Summary of the Conference Call on Zeta's Acquisition of Marigold's Enterprise Software Business Company and Industry - **Company**: Zeta Global - **Acquired Company**: Marigold Enterprise Software - **Industry**: Marketing Technology and Enterprise Software Key Points and Arguments Acquisition Overview - Zeta announced an agreement to acquire Marigold's enterprise software business for a total consideration of **$325 million**, with **$200 million** paid at close and an additional **$125 million** three months post-close, subject to adjustments [2][17] - The acquisition is expected to enhance Zeta's scale with over **100 global enterprise brands**, including **20 of the top 100 advertisers** and more than **40 Fortune 500 companies** [5][11] - Marigold's business is over **90% subscription-based** with a cost of revenue below **30%**, which is expected to be accretive to Zeta's adjusted EBITDA and free cash flow in the first year [6][10] Strategic Rationale - The acquisition aligns with Zeta's strategy to expand its enterprise messaging capabilities and loyalty business, enhancing its presence in EMEA and APAC markets [11][12] - Zeta aims to integrate Marigold's products, including Cheetah Digital, Selligent, SailThru, and LiveClicker, into its existing platform to improve customer engagement and retention [7][8] - The integration is planned to be nondisruptive, with a focus on customer continuity and enhancing the existing product offerings [9][12] Financial Metrics - Marigold's revenue is expected to contribute approximately **$190 million** to Zeta's revenue in **2026**, with a mid to high teens adjusted EBITDA margin profile [19][20] - The acquisition will increase Zeta's total recurring revenue base from approximately **50% to almost 60%** [18][20] - Marigold's cost of revenue was **less than 30%** in fiscal **2025**, compared to Zeta's **40%** in calendar **2024** [18] Integration and Growth Opportunities - Zeta plans to fully integrate Marigold's products within **12 months**, with initial integration of CDP capabilities expected within **3 to 6 months** [25][52] - The acquisition is seen as a significant opportunity to cross-sell Zeta's products to Marigold's existing customer base and vice versa, potentially doubling revenue per customer over time [14][40] - Zeta's strategy includes leveraging Marigold's loyalty offerings to enhance customer engagement and retention, with expectations of substantial returns on investment for clients [72][101] Market Position and Competition - Zeta views the loyalty market as an area with significant growth potential, competing against existing platforms like Oracle CrowdTwist and Yotpo [95][100] - The integration of loyalty data is expected to enhance Zeta's algorithms, improving customer targeting and engagement [101][102] Conclusion - The acquisition of Marigold is positioned as a strategic move to enhance Zeta's capabilities in the marketing technology space, with a focus on integration, customer retention, and growth in new markets [12][76] - Zeta reaffirms its commitment to its existing growth plans, indicating that this acquisition will be accretive to its overall business strategy and financial targets [20][110]

Acquisition Overview - Zeta Global has reached a definitive agreement to acquire Marigold's enterprise software business [1, 19] - The total consideration is up to $325 million, with $200 million ($100 million in cash and $100 million in stock) paid at closing, and up to $125 million paid three months post-close subject to adjustments [25] - The acquisition is expected to close by the end of 2025 [25] Marigold's Enterprise Software Business - Marigold's enterprise software business includes Loyalty, Cheetah Digital, Selligent, Sailthru, Liveclicker, and Grow [19] - It serves 20 of the top 100 advertisers and over 100 global enterprise brands [19] - The acquired business has >90% subscription revenue in FY25 [17, 25] - The acquired business's cost of revenue (COR) was <30% in FY25 [17, 25] Financial Impact and Guidance - The transaction is expected to be accretive to Zeta's adjusted EBITDA and FCF in 2026 [25] - Expect ~$190 million revenue contribution in 2026 with mid- to high-teens adjusted EBITDA margin [25] - Zeta reaffirms its 3Q'25 revenue guidance of $327 million - $329 million, representing 22%-23% year-over-year growth [27] - Zeta reaffirms its FY'25 revenue guidance of $1,258 million - $1,268 million, representing 25%-26% year-over-year growth [27] - Zeta reaffirms its FY'25 Free Cash Flow guidance of $140 million - $144 million [27]

Company Overview - Zeta Global Holdings Corp. is positioned as an all-in-one software platform for data-driven customer engagement, enabling brands to deliver highly targeted advertising campaigns [2] - The company leverages advanced data analytics to maximize customer acquisition and retention, making it appealing for enterprises seeking measurable marketing outcomes [2] Financial Performance - Zeta has demonstrated a three-year revenue CAGR of 31.1%, indicating strong demand for its platform and execution capabilities [3] - A reverse discounted cash flow analysis suggests that to justify its current valuation, Zeta would need to sustain a revenue CAGR of approximately 25.8% over the coming years, implying the need to more than triple its size in under five years [3] Market Position and Valuation - Zeta's stock was trading at $18.68 as of September 4th, below a previously set price alert of $21.9, reflecting skepticism around achieving its ambitious growth targets [4] - The company is not among the 30 most popular stocks among hedge funds, with 40 hedge fund portfolios holding ZETA at the end of the first quarter, up from 39 in the previous quarter [6] Investment Thesis - The investment opportunity lies in Zeta's ability to scale profitably while proving that its data-driven marketing model offers a sustainable competitive edge [4] - Previous analyses highlighted resilience after a short report, insider buying, strong annual recurring revenue (ARR), and a differentiated first-party data network, with the current thesis emphasizing valuation risks from ambitious growth assumptions [5]

