Zeta Global's AI Infrastructure Pivot Powers 44% Revenue Growth Despite Earnings Miss

Zeta Global Continues Streak of Beat-and-Raise Quarters, Stock Rises - Zeta Global Holdings (NYSE:ZETA)

* Zeta Global Holdings stock is at critical resistance. Why is ZETA stock breaking out? Q2 Financial Performance Beats Consensus Total revenue reached $443 million, a 44% increase year-over-year, beating analyst consensus expectations of $420.613 million. The intelligent AI infrastructure provider achieved positive net income of $8 million, generating 3 cents in earnings per share compared to breakeven earnings estimated. Adjusted EBITDA surged to $92 million, expanding margins to 20.7% and achieving the "Rule of 64." Key operational drivers included a 17% growth in Super-Scaled Customers to 197, alongside a 17% increase in Super-Scaled ARPU to $1.8 million. Net cash from operating activities rose 65% year-over-year to $69 million, while free cash flow jumped 73% to $58 million. Upgraded Guidance & Management Commentary Reflecting strong pipeline momentum, management raised full-year 2026 revenue guidance by $33 million at the midpoint to a range of $1,811 million to $1,824 million, topping analyst estimates. Third-quarter sales are now projected between $469 million and $472 million. Full-year Adjusted EBITDA expectation was raised to $404.1-$406.3 million, and GAAP EPS outlook was increased to $0.09-$0.11. "Accelerating revenue growth to 44% and achieving the rule of 64 reflects growing demand for our AI infrastructure platform," said David A. Steinberg, Co-Founder, Chairman, and CEO. "Momentum from collaborations with OpenAI, Snowflake and Palantir marks an inflection point." CFO Chris Greiner added, "Broad-based strength and pipeline visibility give us confidence to significantly increase our full-year expectations." ZETA Shares Surge Wednesday Morning ZETA Price Action: Zeta Global Holdings shares were up 13.73% at $27.58 at the time of publication on Wednesday. The stock is trading at a new 52-week high, according to Benzinga Pro data. Image: Shutterstock Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

Zeta Global at Technology Leadership Forum 2026: growth, AI and scale By Investing.com

On Monday, 10 August 2026, Zeta Global (ZETA) used KeyBank's Technology Leadership Forum 2026 to present a confident case for its business model, product strategy and financial outlook. Management described a company gaining scale in marketing technology and advertising technology, while also facing the usual pressures of a fragmented market, rising competition and investor questions about durability. Chief Financial Officer Chris Greiner and Chief Growth Officer and Vice Chairman Will Margiloff said Zeta is trying to simplify a crowded software stack for large enterprises by combining customer acquisition, retention and wallet-share growth in one platform. They also pointed to new AI tools, especially Athena, and a partnership with Palantir as signs that the company is broadening its reach. Key takeaways * Zeta raised its Q3 organic growth outlook to 23.5 percent, excluding political candidate revenue, after strong pipeline and sales productivity trends. * Management said the company has posted 21-plus straight quarters of organic growth above 20 percent and is tracking toward about $2 billion in revenue over the next couple of years. * The Athena conversational AI product is gaining traction, with 40 percent monthly active use among 200 super-scaled customers and 83 percent of platform interactions happening conversationally. * Zeta said its proprietary dataset and broad platform help it replace multiple point solutions, while a new Palantir partnership could add entirely incremental revenue. * The company highlighted operating leverage, GAAP earnings, improving free cash flow and a $1 billion debt facility that gives it flexibility for buybacks or future deals. Financial results and growth outlook Zeta said its business continues to grow at a fast pace, with management lifting organic growth guidance for the third quarter to 23.5 percent after removing political candidate revenue from the calculation. The company said it has now delivered more than 21 consecutive quarters of organic growth above 20 percent. * Revenue run rate is a little more than $1 billion, with a path toward about $2 billion in the next couple of years. * The revenue mix is now about 60 percent recurring revenue and 40 percent usage-based annual contracts. * Net revenue retention continues to expand and remains at elevated levels. * The company said it is generating GAAP earnings. According to InvestingPro data, Zeta's revenue reached $1.57 billion over the last twelve months as of Q2 2026, with revenue growth of 35.91%, validating management's confidence in the path toward $2 billion. The company's gross profit margin stands at 59%, while its current ratio of 2.38 demonstrates strong liquidity to support ongoing operations. InvestingPro analysis suggests the stock is currently undervalued relative to its Fair Value, placing it among opportunities on the platform's Most Undervalued list. * Free cash flow guidance for the full year was raised by 20 percent, while revenue guidance was raised by 33 percent, showing operating leverage. Management said the second half of the year is already largely in the run rate, which means less incremental execution is needed to reach current expectations. The company also said its forecasting model uses five to six years of historical data to estimate pipeline conversion. Pipeline and sales productivity Executives said one of the strongest signals in the quarter was the health of the sales pipeline. Pipeline growth reached 60 percent in the third quarter, which management described as one of the healthiest pipeline growth periods in company history. * Pipeline creation by sales representatives rose more than 100 percent. * Deal sizes for deals won in the quarter were up 40 percent. * Forward pipeline deal sizes were up 25 percent. * Sales headcount rose by only one sequentially and by 11 percent year over year. Greiner said the company's improved visibility supports the higher guidance. He also said the business has maintained a strong beat-and-raise record, reflecting both demand and execution. Product updates and AI adoption Much of the call focused on Athena, Zeta's conversational AI product, which was launched about 140 to 150 days before the forum and has now reached general availability. Management said the product is helping customers use the platform more easily and more fully. * Among 200 super-scaled customers, 40 percent are monthly active users of Athena. * About 83 percent of platform interactions are now conversational. * AI adopters are growing roughly four times faster than customers that have not adopted AI. * AI adopters also have the highest net revenue retention. * Customer relationships have lengthened from about 48 months to more than 56 months. Greiner said the company is now tracking AI adoption and revenue