8-K
Zeta Global Holdings Corp. (ZETA)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 9, 2021
ZETA GLOBAL HOLDINGS CORP.
(Exact name of registrant as specified in its charter)
| Delaware | 001-40464 | 80-0814458 |
|---|---|---|
| (State or other jurisdiction<br> <br>of incorporation) | (Commission<br> <br>File Number) | (IRS Employer<br> <br>Identification No.) |
3 Park Ave, 33^rd^ Floor
New York, NY 10016
(Address of principal executive offices, including Zip Code)
(212) 967-5055
(Registrant’s Telephone Number, Including Area Code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br> <br>Symbol(s) | Name of each exchange<br> <br>on which registered |
|---|---|---|
| Class A common stock, $0.001 par value per share | ZETA | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results of Operations and Financial Condition. |
|---|
On November 9, 2021, Zeta Global Holdings Corp. (the “Company”) issued a press release announcing its financial results for the quarter ended September 30, 2021. A copy of this press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
| Item 7.01 | Regulation FD Disclosure. |
|---|
On November 9, 2021, the Company posted a supplemental earnings presentation to its website at https://investors.zetaglobal.com (the “Supplemental Earnings Presentation”). A copy of the Supplemental Earnings Presentation is furnished as Exhibit 99.2 to this Current Report on Form 8-K. The Company expects to use the Supplemental Earnings Presentation, in whole or in part, and possibly with modifications, in connection with the earnings call with investors, analysts and others.
The information contained in the Supplemental Earnings Presentation is summary information that is intended to be considered in the context of the Company’s Securities and Exchange Commission (“SEC”) filings and other public announcements that the Company may make, by press release or otherwise, from time to time. The Supplemental Earnings Presentation speaks only as of the date of this Current Report on Form 8-K. The Company undertakes no duty or obligation to publicly update or revise the information contained in the Supplemental Earnings Presentation, although it may do so from time to time. Any such updating may be made through the filing of other reports or documents with the SEC, through press releases or through other public disclosure. In addition, the exhibit furnished herewith contains statements intended as “forward-looking statements” that are subject to the cautionary statements about forward-looking statements as set forth in such exhibit. By furnishing the information contained in the Supplemental Earnings Presentation, the Company makes no admission as to the materiality of any information in the Supplemental Earnings Presentation that is required to be disclosed solely by reason of Regulation FD.
The information contained in Item 2.02 and this Item 7.01, including Exhibit 99.1 and Exhibit 99.2, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing made by the Company under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference in such filing.
| Item 9.01 | Financial Statements and Exhibits. |
|---|
(d) Exhibits.
| Exhibit<br>No. | Description |
|---|---|
| 99.1 | Press Release, dated November 9, 2021 |
| 99.2 | Supplemental Earnings Presentation, dated November 9, 2021 |
| 104 | Cover Page Interactive Data File (formatted in Inline XBRL) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: November 9, 2021 | Zeta Global Holdings Corp. | |
|---|---|---|
| By: | /s/ Christopher Greiner | |
| Christopher Greiner | ||
| Chief Financial Officer |
EX-99.1
Exhibit 99.1
November 9, 2021
Zeta Announces RecordThird Quarter 2021 Financial Results
| • | Delivered record revenue of $115.1 million, an increase of 21% year over year, or 25%excluding $3 million of prior year Presidential cycle revenue, and 8% quarter over quarter |
|---|---|
| • | Grew scaled customer count, scaled customer ARPU, and direct platform revenue quarter over quarter<br> |
| --- | --- |
| • | Booked six multi-year deals for $16 million in total contract value with over 90%recurring revenue |
| --- | --- |
| • | Increasing fourth quarter and full year 2021 revenue and Adjusted EBITDA guidance<br> |
| --- | --- |
| • | Analysts and investors invited to attend Zeta’s inaugural customer conference, Zeta Live, onNovember 16 & 17 |
| --- | --- |
NEW YORK — Zeta (NYSE: ZETA), a cloud-based marketing technology company that empowers enterprises to acquire, grow, and retain customers, today announced financial results for the quarter ended September 30, 2021.
“Our third quarter results demonstrate our strong strategic position, competitive differentiation, and growing sales capacity,” said David A. Steinberg, Co-founder, Chairman & CEO of Zeta. “Through our patented AI, proprietary first party data, and omni-channel activation capabilities, we saw an increase in competitive displacements, average solutions per customer, and further progression in strategic deal size. Disruption in the digital ecosystem is driving marketing technology in our direction, and the need for data-driven, identity-based marketing is expanding our TAM.”
“The third quarter was another example of Zeta executing on both its near and long-term objectives” said Chris Greiner, Zeta’s CFO. “The scaling of our go-to-market is ahead of pace. We are making significant progress refocusing the business toward higher margin, higher recurring revenue streams, which in turn is generating operating leverage throughout the P&L. Increasing our revenue and profit guidance moves us even closer to our long-term targets.”