Core Viewpoint - Zeta Global's stock price has significantly rebounded, increasing from a low of $10 in April to $20.7 currently, marking its highest point since February [1] Company Summary - The current stock price of Zeta Global is $20.7, which represents a notable recovery from its April low of $10 [1] - This price movement has resulted in Zeta Global reaching its highest market capitalization since February [1]

Core Insights - Zeta Global is positioned as a marketing software company that adapts to current market realities, including data privacy constraints and rising customer acquisition costs [1] Company Overview - Zeta Global is not merely a mid-level marketing software company but one that has developed its platform in response to contemporary challenges in the marketing landscape [1] Investment Perspective - The analysis emphasizes a disciplined, fundamentals-first approach to investing, focusing on identifying mispriced quality companies and resilient business models [1]

Group 1 - The industry is experiencing significant changes, particularly in the consolidation of wallet share among customers [1] - Zeta is focusing on consolidating its presence in both marketing technology and ad tech sectors [1] - There is an inquiry into the future landscape of the tech stack, specifically how marketing tech and ad tech will evolve over the next 3 to 5 years [1]

Group 1 - The industry is experiencing significant changes, particularly in the consolidation of wallet share among customers [1] - Zeta is focusing on consolidating its presence in both marketing technology and ad tech sectors [1] - There is an inquiry into the future landscape of the tech stack, combining marketing tech and ad tech, over the next 3 to 5 years [1]

Summary of Zeta Global Conference Call Company Overview - **Company**: Zeta Global (NYSE: ZETA) - **Event**: 2025 Conference on September 10, 2025 - **Key Speakers**: David A. Steinberg, Chris Greiner Industry Insights - **Ecosystem Changes**: The marketing technology and advertising technology sectors are increasingly consolidating, with Zeta Global focusing on integrating these tech stacks for better efficiency and effectiveness [6][10] - **Market Size**: Zeta Global's 567 global enterprise clients are projected to spend $100 billion on marketing in 2025, with Zeta aiming to increase its wallet share from 125 basis points to potentially 500-1,000 basis points by 2028 [9][10] Financial Performance - **Growth Rates**: Zeta Global has experienced a compounded growth rate of over 30% in top-line revenue, over 50% in bottom-line growth, and mid-70s in free cash flow over the last three years [8] - **Client Engagement**: The average number of channels used per client has increased from 1.2 to approximately 3, leading to higher Net Promoter Scores (NPS) and increased spending [9][51] Strategic Initiatives - **One Zeta Strategy**: This initiative aims to encourage clients to utilize multiple use cases, enhancing return on investment (ROI) and overall effectiveness [10] - **AI Integration**: Zeta has been programming in artificial intelligence since 2017, with recent advancements in their AI Agent Studio, which integrates multiple AI agents for improved targeting and attribution [32][33] Market Positioning - **Digital Marketing**: Currently, 50% of client spend is digital, with expectations that this will rise to 75% in the next five to ten years, driven by trends in connected TV and other digital platforms [15][20] - **Competitive Advantage**: Zeta's unique data cloud and first-party tracking capabilities provide a significant competitive edge, allowing for more accurate targeting and better ROI for clients [37][65] Revenue Model - **Revenue Composition**: The revenue model is evenly split between consumption and recurring software revenue, with a focus on providing value-based pricing to clients [40][41] - **Agency Relationships**: Zeta has established strong relationships with major agency Holdcos, providing them with first-party data for free, which enhances their margins and client satisfaction [55][57] Consumer Behavior Insights - **Zeta Economic Index**: The index shows a bifurcation in consumer spending, with the wealthiest 10% spending more while the bottom third spends less. The middle class is experiencing mixed outcomes, with some becoming wealthier due to strong market performance [69][70] - **Consumer Confidence**: The overall consumer environment remains strong, supported by high housing values and market performance, which encourages spending [71] Future Outlook - **Growth Projections**: Zeta Global anticipates a 500 basis point increase in operating margin and a significant rise in free cash flow by 2028, with potential for further growth in agency and digital marketing segments [43][59] Conclusion - Zeta Global is well-positioned in the evolving marketing technology landscape, leveraging its data capabilities and strategic initiatives to drive growth and enhance client ROI. The company is focused on integrating AI and expanding its digital marketing reach, while maintaining strong relationships with agency partners and adapting to changing consumer behaviors.

Group 1 - Zeta Global Holdings Corp. (NYSE: ZETA) has shown positive share price performance since a bullish call made on May 14, indicating strong market sentiment towards the company [1] - The company is positioned in the retail real estate sector, which is overseen by a finance head with extensive experience in banking, mining, and energy sectors [1] - The investment strategy focuses on a balanced approach, emphasizing value stocks while also maintaining exposure to growth opportunities [1] Group 2 - The article expresses a beneficial long position in ZETA shares, indicating confidence in the company's future performance [2] - The author emphasizes that the opinions expressed are personal and not influenced by any business relationships with the company mentioned [2]

Group 1 - Zeta Global Holdings Corp. (NYSE: ZETA) has shown positive share price performance since a bullish call on May 14, indicating strong market sentiment towards the company [1] - The company is positioned well in the market, with a focus on uncovering promising under-the-radar stocks that may not yet be recognized by the broader market [1] Group 2 - The analyst has a beneficial long position in ZETA shares, indicating confidence in the company's future performance [2] - The article reflects the analyst's personal opinions and is not influenced by any external compensation [2]