Cloud-based marketing technology company Zeta Global Holdings Corp. (ZETA) reported its first public results post listing on June 10. The company delivered solid second-quarter revenue backed by growth from both existing and new customers. However, the company reported a wider-than-expected quarterly loss. Shares were down 1.5% in pre-market trading at the time of writing.
Zeta’s software includes patented AI, proprietary data assets, and real-time omnichannel capabilities, which enable companies to acquire, grow, and retain customer relationships at a higher Return on Investment.
In the second quarter, the company reported a quarterly loss of $1.92 per share, much higher than the consensus estimate of $0.98 per share, and higher than the prior-year period’s loss of $0.58 per share.
On a positive note, revenue for the quarter grew 39% year-over-year to $106.89 million, significantly outpacing the Street’s estimate of $99.6 million. (See Zeta Global stock charts on TipRanks)
Zeta’s scaled customers, which contributed at least $100,000 to revenue over the last twelve months, increased to 343 from 333 in the year-ago period. Scaled customer average revenue per user (ARPU) also grew to over $299,000 from the prior-year quarter’s ARPU of $289,000.
David A. Steinberg, Co-founder, Chairman, and CEO of the company, said, “We are well-positioned to benefit from the disruptive pace of digital transformation, with brands seeking solutions that combine scale with precision to extract more value from their first-party data.”
Based on the company’s robust second-quarter results, with all key metrics showing significant growth, the company has raised its full-year 2021 outlook.
For the third quarter and full-year 2021, Zeta forecasts revenue to fall in the range of $108 – $111 million and $432 – $436 million, respectively.
In response to Zeta’s solid results, William Blair analyst Arjun Bhatia reiterated a Buy rating on the stock.
Noting the solid performance in its first quarter as a public company, Bhatia commented, “In addition to the revenue performance and outlook, there were several encouraging points about the business from the call including improving win rates, a positive mix shift to higher gross margin revenue, better-than-expected sales productivity, record net retention rates, and solid new business trends.”
Overall, the stock commands a Strong Buy consensus rating based on 6 Buys and 2 Holds. The average Zeta Global price target of $12.58 implies 113.6% upside potential to current levels. Shares have lost 33.8% since listing.
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