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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Zeta Global Holdings Corp | NYSE:ZETA | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.175 | 1.37% | 12.995 | 13.11 | 12.86 | 12.86 | 1,882,001 | 20:27:48 |
Zeta Global (NYSE: ZETA), a cloud-based marketing technology company that empowers enterprises to acquire, grow, and retain customers more efficiently, today announced financial results for the third quarter ended September 30, 2022.
“Our strong third quarter results were an incredible way to celebrate our 15-year anniversary,” said David A. Steinberg, Co-Founder, Chairman, and CEO of Zeta. “The acceleration in our business is reflective of the pressure on enterprises to improve their ability to acquire, grow, and retain customers. At the same time, marketing investments must be tied to measurable outcomes that deliver a strong, verifiable return on investment. By addressing the requirements for both revenue growth and cost savings, Zeta is well positioned to make sophisticated marketing simple.”
“We once again extended our track record of ‘beat-and-raise’ execution by accelerating revenue growth while increasing profitability and cash generation,” said Chris Greiner, Zeta’s CFO. “The third quarter’s outperformance was broad-based across industries, channels and use cases as well as throughout our Zeta 2025 KPIs, serving as an important demonstration of our business model’s balance and our value proposition’s durability. Based on the strong underlying fundamentals of our business, we are increasing our fourth quarter and full year 2022 guidance, putting us ahead of pace to achieve our Zeta 2025 plan.”
Third Quarter 2022 Highlights
Guidance
Zeta anticipates revenue and Adjusted EBITDA as follows:
Fourth Quarter 2022
Full Year 2022
Investor Conference Call and Webcast
Zeta will host a conference call today, Tuesday, November 1, 2022, at 5:00 p.m. Eastern Time to discuss financial results for the third quarter 2022. A supplemental earnings presentation and a live webcast of the conference call can be accessed from the Company’s investor relations website (https://investors.zetaglobal.com/) where they will remain available for one year.
About Zeta
Zeta Global Holdings Corp. is a leading data-driven, cloud-based marketing technology company that empowers enterprises to acquire, grow, and retain customers. The Company's Zeta Marketing Platform (the "ZMP") is the largest omnichannel marketing platform with identity data at its core. The ZMP analyzes billions of structured and unstructured data points to predict consumer intent by leveraging sophisticated artificial intelligence to personalize experiences at scale. Founded in 2007 by David A. Steinberg and John Sculley, the Company is headquartered in New York City. For more information, please go to www.zetaglobal.com.
Forward-Looking Statements
This press release, together with other statements and information publicly disseminated by the Company, contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with these safe harbor provisions. Any statements made in this press release or during the earnings call that are not statements of historical fact, including statements about our guidance and the timing of when we will achieve the Zeta 2025 plan, are forward-looking statements and should be evaluated as such. Forward-looking statements include information concerning our anticipated future financial performance, our market opportunities and our expectations regarding our business plan and strategies. These statements often include words such as “anticipate,” “expect,” “suggests,” “plan,” “believe,” “intend,” “estimates,” “targets,” “projects,” “should,” “could,” “would,” “may,” “will,” “forecast,” “outlook, “guidance” and other similar expressions. We base these forward-looking statements on our current expectations, plans and assumptions that we have made in light of our experience in the industry, as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances at such time. Although we believe that these forward-looking statements are based on reasonable assumptions at the time they are made, you should be aware that many factors could affect our business, results of operations and financial condition and could cause actual results to differ materially from those expressed in the forward-looking statements. These statements are not guarantees of future performance or results.
