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Call participants
- Chairman & Chief Executive Officer — David Steinberg
- Chief Financial Officer — Chris Greiner
- Senior Vice President, Finance — Matt Pfau
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Takeaways
- Revenue — $337 million, up 26% year over year, or 28% excluding political and live intent contributions, with growth acceleration from Q2.
- Adjusted EBITDA — $78.1 million, with a 23.2% margin, reflecting 46% year-over-year growth and a 320 basis point margin improvement.
- Free Cash Flow — $47.1 million, rising 83% year over year and representing a 14% margin, the highest margin in company history.
- Scaled Customer Count — 572, up 20% year over year, with five additions sequentially; super scaled customer count reached 180, up 25% year over year and an increase of 12 sequentially.
- Scaled Customer Quarterly ARPU — $579,000, up 4% year over year, or 13% adjusted for political revenue; super scaled customer ARPU was $1.6 million, rising 1% year over year, or 12% excluding political impacts.
- Top Industry Vertical Growth — Seven of the top ten verticals each grew above 20% year over year on a trailing twelve-month basis, with telecom newly joining this group.
- Direct Channel Mix — Accounted for 75% of third-quarter revenue, consistent with Q2, up from 70% in the prior year, showing further adoption of the agency direct channel.
- GAAP Net Loss — $3.6 million, a notable improvement from $17.4 million in 2024, with $6.5 million in acquisition-related expenses this quarter; management indicated GAAP profitability absent these costs.
- Share Repurchases — 1.7 million shares bought for $28 million during the quarter; 6 million shares repurchased year-to-date for $85 million, with zero net dilution in the third quarter.
- 2025 Guidance Update — Full-year revenue guidance midpoint raised by $11 million to $1.275 billion (~26% year-over-year growth, excluding political/live intent); adjusted EBITDA midpoint increased by $9 million to $273.7 million (42% growth); free cash flow guidance midpoint lifted by $15 million to $157.4 million (up 71%).
- 2026 Initial Organic Guidance — Revenue $1.54 billion for 21% growth, adjusted EBITDA $354 million at a 23% margin, and free cash flow $209 million at a 14% margin; excludes any Marigold contribution.
- Zeta Live Event Impact — Attendance at Zeta Live climbed 35% to 1,500, with a pipeline goal of closing over $100 million in incremental business from the event.
- Athena Launch — Athena, an AI-enabled conversational agent, was launched in internal beta with client beta due by Q4 and full production readiness targeted by end of 2026.
- OneZeta Initiative — Customers adopting two or more use cases generate over three times the annual revenue of single-use case customers, demonstrating the multiplier effect of deeper platform adoption.
- Marigold Acquisition — Completion expected by year-end; brings over 100 enterprise clients and valuable loyalty data assets aimed at further strengthening AI product offerings.
Summary
Zeta Global Holdings Corp. (ZETA 0.36%) delivered accelerating growth both in revenue and profitability metrics, while concurrently raising 2025 guidance and introducing a 2026 organic baseline that excludes pending M&A contributions. The company explicitly highlighted the launch of Athena as a next-generation AI conversational agent, emphasizing its planned integration to drive customer expansion and ease of use. Significant customer and industry vertical expansion, as well as enhanced share repurchase discipline, contributed to steady operating leverage and improving investor returns. Strategic data advantages and the pending Marigold acquisition are positioned by management as key pillars for future top-line growth and differentiated platform capabilities.
- Steinberg said, “every dollar that is spent through the Zeta marketing platform returns a six x return in revenue to our clients,” positioning the platform as competitive with industry walled gardens.
- The direct mix increase and expanded brand counts within agencies illustrate growing influence with both direct enterprise and agency clients.
- Management reported rapid customer onboarding and deal closure rates, attributing this to automation and AI-enabled internal processes.
- Guidance explicitly stated that Marigold’s financial contribution will not be included until post-close reporting, reaffirming clarity of separation between organic and acquired revenue for investors.
