Saad Ullah
⬤ Zeta Global (ZETA) is finally addressing one of its biggest investor concerns: excessive stock-based compensation. The company's equity awards have dropped 57% from their 2021 highs, and dilution is projected to fall to just 3-4% by 2026. This shift comes as Zeta continues generating solid free cash flow on a trailing twelve-month basis, with recent data showing both metrics trending in favorable directions.
⬤ The financial picture tells an interesting story. Zeta's trailing twelve-month free cash flow has stayed positive throughout the 2023-2025 period, moving from around $200 million in early 2023 to roughly $180-190 million by 2025. Meanwhile, stock-based compensation has been climbing quarter by quarter during this window, but here's the key point: these current levels remain well below the 2021 peaks. That 57% reduction from those earlier highs represents real progress on what had been one of the company's most scrutinized expense lines.
⬤ The expected drop in equity dilution to low single digits by 2026 marks a major turning point. For years, dilution and stock compensation hung over Zeta Global like a dark cloud, affecting how investors viewed the company's financials and limiting shareholder base growth. Now the numbers show a clearer alignment between operating performance and compensation structure. Free cash flow remains stable while the cost of equity awards is finally coming under control.
Saad Ullah
