Zeta Global Holdings Corp. (NYSE:ZETA) Q1 2024 Earnings Call Transcript

Zeta Global Holdings Corp. (NYSE:ZETA) Q1 2024 Earnings Call Transcript May 6, 2024

Zeta Global Holdings Corp. misses on earnings expectations. Reported EPS is $-0.23106 EPS, expectations were $0.08. Zeta Global Holdings Corp. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Greetings, and welcome to the Zeta First Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce Scott Schmitz, Senior Vice President of Investor Relations. Thank you. You may begin.

Scott Schmitz: Thank you, operator. Hello, everyone, and thank you for joining us for Zeta’s first quarter 2024 conference call. Today’s presentation and earnings release are available on Zeta’s Investor Relations website at investors.zetaglobal.com where you will also find links to our SEC filings, along with other information about Zeta. Joining me on the call today are David Steinberg, Zeta’s Co-Founder, Chairman and Chief Executive Officer; and Chris Greiner, Zeta’s Chief Financial Officer. Before we begin, I’d like to remind everyone that statements made on this call as well as in the presentation and earnings release contain forward-looking statements regarding our financial outlook, business plans and objectives and other future events and developments, including statements about the market potential of our products, potential competition and revenues of our products and our goals and strategies.

These statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected. These risks and uncertainties include those described in the company’s earnings release and other filings with the SEC and speak only as of today’s date. In addition, our discussion today will include references to certain supplemental non-GAAP financial measures, which should be considered in addition to and not as a substitute for our GAAP results. We use these non-GAAP measures in managing our business and believe they provide useful information for our investors. Reconciliations of the non-GAAP measures to the corresponding GAAP measures, where appropriate, can be found in the earnings presentation available on our website as well as our earnings release and other filings with the SEC.

With that, I will now turn the call over to David.

David Steinberg: Thank you, Scott. Good afternoon, everyone, and thank you for joining us today. 2024 is off to a great start. In the first quarter of 2024, we delivered revenue of $195 million, up 24% year-over-year with adjusted EBITDA of $30.5 million, up 27% year-over-year. Our adjusted EBITDA margin of 15.6% expanded 40 basis points year-over-year. Our strong competitive position combined with the structural forces propelling our momentum give us the confidence to raise our 2024 full year guidance by $25 million to $900 million at the midpoint. This translates into 24% year-over-year revenue growth and acceleration from the 23% growth we achieved last year. This accelerated full year growth rate is the result of strong visibility into key revenue drivers, including the marketing cloud replacement cycle, the rebound of automotive and insurance sectors, the ramp of our agency business and the hypergrowth of our artificial intelligence platform.

Behind each of these drivers is the need to make AI more actionable with more relevant personalization, more impactful marketing programs and more measurable return on investment. Our AI-powered Marketing Cloud, the Zeta Marketing Platform, or ZMP, delivers actionable intelligence by seamlessly integrating Zeta’s proprietary data cloud with an enterprise’s first-party data to uncover consumer attitudes and activities to determine intent and unlock better consumer experiences and therefore, better results. More importantly, enterprises can transform their data assets into a competitive advantage while protecting their customers’ privacy and the integrity of their ecosystems. Our value proposition is resonating with Chief Marketing Officers as they seek new tools to capitalize on the power of AI and replace legacy marketing clouds with first-generation CVPs that are not delivering on their promises.

Marketers are looking for modern marketing technology platforms like the ZMP that leverage Gen-AI to drive top-line growth and improve operational efficiency without sharing their data back to the collective. We’re also seeing accelerated growth as we gain greater traction in the broader ecosystem, including our expansion with agencies, systems integrators and technology alliances. Each of these provide an incremental source of high-quality demand generation with deals that enter the pipeline pre-qualified and closer to the decision stage. For example, we recently won a seven-figure partner-sourced platform deal with a large financial services company that closed in only four months. We were quickly able to prove that the ZMP will modernize their marketing technology stack, unifying their customer data and enabling rich segmentation and engagement in one single platform.

Whether a deal is sourced through a partner or directly by our sellers, we are winning because the ZMP delivers marketers more predictable, profitable and measurable growth. For instance, last year, we implemented a pilot program at a large specialty retailer of high-quality products for the home to help them acquire new customers. We delivered performance 20% above the required KPIs driven by actionable intelligence in the ZMP, which helped identify new customers with in-market intent signals. Our performance was validated by the brand’s internal analytics team, which in turn should open additional budget for 2024 with expansion across multiple channels. Let me transition to product updates from our last call. In Q1, we launched our generative intelligent agent composer store.

