ZETA Zeta Global Holdings Corp

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 27, 2024

 

 

ZETA GLOBAL HOLDINGS CORP.

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware			001-40464	80-0814458
(State or Other Jurisdiction of Incorporation)			(Commission File Number)	(IRS Employer Identification No.)
3 Park Ave, 33rd Floor
New York, New York				10016
(Address of Principal Executive Offices)				(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: 212 967-5055

 

N/A

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Class A common stock, par value $0.001 per share		ZETA		The New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

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Item 2.02 Results of Operations and Financial Condition.

On February 27, 2024, Zeta Global Holdings Corp. (the “Company”) issued a press release announcing its financial results for the fiscal year and quarter ended December 31, 2023. A copy of this press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information contained in this Current Report on Form 8-K, including Exhibit 99.1, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing made by the Company under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit No.		Description
99.1		Press Release, dated February 27, 2024
104		Cover Page Interactive Data File (formatted in Inline XBRL)

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

			Zeta Global Holdings Corp.
Date:	February 27, 2024	By:	/s/ Christopher Greiner
			Christopher Greiner Chief Financial Officer

 

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Exhibit 99.1

 

 

 

February 27, 2024

 

Zeta Delivers Fourth Consecutive Year of 20%+ Revenue Growth in 2023

Finished 2023 with 10 straight quarters of beating & raising guidance

 

NEW YORK – Zeta Global (NYSE: ZETA), the AI-Powered Marketing Cloud, today announced financial results for the fourth quarter and full year ended December 31, 2023.

“The marketing ecosystem is in a state of change,” said David A. Steinberg, Co-Founder, Chairman, and CEO of Zeta. “Artificial Intelligence has moved from a theoretical to a board room conversation with Chief Marketing Officers mandated to make AI more actionable to deliver greater efficiency and better experiences for consumers. By putting intelligence at the center of our platform and making Generative AI more actionable for marketers, we are at the forefront of a wave that is driving a replacement cycle and accelerating digital transformation.”

“A 10th straight beat and raise quarter continues to demonstrate our consistent execution and ability to capitalize on our competitive advantages,” said Chris Greiner, Zeta’s CFO. “We enter 2024 from a position of strength, as evidenced by multiple elements of our 2024 guidance including: a fifth consecutive year of 20%+ growth, continued Adjusted EBITDA margin expansion, and an acceleration in free cash flow conversion.”

 

Fourth Quarter 2023 Highlights

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Full Year 2023 Highlights

 

1 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.

 

 

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Guidance

First Quarter 2024

Full Year 2024

 

Zeta 2025

Zeta 2025 is a long-term plan introduced by the Company in 2022, intended to drive the Company’s vision to become one of the largest marketing clouds in the industry, with targets for business, product, and industry leadership. The financial targets of this plan are to generate in excess of $1 billion in annual revenue with at least 20% Adjusted EBITDA margins by 2025. In February 2023, we added an additional financial target to the plan of Free Cash Flow with a target of at least $110 million by 2025. In September 2023, we announced that we expect to achieve our Zeta 2025 targets early.

Investor Conference Call and Webcast

Zeta will host a conference call today, Tuesday, February 27, 2024, at 4:30 p.m. Eastern Time to discuss financial results for the fourth quarter and full year 2023. 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 (NYSE: ZETA) is the AI-Powered Marketing Cloud that leverages advanced artificial intelligence (AI) and trillions of consumer signals to make it easier for marketers to acquire, grow, and retain customers more efficiently. Through the Zeta Marketing Platform (ZMP), our vision is to make sophisticated marketing simple by unifying identity, intelligence, and omnichannel activation into a single platform – powered by one of the industry’s largest proprietary databases and AI. Our enterprise customers across multiple verticals are empowered to personalize experiences with consumers at an individual level across every channel, delivering better results for marketing programs. Zeta was founded in 2007 by David A. Steinberg and John Sculley and is headquartered in New York City with offices around the world. To learn more, 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 2024 guidance, the Zeta 2025 plan, the financial targets of Zeta 2025 and the timing of when we will achieve the Zeta 2025 plan, the capabilities of AI and Zeta’s platform, the acceleration of the digital transformation, and the growth and expansion of AI and the Zeta Marketing Platform are forward-looking statements and should be evaluated as such. Forward-looking

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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: 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; the impact of future pandemics, epidemics and other health crises 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; the escalating conflict in Israel, Gaza and in the surrounding areas; our ability to innovate and make the right investment decisions in our product offerings and platform; the impact of new generative AI capabilities and the proliferation of AI on our business; our ability to attract and retain customers, including our scaled and super-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. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

The 2024 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 (“SEC”), 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.

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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 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.

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Adjusted EBITDA, Adjusted EBITDA margin, 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, 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, Adjusted EBITDA margin, and Free Cash Flow 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, Adjusted EBITDA margin, and Free Cash Flow guidance and targets to forward looking GAAP net income (loss), GAAP net income (loss) margin or cash flows from operating activities, respectively, 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.

