across least execute of business durability. EBITDA least XXXX. macro margins balance our as full the back at momentum model's quarter third, Second, through with serving to and outperformance a across momentum, on demonstration throughout cases is and as was guidance revenue our tough channels a confidence our by backdrop, revenue raising Zeta XXXX proposition's industries, business use targets fourth adjusted the and along in XXXX adjusted demonstrating quarter's with our billion the of We exceed EBITDA, $X year this and powerful

into results. dive let's the Now

out for many XX% is business XX%, up was across plus representing overall this of elevated customer year-to-date, now of representing of And was quarters rate of revenue revenue third our direct now. the our in is year-to-year. up areas revenue. data XX% six Zeta up growth grew US business XX% our Direct XX% Year-to-date, revenue been And was or a mix platform of quarter, revenue. year-to-year, industries XX% total quarter year-to-year year-to-date has up US XX% XX XX% year-on-year, XX% XX% evident revenue up XX% basis, And more. total was grew top While customer revenue. Zeta revenue representing scaled the Scaled a of multiple year-to-year. once on XX% XX%. this again, up at

of plan XXX We to compared also and customer against year-to-year. our XQ is executed in in or XX% XXXX five from XX% ahead XXX XQ to XXXX grew up KPIs. beta up XQ count Scaled

In make. X% year-to-year. scaled customer three as twice versus scaled we of more deeper additions fast the into fact, ago, XXXX layer customer times we've continue our count customers new year to growth a tasting of as year-to-date, Zeta Digging provides added context quality a model

customers the to quarter-to-quarter, their others. customers. and of technology remaining retail, superscale total of breadth greater media XX From came added customers the a new and four to six our from among new from from $XXX contribution marketing, million than first industry came while $X three scaled we advertising nine perspective, came consumer Speaking added we size, bringing

expansion finally, our of net growth we existing three scale in in saw quarter, of reflects In is industry customers recognition translated pipeline and expansion ARPU scaled up year-to-year. ahead in is steady pipeline, which Scaled And model versus XXXX September. win six XX% IDC, activity, third XX% new year-to-year customer go-to-market XX of were working acceleration RFP quarter growth. in in has strong month customers XX grew linearity, year-to-year growing IT like new moving new of That's super sales analyst whose additions ARPU scaled XQ, just the cases. motion ARPU Gartner cohort more to in our and quarter. continued were terms $X.X XQ, our up growth of is super model XX% to terms five XX% in scale of with and data Forrester, greater designed. than that in cross-selling use in added, adding The as And from the to ARPU. the of into XX Powering million coupled than is existing, the to contributing became new customers, annualized of XXX,XXX scale customers Zeta rates. incremental the scaled is of customers customers customers the This times the which year-to-year X August, average July, each seven and channels XXX,XXX in million more our

but XXX sales communicated excellence super These opportunity our points February. sales in XX% X.X with headcount, average quota-carrying is and we're quantity, perspective, strong customer not pacing training scaled increased one And culture. we CROs our by viewing year-to-date, to XX. that our teams And and more by for certification farmers add using scaled it's the number of have matters marketing to leaders. our In quickly, investment, XXX most, because XXX a the outstanding leadership year-to-year sales quota data customers while on sales seeing capacity quality the carriers, sales Zeta to year-to-year Zeta. management in ROI strong This of about our hunters quarter, processes channels productivity this projection sales sales are a a we to speak per a just XXXX to systems grew the the to academy, plan quota our programs and case ramp big we XX% to year-end use carriers, and future of continue of product our their from setting, enable than consistent and

of for XXX% our We total XXX% for revenue are good to range data. continue guidance to to we year retention stickiness, net experience and tracking full

in quarter due third candidate revenue with a This to year-to-date channel political XX% and XX% of was assumed to which leaves and guidance. quarter million was $X year-to-date our revenue what which XX%, compares in platform we than ago third Third mix XX%, of quarter of revenue, mix integrated better direct XXXX. mix higher mix quarter than million in $X year the XX%,

this second mix basis the a As XXX through points of I revenue GAAP we of well expected of noting, scale is favorable a basis, more increasing loss XX.X%. call, XXX remain cost cost within mix our track percentage spoke basis to by seasonal XQ points. better it all the revenue on of quarter annual of better year this by data together, cost ahead and million, Bringing by revenue points channels. mix stock-based driver our was our we direct reduce about in of basis points which ago, which our of million to to a model despite net XX change, year, our On XX as is revenue worth XXXX It's same $XX includes $XX XQ basis compensation.

