ZETA(US:ZETA)2021-08-11 03:51Financial Data and Key Metrics Changes - In Q2 2021, Zeta Global reported record revenue of $106.9 million, a 39% year-over-year increase compared to 25% growth in Q1 2021 [20][36] - Adjusted EBITDA for the quarter was $11.4 million, reflecting a 106% year-over-year growth and an adjusted EBITDA margin of 10.7% [20][43] - Net loss increased to $94.9 million, primarily due to $119.3 million in stock compensation expense recognized during the quarter [42] Business Line Data and Key Metrics Changes - The average revenue per scaled customer increased to over $299,000, up 44% year-over-year [48] - Scaled customers grew from 333 in Q1 to 343 in Q2, with both new and existing customers contributing to this increase [51][88] - Revenue mix from the Zeta Marketing Platform (ZMP) increased to 77%, up from 74% in Q1 and 68% at the end of 2020 [38][60] Market Data and Key Metrics Changes - The dataset expanded from 500 million to over 550 million individuals globally, with U.S. data growing from 220 million to over 225 million [9] - CTV (Connected TV) was the fastest-growing channel, increasing by almost 500% year-over-year in Q2 [15][59] - International revenue grew by 33% year-over-year, representing only 6% of total revenue, indicating significant growth potential [60] Company Strategy and Development Direction - The company aims to capitalize on the accelerating demand for data-driven marketing and identity-based targeting [16] - Zeta has made significant investments in product innovation, including enhancements to its CTV offering and the launch of Opportunity Explorer [17][24] - The hiring of a Chief Marketing Officer is expected to enhance brand visibility and drive growth [19][92] Management's Comments on Operating Environment and Future Outlook - Management noted a rebound in customer spending, particularly in travel, hospitality, entertainment, and financial services [68] - The company expects continued growth in scaled customers and revenue, with guidance for Q3 revenue between $108 million and $111 million [61] - Management expressed confidence in the company's ability to navigate a post-cookie world, emphasizing the effectiveness of their proprietary Zeta ID [100] Other Important Information - Cash on the balance sheet increased to $113.6 million, primarily due to IPO proceeds [44] - The company reported a record net revenue retention rate of 118% for total Zeta customers [106] Q&A Session Summary Question: Changes in customer conversations post-IPO - Management noted that customers are starting to spend more, with a rebound in specific sectors and an increase in scaled customers [68] Question: Challenges in growing sales capacity during quarantine - Management highlighted strong sales productivity and effective onboarding processes despite remote work challenges [75][81] Question: Contribution of new customers to growth - Over 30 new logos were signed, with half contributing to the increase in scaled customers [88][89] Question: Significance of hiring a CMO - The CMO is expected to enhance brand awareness and drive growth in the enterprise software space [92][94] Question: Impact of cookie ban delay on Zeta - Management stated that Zeta does not rely on third-party cookies and has adapted to a post-cookie environment [100] Question: Net revenue retention rate for the quarter - The net revenue retention rate for total Zeta was reported at 118% [106] Question: Resources allocated to B2B and SMB opportunities - Management indicated a strong pipeline and dedicated resources for the Dun & Bradstreet partnership [112][114] Question: Growth from recurring versus reoccurring business - There was a significant increase in recurring revenue, contributing to the improved outlook for the second half of the year [125][126]