Zeta Global (NYSE: ZETA ) remains a high-conviction idea, even after a 25% surge since my last coverage . Its second-quarter report is a demonstration of the brilliance of disciplined execution, with continued traction across revenue, margins, and free cash flow. What makesHi, I'm Yiannis. Spotting winners before they break out is what I do best.Experience: Previously worked at Deloitte and KPMG in external/internal auditing and consulting. Education: Chartered Certified Accountant, Fellow Member of ACCA Gl ...

Core Viewpoint - Bragar Eagel & Squire, P.C. is investigating potential claims against Zeta Global Holdings Corp. due to allegations of misleading financial practices and data collection methods that may have harmed long-term stockholders [2][4]. Group 1: Allegations Against Zeta - A report by Culper Research claims that Zeta's data collection and financial reporting integrity is compromised by two main issues: the use of "two-way" contracts with third-party consent farms and the operation of deceptive websites to collect consumer data [3]. - The report alleges that Zeta's revenue growth is artificially inflated through these practices, including "round-tripping" of revenue and reliance on predatory consent farms for data collection [3][4]. - Following the report, Zeta's stock price dropped by $10.46, or 37.07%, closing at $17.76 per share on November 13, 2024, with unusually high trading volume [3]. Group 2: Class Action Complaint - The class action complaint filed against Zeta alleges that the company's executives made materially false and misleading statements and failed to disclose adverse facts about its business operations and prospects [4]. - Specific allegations include the use of two-way contracts to inflate financial results, engagement in round-trip transactions, and reliance on predatory consent farms for user data collection, which have driven nearly all of Zeta's growth [4]. Group 3: Legal Representation - Bragar Eagel & Squire, P.C. is encouraging long-term stockholders of Zeta to contact them for discussions regarding their legal rights and potential claims related to the allegations [1][5].

Summary of Zeta Global Conference Call Company Overview - Zeta Global is a marketing technology company focused on B2C marketing, addressing challenges such as customer acquisition, growth, and retention for enterprise marketers [4][5][6] - The company differentiates itself by providing an all-in-one platform that integrates customer acquisition, growth, and retention, unlike traditional point solutions [5][6] Business Performance Highlights - The agency business is performing well, with significant traction among both large agency holding companies and independent agencies, doubling the number of independent agencies using the platform [10][11] - The OneZeta initiative is showing early success with cross-selling opportunities [11][13] - Integration with LiveIntent is progressing positively, contributing to customer growth and pipeline development for programmatic email products [12][47] Data and AI Capabilities - Zeta Global claims a unique data advantage, emphasizing the scale, durability, governance, and actionability of its proprietary data assets [15][16] - The company has been a pioneer in AI within marketing technology, claiming to be 12 to 18 months ahead of competitors in integrating AI into its platform [20][21] - Zeta's AI capabilities are deeply integrated into its operations, allowing for end-to-end workflow creation and optimization [21][23] Monetization Strategy - Current monetization efforts focus on increasing utilization of AI tools, leading to more effective marketing campaigns and higher frequency of use [26][27] - The company believes that democratizing AI access will drive future monetization [27] Competitive Landscape - Zeta Global differentiates itself from larger competitors like Salesforce and Adobe by focusing on performance improvements rather than merely providing more tools [34][35] - The platform's ability to operate across customer acquisition, growth, and retention creates a significant competitive moat [36] Growth Factors - The agency business is thriving due to the performance of Zeta's technology and data assets, which provide efficiencies and better outcomes for clients [41] - The OneZeta model presents a significant growth opportunity, as many customers are underutilized across multiple use cases [51][55] Future M&A Strategy - Zeta Global is open to future acquisitions that can be integrated into its existing stack, focusing on complementary capabilities [67][68] - The company aims to leverage cross-selling opportunities from acquired customer bases, as demonstrated with LiveIntent [69] Conclusion - Zeta Global is positioned for continued growth through its integrated platform, strong data assets, and AI capabilities, while also exploring strategic acquisitions to enhance its offerings [73]

Zeta Global (ZETA) FY Conference August 12, 2025 09:00 AM ET Company ParticipantsDavid Steinberg - Co-Founder, Chairman & CEOConference Call ParticipantsDavid Hynes - MD - Software Lead AnalystDavid HynesSo I'm DJ Hines. I'm the senior software analyst here at Canaccord. This is the forty fifth year we've hosted this conference. We couldn't do it without the companies that bring all the great content, the investors that show up and support us. So thank you for everyone who's here.Delighted to have the Zeta ...

Group 1: aTyr Pharma - aTyr Pharma is innovating in immunology by discovering that transfer RNA synthetases act as immune system modulators [3] - The lead drug, efzofitimod, is in phase 3 trials for pulmonary sarcoidosis, with results expected in Q3 2025 [4] - The market for sarcoidosis treatment is significant, with over 200,000 Americans affected, and efzofitimod has shown a 58% reduction in steroid use in earlier trials [5] - aTyr's current share price of $5.25 presents a potential upside of 376% based on analyst price targets [6] Group 2: Zeta Global - Zeta Global is transforming digital marketing through its AI Marketing Cloud, processing over 1 trillion signals monthly [7] - In Q2 2025, Zeta reported a 35% year-over-year revenue increase to $308 million, with adjusted EBITDA rising 52% to $59 million [8] - The global digital marketing spend is projected to reach $1.3 trillion by 2027, positioning Zeta to capture a growing market share [9] - Zeta's Agentforce AI enhances marketing efficiency, significantly reducing campaign optimization time [10] Group 3: Vertical Aerospace - Vertical Aerospace is pioneering urban transportation with its VX4 eVTOL aircraft, capable of reducing travel time significantly [11] - The VX4 completed the first airport-to-airport eVTOL flight in July 2025 and promises lower operating costs and zero emissions [12] - Vertical has a $6 billion conditional preorder book from major partners, with profitability projected by 2030 [13] - The current share price of $5.45 suggests significant upside potential compared to analyst targets of $11 [14] Group 4: Innovation Premium - These companies are addressing large-scale problems with innovative solutions, potentially transforming their respective industries [15]

Coming from an IT background, I have dived into the U.S. stock market seven years ago by managing portfolio of my family. Starting managing real money has been challenging for the first time, but long hours of mastering fundamental analysis of public companies paid off and now I feel very confident in my investment decisions. My hands-on experience shaped deep understanding of risk, reward and the delicate balance between these two variables. Driven by a desire to share my insights and contribute to the inv ...

