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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 | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 12.61 | 0 | 01:00:00 |
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 second quarter ended June 30, 2022.
“Zeta delivered another strong quarter with accelerating revenue and profit growth along with robust cash generation,” said David A. Steinberg, Co-Founder, Chairman, and CEO of Zeta. “Marketing efficiency has never been more important than it is today, and Zeta is well positioned to capitalize. We are incredibly proud of the company we have built and the people who have helped us build it. We believe the current valuation of our shares does not reflect the true value of our company. Our new share repurchase authorization reinforces our Board’s confidence in the continued growth of the business and our commitment to creating value for our shareholders.”
“With our fourth straight quarter of beating and raising against expectations, our second quarter results continue to showcase Zeta’s culture of high performance and strong execution,” said Chris Greiner, Zeta’s CFO. “Record new scaled customer additions, continued ARPU expansion, sustained positive mix shift, an increasing mix of multi-year, recurring revenue contracts, record RFP activity, and robust pipeline expansion are continued evidence that our value proposition is resonating in the market and that demand remains resilient. We are tracking ahead of our Zeta 2025 plan with strength across each of our core KPIs.”
Second Quarter 2022 Highlights
Recent Highlights
Zeta Live
Zeta will host its second annual Zeta Live Conference on September 28 & 29, bringing together the industry’s most forward-thinking leaders to discuss the most critical topics impacting businesses and marketing today. A live webcast will be available on our website (https://zetaglobal.com).
Guidance
Zeta anticipates revenue and Adjusted EBITDA to be in the following ranges:
Third Quarter 2022
Full Year 2022
Investor Conference Call and Webcast
Zeta will host a conference call today, Wednesday, August 3, 2022, at 5:00 p.m. Eastern Time to discuss financial results for the second 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 beliefs, intentions, and expectations on whether the Company will withhold shares to cover taxes, repurchase any shares under the stock repurchase program, or use Free Cash Flow to fund such withholdings and repurchases, 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; 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, that could affect our ability to fund any stock repurchases or withhold shares to cover taxes such that sales to cover taxes may be required upon vesting of restricted stock awards (“RSAs”); prevailing stock prices, general economic and market condition and other considerations that could affect the specific timing, price and size of repurchases under our stock repurchase program; 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 third 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: http://www.twitter.com/zetaglobal http://www.facebook.com/ZetaGlobal http://www.linkedin.com/company/zetaglobal http://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 U.S. 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
June 30, 2022
December 31, 2021
Assets
Current assets:
Cash and cash equivalents
$
110,779
$
103,859
Accounts receivable, net of allowance of $1,654 and $1,295 as of June 30, 2022 and December 31, 2021, respectively
89,541
83,578
Prepaid expenses
6,482
6,970
Other current assets
1,906
1,649
Total current assets
208,708
196,056
Non-current assets:
Property and equipment, net
5,538
5,630
Website and software development costs, net
37,031
38,038
Intangible assets, net
47,808
40,963
Goodwill
133,029
114,509
Deferred tax assets, net
1,230
956
Other non-current assets
2,472
1,113
Total non-current assets
$
227,108
$
201,209
Total assets
$
435,816
$
397,265
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
$
38,069
$
21,711
Accrued expenses
53,213
63,979
Acquisition related liabilities (current)
20,533
8,042
Deferred revenue
5,864
6,866
Other current liabilities
6,871
5,159
Total current liabilities
124,550
105,757
Non-current liabilities:
Long term borrowings
183,783
183,613
Acquisition related liabilities (non-current)
18,280
14,915
Other non-current liabilities
2,298
2,492
Total non-current liabilities
204,361
201,020
Total liabilities
$
328,911
$
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, 170,511,917 and 159,974,847 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively
170
160
Class B common stock $ 0.001 per share par value, up to 50,000,000 shares authorized, 35,069,052 and 37,856,095 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively
35
38
Additional paid-in capital
759,311
584,208
Accumulated deficit
(649,863
)
(491,817
)
Accumulated other comprehensive loss
(2,748
)
(2,101
)
Total stockholders' equity
106,905
90,488
Total liabilities and stockholders' equity
$
435,816
$
397,265
Condensed Unaudited Consolidated Statements of Operations and Comprehensive Loss
(In thousands, except share and per share amounts)
Three months ended
June 30,
Six months ended
June 30,
2022
2021
2022
2021
Revenues
$
137,301
$
106,896
$
263,569
$
208,359
Operating expenses:
Cost of revenues (excluding depreciation and amortization)
50,233
42,212
91,958
81,184
General and administrative expenses
55,665
65,907
109,014
85,039
Selling and marketing expenses
