Conference Transcript - ZETA 2026-03-02

Katie Kieser, Analyst — Morgan Stanley

Awesome. Alrighty. Thanks everyone for joining us at day one of the Morgan Stanley TMT conference. My name is Katie Kieser. I'm on the software research team here at Morgan Stanley. Super excited to be joined by the Zeta Global team. David Steinberg, CEO, Chris Greiner, CFO. Hey guys, great to see you.

David Steinberg, Chairman

Great to see you, Katie. Thank you for having us.

Katie Kieser, Analyst — Morgan Stanley

Thanks for being here.

David Steinberg, Chairman

Yeah, it's great to be here.

Katie Kieser, Analyst — Morgan Stanley

Awesome. A quick disclosure statement before we get started. For important disclosures, please see the Morgan Stanley Research Disclosure website. morgan stanley.com forward slash research disclosures awesome so with that um thanks guys for being here great to see you great to see you maybe for investors that are newer to the zeta story just provide a quick overview of the business relatively complex so maybe talk to who the end customer is what about the zeta portfolio lets you kind of uniquely straddle both marketing and advertising and maybe just why the business model is differentiated relative to some of the legacy Martech players that we all know.

David Steinberg, Chairman

We only have 34 minutes. That's like a long answer. I was going to say, I try. I try, Chris. So let me start by saying Zeta has built a software and proprietary data cloud platform that helps very large enterprises more cost-efficiently manage their customer acquisition, customer retention, customer monetization. 51% of the Fortune 100 and 24% of the Fortune 500 use the Zeta marketing platform today. That is not an aspirational number. That is the number that we work with. And what we traditionally do is by combining everything a marketer needs into one user interface with one reporting infrastructure, we're able to deliver a substantially superior return on investment. A recent Forrester survey, or report, I should say, showed that for every dollar spent on the Zeta marketing platform, we return 600% on their ad spend as it relates to returns. So I think that's 100% to 200% better than our next closest competitor.

Katie Kieser, Analyst — Morgan Stanley

Awesome. Maybe just to hit on kind of the AI debate at the top, right? This is the question that's on all of investors' minds, whether AI is representing a threat to the industry, a transformational opportunity for legacy kind of vendors here. So maybe Zeta's been building AI into its platform for a number of years. You're doing a lot on the innovation front with Athena, which we'll get into. But maybe just high level, like where do you see Zeta positioned on the AI threat versus opportunity spectrum? And I think kind of the key question is, what gives you confidence in the durability of the moat going forward, just given how fast the kind of technology gap is going?

David Steinberg, Chairman

I mean, obviously, there's this new, what I would call, silly narrative that large language models are going to disintermediate all enterprise software. And, you know, I guess I joke it's sort of the silly Wall Street narrative du jour. There tends to be one every year or two. As it relates to Zeta, we have three massive moats in our business, first and foremost. We have 552 million active people who are opted in in our data cloud today with an average of 5,000 to 7,000 data elements per person. Our first-party tracking pixel sits on a trillion pages of content and ingests trillions and trillions of proprietary marketing signals that synthesize to a deterministic individual that we have never and would never share with any large language model. Second, in order for our clients to operate with us, which include some of the largest companies in the world, as I've said, 51% of the Fortune 100, we take 100% of their first-party data, we ingest it into a consumer data platform, we then merge our data with it to enrich it. I don't see any of the Fortune 500 companies delivering their first-party data to large language models any time in years to come. And then three, we have a 600% return on investment today. Our clients don't look at us as an expense to be disintermediated. They look at us as a revenue source. We are a revenue center for their businesses, and we are driving meaningful growth into their businesses. And then fourth and final answer is working with a Fortune 500 customer, Katie, very difficult from an onboarding and management perspective. If you have to get through their data security groups, data privacy, procurement, legal, accounting, CIO, CTO, CMO, that is a very difficult skill set to build that we have really become experts at over the years. And it took us a very, very long time to get there. So data, return on investment, and the ability to operate inside of very large enterprises is a massive moat to our business. I'll finish by saying we do believe that the large language models are going to massively benefit our business. So as I like to say, I started my first company at 21 years old in 1991. I was the youngest person in the room for the first 20 years I ran businesses. I am now universally the oldest guy in any room I walk into. There are some exceptions. But the reality is that when you think about it, I lived through the mobile era that was going to destroy technology. I lived through the dot-com era, where the internet was going to destroy Walmart and JPMorgan Chase. I lived through the beginning of cloud computing, which everybody said you're simply going to put applications on top of Snowflake or Databricks or AWS and enterprise software is no longer going to exist. The difference between the winners and the losers, from my vantage point, has always been the ability to create intelligence. Companies that create intelligence and outcomes that adopt these new technologies. And as you said, we adopted artificial intelligence in 2017. We started working with it back then. When we went public in June of 2021, our banner on the side of the New York Stock Exchange said data plus AI equals intent. Everybody was asking me, who's Al and why is he in charge of our data strategy? That's how sort of far back we go in AI. But we've announced a major partnership with OpenAI where we're using them to be the voice foundation and the conversational super agent inside of Athena. But it's all our models. It's all our data that's training it. We use Anthropic inside of our engineering team. In fact, our engineering team today is 125% more productive than it was just 12 months ago. Now, it delivers is 150% increment, but 25% of it, you have to Q&A out, right? So, but the net 125 is very, very strong. We use Microsoft tools, we use Git, you know, we're sort of using everybody across the board to drive productivity, and I think that this is going to be a renaissance for Zeta.

