ZETA - Earnings call 3 2023 | Zeta Global Holdings Corp.

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Operator

Greetings, and welcome to the Zeta Third Quarter 2023 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Scott Schmitz, Senior Vice President of Investor Relations. Please go ahead.

Scott Schmitz

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

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

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

David Steinberg

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

adjusted first quarters productive adjusted above track with up year-over-year, $XX free eventful Board up for including Investor than $XXX Most the record key generated XX% guidance we one XX% translates record basis points In consecutive continued XX.X%, $XX yet, We million, of XXX Customer quarter, approximately Day. EBITDA EBITDA EBITDA time. cash events, of and an year-to-date XXXX margin XX% year-over-year. have results year-over-year.This of the a revenue flow our and third execution, $XX our ZETA was quarter from adjusted revenue. cash million, we million with LIVE, our and our of delivering On our up highlighted importantly, Our flow to up Advisory basis, cash activities, free most delivered XX% consistent our of of up by ninth of Meeting year-over-year. operating our faster of million, XX% grown

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to on efficient well-positioned more marketing need technology. capitalize the to continue for be and We effective

Chris? As Chris turn our Zeta partners, our like the customers, of it discuss our our all would thank support to to greater our shareholders always, results in and detail. I to for vision.Now let me sincerely ongoing over team

Christopher Greiner

afternoon, good and David, you, Thank everyone.

organic XQ and an key I'll XX% includes our During continued headwinds fourth from XX% in drivers today's On along XX% political adjusting this of to from considerations the in insurance accelerated rate revenue, the consistent million last year-to-year. results; call, $XXX the quarter's Starting the execution, automotive basis outlook. I'll growth revenue with on for for up we also quarter. our focus note growth and delivered year's verticals. with

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compared growth of to management quarter. our EBITDA year-to-year productivity an XX% growth $XX expense XX% adjusted disciplined last or acceleration and to in better resulted million Our

increased adjusted points quarter In was in year-over-year.On compensation. we've EBITDA of third $XX XX.X% is of a This includes margins XXth the EBITDA XXX adjusted straight margin quarter basis year-to-year. net fact, which million, stock-based which $XX expanded loss million basis, GAAP

million. would been Excluding have the stock-based compensation IPO, to accelerating expenses $XX our related

to flow flow activities year-to-year. of up continue million, XX% up year-to-year with $XX We free from strong generation. drive Cash operating cash $XX million, was cash XX%

presentation.Speaking And guidance year year-to-year of to midpoint the first The through growth. to $XX big representing we're fourth fully the slide as transition full taking $XXX or raising We're in Now results and third revenue we're on adjusted and up let midpoint revenue flowing EBITDA quarter, million outlook. the first. quarter XX million revenue, to $XXX increasing picture our to XX% from our supplemental earnings beat me guidance by quarter growth. million, our the fourth XX% seen $XXX,XXX at

and from automotive As a includes and pressure a verticals. revenue reminder, faces year's headwind growth political revenue our from insurance fourth quarter rate X-point continued last

most around these quarter become the 'XX.Also expect third in of look insurance similar the as half and quarter revenue, expect to into being likely we to with the of to mix a with persisting second direct the As political in XQ and profile lot quarter we relevant we prevalent then positive turning cost tailwinds the automotive XQ look to XXXX, well. headwinds industries revenue with a first like

guidance increasing EBITDA, up EBITDA an or of to fourth XX.X% year terms XXX $XXX.X XX% increase of In year-to-year. we're adjusted adjusted increase an quarter guidance The million basis midpoint year-to-year basis margin, XX% XXX points $X.X margin, $XX up of by of of is year-to-year million, points midpoint million, or year-to-year. the full XX.X%

days early portfolio for expanding resulted me free scaled expanding management our year-to-year. dynamics of margin let even rapidly to rapidly. as Before flow. close of growing We're of prioritization.Now with XX% in hand added, unique EBITDA questions. scaling many the call customers in cash growing balance of plus turning adjusted managing gross with over and me let to EBITDA quickly striking expense this headwinds the We're for customer brands quarter with final the the XX Xx mix couple and face customers investment disciplined take we're the of and added your new operator margins the back in And thoughts.We're Q&A, mid-XXs industry-specific a revenue and growing while very of The of to the me agency agency rapidly David adjusted Operator? customers. evidence

