ZETA - Earnings call transcript Q4 2024 | Zeta Global Holdings Corp.

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Operator

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

You may begin.

Matt Pfau

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

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

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

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

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

David Steinberg

where of AI Zeta, XXXX you, a where marketing quarter, an year we've consistently Good revolution, front a lines unprecedented expectations. to replacement at record Zeta, was ecosystem. today. going. for is the and us the cycle puck strong everyone, skated capped fourth At once Marketing you is we again the across by Thank for thank the joining exceeded Matt. afternoon, driving technology

our are contributing We in Our fueling and us market and early with as fourth quarter XXXX, share to results both we our XXXX million, plan. year-over-year, $XXX first-party the record billion adjusted customers these up prospects, $XX of XX% of Zeta generated record revenue our our fourth to record resonating outlined in year-over-year investments XX% will up In quarter in gains. guidance. XXXX investments million, revenue with of and $X EBITDA believe ahead over annual propel by AI well data of

XXXX, XX-plus sixth percent guiding another flow to margin year expansion. our free of year are consecutive of cash we alongside growth, For

adjusted XXX XX% XXXX and free flow XXXX, Our points Zeta basis XXXX a plan EBITDA least of XX% CAGR basis over XXX similar organic revenue at trajectory, frame. cash to a margin this to margin least and improvement points of at between forecasts time XX% margin expansion

stronger been is exceptional never an XXXX, the we and business enter XXXX for was as has The year bigger. our and momentum accelerating. been opportunity never Zeta, has

marketing platform data is of ever. with vision all-in-one and resonating more Our its an than at core AI

a efficiency Zeta's drive we both, delivering revenue AI does impact. AI advantage or While drive most gains, creating and either products believe competitive measurable powerful

to close almost RFPs growth total of our dollar In XX%. QX, reached XX% pipeline record the year-over-year value of with a the high, up

client should indispensable. acquisition us. added cases, expanding double that existing use score A who prime an is which customer example customer with saw which use increased to X NPS case, extending focuses with their on a XXX One to is traction XX. retailer our U.S. than become more Our CDP solutions more Fortune our Zeta investment year-over-year initiative, We a points significant retention-based

agentic AI platform. and AI let's adoption about Now across our talk

insights; a for our customer marketing experiences products enabling to AI intelligent AI-driven in complete answers. productivity, marketing agents; audience with X faster, ways: precision, more reminder, with Zeta's personalization, conversationally tasks enhancing platform with empower As and GenAI customers automating marketers interact

tool. an But isn't team. a the extension of just marketing It's AI

enterprise, AI into agentic performs Our workflows superior efficiency roles specialized and within drive seamlessly an integrating performance. to

example, agents. specialist operations For

compliance a efficiency. financial We track with agents campaigns. process, automate are record to AI-driven systems results, institutions processes working These with integrating completion, their ownership multiple quality and QA QA assurance to for of marketing and XX-step ensuring improving replace agent manual

be events virtual can predictive into own can Clients but agents. models data scientist our data models and ingested bring own Your their those with complex. structures platform, aligning

process, the clients. agents and for time resolving manual intelligently formats effort This removes discrepancies. integration ensuring matching accelerates by seamless value to Our data mapping automate fields, normalizing and

agents. Creative

cycles Visual AI to marketers deployment. generate images, campaign campaign acts fully minutes. creative like and slate world-class director, Our a lines and reducing from uses helping existing go blocks, a to accelerating in leverages to blank Composer a content, templates iteration It designed and content subject body

just for platform. AI an some it While our is Zeta, to press companies, foundational a is or for add-on, release

We X,XXX sequentially Over of XXXX, have QX the the embedded our and more AI adoption X using results been within AI have X years, months, not enterprises year taxonomies launch. across to its platform. usage surged. automation. XXX AI platform number for created Data investing adopted of in XXX% prove than our as our grew brands AI agent in first behavioral we AI were doubling in Cloud it. taxonomies alone, nearly more In

monetize AI-powered truly through we consumption, customer products than marketing. our Rather are fees, future shaping the separate accelerating adoption across We charging increased our AI of base.

not meaningful model we which over significant acceleration adoption XXXX, revenue, other a in AI still do XX% Although increased business from unlike across we monetize And XXXX. need companies, software consumption we platform, innovations. are a early our our our pivot our AI impact to saw to in to

doing evidenced already as We our by results. so are XXXX

marketing new at Officer, McKinsey BXB previously Company's businesses. continues AI talent. as Growth ran attract BXC sales cloud a from in practice. See, Lord she Pam marketing joined partner and us our CRM & President leadership top-tier where was recently Zeta's to and of Ed Oracle, their Chief

We our platform. also team both enhance continue and to our

our in January, customers. delivering well completed early ahead happy to report it's our LiveIntent value are the We of schedule, incremental to that and integration already we

have Data the the ]. our acquisition, This e-mails. enhances marketers launched and monetization win-win-win. synergistic enabling premium personalized with Direct LiveIntent's a publisher a Cloud, driving Zeta from [ ROI publisher within Zeta network solution higher Zeta, This We true newsletter marketers already product first directly combines for to ads deliver innovation while

years public reflect never I X Zeta's nearly trajectory clearer. As as company, been on has a

plan our AI of a ability We and many to beat years We for confident XXXX have a Zeta schedule in leadership. business our come. be ahead XX of consecutive XX remain quarters, strengthened outperformed our Rule to year raised data guidance for and

We are truly company. building a one-of-a-kind

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

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

Christopher Greiner

good and you, David, Thank everyone. afternoon,

have share into increasing We information Zeta want company; guidance X details, XX% exciting been greater first, for incredibly consistent, straight cash expanding to beating a lead second, margin or free plan. with also and a years while of has for XX I revenue themes: public on lot consecutive quarters as flow before main results our I X momentum. XXXX raising our and get to XXXX and the But Zeta consistency.

