Zeta Accelerates Revenue Growth in 3Q’22 to 32%

• Delivered 3Q’22 revenue of $152M, up 32% Y/Y, up 11% Q/Q

• Generated US revenue of $146M, up 36%Y/Y, Scaled Customer revenue of $148M, up 34% Y/Y, and Direct Platform revenue of $113M, up 33% Y/Y

• Added a record 16 new Scaled Customers including 6 Super Scaled Customers Q/Q, while growing Scaled Customer ARPU 19% Y/Y

• Generated cash flow from operating activities of $20M, up 92% Y/Y

• Raising 4Q’22 and FY’22 revenue and Adjusted EBITDA guidance

Zeta Global, a cloud-based marketing technology company that empowers enterprises to acquire, grow, and retain customers more efficiently, announced financial results for the third quarter ended September 30, 2022.

“Our strong third quarter results were an incredible way to celebrate our 15-year anniversary,” said David A. Steinberg, Co-Founder, Chairman, and CEO of Zeta. “The acceleration in our business is reflective of the pressure on enterprises to improve their ability to acquire, grow, and retain customers. At the same time, marketing investments must be tied to measurable outcomes that deliver a strong, verifiable return on investment. By addressing the requirements for both revenue growth and cost savings, Zeta is well positioned to make sophisticated marketing simple.”

“We once again extended our track record of ‘beat-and-raise’ execution by accelerating revenue growth while increasing profitability and cash generation,” said Chris Greiner, Zeta’s CFO. “The third quarter’s outperformance was broad-based across industries, channels and use cases as well as throughout our Zeta 2025 KPIs, serving as an important demonstration of our business model’s balance and our value proposition’s durability. Based on the strong underlying fundamentals of our business, we are increasing our fourth quarter and full year 2022 guidance, putting us ahead of pace to achieve our Zeta 2025 plan.”

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“We once again extended our track record of ‘beat-and-raise’ execution by accelerating revenue growth while increasing profitability and cash generation”

Third Quarter 2022 Highlights

• Total revenue of $152 million, an increase of 32% Y/Y and 11% Q/Q.
• Scaled Customer count of 389 compared to 373 in 2Q’22 and 347 in 3Q’21.
• Super Scaled Customer count of 106 compared to 100 in 2Q’22 and 86 in 3Q’21.
• Scaled Customer ARPU of $382K, an increase of 19% Y/Y.
• Direct platform revenue mix of 74% of total revenue, unchanged versus 3Q’21.
• Connected TV (CTV) is the fastest growing channel, up more than 250% Y/Y.
• Lowered the cost of revenue percentage by 90 basis points to 37.8% Y/Y, or 36.8%, excluding stock-based compensation¹.
• GAAP net loss of $69 million, or 45.6% of revenue, was driven primarily by $75 million of stock-based compensation. The net loss in 3Q’21 was $69 million, or 60.0% of revenue.
• GAAP loss per share of $0.49 compared to a loss per share of $0.53 in 3Q’21.
• Cash flow from operating activities of $19.5 million, compared to $10.2 million in 3Q’21.
• Free Cash Flow¹ of $9.4 million, compared to $3.7 million in 3Q’21.
• Repurchased $4.3 million worth of shares through our share repurchase programs.
• Adjusted EBITDA¹ of $22.4 million, an increase of 40% compared to $16.0 million in 3Q’21.
• Adjusted EBITDA margin¹ of 14.7%, compared to 13.9% in 3Q’21.

Guidance

Zeta anticipates revenue and Adjusted EBITDA as follows:

Fourth Quarter 2022

• Increasing revenue guidance to a range of $158 million to $162 million, up $2 million from the prior guidance implied midpoint of $158 million. The revised guidance represents a year-over-year increase of 17% to 20%.
• Increasing Adjusted EBITDA guidance to a range of $29.2 million to $29.7 million, up $0.3 million from the prior guidance implied midpoint of $29.2 million. The revised guidance represents a year-over-year increase of 28% to 30% and an Adjusted EBITDA margin of 18.0% to 18.8%.

Full Year 2022

• Increasing and narrowing our revenue expectations to a range of $574 million to $578 million, up $13 million from the midpoint of the prior guidance range of $560 million to $566 million. Revised guidance represents a year-over-year increase of 25% to 26%.
• Increasing Adjusted EBITDA to a range of $89.0 million to $89.5 million, up $2.7 million from the midpoint of the prior guidance range of $85.8 million to $87.3 million. Revised guidance represents a year-over-year increase of 41% and an Adjusted EBITDA margin of 15.4% to 15.6%.

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