contribution with new metrics. He argued that the product reduces platform complexity, which has been a common customer complaint, and helps unlock more campaigns and audiences. He said, "What we're seeing is that by conversing with the platform, more audiences and more campaigns are being created as was done otherwise, manually. That is good for us because the next downstream revenue is when the usage meter begins to run, when you actually put those campaigns through programs like a cohort of CTV, of email, of mobile, of audio podcasting, of social." Platform positioning and competitive moat Management spent considerable time describing Zeta's market position. The company said it serves the largest enterprises across all 15 industry verticals, with no single vertical concentration. Its top 10 customers account for about 90 percent of revenue, and eight of those 10 are growing at more than 20 percent a year. Executives said Zeta is a consolidation point in a fragmented market and often replaces eight to 12 point solution vendors in an initial implementation. The company said it is the only platform that covers all three use cases it highlighted: customer acquisition, customer retention and wallet-share growth. * Zeta said it covers all major digital channels, including display, video, open web, podcasting, email and social networks. * Its proprietary dataset was described as the largest open web, non-walled garden dataset. * The data is embedded in the platform rather than sold as an add-on. * Customers use it to enrich behavioral, transactional and demographic data and to build lookalike audiences. Greiner said, "Only Zeta, as you'll hear from Will and I throughout the time together this morning, can do all three use cases. Only Zeta can do every single digital channel, and only Zeta, which powers all of this, has a proprietary dataset that you only get access to if you're paying Zeta." Margiloff said the company's strategy was designed to help marketers do more with fewer vendors. He said, "The real strategy that David came up with years ago was to be both, right? Let's help people acquire new customers, which is very AdTech, retain those customers, which is very CRM related, and help grow them, which is also on the CRM side. What we do know is marketers want more technology from less vendors." Customer wins and market expansion Management pointed to a recent Gap customer win as an example of how the platform can replace multiple tools at once. In that case, Zeta said it displaced a customer data platform, a marketing automation solution, a loyalty platform and a mobile solution in a single implementation, while also replacing Salesforce marketing automation capabilities. The customer is described as a multimillion-dollar account with potential to grow to tens of millions of dollars in annual spend. Management said the win shows early traction on the marketing technology side of the business, while leaving room for larger opportunities in media and advertising technology. Zeta also said its addressable market is large because its customers spend hundreds of billions of dollars on marketing. The company said its current revenue is still a small share of that opportunity. Partnerships and agency strategy The company highlighted several partnerships, including Amazon, Snowflake, OpenAI and Palantir. The Palantir relationship was described as different from the others because it includes defined revenue and joint win goals. Greiner said the Palantir partnership is aimed at existing U.S. commercial customers that spend more than $1 billion on marketing. He said the opportunity is quarantined and entirely incremental to Zeta. He explained the fit by saying, "Inside four walls, Palantir is great. Outside your four walls, Zeta does the exact same thing. By virtue of having our Zeta Data Cloud, we go into customers, and we say, 'Here is what is happening outside your four walls relevant to your existing customers and prospects that we know are in market for your brand or a competitor's brand.'" Management said the first use cases are focused on intelligence and analytics, which are higher-margin and use the data cloud more heavily. It said media and programmatic activation could come later, but that is not the current plan. The company also described an agency holdco strategy built around a one-to-many model. Zeta said Athena helps agencies use its data cloud to win new business, then use the platform for client execution after the sale. Margins, capital allocation and balance sheet Zeta emphasized operating leverage and margin expansion across the business. Management said adjusted EBITDA margins are improving across research and development, sales and marketing, and general and administrative expenses. * Year-to-date stock-based compensation dilution was 0.1 percent. * Stock-based compensation is expected to keep falling as a share of revenue. * Capital spending is also declining as a share of revenue. * Free cash flow conversion is improving through capital spending optimization. * The company said it is now generating GAAP earnings. Management said it refinanced a $1 billion debt facility that could support strategic acquisitions or accelerated share buybacks. Still, executives said there are no imminent acquisition targets and that buybacks remain the main capital allocation priority. They said the company generally returns at least 50 percent of quarterly cash generation to repurchases, with the average closer to 60 to 70 percent. Future outlook Looking ahead, management said the company's 2028 model remains achievable based on current trends. It pointed to several levers for further free cash flow margin expansion. * Continued efficiency in R&D, sales and marketing, and G&A. * More disciplined hiring, including a slower pace for quota carriers and a focus on fewer, more expensive engineering hires. * Lower capital spending as a percentage of revenue. * Ongoing reduction in stock-based compensation as a percentage of revenue. Executives said the agency opportunity could deepen over time as Athena makes it easier for agencies to pitch new business and then expand into execution. They also said the media and AdTech side of the business remains largely untapped, while the MarTech side has become a more durable and predictable revenue stream. Management said geographic expansion is being evaluated but is not imminent. It also said answer engine optimization and search-related capabilities are being built in-house. Q&A highlights During the question-and-answer session, investors pressed the company on its place in the MarTech and AdTech stack, the durability of the advertising business, the Palantir deal, and the path to the 2028 targets. * On market position, management said Zeta is both an AdTech and CRM platform because it supports acquisition, retention and wallet-share growth. * On durability, it pointed to expanding net revenue retention, more than 21 quarters of 20 percent-plus organic growth, strong beat-and-raise