Earnings call transcript Q1 2023

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Operator

Greetings and welcome to the Zeta First Quarter 2023 Earnings Conference Call. At this time all participants are in listen-only mode. [Operator Instructions] As a reminder this conference is being recorded.

It is now my pleasure to introduce you your host Scott Schmitz, Senior Vice President of Investor Relations. Thank you.

begin. may You

Scott Schmitz

website Hello, with for operator. presentation thank for our Investor you earnings also you Thank links information find first everyone. about quarter us to Relations Zeta’s on Zeta’s are filings, Today’s investors.zetaglobal.com, XXXX joining where release will along you, SEC available And at other conference and call. Zeta.

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

remind contain everyone and as outlook, our revenues and to our statements regarding we made the including call, products like Before our and other of begin, financial this that well developments, of and products, presentation statements on I’d potential and objectives our events plans goals and strategies. business and forward-looking about competition in future potential as the earnings release statements market

are These the as filings results from SEC only differ of materially subject and cause include and with may today’s described risks These uncertainties actual statements and uncertainties speak other to earnings and release those projected. to those the that date. risks company’s in

information considered addition, our as addition non-GAAP today our references be include certain to for non-GAAP managing the We in In measures they financial our should useful which investors. and believe will supplemental not GAAP for provide a measures, these substitute to results. discussion in use and business

appropriate website, and in can Reconciliations of as found where release the our the on non-GAAP as earnings with our SEC. be measures the measures earnings GAAP well presentation to the filings corresponding available our

over call With turn that, I the now David. will to

David Steinberg

fourth and everyone, considering Good Scott. May you, Thank the the afternoon, date

a strong you. with off XXXX be start. is to

ahead of million, seventh and volatile producing million, our $XX of outlook. revenue up the delivered year-over-year, of XXXX up through macro execute In EBITDA $XXX XX% a adjusted of consecutive to quarter continue first consensus XX% with We we raising backdrop, quarter year-over-year.

in our QX squarely points driven and to sweet is market spot. data belief our The of moving point insights, another expanded that direction. XX fits intelligence in need was margin with proof EBITDA adjusted artificial basis less within Zeta's the with combined XX.X% year-over-year. Our of proliferation more do the

Our execution willing Zeta In solutions twice better see customer resulted new take new against outcomes. risks new XXXX volatile drive drive growth. fast to new this to count continue partners opportunity model. organizations growing and strong has market, we to enormous customer scaled as to in this continues more This our in our with order as adopt

by on outline Along these a we lines, out focusing the in achieved start that how three we sustainable topics and I what long have would marketplace. to like is term advantage believe

accountability held point eliminating we to First, ROI more since realizing solutions reduce steadfast the founding, and and promise our marketing our of making marketing. have driven vision complexity, actionable, data to by

bodied principles of Fortune and multiple our in identity, embrace third, on and XXX guiding Zeta In let platform first, our But largest into we as detail. one which our a a signed wins. consumers expand platform, results activation of And company, change which for during in that these or vision through outline ever differentiation. will technological first of a evident our I me the and time is quarter, contracts intelligence the differentiated strategy better Second, experiences marketing ZMP, delivers brands. our market are brings for better together single platform

to and edge other and to invested one without opt assemble cutting the cost Over and proprietary our the retain last early our learning, XXX evolve. a to next they AI to patents strengthened as XX innovations largest more sector competitive databases at filed can customers help than years, lower and the most generation our investments we technologies have tied continues software. acquire, machine innovated position marketers of and sophisticated and the world's developed data have grow marketing in than a cloud marketing These technology

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Let example. you detailed a me give

the This marketing we of past quarter one very their The to complex. eight retailers largest with figure become multiyear deal cloud. requirements worldwide signed were a

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and required in they buy with integration to cloud IT Third, partners data Snowflake capabilities. sharing ability with optimized leverage such as the

with The process solution customers existing aligned acquire mission they their over on needed vendors. RFP XX their remaining ROI. fourth, that new measurable with while efficiently grow focused And a laser started and relationships to

the era brought to they with many we were all-in-one this were All technology The rounds, marketing upstarts decision one as win an and one to to technology. as to solution. dismissed There to who we great know-how and to a the of platforms the the of architecture during trying the them not enterprise solution transition in involved. out the a with won legacy marketing many their solve many sophistication. functionality many generation assets ZMP early did problems And retailer. next And we Ultimately, were lacked clouds because came enterprise modern stood only a we and smaller typically see requirements. of and meet combined were the makers scale new

