PART I - FINANCIAL INFORMATION Item 1. Financial Statements Presents Zeta Global Holdings Corp.'s unaudited consolidated financial statements and notes for Q2 2025 and FY 2024 Condensed Unaudited Consolidated Balance Sheets 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 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 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 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 Provides detailed explanations of accounting policies, asset/liability breakdowns, and financial disclosures NOTE 1. Organization and Background 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 channels32 NOTE 2. Basis of Presentation and Summary of Significant Accounting Policies 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 customers3637 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, 20245253 - 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 impact5859 NOTE 3. Intangible Assets, Net 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 years60 NOTE 4. Goodwill 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 goodwill61 NOTE 5. Acquisition 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 holdbacks64 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 purposes67 NOTE 6. Acquisition-Related Liabilities 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 NOTE 7. Credit Facilities 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 Facility70 - 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, 20246971 - 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 1.2573 NOTE 8. Commitments and Contingencies 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 condition77 NOTE 9. Stock-Based Compensation 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 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 method87 - 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 years98 NOTE 10. Stockholders' Equity 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, 202699 - During the six months ended June 30, 2025, the Company repurchased 4,290,076 shares of Class A Common Stock for $57.059 million100 - As of June 30, 2025, $26.944 million remained available for purchases under the discretionary plan100 - 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, 2025101 NOTE 11. Leases 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 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 businesses107 NOTE 13. Income Taxes 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 assets111 - 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 2025111 NOTE 14. Net Loss Per Share Attributable to Common Stockholders 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-dilutive112113 NOTE 15. Subsequent Event 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, 2027115 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial condition and results for Q2 2025, covering operations, macroeconomic trends, and key metrics 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 automation118119 - 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 video118119 - Integration of LiveIntent's identity graph has strengthened Zeta's Data Cloud assets, enhancing authenticated identity resolution and deterministic targeting118119120 Macroeconomic trends 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 rates121 - Evolving tariffs and changes in global trade policies contribute to economic uncertainty and could increase costs or adversely impact operations and customer businesses121 Factors Affecting Results of Operations Refers to the 2024 Annual Report and Part II, Item 1A for detailed discussion of factors affecting results of operations Key Performance Metrics 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 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, 2025129 - 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 revenue130 - General and administrative expenses are expected to increase in absolute dollars but decrease as a percentage of revenue over the long term131 - Selling and marketing expenses are expected to increase in absolute dollars due to continued investment in marketing initiatives132 - Research and development expenses are expected to increase in absolute dollars due to ongoing investment in technology platform development133 - Restructuring expenses of $3.2 million were recognized for the six months ended June 30, 2025, related to employee termination costs135 - Interest expense, net, is anticipated to be impacted by changes in variable interest rates136 - Other expenses / (income) are expected to depend on external factors like foreign exchange rates and remeasurement of acquisition-related liabilities137 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 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 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 customers145 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 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 customers155 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 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 items167 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 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 capital172 - 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 months173 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 SRP179 - 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 covenants182183 Critical Accounting Estimates 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 Report189 Recent Accounting Pronouncements Refers to Note 2 of the financial statements for discussion of recent accounting pronouncements Item 3. Quantitative and Qualitative Disclosures About Market Risk 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 Report192 Item 4. Controls and Procedures 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, 2025196 - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025199 PART II - OTHER INFORMATION Item 1. Legal Proceedings 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 condition201 - No material changes to legal proceedings have occurred since the 2024 Annual Report201 Item 1A. Risk Factors 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 fluctuations203204205206 - 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 agencies207208 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 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 acquisition209210 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 Confirms no defaults upon senior securities during the reporting period Item 4. Mine Safety Disclosures States that mine safety disclosures are not applicable to the Company's operations Item 5. Other Information Indicates no additional information to report for this section Item 6. Exhibits 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 Documents215 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, 2025218
ZETA(ZETA) - 2025 Q2 - Quarterly Report