8-K: Zeta Global Beats Q3, Raises FY25 Guidance on AI Strength

Zeta Global reported its 17th consecutive 'beat and raise' quarter, driven by strong AI-powered marketing platform performance and increased customer acquisition.

Summary

• Zeta Global reported third-quarter 2025 revenue of $337 million, a 26% year-over-year increase, surpassing the midpoint of guidance by $9 million.
• Excluding political candidate and LiveIntent revenue, Q3 2025 revenue grew 28% year-over-year, showing acceleration from the second quarter.
• Net cash provided by operating activities reached $58 million, up 68% year-over-year, with a 17% margin.
• Free cash flow was $47 million, an 83% year-over-year increase, achieving a record 14% margin and meeting the 'Rule of 40' metric.
• The company grew its Super Scaled Customer count to 180, adding 12 customers quarter-over-quarter and increasing 25% year-over-year.
• Zeta Global increased its full-year 2025 revenue, adjusted EBITDA, and free cash flow guidance by more than the third-quarter beat.
• Initial full-year 2026 guidance was established ahead of consensus for revenue, adjusted EBITDA, and free cash flow, projecting a sixth straight year of over 20% revenue growth with free cash flow margin expansion.
• A new stock repurchase and withholding program of up to $200 million was authorized on July 23, 2025, with $199 million remaining available as of September 30, 2025.

Sentiment

Score: 9

Explanation: The filing indicates very strong performance with a 17th consecutive 'beat and raise' quarter, significant year-over-year growth in revenue, cash flow, and customer acquisition, coupled with raised full-year guidance and robust initial 2026 projections. The stock repurchase program further reinforces positive sentiment.

Positives

• Achieved 17th consecutive 'beat and raise' quarter, demonstrating consistent strong performance.
• Third-quarter 2025 revenue of $337 million exceeded guidance midpoint by $9 million.
• Year-over-year revenue growth of 26% (28% excluding political/LiveIntent) indicates robust market demand and accelerated growth.
• Net cash provided by operating activities increased 68% year-over-year to $58 million, with a healthy 17% margin.
• Free cash flow surged 83% year-over-year to $47 million, reaching a record 14% margin and satisfying the 'Rule of 40'.
• Super Scaled Customer count grew to 180, a 25% year-over-year increase, highlighting successful customer acquisition and retention.
• Increased full-year 2025 guidance for revenue, adjusted EBITDA, and free cash flow, reflecting strong business momentum.
• Provided initial 2026 guidance that projects continued strong growth (21% revenue, 29% adjusted EBITDA, 33% free cash flow) and margin expansion.
• The launch of 'Athena by ZetaTM', an AI conversational agent, enhances the company's competitive edge in AI marketing.
• A new $200 million stock repurchase program signals confidence in future performance and commitment to shareholder returns.

Negatives

• The company reported a net loss of $(3.6) million for the three months ended September 30, 2025, although this is a significant improvement from $(17.4) million in the prior year period.
• Equity stock-based compensation is projected to be $190 million for full year 2025, which is a substantial non-cash expense.

Risks

• Global supply chain disruptions and macroeconomic trends, including adverse developments in debt, consumer credit, and financial services markets.
• Increases in borrowing costs due to changes in interest rates and other factors.
• Impact of inflation, tariffs, and changes in global trade policies on the company and its customers.
• Potential fluctuations in operating results, making future performance difficult to predict.
• Impact of future pandemics, epidemics, and other health crises on the global economy, customers, employees, and business.
• Domestic and international political and geopolitical conditions or uncertainty, including unrest or changes in trade policy.
• Ability to innovate and make the right investment decisions in product offerings and platform.
• Impact of new generative AI capabilities and the proliferation of AI on the business.
• Ability to attract and retain customers, particularly scaled and super-scaled customers.
• Ability to manage growth effectively and integrate acquisitions or strategic investments.
• Ability to collect and use data online, and the standards adopted by private entities and inbox service providers regarding email use and delivery.
• Risk of significant inadvertent disclosure or breach of confidential/personal information, or a security breach of computer systems.
• Any disruption to third-party data centers, systems, and technologies.

