On Thursday, Zeta Global Holdings (NYSE:ZETA) discussed first-quarter financial results during its earnings call. The full transcript is provided below.
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Summary
Zeta Global Holdings reported 12% to 16% ARPU growth, driven by increased customer use of multiple channels and integration of the Athena platform.
The company highlighted a robust sales pipeline with a 40% year-over-year increase, particularly in discretionary industries like retail and travel.
Direct revenue constituted 75% of total revenue, with a noted increase in GAAP cost of revenue due to new agency wins.
Adjusted EBITDA was $66.1 million with a margin of 16.7%, outperforming the midpoint of guidance despite being 100 basis points lower year-over-year.
The Marigold integration is ahead of schedule, with positive impacts expected on adjusted EBITDA margins.
Zeta Global Holdings aims to achieve GAAP net income and EPS positivity by 2026, showing improvement in GAAP net loss from $21.6 million to $13.2 million year-over-year.
First-quarter operating cash flow was $49.7 million, a 43% increase year-over-year, and free cash flow was $41.7 million, representing a 48% increase.
The company repurchased 1.5 million shares for $25.7 million, with $138 million remaining in share repurchase authorization.
A new long-term equity incentive plan was approved to secure management continuity and drive long-term objectives.
Guidance for 2026 was increased, with revenue expected at $1.785 billion and adjusted EBITDA at $397 million.
Athena is a key strategic focus, driving customer engagement and expected to enhance sales and operational efficiencies.
Full Transcript
DJ Hines (Equity Analyst)
Hey, guys, congrats on a fantastic quarter! Nice start to the year. David, I want to ask you a competitive question. So obviously there's been more public backlash against the trade desk and the agency ecosystem. But. But I think for those living in the marketing and ad tech world, like, that's been going on for a while now, right? So two related questions here. Number one, like, how much do you think Zeta has benefited from that dynamic? And then second, if the trade desk figures out how to get pricing right, or at least make it more transparent, does this rebalance competitive dynamics at all, or is the horse already out of the barn there? Or is the horse already out of the barn there?
David (CEO)
Well, let's. I mean, first of all, dj, thank you. I appreciate it. Could not be happier with this quarter. And I think it really speaks to kicking off the year. Right. And Athena really was a massive driver here. I want to separate the conversation about the agency and other technological platforms like the trade desk that are out there and struggling a bit because the agencies continue to thrive and they're not really having any issues from. From our vantage point. And I just. I just got back from three days at the possible conference where I did 54 meetings in three days, hosted four dinners and three cocktail parties. which is why I'm losing my voice going into this. I think that. And I don't want to speak to any particular platform, but I think the horse is out of the barn. I think that organizations that have built workflow management tools that do not have proprietary data, they do not have proprietary native artificial intelligence are going to really struggle in this next evolution of where sort of marketing is going as it relates to intelligence. Because if you're not creating intelligence in today's world, you're not winning. And I think that we are a direct reason that a number of our competitors are either growing slower or shrinking as we take meaningful market share. Chris, in his prepared remarks was very clear about the fact we had a number of meaningful agency wins in the quarter that will continue to run out through the rest of this year and into future years that are starting with social. We're starting to see those move over to programmatic and connected TV as well. So I think if you separate the agencies which are doing well and thriving from the technological platforms that have based their business on workflow management, I think they are going to struggle and we are going to continue to beat them handedly in the marketplace.
Chris
Yeah, perfect and helpful color. Chris, I want to follow up with you. So David gave a bunch of great anecdotal data points around Athena and the early success there. The product's not explicitly monetized, right? So what are the signs that we all as investors should be paying attention to from a financial perspective that will signal to us that Athena is moving the needle for Zeta? Great question dj. I'm glad you asked. There's a couple of leading indicator data points that I think you can already begin to look at. So as part of the press release, one of the data points that was called out was a sevenfold increase. And this is just in the first week of Athena's general availability we saw a sevenfold increase in the type of in the amount of agentic interactions on the platform, coupled by 60% of the AI usage on our platform being driven by Athena. How that should ultimately translate through the usage part of a revenue can be seen through Average Revenue Per User (ARPU) expansion, some of which you already started to see. So if you look at Average Revenue Per User (ARPU) in the quarter for super scaled customers, it was 1.7 million. It was up 21% year over year. But if you look underneath that, what drove it are exactly the dynamics that Athena was engineered to be able to do, which is to make more of the platform available and visible for the customers to be able to exploit. If you look at multiple use case customers, it was up over 50% year over year. If you look at the customers that were using four or more channels that's up over 40% year over year, which again are not just great examples of Athena as an unlock, but also one Zeta working well.
