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Zeta Global's Q3 revenues surged 46.1% y/y to $492.7M, while adjusted earnings jumped 58.3% to 38 cents.
Athena adoption topped 50% of super-scaled customers, while customer ARPU increased 22% year over year.
ZETA raised its 2026 revenue outlook to $1.853-$1.857B, with adjusted EBITDA projected above $414M.
Zeta Global (ZETA - Free Report) reported impressive third-quarter 2026 results, driven by accelerating AI adoption, higher platform usage and expanding customer relationships. Adjusted earnings of 38 cents per share surpassed the Zacks Consensus Estimate of 28 cents by 35.7% and increased 58.3% year over year.
Zeta Global Holdings Corp. Price, Consensus and EPS Surprise
The company’s third-quarter 2025 actual figures reflect its revised definition of non-GAAP net income, which excludes amortization of acquired intangible assets.
Revenues surged 46.1% year over year to $492.7 million, beating the consensus estimate of $470.5 million by 4.7%. Growth, excluding Marigold and political candidate revenues, accelerated to 30% from 28% in the preceding quarter. Super-scaled customers rose 18%, while average revenue per user (ARPU) increased 22%.
However, investor sentiment remained largely unchanged despite the company’s better-than-expected results and raised revenue outlook for the fourth quarter & full year 2026, with ZETA shares showing little movement since the earnings release on Nov. 9.
For the fourth quarter of 2026, Zeta expects revenues between $521 million and $525 million, implying year-over-year growth of 32-33%. The midpoint increased $15 million from its previous outlook. The Zacks Consensus Estimate for revenues is pegged at $509.29 million for the same period.
Management raised its 2026 revenue guidance to $1.853-$1.857 billion from a previous midpoint of $1.818 billion. The revised outlook indicates growth of 42% or 27% excluding M&A and political candidate revenues. The Zacks Consensus Estimate for revenues is pegged at $1.82 billion for the same period.
Over the past year, CRAI's shares rose 83.6% against the industry's 20.9% decline. The Zacks S&P 500 composite gained 9.4% during that period.
Image Source: Zacks Investment Research
ZETA Benefits From Accelerating Revenue Growth
Third-quarter revenues rose to $337.2 million from $281.5 million in the year-ago period. Excluding Marigold and political candidate revenues, the company generated about $437 million, marking its 22nd consecutive quarter of more than 20% growth on a comparable basis.
Marigold's Enterprise Business contributed $48 million, while political candidate revenues totaled $7.4 million. Seven of Zeta's top 10 industry verticals registered more than 20% trailing-12-month growth. Consumer and retail, travel and hospitality, and automotive collectively generated growth exceeding 40%.
Demand remained strong, with requests for proposals increasing more than 100% year over year. Pipeline creation per seller improved 32%, while average pipeline per seller increased 19%. Quota-carrying headcount rose 11% to 203, indicating improving sales productivity.
Zeta's Customer Metrics Exceed Long-Term Targets
The number of super-scaled customers, generating at least $1 million in trailing-12-month revenues, reached 212 compared with 180 a year earlier and 197 in the preceding quarter. This marked eight consecutive quarters of sequential customer expansion.
Super-scaled customer ARPU reached $2 million compared with $1.6 million a year ago and $1.8 million in the preceding quarter. Customer-count and ARPU growth exceeded the company's 2028 modeled annual growth ranges of 4-8% and 12-16%, respectively.
Cross-sell and upsell deals won increased 38% year over year. Super-scaled customers using all three marketing use cases grew more than 60%, while those employing at least five channels also increased more than 60%.
More than 50% of super-scaled customers became monthly active Athena users, up from slightly more than 40% in the second quarter. Across the broader customer base, Athena adopters accounted for more than 70% of revenues.
The top 25 Athena users generated revenue growth exceeding 70%. Year-to-date net revenue retention among Athena adopters was more than 500 basis points higher than Zeta's overall retention rate, which exceeded its long-term model's upper limit of 115%.
Customer campaign development activity more than doubled sequentially, while time spent on the platform increased more than 50%. Management expects AthenaOS to become generally available in the first quarter of 2027, expanding the platform's capabilities beyond marketing into enterprise intelligence.
ZETA Delivers Profitability and Margin Improvements
Adjusted EBITDA increased 55.1% year over year to $121 million. Adjusted EBITDA margin expanded 140 basis points to 24.6%, reflecting operating leverage and improving sales productivity.
Total operating expenses reached $446.7 million compared with $328.4 million a year ago. Cost of revenues was $195.6 million, while selling and marketing, general and administrative, and research and development expenses were $109.4 million, $75 million and $41.5 million, respectively.
