Zeta Global Holdings Corp. (NYSE:ZETA) Q4 2024 Earnings Conference Call February 26, 2025 4:30 PM ET Company Participants Matt Pfau - Senior Vice President of Investor Relations David Steinberg - Co-Founder, Chairman and CEO Chris Greiner - CFO Conference Call Participants DJ Hynes - Canaccord Genuity Jason Kreyer - Craig-Hallum Ryan MacDonald - Needham Terry Tillman - Truist Securities Arjun Bhatia - William Blair Katie Keyser - Morgan Stanley Jack Nichols - KeyBanc Koji Ikeda - Bank of America Brian Schw ...

Supplemental 4Q'24 & FY'24 Earnings Presentation February 25, 2025 Forward-looking statements and non-GAAP measures This presentation, together with other statements and information publicly disseminated by the Company, contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements to be covered by the safe harbor provisions for for ...

Data and Technology - Zeta's data set includes over 245 million individuals in the U.S. and more than 535 million globally, with an average of over 2,500 attributes per individual [26]. - The Zeta Marketing Platform (ZMP) processes over one trillion content consumption signals per month, synthesizing this data into hundreds of intent-based audiences [26]. - Zeta's Agile Intelligence suite synthesizes trillions of behavioral signals into intent-based scores, enhancing targeting precision across channels [35]. - The integration of LiveIntent's identity graph improves identity resolution technology, expanding the size and scope of the Data Cloud [30]. - The ZMP enables brands to personalize experiences at scale, optimizing marketing spend to increase return on investment [21]. - The company has a patent portfolio of over 130 U.S. and international patents, focusing on machine learning and AI, which enhances efficiency and user experience [69]. - The company aims to differentiate itself through AI-powered marketing solutions and better integration of products into enterprise ecosystems [52]. Financial Performance - For the year ended December 31, 2024, the company generated revenues of $X million from various industry verticals, with the largest contributions from consumer & retail (22%), insurance (10%), telecommunications (9%), financial services (8%), and business services (7%) [50]. - As of December 31, 2024, the company had 1,793 total customers, including 527 scaled customers and 148 super-scaled customers, compared to 1,242 total customers, 452 scaled customers, and 131 super-scaled customers as of December 31, 2023 [50]. - 98% of the company's revenue for the year ended December 31, 2024, was derived from scaled customers, defined as those generating at least $100,000 in trailing-12-month revenue [50]. - The company anticipates continued seasonal trends in marketing activity, with higher revenues typically occurring in the fourth quarter due to the holiday shopping season [57]. - The company expects to experience higher revenues in presidential election years due to cyclicality in political activity [58]. - The company’s top ten customers accounted for more than one-third of total revenue in 2024, with no single customer exceeding 10% of total revenue [77]. Market Strategy and Growth - Zeta aims to further penetrate its existing customer base by cross-selling solutions and capturing a larger share of marketing spend [38]. - The company plans to expand into international markets, particularly in select regions in Europe [42]. - Zeta continues to invest in product innovation with over 500 data scientists and engineers dedicated to developing new solutions [40]. - The company is expanding its international operations, which may require significant management attention and financial resources, with inherent risks involved [106]. Risks and Challenges - The company is subject to evolving data privacy laws, including the California Consumer Privacy Act and the General Data Protection Regulation, which may impact its operations [60][61]. - A significant portion of the company's revenue is derived from usage-based pricing, which is less stable than subscription-based pricing, posing risks to revenue growth if scaled customers reduce their usage [78]. - The company experiences long sales cycles, making it difficult to project when new customers will generate revenue, which can impact financial forecasting [79]. - Payment-related risks exist if customers dispute invoices or decrease spending due to financial downturns, potentially leading to material adverse effects on the company's financial condition [82]. - The company may incur write-offs for bad debt if it fails to collect customer fees on time, which could adversely impact operating results [83]. - Operating results may fluctuate due to seasonal marketing activity, particularly higher revenues during the fourth quarter and election years, complicating future performance predictions [84]. - The company's usage-based pricing model complicates revenue forecasting from current customers and future prospects, leading to potential revenue volatility [85]. - The competitive landscape requires continuous innovation and investment in product offerings to maintain market share and revenue growth [89]. - The company faces risks related to data collection and security, which could harm operating results if regulatory restrictions limit data collection capabilities [117]. - The effectiveness of the company's platform relies on the ability to collect and use online data, which is threatened by consumer technologies that limit data tracking [118]. - The company is dependent on third-party data suppliers, and any withdrawal of data could materially impact its ability to provide products and result in decreased revenues [119]. - The company acknowledges the risks associated with catastrophic events, which could adversely affect business operations and financial condition [110]. - The company is subject to increasing regulatory scrutiny in the technology industry, which could lead to legal actions and penalties affecting business operations [115]. - The company faces significant compliance challenges due to evolving data protection laws, which could adversely affect its operations and financial condition [121]. - The cost of compliance with data protection laws is high and expected to increase, potentially impacting the company's financial performance [121]. - The company is subject to the EU GDPR and UK GDPR, with penalties for noncompliance reaching up to €20 million or 4% of annual global revenues, whichever is greater [126]. - Increased scrutiny from data protection authorities may lead to additional costs and regulatory investigations, affecting the company's ability to provide services [127]. - The company collects extensive consumer data, which is critical for its advertising services, but evolving regulations may restrict data collection and usage [135]. - The company has faced negative publicity regarding its data collection practices, which has previously impacted the price of its Class A Common Stock [134]. - New opt-out mechanisms may lead to a higher number of consumers opting out of data usage for marketing, potentially reducing the company's access to consumer data [125]. - The company is subject to various consumer protection laws, including the TCPA, which impose significant restrictions on telemarketing practices [123]. - Future FTC enforcement actions could have material impacts on the company's business practices and financial results [122]. - The company must navigate complex international data transfer regulations, which could affect its operational capabilities and financial outcomes [127]. - Company faces significant cybersecurity risks, including potential data breaches that could harm its reputation and financial performance [137]. - Employee-related risks are heightened due to remote working arrangements, increasing the likelihood of cybersecurity incidents [138]. - Company relies on third-party data centers and technology vendors, making it vulnerable to disruptions that could adversely affect operations and financial condition [140]. Corporate Governance and Compliance - The company is classified as a "controlled company" under NYSE rules, allowing it to rely on exemptions from certain corporate governance requirements [194]. - The dual class structure allows Class B Common Stock to have ten votes per share, while Class A Common Stock has one vote per share, limiting influence of other stockholders [196]. - The company’s amended and restated certificate of incorporation includes anti-takeover provisions that could delay or prevent changes in control, potentially affecting stock price [197][199]. - The board of directors is permitted to issue up to 200,000,000 shares of preferred stock, with rights and privileges designated by the board [198]. - The company is involved in various legal proceedings but does not believe any current litigation will materially affect its business or financial condition [217]. - The company is cooperating with SEC investigations related to a previous business partner, Kubient, which is deemed quantitatively insignificant to its operations [218]. - A class action lawsuit has been filed against the company and its executives, alleging false and misleading statements about business operations and prospects [219]. Financial Obligations and Capital Structure - The company has $200.0 million outstanding under its Senior Secured Credit Facility, which restricts various business activities without lender consent, including asset sales and incurring additional indebtedness [171]. - Interest rate fluctuations could materially affect the company's financial condition, as a substantial portion of its debt is variable-rate [169]. - The company may need additional capital in the future to meet financial obligations and pursue business objectives, which may not be available on favorable terms [170]. - The company anticipates spending substantial funds to satisfy tax withholding obligations associated with the vesting of executive restricted stock awards, which may adversely affect financial condition [182]. - The company faces risks related to tax liabilities that may exceed expectations due to changing tax laws and potential audits by tax authorities [175]. - The company’s ability to comply with financial covenants in its Senior Secured Credit Facility may be affected by events beyond its control, potentially leading to defaults and immediate repayment of outstanding indebtedness [174]. Human Capital and Culture - The company has 2,191 employees as of December 31, 2024, with a significant portion located outside the U.S. [63]. - Retaining key management and hiring skilled personnel is critical for the company's success, with intense competition for talent in the industry [99]. - The company emphasizes the importance of corporate culture and plans to invest in human capital initiatives to drive inclusiveness and innovation [101]. - The company incurs substantial stock-based compensation expenses due to its equity compensation plan, impacting future financial performance [100]. Cybersecurity and Risk Management - The company has implemented a cybersecurity risk management program, assessed by third-party auditors annually [207][210]. - The management team responsible for cybersecurity includes experienced professionals with relevant certifications and educational backgrounds [213]. - Significant investments are being made in AI technologies to enhance business effectiveness, with expectations for future investment increases [148]. - The market for AI-integrated products is rapidly evolving, and assumptions about market characteristics may be inaccurate, posing risks to business growth [151]. - Company may face legal claims and regulatory investigations if it fails to detect or prevent fraud or malware on its platform, impacting business operations [142]. - Changes in email regulations and standards could limit the effectiveness of the company's marketing efforts, adversely affecting revenue [147]. - Company is at risk of having its IP addresses blacklisted due to customer messaging practices, which could undermine email delivery effectiveness [145]. - Dependence on third-party AI technologies may pose risks if access or pricing changes, potentially harming the company's solutions and reputation [152]. - Cybersecurity threats are expected to increase in frequency and sophistication, complicating the company's ability to protect its IT systems [137]. - The evolving regulatory landscape for artificial intelligence (AI) may adversely affect the company's business and financial condition, with potential compliance costs and operational changes [153]. - The EU AI Act, effective August 1, 2024, will impose requirements on AI use, including fines of up to 7% of worldwide annual turnover for breaches, impacting the company's operations in the EU [155].