results, free cash flow generation and GAAP earnings. * On the Gap win, executives said it validates the platform's ability to replace multiple vendors and shows upside in both MarTech and media. * On guidance, management said the higher outlook reflects stronger pipeline visibility, better sales productivity and the fact that much of the second-half revenue is already in place. * On M&A, executives said the company has flexibility but no near-term acquisition target, and that buybacks remain the main use of capital. Greiner also addressed concerns about AI disintermediation. He said Zeta's proprietary dataset gives the company a moat because it is embedded in the platform and not available as a standalone product. He added that AI adopters are not shortening customer relationships at Zeta; instead, they are extending them. He said, "What we're seeing is that our AI adopters are our fastest-growing. They also have the highest net revenue retention, and they're growing roughly four times faster than our still-to-adopt-AI customers. What is it doing to customer relationships? There's this concept hypothesis in the market that AI is going to create shorter relationships with customers, maybe smaller initial deal sizes. Ours are different. We're seeing customer relationships go from roughly 48 months to now past 56 months." Conclusion Zeta Global presented a message of steady growth, stronger product adoption and expanding financial efficiency at KeyBank's Technology Leadership Forum 2026. Readers can refer to the full transcript below for further detail. Full transcript - Technology Leadership Forum 2026: moderator, KeyBank: Here we go. Good morning, everyone. Welcome to KeyBank's Technology Leadership Forum. This is our second year here in Park City, Utah. We are joined today with the Zeta Global team, Chris Greiner, Chief Financial Officer, and Will Margiloff, Chief Growth Officer and Vice Chairman. Thank you guys for being here. Chris Greiner, Chief Financial Officer, Zeta Global: Thank you. moderator, KeyBank: Maybe we can start off just with a high level of Zeta Global and where you guys see the company going, just at a high level for the room to understand. Chris Greiner, Chief Financial Officer, Zeta Global: Yeah. We will start with who we serve from a customer's perspective and then Will and I will get into how that aperture is getting wider and wider, which is good for a lot of different reasons. First off, our primary customer, the largest enterprises in the economy. We support all 15 industry verticals. Our top 10 roughly account for 90% of revenue. There is no concentration in any one or two. All of our, call it 8 out of our 10 last quarter growing north of 20%. It is a really healthy, diversified customer set. The CMO wakes up every single day trying to figure out, as a brand who is spending hundreds of millions to billions on marketing, that is our target customer set, large enterprises. Who am I going to reach today? How am I going to reach them? Once I do, how do I get them to engage with my brand? Pretty straightforward. They do that through three different use cases. I want to retain my existing customers, I want to grow my wallet share with existing customers, and I want to acquire new ones. If you're a CMO today, your technology stack to do all of those use cases across all digital formats, whether we are all on display video on the open web, or we're listening to a podcast, or we're receiving email, or we're somewhere in the social networks, their technology stack is dizzying. They have to use so many different point solutions to do all of those use cases, paired with all the different channels where all of us exist digitally in the open web or in the real world. Except for Zeta, we are a massive consolidation point. We will typically collapse 8 to 12 vendors in the first implementation. Only Zeta, as you'll hear from Will and I throughout the time together this morning, can do all three use cases. Only Zeta can do every single digital channel, and only Zeta, which powers all of this, has a proprietary dataset that you only get access to if you're paying Zeta. I think it's part of why, as sure we'll get into our net revenue retention rates, have been as high and getting stronger over the last several years. moderator, KeyBank: I think that's a great segue maybe into Zeta's secret sauce is that data asset and how you leverage it. Maybe this would be a great question for Will to- Will Margiloff, Chief Growth Officer and Vice Chairman, Zeta Global: Yeah. We all talk about data all the time and how you can leverage data to make more informed decisions about your marketing operations. But that dataset we've created is the largest open web, non-walled garden dataset. Why is that important? Because whether you're trying to acquire new customers or grow your existing customers, using a dataset to enrich your customer knowledge. Think about retailer knows that they bought a shirt. We can tell them everything else that they've done, where they've gone, what devices they have, what neighborhoods they live in, maybe even generally what transactions they've made. We can tell them so much more so they could be smarter about how to interact with their customers. Then we can help them find customers who look just like their customers, their best customers, and we can help them with this dataset. All that data sits on top of this unique marketing platform that helps our marketers acquire, retain, and grow. All that stuff comes with the platform. It isn't an add-on, and it's one of the reasons why we've won so much business, and taken away, because that is a secondary cost for a marketer in most platforms in digital marketing. It's part of what we do. moderator, KeyBank: Very helpful to understand. Zeta has released some high-powered products this year. Maybe we can start with Athena going generally available and what that does to your super scaled, greater than 1 million ARPU customer cohort, and how that can drive usage there. Chris Greiner, Chief Financial Officer, Zeta Global: Yeah. One of the biggest points of feedback we've received from our customers is as expansive as the dataset is, as much of what the platform can do, it also made it an intimidating lift. They just didn't know how to access all of what was available on the platform. David will often say many of our marketers are super skilled at flying a Cessna, and yet they're presented with a F-22. That's a really difficult chasm to cross. Our solution to that was to create something that facilitated the broader use of the platform, made it easier, and made training super short. That is conversational, conversing with the platform rather than having to do keystroke discovery. What we're seeing initially, Athena's been out for general use about 140, 150 days now, is that of our super scaled customers, 40% of our 200 are now monthly active users, and 83% of their interactions on the platform are conversational. For us, that validated a bet that we were making