Zeta Global Holdings Corp. · NYSE:ZETA
Zeta Global — Q3 2024 Earnings Presentation
40 slides from Zeta Global's earnings presentation, Nov 11, 2024
Slide 1: Supplemental 3Q'24 Earnings Presentation
Supplemental 3Q’24 Earnings Presentation November 11, 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: 3Q'24 Earnings Summary
3Q’24 Earnings Summary 1 2 3 “All-in-one” Platform Expanding the Agency Increasing FY’24 Guidance Winning in the Marketplace Opportunity Even Further With Accelerating Growth Y/Y • Won an 8-figure, 5-year deal with a • Forces driving agencies to work with Zeta • Increasing 2024 revenue guidance glob
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 475 144 $557K $1.6M 5 of the Top 10 +8% Y/Y +16% Y/Y Verticals Grew 2Q’24: 468 3Q’23: 440 2Q’24: 144 3Q’23: 124 2Q’24: $479K
Slide 5: 11 straight quarters of >20% revenue growth and expanding Adj. EBITDA margins
11 straight quarters of >20% revenue growth and 15 consecutive quarters of expanding Adj. EBITDA margins Y/Y Revenue Growth Adjusted EBITDA1,2 Growth $54 $268 20.0% of Revenue $189 $34 17.9% of Revenue 3Q’23 3Q’24 3Q’23 3Q’24 See slide 37 for footnote definitions See appendix for definitions of non-
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+ $111M or 13% $23M or 14% above $10M or 13% $110+ above initial 2024 $986 $1B+ $250 initial 2024 $200 24% $120 above initial 2024 55%+ 60% 19% 48% guidance9 guidance9 18% 20%
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 14 Consecutive Quarters of Sequential 220 Scaled Customer Expansion Y/Y Growth: 8% 468 475 170 452 460 440 144 144 425 131 144 411 124 403 120 118 389 103 110 106 331 70 316 321 316 324 ZETA 2025 300 301 307 283 MODELED CAGR: 8-1
Slide 9: Accelerating Y/Y scaled customer ARPU expansion
Accelerating Y/Y scaled customer ARPU expansion Y/Y ARPU Growth % 19% 15% 10% 10% 10% 7% 11% 22% 33% Y/Y Growth: $382 $424 $392 $418 $454 $416 $479 $557 33% $374 1Q’24 ARPU for $1M+ is 3Q’24 ARPU for $1M+ is 13X 17X ZETA 2025 MODELED CAGR: the $100K - $1M Cohort 8-12% the $100K - $1M Cohort Q3'22 Q4
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 324 331 144 144 316 Scaled Customer 124 Count Total Scaled Customers 3Q’24: 475 2Q’24: 468 3Q‘23 2Q‘24 3Q’24 3Q‘23 2Q‘24 3Q’24 3Q’23: 440 Quarterly ARPU $95 $103 $95 $1,241 $1,326 $1,619 1 7X 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: 4Q'24 & FY'24 Guidance
40'24 & FY'24 Guidance '
Slide 16: Increasing 4Q'24 & FY'24 Guidance
Increasing 4Q’24 & FY’24 Guidance 4Q’24 FY’24 4Q’24 FY’24 Guidance Guidance Guidance Guidance Range Range Midpoint Midpoint Total Zeta Revenue $293.0M – $297.0M $984.1M – $988.1M $295M $986M % Growth Y/Y 39% – 41% 35% – 36% 40% 35% Adj. EBITDA1,2 $64.9M – $66.9M $187.5M – $189.5M $65.9M $188.5M % Gr
Slide 17: Increasing 4Q'24 & FY'24 Guidance
Increasing 4Q’24 & FY’24 Guidance 1Q’24 2Q’24 3Q’24 4Q’24 FY’24 Guidance Guidance Actuals Actuals Actuals Midpoint Midpoint 2024 Revenue Prior Guidance (reported as of 7/31) $263M $925M Y/Y Growth % 25% 27% REVISED 2024 Revenue: 1Q/2Q/3Q Actuals + New Guidance $194.9M $227.8M $268.3M $295.0M $986.0M
Slide 18: FY'24 Revenue Guidance Bridge
FY’24 Revenue Guidance Bridge 1100 +$61M increase in FY’24 revenue guidance $986M 1000 $925M 35% Y/Y growth $14M LiveIntent STEP 1 STEP 2 STEP 3 Acquisition 27% Y/Y growth $15M $41M +3.6 pts +2.9 pts Political 900 Political Candidate Candidate $910M +1.9 pts $931M 800 Rest of $14M $26M $21M Rest of
Slide 19: Anticipating $41M of political candidate revenue and $14M of LiveIntent revenue in 2024
Anticipating $41M of political candidate revenue and $14M of LiveIntent related revenue in 2024 1Q’24 2Q’24 3Q’24 4Q’24 Y/Y % FY’24 Y/Y % Actuals Actuals Actuals Guidance Midpoint Guidance Midpoint Zeta excluding Political Candidate & LiveIntent $195M $226M $247M $263M 25% $931M 28% Revenue Politica