Operator

question with [Operator Instructions] Craig-Hallum. Kreyer First comes from Jason

Jason Kreyer

I clarify on wanted Chris, a little gross more just bit Perfect. margin. to detail

you second would it's year be the for of QX. the I looks I'm do to to early ZMP give guide a a too think looks half You like? XXXX. in progression But Look, mix for year just what like of similar the know more curious Do figures? that first next just indicated QX more see looks to progression the or it we half think Do year? you like two of between start those pretty kind

Christopher Greiner

question. draw appreciate get don't line begin of be to these thanks XXXX a will a mix believe with -- can that -- an the and agencies. I to mix time. over the it. we for become early in yet. too across then days but integrated as into I think it will be I there'll XXXX we're Jason, direct you for work want component, do lot that I But far trend more still more

relationships first said positive XXXX the think then of in well to XXXX, you of that and I it shift agency of half improving So the more second half that XXXX second mix a could direct and and happens. bigger look as mix those the get similar half

Jason Kreyer

terms bigger in that figures. growth from today, growth Appreciate are sizes. just dissect channels seeing driving being you Obviously, a added, cases and that detail. that few are And or changes what then happen talked on use of that any deal customers noticing that the deal new you're ARPU size? David, quarters new bigger seeing Can that the you're we're ARPU bigger in we've for just

David Steinberg

Yeah.

appreciate thank the of very question. First you I all, much.

we have those. and why much have switched a think we're what in we from us have have we've have we larger chosen it. and They didn't Zeta brand.We're in seeing as RFPs, might bigger might put But foremost who much didn't reputation is, gotten won We past at to winning first the Zeta, organizations the RFP. now wouldn't look the have because us. that might good the not we're I seeing

substantially it's us. budgets use choosing just expansion case channel just larger So larger organizations and substantially expansion. with not It's

Now are investment what CTV, very of seeing lot we're messaging. to powerful which connected at case on and is connected seeing messaging to capabilities. connected our through social, very, of the return both look We're we're use a when you messaging seeing

Operator

Next with from question comes Ryan MacWilliams Barclays.

Amin Jassim

Ryan. of point? to ] this macro Amin This would on that are XQ? season XQ you terms baking the at holiday say was environment spend consistent is From a [ guidance into perspective, for you And from what in

David Steinberg

Well, year in prior some first, we first of first quarters insurance the to quarters quarter. two or here headwinds in the three mean, yes, automotive I the saw and this

some verticals pretty in all was in that saw really was growing our of So news the in of the there. And them hung we other mid-XXs consistent. good The most XXs. growing and

continue a So bad, of nations. deliver. But good we that. is good we continue is to choppiness continue The grapple marketplace, to far over some and there's news which see more than to we the tale still two in why there's with

Christopher Greiner

mentioned, on clouds, vendors what engagement was retailer vendors goes the discount that Salesforce replaced feedback we've the management I in broken marketer a automation around seven five David side. coming Investor yeah, [indiscernible] replaced how you the and It we we've ]. also Jason's slide the the universe. we one. was buys find the data competitive marketing around replaced deal and for prepared We able XX, Cloud. other his down marketing address Marketing interesting to data And continuing slide deals. were supplemental, Platform in clarify CDP, categories to for CDPs, done the lot management or remarks, X-figure will, what your [ into Marketing Day to the it's channel We of had included doing illustration the We a activation you'll here is about Zeta's that where that of a -- media.What's the if there's new out good received in in you then question earnings think paid or

filling consolidate all a still of that. with is we ROI. through push are replacement deals need why lowering illustrative that cost and and good a Zeta and But getting better ownership can total cycle bigger a is creating the there a because So