and data its XX X to revenue driving from business, with And investment great momentum us results expected accelerating like at will XXXX core free Of flow U.S. this of organic included other X in to to or our to our is greater a to those in companies. at years. third, XXXX. XXXX next annually are technology from you next the list. growth Of Our our expect to over X are do annual quarter over those expected XX, creating an to in public this we rate AI with Zeta only rarity. and record those, XX% target all-in-one compound fourth annually is are increase the expand Zeta also and positioning revenue continue X, marketing margin GitLab platform plan, to years; There increase XX% to XXXX. and Samsara continuing XXX companies their as next for cash only XXXX X see Cloudflare,

of XQ, XXXX XX% political excluding revenue revenue. XX% and revenue XX%. million revenue. excluding and candidate was into results. year-over-year political XX% Let's get up LiveIntent $XXX delivered year-to-year or just the LiveIntent year's or year full In candidate XX% full fourth The quarter initial or by million, $XXX million up our above we and exceeded $XXX guide billion, $X This of

least months of customer to as X our our to customers us scaled contribution, we up grew X year-over-year. and added Super-scaled XXXX, and December And customer million $X XX year-end XXX us of XXX customer LiveIntent sequentially. a customer customers scaled each many of customer using to X% up are added as customer at as LiveIntent count how reminder, up our the over XX, X% and were for. year-over-year XX% trailing of brands this customers excluding XX count, XX count they sequentially. super-scaled regardless as XX% increased scaled count count. with super-scaled spending Total year-over-year

brands least XX% us with at number the over spending The increased of million year-over-year. trailing $X months XX

have in XXX%, not a of to when at XXX% does an the impact revenue XX% it Scalable year-over-year a end of from year Net $XXX,XXX count, highest Although XX% on of XXX% company. customer XXX% multiple range, the does quarterly as ARPU and for XXXX removing using us our LiveIntent. positive was customer reported benefit impact increase as retention and customers level public for brands increased ARPU. the our high

XX increase automotive, of retail, year-over-year, We and and LiveIntent industries and media an acquisition. with industry From XX% insurance, with of quota advocacy, XXX year in consumer faster carriers, the top fastest. an the perspective, growing XX% X driven technology than our partly and ended our year-over-year by XXXX, grew political

quota-carrying LiveIntent, reps XX% increased year-over-year. Excluding

the than in Our and of to in climbed quarter quarter direct XXXX. slightly third up XX% higher fourth in fourth the the mix from XX%, quarter XX%

revenue year, full XX%. direct For mix was the our

XXXX was points XXXX. of the from XX of a of GAAP quarter XX%, the cost improvement Our in basis fourth third quarter basis the up XX quarter revenue from and point

XX.X%, For adopting increasing agencies higher basis time. of of over channel to mix by direct integrated points spend the driven a prior to XXXX, revenue full to from cost initially year, social our was revenue channels XXX GAAP mostly due up the

fourth despite quarter, of areas of margin adjusted XX.X%, our expenses year-over-year. other XXth we the of million seller additional generated EBITDA straight In of our points margins resulted We our better the in year-over-year and Leverage a of higher million at quarter short expanding defending basis $XX.X guidance midpoint XXX operating related adjusted EBITDA in the our exceeded adjusted report. $X.X to than EBITDA of against incurring million $X guidance. expenses

controls. our firm customer an independent our Committee engaging point, To involved which and accounting allegations, of internal shared oversaw practices forensic vendor accounting the evaluate Audit this a and review to

leading assess a privacy hired data were privacy the without practices. that data U.S. corroborated The merit. short and we to accounting privacy data Additionally, reviews that in with GAAP report seller firm and our and and practices were our consistent allegations the

Additionally, the strength Zeta's findings the controls practices. reinforced data and privacy internal of

For XXXX, and adjusted was year-over-year. margin increase of EBITDA a a million, XX.X% representing $XXX XX%

quarter, fourth net achieved time the as company. we GAAP the public In positive for a income first

quarter a income and quarter Our share $X.XX diluted net to fourth for the share GAAP earnings million, of per $XX.X full which per loss year. translated of was the $X.XX in

driven of million, EBITDA Finally, to translated a up XX% a free includes and This XX%. in fourth flow of a this cycles. flow headwind to have with this, adjusted free XX%. cash on earnings cash margin be by representing $XX This million, Absent XX% ratio was worth It's operating $XX our dynamic cash and of seen up conversion from year-to-year $XX activities quarter cash industry's flow with XX%. million payment the been growth Slide working capital XX supplemental. longer would noting agencies can

For of XXXX, was our a up free at $XX XX% million cash X.X% and flow year-over-year. margin

plan start applicable through get we earnings margin XX in and as plan discuss the to our provide I'll the details. XXXX levers additional our plan, are Slides with growth the into of let's Zeta details XXXX for and XXXX. also will drivers supplemental Zeta many of guidance. Now XX medium-term XXXX our

billion, $X.X To next this a over equates X CAGR For XXXX XX% organic at revenue XXXX was years. least revenue, targeting and between the CAGR our perspective, over to which we're XX%. revenue in put

runway time. customers' to and room our X% in to enough or Importantly, there's target this and we existing X% about spend, than there's estimate penetration to we to this have business achieve core over as only XX% more marketing increase of our advertising more

by We also capabilities. through some features David which of have include highlighted multiple new usage new earlier. of growth consumption drive which GenAI should GenAI More our our as levers, additional we creating revenue platform, monetize

opportunity an and our channels. new This in to the mobile very while Extending also plan better Cloud. introducing relationships. provides still such better margins. continue can with vertical product health to pipeline believe ecosystem. Leveraging publisher today, expanding new partnership Publisher to drive beneficial expertise. CPG, Introducing care, we and monetize We enhance us the for early channels. our will extensive underrepresented We're vertical-specific as Through travel. verticals penetrate functionality, our growth be And we're commerce and this

The similar X% our scaled previous to our We're agencies influencing count our to KPIs is plan. platform. versus X% to plan growth this achieve targeting business, add look to where our CAGR to metric to customer biggest X-year of The XX%. expect brands factor continue we very XXXX our agency of midterm

will trend. only our counted likely count customer. agency how as of a one scaled count growth many around be perspective, brand regardless However, brands and our leveraging From for, historical Zeta is it's

