Zeta Announces Record Fourth Quarter 2022 Financial Results

Rhea-AI Summary

Zeta Global (NYSE: ZETA) reported robust financial results for the fourth quarter and full year ended December 31, 2022. Revenue reached $175 million in 4Q’22, up 30% Y/Y, and $591 million for the year, a 29% increase. The company expanded its customer base by 14% Y/Y, achieving a 112% Net Revenue Retention in 2022. Notably, quarterly cash flow from operations was $23 million. However, a GAAP net loss of $52 million was reported for 4Q’22, mainly due to $68 million in stock-based compensation. For 2023, Zeta anticipates revenue growth of 16% to 18%.

Positive

• 4Q'22 revenue of $175 million, up 30% Y/Y.
• Full-year revenue of $591 million, up 29% Y/Y.
• Scaled customer count increased 14% Y/Y.
• Net revenue retention of 112%.
• Cash flow from operations of $23 million in 4Q'22.

Negative

• GAAP net loss of $52 million in 4Q'22, primarily due to $68 million in stock-based compensation.
• GAAP loss per share of $0.36, versus $0.46 in 4Q'21.
• GAAP net loss of $279 million for the full year 2022.

• Delivered revenue of $175M, up 30% Y/Y in 4Q’22, and $591M, up 29% Y/Y in 2022
• Expanded Scaled Customer count 14% Y/Y adding 14 in 4Q’22 and 48 in 2022
• Grew Scaled Customer ARPU 15% Y/Y to $1.43M in 2022
• Achieved Net Revenue Retention of 112% in 2022
• Generated cash flow from operating activities of $23M in 4Q’22, and $78M in 2022

NEW YORK--(BUSINESS WIRE)-- Zeta Global (NYSE: ZETA), the AI-Powered Marketing Cloud, today announced financial results for the fourth quarter and full year ended December 31, 2022.

“Our execution and competitive position have never been stronger, evidenced by our record fourth quarter results,” said David A. Steinberg, Co-Founder, Chairman, and CEO of Zeta. “The market continues to move in our direction as data and Artificial Intelligence ('AI'), which are foundational elements of the Zeta Marketing Platform, are now mission critical Boardroom topics. By delivering identity-based data and AI to improve consumer experiences and drive a higher return on marketing investments, we are well positioned to capitalize on the ongoing changes in the marketing cloud ecosystem as enterprises place a premium on marketing efficiency and effectiveness.”

“We continue to be a business delivering beyond its commitments, with fourth quarter results once again exceeding expectations, with top- and bottom-line growth rates ahead of the Zeta 2025 model,” said Chris Greiner, Zeta’s CFO. “This quarterly pattern is forming a multi-year trend of accelerating revenue growth and operating leverage. Our performance is driven by years of headcount discipline, operational excellence and investment rigor, which creates a sustainable basis for continued growth and expanding profitability.”

Fourth Quarter 2022 Highlights

• Total revenue of $175 million, an increase of 30% Y/Y and 15% Q/Q.
• Scaled Customer count of 403 compared to 389 in 3Q’22 and 355 in 4Q’21.
• Super Scaled Customer count of 103 compared to 106 in 3Q’22 and 97 in 4Q’21.
• Quarterly Scaled Customer ARPU of $424,000, an increase of 15% Y/Y.
• Quarterly Super Scaled Customer ARPU of $1.33 million, an increase of 26% Y/Y.
• Direct platform revenue mix of 75% of total revenue, compared to 77% in 4Q’21.
• Connected TV (“CTV”) is our fastest growing channel, up more than 300% Y/Y.
• Cost of revenue percentage increased by 130 basis points Y/Y to 37.7%.
• GAAP net loss of $52 million, or 30% of revenue, was driven primarily by $68 million of stock-based compensation. The net loss in 4Q’21 was $61 million, or 45% of revenue.
• GAAP loss per share of $0.36, compared to a loss per share of $0.46 in 4Q’21.
• Cash flow from operating activities of $23.1 million, compared to $20.9 million in 4Q’21.
• Free Cash Flow¹ of $13.8 million, compared to $14.6 million in 4Q’21.
• Repurchased $5.3 million worth of shares through our share repurchase program.
• Adjusted EBITDA¹ of $32.4 million, an increase of 42% compared to $22.9 million in 4Q’21.
• Adjusted EBITDA margin¹ of 18.5%, compared to 17.0% in 4Q’21.

