ZETA - Earnings call transcript Q1 2024 | Zeta Global Holdings Corp.

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Operator

Greetings, and welcome to the Zeta First Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce Scott Schmitz, Senior Vice President of Investor Relations. Thank you.

You may begin.

Scott Schmitz

operator. you, Thank thank Quarter and joining for us Hello, Conference you Call. First XXXX Zeta's everyone, for Today's earnings also Officer; Chief website information are at Chief our presentation David Investor Zeta's filings, and about investors.zetaglobal.com Zeta's and SEC Officer. Co-Founder, the Financial where, Chris release Zeta.Joining are Steinberg, me Greiner, you call with Zeta's Executive will along find on to on links other available today Relations and Chairman

non-GAAP information today's provide that, now non-GAAP filings in in not earnings for to to available products made they include like release future strategies.These and earnings to today plans other our differ call addition, call the to certain earnings website presentation David. remind regarding to as uncertainties measures as managing Before substitute risks on the for be we about and believe and statements references of with speak a goals and our the as include our where earnings in our the and useful will this our We risks to supplemental and events those revenues These well statements that company's corresponding of and our with subject from in discussion release that begin, these competition, investors.Reconciliations may statements release actual and products, found addition including contain the uncertainties the in turn as be other appropriate, described I'd of and non-GAAP developments, and other measures SEC objectives business results. as over financial our can those measures, as filings only potential use the I projected. should everyone potential market our our on date.In statements and the cause financial SEC.With are which and materially presentation results GAAP business well outlook, and measures, forward-looking will of considered to the GAAP our

David Steinberg

Good Thank with great joining afternoon, basis In year-over-year of XXXX adjusted EBITDA XX we up million, million, for up XX% EBITDA you, and $XX.X a $XXX quarter the of to XXXX, is of of first adjusted everyone, delivered you start. margin thank XX.X% revenue points XX% today. Scott. year-over-year.Our year-over-year. us off expanded

privacy importantly, an advantage while to unlock Marketing Zeta integrating AI measurable the impactful ecosystems. of structural each year.This million strong competitive the the drivers $XXX forces give and growth revenue $XX or acceleration midpoint. data year-over-year from their more investment.Our to and last propelling their a by enterprise's the rate cloud XX% raise and intelligence transform XX% of activities and is agency achieved the and and momentum accelerated more better to insurance need revenue sectors, drivers, more of to including the marketing XXXX automotive Our confidence into cycle, cloud delivers Zeta's integrity us position full and artificial combined full of at year hyper This into with enterprises uncover assets consumer is growth platform.Behind competitive by our personalization, growth relevant intelligence better intent strong the year ZMP, actionable of on attitudes the Marketing Platform AI-powered our data first-party determine, the therefore, data key make experiences into more marketing our proprietary rebound with their to business and seamlessly return these the actionable we growth the results.More protecting the ramp consumer programs guidance with of result million translates Cloud, customers' our visibility can replacement

of data sharing and power replace modern seek marketing AI drive accelerated back their new resonating first-generation their for their modernize because the value is single ZMP and as customer in an data directly sellers, also Gen demand services is operational without legacy rich measurable they generation stack, enabling with our quickly Each sourced looking financial line one our a in technology are decision example, prequalified expansion partner X clouds with winning CVPs will technology are engagement the pipeline traction that high-quality systems we technology we closer Marketing marketing integrators and Chief seeing marketing marketers, a the like incremental these with to or not agencies, on efficiency prove their and closed to the source only platform.Whether Our ecosystem, able a to platform the enter through collective.We on we top months. Officers growth growth deal promises.Marketers unifying in are predictable, are and the stage.For to delivering gain and alliances. to by improve that as platforms AI greater profitable X-figure company proposition including growth. ZMP and won partner-sourced capitalize deal provide with more leverage segmentation that with the were ZMP that of tools broader of recently that large deals a We the delivers

retailer within XX% ZMP, a delivered by for actionable customers driven the implemented acquire them performance a For new products in home helped instance, above at market-intent last which help high-quality signals. KPIs, required program the specialty identify year, of pilot to intelligence customers.We new we large the

last internal should from customers the budget was turn, the Generative campaign call. brand's platform product example audiences, actions with agent allows performance Over by cases reports amount time. me more.One analytics conversations workload across XXXX additional and onboarding in have internal the adding built variety building an configurable that a saving our translates month. virtual in like for reduced a short platform actionable easily XX%, Our team, we're advanced which within automation by expansion created.In updates by launched channels.Let of making more validated In to agents and XXX across with work of agents store. agents share hours This of early team to This build QX, multiple automation, already Composer been and and open XXX campaigns, created our our data, use clear we to team Intelligent QX, transition is an Agent outcomes. agent per

capabilities XX, of and our will allowing to push conversational enterprises the accretive internal ecosystems.In Our advantage Live and our time we is transformative the the competitive globally, We Switching mobile are empowers place and strong the I to enhance scheduled power of within achieve core mobile, that conference across form In working enterprises orchestration marketing intelligent QX, very great this development start September customer to their our never creating past allow also to showcasing enterprise's States identify on it people the channel with AI and of gives ID to to our are deliver off capitalize is becoming certified a ensuring was Data where agents for of all opportunistic mobile an support Zeta goal incredibly proud in by powered can XXXX impact and virtual that longer-term thank was our to that market.We a transactions several effective CDP we technology near marketing Zeta the culture to at driving our our team term, held capabilities ZOE. vision our our take and by forward and our a the continuously more a ongoing are Zeta of AI the AI.As programs has efficient providing believe both capabilities the these partners, scientists, to as and over always, shareholders are on ROI.Security the data on is Zeta to the to remain to that strong better continue our and to be master mobile platform connect as capabilities omnichannel native SMS summary, agents, our outside all engine, is year. later Gen recognition made I our to like working in more investment that to for the employer and data our of customers, sincerely a and competitive shared highest Cloud. and us need Zeta. information work are position This regarding strategy.We people at years.In or our United enhance vision. intelligence would our India. in where to capitalize can to look us strengthen This better governance we advantage of our demonstrates modern accelerate