So those questions it two just kind together. of brings

David Steinberg

known as amount frankly, the through grow the to our high that the point And are They entity. They the to Yeah. reasons They than faster. the I pipeline. know go faster Clients of And get one now marketplace, winning take the willing more and environment, we're to more our seeing are. customer seeing deals and of was that that we us see count see count intent very risk choppiness we're ability we're move you're who superscaled able savings you in marketplace. expected. to quite quickly, close through saw drive we're to level of to elimination seeing a in think that them faster of customer this especially in of solutions scaled enterprises and

Amin Jassim

any customers? Got would patterns do buying -- there's for do between budgets you And enterprise difference XXXX? how it. Perfect. say in scaled how you the you and And normal of in guys their think customers customers

David Steinberg

there's this the narrative Yeah. always you cut a first can one environment. of down Interestingly that in enough, been things marketing is

are that. We seeing not

to industries, some transparent Now certain very that. seeing headwinds we're about we're in and trying be

strikes, Some have that had now with which fortunately to settled. of do

not quite We're get to had enterprises were not of seeing seeing enterprises become that a to for the not their as but invest frankly, and of if part, accidents.We same people once going not do headwinds most taking to into into on time, believe the some COVID those at is we've we're share year. we're seeing again, point we're some going open market, it. with. enterprises But which tailwinds we're do in coming marketing. substantial without it And growing under-reserving cut that drive more, and challenges growing next to say with same, as marketing in And been related investing out the very how market

Christopher Quintero

agencies Yeah. discussing. question, obviously, interpreting and enterprises mean your them, XXX large correctly, been Amin, you scaled these very we've didn't large maybe if it, only the clarification, of I'm The in customers, are as all but

cohort So there's that difference $X in us. -- $XXX,XXX with shows time is on a platform, slide at scaled million ] enterprise with the less three-year you're tenure one to that $XXX,XXX. The year, less spent to average $X supplemental than if an average and ]. again, X.X than million more between an been accelerates [ those customers earnings grows the have three-year the a And your or a spends and really you've spend Zeta's of the greater than XX-month to X.X cohort of plus us, then [ than

it's of a kind retention not just superscaled large They're growth. net a drives customer. So really platform revenue the time all normal and enterprises, when a

Operator

William Next question, Blair. Arjun Bhatia with

Arjun Bhatia

a on Perfect. it David, acceleration the the And but still be congrats organic like one, it driver. for execution -- continue or this to and maybe here. Chris, seems strong agencies growth like seems

and how how to marketing, there versus do go-to-market thinking a the resources cons? and allocate sales year As reflect two, agencies pros focusing you sales about want your and how to And with? balancing that? direct customers do evolves resources much you you're marketing about you own have over are your relationship which think Like own the next just how business or the and how on dedicate you're you

David Steinberg

to great, work into As sell agency It it agencies a of trying then the of in question. staff as usual, directly And we're and truth salespeople bifurcation. a is an both. It of go to with is great Arjun, salespeople is a the I the the different subset who than who enterprise. up the matter think go is team into enterprises

four who that are for that heard bringing bringing baseball and space laying and -- long saying for seeing sales hiring in with salespeople me either us directly. guys scale. we very, enterprise across to in five took partner have really scale we're help enterprise sort vast been many very ecosystem faster.But because cycles components working groundwork the certain with best not this, product the agency trying majority in client bring of now what And are the bat we've fill customer of agency or They're agency, by in to lot to we're the agents in agency that's them people in franchises, free agency the in far talking XXX% to can a and they the But cracked, about have salespeople I base. or When doing the We cleanup.And with us years. for our than we now. clear. go I've partnering been more code. But there to world's the They the an years the partner of you a enterprise the be have the is have the like not directly as time agency with cases, partnership agency enterprise we we're to do agency. and the categories we're holes want The crack

staff of in hire people you it's So multiple up both. which by on where going one the the it, with the to we agency, on working simultaneously to focus at close best to an We're sales rep are, in And want to world's about is an we that whereas enterprise continue brands continue would house. news X:X. basis, sales both look when can on both. we're is position to sides good a being I ahead, say