David (CEO)
And by the way, she's just getting started. DJ.
DJ Hines (Equity Analyst)
Yeah, totally awesome. Congrats, guys.
OPERATOR
Thank you. Thanks DJ. And the next question comes from the line of Gabriela Borges with Goldman Sachs. Please proceed with your question.
Gabriela Borges (Equity Analyst)
Hi, good afternoon! Thank you. David, I want to ask you about the people and process part of Athena, meaning the technology you've demoed. It clearly is able to do a huge amount of knowledge work. My question for you is how do you then, then change the end user behavior? What does the training and enabling look like? How do you encourage more people to use it once your customers have already decided to adopt it?
David (CEO)
First of all, Gabrielle, what a great question. First, let me say that we were incredibly proud that we were able to make the product not just generally available on time, but available to 100% of our enterprise clients, which was not a small task. At the same time, to your exact point, we have a learning and development group that is literally purpose built to train our clients and get them up and running on this new product. And they've already done. Our top 30 clients have been onboarded through that group and we're going to be adding all the other clients as we continue to expand out. The other thing that's really important is, is we're doing a weekly leadership, I'm sorry, a weekly learning and training program to all of our clients that's virtual recorded and they're able to then watch it at their convenience inside of the platform when they want to. But we're doing sort of a Ask Athena question of the week. Every week a new question that you could ask Athena goes out to all of our customers so that they can begin the process of using her. And I know, I'm sure you've seen the demo, you know how incredibly intuitive she is to use. So what I would say is we're really focusing on it from a relationship management, learning, development, both in person virtually and weekly follow ups. But the intuitive nature of her is I think one of the reasons you saw her so powerful. Just in the first week she was live, Athena drove 60% of all AI utilization across our platform. That is off the charts for a new product from an adoption perspective.
Gabriela Borges (Equity Analyst)
Very good. And Chris, the follow up for you on inference cost. So Athena has pieces of Zeta proprietary technology and then I believe you have some third party technology in there too. How do you think about managing those inferences or optimizing those inference costs. And then same question for your R and D team, your engineering team. We're at this stage where we've been through more token usage is generally better, but also can sort of outrun budgets very quickly. How do you think about managing that internally?
David (CEO)
So, Gabrielle, I'm going to take that one. Sorry, Chris. First and foremost, as the world moves from large language models to inference based AI, our platform is purpose built for that as the operating system and infrastructure for our clients. The vast majority of our queries, Gabriela, are done on our own platforms, on our own data. So we are not buying tokens as we roll this out to our customers. It's fully embedded, which is one of the reasons I think you're seeing us project substantially higher growth to profits and cash flow than we are even to revenue. We have put ourselves as sort of the perfect spot as the market moves to inference based AI, as it relates to our internal consumption. We have built a platform called Spade. Don't ask me what it stands for, it is an anagram. But the reality is that Spade is a tool that we custom built inside of Zeta and is being utilized by a percentage of our engineering team where effectively an engineer would go into Spade, they would create the construct for the code they are trying to develop. Spade would then automatically choose the most efficient and best large language model to do the coding itself. So if it's security based, we might choose Claude. If it's general coding base, Spade might choose ChatGPT. If it's complex publishing, Spade might choose Gemini. Now, of course, Cursor is sort of at the center of this as we think about where that's expanding. The code is then auto generated by the LLM, which is the only time we utilize tokens. Everything else is sitting on our own platform, our own cloud. The LLM creates the code. It then goes to a program called Zippy, because obviously we have great nomenclature capabilities. And Zippy automatically QAs the code on our platform once again. Once it's done, it sends it to one of our senior architects. They review the code one more time and they can make it generally available. To put it in perspective, Gabriela, at the end of the first quarter, Zeta was already driving 75% automated new code creation. I believe that puts us even above Google as it relates to that. And the pods working on Athena today, I know for a fact, are up from a productivity perspective between 400 and 600% year over year. From an output and productivity perspective, all the while the vast, vast majority of the compute and of the tokenization is on our own platform. So as you look at our growth, we will not experience some of the constriction of margin or additional capex. We've already allowed for everything in the projections that we've got and we're very, very comfortable with where we are externally and from an engineering perspective.
Gabriela Borges (Equity Analyst)
Helpful details. Thank you.