Third Quarter 2021 Financial Highlights
(Unless otherwise noted, all comparisons are to the third quarter of 2020)
| • | Total revenue of $115.1 million, an increase of 21% as reported or 25% excluding the 2020 Presidential<br>cycle. Total revenue grew 8% sequentially. |
|---|---|
| • | Direct platform revenue made up 74% of total revenue compared to 66% in the third quarter of 2020.<br> |
| --- | --- |
| • | Six of our ten largest industry verticals grew greater than 30%. |
| --- | --- |
| • | Increased number of use cases and channels per scaled customer. |
| --- | --- |
| • | Scaled customer count of 347 compared to 343 in the second quarter of 2021. |
| --- | --- |
| • | Scaled customer ARPU over $320,000 compared to $299,000 in the second quarter of 2021. |
| --- | --- |
| • | Lowered the cost of revenue percentage to 37.6%, excluding stock based compensation, down 510 basis points<br>from the third quarter of 2020 and down 160 basis points sequentially. |
| --- | --- |
| • | GAAP Operating loss of $66.9 million, compared to an operating income of $0.6 million, driven<br>primarily by $69.3 million of stock-based compensation expense compared to $0.03 million. |
| --- | --- |
| • | GAAP net loss of $69.1 million, compared to a net loss of $13.0 million. |
| --- | --- |
| • | GAAP diluted loss per share of $0.53 compared to a loss per diluted share of $0.51. |
| --- | --- |
| • | Cash Flow from Operations of $10.2 million, compared to $7.0 million. |
| --- | --- |
| • | Adjusted EBITDA of $16.0 million, an increase of 30% compared to $12.3 million in the third quarter<br>of 2020. |
| --- | --- |
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Fourth Quarter and Full Year 2021 Guidance
Zeta anticipates revenue and adjusted EBITDA to be in the following ranges:
Fourth quarter 2021
| • | Revenue of $121 million to $124 million, a year-over-year increase of 6% to 9%, or an increase of<br>19% to 21% after excluding the $12 million of non-recurring revenue associated with the U.S. presidential election in the fourth quarter of 2020. |
|---|---|
| • | Adjusted EBITDA in the range of $20.6 million to $21.1 million, a year-over-year increase of 16% to<br>19% and an adjusted EBITDA margin of 16.6% to 17.4%. |
| --- | --- |
Full year 2021
| • | Increasing revenue to a range of $445 million to $448 million from $432 million to<br>$436 million. Revised guidance represents a year-over-year increase of 21% to 22%, or an increase of 26% to 27% after excluding the $15 million of non-recurring revenue associated with the U.S.<br>presidential election in the second half of 2020 (with $3 million in the third quarter of 2020 and $12 million in the fourth quarter of 2020). |
|---|---|
| • | Increasing Adjusted EBITDA to a range of $61.0 million to $61.5 million from $55.5 million to<br>$57.5 million. Revised guidance represents a year-over-year increase of 54% to 55% and an adjusted EBITDA margin of 13.6% to 13.8%. |
| --- | --- |
Investor Conference Call and Webcast
Zeta posted prepared remarks on its investor relations website at https://investors.zetaglobal.com/ and will host a conference call today, Tuesday, November 9, 2021, at 5:00pm Eastern Time to discuss financial results for the third quarter of 2021. The live webcast of the conference call can be accessed from the Company’s investor relations website, https://investors.zetaglobal.com/ where it will remain available for one year.
About Zeta
Zeta Global Holdings Corp. is a leading data-driven, cloud-based marketing technology company that empowers enterprises to acquire, grow and retain customers for a lower cost than they can achieve without us. The Company’s Zeta Marketing Platform (the “ZMP”) is the largest omnichannel marketing platform with identity data at its core. The ZMP analyzes billions of structured and unstructured data points to predict consumer intent by leveraging sophisticated artificial intelligence to personalize experiences at scale. Founded in 2007 by David A. Steinberg and John Sculley, the Company is headquartered in New York City. For more information, please go to www.zetaglobal.com.
Forward-Looking Statements
This press release, together with other statements and information publicly disseminated by the Company, contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with these safe harbor provisions. Any statements made in this press release or during the earnings call that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements and should be evaluated as such. Forward-looking statements include information concerning possible or assumed future results of operations, including descriptions of our business plan and strategies. These statements often include words such as “anticipate,” “expect,” “suggests,” “plan,” “believe,” “intend,” “estimates,” “targets,” “projects,” “should,” “could,” “would,” “may,” “will,” “forecast,” “outlook, “guidance” and other similar expressions. We base these forward-looking statements on our current expectations, plans and assumptions that we have made in light of our experience in the industry, as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances at such time. Although we believe that these forward-looking statements are based on reasonable assumptions at the time they are made, you should be aware that many factors could affect our business, results of operations and financial condition and could cause actual results to differ materially from those expressed in the forward-looking statements. These statements are not guarantees of future performance or results.
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The forward-looking statements are subject to and involve risks, uncertainties and assumptions, and you should not place undue reliance on these forward-looking statements. Factors that may materially affect such forward-looking statements include, but are not limited to: the impact of COVID-19 on the global economy, our customers, employees and business; potential fluctuations in our operating results, which could make our future operating results difficult to predict; our ability to innovate and make the right investment decisions in our product offerings and platform; our ability to attract and retain customers, including our scaled customers; our ability to manage our growth effectively; our ability to collect and use data online; the standards that private entities and inbox service providers adopt in the future to regulate the use and delivery of email may interfere with the effectiveness of our platform and our ability to conduct business; a significant inadvertent disclosure or breach of confidential and/or personal information we process, or a security breach of our or our customers’, suppliers’ or other partners’ computer systems; and any disruption to our third-party data centers, systems and technologies. These cautionary statements should not be construed by you to be exhaustive and are made only as of the date of this press release. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
The fourth quarter and full year 2021 guidance items provided herein are based on Zeta’s current estimates and are not a guarantee of future performance. This guidance is subject to significant risks and uncertainties that could cause actual results to differ materially, including the risk factors discussed in the Company’s reports on file with the Securities and Exchange Commission. Zeta undertakes no duty to update any forward-looking statements or estimates.
Availability of Information on Zeta’s Website andSocial Media Profiles
Investors and others should note that Zeta routinely announces material information to investors and the marketplace using SEC filings, press releases, public conference calls, webcasts and the Zeta investors website at https://investors.zetaglobal.com (“Investors Website”). We also intend to use the social media profiles listed below as a means of disclosing information about us to our customers, investors and the public. While not all of the information that the Company posts to the Investors Website or to social media profiles is of a material nature, some information could be deemed to be material. Accordingly, the Company encourages investors, the media, and others interested in Zeta to review the information that it shares at the Investors Website and to regularly follow our social media profile links located at the bottom of the page on www.zetaglobal.com. Users may automatically receive email alerts and other information about Zeta when enrolling an email address by visiting “Investor Email Alerts” in the “Resources” section of the Investors Website.
