Buried within Zeta Global's Q1 2024 earnings transcript lies a hint of something far more revolutionary than their impressive 24% year-over-year revenue growth or the expanding adjusted EBITDA margins. While analysts focused on the immediate impact of AI on Zeta's marketing platform and its appeal to CMOs, a subtler, potentially more transformative narrative is emerging: the quiet rise of Zeta as a business intelligence powerhouse.

This shift isn't trumpeted with bold pronouncements. It's hinted at in the language used, the subtle emphasis on efficiency, and a seemingly innocuous product launch: the Intelligent Agent Composer. This tool, allowing clients to build their own AI-powered agents within Zeta's platform, isn't just about automating marketing tasks; it's the first step in democratizing data science and embedding it across the enterprise.

CEO David Steinberg, fresh from moderating a Milken Global Conference panel on AI, emphasized the pressure on Fortune 500 companies to embrace AI. He astutely noted that these companies will need partners who can bring AI solutions to the table, a role Zeta is increasingly positioned to fill. But what caught my attention wasn't just Zeta's AI capabilities, but rather Steinberg's offhand remark: 'the intelligent agent is a massive revenue opportunity where for the first time, we will begin to sell our artificial intelligence products instead of just using them for efficiency.'

This statement, seemingly tossed off casually, carries significant weight. It signals a strategic shift for Zeta, expanding beyond their core marketing focus and venturing into the broader realm of business intelligence. The Intelligent Agent Composer, with its ability to automate the work of data scientists, becomes the vanguard of this expansion. It allows Zeta to monetize their AI expertise directly, creating a recurring revenue stream that extends beyond the utilization of their marketing platform.

Consider the economics. A data scientist can command an annual salary of $250,000. Zeta's intelligent agents, priced at a hypothetical $50,000 per instance per year, offer a compelling value proposition. Spread across Zeta's nearly 500 scaled clients, even modest adoption could generate a significant new revenue stream. While Steinberg stresses that this revenue isn't baked into their current projections, the potential impact on Zeta's growth trajectory is undeniable.

Furthermore, the expansion into business intelligence opens up new avenues for growth, extending beyond the traditional CMO audience. Elizabeth Porter of Morgan Stanley touched on this during the Q&A, questioning the potential for Zeta's mobile strategy to reach new end users outside the marketing department. Steinberg's response was a resounding affirmation, highlighting growing interest from CIOs in Zeta's technology to power other business functions. This points to a TAM expansion of considerable magnitude, with Zeta's CDP and AI capabilities finding applications in sales, operations, finance, and beyond.

This quiet revolution in business intelligence is further fueled by Zeta's strategic partnerships. The company's integrations with system integrators (SIs) are gaining momentum, with two implementations currently underway. While not yet factored into 2024 guidance, these partnerships offer a compelling avenue for scaling Zeta's reach within the enterprise, particularly with CIOs who often rely heavily on SIs for technology decisions.

Growth of Scaled Customer ARPU

The chart below showcases the growth of Zeta Global's scaled customer ARPU over the past few quarters, highlighting their consistent growth and the potential for continued expansion.

Here's the hypothesis: Zeta is poised to capitalize on a confluence of factors that could propel them into a dominant position in the business intelligence market. Their early and sustained investment in AI, combined with a robust CDP, a unique data asset, and a growing network of strategic partners, creates a potent combination that few competitors can match.

While it's still early days, the evidence suggests a significant shift in Zeta's strategic direction. They're not merely a marketing technology company; they're becoming a business intelligence powerhouse, empowering enterprises to unlock the transformative potential of data and AI across all facets of their operations. This quiet revolution, barely whispered in an earnings transcript, could redefine Zeta's future and reshape the competitive landscape of the enterprise software market.

"Fun Fact: Zeta Global processes over 35 billion consumer records daily, making them a leading player in the data-driven marketing landscape."

"Infographic Idea: Create an infographic that visually represents the growth of Zeta's scaled customer base and their corresponding ARPU, showcasing how their land-and-expand strategy is fueling their expansion."