- Revenue increased 39% year over year to $106.9 million
- Balanced revenue growth contribution between new customers and
existing customers
- Direct platform revenue mix improved to 77% of revenue compared
to 74% in the previous quarter
- Scaled customer count increased to 343 from 333 in the previous
quarter
- Scaled customer average revenue per user (ARPU) increased to
$299K from $289K in the previous quarter
Zeta (NYSE: ZETA), a cloud-based marketing technology company
that empowers enterprises to acquire, grow, and retain customers,
today announced financial results for the quarter ended June 30,
2021.
“Zeta’s results show its growth rate accelerating during the
second quarter, adding over 30 new customers, a 39% increase in
revenues, and 106% growth in adjusted EBITDA year over year,” said
David A. Steinberg, Co-founder, Chairman & CEO of Zeta. “We are
well positioned to benefit from the disruptive pace of digital
transformation, with brands seeking solutions that combine scale
with precision to extract more value from their first party data.
Our software, encompassing patented AI, proprietary data assets,
and real-time omnichannel capabilities, was purpose built to
empower brands to acquire, grow and retain customer relationships
at a higher ROI. A recent study we commissioned from Forrester
Consulting showed that brands using the ZMP achieve 50% higher
effectiveness on their marketing investments over a period of 3
years."
“Our strong second-quarter performance reflects our solid
execution and continued focus on our core growth drivers,” said
Chris Greiner, Zeta’s CFO. “Scaled customers, which we define as
customers with at least $100,000 of revenue over the last twelve
months, are an important cohort for Zeta and represent most of our
revenue. On a sequential basis, we increased scaled customer count
and scaled customer ARPU. We saw sales productivity continue to
ramp in the quarter. With these tailwinds and our improving revenue
visibility in mind, our outlook for revenue and adjusted EBITDA for
the third quarter and full year 2021 has improved.”
Second Quarter 2021 Financial Highlights
(Unless otherwise noted, all comparisons are to the second
quarter of 2020)
- Total revenue of $106.9 million, an increase of 39%.
- Balanced revenue growth contribution between new customers and
existing customers.
- Direct platform revenue mix improved to 77% of total revenue
compared to 74% in the previous quarter.
- Broad-based double-digit growth in 12 out of 15 verticals.
- Strong growth in both US and international markets, at 39% and
33% respectively.
- Significant omnichannel growth highlighted by nearly 500%
revenue growth in connected TV (CTV).
- Scaled customer count of 343 compared to 333 in the previous
quarter.
- Scaled customer ARPU over $299,000 compared to $289,000 in the
previous quarter.
- Operating loss of $122.3 million, compared to an operating loss
of $6.6 million, driven primarily by $119.3 million of stock-based
compensation expense compared to $0.03 million.
- Net loss of $94.9 million, compared to a net loss of $15.1
million.
- Adjusted EBITDA of $11.4 million, compared to $5.5
million.
- Diluted loss per share of $1.92, compared to a diluted loss per
share of $0.58.
Second Quarter 2021 Business Highlights
- Announced a partnership with Dun & Bradstreet (D&B) to
bring Zeta’s core solution to the B2B market. As part of the
agreement, D&B will become an important multi-year scaled
customer. D&B noted that they chose Zeta because of the breadth
of its online data, its ability to combine data inflows seamlessly,
its omnichannel platform capabilities, and its ability to deliver
measurable results.
- Grew the scale of Zeta’s identity graph to over 515 million
individuals globally (from 500 million in the previous quarter) and
over 225 million individuals in the US (from 220 million in the
previous quarter).
- Increased sophistication of Zeta’s CTV offering with CTV Genre
and Content Targeting, which allows marketers to reach their target
audiences in specific context within specific shows. Also developed
a CTV Content Consumption Household Index to provide clients with
deep insights into what content their target households are
watching to inform their go forward media plans and creative
strategy.
- Created a new way for brands to rapidly onboard their first
party data and a faster, more automated path to campaign activation
through “low code onboarding” which eliminates the implementation
dependency on enterprise IT resources and reduces the ramp time for
Zeta from weeks or months to days.
- Released a Total Economic Impact (TEI) study with Forrester
Consulting that revealed 50% higher customer acquisition
effectiveness on marketing investments and accelerated revenue over
a period of three years among interviewed Zeta Marketing Platform
(ZMP) customers that activate the company’s proprietary data.
- Announced the appointment of Crystal Eastman as Zeta’s first
ever Chief Marketing Officer (CMO). Ms. Eastman who previously
served in senior leadership roles with The Trade Desk, American
Express, and BlackRock will lead Zeta’s global marketing and
communications organizations.