Social Media Profiles:
www.twitter.com/zetaglobal
www.facebook.com/ZetaGlobal/
www.linkedin.com/company/zetaglobal
www.instagram.com/zetaglobal/
The FollowingDefinitions Apply to the Terms Used Throughout This Release
| • | Direct Platform and Integrated Platform: When the Company generates revenues entirely through<br>the Company platform, the Company considers it Direct Platform Revenue. When the Company generates revenue by leveraging its platform’s integration with third parties, it is considered Integrated Platform Revenue. |
|---|---|
| • | Scaled Customers: We define scaled customers as customers from which we generated more than $100,000 in<br>revenue per year. We calculate the number of scaled customers at the end of each quarter and on an annual basis as the number of customers billed during each applicable period. We believe the scaled customers measure is both an important contributor<br>to our revenue growth and an indicator to investors of our measurable success. |
| --- | --- |
| • | Scaled Customer ARPU: We calculate the scaled customer ARPU as revenue for the corresponding period<br>divided by the average number of scaled customers during that period. We believe that scaled customer ARPU is useful for investors because it is an indicator of our ability to increase revenue and scale our business |
| --- | --- |
| • | Total Addressable Market (TAM): We sized our market using a<br>bottom-up approach. We believe the size of our total addressable market to be approximately $36 billion. We calculated this figure by first estimating the total number of U.S. Large Enterprises, derived<br>from U.S. Census Bureau data and which we define as firms with over 1,500 employees. We then further segmented the U.S. Large Enterprises by industry verticals in which Zeta maintains most relevance, yielding 9,558 companies. We multiplied this<br>number of relevant U.S. Large Enterprises by our scaled customer ($1M+) ARPU of approximately $3.8 million, derived from internal Company data for the year ended December 31, 2020, to arrive at the TAM. |
| --- | --- |
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Non-GAAP Measures
In order to assist readers of our condensed unaudited consolidated financial statements in understanding the core operating results that our management uses to evaluate the business and for financial planning purposes, we describe our non-GAAP measures below. We believe these non-GAAP measures are useful to investors in evaluating our performance by providing an additional tool for investors to use in comparing our financial performance over multiple periods.
Adjusted EBITDA is a non-GAAP financial measure defined as net loss adjusted for interest expense, depreciation and amortization, stock-based compensation, income tax provision / (benefit), acquisition related expenses, restructuring expenses, change in fair value of warrants and derivative liabilities, certain dispute settlement expense, certain non-recurring IPO related expenses and other expense / (income). Acquisition related expenses and restructuring expenses primarily consist of severance and other personnel-related costs which we do not expect to incur in the future as acquisitions of businesses may distort the comparability of the results of operations. Change in fair value of warrants and derivative liabilities is a non-cash expense related to periodically recording “mark-to-market” changes in the valuation of derivatives and warrants. Other expenses / (income) consist of non-cash expenses such as changes in fair value of acquisition related liabilities, gains and losses on **** extinguishment of acquisition related liabilities, **** gains and losses on sales of assets and foreign exchange gains and losses. In particular, we believe that the exclusion of stock-based compensation, certain dispute settlement expenses and non-recurring IPO related expenses that are not related to our core operations provides measures for period-to-period comparisons of our business and provides additional insight into our core controllable costs. We exclude these charges because these expenses are not reflective of ongoing business and operating results.
Adjusted EBITDA margin is a non-GAAP metric defined as adjusted EBITDA divided by the total revenues for the same period. Adjusted EBITDA and adjusted EBITDA margin provide us with a useful measure for period-to-period comparisons of our business as well as comparison to our peers. We believe that these non-GAAP financial measures are useful to investors in analyzing our financial and operational performance. Our use of adjusted EBITDA and adjusted EBITDA margin has limitations as an analytical tool, and you should not consider these measures in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. Because of these and other limitations, you should consider our non-GAAP measures only as supplemental to other GAAP-based financial performance measures, including revenues and net loss.
We calculate forward-looking non-GAAP Adjusted EBITDA and Adjusted EBITDA margin based on internal forecasts that omit certain amounts that would be included in forward-looking GAAP net income (loss). We do not attempt to provide a reconciliation of forward-looking non-GAAP Adjusted EBITDA and Adjusted EBITDA margin guidance to forward looking GAAP net income (loss) because forecasting the timing or amount of items that have not yet occurred and are out of our control is inherently uncertain and unavailable without unreasonable efforts. Further, we believe that such reconciliations would imply a degree of precision and certainty that could be confusing to investors. Such items could have a substantial impact on GAAP measures of financial performance.
Contacts:
Investor Relations
Scott Schmitz
ir@zetaglobal.com
Press
Megan Rose
press@zetaglobal.com
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ZETA GLOBAL HOLDINGS CORP.