PART I - FINANCIAL INFORMATION [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) Presents Zeta Global Holdings Corp.'s unaudited consolidated financial statements and notes for Q2 2025 and FY 2024 [Condensed Unaudited Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Unaudited%20Consolidated%20Balance%20Sheets) Presents unaudited consolidated balance sheets, detailing assets, liabilities, and equity for Q2 2025 and FY 2024 Condensed Unaudited Consolidated Balance Sheets (As of June 30, 2025 vs. December 31, 2024) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | **Assets** | | | | Cash and cash equivalents | $365,314 | $366,157 | | Accounts receivable, net | $251,007 | $235,227 | | Total current assets | $630,198 | $616,540 | | Total non-current assets | $469,895 | $494,833 | | **Total assets** | **$1,100,093** | **$1,111,373** | | **Liabilities** | | | | Total current liabilities | $193,829 | $199,337 | | Total non-current liabilities | $233,008 | $235,235 | | **Total liabilities** | **$426,837** | **$434,572** | | **Stockholders' Equity** | | | | Total stockholders' equity | $673,256 | $676,801 | | **Total liabilities and stockholders' equity** | **$1,100,093** | **$1,111,373** | [Condensed Unaudited Consolidated Statements of Operations and Comprehensive Loss](index=7&type=section&id=Condensed%20Unaudited%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Details unaudited consolidated statements of operations and comprehensive loss for Q2 2025 and 2024 Condensed Unaudited Consolidated Statements of Operations and Comprehensive Loss (Three and Six Months Ended June 30) | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :------------------------------------------ | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | | Revenues | $308,442 | $227,839 | $572,861 | $422,786 | | Total operating expenses | $313,547 | $254,423 | $594,079 | $485,244 | | Loss from operations | $(5,105) | $(26,584) | $(21,218) | $(62,458) | | Total other expenses | $6,517 | $996 | $10,360 | $4,292 | | Loss before income taxes | $(11,622) | $(27,580) | $(31,578) | $(66,750) | | Income tax provision | $1,192 | $486 | $2,836 | $882 | | **Net loss** | **$(12,814)** | **$(28,066)** | **$(34,414)** | **$(67,632)** | | Basic loss per share | $(0.06) | $(0.16) | $(0.16) | $(0.39) | | Diluted loss per share | $(0.06) | $(0.16) | $(0.16) | $(0.39) | Stock-Based Compensation by Expense Line (Three and Six Months Ended June 30) | Expense Category | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :------------------------------------------ | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | | Cost of revenues | $302 | $499 | $563 | $770 | | General and administrative expenses | $14,896 | $16,728 | $30,315 | $35,627 | | Selling and marketing expenses | $22,460 | $26,947 | $42,005 | $53,497 | | Research and development expenses | $8,813 | $7,985 | $15,575 | $14,903 | | **Total** | **$46,471** | **$52,159** | **$88,458** | **$104,797** | [Condensed Unaudited Consolidated Statements of Changes in Stockholders' Equity](index=8&type=section&id=Condensed%20Unaudited%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) Outlines changes in stockholders' equity for H1 2025, including stock repurchases and compensation Condensed Unaudited Consolidated Statements of Changes in Stockholders' Equity (Six Months Ended June 30, 2025) | Item | Class A Common Stock (Shares) | Class A Common Stock (Amount) | Class B Common Stock (Shares) | Class B Common Stock (Amount) | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total | | :------------------------------------ | :---------------------------- | :---------------------------- | :---------------------------- | :---------------------------- | :------------------------- | :------------------ | :----------------------------------- | :---------- | | Balance as of January 1, 2025 | 213,175,179 | $213 | 24,095,071 | $24 | $1,706,885 | $(1,028,308) | $(2,013) | $676,801 | | Shares repurchased | (4,290,076) | $(3) | — | — | $(57,056) | — | — | $(57,059) | | Stock-based compensation | — | — | — | — | $89,806 | — | — | $89,806 | | Net loss | — | — | — | — | — | $(34,414) | — | $(34,414) | | Balance as of June 30, 2025 | 213,263,264 | $213 | 24,095,071 | $24 | $1,737,840 | $(1,062,722) | $(2,099) | $673,256 | [Condensed Unaudited Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Unaudited%20Consolidated%20Statements%20of%20Cash%20Flows) Summarizes cash flows from operating, investing, and financing activities for H1 2025 and 2024 Condensed Unaudited Consolidated Statements of Cash Flows (Six Months Ended June 30) | Cash Flow Activity | 2025 (in thousands) | 2024 (in thousands) | | :------------------------------------------ | :------------------ | :------------------ | | Net cash provided by operating activities | $76,848 | $55,776 | | Net cash used for investing activities | $(16,240) | $(20,777) | | Net cash used for financing activities | $(61,396) | $(11,949) | | Effect of exchange rate changes on cash and cash equivalents | $(55) | $(78) | | Net (decrease) / increase in cash and cash equivalents | $(843) | $22,972 | | Cash and cash equivalents, beginning of period | $366,157 | $131,732 | | Cash and cash equivalents, end of period | $365,314 | $154,704 | [Notes to Condensed Unaudited Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Unaudited%20Consolidated%20Financial%20Statements) Provides detailed explanations of accounting policies, asset/liability breakdowns, and financial disclosures [NOTE 1. Organization and Background](index=11&type=section&id=NOTE%201.