Zeta Delivers Fourth Consecutive Year of 20%+ Revenue Growth in 2023

Published

Finished 2023 with 10 straight quarters of beating & raising guidance

  • Delivered revenue of $210M, up 20% Y/Y in 4Q’23, and $729M, up 23% Y/Y in 2023
  • Increased Scaled Customer count 12% Y/Y and Super-Scaled Customer count 27% Y/Y
  • Grew Scaled Customer ARPU 10% Y/Y to $1.57M in 2023
  • Generated cash flow from operating activities of $27M in 4Q’23, and $91M in 2023
  • Guiding to fifth consecutive year of 20%+ revenue growth

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, 2023.

“The marketing ecosystem is in a state of change,” said David A. Steinberg, Co-Founder, Chairman, and CEO of Zeta. “Artificial Intelligence has moved from a theoretical to a board room conversation with Chief Marketing Officers mandated to make AI more actionable to deliver greater efficiency and better experiences for consumers. By putting intelligence at the center of our platform and making Generative AI more actionable for marketers, we are at the forefront of a wave that is driving a replacement cycle and accelerating digital transformation.”

“A 10th straight beat and raise quarter continues to demonstrate our consistent execution and ability to capitalize on our competitive advantages,” said Chris Greiner, Zeta’s CFO. “We enter 2024 from a position of strength, as evidenced by multiple elements of our 2024 guidance including: a fifth consecutive year of 20%+ growth, continued Adjusted EBITDA margin expansion, and an acceleration in free cash flow conversion.”

Fourth Quarter 2023 Highlights

  • Total revenue of $210 million, increased 20% Y/Y.
  • Scaled Customer count increased to 452 from 440 in 3Q’23 and 403 in 4Q’22.
  • Super-Scaled Customer count increased to 131 from 124 in 3Q’23 and 103 in 4Q’22.
  • Quarterly Scaled Customer ARPU of $454,000, increased 7% Y/Y.
  • Quarterly Super-Scaled Customer ARPU of $1.31 million, decreased 1% Y/Y.
  • Direct platform revenue mix of 73% of total revenue, compared to 70% in 3Q’23, and compared to 75% in 4Q’22.
  • GAAP cost of revenue percentage of 40.2%, increased 130 basis points Q/Q, and increased 260 basis points Y/Y.
  • GAAP net loss of $35 million, or 17% of revenue, driven primarily by $63 million of stock-based compensation. The net loss in 4Q’22 was $52 million, or 30% of revenue.
  • GAAP loss per share of $0.22, compared to a loss per share of $0.36 in 4Q’22.
  • Cash flow from operating activities of $27 million, compared to $23 million in 4Q’22.
  • Free Cash Flow1 of $18 million, compared to $14 million in 4Q’22.
  • Repurchased $3.9 million worth of shares through our share repurchase program.
  • Adjusted EBITDA1 of $44.8 million, increased 38% Y/Y from $32.4 million in 4Q’22.
  • Adjusted EBITDA margin1 of 21.3%, increased from 18.5% in 4Q’22.

Full Year 2023 Highlights

  • Total revenue of $729 million, increased 23% Y/Y.
  • Scaled Customer ARPU of $1.57 million, increased of 10% Y/Y.
  • Super Scaled Customer ARPU of $4.55 million, increased of 1% Y/Y.
  • Direct platform revenue mix of 72% of total revenue, compared to 77% in 2022.
  • Net Revenue Retention of 111%, compared to 112% in 2022.
  • GAAP cost of revenue percentage of 37.7%, increased 120 basis points Y/Y.
  • GAAP net loss of $187 million, or 26% of revenue, was driven primarily by $243 million of stock-based compensation. The net loss in 2022 was $279 million, or 47% of revenue.
  • GAAP loss per share of $1.20, compared to a loss per share of $2.01 in 2022.
  • Cash flow from operating activities of $91 million, compared to $78 million in 2022.
  • Free Cash Flow1 of $55 million, compared to $39 million in 2022.
  • Repurchased $15.4 million worth of shares through our share repurchase program.
  • Adjusted EBITDA1 of $129.4 million, an increase of 40% compared to $92.2 million in 2022.
  • Adjusted EBITDA margin1 of 17.8%, compared to 15.6% in 2022.

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

First Quarter 2024

  • Revenue of $185 million to $189 million, representing a year-over-year increase of 17% to 20%.
  • Adjusted EBITDA of $28.8 million to $29.3 million, representing a year-over-year increase of 20% to 22% and an Adjusted EBITDA margin of 15.2% to 15.8%.

Full Year 2024

  • Revenue of $870 million to $880 million, representing a year-over-year increase of 19% to 21%.
  • Adjusted EBITDA of $165 million to $167 million, representing a year-over-year increase of 28% to 29% and an Adjusted EBITDA margin of 18.8% to 19.2%.
  • Free Cash Flow of $75 million to $85 million.