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unique a customers brought and ability identify otherwise hidden about. they unknown that We to would have opportunities known not unlock

is a the Labs. with from intelligence and data embedded moat widening, Zeta ZMP business. that this only create new Our And generative week the moat AI artificial in capabilities our earlier around announced our

we make sophisticated goal our to marketing solve their generative everything with challenges approaching we investments. with our the are simple, of As better do, as biggest deliver to business AI on client's marketing results part vision and

believe Zeta power which directly With Zeta's marketers will is for Opportunity generative can evolved many to target? journeys of AI with There marketers improve been as putting question behave, years. channels results. Zeta are accelerate common what critical profitable the only and speed should most as into like as we new but learn ZMP, for more We such technology deliver Which and by most generate agents a chatbot hands. or do, was customers focused so and who a not strategies from are on AI generative AI will they answer AI the powered currently scale lot the humans experience will questions have our ZOE Engine, me? ZOE, I ROI come ideas simple within marketing What also higher we're my and take? incredibly

for the we summary, need to XXXX in In more efficient to technology. marketing as a off capitalize continue are we on strong and effective start

teams partners, would customers, always, our and As support of like the vision. I ongoing to thank our for our Zeta sincerely shareholders of all our

results turn greater detail. discuss our to over Jedi Now, let Chris me Chris? to it young in our

Chris Greiner

all afternoon, And or but Yoda, I'll categories. There quarter, them voice Zeta great did good David. impersonation, a everyone. I'll my is do of no the you, words in seriousness spare In first do lot. in the three cover broad not. try. in Thank the

First, and challenging navigating of beat execution, consecutive how race backdrop. our seventh and quarter led I'll share we're what a macro to

also pipeline what's sales our in driving RFPs. I'll We'll Second, in growth metrics. our to strong continued sales cover detail productivity

million adjusted XX million Zeta XXX our adjusted and the to a our cash more in to and through least than XXX continue model increase at and of revenue, increase of free revenue flow. XXX what how wrap up Third, growth year is walk million. And the details the term with in a EBITDA million full guidance in and guidance contributing EBITDA to power in million long leverage to revenue above to billion adjusted required EBITDA X deliver I'll XXXX X KPIs operating they rates

that, let's with dive in. Okay

up more straight largest model. million, track contributed year-to-year. quarters challenging expanding adjusted channel that's XXX These X in have of with margins consistent digits today's a been importance customer diverse to delivering grew like out growth industry set execution Our environment. from of in double XX% our our eight in while environment. quarters; in a replicate, this simultaneously the for quarter revenue case nine of XX results illustrate illustrate use last To record out having especially EBITDA the Zeta verticals certainly first of XX% to characteristics excess revenue this, year-over-year results nine and a very macro multi a year-to-year, hard resulting revenue of

year-to-year up ahead long first model rate Total the for increases tech ahead count skilled of focus the growth drivers revenue, seasonality, last the The and year where to first quarter at in the achieve versus and XXX plan our on near encouraging, scaled quarter and customers. least quarter, oftentimes XXX representing customer powered is stay required staying of to again growth, continuing and mark which most term profit is for was XX% ecosystem. on is execute once underpinned the XXXX by the Zeta to our our XX long This customer execution cash challenging dual last enabling from skilled two were XXXX up behind Zeta our term times considering of especially of KPIs eight growth.

marketing, quarter we For scaled were context the QX customers travel were were years. economic the scaled super retail seven advertising scaled increase QX customer existing this and cohort two became we under Zeta. than and a count new technology hospitality spend and quarter-to-quarter to Zeta the most customer average consumer six industries customer In the customers industries. and to eighth and more sequential last choose customers over two on And which alone, We're twice the eight the gained Of added scaled. quarter-to-quarter, change and that we continue growing platform. pressure to increased see

The quarter grew customer was double year-to-year first the digits ARPU first quarter in XXXX. scaled up from which XX% XXth quarter consecutive

quarter to XXX,XXX again year-to-year. time, At super ARPU million for XX% saw scaled up growing customer customers Our growth cohort those the XX%. in led XX% way the future This count the super of revenue once pipeline scaled was X pilots super with XX%. our same the of year-to-year ground XX the cohort year-to-year driven strong first count second presentation, skilled in can where customers our in slide XXX,XXX to Increases from for these than customer grow by a the grew XX making earnings as more on seen fertile farmers. supplemental months cohort row this

saw cohort first benefiting this increasing quarter the We ZMP of which XXX,XXX million per from through multi now customers. three product and million by further connection our in where to customer -to-year than are X both This XX% scaled scaled representing the to average an added is channels, of than the using exemplified points XX% greater more in customer. This by groups shown scaled channel more increases X also in is number channels defined customers grew lens as adoption. of by year or year-over-year team Zeta

dynamics couple mix drivers noting in and up mix percentage direct here. with year margin. good were cost of XQ saw We worth compares Shifting strong. of A that against to prior very even revenue

buyers First over newly these record platform start higher shows like time. When customers, integrated case with with with direct channels. scaled for example, can this added occurs, usage an mix can customers new be and track the our to agencies evolution

cost the to In from par average. period profile corporate who higher is we platform the over cost on strong revenue got now direct super with shifted integrated One and of we of mix agency, its of revenue leverage dynamics customer campaigns. such direct effectively revenue our XX% within these of a an two with first skilled quarter, X% very existing year of our our revenue channels, absorbed example