Third Quarter and Full Year 2021 Guidance
Zeta anticipates revenue and adjusted EBITDA to be in the
following ranges:
Third quarter 2021
- Revenue of $108 million to $111 million, a year-over-year
increase of 13% to 16%. Excluding $3 million of non-recurring
revenue associated with the U.S. presidential election cycle in the
third quarter of 2020, the guidance represents a year-over-year
increase of 17% to 20%.
- Adjusted EBITDA in the range of $13.0 million to $13.5 million,
a year-over-year increase of 6% to 10% and an adjusted EBITDA
margin of 11.7% to 12.5%.
Full year 2021
- Revenue of $432 million to $436 million, a year-over-year
increase of 17% to 19%. Excluding $15 million of non-recurring
revenue associated with the U.S. presidential election cycle in the
second half of 2020 (with $3 million in the third quarter of 2020
and $12 million in the fourth quarter of 2020), the guidance
represents a year-over-year increase of 22% to 24%.
- Adjusted EBITDA in the range of $55.5 million to $57.5 million,
a year-over-year increase of 40% to 45% and an adjusted EBITDA
margin of 12.7% to 13.3%.
Investor Conference Call and Webcast
Zeta will host a conference call today, Tuesday, August 10,
2021, at 5pm Eastern Time to discuss financial results for the
second quarter of 2021. The live webcast of the conference call can
be accessed from the Company’s investor relations website,
https://investors.zetaglobal.com/ where it will remain available
for one year.
About Zeta
Zeta Global Holdings Corp. is a leading data-driven, cloud-based
marketing technology company that empowers enterprises to acquire,
grow and retain customers for a lower cost than they can achieve
without us. The Company's Zeta Marketing Platform (the "ZMP") is
the largest omnichannel marketing platform with identity data at
its core. The ZMP analyzes billions of structured and unstructured
data points to predict consumer intent by leveraging sophisticated
artificial intelligence to personalize experiences at scale.
Founded in 2007 by David A. Steinberg and John Sculley, the Company
is headquartered in New York City. For more information, please go
to www.zetaglobal.com.
Forward-Looking Statements
This press release, together with other statements and
information publicly disseminated by the Company, contains certain
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. The Company intends
such forward-looking statements to be covered by the safe harbor
provisions for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995 and includes this
statement for purposes of complying with these safe harbor
provisions. Any statements made in this press release or during the
earnings call that are not statements of historical fact, including
statements about our beliefs and expectations, are forward-looking
statements and should be evaluated as such. Forward-looking
statements include information concerning possible or assumed
future results of operations, including descriptions of our
business plan and strategies. These statements often include words
such as “anticipate,” “expect,” “suggests,” “plan,” “believe,”
“intend,” “estimates,” “targets,” “projects,” “should,” “could,”
“would,” “may,” “will,” “forecast” and other similar expressions.
We base these forward-looking statements on our current
expectations, plans and assumptions that we have made in light of
our experience in the industry, as well as our perceptions of
historical trends, current conditions, expected future developments
and other factors we believe are appropriate under the
circumstances at such time. Although we believe that these
forward-looking statements are based on reasonable assumptions at
the time they are made, you should be aware that many factors could
affect our business, results of operations and financial condition
and could cause actual results to differ materially from those
expressed in the forward-looking statements. These statements are
not guarantees of future performance or results. The
forward-looking statements are subject to and involve risks,
uncertainties and assumptions, and you should not place undue
reliance on these forward-looking statements. Factors that may
materially affect such forward-looking statements include, but are
not limited to: the impact of COVID-19 on the global economy, our
customers, employees and business; potential fluctuations in our
operating results, which could make our future operating results
difficult to predict; our ability to innovate and make the right
investment decisions in our product offerings and platform; our
ability to attract and retain customers, including our scaled
customers; our ability to manage our growth effectively; our
ability to collect and use data online; the standards that private
entities and inbox service providers adopt in the future to
regulate the use and delivery of email may interfere with the
effectiveness of our platform and our ability to conduct business;
a significant inadvertent disclosure or breach of confidential
and/or personal information we process, or a security breach of our
or our customers’, suppliers’ or other partners’ computer systems;
and any disruption to our third-party data centers, systems and
technologies. These cautionary statements should not be construed
by you to be exhaustive and are made only as of the date of this
press release. We undertake no obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by applicable
law.