ARPU, to of with in expecting scaled of XX% XX%, X-year our For CAGR line we're customer growth XX%.

initiative and aiding growth. use channel ARPU expansion, Zeta case One impact positively should Our

also Further, agency the on dynamic positive have will aforementioned ARPU. impact a

net expect revenue continue our XXX% in the direct XX%, in And we in since be line range with to the retention We to that annual mix XX% to we XXXX. XXX% XXXX. we've XX% achieved of roughly the XXX%, expect range to line XX% since been XXX% range to with to revenue in be to

improvement our significant with targeting initial margin plan, Zeta plan. we're like XXXX Much medium-term our

year. margin, implies an EBITDA basis of points adjusted XXXX XXX least Our increase a target of or $XXX of XXX at basis million per XX% average points an

driven products faster improve should to basis of from cost scaling higher XXX channels, XXX business. direct We will compared revenue, of direct adoption believe higher expect mostly by direct initiative a over as consumption be revenue ramping One our of agencies revenue to GenAI by our all usage Zeta driving and areas a of driven revenue. channels, should integrated points. be of We This mix and by to carries this more time. of Cost leverage across which lower margins

other we headcount revenue been higher has adding XXX Zeta point margin anticipate basis percentage U.S. our outside the of XXX Across of of headcount points operating to for and than key expense improvement. One lines, slower of leverage a growing significantly

internally headcount at revenue increased a X past headcount gain XX%, only has headcount enable should at XX% our even the to AI further a Over grown of Implementing years, has us efficiencies. of with total U.S. CAGR CAGR growth while slower.

a tailwind. Expanding our margin partnership ecosystem will also create

additional the We cash expect XX% basis future business. partners customers improvement provide of equates XXXX. plus out XX%, an of From from professional a million a XXX to to which in take $XXX on costs services of margin our points flow from CAGR we some taking today, XXXX, represents of a of XXXX. free perspective, we're targeting This

aforementioned addition the factors In improvement. to X free margin flow additional there cash margin are driving our levers,

revenue. CapEx slower expect than grow we First, to materially

Our a capital expenditures and in XXXX, X.X% was development from capitalized of XXXX. revenue software X.X% in improvement significant

Zeta's overall free on with line comes agencies growth in of that flow over growth. impact the cash time business' should lessen more as Second,

to This LiveIntent on $X.XX LiveIntent our year-to-year Adjusting the provided growth guiding of XXXX billion year revenue growth or the includes Slide bridge supplemental. revenue is midpoint $XX be revenue on of political full political impact comps, and and of to XX of million. XX%. Moving to We're candidate XX%. in in for A earnings the rate XXXX is the LiveIntent guidance. excluding

political no As assumes XXXX expected, there candidate is guidance revenue our revenue.

and million However, $XX for $XX XXXX. in advocacy to $XX and be million we to XXXX revenue million between are modeling in compared million as $XX

at midpoint, to point or a year XX.X%, guiding to the year-over-year be the $XXX.X XXX of We're year-over-year. of flow margin free a to a growth XX.X%, expansion adjusted EBITDA be point million improvement year midpoint of a representing XXXX XXX million at cash of full basis guiding and We're full basis margin $XXX.X XX%.

revenue Slide supplemental, a in we've for adjusted with practice the quarterly on XX earnings prior included Finally, guidance EBITDA, years. XXXX and consistent

story. ahead it entire At plan, I'd revenue, materially like are key issue the can Zeta is surpass but to an to only a this set our year of another original conclude executing with against but targets, plan, one exceeded reflection. of we multiyear schedule. Zeta, we XXXX not Anyone

our most our plan, For to KPIs the Zeta path goals. realistic the them achieve we to same kept fine-tuned and XXXX

XXXX accountable thought entire Just our we against plan, extensive plan, XXXX like is executing and which the company with for. our focused on diligence put Zeta original into and

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

Operator

first is RBC. with question Our from Matt Swanson

Matthew Swanson

Maybe thinking a ground XXXX? going bit about sets X the lens a Congratulations talk of in from there on zoom what through guidance. a pulling you of the maybe of QX spending demand-centric lot both you a macro environment and more like bit. for covered those quarter. you're little little kind a Can Chris, just environment, through for

Christopher Greiner

simplest how which end gone it future get of long-term historically, flexibility and the our in put Yes. requires low terms our we've is to same the followed we've future Look, to as way well guide, we've each years approach that the it of into models. level of us which guide means done gives to KPIs it as of our our

are anticipate of our we've first into where be the quarter, able trends. leveraged very X good Zeta insight the we macro obviously to months in QX. We've data Given economic to got visibility

about I of higher to we We're growth appropriate those like to aware We're saw you'd feel the anything XXXX, our have David, As of that. strong we're verticals the obviously backdrop. would other put We're that very XXXX. we've guide account the of And in for to I macro. add? we tariffs. of but inflationary of the aware items, aware into conservatism as end think contributed performers expect be well aware the on into

David Steinberg

seeing any let at And clients Matt, challenges point. this we're from me that Yes. just not any say

exists as we very where about the today. feeling versus So macro are good it we're environment

Matthew Swanson

that to And their adoption? have hearing quickly a of more LiveIntent already David, bit then, you're in hear you initial about use as great you I terms appreciate just talk initial of January. from customers Can kind and integrated what as cases little that.

then those when verticals gives desire, other that just up that we ARPU guess, Zeta? And new broaden to products drivers. that in long-term do plan, and XXXX out, launch confidence new more I in you products from you have some of it the expansion you new customers' are take some from to What in see

David Steinberg

Yes. And experiencing of ARPU to be clear, been type we've that growth.

the to ARPU we percentage to as end ] doing of our took revenue by a don't product, need the consumer to hit into from to the cool plan. continue the served Matt. a as their newsletters, did a did perspective on what was XXXX. But So consuming. is We just grow Direct embeds we're XXXX Zeta do to inventory, we growth can get this [ we which traditionally What was which was really content based we plan

New So so this or Post Washington daily an might The be might Times. getting York from this you're The on update so forth. publisher, It from newsletter from be automotive a update and

We to consuming. target content in individual revenue in of Data the of the can added an directly the with to we already transaction. they're Cloud addition and shown publisher That a to has higher for marketer investment our sitting us now and on that, return middle top the deterministic the on increased

a as that. revenue higher garner we percentage So of

amongst counts has business, up they agency is again, are good super-scaled with I Matt, just and keep which once if and look more think So where dramatically We, are adding our our win-win-win, equaling X it at fastest a X. about and one feel their X you perfect very it's ARPUs And existing customer. a example as growing, been customers. brands, the of we it because going taking plus really

Operator

comes Hynes next DJ with Canaccord Our question from Genuity.

