Zeta Global Reports Robust Third Quarter Performance, Elevates Full-Year Outlook
## Zeta Global Achieves 17th Consecutive "Beat and Raise" Quarter
**Zeta Global (NYSE: ZETA)**, a provider of an AI Marketing Cloud, announced strong financial results for the third quarter ended September 30, 2025, marking its seventeenth consecutive quarter of exceeding revenue and profitability expectations and subsequently raising forward guidance. This consistent performance underscores the company's operational efficiency and the increasing adoption of its artificial intelligence and data-driven marketing solutions.
## Detailed Q3 2025 Financial Performance
During the third quarter, **Zeta Global** reported revenue of **$337 million**, reflecting a 26% increase year-over-year. This figure surpassed the midpoint of the company's guidance by $9 million and exceeded market consensus forecasts of $328.09 million, representing a 2.72% revenue surprise. Excluding revenue from political candidates and LiveIntent, the year-over-year growth rate stood at 28%, indicating an acceleration from the previous quarter.
Profitability metrics also demonstrated significant expansion. Net cash provided by operating activities reached **$58 million**, a substantial 68% increase year-over-year, with an operating margin of 17%. Free cash flow surged by 83% year-over-year to **$47 million**, achieving a record margin of 14% and satisfying the "rule of 40" on free cash flow margin and revenue growth. The company's **Super Scaled Customer** base grew to 180, an increase of 12 customers quarter-over-quarter and 25% year-over-year, highlighting strong client acquisition and retention.
## Analysis of Market Reaction and Strategic Drivers
The market's bullish sentiment towards **Zeta Global** is a direct consequence of its consistent financial outperformance and strategic positioning in the evolving digital marketing landscape. The robust revenue growth, coupled with significant improvements in cash flow and profitability, reinforces investor confidence in the company's business model and execution capabilities.
Key drivers for this sustained success include the company's proprietary AI and data capabilities, which are central to its **AI Marketing Cloud**. This technology enables clients to achieve higher returns on their marketing investments, leading to increased customer adoption and expanded use cases. The growth in **Super Scaled Customers**—those generating over $100,000 in annual recurring revenue—further validates the value proposition of Zeta's platform.
## Broader Context and Future Implications
**Zeta Global** has demonstrated a remarkable track record, achieving five consecutive years of at least 20% revenue growth and consistent free cash flow margin expansion. The company's updated guidance for fiscal year 2025 now anticipates revenue in the range of **$1,273 million to $1,276 million**, an increase of $11 million at the midpoint from prior guidance, representing a 27% year-over-year growth rate. Adjusted EBITDA guidance was also raised to between **$273.2 million and $274.1 million**, up $9 million at the midpoint, implying a 42% year-over-year growth. Free cash flow guidance saw the most significant increase, rising by $15 million at the midpoint to a range of **$156.9 million to $157.9 million**, indicating 70% to 71% year-over-year growth.
Looking ahead, **Zeta Global** has established initial 2026 revenue guidance of **$1.54 billion**, projecting a 21% growth rate based on its 2025 guidance. This organic-only view does not yet incorporate the full potential of the pending **Marigold** enterprise software acquisition, which is expected to expand Zeta's enterprise reach through cross-selling and significant revenue synergies.
The company's commitment to innovation is further highlighted by the upcoming launch of its AI product, **Athena**. Planned for a client beta by the end of Q4 2025 and full production readiness by Q1 2026, Athena is poised to be a significant driver of future growth by enhancing client productivity and unlocking new revenue streams. Management has set ambitious long-term targets, aiming for over **$2 billion in revenue by 2028**, with EBITDA margins approaching 30% and 70% free cash flow conversion, underscoring a confident outlook on sustained expansion and profitability.