XXX our basis XXXX, quarter and cost and first In better points was quarter-to-quarter. up of the XX% revenue XX.X% realized year-to-year mix basis XXX revenue we direct points by

modeling of XXXX incremental are XXX achieve Just that basis want the by new expansion our assuming February call, in second XXXX do to to From we cost we perspective, additions XXXX cost in adjusted if revenue conservative like than the year-to-year communicated to anticipates and percentage large better reductions upside of developed be on our profile we for in outlook. conference with new a a customer of it continue our revenue not is our margin strong we manner points. EBITDA we to saw guidance which half like guidance of of agencies. in counting so buyers this similar as remainder more inroads We continued

are We of expansion strategy, year-over-year because expense this to contributing another unit operating comfortable or straight. generating strong nine they're quarter margin adjusted with EBITDA economics,

to the R&D million quarter up and which XX better down Sales points based of marketing, stock basis GAAP expense to revenue basis ratios, points. an marketing G&A stock with basis This year-to-year. XX million compensation, each a includes XX% XXX on On led R&D XX first XX was million, G&A loss points, down up were was and adjusted compensation. and Excluding EBITDA basis down of our first our of XX sales margin basis of year-to-year EBITDA points adjusted XX year-to-year. quarter XX.X% and net based

cash IPO, Excluding XX been compensation strong to have stock would generation. related months. And to continue expensing the accelerated we our based drive

Cash was flow free XX XX% million EBITDA. of of to adjusted flow XX million, from operating with acquitting activities cash

This with about ended We XX to productivity I've over that quantity. good of Our the times at not model sales ratio pipeline as XXX quarter quota is and sales two quality, success to new than up and to sales efficient we're strong and expense a so To marketing a in averaging with from productivity. relationships doing XXX customer are at is simply scaled XXXX. bringing more new seeing. topic, years my adding new end, of emphasized, end carriers our faster XXXX second segue to speaks And experience, sales the revenue this always Zeta. growth Zeta them the hires customers

optimism sales primary Two, our the organization more progression competition. where almost our in continued we're selecting thirds of deals, taking pipeline, volumes. than performance and of size tenured three, accounting three Zeta over sales month areas. growth RFP the Our and rooted the the sellers the two now highlighted XX duration rates for our and of pipeline sales and increasing enterprises in our the win is team. One, of of by And caliber the the and

each. We have color on some

heels rate the measure the times record be could seasonally quarter first RFP pipeline, of XQ slow. I On the pipeline quarter metric an a we closely. headcount increase a quota two again first in growing a From we carrier at perspective, our

second one and eight However, in the pipeline not figure was as customers it's that time a RFP to to great any David QX was enterprise that deals about win quantity. in quarter pipeline highest deals in over The also certainly case complex our meaningful only a our becomes not as our if for XXXX. ever. is And Zeta off. comprised the bigger are history, their mentioned only initiatives. was progress today can our essential of intelligence back sales partner for closure. point an Again, but strategic marketing, quality not my Having more

XX% going year-to-year. value The we velocity the experiencing only But right sales relevant economics we the you're This into being and this measure move to but the both. yielding second winning rigorously visibility, stage by the unit XXXX only and momentum opportunities of way. up pipeline for course, bodes evidenced is of We're also late XXXX. that stage along as deals if half well the late from over something of is the not early

And overall those win sellers, for rates. Zeta win RFP experienced our are XX deals quarter even our than more with XX% of rates for months responsible one. First exceeded

These initial are have through of the class and wave programs. way an of their training, sellers who certification completed made

as to the expansion what and Zeta sellers with context and guidance. retention me history topic gained the raising of with guidance have year execution the which cohort and XXXX into and to brings closed with employee our quarter productivity EBITDA each Zeta pipeline XXXX the this visibility great and we're of our time my and with full effect third sales driving more competence shows leading flywheel Our our success a final rates out deal the with revenue extends and XXXX strong gate, is of adjusted we their second

second the as point a similar the For quarter million guidance midpoint million, XX% up to QX. by of we increasing are XXX year-to-year, of XXXX revenue starting X

the year-to-year, midpoint basis of XX.X% points expansion. acceleration XX full and XX% from the second first second or XXX margin This our our of basis of generated the guidance, an The of adjusted raises quarter XXX,XXX upside XX% XXXX at to up the revenue increasing points EBITDA We're first XX represents our XXX growth year guidance is to million, also quarter. the XX.X in guidance quarter midpoint outlook which of year-to-year by of midpoint representing expansion year-over-year. quarter combination higher million million by

