Zeta’s first quarter results reflected continued momentum in its core marketing platform, with management highlighting strong adoption of artificial intelligence tools and expanding relationships with both large enterprises and agency partners as key drivers. CEO David Steinberg pointed to the company’s “omnichannel, people-based artificial intelligence platform” as a differentiator, enabling clients to achieve measurable improvements in customer acquisition costs and marketing efficiency. The quarter benefited from increased commitments from existing “Super Scaled” customers, as well as substantial growth in direct platform revenue, while integration of the LiveIntent acquisition and disciplined operating expense management supported margin improvement. Steinberg emphasized, “Our value proposition continues to stand out, particularly in environments where marketers are under pressure to deliver measurable results and do more with less.”
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Zeta (ZETA) Q1 CY2025 Highlights:
- Revenue: $264.4 million vs analyst estimates of $254.1 million (35.6% year-on-year growth, 4.1% beat)
- Adjusted EPS: $0.11 vs analyst estimates of $0.11 (in line)
- Adjusted Operating Income: $29.03 million vs analyst estimates of $25.73 million (11% margin, 12.8% beat)
- The company slightly lifted its revenue guidance for the full year to $1.24 billion at the midpoint from $1.24 billion
- EBITDA guidance for the full year is $258.5 million at the midpoint, above analyst estimates of $256 million
- Operating Margin: -6.1%, up from -18.4% in the same quarter last year
- Billings: $260.1 million at quarter end, up 32.6% year on year
- Market Capitalization: $3.54 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Zeta’s Q1 Earnings Call
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Terry Tillman (Truist Securities) asked about progress with the One Zeta cross-sell strategy. CEO David Steinberg responded that the strategy is ahead of schedule, noting recent large deal signings and growth in customers using multiple use cases.
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Jason Kreyer (Craig-Hallum) inquired about the impact of macro uncertainty on customer demand. Steinberg clarified that Zeta has not seen any client pause or reduce spend, and CFO Chris Greiner added that April performance continued strong momentum.
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DJ Hynes (Canaccord Genuity) questioned which industry verticals management is monitoring for risk. Steinberg cited initial concerns about automotive and retail but reported stronger-than-expected growth, with no current signs of weakness.
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Elizabeth Porter (Morgan Stanley) asked about the shift from integrated to direct agency business. Steinberg explained that agencies are moving clients to direct relationships to achieve higher returns, a trend expected to continue.
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Ryan MacDonald (Needham & Co.) queried about adoption of the new AI Agent Studio and whether tighter budgets accelerate or slow AI spending. Steinberg stated that uncertainty is actually catalyzing AI adoption, with no slowdown observed among customers.
Catalysts in Upcoming Quarters
In future quarters, the StockStory team will be closely tracking (1) the pace of adoption and monetization of Zeta’s AI Agent Studio and agentic workflows, (2) continued expansion and conversion of agency partnerships, especially within the independent segment, and (3) margin and free cash flow improvements as the company balances growth investments with disciplined capital allocation. The ability to maintain customer retention and upsell rates during macro volatility will also be a key signpost.
Zeta currently trades at $15.42, up from $13.54 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free).
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