Thank you for standing by. This is the conference operator. Welcome to the Zeta Fourth Quarter 2021 Earnings Conference Call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. I would now like to turn the conference over to Scott Schmitz, Head of Investor Relations. Please go ahead.

Thank you, Operator. Hello, everyone. And thank you for joining us for Zeta’s fourth quarter and full year 2021 conference call. Before we begin, I would like to mention that today’s presentation and press release are available on Zeta’s website at www.investors.zetaglobal.com where you will also find links to our SEC filings, along with 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 press 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 financial measures in managing the business and believe they provide useful information for our investors. Reconciliations of the non-GAAP measures to corresponding GAAP measures where appropriate can be found in the company’s earnings release and other filings with the SEC. With that, I will now turn the call over to David.

Thank you, Scott. Good afternoon and thank you all for joining us. 2021 was an incredible year for Zeta, filled with many important milestones, from going public, to hosting our inaugural Zeta Live conference to achieving record results. In 2021, we generated revenue of $458 million, up 25% year-over-year or 30% adjusting for the 2020 Presidential Cycle and we drove significant operating leverage by maintaining a discipline cost structure. Our financial performance is a reflection of the measurable value we deliver for our customers. And as a result of continuous investments we have made in our products, our people and our go-to-market initiatives. These results underscore the disruption that is accelerating in the marketing technology landscape, as marketers seek to re architect their strategies and systems to improve how they reach and engage customers, and achieve the full potential of data driven identity-based marketing. Zeta’s founding vision has never been more relevant in the marketplace to help brands navigate these challenges. As a sign of our confidence, we are announcing the long-term targets of our Zeta 2025 plan. The financial goals of this plan are to generate in excess of $1 billion in annual revenue with at least a 20% adjusted EBITDA margin by 2025. We believe in our ability to achieve these results because of the changes in the digital marketing ecosystem, the evolution of our platform and the expansion of our go-to-market capabilities over the last 15 months, which are truly resonating in the marketplace. The Zeta Marketing Platform with a Customer Data Platform or CDP+ at its core was purpose built to empower marketers to ingest, synthesize and activate identity based data to create personalized marketing programs at scale, through any channel and across the entire customer lifecycle. The single platform makes it easier and faster for…

Thank you, David, and good afternoon, everyone. As David highlighted, 2021 was an incredible year at Zeta, with momentum building across our business. I have two agenda items for today’s call; first, I want to provide deeper insight into the underlying drivers of our Q4 and full year results; and second, I will outline our path to Zeta 2025 and provide more detail on our 2022 guidance. Throughout 2021, we remained focused on executing our plan and the fourth quarter was no exception. In fact, we exceeded our guidance and internal expectations for each of our major reporting metrics and KPIs in the fourth quarter, which can be found on slides four through six in our supplemental deck on our IR website. Revenue of $135 million was up 18% year-to-year or 32% adjusting for the 2020 Presidential Cycle. Additionally, revenue increased 17% quarter-to-quarter. Our topline results were driven by the strength in each of our core drivers, scaled customer count of 355 expanded by 19 customers year-to-year and eight quarter-to-quarter, scaled customer ARPU of $368,000 increased 10% year-to-year and 15% quarter-to-quarter, and we generated 77% of our revenue direct on the Zeta Marketing Platform, up from 60% last year and 74% last quarter. And related to our Direct Platform mix improvement, cost of revenue in the fourth quarter declined by 590 basis points year-to-year or 675 basis points excluding stock-based compensation. On a GAAP basis, our net loss was $61.1 million, which includes $70.5 million of stock-based compensation. We generated adjusted EBITDA of $22.9 million or 17% of revenue in the fourth quarter. Our strong fundamentals were evident over the full years’ time horizon. For the full year 2021, we delivered revenue of $458 million, which was up 25% year-to-year. Normalized for the $15 million of 2020 Presidential Cycle revenue…

Thank you. The first question is from Richard Baldry from ROTH Capital. Please go ahead.

Thanks and congrats on a great quarter. I was sort of curious in that path to 2025, are there areas you would be willing to accelerate opportunistically or do you feel like there’s a balanced approach to this. So, for example, you are much more profitable than most companies grow in your pace. So would you hire faster if the right salespeople came in or does that stress the ability to bring in people in the marketing ecosystems, et cetera, that need to support them?