Katie Kieser, Analyst — Morgan Stanley

Yeah, yeah, great context. I guess, Chris, wanted to kind of bring you in and think about how this translates to the model. um q4 results very strong last week growing 28 on a normalized organic basis guiding to 26 kind of sustaining that 20 growth again i wanted to ask in the context of how you kind of laid out a framework at your analyst day late last year durability predictability and profitability of your growth i thought that was a very thoughtful framework it's kind of the the qualities that investors are looking for so maybe just talk through how you kind of exemplified that in 25 and how you're thinking about it going forward?

Chris Greiner, CFO

Yeah. We used to have a metric of how many straight years we were growing over 20. We've now added the three straight years of growing over 30 on the top line. It's actually 28% even organically on a compound basis over a multi-year period. So I think the ability to show that our market's growing, call it roughly 10%, we're growing two to three times that consistently. So that puts us in a durable take-share position. On the predictability of our business, I mean, it's one thing to beat and raise because you can do that through setting low expectations or low, low expectations and doing kind of okay. We set growth every year at at least 20%. And as you said, we surpass it by giving ourselves that typical, which we disclose, a typical two to five points of buffer. So we try to demonstrate through our track record how predictable our business is. But we also give the metrics that allow us to be predictive in our models to investors. So over 90% of our revenue comes from customers that have been with us over a year. we show investors how those cohorts behave over almost now five-year period so that you can do the same level of modeling that we do internally. And then on the profitability side, it was record adjusted EBITDA, which is great. But as a company, we've more and more anchored to free cash flow. It was record free cash flow margins and a turning point in the company getting to positive gap EPS, not just for the quarter, but then being able to project it forward for 26 as getting to at least two to four cents of positive EPS. And I think that's just kind of us running from here.

David Steinberg, Chairman

At some point, people will start to give us credit for visibility, right? We've been public for 18 quarters. We've beat our guidance and raised guidance 18 consecutive quarters. So we're obviously, we have at least some level of visibility into the business.

Katie Kieser, Analyst — Morgan Stanley

Yeah, yeah, definitely we'll dig into some of those points that you brought up, Chris. But one of the other ways we kind of look at the share gain is by wallet share within your customers. often talk about addressing 1% of the available marketing, advertising wallet today with potential to drive that up. What are the key strategic initiatives? We talked to the impressive ROAS, but anything else that you can highlight on the strategic initiative side to drive that up?

