- Revenue increased 39% year over year to $106.9 million
- Balanced revenue growth contribution between new customers and existing customers
- Direct platform revenue mix improved to 77% of revenue compared to 74% in the previous quarter
- Scaled customer count increased to 343 from 333 in the previous quarter
- Scaled customer average revenue per user (ARPU) increased to $299K from $289K in the previous quarter
Zeta (NYSE: ZETA), a cloud-based marketing technology company that empowers enterprises to acquire, grow, and retain customers, today announced financial results for the quarter ended June 30, 2021.
“Zeta’s results show its growth rate accelerating during the second quarter, adding over 30 new customers, a 39% increase in revenues, and 106% growth in adjusted EBITDA year over year,” said David A. Steinberg, Co-founder, Chairman & CEO of Zeta. “We are well positioned to benefit from the disruptive pace of digital transformation, with brands seeking solutions that combine scale with precision to extract more value from their first party data. Our software, encompassing patented AI, proprietary data assets, and real-time omnichannel capabilities, was purpose built to empower brands to acquire, grow and retain customer relationships at a higher ROI. A recent study we commissioned from Forrester Consulting showed that brands using the ZMP achieve 50% higher effectiveness on their marketing investments over a period of 3 years.”
“Our strong second-quarter performance reflects our solid execution and continued focus on our core growth drivers,” said Chris Greiner, Zeta’s CFO. “Scaled customers, which we define as customers with at least $100,000 of revenue over the last twelve months, are an important cohort for Zeta and represent most of our revenue. On a sequential basis, we increased scaled customer count and scaled customer ARPU. We saw sales productivity continue to ramp in the quarter. With these tailwinds and our improving revenue visibility in mind, our outlook for revenue and adjusted EBITDA for the third quarter and full year 2021 has improved.”
Second Quarter 2021 Financial Highlights
(Unless otherwise noted, all comparisons are to the second quarter of 2020)
- Total revenue of $106.9 million, an increase of 39%.
- Balanced revenue growth contribution between new customers and existing customers.
- Direct platform revenue mix improved to 77% of total revenue compared to 74% in the previous quarter.
- Broad-based double-digit growth in 12 out of 15 verticals.
- Strong growth in both US and international markets, at 39% and 33% respectively.
- Significant omnichannel growth highlighted by nearly 500% revenue growth in connected TV (CTV).
- Scaled customer count of 343 compared to 333 in the previous quarter.
- Scaled customer ARPU over $299,000 compared to $289,000 in the previous quarter.
- Operating loss of $122.3 million, compared to an operating loss of $6.6 million, driven primarily by $119.3 million of stock-based compensation expense compared to $0.03 million.
- Net loss of $94.9 million, compared to a net loss of $15.1 million.
- Adjusted EBITDA of $11.4 million, compared to $5.5 million.
- Diluted loss per share of $1.92, compared to a diluted loss per share of $0.58.
Second Quarter 2021 Business Highlights
- Announced a partnership with Dun & Bradstreet (D&B) to bring Zeta’s core solution to the B2B market. As part of the agreement, D&B will become an important multi-year scaled customer. D&B noted that they chose Zeta because of the breadth of its online data, its ability to combine data inflows seamlessly, its omnichannel platform capabilities, and its ability to deliver measurable results.
- Grew the scale of Zeta’s identity graph to over 515 million individuals globally (from 500 million in the previous quarter) and over 225 million individuals in the US (from 220 million in the previous quarter).
- Increased sophistication of Zeta’s CTV offering with CTV Genre and Content Targeting, which allows marketers to reach their target audiences in specific context within specific shows. Also developed a CTV Content Consumption Household Index to provide clients with deep insights into what content their target households are watching to inform their go forward media plans and creative strategy.
- Created a new way for brands to rapidly onboard their first party data and a faster, more automated path to campaign activation through “low code onboarding” which eliminates the implementation dependency on enterprise IT resources and reduces the ramp time for Zeta from weeks or months to days.
- Released a Total Economic Impact (TEI) study with Forrester Consulting that revealed 50% higher customer acquisition effectiveness on marketing investments and accelerated revenue over a period of three years among interviewed Zeta Marketing Platform (ZMP) customers that activate the company’s proprietary data.
- Announced the appointment of Crystal Eastman as Zeta’s first ever Chief Marketing Officer (CMO). Ms. Eastman who previously served in senior leadership roles with The Trade Desk, American Express, and BlackRock will lead Zeta’s global marketing and communications organizations.
Third Quarter and Full Year 2021 Guidance
Zeta anticipates revenue and adjusted EBITDA to be in the following ranges:
Third quarter 2021
- Revenue of $108 million to $111 million, a year-over-year increase of 13% to 16%. Excluding $3 million of non-recurring revenue associated with the U.S. presidential election cycle in the third quarter of 2020, the guidance represents a year-over-year increase of 17% to 20%.
- Adjusted EBITDA in the range of $13.0 million to $13.5 million, a year-over-year increase of 6% to 10% and an adjusted EBITDA margin of 11.7% to 12.5%.
Full year 2021
- Revenue of $432 million to $436 million, a year-over-year increase of 17% to 19%. Excluding $15 million of non-recurring revenue associated with the U.S. presidential election cycle in the second half of 2020 (with $3 million in the third quarter of 2020 and $12 million in the fourth quarter of 2020), the guidance represents a year-over-year increase of 22% to 24%.
- Adjusted EBITDA in the range of $55.5 million to $57.5 million, a year-over-year increase of 40% to 45% and an adjusted EBITDA margin of 12.7% to 13.3%.
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