Condensed Unaudited Consolidated Balance Sheets
(In thousands, except shares, per share and par values)
| As of December 31, 2020 | |||||
|---|---|---|---|---|---|
| ASSETS | |||||
| Current assets: | |||||
| Cash and cash equivalents | 116,180 | **** | $ | 50,725 | |
| Accounts receivable, net of allowance of 2,046 and 2,207 as of September 30, 2021 and<br>December 31, 2020, respectively | 72,785 | **** | 79,366 | ||
| Prepaid expenses | 5,820 | **** | 3,903 | ||
| Other current assets | 3,058 | **** | 7,374 | ||
| Total current assets | 197,843 | **** | 141,368 | ||
| Property and equipment, net | 5,869 | **** | 6,117 | ||
| Website and software development costs, net | 38,477 | **** | 32,891 | ||
| Intangible assets, net | 28,932 | **** | 28,591 | ||
| Goodwill | 81,917 | **** | 76,432 | ||
| Deferred tax assets, net | 195 | **** | 366 | ||
| Other non-current assets | 1,063 | **** | 521 | ||
| Total non-current assets | 156,453 | **** | 144,918 | ||
| Total assets | 354,296 | **** | $ | 286,286 | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY / (DEFICIT) | |||||
| Current liabilities: | |||||
| Accounts payable | 27,905 | **** | $ | 40,976 | |
| Accrued expenses | 50,619 | **** | 44,622 | ||
| Acquisition related liabilities | 16,155 | **** | 6,018 | ||
| Deferred revenue | 2,739 | **** | 4,053 | ||
| Other current liabilities | 5,044 | **** | 8,310 | ||
| Total current liabilities | 102,462 | **** | 103,979 | ||
| Non-current liabilities: | |||||
| Long-term borrowings | 183,528 | **** | 189,693 | ||
| Acquisition related liabilities | 8,731 | **** | 17,137 | ||
| Warrants and derivative liabilities | — | **** | 58,100 | ||
| Other non-current liabilities | 3,790 | **** | 2,387 | ||
| Total non-current liabilities | 196,049 | **** | 267,317 | ||
| Total liabilities | 298,511 | **** | $ | 371,296 | |
| Commitments and contingencies | |||||
| Mezzanine equity: | |||||
| Redeemable convertible preferred stock 0.001 per share par value, up to 60,137,979 shares<br>authorized and 39,223,194 shares issued and outstanding as of December 31, 2020 | — | **** | 154,210 | ||
| Stockholders’ equity / (deficit): | |||||
| Series A common stock 0.001 per share value, up to 204,220,800 shares authorized, 112,012,693<br>shares issued and outstanding as of December 31, 2020 | — | **** | 112 | ||
| Treasury common stock, 8,195,464 shares repurchased at a weighted average price of 2.86 per<br>share | (23,469 | ) | (23,469 | ) | |
| Series B common stock 0.001 per share par value, up to 3,400,000 shares authorized, 3,054,318<br>shares issued and outstanding as of December 31, 2020 | — | **** | 3 | ||
| Class A common stock, par value 0.001 per share par value, up to 3,750,000,000 shares<br>authorized and 155,022,167 shares issued and outstanding as of September 30, 2021 | 155 | **** | — | ||
| Class B common stock, par value 0.001, up to 50,000,000 shares authorized and 37,856,095<br>shares issued and outstanding as of September 30, 2021 | 38 | **** | — | ||
| Additional paid-in capital | 511,929 | **** | 28,425 | ||
| Accumulated deficit | (430,679 | ) | (242,254 | ) | |
| Accumulated other comprehensive loss | (2,189 | ) | (2,037 | ) | |
| Total stockholders’ equity / (deficit) | 55,785 | **** | (239,220 | ) | |
| Total liabilities and stockholders’ equity / (deficit) | 354,296 | **** | $ | 286,286 |
All values are in US Dollars.
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ZETA GLOBAL HOLDINGS CORP.
Condensed Unaudited Consolidated Statements of Operations and Comprehensive Loss
(In thousands, except share and per share amounts)
| Three months ended September 30, | Nine months ended September 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||||||||
| Revenues | $ | 115,133 | **** | $ | 95,284 | $ | 323,492 | **** | $ | 253,674 | ||
| Operating expenses: | ||||||||||||
| Cost of revenues (excluding depreciation and amortization)^(1)^ | **** | 44,525 | **** | 40,705 | **** | 125,709 | **** | 100,530 | ||||
| General and administrative<br>expenses^(1)^ | **** | 50,643 | **** | 17,150 | **** | 135,682 | **** | 53,270 | ||||
| Selling and marketing expenses^(1)^ | **** | 60,537 | **** | 18,269 | **** | 163,952 | **** | 54,359 | ||||
| Research and development<br>expenses^(1)^ | **** | 13,998 | **** | 6,905 | **** | 50,285 | **** | 23,789 | ||||
| Depreciation and amortization | **** | 11,783 | **** | 10,133 | **** | 33,135 | **** | 30,171 | ||||
| Acquisition related expenses | **** | 480 | **** | 1,230 | **** | 1,516 | **** | 4,321 | ||||
| Restructuring expenses | **** | 30 | **** | 259 | **** | 467 | **** | 1,950 | ||||
| Total operating expenses | **** | 181,996 | **** | **** | 94,651 | **** | **** | 510,746 | **** | **** | 268,390 | **** |
| (Loss) / income from operations | **** | (66,863 | ) | 633 | **** | (187,254 | ) | (14,716 | ) | |||
| Interest expense | **** | 1,342 | **** | 3,823 | **** | 5,705 | **** | 12,548 | ||||
| Other expenses / (income), net | **** | 496 | **** | (188 | ) | **** | 1,031 | **** | (546 | ) | ||
| Gain on extinguishment of debt | **** | — | **** | — | **** | (10,000 | ) | — | ||||
| Change in fair value of warrants and derivative liabilities | **** | — | **** | 9,700 | **** | 5,000 | **** | 16,400 | ||||
| Total other expenses | **** | 1,838 | **** | 13,335 | **** | 1,736 | **** | 28,402 | ||||
| Loss before income taxes | **** | (68,701 | ) | (12,702 | ) | **** | (188,990 | ) | (43,118 | ) | ||
| Income tax provision / (benefit) | **** | 428 | **** | 301 | **** | (565 | ) | 1,319 | ||||
| Net loss | $ | (69,129 | ) | $ | (13,003 | ) | $ | (188,425 | ) | $ | (44,437 | ) |
| Other comprehensive (loss) / income | ||||||||||||
| Foreign currency translation adjustment | **** | (77 | ) | 272 | (152 | ) | (516 | ) | ||||
| Total comprehensive loss | $ | (69,206 | ) | $ | (12,731 | ) | $ | (188,577 | ) | $ | (44,953 | ) |
| Net loss per share | ||||||||||||
| Net loss | $ | (69,129 | ) | $ | (13,003 | ) | $ | (188,425 | ) | $ | (44,437 | ) |
| Cumulative redeemable convertible preferred stock dividends | **** | — | **** | 3,774 | **** | 7,060 | **** | 11,150 | ||||
| Net loss available to common stockholders | $ | (69,129 | ) | $ | (16,777 | ) | $ | (195,485 | ) | $ | (55,587 | ) |
| Basic loss per share | $ | (0.53 | ) | $ | (0.51 | ) | $ | (2.60 | ) | $ | (1.70 | ) |
| Diluted loss per share | $ | (0.53 | ) | $ | (0.51 | ) | $ | (2.60 | ) | $ | (1.70 | ) |
| Weighted average number of shares used to compute net loss per share | ||||||||||||
| Basic | **** | 129,731,980 | **** | 32,607,357 | **** | 75,313,520 | **** | 32,607,373 | ||||
| Diluted | **** | 129,731,980 | **** | 32,607,357 | **** | 75,313,520 | **** | 32,607,373 | ||||
| (1) | The Company recorded the total stock-based compensation expense as follows: | |||||||||||
| --- | --- | |||||||||||
| Three months ended September 30, | Nine months ended September 30, | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||
| 2021 | 2020 | 2021 | 2020 | |||||||||
| Cost of revenues (excluding depreciation and amortization) | $ | 1,183 | $ | — | $ | 1,449 | $ | — | ||||
| General and administrative expenses | **** | 28,243 | 26 | **** | 70,868 | 79 | ||||||
| Selling and marketing expenses | **** | 35,114 | — | **** | 94,626 | — | ||||||
| Research and development expenses | **** | 4,803 | — | **** | 21,670 | — | ||||||
| Total | $ | 69,343 | $ | 26 | $ | 188,613 | $ | 79 |
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ZETA GLOBAL HOLDINGS CORP.
