Zeta Global says short-seller report ‘riddled with misrepresentations’

Zeta Global (ZETA) issued the following statement in response to claims made in a report by Culper Research, a short-seller, published on November 13, 2024, stating: “Based upon Zeta’s and its legal counsel’s preliminary review and evaluation of the report, the Company believes this report is riddled with misrepresentations, speculative conjecture, and categorically false statements. The report is misleading and conveys, at most, a superficial understanding of Zeta’s business and practices. It relies heavily on questionable sources that get basic facts wrong, cites financial metrics that are off by hundreds of millions of dollars, and doesn’t even correctly identify the Company’s Big Four auditor. We are providing the facts on the report’s most egregious claims here: Zeta is confident in its internal accounting processes and controls. Zeta’s independent auditor, Deloitte, performs annual audits of the Company’s financial statements. Zeta is confident in its evaluation of contracts and the determination of revenue recognition in accordance with Generally Accepted Accounting Principles. On a quarterly basis, Zeta management briefs the Audit Committee of the Board of Directors on its relationships with customers who are also vendors. In the aggregate, revenue generated by Zeta’s customer relationships that are also vendors is insignificant. The opinion from our independent auditors, Deloitte, related to Zeta’s FY2023 financial statements was unqualified, as was the opinion on the Company’s internal controls over financial reporting as of December 31, 2023. Zeta is confident in its data collection practices, policies and processes to ensure compliance with applicable laws. We do not operate so-called “consent farms”. Zeta has made significant investments in its data protection, data governance, and privacy oversight and is regularly audited and reviewed by partners and clients. In addition, Zeta reviews the opt-in/opt-out processes and privacy policies of its data partners. Contrary to the report, the total contribution of Apptness and ArcaMax to Zeta’s business is not material. Together, through the third quarter of 2024, their year-to-date revenue contribution is less than 3% and they make up less than 1% of Zeta’s data assets. These contributions have trended down. As further evidence of the inaccuracies of the report, Digital Media Solutions is not a material customer or partner, as demonstrated by its trailing twelve-month revenue being less than $200,000 as of September 30, 2024.”