Summary
Zeta Global reported second quarter fiscal 2024 revenue of $227.84 million, up 32.6% from the prior-year quarter. Year-to-date revenue reached $422.79 million, up 28.3% from the first six months of 2023. The company's GAAP operating loss narrowed to $26.58 million in the quarter, and the year-to-date operating loss narrowed to $62.46 million. GAAP net loss narrowed to $28.07 million in the quarter, while year-to-date net loss narrowed to $67.63 million. Diluted loss per share was $0.16 in the quarter and $0.39 year to date, both improved from the prior-year periods. Operating margin was -11.7% in the quarter, an increase of 15.2 percentage points from the prior-year quarter.
Operational metrics showed broad customer expansion. Scaled Customer count increased to 468, up 8 from the first quarter and up 43 from the prior-year quarter. Super-Scaled Customer count was 144, compared with 144 in the first quarter and 118 in the prior-year quarter. Quarterly Scaled Customer ARPU was $479,000, up 22% year over year and 2x faster than the first quarter of 2024. Quarterly Super-Scaled Customer ARPU was $1.3 million, up 18% year over year. Direct platform revenue mix was 67% of total revenue, compared with 67% in the first quarter and 75% in the prior-year quarter. Management highlighted the Rule of 50, which the company defines as revenue growth plus Adjusted EBITDA margin adding to 50 or more. Adjusted EBITDA was $38.5 million, up 44% year over year from $26.8 million, and Adjusted EBITDA margin was 16.9% versus 15.6%. Cash flow from operating activities was $31.11 million in the quarter, up 50.8% from the prior-year quarter. Free Cash Flow, a non-GAAP measure, was $20 million compared with $13 million in the prior-year quarter.
Guidance was raised for both the next quarter and the full fiscal year. For the third quarter of 2024, Zeta guided revenue to $237.2 million to $241.2 million, up $9.2 million at the midpoint from prior guidance of $230 million, representing a year-over-year increase of 26% to 28%. Third quarter Adjusted EBITDA guidance was $46.8 million to $47.3 million, up $1.8 million at the midpoint from prior guidance of $45.3 million, representing a year-over-year increase of 39% to 40% and an Adjusted EBITDA margin of 19.4% to 19.9%. For the full fiscal year 2024, revenue guidance was raised to $920 million to $930 million, up $25 million at the midpoint from prior guidance of $900 million, representing a year-over-year increase of 26% to 28%. Full year Adjusted EBITDA guidance was $174.5 million to $176.5 million, up $4.5 million at the midpoint from prior guidance of $171 million, representing a year-over-year increase of 35% to 36% and an Adjusted EBITDA margin of 18.8% to 19.2%. Full year Free Cash Flow guidance was $80 million to $90 million, up $5 million at the midpoint from prior guidance of $80 million.
The quarter included a few capital allocation and cash flow items. Zeta repurchased $2.9 million worth of shares through its share repurchase program. Year-to-date operating cash flow was $55.78 million, up 36.9% from the prior-year period. Year-to-date capital expenditures were $12.56 million, up 40.4% from the prior-year period, and deferred revenue was $3.68 million, up 8.9% from the prior-year quarter. The MD&A noted a full valuation allowance against U.S. deferred tax assets, which limited the tax benefit recorded for U.S. operating losses.
Risks remain tied to the macro and operating environment. The 10-Q points to global supply chain disruptions, macroeconomic and industry trends, adverse developments in debt, consumer credit and financial services markets, higher borrowing costs, inflation, and geopolitical tensions. Company-specific risks include the ability to innovate and make the right investment decisions, the impact of new generative AI capabilities, the ability to attract and retain customers including scaled and super-scaled customers, the ability to manage growth, the ability to collect and use data online, future email delivery standards, a significant data breach, and disruption to third-party data centers. Zeta also faces potential fluctuations in operating results that could make future performance difficult to predict.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2024 | Q1 FY2024 | QoQ | Q2 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $227.8M | $194.9M | +16.9% | $171.8M | +32.6% |
| Gross profit | $136.8M | $118.1M | +15.8% | $109.8M | +24.6% |
| Gross margin | 60.0% | 60.6% | -0.5 pp | 63.9% | -3.9 pp |
| Research & development | $23.6M | $20.0M | +18.2% | $17.3M | +36.2% |
| Sales & marketing | $75.6M | $71.4M | +5.9% | $72.5M | +4.3% |
| General & administrative | $51.2M | $48.8M | +4.8% | $50.7M | +0.9% |
| Operating income (loss) | -$26.6M | -$35.9M | +25.9% | -$46.2M | +42.5% |
| Operating margin | -11.7% | -18.4% | +6.7 pp | -26.9% | +15.2 pp |
| Net income (loss) | -$28.1M | -$39.6M | +29.1% | -$52.2M | +46.2% |
| Net margin | -12.3% | -20.3% | +8.0 pp | -30.4% | +18.0 pp |
| Diluted EPS | -$0.16 | -$0.23 | +$0.07 | -$0.34 | +$0.18 |
| Customers | 144 | 144 | ±0.0% | 118 | +22.0% |
Risks
As of June 30, 2024, the company had an accumulated deficit of $1,026.2 million and stated that if operating performance over the next 12 months is below expectations, liquidity and ability to operate could be adversely affected. Net loss was $28.1 million for the quarter and $67.6 million year to date, though both improved versus the prior year.
Cost of revenues (excluding depreciation and amortization) increased 46.8% for the three months ended June 30, 2024, while revenue increased 32.6% for the same period, driven by $29.0 million in incremental media costs. For the six months ended June 30, 2024, cost of revenues rose 44.3% while revenue rose 28.3%, indicating potential gross margin pressure.
For the six months ended June 30, 2024 and 2023, direct platform revenue fell to 67% from 73% of revenues, while integrated platform revenue rose to 33% from 27%. Greater reliance on integrated platform revenue, which involves third-party publishers and media costs, may reduce margins and increase dependency on partners.
Revenue growth for the three months ended June 30, 2024 included $37.6 million from new customers compared to $18.4 million from existing customers. For the six months ended June 30, 2024, new customers contributed $53.5 million of the $93.4 million increase. Dependence on new customer acquisition for growth could make results more sensitive to sales cycle and competition.
As of June 30, 2024, the company had $185.0 million of outstanding long-term borrowings under a senior secured credit facility due February 3, 2026, bearing interest at SOFR plus 2.125% to 2.625%. The facility includes restrictive covenants that may limit incurring additional debt, paying dividends, or making investments, and failure to comply could harm liquidity.
SaaS KPIs
All quarters →Adjusted EBITDA
Adjusted EBITDA margin
Free Cash Flow
Scaled Customer ARPU
Scaled Customers
Super-Scaled Customers
Super-Scaled Customer ARPU
Direct Platform Revenue Mix
Summary, forecast, risks and KPIs are extracted from Zeta Global Holdings Corp.'s SEC filings for Q2 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.