So, Rich, I will jump in on that, first of all. Thank you. Always great to hear from you. I would say, even with our profitability, we have publicly stated that we have invested over $250 million over the last few years in research and development and our go-to-market strategy. And quite frankly, because of our new sales motion, we are seeing sales reps become profitable with, in many cases, within six months of starting work with us. So I don’t see any reason that the two in the Zeta Marketing Platform have to not run parallel. Meaning, we could absolutely bring on more people, we could absolutely accelerate that growth, and it would not hurt our current profitability. In fact, quite frankly, we are budgeting to potentially give ourselves room, because we want to say no to nothing. Meaning, if there’s an opportunity to bring in great people, we want to do it. If there’s an opportunity to grow faster, we want to do it. And we are not going to slow that growth, all we are trying to do is put a real benchmark out there. The interesting thing is, just so you know, this plan started in 2020. It is an internal plan that Steve Gerber and I launched in 2020 to get to $1 billion a year by 2025. And Chris and the team have helped us to accelerate it. Although, I will tell you, we are ahead of where we expected to be at this point when we started in 2020. Chris?

Yeah. I think, Rich, we were -- we wanted to be very, very mindful of the different KPIs we provided the supplemental deck as all of those laid out, a key one that’s tied to our investment is around sales capacity. So if you look at what we are counting on to go from 100 quota carriers that we ended 2021 to the roughly 250 by the end of 2025, it would imply right around a 25% CAGR, whereas over the last couple of years, we have averaged north of 30%. So trying to leave ourselves room in all the metrics from what we have traditionally executed to versus what’s relied upon. But as David said, we believe we can continue to invest in sales and marketing, invest in innovation and get efficient on our cost of revenue line, as well as our G&A line.

Great. Thanks.

The next question is from…

Thanks, Rich.

… DJ Hynes from Canaccord Genuity. Please go ahead, DJ.

Hi. Thanks guys. Congrats on the strong results here and super helpful color with the data Zeta 2025 and all the drivers there, Chris. So thanks for doing that. David, one for you, just I want to ask about what kind of opportunities you are seeing with agency partners and how they may influence kind of your reach in the go-to-market model?

Well, DJ, thanks. I would start by saying that 10 years ago, when we were really building the formation of what was Zeta today, I had a very, very poorly put together a thesis on what was going to happen to the agency ecosystem, and quite frankly, for as many things as we called right, that was one that we called wrong. We have now heavily invested. I would say I am spending a disproportionate percentage of my personal time working with the holding companies to help them. And it’s really interesting, because when you look at solving problems, which is ultimately what we are trying to do with our software and our data, what we have found is a lot of the agency holding companies just can’t get the people to grow at the rates they are still growing. So we are stepping in and saying, listen, not only are we an alternative platform to some of the platforms you are using now, we are able to do it in such an efficient and effective way, it requires 80% less people to operate the Zeta Marketing Platform with the Zeta Data Cloud, all put together in one place versus if they are going to use one of our competitors. So we are starting to see some meaningful traction there. I think, quite frankly, it was one of the reasons you saw the sizable beat in the fourth quarter. And the great thing is, you are simultaneously seeing a pretty material reduction. I think the exact percentage was 590 basis points down in cost of goods sold in the quarter. So you are seeing the business firing on all cylinders right now. And as the software businesses are growing faster than other businesses and you saw the platform business go from 60% on platform to 77% on platform. You are really starting to see the cost of goods sold go down even in an environment where we are working very closely and growing rapidly with the agency holding companies.

Yeah. Yeah. That makes a ton of sense. And then maybe a follow-up, I don’t know if it’s better for you, David or Chris. But just thinking about the 2025 targets, I mean, clearly, you kind of gave us the underpinnings that you can get there organically, but how do you think about M&A, maybe turbocharging those efforts, I mean, historically, you guys have been pretty acquisitive. So I would love to just kind of get like a high level philosophy on how you think about that?