David Hynes

they David, about the with from agencies What kind you you're you the brands? in lots Maybe results. visibility which the could maybe last I opportunity on for agency of that hearing How Clearly, just those the there's folks? is pulling thinking suggest point, Nice what expound growth pipelines that set talk there. for have of and into new momentum are ARPU 'XX business. beyond? gains have have you the of about

David Steinberg

profitable right the appreciate we I in of I part how DJ. think of now, tell generally people I on upcharge competitors of are they're our have would months, something What with much, compliment. that over most We meaningful to the the agency they the that profit I we out bar you a so the because who the of you XX%. is on book and number last or agencies is reasons the think, are one to by of the cost hose increasing understand business partner work drinking their activation don't, the charging some most average is are that agency none fire Thank because the in had data challenges most lowering it bundle data depending a our expense. as

are is more agreements the agencies executed out and been we're minimum more So of comfort as we're gives and that seeing tremendous volume that what more amount amounts year more us. and have putting we're there. seeing in moving of a What this to brands out us the already projections for

David Hynes

follow-up a one of into was Zeta Yes. you to And that out that's opportunity you like meaningful there Maybe to Just these interesting, to does called talk create that. of creatives. the the about that? and agents Are It deep go customers? they Does creative? how curious, push want asking whether Zeta. to I'm any channel sense. kind do agency was a conflict into Makes with

David Steinberg

Yes.

road let be That What taking our as size, example. would a We it want to creative optimizing screen not not agencies is we with compete any are perfect do map. So is me creative. in to the doing clear. and for relates be their it

that optimize Android it commercial. for opening iPhone, is an able device, laptop, an an a dynamic on you're iPad, a that. creative The agent TV to So

clients rates any and not working time creative out But are optimize basic highest an agency might very using to for Now has product to creative an stand-alone that at a investment tools with are utilize on what and the support of agencies, as enterprise and they we creative versus tools we have to some putting product, want by we're help best creative, creative not we have conversion the that return agency. we the a much our want client. assets the very look the

Operator

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

Jason Kreyer

Congrats strong on another quarter.

look, guys with the working marketing companies. are you largest So of some

XXX. of You XX% Fortune the talked about

You're of $X scaled just a at running million today. ARPU customer

So help so not increase time? million million you what or are share, that wallet key it's the $XX $X or elements the over but strategy million of million $XX $XX

David Steinberg

So Well, great mean, let's Zeta, Zeta spend. with the last which we Jason. first, consolidating and of scaled start to one in our customers It's captured all question, use year, that spend sale, into billion we're I starting in One today, cases more one because, of a is we customers. see over have X% interesting marketing, more the $XXX and and year

we get forward spend. is next to don't It's the we X% of to that -- get goal or As XX%. few not to our X% to to have years, look

share, of But clients us which a other we their what where for the and you XXXX. from top up, there wallet that tell go by are would map move you road I X% how the as is number gives or And as above the up. we a then XXX enterprise X.X% have of And to basis move can clients up. mean X% last of move bring you to you this you to year up, mean bring range up year X.XX% points from

Christopher Greiner

but average on look XX% your brand $X our Jason, than grew X at -- clearly if customers, in greater really can which are customers scaled year-over-year, where basis can on million an the already those you on earnings see a on almost million Slide than question, greater spending million. you $X this ARPU to basis, You supplemental XX,

it, you leverage on that to which we if to make $XXX,XXX amount $XXX,XXX, that you'll the Slide shy you have, customers, more now ramping customers to of $XXX,XXX per of significant we a $XXX,XXX per, if annually, of in as within around and we first platform. spend year. there, see substantial almost produce then continue And compared $X in call the our million the reference million at see slide couple growth inroads compare XX, $X a within Now just to years is scaling year, they that first last those we time

Jason Kreyer

talked of Perfect. And December. lot the a spent of then with we over months handful time customers just something a in of about here. your kind biggest to But last follow-up you

Just wondering to with what how it drive to progress. continue that about more do And is Zeta? them want those conversations conversations those to

David Steinberg

efficiency think for efficiency doing as per lot when right? back enterprises growth into Platform it the and well. to revenue drive I are revenue other effectiveness you and Zeta of partners So budget of automation, meaningful course, causing about out superior to which, there vast intelligence, to that invested and goes it a majority move the ability using think artificial growth, of are we're from to But Marketing dollar is them the us.

really in And XX% excluding quarter, the we're implementations. AI's political. seeing the XX% we're business the the And seeing that in results, right? We fourth grew

from a about our XXX% driving the revenue through QX. more to superior talked sequential It's flowing AI growth efficiency, That's QX in also and it's We also driving growth adoption into results. competitors.

