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 margin expansion to 16.9%.

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

• Net loss narrowed to $28 million, including $52 million in stock-based compensation, reflecting improved operating leverage.

• AI and data-driven platform adoption, especially in insurance and automotive verticals, drove growth and margin expansion.

• Agency channel expansion and increased brand count per agency fueled ARPU growth and pipeline strength.

Financial highlights

• Q2 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 of 16.9%, up 130 bps year-over-year.

• Free cash flow of $20 million, up 53% year-over-year; cash from operations $31 million in Q2 and $55.8 million for the first half.

• GAAP net loss of $28 million (12% of revenue), improved from $52 million in Q2 2023.

• Direct revenue growth improved to 20% year-over-year in Q2; integrated revenue (mainly agency social channels) grew 71%.

Outlook and guidance

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

• Q3 2024 revenue guidance midpoint set at $239.2 million (up 27% year-over-year); Adjusted EBITDA guidance at $47.1 million (19.7% margin).

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

• Political revenue guidance maintained at $15 million for the year.

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