Zeta Global Holdings Corp at Needham Technology and Media Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Ryan MacDonald - Needham & Company - Analyst : And then when you look at the types of companies that you're selling into and that would have demand for the solutions today, how do you look at that -- the business from like a vertical exposure perspective?

Question: Ryan MacDonald - Needham & Company - Analyst : Yeah, and -- I mean, given the current volatile macro environment, we're seeing a lot of companies within software technology, broadly, that have either pulled back on either reiterating guidance, cutting guidance, sort of starting to see impact of elongation of sales cycles. But Zeta has really bucked this trend and performed pretty consistently well. Can you kind of talk about what's happening in your red markets that's driving more of that increased demand?

Question: Ryan MacDonald - Needham & Company - Analyst : And obviously, great to hear that healthy environment and sort of the technologies being integrated in sort of more objective evaluation, based on sort of quality and ROI driven. But there obviously are a number of other competitors that aren't the legacy vendors. Can you talk about how you're maybe standing out versus that competition? What sort of the hard ROI that you are driving for these customers?

Question: Ryan MacDonald - Needham & Company - Analyst : And obviously, so it's great to see from a new deal perspective, new customer perspective, but you're also expanding wallet share within your existing base. So can you talk about what you're doing to really continue to drive that expansion? That upsell activity upon renewal?

Question: Ryan MacDonald - Needham & Company - Analyst : I want to talk on Q1 results a bit. So obviously, good strong quarter. You mentioned the eight-figure customer wins, but you had another seven-figure customer wins during the quarter. But a question we got quite often sort of post the print was around sort of the mix shift occurring on direct platform and that perhaps some of this -- the newer revenue streams you're bringing on is maybe more off-platform. Can you talk about the dynamics? What's going on there with that mix shift?

Question: Ryan MacDonald - Needham & Company - Analyst : And do you expect that you're confident in the -- as these relationships mature, that you can sort of replicate the example used from the 7% to 76%? What are the factors that sort of you need to execute on to sort of drive a similar type transition with some of these new work?

Question: Ryan MacDonald - Needham & Company - Analyst : Talking on the -- we get a lot of questions on the eight-figure customer win. And naturally, one is awesome, but with investors, we always want more figure wins if we can get them. In terms of what you see in the pipeline, are you seeing more of these like that size eight-figure type opportunities?

Question: Ryan MacDonald - Needham & Company - Analyst : And then when you think about the -- relative to the RFP activity, when you look at what's pipeline that's being driven directly from your [QCRs] and sort of the partnership opportunities, how is the volume and maybe the size of the actual deals that are in the pipeline? How does that compare relative to the RFP-type deals?

Question: Ryan MacDonald - Needham & Company - Analyst : Oh, interesting. And then -- so on the quota-carrying reps, so you added seven in the quarter. Just curious as where are you finding these new reps? How are you evaluating that? Because obviously, we've seen last pickup in tech broadly. But yes, usually tech companies are not picking up or laying off their best producing sales reps. So how are you finding and evaluating new reps?

Question: Ryan MacDonald - Needham & Company - Analyst : Especially in like a -- more of a technical sale. And like with the data-driven sales that makes sense. As you think about the -- you know, obviously, kind of early days on the Q1 hires, and I think Q4 was relatively flat in terms of hires. But if you think about, with your sales cycle sort of second quarter, third quarter hires last year, what are you seeing in terms of level of productivity if you compare them on a year-over-year basis to the prior cohorts? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 17, 2023 / 6:15PM, ZETA.N - Zeta Global Holdings Corp at Needham Technology and Media Conference

Question: Ryan MacDonald - Needham & Company - Analyst : Oh, it speaks to the potential additional capacity you could add to -- with the -- with many reps or how many deals those reps are carrying like there's room to add to like make that process even more efficient, I imagine.

Question: Ryan MacDonald - Needham & Company - Analyst : Excellent. When you think about the RFP opportunity, in the past, I think you and David have talked about sort of like the biggest challenge for Zeta is getting over the Zeta who question, right? And really sort of broadening out the brand awareness of -- and you're like the biggest company we haven't heard -- people haven't heard of, right? How -- you've made a lot of investment and efforts in trying to drive that brand awareness. Can you talk about what channels have been most effective and what you're seeing in terms of how to getting invited to more RFPs, getting past that first round? Because you've got that awareness now.