that this is how interactions would be on the platform. This is more natural for us anyway. What makes that interesting for our customers and for Zeta and then obviously downstream for investors is if you think about the revenue funnel for Zeta, it starts with licensing the platform, building and creating audiences and campaigns. What we're seeing is that by conversing with the platform, more audiences and more campaigns are being created as was done otherwise, manually. That is good for us because the next downstream revenue is when the usage meter begins to run, when you activate. When you actually put those campaigns through programs like a cohort of CTV, of email, of mobile, of audio podcasting, of social. That drives our P x Q revenue. If that's a good indicator at the top of the funnel of what's to come from usage, it shows you that our original design point of releasing Athena is going down the right path. Will Margiloff, Chief Growth Officer and Vice Chairman, Zeta Global: The biggest knock on marketing technology, I think, has really been not the promise of what it could do. It was actually the implementation. I think Athena really helps somebody quickly get to: Why did I buy this, and how is it going to help me? They don't have to be a technologist to figure that out. They just have to speak. I think that is a huge unlock for the growth in the business. moderator, KeyBank: Speaking of unlock, maybe we could talk about the agency holdco opportunity. Zeta works with the majority of the largest marketing agency hold companies which manage brands. Maybe you can talk about early feedback from Athena for these agencies and what the opportunity could be as you continue to land and expand and acquire new brands. Will Margiloff, Chief Growth Officer and Vice Chairman, Zeta Global: Well, three or four years ago, when we came up with this strategy, it was about how do we have one relationship that unlocks many, so a one-to-many strategy, much like you guys know with system integrators and things like that. That's how we really approached it. Athena, for agencies, is a further unlock, right? They could be using our platform not only to help their marketers be more successful with digital marketing across all the various channels that they might be operating in, but it also could help them win business. Right? So how do they leverage our data cloud to go out and win a new customer of their own? That was the premise years ago. But now with Athena, they can say, "Well, prospect new customer X is in this vertical. How can I look at all the data that's sitting within the data cloud, Zeta's Data Cloud, to make a more informed presentation to try and win business? When they win business, guess what? They're going to use our platform. That's good for us. The unlock there was really, how do we help have Athena have them unlock the Data Cloud, unlock, obviously, then usage of our marketing platform to win more business downstream for us. And it's been a very successful launch for us. Again, an agency on behalf of the marketer still needs to use technology, and we want them to be strategic, not tactical. Conversational AI is really helping them be way more strategic and say, "Help me understand what audiences I should deliver for this marketer or create for this marketer, and where I should deliver it, and how much should I pay for it, and what channel should it be in, and what the creative should look like." All that stuff gets done in milliseconds now as opposed to how it would be done before. moderator, KeyBank: That's, I think, a great segue to maybe talk about the re-architecture and the new partnership with Palantir and Foundry. Maybe can you help us understand the pipeline opportunity, Chris Greiner, Chief Financial Officer, Zeta Global: Yeah moderator, KeyBank: deals closed opportunity, and what the re-architecture does for Foundry, for Zeta Data Cloud? Chris Greiner, Chief Financial Officer, Zeta Global: Totally. I want to take three steps backwards just to give perspective as to why you are starting to see more and more partnerships with Zeta Global going into. It is one thing when you cross your first billion of revenue to do it all on the backs of your own sellers and towards your second billion, like we are tracking to between this year, next year plus. But eventually, you need to unlock other people selling on your behalf, partnerships. If you look back at the partnerships now that we have in place, we have Amazon, we have Snowflake, we have OpenAI, and now Palantir, and that has been a very nicely sequenced set of very important relationships that touch a lot of the market. Palantir is important for a number of reasons, and it is different than others in that Palantir has defined revenue and count joint win goals that is different than other parts of our partnerships, how they are structured. It is highly incentivizing for someone as incredible and as scaled as Palantir and little old Zeta. It is meaningful to both of us. We have a pipeline of opportunities that have been quarantined off that are existing U.S. commercial customers of Palantir that are spending $1 billion-plus in marketing. That would be totally incremental to Zeta. If you go what the value proposition looks like, it is one thing to have a partnership, and obviously Palantir, for what they do, has an incredible magnetic attraction to them. What makes that so is that Palantir is exceptional at helping you as an enterprise create a digital twin of every single piece of data inside your business, whether that is your vendor relationships, your processes and procedures, your people-based, your employee-based information, your customer information. They create a machine-readable version of all of that that allows you to be hyper-efficient and make better decisions. Inside four walls, Palantir is great. Outside your four walls, Zeta does the exact same thing. By virtue of having our Zeta Data Cloud, we go into customers, and we say, "Here is what is happening outside your four walls relevant to your existing customers and prospects that we know are in market for your brand or a competitor's brand." So now you have two organizations with this incredible data and intelligence asset, one that makes you perfect at monetizing what is happening inside your four walls, another that can do the same of what is happening outside your four walls. It creates very interesting, not just marketing use cases, but I think business intelligence use cases as this partnership matures. It has only been in place for a month or so, right? We're early, and you don't want to get too tempted to draw trend lines off of it, but it has some really interesting aspects to it. moderator, KeyBank: It's a joint selling go-to-market. Chris Greiner, Chief Financial Officer, Zeta Global: Correct moderator, KeyBank: opportunity. Chris Greiner, Chief Financial Officer, Zeta Global: Yep. Their quota carriers, our quota carriers in the same room. moderator, KeyBank: Can you walk us through, maybe