Zeta (NYSE:ZETA) Surprises With Strong Q2, Stock Soars

Advertising and marketing company Zeta Global (NYSE:ZETA) reported revenue ahead of Wall Street’s expectations in Q2 CY2025, with sales up 35.4% year on year to $308.4 million. Guidance for next quarter’s revenue was better than expected at $328 million at the midpoint, 1.2% above analysts’ estimates.

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Company Overview

Co-founded by former Apple CEO John Sculley, Zeta Global (NYSE:ZETA) provides software and data analytics tools that help companies market their products to billions of customers.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Any business can have short-term success, but a top-tier one grows for years. Over the last three years, Zeta grew its sales at an impressive 31.1% compounded annual growth rate. Its growth beat the average software company and shows its offerings resonate with customers.

This quarter, Zeta reported wonderful year-on-year revenue growth of 35.4%, and its $308.4 million of revenue exceeded Wall Street’s estimates by 3.9%. Company management is currently guiding for a 22.3% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 16% over the next 12 months, a deceleration versus the last three years. Still, this projection is commendable and suggests the market is baking in success for its products and services.

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Customer Acquisition Efficiency

The customer acquisition cost (CAC) payback period measures the months a company needs to recoup the money spent on acquiring a new customer. This metric helps assess how quickly a business can break even on its sales and marketing investments.

Zeta is extremely efficient at acquiring new customers, and its CAC payback period checked in at 4.6 months this quarter. The company’s rapid recovery of its customer acquisition costs indicates it has a highly differentiated product offering and a strong brand reputation. These dynamics give Zeta more resources to pursue new product initiatives while maintaining the flexibility to increase its sales and marketing investments.

Key Takeaways from Zeta’s Q2 Results

This was a beat and raise quarter. We enjoyed seeing Zeta beat analysts’ EBITDA expectations this quarter. We were also glad its full-year EBITDA guidance exceeded Wall Street’s estimates. Overall, we think this was a decent quarter with some key metrics above expectations. The stock traded up 5.8% to $16.80 immediately following the results.

Zeta put up rock-solid earnings, but one quarter doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.