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

Christopher Greiner

Thank you, David.

expansion rapid revenue by highlighted start in visibility that As wins the in will on EBITDA to and you and today strong customer guidance.To focus is indeed, big existing was said, a topics. to leading from it adjusted a remarks increase customers, key which new X an year, of end, my step-up

a results an All metrics I'll political growth agency several return on enterprise verticals year are candidate customers.And guidance, and our signed second our of shoots growth, outlook. close and of sales pipeline green our XXXX conversion holdcos, we're spending First, seeing large progress an along the increase drivers incorporated detailing with quarter then providing with the in productivity scaling sharing namely, how by run-through and and full from the update insurance the the growth into recently right. on to outlining automotive catalysts, with update discussing large

a rate sequentially XQ XX% with XQ least XXX increase Let's a seasonality, up by consistent for We a delivered in quarter, to revenue with super-scaled points year XX% growth stood accelerated midpoint from in we $XXX,XXX million the customers, $X of reminder, was the up put X% of XX-month XXX to results. In with A up. customers scaled first XX% was versus the this to model.Taking XX% added in is of The spend we've 'XX This perspective, scaled trailing of seen. of consideration which $XXX which, ever growth couple starting XX.To super or the XQ on guidance X% and noting XX% XX% increase. revenue, XX data XXX worth jump ago, dive end rate Zeta our the from as of XQ last the quarter broad-based. highest this year-to-year.The scale out into accounts from at basis. in the was year-to-year, typical on our at but ended into upside sequential the of year, we high and XQ was the million what an increase really cohort million-plus at X what total

X% grew enterprise of as up year-to-year.We from our revenue of over the customers is solid a expand, a and land, at in 'XX large over strong second growth $X retail increase was XX candidates good growth. for ARPU count year.And with also with going quarter growth of quarter a the second, our the most few pipeline model cohort, at quota technology, XX%, sales to the from XXX This those double-digit or ranging from count our high XX% customer to across over the $XXX,XXX of the consumer while and to channels, an a XXX and XQ and generated customers X% scale of model. extend all X customer of from from XX% year-to-year XX% the us of and first First, our hospitality.Growth first end at breadth expansions using increased quarter driven a grew travel end led of entering in demonstration agencies, while ARPU were scaled by industries, million XXXX more illustration well. carrier the super which end in a customers Sale to

as of X and increasing vertical practice established today's experienced to industry XX-month XX-month domain is providing sellers to their the by time, signings leading cohorts.So, classes to all comprehensive productivity stats, win average less comparing way translating time on going X the pipeline than tenured XXXX, months. is same rates, of to progress most of greater growth tenured prior our improved recent catalysts. with the productivity along to average training Our in with metrics, tenure hiring expertise, the than platform.Increasing sales all gets a curriculum month XXXX the to marketing longer almost group back and sellers close sellers At sales our increase the or XX%

double have than returned in Zeta, and combined both good having growth insurance days virtue XXXX. saw of recently in digits remainder the we still X to we First, the other year sooner new sales first in pipeline.Our Their trailed to year-over-year by outlook industries cases, growing signed and growth contracts of combined the opportunities XX automotive progressing assumes verticals quarter, we expected. total visibility but the in the the forward

sales in we here of and making XX revenue candidate later candidate political in XQ, build in for million XXXX all our in anticipate Second, revenue. $X $X changes the Slide political today, supplemental detailed million summer.As guidance any we're million XQ picking revenue pipeline candidate guidance this million on exclude presentation.So, the XQ. of up not activity would discuss starting to see to the we're This assumptions increases $XX political $X I'll in with incremental and is later earnings sit

large but our Third, while recently fourth, also scale ARPU large I'll its quarter's so more expansion and still driven we've expansion a with rapidly. enterprise agencies, stages, by a of first talked holdcos agency and our advancement early moment, expanding about lot with customers do is in super in our was customers.And

agency opportunity of agencies hundreds pivoting compelling holdcos that to several for account so platform that to represents brands this are of Zeta's largest are now was enterprise marketing portion is dozens the working of X the for a large thousands We budgets.Agencies about with and reasons.