just at a high level, the unit economics of Palantir and Zeta and why that is beneficial to both? Chris Greiner, Chief Financial Officer, Zeta Global: Yeah, I think the initial use cases are going to begin with intelligence, so it's going to be focused on the utilization of our Zeta Data Cloud, so higher margin because it's analytics-based revenue. It would not surprise me that as these relationships expand and as we go to market and go to market, there becomes a media aspect to it, which is not just going to help you understand with data intelligence, we're going to go help you now action it and go deliver outside the market in terms of whether it's through programmatic, through email, through other methodologies. I think that could be something that happens also, but not currently planned. moderator, KeyBank: Okay. Helpful to understand. Chris Greiner, Chief Financial Officer, Zeta Global: Yep. moderator, KeyBank: Maybe we can pivot to an investor question that we get a lot of times is where does Zeta fall in terms of the MarTech stack versus the AdTech stack? Is it software? Is it AdTech? Maybe can you help us understand how Zeta falls in line there? Will Margiloff, Chief Growth Officer and Vice Chairman, Zeta Global: It's both. The problem, which is a problem for investors, but a great solution for marketers, is the fact that we span both of those. I think the real strategy that David came up with years ago was to be both, right? Let's help people acquire new customers, which is very AdTech, retain those customers, which is very CRM related, and help grow them, which is also on the CRM side. What we do know is marketers want more technology from less vendors. The disparate technologies and all the stuff they have to do to integrate them is a pain in the butt, and they can't be strategic, and matter of fact, their budgets are smaller and smaller. So they have to do more with less. The real strategy was always, let's be a marketing technology business, which inclusive of that is these two buckets. I think that people have always tried to put us in one or the other. The marketers don't want us in one or the other. They want us in both, and they want a platform that spans both. I think we're quite happy explaining that. It's hard for you guys to put us in a bucket and try and understand it, but really we are both because our technology spans both. Chris Greiner, Chief Financial Officer, Zeta Global: But I think we're also self-aware enough to know that in the AdTech universe, there's plenty of bodies in pools. Sorry. That's typically been caused by, there hasn't been durability of growth in that part of the world from an investor's lens. There certainly hasn't been a level of predictability of revenues. Our answer to that is we need to be able to demonstrate on a fact-based, data-driven way that our business, despite having AdTech attributes from an investor's lens, has the unit economics of software and intelligence businesses, whether that's our net revenue retention rates- whether that is the now 21, I think, plus quarters of organic growth of 20%. We obviously have a very strong beat and raise track record. We are hyper-efficient on the incremental revenue we drive, hitting free cash flow, and not disappearing past adjusted EBITDA. We're now generating GAAP earnings. We need to keep proving that. We understand that. Will Margiloff, Chief Growth Officer and Vice Chairman, Zeta Global: I would also just add that I think one of the important things of having these capabilities across the marketing spectrum is we really don't care where we enter a relationship with a large marketer. Chris Greiner, Chief Financial Officer, Zeta Global: Yeah. Will Margiloff, Chief Growth Officer and Vice Chairman, Zeta Global: We want to solve their biggest problem, and the capabilities that we have allow us to do that, and we will win their business over time. A lot of the slides that we show in investors is about the durability and growth of that revenue over time. It really doesn't matter how we enter. If they're here for 3-5 years, they're growing, and we're into 5-7 now, we'll have that cohort. But those guys just ramp, because we solve a problem, we show we can do something unique, and we expand into other capabilities. moderator, KeyBank: I want to get into the financial section here in a second, but maybe quickly, we can talk about the Gap customer, the recent win, Will Margiloff, Chief Growth Officer and Vice Chairman, Zeta Global: Yeah moderator, KeyBank: displacing a very large marketing vendor as well as other vendors, then maybe how large that could expand to with expanding use cases and continuing down that marketing and AdTech path of combining the two. Will Margiloff, Chief Growth Officer and Vice Chairman, Zeta Global: Yeah. Well, the total addressable market on our side is, we're doing a, let's just say, a billion plus. I won't get into specifics going forward, but let's just say we hit our forecasted $2 billion in a couple of years. That's still a small percentage of the overall marketing spend of our customer base. They're hundreds of billions of dollars. So we think that there's lots of headroom for us with all of our customers, but that win is a great win because it shows that on the CRM side of the business, what you guys would bucket as marketing side of the business, that our capabilities are being recognized as something that could knock out four or five different technologies with a single win. You might say, "Well, okay, what does that mean?" Well, that's a customer data platform. That's a marketing automation solution. That's a loyalty platform. That's a mobile solution for their customers. So, from one platform, they gain four different point solutions they had previously, some of which were done by Salesforce from a marketing automation perspective. So it really is a justification of where we're headed from a business perspective and all these things we've been talking about. On top of having those capabilities, we then have the data intelligence, the Zeta Data Cloud and the intelligence behind it, and that's inclusive in the platform. So I think we're going to see more and more wins that happen from large customers, but that's a multimillion-dollar customer that could be tens of millions of dollars. Because we haven't attacked that media side or the AdTech side at all, and that's where the big dollars are. MarTech is actually durable and reliable and predictable, but it's still a small percentage of the revenue potential. The media side is really a huge opportunity. moderator, KeyBank: Awesome. Now moving into the financials. Organic growth guide raised. What gives you confidence into the visibility of Will Margiloff, Chief Growth Officer and Vice Chairman, Zeta Global: Yeah moderator, KeyBank: this customer base on a usage-based business model Will Margiloff, Chief Growth Officer and Vice Chairman, Zeta Global: Yeah moderator, KeyBank: to keep NRR expanding or within target range Will Margiloff, Chief Growth Officer and Vice Chairman, Zeta Global: Yeah moderator, KeyBank: and the organic growth guide? Chris Greiner, Chief Financial Officer, Zeta Global: Our revenue model can be broken down into two parts. 