a XXXX EBITDA At year-to-year basis XXX our up On of XX%. the year year-to-year. increased to margins, midpoint midpoint XX% increasing the we're guidance, an to our full expand year million, basis full adjusted points adjusted of would EBITDA XXX.X guidance

third and earnings Lastly, XX adjusted we're supplemental EBITDA in deck. providing revenue quarterly the on fourth cadence and slide quarter the of

final up prepared wrap want I I As three my thoughts. to remarks, you leave with

First, zooming more. and on a continue in, we be team to commitments, delivering our

of in We're believe line doesn't the to for of There Zeta and XXXX and to near recognized goals, that, businesses adjusted lot proud grow as growth opportunities rates our and flow Zooming largest out of from a not continue required third, today. on EBITDA margins and on the expanding track top shown their cash while it's plan. far deliver a long we a sustained rely profitably. most term our technology businesses lot growth with the it, long end really growth to and team. the we're And platform as motivator a our annual term of in can wins is Zeta spend ahead in being the We complex Zeta bottom XXXX free enterprises and plus rates and time XX% compound pursuing. universe are simply big that

for Now, take me Operator? back questions. the the and call let your to operator David to hand me

Operator

Our Hynes answer and a with Thank will you. Ladies the this proceed line Please Canaccord. with be gentlemen, DJ from at your Instructions] question. we of time, and question question [Operator session. comes conducting first

DJ Hynes

past. quarter. congratulations for I want guys, Hey, on I seems the scales to the nice customer ARPU. one it of other to views that marketing maybe than about in Chris a I'm this to curious QX larger net dip seasonal seen about metrics? Any how you. we've ask implications respect just inform slightly thinking mean, QX kind budgets retention year. your may the revenue like or on with

Chris Greiner

Thanks, into wouldn't I read DJ. that it.

in in of I this was think that million case, to we number the by that category. more high driven growth it XXXk saw X

grew that kind was in count the did XX% it straight year-over-year that. that of second that So quarter

kind by to being pilots scale. more influenced it's of those So starting

basis, cohort increased you of that If XXXk XXXk growth and came cohort. obviously up But XX% super XX. look last was On XXXk even that scaled within that million, group the the quarter-over-quarter revenue from in as a X you bands the great up ARPU rebound saw of seven to quarter that to most

of XXX was happy retention, count. for with scale XXX. really net customer year year was a obviously, that we're last From So the revenue

of se first can though that metric even it's of you ahead can the per an You back was back into those kind into quarter rates. annual even that

David Steinberg

And any right DJ, system end. echo on not it's in just the marketing our we're me say, seeing now let slowdown

seeing seeing customers is companies there's In in as less us. friction we're existing moving our new fact, there's we're budget. moving more many And of more volatility, to what

not might But growing. of and you our have first definitely Now, coming the we're in in all online as we're seeing seen that evidence quarter. that pipeline

DJ Hynes

add in a hear. the first XXX get reps don't XX roughly this. occasionally questions follow for up, why are could But you mean, what's to one growing and guys market of you of I mean nicely scale sense. at just the I Zeta as model sales that per Good go customers year? that new net kind a slight, guys Yes. to requires time, Makes as from to looking unique And investors I obviously the is talk Maybe maybe need you efficiently. about

David Steinberg

lot first a important I XX it's that those added have the of people think, over last months. note to been all, of

at us? So percentage more we is with of with people who person have per ramping productivity while on who just joined the probably they've us been long have us, look productive been the up salespeople, and our people how Chris, touch have one on should how you been metrics of much we for a versus sales

Chris Greiner

Yes definitely I'll get that. to that. highlight [indiscernible]. I'll

to question. I half are it's in customer we About see massive hunters. think new of a the still sales important DJ, of fair just teams TAM us. understand front And that a

skilled over little called XXX XX,XXX, customers, have We there's enterprises. total large U.S.

a the team's we farming. all skilled So they towards half average is per time, over be hunting, than little half about the million, bigger annualized many that should that. times Same towards sales have X customers other revenue devoted XXX

we've market. focused very kind much of on the team's the two areas of different So

the that and terms into are are there, and farmers the quarter went we first beyond performing. well, that that reps that In of as initial those month how when XX the These tenured to out that us was really of areas reps training kind is went divide this salesforce productivity, through one just class that mentioned David stood of through sets of wave. hunters the

think sales marketing metric, and year-over-year. obviously, there's better I an interesting is our ratio

to were of metric, is revenue going year's are is ours expense. odd X.X that the like an magic around and at the or software change the called number, top There's puts results think I you growth your XX that out interesting in companies And in by last marketing about plot core for which off Barclays if year-over-year, sales divided public the five.

that we're, in don't add we feel we need if like reps. kind So feel because as don't efficiency. with we really mean, of the add the to many fact, anything, right to like productivity I of But we're wildly happy seeing now. we need

DJ Hynes

Yes, guys. detailed Thank very helpful, very you, answers.

