Zeta Global Holdings Corp at William Blair Growth Stock Conference Transcript

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

Question: Arjun Bhatia - William Blair & Company - Analyst : Awesome. So, just a couple of quick disclosures. You can find our disclosures at www.williamblair.com. So please go there if you need to take a look at those. But, Scott, why don't we jump in? For those in the room that may be unfamiliar, just maybe give us a quick overview of Zeta: what you guys do, the problems you solve for your customers.

Question: Arjun Bhatia - William Blair & Company - Analyst : Yes. No, that's very helpful. I think that's a great overview. Obviously, you spent a lot of time talking about data. We know that's a big part of the draw for customers is that you collected all this data, you put it together, so that they can actually use it to grow, acquire, and retain customers, as you said. One question I get from investors a lot is how much of that data asset that you've built is proprietary versus what is coming from either partners or other. So, is there any way to quantify that? And maybe, you know, a part of that question is also how proprietary is it and how difficult is it for someone else to replicate this? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 06, 2022 / 6:20PM, ZETA.N - Zeta Global Holdings Corp at William Blair Growth Stock Conference

Question: Arjun Bhatia - William Blair & Company - Analyst : Got it. So, you sit at kind of this intersection of MarTech and AdTech. You do have advertising channels as a part of your platform. We all know -- I think there's been a lot of changes in the advertising ecosystem over the last couple of years with IDFA, with third-party cookies. What does that mean for Zeta's business? What does that mean for your data? And how do these changes impact your position in the market?

Question: Arjun Bhatia - William Blair & Company - Analyst : Interesting. Let's talk about, actually, the competitive environment a little bit. You talked about some of the tailwinds that you're seeing. But how have your win rates trended against your competitors? Who do you tend to see in deals more often? And what is it that you're improving on that out in the market today?

Question: Arjun Bhatia - William Blair & Company - Analyst : All right. Awesome. Let's maybe switch gears a little bit. Just since you came public last year, I think go-to market changes were big part of the evolution of the business that took place during that time. Just maybe walk through some of the changes that you've made since the IPO to the go-to-market motion, how that's impacted your ability to sell, to grow, to add customers to improve your net retention rates. Just give us an overview of what's changed in the last nine months or so since you've been public.

Question: Arjun Bhatia - William Blair & Company - Analyst : And so, as you as you think about how the next few quarters and your next few years play out in terms of growth, as you make these sales investments, do you expect your growth algorithm to lean one way towards expansions or new, or is there a balance that we should expect to play out? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 06, 2022 / 6:20PM, ZETA.N - Zeta Global Holdings Corp at William Blair Growth Stock Conference

Question: Arjun Bhatia - William Blair & Company - Analyst : Okay. And then just sticking to go-to market a little bit. What are your sales folks hearing out in the market today? I know it's -- there's obviously a lot of macro uncertainty out there, there's inflation, there's more rising interest rates. What is your sales force telling you about what customers are saying? How is the demand environment changing? Are you seeing anything come through your pipeline or come through demand that's suggesting there is a slowdown or something coming?

Question: Arjun Bhatia - William Blair & Company - Analyst : Yes. It seems like there's certainly sufficient tailwinds to overcome a lot of the uncertainty that's out there. But if there were budgetary pressures or if there are -- if there is a slowdown that comes, how do you kind of think about stress testing the business? What might happen to growth rates? Because I think a part of your model is recurring. And then there is a part that's also consumption based, utilization based. What happens to that part that's consumption, utilization based, if there is a slowdown in advertising, how do you think about what the downside may be if there is a slowdown?

Question: Arjun Bhatia - William Blair & Company - Analyst : Okay. Let's talk about your Zeta 2025 vision, which you hinted at earlier. But you did announce financial targets for 2025. I think it was $1 billion in revenue by 2025 and 20% adjusted EBITDA margins. So, we are looking at somewhat of a balanced growth and margin profile. How do you just think about, high level, the key drivers that get you to those 2025 targets? And maybe what gives you the confidence? Is it new products? Is it the go-to-market motion that we talked about? How would you lay out the pathway to $1 billion in revenue?

Question: Arjun Bhatia - William Blair & Company - Analyst : Does -- in the interim, obviously, I think there's been a sentiment change in the market a little bit where investors do want to see more efficiency. They want to see more profitability. Does your balance between growth and profitability change between now and 2025 -- how you're operating the business and managing to certain metrics around -- whether its sales hiring or ROI on some of the investments you're making?

Question: Arjun Bhatia - William Blair & Company - Analyst : Okay. You talked a little bit earlier about your enterprise customers. I think you classify that as $100,000-plus in annual spend. Give us a sense for where those customers are coming from. Because we've seen those customers expand with Zeta. But we've also seen new customers being added to the group. Is that a typical landing point for some of the new customers that are coming onto Zeta? Is that -- are those customers have been around for a while and are expanding into that $100,000-plus cohort -- where is that enterprise traction coming from?

Question: Arjun Bhatia - William Blair & Company - Analyst : And that's a recent launch. That's not something that's been around for --

Question: Arjun Bhatia - William Blair & Company - Analyst : Talk about M&A a little bit as a part of your strategy. I know it's been a part of your platform building approach over the last, I'll say, decade-plus. And you talked about a couple recent acquisitions that you made with ArcaMax and Apptness as well. What role does M&A play in your growth strategy and your product development roadmap over the next couple of years? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 06, 2022 / 6:20PM, ZETA.N - Zeta Global Holdings Corp at William Blair Growth Stock Conference

Question: Arjun Bhatia - William Blair & Company - Analyst : Okay. Let's -- I wanted to touch on your net retention rate. Because it has improved over the last year or so. I think you're at 113%. It used to be a low 100s%. What has driven that uplift? And where is the -- what are the primary drivers of expansion that you're seeing in the business, whether it's new channels or anything else that you want to point out that are key drivers there?

Question: Arjun Bhatia - William Blair & Company - Analyst : Are there any channels that come to mind as those where you've seen a lot more traction recently? Whether it's, I don't know, social or CTV, what are the key growth channels that you're seeing customers adopt incrementally?

Question: Arjun Bhatia - William Blair & Company - Analyst : In the last minute or so that we have left here, I think you kind of touched on it right there. But you have kind of two parts of your business is the direct platform and then there's the integrated platform. What is the difference between those two? And maybe what are the economic differences or Zeta's model, as well, between those two aspects of the business?

Question: Arjun Bhatia - William Blair & Company - Analyst : Which means higher margins.

Question: Arjun Bhatia - William Blair & Company - Analyst : All right, perfect. Well, that's all the time we have. Scott, thank you for joining us. That was a pleasure. For those that are in person, we will have the breakout in [Jenny A.], which is upstairs.