Operator

Ryan Company. from MacDonald Our next question Needham comes with &

Ryan MacDonald

sale. One as early Zeta, motion? on RFPs use where to that? David, the cases into mature you of terms given you're challenges in your of a signs close acquired, of that of on the benefits concept forces you like this just you're RFP in you that you new to one of talk of all consolidating sort Can the about about Congrats now that talked concept great integrating XXXX. say, recently sales larger are on, adding or in products more of generative flow you've comprehensive seeing that then And AI that just

David Steinberg

proud and the year. the The you, of We're First quarter Ryan. absolutely of answer yes. all, super thank is

see to for to group. you, are Zeta. our One company cross with will tell changing time, Pam the they meaningful both the for to and the really with starting, do going that game addition And first one the sell as we're across coming addition have I to the entire of Ed So RFPs relationships of the be and ability in ability

to have know, a been as in you I create think then Whereas you past, would siloed, we in. come would had you the where sale,

to upsell. You try

would You'd very have the spawn it's close to doing been to farmers and we're the now exciting silos. break the Zeta. then And hunter What One very, deal out. -- the leading with we're would try through those is

Christopher Greiner

X If of pipeline, average a those seeing is we're evidence, your you bringing of look what size inside just point is so as together. deal Ryan, use sales the the up cases all XX% that year-to-year, point of

Ryan MacDonald

on agencies the I Can that Appreciate it's seen about advertising. reports newer competitively talk creates color that. We've you're or on to, had, Meta then the or about recently sort market. think, success given any the has what whether company in more the all near do seeing go all terms of any going the moves to movement trying changes And gardens competition bring of the obviously term? from to into new concern obviously the of maybe in this you some not to just walled AI-based and in

David Steinberg

Yes. any Ryan. we're guys Thank competition seeing you, from not No, like that.

tend continue we on relationship deep very pretty They a partners. with few, fact, In focus very large meaningful and Meta them. business to to have grow materially our and very with

deeper good it's, more able Quite in a no each business You frankly, Because But Meta little more against been has, with build Meta, meaningful some us. Google other. a I form relationship. bit that way, such in going that and ways, and shape or drive and think benefited affected we're are us. seeing at we've it to partners

pure seen for that years. the that think of inability the either. start-ups any also lot of financing get X to up small would I fact and haven't over X I last we to has the been a AI And on comers comment outside

would get would new So in and a size, normal you. have growth some our our coming you you start-ups our to scale after rate and world,

not have either. seen that We

everything traditionally need opportunity would to been it's a to So where Platform trying any of we've you put different as can this brought vendors seeing one really what together unique organization replicate not together upwards point. Zeta We're at that XX the deliver. Marketing

Operator

comes Securities. Our next with Terry question Truist from Tillman

Terrell Tillman

as Congratulations well. from me

of about and is the how follow-up. think follow-up. some meaningful longer start timing And of 'XX? multiparter, pipeline then in revenue. a we the that a bit be converting had What that value or interesting and take model of I about deals, do it does kind curious of But provided we a you in these I'm pipeline kind might in little And question Zeta First the some of terms if stats into then ending seeing year. material had all the One of before are like the a I

Christopher Greiner

seeing we've we're been that saying not Yes, any that's something in our frankly, cycles, now been and years. for, change deal

concepts. can move bigger will the faster So RFP that the months, be But to closing, vast doubt, through doesn't way. still all the of the cases. in use it call by a than can time, and majority we're of proof amount that and it, range. without XX of deals That the And still take pilots process some long X to much a X that in mean are come they be, that's on deals of

in different pipeline in be to 'XX it conversion pipeline from if having longer So take us or the in doesn't you seen XXXX. 'XX deals expect I any we've of necessarily stop will. don't than the the

David Steinberg

X X that months, Terry, guys or pipeline ago. entered many remember, X our of X months those And or

and consistent movement the converted scale clients what the to scaled is say and to would from to to seeing actually a I clients. pilots super-scaled you're ability to to pipeline then clients ultimately So RFPs

So at XX% we're that organic a a confidence I the show plan a now. minimum bullish of where CAGR, feeling our putting in continues our if very to is XXXX right look business, about business forth think you that

Terrell Tillman

really I Yes, seems that wasn't it it clear, long in like definitely but Zeta that's David. ago guess ago, forever Live.

So the side. there much then, happened mobile on was a since but has lot

quick in this channel? start 'XX a in maybe revenue becoming a key potentially on could meaningful terms that. just of update And So

David Steinberg

XXXX could thought into in XXXX. said beyond, and happen driver big would mobile a and it be we We've always

who have a well. number product growing clients have quite We it, doing a off the but it's massive very X rate, mean very, adopted at of a built, it's and we've I and of right? we're base, proud

the if one needle. a getting they're XXX% it's products above television, at But you look products really year. growing drive harder the about still bigger for So challenge bigger is connected like to and new

that we're impact seeing to mobile years the that's in come. it's a I starting now business. really to do revenue, as to So meaningful that expect what a

Christopher Greiner

how they of to our right? selling learn It's as new they're motion a though very not for an today sellers, really It's extension as a capability. have channel. It's new natural selling a

Operator

Blair. from Our with Arjun William Bhatia next question comes

Arjun Bhatia

shape of they're out can to growth role the anticipating are for back see a curious terms the Maybe you on agencies Congrats of growth over couple what in the of second. of model. But close curve next how I kind years? strong the you year the XXXX in part upward of here. Perfect. know if might I'm right that the to Chris, switch on agencies contemplating kind S now. We

the in the the starting years? mix, thinking you pick early And 'XX, digital sorry, might or, then piece channel trend you Is that like do agencies of here? coming late in see you that -- -- channels? terms how up direct And are where think in the are that to of are pace other 'XX just over adopting just

Christopher Greiner

Yes.

XX% it, $X.X and and drivers ways is number growth least. market just by us why it's incremental So we share. drive which into an the by revenue frankly, other pie into that to the of core a get of part agency to right the wallet of But accessing obviously could is said of first the of to the able which part And an more do highlighted substantial it at brand the strategy bigger billion, being north can be XXXX. expected which think Obviously, that, to was to growth we the of of the we that. go deeper plan -- we brand itself we growth one more call off, around core fastest as year, go and as even see reached, this we that

our on be it not more with going their that to as mix, higher we're that revenues of margins of obviously, exciting to by quite gross as upside brings doing channel our getting think that's we in this also still I terms In in accretive And and mix business improvements margin made XX% to our direct grow One towards more year. where still those in there's to are there. agencies generated roughly grow as work generative profile Zeta. addition consumption-based well. We're also And we really AI, adoption on so continue the integrated, brands, direct XX% to direct like at

Arjun Bhatia

impact short customers events a in in following And the conversations or or bit quick the fallout change then from of there finer it. one late had conversations And know with that Understood. been on seeing you've them of last year? the has just any -- I to a late reacting? this that's but since happened? what post you up Okay. a report, any XXXX, post your point put your those some are of customer we from little talked How about customers are the some kind

