Zeta Global Holdings Corp. · NYSE:ZETA

Zeta Global — Q4 2022 Earnings Presentation

31 slides from Zeta Global's earnings presentation, Feb 23, 2023

  1. Slide 1: Supplemental 4Q'22 Earnings Presentation

    Supplemental 4Q’22 Earnings Presentation July 15, 2022 February 23, 2023 2023 Zeta Global Corp. All Rights Reserved. ZetaGlobal.com

  2. 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

  3. Slide 3: 4Q & FY 2022 Earnings Summary

    4Q & FY 2022 Earnings Summary KEY THEMES RESULTS 1 THE MARKET IS MOVING TO ZETA 4Q’22 FY’22 Zeta ‘25 Pacing • Explosion of AI & data, which are foundational to the Zeta Marketing RESULTS RESULTS Vs. Model Platform (“ZMP”) • Enterprises require better outcomes at a lower TCO • Strong competitive diff

  4. Slide 4: Consistent Execution and Strong Underlying Fundamentals

    Consistent Execution and Strong Underlying Fundamentals Increasing Scaled Growing Scaled Broad Industry Customer Count1 Customer ARPU Vertical Contribution 403 2022 4Q’22 2022 $424K $1.4M 6 Of The Top 10 Verticals Grew 3Q’22: 389 4Q’21: 355 +15% Y/Y +11% QtQ +15% Y/Y Greater Than 25% Increasing Sale

  5. Slide 5: Accelerating Revenue and Adjusted EBITDA Growth While Driving Margin Expansion

    Accelerating Revenue and Adjusted EBITDA Growth While Driving Margin Expansion, Beyond Rule of 40 Revenue Growth Adjusted EBITDA1 Growth $175 $32 $135 18.5% $23 of Revenue 17.0% of Revenue 4Q’21 4Q’22 4Q’21 4Q’22 4Q’21 GAAP net loss of $61M, or 45% of revenue, includes $71M of stock-based compensati

  6. Slide 6: Accelerating Growth and Margin Expansion

    Accelerating Growth and Margin Expansion Revenue Growth Adjusted EBITDA1 Growth $92 $591 15.6% $458 $63 of Revenue $368 13.8% $306 $40 of Revenue $24 10.8% of Revenue 8.0% of Revenue FY’19 FY’20 $1.00 FY’21 FY’22 FY’19 FY’20 FY’21 FY’22 $1 GAAP net loss in 2019, 2020, 2021, and 2022 was: $38M, $53M,

  7. Slide 7: Pacing Ahead of Zeta 2025 Targets; Adding Free Cash Flow

    Pacing Ahead of Zeta 2025 Targets; Adding Free Cash Flow 2025 REVENUE TARGET 2025 ADJ. EBITDA1 TARGET FCF TARGET1 $1B+ 20%+ $110M+ $46M above initial $1B+ $10M above initial Operating Leverage 2022 guidance 2022 guidance Increasing Free Cash Flow $110+ 120 60% 250.0 22% 55%+ 55% $200+ 20% 100 20%+ 2

  8. Slide 8: Zeta 2025 KPIs In Line or Ahead of Long-term Target

    Zeta 2025 KPIs In Line or Ahead of Long-term Target SCALED SCALED DIRECT NET SALES CUSTOMER CUSTOMER PLATFORM REVENUE HEADCOUNT COUNT1 ARPU REVENUE MIX2 RETENTION3 ~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% The Company

  9. Slide 9: Scaled Customer Count is Tracking Ahead of the Zeta 2025 Target

    Scaled Customer Count is Tracking Ahead of the Zeta 2025 Target 7 Consecutive Quarters of Sequential Scaled Customer Expansion 2022 403 GROWTH: 14% 389 103 373 106 355 359 100 343 347 99 97 INITIAL ZETA 333 76 86 300 70 283 2025 REQUIRED 273 267 261 258 260 CAGR: 6% 263 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22