The third quarter and full year 2021 guidance items provided
herein are based on Zeta’s current estimates and are not a
guarantee of future performance. This guidance is subject to
significant risks and uncertainties that could cause actual results
to differ materially, including the risk factors discussed in the
Company's reports on file with the Securities and Exchange
Commission. Zeta undertakes no duty to update any forward-looking
statements or estimates.
The Following Definitions Apply to the Terms Used Throughout
This Release
- Scaled Customers: We define scaled
customers as customers from which we generated more than $100,000
in revenue per year. We calculate the number of scaled customers at
the end of each quarter and on an annual basis as the number of
customers billed during each applicable period. We believe the
scaled customers measure is both an important contributor to our
revenue growth and an indicator to investors of our measurable
success.
- Scaled Customer ARPU: We calculate
the scaled customer ARPU as revenue for the corresponding period
divided by the average number of scaled customers during that
period. We believe that scaled customer ARPU is useful for
investors because it is an indicator of our ability to increase
revenue and scale our business
- Direct Platform and Integrated Platform: When the Company generates
revenues entirely through the Company platform, the Company
considers it Direct Platform Revenue. When the Company generates
revenue by leveraging its platform’s integration with third
parties, it is considered Integrated Platform Revenue.
Non-GAAP Measures
In order to assist readers of our condensed unaudited
consolidated financial statements in understanding the core
operating results that our management uses to evaluate the business
and for financial planning purposes, we describe our non-GAAP
measures below. We believe these non-GAAP measures are useful to
investors in evaluating our performance by providing an additional
tool for investors to use in comparing our financial performance
over multiple periods.
Adjusted EBITDA is a non-GAAP financial measure defined as net
loss adjusted for interest expense, depreciation and amortization,
stock-based compensation, income tax (benefit)/provision,
acquisition related expenses, restructuring expenses, change in
fair value of warrants and derivative liabilities, certain
non-recurring IPO related expenses and other (income)/expense.
Acquisition related expenses and restructuring expenses are
acquisition related expenses and primarily consist of severance and
other personnel-related costs which we do not expect to incur in
the future as acquisitions of businesses may distort the
comparability of the results of operations. Change in fair value of
warrants and derivative liabilities is a non-cash expense related
to periodically recording “mark-to-market” changes in the valuation
of derivatives and warrants. Other (income)/expense consist of
non-cash expenses such as changes in fair value of acquisition
related liabilities, gains and losses on extinguishment of
acquisition related liabilities, gains and losses on sales of
assets and foreign exchange gains and losses. In particular, we
believe that the exclusion of stock-based compensation and
non-recurring IPO related expenses that are not related to our core
operations provides measures for period-to-period comparisons of
our business and provides additional insight into our core
controllable costs. We exclude these charges because these expenses
are not reflective of ongoing business and operating results.
Adjusted EBITDA margin is a non-GAAP metric defined as adjusted
EBITDA divided by the total revenues for the same period. Adjusted
EBITDA and adjusted EBITDA margin provide us with a useful measure
for period-to-period comparisons of our business as well as
comparison to our peers. We believe that these non-GAAP financial
measures are useful to investors in analyzing our financial and
operational performance. Our use of adjusted EBITDA and adjusted
EBITDA margin has limitations as an analytical tool, and you should
not consider these measures in isolation or as a substitute for
analysis of our financial results as reported under U.S. GAAP.
Because of these and other limitations, you should consider our
non-GAAP measures only as supplemental to other GAAP-based
financial performance measures, including revenues and net
loss.
We calculate forward-looking non-GAAP Adjusted EBITDA and
Adjusted EBITDA margin based on internal forecasts that omit
certain amounts that would be included in forward-looking GAAP net
income (loss). We do not attempt to provide a reconciliation of
forward-looking non-GAAP Adjusted EBITDA and Adjusted EBITDA margin
guidance to forward looking GAAP net income (loss) because
forecasting the timing or amount of items that have not yet
occurred and are out of our control is inherently uncertain and
unavailable without unreasonable efforts. Further, we believe that
such reconciliations would imply a degree of precision and
certainty that could be confusing to investors. Such items could
have a substantial impact on GAAP measures of financial
performance.
ZETA GLOBAL HOLDINGS
CORP.
