Zeta Global Holdings Corp. · NYSE:ZETA
Zeta Global — Q2 2023 Earnings Presentation
33 slides from Zeta Global's earnings presentation, Aug 2, 2023
Slide 1: Supplemental 2Q'23 Earnings Presentation
Supplemental 2Q’23 Earnings Presentation August 2, 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: 2Q'23 Zeta Earnings Summary
2Q’23 Zeta Earnings Summary 1 2 3 2 years of “Beat & Strong Scaled Customer Accelerating Raise” Results Count Growth Profitability • Consistent execution towards • Growing scaled customers 2x • 10th straight quarter of the Zeta 2025 plan faster than Zeta 2025 model expanding Adj. EBITDA • Continued
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 6 of the Top 10 425+14% Y/Y 118 +18% Y/Y $392K $1.1M Verticals Grew 1Q’23: 411 1Q’23: 110 1Q’23: $374K 1Q’23: $1.2M Greater T
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 $172 $27 $137 15.6% $19 of Revenue 13.5% of Revenue 2Q’22 2Q’23 2Q’22 2Q’23 See slide 30 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+ $24M above initial $1B+ $7.1M above initial Operating Leverage 120 $110M+60% Increasing Free $225.0 23% 2023 guidance9 2023 guidance9 $200M+ 55% 20%+ Cash Flow 100 55%+ $715 $175.0 17% 18%
Slide 7: Pacing 6pts Ahead on Revenue & Adj. EBITDA Targets
Pacing 6pts Ahead on Revenue & Adj. EBITDA1,2 Targets 2025 REVENUE TARGET Required CAGR at time ADJ. EBITDA TARGET1,2 $1B+ of Zeta 2025 Announcement (vintage Feb. 2022) $200M+ Vs. Actual TTM growth 2023 Revenue 2023 Current $715M $125M Current Guidance 22% Zeta 2025 model CAGR Guidance 2022 $591M 28
Slide 8: Scaled Customer Count is Tracking Ahead of the Zeta 2025 Target
Scaled Customer Count is Tracking Ahead of the Zeta 2025 Target 9 Consecutive Quarters of Sequential Scaled Customer Expansion 2Q’23 Y/Y Growth: 425 14% 411 403 118 389 110 103 373 106 355 359 100 343 347 97 99 ZETA 2025 86 301 307 76 300 273 283 MODELED CAGR: 267 261 258 260 Q2'21 Q3'21 Q4'21 Q1'22
Slide 9: 12th Consecutive Quarter of Double-digit Scaled Customer ARPU Growth
12th Consecutive Quarter of Double-digit Scaled Customer ARPU Growth Y/Y ARPU Growth % 45% 23% 10% 18% 19% 19% 15% 10% 10% 2Q’23 Y/Y Growth: $424 $368 $341 $355 $382 $374 $392 10% $320 $299 2Q’23 ARPU for $1M+ is $1,127 ZETA 2025 10X MODELED CAGR: vs. the $100K - $1M Cohort of $109 14% Q2'21 Q3'21 Q
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 301 307 118 Scaled 110 Customer 273 Count 100 Total Scaled Customers 2Q’22: 373 1Q’23: 411 2Q‘22 1Q‘23 2Q’23 2Q‘22 1Q‘23 2Q’23 2Q’23: 425 Quarterly ARPU $102 $88 $109 $1,047 $1,158 $1,127 1 0 X O P P.