OPERATOR
And the next question comes from the line of Arhun Bhatia with William Blair. Please proceed with your question.
Arjun Bhatia
Perfect. Thank you so much and congrats guys on a very strong quarter here. David, I have two questions. Maybe I'll just do them one at a time. The first on awareness. It seems like the customers that are using it are getting great value out of it. It's early, but for this to have a material impact for the company as a whole, you have a fairly large revenue base. How do you roll this out to all your large customers? Where is it right now in terms of customers having awareness and knowing, you know, what, what Athena can do and how do you sort of plan to progress that?
David (CEO)
Yeah. So great question, Arjun. First of all, from an awareness perspective, I would say that our marketing team today is doing the greatest job it's ever done in the history of our company. I just came back from, from the possible conference where you couldn't walk five feet without seeing the brand Athena and without seeing Bizeta. And it was really exciting. We did an Athena suite, we did a Zeta cafe powered by Athena. And we're starting to see that we're moving to that next evolution of our brand where it sort of moved to. It's getting the must have Zeta in our industry. And I didn't think I would say that this early as it relates to internal awareness. We have built an internal learning and development team which is doing nothing but training and onboarding our clients. One of the things we're going to be rolling out in the next few months, which I'm super excited about, is in a feeda certification. We're going to certify the individuals who work for our clients on athe utilization. They'll get a full certification that they can put into their resume. And we're very excited about how that's going to be rolling out. So we're also doing sort of a hint of the week, tip of the week, question of the week. It's going out to all of our clients. I would tell you, in all of the years I've run this company, which is a long time now, I have never seen a faster uptake of a technological product that we've rolled out and it's really been exciting. Arjun, awesome.
Arjun Bhatia
That's great to hear. And then maybe switching gears from Athena for a second, Marigold, that also looked like it was off to a strong start. I think you beat your sort of Q1 target on that front. But where are we on the cross sell there and what's the early traction you're seeing on I guess the two sided cross sell both into your base and into Marigold's base?
Chris
Arjun, I'll take that and David will wrap it up also. So a couple places where you can see where it's evident that the cross selling is working. We talked about the number of multi use cases. It's nicely contributing to the growth that we've seen across the base of super scaled customers. But I think more broadly, if you look at the areas that we talked about being purposely conservative around Marigold, it was around the potential for their S and P and mid market customers that were on the enterprise platform.
David (CEO)
We anticipated Churn. We're not seeing as much as we thought, which is good. There were products and geographies that we thought we would have less growth on and would also see Churn. That hasn't happened yet. And then just more broad, normal Churn at the enterprise level and it's, it stayed healthy. And by the way, a lot of that is being driven by Zeta's interactions with those customers and partnering with Marigold's people. So it's been really interesting. Arjun. We've seen a meaningful uptick from existing Marigold clients with us integrating the data cloud into the platform. So the first thing we did and we had it done within 90 days was a full data cloud integration into their platforms which allowed clients to begin to access data sets that they've never had access to before. So we've seen meaningful growth there as it relates to cross selling. We're really, we're making progress, but not, not a lot of that is in the numbers yet. These products are complicated and they're very big. I think you'll see more of that as the year progresses. But I think, I think, I mean to say we're very excited about how well we're performing with the asset would be an understatement. And a lot of that today is a result of the data cloud integration. Now whether you want to consider that a cross sell because we're bundling the data cloud in to drive additional utilization or not, that's up to you. But to us, as we're rolling out loyalty to all of our global clients and we're starting to take sail through and roll it out to the live intent clients and all of the different things we're doing that's in the early stages and I think will drive meaningful growth in the future. Very helpful. Thank you both.
OPERATOR
And the next question comes from the line of Jack Nichols with Keybanc Capital Markets. Please proceed with your question.
Jack Nichols (Equity Analyst)
Hey guys, thank you for taking the question. Maybe pivoting back to Athena. I was wondering if you could walk us through the early adoption trends among the enterprise customer base, specifically around how they're deepening engagement with the platform and then existing use cases today. Then I've got a quick follow up.
David (CEO)
Well, first of all, welcome Jack. It's great to have you on coverage. We really appreciate you. Second, we have been really blown away by the early adoption of Athena. We made it generally available to 100% of our enterprise clients and we saw a 7x increase in agentic interactions from our clients in the first week of Athena alone. So, you know, we, we think of that as pretty good. You know, 7x is always something we aspire to. But you know, our long term goal is for Athena to be the operating system of our clients businesses and we're just getting started on that. But, but early adoption has been very, very exciting.
