On July 31, 2024, Zeta Global Holdings Corp (ZETA, Financial) released its 8-K filing for the second quarter of 2024, showcasing a robust financial performance that exceeded analyst expectations. Zeta Global Holdings Corp is an omnichannel data-driven cloud platform that provides enterprises with consumer intelligence and marketing automation software. The company serves enterprise customers across multiple industries, including financial services, insurance, telecommunications, automotive, travel and hospitality, and retail. Its Zeta Marketing Platform (ZMP) leverages sophisticated machine learning algorithms and a vast opted-in data set for omnichannel marketing.
Performance and Challenges
Zeta Global Holdings Corp (ZETA, Financial) reported record quarterly revenue of $228 million, a 33% year-over-year increase, surpassing the analyst estimate of $212.45 million. The company also reported a GAAP net loss of $28 million, or $0.16 per share, aligning with the analyst estimate of -$0.16 per share. Despite the net loss, the company showed significant improvement compared to the $52 million net loss in Q2 2023.
The company faces challenges such as high stock-based compensation expenses, which amounted to $52 million in Q2 2024. This expense significantly impacts the net income, but the company’s strategic investments in AI and data are expected to drive future growth and efficiency.
Financial Achievements
Zeta Global Holdings Corp (ZETA, Financial) achieved several financial milestones in Q2 2024:
- Scaled Customer count increased to 468, up from 460 in Q1 2024 and 425 in Q2 2023.
- Quarterly Scaled Customer ARPU rose to $479,000, a 22% year-over-year increase.
- Generated $31 million in cash flow from operating activities, a 51% year-over-year increase.
- Free Cash Flow increased by 53% year-over-year to $20 million.
- Adjusted EBITDA grew by 44% year-over-year to $38.5 million, with an Adjusted EBITDA margin of 16.9%.
These achievements are crucial for a software company like Zeta Global Holdings Corp (ZETA, Financial) as they indicate strong customer retention and growth, efficient cash management, and improved profitability metrics.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Total Revenue | $228 million | $171.8 million |
| GAAP Net Loss | -$28 million | -$52 million |
| Adjusted EBITDA | $38.5 million | $26.8 million |
| Adjusted EBITDA Margin | 16.9% | 15.6% |
Balance Sheet and Cash Flow
As of June 30, 2024, Zeta Global Holdings Corp (ZETA, Financial) reported $154.7 million in cash and cash equivalents, up from $131.7 million at the end of 2023. The company’s total assets stood at $583.9 million, with total liabilities of $366.8 million, resulting in a stockholders' equity of $217 million.
Cash flow from operating activities was $31 million for Q2 2024, compared to $21 million in Q2 2023. Free Cash Flow for the quarter was $20 million, up from $13 million in the same period last year.
Commentary and Future Outlook
“Investments we made over the last seven years to put Artificial Intelligence and data at the core of our platform are now helping us accelerate the marketing cloud replacement cycle and our overall growth rate,” said David A. Steinberg, Co-Founder, Chairman, and CEO of Zeta.
“High visibility into our customers and momentum across several of our growth catalysts drove an acceleration in revenue growth, Adjusted EBITDA margin expansion, and cash conversion in the second quarter,” said Chris Greiner, Zeta’s CFO.
Guidance
For Q3 2024, Zeta Global Holdings Corp (ZETA, Financial) has raised its revenue guidance to a range of $237.2 million to $241.2 million, representing a year-over-year increase of 26% to 28%. Adjusted EBITDA guidance has also been increased to a range of $46.8 million to $47.3 million, reflecting a year-over-year increase of 39% to 40%.
For the full year 2024, the company has raised its revenue guidance to a range of $920 million to $930 million, up from the previous guidance of $900 million. Adjusted EBITDA guidance has been increased to a range of $174.5 million to $176.5 million, and Free Cash Flow guidance has been raised to a range of $80 million to $90 million.
For more detailed financial information, please refer to the 8-K filing.
Explore the complete 8-K earnings release (here) from Zeta Global Holdings Corp for further details.