This allows customers to easily build and share agents within the platform across a variety of use cases. In a short amount of time, over 300 virtual agents have already been built and created. In Q2, we’re adding more advanced automation, making agents configurable with clear and actionable outcomes. This automation translates agent conversations to platform actions like onboarding data, building audiences, campaigns, reports and more. One early example is an agent created by an internal team that reduced the campaign workload by 70%, saving our team 400 hours of work per month. Our intelligent agents are becoming an enterprise’s virtual data scientists, providing better information and driving a better ROI. Security and governance are at the core of these agents, ensuring that customer data is never shared outside of Zeta.

Switching to mobile, where our vision is to connect the mobile channel to intelligence within our CDP and Data Cloud. This is where the data ID gives us a strong competitive advantage by allowing us to identify people across the ecosystems. In the near term, we are working to deliver native push and SMS capabilities with a longer-term goal of creating conversational capabilities powered by our Gen AI engine, ZOE. We believe our mobile capabilities will allow enterprises to take advantage of our master orchestration to enhance their omnichannel strategies. We are continuously working to strengthen our competitive position through internal development and remain opportunistic regarding accretive transactions that can enhance our platform or accelerate our time to market.

We look forward to showcasing all our AI and mobile capabilities at our Zeta live conference scheduled to be held on September 26 later this year. In Q1, I was also incredibly proud that Zeta was certified as a great place to work in both the United States and India. This is the highest form of recognition employer can achieve globally, and it demonstrates the impact that our investment in our people and our culture has made over the past several years. In summary, we are off to a very strong start in 2024, as we continue to capitalize on the need for more efficient and effective marketing programs and more modern marketing technology that empowers enterprises to capitalize on the transformative power of AI. As always, I would sincerely like to thank our customers, our partners, team Zeta and all our shareholders for the ongoing support of our vision.

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

Chris Greiner: Thank you, David. As you said, it was a strong start to the year indeed, highlighted by an increase in visibility from new customer wins and rapid expansion of existing customers, which is leading to a big step-up in revenue and adjusted EBITDA guidance. To that end, my remarks today will focus on two key topics. First, I’ll run through of the results with an update on the green shoots we’re seeing from several of 2024 growth catalysts, namely outlining the automotive and insurance verticals return to growth, discussing our progress of scaling recently signed large agency HoldCos, providing an update on political candidate spending and sharing sales productivity and pipeline conversion metrics with large enterprise customers.

And then I’ll close by detailing the increase in our second quarter and full year guidance, along with how our growth drivers are incorporated into the outlook. All right. Let’s dive in by starting with the results. In the first quarter, we delivered $195 million in revenue, up 24% year-to-year. The $8 million of upside versus the midpoint of guidance was broad-based. We ended the quarter with 460 scaled customers, which, as a reminder, accounts for 98% of total Zeta revenue and spend at least $100,000 on a trailing 12-month basis. This was up 8% from 4Q and 49% or 12% from a year ago, at the high end of our 8% to 12% growth model. Taking into consideration, difficult 4Q to 1Q seasonality, this was consistent with what we added sequentially last year.

But what really stood out was the rate at which customers scaled up. The growth rate of our one million-plus super-scaled cohort accelerated 31% year-to-year, an increase from 131 in 4Q 2023 to 144 in 1Q 2024. To put this into perspective, the sequential jump of 13 is the highest increase we’ve ever seen. A couple of data points worth noting on the super-scaled increase. First, all 13 customers scaled up from the $100,000 to $1 million cohort, a strong demonstration of our land expand, extend sales model and a good illustration, while over 90% of our revenue is generated from customers with us over a year. And second, while few of those were agencies, most were large enterprise expansions across a breadth of industries, ranging from technology, consumer and retail, and travel and hospitality.

Growth in super-scaled customer count led to double-digit ARPU growth. Scaled customer ARPU in the first quarter grew 11%, an increase from the 7% year-to-year growth in 4Q 2023 and at the high end of our 8% to 12% growth model. This was driven by customers using two or more channels, which increased over 30% year-to-year. We also grew our quota carrier count, going from 136 at the end of 2023 to 142 at the end of the first quarter with a solid pipeline of candidates entering the second quarter as well. Our established practice of hiring experienced sellers with marketing domain and industry vertical expertise, along with providing comprehensive training curriculum is leading to increasing sales productivity metrics, comparing today’s group of less than 12-month tenured sellers to the average of the prior three cohorts.

