Zeta Global Holdings Corp. · NYSE:ZETA
Zeta Global — Q1 2024 Earnings Presentation
35 slides from Zeta Global's earnings presentation, May 6, 2024
Slide 1: Supplemental Q1'24 Earnings Presentation
Supplemental Q1’24 Earnings Presentation May 6, 2024
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'24 Earnings Summary
1Q’24 Earnings Summary 1 2 3 2024 Growth Generating Strong Increased Guidance Calls Catalysts Are Scaling Return On Investment For Accelerating Growth Y/Y • Both Automotive and the Insurance • Launched 300 intelligent agents in 1Q’24 • Increasing guidance for each industries returned to growth in 1Q
Slide 4: Kicking off the year with strong underlying fundamentals
Kicking off the year with strong underlying fundamentals Scaled Customer Count Scaled Customer ARPU Industry Verticals TOTAL SCALED4 SUPER-SCALED5 TOTAL SCALED6 SUPER-SCALED7 460 144 $416K $1.1M 5 of the Top 10 +12% Y/Y +31% Y/Y Verticals Grew 4Q’23: 452 1Q’23: 411 4Q’23: 131 1Q’23: 110 4Q’23: $454K
Slide 5: 9 straight quarters of >20% revenue growth and 13 consecutive quarters of expanding Adj. EBITDA margins
9 straight quarters of >20% revenue growth and 13 consecutive quarters of expanding Adj. EBITDA margins Y/Y Revenue Growth Adjusted EBITDA1,2 Growth $195 $31 $158 $24 15.6% of Revenue 15.3% of Revenue 1Q’23 1Q’24 1Q’23 1Q’24 See slide 32 for footnote definitions See appendix for definitions of non-G
Slide 6: Expecting to achieve our Zeta 2025 targets early
Expecting to achieve our Zeta 2025 targets early 2025 REVENUE TARGET 2025 ADJ. EBITDA1,2 TARGET FCF2 TARGET $1B+ $200M+ $110M+ $25M or 3% above $5M or 3% above $200+ Operating Leverage $110+ $1B+ Increasing Free $250 25% initial 2024 initial 2024 21% $120 55%+ 60% guidance9 $900 guidance9 19% Cash F
Slide 7: KPIs powering the early achievement of Zeta 2025
KPIs powering the early achievement of Zeta 2025 AS OF FY’23 SCALED SCALED DIRECT NET SALES CUSTOMER CUSTOMER PLATFORM REVENUE HEADCOUNT COUNT4 ARPU6 REVENUE MIX8 RETENTION12 MODEL MODEL MODEL MODEL MODEL ~185–200 8-12% Growth 8-12% Growth ~75% 110–115% 452 +12% YTY 2023 136 $1.57M +10% YTY 2022 123
Slide 8: Scaled customer count continues to track ahead of the Zeta 2025 target
Scaled customer count continues to track ahead of the Zeta 2025 target 12 Consecutive Quarters of Sequential Scaled Customer Expansion Y/Y Growth: 12% 180 460 160 452 440 425 144 140 131 120 411 124 403 118 389 110 100 103 80 373 106 359 100 99 321 316 ZETA 2025 60 307 316 300 301 283 MODELED CAGR:
Slide 9: Consistent Y/Y scaled customer ARPU expansion
Consistent Y/Y scaled customer ARPU expansion Y/Y ARPU Growth % 18% 19% 19% 15% 10% 10% 10% 7% 11% Y/Y Growth: $382 $424 $374 $392 $418 $454 $416 11% $341 $355 1Q’24 ARPU for $1M+ is 1Q’24 ARPU for $1M+ is ZETA 2025 13X 12X MODELED CAGR: 8-12% the $100K - $1M Cohort the $100K - $1M Cohort Q1'22 Q2'2
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 321 316 301 144 Scaled 131 Customer Count 110 Total Scaled Customers 1Q’23: 411 4Q’23: 452 1Q‘23 4Q‘23 1Q’24 1Q‘23 4Q‘23 1Q’24 1Q’24: 460 Quarterly ARPU $88 $104 $95 $1,158 $1,313 $1,120 1 2X OP P . Av
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’23 Scaled Customer ARPU $2.1M $1.7M $1.3M $1.4M $0.6M $0.7M $0.7M $1.4M $1.7M FY’22 FY’22 FY’22 Scaled Customer <1 Year 1-3 Years 3+ Years Count 92 124 236 Revenue $54M $167M $490M ~90% Revenue driven by scaled customers who have been
Slide 12: Agencies are key partners, with powerful scaling potential
Agencies are key partners, with powerful scaling potential LEGEND 1st Large 3 Unique Brands Revenue Year 1 Integrated Hold Co % Direct Mix % Integrated Mix # Unique Brands (vintage 2020) Started small in Year 2 Direct Integrated 5+ Unique Brands revenue and # of brands, and grew, while Year 3+ Direc
