ZETA(ZETA) - 2025 Q2 - Quarterly Results

Executive Summary & Q2 2025 Highlights Zeta Global achieved its 16th consecutive quarter of exceeding expectations, driven by strong AI platform demand and raised 2025 guidance Q2 2025 Financial Performance & Strategic Commentary Zeta Global achieved its 16th consecutive quarter of exceeding expectations, driven by strong AI platform demand and raised 2025 guidance - Achieved its 16th consecutive quarter of outperforming expectations and raising guidance[1] - Growth driven by demand for its AI-powered marketing platform[3] - On track to achieve ambitious 2028 revenue and free cash flow targets[3] - Significantly raised full-year revenue, Adjusted EBITDA, and free cash flow guidance[3] Key Q2 2025 Achievements Zeta Global achieved significant Q2 2025 year-over-year growth in revenue, operating cash flow, and free cash flow, exceeding guidance, and approved a new $200 million share repurchase program Key Q2 2025 Financial Achievements | Metric | Q2 2025 Amount ($M) | Year-over-Year Growth | Exceeded Guidance Midpoint ($M) | | :----- | :------------------ | :-------------------- | :------------------------------ | | Revenue | $308 | 35% | $11 | | Net Cash from Operating Activities | $42 | 35% | N/A | | Free Cash Flow | $34 | 69% | N/A | - Achieved zero net dilution by the end of Q2 2025, on track to meet 2025 dilution and SBC expense targets[6] - Board approved a new $200 million two-year share repurchase program to supplement the existing plan[6] Corporate Events & Investor Information Zeta Global is hosting upcoming investor and company events, including an Investor Day and its Zeta Live conference, and provides details on investor communications Upcoming Investor & Company Events Zeta Global will host its second Investor Day on October 8, 2025, to share its long-term roadmap, followed by the fifth Zeta Live conference on October 9, focusing on thought leadership and product launches - Second Investor Day on October 8, 2025, to share the long-term roadmap, R&D pipeline, and expanded leadership team[4] - Fifth Zeta Live conference on October 9, 2025, themed 'Achieving the Impossible,' featuring thought leadership sessions and a dedicated product launch stage[4] Investor Conference Call and Webcast Zeta Global will host a conference call on August 5, 2025, to discuss Q2 2025 financial results, with a supplemental presentation and webcast available - Conference call to discuss Q2 2025 financial results on Tuesday, August 5, 2025, at 4:30 PM ET[11] - Supplemental earnings presentation and webcast available on the company's investor relations website[11] Availability of Information on Zeta's Website and Social Media Profiles Zeta Global regularly discloses important information via SEC filings, press releases, webcasts, and its investor relations website, also leveraging social media for public updates - Company regularly publishes important information through SEC filings, press releases, public conference calls, webcasts, and its investor relations website[19] - Company also uses social media profiles (e.g., X, Facebook, LinkedIn, Instagram) to disclose information to customers, investors, and the public[19][20] Financial Guidance Zeta Global has significantly raised its financial guidance for both Q3 and the full year 2025, reflecting strong confidence in continued growth and performance Third Quarter 2025 Guidance Zeta Global raised its Q3 2025 revenue and Adjusted EBITDA guidance, reflecting strong expectations for future growth Third Quarter 2025 Financial Guidance | Metric | Previous Guidance Midpoint ($M) | Revised Guidance Midpoint ($M) | Change ($M) | Year-over-Year Growth Rate | | :----- | :------------------------------ | :----------------------------- | :---------- | :------------------------- | | Revenue | $323 | $328 | +$5 | 22% to 23% | | Adjusted EBITDA | $69.7 | $70.65 | +$1 | 31% to 32% | | Adjusted EBITDA Margin | N/A | 21.4% to 21.7% | N/A | N/A | Full Year 2025 Guidance The company significantly raised its full-year 2025 revenue, Adjusted EBITDA, and free cash flow guidance, indicating strong confidence in sustained performance and growth Full Year 2025 Financial Guidance | Metric | Previous Guidance Midpoint ($M) | Revised Guidance Midpoint ($M) | Change ($M) | Year-over-Year Growth Rate | | :----- | :------------------------------ | :----------------------------- | :---------- | :------------------------- | | Revenue | $1,242 | $1,263 | +$21 | 25% to 26% | | Adjusted EBITDA | $258.5 | $264.6 | +$6 | 37% to 38% | | Adjusted EBITDA Margin | N/A | 20.8% to 21.1% | N/A | N/A | | Free Cash Flow | $131.5 | $142 | +$10.5 | 52% to 56% | | Free Cash Flow Margin | N/A | 11.0% to 11.4% | N/A | N/A | - Equity stock compensation is projected to be $190 million[13] Share Repurchase Program Zeta Global has authorized a new $200 million share repurchase program and has utilized a significant portion of its existing program New Stock Repurchase Authorization Zeta's Board approved a new stock repurchase and withholding program of up to $200 million, valid until December 31, 2027, for Class A common stock and tax-related