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 • Broad coverage across verticals 13% Education 6% • 6 of top 10 verticals grew greater Consumer & than 25% in 2022 Automotive Retail 12% 6% • Largest customer accou
Slide 13: 3Q'23, 4Q'23 & FY'23 Guidance
3Q’23, 4Q’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* Actuals Guidance Guidance Guidance 2023 Revenue Actuals & Prior Guidance $157.6M $162.0M $176.0M $205.0M $700.6M + M&A Revenue +$0.8M +$1.8M +$1.5M +$1.5M +$5.6M + Additional Upside / Raise ($0.8M) +$8.0M +$1.5M
Slide 15: Guidance Midpoints
Guidance Midpoints 3Q’23 FY’23 3Q’23 FY’23 Guidance Guidance Guidance Guidance Range Range Midpoint Midpoint Total Zeta Revenue $177M – $181M $712M – $718M $179M $715M % Growth Y/Y 16% – 19% 20% – 21% 18% 21% Adj. EBITDA1 $31.7M – $32.2M $124.2M – $124.8M $32.0M $124.5M % Growth Y/Y 41% – 44% 35% –
Slide 16: Anticipating ~2 to 3 Pts of Growth Headwind in 2H'23 from Prior Year Political
Anticipating ~2 to 3 Pts of Growth Headwind in 2H’23 from Prior Year Political Candidate Revenue Comparison ~3 pts ~2 pts Related political growth headwinds Related political $4.5 growth headwinds $207 $3 $179 $171 $172 $149 Revenue $158 Excl. political Revenue Excl. political 3Q’22 4Q’22 1Q’23 2Q’2
Slide 17: Estimated Stock-based Compensation Expense
Estimated Stock-based Compensation Expense Stock Compensation Expense ($M) FY’22 1Q’23 2Q’23 FY’23E FY’24E FY’25E FY’26E FY’27E 1 Pre-IPO $242.4 $43.0 $36.9 $143.9 $74.8 $31.3 $4.5 $0.1 2 + Post-IPO Grants Issued to Date $56.5 $21.5 $20.7 $89.1 $60.3 $33.2 $20.1 $7.2 3 + New Grants to be Issued + Ex
Slide 18: The Market is Moving To Zeta
The Market is Moving To Zeta
Slide 19: 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 20: 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 20
Slide 21: 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
Slide 22: 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 Identified 36M additional consumers who Helped the brand be smarter with their TV ad for a new medication & compa
Slide 23: 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 + • Started as $50k pilot Minimum Usage • Started with 1 channel & 1 use case Started as a spoke in the customer’s $2B+ Incremental 2022 • market
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 350 12.7B+ Digital Identifiers 600 500In US 300 400 250 235M+ People In US 300 200 200 150 100 100 0 2018 2019 2020 2021 2022 Data Privacy Regulation & Browser U
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
Slide 26: 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 27: The Importance of An Effective Integrator
The Importance of An Effective Integrator Zeta recently commissioned a study with Forrester Consulting that revealed almost half of marketers do not trust the reliability of their data due to fragmented tools, finding that marketers must invest in integrated platforms to deliver superior consumer ex
Slide 28: September 27th & 28th, 2023 Investor Event and Zeta Live Conference
September 27th & September 28th, 2023 Wed 9/27: Investor Event | 8-12PM Thurs 9/28: Zeta Live Conference | All-day • Customer Journey & Competitive Edge: Come away • Exceptional Talent: Industry experts and luminaries with an even better understanding of a customer from world-class brands; C-Suite,
Slide 29: Appendix
Appendix
Slide 30: Footnotes
Footnotes 1 | 2Q’23 GAAP net loss of $52M, or 30% of revenue, includes $58M of stock-based compensation. See the graded vesting schedule on slide 17. 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 31: 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 32: Bridge To Adjusted EBITDA And Adjusted EBITDA Margin
Bridge To Adjusted EBITDA And Adjusted EBITDA Margin $ in ’000s, unless otherwise noted ` 2Q’23 2Q’22 1H’23 1H’22 Net loss $(52,159) $(86,009) $(109,114) $(158,046) Net loss margin 30.4% 62.6% 33.1% 60.0% Depreciation and amortization 12,596 13,315 24,421 26,081 Stock-based compensation 57,612 82,33
Slide 33: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation $ in ’000s, unless otherwise noted 2Q’23 2Q’22 1H’23 1H’22 Cash Flows from Operating Activities $20,629 $14,667 $40,733 $35,850 Capital expenditures (3,786) (4,768) (8,950) (11,511) Website and software development costs (4,006) (4,121) (8,906) (8,586) Effect of exchang