Yeah. DJ, I will take it and David can certainly add color, just given the company’s historical expertise on it. So, certainly, it is an organic plan. Our focus is on continuing to identify great new types of first-party data, great engineers, great sales talent, which could lead us to small tuck-in Aqua hire type scenarios, but nothing transformational by any stretch assumed in our 2025 model or 2022 guidance.

Yeah. And quite frankly, I think that we have, as I like to joke, we have done 16 deals in 14 years. I think it’s highly probable we will do a 17. But the deals we are doing, as you have seen from a size perspective, not only are they really small, they are businesses that we believe we can grow rapidly and transform them into product services or data ecosystems for our existing customers. So we feel like we are really well positioned to continue to do the type of deals we have been really good at. But I do want to say again, because I don’t want it to be lost, the 2025 plan is an organic plan. If we were to do continue M&A we would get to that $1 billion in revenue sooner.

Understood. Thanks you guys. Congrats.

Thanks, DJ.

The next question is from Ryan MacDonald from Needham. Please go ahead.

Hi. Thanks for taking my questions and congrats on a great quarter. David, first one for you, you have really talked about, I guess, since the IPO of improving the market awareness for the Zeta Platform and the functionality, and you since added partnership with Dun & Bradstreet and Snowflake, and had some improvements around getting into the Forrester report. I am just curious how these partnerships and sort of this increased marketing is translating to sort of more deal visibility, and perhaps, with the help of the partners, how that’s translating to win rates versus what you have historically seen?

Hi. First of all, thank you and really good question, not that the others weren’t. But the reality is that, that’s one of the reasons you really saw the fourth quarter beat by such a handed amount and we increased 2022 and felt really comfortable putting out the 2025 plan. If you look at the big transformational moves to our brand last year, whether we like the initial outcome or not, the IPO was transformational, as it related to our brand, Zeta Live was transformational, where we had 3,000 thought leaders and clients show up. We are already planning Zeta Live for later this year and we think it’s going to be substantially bigger. Signing partnerships with Dun & Bradstreet and Snowflake, these are just major moves in the marketplace. We -- I believe a couple of quarters ago, we publicly said that we closed over 50% of the engagements we got invited to participate in from a sales perspective. What I would tell you was, quite frankly, we would have liked to get more at that, really I’d rather close 40% of twice the RFPs than 50% of where we were. In the fourth quarter, we saw more RFPs than we have ever seen in any quarter ever by a lot and none of it even translated into revenue in that quarter. So I think, once again, we feel like all of these transformational events have led to the numbers and the results and the guidance. Chris?

No. Nothing here.

Yeah.

Awesome. And then, Chris, maybe a follow-up for you, in terms of how we should think about 2022 guidance and for gross margins, obviously, a really strong year of expansion in 2021. I think you had talked previously about a cadence of trying to focus on 100 basis points of improvement each year. Is it something that you think is achievable as you think of the 2022 guidance here?

Yeah. We do Ryan. And certainly sticking to that at least 100 on the COGS line, obviously, we well exceeded that in 2021. The model even going out farther to 2025 would even imply a slightly, I think, it’s right around 65-ish basis points of expansion. So still very much committed to the 100 basis points, that David mentioned, continuing to be tied to continuing to drive a positive mix shift to the Direct Platform. So, just really pleased with the progress on that front.

Okay. Thanks. Congrats again.

Thanks, Ryan.

The next question is from Arjun Bhatia from William Blair. Please go ahead.

Thank you very much and congrats on a great quarter, guys. I want to maybe tack on to DJ’s earlier question around, not necessarily M&A, but maybe how the product and the Zeta Platform looks like in 2025? Do you feel that you have all the pieces in place to get you to $1 billion or are we looking at pay additional innovation, additional changes to the platform, not minor changes, but large structural changes that might be needed to get you there or do you feel confident with what you have? And then, Chris, a follow-up for you on the 2025 vision, maybe just -- is there a linearity that we should assume that 2022 CAGRs are going to be higher growth upfront and maybe closer to low 20s later on? How should we think about that?

Do you want to take the second part first?

No…

Should I take the first part first?

Yeah. Yeah.

So part for the…

I am older than you. That is true.