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. In February 2023, we added an additional financial target to the plan of Free Cash Flow with a target of at least $110 million by 2025. In September 2023, we announced that we expect to achieve our Zeta 2025 targets early.

Investor Conference Call and Webcast

Zeta will host a conference call today, Tuesday, February 27, 2024, at 4:30 p.m. Eastern Time to discuss financial results for the fourth quarter and full year 2023. 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 2024 guidance, the Zeta 2025 plan, the financial targets of Zeta 2025 and the timing of when we will achieve the Zeta 2025 plan, the capabilities of AI and Zeta’s platform, the acceleration of the digital transformation, and the growth and expansion of AI and the Zeta Marketing Platform 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 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; the escalating conflict in Israel, Gaza and in the surrounding areas; our ability to innovate and make the right investment decisions in our product offerings and platform; the impact of new generative AI capabilities and the proliferation of AI on our business; 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. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

The 2024 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 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 1.8% and 6.3% of revenue for 2023 and 2022, 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.

 

Zeta Global Holdings Corp.

Consolidated Balance Sheets (in thousands, except share and per share amounts)

 
 

 

 

As of December 31,

 

 

 

2023

 

 

 

2022

 

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

131,732

 

 

$

121,110

 

Accounts receivable, net of allowance of $3,564 and $1,882 as of December 31, 2023 and December 31, 2022, respectively

 

 

170,131

 

 

 

106,322

 

Prepaid expenses

 

 

6,269

 

 

 

7,150

 

Other current assets

 

 

1,622

 

 

 

1,866

 

Total current assets

 

 

309,754

 

 

 

236,448

 

Non-current assets:

 

 

 

 

Property and equipment, net

 

 

7,452

 

 

 

5,981

 

Website and software development costs, net

 

 

32,124

 

 

 

36,713

 

Right-to-use asset - operating leases, net

 

 

6,603

 

 

 

7,388

 

Intangible assets, net

 

 

48,781

 

 

 

44,358

 

Goodwill

 

 

140,905

 

 

 

133,069

 

Deferred tax assets, net

 

 

728

 

 

 

745

 

Other non-current assets

 

 

4,367

 

 

 

1,800

 

Total non-current assets

 

 

240,960

 

 

 

230,054

 

Total assets

 

$

550,714

 

 

$

466,502

 

Liabilities and Stockholders’ Equity

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

63,572

 

 

$

33,668

 

Accrued expenses

 

 

85,455

 

 

 

72,364

 

Acquisition-related liabilities

 

 

17,234

 

 

 

14,743

 

Deferred revenue

 

 

3,301

 

 

 

2,228

 

Other current liabilities

 

 

6,823

 

 

 

5,707

 

Total current liabilities

 

 

176,385

 

 

 

128,710

 

Non-current liabilities:

 

 

 

 

Long-term borrowings

 

 

184,147

 

 

 

183,953

 

Acquisition-related liabilities

 

 

3,060

 

 

 

17,932

 

Other non-current liabilities

 

 

6,602

 

 

 

7,877

 

Total non-current liabilities

 

 

193,809

 

 

 

209,762

 

Total liabilities

 

 

370,194

 

 

 

338,472

 

Stockholders’ equity:

 

 

 

 

Class A common stock $ 0.001 per share par value, up to 3,750,000,000 shares authorized, 188,631,432 and 175,266,917 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively

 

 

189

 

 

 

175

 

Class B common stock $ 0.001 per share par value, up to 50,000,000 shares authorized, 29,055,489 and 32,099,302 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively

 

 

29

 

 

 

32

 

Additional paid-in capital

 

 

1,140,849

 

 

 

900,924

 

Accumulated deficit

 

 

(958,537

)

 

 

(771,056

)

Accumulated other comprehensive loss

 

 

(2,010

)

 

 

(2,045

)

Total stockholders’ equity

 

 

180,520

 

 

 

128,030

 

Total liabilities and stockholders' equity

 

$

550,714

 

 

$

466,502

 

 

Consolidated Statements of Operations and Comprehensive Loss (in thousands, except share and per share amounts)

 
 

 

 

Three months ended December 31,

 

Year ended December 31,

 

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Revenues

 

$

210,320

 

 

$

175,140

 

 

$

728,723

 

 

$

590,961

 

Operating expenses:

 

 

 

 

 

 

 

 

Cost of revenues (excluding depreciation and amortization)

 

 

84,615

 

 

 

65,979

 

 

 

274,482

 

 

 

215,466

 

General and administrative expenses

 

 

51,397

 

 

 

51,017

 

 

 

205,419

 

 

 

213,615

 