Full Year 2022 Highlights

• Total revenue of $591 million, an increase of 29% Y/Y.
• Scaled Customer ARPU of $1.43 million, an increase of 15% Y/Y.
• Super Scaled Customer ARPU of $4.52 million, an increase of 25% Y/Y.
• Direct platform revenue mix of 77% of total revenue, compared to 76% in 2021.
• Net Revenue Retention of 112%, compared to 113% in 2021.
• Cost of revenue percentage decreased by 170 basis points Y/Y to 36.5%.
• GAAP net loss of $279 million, or 47% of revenue, was driven primarily by $299 million of stock-based compensation. The net loss in 2021 was $250 million, or 54% of revenue.
• GAAP loss per share of $2.01, compared to a loss per share of $2.95 in 2021.
• Cash flow from operating activities of $78.5 million, compared to $44.3 million in 2021.
• Free Cash Flow of $39.1 million, compared to $17.5 million in 2021.
• Adjusted EBITDA of $92.2 million, an increase of 46% compared to $63.3 million in 2021.
• Adjusted EBITDA margin of 15.6%, compared to 13.8% in 2021.

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.

Guidance

Zeta anticipates revenue and Adjusted EBITDA as follows:

First Quarter 2023

• Revenue of $149 million to $151 million, representing a year-over-year increase of 18% to 20%.
• Adjusted EBITDA of $22.4 million to $22.7 million, representing a year-over-year increase of 19% to 21% and an Adjusted EBITDA margin of 14.8% to 15.2%.

Full Year 2023

• Revenue of $686 million to $696 million, representing a year-over-year increase of 16% to 18%.
• Adjusted EBITDA of $116.5 million to $118.3 million, representing a year-over-year increase of 26% to 28% and an Adjusted EBITDA margin of 16.7% to 17.3%.

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. We are adding an additional financial target to the plan of Free Cash Flow with a target of at least $110 million by 2025.

Investor Conference Call and Webcast

Zeta will host a conference call today, Thursday, February 23, 2023, at 5:00 p.m. Eastern Time to discuss financial results for the fourth quarter and full year 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 (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 guidance, the Zeta 2025 plan, the financial targets of Zeta 2025, 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: 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 COVID-19 and other 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; 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 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.

The first quarter and full year 2023 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.

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

• Direct Platform and Integrated Platform: When the Company generates revenues entirely through the Company platform, the Company considers it direct platform revenue. When the Company generates revenue by leveraging its platform’s integration with third parties, it is considered integrated platform revenue.
• Cost of revenue: Cost of revenue excludes depreciation and amortization and consists primarily of media and marketing costs and certain personnel costs. Media and marketing costs consist primarily of fees paid to third-party publishers, media owners or managers, and strategic partners that are directly related to a revenue-generating event. We pay these third-party publishers, media owners or managers and strategic partners on a revenue-share, a cost-per-lead, cost-per-click, or cost-per-thousand-impressions basis. Personnel costs included in cost of revenues include salaries, bonuses, commissions, stock-based compensation and employee benefit costs primarily related to individuals directly associated with providing services to our customers.
• Scaled Customers: We define scaled customers as customers from which we generated at least $100,000 in revenue on a trailing twelve-month basis. We calculate the number of scaled customers at the end of each quarter and on an annual basis as the number of customers billed during each applicable period. We believe the scaled customers measure is both an important contributor to our revenue growth and an indicator to investors of our measurable success.
• Super Scaled Customers: We define super scaled customers, which is a subset of Scaled Customers, as customers from which we generated at least $1,000,000 in revenue on a trailing twelve-month basis. We calculate the number of super scaled customers at the end of each quarter and on an annual basis as the number of customers billed during each applicable period. We believe the super scaled customers measure is both an important contributor to our revenue growth and an indicator to investors of our measurable success.
• Scaled Customer ARPU: We calculate the scaled customer average revenue per user (“ARPU”) as revenue for the corresponding period divided by the average number of scaled customers during that period. We believe that scaled customer ARPU is useful for investors because it is an indicator of our ability to increase revenue and scale our business.
• Super Scaled Customer ARPU: We calculate the super scaled customer average revenue per user (“ARPU”) as revenue for the corresponding period divided by the average number of super scaled customers during that period. We believe that super scaled customer ARPU is useful for investors because it is an indicator of our ability to increase revenue and scale our business.
• Net Revenue Retention (“NRR”): We calculate our annual NRR rate by dividing current year revenue earned from customers from which we also earned revenue in the prior year, by the prior year revenues. We exclude political and advocacy customers, which represented 6.3% and 1.5% of revenue for 2022 and 2021, respectively, from our calculation of annual NRR rate because of the biennial nature of these customers.

