ZETA Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics

Revenue: $396 million, a 50% year-over-year increase, and 29% growth excluding Marigold and political candidate revenue.
Adjusted EBITDA: $66 million, up 42% year-over-year, with a margin of 16.7%.
Free Cash Flow: $42 million, representing a conversion rate of 63%, up from 48% year-over-year.
Super-scaled Customer Count: Increased to 189, up 19% year-over-year.
Average Revenue Per User (ARPU): $1.7 million, a 21% year-over-year increase.
Net Retention Rate: Remained above the target range of 110% to 115%.

2. Strategic Updates and Business Highlights

Zeta achieved its 19th consecutive "beat and raise" quarter, indicating strong operational consistency.
The launch of Athena, an AI-driven marketing interface, has significantly contributed to revenue growth and customer engagement.
Zeta was recognized as a leader in the AI-driven marketing ecosystem by Forrester, with claims of delivering an average 600% return on marketing spend for clients.
The company is seeing strong adoption of Athena, with a 7x increase in agentic interactions within the first week of its launch.
Zeta's proprietary data and the SuperGraph are key differentiators, enabling clients to consolidate multiple vendors into a single platform.

3. Forward Guidance and Outlook

2026 Revenue Guidance: Increased by $30 million to $1.785 billion, representing 37% growth.
Adjusted EBITDA Guidance: Raised to $397 million, reflecting a 43% year-over-year increase.
Free Cash Flow Guidance: Increased to $235 million, indicating a 43% growth year-over-year.
Q2 Revenue Guidance: Expected to be $420 million, a 36% year-over-year growth.

4. Bad News, Challenges, or Points of Concern

GAAP Net Loss: Reported at $13.2 million, an improvement from $21.6 million in the prior year, but still a loss.
Cost of Revenue: Increased by 190 basis points year-over-year to 41%, primarily due to new agency wins.
Integration of Marigold: While progressing well, it remains a focus area with ongoing costs associated with integration.

5. Notable Q&A Insights

Competitive Landscape: Zeta is gaining market share at the expense of legacy marketing clouds and platforms like Trade Desk, driven by its proprietary data and AI capabilities.
Athena's Adoption: The company is actively training clients on Athena, with plans for certification programs to enhance user engagement.
Sales Pipeline: The sales pipeline has grown by 40% year-over-year, particularly in discretionary industries, although deal cycles remain consistent.
Cross-Selling Opportunities: Early traction in cross-selling Marigold's loyalty products alongside Zeta's offerings is promising, though significant growth is expected to materialize over time.

Overall, Zeta's Q1 2026 results reflect robust growth and strategic positioning in the AI-driven marketing space, despite challenges related to net losses and rising costs. The forward guidance indicates continued optimism for revenue and profitability growth.

ZETA — Zeta Global Holdings Corp.