Arjun, I would tell you that we could put $10 billion in revenue through the Zeta Marketing Platform this week. It is an infinitely scalable platform that over the last five years, we fully re-architected, rolled out and built. And as you know, we have moved from sort of the lag -- I would joke the laggard category to the leader in the leader category with Forrester, really putting artificial intelligence and data at the absolute heart as native to the Zeta Marketing Platform. Now the beauty of the platform itself is that it is activation agnostic. As we rollout new activation methodologies, our only criteria is we want to keep them on platform from a margin perspective. Once again, you saw us go from 60% on platform to 77% on platform. I think we have given long-term guidance to get that upwards of 80%. But as new activation methodologies are created, augmented reality, virtual reality, how the blockchain begins to play into marketing, how tokenization and gamification, ultimately begin to change the way the marketing ecosystem operate, the Zeta Marketing Platform is already built to integrate into them, which is not to say there might not be little tweaks that have to happen to incorporate blockchain or gamification or crypto. But today, we could turn on augmented reality, virtual reality. It’s really a question as to how does that market mature. And one of the bets we made when we made the decision to completely re-architect the platform was to really stay agnostic and not make an all-in bet on one platform or another, which is why we chose never to use Apple’s IDFA and why we chose not to use a third-party cookie to identify people or measure marketing campaigns over the Internet, because I didn’t want to be dependent on another company to operate our company. And I will tell you that the Zeta Marketing Platform is fully ready for what comes next. Chris?

Arjun on the linearity point, in the most immediate term, so for 2022, if you haven’t had a chance to download the supplemental on the IR website yet, on slide 22, we actually provide the in-year expected linearity of revenue based upon our three-year historical average. Now zooming out, which was your question for our model purposes we have assumed an even rate of growth of right around 22%. So if you look at our topline CAGR from 2019 to 2021, it was right at 22%. We have modeled the same out for 2021 through 2022 through 2025. And on the bottomline, we have actually enjoyed twice as higher rate of growth of around 61% from 2019 to 2021 than what we are assuming for the out years and that goes back to the beginning questions we got from Rich was wanting to make sure we are committed to investing in innovation, investing in growth, but while still are able to drive margin expansion.

Perfect. That’s very helpful and appreciate all the details in the slide, Chris. And one quick follow-up, David, if I can, you mentioned third-party cookies, and obviously, there’s been a lot of changes in that broader ecosystem, especially with the Walled Gardens, I am curious to what level that’s coming up in customer conversations as they reason to look to a platform like Zeta that’s not relying on any of those for marketing efficacy and customer targeting?

I would tell you, first of all, very intuitive question, every conversation we have involves that conversation at this point. Every RFP we submit, talks about it and every engagement with every existing client really focuses on it. And I know we talked about going from 347 to 355 scaled customers, but if you look at the revenue per customer that to me is really the interesting story, where you are seeing the ARPU per customer begin to really scale and that’s because they are moving, what they have spent with other companies that are not able to do where the puck is going to us and that’s a trend that we think will continue. Listen, I don’t want to sort of get too focused on what the very large tech platforms are doing, but I think it’s fairly safe to say they are consolidating their own marketplaces. And as they consolidate, I think marketers want an open opportunity to work in the part of the Internet that is not fully controlled by one player or another, which by the way, then begins to suck up additional margin from our clients. So not only our clients talking to us about our ability to do this, they are really excited by the ability to manage their marketing at upwards of 50% efficiency versus working with other marketers. So and a lot of that is directly, because we are able to work in the open web, and quite frankly, we are able to work in many of the Walled Gardens as well, and like most of us we cooperate with them as often as we do not.

That’s very helpful…

Thank you, Arjun.

… and congrats again.

Thank you. Arjun.

The next question is from Stan Zlotsky from Morgan Stanley. Please go ahead.

Hi. This is Elizabeth on for Stan. Congrats on the quarter. I had a question on the 2025 plan. The 355 scaled customers this year with 100 sales heads implies about 3.5 accounts per person in fiscal 2021 and when we fast forward to fiscal 2025, the plan implies about 1.8. So my question is, what drives that contraction, is it any sort of increased complexity in requiring more sales heads to support customers or is that just a level of conservatism?

