Zeta Global Holdings Corp. Q2 FY2025 earnings call

• Delivered 35% revenue growth and 52% adjusted EBITDA growth in Q2, both above guidance. - Launched Zeta Answers, a prescriptive AI framework. - Sustained momentum in agency business with large holding companies and independent agencies. - OneZeta initiative driving multiuse case adoption, with significant wins. - Zeta Live returns to NYC in October with Tom Brady and Serena Williams as headliners, and Investor Day on October 8. - Increased full-year revenue guidance by $21 million, adjusted EBITDA guidance by $6 million, and free cash flow guidance by $10.5 million.

In the second quarter, revenue was $308 million, up 35% year-over-year. Adjusted EBITDA grew by 52% to $59 million. Scaled customer count grew to 567, up 21% year-over-year. Scaled customer quarterly ARPU was $532,000 (up 11% year-over-year) and super-scaled customer quarterly ARPU was $1.6 million (up 19% year-over-year). Direct mix was 75% in Q2, up from 73% in Q1 2025 and 67% a year ago.

• 2025 revenue midpoint now $1.263 billion, up $21 million from prior guidance. - 2025 adjusted EBITDA midpoint $264.6 million, up $6 million from prior guidance. - 2025 free cash flow midpoint $142 million, up $10.5 million from prior guidance. - Projected over $2.1 billion in annual revenue, at least 25% adjusted EBITDA margin, and 16% plus free cash flow margin in 2028.

No specific risks discussed in detail

Q: Scott Berg from Needham & Company asked about interest level in new AI module and linearity in the quarter.

A: David Steinberg said awareness is good with meaningful uptake but can improve, and Chris Greiner said April was as strong as March with consistent growth throughout Q2.

Q: Luke Hannan from Canaccord Genuity asked about partnership with Amazon and ROI from AI.

A: David Steinberg said partners with Amazon, not a competitor, and Chris Greiner talked about sales pipeline and margin improvement.

Q: Callie from Goldman Sachs asked about AI-driven campaigns and OneZeta sales head count.

A: David Steinberg said massive AI adoption with high ROI, and Christopher Greiner talked about geography and industry focus for sales head count additions.

Q: Koji Ikeda from Bank of America asked about product strategy and gross margins.

A: David Steinberg said growth across all use cases and Christopher Greiner discussed gross margin trajectory and Zeta 2028 model assumptions.

Q: Bobby Dee from Truist Securities asked about brands bringing marketing in-house and Zeta Data & AI Lab.

A: David Steinberg said agencies still driving growth and Nate Yohannes joining for innovation.

Q: Matthew Swanson from RBC asked about independent agencies and brand recognition.

A: David Steinberg said independent agencies partner with Zeta for AI tools and brand recognition is growing.

Q: Zach Cummins from B. Riley Securities asked about OneZeta and expanding use cases.

A: David Steinberg said showing case studies to existing clients to add more use cases.

Q: Jackson Ader from KeyBanc asked about agency brand count and vertical growth.

A: David Steinberg said joint relationship with agencies and strong growth in verticals despite 2024 comparisons.

Q: Clark Wright from D.A. Davidson asked about agency segment percentage and ARPU without agency.

A: Christopher Greiner said not breaking out agency segment percentage and enterprise business also growing.