ZETA — Zeta Global Holdings Corp.

ZETA Q3 2025 Earnings Call Summary

1. Key Financial Results and Metrics

• Revenue: $337 million, up 28% year-over-year (excluding political and LiveIntent contributions).
• Adjusted EBITDA: $78 million, a 46% increase year-over-year, with a margin of 23.2%.
• Free Cash Flow: $47 million, up 83% year-over-year, achieving a margin of 14%, the highest in company history.
• Customer Growth: Total scaled customers increased to 572 (+20% YoY), with super-scaled customers rising to 180 (+25% YoY).
• Average Revenue Per User (ARPU): Scaled customer ARPU at $579,000 (+4% YoY), super-scaled ARPU at $1.6 million (+1% YoY).

2. Strategic Updates and Business Highlights

• AI Leadership: Launched Athena, an AI conversational agent designed to enhance user experience and operational efficiency within the Zeta Marketing Platform.
• Zeta Live Event: Hosted its most successful event to date, with a 35% increase in attendance and strong customer feedback. Aiming for over $100 million in incremental business from this event.
• Marigold Acquisition: On track to close by year-end, expected to enhance Zeta's data capabilities and customer base, with a focus on cross-selling opportunities.
• Industry Growth: Notable momentum in the telecom vertical, with significant wins and displacing competitors.

3. Forward Guidance and Outlook

• 2025 Revenue Guidance: Raised by $11 million to $1.275 billion, representing 26% growth (excluding political and LiveIntent).
• 2025 Adjusted EBITDA Guidance: Increased to $273.7 million, a 42% year-over-year increase.
• 2025 Free Cash Flow Guidance: Raised to $157.4 million, a 71% year-over-year increase.
• 2026 Initial Guidance: Projected revenue of $1.54 billion (21% growth), with adjusted EBITDA of $354 million (23% margin).

4. Bad News, Challenges, or Points of Concern

• GAAP Net Loss: Reported a net loss of $3.6 million, though improved from a loss of $17.4 million in Q3 2024.
• Cost of Revenue: Increased to 39.5%, reflecting higher costs associated with display and video channels.
• Sales and Marketing Expenses: Decreased sequentially, raising questions about future investment in growth despite strong pipeline metrics.
• Working Capital Headwinds: Ongoing challenges with longer payment cycles from agencies impacting cash flow conversion.

5. Notable Q&A Insights

• Customer Spend: Customers are increasingly looking for alternatives to "walled gardens," with Zeta's platform reportedly delivering a 6x return on investment.
• Customer Count Dynamics: While total scaled customer additions were lower in Q3, there was strong growth in super-scaled customers, indicating deeper engagement.
• Athena's Impact: Expected to significantly enhance cross-selling opportunities and customer retention by simplifying user interactions with the platform.
• Pipeline Confidence: Management expressed high confidence in the sales pipeline, attributing larger contracts from major clients to increased visibility and commitment.
• Marigold's Contribution: Guidance for 2026 does not include Marigold's expected revenue, which could enhance growth projections post-acquisition.

Overall, Zeta demonstrated strong financial performance and strategic momentum, particularly in AI and customer engagement, while navigating challenges related to net losses and operational costs. The company remains optimistic about future growth driven by its innovative offerings and upcoming acquisitions.