Zeta Global (ZETA) Q4 2024 Earnings Call February 26, 2025 08:45 AM ET Company Participants Matthew Pfau - SVP - Investor RelationsDavid Steinberg - Co-Founder, Chairman & Chief Executive OfficerChristopher Greiner - Chief Financial OfficerMatthew Swanson - Director - Equity ResearchTerry Tillman - Managing DirectorCarolyn Valenti - Equity Research AssociateKoji Ikeda - Director - Enterprise Software Equity Research Conference Call Participants David Hynes Jr. - Managing Director, Software Lead AnalystJason ...

Core Insights - Zeta Global Holdings reported quarterly earnings of $0.20 per share, missing the Zacks Consensus Estimate of $0.23 per share, but showing an increase from $0.17 per share a year ago, resulting in an earnings surprise of -13.04% [1] - The company achieved revenues of $314.67 million for the quarter ended December 2024, exceeding the Zacks Consensus Estimate by 6.66% and up from $210.32 million year-over-year [2] - Zeta has surpassed consensus revenue estimates four times over the last four quarters, indicating a strong revenue performance [2] Future Outlook - The sustainability of Zeta's stock price movement will largely depend on management's commentary during the earnings call and future earnings expectations [3] - The current consensus EPS estimate for the upcoming quarter is $0.12 on revenues of $261.85 million, and for the current fiscal year, it is $0.78 on revenues of $1.22 billion [7] - The estimate revisions trend for Zeta is mixed, currently resulting in a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market in the near future [6] Industry Context - The Technology Services industry, to which Zeta belongs, is currently ranked in the top 31% of over 250 Zacks industries, indicating a favorable industry outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Revenue Growth - Total revenue for Q4 2024 was $315 million, representing a 50% year-over-year increase[4] - Full year 2024 revenue reached $1,006 million, up 38% year-over-year[9] - Revenues for Q4 2024 reached $314,673,000, a 49.5% increase from $210,320,000 in Q4 2023[27] - Total revenues for the year ended December 31, 2024, were $1,005,754,000, up 37.9% from $728,723,000 in 2023[27] - The company is guiding for a sixth consecutive year of 20%+ revenue growth[4] - The Zeta 2028 plan targets over $2 billion in annual revenue by 2028[2] Customer Metrics - Scaled Customer count increased by 17% year-over-year to 527, while Super-Scaled Customer count rose by 13% to 148[5] - Scaled Customer ARPU grew 19% year-over-year to $1.87 million, and Super-Scaled Customer ARPU increased 26% to $5.71 million[9] - The number of super-scaled customers generating at least $1,000,000 in revenue is a key metric for revenue growth[20] Profitability - GAAP net income for Q4 2024 was $15 million, compared to a net loss of $35 million in Q4 2023[5] - The company reported a net income of $15,236,000 for Q4 2024, reversing a net loss of $35,281,000 in Q4 2023[27] - Net loss for the year ended December 31, 2024, was $69,771 thousand, an improvement from a net loss of $187,481 thousand in 2023[29] - Adjusted EBITDA for full year 2024 was $193 million, a 49% increase from $129 million in 2023[9] - Adjusted EBITDA for Q4 2024 was $6,922,000, compared to a loss of $31,859,000 in Q4 2023[27] - Adjusted EBITDA