10-Q: Zeta Global Reports Strong Q3 Growth, Reduced Losses

Zeta Global Holdings Corp. announced robust revenue growth and significantly narrowed net losses for the third quarter and first nine months of 2025, driven by new customer additions and strategic acquisitions.

Summary

• Revenues for the three months ended September 30, 2025, increased by $68.9 million, or 25.7%, to $337.2 million, compared to $268.3 million in the prior year period.
• Net loss for the third quarter of 2025 significantly narrowed to $3.6 million, a substantial improvement from a net loss of $17.4 million in the same period of 2024.
• Income from operations turned positive at $8.8 million for Q3 2025, compared to a loss of $12.4 million in Q3 2024.
• Adjusted EBITDA for the three months ended September 30, 2025, grew by 45.6% to $78.1 million, with an improved margin of 23.2% compared to 20.0% in Q3 2024.
• For the nine months ended September 30, 2025, revenues increased by 31.7% to $910.0 million, up from $691.1 million in the prior year.
• Year-to-date net loss decreased to $38.0 million from $85.0 million in the first nine months of 2024.
• Adjusted EBITDA for the nine months ended September 30, 2025, increased by 49.7% to $183.5 million, with the margin improving to 20.2% from 17.7% in the prior year period.
• Scaled customers increased by 20% to 572 as of September 30, 2025, up from 475 in the prior year, including 180 super-scaled customers.
• Scaled customer Average Revenue Per User (ARPU) increased by 4% to $579 thousand for Q3 2025.
• The acquisition of LiveIntent, Inc. contributed approximately $20.6 million to Q3 2025 revenues and $60.1 million to year-to-date 2025 revenues.
• A Purchase Agreement was entered into on September 27, 2025, to acquire Marigold Group, Inc.'s enterprise software business for up to $325.0 million, expected to close by the end of 2025.

Sentiment

Score: 8

Explanation: The company demonstrated strong financial performance with significant revenue growth, a substantial reduction in net losses, and improved Adjusted EBITDA. Strategic acquisitions and customer growth further bolster a positive outlook, despite ongoing net losses and macroeconomic risks.

Positives

• Strong revenue growth of 25.7% for Q3 2025 and 31.7% for the nine months ended September 30, 2025.
• Significant reduction in net loss, turning operating income positive in Q3 2025.
• Adjusted EBITDA increased substantially by 45.6% in Q3 and 49.7% year-to-date, with improved margins.
• Growth in scaled customers by 20% and an increase in scaled customer ARPU by 4%.
• Successful integration and revenue contribution from the LiveIntent acquisition.
• Strategic proposed acquisition of Marigold enterprise software business to expand capabilities.
• Increased interest income on money market accounts and short-term deposits, leading to a decrease in net interest expense.

Negatives

• Despite significant improvements, the company still reported a net loss of $3.6 million for Q3 2025 and $38.0 million for the nine months ended September 30, 2025.
• Acquisition-related expenses increased by 41.4% for both the three and nine months ended September 30, 2025, due to higher legal and professional fees.
• Restructuring expenses of $3.2 million were incurred during the nine months ended September 30, 2025, related to employee termination costs.
• Other expenses, net, increased significantly by $8.9 million (Q3) and $19.6 million (YTD) primarily due to changes in the fair value of acquisition-related liabilities (LiveIntent earn-outs).

Risks

• Success and revenue growth depend on the ability to add and retain scaled customers and convert them into super-scaled customers.
• Long sales cycles can make it difficult to project revenue generation from potential customers.
• Fluctuations in operating results, including higher revenues during presidential election years, could make future results difficult to compare and predict.
• Ineffective growth management could negatively impact platform quality, business, operating results, and financial condition.
• Intense industry competition and failure to innovate or make the right investment decisions could harm the business.
• Acquisitions or strategic investments, including the proposed Marigold acquisition, could be difficult to identify and integrate, divert management attention, disrupt business, dilute stockholder value, and adversely affect financial condition.
• Increasing scrutiny in the technology industry could result in U.S. federal or state government actions negatively affecting the business.
• Ability to collect and use data online is threatened by new consumer tools, regulatory restrictions, and changes to web browsers and mobile operating systems.
• Actual or perceived failures to comply with data protection, privacy, and security laws could adversely affect the business.
• Unfavorable publicity or negative public perception of data collection practices could lead to additional regulations.
• Significant inadvertent disclosure or security breach of confidential/personal information could be detrimental to business, reputation, and financial performance.
• Dependence on third-party data centers, systems, and technologies, the disruption of which could adversely affect the business.
• Failure to detect or prevent fraud or malware intrusion could lead to loss of publisher confidence, legal claims, and regulatory investigations.
• Future standards adopted by private entities and inbox service providers for email use and delivery may interfere with platform effectiveness.
• Actual or perceived failure to comply with evolving regulatory frameworks around AI development and use could adversely affect the business.
• General economic and market conditions, including U.S. trade policies and tariffs, could negatively impact the business and customers.
• Incurring additional debt or issuing new debt or equity securities could impact business and financial condition.
• Catastrophic events (pandemics, natural disasters, war, terrorism) could cause business and operational interruption.
• Reliance on technology and development resources in India and other non-U.S. locations exposes the company to risks such as wage inflation, geopolitical conditions, intellectual property protection issues, health crises, and currency fluctuations.
• Payment-related risks, including customer disputes, non-payment, decreased spend, and sequential liability arrangements with marketing agencies, could lead to bad debt write-offs.