The forward-looking statements are subject to and involve risks, uncertainties and assumptions, and you should not place undue reliance on these forward-looking statements. Factors that may materially affect such forward-looking statements include, but are not limited to: the impact of COVID-19 on the global economy, our customers, employees and business; the war in Ukraine and escalating geopolitical tensions as a result of Russia’s invasion of Ukraine; global supply chain disruptions; macroeconomic and industry trends and adverse developments in the debt, consumer credit and financial services markets and other macroeconomic factors beyond Zeta’s control; increases in our borrowing costs as a result of changes in interest rates and other factors; the impact of inflation on us and on our customers; potential fluctuations in our operating results, which could make our future operating results difficult to predict; underlying circumstances, including cash flows, cash position, financial performance, market conditions and potential acquisitions; prevailing stock prices, general economic and market condition; our ability to innovate and make the right investment decisions in our product offerings and platform; our ability to attract and retain customers, including our scaled customers; our ability to manage our growth effectively; our ability to collect and use data online; the standards that private entities and inbox service providers adopt in the future to regulate the use and delivery of email may interfere with the effectiveness of our platform and our ability to conduct business; a significant inadvertent disclosure or breach of confidential and/or personal information we process, or a security breach of our or our customers’, suppliers’ or other partners’ computer systems; and any disruption to our third-party data centers, systems and technologies. These cautionary statements should not be construed by you to be exhaustive and the forward-looking statements are made only as of the date of this press release. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
The fourth quarter and full year 2022 guidance provided herein and Zeta 2025 targets are based on Zeta’s current estimates and assumptions and are not a guarantee of future performance. The guidance provided and Zeta 2025 targets are subject to significant risks and uncertainties, including the risk factors discussed in the Company's reports on file with the Securities and Exchange Commission, that could cause actual results to differ materially. There can be no assurance that the Company will achieve the results expressed by this guidance or the targets.
Availability of Information on Zeta’s Website and Social Media Profiles
Investors and others should note that Zeta routinely announces material information to investors and the marketplace using SEC filings, press releases, public conference calls, webcasts and the Zeta investor relations website at https://investors.zetaglobal.com (“Investors Website”). We also intend to use the social media profiles listed below as a means of disclosing information about us to our customers, investors and the public. While not all of the information that the Company posts to the Investors Website or to social media profiles is of a material nature, some information could be deemed to be material. Accordingly, the Company encourages investors, the media, and others interested in Zeta to review the information that it shares on the Investors Website and to regularly follow our social media profile links located at the bottom of the page on www.zetaglobal.com. Users may automatically receive email alerts and other information about Zeta when enrolling an email address by visiting "Investor Email Alerts" in the "Resources" section of the Investors Website.
Social Media Profiles: www.twitter.com/zetaglobal www.facebook.com/ZetaGlobal/ www.linkedin.com/company/zetaglobal www.instagram.com/zetaglobal/
The Following Definitions Apply to the Terms Used Throughout this Release, the Supplemental Earnings Presentation and Investor Conference Call
Non-GAAP Measures
In order to assist readers of our condensed unaudited consolidated financial statements in understanding the core operating results that our management uses to evaluate the business and for financial planning purposes, we describe our non-GAAP measures below. We believe these non-GAAP measures are useful to investors in evaluating our performance by providing an additional tool for investors to use in comparing our financial performance over multiple periods.
Adjusted EBITDA, Adjusted EBITDA margin, Cost of revenue excluding stock-based compensation, and Free Cash Flow provide us with useful measures for period-to-period comparisons of our business as well as comparison to our peers. We believe that these non-GAAP financial measures are useful to investors in analyzing our financial and operational performance. Nevertheless our use of Adjusted EBITDA, Adjusted EBITDA margin, Cost of revenue excluding stock-based compensation, and Free Cash Flow has limitations as an analytical tool, and you should not consider these measures in isolation or as a substitute for analysis of our financial results as reported under GAAP. Other companies may calculate similarly-titled non-GAAP financial measures differently than us, thereby limiting the usefulness of these non-GAAP financial measures as a comparative tool. Because of these and other limitations, you should consider our non-GAAP measures only as supplemental to other GAAP-based financial performance measures, including revenues and net loss.
We calculate forward-looking Adjusted EBITDA and Adjusted EBITDA margin based on internal forecasts that omit certain amounts that would be included in forward-looking GAAP net income (loss). We do not attempt to provide a reconciliation of forward-looking Adjusted EBITDA and Adjusted EBITDA margin guidance and targets to forward looking GAAP net income (loss) because forecasting the timing or amount of items that have not yet occurred and are out of our control is inherently uncertain and unavailable without unreasonable efforts. Further, we believe that such reconciliations would imply a degree of precision and certainty that could be confusing to investors. Such items could have a substantial impact on GAAP measures of financial performance.