with margin, up compensation. up XX These XXX basis helped points points R&D strong expensing XX% been of by respectively, expense EBITDA, accelerated points excluding million in to year-to-year adjusted an and would both IPO perspective, year-to-year, our revenue year-to-year. stock-based $XX.X to leverage basis operating compensation leverage the continue adjusted have XX.X% From decreased Excluding million. generate stock-based to which to drive related points XXX we and of G&A, basis of $XX EBITDA

was $XXX Finally, We with driving as conversion of program. a quarter operating quarters generation the after from million $XX.X a Year-to-date, for also XXXX. perspective, ended cash a to on million balance share EBITDA $X.X higher million, million up cash year-to-year. $X.X we from of free cash up Cash activities flow free with quarter XXX% XX% converted rates. our cash it three of flow was remain using the repurchase of flow, adjusted from our X% first through strong focused

continues like Zeta found XX we guidance us business, on of Now, Full with XXXX to increased underlying be achieve and to our Based of quarter plan. year increase, our our I'll profile. putting even full And supplemental. we're believe quarter, increasing guidance details, this including pace have ahead transition last our fourth guidance to on can our XXXX fundamentals earnings strong of derisked a slide guidance. the XXXX ranges

representing XX.X%. fourth the the adjusted $XX.X EBITDA year-to-year. we're no XX% midpoint increased in revenue contribution increasing $X points And we're basis We're the $X year-to-year. to I've Questions-and-Answers million we're me guidance $XXX guidance, million, candidate quarter, growth to track up margins to quarter execution. year our David of by of For up midpoint stated revenue our that, guidance midpoint year-to-year fourth representing of year-to-year. we're quarter increasing high upside XXX the political and a million, from assumptions. guidance a XXXX of increasing prior at adjusted At predictable of XX% margin to of the EBITDA by the to quarter third change an call million On XX% before, fourth performance of the for $XX Operator? XX% let the of quarter XX.X% up full full to take adjusted our clarity, midpoint hand full guidance fourth the XXXX, cementing back $XXX Session million assuming of our and expand guidance. for our $XXX,XXX $XX.X And of EBITDA With million, and outlook Combination to basis, year-to-year higher and year me revenue XXXX raises year as questions. midpoint would your million, consistent culture record operator and by

Operator

[Operator MacDonald question Please first We'll is Ryan you. the begin Our with question-and-answer instructions] from Thank now go Needham. session. ahead.

Matt Shea

on Shea guys. Hey, you here. congrats Ryan on a taking for quarter nice This and the MacDonald. for Matt is Thank really question

wanted strong growth start customers, the I with XX some first, to there. So new scaled

be tracking of the ahead expectations. five With seems that up-sells, to

your long-term is then, in up-sells kind is are that included vision? how strong just given changing their driving these curious, what not so outlook, So of XXXX And up-sells? the the strong is understanding contributions,

Chris Greiner

A Matt. couple data from points. Hey, you. Good of hear to

data just customers, go five kind that kind our them the of hand And of number just David mix how stats I highlights record the think in motion. were actually view, we net the a number. it some new But and there. the go-to-market just are XX XX new of were through to on and bring was the you not how quality of XX it that so and we but them on in added, important existing that to make we for on why bigger speak to added, on First, I'll such

and the added think three first, with quarter, July. linearity So across of the month we August the I month in September. We in in starting of the added six seven

size So new really X really distribution nice for the six across is superscale great, over million customers a was quarter. adding just really, us. powerful The

growth I think XX% over it's number on that year-over-year.