Future Outlook

Zeta Global has raised its full-year 2025 guidance for revenue to a range of $1,273 million to $1,276 million, adjusted EBITDA to $273.2 million to $274.1 million, and free cash flow to $156.9 million to $157.9 million. The company also provided initial full-year 2026 guidance, projecting revenue of $1,540 million, adjusted EBITDA of $354 million, and free cash flow of $209 million. This outlook anticipates a sixth consecutive year of over 20% revenue growth and continued free cash flow margin expansion, driven by its superior AI and data capabilities. The guidance does not yet include contributions from the Marigold enterprise software business, which is expected to close in Q4 2025.

Management Comments

• David A. Steinberg, Co-Founder, Chairman, and CEO: "The reason we are growing at an accelerated rate is simple: we have superior artificial intelligence and data to our competitors."
• David A. Steinberg, Co-Founder, Chairman, and CEO: "Our latest launch of Athena by ZetaTM, our AI conversational, superintelligent agent, combined with the momentum coming out of our most successful Zeta Live, and the continued success with One Zeta, reinforces our conviction in Zetas leadership and future in the martech landscape."
• Chris Greiner, CFO: "The theme of our investor day in October was durable, predictable, and profitable growth, and our third quarter results are a perfect illustration of this."
• Chris Greiner, CFO: "Our updated 2025 guidance, and initial outlook for 2026 underscore the durability, predictability, and profitability of our growth and reflect the confidence and momentum we have in the business."

Industry Context

Zeta Global operates in the highly competitive and rapidly evolving AI Marketing Cloud and martech landscape. The company's emphasis on superior artificial intelligence and data, as well as the launch of its 'Athena by ZetaTM' AI conversational agent, positions it to capitalize on the increasing demand for sophisticated, personalized marketing solutions. The consistent 'beat and raise' performance and strong customer growth suggest it is gaining market share and effectively navigating industry trends towards AI-driven digital transformation.

Comparison to Industry Standards

• The filing does not provide specific comparable companies, projects, or results to assess the company's performance against global benchmarks.

Stakeholder Impact

• Shareholders: Positive impact due to strong financial performance, raised guidance, and a new $200 million stock repurchase program, indicating potential for increased shareholder value.
• Customers: Positive impact from continued innovation in AI marketing solutions, including the launch of 'Athena by ZetaTM', which aims to provide superior and more efficient marketing outcomes.
• Employees: Positive impact from accelerated growth and expansion, potentially leading to more opportunities and stability within the company.
• Creditors: Positive impact from improved cash flow generation and overall financial health, enhancing the company's ability to meet its obligations.

Next Steps

• Closing of the Marigold enterprise software business acquisition, expected in Q4 2025, after which guidance on its contribution will be provided.
• Zeta Global will host a conference call on November 4, 2025, at 4:30 p.m. Eastern Time to discuss financial results.

Key Dates

Recommendation

Zeta Global's consistent 'beat and raise' performance, robust revenue and free cash flow growth, and significant increase in Super Scaled Customers demonstrate strong operational execution and market leadership in the AI marketing space. The raised full-year 2025 guidance and optimistic initial 2026 outlook, coupled with a substantial stock repurchase program, signal strong management confidence and a commitment to shareholder returns. The company's focus on AI innovation further solidifies its competitive advantage, making it an attractive investment for long-term growth.

Keywords

AI Marketing Cloud, Martech, Marketing Technology, Customer Acquisition, Customer Retention, Financial Results, Earnings Report, Guidance Update, Free Cash Flow, Adjusted EBITDA, Stock Repurchase, Super Scaled Customers, Artificial Intelligence, Zeta Marketing Platform