Zeta Global (ZETA) 31 Jul 242024 Q2 Earnings call transcript

Greetings, and welcome to the Zeta Second Quarter 2024 Earnings Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Scott Schmitz, Senior Vice President of Investor Relations. Thank you, Scott.

begin. may You

where thank about Quarter and release joining for along at us available to find Hello, SEC our Conference you Call. Second filings, investors.zetaglobal.com, website Relations XXXX Zeta's other earnings will Today's Zeta's also on links information everyone, with Investor for you Zeta. presentation are and

me the call Zeta's Co-Founder, Executive Chief and Chris on today Greiner, Zeta's Joining Officer; Financial Chief Officer. Chairman are David and Steinberg,

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business, our well our other the will GAAP in results. addition, GAAP financial the We that, earnings In certain substitute can SEC. found use and now believe and to of the today non-GAAP the as be provide filings and over measures, references the considered David. addition they non-GAAP as for our supplemental on our include where available these measures, in to discussion our will With non-GAAP in Reconciliations should to useful measures a appropriate, release our managing call with which I not corresponding for investors. information to measures turn earnings as presentation be website

of bringing afternoon, marketing today. we to together public data us promise modernize Good Three thank and you technology. you, went Thank with everyone, ago, years the AI Scott. and for joining

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Chris? over it detail. turn let discuss greater results Now, Chris to our in me to

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year. guidance, increase upside XX% of XX% represents the representing full-year prior growth of increasing and XQ, For This midpoint the from year-over-year. from full-year our guidance the a XXXX, we're delivered an revenue growth last of $XXX in million, million $XX is of million acceleration more to $XX than we

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year-to-year. For up revenue increasing to the million of we're the XXXX, midpoint guidance XX% $X.X by $XXX.X third million, quarter of

million, adjusted of of the a EBITDA XXXX to full-year margin. increase midpoint of or terms XXXX representing In were guidance XX% $XXX.X increasing XX% year-over-year

million our up of cash XX.X% cash XXXX, a the of in up raising to from flow For $XX.X million XX% million This midpoint We're the guidance margin. XX% of year-to-year EBITDA full-year by adjusted third XX%, to increasing represents prior the $XX $XX conversion free quarter outlook. last of we're percentage versus or guidance $X.X midpoint million, also year.

take with questions, a I'll of we your wrap couple Before thoughts. final

And to investments guidance and made platform, our layer, the clear is reengineer and native our to motion our it's be First, make hot, to strengthen. proving therefore, AI to in go-to-market precious. rearchitect into continues business ago confidence application is years visibility and our second, data

David let your for Operator? back Now, take to call over and me questions. the me to operator the hand

Thank you.

conducting be now will question-and-answer We session. Instructions]. [Operator a

Needham First Company. question from with Ryan comes MacDonald &

amazing quarter. scaled start the strong continues you, to all excellent David, on maybe about customer big agency a that. Congrats channel to the with clearly, ARPU expansion. an hear driver And to be of

existing that forward? move these And additional As agency these about added, brands -- any of additions clarification, there seasonality brand is quarter? the we partners with expansions added as were about there customers base were seasonality agencies? agency during new think the just as the within are all-brands we should think a we any of Or

the appreciate of we Well, first, have We gone to X to it. you, I over Ryan. that thank from couple quarters X said had last X.

is rapidly. are those ones as over seeing scale we've So, these agencies the added last X, the that but X in the new answer months, in the we're very very,

at of the about our of at our that existing growth we're and ARPU well clients is it it, you interesting AI, of When are emblematic so have from per average software average using the growing of One because how our customers because the things agency you I really per if XX the going that's quarter prepared an look working an from at remarks, XX% found agency was, seeing pace. accelerated are data, with look of surface, Holdco XX today that to talked in each work really scratching which about clients. it, just at an the we agency, hundreds these if of brands you Chris X look brands

about happy we're So, the very progress there.

our with agency love -- depends asking not seasonality you're been are clients. seasonality, right? the As brands, agency it's it about to about us. They've clients. incredible on of addition really partners the working our to if it relates We all case, We

their to stories So, as the And more right? the service we're with a is agencies. as of them us that. a of there heroes to bringing with help be to they're subset, goal their brands, work brands Our part