David Steinberg

think if What you material Arjun, changes, we I would is no. have by seen tell we I wouldn't had Well, XX%. grown

have We last seen we changes we and client this, the to gave, have material any which not lost no from continue that. update over directly was we see

I one brought every transactions accounting was review. a that data and be Audit us. put they a Audit of our a in everything to could then and this were to vetted went in Committee, to behind they in deemed no we the found issues is report, top And happy the issue reported done that in was no of there. that client and brought announce in They forensic full super our single They vendor found that whatsoever in that and able firm which full firm whatsoever the through very we it, a country. one law was excited that a Committee the that had experts merit

Operator

from Valentini Goldman with [ ] next Our comes question Sachs. Kelly

Unknown Analyst

in Wanted you to the budget through X% walled of from you typical XX%. customer taking to expect share to see that getting from taking comments quarter. the versus expansion, be the penetration that much on you technology to how walk would on share Congrats made other those providers? Curious garden like

David Steinberg

partner [ and We appreciate take walled question. it's a traditionally you, ]. I great Kelly We the Thank traditionally business the from them. gardens. compliment, don't with

walled outside able attribution do we're go of build what an garden it to data, a can or a to by model using walled garden. can that So into able we're go our

our than our gardens as we more So walled partner the competitor. see

a share AI from. are out there marketing where that Hard native obviously number Now haven't at or to the weren't. last-generation taking integrated fully to layer. business as rates of meaningful we I They're traditionally, these companies clouds market they say, and would application if DSPs, the last-generation there grow we're data

can, to of get type platform return to of their So the that investment. which for not to because on able speed substantially allows intelligence superior tech our debt, they're

would competitors. XX%, and So grew XX%, infer market would itself if including not the that that political, from is taking XX%, market above growing been everything share we have

Unknown Analyst

and makes That you just of the you're assumptions XXXX a revenue follow-up, give and making sense. as curious, then on can XXXX what anything on And growth AI targets? kind

Christopher Greiner

if Zeta's higher outcomes, the revenue, new are by in XXXX, which which line roughly say from have you I broken item haven't products, by like out is we to annually feel portion more driven X did -- it north to growth didn't it, and half we acceleration call We will Yes. consumption-based drive the intended in early-stage drive of usage, But addition our business. levers generative revenue, which of accelerated think in of an a the our it core that's, brand a XX% We we spend X be look XXXX certainly, time. XXXX that fashion. more and over AI of drive year-over-year, then was then with and which that towards the

David Steinberg

be we're all is an a in Platform. can the drive Marketing charging on the AI, be although be have company rolling for better for of will on of than will a eat return it you or to what products out sort paid Kelly ], [ the And Zeta us is ability consumption a as seeing, the we to top substantially price as sitting putting near that on term AI small relates to investment meaningfully

Operator

with from Stanley. question Morgan comes Elizabeth next Porter Our

Kathleen Alexis Keyser

has This on had afternoon. across hit is for the business this piece success Porter Wanted here. lot verticalization kind Elizabeth diversification given Katie on to of of a Zeta the industries. of

some commerce vertical-specific competitors there. you in of And in called and some CPG of those key do kind verticals out have

model? verticals where more of today? expect these in we win to can expansion you're And right contribution layer into the Zeta kind to vertical underpenetrated when that gives what the So

Christopher Greiner

problem, build. to Thanks started for No question. Katie. Yes. already We've the

CPG showcase customers actually spending a with with do real-world virtual using what show demo as we'll are on fact, lot well we're today, we being demos their to their them In brand in where competitors. and of that as our a with investors, customers able their

comes a it and to a way down the there's data amount of down in marketing type that than it can and to our actionable massive where make in we So what advertising underrepresented in of one put where spend, do. we how marketer can TAM competitors verticals different them those all front we we're comes today, and each think can totally the for of of

data on starts So with that of on it the that put coming out perform they the the then all we can of top platform the it. then the and software it recommendations and analysis and

David Steinberg

platform sales And really perspective they perspective. from by are than competitors" "vertical focused the way, a of the lot a a vertically from more are

expanding in with will we're pretty salespeople sales quota think benefit me So last this really the into years and that say. we've us invested year growing new to as verticals the come. we force, year to over XXX to for And our out seen, carriers, easy heavily you've

Kathleen Alexis Keyser

the maybe there XXX% just the higher quick expansion Helpful. you drivers And today. model, these land as ARPU on NRR. of there. customers? NRR pretty any to Is In to inflect limitation the just the from a then stat upper Obviously, on one already. activity the looking expand on materially different But follow-up impressive with long-term that's too not bound kind around

David Steinberg

a although that's thing, right? between also grows got where we XXX%. the XXX% I agency been on has been dramatically, customers, benefit we would What which say good guide there's We've you've sort ARPU just and go, XXX%, holdcos, a to Well, lot NRR. XXX% And first, as big can where no which have. their limitation is, is to of to it we very lose to don't a which of continue

the above So continue to years that short I think we to getting then And to we keep I to begin run, in at look But with the comfortable in it XXX% very we in range. think come, that XXX%. range. can can it feel

Christopher Greiner

the Slide less now is continues up $X.X supplemental, which they're been you last year. an set. have $XXX,XXX They're at look the XX to And the platform we those I And are life average if good accelerate at -- those $X.X customers Katie, the years, there's cohort of year. in X- think that cohorting an to grow. more than on $XXX,XXX, with continuing last or spending million compared customer year, that to a -- million a on really show spending of a from of earnings they're And X That million. average then to X-year are of to us that $X.X

feel which deep in And our new. that XXX% half of existing historically been rooted like customers our growth we from XXX% analysis from and So has coming about growth to also with algorithm, half is by cohort. it's our consistent

Operator

from comes question next with Ader Our Markets. KeyBanc Jackson Capital

Jackson Nichols

This is market your revenue assumptions political what to are in with you outlook. Jackson do share expect Wanted your Ader. to campaigns? on gain implied Jack political ask And on for

