ZETA

Business Context and Reporting Period

Zeta Global Holdings Corp. (Zeta) is a marketing technology company providing an AI-powered omnichannel data-driven cloud platform. This Form 10-Q covers the quarterly period ended March 31, 2026. The company operates as a single reportable segment and is classified as a large accelerated filer.

Key Financial Metrics

Liquidity: As of March 31, 2026, Zeta held $288.8 million in cash and cash equivalents with $335.1 million in net working capital. The company maintains a $550 million senior secured credit facility, with $332.5 million undrawn as of the period end.

Material Changes vs. Prior Period

• Revenue Growth: Revenue increased 49.9% year-over-year to $396.3 million. This was driven by $87.0 million from new customers and $44.9 million from existing customers. The acquisition of Marigold's Enterprise Business contributed $55.6 million in revenue.
• Profitability: Net loss improved to $13.2 million from $21.6 million in the prior year, despite higher operating expenses. Adjusted EBITDA increased to $66.1 million.
• Expense Increases:
  • Cost of Revenues: Increased 57.0% to $162.4 million, primarily due to $47.8 million in incremental media costs.
  • Operating Expenses: Total operating expenses rose to $415.1 million. Notable increases include R&D (up 67.7% to $44.9 million) and Selling & Marketing (up 35.9% to $102.4 million).
  • Restructuring: Expenses increased 114.2% to $6.8 million due to employee termination costs.
• Acquisition Activity: The company completed the acquisition of Marigold's Enterprise Business in November 2025. In Q1 2026, it settled a portion of the consideration with $47.0 million in cash and 3.9 million shares of Class A Common Stock.

Guidance, Outlook, and Risks

Management Commentary: Management highlighted a 19% increase in "super-scaled customers" to 189 and a 21% increase in Average Revenue Per User (ARPU) to $1.7 million. The company continues to invest in R&D and marketing to drive growth.

Stock Repurchases: Under the 2025 Stock Repurchase Program (2025 SRP), the company repurchased 1.55 million shares for $25.7 million during the quarter. Approximately $138.3 million remains available under the program.

Risks and Contingencies:

• Customer Concentration: One customer accounted for more than 10% of total revenues and accounts receivable in both periods.
• Regulatory Environment: Risks include evolving data privacy regulations, AI regulatory frameworks, and potential changes to web browsers/mobile operating systems affecting data collection.
• Macroeconomic Factors: Potential impacts from inflation, tariffs, and global trade policies.
• Integration Risks: Challenges related to integrating the Marigold acquisition and managing long sales cycles.

Investor Verification Checklist

• Revenue Quality: Verify the sustainability of the 49.9% revenue growth and the specific contribution of the Marigold acquisition ($55.6M) versus organic growth.
• Customer Concentration: Assess the risk associated with the single customer representing >10% of revenue and receivables.
• Expense Trajectory: Monitor the 67.7% increase in R&D and 57% increase in Cost of Revenues to ensure margins stabilize as revenue scales.
• Debt Covenants: Confirm continued compliance with the Consolidated Net Leverage Ratio (3.25x) and Fixed Charge Coverage Ratio (1.25x) under the $550M credit facility.
• Stock-Based Compensation: Review the $53.0 million SBC expense and the $428.1 million of unrecognized compensation expense to understand future dilution and cash flow impacts.