Zeta Global’s Earnings Call Highlights Record Growth and AI Success

Zeta Global Holdings Corp. Class A ((ZETA)) has held its Q4 earnings call. Read on for the main highlights of the call.

The recent earnings call for Zeta Global Holdings Corp. Class A was filled with optimism and positivity. The company reported record-breaking financial performance, highlighting significant growth in revenue and EBITDA, alongside successful strategic initiatives such as AI adoption and acquisition integration. Despite some challenges, the overall sentiment was overwhelmingly positive, with a strong growth outlook under the Zeta 2028 plan.

Record Revenue and EBITDA

Zeta Global achieved a milestone in Q4 2024 by generating record revenue of $315 million, marking a 50% increase year-over-year. The company also reported record adjusted EBITDA of $70 million, up 57% from the previous year. This strong financial performance underscores Zeta’s robust business model and effective execution of its growth strategies.

Strong Full-Year Performance

For the full year 2024, Zeta’s revenue surpassed the $1 billion mark, exceeding initial guidance by $131 million or 15%. This achievement reflects the company’s ability to outperform expectations and deliver consistent growth throughout the year.

Positive GAAP Net Income

In a significant milestone, Zeta reported positive GAAP net income for the first time as a public company, with $15.2 million in Q4 2024. This marks a turning point for the company, showcasing its profitability potential.

AI Adoption and Impact

AI adoption across Zeta’s platform surged with a 200% sequential growth in Q4, significantly impacting consumption revenue, which increased over 40% in 2024. This highlights the company’s strategic focus on leveraging AI to drive revenue growth and enhance operational efficiency.

Successful Integration of LiveIntent

Zeta completed the integration of LiveIntent ahead of schedule in early January, leading to the launch of synergistic products like Zeta Direct. This successful integration demonstrates Zeta’s capability to effectively incorporate acquisitions into its operations, enhancing its product offerings.

Growth in Scaled Customers

The total scaled customer count grew to 527 by the end of 2024, representing a 17% increase year-over-year. This growth in customer base is a testament to Zeta’s ability to attract and retain large-scale clients, contributing to its revenue expansion.

Zeta 2028 Plan

Zeta has outlined an ambitious Zeta 2028 plan, aiming for a 20% organic revenue CAGR between 2024 and 2028, with a target of over $2.1 billion in revenue by 2028. This plan reflects the company’s long-term vision and commitment to sustained growth.

Impact of Short Seller Report

Zeta faced $2 million in additional expenses to defend against a short seller report. However, investigations found no merit in the allegations, allowing the company to maintain its focus on growth and strategic initiatives.

Working Capital Headwind from Agencies

A $22 million working capital headwind was noted due to growth with agencies and longer payment cycles in the industry. Despite this challenge, Zeta continues to manage its working capital effectively to support its growth trajectory.

Guidance for 2025 and Beyond

Looking forward, Zeta has provided guidance for 2025, predicting a sixth consecutive year of 20%+ growth. The company forecasts a 20% organic revenue CAGR between 2024 and 2028, with plans to improve its adjusted EBITDA margin by 580 basis points to at least 25% and expand its free cash flow margin by 700 basis points to at least 16% by 2028. Zeta’s strategic initiatives include expanding its customer base, enhancing its partnership ecosystem, and leveraging AI capabilities to drive productivity and revenue gains.

In conclusion, Zeta Global Holdings Corp. Class A’s earnings call was characterized by a strong positive sentiment, driven by record financial performance and strategic growth initiatives. The company’s forward-looking guidance and ambitious Zeta 2028 plan underscore its commitment to sustained growth and innovation, making it a compelling prospect for investors and stakeholders.