%20Organization%20and%20Background) Zeta Global Holdings Corp. is a marketing technology company leveraging data, AI, and software for customer management - Zeta Global Holdings Corp. is a marketing technology company utilizing proprietary data, AI, and software to enable data-driven marketing programs for enterprises across digital channels[32](index=32&type=chunk) [NOTE 2. Basis of Presentation and Summary of Significant Accounting Policies](index=11&type=section&id=NOTE%202.Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) Outlines financial statement presentation, revenue recognition, stock compensation, segment reporting, and new accounting pronouncements - Revenues are primarily derived from subscription fees, volume-based utilization fees, and professional services, recognized when control of services is transferred to customers[36](index=36&type=chunk)[37](index=37&type=chunk) Disaggregation of Revenues by Platform Type (Three and Six Months Ended June 30) | Revenue Type | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Direct platform revenue | 75% | 67% | 74% | 67% | | Integrated platform revenue | 25% | 33% | 26% | 33% | Revenues by Geographic Region (Three and Six Months Ended June 30) | Region | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :----------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | | US | $298,490 | $222,156 | $553,151 | $410,334 | | International | $9,952 | $5,683 | $19,710 | $12,452 | | **Total revenues** | **$308,442** | **$227,839** | **$572,861** | **$422,786** | - One customer accounted for over **10%** of total revenues for the six months ended June 30, 2025, and also represented over **10%** of accounts receivables as of June 30, 2025 and December 31, 2024[52](index=52&type=chunk)[53](index=53&type=chunk) - The FASB issued ASU No. 2024-03 and ASU No. 2023-09, which will require more detailed disclosures on income statement expenses and income taxes, respectively. The Company is currently evaluating their impact[58](index=58&type=chunk)[59](index=59&type=chunk) [NOTE 3. Intangible Assets, Net](index=17&type=section&id=NOTE%203.Intangible%20Assets%2C%20Net) Provides a breakdown of intangible assets, net values, and amortization expenses for Q2 2025 and 2024 Intangible Assets, Net (As of June 30, 2025 vs. December 31, 2024) | Intangible Asset Category | Net Value (June 30, 2025, in thousands) | Net Value (December 31, 2024, in thousands) | | :-------------------------- | :------------------------------------ | :-------------------------------------- | | Data supply relationships | $19,193 | $24,660 | | Tradenames | $11,005 | $11,877 | | Completed technologies | $31,049 | $38,675 | | Customer relationships | $33,934 | $39,968 | | **Total intangible assets** | **$95,181** | **$115,180** | Amortization Expense | Period | Amortization Expense (in thousands) | | :-------------------------------- | :-------------------------------- | | Three months ended June 30, 2025 | $11,173 | | Six months ended June 30, 2025 | $22,582 | | Three months ended June 30, 2024 | $6,094 | | Six months ended June 30, 2024 | $12,813 | - The weighted average useful life of unamortized intangible assets as of June 30, 2025, was **2.96 years**[60](index=60&type=chunk) [NOTE 4. Goodwill](index=19&type=section&id=NOTE%204.%20Goodwill) Summarizes goodwill carrying amount, decreasing to $317.672 million by June 30, 2025, with no impairment warranted Summary of Goodwill Carrying Amount | Item | Amount (in thousands) | | :-------------------------- | :-------------------- | | Balance as of January 1, 2025 | $325,992 | | Purchase price allocation adjustments | $(8,343) | | Foreign currency translation | $23 | | **Balance as of June 30, 2025** | **$317,672** | - No events during the six months ended June 30, 2025, warranted an impairment analysis for goodwill[61](index=61&type=chunk) [NOTE 5. Acquisition](index=19&type=section&id=NOTE%205.%20Acquisition) Details the LiveIntent, Inc. acquisition on October 21, 2024, with a $276.976 million purchase consideration and asset allocation - The Company acquired LiveIntent, Inc. on October 21, 2024, for an aggregate purchase consideration of **$276.976 million**, including cash acquired, earn-outs, and holdbacks[64](index=64&type=chunk) Preliminary Purchase Price Allocation for LiveIntent Acquisition | Asset Category | Amount Recognized (in thousands) | | :-------------------------- | :----------------------------- | | Customer relationships | $29,760 | | Completed technologies | $36,180 | | Tradenames | $12,220 | | Goodwill | $176,748 | | Other net assets | $22,068 | | **Total** | **$276,976** | - Goodwill acquired in the LiveIntent acquisition is not deductible for tax purposes[67](index=67&type=chunk) [NOTE 6. Acquisition-Related Liabilities](index=19&type=section&id=NOTE%206.%20Acquisition-Related%20Liabilities) Summarizes acquisition-related liabilities, totaling $39.161 million as of June 30, 2025, primarily from LiveIntent earn-outs Summary of Acquisition-Related Liabilities (in thousands) | Item | Apptness | ArcaMax | LiveIntent | Total | | :-------------------------- | :------- | :------ | :--------- | :------ | | Balance as of January 1, 2025 | $7,333 | $3,283 | $31,248 | $41,864 | | Payments made during the period | $(7,333) | $(3,333) | $(1,202) | $(11,868) | | Change in fair value of earn-out | — | $50 | $9,115 | $9,165 | | **Balance as of June 30, 2025** | **$-** | **$-** | **$39,161** | **$39,161** | - The Company recorded a **$9.165 million** increase in the fair value of LiveIntent earn-outs due to revised forecasted financial performance, impacting 'Other expenses / (income)'[68](index=68&type=chunk) [NOTE 7. Credit Facilities](index=20&type=section&id=NOTE%207.