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.

• Adjusted EBITDA is a non-GAAP financial measure defined as net loss adjusted for interest expense, depreciation and amortization, stock-based compensation, income tax (benefit) / provision, acquisition related expenses, restructuring expenses, change in fair value of warrants and derivative liabilities, certain dispute settlement expenses, gain on extinguishment of debt, certain non-recurring IPO related expenses, including the payroll taxes related to vesting of restricted stock and restricted stock units upon the completion of the IPO, and other expenses. Acquisition related expenses and restructuring expenses primarily consist of severance and other employee-related costs which we do not expect to incur in the future as acquisitions of businesses may distort the comparability of the results of operations. Change in fair value of warrants and derivative liabilities is a non-cash expense related to periodically recording “mark-to-market” changes in the valuation of derivatives and warrants. Other expenses consist of non-cash expenses such as changes in fair value of acquisition related liabilities, gains and losses on extinguishment of acquisition related liabilities, gains and losses on sales of assets and foreign exchange gains and losses. In particular, we believe that the exclusion of stock-based compensation, certain dispute settlement expenses and non-recurring IPO related expenses that are not related to our core operations provides measures for period-to-period comparisons of our business and provides additional insight into our core controllable costs. We exclude these charges because these expenses are not reflective of ongoing business and operating results.
• Adjusted EBITDA margin is a non-GAAP financial measure defined as Adjusted EBITDA divided by the total revenues for the same period.
• Free Cash Flow is a non-GAAP financial measure defined as cash from operating activities, less capital expenditures and website and software development costs, adjusted for the effect of exchange rates on cash and cash equivalents.

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.

Consolidated Balance Sheets (In thousands, except share and per share amounts)
				As of December 31,
				2022				2021
Assets
Current assets:
Cash and cash equivalents				$	121,110			$	103,859
Accounts receivable, net of allowance of $1,882 and $1,295 as of December 31, 2022 and December 31, 2021, respectively					106,322				83,578
Prepaid expenses					7,150				6,970
Other current assets					1,866				1,649
Total current assets					236,448				196,056
Non-current assets:
Property and equipment, net					5,981				5,630
Website and software development costs, net					36,713				38,038
Right-to-use asset - operating leases, net					7,388				—
Intangible assets, net					44,358				40,963
Goodwill					133,069				114,509
Deferred tax assets, net					745				956
Other non-current assets					1,800				1,113
Total non-current assets					230,054				201,209
Total assets				$	466,502			$	397,265
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable				$	33,668			$	21,711
Accrued expenses					72,364				63,979
Acquisition-related liabilities (current)					14,743				8,042
Deferred revenue					2,228				6,866
Other current liabilities					5,707				5,159
Total current liabilities					128,710				105,757
Non-current liabilities:
Long-term borrowings					183,953				183,613
Acquisition-related liabilities (non-current)					17,932				14,915
Other non-current liabilities					7,877				2,492
Total non-current liabilities					209,762				201,020
Total liabilities					338,472				306,777
Stockholders’ equity:
Class A common stock $ 0.001 per share par value, up to 3,750,000,000 shares authorized, 175,266,917 and 159,974,847 shares issued and outstanding as of December 31, 2022 and December 31, 2021, respectively					175				160
Class B common stock $ 0.001 per share par value, up to 50,000,000 shares authorized, 32,099,302 and 37,856,095 shares issued and outstanding as of December 31, 2022 and December 31, 2021, respectively					32				38
Additional paid-in capital					900,924				584,208
Accumulated deficit					(771,056	)			(491,817	)
Accumulated other comprehensive loss					(2,045	)			(2,101	)
Total stockholders’ equity					128,030				90,488
Total liabilities and stockholders' equity				$	466,502			$	397,265

