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The call conveyed strong, broad-based operational momentum: sizable top-line growth (50% YoY; 29% ex-acquisitions), improving profitability and cash generation, meaningful customer expansion (ARPU +21%, multi-use +50%), rapid early adoption of Athena (7x agentic interactions, 60% AI usage) and pipeline growth (+40% YoY). Near-term headwinds included a Q1 GAAP loss (improved but negative), an increase in cost of revenue (41%, +190 bps YoY) driven by initial agency/social mix, and a working capital headwind from agency payment cycles. Management emphasized Marigold integration progressing ahead of plan and maintained conservative guidance assumptions (minimal Athena revenue contribution baked in). On balance, the positives — recurring revenue strength, accelerating customer monetization, improved free cash flow conversion, product-led differentiation (Athena, SuperGraph) and expanding pipeline — materially outweigh the limited near-term margin/cash-cycle headwinds.
Zeta raised its 2026 outlook, increasing the revenue midpoint by $30 million to $1.785 billion (reported growth of 37%, or 22% ex‑Marigold and political revenue) and setting Q2 midpoint revenue at $420 million (up $4 million, +36% YoY or +21% ex‑Marigold/politicals); management assumes $15 million of political candidate revenue in 2026 ($7M Q3, $8M Q4) and is conservatively modeling Marigold at $47.5 million per quarter for the remainder of the year. Full‑year adjusted EBITDA midpoint was raised to $397 million (up $6 million), a 43% YoY increase at a 22.3% margin (+90 bps vs. 2025), with Q2 adjusted EBITDA now expected at $86.6 million (vs. prior $84.9M) and a 20.6% margin (+155 bps YoY). Free cash flow guidance increased to $235 million (from $231M), up 43% YoY and representing ~59% of adjusted EBITDA (Q1 FCF was $41.7M, 10.5% margin, 63% conversion); Zeta reiterated a 2026 GAAP EPS target of $0.02–$0.04 (Q1 GAAP loss $13.2M, $0.06 loss per share). Management pointed to Q1 strength that underpins the raise: Q1 revenue $396M (+50% reported, +29% ex‑Marigold), adjusted EBITDA $66.1M, 189 super‑scaled customers (+19% YoY) with $1.7M ARPU (+21% YoY), a sales pipeline up ~40% YoY and RPOs up $66M QoQ.
Delivered 19th consecutive beat-and-raise quarter; raised full-year 2026 revenue midpoint by $30M to $1.785B (37% reported growth; 22% growth excluding Marigold and political revenue). Q2 2026 midpoint revenue $420M (36% YoY; 21% ex Marigold/political).
Q1 revenue of $396M, up 50% year-over-year (29% YoY excluding Marigold), marking fourth straight quarter of revenue-growth acceleration excluding acquisitions and political candidate revenue; 4-year revenue CAGR of 30%.
Adjusted EBITDA of $66.1M in Q1, up 42% YoY (margin 16.7%); raised 2026 adjusted EBITDA midpoint to $397M (up $6M) implying a 22.3% margin (+90 bps vs 2025). Net cash provided by operating activities $49.7M (up 43% YoY); free cash flow $41.7M (up 48% YoY) representing a 10.5% margin and a 63% free cash flow conversion (improvement of 270 bps YoY).
Total super-scaled customers grew to 189, up 19% YoY (add 5 sequentially); super-scaled customer ARPU $1.7M, up 21% YoY; number of super-scaled customers using >1 use case up >50% YoY; customers using >3 channels up 40% YoY; net retention remained above target range (110%-115%).
Athena (generally available) drove a 7x increase in agentic interactions in first week and accounted for ~60% of AI usage on the platform; contributed materially to marquee enterprise and agency wins including a global apparel retailer (consolidated 4 vendors to Zeta) and drove large deals where incumbents were displaced.
Forward-looking sales pipeline up ~40% YoY, with discretionary industries (retail, advertising, travel, restaurants, furniture, resorts) up even more; ARV / deal sizes increasing and agencies signing longer-term committed contracts; RPOs increased ~$66M QoQ.
Proprietary Zeta SuperGraph identity & intelligence graph cited as key win driver (example: e-commerce pet retailer win); Forrester recognition as a leader and a reported 600% average return on marketing spend for customers; Fortune 100 telco expansion expected to drive an 18x increase in spend in 2026 vs 2025.
Marigold integration tracking ahead of expectations with revenue better than anticipated; cross-selling and data cloud integration progressing; repurchased 1.5M shares for $25.7M with ~$138M remaining authorization; dilution improved (excluding Marigold, first-quarter dilution 0.1%).
Built internal tooling (Spade) for automated code generation and model selection driving ~75% automated new code creation and reported pod productivity gains of 400%-600% YoY; majority of inference runs on Zeta infrastructure (management states minimal token spend), supporting margin expansion.
Greetings, and welcome to the Zeta Q1 '26 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Matt Pfau. You may begin.
Thank you, operator. Hello, everyone, and thank you for joining us for Zeta's First Quarter 2026 Conference Call. Today's presentation and earnings release are available on Zeta's Investor Relations website at investors.zetaglobal.com, where you will also find links to our SEC filings, along with other information about Zeta. Joining me on the call today are David Steinberg, Zeta's Co-Founder, Chairman and Chief Executive Officer; and Chris Greiner, Zeta's Chief Financial Officer. Before we begin, I'd like to remind everyone that statements made on this call as well as in the presentation and earnings release contain forward-looking statements regarding our financial outlook, business plans and objectives and other future events and developments, including statements about the market potential of our products, potential competition, revenues of our products and our goals and strategies. These statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected. These risks and uncertainties include those described in the company's earnings release and other filings with the SEC and speak only as of today's date. In addition, our discussion today will include references to certain supplemental non-GAAP financial measures, which should be considered in addition to, and not as a substitute for, our GAAP results.
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