GAAP net income reached $38.3 million compared with a net loss of $3.6 million a year ago. GAAP earnings improved to 14 cents per share from a loss of 2 cents.
Zeta Generates Stronger Cash Flow and Liquidity
Operating cash flow increased 57.7% year over year to $91.3 million. Free cash flow advanced 73% to $81.5 million, while free cash flow margin expanded 250 basis points to 16.5%.
Zeta ended the quarter with cash and cash equivalents of $340.1 million and long-term borrowings of $243.9 million.
The company repurchased approximately 1.3 million shares for $29.9 million during the quarter. Year-to-date repurchases through Nov. 9 totaled $101.4 million, with $62.6 million remaining under its existing authorization.
Zeta Raises its 2026 Earnings and Cash Flow Guidance
For the fourth quarter of 2026, adjusted EBITDA is projected between $135.2 million and $136.3 million, representing year-over-year growth of 42-43%. The corresponding margin is expected to be between 25.7% and 26.2%.
For 2026, adjusted EBITDA is now expected to be between $414.1 million and $415.2 million from the previously guided range of $404.1-$406.3 million. Free cash flow guidance increased to $270.6-$271.6 million from $254.8-255.8 million, while GAAP earnings guidance rose to 22-24 cents per share from 9-11 cents per share.
Trane Technologies plc (TT - Free Report) reported better-than-expected third-quarter 2026 results. TT’s earnings per share of $4.86 outpaced the Zacks Consensus Estimate by 2.5% and increased 25.3% from the year-ago quarter. TT’s revenues of $6.76 billion surpassed the consensus estimate by 5% and improved 17.7% year over year.
Waste Connections, Inc. (WCN - Free Report) reported impressive third-quarter 2026 results. WCN’s adjusted earnings of $1.58 per share outpaced the consensus mark by 4% and rose 9.7% from the year-ago quarter. WCN’s total revenues of $2.64 billion surpassed the consensus mark by 1.2% and increased 7.3% year over year.
Equifax (EFX - Free Report) reported better-than-expected third-quarter 2026 results. EFX’s adjusted earnings per share of $2.26 outpaced the Zacks Consensus Estimate by 3.2% and increased 10.8% from the year-ago quarter. EFX’s revenues of $1.69 billion marginally surpassed the consensus estimate and improved 9.6% year over year.
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ZETA Q3 Earnings & Revenues Beat Estimates, Shares Barely Move
Key Takeaways
Zeta Global (ZETA - Free Report) reported impressive third-quarter 2026 results, driven by accelerating AI adoption, higher platform usage and expanding customer relationships. Adjusted earnings of 38 cents per share surpassed the Zacks Consensus Estimate of 28 cents by 35.7% and increased 58.3% year over year.
Zeta Global Holdings Corp. Price, Consensus and EPS Surprise
Zeta Global Holdings Corp. price-consensus-eps-surprise-chart | Zeta Global Holdings Corp. Quote
The company’s third-quarter 2025 actual figures reflect its revised definition of non-GAAP net income, which excludes amortization of acquired intangible assets.
Revenues surged 46.1% year over year to $492.7 million, beating the consensus estimate of $470.5 million by 4.7%. Growth, excluding Marigold and political candidate revenues, accelerated to 30% from 28% in the preceding quarter. Super-scaled customers rose 18%, while average revenue per user (ARPU) increased 22%.
However, investor sentiment remained largely unchanged despite the company’s better-than-expected results and raised revenue outlook for the fourth quarter & full year 2026, with ZETA shares showing little movement since the earnings release on Nov. 9.
For the fourth quarter of 2026, Zeta expects revenues between $521 million and $525 million, implying year-over-year growth of 32-33%. The midpoint increased $15 million from its previous outlook. The Zacks Consensus Estimate for revenues is pegged at $509.29 million for the same period.
Management raised its 2026 revenue guidance to $1.853-$1.857 billion from a previous midpoint of $1.818 billion. The revised outlook indicates growth of 42% or 27% excluding M&A and political candidate revenues. The Zacks Consensus Estimate for revenues is pegged at $1.82 billion for the same period.
Over the past year, CRAI's shares rose 83.6% against the industry's 20.9% decline. The Zacks S&P 500 composite gained 9.4% during that period.
Image Source: Zacks Investment Research
ZETA Benefits From Accelerating Revenue Growth
Third-quarter revenues rose to $337.2 million from $281.5 million in the year-ago period. Excluding Marigold and political candidate revenues, the company generated about $437 million, marking its 22nd consecutive quarter of more than 20% growth on a comparable basis.