Condensed Unaudited Consolidated Balance Sheets
(In thousands, except shares, per share and par values)
As of
September 30, 2022
December 31, 2021
Assets
Current assets:
Cash and cash equivalents
$
114,808
$
103,859
Accounts receivable, net of allowance of $1,746 and $1,295 as of September 30, 2022 and December 31, 2021, respectively
91,414
83,578
Prepaid expenses
7,600
6,970
Other current assets
1,893
1,649
Total current assets
215,715
196,056
Non-current assets:
Property and equipment, net
6,235
5,630
Website and software development costs, net
36,863
38,038
Intangible assets, net
45,601
40,963
Goodwill
133,009
114,509
Deferred tax assets, net
1,253
956
Other non-current assets
2,059
1,113
Total non-current assets
$
225,020
$
201,209
Total assets
$
440,735
$
397,265
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
$
28,400
$
21,711
Accrued expenses
63,516
63,979
Acquisition related liabilities (current)
17,220
8,042
Deferred revenue
6,104
6,866
Other current liabilities
8,258
5,159
Total current liabilities
123,498
105,757
Non-current liabilities:
Long term borrowings
183,868
183,613
Acquisition related liabilities (non-current)
22,032
14,915
Other non-current liabilities
2,225
2,492
Total non-current liabilities
208,125
201,020
Total liabilities
$
331,623
$
306,777
Commitments and contingencies
Stockholders’ equity:
Class A common stock $ 0.001 per share par value, up to 3,750,000,000 shares authorized, 173,957,931 and 159,974,847 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively
174
160
Class B common stock $ 0.001 per share par value, up to 50,000,000 shares authorized, 32,464,430 and 37,856,095 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively
32
38
Additional paid-in capital
831,731
584,208
Accumulated deficit
(719,303
)
(491,817
)
Accumulated other comprehensive loss
(3,522
)
(2,101
)
Total stockholders' equity
109,112
90,488
Total liabilities and stockholders' equity
$
440,735
$
397,265
Condensed Unaudited Consolidated Statements of Operations and Comprehensive Loss
(In thousands, except share and per share amounts)
Three months ended September 30,
Nine months ended September 30,
2022
2021
2022
2021
Revenues
$
152,252
$
115,133
$
415,821
$
323,492
Operating expenses:
Cost of revenues (excluding depreciation and amortization)
57,529
44,525
149,487
125,709
General and administrative expenses
53,584
50,643
162,598
135,682
Selling and marketing expenses
76,987
60,537
223,044
163,952
Research and development expenses
16,954
13,998
52,223
50,285
Depreciation and amortization
13,367
11,783
39,448
33,135
Acquisition related expenses
—
480
344
1,516
Restructuring expenses
—
30
-
467
Total operating expenses
$
218,421
$
181,996
$
627,144
$
510,746
Loss from operations
(66,169
)
(66,863
)
(211,323
)
(187,254
)
Interest expense
2,038
1,342
5,002
5,705
Other expenses
1,142
496
12,111
1,031
Gain on extinguishment of debt
—
—
-
(10,000
)
Change in fair value of warrants and derivative liabilities
(805
)
—
410
5,000
Total other expenses
$
2,375
$
1,838
$
17,523
$
1,736
Loss before income taxes
(68,544
)
(68,701
)
(228,846
)
(188,990
)
Income tax provision / (benefit)
896
$
428
$
(1,360
)
$
(565
)
Net loss
$
(69,440
)
$
(69,129
)
$
(227,486
)
$
(188,425
)
Other comprehensive loss:
Foreign currency translation adjustment
774
77
1,421
152
Total comprehensive loss
$
(70,214
)
$
(69,206
)
$
(228,907
)
$
(188,577
)
Net loss
$
(69,440
)
$
(69,129
)
$
(227,486
)
$
(188,425
)
Cumulative redeemable convertible preferred stock dividends
—
—
—
7,060
Net loss available to common stockholders
$
(69,440
)
$
(69,129
)
$
(227,486
)
$
(195,485
)
Basic loss per share
$
(0.49
)
$
(0.53
)
$
(1.66
)
$
(2.60
)
Diluted loss per share
$
(0.49
)
$
(0.53
)
$
(1.66
)
$
(2.60
)
Weighted average number of shares used to compute net loss per share
Basic
140,594,128
129,731,980
136,793,272
75,313,520
Diluted
140,594,128
129,731,980
136,793,272
75,313,520
The Company recorded following stock-based compensation under respective lines of the above unaudited consolidated statements of operations and comprehensive loss:
Three months ended September 30,
Nine months ended September 30,
2022
2021
2022
2021
Cost of revenues (excluding depreciation and amortization)
$
1,536
$
1,183
$
4,436
$
1,449
General and administrative expenses
