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    ZETA
    Earnings call· Jun 2026(Q2 FY26)

    Zeta Global Holdings Q2 FY26 earnings call ZETA

    Aug 4, 2026 Source

    Executive summary

    Zeta Global Q2 FY26 — 20th Consecutive Beat & Raise, AI Infrastructure Platform

    Zeta Global delivered its 20th consecutive beat and raise quarter, showcasing accelerated revenue growth and expanding profitability. The company is transforming into an intelligent AI infrastructure platform, leveraging strategic partnerships with OpenAI, Palantir, and Snowflake to expand market opportunities beyond traditional marketing. Rapid AI adoption is translating into higher customer engagement and net revenue retention, driving increased full-year guidance and strong operating leverage.

    Highlights

    6

    • Revenue grew 44% year-over-year to $443 million, beating guidance by $23 million.

    • Adjusted EBITDA increased 56% year-over-year to $92 million, with margin expanding 170 basis points to 20.7%.

    • Free cash flow surged 73% year-over-year to $58 million, achieving a 13.1% margin and 63% conversion.

    • GAAP net income turned positive at $8.2 million, resulting in GAAP EPS of $0.03.

    • Super-scaled customer count grew 17% year-over-year to 197, more than double the 2028 model growth rate, driven by Athena demand.

    • Sales pipeline increased over 60% year-over-year, with pipeline creation per seller up over 100% year-over-year.

    Guidance & targets

    12
    CategoryTargetConfidence
    Full Year 2026 Revenue
    $1.818 billion
    high materiality
    High
    Full Year 2026 Adjusted EBITDA
    $405 million
    high materiality
    High
    Full Year 2026 Free Cash Flow
    $255 million
    high materiality
    High
    Full Year 2026 GAAP EPS
    $0.10
    high materiality
    High
    Q3 2026 Revenue
    $471 million
    high materiality
    High
    Q3 2026 Adjusted EBITDA
    $115 million
    high materiality
    High
    Q3 2026 Political Candidate Revenue
    $7 million
    medium materiality
    Medium
    Q4 2026 Political Candidate Revenue
    $8 million
    medium materiality
    Medium
    Free Cash Flow Conversion
    65%
    medium materiality
    High
    Super-scaled Customer Growth Rate
    4% to 8%
    medium materiality
    High
    Super-scaled ARPU Growth Rate
    12% to 16%
    medium materiality
    High
    Net Dilution
    3% to 4%
    low materiality
    High

    Operational metrics

    36
    Revenue
    $443 millionup 44% YoY
    Q2 FY26

    Beat guidance by $23 million or 5%.

    Adjusted EBITDA
    $92 millionup 56% YoY
    Q2 FY26

    $5 million better than the midpoint of guidance.

    Net income
    $8.2 millionvs net loss of $12.8 million in Q2 FY25
    Q2 FY26

    Positive GAAP net income.

    EPS (GAAP)
    $0.03
    Q2 FY26

    Resulting from positive GAAP net income.

    Super-scaled customer count
    197up 17% YoY
    Q2 FY26

    More than double our 4% to 8% 2028 model growth rate, driven by demand for Athena.

    Super-scaled ARPU
    $1.8 millionup 17% YoY
    Q2 FY26

    Above our 12% to 16% long-term 2028 model.

    Athena voice user interaction rate
    500% highervs non-Athena users
    last 60 days

    Reinforcing thesis that natural language will become primary interface and drive higher utilization.

    New code generated by AI
    90%up from 75% in Q1 FY26
    Q2 FY26

    Automated new code generation, helping teams innovate faster.

    Multi-use case customers
    up 90%YoY
    Q2 FY26

    Driven by One Zeta sales initiative.

    Customers using 5+ channels
    up 50%YoY
    Q2 FY26

    Driven by One Zeta sales initiative.

    Cross-sell and upsell deals won
    up 43%
    Q2 FY26

    Driven by One Zeta sales initiative.

    Total sales pipeline
    up over 60%YoY
    end of Q2 FY26

    Up over $100 million compared to 90 days ago.

    Pipeline creation per seller
    up more than 100%YoY
    Q2 FY26

    Driven by One Zeta and Marigold cross-selling.