to third, we new help better omnichannel at our their ramp. identifies attribution from to and data target. to clients.Each we larger different artificial X offer new higher cross-selling people-based intent-driven in based. the client resulting And makes efficient recommends enables strategies, win audiences them attribution for years agency Zeta's ROI them opposed are as ranging activation clients to This we products and the of insights intelligence stickier. those platform This And and agency opportunities campaigns.Second, deterministic holdco at data prove for provide agencies agency's scale measurement to to on ROI more Zeta's new personas ability the relationships incremental the to First, allows drive stages, enrichment. and outcomes cookie just beginning and a them like intelligence business. help

a XXXX, going and We is exiting saw mix cost to have of good was of percentage in into our in this similar last it dynamic XXXX, prudent which you call, assume XXXX. said visibility earnings into why we profile revenue revenue as

which profile is with that I integrated mix use dynamic and start platform because These often continues meaning their holdcos cycle like the as their holdcos channels, mind, platform primarily YouTube selling are CDP, in also direct is as direct channels, XX grow mid-XXs. Zeta.We're our social others, Zeta's XQ our illustrates. good have Facebook, to CTV using early earnings was think to simply assumption.This newer e-mail, in mix, on with a Slide networks in margin today partnership be demand-side in new channel plan of XX%. revenue and supplemental the direct spend a in increases our and this With lower our

net than better slightly quarter $XX year-to-year, quarter was metrics, of GAAP which million expectation revenue was Importantly, up XX of hold profit range.Overall, loss to which the some other quarter-to-quarter, margin of first points the our the basis profile continues our firm of our million, of cost Zeta's compensation. direct in includes mid-XXs revenue stock-based in XX%.Staying was our XX.X%, an of points basis improvement XXX but on $XX

accelerated IPO, our $XX million.In and near the revenue. OpEx been down stock-based year, excluding is XQ, compensation total would basis related percentage as only Excluding points a XXX of grew expensing stock-based to have compensation XX%

my XXXX, EBITDA, earlier, midpoint so.In of forces of me our through doing $XX sales we're assumptions. revenue and found driving increased representing full the $XX.X we profit increase quarter year-over-year. Our year-over-year XX% pipeline into XX% activities above $X to sales increase guidance XX acceleration million, EBITDA revenue adjusted XX% at full final million, of by candidate and year-on-year. up with flow our $XXX earnings basis operating disciplined to of expansion, up QX our expansion $XX and million, in achieved remain from can Cash the growth of of attributable in quarter guidance political expense revenue year expansion XX million, from million management continued momentum, $XX the million productivity Slide up productivity with year-to-year. guidance, upside revenue $X the year.For quarter XXXX. year-on-year, have XXXX we're adjusted growth our the higher of visibility of we topic, sellers, each margin up structural XXXX, to XX% an EBITDA represents XXth increasing generated we outlook free This $XX XXXX.As be cash from midpoint XQ in constant Details XX.X%. none and the guidance.With better brings second of the for points the straight is our resulted to was strong prior mentioned is million margin revenue a for XX% and million year-to-year flow quarter, our Those of and to we're adjusted This on supplemental.For $XXX million guidance well in of increasing our the year full increasing prior the our

In year-over-year terms we're million, XX.X% midpoint XX% we're XXXX the adjusted the EBITDA XX% guidance XXXX, XX% increase by increasing million the of adjusted margin.For year-to-year representing to up margin. of million, a of $XX.X $XXX of quarter to guidance midpoint of EBITDA, or or increasing $X.X second

these flow wide expect in the with to $XX the free continue payment lot enterprise we've timing year million there's see And the guidance. increased newer started to about. discussed of of who, range. with increased collections a scenarios range.The have gravitate of where summary, million. to gating We agency previously about from feel free the obviously factor end visibility, longer higher happy our cycles start very the a the we're customers.In here We is increases, flow customers $XX cash to we simply good we than we range And year with the can full cash

development, new on product showing and across with all seeing encouraging pointing up. are enterprise marketing. We're And and customers.It's returns green vectors and those are deeper Our agency growth good stickier relationships when investments we're creating sales shoots. our catalysts

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

Operator

the Instructions] of with Elizabeth first [Operator comes question Our Porter line Morgan Stanley. from

Elizabeth Elliott

agency ask side the about wanted of I to business. the

Looking at newer X you're brands. the your the of about brands first XX it But within XX-plus year already now years XX, took Slide to with first the to it with some get looks scaling of relationships. like relationship

think land X?And So, year of second, of I direct now those are are go-to-market that you mix you previously? off with motions that brands of faster then wanted to more some running just terms versus some helping just that ask, you've factors of what seen any in than what the you're integrated helping larger shift

David Steinberg

Thank I you, Elizabeth. the question. appreciate

we're to to and global them go relates remarks, using It think just on-platform way, second land second have do amount we of is we to your it's time tremendous our would leads migrate holdcos, prepared and question, spend holdco used efficacy on into what up when when starting finding his question, agency platform to your it now. right? versus seeing we bigger, faster, is in, in to we're educating get them an you the and mentioned as higher. substantially First, better which, X we a how agency Because be over.And we we're to go of by are.Now, as Chris integrated the we're would efficiency who them I

the it faster it low in of are at the relates the that as where on-platform integrated to begin making to believe we decision-makers And next up and its see in Chris? is say current that. we point, would be, come would front getting will we're sure mix quarters few versus we that that platform So, it I to traditionally of

Christopher Greiner

And year of first Elizabeth, is large you north agency that X%. us it it is Year that in direct noted, mix as X in year's XX%. XX%. X, around around like took first was revenue holdco

they what like help them win ROI.In same linear So, motion, a data new because we of enrichment use We're have terms opportunities. sellers. it. it's CTV our Zeta's them expect of data client said, it's We recent not social to now drive go-to-market don't help have cross-sells. don't can business. And just stick.We sellers. as the more Back to just to cookie-based, kind just a the David as don't e-mail attribution verifiable in we sellers. have pacing that opposed is to We we're hockey people-based We to providing signings nice have

the Zeta's but interest agencies, Our strategy. process and best that these agency just right? activation intelligence selling the holdco an in the in as Zeta's on time that went our beginning, data social, first ramping expect are omnichannel that it's new that, clients' we sellers and are intelligence their the insights these platform, sales us. that motion so and those starting leverage are selling happens be It the to channels.And through similar to the David They're over said X starting direct by now mimicked cloud with with