David Steinberg

Thank you, DJ.

Operator

comes Needham. the question. proceed of with line Ryan your Please next from Our question MacDonald with

Ryan MacDonald

Thanks my in questions. the really of sort lot to for of to the team congrats continue been sounds Zeta there's focus are pipeline think out there. top David for to on taking of like solve trying great drive the I about a quarter. problem brand the sort of looking the And a attractive. from pretty It who awareness funnel metrics continuing

talk So to making can you And things especially about progress impact side there? the you're in RFPs? just how on that starting sort of rate win the

David Steinberg

Well, panel Officer wrapped I thank Marketing four to host Ryan. global you, panel with funny LogicTech where the and at the and global personally and days large And AI Chief asked CMOs, was other because very, very Pepsi, Milken host conference moderate it's just Milken up the entire I for Visa, the conference generative the organizations.

sorry, call have we problem. and who many did people a Monday Wednesday hosted we to to I say recognize were to really on call, the starting I so amazing no, known morning how Zeta to my were my couldn't how events also many that. management was to attend. Zeta might see It me invited was the I organizations I'm We actually VIP and and dinner, team, finally solved

record seeing RFPs we well think now that. what last we record I were said quite are frankly, quarter, we're is we at and above pipelines, also if even

seen. seeing have are never We that we pipelines

announced that marketing just of brand, legacy said, seeing enterprises today, the them just fact, move in all our clouds their have competitors as global up they probably not in on the ago case In clouds multinational first dismissed we're were transaction of businesses. because chain. would biggest marketing with seeing many us the of core as the most deals not closing of food focus years displaced round are the the we we legacy We're We the which of

things So talk I the like one to about. of

you It's that sort the if side marketing the those clouds, dwarfs bought their one so look hustle conglomerates. now something or the even those of the hustle marketing of assets build bought they cloud. Every it's of tech has inside hustle marketing of legacy their to the anymore. So conglomerates core those size side side clouds, not clouds, ago, the years now to at the

they jobs, fastest costs, as they where cutting are their investment And side cutting I cutting all promise world from in hustle you, they're the side think about all are them hustle. a they dollars, to the

marketing getting what competitors, see So problem, been wayside, simultaneously through traditionally their biggest while big is in in “Zeta we they're are winning, the to who” our starting fall that Zeta, art the we to not businesses in to a suggest seeing their going aren't we're and core well and we between us doing separation But clouds, big incredibly what I'm changing. do. game definitely them not are

Ryan MacDonald

you're apologize outperforming really mix obviously top down driving just in touch I to I I revenue. of on That's up still about platform wanted if but that line. great mix to direct and but sort follow missed what's hear. And for Maybe on of Chris, sort commentary, of the it talk your you

how the direct today. is is guess really still XX% to sort I So platform of important mix question reaching Zeta that XXXX

Chris Greiner

set In in in a a XX% ours percentage has in Zetas our can for had for that It's direct It's as our influenced those of year interesting, a we quarter start direct as mix we likely channel their opportunity the just agencies, obviously within we as with revenue off existing big X% how to the couple you agency off year our new even that It's began particular, interesting script or at pipeline the been this and saw of skilled over their well. super case, And evolved to come to to not mix starting with more period. look uncommon new through. social. a we've enterprises, be month. a total several within mix customer, that seen skilled great that a agencies. put revenue our direct so added that's what's but now was quarter, the total percentage from platform customer combination of within years, What that additions important. of to we've group super of really two a But when now of within a also onboard is

But So really continue got some strategies going which It's feel omni-channel we as operated we higher mix profile. like playbook and use build to get margin they work. and do confident direct a obviously we some Zeta's drives over a better mean them. other do they good time, a social, gross to then can to them great owned channels, we've we with feel channel

David Steinberg

that on the have been were we sold our our we in the Ryan. cost by able other And saw nicely side down way, of which goods direct would offset to than anything also come more

feeling really about very this The business, That's going platform down. many new boarded like large to good the have is too brought slightly that a we're now. trade quarter. up and some make. any willing on which in one up we for clients, we're business artificially right problem vacillate metrics So have off to biggest we definitely you're But

Ryan MacDonald

the line metrics top moving keep [indiscernible] up.

it's So you again. see great to congrats

David Steinberg

so Thanks much.

