Yahoo Finanza Zeta Global Holdings Corp (ZETA) (Q1 2024) Earnings Call Transcript Highlights: Strong Growth ...
Revenue: $195 million, up 24% year-over-year.
Adjusted EBITDA: $30.5 million, up 27% year-over-year.
Adjusted EBITDA Margin: 15.6%, expanded by 40 basis points year-over-year.
Full Year Revenue Guidance: Raised to $900 million, indicating 24% year-over-year growth.
Net Loss: $40 million, including $53 million of stock-based compensation.
Free Cash Flow: $15 million, up 51% year-over-year.
Scaled Customers: 460, up 12% year-over-year.
Superscale Customer Growth: Accelerated to 31% year-over-year.
Customer ARPU Growth: 11% year-over-year.
Release Date: May 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Zeta Global Holdings Corp (NYSE:ZETA) reported a strong start to 2024 with a 24% year-over-year revenue increase to $195 million in Q1.
Adjusted EBITDA for Q1 rose 27% year-over-year to $30.5 million, with a margin expansion of 40 basis points to 15.6%.
The company raised its full-year 2024 revenue guidance by $25 million to $900 million, reflecting confidence in continued growth and market momentum.
Zeta Global Holdings Corp (NYSE:ZETA) launched over 300 virtual agents through its generative intelligent agent Composer store, enhancing platform capabilities and customer engagement.
The company was certified as a Great Place to Work in both the United States and India, highlighting its strong corporate culture and employee satisfaction.
Negative Points
Despite strong growth, the direct revenue mix decreased to 67% in Q1, which may indicate a shift towards lower-margin integrated channels.
The company's cost of revenue increased by 490 basis points year-over-year to 39.4%, although it showed an 80 basis point improvement quarter-to-quarter.
Zeta Global Holdings Corp (NYSE:ZETA) reported a GAAP net loss of $40 million in Q1, influenced by $53 million of stock-based compensation.
Political candidate revenue guidance remains unchanged despite the overall increase in revenue guidance, suggesting potential uncertainty in this segment.
The company's free cash flow guidance was not raised, with the only gating factor being the timing of collections from newer agency customers.
Q & A Highlights
Q: Can you discuss the factors helping Zeta Global land larger agency relationships within the first year? A: David Steinberg, CEO, explained that Zeta Global's increasing familiarity in the market has expedited the onboarding process with agencies. The company's efficiency and effectiveness in using their platform have encouraged quicker adoption and integration, leading to larger initial engagements.
Q: How is the intelligent agent feature being adopted by clients, and what impacts is it having? A: David Steinberg, CEO, noted that the uptake of the intelligent agent feature has been strong, with over 300 agents created shortly after launch. This feature is enhancing efficiency and driving revenue growth, indicating robust client engagement and repeated use.
Q: What is the impact of the growth in the agency business on the direct revenue mix? A: Christopher Greiner, CFO, stated that the direct revenue mix was at 67% in Q1, which he expects to be the low point. The company anticipates this mix to improve as agency relationships mature and shift more towards direct revenue channels.
Q: Can you provide insights into the initiatives to drive increased channel usage among brands? A: Christopher Greiner, CFO, highlighted significant growth in the number of super-scaled customers and a strong increase in scaled customer ARPU, driven by customers using multiple channels. This indicates successful channel expansion and increased engagement.
Q: What are the expectations for political ad spending in the upcoming election cycle? A: David Steinberg, CEO, emphasized that despite some funds being diverted to legal fees, the overall political ad spend is expected to be the highest ever for an election cycle in the U.S., with Zeta Global well-positioned to benefit.
Q: How is Zeta Global enhancing its mobile platform, and what are the revenue expectations? A: David Steinberg, CEO, mentioned that Zeta Global is advancing its mobile capabilities with significant product launches expected by mid-year. He anticipates that mobile will become a major revenue driver starting next year, potentially growing into a $100 million business.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