In terms representation, right the I probably XX now would came macro, industries that industry and -- the you X be under of retail. of from consumer suggest pressure

came three advertising media, Another of a another in technology marketing were from there other the the others in and terms of and industries. sprinkled two couple

a quality them really was to we it bigger. result, David So good speak will make how

David Steinberg

where to we our I was one with out data, coming able were in but we're your able and with more to that And of do motion today, marketing people with just pressure By put under customers. rearchitect their take their products. seeing it currently go Well, also efficiency would on their starts so what either able in we're on of before high-quality one CEOs approved or who focus right? is find really their a $XXX,XXX do the one XXX we're these Chris or clients to you're of we're over in the into able for They're the market of products every market that think in to million and of we dollars. opted to customers win their -- testing existing becoming the out others the all cases. pilot what we're and and their that we in our a match that launch cloud the budget? the $XX,XXX credit emblematic down CDP, starts to where Americans our are followed wouldn't funnel we every of how are for want a take qualified ever more market are existing interested it product, test who many I of marketplace, our to being of who reasons sales the removing journey be saying, data we point are their pointed than CMOs are people excess, the into then product out ecosystem, in for data your of to And not able target be in their certain all product not day marketing

efficiency platform, more to a after continue data efficient our the study platform, the we on substantially client we through be as intelligence the enterprise enterprise customers. said, to able able platform can to spend So and to XX scale superscale uses of that scaled smarter, the increase to customers. motion $XX,XXX to into were Zeta pointed $XXX,XXX sales gets and pilots have the think you're better gets, the case on case the we from pretty more move excited as very large for that to study a to test, And return able platform. also the as customers the and more smarter longer And of really the we our move, quickly we're able we that efficient they I were marketing super marketing an a we the Chris also, I'm artificial the have think out, in scale investment -- and move

Chris Greiner

I one around model. to incremental Matt, to thing point on your the question being out wanted

of You're correct channels in addition that we the on modeled channels. XXXX in and ARPU data growth

your just remarks, for of $X.XX expansion in the We're heard cases. is model what's And in terms that X.X%. than we ARPU, of an the one this average That you for XXX about channel XX% to customer big, case. customers correct we you're per point, but opportunity average piece XX%. grew the as So our now and it, growth big up the use clarified. built scaled our at But superscale is using in incremental more to still have They're another is channels added I the into to incremental a by now prepared is That's customers. call, use XX as we at per the channels of year-over-year. now scaled is XX% talked to that of now be us quarter's are

Matt Shea

Thanks. it. Got Great.

Scott Schmitz

question, please. Next

David Steinberg

Matt. Thanks,

Operator

The next ahead. Kreyer question with is Craig-Hallum. Please from Jason go

Jason Kreyer

a metrics give on congrats and scaled any that, ask Are guys timeframe can of there quarter. get just rapidly? then to customers. you're you in I cases that's to Thanks some any phenomenal where that the helping just on super level? the about -- the six wanted to scaled to terms And the callouts channels those that's customers getting get seeing to or use super acceleration more that level

David Steinberg

Yeah.

in they that platform onto we're consolidate the that we're the ever as before. -- reality which consolidating really uncertainty, record that say a are clients we've know time many solution, I if past. record, I from ever this seeing we vendors growth. company customer, growth was by we faster than And faster frankly, scale before. know our in in ever I is that those than a grow they this we're shown I can I faster what is can adding but the only continue I'll super remember single point customers seen And say they're would be scaled say the and said scale. quite multiple Jason, So that What spends think is what's seeing differ it to can't client true But I seeing one-point client don't is super the of to growth happening from is to of does than solution. how scaled today have quickly pilots what think we've them

thing market. of other also at what's requests. said continue I record RFP to be in that is going we The a on we've And lot the is think

a So into are and heavily Machiavelli waste our that crisis, motion, the getting out. as said, are listen, are sales one sure word team, sales we we investing our and never making we

team in-person after. to Zeta our over have to we high-quality X,XXX company but get either people did virtually, again, the leads really we sales generated want reiterate not Live, think or X,XXX I over I have for go attend only

So really Zeta. a now time we're exciting at really Chris? seeing right

Chris Greiner

usage CTV back of Yes. gotten use is single of strength on Jason, the some around low It's digits, double color ago, into on platform. year grew digits. a channel to growth percentage the Its the the the It's was our digits it very continues the growth, be and growth broad-based which -- A standout. channels XXX%. But was in great to incredible. quarter, double great. in case now strong all

it nice aside CTV's So setting a performance even growth. was distributed outstanding

terms of is, In another the to cases, all acquiring use I are which The grew balance. cases firing. year-over-year, use testament grow really think

that's to color to That's be more good a just thing. bit So continues that question. -- a your

Jason Kreyer

you. Thank great. That's

David Steinberg

Thanks Jason.