David Steinberg, Chairman

To be clear, our 603 global enterprise clients spent $100 million on marketing last year, and we had 1.3% of that wallet share put us to about $1.3 billion in revenue last year. We're projecting $1.755 billion this year up from the $1.3 last year, which would, you know, and our clients are growing about 10% a year. So you would say that grows to about 1.6% to 1.7% of wallet share. Our long-term goal is to get to 10% of wallet share or build a $10 billion a year business with a 30% operating margin and 75 plus percent of that flowing to free cash flow. We're not going to do that over the next few weeks, but we do think we're going to do that over the next number of years. What we're seeing is that the higher we drive the return on investment, the greater the percentage of budget that our clients move to us. And I think the next step function in return on investment is going to be the launch of Athena. Athena, which is our conversational, super intelligent agent, say that three times fast, is really a conversational voice platform that allows you to manage the Zeta marketing platform. So if you think about it, we've built an F-22 fighter jet at Zeta, but our average client knows how to fly a Cessna. And they're flying that Cessna and they're returning 600%, but they're not using anywhere near the capabilities of the fighter jet. Athena is going to be our client's co-pilot in managing the fighter jet. So you'll be able to say to Athena, Athena, I'd like to create 2 million incremental customers this quarter. I'd like to simultaneously lower my cost to create a customer by an average of 7%. What new data sets am I not accessing that I should access to do that? Or what new channels can we experiment to get there? Not only will Athena speak back to the client, it'll change the entire user interface to show the answers. By the way, there's great demos of this on our website if you want to see it. The clients that are already using it in beta are seeing a substantially higher return on ad spend than the 600% we're showing. And the best quote I was given, that it has totally and completely revolutionized their workflow. So the ability to speak in a conversational way with a platform, have it answer you, have that interface then change the platform, be able to say, yes, Athena, I like those new data sets. I like that channel. Let's start the activation. But I don't want to start with $10 million. I'd like to start with $500,000. And I have to be out of the office for the rest of the day, could you email me hourly with the return on investment so I can track it remotely and we can make sure it's staying on track before I expand this? That's all available in version one of Athena, which will be generally available by the end of this quarter. Awesome. Maybe taking a step

Katie Kieser, Analyst — Morgan Stanley

back and thinking about the data asset that feeds a lot of this ROAS goodness, very robust proprietary database. Maybe talk us through what having this database does for you. How is it compiled? And then when we think about the breadth of the data set, definitely very wide, but when we think about the depth of it, how do you guys think about the need to kind of go out and acquire more data? Do you feel like you have enough to keep delivering that insight? Well, so first of

David Steinberg, Chairman

our data cloud, which has 552 million globally people opted in, 242 million in the United States, we touch 2 billion people a quarter. We just don't track them because they're not opted in. We do see some of their data from a modeling perspective. We have 20 different platforms that plug into publishers that we partner with the publishers. We give them software that makes to them, more profitable, allows them better interaction with their end users, allows their end users to share their data out and drive large volumes of traffic to the publishers. And in exchange, they put our first-party tracking pixel on every page they host, they host our JavaScript on every page, and then a host of other things that we do. So what I would tell you is today, we have pretty much every credit card transaction, we have all of their psychographic, all of their demographic, all of their web behaviors, searches are all synthesizing in for those 552 million people. As it relates to is it enough? You know, listen, some data isn't valuable until seven years later. Some data is worthless in 10 seconds So the more data we can ingest the more powerful the models can be and because we never share our data With any large language model ever it's proprietary to us and it's a major moat to our business. What I would say as well is Whenever we look at an acquisition when we think about buying companies, you know We bought 18 companies in 18 years. I'd say it's highly probable. There'll be a 19th you know we look at data sets and we look at what's what's there and when you think about the most recent acquisition of marigold where we picked up some unbelievable enterprise assets you picked up cheetah digital you picked up cell agent you picked up sail through but i'd say the most valuable is the loyalty program where many fortune 500 customers are currently using us for loyalty, that is now, Katie, giving us skew-level transaction data to train our models on. And my entire goal is to continue to drive a greater return on investment. My goal is to get to a order of magnitude return on investment for our clients, 1,000%. And I believe we can do that over the next couple of years as it relates to our data sets, the evolution of our internal AI, partnering with third-party AI partners. And I think Athena

Katie Kieser, Analyst — Morgan Stanley

will be the tip of the spear. And maybe talk a little bit about the two platforms that you have to activate this data, direct, integrated, maybe talk a little bit about channel expansion.

David Steinberg, Chairman

So I want to be clear. We have one platform, just so you know. You asked the right question, but we have one platform. Yes. We have one user interface, one reporting infrastructure. The SEC mandated that we report it in two separate segments. One we call on our platform. One is our integrated platform. Our integrated platform is mostly our partnership with Meta and others where we match the Zeta ID to the Meta ID. I don't know really anybody else in our industry who does that. And listen, Meta takes a disproportionate percentage of the revenue, as they should, which makes us even more valuable to them. As it relates to how we sell it, I would tell you that when we started with our agency HoldCo clients, they didn't have a solution for seamlessly managing their social media marketing. Most of the competitors in the programmatic space, they're just focused on the open web, and they're all trying to figure out connected TV, whereas we came at it with a fully integrated solution that included social, mobile, display, online video, messaging, and connected TV. When a client activates through us using our data and our setup tools to a third-party walled garden that we partner with, We count that as integrated, whereas on platform, it's going directly through us to the publisher.

