ZETA's Path to Profitability: Sustainable or a Mere One-Time Event?

Zeta Global ZETA reported its 18th consecutive “beat and raise” quarter in its fourth-quarter 2025 earnings release. The primary point of interest was $6.5 million in net income, accompanied by a 1.7% margin. This was a significant detour from the net losses that characterized the company’s early years.

Factors, including a maturing customer base, operational prowess and healthy free cash flow aiding investments, drove profitability during the quarter, and we expect them to continue. In the fourth quarter of 2025, super-scaled customers (customers from which ZETA generates at least $1 million in revenues on a trailing 12-month basis) gained 24% year over year to 184.

A 174-basis-point year-over-year expansion in adjusted EBITDA displayed ZETA’s operationally efficient business model. Finally, a 78% year-over-year hike in the free cash flow (FCF), logging a margin of 13%, supports sustainable profit requiring the cash to be invested to generate more profits.

Zeta Global’s management showed signs of high confidence in its growth trajectory, thus hiking the 2026 revenue guidance to $1.75-$1.76 billion, marking a $25-million rise at the mid-point from the previously mentioned $1.73 billion. Adjusted EBITDA is expected to be $389.9-$392.1 million, up $6 million at the mid-point from the prior stated $385.4 million. This heightened demand and operational prowess, coupled with an upsurge in FCF outlook to $230.7-$231.7 million, should lead to a net income.

The company’s ability to generate profit is propelled by the integration of the Marigold enterprise business, which is expected to realize operating leverage. It suggests that ZETA’s profitability trajectory is not a one-time event, but a start to long-term sustenance.

ZETA’s Price Performance, Valuation & Estimates

The stock has dipped 4.5% over the past year against the industry’s 4.6% rise and the Zacks S&P 500 composite's 19.1% return. ZETA’s industry peer MediaAlpha MAX has declined marginally, while Dave DAVE has surged 63.5% in the same period.

1-Year Share Price Performance

From a valuation perspective, ZETA trades at a forward price-to-sales ratio of 2.31X, lower than Dave’s 3.38X, while being more expensive than MediaAlpha’s 0.45X.

Price/Sales F12M

Zeta Global and Dave carry a Value Score of C. MediaAlpha has a Value Score of A.

The Zacks Consensus Estimate for ZETA’s earnings for 2026 has been kept at 67 cents, flat over the past 60 days. For 2027, EPS is at 99 cents, down 3.9% over the past 60 days.

ZETA currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research