Zeta Global, a marketing cloud platform, reported 25% YoY revenue growth to USD 172 million in Q2 2023, 6% above consensus estimates, as well as the upper bound of firm guidance. This growth was driven by new client acquisitions, where the firm added fourteen new customers during the quarter (3.4% QoQ growth), reaching 425 customers by Q2 2023, as well as an expansion in average revenue per unit (ARPU) to USD 392,000 (10% YoY growth). The Zeta marketing platform (ZMP) continued to account for an increasing share of its revenue at 75% of quarterly revenue.

During the quarter, the firm recorded adjusted EBITDA of USD 27 million (45% YoY growth), 9.3% above the upper bound of company guidance. This corresponded to an adjusted EBITDA margin of 15.6% (compared with 13.5% in Q2 2022), which was above company guidance. The firm narrowed its GAAP net loss on a quarterly basis to USD 52 million (compared with a net loss of USD 86 million in Q2 2022). The loss was primarily due to a USD 58 million stock-based compensation.

For the full-year 2023E, the company raised its revenue expectations to range from USD 712 million to USD 718 million, a YoY growth of 19% from its midpoint estimate. The company also increased its adjusted EBITDA, which it expects to be between USD 124.2 million and USD 124.8 million, YoY growth of 35% from its midpoint estimate, with an adjusted EBITDA margin of 17.3% to 17.5%.

Analyst QuickTake: Zeta Global has been consistently outperforming analyst predictions, particularly in revenue growth, and been revising its future forecasts upwards. Zeta Global showcases its robust growth expectations by projecting increased adjusted EBITDA margins and improved free cash flow. The Zeta 2025 initiative, which sets a goal of achieving more than USD 1 billion in annual revenue and maintaining adjusted EBITDA margins of at least 20%, aligns with its strategy of leveraging data-driven insights and inventive solutions.