Summary
Zeta Global closed FY2023 Q4 with revenue of $210.32 million, up 20.1% from the prior-year quarter. Full-year revenue was $728.72 million, up 23.3% from the prior year. The company described 2023 as its fourth consecutive year of 20%+ revenue growth. Customer counts moved in the same direction. Scaled customers rose to 452 from 403 a year earlier, and super-scaled customers rose to 131 from 103. Full-year scaled customer ARPU was $1.57 million, up 10%, while quarterly scaled customer ARPU was $454,000, up 7%. Quarterly super-scaled customer ARPU was $1.31 million, down 1%. Direct platform revenue mix was 73% of total revenue in the quarter, compared with 75% in the prior-year quarter. Net revenue retention was 111%, compared with 112% in 2022. Of the 452 scaled customers, 236 had tenure of three or more years, and 87 of the 131 super-scaled customers had tenure of three or more years. Channels per scaled customer were 2.1 in 2023 and 2.0 in 2022.
Profitability improved on a GAAP basis even though losses remained large. Operating loss was $31.86 million in the quarter, an improvement of 33.2% from the prior-year quarter, and $167.68 million for the full year, an improvement of 35.3%. Net loss was $35.28 million in the quarter, an improvement of 31.8%, and $187.48 million for the full year, an improvement of 32.9%. Diluted loss per share for the full year was $1.20, an improvement of $0.81 from the prior year. Operating margin was -15.1% in the quarter, up 12.1 percentage points from the prior-year quarter, and -23.0% for the full year, up 20.8 percentage points. Stock-based compensation was the main driver of the GAAP net loss. On a non-GAAP basis, adjusted EBITDA was $44.8 million in the quarter, up 38% from $32.4 million, with a 21.3% margin versus 18.5%. Full-year adjusted EBITDA was $129.4 million, up 40% from $92.2 million, with a 17.8% margin versus 15.6%.
Cash generation also improved. Operating cash flow was $26.96 million in the quarter, up 16.7%, and $90.52 million for the full year, up 15.3%. Free cash flow, a non-GAAP measure, was $18 million in the quarter and $55 million for the full year. Capital expenditures were $5.60 million in the quarter, up 10.5%, and $20.48 million for the full year, down 7.9%. Deferred revenue was $3.30 million, up 48.2% from the prior-year quarter.
Guidance points to another year of growth. For the first quarter of 2024, management guided to a year-over-year revenue increase of 17% to 20% and adjusted EBITDA of $28.8 million to $29.3 million, a year-over-year increase of 20% to 22% with a 15.2% to 15.8% margin. For the full year 2024, the company guided to a year-over-year revenue increase of 19% to 21% and adjusted EBITDA of $165 million to $167 million, a year-over-year increase of 28% to 29% with an 18.8% to 19.2% margin. Full-year 2024 free cash flow guidance was $75 million to $85 million. The Zeta 2025 plan targets more than $1 billion in annual revenue, at least 20% adjusted EBITDA margins by 2025, and free cash flow of at least $110 million by 2025. The company said it expects to achieve its Zeta 2025 targets early.
