Zeta Global Holdings Corp. · NYSE:ZETA
Zeta Global — Q1 2023 Earnings Presentation
30 slides from Zeta Global's earnings presentation, May 4, 2023
Slide 1: Supplemental 1Q'23 Earnings Presentation
Supplemental 1Q’23 Earnings Presentation May 4, 2023
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: 1Q'23 Earnings Summary
1Q’23 Earnings Summary 1 2 3 EXECUTING ON OUR DELIVERING OUR 7TH TRACKING AHEAD OF VISION TO MAKE CONSECUTIVE BEAT OUR ZETA 2025 SOPHISTICATED AND RAISE QUARTER TARGETS3 MARKETING SIMPLE • Signed one of the largest • Sales pipeline and RFP activities • Raising 2Q’23 and FY’23 revenue contracts to da
Slide 4: Consistent Execution with Strong Underlying Fundamentals
Consistent Execution with Strong Underlying Fundamentals Scaled Customer Count Scaled Customer ARPU Industry Verticals TOTAL SCALED4 SUPER-SCALED5 TOTAL SCALED6 SUPER-SCALED7 Double-Digit 411 +14% Y/Y 110 $374K $1.2M +11% Y/Y Growth in 9 of 10 4Q’22: 403 1Q’22: 359 4Q’22: 103 1Q’22: 99 4Q’22: $424K
Slide 5: Adj. EBITDA Continuing to Grow Even Faster than Revenue
Adj. EBITDA Continuing to Grow Even Faster than Revenue Revenue Growth Adjusted EBITDA1,2 Growth $158 $24 $126 $19 15.3% of Revenue 14.9% of Revenue 1Q’22 1Q’23 1Q’22 1Q’23 See slide 27 for footnote definitions | $ in millions unless otherwise noted See appendix for definitions of non-GAAP metrics u
Slide 6: Pacing Ahead of Zeta 2025 Targets
Pacing Ahead of Zeta 2025 Targets 2025 REVENUE TARGET 2025 ADJ. EBITDA TARGET1,2 FCF TARGET2 $1B+ $200M+ $110M+ $1B+ $1B+ $10M above initial $2.3M above initial Operating Leverage $110M+ 2023 guidance $200M+ Increasing Free $225.0 23% 120 60% 2023 guidance $701 Cash Flow 55% 17% 20%+ 100 55%+ 16% $1
Slide 7: Zeta 2025 KPIs In Line or Ahead of Long-term Target
Zeta 2025 KPIs In Line or Ahead of Long-term Target AS OF FY’22 NET SALES SCALED CUSTOMER SCALED CUSTOMER DIRECT PLATFORM REVENUE HEADCOUNT COUNT ARPU REVENUE MIX RETENTION9 ~250 500+ Up from 450 ~$2.1M ~80% 110-115% 403 $1.43M 2022 Model 123 77% 112% 2021 100 355 $1.24M 76% 2020 72 336 $1.05M 68% 2
Slide 8: Scaled Customer Count is Tracking Ahead of the Zeta 2025 Target
Scaled Customer Count is Tracking Ahead of the Zeta 2025 Target 8 Consecutive Quarters of Sequential Scaled Customer Expansion 1Q’23 Y/Y Growth: 14% 411 403 389 110 103 373 106 355 359 100 343 347 99 97 ZETA 2025 333 76 86 300 301 70 283 MODELED CAGR: 273 260 7% 267 261 258 263 Q1'21 Q2'21 Q3'21 Q4'
Slide 9: 11th Consecutive Quarter of Double-digit Scaled Customer ARPU Growth
11th Consecutive Quarter of Double-digit Scaled Customer ARPU Growth; Super Scaled ARPU Grew 18% Y/Y Y/Y ARPU Growth % 36% 45% 23% 10% 18% 19% 19% 15% 10% 1Q’23 Y/Y Growth: 10% $424 $382 $374 $368 $355 $341 $320 $290 $299 ARPU for $1M+ Cohort is ZETA 2025 13X MODELED CAGR: $100K - $1M Cohort 14% Q1'
Slide 10: Multi-Channel Adoption by Scaled Customers is Driving ARPU Expansion
Multi-Channel Adoption by Scaled Customers is Driving ARPU Expansion $100K to $1M Greater than $1M 300 301 110 Scaled Customer 103 260 99 Count Total Scaled Customers 1Q’22: 359 4Q’22: 403 1Q‘22 4Q‘22 1Q’23 1Q‘22 4Q‘22 1Q’23 1Q’23: 411 Quarterly ARPU $98 $113 $88 $981 $1,331 $1,158 1 3 X O P P. Avg.