Slide 13: Zeta is well-diversified across a wide range of verticals
Zeta is well-diversified across a wide range of verticals FY 2023 Revenue by Vertical Well Diversified Customer Set Consumer & Retail, Automotive, 4% 17% • Broad coverage across 15 Technology & Media, 4% different industry verticals Advertising & Marketing, 5% • 6 of top 10 verticals grew Insurance,
Slide 14: Serving over 40% of the Fortune 100
Serving over 40% of the Fortune 100 14 11 of the 17 largest 4 of the 10 largest 4 of the 10 largest Insurance Consumer & Retail Financial Services companies in the world companies companies 6 of the 11 largest 4 of the largest Agency 4 of the 4 largest Technology & Media Hold Cos Telecommunications
Slide 15: 2Q'24 & FY'24 Guidance
20'24 & FY'24 Guidance '
Slide 16: Guidance that is balanced between growth & operating leverage
Guidance that is balanced between growth & operating leverage 2Q’24 FY’24 2Q’24 FY’24 Guidance Guidance Guidance Guidance Range Range Midpoint Midpoint Total Zeta Revenue $210M – $214M $895M – $905M $212M $900M % Growth Y/Y 22% – 25% 23% – 24% 23% 24% Adj. EBITDA1,2 $35.3M – $35.8M $170M – $172M $35
Slide 17: Raising guidance in each quarter of 2024
Raising guidance in each quarter of 2024 1Q’24 2Q’24 3Q’24 4Q’24 FY’24 Actuals Guidance Guidance Guidance Guidance 2024 Revenue Prior Guidance $187M $204M $225M $259M $875M Y/Y Growth % 19% 19% 19% 23% 20% NEW 2024 Revenue: 1Q Actuals + New Guidance $195M $212M $230M $263M $900M NEW Y/Y Growth % 24%
Slide 18: Continuing to anticipate $15M of political candidate revenue in 2024
Continuing to anticipate $15M of political candidate revenue in 2024 (no change from prior guidance) 1Q’24 2Q’24 3Q’24 4Q’24 FY’24 Actuals Midpoint Zeta excluding Political Candidate $195 $210 $225 $255 $885 Revenue Estimated Political Candidate Revenue NM* $2 $5 $8 $15 Total Zeta Revenue Updated Gu
Slide 19: Guiding to Free Cash Flow of $80M, on track to achieve Zeta 2025 target of $110M+
Guiding to Free Cash Flow of $80M, on track to achieve Zeta 2025 target of $110M+ $250 ADJ. EBITDA 55%+ 60% FCF $ 47% $200+ FCF / EBITDA % 42% 42% $171 50% $200 $129 40% 28% $150 26% $110+ $92 30% $80 $63 $100 $55 20% $40 $39 $17 $50 $10 10% $- 0% 2020 2021 2022 2023 2024 2025 2020 2021 2022 2023 20
Slide 20: We are targeting to reduce SBC and dilution substantially
We are targeting to reduce SBC and dilution substantially 10 Incorporating the use of more PSUs and Options (vs. RSAs only) Pre-IPO $73 Post-IPO 1Q’24 Actuals: $31 Pre-IPO: $23M $85 $5 Post-IPO: $30M $8 $38 Fully diluted share count: 220M $22 2024e 2025e 2026e 2027e Share Dilution % : 3.5% – 3.75% L
Slide 21: Zeta makes sophisticated marketing SIMPLE
Zeta makes sophisticated marketing SIMPLE 21
Slide 22: Being a Sophisticated Marketer Is Harder Than Ever
What message will resonate? Being a Sophisticated Who should Marketer Is How can I make Gen AI I target? How do I know who’s Harder Than Ever actionable? in market Which channels With fragmented tools, are more profitable? processes, and poorly integrated data, 55% of marketers cannot identify What
Slide 23: Zeta helps marketers Acquire, Grow & Retain customers more efficiently and effectively
Zeta helps marketers Acquire, Grow & Retain customers more efficiently and effectively by… …enriching customer data …synthesizing data …and delivering real-time with Zeta data… into Intelligence… omnichannel engagement CRM EMAIL Zeta MOBILE AI Marketing Platform SOCIAL WEBSITE PERSONALIZATION DSP Ze
Slide 24: Zeta consolidates the fragmented marketing landscape