Elizabeth Elliott

just Really as to hear about a ask wanted some follow-up, I the to impressive side. intelligent on of And agent agents. XXX the

billing Just still how lot Or more of order being it in view of the more adoption? the pilot think need meaningful this to you kind drive need see to you Is engagement what to you of some is And and a adopted curious the kind widespread? are that factors customers in of testing there? some phases? of

David Steinberg

Yes.

focus build-your-own-agent. and surprised uptake don't thousands XXX first we're think efficiency And quite we're intelligent of a cloud from I were I represent, a even think of to internally.These the market to frankly, are potential cases. clients start So, And first we with we on with our like seeing what is, lot people of agents the seeing, level with we of marketing use know, of all, agencies. the lot

the of agent.And the guidance. virtual build raise for own revenue using data they results growth for saw you that's the their using intelligent our do data as us first driving in the the scientists AI how time generative platform of obviously, So, form and

the very going setting that seeing really it. clients up But adoption. who it I'm we're and it from We we're in level a of meaningful platform seeing it seeing uptake. clients, the about Elizabeth, the uptake that's are utilization not and continue. and very, that. once.We're seeing we're seeing of who So, think They're used, done using being We're increase to excited have this level using really using utilization,

Operator

next from Wright of the Davidson. Our question comes D.A. line with Clark

Clark Wright

a could you down in revenue direct quantify to do maybe start has quarter, the this you how business since great over possibly mix points the Either if was just in X of XQ? off the it growth trending And just the wanted course agency and impacted where year? see

Christopher Greiner

in they this follow to their like trajectory that time is years be large work direct a X% think the range.So, percentage time. XXXX, that think of of we follow mix, early that ago, same XXXX, of around now revenue it a in point, follow with have lot plan X-plus and frame, that these us I we the around low going to profile is we agencies of in at similar agency the mix fourth which XX% direct new if quarter and revenue heck the revenue they how is, on Elizabeth's the to signed point pattern look quarter the started and expanded the would ended to basis.Our first X was see. in the were you a It's also with of we first cost our now over revenue expectation recently ended holdco will the that a cost XX% mix how that XX% would

David Steinberg

saw revenue QX our though slight from saw of direct in even we we a And you down went And cost QX. quite drop integrated, into of indication see that already. frankly, versus that

to on platform expect we I very be versus continues because then as think trends integrated. direct that's our very, platform solid. the continue move those both of to And the agencies we

Clark Wright

about second increased drive in channel brands the hear seeing And current also you're initiatives talk could terms trends and and to are company's engaging Could for way prospective as the usage any if customers? I one. then you the that of

Christopher Greiner

actually a this You couple places of meaningfully. quarter in can it see really

the quarter-over-quarter in significant scale super increase The customers. first is

acceleration we've It's customers seen So, on the on grew trailing of those are at customer if years.And time, sequential with part, channels highest our been an basis tracking are That a you usage the double-digit were good the that's X%. same XX% was in scaled million we've XX-month XXs. strong of now in scaled ever XX%. of X over rest number the customers digits. low XX% you channels metric now ARPU a channel grew The $X CTV the growth, a base. since year-over-year.We basis. that the do strong over over growth the look from the us channel using look then or that double across And at the the had number more

good across different we mix offer So, the that we're seeing channel customers. adoption our

Operator

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

Richard Baldry

the a up on fixed top expected. we versus in again much you Congrats might question it's spending? picking have the under line sort internal scenario broader leverage your had what your you of variable as is acceleration about of quarter. And about, talk beyond increase Could to and rate what how have automation you

David Steinberg

all, of investment out, because are you. obviously, Rich, interesting they've putting first if at AI. their It's a thank results the companies lot of that increased look you massively into

budget see years is X we material in interesting it difference don't we the is, X this a this our but step-up needed, started for think doing I ago.So, or year.

than any prior more into in We will year. invest money innovation

we don't what and puck layer, revenue, of are material just And but forecasting are So, it not putting we artificial really so investments.And we on increasing those we're application dollars in for but doing are the They to today. in growing speak. as gross and where the is before, said appears dramatically and already environment the making if data investment percentage a profit step see ago we're going, that's to native bets year. it our the up really where is we're years revenue where think, I as than faster intelligence puck was made innovation, I this as an I've are where investing a our heavily, in the

Richard Baldry

about represent for who those can live sort that would sort of sort And think the of scale the most with, agency about obviously, contrast you those your then how in agency the with number little that per along of and customer? curve of of your budget a that far think mature are you maybe customers don't ad world, and talk customer penetration And maybe you rate?