Condensed Unaudited
Consolidated Balance Sheets
(In thousands, except shares,
per share and par values)
As of June 30, 2021
As of December 31,
2020
ASSETS
Current assets:
Cash and cash equivalents
$
113,568
$
50,725
Accounts receivable, net of
allowance of $2,066 and $2,207 as of June 30, 2021 and December 31,
2020 respectively
72,044
79,366
Prepaid expenses
2,662
3,903
Other current assets
6,122
7,374
Total current assets
194,396
141,368
Property and equipment, net
5,738
6,117
Website and software development
costs, net
38,615
32,891
Intangible assets, net
32,734
28,591
Goodwill
81,924
76,432
Deferred tax assets
199
366
Other non‑current assets
905
521
Total non‑current assets
160,115
144,918
Total assets
$
354,511
$
286,286
LIABILITIES AND STOCKHOLDERS’
EQUITY / (DEFICIT)
Current liabilities:
Accounts payable
$
30,869
$
40,976
Accrued expenses
48,867
44,622
Acquisition related
liabilities
6,275
6,018
Deferred revenue
3,612
4,053
Other current liabilities
7,356
8,310
Total current liabilities
96,979
103,979
Non‑current liabilities:
Long term borrowings
183,443
189,693
Acquisition related
liabilities
18,446
17,137
Warrants and derivative
liabilities
—
58,100
Other non‑current liabilities
2,585
2,387
Total non‑current liabilities
204,474
267,317
Total liabilities
301,453
371,296
Commitments and contingencies
Mezzanine equity:
Redeemable convertible preferred
stock $0.001 per share par value, up to 60,137,979 shares
authorized and 39,223,194 shares issued and outstanding as of
December 31, 2020
—
154,210
Stockholders’ equity /
(deficit):
Series A common stock $0.001 per
share value, up to 204,220,800 shares authorized, 112,012,693
shares issued and outstanding as of December 31, 2020
—
112
Treasury common stock, 8,195,464
shares repurchased at a weighted average price of $2.86 per
share
(23,469)
(23,469)
Series B common stock $0.001 per
share par value, up to 3,400,000 shares authorized, 3,054,318
shares issued and outstanding as of December 31, 2020
—
3
Class A common stock, par value
$0.001 per share par value, up to 3,750,000,000 shares authorized
and 152,270,401 shares issued and outstanding as of June 30,
2021
152
—
Class B common stock, par value
$0.001, up to 50,000,000 shares authorized and 37,856,095 shares
issued and outstanding as of June 30, 2021
38
—
Additional paid‑in capital
439,999
28,425
Accumulated deficit
(361,550)
(242,254)
Accumulated other comprehensive
loss
(2,112)
(2,037)
Total stockholders’ equity /
(deficit)
53,058
(239,220)
Total liabilities and
stockholders’ equity / (deficit)
$
354,511
$
286,286
ZETA GLOBAL HOLDINGS
CORP.
Condensed Unaudited
Consolidated Statements of Operations and Comprehensive
Loss
(In thousands, except share
and per share amounts)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Revenues
$
106,896
$
77,130
$
208,359
$
158,390
Operating expenses:
Cost of revenues (excluding
depreciation and amortization)(1)
42,212
29,296
81,184
59,825
General and administrative
expenses(1)
65,907
17,327
85,039
36,120
Selling and marketing
expenses(1)
82,845
16,842
103,415
36,090
Research and development
expenses(1)
26,503
8,161
36,287
16,884
Depreciation and amortization
11,235
10,497
21,352
20,038
Acquisition related expenses
329
1,156
1,036
3,091
Restructuring expenses
150
498
437
1,691
Total operating
expenses
229,181
83,777
328,750
173,739
Loss from operations
(122,285)
(6,647)
(120,391)
(15,349)
Interest expense
1,402
4,382
4,363
8,725
Other (income) / expenses,
net
(749)
(471)
535
(358)
Gain on extinguishment of
debt
(10,000)
—
(10,000)
—
Change in fair value of warrants
and derivative liabilities
(18,600)
4,100
5,000
6,700
Total other (income) /
expenses
(27,947)
8,011
(102)
15,067
Loss before income taxes
(94,338)
(14,658)
(120,289)
(30,416)
Income tax provision /
(benefit)
584
396
(993)
1,018
Net loss
$
(94,922)
$
(15,054)
$
(119,296)
$
(31,434)
Other comprehensive loss:
Foreign currency translation
adjustment
(129)
(47)
(75)
(788)
Total comprehensive
loss
(95,051)
(15,101)
(119,371)
(32,222)
Net loss per share
Net loss
(94,922)
$
(15,054)
$
(119,296)
$
(31,434)
Cumulative redeemable convertible
preferred stock dividends
3,166
3,716
7,060
7,376
Net loss available to common
stockholders
$
(98,088)
$
(18,770)
$
(126,356)
$
(38,810)
Basic loss per share
$
(1.92)
$
(0.58)
$
(3.01)
$
(1.19)
Diluted loss per share
$
(1.92)
$
(0.58)
$
(3.01)
$
(1.19)
Weighted average number of
shares used to compute net loss per share
Basic
51,202,335
32,362,610
41,973,595
32,607,382
Diluted
51,202,335
32,362,610
41,973,595
32,607,382
(1) The Company recorded the total stock‑based compensation
expense as follows:
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Cost of revenues (excluding
depreciation and amortization)
266
-
266
-
General and administrative
expenses
42,625
27
42,625
53
Selling and marketing
expenses
59,512
-
59,512
-
Research and development
expenses
16,867
-
16,867
-
Total
119,270
27
119,270
53
ZETA GLOBAL HOLDINGS
CORP.