Christopher Greiner

the the why revenue the there. any throughout results Two political expectation in there reported it, So broke there's And our of political X any of year always XXXX, in materiality that, candidate and it's guide out shouldn't our in pieces -- thanks, reason answer was, $XX candidate XXXX. There's in million that Jack. call which we be our was revenue, pieces been certainly.

as is million. in NGOs. was advocacy with the with portion, well there's that groups where line our It Then XXXX, Zeta expectations. In action political is as which was working $XX

quota that our capabilities, that of that leveraging goes of is business in million putting which new XXXX. our more cycle, political relationships to $XX carriers out building into, expectation to come we're piece the For $XX million business,

million. you -- Now if XXXX, considerably that's the in was that from back political year in compare an how up off $XX around

we advocacy how think candidate that's political So about and of in contribution XXXX. the

Jackson Nichols

it be follow-up, a how And progresses? that as from the is marketing much revenue coming expect Got today as it. to cloud? how XXXX Very you helpful. do much in And

David Steinberg

-- marketing fine-tune don't it's all All goes question. mean it? I so revenue -- of that through the I cloud, our maybe could you

Jackson Nichols

you offline that. on with up follow I'll guys

David Steinberg

through of at a marketing this But Yes. all bit. talk mean going cloud to our revenue goes in Well, Jack, I we're the literally, point.

years we with reporting few everything ago, one through one when that consolidated interface now user goes So integrated. everything a and totally is infrastructure,

Operator

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

Koji Ikeda

one's this Chris. Maybe for

look when third very that I XX%. you And transcripts, growth revenue were said so quarter I with at you comfortable recall the Chris, of XXXX consensus

couple $X.XXX today is so below billion a that was number LiveIntent, I $X.XXX LiveIntent. guiding that of million you're that millions and without the And to us be a -- to know to without got that supposed

and I And versus organic third then ended said where up if that $X.XXX compare XX, quarter the when implies number Slide use to it XX% it growth. know XX%. XXXX, the But at I on XX% growth you you says that billion

I'm sure to comment original apples And from so with I apples want third that the here call. quarter make comparing just to XX%

Christopher Greiner

Yes. carefully gotten we walked in revenue And have very were billion $X.XX that to the comment, around, through and compared it, we're most when what XX% The should that we billion today. analysts presuming, that Street to call at $X.X

and $XX back LiveIntent the in million base you you revenue, of obviously, of get billion normalized $XX million you candidate a of from in XXXX $X.X political out we $XXX did million. back to So out revenue

then You on same XXXX. the do

with -- made LiveIntent, which LiveIntent for we'd growth expect we acquisition. $XX rate million we that about talked from remove is You when that's and consistent business, what what XX% the a

it, call to, get You billion. $X.XX

what effectively Slide of exclude is exclude we is the to kind growth out quarter X find when this revenue roughly XX clearly itself. about XXXX, went each than had points XX% break of earlier. also task LiveIntent between rate, quarter, so a and you So higher talked and XX% candidate growth by it's XX% XX% for that steps in you'll that that We through and on political

David Steinberg

XXXX. apples, that it can't quarter, even without inorganic pull wanted it So -- you to do And because in of LiveIntent fourth have you would pulling up But If exclude really got get X those picked we've important I you the exclude just to you to revenue to think, the from if XX%. we right? out to Koji, the apples it's things to revenue XXXX out of out. pull

Koji Ikeda

any pulled the maybe conservatism with ask and -- conservatism any consideration did quick the And macro in want out all guide additional about the year? that's there, you a that this and or follow-up. this just guidance if there sort is tariff just noise in the it. Got I of year, the guidance regulatory thinking to

Christopher Greiner

our midpoint guidance. We end to we be approach, in which even need get with or our build don't tried ample to that to the metrics to historical so conservatism high consistent our the of is

our I metrics at of call backdrop. to one add? As kind what's you'd said we awareness in each that macro Q&A, anything upon for. going based on of earlier the in our our call the low of obviously And can get the we made end -- guidance David, one of of

David Steinberg

a now. I each and other in known say, XX a Yes. quarters would for beat while Koji, just we've We've raised row.

to out times raised And that. is guidance we year to goal saying row. a beat we've put Our right do be same and time the next the here we've now and XX in feel

Operator

Brian from Oppenheimer. comes with question next Our Schwartz

Christopher Greiner

there? you out Brian,

David Steinberg

Brian, are you on mute?

Brian Schwartz

mute. on I'm

XQ organic contemplating spending you're that anything Sorry you about comp guide? guide. harder have that. an is to A comparable. here else couple I the headwinds points follow-up. on me. and a Having from in just And decel that of political to ask day, type X Chris, there's in there know of impact the is that a less then questions those XQ that But beyond few the of the wanted on I guide the is see I also deceleration terms in items?

Christopher Greiner

kind be No, impact. that no, wouldn't any of material

to LiveIntent XX% it's first if The is ways get in of really it's terms in to in We're in for what there effectively place said, the our and revenue our traditional because beats conservatism. trying just past And past do consistent be XX% with are. in. candidate wasn't build political and done we've to in guide number like all you what -- feel the As same we've quarter. the we adjust multiple been the if be you just we'll that, any the

Brian Schwartz

was the on could Is to of earlier know guide. mix revenue I percentage is terms Okay. business, well forward XXXX. there in expectation, you. which agency of the then XXXX doing the that follow-up your And Chris, really I some double for that, we as question business fast its it had discussion about the

Christopher Greiner

outside will I So it's possibility. keep the -- right? size, I So mean, doubling think it's of base not growing, in without realm the not

I think piece bigger XX% it's will Like it I today, bigger and the said, of about revenue. be a pie. of

cases wouldn't I I it doubling, that, are certainly we there think for today. here but on as sit count

David Steinberg

nor would Brian. Yes, I,

to going to I double it's I as going as double think a don't think business. percentage. a it's

Operator

Riley Our Securities. next question B. from comes Zach with Cummins

Zach Cummins

on adding congratulations quarter. for Just the my

Just you have you double bit little side? that more the the a the on maybe opportunity the your I agency on versus clicking X can aspirations David, holding opportunity. companies to the mid-market into speak just growth mean, expand with agency top to global