David Steinberg

mean perspective, agency in put in the holdcos with just a to spend X I billion it Yes. over year we $XXX work marketing.

just partner, our with mature even are the So, scratching surface. we

indirect.But back X% client we Now, think are the perspective, mean, are those are just original focusing scratching with business. to clients, in our versus in that Elizabeth's on on we agencies think being largest I to to this of we migrating put question, think don't surface. those direct I I it their ecosystem, I

think So, we have a of headroom. I lot

we think I the agency us meaningful of with holdcos.And see relationships as set. these by they part solution their way, have

has with they're winning clients Chris us. As said,

strategy And entire is it and job a you here stories. better the clients, really them hero are to and their Our do clients look at enterprise them we to appears help of support the to when holdcos, resonating. be our with agency make their

Operator

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

Ryan MacDonald

time being Congrats I and interesting sort sort large that win close. aspect on quarter. financial deal the in the the of focus to great of partner-driven services wanted X-figure quick to of on

of we And sort of what's that's that? versus As today direct have shift mix the stands about months mix out at should that about you the X versus pipeline of How driven? think are sort coming you initiatives it SIs, relationships the think maybe all? partner that to to ago, sort accelerating pipeline where XX with of build

David Steinberg

enterprise. XXX% selling our appreciate the are to we're or of direct I sales we're the Ryan. effectively selling mean you, direct So, Today, agency holdco thank direct. it. whether I to

of be are frankly, this business the contemplated with, integration SI our a in driver the current guidance. X than in not We it years, in at that but out is point.We more will believe quite big

We Chris on touch said, should sales sales force. focus I building senior people. has hire the and we and continue continues of force you on think our And just climb our to as more again, as productivity more to

Christopher Greiner

very from Ryan, XX% growing have don't is pipeline Yes. which would directly numbers, but today, sales exact of I the nicely, I our sellers. say, than greater is the generated

the those productivity and About can the on sellers we rapid then we're were We've that of help Shepherd productivity on evidence side point the are these sales their counting more sellers.I that sales that in We most are, to flowed partner think more almost we from we'll the and that direct before than this faster were in the David them, about of enter And you continue X/X by as some now was guide, ecosystem, and as to our on talk though, and helped sales our pipeline best Auto more expansions X/X, agency came if year starting flowed starting seeing through still through. was to them, X/X. and that think from quarter, is, outlook working their of the X/X, upside does as enterprise mentioned, exciting, how another sellers, you we those it guidance. about is And first great. classes insurance calls before the close.As then compare growth recent take cohort to them. about with in what data? to back see. before deals ultimately can the than that you thought.We It what duly benefit with the coming in our really what's see deliver see in to created think

is close So now, recent data back first going years. X-plus hired in class there.Those their pretty we've good close points some months' time X to to the most There's now time at deal. sellers

they the deals pipelines more and deals go are of better deals with years XX% then have up, carry tenure expand. So, a they And the there data value at what and get go the as win rates X experience belt, their more average same their than under more number average of time.The their up been.

So, team. sales to and the business credit development sales enormous seeing nice productivity leaders and really our to unit training we're

David Steinberg

running it XXX% It's X-year XX% were we way, be ago. might where X years above the average. the above by And

AI seeing really layer, who made it at bringing but landscape raised results of AI quarter a our a to a organizations that. are are for we of for we put lot the utilizing up are this not talking growth.It reforecasting that is contributor revenue organizations we're Zeta ago there into look why, having in, So, the the funny and And, course, drive lot year. today, the years right as the native direct in are people guidance data the application X, to way meaningful it, just that and about you from there sort of first of it's because going X investment Zeta to the

Ryan MacDonald

as closer full or business driven we hearing are legal about by sort towards than we're in, sort there.I maybe great core of of we half the which follow-up, as forcing Maybe the fully expectations more perhaps fees is ad one to and from to the increase spend at all being strength and for conversations as the party administration this into guidance expectations the and need of How see election, want did don't to the the spend sort a your not look the they second year to aggressively are for getting I think more year? political funding maybe by of as other, if there. into about But to. closer going ask political factoring

David Steinberg

spent history will So, marketing be in let of on will than the when more look believe, States me on I America. United be statistical people totally be, And any the election money There election the back for What clear. fact that cycle. candidates percentage they're of this this of candidates of amounts currently there spend can and for is are that tell money you fees.But a being one the yes, legal is, to of it. large raising revenue the utilized is going very in I

but be historical not to believe good put be I include at As we've to what I look think in levels, in Chris it it's feel you going guidance, expect would not to we increase there. current be, down we our a we an And where from that does our said, political. if placeholder for think,

Operator

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

Jason Kreyer

pipeline Congrats AI, than quarter. of me your share, as that the of if fair parse can seems you fair now just can but of maybe frame wondering won your Great kind conversations. if maybe winning curious your always AI but in even because you're from you David, than you've more more share importance well. Like like it that out.

David Steinberg

why Well, for appreciate today, X,XXX. to It's I'm to got Coast, to consensuses I to it. platform this the And then with on the artificial first not able Conference I are artificial move is a organization evolved our more program, data, And the from intelligence telling then revenue you it's look It's of if to out, got who agents building their of better you've internally all the way, going that with It existing And we're an own. you, out to year.But going out the moderated really utilizing Global be rushed to do they're generates at of our to vendors what with XXXX. starting all, so I the you thank XXX, first $X,XXX there a solve They own is so bring did was, them.And panel conversations, here they raising panelists out the have you, before again, this just that start their so intelligence conversation through said that their to West AI then is which, our Chris is Jason, if at by I by can one and happens do are I I issue. He we speak, at agent on it both. not and using to Milken focused scientists literally efficiency, can of problem. meaningful the conversation sort on this us, today. but help that focused virtual funny, efficiently sure do expanding is, their for and we Jason. which quarter which why are one starts looking generation. technologies and very over today here and not there is They and people from build they results find can on team.I'm building the so run for the and their they I logical.And to are. interesting. now, we right that guidance ages, going platforms this consensuses need said, increment the It enterprises one how the to partners can the of panel, put was who big the feel how once Fortune AI not the revenue big right, are we you table of not then of the have efficiency think the tell meaningful we that our data comfortable AI of posted panel every partners

Jason Kreyer

pivot wanted platform. this the I over more, mobile one Just of to to build-out

and products accelerant us has you idea kind give become seen in CTV if that because maybe an can for growth of progression Just there the we've of kicked a like Zeta.

at so, that curious contribute and point critical mobile achieve could what more And results? to I'm mass

David Steinberg

Yes.