Jack Nichols (Equity Analyst)
That makes sense. And then pivoting quickly to Marigold and thinking about the recurring revenue mix as those customers adopt the Zeta platform. Should we expect that mix to trend down or up over time or kind of remain in line with the 2025, 60% expectation disclosure?
Chris
Hey Jack, it's Chris. I'll take this. And David said welcome. It should go up is the short answer. And I think a really interesting proof point that you'll see in the queue tomorrow is just how substantially RPOs went up quarter to quarter. They went up $66 million just from fourth quarter to the first quarter. Obviously part of that is Marigold, which then helps with visibility. But I think an interesting thing for the audience here to understand is another large piece of that was not only these marquee wins that we talked about with the apparel retailer and the E commerce pet retailer, but it was also agencies beginning to now also sign long term committed contracts. That is an exciting proof point for us. It adds to the recurring revenue which then obviously adds to visibility, which both of those came into our confidence and be able to raise the guidance that we did on the top line by 30 million while continuing to keep to our 2 to 5% conservatism.
Jack Nichols (Equity Analyst)
Wonderful.
OPERATOR
Thank you guys. And the next question comes from the line of Clark Wright with DA Davidson. Please proceed with your question.
Clark Wright
Awesome. Thank you. I wanted to maybe quickly touch on the consolidation story. You noted on one of the marquee wins this quarter that you consolidated four, and I recognize over the course of the last few quarters you mentioned consolidation
David (CEO)
being a key piece of. Can you talk about the use cases that Zeta continues to solve for and how you see that expanding over time? Yeah. Thank you, Clark. You know, listen, when John and I founded this company, I don't know, 18, 19 years ago at this point, our vision was to put everything a marketer needed into one user interface with one reporting infrastructure. And I would tell you that because of Athena, I think we are finally there. And our ability to consolidate anywhere from 8 to 12 different vendors into one user interface and one reporting infrastructure has never been stronger. In the case of this global company because it's a retailer and a manufacturer of their clothing, we displaced what I think many people think to be certainly the longest serving of the marketing clouds. They made I think their acquisition first in the space as they built their marketing cloud. And in fact this particular client used that company for everything. They considered themselves a, you know, what shop, so to speak. So decoupling their marketing cloud from everything else they were doing, I think was a very difficult decision. We also displaced another competitor of ours who tends to be more focused on mobile. They tend to be a little easier to displace because they're so singularly focused on mobile. And neither of those companies brought any data or any activation capabilities to task. When you're working with one of the large marketing clouds and you displace them, you're almost always also displacing a professional service provider who they have to then spend millions of dollars on to customize their platform versus our platform is pretty much ready to go from a cloud perspective. So that would be a really good example of a. And we see this as one of the most important wins in our company's history. And it goes back to not just our ability to consolidate other vendors, but to do everything that each one of those point solutions does better than they do while simultaneously putting everything into one place.
Clark Wright
Got it. That's helpful. And then if I could just add one more over the long term. You talk about increasing wallet share with customers.
David (CEO)
Do you think AI accelerates the rate of share capture, increases the total wallet share, or both? I think both. I mean, you know, remember the single greatest way Clark to get market share is drive meaningful return on investment to your clients. The Forrester study that came out. That said, we have a 600% return on marketing spend. We're seeing early adopters of Athena at a materially higher return on investment than even that. The higher we drive return on investment, the more wallet share we're naturally going to get. And as you know, our existing global super scaled customers will spend well over 100 to $110 billion on marketing this year. And at the middle of our range, we'll have call it 150 to 170 basis points of wallet share. I believe we can get that to 700 to 1000% of their wallet share in the years to come. The key will be driving better return on investment. Artificial intelligence, specifically Athena plus our data as a moat into our business is going to drive return on marketing spend up meaningfully, which we think will then drive wallet share.
OPERATOR
Got it. Thank you. Our next question comes from Jason Crier with Craig Hallum.
Jason Crier (Equity Analyst)
Thanks, guys. Great job. So I wanted to stick with the point on wallet share because you announced some major wins and, and you've noticed some major wins over recent quarters. But I'm curious, when you look at the aggregate data representing somewhere less than 2% of wallet share, how big of deals are you winning today and how big a deal do you think you can win over time just in terms of the wallet share of those customers?
