ZETA(US:ZETA)2025-02-26 12:45Financial Data and Key Metrics Changes - In Q4 2024, Zeta Global achieved record revenue of $315 million, representing a 50% year-over-year increase, and record adjusted EBITDA of $70 million, up 57% year-over-year, both exceeding guidance [10][30] - For the full year 2024, revenue surpassed $1 billion, up 38% year-over-year, with adjusted EBITDA of $193 million, a 49% increase year-over-year [38][30] - The company reported a GAAP net income of $15.2 million in Q4, marking its first positive net income as a public company [38] Business Line Data and Key Metrics Changes - The scaled customer count grew to 527, up 17% year-over-year, with super-scaled customers increasing by 13% to 148 [31][32] - Quarterly ARPU for scalable customers reached $577,000, a 27% increase year-over-year [33] - Net revenue retention for the year was 114%, up from 111% in 2023, indicating strong customer loyalty [33] Market Data and Key Metrics Changes - Seven of the top ten industries served by Zeta grew faster than 20% year-over-year, with automotive, consumer and retail, insurance, political and advocacy, and technology and media leading the growth [34] - The direct revenue mix in Q4 climbed to 74%, up from 70% in Q3 2024 [35] Company Strategy and Development Direction - Zeta's strategy focuses on becoming an all-in-one marketing platform with AI and data at its core, aiming for over $2 billion in annual revenue by 2028 [10][11] - The Zeta 2028 plan targets a 20% organic revenue CAGR and adjusted EBITDA margin improvement to at least 25% [11][41] - The company emphasizes the importance of AI in driving both efficiency and revenue growth, with significant investments made over the past seven years [19][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's resilience against macroeconomic challenges, noting no significant client issues [63] - The company anticipates continued strong performance in 2025, guided by a conservative approach to macro trends and a robust pipeline [61][62] Other Important Information - Zeta completed the integration of LiveIntent ahead of schedule, launching the Zeta Direct product, which combines LiveIntent's network with Zeta's Data Cloud [24] - The company has seen a surge in AI adoption, with a nearly 200% sequential growth in AI agent usage in Q4 [20] Q&A Session Summary Question: Can you discuss the macro environment and demand-centric spending for Q1 and 2025? - Management indicated good visibility into Q1 and expects strong performance from verticals that contributed to growth in 2024, while being aware of inflation and tariffs [61][62] Question: What are the initial use cases and adoption feedback for LiveIntent? - Management noted that the integration has shown increased ROI for marketers and higher revenue for publishers, indicating strong initial adoption [66] Question: Can you elaborate on the agency business and its growth potential? - Management highlighted that Zeta is the most profitable partner for agencies, leading to increased brand volume and confidence in growth projections [72][74] Question: How does Zeta plan to increase wallet share from existing customers? - Management emphasized the One Zeta initiative, which consolidates use cases into one sale, aiming to increase penetration from 1% to 2% of customer marketing spend [80] Question: What is the outlook for competition in the market? - Management stated that they are not seeing significant competition from major players like Meta and Google, and have maintained strong partnerships with them [96][100] Question: How does Zeta view the role of agencies in the 2028 model? - Management expects agencies to play a larger role in revenue growth, with ongoing improvements in direct channel adoption [115]