Slide 20: Guiding to Free Cash Flow of $90M, on track for Zeta 2025 target
Guiding to Free Cash Flow of $90M, on track to achieve Zeta 2025 target of $110M+ $250 ADJ. EBITDA 48% 55%+ 60% FCF $ FCF / EBITDA % $189 $200+ 42% 42% 50% $200 $129 40% 28% $150 26% $110+ $92 $90 30% $63 $100 $55 20% $40 $39 $17 $50 $10 10% $- 0% 2020 2021 2022 2023 2024 2025 2020 2021 2022 2023 20
Slide 21: Targeting to reduce dilution and SBC
Targeting to reduce dilution and SBC 10 Dilution May Be Impacted By Share Price Appreciation $250 $200 Pre-IPO Post-IPO $150 $71 3Q’24 SBC Actuals: $31 $100 Pre-IPO: $16M Post-IPO: $123 $5 $31M $74 $23 $50 $42 $12 Fully diluted share count: 241M $- 1 2 3 4 5 2024e 2025e 2026e 2027e 2028e Dilution Ta
Slide 22: Zeta makes sophisticated marketing SIMPLE
Zeta makes sophisticated marketing SIMPLE 22
Slide 23: 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 24: Zeta helps marketers Acquire, Grow & Retain customers
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 25: 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 26: 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 27: Long-term partnership with global healthcare provider results in double-digit spend growth
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 28: Intelligence and activation drove 86% increase in sales at targeted locations
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 29: 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 30: 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 31: 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 37 for footnote definitions 31
Slide 32: 3Q'24 Highlights
3Q’24 Highlights
Slide 33: Zeta was named a Leader in the Latest Forrester Wave
Zeta was named a Leader in the Latest Forrester Wave16 Zeta was named as the leader, by a 3Q 2024 wide margin, scoring highest possible rating in 13 of 22 categories. Highlights 1Q 2022 “Zeta Global stands out with a solution that suits the most type of marketers.” “Zeta’s current offering leads our
Slide 34: Zeta acquired LiveIntent, a strategic rationale for Zeta
Zeta acquired LiveIntent, a highly compelling strategic rationale for Zeta IDENTITY RESOLUTION PUBLISHER CLOUD MOBILE & RETAIL MEDIA Offers Zeta new capabilities and Expands Zeta into publisher Accelerates Zeta’s mobile and products to sell in identity resolution monetization, a new market for Zeta
Slide 35: LiveIntent fulfilled all of Zeta's guiding M&A principles
LiveIntent fulfilled all 4 of Zeta’s guiding M&A principles 1 2 3 4 CRITERIA 1 CRITERIA 2 CRITERIA 3 CRITERIA 4 Possess clear Grow the acquired Fully integrate into Be accretive from synergies across business at faster our platform in less Day 1 combined customer pace than our overall than a year ba
Slide 36: Appendix
Appendix
Slide 37: Footnotes
Footnotes 1 | 3Q’24 GAAP net loss of $17.4M, or 6.5% of revenue, includes $47.2M of stock-based compensation. See the graded vesting schedule on slide 21. 2 | Adjusted EBITDA, Adjusted EBITDA Margin, and Free Cash Flow are non-GAAP metrics, see reconciliations in the Appendix. 3 | Free Cash Flow to
Slide 38: 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 39: Reconciliation for Adj. EBITDA and Adj. EBITDA margin
Reconciliation for Adj. EBITDA $ in ’000s, unless otherwise noted and Adj. EBITDA margin ` 3Q’24 3Q’23 FY’23 FY’22 FY’21 FY’20 FY’19 Net loss $ (17,375) $ (43,086) $ (187,481) $ (279,239) $ (249,563) $ (53,225) $ (38,465) Net loss margin (6.5)% (22.8)% (25.7)% (47.3)% (54.4)% (14.5)% (12.6)% Stock-b
Slide 40: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation $ in ’000s, unless otherwise noted 3Q’24 3Q’23 FY’23 FY’22 FY’21 FY’20 FY’19 Cash Flows from Operating Activities $ 34,402 $ 22,828 $ 90,523 $ 78,486 $ 44,292 $ 35,539 $ 30,599 Capital expenditures (4,893) (5,936) (20,483) (22,232) (9,482) (2,249) (3,300) Website and so