Condensed Unaudited
Consolidated Statements of Cash Flows
(In thousands)
Six Months Ended June
30,
2021
2020
Cash flows from operating
activities:
Net loss
$
(119,296)
$
(31,434)
Adjustments to reconcile net loss
to net cash provided by operating activities:
Depreciation and amortization
21,352
20,038
Stock‑based compensation
119,270
53
Deferred income taxes
(1,641)
290
Change in fair value of warrant
and derivative liabilities
5,000
6,700
Gain on extinguishment of
debt
(10,000)
—
Others, net
1,067
1,843
Changes in non‑cash working
capital (net of acquisitions):
Account receivable
8,165
32,478
Prepaid expenses
1,241
641
Other current assets
1,252
1,025
Other non‑current assets
(384)
266
Deferred revenue
(440)
446
Accounts payable
(14,083)
8,324
Accrued expenses and other
current liabilities
1,502
(31,503)
Other non‑current liabilities
198
504
Net cash provided by operating
activities
13,203
9,671
Cash flows from investing
activities:
Capital expenditures
(4,381)
(1,024)
Website and software development
costs
(9,529)
(11,738)
Business and asset acquisitions,
net of cash acquired
(2,159)
—
Net cash used for investing
activities
(16,069)
(12,762)
Cash flows from financing
activities:
Proceeds from initial public
offering, net of issuance costs
127,363
—
Cash paid for acquisition related
liabilities
(64)
(496)
Proceeds from term loan, net of
issuance cost
183,311
—
Proceeds from paycheck protection
program loan
—
10,000
Repurchase of restricted
stock
(64,130)
—
Exercise of warrants
41
—
Repayments against the credit
facilities
(180,745)
(3,500)
Net cash provided by financing
activities
65,776
6,004
Effect of exchange rate changes
on cash and cash equivalents
(67)
(49)
Net increase in cash and cash
equivalents and restricted cash
62,843
2,864
Cash and cash equivalents and
restricted cash, beginning of period
50,725
37,818
Cash and cash equivalents and
restricted cash, end of period
$
113,568
$
40,682
Supplemental cash flow
disclosures including non-cash activities:
Cash paid for interest
$
4,377
$
6,990
Cash paid for income taxes,
net
$
941
$
672
Contingent consideration
liability established in connection with acquisitions
$
1,630
$
—
Shares issued in connection with
acquisitions and other agreements
$
5,454
$
423
Dividends on redeemable
convertible preferred stock settled in Company’s equity
$
60,082
$
—
Non-cash settlement of warrants
and derivative liabilities
$
63,100
$
—
Capitalized stock-based
compensation expense as website and software development costs
$
7,505
$
—
ZETA GLOBAL HOLDINGS
CORP.
Unaudited Reconciliation of
GAAP to Non-GAAP Financial Measures
(In thousands)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Net loss
$
(94,922)
$
(15,054)
$
(119,296)
$
(31,434)
Net income (loss)
margin
(88.9%)
(19.5%)
(57.3%)
(19.9%)
Add back:
Interest expense
1,402
4,382
4,363
8,725
Depreciation and amortization
11,235
10,497
21,352
20,038
Stock-based compensation
119,270
27
119,270
53
IPO related expenses
2,705
—
2,705
—
Gain on extinguishment of
debt
(10,000)
—
(10,000)
—
Income tax provision /
(benefit)
584
396
(993)
1,018
Acquisition related expenses
329
1,156
1,036
3,091
Restructuring expenses
150
498
437
1,691
Change in fair value of warrants
and derivative liabilities
(18,600)
4,100
5,000
6,700
Other income / (expense)
(749)
(471)
535
(358)
Adjusted EBITDA
$
11,404
$
5,531
$
24,409
$
9,524
Adjusted EBITDA margin
10.7%
7.2%
11.7%
6.0%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210810005919/en/
Investor Relations Idalia Rodriguez ir@zetaglobal.com
Press Megan Rose press@zetaglobal.com
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