%20Credit%20Facilities) Details long-term borrowings, including a $550 million Senior Secured Credit Facility, with $196.686 million outstanding as of June 30, 2025 Long-Term Borrowings (in thousands) | Item | As of June 30, 2025 | As of December 31, 2024 | | :-------------------------------- | :------------------ | :---------------------- | | Credit facility | $200,000 | $200,000 | | Less: Unamortized deferred financing cost | $(3,314) | $(3,712) | | **Long-term borrowings** | **$196,686** | **$196,288** | - The Company refinanced its credit facility in August 2024, establishing a new **$550 million** Senior Secured Credit Facility, comprising a **$200 million** Term Loan and a **$350 million** Revolving Facility[70](index=70&type=chunk) - The effective interest rate for the Senior Secured Credit Facility was **6.4%** for the six months ended June 30, 2025, a decrease from **7.6%** for the six months ended June 30, 2024[69](index=69&type=chunk)[71](index=71&type=chunk) - As of June 30, 2025, the Company was in compliance with its financial covenants, including a Consolidated Net Leverage Ratio of **3.25** and Consolidated Fixed Charge Coverage Ratio of **1.25**[73](index=73&type=chunk) [NOTE 8. Commitments and Contingencies](index=21&type=section&id=NOTE%208.%20Commitments%20and%20Contingencies) Outlines $77.234 million in purchase obligations and ongoing legal proceedings not expected to have a material adverse impact Purchase Obligations (Year ended December 31, in thousands) | Year | Amount | | :---------------- | :----- | | Remainder of 2025 | $27,082 | | 2026 | $39,894 | | 2027 | $10,202 | | 2028 | $56 | | 2029 | — | | 2030 and thereafter | — | | **Total** | **$77,234** | - The Company is a party to various litigations and administrative proceedings in the ordinary course of business, but management believes their resolution will not materially impact the Company's financial condition[77](index=77&type=chunk) [NOTE 9. Stock-Based Compensation](index=21&type=section&id=NOTE%209.%20Stock-Based%20Compensation) Details stock-based compensation plans, activity summaries for restricted stock, RSUs, options, PSUs, and unrecognized expense - Total stock-based compensation expense recognized was **$46.471 million** for the three months ended June 30, 2025 (down from **$52.159 million** in 2024) and **$88.458 million** for the six months ended June 30, 2025 (down from **$104.797 million** in 2024)[82](index=82&type=chunk) Restricted Stock and RSU Activity (Six Months Ended June 30, 2025) | Item | Shares | Weighted Average Grant Date Fair Value | | :-------------------------- | :------------- | :------------------------------------- | | Non-vested as of January 1, 2025 | 32,029,604 | $11.26 | | Granted | 4,608,334 | $15.44 | | Vested | (10,624,686) | $10.54 | | Forfeited | (777,612) | $12.37 | | **Non-vested as of June 30, 2025** | **25,235,640** | **$12.30** | Stock Option Activity (Six Months Ended June 30, 2025) | Item | Number of Options | Weighted Average Exercise Price | | :-------------------------------- | :---------------- | :------------------------------ | | Outstanding options as of January 1, 2025 | 3,814,015 | $9.70 | | Granted | 9,290,214 | $12.57 | | Exercised | (145,080) | $6.73 | | Forfeited | (130,308) | $10.64 | | **Outstanding options as of June 30, 2025** | **12,828,841** | **$11.80** | - The Company granted **9,290,214** options during the six months ended June 30, 2025, with an estimated fair value of **$7.09** per option using the Black-Scholes-Merton method[87](index=87&type=chunk) - As of June 30, 2025, the Company had **$255.943 million** of unrecognized stock-based compensation expense, to be recognized over a weighted average period of **1.11 years**[98](index=98&type=chunk) [NOTE 10. Stockholders' Equity](index=27&type=section&id=NOTE%2010.%20Stockholders%27%20Equity) Describes the $100 million 2024 stock repurchase program and the issuance of Class A Common Stock for earn-out payments - The Board authorized a new **$100 million** stock repurchase and withholding program (2024 SRP) on November 13, 2024, valid through December 31, 2026[99](index=99&type=chunk) - During the six months ended June 30, 2025, the Company repurchased **4,290,076** shares of Class A Common Stock for **$57.059 million**[100](index=100&type=chunk) - As of June 30, 2025, **$26.944 million** remained available for purchases under the discretionary plan[100](index=100&type=chunk) - The Company issued **247,764** shares of Class A Common Stock for **$4.334 million** in connection with earn-out payments for Apptness and ArcaMax acquisitions during the six months ended June 30, 2025[101](index=101&type=chunk) [NOTE 11. Leases](index=27&type=section&id=NOTE%2011.%20Leases) Details operating lease balances, with net right-to-use assets of $10.147 million and total liabilities of $12.006 million as of June 30, 2025 Operating Lease Balances (in thousands) | Item | As of June 30, 2025 | As of December 31, 2024 | | :------------------------------------------ | :------------------ | :---------------------- | | Right-to-use assets - operating leases, net | $10,147 | $8,806 | | Current portion of long-term operating lease liabilities | $3,788 | $3,631 | | Long-term operating lease liabilities | $8,218 | $7,139 | | **Total discounted operating lease liabilities** | **$12,006** | **$10,770** | [NOTE 12. Fair Value Disclosures](index=29&type=section&id=NOTE%2012.%20Fair%20Value%20Disclosures) Outlines fair value hierarchy for financial instruments, with cash as Level 1 and acquisition liabilities as Level 3 as of June 30, 2025 Fair Value of Financial Instruments (As of June 30, 2025, in thousands) | Item | Level 1 | Level 2 | Level 3 | Total | | :-------------------------- | :------ | :------ | :------ | :------ | | **Assets** | | | | | | Cash and cash equivalents | $349,492 | — | — | $349,492 | | **Liabilities** | | | | | | Acquisition-related liabilities | — | — | $39,161 | $39,161 | - Acquisition-related liabilities are classified as Level 3 financial instruments, with fair value estimated using the Monte-Carlo simulation model based on forecasted financial performance of acquired businesses[107](index=107&type=chunk) [NOTE 13. Income Taxes](index=30&type=section&id=NOTE%2013.