Operator

the from of your comes Kreyer question line Jason Please next Craig-Hallum. question. Our with proceed with

Unidentified Analyst

from if bear revenue to to Jason. how the of some channel the can most me in on if you first being influenced talk understand relationships? are and in channel is terms of of fruit this Hey, here pipeline for leads of that's of start, Couple phase? your the kind generation are starting from those the about still pilot Cal just to opportunities trying or Just relationships by

David Steinberg

their customer channel think our bringing incredible been a it's I we're record velocity They've them. pipeline great partner. ton with into mean, out [indiscernible] up we and I Question of our our don't an through lighting we us and people. directly do opportunities opportunities Snowflake, So major customer partner. platform are on seeing are we major coming biggest They obviously

board, winning you're to working with you primarily channel really quite with say are board Snowflake, very, But winning. very the seeing we frankly, sale, the but So across partnerships, we're primarily across hate well. the simultaneously,

Unidentified Analyst

Perfect. you can that Thanks. ZMP just for the And your give AI operation And vision kind really curious that lower lately. performance, been just me. then more you help going? just of highlighting I'm can one cost optimize you utilizing of for where see either and AI kind do within last of guys you if how

David Steinberg

into even models intelligence. before large wasn't talking artificial Artificial really We about play. talking language about these been started learning, we've coming started it since deep So machine Intelligence, learning

has not gets customers. data that's things of exists large of the to I put us when One is to AI generative into week, quite that I conference that language of it. the the AI place hosted And as good large lost enterprise as incorporate moderated the And think in the models in models our addition panel able as is unparalleled. and things frankly that, only the this said, I been at talked put small between really about. ability one But think I our to form a we're today language and into CDP very Milken is

who Americans than that unparalleled of So large models echo Zeta party that language the their private an ability exists inside then that million merge small The opted system greater data from can create data XXX is to lower our lower plus cloud first to CDP customer into data in by models where data years and to exist to and smarter. in our the up performance, a not cost XX% come to you our creation, per to the it. of able by customer in then that language have outside greater learn just into models but map does translate XX the can a really the percent as How generally than to business quickly. get unparalleled. customer's We're we smarter be that that

Artificial scores consistently private of intend not is who customers of for in for ingesting approved them. what can based market into are And signals, individuals our products, millions do mapping of be using the enterprise clients next. remove intent do that or that won't on as That we to to all the it to incorporation Intelligence signals, of relates open hundreds trillions build

before they of that out All money spend comes on marketing.

artificial greater than So XXXX frankly, think next. the I go to how is customer our intelligence data reasons hit reasons up count quite of what you Zeta win and one our model saw we do our the effective XXX% people scaled more one are and than to creating continue of intend needed to at we by our

Unidentified Analyst

much. so guys you Thank Perfect.

Operator

question Please Morgan proceed Porter comes of from Elizabeth next question. with line with Our the Stanley. your

Elizabeth Porter

AI really engine. agents It's technology. data yes. did particularly but along kind the the side, the and Great, of quick opportunity interesting for another more up I follow

you what kind capabilities of of just it is you the us capabilities detail how into it can for do Or be a evolution could you Is So replacing? versus these is bit shares? top playing a the something line separate see model? on think financial the give via Thank augmenting more taking more then it the And SKU? that monetized monetized via you.

David Steinberg

But allow ask real multiple wasn't first our that a read sort in of a the sure customer business get support First and questions of press answers going ZOE accurate help, even to CMO of or of the incredibly be driver all, world all, release. a ways. think ability is modernization which to anybody to you, that and major thank is marketer bothered I customer I to Elizabeth. to

layer everything it on that's First the effectively is changing. all of enterprise world, in new all game is global describe as marketing is their that the to imported platform ingesting, and and of be product, it because a can that sits I models top language that new, said, and AI ingesting of customer important. It language be is it's models outside CDP can small doing Zeta inside large the

valuable It this my rolling cohorts are audience new something to the be say in product then I'm I perspective an from allows Who marketer for what like, can ZOE that the database? to targeting out. most

bigger bigger building what this new it. marketing a to them and can I build see And answers. a life. is I've now being development my it They're As in my what inside Why chief asked of product, it? simplistic new would and participate world starting product hate real than If existing are to their the with to they like taking the new told, products. buy look sell seen at in help integration, being of ever percent officers here's customers Because we're of that? product enterprises CMOs is that. ownership go out ZOE spits

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Elizabeth Porter

Thank Great. much. you so

Operator

proceed line comes with Please question of Richard the next Baldry from question. with your Our ROTH.

