Zeta Global Holdings Corp. · NYSE:ZETA
Zeta Global — Q4 2021 Earnings Presentation
30 slides from Zeta Global's earnings presentation, Feb 23, 2022
Slide 1: Supplemental 4Q'21 Earnings Presentation
Supplemental 4Q’21 Earnings Presentation February 23, 2022 2022 ZETA GLOBAL – PROPRIETARY & CONFIDENTIAL
Slide 2: Forward-Looking Statements and Non-GAAP Measures
Forward-Looking Statements and Non-GAAP Measures This presentation, together with other statements and information publicly disseminated by the Company, contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Sec
Slide 3: Key Themes
Key Themes Consistent Powerful Achievable Execution Operating Leverage Path to Zeta 2025 ✓ Business model strength ✓ Adjusted EBITDA1 grew ✓ Targeting $1B+ of continues to outperform ~2.5x revenue growth in revenue and 20%+ Adj. expectations 2021; +300bps of YtY EBITDA margin in 20253 margin expansi
Slide 4: Strong Revenue Growth Consistently Ahead of Expectations
Strong Revenue Growth Consistently Ahead of Expectations Full Year 2021 Growth 25% as reported 30% ex-Presidential Cycle 1,2 $135M $115M 18% $101M $107M 32% 21% 25% 39% 25% 1Q'21 2Q'21 3Q'21 4Q'21 YtY As Reported | YtY Ex-Presidential Cycle 1. 3Q’21 year to year revenue growth percentage normalized
Slide 5: Strong Underlying Fundamentals
Strong Underlying Fundamentals Scaled Customer Count1 Scaled Customer ARPU Total Zeta NRR2 2021 4Q’21 2021 2021 355 $368K $1.2M 113% 3Q’21: 347 +10% YtY +15% QtQ +18% YtY FY’20: 104% 4Q’20: 336 Quota Carrying Direct Platform Cost of Revenue4 Headcount Revenue Mix3 2021 4Q’21 2021 4Q’21 2021 100 77%
Slide 6: Adjusted EBITDA Consistently Growing Faster Than Revenue
Adjusted EBITDA Consistently Growing Faster Than Revenue 300 basis points of Adjusted EBITDA While continuing to invest in S&M and Margin Expansion in 2021 R&D which grew 25% in 2021 2 $63.3M 13.8% $22.9M $39.6M of Revenue $17.8M 17.0% 10.8% of Revenue 15.5% of Revenue of Revenue 4Q’20 4Q’21 2020 20
Slide 7: Zeta 2025
Zeta 2025 7
Slide 8: Zeta 2025 North Star
Zeta 2025 North Star Business Leadership Product Leadership Industry Leadership Indispensable to #1 Marketing Cloud Best-in-Class Advocacy Sophisticated Data-driven Among Stakeholders Marketers 2022 2022 ZETA ZETA GLOBAL GLOBAL – PROPRIETARY – PROPRIETARY & CONFIDENTIAL & CONFIDENTIAL 88
Slide 9: Path to Zeta 2025 Targets
Path to Zeta 2025 Targets TRAJECTORY TARGETS $1B $1,00 0 $1B+ 20%+ $200M+ REVENUE GROWTH ADJ. EBITDA MARGIN2 450+ ~80%+ $80 0 SCALED CUSTOMERS3 DIRECT PLATFORM REVENUE4 $60 0 $545 $458 ~$2.1M 35% or better $368 $82 SCALED CUSTOMER ARPU COST OF REVENUE $306 $400 $63 $40 CATALYSTS $200 $24 o Go-to-Mar
Slide 10: How Do We Get to Zeta 2025?
How Do We Get to Zeta 2025? a) b) By Maintaining Consistent …and Without Requiring an Upward Execution On Our Core Drivers… Inflection in Our Growth Trajectory Sales Headcount ACTUALS ZETA 2025 ’19 – ’21 ’21 – ’25 CAGR CAGR Scaled Customer Count Scaled Customer ARPU REVENUE 22% 22% Net Revenue Reten
Slide 11: Add Productive Sales Capacity in a Data-Driven Approach
Add Productive Sales Capacity in a Data-Driven Approach 2025 ~250 Sales Headcount • Maintain active recruiting pipeline with a balance of ACTIONS Scaled Customer hunters and farmers Count • Invest in brand awareness and demand generation • Build a high velocity sales pipeline Scaled Customer • Drive
Slide 12: Grow Our Scaled Customer Footprint
Grow Our Scaled Customer Footprint 2025 450+ Sales Headcount • Expand go-to-market capacity in hunters, farmers, SDRs ACTIONS Scaled Customer • Extend partnership ecosystem Count • Add new verticals and access new markets • Grow Enterprise and Agency relationships Scaled Customer ARPU Net Revenue 20
Slide 13: Add High Value Customers with Opportunities to Scale
Add High Value Customers with Opportunities to Scale Channels per Scaled Customer 2025 ~$2.1M ~4.0 Sales Headcount • Deliver strong, attributable ROI for customers ACTIONS Scaled Customer • Drive use case and channel expansion Count • Leverage our pricing power • Maximize sales force productivity Sc
Slide 14: Enhance Our Customer Commitment and Drive Strong Retention
Enhance Our Customer Commitment and Drive Strong Retention 110% to 2025 115% Sales Headcount • Cultivate customer loyalty by delivering high ROI ACTIONS Scaled Customer • Actively manage renewal pipeline Count • Extend into new lines of business with Enterprise and Agency customers Scaled Customer •
Slide 15: Leverage Our Direct Platform
Leverage Our Direct Platform 2025 80%+ Sales Headcount • Focus Farmers on selling owned and operated channels ACTIONS Scaled Customer • Add new products & capabilities Count • Drive more touchpoints native to the ZMP • Deliver on ease of activation on ZMP Scaled Customer ARPU Net Revenue 2021 76% Re
