Lucas Metcalf

Lucas Metcalf, on behalf of Scott Berg, inquired about 2026 marketing budgets, specifically what Zeta is hearing from customers regarding overall spend growth and how AI is influencing allocation decisions, including whether AI drives incremental budget expansion, platform consolidation, or reallocation within existing spend.

Answer

David Steinberg, Co-founder, Chairman, and CEO, confirmed that Zeta is observing platform consolidation, with its strategy of disintermediating point solutions into one platform gaining traction, evidenced by the 120% net retention rate. He also noted that U.S. marketing budgets are expected to increase in 2026, and Zeta anticipates growing at a multiple of that market growth by continuing to take market share.

Lucas Metcalf asked about 2026 marketing budgets, specifically what customers are communicating regarding overall spend growth and how AI is influencing their allocation decisions, including incremental budget expansion, platform consolidation, or reallocation.

Answer

David Steinberg, Co-founder, Chairman, and CEO, confirmed seeing platform consolidation, with Zeta's strategy of disintermediating point solutions taking hold, evidenced by the 120% net retention rate. He also noted that marketing budgets in the U.S. are expected to increase in 2026, and Zeta anticipates growing at a multiple of that market growth.

Lucas Metcalf inquired about the productivity of sales investments made in fiscal 2025, given elongated sales cycles, and what additional sales investments are implied by the fiscal 2026 guidance. He also asked about the primary drivers behind the net revenue retention compression.

Answer

CEO Or Offer stated that the company was not happy with the yield from 2025 sales investments, but no further investments are needed for 2026, as the team is fully ramped after optimizations. Or Offer also confirmed that NRR compression was primarily due to large AI contracts from late 2024 lapsing and one-time LLM deals not being reflected in recurring NRR metrics, expecting NRR to improve as these mature into ARR.

Lucas Metcalf inquired about the productivity of sales investments made in fiscal 2025 and the implied additional sales investments for fiscal 2026 guidance.

Answer

Or Offer (CEO and Co-Founder, Similarweb) stated dissatisfaction with the yield from 2025 sales investments but noted improving productivity each quarter. No new sales investments are needed for 2026, as go-to-market motions were optimized. He also confirmed that NRR compression was impacted by some big deals lapsing and the nature of one-time AI data deals not being reflected in NRR, expecting NRR metrics to improve as more one-time trials mature into recurring ARR.