Richard Baldry

curious demonstrate be most So able And of may to a that first. when I'm as sale? them Thanks. of that; do you sort superscalar it's higher, customers will generative be not that have with sort note you channels sort side much equal Thanks. that think giving actually target could then it to that recommendations likely or yet? think how been the AI it adopted cross of or ROI could auto if showing you will be able opportunities they may other whose piloting or to not help access

David Steinberg

Rich, Well, both, you I as nailed think usual, right.

hearing they generative willing they're no that the AI concept AI the to be So solution in going efficiency to small yes, the the what call versus of open faster. we're we model love closed generative more bottom enterprise, adopt model. there from their the What more is to question larger companies matters the is the the line, most the

saw time. all that we got think AI for first open I Now, the hacked

was much the was by algorithm ChatGPT under attention getting. annoyed another impression I'm how just

them. of large ZOE them. also language model a the language It can information, the Zeta small the it But model. of to the Inside the little collective able but be still has that So into to as attention data hacked they were it import large the truth closed AI, keep we matter don't to enterprises' to is of It is including the exclusive competitors. themselves. benefiting for keep get ChatGPT generative is, can importation understand a going how that to tight

seeing Biggest So and products additional faster. additional channels we're that enterprises. is benefit to none to these adding us, bar definitely adding

seeing the using the to AI channels. as into is Because what able they're move we're efficient is most the AI, them

is keeps them. it client fully revenue they what of us then job able if of started and are because AI who a quarter. I'm our the AI the their I than As ZMP Chris native using platform better number to the showing that more correct when products them data of revenue do from move we more profitable them integrated greater as years Bottom that examples to our Last to you're XX% out wrong on comes of on new their X% and believe was said, here, platform a efficient Chris platform. to ago line close can into was enough. one one on me best have

Richard Baldry

from of would it'd it people be seeing be they internally. it, lot me. layoffs of their Last call we'll does go for is a are but competitive, good unsettled and you first, people worst there let leave unsettled your presumably

on upside after more days? an why the that to of pull growing these So is Thanks. talent think after go race scenario, not a some in beaten easy profitability back go bit really better side I little would the

David Steinberg

very, very people XX% my lay like who its sound careful could laid individuals you is not, organization an which say of not this would meeting last that off Well, great to job in people off top HR to scenario in but would and be not got a I've assume here, do incredible not we're is me right. you Because organizationally. that

an the than high more the are But guidance as are best we positively Rich, end work We raising recruiting And to Generally the different even amazing who people and XX host on the project winning we raising incredible when capital But large managers, we're that I people still are from win, reasons. more into we those it year. the QX, other these people going bringing people RFP go companies, operating coming profitability again we people, are salespeople, think a of call to and on human at absolutely to the Zeta. who because out, an companies, unsettled into world's for for we organizations are point in focused today, nervous. the we're people. I is from pull we for think seeing are whole environment. for onboard opportunity are want back today's us, guidance don't who

that the people can have dry the feel do sure world thoughtful very we been numbers we making those in it. today's have both. to And opportunity in powder we see do we add in where confident we to think I incredible

Richard Baldry

Thanks, congrats year. start to on a the great

David Steinberg

Rich. Thanks,

Operator

with Please B. comes Riley. Cummins question from question. next Our line your proceed Zach with the

Zach Cummins

afternoon. I CTV update on for a quarters. that's the good lot give channel, us gaining the of that's Thanks questions. traction one can Hi, David, been know, Yes. couple past taking of my an you in

So incremental of update sort any would be appreciated? there

David Steinberg

Yes.

one first really CTV channels, highest the fastest the see as CTV So What is our of in of channel. we seeing of ever we're continue of customers the way use customers. we're quarter our percentage to growing inside scaled by example, our especially seeing

continue data best call connected CTV, what the marketing our there. target using AI see of what massive we're cloud and We our where we a to we're where doing run to to differentiator inside as

Zach Cummins

I would Is Got companies great. of it. the with sort be from? details are legacy mean, solutions, for sourced clouds? being are that still are question mean, And or they're incremental point you these using on that around marketing and where just detail final hear incremental great of pipeline renewing can typically it's RFP Any the sense pipeline. a deals really some levels. overall of is their not at to it record the give me I us levels there

David Steinberg

people companies integrations Yes. of even one I Whereas one use on the expensive. of in everything you marketplace. that talk. ZMP, multimillion each you to point dollar to to services get have using And major tired professional companies to about them most bring if mean, is don't solutions. listen, are don't expense talk exists in They're the They speak the other.

entered four into other or anymore. years with clouds replacement thing we've marketing companies the just ago cloud major legacy appears them lot they started giving need not five seeing if and ecosystem where in as what The marketing of the it cycle it's three, we're is a a

to solution Chris, do and tends going out looking that? they're at a So want to to full they're for. greater frankly, what you to RFP be rate our quite add

Chris Greiner

under needing David's not that most sacrifice I'd And it's I the on because think down they're I from coming it the turmoil perspective, look are of right from, but sheet to the Zeta that's helpful is, where of of are really add efficient, as Zeta you growth. the an probably thing that think agree industry just financial a economic have ones Zack if partner. a almost paper you and only David know, in really to be on goes to the back point to comes choosing do at call more earlier where and

Zach Cummins

And thanks best my Got remainder of luck of with questions. for it. answering the Well,

quarter. the

David Steinberg

you Thank very much Zack.