Christopher Greiner

to great math the it. a Yeah, bringing David, point, it's I think -- bringing

Arjun. I interesting we're sales our productivity when how statistic it's go-to-market think And add, investing quality continued we to by be in quantity. data-driven. on there's an very led It over

quarter customers about, And Xx adding scaled while added period on quarter, last XX improve basis that brands, going alone saw added roughly from XX scaled to which so carriers, those scaled quota unique each while carriers that this we definition XX XX-month same XX X.Xx we've of quota X.X carriers basis. the fit last over XX-month time over we least of of XX quarter-to-quarter, customer added.This spending on months, customers a meaningfully talked adding per we XX pretty XX to quota a at trailing quarter where scaled equated trailing a had leverage. example, scale For customers so customer the $XXX,XXX

addition We really what in So seeing from to David productivity continues good favor. be on our mentioned, agency the as relationship in the enterprise get to leverage, we're side.

Arjun Bhatia

trending those the that think a give sense for I kind and and Chris, then, how with what and verticals? just quarter-to-quarter improvement those in in this And you year? color. next that into maybe insurance some headwinds quarter auto magnitude the mentioned for they XXXX, saying sometime I helpful gives that you you benefit. visibility customers have very That's Can the of have headwinds flip And QX you, be become perspective to a continued mean, QX? are had Perfect. a from qualitatively, any you those of spending might what improve from might conviction

Christopher Greiner

less they're in second. an them then we're environment third are will into to into saying their Sure. beyond better tailwind second from with Fourth headwind the our a public what from we from posting, also they headwind, of customers, seeing be they're the but or year, still will metrics and in expect worse with turn Mathematically, that in be going as Quantitatively, improve. quarter first than a say, and financial also quarter was bit headwind although little are than will us calls all it XXXX. hearing be earnings terms so seeing the us, I what the third, the we quarter that of and next company of aggregate should it a still quarter

the downward upward think way I don't So again at of we're I versus on still our on kind think trend. we're -- that

David Steinberg

number And historic on a these in for time. the buying customers some people conversations first that how marketing. most are embedded very organization have about signs a enterprise tremendous future we're of success-oriented for to we're manage better time out with helping in getting also our the It's to clients. figure talking their asking quite clear, And our large are of very we clients we're plans, having. Remember, that They're basis.

and think being believe we from quantitative do it's headwind go I will tailwind a this sometime that qualitative a in it's the near future. So to here

Operator

Porter question Next from Stanley. Morgan with comes Elizabeth

Christopher Quintero

know of about to This for one [ Quintero for lead you is you. kind ] talked can Porter. accelerating on all Elizabeth maybe David, have growth. more Chris I getting bats

you [indiscernible] about are you're what coming today, bats over that where of next the think the come getting in from you new just those [ -- ] through? when year? that think mostly go-to-market And those channels do can more So curious,

David Steinberg

you. Thank question. Great Yeah.

at a professional we prepared to bats we existing came at exciting frankly, quite [ scaled to had bats continuing saying, did invited I firms perspective We're us relates for people and do clients with do we're where see them my And lot which a of disproportionate a how as statement, strategy, seen collective. growth more with of from really building an is see continue super an had bats together? record where I are the be to ], it time of It's RFP partnership why think bats RFPs see potential [ have customers to also from first in all-time first of to percentage our LIVE. I important are a agency we think of We that component But ]. an were clients they're I incredible record a that in ZETA clients how incredible really was and able in go to as quarter. an third we Snowflake. did or channel that an large such say that, engagements ]. undervaluing get bringing our relationships, bringing working come.We to when [ [ think of in up and together absolute after large could addition come our of number starting potentially with customers scaled what both do, which a in been I relationship win really basis, -- we we're up this to at we And And we partnering continue when do that we we're a a the hit to services the on ]. group RFP to QX, In at them. we QX.So for group number I on clients and more pipeline them, never do more of partnerships focused had and gross really than volumes all, just wow, do out