Katie Kieser, Analyst — Morgan Stanley

Right. And I think the kind of next setup for why Athena can be so interesting is when we start to think about the cohort progression, right, that Chris were talking about early. So maybe when you are thinking about the use case expansion with your customers, what are you seeing there? You talked to an 80% kind of increase in incremental use case expansion on Q4. So maybe what's driving that strength in the use case adoption?

Chris Greiner, CFO

Yeah, it's interesting. Outcomes, better outcomes, but we just conducted our most recent NPS survey, and what the survey comes out almost indisputably is the more our customers use what's available on the platform, whether that's more channels or more use cases or more of our data, the happier they are. our ability and i think it was seen through our net revenue retention rate of 120 which was coming off a prior year record 114 is a good indication reflection of that usage that happiness that loyalty of the customer so what's been driving that to your point um for most part up until 2024 was channel expansion so we were getting an average of call it three channels per skilled customer this year 2025 i should say was the year in which we saw an inflection point in use case adoption. That's important to our financial model because when customers use more than one of our use cases, they spend roughly five times more. And that could be going from retention to grow or retention to acquire or any different direction. We are now at a point where in the most recent quarter, 80%, so 80% growth in number of use cases greater than one, which reflects almost a quarter of our total customer base. And that's up from, call it 13% of our customer base using more than one use case a year ago I think for us the the one Zeta sales motion which you know we're organized all sellers can sell any channel if you will on the truck but we do have them organized by use cases that's how our customers for the most part organized they have custom existing customer set of technologies and people and new customer acquisition set of technologies and people focused on that we have a thin layer of think about it as fire pilots that sit above all those use cases that are very strategically going at existing customers and then process and market to where we see we can add immediate value by

David Steinberg, Chairman

getting them to use more than one use case. And if you think about it, when a client uses us for customer acquisition and then chooses to add retention, the data from acquisition informs retention. Then the data from retention informs monetization, which then both of those inform acquisition. And the return on investment, not just return on ad spend, the return on investment goes up exponentially when you use us for all three, which is why they spend 500% more. We actually discovered this almost by accident when we looked inside of the NPS score a year ago, and we said, wow, we better get behind this. And we brought in a gentleman named Ed C, who ran the Chief Marketing Officer Practice for McKinsey. Very difficult to get a practice leader out of McKinsey, but we brought him in. His technical title is Chief Growth Officer, but I call him Chief One Zeta Officer. And he's doing two things. One, they're going in and they're doing this. This 80% lift in customers who use us for multiple use cases was not an accident. But what's more important than that, Katie, is I believe Athena is going to be the tip of the spear for multi-use case. Let's go back to what we were talking about earlier. So now we've completed how we're going to add 2 million customers at a 7% discount, yada, yada, yada. Athena can then literally pivot and say, by the way, did you know 1 million of your existing customers are currently doing research with your competitors' products and thinking about churning, would you like to save them? And that's how you go from one use case to two automatically because we're tracking all the data.

Katie Kieser, Analyst — Morgan Stanley

Awesome. Yeah, that's helpful. Maybe for a little bit of context around the actual technology of Athena, how would you characterize the evolution from Zoe, which was previously the kind of innovation engine here, and then into what's kind of fundamentally different about Athena and then started to get at what's really interesting from the use case perspective. Maybe, Chris, if you could kind of just talk to monetization, if you kind of look at historical precedents, there was a pretty material uplift for Zoe usage, and so kind of how are you thinking about the data?

David Steinberg, Chairman

Why don't I start with the technology and how it works, and I'll turn it over to you to give the percentages on Zoe return. What I would say first and foremost is when you look at the fighter jet that we've bought. It is so complex. It's not just us. It's tech companies. We get so excited about building our platform, and we put every feature in it and every function in it. We think it's amazing, and then clients get in front of them like, what the hell do I do with this? And we're a product of that. So we found that clients are using a small percentage of what our platform can do, because that's what they know how to do. And the concept of sending out a learning and development group to train these people how to use the entire platform when this is what they do an hour a day. They're not doing it 100 hours a day, right? Well, not possible, but somebody will tease me later for that. The bottom line is that by adding the voice enablement that can also control the platform, it's going to open up all of the data sets and use cases and channels that they don't currently use. Today, all of our AI is internally built. You've got large language models out there. You've got small language models out there. I sort of jokingly say we build mid-sized language models where we're looking at trillions of data points, but we don't need to ingest the entire internet to decide if this individual is going to get a credit card and will credit approve for our client's credit card. right so when you think about athena she is native to the application layer for the zeta marketing platform if she wasn't she couldn't control it like you couldn't have an api in and out and have that work it has to be native but we're using open ai's voice enablement platform which is the best in the world to make her truly conversational the other thing that's going to happen in v2 is you'll be able to access her as a zeta client inside of your chat gpt app inside of your phone so it's going to be native going both ways and i think that's going to be an incredible uplift to return on investment to get from that 600 to a thousand percent chris