60%, which continues to be up from several years ago, is recurring, and that is the licensing of the data cloud platform, subscription to the Zeta Marketing Platform, and then where there is multi-year contractual minimum usage for whether it's emails, impressions, mobile messages, could be anything. That's 60% of our business and growing really, really healthy. The other 40% is where we have annual contracts for the most part. Some could be multi-quarter, but let's say annual contracts that are P x Q, and that's for any combination of channels that can be used. For us, that is also growing quite rapidly. So what gave us the confidence to raise our guide? We took the third quarter up to around 23.5% organic growth. We removed political candidate revenue as well. We have this all broken out in our filing, so it's very clear in our guide what we're counting on. Pipeline visibility is number one. We talked about having one of the healthiest, again, pipeline growth quarters in our history at 60%. But the underlying pipeline dynamics, how it actually gets sold, we're seeing much better sales productivity, ramping sales productivity, whether that is the pipeline that's being created by reps is up over 100%. Deal sizes, they're able to go in and create bigger opportunities. Deal sizes for deals won in the quarter, not just in our pipeline, but deals won was up 40%. Then the going forward size of the deals in the pipeline's up 25%, all while we added one seller sequentially, and 11% year-over-year. So we're seeing really good productivity in the app front. We have five, six years worth of data to be able to model what we're going to convert from the pipe. Then a lot of the revenue's already in the wood. It's already in the second half run rate already. There's very little go get left in the second half of the year. moderator, KeyBank: For the 2028 target model, that seems to be ahead of pace already. Chris Greiner, Chief Financial Officer, Zeta Global: Yeah. moderator, KeyBank: What levers can you continue to pull for free cash flow margin expansion, again, with SBC discipline? Can you help us walk us through the 2028 opportunity? Chris Greiner, Chief Financial Officer, Zeta Global: Yeah. This was our highest levered drop from our raise in revenue to free cash flow that we've done. We raised the full year's revenue by 33, and we raised free cash flow by 20 for the full year. That's a very, very nice margin conversion. We are getting right now, if you walk down the P&L, what's creating that leverage first on the adjusted EBITDA line, then on the free cash flow, then on the GAAP earnings side. We saw efficiencies across the board in R&D, sales and marketing, and G&A, and I think that should just continue. We, right now, are investing in Zeta Labs, which is engineering. Fewer incremental heads being hired, more expensive, big expertise. But that's where hiring is happening on the engineering side of the house. We're hiring quota carriers. We just don't think we need to add as many as we have historically. We've, call it the last four years, added 22% more quota carriers year-over-year. We're averaging now closer to 10%-13%, and I think that can hold. So continuing to be really efficient on the OpEx side. On the free cash flow conversion, we're doing a great job of driving down CapEx as a percentage of revenue, and there's nothing that would get in the way of that. Then, as it relates to GAAP earnings, one of the areas that we've been very responsive to and thankful for constructive feedback from investors has been continue to reduce dilution and reduce SBC, and we are doing both. Year-to-date, we have 0.1% dilution. And as a percentage of revenue, like it's been doing, I would expect SBC to keep going down. So, we've got good leverage happening throughout the P&L as it breaks down to earnings with the right level of revenue visibility right now. moderator, KeyBank: Mm-hmm. Awesome. And I see we have a few minutes left. I wanted to open up to the audience if anyone has any questions. Maybe we can talk about the new refinanced billion-dollar debt facility. Chris Greiner, Chief Financial Officer, Zeta Global: Yeah moderator, KeyBank: That could be used for M&A opportunities. Zeta's done a couple acquisitions over the past couple years, larger. What capabilities do you think that the platform might need, or where do you think that billion dollars could be deployed? Chris Greiner, Chief Financial Officer, Zeta Global: There's nothing imminent in the pipe right now. That should not signal to an investor that there's a go race like our teenage kids might do once they get a little cash in their wallet to go spend it. It is not the case. Share buybacks continue to be super attractive to us. We are models to use at least 50% of the cash we generate in a quarter to buy back our own shares. We've averaged closer to 60%-70%, but that's the at least model. This facility could allow us to step on the gas on that if we chose to. M&A is a great option. We've been using a mix of cash and shares. As we talked about dilution, this allows us to avoid shares as a way to potentially pay for an acquisition. Deals that we're looking at, I'll let Will comment on who runs that part of our business as well. Will Margiloff, Chief Growth Officer and Vice Chairman, Zeta Global: Yeah, look, I think in the past, there were glaring things that we thought we needed for this to expand our revenue and footprint, I would say. Solutions-wise, I don't think there's anything today that we're jumping up and down about. I think we can build some of the things that we think are next generation. If you think about Answer Engine Optimization or things like that, or things we've stated we're building in-house, because I think those are going to be interesting channels. Search is increasing. Whether it's from AI or from traditional search, we've got capabilities that can help a marketer within those things, so we'll continue that. Geographically, there might be some things. I think we've all been in business long enough to know that there are challenges in certain markets that we don't want to step into and distract ourselves from. We have the capabilities today with the spend in those capabilities to have a huge business and hit plan numbers that we have. We'll be opportunistic and look for things that make sense as they come up, but I don't think there's anything imminent right now. Chris Greiner, Chief Financial Officer, Zeta Global: No. moderator, KeyBank: Okay. One final question. Maybe it could be answered potentially quickly. AI disintermediation risk, something we hear from a lot of other software vendors. Why does Zeta have a defensible moat from being vibe coded away? Chris Greiner, Chief Financial Officer, Zeta Global: Our data's a huge asset for us in creating that