- CFO Greiner clarified, “We continue to focus on using greater than half of our free cash flow for retiring shares and repurchasing shares,” with current buybacks representing about 85% of year-to-date free cash flow.
Industry glossary
- ZMP (Zeta Marketing Platform): Zeta’s unified cloud-based solution for omnichannel marketing automation, analytics, and predictive consumer intelligence.
- OneZeta: A strategic initiative designed to consolidate multiple marketing use cases for customers on the Zeta Marketing Platform, amplifying revenue and engagement per client.
- Athena: Zeta’s proprietary AI conversational agent, offering voice-activated, real-time control over planning, execution, analysis, and optimization functions within the Zeta Marketing Platform.
- LiveIntent: Acquisition completed by Zeta, contributing specialized capabilities to Zeta’s product and cross-sell opportunities, especially related to email and identity targeting.
- Super Scaled Customers: Clients whose scale and usage on the Zeta platform significantly exceed the standard scaled customer classification, contributing higher ARPU and broader adoption metrics.
Conference Call Transcript
Matt Pfau: Thank you, operator. Hello, everyone, and thank you for joining us for Zeta Global Holdings Corp.’s third quarter 2025 Conference Call. Today’s presentation and earnings release are available on Zeta’s Investor Relations website at investors.zetaglobal.com, where you will also find links to our SEC filings along with other information about Zeta Global Holdings Corp. Joining me on the call today are David Steinberg, Zeta’s cofounder, chairman, and chief executive officer, and Chris Greiner, Zeta’s chief financial officer.
Before we begin, I’d like to remind everyone that statements made on this call, as well as in the presentation and earnings release, contain forward-looking statements regarding our financial outlook, business plans and objectives, and other future events and developments, including statements about the market potential of our products, potential competition, revenues of our products, and our goals and strategies. These statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected. These risks and uncertainties include those described in the company’s earnings release and other filings with the SEC and speak only as of today’s date.
In addition, our discussion today will include references to certain supplemental non-GAAP financial measures which should be considered in addition to and not as a substitute for our GAAP results. We use these non-GAAP measures in managing our business and believe they provide useful information for our investors. Reconciliations of the non-GAAP measures to the corresponding GAAP measures, where appropriate, can be found in the earnings presentation available on our website as well as our earnings release and our other filings with the SEC. With that, I will now turn the call over to David.
David Steinberg: Thank you, Matt. Good afternoon, everyone, and thank you for joining us today. For the seventeenth quarter in a row, we once again delivered a beat and raise quarter driven by our leadership in AI-powered marketing. In Q3, revenue was $337 million, up 28% year over year, excluding political and live intent. This is an acceleration in growth from Q2. Adjusted EBITDA was $78 million, up 46% year over year. And free cash flow was $47 million, up 83% year over year, representing a margin of 14%. This is the highest free cash flow margin we have ever achieved, and we did it while accelerating our revenue growth, excluding political and live intent.
This demonstrates our focus on driving growth and improved profitability while investing to extend our AI leadership. Based on our year-to-date momentum and our pipeline exiting Zeta Live, we are raising our 2025 revenue guidance by $11 million at the midpoint and providing an initial 2026 outlook well ahead of consensus. In October, we hosted our fifth annual Zeta Live, our most successful event yet, with max capacity audience. Attendance was up 35%, and, unfortunately, we had to turn away a large number of people. For next year, we are currently looking for a bigger venue. We had strong executive participation representing more than $100 billion in annual marketing spend decision-makers in attendance.
At Zeta Live, 38 sessions featured 95 speakers, delivered nearly 120 product demos, and shockingly served 7,600 coffees to the 1,500 attendees. Customer feedback was overwhelmingly positive, with many attendees commenting that it was one of the best events they have ever attended. Our goal is to close over $100 million in incremental business coming out of Zeta Live. At Zeta Live, we launched Athena, our next step in leading the AI revolution in marketing. Athena is our AI conversational super intelligent agent that becomes the intelligent system for our clients’ businesses and ultimately for their lives.
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