Consolidated Statements of Operations and Comprehensive Loss (In thousands, except share and per share amounts)
		Three months ended December 31,								Year ended December 31,
		2022				2021				2022				2021
Revenues		$	175,140			$	134,846			$	590,961			$	458,338
Operating expenses:
Cost of revenues (excluding depreciation and amortization)			65,979				49,011				215,466				174,720
General and administrative expenses			51,017				53,924				213,615				189,606
Selling and marketing expenses			76,194				65,391				299,238				229,343
Research and development expenses			17,231				14,189				69,454				64,474
Depreciation and amortization			12,430				12,787				51,878				45,922
Acquisition-related expenses			—				437				344				1,953
Restructuring expenses			—				260				—				727
Total operating expenses		$	222,851			$	195,999			$	849,995			$	706,745
Loss from operations			(47,711	)			(61,153	)			(259,034	)			(248,407	)
Interest expense			2,301				1,328				7,303				7,033
Other expenses / (income)			1,872				(1,310	)			13,983				(279	)
Gain on extinguishment of debt			—				—				—				(10,000	)
Change in fair value of warrants and derivative liabilities			—				—				410				5,000
Total other expenses		$	4,173			$	18			$	21,696			$	1,754
Loss before income taxes			(51,884	)			(61,171	)			(280,730	)			(250,161	)
Income tax benefit			(131	)			(33	)			(1,491	)			(598	)
Net loss		$	(51,753	)		$	(61,138	)		$	(279,239	)		$	(249,563	)
Other comprehensive (income) / loss:
Foreign currency translation adjustment			(1,477	)			(88	)			(56	)			64
Total comprehensive loss		$	(50,276	)		$	(61,050	)		$	(279,183	)		$	(249,627	)
Net loss per share
Net loss		$	(51,753	)		$	(61,138	)		$	(279,239	)		$	(249,563	)
Cumulative redeemable convertible preferred stock dividends			—				—				—				7,060
Net loss available to common stockholders		$	(51,753	)		$	(61,138	)		$	(279,239	)		$	(256,623	)
Basic loss per share		$	(0.36	)		$	(0.46	)		$	(2.01	)		$	(2.95	)
Diluted loss per share		$	(0.36	)		$	(0.46	)		$	(2.01	)		$	(2.95	)
Weighted average number of shares used to compute net loss per share
Basic			145,489,764				133,697,870				138,985,265				86,932,191
Diluted			145,489,764				133,697,870				138,985,265				86,932,191

The Company recorded total stock-based compensation as follows:

		Three months ended December 31,						Year ended December 31,
		2022			2021			2022			2021
Cost of revenues (excluding depreciation and amortization)		$	2,198		$	1,140		$	6,634		$	2,589
General and administrative expenses			24,528			29,292			113,401			100,160
Selling and marketing expenses			34,612			34,951			152,377			129,577
Research and development expenses			6,365			5,163			26,580			26,833
Total		$	67,703		$	70,546		$	298,992		$	259,159

Consolidated Statements of Cash Flows (In thousands)
		Three months ended December 31,								Year ended December 31,
		2022				2021				2022				2021
Cash flows from operating activities:
Net loss		$	(51,753	)		$	(61,138	)		$	(279,239	)		$	(249,563	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization			12,430				12,787				51,878				45,922
Stock-based compensation			67,703				70,546				298,992				259,159
Gain on extinguishment of debt			—				—				—				(10,000	)
Deferred income taxes			446				(840	)			(2,668	)			(2,475	)
Change in fair value of warrant and derivative liabilities			—				—				410				5,000
Change in fair value of acquisition-related liabilities			756				(1,806	)			12,990				(1,823	)
Others, net			(376	)			(658	)			(592	)			1,868
Change in non-cash working capital (net of acquisitions):
Accounts receivable			(15,231	)			(8,578	)			(19,826	)			(1,155	)
Prepaid expenses			219				(1,150	)			(270	)			(3,067	)
Other current assets			27				1,409				(214	)			5,725
Other non-current assets			(87	)			(50	)			63				(592	)
Deferred revenue			(3,801	)			4,127				(4,566	)			2,813
Accounts payable			6,277				(4,282	)			13,530				(22,243	)
Accrued expenses and other current liabilities			8,223				11,856				10,001				14,618
Other non-current liabilities			(1,736	)			(1,297	)			(2,003	)			105
Net cash provided by operating activities			23,097				20,926				78,486				44,292
Cash flows from investing activities:
Capital expenditures			(5,067	)			(2,599	)			(22,232	)			(9,482	)
Website and software development costs			(4,184	)			(3,853	)			(17,004	)			(17,274	)
Business and asset acquisitions, net of cash acquired			—				(17,934	)			(9,209	)			(20,093	)
Net cash used for investing activities			(9,251	)			(24,386	)			(48,445	)			(46,849	)
Cash flows from financing activities:
Cash paid for acquisition-related liabilities			(3,667	)			(9,786	)			(5,959	)			(9,850	)
Proceeds from credit facilities, net of issuance cost			—				—				5,625				183,311
Proceeds from initial public offering, net of issuance cost			—				—				—				126,538
Repurchase of shares			(5,297	)			—				(9,607	)			(64,468	)
Proceeds from employees’ stock purchase plan			1,422				809				2,742				809
Exercise of warrants and options			34				27				199				137
Repayments against the credit facilities			—				—				(5,625	)			(180,745	)
Net cash (used for) / provided by financing activities			(7,508	)			(8,950	)			(12,625	)			55,732
Effect of exchange rate changes on cash and cash equivalents			(36	)			89				(165	)			(41	)
Net increase in cash and cash equivalents, including restricted cash			6,302				(12,321	)			17,251				53,134
Cash and cash equivalents and restricted cash, beginning of period			114,808				116,180				103,859				50,725
Cash and cash equivalents and restricted cash, end of period		$	121,110			$	103,859			$	121,110			$	103,859
Supplemental cash flow disclosures including non-cash activities:
Cash paid for interest, net		$	1,670			$	1,331			$	5,673			$	7,004
Cash paid for income taxes, net		$	497			$	464			$	1,611			$	1,758
Liability established in connection with acquisitions		$	756			$	8,390			$	20,529			$	10,185
Capitalized stock-based compensation as website and software development costs		$	1,263			$	1,366			$	5,394			$	10,196
Shares issued in connection with acquisitions and other agreements		$	4,069			$	23,000			$	19,005			$	29,650
Dividends on redeemable convertible preferred stock settled in Company’s equity		$	—			$	—			$	—			$	60,082
Non-cash settlement of warrants and derivative liabilities		$	410			$	—			$	410			$	63,100
Right-to-use asset established		$	9,559			$	—			$	9,559			$	—
Operating lease liabilities established		$	12,050			$	—			$	12,050			$	—
Non-cash consideration for website and software development costs		$	274			$	1,506			$	1,255			$	1,551