moat. In fact, it was our intention this quarter, for the very first time, we put out metrics that we wanted to be able to now repeat and show investors how our customers are adopting our AI versus not, and then that introduces the opportunity for them to use someone else. So we talked about adoption metrics, then we talk about how that adoption translates to the contribution of revenue. What we're seeing is that our AI adopters are our fastest-growing. They also have the highest net revenue retention, and they're growing roughly four times faster than our still-to-adopt-AI customers. What is it doing to customer relationships? There's this concept hypothesis in the market that AI is going to create shorter relationships with customers, maybe smaller initial deal sizes. Ours are different. We're seeing customer relationships go from roughly 48 months to now past 56 months. Again, the NRR has been improving over the last three years in a row. moderator, KeyBank: Awesome. Well, I think we are at time. Thank you guys very much for being here. Thank you for Chris Greiner, Chief Financial Officer, Zeta Global: Thank you, Jack. That was awesome. moderator, KeyBank: coming in. Thank you. Chris Greiner, Chief Financial Officer, Zeta Global: Yeah, thank you. This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Zeta Q2 2026 presentation: AI pivot drives growth, EPS miss weighs By Investing.com

Zeta Global Holdings Corp. (NYSE:ZETA) presented its second quarter 2026 supplemental earnings materials on August 4, 2026, showcasing what the company characterized as its 20th consecutive "beat and raise" quarter while simultaneously repositioning itself from a marketing technology provider to an "intelligent AI infrastructure" platform. Despite strong revenue growth and raised guidance, shares fell 7.05% in after-hours trading to $22.55 following an earnings per share miss that overshadowed operational achievements. The presentation detailed revenue of $443 million, representing 44% year-over-year growth, alongside adjusted EBITDA of $92 million with a 20.7% margin. However, the company's GAAP EPS of $0.03 fell significantly short of the $0.1995 analyst consensus, highlighting a disconnect between top-line momentum and near-term profitability that concerned investors. Quarterly Performance Highlights Zeta's second quarter results demonstrated broad-based growth across multiple dimensions, as illustrated in the company's key themes and financial summary. The company achieved what it terms the "Rule of 64" -- the sum of revenue growth (44%) and adjusted EBITDA margin (20.7%) -- while posting organic growth of 28% excluding mergers and acquisitions. Free cash flow reached $58 million, representing a 13.1% margin and 63% conversion rate, both improvements from the prior year. The operational metrics showed particular strength in customer expansion and platform adoption, as detailed in the following performance indicators. Super-scaled customers -- those generating at least $1 million in trailing twelve-month revenue -- grew to 197, up 17% year-over-year, while average revenue per user among this cohort increased to $1.8 million, also up 17%. Notably, eight of the company's top 10 industry verticals grew more than 20%, with consumer & retail, financial services, automotive, and healthcare all accelerating from the first quarter. Strategic Repositioning to AI Infrastructure A central theme of the presentation was Zeta's strategic pivot from being perceived as a vertical marketing SaaS tool to positioning itself as an intelligent AI infrastructure company. The company outlined four major catalysts driving this transformation. The evolution centers on partnerships with OpenAI, whose models power Zeta's Athena conversational AI agent; Palantir, which provides the Foundry infrastructure layer for Zeta's Data Cloud; and Snowflake, with which Zeta has deep customer integration. Management emphasized that "the model leader and the infrastructure leader both chose Zeta -- with Athena as the agent layer between them." Zeta presented three independent proofs to support its infrastructure positioning, moving beyond future promises to current evidence. The company highlighted record 120% net revenue retention, 78% free cash flow growth, and what it described as "durable 20%+ revenue growth at scale" as the financial signature of a consumed platform rather than a re-sold tool. The proprietary identity graph covering 535 million individuals was positioned as a "scarce, infrastructural layer that competitors cannot replicate," with external validation from Palantir's decision to embed Zeta's Data Cloud into Foundry. The foundation of this infrastructure claim rests on Zeta's Data Cloud, which the company characterized as its competitive moat. Built over 20 years with trillions of consumer signals resolved to real people, the Data Cloud represents owned rather than rented data. Management argued that "every AI system is only as good as the data beneath it," positioning the proprietary identity graph as an advantage that cannot be bought, rented, or rebuilt by competitors. Customer Growth and Platform Economics The presentation demonstrated sustained customer expansion over seven consecutive quarters, with super-scaled customer count showing consistent sequential growth. The 17% year-over-year growth in super-scaled customers significantly exceeded the company's 2028 model target of 4-8% CAGR, suggesting accelerating adoption among enterprise customers. This was complemented by average revenue per user expansion that similarly outpaced long-term targets. Customer longevity analysis revealed that the longer customers remain with Zeta, the more valuable they become, with customers of five-plus years generating $3.9 million in average annual revenue compared to $0.7 million for customers of less than one year. Approximately 90% of revenue is driven by scaled customers who have been with Zeta for more than one year, demonstrating the platform's stickiness and expansion potential. The company emphasized that existing enterprises spend more annually and run more of their technology stack on Zeta -- what management described as "the financial signature of a platform being consumed, not a tool re-sold." Revenue diversification across industry verticals showed balanced exposure, with no single sector dominating. Consumer & retail led at 24% of fiscal 2025 revenue, followed by travel & hospitality and insurance at 11% each. Nine of the top 10 verticals grew more than 20% in 2025, with the five fastest-growing sectors being travel & hospitality, advertising & marketing, automotive, consumer & retail, and telecommunications. Enhanced Guidance and Long-term Targets Zeta raised its fiscal 2026 guidance across all key metrics, reflecting improved visibility and confidence in demand trends. The company increased full-year revenue guidance to a midpoint of $1.818 billion, implying 39% growth, with adjusted EBITDA guidance raised to $405.2 million at a 22.3% margin. Free