Selling and marketing expenses

 

 

72,727

 

 

 

76,194

 

 

 

288,441

 

 

 

299,238

 

Research and development expenses

 

 

19,945

 

 

 

17,231

 

 

 

73,869

 

 

 

69,454

 

Depreciation and amortization

 

 

13,495

 

 

 

12,430

 

 

 

51,149

 

 

 

51,878

 

Acquisition-related expenses

 

 

 

 

 

 

 

 

203

 

 

 

344

 

Restructuring expenses

 

 

 

 

 

 

 

 

2,845

 

 

 

 

Total operating expenses

 

$

242,179

 

 

$

222,851

 

 

$

896,408

 

 

$

849,995

 

Loss from operations

 

 

(31,859

)

 

 

(47,711

)

 

 

(167,685

)

 

 

(259,034

)

Interest expense

 

 

2,800

 

 

 

2,301

 

 

 

10,939

 

 

 

7,303

 

Other expenses

 

 

682

 

 

 

1,872

 

 

 

7,820

 

 

 

13,983

 

Change in fair value of warrants and derivative liabilities

 

 

 

 

 

 

 

 

 

 

 

410

 

Total other expenses

 

$

3,482

 

 

$

4,173

 

 

$

18,759

 

 

$

21,696

 

Loss before income taxes

 

 

(35,341

)

 

 

(51,884

)

 

 

(186,444

)

 

 

(280,730

)

Income tax (benefit)/provision

 

 

(60

)

 

 

(131

)

 

 

1,037

 

 

 

(1,491

)

Net loss

 

$

(35,281

)

 

$

(51,753

)

 

$

(187,481

)

 

$

(279,239

)

Other comprehensive income:

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

(113

)

 

 

(1,477

)

 

 

(35

)

 

 

(56

)

Total comprehensive loss

 

$

(35,168

)

 

$

(50,276

)

 

$

(187,446

)

 

$

(279,183

)

Net loss per share

 

 

 

 

 

 

 

 

Net loss available to common stockholders

 

$

(35,281

)

 

$

(51,753

)

 

$

(187,481

)

 

$

(279,239

)

Basic loss per share

 

$

(0.22

)

 

$

(0.36

)

 

$

(1.20

)

 

$

(2.01

)

Diluted loss per share

 

$

(0.22

)

 

$

(0.36

)

 

$

(1.20

)

 

$

(2.01

)

Weighted average number of shares used to compute net loss per share

Basic

 

 

163,922,676

 

 

 

145,489,764

 

 

 

156,697,308

 

 

 

138,985,265

 

Diluted

 

 

163,922,676

 

 

 

145,489,764

 

 

 

156,697,308

 

 

 

138,985,265

 

 

The Company recorded total stock-based compensation as follows:

 

Three months ended December 31,

Year ended December 31,

 

2023

2022

2023

2022

Cost of revenues (excluding depreciation and amortization)

$

404

$

2,198

$

2,502

$

6,634

General and administrative expenses

 

22,244

 

24,528

 

88,465

 

113,401

Selling and marketing expenses

 

31,799

 

34,612

 

124,732

 

152,377

Research and development expenses

 

8,688

 

6,365

 

27,182

 

26,580

Total

$

63,135

$

67,703

$

242,881

$

298,992

 
 

Consolidated Statements of Cash Flows (in thousands)

 
 

 

 

Year ended December 31,

 

 

 

2023

 

 

 

2022

 

Cash flows from operating activities:

 

 

 

 

Net loss

 

$

(187,481

)

 

$

(279,239

)

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization

 

 

51,149

 

 

 

51,878

 

Stock-based compensation

 

 

242,881

 

 

 

298,992

 

Deferred income taxes

 

 

11

 

 

 

(2,668

)

Change in fair value of warrant and derivative liabilities

 

 

 

 

 

410

 

Change in fair value of acquisition-related liabilities

 

 

7,200

 

 

 

12,990

 

Others, net

 

 

2,015

 

 

 

(592

)

Change in non-cash working capital (net of acquisitions):

 

 

 

 

Accounts receivable

 

 

(64,052

)

 

 

(19,826

)

Prepaid expenses

 

 

1,061

 

 

 

(270

)

Other current assets

 

 

243

 

 

 

(214

)

Other non-current assets

 

 

(1,526

)

 

 

63

 

Deferred revenue

 

 

807

 

 

 

(4,566

)

Accounts payable

 

 

26,262

 

 

 

13,530

 

Accrued expenses and other current liabilities

 

 

12,443

 

 

 

10,001

 

Other non-current liabilities

 

 

(490

)

 

 

(2,003

)

Net cash provided by operating activities

 

 

90,523

 

 

 

78,486

 

Cash flows from investing activities:

 

 

 

 

