Summary
Zeta Global reported first-quarter 2024 revenue of $194.95 million, up 23.7% from the prior-year quarter. The operating loss narrowed to $35.87 million from $52.44 million a year earlier. Net loss narrowed to $39.57 million from $56.96 million. Diluted loss per share was $0.23, compared with a loss of $0.38 in the prior-year quarter. First-quarter operating margin improved to negative 18.4% from negative 33.3%. The GAAP loss still reflected significant stock-based compensation and other non-cash charges, but the direction of travel on profitability improved.
Customer metrics showed steady expansion. Scaled customer count reached 460 as of March 31, 2024, up from 452 in the fourth quarter of 2023 and 411 in the first quarter of 2023. Super-scaled customer count rose to 144, up from 131 in the fourth quarter of 2023 and 110 in the first quarter of 2023. First-quarter scaled customer ARPU was $416,000, up 11% year over year. Super-scaled customer ARPU was $1.12 million, down 3% year over year. Direct platform revenue mix was 67% of total revenue, compared with 73% in the fourth quarter of 2023 and 71% in the first quarter of 2023. That mix shift is worth watching because integrated platform revenue can carry different margin and control characteristics.
Cash generation improved. First-quarter operating cash flow was $24.67 million, up 22.7% from $20.10 million in the prior-year quarter. Capital expenditures were $5.81 million, up 12.5% from $5.16 million. Deferred revenue, current portion, was $4.46 million at March 31, 2024, up 20.1% from $3.71 million a year earlier. Free cash flow, a non-GAAP measure, was $15 million, up 51% year over year from $10 million. Adjusted EBITDA, also non-GAAP, was $30.5 million, up 27% year over year from $24.0 million. Adjusted EBITDA margin was 15.6%, compared with 15.3% in the prior-year quarter. Zeta also repurchased shares through its repurchase program during the quarter. Deferred revenue remains small relative to revenue, so it is not a major leading indicator here, but the increase is consistent with growth.
Management raised guidance for the second quarter of 2024 and for full year 2024. For the second quarter, revenue guidance is $210 million to $214 million, up $8 million at the midpoint from the prior guidance of $204 million, and represents a year-over-year increase of 22% to 25%. Second-quarter Adjusted EBITDA guidance is $35.3 million to $35.8 million, up $1.3 million at the midpoint from the prior guidance of $34.2 million, with a year-over-year increase of 31% to 33% and an Adjusted EBITDA margin of 16.5% to 17.0%. For full year 2024, revenue guidance is $895 million to $905 million, up $25 million at the midpoint from the prior guidance of $875 million, and represents a year-over-year increase of 23% to 24%. Full-year Adjusted EBITDA guidance is $170 million to $172 million, up $5 million at the midpoint from the prior guidance of $166 million, with a year-over-year increase of 31% to 33% and an Adjusted EBITDA margin of 18.8% to 19.2%. Full-year Free Cash Flow guidance is $75 million to $85 million. The long-term Zeta 2025 plan targets more than $1 billion in annual revenue, at least 20% Adjusted EBITDA margins by 2025, and at least $110 million in Free Cash Flow by 2025.
The main risks are familiar for a growth software company. Zeta faces macroeconomic and industry trends, adverse developments in consumer credit and financial services markets, changes in interest rates, inflation, and the ability to attract and retain customers, including scaled and super-scaled customers. The forward-looking statement also flags risks tied to data privacy and security breaches, third-party data centers, reliance on email delivery standards, and the impact of new generative AI capabilities. The company carries long-term borrowings and is subject to financial maintenance covenants, and it says it is in compliance with those covenants. The quarter showed revenue growth, narrower losses, and better cash generation. Guidance implies that Zeta expects the momentum to continue through 2024. Execution on enterprise customer expansion, platform mix, and cost discipline will determine whether the raised outlook translates into durable free cash flow.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2024 | Q4 FY2023 | QoQ | Q1 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $194.9M | $210.3M | -7.3% | $157.6M | +23.7% |
| Gross profit | $118.1M | $125.7M | -6.1% | $103.3M | +14.4% |
| Gross margin | 60.6% | 59.8% | +0.8 pp | 65.5% | -4.9 pp |
| Research & development | $20.0M | $19.9M | +0.2% | $18.5M | +7.9% |
| Sales & marketing | $71.4M | $72.7M | -1.8% | $72.5M | -1.6% |
| General & administrative | $48.8M | $51.4M | -5.0% | $52.6M | -7.2% |
| Operating income (loss) | -$35.9M | -$31.9M | -12.6% | -$52.4M | +31.6% |
| Operating margin | -18.4% | -15.2% | -3.2 pp | -33.3% | +14.9 pp |
| Net income (loss) | -$39.6M | -$35.3M | -12.1% | -$57.0M | +30.5% |
| Net margin | -20.3% | -16.8% | -3.5 pp | -36.1% | +15.8 pp |
| Diluted EPS | -$0.23 | -$0.23 | ±$0.00 | -$0.38 | +$0.15 |
| Customers | 144 | 1,155 | -87.5% | 110 | +30.9% |
Risks
Cost of revenues excluding depreciation and amortization increased 41.4% to $76.9 million in Q1 2024 from Q1 2023, faster than the 23.7% revenue increase, driven primarily by $22.5 million in incremental media costs. If media and other direct costs keep rising faster than revenue, margins could be pressured.
MD&A states that if operating performance during the next 12 months is below expectations, liquidity and ability to operate the business could be adversely affected. As of March 31, 2024, the company had an accumulated deficit of $998.1 million and a net loss of $39.6 million for Q1 2024.
As of March 31, 2024, the company had $184.2 million of net outstanding long-term borrowings under its Senior Secured Credit Facility, which contains restrictive covenants limiting additional debt, liens, security purchases, affiliate transactions, investments, dividends, and distributions. These covenants could restrict strategic flexibility if performance deteriorates.
Interest expense increased 7.2% to $2.6 million in Q1 2024 compared to Q1 2023, primarily due to increases in interest rates in recent periods. Borrowings bear interest at SOFR plus 2.125% to SOFR plus 2.625%, so further rate increases would raise financing costs.
SaaS KPIs
All quarters →Adjusted EBITDA
Adjusted EBITDA margin
Free Cash Flow
Scaled Customers
Super-Scaled Customers
Summary, forecast, risks and KPIs are extracted from Zeta Global Holdings Corp.'s SEC filings for Q1 FY2024 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 6, 2026.