Zeta consolidates the fragmented marketing landscape The Zeta Marketing Platform (ZMP) consolidates all 3 Data Marketing Management Automation Engagement (Marketing Clouds (Programmatic) (CDPs) & ESPs) How brands create a unified How brands effectively reach and How brands acquire new customer datab
Slide 25: The Zeta Advantage
The Zeta Advantage Integrated Identity & Intelligence The ZMP is Makes Generative AI Actionable Built For Results Real time Only Zeta’s Purpose-Built Platform Can Replace Legacy Technology or Optimize Flexibility to Wrap Around Tech Stack Existing Tech Lower Total Cost of Ownership Generates Higher
Slide 26: Zeta's long-term partnership with global healthcare provider results in double-digit growth in spend
Zeta’s long-term partnership with global healthcare provider results in Published 2/27/24 double-digit growth in spend Acquire Grow Retain USE CASE THEIR CHALLENGES WHY ZETA OUR PARTNERSHIP • Cultivating loyalty among members to • Our personalized solution • 10+ years; Zeta viewed as a trusted grow
Slide 27: Zeta's intelligence and activation drove 86% increase in sales at locations targeted
Zeta’s intelligence and activation drove 86% increase in sales at Published 2/27/24 locations targeted versus prior period Acquire Grow Retain USE CASES THEIR CHALLENGES WHY ZETA OUR PARTNERSHIP • Lack ‘Single View of the Customer’ • Our identity resolution and ability to • Began as a pilot that qui
Slide 28: Zeta's data management, identity resolution, and direct channel expansion drive increased sales
Zeta’s data management, identity resolution, and direct channel Published 2/27/24 expansion drive increased sales Acquire Grow Retain USE CASES THEIR CHALLENGES WHY ZETA OUR PARTNERSHIP • Absence of unified identity with • Our CDP technology consolidated • Reduced audience & campaign siloed data acr
Slide 29: Our identity data graph is durable and growing
Our identity data graph is durable and growing In an Evolving Data Privacy Environment, Zeta’s Proprietary Identity Data Set has Consistently Grown Unique Global 0.26 15B+ 23 Digital Identifiers In US 0.255 18 0.25 242M+ People In US 0.245 13 0.24 8 0.235 0.23 3 0.225 0.22 -2 2021 2021 2022 2022 202
Slide 30: The intelligence powered era is breaking boundaries
The intelligence powered era is breaking boundaries U.S. TAM 11 CAGR 11 OMNICHANNEL 2023 ’23 – ‘25 ENGAGEMENT Data Media MarTech SIGNALS Intelligence Powered $19B 14% Marketing IPM Technology 12% Intelligence Powered Media $64B IDENTITY See slide 32 for footnote definitions 30
Slide 31: Appendix
Appendix
Slide 32: Footnotes
Footnotes 1 | 1Q’24 GAAP net loss of $40M, or 20% of revenue, includes $53M of stock-based compensation. See the graded vesting schedule on slide 20. 2 | Adjusted EBITDA, Adjusted EBITDA Margin, and Free Cash Flow are non-GAAP metrics, see reconciliations in the Appendix. 3 | 1Q'24 revenue includes
Slide 33: 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 34: Bridge to Adj. EBITDA and Adj. EBITDA margin
Bridge to Adj. EBITDA $ in ’000s, unless otherwise noted and Adj. EBITDA margin ` 1Q’24 1Q’23 FY’23 FY’22 FY’21 FY’20 FY’19 Net loss $ (39,566) $ (56,955) $ (187,481) $ (279,239) $ (249,563) $ (53,225) $ (38,465) Net loss margin (20.3)% (36.1)% (25.7)% (47.3)% (54.4)% (14.5)% (12.6)% Depreciation an
Slide 35: Free Cash Flow reconciliation
Free Cash Flow reconciliation $ in ’000s, unless otherwise noted 1Q’24 1Q’23 FY’23 FY’22 FY’21 FY’20 FY’19 Cash Flows from Operating Activities $ 24,666 $ 20,104 $ 90,523 $ 78,486 $ 44,292 $ 35,539 $ 30,599 Capital expenditures (5,811) (5,164) (20,483) (22,232) (9,482) (2,249) (3,300) Website and so