Marigold's Enterprise Business contributed $48 million, while political candidate revenues totaled $7.4 million. Seven of Zeta's top 10 industry verticals registered more than 20% trailing-12-month growth. Consumer and retail, travel and hospitality, and automotive collectively generated growth exceeding 40%.
Demand remained strong, with requests for proposals increasing more than 100% year over year. Pipeline creation per seller improved 32%, while average pipeline per seller increased 19%. Quota-carrying headcount rose 11% to 203, indicating improving sales productivity.
Zeta's Customer Metrics Exceed Long-Term Targets
The number of super-scaled customers, generating at least $1 million in trailing-12-month revenues, reached 212 compared with 180 a year earlier and 197 in the preceding quarter. This marked eight consecutive quarters of sequential customer expansion.
Super-scaled customer ARPU reached $2 million compared with $1.6 million a year ago and $1.8 million in the preceding quarter. Customer-count and ARPU growth exceeded the company's 2028 modeled annual growth ranges of 4-8% and 12-16%, respectively.
Cross-sell and upsell deals won increased 38% year over year. Super-scaled customers using all three marketing use cases grew more than 60%, while those employing at least five channels also increased more than 60%.
ZETA's Athena Adoption Drives Higher Platform Usage
More than 50% of super-scaled customers became monthly active Athena users, up from slightly more than 40% in the second quarter. Across the broader customer base, Athena adopters accounted for more than 70% of revenues.
The top 25 Athena users generated revenue growth exceeding 70%. Year-to-date net revenue retention among Athena adopters was more than 500 basis points higher than Zeta's overall retention rate, which exceeded its long-term model's upper limit of 115%.
Customer campaign development activity more than doubled sequentially, while time spent on the platform increased more than 50%. Management expects AthenaOS to become generally available in the first quarter of 2027, expanding the platform's capabilities beyond marketing into enterprise intelligence.
ZETA Delivers Profitability and Margin Improvements
Adjusted EBITDA increased 55.1% year over year to $121 million. Adjusted EBITDA margin expanded 140 basis points to 24.6%, reflecting operating leverage and improving sales productivity.
Total operating expenses reached $446.7 million compared with $328.4 million a year ago. Cost of revenues was $195.6 million, while selling and marketing, general and administrative, and research and development expenses were $109.4 million, $75 million and $41.5 million, respectively.
GAAP net income reached $38.3 million compared with a net loss of $3.6 million a year ago. GAAP earnings improved to 14 cents per share from a loss of 2 cents.
Zeta Generates Stronger Cash Flow and Liquidity
Operating cash flow increased 57.7% year over year to $91.3 million. Free cash flow advanced 73% to $81.5 million, while free cash flow margin expanded 250 basis points to 16.5%.
Zeta ended the quarter with cash and cash equivalents of $340.1 million and long-term borrowings of $243.9 million.
The company repurchased approximately 1.3 million shares for $29.9 million during the quarter. Year-to-date repurchases through Nov. 9 totaled $101.4 million, with $62.6 million remaining under its existing authorization.
Zeta Raises its 2026 Earnings and Cash Flow Guidance
For the fourth quarter of 2026, adjusted EBITDA is projected between $135.2 million and $136.3 million, representing year-over-year growth of 42-43%. The corresponding margin is expected to be between 25.7% and 26.2%.
For 2026, adjusted EBITDA is now expected to be between $414.1 million and $415.2 million from the previously guided range of $404.1-$406.3 million. Free cash flow guidance increased to $270.6-$271.6 million from $254.8-255.8 million, while GAAP earnings guidance rose to 22-24 cents per share from 9-11 cents per share.
Zeta Global currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Earnings Snapshots
Trane Technologies plc (TT - Free Report) reported better-than-expected third-quarter 2026 results. TT’s earnings per share of $4.86 outpaced the Zacks Consensus Estimate by 2.5% and increased 25.3% from the year-ago quarter. TT’s revenues of $6.76 billion surpassed the consensus estimate by 5% and improved 17.7% year over year.
Waste Connections, Inc. (WCN - Free Report) reported impressive third-quarter 2026 results. WCN’s adjusted earnings of $1.58 per share outpaced the consensus mark by 4% and rose 9.7% from the year-ago quarter. WCN’s total revenues of $2.64 billion surpassed the consensus mark by 1.2% and increased 7.3% year over year.
Equifax (EFX - Free Report) reported better-than-expected third-quarter 2026 results. EFX’s adjusted earnings per share of $2.26 outpaced the Zacks Consensus Estimate by 3.2% and increased 10.8% from the year-ago quarter. EFX’s revenues of $1.69 billion marginally surpassed the consensus estimate and improved 9.6% year over year.