So, to I with to with brands as continue to whole to grow very, the host And and of well. I expect we're by goal which expect us incredible agencies. some them grow those very continue. working midsize of agencies, that our way, is there's trend within a closely,

for As the revenue brand. depends it it of really business the relates seasonality to on

buying around in the You've you've got season. some that quarter holiday brands up up brands quarter and got fourth in go that the season around some go the first

up in that. right? have go increasing with X been number around we brands is You that goal go work you to we've brands those consistently But third the some continue can through the brands. And back-to-school, to the add those quarter agencies of and that

Are XXXX the this Maybe get for and those and those because just verticals out remind current And not levels? quarter. the we ask for as and obviously wanted to a back exceed follow-up, just as they were them, prior a to sort there of, about the a where again automotive where of just let's fully environment, to yet? point to you those insurance of trending think a us of maybe on to are you levels those acceleration verticals verticals point the grow is Can they sort levels kind called sort that to but call relative possibility improve? recover

can't one no substantially into they brands think the we have And in verticals basis, insurance than grew opportunities there's But at But growth a we we've they at combined the places. quarter, well. second The peak, Thanks, both got each no, momentum individually existing like In the good total the in even different not point. X and to as Zeta's grow XX%. feel larger faster years and obviously, first returned on then those quarter. to over were those Ryan. and reason automotive to than in verticals yet pipeline

again a Congrats quarter. on great

Securities. Tillman with Next question. Terry Truist

David, Scott, as from I couple had Chris well. a and congratulations me of questions.

indirectly, the at love seeing. then to market don't at I'd first for point. in to RFPs you replacements? AI that creating revenue of direct language part little the is delve But the I use this opportunity, question, the this first bit into second question AI, Are the Chris. it monetization part And have you Gen consumption it And involved how more is know $X AI or driving a modules? actually the and point, billion-plus then follow-up in the more on direct Gen conversation traction of deal? you're have a The strategy a those for Gen seeing replacement other I as

you, thank appreciate all, it. of I First Terry.

tell majority actually the it would our I is are products, result of I know customers it. I ARPU you, and existing using of -- not sure So, of a percentage, XX% our share now direct AI believe growth the actively can our vast it's Gen I'm the I customers. But

not than We use with faster and adopted are that seeing customers customers us. who their yet utilization in contractual it fees scale substantially have it, increasing relationships

I scenario We're more generation data charging revenue But advanced So to not it in is we a for XX% as for rate. I see correct, it's today. think the it build do a direct do scientists directly where come box. growth not corporate yet. years now, a responsible for the we in

high replacement ones the to seen did an months it relates incredibly winning an we the percentage reason cycle, will component X And to not that last are I RFPs an AI RFP over personally win believe I the and of that the it. have at is see. to it we that continue have not As

Our to why what to My Zeta. to what Zeta used long-term is goal is continue and be to Zeta to work to continue from on now, who goal Zeta, that. must-have to get we is grow

more in we AI around higher are the language of get, them we RFPs more the the the So, there, percentage that's winning.

just mean And a final scaled here at was it the I I substantial. Chris, is I on had second mean, I it ARPU. to question time. customer look the guess,

do about we we this X% XX% how in was in I range Holdco the But XQ and know that congrats and to something brands, of assume but agency growth by more think XQ driven XQ? definitely should with some So, on XQ? that. traction

to best our keep expectations do Terry. think Thanks, it's within I model.

ARPU and customers, between the XX%, X% is and have then grow helped X% and them the which quarter to have and bigger for ARPU adding of between to What the scale scaled really amount making X/X our both it's X think channels. the first cases our of for of a use then the I count grew X terms case, over in growth that cases, And use of use the customers over while, offer total acquirer, great to grow, time, now is using of and X a in we this XX%. the customers growth and grow XX%. tailwind or more those So, And could of all XX%. we retained revenue grew all

was verticals broad-based. across of It was it strong So, was multichannel. industry our and adoption it

question. Next RBC. Swanson, Matt with

also going for I'll pain your staying you David, goal long do Gen you you're little before CDP? AI seeing one down with with achievable echo the my longest Could is an of quarter. marketing have into And accelerated that's as pathway, AI. the congratulations largest get what that becomes on think of the real been people maybe shift. this that this it personalized kind on just how like deeper and causing then we point bit the a

