Supplemental
Q1'24 Earnings
Presentation
May 6, 2024
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 Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with these safe harbor provisions. Any statements made in this presentation or during the earnings call that are not statements of historical fact, including statements about our second, third, and fourth quarters and full year 2024 guidance, the Zeta 2025 targets, and the timing of when we will achieve such targets, our ability to execute on KPIs and grow our scaled and super scaled customers, expected political candidate revenues, anticipated stock based compensation reductions, the capabilities of AI and Zeta's platform, and the growth and expansion of the Zeta Marketing Platform, are forward-looking statements and should be evaluated as such. Forward-looking statements include information concerning our anticipated future financial performance, our market opportunities and our expectations regarding our business plan and strategies. These statements often include words such as "anticipate," "expect," "suggests," "plan," "believe," "intend," "estimates," "targets," "projects," "should," "could," "would," "may," "will," "forecast," "outlook, "guidance" and other similar expressions. We base these forward-looking statements on our current expectations, plans and assumptions that we have made in light of our experience in the industry, as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances at such time. Although we believe that these forward-looking statements are based on reasonable assumptions at the time they are made, you should be aware that many factors could affect our business, results of operations and financial condition and could cause actual results to differ materially from those expressed in the forward-looking statements. These statements are not guarantees of future performance or results. The forward-looking statements are subject to and involve risks, uncertainties and assumptions, and you should not place undue reliance on these forward-looking statements. These cautionary statements should not be construed by you to be exhaustive and the forward- looking statements are made only as of the date of this presentation. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
The second quarter and full year 2024 guidance and Zeta 2025 targets provided herein are based on Zeta's current estimates and assumptions and are not a guarantee of future performance. The guidance provided and Zeta 2025 targets are subject to significant risks and uncertainties, including the risk factors discussed in the Company's reports on file with the Securities and Exchange Commission, that could cause actual results to differ materially. There can be no assurance that the Company will achieve the results expressed by this guidance or the targets.
This presentation contains non-GAAP financial measures such as adjusted EBITDA, adjusted EBITDA margin, and free cash flow ("FCF"). These measures are not prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") and have important limitations as analytical tools. Non-GAAP financial measures are supplemental, should only be used in conjunction with results presented in accordance with GAAP and should not be considered in isolation or as a substitute for such GAAP results. Refer to the Appendix of this presentation for (i) the definitions of the non-GAAP measures used in this presentation and (ii) a reconciliation of the non-GAAP financial measures used herein to the most directly comparable financial measures calculated and presented in accordance with GAAP.
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2
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 industries returned to growth in 1Q
- Political candidate spending pipelines are starting to build
- Winning new business & rapidly expanding with large Agency HoldCos
- Launched 300 intelligent agents in 1Q'24
- Connecting the mobile channel to the intelligence within our Data Cloud
- Driving productivity gains with sales headcount and marketing investments, as well as through the expansion of our partner ecosystem
- Increasing guidance for each quarter of 2024
- Increasing 2024 revenue guidance by $25M to $900M, up 24% Y/Y
- Increasing 2024 Adjusted EBITDA1,2 guidance by $5M to $171M, up 32% Y/Y
REVENUE3 | CASH FROM OPS | ADJ. EBITDA1,2 | ADJ. EBITDA MARGIN1,2 | |
RESULTS | $194.9M | $24.7M | $30.5M | 15.6% |
1Q'24 | ||||
24% Y/Y GROWTH | 23% Y/Y GROWTH | 27% Y/Y GROWTH | 40 BPS Y/Y EXPANSION | |
See slide 32 for footnote definitions |
See appendix for definitions of non-GAAP metrics used herein and reconciliations to the most directly comparable GAAP metric
3
Kicking off the year with strong
underlying fundamentals
Scaled Customer Count
Scaled Customer ARPU
Industry Verticals
TOTAL SCALED4
460
+12% Y/Y
4Q'23: 452
1Q'23: 411
SUPER-SCALED5
144
+31% Y/Y
4Q'23: 131
1Q'23: 110
TOTAL SCALED6
$416K
4Q'23: $454K
1Q'23: $374K
SUPER-SCALED7
$1.1M
4Q'23: $1.3M
1Q'23: $1.2M
5 of the Top 10