So going all the way back to 2021, the most recent classes average time to close improved by almost one month or 20% to four months. At the same time, our greater than 12-month tenured sellers win rates, signings and pipeline stats, all increase as their tenure gets longer on the platform. Increasing sales productivity is translating to progress in our 2024 growth catalysts. First, we saw both the automotive and insurance verticals returned to growth in the first quarter, 90 days sooner than we expected. Their combined growth still trailed total Zeta, but we have good visibility to the remainder of the year by virtue of having recently signed contracts and in other cases, progressing new sales opportunities forward in the pipeline. Our outlook assumes the two combined industries growing double digits year-over-year in 2024.

Second, we’re starting to see the sales pipeline build for political candidate revenue and would anticipate activity picking up later this summer. As we sit here today, we’re not making any changes to our political candidate revenue guidance assumptions of $15 million in 2024 with $2 million in 2Q, $5 million in 3Q and $8 million in 4Q. This is detailed on slide 18 in the earnings supplemental presentation. So all of the guidance increases I’ll discuss later; exclude incremental political candidate revenue. Third, while we’ve talked a lot recently about our expansion with agencies, and I’ll do so more in a moment, our first quarter’s expansion of ARPU and super-scaled customers was also driven by large enterprise customers. And fourth, our advancement with large agency HoldCos is still in its early stages, but expanding rapidly.

We are now working with the five largest agency HoldCos with so compelling about the opportunity is that this represents dozens of agencies and hundreds to thousands of brands that account for a large portion of enterprise marketing budgets. Agencies are pivoting to stay on this platform for several reasons. First, we help them win new business. Zeta’s insights and data intelligence identifies new audiences and personas for the agency’s clients to target. And Zeta’s artificial intelligence recommends intent-driven omni-channel activation strategies, resulting in more efficient and higher ROI campaigns. Second, we help them offer incremental products like client data enrichment. This enables new cross-selling opportunities for the agency and makes them stickier.

And third, we provide deterministic people-based measurement attribution, as opposed to cookie-based. This allows agencies to drive better outcomes and the ability to prove their ROI attribution to clients. Each of our agency HoldCo relationships are at different stages, ranging from four years on the platform at a larger scale to those just beginning to ramp. We have good visibility into this dynamic going into 2024, which is why in our last earnings call, we said it was prudent to assume a similar revenue mix and percentage of cost of revenue profile in 2024, as you saw exiting 2023. I think that continues to be a good assumption. This is because new HoldCos on the platform often start with integrated channels, primarily social networks like Facebook, YouTube and others, which have a lower margin profile in the mid-30s.

These newer HoldCos are also using direct channels and our plan is to grow their direct channel mix, meaning use of Zeta’s CDP, e-mail, demand-side platform and CTV as their spend increases with Zeta. We’re simply early in our partnership selling cycle today, as Slide 12 in our earnings supplemental illustrates. With this dynamic in mind, our direct revenue mix in 1Q was 67%. Importantly, the margin profile of our direct revenue continues to hold firm in the mid-70s range. Overall, Zeta’s cost of revenue in the quarter was 39.4%, up 490 basis points year-to-year, but an improvement of 80 basis points quarter-to-quarter, which was slightly better than our expectation of 40%. Staying on some of our other profit metrics, our first quarter GAAP net loss was $40 million, which includes $53 million of stock-based compensation.

Excluding the accelerated expensing related to our IPO, stock-based compensation would have been $30 million. In 1Q, total OpEx grew only 10% near year, excluding stock-based compensation and is down 570 basis points as a percentage of revenue. Our disciplined expense management and better sales productivity resulted in continued year-over-year adjusted EBITDA margin expansion, our 13th straight quarter of doing so. In the quarter, we generated $30.5 million of adjusted EBITDA, up 27% year-to-year with 40 basis points of margin expansion to 15.6%. Cash flow from 1Q operating activities was $25 million, up 23% year-on-year, with free cash flow of $15 million, up 51% year-on-year. This brings me to my final topic, our increased 2024 revenue and profit guidance.

