Zeta Global Earnings Call Highlights AI-Fueled Growth

Zeta Global Holdings Corp. Class A ((ZETA)) has held its Q4 earnings call. Read on for the main highlights of the call.

Zeta Global Holdings Corp. Class A’s latest earnings call struck an upbeat tone, with management spotlighting record revenue growth, expanding margins, and a clear path to sustained profitability. While they acknowledged rising costs, working capital pressure and customer concentration risk, the overall message was one of accelerating momentum and meaningful upside from new AI-driven products and recent acquisitions.

Record Revenue Growth and Acceleration

Zeta posted Q4 revenue of $395 million, up 28% year over year on an organic basis and faster than the prior quarter’s pace. For full-year 2025, revenue reached $1.305 billion, rising 30% and topping the midpoint of initial guidance by $65 million, signaling consistent outperformance against management’s own expectations.

Profitability Surges and Cash Flow Strengthens

Adjusted EBITDA in Q4 climbed 35% to $95.1 million with margins improving to 24.1%, while full-year adjusted EBITDA jumped 44% to $279 million. Free cash flow looked even stronger, with Q4 up 76% to $55.8 million and full-year free cash flow of $165 million, representing a 12.6% margin and sharply better cash conversion.

Turning the Corner on GAAP Profitability

The company produced positive GAAP net income of $6.5 million in Q4 after posting a loss in the prior quarter. Management underscored this as an inflection point and reiterated its expectation of delivering positive GAAP net income for the full year 2026, reinforcing the shift from growth-at-all-costs to profitable expansion.

Upgraded 2026 and 2028 Financial Ambitions

Zeta raised its 2026 revenue midpoint to $1.755 billion, implying 35% growth and a strong trajectory even when excluding Marigold and political contributions. The company now targets 2026 adjusted EBITDA of $391 million and free cash flow of $231 million, and extended its view with 2028 goals of $2.3 billion in revenue, 25% margins, and robust free cash flow.

Athena AI Agent Shows Early Promise

Management highlighted Athena, its new enterprise marketing agent, which should reach general availability by the end of Q1 and is already delivering time savings and better returns for early users. A partnership with OpenAI embeds large language models directly into Athena, positioning Zeta to automate and personalize campaigns at scale as AI adoption accelerates.

SuperGraph Data Moat Drives Personalization Edge

At the core of Zeta’s pitch is its SuperGraph, a deterministic identity graph that spans more than 245 million U.S. adults and 535 million consumers globally. With more than 1 trillion signals feeding into the system, management argues this proprietary data asset is a key differentiator as marketing shifts toward one-to-one personalization and performance-based buying.

One Zeta Adoption Powers Retention

The company is seeing more customers consolidate spending across its platform, with the number using more than one use case jumping more than 80% year over year in Q4. Net revenue retention reached a record 120% in 2025, up from 114%, demonstrating that existing clients are expanding their wallets as they adopt more of Zeta’s solutions.

Customer Scale, ARPU Gains and Vertical Wins

Zeta ended the year with 602 scaled customers, up 14%, and 184 super-scaled clients spending more than $1 million annually, up 24%. Average revenue per scaled customer rose to $625,000 and super-scaled ARPU reached $1.8 million, while verticals like travel, advertising, automotive and consumer retail all delivered standout growth.

Record Pipeline and RFP Momentum

Request-for-proposal activity more than doubled versus last year, and the company exited its Zeta Live event with a record pipeline. Management said it has already closed $39 million of business tied directly to the event and is targeting a total of $100 million, with roughly $130 million in additional opportunities still in the pipeline.

Marigold Integration and Accretion Outlook

The Marigold acquisition appears to be progressing smoothly, with integration advances and an expectation that it will be accretive to both free cash flow and adjusted EBITDA in its first year. Zeta is modeling at least $190 million of 2026 revenue from Marigold and seeing strong customer interest in its loyalty offerings, which could deepen client relationships.

Capital Returns and Dilution Control

Zeta continued to buy back stock aggressively, repurchasing 1.9 million shares for $35 million in Q4 and 7.9 million shares for $120 million across 2025. Additional repurchases since the start of 2026 and lower stock-based compensation have helped bring net dilution down to 4.3%, with management targeting a tighter 3% to 4% range next year.

Higher Cost of Revenue from Channel Mix

GAAP cost of revenue climbed to 40.4% in Q4, increasing both year over year and sequentially as the mix shifted toward social media and connected TV. These fast-growing channels carry lower gross margins than Zeta’s corporate average, pressuring near-term profitability even as they open up larger market opportunities.

Working Capital Drag from Agency Cycles

Free cash flow in the quarter faced an estimated nine-point headwind from slower payments, particularly in agency-driven business where extended terms are common. While management framed this as an industry-wide timing issue rather than a demand problem, it does weigh on near-term cash conversion and will be closely watched by investors.

Rising Revenue Concentration Among Top Customers

Revenue concentration in super-scaled accounts spending at least $1 million annually has grown to nearly 90% of total sales, versus about 70% in 2020. More than 90% of revenue growth since 2020 has come from this cohort, highlighting strong enterprise traction but also elevating the risk associated with a small group of large customers.

Conservative Athena and Political Assumptions

Despite enthusiasm around Athena, Zeta is assuming only minimal revenue contribution from the product in its 2026 guidance, leaving room for upside if adoption accelerates. The outlook also bakes in just $15 million of political candidate revenue split between Q3 and Q4, reflecting management’s cautious stance on a historically volatile line item.

Stock-Based Compensation and Competition Remain Watchpoints

Stock-based compensation has improved as a percentage of revenue, dropping from 19% to 14%, yet management still sees dilution as an area to manage carefully. At the same time, the RFP environment is highly competitive, with rivals like Salesforce, Adobe and The Trade Desk regularly appearing in deals even as Zeta claims to win more than half of the opportunities it pursues.

Guidance Points to Faster Growth and Better Margins

Looking ahead, Zeta raised its 2026 guidance, now targeting $1.755 billion of revenue and $391 million of adjusted EBITDA, implying margin expansion to 22.3%. The company also expects $231 million in free cash flow and positive GAAP net income in 2026, while maintaining a conservative cushion and assuming limited near-term benefit from Athena, which could provide additional upside.

Zeta’s earnings call painted the picture of a company successfully scaling its data and AI platform while steadily improving profitability and cash generation. Investors will need to keep an eye on cost pressures, customer concentration and competitive intensity, but the upgraded multi-year targets and disciplined guidance suggest management sees significant runway for continued growth and value creation.