28,193
28,243
88,873
70,868
Selling and marketing expenses
38,868
35,114
117,765
94,626
Research and development expenses
6,621
4,803
20,215
21,670
Total
$
75,218
$
69,343
$
231,289
$
188,613
Condensed Unaudited Consolidated Statements of Cash Flows
(In thousands)
Nine months ended September 30,
2022
2021
Cash flows from operating activities:
Net loss
$
(227,486
)
$
(188,425
)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization
39,448
33,135
Stock-based compensation
231,289
188,613
Gain on debt extinguishment
-
(10,000
)
Deferred income taxes
(3,114
)
(1,635
)
Change in fair value of warrants and derivative liabilities
410
5,000
Others, net
12,018
2,509
Change in non-cash working capital (net of acquisitions):
Accounts receivable
(4,595
)
7,423
Prepaid expenses
(489
)
(1,917
)
Other current assets
(241
)
4,316
Other non-current assets
150
(542
)
Deferred revenue
(765
)
(1,314
)
Accounts payable
7,253
(17,961
)
Accrued expenses and other current liabilities
1,778
2,762
Other non-current liabilities
(267
)
1,402
Net cash provided by operating activities
55,389
23,366
Cash flows from investing activities:
Capital expenditures
(17,165
)
(6,883
)
Website and software development costs
(12,820
)
(13,421
)
Business acquisitions, net of cash acquired
(9,209
)
(2,159
)
Net cash used for investing activities
(39,194
)
(22,463
)
Cash flows from financing activities:
Cash paid for acquisition-related liabilities
(2,292
)
(64
)
Proceeds from credit facilities, net of issuance costs
5,625
183,311
Proceeds from IPO, net of issuance cost
-
126,538
Repurchase of shares
(4,310
)
(64,468)
Issuance under employee stock purchase plan
1,320
-
Exercise of options
165
110
Repayments against the credit facilities
(5,625
)
(180,745
)
Net (used for) / cash provided by financing activities
(5,117
)
64,682
Effect of exchange rate changes on cash and cash equivalents
(129
)
(130
)
Net increase in cash and cash equivalents
10,949
65,455
Cash and cash equivalents, beginning of period
103,859
50,725
Cash and cash equivalents, end of period
$
114,808
$
116,180
Supplemental cash flow disclosures including non-cash activities:
Cash paid for interest
$
4,003
$
5,673
Cash paid for income taxes, net
$
1,114
$
1,294
Liability established in connection with acquisitions
$
19,773
$
1,795
Capitalized stock-based compensation as website and software development costs
$
4,131
$
8,830
Shares issued in connection with acquisitions and other agreements
$
14,936
$
6,650
Dividends on redeemable convertible preferred stock settled in Company’s equity
$
-
$
60,082
Non-cash settlement of warrants and derivative liabilities
$
-
$
63,100
Non-cash consideration for website and software development costs
$
981
$
45
Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands)
Three months ended September 30,
Nine months ended September 30,
2022
2021
2022
2021
Net loss
$
(69,440
)
$
(69,129
)
$
(227,486
)
$
(188,425
)
Net loss margin
45.6
%
60.0
%
54.7
%
58.2
%
Add back:
Depreciation and amortization
13,367
11,783
39,448
33,135
Restructuring expenses
-
30
-
467
Acquisition related expenses
-
480
344
1,516
Stock-based compensation
75,218
69,343
231,289
188,613
Other expenses
1,142
496
12,111
1,031
Gain on extinguishment of debt
-
-
-
(10,000
)
IPO related expenses
-
-
-
2,705
Change in fair value of warrants and derivative liabilities
(805
)
-
410
5,000
Dispute settlement Expense
-
1,196
-
1,196
Interest expense
2,038
1,342
5,002
5,705
Income tax provision / (benefit)
896
428
(1,360
)
(565
)
Adjusted EBITDA
$
22,416
$
15,969
$
59,758
$
40,378
Adjusted EBITDA margin
14.7
%
13.9
%
14.4
%
12.5
%
_______________________ 1 Cost of revenue excluding stock-based compensation, Free Cash Flow, Adjusted EBITDA and Adjusted EBITDA margin are not measures of financial performance prepared in accordance with GAAP. See “Non-GAAP Measures” for more information and, where applicable, reconciliations to the most directly comparable GAAP financial measures at the end of this release.
View source version on businesswire.com: https://www.businesswire.com/news/home/20221101006205/en/
Investor Relations Scott Schmitz ir@zetaglobal.com
Media Relations Megan Rose, GVP Marketing Communications press@zetaglobal.com
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