%20Income%20Taxes) Details income tax provision and effective tax rates, with a negative 9.0% rate for H1 2025 due to valuation allowance Income Tax Provision and Effective Tax Rate (Three and Six Months Ended June 30) | Period | Income Tax Provision (in thousands) | Pre-Tax Loss (in thousands) | Effective Tax Rate | | :-------------------------------- | :-------------------------------- | :-------------------------- | :----------------- | | Three months ended June 30, 2025 | $1,192 | $(11,622) | -10.3% | | Six months ended June 30, 2025 | $2,836 | $(31,578) | -9.0% | | Three months ended June 30, 2024 | $486 | $(27,580) | -1.8% | | Six months ended June 30, 2024 | $882 | $(66,750) | -1.3% | - The effective tax rate differs from the U.S. statutory rate primarily due to a full valuation allowance maintained against U.S. deferred tax assets[111](index=111&type=chunk) - The One Big Beautiful Bill Act was enacted on July 4, 2025, and the Company is evaluating its tax impacts for the third quarter of 2025[111](index=111&type=chunk) [NOTE 14. Net Loss Per Share Attributable to Common Stockholders](index=31&type=section&id=NOTE%2014.%20Net%20Loss%20Per%20Share%20Attributable%20to%20Common%20Stockholders) Details basic and diluted net loss per share calculations, identical due to the Company's net loss position Net Loss Per Share Attributable to Common Stockholders (Three and Six Months Ended June 30) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net loss available to common stockholders (in thousands) | $(12,814) | $(28,066) | $(34,414) | $(67,632) | | Weighted-average common stock | 217,253,856 | 177,870,238 | 214,918,925 | 174,475,591 | | **Basic and Diluted loss per share** | **$(0.06)** | **$(0.16)** | **$(0.16)** | **$(0.39)** | - Due to net losses in all periods, diluted net loss per share was the same as basic net loss per share, as potential common equivalent shares were anti-dilutive[112](index=112&type=chunk)[113](index=113&type=chunk) [NOTE 15. Subsequent Event](index=31&type=section&id=NOTE%2015.%20Subsequent%20Event) Reports the Board's authorization of a new $200 million share repurchase program (2025 SRP) on July 23, 2025 - On July 23, 2025, the Board authorized a new share repurchase program (2025 SRP) for up to **$200 million** of Class A common stock through December 31, 2027[115](index=115&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition and results for Q2 2025, covering operations, macroeconomic trends, and key metrics [Overview](index=32&type=section&id=Overview) Zeta operates an AI-powered omnichannel data-driven cloud platform, ZMP, for consumer intelligence and marketing automation - Zeta operates an AI-powered omnichannel data-driven cloud platform, the Zeta Marketing Platform (ZMP), for consumer intelligence and marketing automation[118](index=118&type=chunk)[119](index=119&type=chunk) - The ZMP leverages Generative AI (GenAI) and machine learning to predict consumer intent, optimize messaging, and personalize marketing across channels like email, social, web, CTV, and video[118](index=118&type=chunk)[119](index=119&type=chunk) - Integration of LiveIntent's identity graph has strengthened Zeta's Data Cloud assets, enhancing authenticated identity resolution and deterministic targeting[118](index=118&type=chunk)[119](index=119&type=chunk)[120](index=120&type=chunk) [Macroeconomic trends](index=32&type=section&id=Macroeconomic%20trends) The Company's business is sensitive to macroeconomic conditions, including economic growth, inflation, and global trade policies - The Company's business is susceptible to macroeconomic conditions, including slower economic growth, potential recession, and increased inflation rates[121](index=121&type=chunk) - Evolving tariffs and changes in global trade policies contribute to economic uncertainty and could increase costs or adversely impact operations and customer businesses[121](index=121&type=chunk) [Factors Affecting Results of Operations](index=32&type=section&id=Factors%20Affecting%20Results%20of%20Operations) Refers to the 2024 Annual Report and Part II, Item 1A for detailed discussion of factors affecting results of operations [Key Performance Metrics](index=32&type=section&id=Key%20Performance%20Metrics) Reports key performance metrics, including a 21% increase in scaled customers and an 11% ARPU growth for scaled customers Key Performance Metrics (As of June 30) | Metric | June 30, 2025 | June 30, 2024 | Change (YoY) | | :-------------------------------- | :------------ | :------------ | :----------- | | Scaled customers | 567 | 468 | **+21%** | | Super-scaled customers | 168 | 144 | **+16.7%** | | Scaled customer ARPU (3 months) | **$532 thousand** | $479 thousand | **+11%** | | Super-scaled customer ARPU (3 months) | **$1.6 million** | $1.3 million | **+19%** | [Description of Certain Components of Financial Data](index=33&type=section&id=Description%20of%20Certain%20Components%20of%20Financial%20Data) Describes financial data components, including revenue recognition, operating expenses, and expected future trends - Revenue is primarily from technology platform usage (subscription, volume-based fees) and professional services, with **74%** from direct platforms and **26%** from integrated platforms for the six months ended June 30, 2025[129](index=129&type=chunk) - Cost of revenues includes media and marketing costs (fees to third-party publishers/partners) and employee-related costs, expected to slightly fluctuate as a percentage of revenue[130](index=130&type=chunk) - General and administrative expenses are expected to