  10. Slide 10: Consistently Delivering Scaled Customer ARPU Growth Ahead of Target

    Consistently Delivering Scaled Customer ARPU Growth Ahead of the Zeta 2025 Target Y/Y ARPU Growth % 36% 45% 23% 10% 18% 19% 19% 15% 2022 GROWTH: $424 $368 $341 $355 $382 15% $320 $290 $299 ARPU for $1M+ Cohort is ZETA 2025 11X REQUIRED CAGR: 14% $100K - $1M Cohort Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22

  11. Slide 11: Channel Expansion Across Scaled Customer Cohorts Is Driving ARPU Expansion

    Increasing Channel Expansion Across Scaled Customer Cohorts Is Driving ARPU Expansion $100K to $1M Greater than $1M 300 Scaled 283 106 103 Customer2 Count 258 97 Total Scaled Customers2 4Q’21: 355 3Q’22: 389 4Q‘21 3Q‘22 4Q’22 4Q‘21 3Q‘22 4Q’22 4Q’22: 403 Quarterly ARPU $109 $94 $113 $1,058 $1,149 $1

  12. Slide 12: The Longer Our Customers Stay With Us, The Bigger They Become

    The Longer Our Customers Stay With Us, The Bigger They Become1 Scaled Customer ARPU 2X Opportunity graduating the <1 year $1.7M $1.7M customer cohort beyond 1-year $1.4M $1.4M ~90% Revenue driven by scaled customers who have been with Zeta >1 year $0.7M $0.7M <1 Year 1-3 Years 3+ Years Scaled Custom

  13. Slide 13: Zeta Is Well-diversified Across A Wide Range Of Verticals

    Zeta Is Well-diversified Across A Wide Range Of Verticals FY 2022 Revenue by Vertical1 Well Diversified Customer Set Financial Services 13% • Broad coverage across verticals Education, 6% • 6 of top 10 verticals grew greater Consumer & Retails, than 25% in 2022 Automotive, 12% 6% • Largest customer

  14. Slide 14: Increased Direct Platform Revenue Mix Leads to Improved Operating Leverage

    Increased Direct Platform Revenue Mix Leads to Improved Operating Leverage Continued Increase in Revenue Model1 Direct Platform Revenue Mix 78% DIRECT PLATFORM 76% Revenue generated by the ZMP comprised of 74% subscription software and utilization fees generated by channels owned and operated by Zet

  15. Slide 15: 1Q'23 & FY'23 Guidance

    1Q’23 & FY’23 Guidance 2023 Zeta Global Corp. All Rights Reserved. ZetaGlobal.com 15

  16. Slide 16: Guidance: Balanced Growth and Operating Leverage

    Guidance: Balanced Growth and Operating Leverage 1Q’23 FY’23 1Q’23 FY’23 Guidance Guidance Guidance Guidance Range Range Midpoint Midpoint Total Zeta Revenue $149M – $151M $686M – $696M $150M $691M % Growth Y/Y 18% – 20% 16% – 18% 19% 17% Adj. EBITDA1 $22.4M – $22.7M $116.5M – $118.3M $22.6M $117.4M

  17. Slide 17: Expected Approximate % of FY'23 Revenue Following 3-Year Historical Pattern

    We Expect the Approximate % of FY’23 Revenue To Follow the 3-Year Historical Pattern 1Q’23 2Q’23 3Q’23 4Q’23 2023 Quarterly 3-year average ~22% ~23% ~26% ~29% 100% % of full year revenue Guidance 2023 Revenue Guidance $149 – 151M $160M $176M $205M $691M Y/Y Growth % 18% – 20% 16% 16% 17% 17% Guidanc