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.

Reconciliation of GAAP to Non-GAAP Financial Measures (in thousands)
		Three months ended December 31,								Year ended December 31,
		2022				2021				2022				2021
Net loss		$	(51,753	)		$	(61,138	)		$	(279,239	)		$	(249,563	)
Net loss margin			(29.5	)%			(45.3	)%			(47.3	)%			(54.4	)%
Add back:
Depreciation and amortization			12,430				12,787				51,878				45,922
Restructuring expenses			—				260				—				727
Acquisition-related expenses			—				437				344				1,953
Stock-based compensation			67,703				70,546				298,992				259,159
IPO related expenses			—				—				—				2,705
Gain on extinguishment of debt			—				—				—				(10,000	)
Dispute settlement expense			—				—				—				1,196
Other expenses / (income)			1,872				(1,310	)			13,983				(279	)
Change in fair value of warrants and derivative liabilities			—				—				410				5,000
Interest expense			2,301				1,328				7,303				7,033
Income tax benefit			(131	)			(33	)			(1,491	)			(598	)
Adjusted EBITDA		$	32,422			$	22,877			$	92,180			$	63,255
Adjusted EBITDA margin%			18.5	%			17.0	%			15.6	%			13.8	%

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,
		2022				2021				2022				2021
Cash Flows from Operating Activities		$	23,097			$	20,926			$	78,486			$	44,292
Capital expenditures			(5,067	)			(2,599	)			(22,232	)			(9,482	)
Website and software development costs			(4,184	)			(3,853	)			(17,004	)			(17,274	)
Effect of exchange rate changes on cash and cash equivalents			(36	)			89				(165	)			(41	)
Free Cash Flow		$	13,810			$	14,563			$	39,085			$	17,495

 

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Investor Relations

Scott Schmitz

ir@zetaglobal.com



Media Relations

Megan Rose

press@zetaglobal.com

Source: Zeta Global

FAQ

What were Zeta's revenue results for Q4 2022?

Zeta reported revenue of $175 million for Q4 2022, a 30% increase year-over-year.

What is Zeta's guidance for Q1 2023?

Zeta anticipates revenue between $149 million and $151 million for Q1 2023, representing an 18% to 20% year-over-year increase.

What was Zeta's net loss in Q4 2022?

Zeta reported a GAAP net loss of $52 million for Q4 2022.

What is Zeta's adjusted EBITDA for Q4 2022?

Zeta's adjusted EBITDA for Q4 2022 was $32.4 million, a 42% increase compared to the previous year.

What is the expected revenue for Zeta in 2023?

Zeta expects 2023 revenue between $686 million and $696 million, up 16% to 18% year-over-year.