Operator

from The next question is Morgan Elizabeth go with Porter Stanley. Please ahead.

Elizabeth Porter

Hi, great. much. Thank you so

Just about growth on XXXX QX QX. you year-over-year that a over just to in XXXX guidance question XX implies did to compared

you're including the you. to Just pretty out any baked that conservatism wanted into just So figure what strong quarter, outlook. Thank you and a have in is assumptions QX for macro? given usually that

David Steinberg

Hi. great Elizabeth. you. hear from Always to

put raised that in we're I'm "Slowing that I think And We possibly so. now correct to a now if well. company. as we time, And wrong, right the that what beat quarters is will public we out, today seeing and I business we we're business but think to make executing six we're me, in that on can we put row trying Down". make anything We're want a a At sure we guidance ourselves -- continue position we in the not sure do to is extremely conservative executing. as focused as can. same the Chris seeing that

the we're fourth at sizable had look seeing big a pretty in We the You quarter growth would also fact business. last year.

continue but we're be not So business. seeing to where we we're successful, ourselves in putting position a the a can in deceleration

Elizabeth Porter

had impressive new adds. to I with a just introduce to know And and the has it. AWS I of customers. then, kind kind opportunity Got follow-up customer of the you Snowflake new that quick an partnership on

or is shown So that have hasn't look future up results? that should is the in a to yet still that opportunity benefit, we a that of separate in starting to kind forward

David Steinberg

we've resulted than deal answer question, a in quite great frankly, actually not seen seeing partners it's more The current seeing we're strategic ever is you're what That's that, the flow results. in Elizabeth. before. But from

going sizable going into we're that us channels, engaged that through big channels, are What what the fuel integrated coming we're at that AWS into I will And of those if haven't it's and have Snowflake, because a know continue to number pace. think seeing those in I RFPs clients because help business although, come you we now the part year. say of I a business integrated continue to through you the record to into have that, they been would is tell we're I'm grow next would a saying.

So partners technology from a a incredibly make be customer to-date, important sense? they've scaled will Chris, been I I into clients foreseeable credibility from that think, future. and perspective the incredibly going adds think they does important new

Chris Greiner

Yeah. Yeah. Totally.

David Steinberg

Thanks, Elizabeth.

Elizabeth Porter

you. Thank

Operator

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

Arjun Bhatia

mean, on you and good additions, wanted Perfect. quarter growth. continue Thank theme of the maybe ARPU just pretty to congrats on customer another seeing I you're not the it's great just additions. I I guys, think customer right?

You're large customers. seeing

plans? here. visibility that more for you more of seeing you're a base tougher. do And cohorts. this your now do? with growth and get revenue just it customers, you little if super What does your do scaled to add that larger does your XXXX your more seeing think new confidence for sell bit about streams -- traction that when can Chris, that XXXX, what know an have we customers customers uncertain you into, a for in we're then, of macro established things does business future What a do, today But your You're into the entering

Chris Greiner

them be. progress is the has where they confidence call you're our revenue the you to But only the super why with type right, retention, been mix in net that we've the ARPU we this up. plan. $X $XXX,XXX those you throw increasing for a greater for -- same $X stick revenue of about also it's a increasing of could it mile we give just What difference makes to feeling to We'll customers, And we're should easier the our is exceed the yard very that XXXX it's have million, leave terms higher But and the said of that XXx talk investors February. customer are of us You're there's quarters sticky, right. ARPU scaled of rely customer the markers scaled GAAP upon, And million of the that can important versus think have $XXX,XXX in net revenue but was on so to like count along predict we than confidence than not retention which to our the and million. XXXX way that, prop for so putting we're making. rate in and $X

million and David? faster getting $X $X the the we're see that million-plus, over almost million per. faster that said, average David as fast past As can to them to what the now moving $X you is of