I people third-party Zeta mobile we So, we much listen, build mean, like and never because an in ID the that gives a advantage we the believe identify IDFA. don't us ecosystem used models, Apple's cookie unfair to use attribution

percentage of pixel a of been as ecosystem opting the it, in, of there.Some of their the eliminated what already. like a from models in very sort many and multiples to build get Meta able that go a able a organizations wild they're So, Meta have there.We've of able in enough percentage out to user bit tracking be receiving when they comprehensive identify mobile has to to created to west been opt it base

I have really we this So, will will product start be it said, and meaningful mobile Jason, component year. like place million we're we're our don't year. expect have we next. expand publicly will into next $XXX next it's as be into think is that the our that believe year. kick a reiterate business this out going think very and we'll we to to good mid upside. feel continue CTV, to to again, roll in that. to increased And ready meaningful production revenue believe I putting mobile I And a I I But we year.I next of in as for and guidance driving by have scale

Operator

the Our next of America. line Bank from Ikeda comes of with Koji question

Koji Ikeda

super scaled wanted the again customer there. ask customer to strength the strength, the new I focus I to want about agency strength. But net did addition on

adoption within client champion being an the agencies really on internal is focused how Does these owners? for of so around mind within Zeta agencies? is more agencies Or is share within like targeting really these driven? Zeta relationship, question relationship need these So, gaining the top-down Zeta each

Christopher Greiner

All I'll point, XX over the record scale data of $XXX,XXX to first Chris. from us. go it you by Koji, I'll that it's as a up the cohort. pass Yes, million scaled then for mentioned, on XX, up couple way, super $X to David.

range a us benefit So, beyond expansions now a our XX% revenue came of ARPU relationships is driven retail, of expand X of they with than agencies. a enterprise David? industries rather through saw demonstration data from the as for than was you also use working the And then customers very various were hospitality.And side, having even and to the and with on travel extend up primarily more point technology from about year.What strong it land consumer great good over those really channels strategy XX% by also is of us. just of

David Steinberg

heavily you Holding from or the as invested a thank have relates very the working it now X to agencies Koji, at ground What many the the CEO we're integrated into we Quite is, X years, over both. of would work cases, the asked We're or the in Corporation. team down up.We relationships, that bottoms top if is with. frankly, in, that a I And simultaneously It's we've you fully team. And Global up, last the tell Chairman in you coming is yes. agency again. answer

is, you we make work them at right? this you presence presence that to more Electronics mission-critical presence relationships but thing than this where think it's agencies and a We going are, meaningful Show will we're other possible the at as conference have So, hero. these the year.And, the a sides, Consumer The with agencies, a anything, the year. we had had at about have the both Canlion

an we the servicing be work them, the And, come is good to absolute incredible term.So, you, spend with them to we lot top. client that's team day-to-day basis. we about of in as make a and we tell that's have that that's and to then you able are very on on I relationships this agency I sure have long working time have the will we how And the team a in make imagine, have knows feel there that's hero, at You personal another can mission-critical I that the that. farming, integrated. and And

Koji Ikeda

wanted I follow-up ask just here. a question. to And a

I it in appreciate revenue guidance, rate. raise But EBITDA. to revenue raise revenue versus EBITDA, looks from and the raise the the less the look the bit in On a when the little the I at also the flow-through on EBITDA

raised the flow. like puts and So, just on then all on just takes to help I some EBITDA wanted And also that bridge us flow, looks from and at it of wondering, revenue the cash wasn't understand I'm the there. then just free free cash guidance. to

Christopher Greiner

Yes.

definitely of flow signing cash how lower.In in year.The wide gating anything the deleverage these that the no point. of of at we now free was, beyond timing collections. been the that range there factor really to only with in one is fundamentally with appreciate remarks XX I scenario new after to start comments And was was we've that it agencies the end in range ratio terms prepared more that the There's the the kind the the of in a drive higher conversion I just pretty reflection at raise. be year of that, would this model, So, there's XX. the we're the made to But prepared where remarks, entering with of the at had a begin a range wide

to we think amount grew guidance in increase you're basis, at revenue, a EBITDA's guide in EBITDA the XX% like updated around guide, it drops XX%. relation drops If that you prior to current margin.On from growth our right, the I raised, year it the revenue full the guide adjusting pure year-over-year look

I of reflection about. David think talked that's a

plan. our in look, going running We make investments year, us see we're You're to continued this ahead marketing. to of want

dollars. marketing making of in partnership making Live Just in hundreds in mean the our building The that more anticipate we're mobile progress of ecosystem. with those these that We then And incremental progress doing XX the last the launch from we can just made week, we're the progress days R&D, agents. on Zeta on program.So, and given more I we've of success saw regional-based held we Dallas. getting a intelligent

will fact, exciting get doing in adjusted investment some today, changing. business, very new leader for we just anticipate XXth This to We don't we margin sales is continue the made In straight a more in Zeta.So, partner our EBITDA expansion. of putting that. network that the hire quarter

other. don't taken So, away message be that I want to

David Steinberg

the are point to end And of I out, the of year. we rule first the Koji, of guiding also quarter to XX% the now at want

projected So, of of forward take we like we're XX% XX% pretty you good an as our margin rate, operating job a plus projecting feel doing sort our organization. growth if