Well, Matt. thank you,

Let a top right which and our investment a is down could And should able intelligence, the is are year investment? artificial doing industries native me even pretty to return an for at that. buy already marketing to to high-quality products the the And does higher clients' be start seeing of to we years, and points on what show the we're buy layer, eliminate were ago. get take which our percentage ability How intent of not the And by were ripe if haven't application and return over last, to highest pick disruption, look data people and the data, even at our on really marketing you application ago. native inclination utilizing year the in we that using intelligence, saying ability than right? the a the your that biggest Gen with and the by AI artificial number, level of pain XXX show marketing to do that layer, the well a you changed the to is

why So, exponentially, buying at we're on for able them They're onboarding we're clients investment it. seeing using up see clients, clients products advancement. that seeing the They're I our pace. is you And up we're go to speed. return are existing our higher get think in as to who substantially a the then and which

As don't to already one-to-one marketing get I also you literally really that individual, doing to organization do scale. do at know able And another you targeted that. asked, massive that's how we're

So, we're X,XXX able and individual to signals look at individual to to products to as an as target services. relates clients' many it data as our X,XXX

there. much So, grow I investment. we're long-term, the our to marketing ARPU approved well that's only to right? way evolve clients how to very we're for return Because clients to and would continue will where customers. getting to continue we And be I'd be, on our continue onboard our existing But on fully to run think like I not are like to and market who in and

of, Chris, starting to point, whose are lands you you things it the as your now like matters land larger you then, kind well currently. when but more just also as your seems as recognition that And prevalence getting index, the expanding are as the in you mentioned, past brand guys of data David are like get the see market? size through But

We've done, bigger. job processes has most very, is making Matt, done good RFP the in sales team very prominent a where its

a the the So, into to an get and what of to demonstrate plus CDP what able breadth the the we're and phase, second e-mail an scope. then deeper e-mail we're the the was phase through as maybe able we upsell to sandbox as enter we platform customers first into phase scope

a and on pilot and pilot we able as I noted, to and in channels have to adding where see as the proof as think as then use the are that's XXX,XXX I a to not most But sauces evidence mentioned choppiness getting secret bigger. shy we the many too So we're of navigating from And of outlined deals think you nicely cases. with that off start or concept. the prepared I one go of of slides, very is the remarks, we quickly

Next question. Oppenheimer. with Brian Schwartz

was upselling more color medium-term sense number? acceleration, these hoping items, give you sense growth versus X ask you that Chris, us consumption. the quantify Is revenue of it versus possible growth seat I to the from that us that on revenue a giving order specifically little of driving growth strong at or contribution near-term, a for to anything all rank a what's can what

really is our stood more threshold really consumption. X/X we And would of us what customers channels. or saw interesting out we using a quarter, X scaled I of very I say question, to It's neat Brian. as crossed this strong noted, a

So, driver cases, quarter evidence meaning more over of a of can't consumption there just XX% think year-to-year X being that big Cross-selling, I was adding use might highlighted quarter. a this I cases point around have a all growth. price, us but as of us analytics stood really out is. too. And how for well. that we that we're driver growth the been, processing part size but isn't See that to was I think the use of

fast We're in And been, that's really growing at starting seeing really a at the your growth to that core, which box. overall scientist It's material frankly, own a has it data its into such the pace. really is ZOE product, quite drive business. analytics

every who enterprises customers, their into and voice-enabled the their package be, could to customers, ecosystem. So, it's better to really target could allows get you additional a that how customers marketing analytics understand output possibly

year? duration. your to you more cadence customers sales you're what terms to buy follow-up seeing Are picking coming back was a had saw seeing or the I one question cycles, from in with you either you customers scaled year on of just earlier this scaled The of compared the last what up the

a No, Zeta. slowdown of see didn't course, at Brian. We

So, continued on a up. I it's process. high-quality ticking very wouldn't say It's

half at it numbers for very look you solid first growth. the If was superscale,

want thing other really our for I note to client, agency-client The though superscale individual could to Chris I was that that each shows is important 'XX be from brands went agency think a our those one XX customer. average each as XX. of only accounting reiterate to one Even

to clients the consolidating growing of of So entity. represented substantially numbers, though faster inside we're it's and superscale inside and scaled even one scaled super-scaled