    Average contract value (deals won)
    up more than 40%YoY
    Q2 FY26

    Compared to last year.

    Overall deal sizes (pipeline)
    up more than 25%YoY
    Q2 FY26

    Driven by higher attachment rates across channels and use cases.

    Quota-carrying headcount
    198up 11% YoY
    Q2 FY26

    Increased by just one versus last quarter.

    R&D expense to revenue ratio
    improved 30 bpsYoY
    Q2 FY26

    Driven by Marigold restructuring actions and integration savings.

    G&A expense to revenue ratio
    improved 180 bpsYoY
    Q2 FY26

    Driven by Marigold restructuring actions and integration savings.

    Sales and marketing expense to revenue ratio
    improved 250 bpsYoY
    Q2 FY26

    Driven by Marigold restructuring actions and integration savings.

    Cost of revenue
    41%10 bps better sequentially and 300 bps higher YoY
    Q2 FY26

    Reflecting strong social channel adoption by agencies.

    Share buyback executed
    $29.9 million
    Q2 FY26

    Prioritized using cash for repurchases.

    Share buyback executed
    $74.6 million
    YTD as of July 30

    Year-to-date spend on share repurchases.

    Remaining share repurchase authorization
    $89.4 million
    as of July 30

    Remaining authorization on share repurchase program.

    Dilution
    0.1%
    Q2 FY26

    Dilution in the quarter.

    Credit facility
    $1 billion
    Q2 FY26

    New credit facility closed, providing capital flexibility for M&A, share repurchases, and disciplined investment.

    Super-scaled customers AI adoption
    >40%
    since Athena launch (130 days ago)

    More than 40% of super-scaled customers are monthly active users of Athena.

    AI-related revenue contribution
    ~70%
    Q2 FY26

    The 20% of total customers (including pilots, proof-of-concepts, and scaled customers) who have comprehensively adopted AI tools account for roughly 70% of revenue.

    AI-related revenue contribution (super-scaled)
    75%
    Q2 FY26

    Among super-scaled customers, the 50% who have comprehensively adopted AI tools drive 75% of super-scaled customer revenue.

    AI super users growth rate
    4x fastervs 80% of customers still early in AI adoption
    Q2 FY26

    AI super users grew 4x faster than customers early in their AI adoption journey.

    Super-scaled customer relationship duration
    56 monthsup from 48 months a couple of years ago
    Q2 FY26

    Based on data going back to 2018.

    Net revenue retention (AI adopters)
    400 bps abovevs overall Zeta
    YTD

    Customers who are most comprehensively adopted AI tools have a year-to-date net revenue retention that is 400 basis points above overall Zeta, and more than 20 percentage points above customers still ramping in their adoption of AI.

    Agency business revenue mix
    20%
    Q2 FY26

    Approximately 20% of revenue.

    Direct-to-enterprise revenue mix
    80%
    Q2 FY26

    Approximately 80% of revenue.

    Direct platform revenue mix
    72%sequential step down from 75%
    Q2 FY26

    Driven by new sales and expansions with agencies, particularly strong social channel adoption.

    Internal AI cost
    well under 1%
    Q2 FY26

    Total AI cost for the company internally.

    AI unit costs
    down almost 40%
    Q2 FY26

    Unit costs for AI are down due to negotiated relationships.

    Industry KPIs

    8
    MetricValueDetails
    Revenue growth$443 millionUSD
    Bookings billings—
    Customer account count197customers
    Large deal new logo metricsup more than 40%%
    Multi product platform attachup 90%%
    Operating FCF margin rule of 4020.7%%
    Ai product adoption monetization>40%%
    Net revenue net dollar retention400 bps above overall Zetabps

    Product announcements

    2
    ProductTypeDetails
    Zeta Livemilestone
    Athena for agencieslaunch

    Deals & partnerships

    4
    OpenAICollaboration to enhance Athena's capabilities and create new commercial opportunities.

    OpenAI powers the voice component of Athena. Zeta has a ubiquitous enterprise agreement with OpenAI, giving all global employees access to OpenAI's products with baked-in usage costs.

    SnowflakeDeepened existing partnership, reinforcing Zeta's role in the enterprise data ecosystem.