Condensed Unaudited Consolidated Statements of Cash Flows
(In thousands)
| Nine months ended September 30, | ||||||
|---|---|---|---|---|---|---|
| 2021 | 2020 | |||||
| Cash flows from operating activities: | ||||||
| Net loss | $ | (188,425 | ) | $ | (44,437 | ) |
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||
| Depreciation and amortization | **** | 33,135 | **** | 30,171 | ||
| Stock-based compensation | **** | 188,613 | **** | 79 | ||
| Deferred income taxes | **** | (1,635 | ) | (170 | ) | |
| Change in fair value of warrant and derivative liabilities | **** | 5,000 | **** | 16,400 | ||
| Gain on extinguishment of debt | **** | (10,000 | ) | — | ||
| Other, net | **** | 2,509 | **** | 2,880 | ||
| Changes in non-cash working capital (net of<br>acquisitions): | ||||||
| Accounts receivable | **** | 7,423 | **** | 28,967 | ||
| Prepaid expenses | **** | (1,917 | ) | (450 | ) | |
| Other current assets | **** | 4,316 | **** | 349 | ||
| Other non-current assets | **** | (542 | ) | 1,294 | ||
| Deferred revenue | **** | (1,314 | ) | 184 | ||
| Accounts payable | **** | (17,961 | ) | (325 | ) | |
| Accrued expenses and other current liabilities | **** | 2,762 | **** | (19,405 | ) | |
| Other non-current liabilities | **** | 1,402 | **** | 1,105 | ||
| Net cash provided by operating activities | **** | 23,366 | **** | 16,642 | ||
| Cash flows from investing activities: | ||||||
| Capital expenditures | **** | (6,883 | ) | (1,903 | ) | |
| Website and software development costs | **** | (13,421 | ) | (17,505 | ) | |
| Business and asset acquisitions, net of cash acquired | **** | (2,159 | ) | — | ||
| Net cash used for investing activities | **** | (22,463 | ) | **** | (19,408 | ) |
| Cash flows from financing activities: | ||||||
| Proceeds from initial public offering, net of issuance costs | **** | 126,538 | **** | — | ||
| Cash paid for acquisition related liabilities | **** | (64 | ) | (496 | ) | |
| Proceeds from term loan, net of issuance cost | **** | 183,311 | **** | — | ||
| Proceeds from paycheck protection program loan | — | 10,000 | ||||
| Repurchase of restricted stock | **** | (64,468 | ) | — | ||
| Exercise of warrants and options | **** | 110 | **** | — | ||
| Repayments against the credit facilities | **** | (180,745 | ) | (3,500 | ) | |
| Net cash provided by financing activities | **** | 64,682 | **** | 6,004 | ||
| Effect of exchange rate changes on cash and cash equivalents | **** | (130 | ) | (102 | ) | |
| Net increase in cash and cash equivalents | **** | 65,455 | **** | 3,136 | ||
| Cash and cash equivalents, beginning of period | **** | 50,725 | **** | 37,818 | ||
| Cash and cash equivalents, end of period | $ | 116,180 | **** | $ | 40,954 | **** |
| Supplemental cash flow disclosures including non-cashactivities: | ||||||
| Cash paid for interest | $ | 5,673 | **** | $ | 10,330 | |
| Cash paid for income taxes, net | $ | 1,294 | **** | $ | 1,224 | |
| Liability established in connection with acquisitions | $ | 1,795 | **** | $ | — | |
| Shares issued in connection with acquisitions and other agreements | $ | 6,650 | **** | $ | 423 | |
| Dividends on redeemable convertible preferred stock settled in Company’s equity | $ | 60,082 | **** | $ | — | |
| Non-cash settlement of warrants and derivative<br>liabilities | $ | 63,100 | **** | $ | — | |
| Capitalized stock-based compensation as website and software development costs | $ | 8,830 | **** | $ | — | |
| Non-cash consideration for website and software<br>development costs | $ | 45 | $ | 770 |
7
ZETA GLOBAL HOLDINGS CORP.
Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands)
| Three months ended September 30, | Nine months ended September 30, | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | ||||||
| Net loss | $ | (69,129) | $ | (13,003) | $ | (188,425) | **** | $ | (44,437) |
| Net loss margin | **** | (60.0)% | (13.6)% | **** | (58.2)% | **** | (17.5)% | ||
| Add back: | |||||||||
| Interest expense | **** | 1,342 | 3,823 | **** | 5,705 | **** | 12,548 | ||
| Income tax provision / (benefit) | **** | 428 | 301 | **** | (565 | ) | 1,319 | ||
| Depreciation and amortization | **** | 11,783 | 10,133 | **** | 33,135 | **** | 30,171 | ||
| Stock-based compensation | **** | 69,343 | 26 | **** | 188,613 | **** | 79 | ||
| IPO related expenses | **** | — | — | **** | 2,705 | **** | — | ||
| Gain on extinguishment of debt | **** | — | — | **** | (10,000) | **** | — | ||
| Acquisition related expenses | **** | 480 | 1,230 | **** | 1,516 | **** | 4,321 | ||
| Restructuring expenses | **** | 30 | 259 | **** | 467 | **** | 1,950 | ||
| Change in fair value of warrants and derivative liabilities | **** | — | 9,700 | **** | 5,000 | **** | 16,400 | ||
| Dispute settlement expense | **** | 1,196 | — | **** | 1,196 | **** | — | ||
| Other expenses / (income) | **** | 496 | (188) | **** | 1,031 | **** | (546) | ||
| Adjusted EBITDA | $ | 15,969 | $ | 12,281 | $ | 40,378 | **** | $ | 21,805 |
| Adjusted EBITDA margin | **** | 13.9% | **** | 12.9% | **** | 12.5% | **** | **** | 8.6% |
8
EX-99.2
Exhibit 99.2 Supplemental 3Q’21 Earnings Presentation November 9, 2021 2021 ZETA GLOBAL – PROPRIETARY & CONFIDENTIAL
Safe Harbor This presentation has been prepared by Zeta Global Holdings Corp. and its subsidiaries (together, the “Company”, “Zeta”, or “we”) and is made for informational purposes only. The information set forth herein does not purport to be complete or to contain all of the information you may desire. You must evaluate, and bear all risks associated with, the use of any information provided hereunder, including any reliance on the accuracy, completeness, safety or usefulness of such information. This information is not intended to be used as the primary basis of investment decisions. It should not be construed as advice designed to meet the particular investment needs of any investor. Statements contained herein are made as of the date of this presentation unless stated otherwise, and this presentation shall not under any circumstances create an implication that the information contained herein is correct as of any time after such date or that information will be updated or revised to reflect information that subsequently becomes available or changes occurring after the date hereof. You should read the prospectus in the Registration Statement (No. 333-255499) and the other documents that the Company has filed with the SEC for more information about the Company. You can obtain these documents for free by visiting EDGAR on the SEC website at www.sec.gov or on our website at https://investors.zetaglobal.com/financials/sec-filings. This presentation shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction. This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with these safe harbor provisions. Any statements made in this presentation that are not statements of historical fact, including statements about the Company’s beliefs and expectations, are forward-looking statements and should be evaluated as such. Forward-looking statements include information concerning possible or assumed future results of operations, including descriptions of our business plan and strategies. These statements often include words such as “anticipate,” “expect,” “suggests,” “plan,” “believe,” “intend,” “estimates,” “targets,” “projects,” “should,” “could,” “would,” “may,” “will,” “forecast,” “outlook,” “guidance” and other similar expressions. The Company bases these forward-looking statements on its current expectations, plans and assumptions that the Company has made in light of its experience in the industry, as well as its perceptions of historical trends, current conditions, expected future developments and other factors the Company believes are appropriate under the circumstances at such time. As you read and consider this presentation, you should understand that these statements are not guarantees of future performance or results. The forward-looking statements are subject to and involve risks, uncertainties and assumptions, and you should not place undue reliance on these forward-looking statements. Although the Company believes that these forward-looking statements are based on reasonable assumptions at the time they are made, you should be aware that many factors could affect the Company’s actual results or results of operations and could cause actual results to differ materially from those expressed in the forward- looking statements. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. All future written and oral forward-looking statements made in connection with this presentation attributable to the Company or persons acting on the Company’s behalf are expressly qualified in their entirety by this paragraph. This presentation contains non-GAAP financial measures such as adjusted EBITDA and adjusted EBITDA margin. These measures are not prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and have important limitations as analytical tools. Non-GAAP financial measures are supplemental, should only be used in conjunction with results presented in accordance with GAAP and should not be considered in isolation or as a substitute for such GAAP results. Refer to the Appendix of this presentation for a reconciliation of the non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP. The contents and appearance of this presentation is copyrighted and the trademarks and service marks are owned by Zeta Global Corp. All rights reserved. 2021 ZETA GLOBAL – PROPRIETARY & CONFIDENTIAL 2
3Q’21 Performance Highlights Strong Execution: Beating the Largest Delivering on our Beat & Raise Marketing Clouds Growth Drivers ü Sales transformation ü Executing on our plan to ü Continued positive mix ahead of pace, with add more multi-year, shift towards higher revenue above high-end of software subscription and margin solutions with guidance, up 21% YtY and minimum usage contracts 74% of revenue from 25% ex-Pres. cycle Direct Platform ü Booked 6 multi-year, ü Increasing midpoint of recurring revenue deals ü Two-thirds of YtY FY21 revenue guidance at $16M of TCV growth generated from by $12.5M to $446.5M new customers ü Opportunity Explorer ü Increasing Adj. EBITDA continues to be a sales ü Increased scaled guidance by $4.8M to accelerator customer count QtQ and $61.3M accelerated scaled customer ARPU 2021 ZETA GLOBAL – PROPRIETARY & CONFIDENTIAL 3
Strong Revenue Growth in 3Q’21, Ahead of Guidance 1 Growth As Reported Growth Ex-Presidential Cycle $115.1 $115.1 $95.3 $92.3 3Q’20 3Q’21 3Q’20 3Q’21 1. 3Q’21 year to year revenue growth percentage normalized for $3M of Presidential Cycle revenue generated in 3Q’20 that did not repeat in 3Q’21 2021 ZETA GLOBAL – PROPRIETARY & CONFIDENTIAL 4 2. All values in millions of dollars unless otherwise stated.