Chris Greiner, CFO

the intent from the very first version if you will of athena which was a zeta opportunity engineer zoe was make life easier for our customers to use more of the platform There was so much data and intelligence to be extracted, but it was sometimes hard to navigate. So Zoe made that discovery process faster and easier. Athena now kind of hypercharges that. And we wanted to understand our intent was to make life easier, which meant you used more channels, more use cases. Was that actually happening on the platform? So then we took a sample of customers in the dozens that had Zoe's capabilities, and then we looked at over a month, six months, nine months, 12 months, beyond a year of what was their change in ARPU over that period of time, those that had Zoe but weren't using it and those that had Zoe and were using it. We found there was a two to three times greater ARPU on those earliest adopters of Zoe than those were not using it. So as we begin to kind of have the fun with numbers on what Athena could generate, you kind of start at a base level of two and you can really model up because Athena has really made it, you know, a multiplier easier to

David Steinberg, Chairman

navigate the platform. And to be clear at this point, we've included a de minimis amount of Athena increment into the projections for this year because it goes generally available, you know, by definition, we're saying the end of the quarter, but it's now by the end of the month, right? We're in March and we're very, very much on track for that. I feel highly confident. And, you know, the reality is that we'll have to see. What we're doing is we're going to launch her. We're actually birthing Athena, sort of like the birth of Venus. We're going to have the birth of Athena. We'll see if we can pull off a Botticelli in event. But the reality is that when she comes out, we've got a full learning and development package that we're going to be rolling out with it to all of our clients. And we'll start with our top 30 customers and we'll physically go visit them with the learning and development group to start getting everybody up to speed. So listen, if they adopt it quickly and they see higher return on investment, I think it's highly probable that they will spend

Katie Kieser, Analyst — Morgan Stanley

more than we're budgeting. Right. I wanted to zoom out a little bit to some of the bigger picture kind of industry buying patterns that you're seeing from customers. The RFP stats that you guys throw out continue to be very, very interesting. Well, only up 100%. Right. Maybe like anything particular in the competitive dynamic that's driving that? Any differences in kind of win rates that you're seeing over the past few quarters? And then not just kind of more RFP wins, but larger ones. So kind of what's driving that? You know, what's been interesting

David Steinberg, Chairman

is for many years, we got RFPs. But you could tell they were literally written by the incumbent, Like the incumbents sitting in the room writing the RFP so they cannot lose it, right? Because this might be a Salesforce shop, or it might be an Adobe shop, or it might be an Oracle shop, and they're not going to not be those shops. And by writing the RFP, those large enterprises probably have a rule. They have to go out every three years or every five years or so on and so forth. That's changed. For the first time, I would say the vast majority of the RFPs we're receiving, the companies are willing to bifurcate marketing cloud from the core products of the larger software companies. And I think a lot of that is because their architectures at this point go back, in most cases, 15 years. You know, you're still talking about exact target responses in Neolane here. And what happens is you can't integrate AI into the platform. You can talk about agent force from now until you're blue in the face, but it doesn't make any difference if it doesn't really work, right? And Salesforce's marketing cloud shrunk last quarter. That was their results. We're not interpreting them. That's what they said. Adobe and Oracle don't break it out, but I don't know what they're doing. What I would tell you is the architecture that we have built has data and AI as native to the application layer. When our competitors put AI on their platform, you have to step out of the platform to an AI algorithm, do a query. The algorithm has to do a data dip into a data repository, back to the algorithm to create intelligence, and then it informs the marketing cloud what to do. So that latency destroys return on investment. Because AI and data, we launched a whole new platform in 2021 that literally we can process thousands of data points in milliseconds and decide, should this person see this ad, get this message, or get this connected TV ad? That is creating this 600% return on investment. So I want to be very clear. Guys like Salesforce, Oracle and Adobe are some of the greatest companies in the world. Their core products are best of breed. I don't even think they have meaningful competitors yet in their core products. But their marketing clouds are now the side hustle to their side hustle. And they're just not getting the investment. They would have to re-architect the entire thing, which they could at some point choose to do. But then none of them own any first-party data. They're just using their clients' data to train the algorithms, we are very, very focused on this sort of one plus one equals four as it relates to our clients' data plus our data. And so not only are you seeing 100% increment in RFP volume, which we talked about, I think we're seeing RFPs, we're going to win at a greater percentage than we've ever won before. Yeah. And I think one of the most