withholding - Board authorized a new stock repurchase and withholding program of up to $200 million[9] - Program valid until December 31, 2027, for repurchasing Class A common stock and withholding shares for tax requirements upon restricted stock award vesting[9] - Repurchases may occur through open market purchases, privately negotiated transactions, or other means[10] Existing Program Utilization As of July 25, 2025, Zeta utilized $85 million of its $100 million stock repurchase authorization approved in November 2024, with $15 million remaining - As of July 25, 2025, $85 million of the $100 million stock repurchase authorization approved in November 2024 has been utilized[6] - $15 million remains available under the existing stock repurchase program before its expiration on December 31, 2026[9] Company Overview This section provides a concise overview of Zeta Global, highlighting its core business as an AI marketing cloud and its foundational principles About Zeta Global Zeta Global is an AI marketing cloud company leveraging advanced AI and vast consumer signals via its Zeta Marketing Platform (ZMP) to help marketers acquire, grow, and retain customers efficiently - Zeta Global (NYSE: ZETA) is an AI marketing cloud[12] - Leverages advanced AI and trillions of consumer signals to help marketers more efficiently acquire, grow, and retain customers[12] - The Zeta Marketing Platform (ZMP) simplifies complex marketing through unified identity, intelligence, and omnichannel activation, powered by the industry's largest proprietary database and AI[12] - Founded in 2007 by David A. Steinberg and John Sculley, headquartered in New York City[12][14] Legal & Financial Disclosures This section outlines the company's forward-looking statements, defines key operational and financial terms, and explains the use and limitations of non-GAAP financial measures Forward-Looking Statements This section contains standard forward-looking statements about future financial performance, market opportunities, and business strategies, subject to risks and uncertainties that may cause actual results to differ - Forward-looking statements include information on 2025 guidance, 2028 targets, market share growth, product capabilities, competitive position, customer expansion, AI platform capabilities, and future share repurchases[15] - Subject to risks, uncertainties, and assumptions including macroeconomic trends, interest rate changes, inflation, geopolitical conditions, innovation capabilities, AI impact, customer retention, data collection, and security breaches[16] - Company undertakes no obligation to update or revise any forward-looking statements, except as required by applicable law[16] Definitions of Key Terms Zeta Global defines key operational and financial terms, including direct and integrated platform revenue, cost of revenue components, and classifications of scaled and hyperscaled customers with their ARPU - Direct Platform Revenue: Revenue generated entirely through the company's platform[20] - Integrated Platform Revenue: Revenue generated through the company's platform in conjunction with third-party integrations[20] - Cost of Revenue (excluding depreciation and amortization): Primarily includes media and marketing costs (fees paid to third-party publishers/partners) and employee-related costs[20] - Scaled Customer: A customer generating at least $100,000 in revenue over the preceding twelve months[20] - Hyperscaled Customer: A subset of Scaled Customers, generating at least $1 million in revenue over the preceding twelve months[21] - Scaled Customer ARPU / Hyperscaled Customer ARPU: Revenue for the respective period divided by the number of corresponding Scaled Customers at the end of that period[23] Non-GAAP Measures Zeta Global uses non-GAAP measures like Adjusted EBITDA and Free Cash Flow to provide insights into core operating performance and facilitate comparisons, while acknowledging their analytical limitations - Non-GAAP measures (Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow, and Free Cash Flow Margin) are used for business evaluation, financial planning, and investor comparisons[22][23] - Adjusted EBITDA: Net income/(loss) adjusted for net interest expense, depreciation and amortization, stock-based compensation, income tax (benefit)/provision, acquisition-related expenses, restructuring expenses, change in fair value of warrant and derivative liabilities, certain dispute settlement expenses, gain on extinguishment of debt, certain non-recurring financing-related expenses, and other expenses/(income)[23] - Free Cash Flow: Cash flow from operating activities less capital expenditures and website and software development costs, adjusted for the effect of exchange rates on cash and cash equivalents[23] - Limitations: Should not be considered in isolation or as a substitute for GAAP financial results analysis; other companies may calculate similarly titled non-GAAP financial measures differently[24] - Due to inherent uncertainties and unreasonable efforts, the company does not provide a reconciliation of forward-looking Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow, and