David Steinberg

of uncertainty Yes. want in XXXX companies I methodologies What and the not get net Chris. a countercyclical. is without because And do we look that potential Right, to as that our of right? don't that, the insinuate on -- firm. that, touching on downturn benefit obviously, new to to we'll a given of I I times is marketers cost. inside February, want times for tougher, cut I insinuate guidance we've think we’re to believe But

We think are currently RFP in publicly that seeing marketplace. said platform we're that we've efficient what with we and And marketing when scale, the what I'm aware dealing requests. of single the record about is most are you at

then Zeta to that which the of leads, fact, with respond try X,XXX And for Live high-quality X,XXX to In out attending, course, RFPs you us, people at chunk. all getting. with want we're people hiring I of we're to turbulent, couple that a to we look big that, us, it's a net actually benefit where executing, And as and that get is more is things argue don't to business crisis. would the this actually you coming waste

pruning tell great exceptional. number times get we the reiterate, would get to are That's We not salespeople as are to engineers. I and get would you the said now. of that potential a to to uncertain, pruned. is we have And better of that, not And still We What we we'd had we much I XXX had flow higher salespeople. XXX also quality. said by end again, above year. XXX We're the continuing want add we're ones

over want for marketplace calling working where beating are we're here. seeing the those salespeople other we we're as are who come So other to companies on companies the saying, and RFPs, us

metrics And the cut quality our I downturn, and seen we're incredibly faster the people, we'll we of of is ever take maintain sales think we've more every to say, is on today, lot fast it's a willing we know university. in XX%. their the a our into enterprises people accelerate customers didn't how past. metric motion, cost to come and see And be in get onboarding, that and of monetize to can that up into call, sales the you to Chris your to a create, of we'll great getting are get One pilot every can't in on than and new by we can able when transaction. think salespeople the first hiring risk I I

Arjun Bhatia

you investing, evolves Should expect another in are developers not market go-to-market helpful. kind maybe super me. this it or on a And was of on is, you point put product, I then, think profitability? finer but we it growth a also balance to but And David, little when how That's at motion, the one you one touched approaching Perfect. as last hoping between about time? that a just Are bit for you the leaning in there, way the just and here?

David Steinberg

of we and for we things decisions investment we make I are all budget, first and our think QX so is process QX sort look how a rollable of our one quarter flexible we of the at for budgeting great about QX. before build the

risk So any we take don't meaningful there.

seeing Chris to been lot past, the over leaders, and noise because on before My incredibly business speak really business nervous lot but my executing to more I seeing I've other a full. of regularly about all give hear that, of it I'm than of a of to is talking better leaders. I'm requests the from in funny. I detail to everybody I'm I've continue Although, pipeline speaking, well, throw and it. I seen business out it's and there

about we be on forward prepared how roll can make the us we on I Chris? thinking to need investment, we if at I a business investments flexibility. that weren't would naïve, think rolling the which do gives basis, we'd think we're to least but that of closing execute we're it we a lot

Chris Greiner

in we'll do said Yes we do plan. Arjun, what and the XXXX would dated we

mix David said to fast and on We've an as So And continue than exceptionally the grow invest was earlier, and G&A basis ETR as and R&D slightly R&D XXX, continue where was done for or team efficiencies. in better absolute growth. R&D sales both points, better like this similar dollars utilize XQ, footprint last What faster we'll global a it get ETR well quarter, marketing. revenue XXX in you and the as quarter G&A, basis the mentioned will to G&A. we'll has on saw

So at a that's And focus we point. right? on. to continue we'll can I people so, compelling cost add very we've think done something

David Steinberg

Arjun Thanks,

Arjun Bhatia

Thank helpful. you, Very guys.