With structural forces driving our momentum, the expansion and visibility we have within the sales pipeline and strong productivity of our sellers, we’re increasing our revenue and adjusted EBITDA outlook for each quarter in 2024. Details can be found on Slide 17 in our earnings supplemental. For the full year of 2024, we’re increasing the midpoint of revenue guidance to $900 million, representing 24% growth year-over-year. This is a $25 million increase from our prior guidance, well above the $8 million upside we achieved in Q1 and represents an acceleration of full year growth through 2023. As mentioned earlier, none of the increase is attributable to higher political candidate revenue assumptions. Those remain constant from our prior guidance of $15 million for the full year.

For the second quarter of 2024, we’re increasing the midpoint of revenue guidance by $8 million to $212 million, up 23% year-to-year. In terms of adjusted EBITDA, we’re increasing the midpoint of 2024 guidance to $171 million, representing a year-over-year increase of 32% or 19% margin. For the second quarter of 2024, we’re increasing the midpoint of adjusted EBITDA guidance by $1.3 million to $35.5 million, up 32% year-to-year or 16.8% margin. We continue to expect full year free cash flow in the range of $75 million to $85 million. We started the year with a wide free cash flow range and with these increases, we can see scenarios where we start to gravitate to the higher end of the range. The gating factor here is simply the timing of collections from newer agency customers, who we’ve discussed previously, have longer payment cycles than our enterprise customers.

In summary, there’s obviously a lot we’re happy about and with the increased visibility, we feel very good about the increased guidance. Our growth catalysts are showing green shoots. We’re seeing encouraging returns on investments across product development, sales and marketing. And we’re creating deeper and stickier relationships with our enterprise and new agency customers. It’s good when all those vectors are pointing up. Now, let me hand the call back to the operator for me and David to take your questions. Operator?

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Q&A Session

Operator: Thank you. Ladies and gentlemen, at this time, we’ll be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Elizabeth Porter with Morgan Stanley. Please proceed with your question.

Elizabeth Porter: Hi, thank you so much. I wanted to ask about the agency side of the business. Looking at your Slide 12, it looks like it took with the first relationship about three years to get to 10 brands. But now you’re scaling with 10-plus brands already within the first year of some of the newer relationships. So, I just wanted to ask, what are some of the factors that you think are helping you now land larger with some of those more brands just off of year one? And then second, any go-to-market motion that you’re running in terms of helping shift that direct versus integrated mix faster than what you’ve seen previously? Thank you.

David Steinberg: Thank you, Elizabeth. Appreciate the question. First, as it relates to starting bigger, we’re just better now. It used to be we would go into an agency Holdco and we would have to spend a tremendous amount of time educating them on who we are. Now. what we’re finding is when we go in, and I think as Chris mentioned in his prepared remarks, we’re up to five global agency Holdcos, we’re seeing them land faster, which, by the way, leads to your second question, right? Because when you get to your second question, it’s how do we migrate them over. And the efficacy and efficiency of using our on-platform versus integrated platform is substantially higher. So, we are making sure that we’re getting in front of the decision-makers faster as it relates to that.

And I would say that we believe that the current mix of on-platform versus integrated platform is at its low point, and we will begin to see it come up in the next few quarters to where it would traditionally be. Chris?

Chris Greiner: Elizabeth, it took us in that first large agency Holdco, that first year’s direct revenue mix is around 7%. And as you noted, in year three, it was around north of 70%. Year two is like 40%. So it’s not as this like a hockey stick. We don’t expect — we expect the more recent signings to have that same nice kind of linear pacing to it. Back to what David said, we help them win new business. We help them cross-sells. We’re providing now client data enrichment opportunities. And because we’re people based in our attribution as opposed to cookie-based, they can use Zeta’s data to drive a verifiable ROI. In terms of the go-to-market motion, we don’t have just social sellers. We don’t have just CTV sellers, we don’t have just e-mail sellers.

Our sellers are selling the platform, right? They’re going to the intelligence and the insights and an omnichannel activation strategy. It just so happens that these agencies, as David said in the beginning, are starting with social, but it’s in their clients’ best interest to leverage Zeta’s data cloud and Zeta’s intelligence on our direct channels. And we expect the similar sales motion that, that first agency HoldCo went through over time to be mimicked by those now that were these new four that are starting the ramping process with us.