Verticals Grew
Greater Than 30%
GAAP Cost of Revenue13
39.4%
4Q'23: 40.2%
1Q'23: 34.5%
See slide 32 for footnote definitions
Direct Revenue Mix8
67%
4Q'23: 73%
1Q'23: 71%
Quota Carrier Headcount
142
FY'23: 136
1Q'23: 130
See appendix for definitions of non-GAAP metrics used herein and reconciliations to the most directly comparable GAAP metric
4
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 | $24 | $31 |
$158 | 15.6% | |
15.3% | of Revenue |
of Revenue |
1Q'23 1Q'24
1Q'23 1Q'24
See slide 32 for footnote definitions
See appendix for definitions of non-GAAP metrics used herein and reconciliations to the most directly comparable GAAP metric
5
Expecting to achieve our Zeta 2025 targets early
2025 REVENUE TARGET
$1B+
$25M or 3% above | $1B+ |
initial 2024 | |
guidance9 | $900 |
$729
$591
$458
$306$368
'19 | '20 | '21 | '22 | '23 | '24* | '25 |
2025 ADJ. EBITDA1,2 TARGET
$200M+
$ | 250 | $5M or 3% above | $200+25% | |||||||||||
initial 2024 | 21% | |||||||||||||
guidance9 | 19% | |||||||||||||
18% | ||||||||||||||
$ | 200 | $171 | 20% | |||||||||||
16% | ||||||||||||||
$150 | 14% | $129 | 15% | |||||||||||
11% | ||||||||||||||
$92 | ||||||||||||||
$100 | 10% | |||||||||||||
$63 | ||||||||||||||
$50 | $40 | 5% | ||||||||||||
$ | - | 0% | ||||||||||||
'19 | '20 | 2 | '21 | 3 | '22 | 4 | '23 | '24* | '25 | |||||
1 | 5 | 6 | ||||||||||||
ADJ. EBITDA $ | ADJ. EBITDA Margin |
FCF2 | TARGET | |||||||||||||||
$110M+ | ||||||||||||||||
Operating Leverage | $110+ | |||||||||||||||
$120 | Increasing Free | 55%+ 60% | ||||||||||||||
Cash Flow2 | 47% | 55% | ||||||||||||||
$100 | 50% | |||||||||||||||
42% | 43% | $80 | 45% | |||||||||||||
$80 | ||||||||||||||||
40% | ||||||||||||||||
$55 | ||||||||||||||||
$60 | 35% | |||||||||||||||
27% | ||||||||||||||||
25% | $39 | 30% | ||||||||||||||
$40 | 25% | |||||||||||||||
$17 | ||||||||||||||||
$10 | 20% | |||||||||||||||
$20 | ||||||||||||||||
15% | ||||||||||||||||
$0 | 10% | |||||||||||||||
'20 | '21 | '22 | '23 | '24* | '25 | |||||||||||
1 | 2 | 3 | 4 | 5 | 6 | |||||||||||
FCF | ||||||||||||||||
FCF to Adj. EBITDA Ratio16 |
See slide 32 for footnote definitions | *See FY'24 Guidance outlined on slide 16
See appendix for definitions of non-GAAP metrics used herein and reconciliations to the most directly comparable GAAP metric
6
KPIs powering the early achievement of Zeta 2025
AS OF FY'23
SALES | SCALED | SCALED | DIRECT | NET | ||||||||
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 | ||||||||||||
136 | +12% YTY | $1.57M | ||||||||||
2023 | ||||||||||||
+10% YTY | ||||||||||||
2022 | 123 | 403 | $1.43M | 72% | ||||||||
100 | 355 | $1.24M | 111% | |||||||||
2021 | ||||||||||||
2020 | 72 | 336 | $1.05M |
See slide 32 for footnote definitions
2022: 77% | 2022: 112% |
2021: 76% | 2021: 113% |
See appendix for definitions of non-GAAP metrics used herein and reconciliations to the most directly comparable GAAP metric
7
Scaled customer count continues to track
ahead of the Zeta 2025 target
180
160
140
120
100
80
60
40
20
-
12 Consecutive Quarters of Sequential
Scaled Customer Expansion
440 | 452 | 460 | ||||||
425 | 131 | 144 | ||||||
403 | 411 | 124 | ||||||
118 | ||||||||
389 | 110 | |||||||
373 | 103 | |||||||
106 | ||||||||
359 | ||||||||
100 | 316 | 321 | 316 | |||||
99 | 283 | 300 | 301 | 307 | ||||
260 | 273 | |||||||
Q1'22 | Q2'22 | Q3'22 | Q4'22 | Q1'23 | Q2'23 | Q3'23 | Q4'23 | Q1'24 |
$100K - $1M | $1M+ |
Y/Y Growth:
12%
ZETA 2025
MODELED CAGR:
8-12%
See slide 32 for footnote definitions
See appendix for definitions of non-GAAP metrics used herein and reconciliations to the most directly comparable GAAP metric
8
Consistent Y/Y scaled customer ARPU expansion
Y/Y ARPU Growth %
18% 19% 19%
15%
10%
10%
10%
7%
11%
Y/Y Growth:
11%
$424 | $418 | $454 | $416 | |||||
$382 | $374 | $392 | ||||||
$341 | $355 | |||||||
1Q'24 ARPU for $1M+ is | ||||||||
12X | ||||||||
the $100K - $1M Cohort | ||||||||
Q1'22 | Q2'22 | Q3'22 | Q4'22 | Q1'23 | Q2'23 | Q3'23 | Q4'23 | Q1'24 |
ZETA 2025
MODELED CAGR:
8-12%
See slide 32 for footnote definitions | $ in thousands, unless otherwise noted
See appendix for definitions of non-GAAP metrics used herein and reconciliations to the most directly comparable GAAP metric
9
Multi-channel adoption by scaled
customers is driving ARPU expansion
$100K to $1M | ||
321 | 316 | |
Scaled | 301 | |
Customer | ||
Count |
1Q'23 | 4Q'23 | 1Q'24 | |
Quarterly ARPU | $88 | $104 | $95 |
Avg. Channels Per | 1.8 | 1.8 | 1.8 |
Greater than $1M
144
131
110
1Q'23 | 4Q'23 | 1Q'24 |
$1,158 | $1,313 | $1,120 |
2.8 | 3.0 | 2.9 |
Total Scaled Customers
1Q'23: 411
4Q'23: 452
1Q'24: 460
1 2 X O P P .
~ 6 0 %
See slide 32 for footnote definitions | $ in thousands, unless otherwise noted
See appendix for definitions of non-GAAP metrics used herein and reconciliations to the most directly comparable GAAP metric
10
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Zeta Global Holdings Corporation published this content on 06 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 May 2024 20:33:03 UTC.