Zeta Accelerates Revenue Growth and Achieves the “Rule of 50” in 2Q’24

• Delivered record quarterly revenue of $228M, up 33% Y/Y and $16M better than guidance
• Grew total Scaled Customer count to 468, an increase of 8 Q/Q and 43 Y/Y
• Increased quarterly Scaled Customer ARPU to $479K, up 22% Y/Y, 2x faster than 1Q’24
• Generated cash flow from operating activities of $31M, an increase of 51% Y/Y, and Free Cash Flow of $20M, an increase of 53% Y/Y
• Raising 2024 revenue guidance by $25M to a midpoint of $925M or 27% Y/Y growth

Zeta Global (NYSE: ZETA), the AI-Powered Marketing Cloud, today announced financial results for the second quarter ended June 30, 2024.

“Investments we made over the last seven years to put Artificial Intelligence and data at the core of our platform are now helping us accelerate the marketing cloud replacement cycle and our overall growth rate,” said David A. Steinberg, Co-Founder, Chairman, and CEO of Zeta. “As the use of generative AI tools has grown, there is greater acknowledgement that marketing is among the first functions to be transformed by AI. Our ability to turn AI into real-world results has enterprises looking to Zeta to improve productivity, deliver personalization at scale, and develop marketing programs with a measurable and superior return on investment.”

“High visibility into our customers and momentum across several of our growth catalysts drove an acceleration in revenue growth, Adjusted EBITDA margin expansion, and cash conversion in the second quarter,” said Chris Greiner, Zeta’s CFO. “This gives us increased confidence to once again raise guidance.”

Second Quarter 2024 Highlights

• Total revenue of $228 million, increased 33% Y/Y.
• Scaled Customer count increased to 468 from 460 in 1Q’24 and 425 in 2Q’23.
• Super-Scaled Customer count of 144 compared to 144 in 1Q’24 and 118 in 2Q’23.
• Quarterly Scaled Customer ARPU of $479,000, increased 22% Y/Y.
• Quarterly Super-Scaled Customer ARPU of $1.3 million, increased 18% Y/Y.
• Direct platform revenue mix of 67% of total revenue, compared to 67% in 1Q’24, and 75% in 2Q’23.
• GAAP cost of revenue percentage of 40%, increased 50 basis points Q/Q, and increased 390 basis points Y/Y.
• GAAP net loss of $28 million, or 12% of revenue, driven primarily by $52 million of stock-based compensation. The net loss in 2Q’23 was $52 million, or 30% of revenue.
• GAAP loss per share of $0.16, compared to a loss per share of $0.34 in 2Q’23.
• Cash flow from operating activities of $31 million, compared to $21 million in 2Q’23.
• Free Cash Flow¹ of $20 million, compared to $13 million in 2Q’23.
• Repurchased $2.9 million worth of shares through our share repurchase program.
• Adjusted EBITDA¹ of $38.5 million, increased 44% Y/Y compared to $26.8 million in 2Q’23.
• Adjusted EBITDA margin¹ of 16.9%, compared to 15.6% in 2Q’23.

Zeta Live

Zeta will hold its fourth annual conference, ZETA LIVE 2024, on Thursday, September 26, in New York City. Zeta Live provides a unique opportunity to gain deep insights, discover practical strategies, and take advantage of invaluable networking connections that will help brands harness the transformative power of AI. Register Now!

Guidance*

Third Quarter 2024

• Increasing revenue guidance to a range of $237.2 million to $241.2 million, up $9.2 million at the midpoint from the prior guidance of $230 million. The revised guidance represents a year-over-year increase of 26% to 28%.
• Increasing Adjusted EBITDA guidance to a range of $46.8 million to $47.3 million, up $1.8 million at the midpoint from the prior guidance of $45.3 million. The revised guidance represents a year-over-year increase of 39% to 40% and an Adjusted EBITDA margin of 19.4% to 19.9%.

Full Year 2024

• Increasing revenue guidance to a range of $920 million to $930 million, up $25 million at the midpoint from the prior guidance $900 million. Revised guidance represents a year-over-year increase of 26% to 28%.
• Increasing Adjusted EBITDA guidance to a range of $174.5 million to $176.5 million, up $4.5 million at the midpoint from the prior guidance of $171 million. Revised guidance represents a year-over-year increase of 35% to 36% and an Adjusted EBITDA margin of 18.8% to 19.2%.
• Increasing Free Cash Flow guidance to a range of $80 million to $90 million, up $5 million at the midpoint from the prior guidance of $80 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, Wednesday, July 31, 2024, at 4:30 p.m. Eastern Time to discuss financial results for the second 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.