Christopher Quintero

then wanted your that opportunity. one you improve talked I could could solution also you? need Awesome. I exactly channel you of Very to you're it have helpful. And do about what guess this I of the big on be for opportunity improve and upon? an a to M&A to there. looking know where ask being how there? key mobile And all capabilities And a be part

David Steinberg

grow IDFA, is Yeah. with mobile. the the We we always again, a we look I at There truth in buyer partnerships, we [ is a products matter build elimination a the ]. of to opportunity everybody remind include series first We not that time will just of our have and connected RFPs to of are used as starting social vesting and that consolidate right and in have it to at really but other, environment campaigns just mobile products and see not we And the the to the we relates believe series today, first the have and now which Apple's in meaningful right mobile. time. the continue just never of CTV But not place. business.And unique for

future.But and say, best-of-breed bought with. companies past worse. where think of our guys that partners transform deals continue to Quite to can are I the transformative I out some that our they're continuing might build those in we partner both we believe have products, always we and we we the as work We frankly, the for in own

great should data allow Day, continue I we can our to our to tuck-in we So do those where technology, all and smaller at of strategy with about products will say, talked length use up products at think M&A we'll on continue people, them. syndicate we then into ZMP can and clients those the that discussed we where great our integrate great Investor or, deals pick

Operator

Next question, Hynes with Canaccord DJ Genuity.

David Hynes

the customers. Chris, mix the as Congrats revenue direct on nice to on you quarter. one for agency it pertains

mature, you your revenue? direct higher to always it direct bit start to time revenue be look indirect mix or and expect that customer like little those over structurally relationships kind of As will relationships of enterprise a would indirect

Christopher Greiner

mean, of and you mentioned material X% experience. in with large agency in a we think us, in most No. was remarks, spent our of began number prepared working only the first of which, from as that case, with And the look, I million The global I have direct we revenue. got $X I XXXX, to learn examples.

was you over and was that customer as expect, closer there revenue ending million of an you'd mix, channels.And and half $XX been using it's of is profile low the and and quarter to of If mid-XXs. our margin fast gross the between XXs spend holding that was our margin evolved mid-XXs, forward business direct direct XXXX, year the steady, to it the profile a this XX%

get our expect to HoldCo not but do starts a global balance with yeah, get So as the large first more XXXX. bigger, those like relationships that example we look mix do only they and in tenured, lot that out

David Hynes

Yes.

question Okay, it. for a Makes then, got sense. maybe And you. David, high-level

'XX. you're what sequencing So look of you at your of initiatives next for in like kind out I'm priority this sure about to as the early think highest the planning as point year? you cycle dollars, But investment are

David Steinberg

think do on the roll I everything. investing continue different goal that said, investing you a about as services to things, we salespeople products mean, bigger AI, quite them we have our that already we where out is Generative will bring automate begun We'll roll to Day. things into a them talked XXXX. Chris I business. and frankly, we partners, can ZMP. with as I start invest in larger think top help early Well, can think channel, were going to suite and out a that into to grow working heavily partner I to going to be we'll heavily we're those right, part the heavily more that enterprise our as But it's high-quality firms where into meaningful professional where products with engineers, to our firms partner and is see analytics in get little us of the the be which, invest are conversations that through bigger to professional deliverables on us build relationships also We've direct the Investor what in ecosystem, we with do and can services continue of enterprises in to of mobile continue do.And

Operator

with MacDonald Needham Company. Ryan is question & Next

Ryan MacDonald

that Congrats and will heavy it of mix the an from as with off before saying with brands we you have each on a incremental to do clear. to that that, better continue them, quarter. add I'm be agencies mix that a indirect. at will indirect question when was the you that direct those great as of expect start you deepen piggybacking relationships, agency continue DJ, you with brand a Hopefully, brand of Maybe experience from that curious, new start or greater grow versus will as incremental on brand add