Elizabeth Porter: Great. Thank you so much. And just as a follow-up, I wanted to ask on some of the intelligent agent side. Really impressive to hear about the 300 agents. Just curious how you view some of the engagement there? Is a lot of this still kind of in testing and pilot phases or is it daily being adopted kind of more widespread? And what are some of the factors that you think you need to — customers need to see in order to drive the more meaningful adoption?

David Steinberg: Yes. So first of all, we think we are the first marketing cloud to market with build your own agent. And quite frankly, we were even surprised with the level of uptake from our clients and internally. These 300 agents represent, I don’t know, thousands of potential use cases. And what we’re seeing, I think like a lot of people is we’re seeing a lot of focus on efficiency to start with the intelligent agencies. So how do they build virtual data scientists using their own data for the first time, using our generative AI platform in the form of the intelligent agent? And obviously, that’s driving revenue growth for us as you saw the results and the raise of guidance. So we’re seeing that uptake. We’re seeing the adoption.

We think that’s going to continue. But I’m very, very excited about the level of uptake and the level of utilization. We’re seeing clients Elizabeth, who are using this really using it. They’re not setting it up and using it once. We’re seeing it being really used, and we’re seeing a meaningful increase in platform utilization from clients who have done that.

Elizabeth Porter: Great. Thank you so much. Congrats on a quarter.

David Steinberg: Thank you.

Operator: Our next question comes from the line of Clark Wright with D.A. Davidson. Please proceed with your question.

Clark Wright: Hi, there. Great quarter. Just wanted to maybe start off and if you could possibly just quantify how growth in the agency business has impacted the direct revenue mix, since it was down 6 points in 4Q? And where you see this trending over the course of the year?

Chris Greiner: I think the direct revenue mix in the first quarter at 67% is going to be the low point that we see. It’s our expectation that the direct revenue mix will look a heck of a lot like how it ended in 2023, and that the percentage cost of revenue profile would also follow how we ended the fourth quarter of 2023, which was around 40% on a cost of revenue basis. Our plan is — and this is to Elizabeth’s point, if you follow the trajectory of the first large agency HoldCo, we started to work with now four-plus years ago. In their early time frame, they were around 7% mix and they expanded that to 76% in that range. So we think the same agencies that have now signed with us these recently new four would follow a similar pattern over time.

David Steinberg: And we see indication of that already and quite frankly, even though we saw a slight drop in direct versus integrated, you saw that our cost of revenue went down from Q4 into Q1. I think that’s because the integrated platform — I’m sorry, that’s because the direct platform continues to be very, very solid. And we expect both of those trends to continue as we then move the agencies on our platform versus integrated.

Clark Wright: Got it. Appreciate that color. Then if I could hear for the second one, can you also talk about the company’s initiatives to drive increased channel usage and any trends you are seeing in terms of the way the brands are engaging with prospective and current customers?

David Steinberg: You can actually see it in a couple of places this quarter really meaningfully. The first is the significant increase quarter-over-quarter in superscale customers. Those are customers that do over $1 million with us on a trailing 12-month basis. That grew 13. That’s the highest we’ve ever seen on a sequential basis since we’ve been tracking the metric now over a number of years. And then if you look at the same time, the double-digit strong 11% skilled customer ARPU growth, that’s an acceleration from the 7%. And now you look at the channel usage part, the number of our scaling customers that are using two or more channels grew over 30% year-over-year. We had good growth across the channel base. CTV was in the low 40s. The rest of the channels were in strong double-digits. We’re seeing good adoption across the different channel mix that we offer our customers.

Clark Wright: Appreciate it. Thank you.

Operator: Our next question comes from the line of Richard Baldry with ROTH. Please proceed with your question.

Richard Baldry: Thanks, and congrats again on the quarter. Can you talk about under what acceleration scenario might you have to increase your rate of internal spending? And it’s a broader question about how much automation and leverage you have sort of in your fixed versus variable as the top line is picking up beyond what we’d expected? Thanks.

David Steinberg: Rich, first of all, thank you. It’s interesting because if you look at a lot of the companies that are putting results out, obviously, they’ve massively increased their investment into AI. I think the difference is we started doing this seven or eight years ago. So we don’t see a material step-up needed, but it is interesting. In our budget for this year, we will invest more money into innovation than in any prior year. So we are increasing the investment in innovation, but we’re doing it in an environment where our revenue and our gross profit dollars are growing dramatically faster than we’re making those investments. And as I think I’ve said before, it really appears as if the bets we made years ago on putting data and artificial intelligence as native to the application layer were not just where the puck was going, so to speak.