for the year ended December 31, 2024, was $193,022 thousand, compared to $129,393 thousand in 2023, reflecting a margin increase from 17.8% to 19.2%[32] Cash Flow and Financial Health - Cash flow from operating activities was $44 million in Q4 2024, up from $27 million in Q4 2023[5] - Free Cash Flow for full year 2024 was $92 million, compared to $55 million in 2023[9] - Net cash provided by operating activities for the year ended December 31, 2024, was $133,861 thousand, up from $90,523 thousand in 2023[32] - Free cash flow for the year ended December 31, 2024, was $92,321 thousand, significantly higher than $54,519 thousand in 2023[32] - Cash and cash equivalents increased to $366,157,000 as of December 31, 2024, from $131,732,000 in 2023[25] - The net increase in cash and cash equivalents for the year was $234,425 thousand, compared to an increase of $10,622 thousand in 2023[29] Assets and Equity - Total assets grew to $1,111,373,000 in 2024, up from $550,714,000 in 2023, reflecting a 101% increase[25] - The company’s total stockholders' equity increased to $676,801,000 in 2024, compared to $180,520,000 in 2023[25] Capital Expenditures and Investments - Capital expenditures for the year ended December 31, 2024, totaled $25,727 thousand, compared to $20,483 thousand in 2023[29] - The company reported a net cash used for investing activities of $97,586 thousand in 2024, compared to $54,215 thousand in 2023[29] - The company raised $228,956 thousand in equity capital during the year, with net proceeds after issuance costs[29] - Stock-based compensation for the year ended December 31, 2024, was $194,984 thousand, down from $242,881 thousand in 2023[29]

Core Viewpoint - Shareholders of Zeta Global Holdings Corp. (ZETA) who experienced financial losses are being encouraged to participate in a class action lawsuit to seek potential compensation [1] Group 1 - The class action is being organized by Levi & Korsinsky, a law firm specializing in shareholder rights [1] - The lawsuit aims to address the grievances of shareholders who lost money due to the company's performance [1] - Zeta Global Holdings Corp. is facing scrutiny from its investors following significant financial losses [1]

NEW YORK, Jan. 21, 2025 (GLOBE NEWSWIRE) -- Leading securities law firm Bleichmar Fonti & Auld LLP announces that a lawsuit has been filed against Zeta Global Holdings Corp. (NYSE: ZETA) and certain of the Company’s senior executives for potential violations of the federal securities laws. If you invested in Zeta, you are encouraged to obtain additional information by visiting https://www.bfalaw.com/cases-investigations/zeta-global-holdings-corp. Investors have until January 21, 2025, to ask the Court to be ...

Core Viewpoint - Zeta Global Holdings Corp. investors are encouraged to secure legal counsel before the important January 21 deadline related to a securities class action lawsuit [1] Group 1 - The deadline for Zeta Global Holdings Corp. investors to act is January 21 [1] - The Rosen Law Firm, acting as national trial counsel, is urging investors to take action [1] - The class action lawsuit pertains to securities issues involving Zeta Global Holdings Corp. [1]

ZETA FINAL DEADLINE: Tomorrow is the Final Deadline in Zeta Global Holdings Class Action - Contact BFA Law if You Lost Money ...