David Steinberg

it's clear, is it No, the latter. absolutely answer a question. great and And the was

they more new lot gets the with is on platform. they we already all start where the brands that with platform. messaging, of are integrated a jump that, or seeing when And on platform, video of from integrated agency which CTV As comfortable to or is online social,

new start are which using higher. very them investment, the because And it usually, they they grow platform nose to data they why of usually to the assets once clients, access two because that it's revenue being as platform? clear percentage substantially like use three to wasn't the brands. go their So we interesting that it's X% or from they the with The [ It's just of you're of return start very and XX% ] evident agency they one did It get us. platform, and a power un-integrated. on our see is on is you it, as it. Therefore, attribution as other to use all happens is things they with why of the capabilities, and not using the power usually to know on begin what ability tent, to being brand. want starting one you under where on a see most the is when for this about It's platform platform.So on accelerate

Ryan MacDonald

next channel. and of terms the about talked you meaningful year, having in for David, in partner then, priorities And helpful. the Super really investing conversations

winner like As Zeta we've will, where an investment. SIs conferences, in competitive if best-of-breed terms vendors at are a you sort Do be or I side area partner multi-sourced for focus guess, an of the these opportunities? in lot established of a, putting conversations, to of to the the try going it's you SIs it's be a and the to or amongst the do industry you right CDP or get been sense partnership the takes think making are large a of terms it's some of all now? clearly How others

David Steinberg

us I going providers Unfortunately, is competitors. multi-sourced which, don't the see to two of be going the it's I think way, because by one, think or our you're behind opportunities. already for to large service good really working consolidating three they're with

there believe us activation data I have it the products competitors our to I believe breed. products So the system, that do the best our the believe we and because best our equal, all the nose have believe going have best our to in I is cloud. to I get service being things get are that world.So allows those and system we believe under tent. are over in best the products best CDP. recommend our superior. have believe we believe What I providers I messaging I we are

the deliverable with The that. top type they a of other you Oracle, on ours, dollars we have platforms choose that to on doesn't or what really if competitors top a need platform we've service I think really others.With do things never could integration And Accenture, to on important learned those do, the have going built our millions build our thing Because you're here that had deliverable Merkle provider don't when right? don't of really that to Salesforce, platform is that is if integrating is be most spend of Adobe, we of before. do one of your you require the of can

top providers don't So that can doing who's that. provider, on coming are deliverables the as direct were built We've now subscription anybody of added service from else clients also services which that behind. I -- their which to the build to service ZMP, we know some these -- build value

recurring of a is to revenue revenue revenue lot our nature. the move deliverables are they we've excitement their So providers, versus on them of as in possible for in much we're which to and that service nature as I integration want competitors, that. as talk built the getting to And subscription

Operator

question Baldry from with next The Richard MKM. ROTH

Richard Baldry

If That's we of see always a historically, in a sequentially we than out this quarter. time implied third lot dollar the look basis, guidance stronger is been it's not XQ your what around. on

about there conservatism we need is of Sort typical do something be normalize about? of macro there thinking that your should to just think or there curious, anything you we it's out or is

Christopher Greiner

headwind. growth you I look normalization similar XX%. starting I guide quarter's last is do, started next point XX% really the fourth it's at quarter's X-point the a XX%, Rich, for is level, a we've -- a is political and fair What No, rate or every think year's quarter at you think if at

stretch, you by strong cause from as you'll going when we've I And the is say forward XX% not by could to that comfortable some the top big mean, XX%. signings $XXX in if it's $XXX see and the way, RPO you the out comes the any in but a very with the Q improvement really -- we it's with from RPO million of tomorrow, this for comfortable bottom victory no, very guide. both lap we're look But guide, So these very million line quarter. to quarters.And XXXX, tailwinds had the a

tailwind political think year, in kicks kicks that next in. So I

turned positive. second and in quarter, auto As think, I mentioned, the insurance, we

a fourth start next So think into be nice quarter to first running we quarter year. of going is the