Contacts:

 

Investor Relations

Scott Schmitz

ir@zetaglobal.com

 

Press

James A. Pearson

press@zetaglobal.com

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Zeta Global Holdings Corp.

Consolidated Balance Sheets

(in thousands, except share and per share amounts)

		As of December 31,
		2023				2022
Assets
Current assets:
Cash and cash equivalents		$	131,732			$	121,110
Accounts receivable, net of allowance of $3,564 and $1,882 as of December 31, 2023 and December 31, 2022, respectively			170,131				106,322
Prepaid expenses			6,269				7,150
Other current assets			1,622				1,866
Total current assets			309,754				236,448
Non-current assets:
Property and equipment, net			7,452				5,981
Website and software development costs, net			32,124				36,713
Right-to-use asset - operating leases, net			6,603				7,388
Intangible assets, net			48,781				44,358
Goodwill			140,905				133,069
Deferred tax assets, net			728				745
Other non-current assets			4,367				1,800
Total non-current assets			240,960				230,054
Total assets		$	550,714			$	466,502
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable		$	63,572			$	33,668
Accrued expenses			85,455				72,364
Acquisition-related liabilities			17,234				14,743
Deferred revenue			3,301				2,228
Other current liabilities			6,823				5,707
Total current liabilities			176,385				128,710
Non-current liabilities:
Long-term borrowings			184,147				183,953
Acquisition-related liabilities			3,060				17,932
Other non-current liabilities			6,602				7,877
Total non-current liabilities			193,809				209,762
Total liabilities			370,194				338,472
Stockholders’ equity:
Class A common stock $ 0.001 per share par value, up to 3,750,000,000 shares authorized, 188,631,432 and 175,266,917 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively			189				175
Class B common stock $ 0.001 per share par value, up to 50,000,000 shares authorized, 29,055,489 and 32,099,302 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively			29				32
Additional paid-in capital			1,140,849				900,924
Accumulated deficit			(958,537	)			(771,056	)
Accumulated other comprehensive loss			(2,010	)			(2,045	)
Total stockholders’ equity			180,520				128,030
Total liabilities and stockholders' equity		$	550,714			$	466,502

 

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Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except share and per share amounts)

		Three months ended December 31,								Year ended December 31,
		2023				2022				2023				2022
Revenues		$	210,320			$	175,140			$	728,723			$	590,961
Operating expenses:
Cost of revenues (excluding depreciation and amortization)			84,615				65,979				274,482				215,466
General and administrative expenses			51,397				51,017				205,419				213,615
Selling and marketing expenses			72,727				76,194				288,441				299,238
Research and development expenses			19,945				17,231				73,869				69,454
Depreciation and amortization			13,495				12,430				51,149				51,878
Acquisition-related expenses			—				—				203				344
Restructuring expenses			—				—				2,845				—
Total operating expenses		$	242,179			$	222,851			$	896,408			$	849,995
Loss from operations			(31,859	)			(47,711	)			(167,685	)			(259,034	)
Interest expense			2,800				2,301				10,939				7,303
Other expenses			682				1,872				7,820				13,983
Change in fair value of warrants and derivative liabilities			—				—				—				410
Total other expenses		$	3,482			$	4,173			$	18,759			$	21,696
Loss before income taxes			(35,341	)			(51,884	)			(186,444	)			(280,730	)
Income tax (benefit)/provision			(60	)			(131	)			1,037				(1,491	)
Net loss		$	(35,281	)		$	(51,753	)		$	(187,481	)		$	(279,239	)
Other comprehensive income:
Foreign currency translation adjustment			(113	)			(1,477	)			(35	)			(56	)
Total comprehensive loss		$	(35,168	)		$	(50,276	)		$	(187,446	)		$	(279,183	)
Net loss per share
Net loss available to common stockholders		$	(35,281	)		$	(51,753	)		$	(187,481	)		$	(279,239	)
Basic loss per share		$	(0.22	)		$	(0.36	)		$	(1.20	)		$	(2.01	)
Diluted loss per share		$	(0.22	)		$	(0.36	)		$	(1.20	)		$	(2.01	)
Weighted average number of shares used to compute net loss per share
Basic			163,922,676				145,489,764				156,697,308				138,985,265
Diluted			163,922,676				145,489,764				156,697,308				138,985,265

 

The Company recorded total stock-based compensation as follows:

		Three months ended December 31,								Year ended December 31,
		2023				2022				2023				2022
Cost of revenues (excluding depreciation and amortization)		$	404			$	2,198			$	2,502			$	6,634
General and administrative expenses			22,244				24,528				88,465				113,401
Selling and marketing expenses			31,799				34,612				124,732				152,377
Research and development expenses			8,688				6,365				27,182				26,580
Total		$	63,135			$	67,703			$	242,881			$	298,992

 

 

 

 

 

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Consolidated Statements of Cash Flows

(in thousands)