cash flow guidance was lifted to $255.3 million, while GAAP EPS guidance increased to a range of $0.09 to $0.11, up $0.07 at the midpoint from prior guidance of $0.02 to $0.04. The quarterly cadence of guidance provides additional granularity on expected performance progression. Excluding Marigold and political revenue, Zeta expects organic growth of 23% in the third quarter and 20% in the fourth quarter, decelerating from the 28% pace in the second quarter but maintaining what management characterized as durable double-digit expansion. Beyond 2026, Zeta reiterated its 2028 targets, showing a clear path from current performance to long-term objectives. The company targets revenue exceeding $2.3 billion by 2028, representing a 23% implied CAGR, alongside adjusted EBITDA of more than $573 million at a 25% margin and free cash flow surpassing $371 million with 65% conversion. The trajectory from 2026 estimated results to 2028 targets suggests continued margin expansion and operating leverage. Historical performance versus the 2028 model demonstrated that Zeta has consistently exceeded its own growth expectations across key metrics. Actual performance from 2021 to 2025 showed revenue CAGR of 30% versus the modeled range, adjusted EBITDA CAGR of 45%, and free cash flow CAGR of 75%. Super-scaled customer count grew at a 17% CAGR, well above the 4-8% model, while ARPU expanded at 14% CAGR against a 12-16% target. The free cash flow trajectory illustrated improving conversion rates and expanding margins over time. Industry Recognition and Competitive Position Zeta's market positioning received third-party validation through industry analyst recognition and strategic partnerships. The company was named a leader in the Q1 2026 Forrester Wave for Email Marketing Service Providers, achieving the top score in the strategy category and the highest possible scores in 11 of 26 criteria, including identity resolution, data management, AI approach, and vision. External confirmation of Zeta's infrastructure category positioning came from partnerships with category-defining technology companies. OpenAI's models power Athena's voice capability while Zeta partners with OpenAI's advertising operations, described as "the most instrumental partnership in Zeta's history." Palantir rearchitected Zeta's Data Cloud on Foundry, its enterprise AI infrastructure layer, in a seven-year partnership with joint go-to-market initiatives. Gap Inc. named Zeta as its system of record with forward-deployed engineers embedded onsite, operating a production partnership involving OpenAI, Palantir, and Zeta together. A comparative analysis positioned Zeta within the AI infrastructure cohort, highlighting a valuation gap relative to operational performance. Zeta's Rule of 40 score of 51% placed it competitively against peers like Datadog (50%) and CrowdStrike (44%), while its 120% net revenue retention aligned with the 115-125% band of comparable companies. However, the company's enterprise value-to-revenue multiple of approximately 3x compared to a cohort range of 7-34x, which management characterized as "the repositioning opportunity." New Business Intelligence Offering The presentation introduced Zeta Business Intelligence (ZBI) as the company's fourth use case, leveraging the Data Cloud to help organizations transform business and customer data into intelligence and action. ZBI addresses six primary areas: real estate intelligence, customer experience optimization, market sizing and opportunity assessment, loyalty growth, business expansion, and business measurement. Real-world customer examples span diverse industries including luxury lifestyle brands, automotive services franchises, specialty bakery franchises, athletic apparel companies, and global sports and entertainment firms. Management positioned ZBI as a natural extension of the platform that deepens customer relationships and expands addressable use cases beyond traditional marketing applications. Market Context and Challenges Despite the operational achievements detailed in the presentation, the market reaction reflected concerns about profitability timing and cost structure. The earnings article noted that GAAP cost of revenue rose 300 basis points year-over-year, potentially limiting future margin expansion if revenue mix continues to shift. Direct platform revenue mix declined from 75% in the prior year to 72% in the second quarter, suggesting a higher proportion of lower-margin agency business. The significant EPS miss -- $0.03 actual versus $0.1995 consensus -- demonstrated that profit performance remains uneven even as revenue accelerates. This volatility in bottom-line results, despite consistent top-line beats, raises questions about the sustainability of margin expansion and the timing of profitability improvements. Competitive pressures also loom as larger marketing and data platforms add AI features to their offerings. While Zeta emphasizes its proprietary data advantage, the company must continue to demonstrate that this moat translates into sustainable differentiation as AI model capabilities become increasingly commoditized across the industry. Forward-Looking Outlook Management's commentary emphasized that the company's partnerships with OpenAI, Palantir, and Snowflake represent opportunities not yet fully reflected in guidance. The company plans to unveil the next generation of Athena at its Zeta Live event on October 8, 2026, in New York, potentially providing additional catalysts for customer adoption and revenue acceleration. The presentation highlighted that 90% of new code generated in the second quarter was automated, enabling the company to compress product development cycles from years to months and, in some cases, from months to hours. This productivity improvement allows revenue and cash flow to grow faster than headcount, supporting margin expansion over time. With approximately 90% of revenue driven by customers who have been with Zeta for more than one year, the business model demonstrates durability and predictability. The company's ability to deliver its 20th consecutive beat-and-raise quarter, despite a challenging macroeconomic environment, suggests underlying demand strength for its platform. However, investors will likely scrutinize the path to improved GAAP profitability and whether the company can sustain its margin expansion trajectory while investing heavily in AI capabilities and strategic partnerships. The repositioning from marketing technology to AI infrastructure represents both an opportunity to expand addressable markets and a risk if execution falters or if the market remains skeptical of the narrative shift. The stock's after-hours decline, despite raised guidance and strong operational metrics, indicates that near-term profitability delivery will be critical to maintaining investor confidence as Zeta pursues its ambitious 2028 targets and infrastructure platform positioning. Full presentation: This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.