Well, Elizabeth, you are assuming we closed every customer we have ever with this year, which is a pretty poor assumption. So when you look at the average customer tenure, the average customer has been with us for over three years. So you can’t just take that one screenshot and then extrapolate it and divide it by the number of sales reps. I would also point out we doubled our number of sales reps throughout the year. So I don’t see it as a contraction. I see it as, quite frankly, conservatism as we look at the model and we fully believe that we will be able to continue our strategy of putting out results that we feel that we can beat and then raise from.

Elizabeth, just from a model perspective, I think, it’s important to take into consideration that about half of our sellers today and you could assume a similar mix going out to 2025 are hunters and farmers. So, obviously, it’s the hunters that are going out and closing new scaled customers and is the farmers that are the ones that are charged with starting small and getting bigger. And if you had a chance to kind of dig through the transcript or look at some of the supplemental earnings materials, I think, one of the areas that the company has excelled since we put the focus of a hunter farmer is growing those large customers. So, for example, we mentioned in the call a 43% increase now up to 97 scaled customers doing over $1 million per year in revenue with us. That’s the manifestation of growing the number of channels per. So we have gone from 1.2 to 1.4 at the end of 2020 to now 1.9. In fact, if you look even deeper within that metric, in 2019, 80% of our scaled customers were using one channel. We have now gotten that down to about half. So all of this is leading to the ARPU growth, which is, I think, the other part of the Zeta 2025. So while the count assumes about a 5% CAGR over the next four years, we are assuming about a 15% CAGR on ARPU, both below what we have been driving. So back to David’s kind of last point that he closed with, look, we want to be conservative. That holds true for our model. It also holds true, by the way, for 2022, building that track record of consistent execution.

Thank you Elizabeth. Next question, please.

Next question is from Koji Ikeda from Bank of America. Please go ahead.

Yeah. Hey, guys. Thanks for taking my question. I wanted to ask another question on the 2025 rev target, the $1 billion here, doing the math, 450 customers, $2.1 million in annual ARPU. I guess that is a pretty big increase in the annual ARPU from where we are today. I mean, I guess, what gives you the confidence in that sort of ARPU expand from here?

Yeah. So if you look at the ARPU rate of growth, right? So as you pointed out, we would be at $2.1 million per in 2025, compared to the 1.2 we are at today. So that’s about a 14% CAGR. We have grown north of almost 20% from a -- on a CAGR basis over the last couple of years. So we see ourselves continuing to drive the number of channels used per scale customer. We are at about 1.9 today. Our super scaled customers, those that are greater than $1 million, are already north of $2 million and we see that getting to $4 million. So I think the combination of adding more farmers, continuing to be able to drive more of our scaled customers using of larger number of channels. And by the way, still 90% of our scaled customers are only using Zeta for one of the three use cases we offer today. So a significant amount of white space even from that dimension of growing our existing customer set. That on top of the newest deals we have been signing have been coming in at a much larger average revenue per. That’s a combination of them being multiyear deals, but also out of the gate selling more channels on the platform.

Got it. Got it. Thanks Chris. And then just one follow-up, kind of adding on to a previous question on the QBRs here. So maybe help us understand the sales motion here and understanding why do you guys need to add so many sales reps, but not that many new scaled customers, right? It’s kind of going from 355 to maybe 450 plus to get to that $1 billion target, but really increasing the sales reps 2 times and 2.5 times here over the next few years. So could you help us understand why so many reps? Are they mostly farmers here or what -- why do you need so many reps to just add kind of only 100 customers from here?

Well, first of all, I want to say, I think, we are going to add a lot more customers than that, just so we are all on the same page. But we are in a position now where if we can get a sales rep to break even in the first six months to 12 months, we want to add as many of them as we possibly can, and we want to scale the business as fast as we can. So I think that, yes, on paper, it looks like we are adding a lot of bodies to not specifically add a lot of enterprise customers. But I think what you are going to see in reality is probably more customers and the ARPU in a similar place. But I think a lot of it is, right now, we have got the margin to invest. We believe we can hit our operating margin expansion plans with this headcount increase and I think with the amount we want to continue to grow, it’s a good investment to do that. Chris?