Slide 11: The Longer Our Customers Stay With Us, The Bigger They Become
The Longer Our Customers Stay With Us, The Bigger They Become FY’22 Scaled Customer ARPU ~90% Revenue driven by scaled customers who have been with Zeta >1 year $1.7M $1.7M Proven ability to scale pilots in year 1 $1.4M $1.4M $0.7M $0.7M $0.7M $0.9M $1.9M FY’21 FY’21 FY’21 <1 Year 1-3 Years 3+ Years
Slide 12: Zeta Is Well-diversified Across a Wide Range of Verticals
Zeta Is Well-diversified Across a Wide Range of Verticals FY 2022 REVENUE BY VERTICAL WELL DIVERSIFIED CUSTOMER SET Financial Services 13% • Broad coverage across verticals Education, 6% • 6 of top 10 verticals grew greater than Automotive, Consumer & 25% in 2022 Retail, 12% 6% • Largest customer ac
Slide 13: 1Q'23 & FY'23 Guidance
1Q’23 & FY’23 Guidance
Slide 14: Guidance: Balanced Growth and Operating Leverage
Guidance: Balanced Growth and Operating Leverage 1Q’23 2Q’23 3Q’23 4Q’23 FY’23 Actuals Guidance Guidance Guidance Guidance 2023 Revenue Prior Guidance $150M $160M $176M $205M $691M Y/Y Growth % 19% 17% 16% 17% 17% 2023 Revenue: 1Q Actuals + New Guidance $158M $162M $176M $205M $701M NEW Y/Y Growth %
Slide 15: Guidance: Balanced Growth and Operating Leverage
Guidance: Balanced Growth and Operating Leverage 2Q’23 FY’23 2Q’23 FY’23 Guidance Guidance Guidance Guidance Range Range Midpoint Midpoint Total Zeta Revenue $160M – $164M $696M – $706M $162M $701M % Growth Y/Y 17% – 19% 18% – 19% 18% 19% Adj. EBITDA1 $24.2M – $24.7M $118.8M – $120.6M $24.5M $119.7M
Slide 16: Estimated Stock-based Compensation Expense
Estimated Stock-based Compensation Expense Stock Compensation Expense ($M) FY’22 1Q’23 FY’23E FY’24E FY’25E FY’26E Pre-IPO $242.4 $43.0 $146.4 $75.5 $31.6 $4.6 Post-IPO Grants $56.5 $21.5 $57.1 $28.0 $16.0 $9.1 New Grants to be Issued Expect to issue 6-8M shares annually P&L Expense Total $298.9 $64
Slide 17: The Market is Moving To Zeta
The Market is Moving To Zeta
Slide 18: The Zeta Value Proposition is Resonating in the Market
The Zeta Value Proposition is Resonating in the Market Enabling Enterprises to Identify, Reach, and Engage Consumers Across Channels WHAT MARKETERS NEED WHAT ZETA DELIVERS EASIER All-in One Platform FASTER Rapid Time-to-Value BETTER 50% Greater ROI 10 Proprietary Patented Omnichannel Data Cloud Soft
Slide 19: Marketing Cloud Competitive Landscape
Marketing Cloud Competitive Landscape Zeta Has Proprietary Data, Patented Software and AI, and Omnichannel Activation Capabilities All In A Single Platform Software, Data & Software Activation Proprietary Identity Data Marketing Automation Software and AI Omnichannel Activation Capabilities
Slide 20: The Zeta Marketing Platform Consolidates the Ad-tech and Mar-tech Stack
The Zeta Marketing Platform Consolidates the Ad-tech and Mar- tech Stack, Allowing for a Greater Share of Wallet Typical Brand AdTech and MarTech Stack Zeta Marketing Platform Analytics Display + Core ESP Social CDP+ Omni Channel Separate Omnichannel Recommendations Databases Execution & Per Solutio
Slide 21: Transforming Non-Addressable Audiences into Addressable Channels
Transforming Non-Addressable Audiences into Addressable Channels How Zeta helped a leading pharma brand reach in-market prospects to improve ROI Identified households exposed to a linear TV Identified 36M additional consumers who Helped the brand be smarter with their ad for a new medication & compa
Slide 22: ZMP Helps Customers Realize A Strong ROI
ZMP Helps Customers Realize A Strong ROI CASE STUDY: Zeta’s Revenue Scales With Platform Expansion ACQUIRE Insurance Customer LAND Recurring Platform Fees + Minimum • Started as $50k pilot Usage • Started with 1 channel & 1 use case • Started as a spoke in the customer’s $2B+ marketing Incremental 2
Slide 23: Our Data Is Durable
Our Data Is Durable In an Evolving Data Privacy Environment, Zeta’s Proprietary Identity Data Set has Consistently Grown 400 350 12.7B+ Unique 600 Global Digital Identifiers In US 500 300 400 250 235M+ People In US 300 200 200 150 100 100 0 2018 2019 2020 2021 2022 Data Privacy Regulation & Browser
Slide 24: 3 Pillars of Zeta's Data Cloud
3 Pillars of Zeta’s Data Cloud IDENTITY SIGNALS CONNECTIVITY Create a real-time 360-degree Capture interest and intent Attach identity to an view of an individual using through Artificial Intelligence individual and activate to durable identifiers from to enrich customer data sets deliver personaliz
Slide 25: A Leading Marketing Platform Provider
A Leading Marketing Platform Provider ANALYST ACCOLADES THE FORRESTER WAVE™,13 Now Tech, Customer Data Platforms11: Zeta is one of 5 CDPs in the large market presence segment and recognized as an Automation CDP, which provide a campaign design interface, natively execute campaigns such as email and
Slide 26: Appendix
Appendix
Slide 27: Footnotes
Footnotes 1 | 1Q’23 GAAP net loss of $57M, or 36% of revenue, includes $64M of stock-based compensation. See the graded vesting schedule on slide 16. 2 | Adjusted EBITDA, Adjusted EBITDA Margin, and Free Cash Flow are non-GAAP metrics, see reconciliations in the Appendix. 3 | The financial targets o
Slide 28: 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 29: Bridge To Adjusted EBITDA And Adjusted EBITDA Margin
Bridge To Adjusted EBITDA And Adjusted EBITDA Margin $ in ’000s, unless otherwise noted ` 1Q’23 1Q’22 Net loss $(56,955) $(72,037) Net loss margin 36.1% 57.1% Depreciation and amortization 11,825 12,766 Acquisition related expenses 203 344 Stock-based compensation 64,462 73,736 Other expenses 1,864
Slide 30: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation $ in ’000s, unless otherwise noted 1Q’23 1Q’22 Cash Flows from Operating Activities $20,104 $21,183 Capital expenditures (5,164) (6,743) Website and software development costs (4,900) (4,465) Effect of exchange rate changes on cash and cash equivalents (32) (232) Free C