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Zeta (ZETA) Q4 FY25 earnings call: guidance and Q&A

Earnings call· Dec 2025 (Q4 FY25)· Information Technology· Feb 24, 2026

Source: earnings call transcript

Executive summary

Zeta Q4 FY25 — 18th Consecutive Beat & Raise Driven by AI Leadership and One Zeta Strategy

Zeta delivered another strong quarter, extending its beat-and-raise streak, fueled by its AI-driven platform and successful One Zeta strategy. The company is seeing significant customer expansion and record net revenue retention, with its Athena AI agent on track for general availability. Management raised its 2026 revenue and profit guidance, signaling continued confidence in its market share gains and operating leverage.

Highlights

5

  • 18th consecutive beat and raise quarter, with Q4 revenue of $395 million, up 28% YoY ex-acquisition and political candidate.

  • Adjusted EBITDA grew 35% YoY to $95.1 million, expanding margins by over 200 bps for the full year.

  • Net revenue retention hit a record high of 120% in 2025, up from 114% in 2024, indicating strong customer expansion.

  • Super-scaled customer count (>$1M annual spend) grew 24% YoY to 184, now representing nearly 90% of total revenue.

  • Full-year 2025 free cash flow reached $165 million, up 78% YoY, with a margin of 12.6%.

Concerns

2

  • GAAP cost of revenue increased 50 basis points YoY to 40.4% in Q4, driven by strong growth in social and connected TV channels.

  • Working capital headwind of roughly 9 points in Q4 due to longer agency payment cycles.

Guidance & targets

CategoryTargetConfidence
Full-year 2026 Revenue
$1.755 billion
high materiality
High
Full-year 2026 Revenue Growth (ex-Marigold and political candidate)
21% year-over-year
high materiality
High
Q1 2026 Revenue
$370 million
high materiality
High
Q1 2026 Revenue Growth (ex-political candidate and Marigold)
22% growth
high materiality
High
Full-year 2026 Adjusted EBITDA
$391 million
high materiality
High
Full-year 2026 Adjusted EBITDA Margin
22.3%
high materiality
High
Q1 2026 Adjusted EBITDA
$61.5 million
medium materiality
High
Full-year 2026 Free Cash Flow
$231 million
high materiality
High
Full-year 2026 Free Cash Flow Conversion
59% of adjusted EBITDA
medium materiality
High
Full-year 2026 GAAP Net Income
positive
high materiality
High
Political Candidate Revenue Assumption
$15 million
medium materiality
High
Marigold Revenue Contribution
at least $190 million
medium materiality
High
Athena-driven Revenue
minimal contribution
low materiality
High
Net Dilution Target
3% to 4%
medium materiality
High
2028 Revenue Target
$2.3 billion
high materiality
High
2028 Adjusted EBITDA Target
$573 million
high materiality
High
2028 Free Cash Flow Target
$371 million
high materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Travel and Hospitality
Fastest-growing vertical in 2025.
—105%——
Advertising and Marketing
Fast-growing vertical in 2025.
—70%——
Automotive
Fast-growing vertical in 2025.
—60%——
Consumer Retail
Fast-growing vertical in 2025.
—46%——
Health Care
Area of new investment, showing strong momentum in 2025.
—over 20%——
Top 10 Verticals
9 out of top 10 verticals grew over 20% year-to-year in 2025, a first for the company as a public entity.
—over 20%——

ZETA operating KPIs by quarter

ZETA operating KPIs stated on its earnings calls, by fiscal quarter
KPIThis call Dec 2025 Q4 FY25 Mar 2026 Q1 FY26 Jun 2026 Q2 FY26Change vs prior quarter
Customers above an annual spend threshold Super-scaled customers
184 We ended the quarter with 184 super-scaled customer customers, up 24% year-over-year, well above our target of 4% to 8%. Source: earnings call transcript
189 Total super-scaled customer count grew to 189, up 19% year-over-year and an addition of 5 customers sequentially. Source: earnings call transcript
197 Super-scaled customers grew to 197, up 17% year-over-year, more than double our 4% to 8% 2028 model growth rate, driven by demand for Athena. Source: earnings call transcript
+4.2%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Orderbook & backlog

Zeta Live Pipeline $130 million Q4 FY25

200 distinct opportunities tied to Zeta Live event.