Growth in Scaled Customer Count and ARPU Scaled Customer Scaled Customer Scaled Customer ARPU Count Growth Drivers More Use Cases 347 $320k More Channels 2Q’21: 343 +23% YtY 1Q’21: 333 +7% QtQ We define scaled customers as customers from which we generate more than $100,000 of revenue on a trailing twelve-month (TTM) basis. 2021 ZETA GLOBAL – PROPRIETARY & CONFIDENTIAL 5
Long-term Shift Towards Direct Platform Revenue Leads to Lower Cost of Revenue % 1 Total Cost of Revenue % Direct Platform Revenue $85 $83 74% 77% $63 Rev Rev 42.7% Mix Mix 39.2% 66% 37.6% Rev Mix 3Q’20 2Q’21 3Q’21 3Q’21 3Q’20 2Q’21 1. Direct Platform Revenue: Revenue generated by the ZMP comprised of subscription software and utilization fees generated by channels owned and operated by Zeta, resulting in stronger operating leverage. 2021 2021 Z ZE ET TA A G GL LO OB BA AL L – – P PR RO OP PR RIET IETA AR RY Y & & C CO ON NF FID IDEN ENT TIA IAL L 6 6 2. All values in millions unless otherwise stated.
Adjusted EBITDA Growing Faster than Revenue YtY and QtQ Adjusted EBITDA Adjusted EBITDA Margin % $16.0 13.9% 12.9% $12.3 10.7% $11.4 3Q’20 2Q’21 3Q’21 3Q’20 2Q’21 3Q’21 1. Adjusted EBITDA, Adjusted EBITDA Margin are non-GAAP metrics, see reconciliation in Appendix. 2021 ZETA GLOBAL – PROPRIETARY & CONFIDENTIAL 7 2. All values in millions of dollars unless otherwise stated.
2021 Guidance Reflects Increased Revenue Visibility and Momentum On Growth Driver Execution Current 4Q’21 Prior 4Q’21 Implied 1 Guidance Midpoint Guidance Revenue $116.5M $121M - $124M 2 Apptness Revenue N/A $2M 3 % Growth YTY 2% 6% - 9% Excl. Presidential Cycle 14% 19% - 21% % Growth YTY 4 Adj. EBITDA $18.8M $20.6M - $21.1M % Growth YTY 6% 16% - 19% 4 Adj. EBITDA Margin 16.2% 16.6% - 17.4% BPS Change YTY ~70 BPS ~110 to ~190 BPS 1. Prior 4Q’21 implied guidance was calculated by taking our prior full year 2021 guidance less actual results from 1H’21 and less the midpoint of our prior 3Q’21 guidance. 2. Acquired the digital survey platform of Apptness on October 4, 2021. See Form 8-K on file with the Securities and Exchange Commission. 3. Revenue Growth compared to equivalent prior period. 4. We calculate forward-looking non-GAAP Adjusted EBITDA and Adjusted EBITDA margin based on internal forecasts that omit certain amounts that would be included in forward- looking GAAP net income (loss). We do not attempt to provide a reconciliation of forward-looking non-GAAP Adjusted EBITDA and Adjusted EBITDA margin guidance to forward looking GAAP net income (loss) because forecasting the timing or amount of items that have not yet occurred and are out of our control is inherently uncertain and unavailable without unreasonable efforts. Further, we believe that such reconciliations would imply a degree of precision and certainty that could be confusing to investors. Such items could have a substantial impact on GAAP measures of financial performance. 2021 ZETA GLOBAL – PROPRIETARY & CONFIDENTIAL 8
2021 Guidance Reflects Increased Revenue Visibility and Momentum On Growth Driver Execution Prior FY’21 Current FY’21 Long-Term 1 Guidance Guidance Targets Revenue $432M - $436M $445M - $448M 2 Apptness Revenue N/A $2M Greater than 25% 3 % Growth YTY 17% 19% 21% - 22% YTY Revenue Excl. Presidential Cycle Growth 22% - 24% 26% - 27% % Growth YTY 4 $55.5M - $57.5M Adj. EBITDA $61.0M - $61.5M At least 20% 40% - 45% % Growth YTY 54% - 55% Adj. EBITDA 4 Margins 12.7% - 13.3% Adj. EBITDA Margin 13.6% - 13.8% 197 BPS – 255 BPS BPS Change YTY ~280 to ~300 BPS 1. These are not projections; they are goals/targets and are forward-looking, subject to significant business, economic, and competitive uncertainties and contingencies, many of which are beyond the control of the Company and its management and are based upon assumptions with respect to future decisions, which are subject to change. Actual results will vary, and those variations may be material.. Nothing in this presentation should be regarded as a representation by any person that these goals/targets will be achieved, and the Company undertakes no duty to update its goals. 2. Acquired the digital survey platform of Apptness on October 4, 2021. See Form 8-K on file with the Securities and Exchange Commission. 3. Revenue Growth compared to equivalent prior period. 4. We calculate forward-looking non-GAAP Adjusted EBITDA and Adjusted EBITDA margin based on internal forecasts that omit certain amounts that would be included in forward-looking GAAP net income (loss). We do not attempt to provide a reconciliation of forward-looking non-GAAP Adjusted EBITDA and Adjusted EBITDA margin guidance to forward looking GAAP net income (loss) because forecasting the timing or amount of items that have not yet occurred and are out of our control is inherently uncertain and unavailable without unreasonable efforts. Further, we believe that such reconciliations would imply a degree of precision and certainty that could be confusing to 2021 ZETA GLOBAL – PROPRIETARY & CONFIDENTIAL 9 investors. Such items could have a substantial impact on GAAP measures of financial performance.