The other thing I’d add Koji is that we want to continue to be data driven like we have been, right? We have been very transparent in our sales productivity metrics, which have continued to be very strong. But just to bring kind of it to life why we believe we need incremental sales capacity, not only are we investing more in brand awareness, not only are we investing more in demand generation, our quota carriers have been significantly adding to the pipeline because of our investment in the sales development rep function. So if you zoom out our hunters are carrying roughly 20 deals per in their pipeline today. That’s too many. That’s just way too many deals for one individual to chase at the same time. So I think we want to strike a good balance of, again, investment, profitability but making sure that our quota carriers have the right amount of opportunities that they can go close versus not to get everything in their pipeline.

Thank you, Koji.

Got it.

Next question please.

Thank you.

Thanks, Koji.

The next question is from Phil Winslow from Credit Suisse. Please go ahead.

Hey. Thanks for taking my question. Congrats on the quarter. I just wanted to focus on the channels per scaled customer. As you mentioned, it went up to 1.9 from 1.2 just a couple of years ago. Can you just give us a sense or sort of what’s inflecting, what’s the feedback you are getting from customers, and then, obviously, the path that you gave 2025 is approximately 4. Just kind of help us what’s been inflecting and then how are you thinking about that in the context of 2025?

Yeah. Great question, Phil. Good to hear from you. For us kind of look at the revenue growth by major channels. So I think about major channel, it’s messaging, it’s social, it’s site optimization, it’s CTV, all growing double digits and have been growing double digits. What we have been successful at is leading with the first channel and that could the email, it could be something in the programmatic universe, but very quickly, following on the connected TV with display video. We have accelerated our sales motion from the time for the first channel and the ability to attribute our work to an ROI and then a very fast follow. And kind of going back to I think the growth we have seen. If you look at the slide in the supplemental, you see that those customers that are still with us in that first year, there’s an average revenue per around $700,000. Our ability to get them to 3x that, if you kind of zoom out those in the scaled customer universe that are three or more years with us have an average revenue per 1.7. So I think that’s continuing to hone the farming sales motion, the upselling and the cross-selling, which we are doing great. We just think we can do even better and getting to 4. But all channels are resonating well. I think it more points back to the time to show the ROI in a very fast follow on the second sale.

Got it. And then just one follow-up to that, there have been some recent surveys, in fact, just one from Gartner today, about pretty distinct changes in shifts and just the efficacy of different marketing channels. The fact that your point that that Zeta offers multiple that you can consolidate on, are you starting to hear that resonate with customers? Just as you -- like, as you mentioned with IDFA, et cetera, you are just seeing sort of variability in the efficacy of different channels?

Yeah. I couldn’t agree with you more. It’s -- I think some of it is what’s going on in the wider ecosystem, some of it is the changes that are coming and some of it is just the focus on efficiency as clients move from analog to digital. But what I really want to make clear, Phil, is that the Zeta ID number can identify an individual across any digital channel. So our ability to have a high level of efficiency in messaging, social, mobile, display, online video, CTV, addressable TV, goes across the entire methodology. And it is, without question, one of the reasons you saw us over perform in the fourth quarter and why we felt comfortable raising the goals for 2022 and out. I think to your point, it’s becoming table stakes, whereas two years or three years ago, it was just becoming a conversation. Now it’s everybody wants to talk about it and it’s really where the puck is going. It’s almost where the puck is and at the same time. So it’s been very impactful to our business.

Thanks, Phil.

Thank you. I appreciate it.

Thanks.

Next question is from Ryan MacWilliams from Barclays. Please go ahead.

Thanks for taking the question and happy to hear about the strong EBITDA margin guidance through 2025. I think that message of profitability-focused growth is now resonate with investors more than ever. You just called out kind of your growth rates year-over-year against the Presidential Election. Chris, just going forward for this year’s guidance, anything baked in for the mid-term elections in your revenue guide?

Yeah. We are -- we think of it around 20% to 30% of what we saw in 2020, is how we have it factored in. And you would expect kind of a heavy part of that being again in September and in October of this year.

