Zeta Beats 1Q’24 and Guides to Accelerating Growth in 2024

Zeta Global, the AI-Powered Marketing Cloud, announced financial results for the first quarter ended March 31, 2024.

“The actionable intelligence delivered by the Zeta Marketing Platform is fueling the acceleration in our business,” said David A. Steinberg, Co-Founder, Chairman, and CEO of Zeta. “Chief Marketing Officers are seeking modern marketing technology platforms, like the ZMP, that leverage Gen AI to drive top line growth and improve operational efficiency, while protecting their data. Our strong competitive position combined with structural demand drivers give us confidence to raise our outlook.”

“It was a strong start to the year, highlighted by an increase in visibility from new customer wins and the rapid expansion of existing customers, which is leading to a step up in revenue and Adjusted EBITDA guidance,” said Chris Greiner, Zeta’s CFO. “Growth catalysts are showing green chutes, we’re seeing solid returns from investments, and we’re creating deeper and stickier relationships with our enterprise and new agency customers. All in, a strong combination going into the second quarter and the rest of the year.”

First Quarter 2024 Highlights

• Total revenue of $195 million, increased 24% Y/Y.
• Scaled Customer count increased to 460 from 452 in 4Q’23 and 411 in 1Q’23.
• Super-Scaled Customer count increased to 144 from 131 in 4Q’23 and 110 in 1Q’23.
• Quarterly Scaled Customer ARPU of $416,000, increased 11% Y/Y.
• Quarterly Super-Scaled Customer ARPU of $1.12 million, decreased 3% Y/Y.
• Direct platform revenue mix of 67% of total revenue, compared to 73% in 4Q’23, and compared to 71% in 1Q’23.
• GAAP cost of revenue percentage of 39.4%, decreased 80 basis points Q/Q, and increased 490 basis points Y/Y.
• GAAP net loss of $40 million, or 20% of revenue, driven primarily by $53 million of stock-based compensation. The net loss in 1Q’23 was $57 million, or 36% of revenue.
• GAAP loss per share of $0.23, compared to a loss per share of $0.38 in 1Q’23.
• Cash flow from operating activities of $25 million, compared to $20 million in 1Q’23.
• Free Cash Flow¹ of $15 million, compared to $10 million in 1Q’23.
• Repurchased $3.5 million worth of shares through our share repurchase program.
• Adjusted EBITDA¹ of $30.5 million, increased 27% Y/Y compared to $24.0 million in 1Q’23.
• Adjusted EBITDA margin¹ of 15.6%, compared to 15.3% in 1Q’23.

Guidance*

Second Quarter 2024

• Increasing revenue guidance to a range of $210 million to $214 million, up $8 million at the midpoint from the prior guidance of $204 million. The revised guidance represents a year-over-year increase of 22% to 25%.
• Increasing Adjusted EBITDA guidance to a range of $35.3 million to $35.8 million, up $1.3 million at the midpoint from the prior guidance of $34.2 million. The revised guidance represents a year-over-year increase of 31% to 33% and an Adjusted EBITDA margin of 16.5% to 17.0%.

Full Year 2024

• Increasing revenue guidance to a range of $895 million to $905 million, up $25 million at the midpoint from the prior guidance $875 million. Revised guidance represents a year-over-year increase of 23% to 24%.
• Increasing Adjusted EBITDA to a range of $170 million to $172 million, up $5 million at the midpoint from the prior guidance of $166 million. Revised guidance represents a year-over-year increase of 31% to 33% and an Adjusted EBITDA margin of 18.8% to 19.2%.
• Free Cash Flow of $75 million to $85 million.

* This press release does not include a reconciliation of forward-looking Adjusted EBITDA, Adjusted EBITDA margin, and Free Cash Flow to forward-looking GAAP net income (loss), net income (loss) margin, or cash flows from operating activities, respectively, because the Company is unable, without making unreasonable efforts, to provide a meaningful or reasonably accurate calculation or estimation of certain reconciling items which could be significant to the Company’s results.

Investor Conference Call and Webcast

Zeta will host a conference call today, Monday, May 6, 2024, at 4:30 p.m. Eastern Time to discuss financial results for the first quarter 2024. A supplemental earnings presentation and a live webcast of the conference call can be accessed from the Company’s investor relations website (https://investors.zetaglobal.com/) where they will remain available for one year.

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1} Free Cash Flow, Adjusted EBITDA, and Adjusted EBITDA margin are not measures of financial performance prepared in accordance with GAAP. See “Non-GAAP Measures” for more information and, where applicable, reconciliations to the most directly comparable GAAP financial measures at the end of this release.

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