increase in absolute dollars but decrease as a percentage of revenue over the long term[131](index=131&type=chunk) - Selling and marketing expenses are expected to increase in absolute dollars due to continued investment in marketing initiatives[132](index=132&type=chunk) - Research and development expenses are expected to increase in absolute dollars due to ongoing investment in technology platform development[133](index=133&type=chunk) - Restructuring expenses of **$3.2 million** were recognized for the six months ended June 30, 2025, related to employee termination costs[135](index=135&type=chunk) - Interest expense, net, is anticipated to be impacted by changes in variable interest rates[136](index=136&type=chunk) - Other expenses / (income) are expected to depend on external factors like foreign exchange rates and remeasurement of acquisition-related liabilities[137](index=137&type=chunk) Unrecognized Stock-Based Compensation (in thousands) | Year ended December 31, | Amount | | :---------------------- | :----- | | Remainder of 2025 | $87,276 | | 2026 | $99,868 | | 2027 | $49,220 | | 2028 | $19,005 | | 2029 | $574 | | **Total** | **$255,943** | [Results of Operations](index=36&type=section&id=Results%20of%20Operations) Compares financial performance for Q2 and H1 2025 and 2024, highlighting changes in revenues and net loss Consolidated Statements of Operations (Three and Six Months Ended June 30) | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :------------------------------------------ | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | | Revenues | $308,442 | $227,839 | $572,861 | $422,786 | | Total operating expenses | $313,547 | $254,423 | $594,079 | $485,244 | | Loss from operations | $(5,105) | $(26,584) | $(21,218) | $(62,458) | | Net loss | $(12,814) | $(28,066) | $(34,414) | $(67,632) | [Comparison of the Three Months Ended June 30, 2025 and 2024](index=36&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20June%2030%2C%202025%20and%202024) Revenues increased by 35.4% to $308.4 million, while net loss decreased by 54.3% to $12.8 million for Q2 2025 Revenue Growth (Three Months Ended June 30) | Metric | 2025 (in thousands) | 2024 (in thousands) | Change (Amount) | Change (%) | | :------- | :------------------ | :------------------ | :-------------- | :--------- | | Revenues | $308,442 | $227,839 | $80,603 | **35.4%** | - Revenue increase was driven by **$52.4 million** from new customers (including **$20.1 million** from LiveIntent acquisition) and **$28.2 million** from existing customers[145](index=145&type=chunk) Operating Expense Changes (Three Months Ended June 30) | Expense Category | 2025 (in thousands) | 2024 (in thousands) | Change (Amount) | Change (%) | | :------------------------------------------ | :------------------ | :------------------ | :-------------- | :--------- | | Cost of revenues (excl. D&A) | $116,988 | $91,082 | $25,906 | **28.4%** | | General and administrative expenses | $62,172 | $51,159 | $11,013 | **21.5%** | | Selling and marketing expenses | $86,392 | $75,604 | $10,788 | **14.3%** | | Research and development expenses | $30,592 | $23,614 | $6,978 | **29.6%** | | Depreciation and amortization | $17,403 | $12,964 | $4,439 | **34.2%** | Other Financial Changes (Three Months Ended June 30) | Metric | 2025 (in thousands) | 2024 (in thousands) | Change (Amount) | Change (%) | | :-------------------------- | :------------------ | :------------------ | :-------------- | :--------- | | Interest expense, net | $166 | $2,560 | $(2,394) | **(93.5)%** | | Other expenses / (income) | $6,351 | $(1,564) | $7,915 | NM* | | Income tax provision | $1,192 | $486 | $706 | **145.3%** | [Comparison of the Six Months Ended June 30, 2025 and 2024](index=39&type=section&id=Comparison%20of%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) Revenues increased by 35.5% to $572.9 million, and net loss decreased by 49.1% to $34.4 million for H1 2025 Revenue Growth (Six Months Ended June 30) | Metric | 2025 (in thousands) | 2024 (in thousands) | Change (Amount) | Change (%) | | :------- | :------------------ | :------------------ | :-------------- | :--------- | | Revenues | $572,861 | $422,786 | $150,075 | **35.5%** | - Revenue increase was driven by **$106.6 million** from new customers (including **$39.5 million** from LiveIntent acquisition) and **$43.5 million** from existing customers[155](index=155&type=chunk) Operating Expense Changes (Six Months Ended June 30) | Expense Category | 2025 (in thousands) | 2024 (in thousands) | Change (Amount) | Change (%) | | :------------------------------------------ | :------------------ | :------------------ | :-------------- | :--------- | | Cost of revenues (excl. D&A) | $220,476 | $167,955 | $52,521 | **31.3%** | | General and administrative expenses | $116,209 | $99,965 | $16,244 | **16.2%** | | Selling and marketing expenses | $161,761 | $147,019 | $14,742 | **10.0%** | | Research and development expenses | $57,391 | $43,600 | $13,791 | **31.6%** | | Depreciation and amortization | $35,090 | $26,705 | $8,385 | **31.4%** | | Restructuring expenses | $3,152 | — | $3,152 | **100.0%** | Other Financial Changes (Six Months Ended June 30) | Metric | 2025 (in thousands) | 2024 (in thousands) | Change (Amount) | Change (%) | | :-------------------------- | :------------------ | :------------------ | :-------------- | :--------- | | Interest expense, net | $497 | $5,185 | $(4,688) | **(90.4)%** | | Other expenses / (income) | $9,863 | $(893) | $10,756 | NM* | | Income tax provision | $2,836 | $882 | $1,954 | **221.5%** | [Non-GAAP Financial Measures](index=40&type=section&id=Non-GAAP%20Financial%20Measures) Presents Adjusted EBITDA and Adjusted EBITDA margin as key non-GAAP measures for evaluating core business performance and