Operator

line of question Riley. with next Our from comes Cummins Zach B. the

Zach Cummins

from strong us insurance results. little seen of year. sure I'm many you I the if sense in the the give but on another we've of really call, already big I on half not first vertical asked, in more recovery had lead in Congrats the half see can the specifically? I somebody this demand players recovery apologize a mean Gen a

the what seeing on side within guidance rest that So, that being year what's and you're for just vertical? curious really your of into the built

Christopher Greiner

to XXXX see growth second the anticipated We and going we closer insurance Thanks, to X into would both it distinct automotive, return that industries, quarter. Zach.

growth course surprise still the of combined of our of think late-stage the confidence to grow. the we faster going grower virtue outlook surprised in both of So, growth of feeling a very and faster, that becomes wouldn't to those to of automotive, we and what our both number. them insurance growing, by very about signed pleasantly rest in are each with that roll over were hand combined industries those of the first was but our of having getting X/X at growth, for the albeit double-digit rate kind deals through the pipeline contracts in industries outlook.But in beat comfortable total We've us gave quarter's through not grow Zeta's but by.Also embedded us than year,

Zach Cummins

a that if potentially? future sort think about XXXX date that you how script, as maybe but it about I targets? Or to And your any is update apologize addressed thinking to the in fair of you're

David Steinberg

we is about again, at out everything XXXX point say I'll Zach least.

now don't But to right give it think do to we'll the we we're point, at as $XXX I the the time, believe get execute. in want ahead when the about at the we'll right to We're update thoughts have middle products, some the we've very people projected logically year. to feeling good ourselves. this at at million want for So, business.We start of a XXXX. of the continue got place time. And right it's We about to right range

Christopher Greiner

I you was I getting going ready to different. kick you because go thought somewhere were to

David Steinberg

That's joke. a I was I $X billion in to You going kidding. thought XXXX. was say

Operator

Our question with the comes Ryan line MacWilliams Barclays. of from next

Ryan MacWilliams

see improvement in from growth scale the ARPU good customers in So, the quarter. to

more rates their before we're the spend, in that getting the interest to your they better to where you? the are of just marketing where macro do on involved into kind further along about outcome to feel see compared they customers the year, side? just larger Or and started the Now waiting year stand terms election of of they

David Steinberg

No. have what not as marketer the of I But big we will get say would few We're expensive marketing organizations, and I seeing spending.Now, issues happen worried seeing come now. cycle say and see you'll not marketing beneficiary as of dollars election not not of organizations right it I'm spend. rates get you last years. the I and bullish to will is any in, quite mean more it that seeing as in in our on to frankly, the and people I'm seen this a massive there I've to I environment flood relates is when business.So, about into that channels. begin some have by interest is, I relates marketing, election as I this seen affected people, mean seen, political And are a the

Christopher Greiner

it you And an verticals of even look it, over from half I XX%. was like our top if XX grew perspective, industry Ryan, think at vertical

it very there. seems be So, out healthy to

Ryan MacWilliams

could organic around would your David, Any for with Any on they David, here guys customers?And And like one about just how into Chris. then provide additional results update for on for this one could It the of scale housekeeping sell M&A be you maybe margins year? quick Chris, a think have modeling and gross booked updates for X-part split. a IPO your thoughts how item. since we some then question.

David Steinberg

the something in company. growth a time, people. technology, Ryan, we we incredible a be be continue same lot. to it accretive, trigger.But high-quality the pulled purchase being that side good pull not from look that the and at is M&A incredibly environment could will have human anything need accretive great we for data organic continue thought the all we're we always a we Until to organizations at trigger haven't acquisition. focus of could the side great things And think for on just in looking we seen look. continue is we perspective, merge find But and/or we're really because great capital, haven't look And to which We we we the with could on. an we

Christopher Greiner

second quickly, hitting Ryan. question, just And

bit just in holdcos given bps. our I direct a a back XX%.We so of on what the XX heads anyway, did I agency But low we at we process. early GAAP year. that around assume our that's about better would said was and assumption rest where revenue the saw saw February. a of exiting profile XXs basis a good that a That's their large in percentage mix where think think quarter, we similar it's I it cost are exiting same similar for operating this revenue are ramping call which XXXX, as XXXX, little

Operator

Our from the Bhatia Blair. with Arjan next William of comes line question

Christopher Madison

for Arjan. on Chris is Congrats a on This quarter. great

seen? main spend you're levers of their enterprise Or seeing using customers, grow accelerated factors what primarily customers success the there with some Is are well? the particular? in are First as channel that's me, other were question scaling behind this are expansion the for you've to that driving that

David Steinberg

Well, Chris. thank you,

see to have is what component downplay major are for don't adoption AI for from again, of is.Once months. we an of perspective. that important We've a think of lot point, years. X one. an it or I X organizations been a talking Zeta And about Chris? a this And enterprises enterprises looking now number at I been for choosing to it AI continue building why want

