Zeta Global (ZETA) Q2 2024 earnings summary

Executive summary

• Achieved Q2 2024 revenue of $228 million, up 33% year-over-year, with Adjusted EBITDA of $38.5 million, up 44% year-over-year and a margin of 16.9% (130 bps expansion).

• Scaled customer count increased 10% year-over-year to 468, with ARPU for scaled customers up 22% year-over-year to $479,000.

• Agency channel and verticals like insurance and automotive accelerated, with six of the top ten verticals growing 25% or more.

• Strong cash generation: $31 million from operations (up 51%), $20 million free cash flow (up 53%), with 51% Adjusted EBITDA to FCF conversion.

• AI-driven platform and proprietary data cloud cited as key differentiators, fueling customer growth, ARPU expansion, and competitive wins.

Financial highlights

• Revenue of $228 million exceeded guidance midpoint by $16 million; fastest growth rate since IPO.

• Adjusted EBITDA of $38.5 million, $3 million above guidance, with margin improvement to 16.9%.

• GAAP net loss of $28 million, including $52 million in stock-based compensation; loss per share improved to $(0.16) from $(0.34) YoY.

• Free cash flow: $20 million in Q2, up from $13 million in Q2 2023; guiding to $85 million for FY 2024 (+56% YoY).

• Cash and cash equivalents: $154.7 million as of June 30, 2024.

Outlook and guidance

• Full-year 2024 revenue guidance raised to $925 million (27% YoY growth); Adjusted EBITDA guidance to $175.5 million (36% YoY growth, 19% margin).

• Q3 2024 revenue guidance midpoint increased to $239.2 million (27% YoY growth); Adjusted EBITDA guidance to $47.1 million (19.7% margin).

• Free cash flow guidance for 2024 raised to $85 million (48% cash conversion); on track for 2025 target of $110 million+.

• Political and advocacy revenue expected at $15 million for the year, with advocacy being a recurring revenue stream.

• 2025 targets: revenue $1B+, adjusted EBITDA $200M+, free cash flow $110M+.