planning - Adjusted EBITDA is a non-GAAP measure defined as net income/(loss) adjusted for interest, taxes, depreciation, amortization, stock-based compensation, acquisition-related expenses, restructuring expenses, and other non-recurring items[167](index=167&type=chunk) Adjusted EBITDA and Adjusted EBITDA Margin (Three and Six Months Ended June 30) | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :-------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | | Net loss | $(12,814) | $(28,066) | $(34,414) | $(67,632) | | Net loss margin | **(4.2)%** | (12.3)% | **(6.0)%** | (16.0)% | | Adjusted EBITDA | **$58,769** | $38,539 | **$105,482** | $69,044 | | Adjusted EBITDA margin | **19.1%** | 16.9% | **18.4%** | 16.3% | [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) Discusses liquidity, with $365.3 million in cash and $436.4 million in net working capital as of June 30, 2025 - As of June 30, 2025, the Company had **$365.3 million** in cash and cash equivalents and **$436.4 million** in net working capital[172](index=172&type=chunk) - Management believes existing cash and anticipated operating cash flows, along with available credit, will be sufficient for working capital needs for at least the next **12 months**[173](index=173&type=chunk) Cash Flow Summary (Six Months Ended June 30) | Cash Flow Activity | 2025 (in thousands) | 2024 (in thousands) | | :------------------------------------------ | :------------------ | :------------------ | | Net cash provided by operating activities | $76,848 | $55,776 | | Net cash used for investing activities | $(16,240) | $(20,777) | | Net cash used for financing activities | $(61,396) | $(11,949) | | Net (decrease) / increase in cash and cash equivalents | $(843) | $22,972 | - Net cash used for financing activities increased significantly to **$61.4 million** for the six months ended June 30, 2025, primarily due to **$57.9 million** in share repurchases under the 2024 SRP[179](index=179&type=chunk) - The Company's Senior Secured Credit Facility has **$196.7 million** outstanding as of June 30, 2025, and the Company is in compliance with its financial covenants[182](index=182&type=chunk)[183](index=183&type=chunk) [Critical Accounting Estimates](index=45&type=section&id=Critical%20Accounting%20Estimates) Confirms no material changes to critical accounting estimates since the 2024 Annual Report - No material changes to critical accounting estimates have occurred since the 2024 Annual Report[189](index=189&type=chunk) [Recent Accounting Pronouncements](index=45&type=section&id=Recent%20Accounting%20Pronouncements) Refers to Note 2 of the financial statements for discussion of recent accounting pronouncements [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Reports no material changes in market risk during H1 2025 compared to the 2024 Annual Report - No material changes in market risk occurred during the six months ended June 30, 2025, compared to the 2024 Annual Report[192](index=192&type=chunk) [Item 4. Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of June 30, 2025, with no material internal control changes - The CEO and CFO concluded that disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2025[196](index=196&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[199](index=199&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings](index=47&type=section&id=Item%201.%20Legal%20Proceedings) The Company is involved in ordinary course legal proceedings, not expecting a material adverse effect, with no material changes - The Company is not currently a party to any litigation expected to have a material adverse effect on its business or financial condition[201](index=201&type=chunk) - No material changes to legal proceedings have occurred since the 2024 Annual Report[201](index=201&type=chunk) [Item 1A. Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) Highlights new risk factors including reliance on non-U.S. development resources and payment-related risks from customer disputes - Reliance on technology and product development in India and other non-U.S. locations exposes the Company to risks such as wage inflation, geopolitical instability, differing intellectual property protections, and currency fluctuations[203](index=203&type=chunk)[204](index=204&type=chunk)[205](index=205&type=chunk)[206](index=206&type=chunk) - The Company faces payment-related risks, including customer disputes, non-payment, and increased bad debt, particularly during economic downturns or due to sequential liability arrangements with marketing agencies[207](index=207&type=chunk)[208](index=208&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Reports unregistered issuance of 50,736 Class A Common Stock shares for $0.7 million and repurchases of 2,673,451 shares under the 2024 SRP - On June 23, 2025, the Company issued **50,736** shares of Class A Common Stock, valued at **$0.7 million**, to former ArcaMax shareholders in an unregistered sale related to the acquisition[209](index=209&type=chunk)[210](index=210&type=chunk) Common Stock Repurchases (Quarter Ended June 30, 2025) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Approximate Dollar Value of Shares that May Yet Be Purchased (in millions) | | :-------------------------- | :----------------------------- | :--------------------------- | :----------------------------------------------------------------------- | | April 1, 2025 – April 30, 2025 | 1,808,623 | $11.62 | $37.9 | | May 1, 2025 – May 31, 2025 | - | - | $37.9 | | June 1, 2025 – June 30, 2025 | 864,828 | $12.72 | $26.9 | | **Total** | **2,673,451** | | | [Item 3. Defaults Upon Senior Securities](index=48&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Confirms no defaults upon senior securities during the reporting period [Item 4. Mine Safety Disclosures](index=48&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) States that mine safety disclosures are not applicable to the Company's operations [Item 5. Other Information](index=48&type=section&id=Item%205.