    Over 100 shared customers, connecting data environments with intelligence and activation.

    PalantirSignificantly expands Zeta's enterprise opportunity. Palantir provides ontology, governance, and enterprise AI infrastructure, while Zeta contributes proprietary customer intelligence, data, identity, decisioning, and activation.

    The Palantir relationship is seen as a major entry point into large advertisers, with Zeta's data cloud now built on Foundry.

    GapSelected Zeta to architect its next-generation marketing stack with Athena at the center, unifying decision-making across its iconic brands.multiyear agreement

    Zeta is helping Gap remove silos, build a more intelligent marketing engine, and has become Gap's system of record, displacing Salesforce and three other vendors.

    What to watch in Q3 FY26

    5

    AI-specific revenue contribution from partnerships

    next quarter
    Currentnot baked into current guidance
    Targetmeaningful revenue contribution

    Why it matters

    Management stated that revenue from OpenAI and Palantir partnerships is not yet included in guidance, implying potential upside.

    I will tell you that if I put the numbers of the deals we're working to into our pipeline, it would artificially skew our pipeline up too much at this point. it is that big an opportunity... as Chris said, is not baked into the numbers just yet.

    Q&A highlights

    8

    How will One Zeta and Athena continue to drive multi-use case adoption and channel usage, and what's the outlook for ARPU growth?

    Management expects continued runway for multi-use case adoption (up 90% YoY) and 5+ channel usage (up 50% YoY), with cross-sell/upsell deals up 43%. Athena is seen as a powerful tool for cross-selling, contributing to ARPU growth above the long-term model.

    “And we're seeing Athena really just the tip of the spear it's just getting started. It's one of the single most powerful tools we've ever had for cross-selling against use cases and channels, Jason.”

    asked by Jason Kreyer · answered by David Steinberg

    2 min read5 chapters

    Detailed Narrative

    01

    Transformation to Intelligent AI Infrastructure

    Zeta is evolving beyond a marketing technology company to an intelligent AI infrastructure platform. This platform combines proprietary data, AI (Athena), workflow automation, and activation into a single operating system. The foundation is a data cloud built on proprietary data covering over 535 million individuals globally and trillions of signals. This transformation is accelerated by strategic partnerships and the expansion into new use cases like Zeta Business Intelligence (ZBI).

    02

    Athena's Impact and OpenAI Partnership

    Athena, powered by OpenAI for voice interactions, is fundamentally changing how customers interact with the Zeta platform. It enables natural language queries, allowing customers to focus on outcomes rather than navigating dashboards. This has led to 500% higher interaction rates for voice users and 90% of new code generation being automated internally, significantly accelerating product development and platform enhancements. The OpenAI partnership validates Zeta's AI strategy and creates new commercial opportunities.

    03

    Strategic Partnerships and Market Expansion

    Deepened partnerships with Snowflake (over 100 shared customers) and Palantir (data cloud fully integrated with Foundry) are significantly expanding Zeta's enterprise opportunity. These collaborations enhance data governance, provide enterprise AI infrastructure, and enable Zeta to act on data, not just store and analyze it. These partnerships are driving new commercial opportunities, including multiple joint sales agreements with Palantir, and are not yet fully reflected in current guidance.

    04

    ZBI Use Cases and Rapid Productization

    Zeta Business Intelligence (ZBI) is emerging as a fourth use case, helping enterprises predict and act on business insights in real-time, moving beyond static dashboards. Examples include optimizing sports broadcasting rights negotiations and quantifying brand value for retail partners. The ability to auto-generate 90% of new code allows for rapid productization of client requests, building out vertical-specific solutions within ZBI and creating a flywheel effect for incremental revenue and deeper client engagement.

    05

    Sales Productivity and Market Position

    The company is experiencing significant improvements in sales productivity, with pipeline creation per seller up over 100% year-over-year and average contract values up over 40%. This is driven by the 'One Zeta' initiative, Marigold cross-selling, and a hyper-focus on vertical expertise. Zeta is well-positioned to capitalize on a marketing cloud replacement cycle, offering a natively integrated data and AI platform that provides superior return on marketing spend compared to competitors, as evidenced by a major win with Gap.

    AI-generated summary of the company’s earnings call. Not investment advice.