Free Cash Flow Margin guidance to forward-looking GAAP net income/(loss)[25] Financial Statements This section presents Zeta Global's condensed unaudited consolidated balance sheets, statements of operations, and cash flows, providing a snapshot of the company's financial position and performance Condensed Unaudited Consolidated Balance Sheets As of June 30, 2025, Zeta Global's total assets were $1,100,093 thousand, with total liabilities at $426,837 thousand and total stockholders' equity at $673,256 thousand Condensed Unaudited Consolidated Balance Sheets (in thousands of dollars) | Metric | June 30, 2025 ($K) | December 31, 2024 ($K) | Change ($K) | | :-------------------- | :----------------- | :--------------------- | :---------- | | Total Assets | $1,100,093 | $1,111,373 | -$11,280 | | Total Liabilities | $426,837 | $434,572 | -$7,735 | | Total Stockholders' Equity | $673,256 | $676,801 | -$3,545 | - Cash and cash equivalents slightly decreased from $366,157 thousand to $365,314 thousand[28] - Accounts receivable increased from $235,227 thousand to $251,007 thousand[28] Condensed Unaudited Consolidated Statements of Operations For Q2 2025, Zeta Global's revenue was $308,442 thousand, a significant year-over-year increase, with net loss improving to $(12,814) thousand Condensed Unaudited Consolidated Statements of Operations (in thousands of dollars) | Metric | Three Months Ended June 30, 2025 ($K) | Three Months Ended June 30, 2024 ($K) | Six Months Ended June 30, 2025 ($K) | Six Months Ended June 30, 2024 ($K) | | :-------------------- | :------------------------------------ | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Revenue | $308,442 | $227,839 | $572,861 | $422,786 | | Operating Loss | $(5,105) | $(26,584) | $(21,218) | $(62,458) | | Net Loss | $(12,814) | $(28,066) | $(34,414) | $(67,632) | - Total operating expenses for Q2 2025 were $313,547 thousand, up from $254,423 thousand in Q2 2024[30] - Stock-based compensation expense for Q2 2025 was $46,471 thousand, lower than $52,159 thousand in Q2 2024[30] Condensed Unaudited Consolidated Statements of Cash Flows For the six months ended June 30, 2025, operating cash flow increased to $76,848 thousand, investing cash flow decreased, and financing cash flow significantly increased due to share repurchases Condensed Unaudited Consolidated Statements of Cash Flows (in thousands of dollars) | Metric | Six Months Ended June 30, 2025 ($K) | Six Months Ended June 30, 2024 ($K) | | :-------------------- | :-------------------------------- | :-------------------------------- | | Net Cash from Operating Activities | $76,848 | $55,776 | | Net Cash Used in Investing Activities | $(16,240) | $(20,777) | | Net Cash Used in Financing Activities | $(61,396) | $(11,949) | | Net (Decrease)/Increase in Cash and Cash Equivalents | $(843) | $22,972 | - Share repurchases significantly increased from $(8,363) thousand in 2024 to $(57,931) thousand in 2025[32] Reconciliation of GAAP to Non-GAAP Financial Measures This section provides detailed reconciliations of GAAP net loss to Adjusted EBITDA and cash flow from operating activities to Free Cash Flow Adjusted EBITDA Reconciliation Q2 2025 Adjusted EBITDA was $58,769 thousand (19.1% margin), a significant increase from Q2 2024, driven by improved net loss and adjustments Adjusted EBITDA Reconciliation (in thousands of dollars) | Metric | Three Months Ended June 30, 2025 ($K) | Three Months Ended June 30, 2024 ($K) | Six Months Ended June 30, 2025 ($K) | Six Months Ended June 30, 2024 ($K) | | :-------------------- | :------------------------------------ | :------------------------------------ | :-------------------------------- | :-------------------------------- | | 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% | - Key adjustments include adding back depreciation and amortization ($17,403 thousand in Q2 2025) and stock-based compensation ($46,471 thousand in Q2 2025)[35] Free Cash Flow Reconciliation Q2 2025 Free Cash Flow significantly increased to $33,558 thousand from Q2 2024, derived from operating cash flow minus capital and software development costs Free Cash Flow Reconciliation (in thousands of dollars) | Metric | Three Months Ended June 30, 2025 ($K) | Three Months Ended June 30, 2024 ($K) | Six Months Ended June 30, 2025 ($K) | Six Months Ended June 30, 2024 ($K) | | :-------------------- | :------------------------------------ | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Net Cash from Operating Activities | $42,049 | $31,110 | $76,848 | $55,776 | | Capital Expenditures | $(2,349) | $(6,754) | $(5,085) | $(12,565) | | Website and Software Development Costs | $(5,798) | $(4,569) | $(9,953) | $(8,212) | | Free Cash Flow | $33,558 | $19,822 | $61,755 | $34,921 | Contacts This section provides essential contact information for investor relations and media inquiries Investor Relations and Press Contacts Contact information for Zeta Global's investor relations and media departments is provided for inquiries - Investor Relations Contact: Matt Pfau, ir@zetaglobal.com[26] - Press Contact: Candace Dean, press@zetaglobal.com[26]