But I want to be clear, the mid-terms are not anywhere near as impactful. It’s almost like just adding a few extra customers.

Excellent. And then, David, I know you expect to close every customer that you come into contact with in a quarter. Maybe we will hold you that to next year. But last quarter, you mentioned some strong initial wins with Opportunity Explorer. Anything to call out there or are you seeing continued momentum of that product?

Yeah. So I am disappointed, Ryan, if I don’t close everybody I pitch. That is true. What I would say is we publicly announced two quarters ago that we had closed over half of the initiatives we were invited to be in. I would tell you that we closed even greater than that last quarter. So we are starting to really see the messaging back to one of the earlier questions, it used to be when we would talk about what we could do, people would sort of look at us like how can you do that? There was a bit of disbelief. Now when they hear the 34% of the Fortune 100 use us and they see that we are a publicly traded company on the New York Stock Exchange and they see the logos that are associated with, it actually makes it even easier to close the deal and it’s been really rewarding to see that, I would tell you. I am so incredibly proud of our Zeta people and the work that they are doing, behind the scenes, it’s interesting, because I would tell you that, as of last quarter, I touch less than 1% of our sales channel. 99% of the deals that we closed are being done through the sales factories that Steve Gerber has built with Chris Greiner and I am occasionally trotted out when they need somebody to close normally if I am doing 1%. There’s a -- I like to joke, there’s a lot of wine, a lot of stake and a lot of revenue involved. But the reality is that the factories themselves are what are driving the business and we have really made a very successful shift from what was an entrepreneurial-led sales motion to what is today a more factory-driven sales motion, and as I look out three years to getting to that $1 billion plus in revenue, I feel like we have never been better positioned to do that.

I think, Ryan, something that has held true from last quarter, which was new, but we called it out is Opportunity Explorer has been and continues to be a very effective land tool, typically in a pilot. But more often than not, that Opportunity Explorer can be a seven-figure leader of a sales process. That, in addition to the fact that of the deals we closed through OE, we continue to hold to about one-thirds of them being cross-sell and upsell, and the balance being with new customers. So those data points that we highlighted last quarter continue to hold true and we would expect to continue to be true over the next several quarters and years.

Okay.

Thank you, Ryan.

Got it.

Operator, I think we have time for, sorry, I think we have time for one more question.

Certainly. The next question -- the last question is from Brian Schwartz from Oppenheimer. Please go ahead.

Hi. This is Ari Friedman subbing in for Brian Schwartz. Thank you for taking my question and congrats on the quarter. I was wondering if you could talk a little bit about the competitive landscape and what you have seen coming into 2022, and if you ever see experienced management vendors when you go out for RFP? Thanks.

Well, thanks for joining, Ari. So as I like to say, in 100% of the wins we had last quarter, we either beat or displaced Salesforce, Oracle, Adobe or Epsilon. So we feel pretty good about our position in the competitive landscape. Now these are large companies, they have very formidable teams and they have incredible core products. In fact, all four them have -- well, three of the four have core products. But the reality is that as they have built their marketing clouds, they really been more of a container, where they are effectively putting different businesses into that container and sort of trying to consolidate HR legal, accounting and sales to the top of that silo. As we have gone to market as really the largest independent marketing cloud out there today fully bespoke for what we do with artificial intelligence and data native to the platform, which none of our competitors can say, I think, it’s the reason we win. It’s also important to note that an average of 17 companies are invited to participate in most of the RFPs that we win over half of. So it’s not like we are going up against one or two. As it relates to experienced managers, we don’t really bump into them, because we are still out there selling software, we really are bump in more to sort of the Oracle, Adobe, Salesforce, Epsilon and others that have focused heavily on marketing automation and being a marketing cloud. Chris?

Thank you, David. Just as we wrap up, I know we are over the past time, so appreciate everybody’s patience. Zeta is really excited about attending two conferences this quarter. On March 8th, we will be with Morgan Stanley in San Francisco. We would love to be meeting with folks. And then on March 14th and 15th, we will be attending the ROTH Conference here in Laguna, California. So looking forward to that, and as always, very grateful for your time and the questions and look forward to staying in touch with everyone. Thank you.

This concludes today’s conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.