77,139
82,845
146,057
103,415
Research and development expenses
18,038
26,503
35,269
36,287
Depreciation and amortization
13,315
11,235
26,081
21,352
Acquisition related expenses
-
329
344
1,036
Restructuring expenses
-
150
-
437
Total operating expenses
$
214,390
$
229,181
$
408,723
$
328,750
Loss from operations
(77,089
)
(122,285
)
(145,154
)
(120,391
)
Interest expense
1,666
1,402
2,964
4,363
Other expenses / (income)
5,696
(749
)
10,969
535
Gain on extinguishment of debt
—
(10,000
)
—
(10,000
)
Change in fair value of warrants and derivative liabilities
1,215
(18,600
)
1,215
5,000
Total other expenses / (income)
$
8,577
$
(27,947
)
$
15,148
$
(102
)
Loss before income taxes
(85,666
)
(94,338
)
(160,302
)
(120,289
)
Income tax provision / (benefit)
343
$
584
$
(2,256
)
$
(993
)
Net loss
$
(86,009
)
$
(94,922
)
$
(158,046
)
$
(119,296
)
Other comprehensive loss:
Foreign currency translation adjustment
$
403
$
129
$
647
$
75
Total comprehensive loss
$
(86,412
)
$
(95,051
)
$
(158,693
)
$
(119,371
)
Net loss
$
(86,009
)
$
(94,922
)
$
(158,046
)
$
(119,296
)
Cumulative redeemable convertible preferred stock dividends
—
3,166
—
7,060
Net loss available to common stockholders
$
(86,009
)
$
(98,088
)
$
(158,046
)
$
(126,356
)
Basic loss per share
$
(0.63
)
$
(1.92
)
$
(1.17
)
$
(3.01
)
Diluted loss per share
$
(0.63
)
$
(1.92
)
$
(1.17
)
$
(3.01
)
Weighted average number of shares used to compute net loss per share
Basic
135,903,592
51,202,335
134,835,401
41,973,595
Diluted
135,903,592
51,202,335
134,835,401
41,973,595
The Company recorded following stock-based compensation under respective lines of the above unaudited consolidated statements of operations and comprehensive loss:
Three months ended
June 30,
Six months ended
June 30,
2022
2021
2022
2021
Cost of revenues (excluding depreciation and amortization)
$
1,738
$
266
$
2,900
$
266
General and administrative expenses
30,905
42,625
60,680
42,625
Selling and marketing expenses
42,090
59,512
78,897
59,512
Research and development expenses
7,602
16,867
13,594
16,867
Total
$
82,335
$
119,270
$
156,071
$
119,270
Condensed Unaudited Consolidated Statements of Cash Flows
(In thousands)
Six months ended June 30,
2022
2021
Cash flows from operating activities:
Net loss
$
(158,046
)
$
(119,296
)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization
26,081
21,352
Stock-based compensation
156,071
119,270
Gain on debt extinguishment
-
(10,000
)
Deferred income taxes
(3,090
)
(1,641
)
Change in fair value of warrant and derivative liabilities
1,215
5,000
Others, net
11,365
1,067
Change in non-cash working capital (net of acquisitions):
Accounts receivable
(4,740
)
8,165
Prepaid expenses
524
1,241
Other current assets
271
1,252
Other non-current assets
(703
)
(384
)
Deferred revenue
(1,016
)
(440
)
Accounts payable
18,703
(14,083
)
Accrued expenses and other current liabilities
(10,591
)
1,502
Other non-current liabilities
(194
)
198
Net cash provided by operating activities
35,850
13,203
Cash flows from investing activities:
Capital expenditures
(11,511
)
(4,381
)
Website and software development costs
(8,586
)
(9,529
)
Business acquisitions, net of cash acquired
(9,157
)
(2,159
)
Net cash used for investing activities
(29,254
)
(16,069
)
Cash flows from financing activities:
Cash paid for acquisition-related liabilities
(1,292
)
(64
)
Proceeds from credit facilities, net of issuance costs
5,625
183,311
Proceeds from IPO, net of issuance cost
-
127,363
Repurchase of RSAs and RSUs
-
(64,130
)
Issuance under employee stock purchase plan
1,320
-
Exercise of options
130
41
Repayments against the credit facilities
(5,625
)
(180,745
)
Net cash provided by financing activities
158
65,776
Effect of exchange rate changes on cash and cash equivalents
166
(67
)
Net increase in cash and cash equivalents
6,920
62,843
Cash and cash equivalents, beginning of period
103,859
50,725
Cash and cash equivalents, end of period
$
110,779
$
113,568
Supplemental cash flow disclosures including non-cash activities:
Cash paid for interest
$
2,486
$
4,377
Cash paid for income taxes, net
$
480
$
941
Liability established in connection with acquisitions
$
18,334
$
1,630
Capitalized stock-based compensation as website and software development costs
$
2,653
$
7,505
Shares issued in connection with acquisitions and other agreements
$
14,936
$
5,454
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
$
632
$
689
Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands)
Three months ended June 30,
Six months ended June 30,
2022
2021
2022
2021
Net loss
$
(86,009
)
$
(94,922
)
$
(158,046
)
$
(119,296
)
Net loss margin
62.6
%
88.8
%
60.0
%
57.3
%
Add back:
Depreciation and amortization
13,315
11,235
26,081
21,352
Restructuring expenses
-
150
-
437
Acquisition related expenses
-
329
344
1,036
Stock-based compensation
82,335
119,270
156,071
119,270
Other expenses / (income)
5,696
(749
)
10,969
535
Gain on extinguishment of debt
-
(10,000
)
-
(10,000
)
IPO related expenses
-
2,705
-
2,705
Change in fair value of warrants and derivative liabilities
1,215
(18,600
)
1,215
5,000
Interest expense
1,666
1,402
2,964
4,363
Income tax provision / (benefit)
343
584
(2,256
)
(993
)
Adjusted EBITDA
$
18,561
$
11,404
$
37,342
$
24,409
Adjusted EBITDA margin
13.5
%
10.7
%
14.2
%
11.7
%
____________________
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/20220803005726/en/
Investor Relations Scott Schmitz ir@zetaglobal.com
Press Megan Rose press@zetaglobal.com
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