Richard Baldry

set accelerating, there's win experience competitive which where next into around. you're go not obviously a because vendor engagements just talk displace your to the time vendors, trade-off maybe rates a come not maybe might the competitive around, other And net on still a legacy you it those.So positive getting the is rates? committed getting and legacy win about a to down of side of more, you but at about you're be little, you do some the tougher companies. of have think lot are intermediate it you might you the say, to little but win engagements up win over Can into As the term it's maybe people but out should table, might to pull cycles talked sales previously the harder larger first

David Steinberg

see It's that publicly close Rich. I've rate privately We've our happen. as probably funny that. said go XX%. thought and that increased would RFPs, not that, seen below you would dramatically we We we say

We continue and the invited of to get greater to. RFPs than close XX% we engagements

are years. CDPs. I are think to their they have cycle entering we know last first-generation from really people in legacy $X.XX what's their not is large happening and marketing their that And into clouds a upgrade looking the where products few first-generation invested vendors the

to like their right?Salesforce's joke, cloud. used I to marketing hustle be As side

Now before being marketing a of won allowing percentage we've the on at capabilities their -- years, And those and shouldn't ever current quite us the And to the investment, frankly, that theirs. probably cloud board, side some quality in cases, to same have which Marketing bigger us. surprises winning is is organizations seen we've hustle the is distance done side than the but we're quite which cut does. and to over frankly, their even technology we've cuts as Slack hustle consistently our call, I hustle. say it that side of seeing we're lot which the those further in in deals this Cloud, across won

Operator

Zach Cummins Securities. question B. with Riley Next

Zach Cummins

into I of the as platform your you could really how and about you or some XX further just adoption you've over going product adoption next Can transform year. outlined key investment months? driving maybe one of into know next of from the early talk ZOE your AI of David, areas Generative that XX the seen even Zeta marketing

David Steinberg

incredible using It's that ZOE analysis data becomes your platform are Yeah. component many how a today, own data Generative It's of internal tool. almost effectively people the AI the scientists.

losing on the is are to what are questions. drive my future. we're from products all more where most cohorts our customers than finding that our more are the who near think they are me? of are using using.And What are of platform. money additional clients from those from perspective? continue to real-world And my valuable we adoption a in What money that out competitors are All ask utilization my clients real-world spending very ZOE audiences, can will to investment you people additional roll questions of am I So marketing existing And rate goal substantially platform. of ZOE and is buying

take if draw amount you our of the the that into all line they period higher. out We are the points even a you believe Chris top time, time ZOE that can with the platform, look accelerate line right that on of of As will up and money clients at the spend.

Zach Cummins

cash Understood. That's And flow. free one Chris, helpful. from question just regarding me

With agencies mean, dynamics you term, in the think free talk how quarters? I the near over flow conversion increasing about can we about traction and cash with the the should coming

Christopher Greiner

working I outstanding financial by days if look you'll period. an think $X about been headwind that's XX, you sales published our that is what's press and and the in see the -- statements driven best principally driven there from agencies example XX was going the release, by million to the in days through capital the Q

the would cash in back plug to been in, at that a you have If EBITDA looking XXs. you conversion

half So that think we that wrap on that. reality -- but to year next it normalizes. the We by going is a of second we're

but live it cash for see with couple that we'll another of to move quarters, So start you up. conversion should

David Steinberg

to it expect form. XXXX affect way or shape don't we our any plan And in

Operator

Next with Camden Oppenheimer. Levy question,

Camden Levy

direct expansion coming channel for the Levy is revenue is more expansion the your growth brand for adoption? in you helpful. mix, it would most of is like a then metric to Brian regards to to guidance impact This directly? additionally, And or basis provide sitting so could drivers And updated from Schwartz. the on I Anything wondering did expectations can the be be ARPU it forward there for relates XXXX that Camden stack In shift you XXXX? as was rank that mix going