Katie Kieser, Analyst — Morgan Stanley

compelling data points from the print was how balanced from a vertical perspective it was. Nine out of the top 10 kind of growing over 20%. I guess, are there any key areas from a vertical perspective that you're thinking could be delivering outside share gains anywhere specifically you're

Chris Greiner, CFO

thinking about for 26? You know, it's continued to strike us positively that the verticals that are closest to consumer discretionary, which are the brands that have to make the most kind of get the most ROI for their dollars invested, were our best-performing verticals again. They grew over very strong comps in the year prior. One vertical that I'd call out because we've been intentional on incremental investment, not just in people, but health care is one that you absolutely cannot have a generalist You must have a domain expertise in health care, by the way, across health plans, across health systems, et cetera. But we've also been intentional in finding partnerships around data there. So that was a vertical that did not grow 20% in 2024, that did grow over 20% in 2025 that we're optimistic about.

David Steinberg, Chairman

And I would just say, one of the things we decided when we sort of pivoted this business in 2017 into what it is today was we wanted to operate across every vertical. We effectively operate against 15 different verticals that I'm not sure what percentage of GDP those 15 make up, but I know the top three make up half. So it's got to be a disproportionate percentage. What I would say is we're very well balanced. Well, usually there's a year where a couple of the verticals are flat, a couple of the verticals are growing a little bit, a couple of the verticals are skyrocketing growth. The last couple of years, we've seen really solid growth from over 10 of our verticals in pretty much every quarter. And, you know, it's been interesting, even some of the verticals that their industries have been challenged. They're moving more budget to us than ever before because they need the higher return on investment. And then the guys who are skyrocketing are doing the same thing because they want to supercharge the growth. So it's been great. I would tell you, Katie, I believe based on the business we've built, the assets we control, we have the people, the technology, and the data to continue to be a 20 plus percent organic growth

Katie Kieser, Analyst — Morgan Stanley

company for many, many years to come. Yeah. And you're not just growing well, but you're expanding margins as well. So maybe with the last few minutes, just talk about kind of the key leverage drivers and how you're thinking about balancing AI investment with

David Steinberg, Chairman

still expanding margins. I'll start and let you turn it over. But let me just start by saying A lot of the investments we made in AI, we made from 2017 to 2021. So everybody's now trying to catch up at 3,000% more cost per item. So we were able to get in before the prices really skyrocketed. A lot of people after our call said, well, if you're really delivering 600% return on investment, why are you not raising price? And to me, what a lot of people don't understand is the 40% approximate of our business, that's utilization fees. We effectively buy the marketing for our clients, and it transitions through our platform. So we decide what the margin is there. Do we want to manage it to growth, or do we want to manage it to profitability? I believe that over the next few years, we will surpass 1,000% return on investment to our clients, and I believe we'll be able to keep all of the margin that exists above that, which will start to drive meaningful increment to gross margin. Chris, I didn't leave you much time, but I'm sorry.

Chris Greiner, CFO

I'll go super fast. We've created a model to where we don't have to sacrifice growth or profitability or vice We give as much, truly, as much investment we can to the innovation team. We try to be as smart in how many people and who we hire on the marketing and sales side. The secret sauce is everything else in the middle should be zero. and we're not there but that allows us to really refine get efficiency in the middle over invest in the ends and that's resulted in great growth and profitability

David Steinberg, Chairman

and by the way we've grown the business I think on a three or this will be the fourth year of a compound at 30 plus percent growth rate greater than a 50 percent last year we grew free cash flow by 78 percent so yeah I feel like we're doing a good job managing to that

Katie Kieser, Analyst — Morgan Stanley

very impressive awesome we'll leave it there thanks so much guys

David Steinberg, Chairman

thank you Katie

Katie Kieser, Analyst — Morgan Stanley

appreciate it