David Steinberg

faster even on I we think And platform. mean I than are have Yes. mid-market adding agencies they're could expected. all we

the But is So that's holdcos what margin would work long with opportunity with term. agency the Zach, large. that X really very I very, for the say, we nice a thing is in large

expect those partner. our brands. numbers. if would them. of and us continue still to grow tend we continue built continue to of end most times, meaningfully than at We the you those projections we their our XXXX, We profitable to at meaningfully sort more look think, relationships metrics said and have to a meaningful few as Chris, I deep competitors, And beat and and be can through out grow has I our to be with be flexible businesses low

Zach Cummins

but larger curious Understood. follow-up And baking that you're XXXX? to capacity ago much those hiring Can sales efficiency for one just Chris. any versus plans of quota that Zeta just talk carrying about necessary than targets. force years Obviously, my execute you for towards gains into sales your on X

Christopher Greiner

lays supplemental carrier was our XX% first out first long-term rates to have The compound you -- the compound plan. what the growth Slide Yes. annual will, quota rate through from XXXX in the growth XX XXXX. if been

grow want we we some XX%. seeing it's XX% that we've at of just the the well, frankly, to baking we us down where sales. found, in don't to is had and to for what can on We we, late do allows quantity, force bodies carrier continued throwing quota that What of over that growth this expectation us a been our are element path between efficiency quality focus as base number just though, and to

Operator

comes with Capital Richard Baldry ROTH question next from Our Partners.

Richard Baldry

wanted I gears. switching Maybe at to balance look the sheet.

done matched year and $XX You free what almost of the of That's repurchased the your quarter. combined rest million cash flow. Xx the in shares worth you've

process your pursue a you'll run be curious on like of Do Just down backdrop a year opportunistic ahead. flow? buyback the ever at you of thought give more Do to balances actual go Sort aggressively? for free the the higher you'd it us cash at around look cash taking it think forward. the think you to a percent and

David Steinberg

Rich, think, we stock to dropped I thought stupid the listen, a place.

buying buying the used we of for flow. cash back. shares accelerated use cash We than low, stock. it's at buy now think yes, accelerated continue XXX% So free our still better And right and to we massively any our very we'll an about don't it pace. I see

We expect to year. drive this meaningful flow free cash

potentially at us now I right least back we as percentage cash see in flow higher do, our and could is at as the for buying You the it say, the cash stock us once current best look again, a environment. would because, half of investment much free for

Richard Baldry

for let through. more be, an it that we follow-up looks with the a go me would things M&A administration better might And like probably environment have

as are the cetera? now opportunities to get about growth, how inorganic you look et markets, So into new offerings, sort ahead of growth you thinking and broaden

David Steinberg

Yes.

find in act If be X to hard M&A match will deals X deals we have that M&A We pillars, say, that still many deals it's we to are I years. than them. we seeing on would can now find going more pillars. our match our What

cash. meaningful have We

we're a very of capacity, meaningful able free very with we cash position the have deals. in expect opportunistic unique be We type flow to do to to and generate

But anything I opportunities what take look X X very that we to we at companies be where and I and whenever will believe "is won't the I worse, say both together. so say plus will we we're equal be opportunistic transformative". can continue X. you transformative very, doing deals transform to for

Operator

Our next with question comes Barclays. from Ryan MacWilliams

Eamon Coughlin

for this the flow your the and levers you the for and Appreciate is help David Chris, Eamon us Can free all guide? by key cash highlighted on XXXX Ryan. understand detail today. EBITDA expansion margin

Christopher Greiner

Yes, certainly.

think, anywhere XXX to that So getting XXX from revenue, basis from and by driven cost we points, talked about we being of really initiatives. X different

The One also drive particular, all that in channel with across together, as our synergies lever a our good scales, And direct to successful to us we're a more to profile, at generative being higher line. the consumption-based it, higher and cases tends have the COGS towards where and first AI use X which platform, agencies. revenue, our margin and more continuing then gives and which be margin more should usage Zeta, being bringing more

think can leverage revenue last even rate headcount, over U.S. continue to we've XX% that, well we a that. on the compound a is headcount compared OpEx represented the get that in show rate We growth out line. really to rate being the well think, in several growth of years where as had annual great we I And only supplemental in compound below at deck XX%

start capital up. had it we a that gap, position, eventually as catch to starts In mean, the didn't, addition growth a significant with up that million make to That's neutral working I fourth working free -- a agency you a that levers, was have deficit see those to for we'll year's been XX% quarter, $XX we just the conversion. if have which flow example, capital this cash we would lever.

So key driver. that's I a think

And then and less business. percentage the results of this will a year's and of again, it, over CapEx evidenced in time, revenue be less as

really reach So XX% well, within nicely puts out get there from think as us. in of we'll which I XXXX efficiencies that conversion

there really normalized already a In basis. on fact,

Eamon Coughlin

changes to the as then And election a environment in as spend? U.S. Perfect. have follow-up, any you seen customers' post to it willingness relates

David Steinberg

very, We've with customers. Eamon. been know, our customers. close we're very really our you haven't, to We working as And

out. conservative projections done Chris have into a have always large of We people said be we what we business in discount I think we that times, percentage forth. put visibility as to the our couple the incredible tried of already put we a we've has year. And enter incredibly when what

clients not back. And So full we thus have far, be speed had any pull ahead. continue we to

Operator

David There time. over at for this the no now questions Steinberg turn are would to closing comments. like to I back further floor

David Steinberg

prouder the have as not could we've I put results over the last worked to we've that seen this type of of through quarter team put up and an be up the that turbulence organization.

this to as our that them really strategy shows platform it can and data is best foundational do believe the not to be again next putting to running show we more And that jobs strong world's business am think incredibly over of I our I in ultimately marketplace. people, could drive the be to the years. we're our really much. in Thank their I very double company. proud Zeta how going you X this financial our proud and results and of bringing letting platform, organically people AI

Operator

teleconference. today's concludes This

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

Zeta Global (ZETA) 25 Feb 252024 Q4 Earnings call transcript