Christopher Greiner

mix grow the Sure. to over more do to business, if through what meet pegged or and now that it's our more and then a case, use now the well about XX case we've acquired existing -- really rates a adjusted they've Day, we at driven but the retain Thanks to single not using about months. and channel back good with quarter, when when direct growth it's use to question. channels forces, the principally you into good seen we use revenue we growth the XX%, third year-over-year just so our ARPU, are this I adoption cases. multichannel scaled the of of and the go chosen.Although expansion different get Investor and revenue, business is XX% in overall the to third of for digits think the it If And and year-over-year, up example, customers, grew there's -- to them both by in last over customers three quarter. continuing the driven the you direct overall three look double And the the more by revenue

David Steinberg

or the by way, our XXXX direct to we don't have expect not versus change. we long-term at revenue And indirect And this XXXX changed for for point. guidance that

Camden Levy

and you you guys should modeling improved? should XXXX mind regards have the we do be troughed gross that the to margin Okay. expect and guys anything here similar there? then thinking in gross know margin, margins that And to I about but they just keep gross considerations Awesome. more in sequentially, said

Christopher Greiner

Yes. Yes.

it's good course. a Of No, question.

a and the there start year the think next And and the more you'd as was with business second agencies half looks with XXXX. like we're in sequential a an I see half was probably becomes the and to earlier mix there grows half more second XXXX, that working the the in of we from entered of then improvement direct. realm question same of how lot first the

Operator

America Kiechle of Securities. [ Bank is Cody question with Next ]

Analyst

encouraging of have of remaining to I going you notable the you win of hear This about kind It's the improving? is kind strong. any [ was on sales ask, Koji to great cycles did ]. when notice guys just [ competitive rates for changes sales ] landscape? kind seen improving cycles George and And in

David Steinberg

Yeah.

So good you. question. Thank

RFPs. [ not turning point we used sort I while than think even final getting scaled a we're competitors legacy make second it's because ], legacy quarter it this And rate invited why so combined. number at more really XX% it a seeing this very lot starting of a to and interesting of when And of to super earlier the big many which we're get again, the to continue providers providers would once we incumbent. was stages the year we three us allowed the delivered scaled at the not big see into us they to started seeing known years big final the third the customers allowed even to a legacy unique to of brand.Now few round, the be choose has are what close one down that were is way, would in ago, we're a to and is they the shine final that big even and in they greater bats and of because seeing customers

Analyst

the makes kind I anything there? the Is one out And to you're awareness. reasons driving of and what's getting know call there sense. This of else of of there That strength kind brand out RFPs. kind called is you more kind of greater

David Steinberg

lot of before. give that attention would a gotten We're Yeah. seeing us we have analysts never

world. the that best I in we IDC. were by CDPs said one of believe in As prepared was my named I the remarks,

we're RFPs, have responsible as analysts the marketing quadrant So very of automation, start RFPs categories.And products, intelligence we've have analyst evaluated substantially And we're layer, of other AI groups. We're a a the which problems. seeing the putting to and a complex as I these in not as for that of Forrester category making. you marketing to move seen say, they've able rightest the leader substantially to to right? lot think number the accelerated our decisions talk data the analysts We by simplify are at behind marketing application messaging continues speed step-outs, in furthest, more us Zeta. and with native with to

Operator

over floor David would to the Steinberg turn I like remarks. to for closing

David Steinberg

we at the as Clouds, at Zeta for cycle people at from technology, firing Zeta not and through perspective, these and as market. more incredible and I really at stages look an we we evolution Obviously, the motion, innovation And business we our types be at the continue everybody. to product, must the development what look all today beginning proud could you, our a the our marketplace. get Thank is we very appears because of replacement Zeta we're and and choppy Marketing a be our I outputs, to legacy of to look in on for our expect win look we people of cylinders.And we in forefront continue sales to have drive inputs. innovation of am a quarter product CDPs marketing to than to

forward for we look to the and today, in we near thank you again future. much time So very to speaking you your

Operator

This you. teleconference. Thank concludes today's

time. lines disconnect at for may Thank You you your your this participation.

Zeta Global (ZETA) 1 Nov 232023 Q3 Earnings call transcript