David Steinberg

Thank you

Operator

go ROTH The Please next Richard Capital. question with ahead. Baldry is from

Richard Baldry

those somehow less sort competitive in number because people limited competitive, goes as little win a the up are they a or that competitive rates? talk percentage growth same much. RFPs more you the or targeting bit Are in? seeing of involved, of they so about or sort the you of curious Can vendors Thanks. invite are only they're I'm RFP

David Steinberg

That's a great question as usual, Rich.

company and Like about We're out to those our to continue because doesn't even respond still percent as we those used to we disproportionately we're RFPs even can't substantially responding literally to them, higher a percentage if have to some to we has just actually a percentage alongside your our win the to we can companies, stack. the win yes, a to we great existing things RFP than and bigger want seeing might And to remind just to from seriously platform is vendor. a change them, to as the reputation, go as win And get not wrap number we're share. close existing expect would going to respond that. of you show RFP considering XX-plus be we RFPs we to is of what sit we start they're quadruple right? -- the high didn't know, to of them. But get of one lower leaving bandwidth I of want not So market our of because naturally around response tech that can bother the we rate you percentage perspective. now you, an Because RFPs

a can a us of into internally, company customer for particular platform. very versus the it acquisition easy platform we another If software CRM their acquisition the if it's company ours using become is like plug is record, to agency So doing the another CRM. for customer and

we're So going we to I think haven't -- really tabulated.

And not this as publishing in those us help not over seeing trying your new I part seeing companies There's up many only enterprise we're so to got and to win XX% a that come of closing that we But the coming we into or But times to we are which the than where of to suite And day, RFPs number. the us which against. our large wrap that down XXs companies hey, – handle of you've XX% you're includes if think almost don't the better look any second trail right? as And incumbents this incumbent and I seeing of world. many fall-off question, does that that automation And expect of last in closing we're a even them, on type of you products actually and at can play our the back quarter. of We're four sales around that of map centralize very the we're we're couple we guys did half component? end win that's sell. large couple would to XX% percentage entrants the the can keep can seeing handle. are here continue the force XXs. the not and we at But say, total products, eye their on scale as ball answer with many completely. we're the of ecosystem, enterprises very to

Richard Baldry

One it's start to good see buyback for Chris, up. the

using flow your drawing in than half the about the under sheet. balance cash on which free flow cash you're was quarter. talked more But You still of down

that, of the finishing a Thanks. you go-forward either aggressive thought how year up overall? sort to on process be I'm So curious around your on expect basis

Chris Greiner

Yeah.

You're we said in kind the if What high will, anywhere the but free you as we probably as XX% that, of own of our right. million we've is We XX%, devoted maybe programs. towards cash minds, flow XX%, likely $X.X generated. earmarked more around

quarter. kind we right So, this plan for on of

David Steinberg

in $X.X million, XX%. below cash continue $X.X slightly that. think target million were Remember, free But we'll I around in Yeah. buyback flow, to million $X.X we

Chris Greiner

Rich. Thanks,

Richard Baldry

Thanks.

Operator

The Genuity. Hynes with DJ ahead. go next Canaccord Please is from question

DJ Hynes

on the two Hey, guys. of questions to I results the continued pipeline nice for strength. have hear and Congrats Chris.

helpful. that asked that about that So investors front? that That forecasting Chris, on Can just you business? the think much I'm how kind of often quantify on into variable you for, Any are part accounts to about color commitments by visibility of usage-based or the revenue. you would be made how

Chris Greiner

Yeah.

more activation happens one to our and it, that's continue the activate. And that's what point spend through that that think said the on it And think at CDP, results it's of in part to data compels them to more run revenue customers they down is realization. our to I double ROI they that which simplest stream. about of want of way our and Zeta Live, the more the this

as as one It's results continue my models in so to team because on to only stream. to are side, to are they with has of the when contracts, and ROI much a to duration, said, as revenue for it long if our predict. we've So solid able together, and time get value, forecast we it's on replenishment becomes – predictable ability so very a predict fast – with in very added pull there getting as it frankly, planning it and to to the customers, they're you many our longer revenue the working many our fastest of rely tie that easy it,

DJ Hynes

Yeah.

good we follow-up data have look, Okay. right, the And and in to plus be, then $XXX targets, That's hear. XXXX your million would helpful EBITDA.