  18. Slide 18: Introducing a Zeta 2025 Free Cash Flow Target of at least $110M

    Introducing a Zeta 2025 Free Cash Flow1 Target of at least $110M 55% $250 60.0% $200 55.0% $200 50.0% 42% 45.0% $150 $110 40.0% 28% $92 26% $100 35.0% $63 $40 $39 30.0% $50 $10 $17 25.0% $0 20.0% 2020 2021 2022 Zeta 2025 Adj. EBITDA 1 FCF 1 FCF to Adj. EBITDA Ratio 1 GAAP net loss in 2020, 2021, and

  19. Slide 19: Estimated Stock-based Compensation Expense

    Estimated Stock-based Compensation Expense Stock Compensation Expense ($M) 1Q’22 2Q’22 3Q’22 4Q’22 FY’22 FY’23 FY’24 FY’25 FY’26 Pre-IPO $64.8 $66.4 $58.7 $52.5 $242.4 $144.8 $75.2 $31.4 $4.5 Post-IPO Grants $8.9 $15.9 $16.5 $15.2 $56.5 $53.5 $26.1 $15.1 $8.7 New Grants to be Issued Expect to issue

  20. Slide 20: The Market's Moving To Zeta

    The Market’s Moving To Zeta 2023 Zeta Global Corp. All Rights Reserved. ZetaGlobal.com 20

  21. Slide 21: 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 1 Proprietary Patented Omnichannel Data Cloud Softw

  22. Slide 22: 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 2023 Zet

  23. Slide 23: 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 Solution

  24. Slide 24: Our Data Is Durable

    Our Data Is Durable In an Evolving Data Privacy Environment, Zeta’s Proprietary Identity Data Set has Consistently Grown 400 Unique Global Digital 12.7B+ Identifiers 600 In US 350 500 300 400 250 235M+ People 300 In US 200 200 150 100 100 0 2018 2019 2020 2021 2022 Data Privacy Regulation & Browser

  25. Slide 25: 3 Pillars of Zeta's Data Cloud

    3 Pillars of Zeta’s Data Cloud IDENTITY SIGNALS CONNECTIVITY Create a real-time 360- Capture interest and intent Attach identity to an degree view of an individual through Artificial individual and activate to using durable identifiers Intelligence to enrich deliver personalized from multiple source

  26. Slide 26: ZMP Helps Customers Realize A Strong ROI

    ZMP Helps Customers Realize A Strong ROI Zeta’s Revenue Scales With Platform Expansion CASE STUDY: ACQUIRE Insurance Customer LAND Recurring Platform Fees + • Started as $50k pilot Minimum Usage • Started with 1 channel & 1 use case Incremental 2022 • Started as a spoke in the customer’s $2B+ market

  27. Slide 27: A Leading Marketing Platform Provider

    A Leading Marketing Platform Provider ANALYST ACCOLADES THE FORRESTER WAVE™ Now Tech, Customer Data Platforms1: 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 mobi

  28. Slide 28: Appendix

    Appendix 2023 Zeta Global Corp. All Rights Reserved. ZetaGlobal.com 28

  29. Slide 29: 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

  30. Slide 30: Bridge To Adjusted EBITDA And Adjusted EBITDA Margin

    Bridge To Adjusted EBITDA And Adjusted EBITDA Margin ` 4Q’22 4Q’21 FY’22 FY’21 Net loss $(51,753) $(61,138) $(279,239) $(249,563) Net loss margin (29.5)% (45.3)% (47.3)% (54.4)% Depreciation and amortization 12,430 12,787 51,878 45,922 Restructuring expenses - 260 - 727 Acquisition related expenses

  31. Slide 31: Free Cash Flow Reconciliation

    Free Cash Flow Reconciliation 4Q’22 4Q’21 FY’22 FY’21 Cash Flows from Operating Activities $23,097 $20,926 $78,486 $44,292 Capital expenditures (5,067) (2,599) (22,232) (9,482) Website and software development costs (4,184) (3,853) (17,004) (17,274) Effect of exchange rate changes on cash and (36) 8

Zeta Global Holdings — Q4 2022 Earnings Presentation on 6ix