Slide 16: Disciplined Cost and Expense Management Drives Operating Leverage
Disciplined Cost and Expense Management Drives Operating Leverage 100% Adjusted EBITDA Expansion 90% 8% to 20%+ SALES & MARKETING 20%+ 20% Data-driven approach to headcount growth 80% 70% Less Likely RESEARCH & DEVELOPMENT 14% 15% 60% to Scale Investing in further platform innovation 50% 11% 40% 8%
Slide 17: Converting Customers From Scaled to Super Scaled Driving ARPU Expansion
Converting Customers From Scaled ($100k - $1M) To Super Scaled ($1M+) Driving Significant ARPU Expansion Scaled Customers Generate >95% of TTM Zeta Revenue $100K to $1M Greater than $1M 43% YtY 97 Increase Scaled 68 Customer Count 268 258 FY ‘20 FY ‘21 FY ‘20 FY ‘21 ARPU $0.36M $0.35M $3.81M $3.61M
Slide 18: The Longer Our Customers Stay With Us, The Bigger They Become
The Longer Our Customers Stay With Us, The Bigger They Become Scaled Customer ARPU $1.9M $0.9M $0.7M <1 Year 1-3 Years 3+ Years Scaled Customer Count 61 150 144 Scaled Customer Revenue $41M $133M $267M 2022 ZETA GLOBAL – PROPRIETARY & CONFIDENTIAL 18 1. $200M OPPORTUNITY: Graduating the less than 3-
Slide 19: Zeta Is Well-diversified Across A Wide Range Of Verticals
Zeta Is Well-diversified Across A Wide Range Of Verticals FY 2021 Revenue by Vertical Well Diversified Customer Set Consumer & Retail, 13% Technology & Media, 5% • Broad coverage across Education, 7% verticals Insurance, 12% • 7 of top 10 verticals grew Services, 7% greater than 25% in 2021 Automoti
Slide 20: 1Q'22 & FY'22 Guidance
1Q’22 & FY’22 Guidance 20
Slide 21: Guidance: Balanced Growth and Operating Leverage
Guidance: Balanced Growth and Operating Leverage 1Q’22 FY’22 Long-Term Guidance Guidance Targets1 Revenue $118M - $121M $540M - $550M Greater than % Growth YTY2 17% - 19% 18% - 20% 25% YTY Revenue Adj. EBITDA3 $16.5M - $17.0M $80M - $83M Growth 27% - 31% At least 20% % Growth YTY 26% - 31% Adj. EBIT
Slide 22: 2022 Revenue Linearity Expected to Follow the Historical Average
2022 Revenue Linearity Expected to Follow the Historical Average 3-Year Average Percentage of Annual Revenue1 Quarterly deviation +/- 1 point 32% 30% 30% 28% 26% 25% 24% 23% 22% 22% 20% 18% Q1 Q2 Q3 Q4 1. Excludes the impact of the Presidential Cycle in 3Q’20 and 4Q’20 The Company's targets are base
Slide 23: Appendix
Appendix 23
Slide 24: Non-GAAP Measures
Non-GAAP Measures In order to assist readers in understanding the core operating results that our management uses to evaluate the business, we describe our non-GAAP measures referenced in this presentation below. We believe these non-GAAP measures are useful to investors in evaluating our performanc
Slide 25: Bridge To Adjusted EBITDA And Adjusted EBITDA Margin
Bridge To Adjusted EBITDA And Adjusted EBITDA Margin 4Q’21 4Q’20 FY’21 FY’20 Net Income/(Loss) $(61,138) $(8,789) $(249,563) $(53,225) Depreciation and amortization 12,787 9,893 45,922 40,064 Restructuring expenses 260 139 727 2,090 Acquisition related expenses 437 1,081 1,953 5,402 Stock-based comp
Slide 26: FY 2021 and 2020 P&L Bridge
FY 2021 and 2020 P&L Bridge For the twelve months ended December 31, 2021 For the twelve months ended December 31, 2020 One-time One-time As Stock Based Depr. As As Stock Depr. As Other Other Reported Comp. & Amort. Adjusted Reported Based Comp. & Amort. Adjusted Items Items Revenues $458,338 - - -
Slide 27: 4Q 2021 and 4Q 2020 P&L Bridge
4Q 2021 and 4Q 2020 P&L Bridge For the three months ended December 31, 2021 For the three months ended December 31, 2020 One-time One-time As Stock Based Depr. As As Stock Depr. As Other Other Reported Comp. & Amort. Adjusted Reported Based Comp. & Amort. Adjusted Items Items Revenues $134,846 $- $-
Slide 28: 4Q 2021 and 2020 Cash Flow
4Q 2021 and 2020 Cash Flow 4Q’21 4Q’20 Incr./(Decr.) Cash flows from operating activities: Net loss $(61,138) $(8,788) $(52,350) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 12,787 9,893 2,894 Stock-based compensation 70,546 26 70,520
Slide 29: Overview Of Stock-based Compensation Expense
Overview Of Stock-based Compensation Expense • Historically, Zeta did not recognize any stock compensation expense for grants of restricted stock awards or restricted stock units (collectively, “the RSA’s/RSU's"). Pursuant to the Company’s stock compensation plan, the RSA’s/RSU’s did not vest until
Slide 30: Estimated Stock-based Compensation Expense
Estimated Stock-based Compensation Expense FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 Total Stock-based compensation 269.4 264.9 154.3 82.5 34.2 4.5 809.8 Capitalized stock-based compensation 10.2 6.0 4.0 2.5 1.0 - 23.7 Stock-based compensation in PnL 259.2 258.9 150.3 80.0 33.2 4.5 786.1 Notes