Zeta Global Holdings Corp. (ZETA) - Q3 2025 10-Q Summary
Business Context and Reporting Period
This summary covers the quarterly period ended September 30, 2025. Zeta Global Holdings Corp. operates as a single segment, providing an AI-powered omnichannel data-driven cloud platform for marketing automation and consumer intelligence. The company recently integrated LiveIntent to enhance its identity graph and is pursuing the acquisition of the Marigold enterprise software business.
Key Financial Metrics
| Metric | Q3 2025 (3 Months) | Q3 2024 (3 Months) | YTD 2025 (9 Months) | YTD 2024 (9 Months) |
|---|---|---|---|---|
| Revenue | $337.2 million | $268.3 million | $910.0 million | $691.1 million |
| Net Loss | $(3.6) million | $(17.4) million | $(38.0) million | $(85.0) million |
| Adjusted EBITDA | $78.1 million | $53.6 million | $183.5 million | $122.6 million |
| Adjusted EBITDA Margin | 23.2% | 20.0% | 20.2% | 17.7% |
| Cash and Equivalents | $385.2 million (as of Sept 30, 2025) | |||
| Long-Term Borrowings | $196.9 million (net of deferred costs) | |||
| Operating Cash Flow (YTD) | $134.8 million | $90.2 million |
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 25.7% QoQ and 31.7% YTD, driven by $63.0 million in new customer revenue (including ~$20.6 million from the LiveIntent acquisition) and $5.9 million from existing customers in Q3.
- Profitability Improvement: The company reported an operating income of $8.8 million in Q3 2025, compared to an operating loss of $12.4 million in Q3 2024. Net loss narrowed significantly to $3.6 million from $17.4 million.
- Expense Trends:
- Cost of Revenue: Increased 26.1% due to incremental media costs and higher technology expenses.
- R&D Expenses: Increased 30.7% due to higher employee-related costs and stock-based compensation.
- Other Expenses: Increased 311% to $11.7 million, primarily due to a $11.5 million increase in the fair value of acquisition-related liabilities (LiveIntent earn-outs).
- Customer Metrics: Scaled customers grew 20% to 572. Super-scaled customers increased to 180. Average Revenue Per User (ARPU) for scaled customers rose 4% to $579,000.
Guidance, Outlook, and Risks
- Acquisition Activity: On September 27, 2025, Zeta entered an agreement to acquire the Marigold enterprise software business for up to $325 million (cash, stock, and seller note). Closing is expected by the end of 2025.
- Capital Allocation: The company authorized a new $200 million share repurchase program (2025 SRP) in July 2025, supplementing the existing $100 million program. Approximately $86.0 million was used for repurchases in the first nine months of 2025.
- Liquidity: Management believes existing cash ($385.2 million) and available borrowings ($342.5 million undrawn on the revolving facility) are sufficient to fund operations and the Marigold acquisition for the next 12 months.
- Risks:
- Integration Risk: Challenges in integrating the Marigold business or LiveIntent could disrupt operations.
- Regulatory & Data: Scrutiny on data collection, privacy laws, and AI regulations could impact platform effectiveness.
- Macroeconomic: Inflation, tariffs, and economic downturns could affect customer spending and credit risk.
Investor Verification Checklist
- LiveIntent Earn-Out Liability: Verify the assumptions used to value the $50.7 million acquisition-related liability, as changes in forecasted performance significantly impact "Other expenses."
- Marigold Acquisition Funding: Confirm the final structure of the $325 million deal and the impact on cash reserves and dilution.
- Customer Concentration: Note that one customer accounted for >10% of revenue in the first nine months of 2025; verify retention status.
- Stock-Based Compensation: Review the $134.1 million YTD expense and the $217.7 million of unrecognized future compensation.
- Debt Covenants: Confirm continued compliance with the Consolidated Net Leverage Ratio (3.25x) and Fixed Charge Coverage Ratio (1.25x) under the $550 million credit facility.