Advertising and marketing company Zeta Global (NYSE:ZETA) reported Q4 FY2023 results beating Wall Street analysts' expectations, with revenue up 20.1% year on year to $210.3 million. The company expects next quarter's revenue to be around $187 million, in line with analysts' estimates. It made a GAAP loss of $0.22 per share, down from its profit of $0.08 per share in the same quarter last year.
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Zeta (ZETA) Q4 FY2023 Highlights:
- Revenue: $210.3 million vs analyst estimates of $207.5 million (1.3% beat)
- EPS: -$0.22 vs analyst expectations of -$0.16 (35.1% miss)
- Revenue Guidance for Q1 2024 is $187 million at the midpoint, roughly in line with what analysts were expecting
- Management's revenue guidance for the upcoming financial year 2024 is $875 million at the midpoint, beating analyst estimates by 2.9% and implying 20.1% growth (vs 23.5% in FY2023)
- Free Cash Flow of $18.22 million, up 36.4% from the previous quarter
- Customers: 452 customers paying more than $100,000 annually
- Gross Margin (GAAP): 59.8%, down from 62.3% in the same quarter last year
- Market Capitalization: $2.21 billion
Co-founded by former Apple (NASDAQ:AAPL) CEO John Scully, Zeta Global (NYSE:ZETA) provides software and data analytics tools that help companies market their products to billions of customers.
Advertising SoftwareThe digital advertising market is large, growing, and becoming more diverse, both in terms of audiences and media. As a result, there is a growing need for software that enables advertisers to use data to automate and optimize ad placements.
Sales GrowthAs you can see below, Zeta's revenue growth has been strong over the last two years, growing from $134.8 million in Q4 FY2021 to $210.3 million this quarter.
This quarter, Zeta's quarterly revenue was once again up a very solid 20.1% year on year. On top of that, its revenue increased $21.34 million quarter on quarter, a very strong improvement from the $17.17 million increase in Q3 2023. This is a sign of re-acceleration of growth and great to see.
Next quarter's guidance suggests that Zeta is expecting revenue to grow 18.7% year on year to $187 million, slowing down from the 24.8% year-on-year increase it recorded in the same quarter last year. For the upcoming financial year, management expects revenue to be $875 million at the midpoint, growing 20.1% year on year compared to the 23.3% increase in FY2023.
Large Customers Growth This quarter, Zeta reported 452 enterprise customers paying more than $100,000 annually, an increase of 12 from the previous quarter. That's a bit fewer contract wins than last quarter but about the same as what we've typically seen over the last year, suggesting that the company still has decent sales momentum.
Key Takeaways from Zeta's Q4 ResultsIt was good to see Zeta's full-year revenue forecast beat analysts' expectations. We were also glad next year's revenue guidance is strong. On the other hand, its gross margin fell and its new large contract wins shrunk. Zooming out, we think this was still a decent, albeit mixed, quarter, showing that the company is staying on track. The stock is flat after reporting and currently trades at $10.76 per share.