		Year ended December 31,
		2023				2022
Cash flows from operating activities:
Net loss		$	(187,481	)		$	(279,239	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization			51,149				51,878
Stock-based compensation			242,881				298,992
Deferred income taxes			11				(2,668	)
Change in fair value of warrant and derivative liabilities			—				410
Change in fair value of acquisition-related liabilities			7,200				12,990
Others, net			2,015				(592	)
Change in non-cash working capital (net of acquisitions):
Accounts receivable			(64,052	)			(19,826	)
Prepaid expenses			1,061				(270	)
Other current assets			243				(214	)
Other non-current assets			(1,526	)			63
Deferred revenue			807				(4,566	)
Accounts payable			26,262				13,530
Accrued expenses and other current liabilities			12,443				10,001
Other non-current liabilities			(490	)			(2,003	)
Net cash provided by operating activities			90,523				78,486
Cash flows from investing activities:
Capital expenditures			(20,483	)			(22,232	)
Website and software development costs			(15,487	)			(17,004	)
Acquisitions and other investments, net of cash acquired			(18,245	)			(9,209	)
Net cash used for investing activities			(54,215	)			(48,445	)
Cash flows from financing activities:
Cash paid for acquisition-related liabilities			(15,508	)			(5,959	)
Proceeds from credit facilities, net of issuance cost			11,250				5,625
Issuances under employee stock purchase plan			3,058				2,742
Exercise of options			241				199
Repurchase of shares			(13,443	)			(9,607	)
Repayments against the credit facilities			(11,250	)			(5,625	)
Net cash used for financing activities			(25,652	)			(12,625	)
Effect of exchange rate changes on cash and cash equivalents			(34	)			(165	)
Net increase in cash and cash equivalents			10,622				17,251
Cash and cash equivalents, beginning of period			121,110				103,859
Cash and cash equivalents, end of period		$	131,732			$	121,110
Supplemental cash flow disclosures including non-cash activities:
Cash paid for interest, net		$	10,481			$	5,673
Cash paid for income taxes, net		$	1,900			$	1,611
Liability established in connection with acquisitions		$	8,189			$	20,529
Capitalized stock-based compensation as website and software development		$	3,790			$	5,394
Shares issued in connection with acquisitions and other agreements		$	5,387			$	19,005
Non-cash settlement of warrants and derivative liabilities		$	—			$	410
Right-to-use asset established		$	165			$	9,559
Operating lease liabilities established		$	165			$	12,050
Non-cash consideration for website and software development		$	963			$	1,654

 

 

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Reconciliation of GAAP to Non-GAAP Financial Measures

(in thousands)

 

The following table reconciles adjusted EBITDA and adjusted EBITDA margin to net loss and net loss margin, respectively, the most directly comparable financial measures calculated and presented in accordance with GAAP.

		Three months ended December 31,								Year ended December 31,
		2023				2022				2023				2022
Net loss		$	(35,281	)		$	(51,753	)		$	(187,481	)		$	(279,239	)
Net loss margin			(16.8	)%			(29.5	)%			(25.7	)%			(47.3	)%
Add back:
Depreciation and amortization			13,495				12,430				51,149				51,878
Restructuring expenses			—				—				2,845				—
Acquisition-related expenses			—				—				203				344
Stock-based compensation			63,135				67,703				242,881				298,992
Other expenses			682				1,872				7,820				13,983
Change in fair value of warrants and derivative liabilities			—				—				—				410
Interest expense			2,800				2,301				10,939				7,303
Income tax (benefit)/provision			(60	)			(131	)			1,037				(1,491	)
Adjusted EBITDA		$	44,771			$	32,422			$	129,393			$	92,180
Adjusted EBITDA margin%			21.3	%			18.5	%			17.8	%			15.6	%

 

 

The following table reconciles Cash Flows from Operating Activities in the Consolidated statements of cash flows to free cash flow.

		Three months ended December 31,								Year ended December 31,
		2023				2022				2023				2022
Cash Flows from Operating Activities		$	26,962			$	23,097			$	90,523			$	78,486
Capital expenditures			(5,597	)			(5,067	)			(20,483	)			(22,232	)
Website and software development costs			(3,143	)			(4,184	)			(15,487	)			(17,004	)
Effect of exchange rate changes on cash and cash equivalents			(41	)			(36	)			(34	)			(165	)
Free Cash Flows		$	18,181			$	13,810			$	54,519			$	39,085

 

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v3.24.0.1

Document And Entity Information	Feb. 27, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Feb. 27, 2024
Entity Registrant Name	ZETA GLOBAL HOLDINGS CORP.
Entity Central Index Key	0001851003
Entity Emerging Growth Company	false
Entity File Number	001-40464
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	80-0814458
Entity Address, Address Line One	3 Park Ave, 33rd Floor
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10016
City Area Code	212
Local Phone Number	967-5055
Entity Information, Former Legal or Registered Name	N/A
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Class A common stock, par value $0.001 per share
Trading Symbol	ZETA
Security Exchange Name	NYSE

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