Stanley. Next question. with Elizabeth Porter Morgan

I wanted the to up growth. follow on ARPU

of coming insurance non-agency an seeing out side. back. sizable being you wanted But And I a called in you broadly? permit from kind of agency it's drivers driver. early, on what a growth as and the seeing be auto what would kind given just X insurance cohort to to spend seems first were kind we're of not more ARPU third that double-click and more non-auto AI today? The durable really in And are rate And the make

you, Thank Elizabeth.

start saw Holdco. see we saying agency ARPU the the by me board. We it just let growth across with didn't So

generative And as out AI customers And the interface. and part majority are of we were it using rolled user into out them, of I of I as see in time all using the vast earlier, up. upgrade as So, the an to want started of they integrated almost our ZMP. products. that our able again, said our in real went a go to really start that to we part to to It's them a customers now just ARPU that, growth reiterate automated just

to have at ability we're pace, I continue than a ARPU exact its and in say that of but to would AI -- can faster the to going it's ARPU here today relates grow sure pace growth, to continue because expect not artificial Chris? we continue intelligence. at it that type As sit and I'm us past I to of

now We neat. started It's Elizabeth. to measure conversations,

talked our And up now We're at mentioned, launched in library, will. high we're what engagement. is a really agents we level if David having quarter intelligent to as you So, seeing, of last XXX. XXX

interacting a you It's June, as May conversations think to those just It's conversation thread platform one as conversations, actually conversation. from answers. kind as one and and XXX%. a back those the And completed of of forth. increased just that counts only And So your threads, with right? isn't getting completed user

good see use think into product team and our and turned it's is really external development making the our I engagement. helped So, also And what to it learning customers to technology easy internal for customer usage. the really that's platform resources trainers, and championing we've

we learning our really our their that to to will us, a out has been is with rolling development ability and continue. trend that game-changing clients think to really I with scale want And that's and drive home

I as then the And haven't follow on mobile opportunity. And to much. that touched wanted on up we

does just long on development, kind So, we're rolling on take the trending start to And it really us revenue product of on an contributing before if where update historically, to new line? you how give products expectations see customers. out that could usually you

debut York, we Live we September will so on New our be in Zeta Well, mobile and we said would at product XX there.

faster as of on very, we into So, having source I competitive $XXX ability about not we're again, part like and to we've of good clear, our the utilization. us that think think it in it say this want advantage I that to be that. years ID that there companies X We would very and a solution, get be year. top quickly. second to television. synthesize the the got took it. could Mobile, baked it's excited. the the for base, already using entire a with and than we're other believe very business a few their with very it artificial To as your I could with that everything very question, a a million are CRM Zeta scale a at not Mobile are fully primary our and of intelligence beta-testing numbers it's We're solution, to connected There Mobile products few operational and think job we clients, to year out I do this the putting our We feel be well-positioned. customer will CTV, think we would

in. that way be ZOE same able into will or ZOE other into to activate we CTV, activate operate activation online So, video, the mobile any methodology social,

Canaccord Hynes DJ question. Next with Genuity.

results. how quarter, of in on turn at what decisions, advertising the top think on that mind of with decision spend I'm impact from clients and Google's the deprecation else there? you're excellent field are third-party David, all, might cookies, anything wondering how, if you hearing allocated, Congrats dollars that's

quite believed never it gone would I I've Google get back and for I to I've believe of Yes. to some forefront extremely the Chrome. opt-out you, saying interesting. because the been process cookie. make as forth. DJ, consumers they're it easy was going I of and said at loading time, They've you know, just process the for mean, the rid of

true it, last where is attribution. effectively attribution at the ability over I'm I Marketers to think a few investment models. going all of want not build can So, I years. cookies that we're today, and almost you call it's to of do the third-party if going next think what a part I cookies be return even just dissipation all-or-nothing. see touch do don't sure that are an third-party to cookies look on

ad So, to looking to to that $XXX return this to might up, $XXX. customer then the them was last every they or going last we're that But on and it's of them XXX% true by at deliver really you attribution. product. spend making the to purchased investment of touch buy Zeta a clicked absolute addressing utilizing get the ran touch you versus like of $XXX being a ID click on What point a attribution a is and look last able

companies of efficient to return are flow think one Zeta as I most invested on are of it. already lot see to to component Google they understanding them. not be a that it in interesting lot marketers where most rolls It's dollars how a So, and going are choice There this. the of seeing relates consumer to out a is have we're investment. very the that,