Question: Ryan MacDonald - Needham & Company - Analyst : And as you think about additional opportunities to continue to expand the -- your shots on goal, how do you think about continued evolution of the partner ecosystem, Scott? Because there are obviously large dollars being spent in this marketing ecosystem refresh, if you will. I got to imagine global SIs are now sort of licking their chops at that opportunity there. But how do you think about sort of expansion? And does it make sense from a global SI perspective to happen?

Question: Ryan MacDonald - Needham & Company - Analyst : Excellent. Got to talk about generative AI and ChatGPT. You know, the company is just announced some new functionality in the platform. I believe you're calling it ZOE at this point. But can you kind of talk about who is or what is ZOE? I don't know if -- what it's preference is at this point. But -- and what benefits that creates for the customer?

Question: Ryan MacDonald - Needham & Company - Analyst : I have to sign up for them myself. Alright, let's get going.

Question: Ryan MacDonald - Needham & Company - Analyst : You're not charging for the offering today, and I think you're starting with sort of a small subset of clients, but how should we think about their -- your plans or in the timeline for a broader release and sort of longer term, how do you envision monetizing these investments?

Question: Ryan MacDonald - Needham & Company - Analyst : I mean, especially if a marketer can start going in essentially asking for suggestions on sort of marketing channels in which to go, I imagine it drives a lot more volume just on the platform. So -- you've also noted that it can potentially open up a new use case for business intelligence. Can you talk us through the vision sort of on the business intelligence side and sort of how what the potential expansion opportunity and sort of timeline on that use case? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 17, 2023 / 6:15PM, ZETA.N - Zeta Global Holdings Corp at Needham Technology and Media Conference

Question: Ryan MacDonald - Needham & Company - Analyst : Yes. Now, so you're clearly making a lot of organic investments in the business, but you do tend to supplement with some M&A when there's opportunities. And so a question we got off recently from the Q1 as well as just on this acquisition of what counts. So can you just talk about what it adds to the Zeta platform?

Question: Ryan MacDonald - Needham & Company - Analyst : Moving on to Zeta 2025, you've made -- you've laid out those targets last year, made really marked progress and been ahead of schedule on pretty much across the board on that. But as you think about your investment strategy moving forward, given sort of you're ahead of schedule, what flexibility does that give you to make incremental investments in the near term that may be, especially on the margins side, maybe like what gets you back more in line with those 2020 targets on the 20% EBITDA margins?

Question: Ryan MacDonald - Needham & Company - Analyst : I better stop. We got about eight minutes. If there's questions in the audience, we can touch on some of those. If not, I can keep going. Good? Okay. In terms of the -- when you think about the components of getting to the topline targets. I think question is coming back to sort of the revenue mix on direct platform revenue. Do you need to hit -- do you feel like you need to hit 80% on the direct platform mix to be able to achieve those targets on revenue and adjusted EBITDA?

Question: Ryan MacDonald - Needham & Company - Analyst : And as you continue to progress towards those targets, you've talked a lot about sort of goals for new logo additions through '25 ARPU expansion and what some of the components that might actually drive that upside, being channel expansion being one of them. But the use case expansion has been -- is sort of not included in those targets. I'm curious, how much of a priority is sort of continued use case expansion for you internally? And are you seeing any additional traction on getting those multiple use cases?

Question: Ryan MacDonald - Needham & Company - Analyst : And maybe as you think about clarifying, on like -- on the re-occurring revenue stream. A question we get a lot is the ad market has been rough for last six, 12 months. But you really haven't been negatively impacted about that. Can you talk about how you're contracting with your customers when you have a little bit better visibility in there? And maybe how you go about on the forecasting that business to remain conservative in your expectations?

Question: Ryan MacDonald - Needham & Company - Analyst : Well, it's amazing consistency. And then lastly, just wanted to touch on maybe some of the ancillary opportunities. You know, in the past, you've talked about B2B as an attractive channel, not really built into Zeta 2025, but something you guys have worked on. Any updates on that business and how you see the opportunity evolving? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 17, 2023 / 6:15PM, ZETA.N - Zeta Global Holdings Corp at Needham Technology and Media Conference

Question: Ryan MacDonald - Needham & Company - Analyst : The B2B wants to contact me whatever channel the PGA Championship is on this week, and that's where you can get the best conversion right there. Look, that's all we have, we have about a minute left. But I wanted to thank you, Chris, Scott for joining us today. Thanks, everyone, in the room for participating and have a great rest of the conference.