Risks remain. Management cited macroeconomic and industry trends, changes in interest rates, inflation, the war in Ukraine, and the conflict in Israel and Gaza. The company also flagged its ability to innovate and make the right product investments, especially around generative AI, and its ability to attract and retain scaled and super-scaled customers. Other risks include rules on data use and privacy, changes in email delivery standards, a security breach, and disruption at third-party data centers. Seasonality is a recurring factor. Marketing activity is historically higher in the fourth quarter, and the first quarter tends to show lower activity.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2023 | Q3 FY2023 | QoQ | Q4 FY2022 | YoY |
|---|---|---|---|---|---|
| Revenue | $210.3M | $189.0M | +11.3% | $175.1M | +20.1% |
| Gross profit | $125.7M | $115.5M | +8.8% | $109.2M | +15.2% |
| Gross margin | 59.8% | 61.1% | -1.3 pp | 62.3% | -2.6 pp |
| Research & development | $19.9M | $18.1M | +10.4% | $17.2M | +15.8% |
| Sales & marketing | $72.7M | $70.7M | +2.9% | $76.2M | -4.6% |
| General & administrative | $51.4M | $50.7M | +1.4% | $51.0M | +0.7% |
| Operating income (loss) | -$31.9M | -$37.2M | +14.3% | -$47.7M | +33.2% |
| Operating margin | -15.2% | -19.7% | +4.5 pp | -27.2% | +12.1 pp |
| Net income (loss) | -$35.3M | -$43.1M | +18.1% | -$51.8M | +31.8% |
| Net margin | -16.8% | -22.8% | +6.0 pp | -29.6% | +12.8 pp |
| Diluted EPS | -$0.23 | -$0.27 | +$0.04 | -$0.37 | +$0.14 |
| Customers | 1,155 | 124 | +831.5% | — | — |
Risks
A substantial portion of revenue is usage-based, which is less stable than subscription pricing, and scaled customers can decrease spend or terminate with limited notice; revenue could decline if they reduce platform usage.
Zeta's collection and use of online data face browser and mobile operating system restrictions, opt-out mechanisms such as Global Privacy Control, and evolving GDPR/CCPA/CPRA rules; Zeta received a Norwegian authority notice of intent to fine over cookie-based personal data collection.
The marketing technology industry is intensely competitive and consolidating, with larger competitors able to buy emerging technologies and customers able to use multiple providers without significant cost, potentially forcing price reductions or market share loss.
Success depends on senior management and key employees, especially Co-Founder and CEO David Steinberg; Zeta has no key person insurance, all key personnel are at-will, and stock sale proceeds may reduce motivation to stay.
In 2023, Zeta's top ten customers accounted for approximately one-third of total revenue, and agency holding companies could control multiple separately billed marketing agencies, so a holding company termination could disproportionately reduce revenue.
Zeta often has long sales cycles, creating significant time between initial contact and customer agreement and making it difficult to project when or if revenue will be generated from prospective customers.
Marketing activity is historically higher in the fourth quarter holiday season and lower in the first quarter, causing operating results to fluctuate and making period-to-period comparisons less reliable.
Evolving laws and regulations regarding artificial intelligence and machine learning, including bias and antidiscrimination rules, may restrict Zeta's data collection or use and impair development and training of AI algorithms.
A substantial portion of debt is variable-rate, and interest expense increased 49.8% for the year ended December 31, 2023 compared with 2022 due to higher interest rates, impacting financial condition and cash available for working capital.
The Senior Secured Credit Facility contains operating and financial covenants and restricts asset sales, mergers, additional debt, liens, dividends, investments, and affiliate transactions; a future breach could accelerate the $185.0 million outstanding and impair going concern.
As of December 31, 2023, Zeta had cash and cash equivalents of $131.7 million, net working capital of $133.4 million, and an accumulated deficit of $958.5 million; if operating performance falls below expectations, liquidity could be adversely affected.
Zeta conducts significant technology and product development in India and other non-U.S. locations, exposing it to wage inflation, weaker IP and confidentiality protections, currency fluctuations, and tax compliance risks that could diminish expected cost savings.
Tax liabilities may be greater than anticipated due to audits by the IRS and state, local, and foreign jurisdictions, changing tax laws, and OECD Pillar Two rules; NOL carryforwards may also be limited by ownership changes.
As of December 31, 2023, Co-Founder and CEO David Steinberg and affiliates held 65.4% of the voting power, and the dual-class structure concentrates control, limiting other stockholders' ability to influence corporate matters.
As of December 31, 2023, Zeta became a large accelerated filer and is no longer an emerging growth company, which will increase costs and management demands and require independent auditor attestation of internal control over financial reporting.
SaaS KPIs
All quarters →Adjusted EBITDA
Adjusted EBITDA margin
Free Cash Flow
Scaled Customer ARPU
Super-Scaled Customer ARPU
Direct Platform Revenue Mix
Summary, forecast, risks and KPIs are extracted from Zeta Global Holdings Corp.'s SEC filings for Q4 FY2023 (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.