Zeta Live Business Closed $39 million YTD 2026

Business directly attributable to the Zeta Live event, closed year-to-date.

Product announcements

ProductTypeDetails
Athenalaunch

Deals & partnerships

Marigold Acquisition of Marigold to expand data, use cases, and value for customers, particularly in loyalty products.

Integration is progressing well. Actively engaging with Marigold's enterprise clients through a One Zeta lens to identify cross-sell opportunities. Seeing strong interest from Zeta customers in adopting Marigold's loyalty product.

OpenAI Strategic partnership to make OpenAI's technology foundational to Athena.

Management views large language models as foundational technologies. Zeta is also exploring other components of their business to help OpenAI, while OpenAI helps Zeta.

Risks & headwinds

Working Capital Headwind Q4 FY25

roughly 9 points

Mitigation:Not explicitly stated, but implies management is aware and managing through it.

What to watch in Q1 FY26

Athena General Availability

end of the first quarter
Current on track for general availability
Target generally available

Why it matters

Athena is expected to drive deeper platform adoption, greater utilization, and higher ROI, amplifying the One Zeta strategy and potentially contributing to incremental consumption revenue upside.

We are very encouraged by this early customer feedback and remain on track to make Athena generally available by the end of the first quarter.

Find out whether ZETA delivers this. Inve re-checks your case every morning.

Q&A highlights

Inquired about the number of Athena agents, their primary functions, monetization structure, and if Athena has influenced deals closed year-to-date.

David Steinberg explained that Insights and Adviser are the first two agents, driving significant customer benefit. Athena will be a single agent with evolving feature sets, not multiple agents. Early users report game-changing workflow and higher ROI. While not yet monetized, Athena has influenced deals, contributing to the $39 million closed from Zeta Live.

“The beauty of Athena is the ability to fly the entire 747 just by narrating and speaking to Athena who can automatically do it.”

asked by Terrell Tillman · answered by David Steinberg

2 min read 6 chapters

Detailed narrative

AI-Driven Growth and Athena Launch

Zeta's consistent performance is attributed to its long-term AI investments, which began 8 years ago and are now yielding significant results. The company's new super intelligent agent, Athena, introduced at Zeta Live and CES, is on track for general availability by the end of Q1. Early users report substantial time savings in marketing workflows and significantly improved return on investment, enhancing the Zeta Marketing Platform's capabilities.

OpenAI Partnership and SuperGraph Advantage

Zeta announced a strategic partnership with OpenAI, making its technology foundational to Athena. Management views large language models as essential infrastructure, similar to cloud services, with true differentiation stemming from proprietary data, tools, and workflows built on top. Zeta's SuperGraph, a deterministic identity and relationship graph covering over 245 million U.S. adults and 535 million globally with more than 1 trillion signals, provides a critical and widening data moat.

One Zeta Strategy and Customer Expansion

The 'One Zeta' strategy has matured into a repeatable sales model, evidenced by an 80% year-over-year increase in scaled customers utilizing more than one use case in Q4. The company has expanded its reach within the Fortune 100 (now 51 customers) and Fortune 500 (over 120 customers), tapping into a collective marketing spend exceeding $100 billion. Athena is expected to further streamline platform adoption and multi-use case expansion.

Marigold Acquisition Integration

The integration of the Marigold acquisition is progressing smoothly, with expectations for it to be accretive to free cash flow and adjusted EBITDA within the first year. Zeta is actively cross-selling to Marigold's enterprise clients, identifying opportunities to expand value and use cases. Concurrently, existing Zeta customers are showing strong interest in adopting Marigold's loyalty product, indicating successful synergy.

Evolution of Customer KPIs

Zeta is shifting its quarterly KPI reporting focus exclusively to super-scaled customers (those spending over $1 million annually) and their ARPU, starting in 2026. This cohort now accounts for nearly 90% of total revenue and over 90% of total revenue growth, reflecting the effectiveness of Zeta's land, expand, and extend sales motion and the increasing prominence of larger client relationships.

Capital Allocation and Share Repurchases

The company remains committed to returning capital to shareholders, having repurchased $35 million in shares in Q4 and $120 million for the full year 2025. An additional $25 million was spent on buybacks in early 2026, with $139 million remaining on the authorization. Management views share buybacks as the most effective use of capital at current valuation levels and plans to continue being an active buyer.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.