Christopher Greiner

perfect. Yes,

Christopher Madison

seller a products in success of then in are in past terms number this rolled the over products second me productivity? seeing so. of of seen the play was, of you've out one year new you've these or for go-to-market? terms And out the Is you some having so, a How role

David Steinberg

good the and Chris? there and always of another use on there's arsenal channels to mean, Yes. we additional get listen, be the it's able when quiver sell. additional to I cases. salespeople to in focus And out continue

Christopher Greiner

real prospects, sale even their but from meeting customers.So, #X, it's a I think Yes. helps appreciate And, they we're with we about sales their going our the more than to which about Chris, the existing and that much pitching them sometimes have, customers it's your highly know PowerPoints. not also certainly very very literally in visualized, telling sales I point. productivity meetings them early think oftentimes data cloud, at We're

Operator

the from Canaccord. comes question line Reagan with next of Dan Our

Daniel Reagan

to Heinz. of just consistent DJ. the want raise, another Dan see solid is Love too. say quarter Reagan for guidance This on I congrats execution. to to

you you're it that up of Or sellers more step hiring? pretty guys it's is pace think capacity? with productivity That experienced revenue growth gain signals you to little I see. would you or inform bit, then And growth several to to availability great faster questions.First, been headcount that know could on has dependent the time but grow what looking on devil's you you with do secondly, outpacing So sales materially touched sales for play this a want more the of advocate for? quarters. is But X

David Steinberg

earlier lot not a surface. like little hired the below DUC go people. interesting. let We've some a of productive. are Yes. of It's bit just the as also We've who cohorts a It's of

we've think to gone you'll that win vast disproportionate engagements get and of invited cycle, to we grow of think a as see greater XX% head that and to we majority salespeople.But will and it through participate continue again I RFPs percentage begin I relates the in, the now count to than continue. really

Christopher Greiner

nice of We quarter. $XXX had out million. the coming a million got made to up $XXX We fourth Yes. step

domain of be down going evaluate into expertise, high-quality at many narrows marketing $XXX number third expertise, in we plays use that quarter. it, productivity range over we're that kind big. we'll is to specific think I talent, experience.So, vertical the Sales quantity a to pool quality gates The years it people of the of after.

seeing. productivity But got So, really like now, feel the sales we're right the we I right appreciate we've the balance. point. like

Daniel Reagan

is to approach also, many agencies relationships also with question you? shift have are makes this their data doing? approach over What holdcos. Zeta's agencies to is platform than other your significant the of then enough providers. the space portions incentivize And how different to what and And in unique And for budgets existing these guys

David Steinberg

it. different people in attribution we methodologies $XXX they're are do, with about to meaningful do them Chris doing cloud it's holdcos building from build models PowerPoint and but partners other AI moving truthfully, better taking a application they what the really up is set, that and lot and data then starting artificial multiple that presentations, $XX algorithm, dollars itself, they're world.So, agency targeting Well, said they a scale you. waking third-party have saying, a and and to obviously, but activation in data layer, and a yes, native better to come talk building and expand. They're almost activate at impossible times, can't move it.And, with like third-party not has They meaning test better by prove attribution million able million, target, let's the to putting the us, native we're intelligence it's marketing to to because of as

seen the said went we've X what been we year from Now, over we've that X. to is last testing we where the doing

why our We very very, went budget from test additional to meaningful gone very scaling is you then product X our is rapidly happened are to the move they we've holding product.We prove X us. start because product Thank X X superior, is which the Now What's and don't to that companies. is, that our they say superior. that much. on

Operator

Our last of question Ryan from with comes Schwartz the Oppenheimer. line

Ari Friedman

wanted buy a to sitting environment. like to This time marketers kind there last same marketing last since Friedman and year? marketing year what is of same Or same? this marketing Schwartz. scrutiny prioritizing? kind the reprioritization of I wondering is budget? stack it last in has better? Or then was the Brian double what And under it like buying the Ari with of is like been click it and the year like in Is of of solutions And terms on they're the I for want as

David Steinberg

Yes.

seeing of first is an upswing marketing all, we're Ari, So, the answer itself. in

there. So, you've tide rising a got

we Second, as artificial data to native intelligence application layer. and seeing are the really marketers want

of promised thing important strategy you can So, I we is is our land other when talks presentations the and have other people come will it. and And so because again. expand and a start strategy they same tell in people we is we that interesting of test, our entire into it think do the the we prove lot this, prove where go them Chris about will we thing.One things the is, conversations, again

shift purchasing. to that, to the Zeta data We're So, best market relates technology, results we best or deliver the either seeing and their possible any as agencies not solution of as proving we're in the are the case. the to relates it far, best strategy clients.And best is with sort seeing of to that enterprise sort so their it enterprises want

like data, everybody told the be more and to your over feel made the in greatest marketing reasons of that one to appreciate X platform, sit and you into we world's it feel it. Zeta, off. about wrap pay decisions a comfortable I intelligence, and marketing for bullish increasing our as year.So, very into our team. about I've can our investment The we our environment, we're I been robust expect up. market into guidance Zeta are or we for is team proud incredibly where X the people about to it related off.We question, As And I some have executing bringing to second of we continue could seeing I artificial in years to not the What really it's the tell last so is this into is business, paying of attending.

perfectly believe wonderful where said going. today before, Zeta.I for I just is don't hope have a as believe going Bye. where where attending. puck you it's we the the we're puck I've is and and is We positioned So, day, appreciate your

Operator

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

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

Zeta Global (ZETA) 6 May 242024 Q1 Earnings call transcript