any what EBITDA now. that $XXX tracking of for think in on thought free like? that to you ahead clearly Have conversion look might do You're you million that? put cash flow

Chris Greiner

a we're on year-to-date think in lot something I'd a analyst part But conversion we've detail way comment we're as That drop free investors. are more XXXX we year I updating of get expect driving certainly data It's today got you've our to considering from It's and update the from having February. versus X% and compares were in seen we on we're and ago, that cash XX% more that -- question year-to-date. be XXXX to where to the flow line. where we last that progression very the The is, year. the community the we're But business of running February. profitable we're in contracts, and that when a more something we

DJ Hynes

results. a like Yes. the on It plan. guys. congrats Well, sounds Thanks

Chris Greiner

you. Thank

Operator

ahead. Please The from MacWilliams next Ryan with go is Barclays. Instructions] question [Operator

Ryan MacWilliams

given Thanks see interest in straight for accelerating your make Thanks. sense maybe improving to adding there? particular additional Please features that of taking in opportunity, any – top areas might any question. Guys market new line. acquisition? three And quarter

Chris Greiner

Yes.

Ryan. you, thank So

clear have and enterprise but M&A. on I look you that. I to continue We we're of to lookout we're to be of products a add have super to the data great to is and into clients. think we we're never add and to this. roll know, you I time there. and for the think CDPs of landscape, as going feel But sort CTV think great out we continue that wrap reiterate that And opportunistic platform and see think, always as a believe the And roadmap, on out marketplace. about the and look to platform. -- We sort relates to always going we people additional proprietary the I in can again right? want X,XXX-plus And looking looking is in we I need interesting we deals period it been, and done functions smaller up our -- transformative like always none with of differentiated potential developed opportunities some on to future and internally businesses currently want now global majority interesting the out pick has on years, and and people the where marketing features incredibly acquisition, we great our always But listen, we're over at Zeta are there's the them focus to to we opportunities, we've to we we'll where additional that do the could tuck-ins. as some them of into vast continue looking be

Ryan MacWilliams

a scaled case also using you. year-over-year. it's scale little are resonating color maybe or there? that that's than And nice there. more these case that's explorer, opportunity use particular color customers, XX% more Thank with see CDP particularly up Any to the Appreciate customers it's one the in use

Chris Greiner

superscale Yes. David scaled products, is CTV future are said big products the our customers. we by what and being growth added see customers CDP, as big, and most

David Steinberg

is super what explorer, The of other intelligence does intelligence the the Ryan, not agile marketer, the fingertips of the only put inside data is at the data it of enterprise our clients. that thing really does our which we debuted all at it Zeta at which puts live, it's I the business of opportunity am product, assets excited evolution fingertips about all of the the

marketing from where next dollar. And level. the Agile our best -- to I'm to Explorer figure think Internet next evolve to So, as evolve to going be they just we to their the product to they're is where they put the able should next it location use I go physical that Intelligence out investing should we everything product, data sorry, as

Explorer hope Now, Explorer, I but I'm old that I talked what opportunity know meant. I of instead about all Internet you

Ryan MacWilliams

much, the there. got guys. the appreciate so We Thanks color picture. I

David Steinberg

Ryan. Thanks

Operator

session. This David question-and-answer the to remarks. concludes closing turn Steinberg the to any back I'd for like over conference

David Steinberg

we did down really that comes this to at people an It We Zeta. have quarter. feel the exceptional like job we

ever probably you're their people's like people seeing in of now had Most seeing careers. have with it them working honor rate and me, that where first their the experienced most them old majority some in global are of have rising a first the We and competition I've the it sort an grip, vast ever you're seeing not, seeing of you're you're focus, environment through as amazing you're of seeing is as it the of, environment tough interest ever. through pandemic, and

level; I what not to to tell people Take great care. be that I to Global. team, the quarter, this and the focus be more you, proud Our more proud grit, be this us hope really be hard be continue I'll could not here. the I day, of next proud and on wanting week, not of And could work, Bye. win culture more month. of is I and has everybody drives could to leader Zeta we a

Operator

today's concludes call. This conference

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

Zeta Global (ZETA) 2 Nov 222022 Q3 Earnings call transcript