ZETA — Zeta Global Holdings Corp.

ZETA Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics:

• Revenue: $396 million, up 50% year-over-year; 29% growth excluding Marigold and political candidate revenue.
• Adjusted EBITDA: $66 million, a 42% increase year-over-year, with a margin of 16.7%.
• Free Cash Flow: $42 million, representing a 63% conversion rate.
• Super-scaled Customer Count: Increased to 189, up 19% year-over-year.
• Average Revenue Per User (ARPU): $1.7 million, up 21% year-over-year.
• Net Retention Rate: Remained above the target range of 110% to 115%.

2. Strategic Updates and Business Highlights:

• Zeta achieved its 19th consecutive "beat and raise" quarter, driven by a structural shift towards AI in marketing.
• The launch of Athena, a new AI-driven user interface, has been well-received, with a 7x increase in agentic interactions within the first week of availability.
• Significant wins included a major apparel retailer consolidating from four vendors to Zeta, showcasing the platform's ability to handle complex enterprise needs.
• The integration of Marigold is progressing well, with better-than-expected revenue contributions and operational synergies anticipated to enhance EBITDA margins.

3. Forward Guidance and Outlook:

• 2026 Revenue Guidance: Increased by $30 million to $1.785 billion, representing a 37% growth rate.
• Q2 2026 Revenue Expectation: $420 million at the midpoint, a 36% year-over-year growth.
• Adjusted EBITDA Guidance for 2026: Raised to $397 million, reflecting a 43% year-over-year increase.
• Free Cash Flow Guidance for 2026: Increased to $235 million, up from $231 million.

4. Bad News, Challenges, or Points of Concern:

• GAAP Net Loss: Reported at $13.2 million, though improved from a loss of $21.6 million in Q1 2025.
• Cost of Revenue: Increased to 41%, driven by new agency wins, which may impact margins in the short term.
• Competitive Pressures: Concerns about competitors adapting pricing strategies could affect Zeta's market position, though management believes their unique data and AI capabilities provide a strong competitive moat.

5. Notable Q&A Insights:

• Management emphasized the importance of Athena in driving efficiency and deeper engagement with clients, with a focus on large enterprises.
• There is optimism about the potential for increased wallet share as clients experience higher returns on marketing spend through Zeta’s platform.
• The sales pipeline is robust, with a 40% year-over-year increase, particularly in discretionary industries, although deal cycles remain consistent and may not accelerate immediately.
• Management highlighted the importance of training and support for clients to maximize the use of Athena, with plans for certification programs to enhance user engagement.

Overall, Zeta's Q1 2026 results reflect strong growth and strategic positioning in the AI-driven marketing landscape, with a positive outlook for continued expansion despite some challenges related to profitability and competitive dynamics.