major individuals for attribution, to believe that time, As the our will believe a at advantage. we or pointed repeatedly, we continue, ability but continue that out I the building going use our of models, cookie to and to cookie we a dissipation track is third-party addressing without be the it competitive do same do not

for Chris, you. then, follow-up And a

pertains business. I question capacity on a agency So, sales have as the it to

your active in Do capacity of spend how about it customers? I to accounts. think onboard new have agency agency an time the have mean, get reps on agency to is those you got your and once be led to that sellers Just your So, direct helping with involved? by board ramping with do agency? reps all how trying Zeta, kind much

the We the for is It's happening by reps. a the you where an relationship-building process. much about it are very in Zeta, X the the hunters ways. our team think efficient in selling different us, same then our team have we pot. agency go-to-market sales because model, have only in And farmers is But and bottoms-up agencies the top-down

it's hunters then is and So, new very what involved becomes very the working more of ago with more work and subagencies that we partners XX the in today. large working XX more up inside farmers with as in the much those begin begin year to gone agencies that with within really from that's And farmers than process, these land average brands, agency Holdco. effective that we've and a how XX% their the to that then

Arjun Next William question. Bhatia with Blair.

to guys are new and of But us the brands work of them nice to certainly is where to take? acceleration Or great get theme, that a just take that of your to maybe over just on congrats, that scale a a on to steps sense the can coming can My other platform? on here. Zeta lot coming the One, in have the give start of Is what needs time maybe just in. of some that brands something function see itself agency the you is these the continue new from agencies you it brand do? really a might to you the combination agency time? of move and that channels channel social the beyond function Or a

I thank me let you, Well, by saying it. start Arjun. appreciate

combination I with into think think our the right? Chris brands. the a it's actively working I and X, as embedded farmers agencies the of said, are actively

very the where onboard not, to automate Holdco process into operate to because the process. we of social social, Zeta being others able able using for efficient to ecosystem do and agency automation a which inside there everybody is have such remind to the ID we're So, good -- the

social took We client, process it really If X from platform. greater move to the agency to see years on with the other you that brands the through on-platform them agencies will that X look most onboarded agency about of primarily at able with. really are we're scaled we be to our believe go substantially And we've same platform. going on a growing we versus largest, primarily to and to percentage and those juxtapose expect ultimately

is know another is still accretive lower, it everybody for you I'm margin. point saying that gross to it I important margin get think our this, I is but the yes, operating though, Arjun, but

we from feel anybody is don't we're primarily very although focused those to continue methodology, do efficient we So, directly of work think agencies, both on And like will agencies of brands a work that contribution things. a We and sort to I and want with perspective. we with this now.

along kind that acquirer of XX%, if lines, the changed has to growth if hear cases Because remember believe, I then up? anything, What All grow use I growing I for I that surprised, similar of the retain right, use has to number primary and think above helpful. pick right. And there, been to I Very get time. some case was. are your was pleasantly kind guess,

I'm so, technology to perspective from operationally And growth. if there's that a done drive you've anything a curious perspective sales or that

to of use is case the reiterate, pace. last for clear, more products we've the the and sorry, more new adoption to exponential pretty been seeing Arjun, are be dead a different Yes, balanced. also of were it's We just using but use I'm at cases adopting different drum, as over clients clients the grow, an looking and relates the retain, clients, couple good us It cases We're at I the faster using for had use keep And years I cases, been said, Gen are What and well are who channels. growing at Chris artificial looking was as it including always see to X -- seeing acquire. beating hate growing acquire. to more to AI AI that that intelligence. we're use want

time. Stock when has to plus AI of intelligence has of really at the perspective the exciting. equals And begun ago adopt market Chat from started been artificial awakening a that a to I GPT our funny. the we that sort have that launch us as data clients operating joke sign York begun there was had years Exchange, meant intent, artificial we ago, power our what the and X years public of it's to of great It seems It's went benefited on like said tailwind with X data. to I the it. understand the intelligence people New explain So, side

Next Craig-Hallum. Kreyer with question. Jason

guys. Congrats,

clearly mean, activity? inflect RFP new Just we just little Or growth can the a customers share? at generating more more Is pipeline AI really I are wondering is if related filling more onboarding how you trajectory. maybe bit this this faster to define wallet a rate?