Future Outlook

Management anticipates general and administrative, selling and marketing, and research and development expenses to increase in absolute dollars in future periods, with G&A expected to decrease as a percentage of revenue over the long term. Acquisition-related and restructuring expenses are expected to correlate with future activities. Interest expense will be impacted by variable rates, and other expenses will depend on foreign exchange rates and acquisition-related liability remeasurement. The proposed acquisition of Marigold's enterprise software business is expected to close by the end of 2025. The company believes its existing cash, anticipated operating cash flows, and available credit facilities will be sufficient to meet working capital requirements for at least the next 12 months and the foreseeable future, including funding the Marigold acquisition. The company may also seek to raise additional capital through equity or debt financing in the future.

Management Comments

• Our Generative AI (GenAI)-driven marketing solutions enable brands to personalize experiences at scale, measure impact with precision and optimize marketing spend to increase return on investment (ROI).
• With the integration of LiveIntents identity graph and publisher network, we have strengthened our Data Cloud assets and our ability to deliver authenticated, people-based marketing across addressable channels.
• Our Zeta Marketing Platform, or ZMP, is an AI-powered marketing platform with identity data at its core.
• The ZMPs data-driven algorithms and processes learn and optimize each customers marketing program in real time, producing a flywheel effect that enables our customers to test, learn and improve their marketing programs in real time.
• Our Consumer Data Platform (CDP+) now integrates LiveIntents identity graph, improving identity resolution while maintaining compliance with evolving privacy standards.

Industry Context

Zeta Global operates in the highly competitive marketing technology industry, leveraging AI-powered omnichannel data-driven cloud platforms. The company's focus on Generative AI and machine learning for consumer intelligence and marketing automation aligns with broader industry trends towards personalized, data-driven marketing. The integration of LiveIntent's identity graph strengthens its first-party data foundation, crucial in an evolving privacy landscape. The proposed acquisition of Marigold's enterprise software business indicates a strategy of consolidation and expansion within the marketing technology sector. The company acknowledges macroeconomic uncertainties, including potential for slower economic growth, inflation risks, and impacts from global trade policies, which could affect its business and customer spending. The increasing scrutiny on data protection, privacy, security, and AI regulatory frameworks also represents a significant industry challenge.

Corporate Governance

Legal Proceedings

• The company is involved in various legal proceedings arising from the normal course of business activities.
• Management believes the resolution of these matters will not have a material adverse effect on the company's business, results of operations, financial condition, or cash flows.
• No material changes from previously disclosed legal proceedings were reported.

Stakeholder Impact

• Shareholders: Benefit from improved financial performance, share repurchase programs, and strategic acquisitions, but face potential dilution from future equity raises or the Marigold acquisition.
• Employees: Impacted by restructuring activities (employee termination costs) but also benefit from stock-based compensation plans.
• Customers: Expected to benefit from enhanced platform capabilities, GenAI-driven solutions, and expanded offerings through strategic acquisitions like LiveIntent and Marigold.
• Creditors: The company is in compliance with its financial covenants under the Senior Secured Credit Facility, indicating a stable credit profile.

Next Steps

• Close the proposed acquisition of Marigold's enterprise software business by the end of 2025.
• Continue to invest in marketing initiatives to drive growth.
• Continue to invest in research and development to enhance the technology platform and drive incremental value.
• Potentially raise additional capital through equity or debt financing arrangements in the future.

Key Dates

Recommendation

Zeta Global's Q3 2025 results demonstrate strong operational momentum, with significant revenue growth, a substantial reduction in net losses, and robust Adjusted EBITDA expansion. The strategic acquisition of LiveIntent is already contributing positively, and the proposed Marigold acquisition signals continued expansion and market leadership. While the company still reports a net loss, the trend towards profitability and strong underlying business metrics, coupled with a healthy cash position and active share repurchase program, suggest a compelling investment opportunity for long-term growth. The focus on AI-powered solutions and data-driven marketing positions the company well within a growing industry, despite macroeconomic uncertainties and integration risks associated with acquisitions.

Keywords

Marketing Technology, AI-powered Platform, Omnichannel Marketing, Data-driven Marketing, Customer Relationship Management, Generative AI, Machine Learning, Identity Resolution, LiveIntent, Marigold Acquisition, SEC Filing, 10-Q, Financial Results, Revenue Growth, Adjusted EBITDA, Scaled Customers, ARPU, Stock Repurchase, Corporate Governance, Risk Factors