Operator

comes Blair. proceed Please Our next of with your William question question. Arjun Bhatia from the with line

Arjun Bhatia

a already. deploys your Zeta, mean work think there's a taking Obviously, you this? there's and curious Zeta that in how need generative for as you guys, of the that Hey, obviously, continue But what made that how AI. AI might theme questions thanks, kind you what does how David And it rapidly changing you've paradigm change the great you mean, else adjustments the make? sell do here. might I'm think product maybe change through role? of of we're we the living to you for with like kind that just and need on to in any the might of and announcements business marketers job rise it lot does how CMOS change

David Steinberg

Yes.

rearchitected marketing going has question. Artificial is today, I meaning feel Intelligence layer. starting I where as great I to going, application want what we the are like years five platform the into going, which know, we data to not I it Arjun and ago a where the the that's think mean, you is as puck native about to Zeta reiterate, puck is

meat means. on that some of put the really to what bones So

marketing Artificial running legacy instructions data takes think then has platform and to has and from claim they talk data their Intelligence, AI make to decision. how algorithm in, have dips that to do pull to your marketing about marketing on a based the a cloud, you're algorithm, cloud the multiple If to proper the which that long to to

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help enough from for them, I how or going by their we're buy really it who funnel, to think to doing customers one. monetize them. the using does or that we're are platform Intelligence, Artificial and your understanding cost benefit foremost early But in process it's to is in not removing your and your save the That's qualified maintain, is enterprises marketing interesting. to churn products not going business what lower and customers first create, to

been world help solution The their and also by algorithm. a understand intelligence we're owned our small of because it's learns to what And you tool is only that from it By rolling a learns it data. learns doing language not from of marketing rolling in. and how models from external perspective. thing CMOs that their customers, out intelligence, simple effectively other models, better way, marketers as your out always The are internal the interested language ZOE to with business large an manage real you're ZOE the their AI it's

do an So it to that question, eye a it ask with forever. on once question you keeps everything

So next back smarter when question ask and time. come it's you again, that it than

smarter all the [indiscernible] allows less maintain and do generative create AI. customer more with to your So which analysts, enterprise cost are which to from with consistently customers, cost to existing data, less getting driven very less, less a expensive, lower

Arjun Bhatia

customer appreciate I some insightful. That's new this should metrics, quarter customers curious, the some Chris, of super in scaled we very buckets had good those as into those lands and metrics? internally look we as you we expansions? the scale and one see saw in starting coming you, at that new those in for Are maybe playing obviously trends two just customers that. deal you big and those think well? How retail. super to trends about are through in those helpful I'm

Chris Greiner

them a earnings customers eight and new one even about to talked to scaled and existing quarter-to-quarter scaled million that about moving Out was in that cohort the of point of really XXXk super we multichannel And the the to the internally six X customers we of within added to that were new got then became metrics that Zeta then the from call we scaled. plus, adoption. million excited scaled

more grew So scaled year-over-year. of number channels three the using customers that now or XX%

omni-channel traction in building these perspective. good were new good from really see But base grew had, to we as experiences. us customer continue as well we make we the some with additions So that very for the what was that to happy

David Steinberg

ever deal And see sizes RFPs far done. by seeing just the record of we've Arjun we just biggest enterprises, that are not by continue we're to number

Arjun Bhatia

job interesting. on and Very the appreciate All right, here. color quarter guys great the

Operator

There are back I'd like hand no the to in further to queue. David over call the questions

Steinberg remarks. for closing

David Steinberg

We enterprises we XXXX helping And here as In incredibly our seeing us and our do lot excited vendor. as Zeta incredibly we're are going less we But in about are We are And as people even take a willing lot our like business. I winning about our we to as our about on friction we new ways, and people. feel good quite volatility go our is as business as environment, the the where We in felt talk plan be we're drive is really, XXXX volatile I results. a a today. marketplace. feeling our to really where a And ultimately, talk that drive feel have winning. to many about about about lot frankly, current these to we technology. possibly the of from proud after. can environment, never we're a of we're for We continue talk because a it I a chance well-positioned we business sitting good data. like

all all thanking all win is and always for do our our win thanking So the of I in all the today. vision vendors, our taking marketplace your time by employees, and of shareholders I our continue very our will our much together. for and goal of finish to as you Thank clients, and of to belief

Operator

teleconference. today's Ladies Thank you participation. and conclude your gentlemen, for this does

You lines at may this and disconnect time wonderful have your a day.

Zeta Global (ZETA) 4 May 232023 Q1 Earnings call transcript