Jason, above. of all I think it's the

RFPs of than land us are with faster customers that seeing you're even scale growing engagements and percentage our We're able ever. and winning think customers new I in. faster greater we're to an expand to invited strategy participate and existing

And talked case. bit we use about a has AI influenced how

behavior curious the work Just across changing if that's different customer any channels you with?

It I e-mail wouldn't informing the good because again, see across balance it. of strategy. really -- right channels I really AI is all across which growth in it's X was omnichannel other balanced kind the was the it CTV be used are display. was to mean,

pretty was growth set across well. channel balanced the as it So

of Next Koji Bank America. with question. Ikeda

XXXX Congratulations weren't. I Alstrom's to that. wanted one in was does press looking the updated it in the I to sound on really question quarter, results a XXXX deck, strong. targets here. for like noticed this ask maybe on for And investor And potential the commentary was thing great be I or the Clearly, but they targets. the release the

high. is You visibility did mention

something that little get today? targets visibility into those happens it 'XX is than update turns the murkier as not where today? a why the bit calendar So might Is there

No.

You're for the inner same thing. David. been channeling your He's asking

do who's X in last like February. it So, is the years, saying, which one have we let's I'm the

update really that the call, putting as surprise that. we we've It's the with model the momentum that's the started we our reasons to I have. are given the updated We of the business process, that change next in growth do year's excited February. next in we one into visibility it guide contributed me the if have a is doesn't also several we high. as guidance out and just super that of wouldn't is And And part when good pattern long-term process February. about in of That the

given would fact we're we page. I read same on that And just yet, into not have definitely the so not the

had just done on to a an And since follow been it wanted And about being prepared there. a also the out that comment opportunistic in acquisition. then has you up you've while remarks

in So, remind to What us like bigger And consideration go M&A in sort the be today there framework? or can changed? has versus of similar you past? does much would that your that it framework? it look Is what

for Yes. transforms both Koji, that believe the companies I I worst. always transformative M&A say,

products doing might we we same almost too growth quite really terribly have us clients. smaller now platform What big, we and won't time, into see we the XXX frankly. But don't you So, the scale buy. accelerate at have other currently that plug that asset the anything a of could

The little I of didn't the sure a a understand of year guidance And make power have as that initially, we So, I've I was that current tuck-ins. wouldn't organic public always But pure for think people size lot AI public what we've it purely our focus did that maybe years tuck-in A might X to at early be different that. game we organic. strategy. an to show considered this important than on or given change and a growth. as Zeta time, slightly where X at it done wanted to organization, for was company I is the newly it same ago. really the

So, at, meaning which a it's into X lower buy would that do product XX at we our completely integrate clients under and those primary that within believe than something look as are scenarios buy, stack multiple opportunistic, to would we could something. M&A, we a existing at trade months it we're tech it's we substantially it our the

up and picking people data. love also great We great

is Next Ryan Barclays. question MacWilliams from

the For here revenue expectations a beyond election advocacy that. continue presidential month candidate? second Obviously, in each David, has election? And increased new customers quarter. see Could spend these to difference Democratic the given happy of any

this million it, the what We a but That a part the not is So million for the Ryan. the as answer lens was not of political a was of growth Chris would up. is frankly. into guidance the step -- remarks, on, in for quite I see we advocacy. was big it quarter most it of at and of always said a did on But in part going $X.X did under look rate Obviously, our advocacy we constant quarter. step-up second the was period keeping $XX And it, political. a prepared we're see

QX infer would as at in very be point, business. That at political this we're $XX.X a conservative, that XX% might that So driver very, QX. and advocacy would in but growth and not of we'll And look pleased of see guidance. I perhaps core that of the rise rate million with the once big again, operations

the it total was. just political only than a to was how $XX between sense you advocacy revenue By give for was way, and it million small like less it --

advocacy for which of always most on. And is

it's So, I say, just "Oh, they look at and that don't want anybody to that's why grew, not.

about for point? year. next about then And just And at Yes, platform them of up. just differences about in feel the year? growth, more you for thinking pipeline this guys that clearing on what the for can was Thanks with half or how do the how I revenue are Chris, changes thinking that direct this you you second revenue any direct

strong. is pipeline Direct

mix to direct in first and was. I in first becomes like the at it think the the more are improves half that growth to growth the mix terms for direct in XX%. XX% where prominent. I revenue quarter the The rate of half, second was year-over-year odds in half, We being XX% second from rate grew think

across about mix the feeling the good as we So, year. go of direct increasing

do way, your but Ryan, it's to by through to start advocacy, you with the And once working last political, that. pipeline continue on they after point, a good them, tend

as could of well. they be a next So, component year

with Clark Next Wright D.A. question, Davidson.

