Zeta Global Holdings Corp. Class A ((ZETA)) has held its Q1 earnings call. Read on for the main highlights of the call.
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Zeta Global Holdings Corp. Class A’s recent earnings call painted a picture of robust financial health and strategic progress, as the company reported record revenue and profitability metrics. The sentiment was overwhelmingly positive, driven by successful product launches and customer acquisition strategies. However, Zeta maintained a conservative outlook for the latter half of 2025, citing macroeconomic uncertainties despite no immediate impact on their business.
Record-Breaking Revenue Growth
Zeta Global reported an impressive revenue of $264 million for the first quarter of 2025, marking a 36% increase compared to the same period last year. This growth exceeded the company’s guidance, showcasing its ability to outperform expectations and drive significant top-line expansion.
Strong Adjusted EBITDA Growth
The company also reported a strong adjusted EBITDA of $47 million for Q1 2025, reflecting a 53% year-over-year increase. This surge in EBITDA highlights Zeta’s operational efficiency and its capacity to convert revenue growth into substantial profitability.
Successful AI Product Launch
Zeta’s launch of the AI Agent Studio, a suite of generative AI tools, has been met with significant customer adoption. This product launch has not only driven revenue growth but also positioned Zeta as a leader in AI innovation within its industry.
Customer Acquisition Cost Improvements
The company achieved notable improvements in customer acquisition costs, with a 53% reduction for a telecommunications client and a 37% reduction for an insurance provider. These improvements underscore Zeta’s effectiveness in optimizing its customer acquisition strategies.
Robust Sales Pipeline and Customer Retention
Zeta reported strong growth in its sales pipeline and maintained a net revenue retention rate of 111% or higher since its IPO. The addition of 21 scaled customers sequentially further demonstrates the company’s ability to retain and grow its customer base.
Strong Free Cash Flow Growth
In Q1 2025, Zeta generated $28.2 million in free cash flow, an 87% increase year-over-year. This strong cash flow performance reflects the company’s financial health and its ability to convert earnings into cash efficiently.
Macro Uncertainty Caution
Despite the strong performance, Zeta expressed caution in its guidance for the second half of 2025 due to macroeconomic uncertainties. This conservative stance suggests that while the company is performing well, it remains vigilant about potential external economic challenges.
Sequential Decline in Direct Revenue Mix
The direct revenue mix for Q1 2025 was 73%, a slight decline from 74% in the previous quarter, although it showed improvement from 67% a year ago. This indicates a minor shift in revenue composition that the company is monitoring closely.
GAAP Net Loss
Zeta reported a GAAP net loss of $22 million for Q1 2025, an improvement from a $40 million loss in the same quarter of the previous year. This reduction in net loss reflects the company’s progress toward achieving profitability.
Forward-Looking Guidance
Zeta’s forward-looking guidance remains optimistic, with increased projections for the second quarter and full-year 2025 despite macroeconomic uncertainties. The company’s focus on delivering measurable ROI and performance-based outcomes, along with its AI innovations and strategic partnerships, are expected to drive continued growth. Zeta also plans to enhance its cash flow generation and reduce stock-based compensation and dilution.
In summary, Zeta Global Holdings Corp. Class A’s earnings call highlighted a strong financial performance and strategic advancements, with a positive sentiment tempered by cautious future guidance. The company’s record-breaking revenue growth, successful AI product launch, and improved customer acquisition costs were key highlights. Despite macroeconomic uncertainties, Zeta remains optimistic about its future growth prospects, supported by its innovative strategies and robust financial health.