They are really where the puck is today. I don’t see a material step-up as a percentage of revenue, but we are investing heavily, and that’s already in what we’re forecasting for this year.

Richard Baldry: For those who don’t live in the agency ad world, can you talk a little about sort of the scale of number of customers that those would represent and sort of contrast that with, obviously, your penetration rate? And then maybe think about the budget per customer and how far along that curve you think you are with maybe your most mature agency customer?

David Steinberg: Yeah. I mean, just to put it in perspective, the five agency HoldCos we work with spend over $100 billion a year in marketing. So even with our mature partner, we are just scratching the surface. Now, I think back to Elizabeth’s original question, we are focusing on migrating those clients, those agencies on to being direct versus indirect. But I think that we are just scratching the surface. I mean, to put it in perspective, with our largest client in this ecosystem, I don’t think we are 1% of their business. So I think we have a lot of headroom. I think we have meaningful relationships with these agency HoldCos. And by the way, they see us as part of their solution set. As Chris has said, they’re winning clients with us.

We are our entire strategy is to make our clients the hero of their stories. And when you look at the agency HoldCos, we are here to support them and help them do a better job with their enterprise clients, and it really appears to be resonating.

Richard Baldry: Thanks. Congrats on the momentum.

David Steinberg: Thank you, Rich.

Operator: Our next question comes from the line of Ryan MacDonald with Needham. Please proceed with your question.

Ryan MacDonald: Hi. Thanks for taking my questions, and congrats on a great quarter. I wanted to focus on the large seven-figure financial services win in sort of the interesting aspect of that being partner-driven deal and sort of quick time to close. As you think about the pipeline where it stands today maybe versus 6 to 12 months ago, what’s the mix of pipeline versus — that’s coming sort of direct versus partner driven? And are the initiatives that you have to sort of build out relationships with SIs, sort of accelerating that mix shift at all? How should we think about that?

David Steinberg: So thank you, Ryan. I appreciate it. Today, 100% of our sales effectively are direct. I mean whether we’re selling direct to the agency HoldCo or we’re selling direct to the enterprise. We are in integration with, quite frankly, more than one SI at this point. We believe that will be a big driver of the business. But in the out years, it is not contemplated in our current guidance. We continue to focus on building our sales force. And as Chris has said, and I think you should touch on again, the productivity of our sales force just continues to climb as we hire more and more senior people. Yeah.

Chris Greiner: Ryan, I would say — I don’t have the exact numbers, but greater than 90% of the sales pipeline today, which is growing very nicely, is generated directly from our sellers. We are, though, starting to see with — as the benefit of working with more and more in the partner ecosystem, starting to see deals enter our sales pipeline that were created by those sellers that then we’ll ultimately take on and help duly Shepherd to close. As David mentioned, what’s really exciting, and if you think about what helped deliver the upside in the quarter, you can almost think about it as a-third, a-third, a-third. Auto and insurance coming back to growth was great. It came in faster than we thought. We flowed that through the outlook and the guide, as you can see.

About another a-third was from more rapid agency expansions than we were counting on our guidance. We’ve now flowed some of that through. And then sales productivity we’re seeing on the enterprise side from our direct sellers. And if you — I think the best evidence point that we continue to talk about in these calls is what is this most recent cohort of sellers, those that are still in their first year with data? And how does their sales productivity compare to the classes before them, before them, before them. So now going back three-plus years. So there’s some pretty good data points there. Those sellers time to close in the most recent class we’ve hired is now at 4 months’ time to close their first deal, so 20% better than what the average 3 years have been.

And then as they get more tenure with Zeta, more experience more deals under their belt, there are a number of deals they carry at the same time. The average value of the deals go up, their win rates go up and their pipelines expand. So we’re seeing really nice sales productivity enormous credit to the business unit sales leaders and our training and development team.

Chris Greiner: And by the way, it might be 20% above the 3-year running average. It’s 100% above where we were 3 years ago. So we’re really seeing that. And of course, going from data to Zeta who to Zeta why, bringing the right people in, having made the investment 7 to 8 years ago into data and AI as native to the application layer, it’s funny because you look at the sort of AI landscape today, there are a lot of organizations talking about it, but there are not a lot of organizations that are utilizing it to drive meaningful revenue growth. It is a direct contributor in the results that we just put up for the first quarter and the way we are reforecasting our raised guidance for this year.