the following just about business. that up Maybe on point agency

gross think that Given do to you expected, it than relative terms is margins current in levels? is you scaling faster the of what impact

what When which Clark, it's leads operated what seeing an and that is using starting advantage. they to more gives over owned our our to then channel with omnichannel right we're -- more them and channels. social big time they When capabilities, automation them Chris. But take using go a is do now, start, strategy they're

now you've e-mail, display or But converting where social lower what process our seen they're a higher actually higher over where agencies, does seen it adoption, we've the a TV. EBITDA margin gross it margin even seen social gross of months But drive margin contracting the the it's has XX in with we've to to part last, adjusted expansion. as hyper say, will our initial channel scaling this lower though because is a led video of So, profile. using connected that

accretive an operating at in come revenues those contribution margin. So,

just terms going in quarter forward, continue you last you effectively said reiterate current levels. And continues to ramp of that from what to had it

you Are the specifically speaking to profile? Yes. margin

political It's think political quarters. pretty in frankly. about it the The level. first of of way year XX% the course side, is lower dynamic, the margins margin right or talked question sold could and be gross that the the in the XX% be half back mark in of being can goods I XX% continues throughout on to the the cost X year. of come it, call We been percentage

that point. at that So the only would it off of thing minus the or this XX% plus takes be

me. for one last just then And

that catalyst the this efficiency, called further you that Or terms was quarter-over-quarter? last quarter? a as of In relatively ramp that same out sales Did quarter.

I'm a broke sorry, repeat I for second. apologize. question. I up your

a beat. this and terms quarter results last in and was relative noted about was I same? say, quarter, to you last efficiency, terms in was a that, of to that Was it the quarter catalyst going catalyst of the sales the that also

that first productivity to that do we maybe heard was mean, if I it I'm with -- time, up, had the sure. go but political to I I nothing continue see sales thought

is I Yes, but I guess going route forward, appreciate that. ex political

yes. Ex-political, Clark. you, Yes, yes. Thank

question. from Securities. Cummins Next B. Zach Riley

to David, of your the some and I marketing their landscape, of you curious on ad is really David quarter. on key commentary an tech cycle. speaking acceleration down competitive Chris, this replacement current assets. was I your mean, just considering competitors especially were of one on winding congrats platform

AI to intelligence some into our assets when We or have to that put layer, companies like level in heart ago our us. platform, with and wind made our then is where decision database, their able to in of We're making we a step that. out come shape to matters. algorithm, world, We back investment Cloud. application competitive In a the us with create down native has Marketing dipinto like the the of years we're up Yes. Listen, data to algorithm, truly platform a a which go and way, put of do the substantially rearchitect intelligence completely competed an intelligence answer the which big form artificial -- to do allows landscape a the to the platform faster to X back millisecond data better go third-party to on an and return real-time. by

to to And are, the to we our advantage believe that that. is catch landscape they're we're assets and continue we our and the on our as generation. competitive continue trying while getting over up to invest competitive moving So, to as bigger to AI focus next data where we do we'll continue

standing not are We still.

we going we're technologically, where excited incredibly and as are about are where organization We Zach. an

one Can raise really follow-up guidance cash see increase in the you're flow collection comment to that as your cycles the And on flow my the in getting some it's you Chris, to free and these well. the nice free agency confidence for comfort of with in being customers guidance? cash able

of driven learning was perspective still patterns. from working payment a a quarter, by this customers. their million $X still that cohort capital It headwind We're

said very, trying well. to very I've These have balance that before, As as tables kind and very, are of corporations. David isn't said scenario. They very and they're just different this if has of an kind solid

I made that on cash some taken variability But call aspect of even we've through it. free the flow, certainty. feel of still degree working high into we've a that like timing of with account. So, our We're

also XXX% note, just to you pay pay It's of over, they the they Because some Zach, important rolls if of you this right? slower, even time.

does some catch up and at point, that. we're to it already see So, starting

This concludes teleconference. today's

participation. your this You for may thank and you at your time, lines disconnect