Capital expenditures

 

 

(20,483

)

 

 

(22,232

)

Website and software development costs

 

 

(15,487

)

 

 

(17,004

)

Acquisitions and other investments, net of cash acquired

 

 

(18,245

)

 

 

(9,209

)

Net cash used for investing activities

 

 

(54,215

)

 

 

(48,445

)

Cash flows from financing activities:

 

 

 

 

Cash paid for acquisition-related liabilities

 

 

(15,508

)

 

 

(5,959

)

Proceeds from credit facilities, net of issuance cost

 

 

11,250

 

 

 

5,625

 

Issuances under employee stock purchase plan

 

 

3,058

 

 

 

2,742

 

Exercise of options

 

 

241

 

 

 

199

 

Repurchase of shares

 

 

(13,443

)

 

 

(9,607

)

Repayments against the credit facilities

 

 

(11,250

)

 

 

(5,625

)

Net cash used for financing activities

 

 

(25,652

)

 

 

(12,625

)

Effect of exchange rate changes on cash and cash equivalents

 

 

(34

)

 

 

(165

)

Net increase in cash and cash equivalents

 

 

10,622

 

 

 

17,251

 

Cash and cash equivalents, beginning of period

 

 

121,110

 

 

 

103,859

 

Cash and cash equivalents, end of period

 

$

131,732

 

 

$

121,110

 

Supplemental cash flow disclosures including non-cash activities:

Cash paid for interest, net

 

$

10,481

 

 

$

5,673

 

Cash paid for income taxes, net

 

$

1,900

 

 

$

1,611

 

Liability established in connection with acquisitions

 

$

8,189

 

 

$

20,529

 

Capitalized stock-based compensation as website and software development

 

$

3,790

 

 

$

5,394

 

Shares issued in connection with acquisitions and other agreements

 

$

5,387

 

 

$

19,005

 

Non-cash settlement of warrants and derivative liabilities

 

$

 

 

$

410

 

Right-to-use asset established

 

$

165

 

 

$

9,559

 

Operating lease liabilities established

 

$

165

 

 

$

12,050

 

Non-cash consideration for website and software development

 

$

963

 

 

$

1,654

 

 

Reconciliation of GAAP to Non-GAAP Financial Measures (in thousands)

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.

 

 

Three months ended December 31,

 

Year ended December 31,

 

 

 

2023

 

 

 

2022

 

 

 

 

2023

 

 

 

2022

 

Net loss

 

$

(35,281

)

 

$

(51,753

)

 

$

(187,481

)

 

$

(279,239

)

Net loss margin

 

 

(16.8

)%

 

 

(29.5

)%

 

 

(25.7

)%

 

 

(47.3

)%

Add back:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

13,495

 

 

 

12,430

 

 

 

51,149

 

 

 

51,878

 

Restructuring expenses

 

 

 

 

 

 

 

 

2,845

 

 

 

 

Acquisition-related expenses

 

 

 

 

 

 

 

 

203

 

 

 

344

 

Stock-based compensation

 

 

63,135

 

 

 

67,703

 

 

 

242,881

 

 

 

298,992

 

Other expenses

 

 

682

 

 

 

1,872

 

 

 

7,820

 

 

 

13,983

 

Change in fair value of warrants and derivative liabilities

 

 

 

 

 

 

 

 

 

 

 

410

 

Interest expense

 

 

2,800

 

 

 

2,301

 

 

 

10,939

 

 

 

7,303

 

Income tax (benefit)/provision

 

 

(60

)

 

 

(131

)

 

 

1,037

 

 

 

(1,491

)

Adjusted EBITDA

 

$

44,771

 

 

$

32,422

 

 

$

129,393

 

 

$

92,180

 

Adjusted EBITDA margin%

 

 

21.3

%

 

 

18.5

%

 

 

17.8

%

 

 

15.6

%

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,

 

 

 

2023

 

 

 

2022

 

 

 

 

2023

 

 

 

2022

 

Cash Flows from Operating Activities

 

$

26,962

 

 

$

23,097

 

 

$

90,523

 

 

$

78,486

 

Capital expenditures

 

 

(5,597

)

 

 

(5,067

)

 

 

(20,483

)

 

 

(22,232

)

Website and software development costs

 

 

(3,143

)

 

 

(4,184

)

 

 

(15,487

)

 

 

(17,004

)

Effect of exchange rate changes on cash and cash equivalents

 

 

(41

)

 

 

(36

)

 

 

(34

)

 

 

(165

)

Free Cash Flows

 

$

18,181

 

 

$

13,810

 

 

$

54,519

 

 

$

39,085

 

 

Investor Relations Scott Schmitz ir@zetaglobal.com Press James A. Pearson press@zetaglobal.com

Source: Zeta Global

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