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Appendix
Bridge To Adjusted EBITDA And Adjusted EBITDA Margin Q3’21 Q3’20 YTD’21 YTD’20 Net loss (69,129) (13,003) (188,425) (44,437) Interest expense 1,342 3,823 5,705 12,548 Depreciation and amortization 10,133 33,135 30,171 11,783 Stock based compensation 69,343 26 188,613 79 IPO related expense
-
- 2,705 - Gain on extinguishment of debt - - (10,000) - Income tax provision / (benefit) 428 301 (565) 1,319 Acquisition related expenses 480 1,230 1,516 4,321 Restructuring expenses 30 259 467 1,950 Change in fair value of derivatives - 9,700 5,000 16,400 Dispute settlement expense 1,196 - 1,196 - Other expenses / (income) 496 (188) 1,031 (546) Adjusted EBITDA 15,969 12,281 40,378 21,805 Adjusted EBITDA Margin 13.9% 12.9% 12.5% 8.6% 2021 ZETA GLOBAL – PROPRIETARY & CONFIDENTIAL 12
3Q 2021 and 2020 P&L Bridge For the three months ended September 30, 2021 For the three months ended September 30, 2020 One-time One-time As Stock Based Depr. As As Stock Depr. As Other Other Reported Comp. & Amort. Adjusted Reported Based Comp. & Amort. Adjusted Items Items Revenues $115,133 $- $- $- $115,133 $95,284 $- $- $- $95,284 Operating expenses: 44,525 (1,183) - - 43,342 40,705 - - - 40,705 Cost of revenues General and administrative expenses 50,643 (28,243) (1,196) - 21,204 17,150 (26) - - 17,124 Selling and marketing expenses 60,537 (35,114) - - 25,423 18,269 - - - 18,269 Research and development expenses 13,998 (4,803) - - 9,195 6,905 - - - 6,905 Depreciation and amortization 11,783 - - (11,783) - 10,133 - - (10,133) - 480 - (480) - - 1,230 - (1,230) - - Acquisition related expenses Restructuring expenses 30 - (30) - - 259 - (259) - - $181,996 ($69,343) ($1,706) ($11,783) $99,164 $94,651 ($26) ($1,489) ($10,133) $83,003 Total operating expenses ($66,863) $69,343 $1,706 $11,783 $15,969 $663 $26 $1,489 $10,133 $12,281 Operating (loss) / income Interest expense 1,342 - - - 1,342 3,823 - - - 3,823 Other expenses / (income) 496 - - - 496 (188) - - - (188) Dispute settlement expense - 1,196 - 1,196 - - - - - Change in FV of warrants and derivatives - - - - - 9,700 -
-
- 9,700 Stock based compensation - 69,343 - - 69,343 - 26 - - 26 Restructuring and acquisition related expenses - - 510 - 510 - 1,489 - 1,489 - - - 11,783 11,783 - - - 10,133 10,133 Depreciation and amortization 1,838 $69,343 $1,706 $11,783 $84,670 $13,335 $26 $1,489 $10,133 $24,983 Total other expenses (68,701) - - - (68,701) (12,702) - - - (12,702) Loss before income taxes Income tax provision 428 - - - 428 301 - - - 301 ($69,129) $- $- $- ($69,129) ($13,003) $- $- $- ($13,003) Net loss The intention of the bridge is to show operating expenses net of Stock Based Compensation and other non-GAAP adjustments. These are then reconciled to the net income / (loss) in the lower portion of the table. 2021 ZETA GLOBAL – PROPRIETARY & CONFIDENTIAL 13
3Q 2021 and 2020 Cash Flow 3Q’21 3Q’20 Variance Net loss (69,129) (13,003) (56,126) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 11,783 10,133 1,650 Stock-based compensation 69,343 26 69,317 Change in fair value of warrants and derivatives - 9,700 (9,700) Deferred income taxes & others, net 1,448 577 871 Change in non-cash working capital (net of effect of acquisitions): Accounts receivable (742) (3,511) 2,769 Prepaid expenses & other current/non-current assets (252) (739) 487 Accounts payable (3,878) (4,206) 328 Accrued expenses and other current liabilities 1,260 7.655 (6,395) Deferred revenues and other non-current liabilities 330 339 (9) Net cash provided by operating activities 10,163 6,971 3,192 Purchases of property and equipment (2,502) (879) (1,623) Website and software development costs (3,892) (5,767) 1,875 Net cash used for investing activities (6,394) (6,646) 252 Payments of IPO issuance cost (825) - (825) Payment for share repurchases related to IPO (338) - (338) Exercise of options 69 - 69 Net cash used for financing activities (1,094) - (1,094) Effect of foreign exchange on cash (63) (53) (10) Net increase in cash and cash equivalents 2,612 272 2,340 Opening cash and cash equivalents 113,568 40,682 72,886 Closing cash and cash equivalents 116,180 40,954 75,226 2021 ZETA GLOBAL – PROPRIETARY & CONFIDENTIAL 14
Overview of stock-based compensation expense • Historically, Zeta did not recognize any stock compensation expense for grants of restricted stock awards or restricted stock units (collectively, “the RSA’s/RSU's ). Pursuant to the Company’s stock compensation plan, the RSA’s/RSU’s did not vest until a change of control and as such the expense was not recognized. • In March 2021, the Board of Directors of the Company approved the modification of the plan to: ― Include the IPO in the definition of change of control. ― Extend the vesting schedule of certain grants. • This resulted in a repricing and expensing of the modified grants post-IPO. • Zeta continues to estimate approximately $800M of future stock-based compensation expense related to the pre-IPO grants. • Zeta adopted the graded vesting attribution method for expensing stock-based compensation, which will result in a greater stock-based compensation expense in the first 1-2 years and lower expense in years 3-6. Zeta elected to recognize forfeitures as they occur and does not estimate forfeitures in stock-based compensation expense. 2021 ZETA GLOBAL – PROPRIETARY & CONFIDENTIAL 15
Estimated stock-based compensation expense FY21-26 1Q'21 2Q'21 3Q'21 4Q'21 FY2021 FY2022 FY2023 FY2024 FY2025 FY2026 Total Stock-based compensation expense (Pre-IPO Issuances) - $119.3 $69.3 $69.3 $257.9 $255.8 $152.3 $77.8 $33.0 $4.5 $781.3 Notes: 1) All amounts shown above are in millions. 2) 2Q ‘21 and 3Q ’21 stock-based compensation shown above are actuals, other periods are estimates. 3) The stock-based compensation estimate presented here relates to the pre-IPO issuances only and does not include any grants that the Company expects to issue in the future. Further, the Company estimates to grant approximately 6M-8M restricted stock on an annual, go-forward basis. 2021 ZETA GLOBAL – PROPRIETARY & CONFIDENTIAL 16