%20Other%20Information) Indicates no additional information to report for this section [Item 6. Exhibits](index=49&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with the Quarterly Report on Form 10-Q, including organizational documents and executive certifications - Exhibits include Amended and Restated Certificate of Incorporation and Bylaws, Certifications of Principal Executive and Financial Officers (Sections 302 and 906), and XBRL Instance, Schema, Calculation, Definition, and Label Linkbase Documents[215](index=215&type=chunk) [Signatures](index=50&type=section&id=Signatures) Contains signatures of the President, CEO, and CFO, certifying the report filing on August 6, 2025 - The report was signed by David A. Steinberg (President, CEO) and Christopher Greiner (CFO) on August 6, 2025[218](index=218&type=chunk)

Zeta Global's Business and Strategic Focus Zeta Global operates in the digital marketing sector, offering AI-based platforms to help businesses personalize and optimize their marketing across channels. Its main product, the Zeta Marketing Platform, uses machine learning and generative AI (a type of artificial intelligence that creates new content or predictions) to process billions of data signals and deliver targeted advertising and messaging. The company's recent strategic focus areas include expanding it ...

Zeta Global Holdings (ZETA) came out with quarterly earnings of $0.14 per share, in line with the Zacks Consensus Estimate . This compares to earnings of $0.13 per share a year ago. These figures are adjusted for non-recurring items. A quarter ago, it was expected that this cloud-based marketing technology company would post earnings of $0.12 per share when it actually produced earnings of $0.07, delivering a surprise of -41.67%. Over the last four quarters, the company has not been able to surpass consensu ...

Financial Data and Key Metrics Changes - In Q2 2025, revenue reached $308 million, representing a 35% year-over-year increase, while adjusted EBITDA grew by 52% to $59 million, both exceeding guidance [6][14][20] - Free cash flow was $33.6 million, up 69% year-over-year, translating to a margin of 11% [20][26] - The company reported a GAAP net loss of $12.8 million, an improvement from a loss of $28.1 million in the previous year [20] Business Line Data and Key Metrics Changes - The total scaled customer count grew to 567, up 21% year-over-year, with 168 super scaled customers, an increase of 17% [17] - Quarterly ARPU for scaled customers was $532,000, an 11% increase year-over-year, while super scaled customer ARPU was $1.6 million, up 19% [17] - The agency business saw a 40% year-over-year increase in the average number of scaled brands per large agency holding company [18] Market Data and Key Metrics Changes - Six of the top ten verticals grew faster than 20% year-over-year, with technology and media, consumer and retail, and advertising and marketing being the largest contributors [18] - Direct revenue mix increased to 75%, up from 67% a year ago, resulting in direct revenue growth of 51% year-over-year [19] Company Strategy and Development Direction - The company is focused on AI innovation, launching Zeta Answers, a prescriptive AI framework that automates outcome-driven actions in real-time [7][9] - The One Zeta initiative aims to accelerate multi-use case adoption across acquisition, growth, and retention, leading to better ROI and customer stickiness [10][11] - The company is expanding its presence in the public sector, leveraging relationships built through its political business [92] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in capturing more market share due to strong sales pipeline and AI-driven momentum [12][24] - The company raised its full-year revenue guidance by $21 million, reflecting strong first-half performance and customer behavior consistency [24][25] - Management remains committed to reducing equity dilution and achieving long-term targets, including over $2.1 billion in annual revenue by 2028 [27] Other Important Information - The company plans to host its fifth annual Zeta Live conference on October 9, featuring prominent speakers and a dedicated stage for product showcases [12][13] - A second Investor Day will be held on October 8 to share long-term roadmap and R&D pipeline [14] Q&A Session Summary Question: Interest level from customers regarding the new AI module - Management noted good awareness and meaningful uptake of the AI suite, with plans to showcase new products at Zeta Live [30][33] Question: Linearity in the quarter and growth consistency - Management confirmed consistent growth throughout the quarter, with strong performance across key verticals [34][35] Question: KPIs and sales productivity - Management highlighted strong sales productivity and pipeline conversion, with a focus on cost of revenue and expense management [42][44] Question: Trends in marketing operations and AI - Management indicated that most enterprises still rely on agencies for marketing, but many are testing AI tools internally [72] Question: Goals for the Zeta Data and AI Lab - The lab aims to drive innovation and stay ahead of competitors in AI tools and workflows [76] Question: Success with independent agencies - Management emphasized the importance of partnerships with independent agencies, providing them access to advanced AI tools [81][83] Question: Changes in customer behavior and pipeline filling - Management noted a shift in brand recognition, leading to a stronger pipeline and higher conversion rates [87]