David (CEO)
It's interesting, Jason. I would say the last few wins we've had have been at a comparable wallet share to our current wallet share, but the clients are spending four or five times as much per year on marketing and CRM. So they represent some of the largest deals we've ever done right out of the gate. Does that make sense just mathematically? At the same time, what we're starting to see is some of our clients who've been on the platform for 2, 3, 4, 5 years are getting to that 7 to 10% of wallet share and higher. And we're using that as a roadmap for how do we take new clients there. So the wins are much bigger than they've ever been. But I'm not sure they're much bigger wallet share only because the companies are so big that we're winning now. That'll give us meaningful upside as they're on the platform. And Chris does a much better job than I do talking about how ARPU grows the longer a client is with us. And these clients are starting at probably the highest ARPU we've ever seen clients starting.
Chris
That also jives Jason with our sales pipeline. So we talked about its growth. But if you look at deal sizes in particularly, the annual contract value of deals are up pretty substantially year over year.
Jason Crier (Equity Analyst)
Perfect. Maybe one quick follow up. David, you've been doing AI for a long time, but it seems like the release of Athena has certainly put you in a different conversation within the AI industry. So I'm curious, how is that translated to conversations with customers? And like, do you feel like Data is becoming more of an AI thought leader in the marketing ecosystem and that's driving that engagement?
David (CEO)
You know, it's interesting, Jason, in some ways, being a native AI company has been complex for us over the last few years because everybody's rolling out shiny new products, most of which are not real, but most of the people are rolling them out. And we've always been seen as sort of like AI is under the engine. Athena is the hood ornament to what we're doing as a company. She is now us announcing ourselves with authority that we are not just an AI company. We are the leader and the disruption disruptor in the AI space. And with the launch of Athena as a marquee product, it has changed the game for the way people are seeing us. And I will tell you, the two client wins we talked about in the prepared remarks, there is zero chance we would have been in the room if we had not launched Athena or started talking about her at Zeta Live. And there's, I don't think a chance we would have won these accounts without Athena showing that we are the leader in artificial intelligence as it relates to marketing from an internal perspective. We're also one of the best users of AI. I mean, back to what I was saying around the Spade internal platform we built, if you had told me a year ago we'd be auto generating 75% of our own code while simultaneously driving the type of quality products we're driving, I would have said that's just not possible. Spade has made that possible. And it's really been very interesting how we've done that in an environment where we're still using a very de minimis percentage of tokens versus what many of our competitors are doing, which is going to allow us to continue expanding our operating margin as we've done over the years. Thank you, David.
OPERATOR
Our next question is from Matt Swanson with rbc.
Matt Swanson (Equity Analyst)
Yeah, great. Thank you guys for taking my questions and I'll add my congratulations to the quarter. I think the metric that really jumped out to me was the increase in multi use case and I know that's something we had kind of talked about with Athena and its ability to kind of create this organic expansion motion, given that that 50% increase was for the full quarter. Like is Athena a real part of that? Is there other parts of your go to market driving that? If you could just kind of touch a little more there.
David (CEO)
The great news is Athena is just getting started. So we had a great trajectory going into our launch. Now I will tell you, every client that was on the beta became multi use case. So it was, you know, but that was not a lot of clients. Right. So as she rolled out to generally available, we saw an uptick there. But. But I think that's continued upside to growth in multi use case. And you know, the One Zeta team continues to just do an exceptional job. I'll remind you, Matt, we really started on the One Zeta mission just 18 months ago. So you've got a massive tailwind coming out of the work we've been doing there. And then I think Athena is going to supercharge that.
Chris
Matt, I think the reason why you picked up on it, but for others, empirically, what we know is that when customers use more than one use case, their ARPU is three to five times greater. So I think you're right on that being an exciting data point.
Matt Swanson (Equity Analyst)
Yeah, no, I appreciate that. And we'll make sure to take note that 100% of Athena users will become multi use case. That's. That's what I heard. I wouldn't go. I wouldn't go quite there. I mean we. That obviously that's the goal, Matt, but we certainly didn't say that just yet.
David (CEO)
Yeah. The other one I want to talk about is the independent agencies. I know you called out advertising as a key vertical for you guys. I think your willingness to kind of share the credit with agencies and allow them to white label some of your technology has been part of the reason you've been so successful. There's, I guess with ascena. How much more can that help you in those deal environments as a lot of these independent agencies are trying to compete with the big hold cos and so on.
Chris
One of the key wins we had Matt in the corner was with a large independent. If you look at business done a year ago with them was zero. Business done within this quarter was eight figures. With Athena being again something that was visible to them as something they could also exploit for their benefit. The same was true with a very large new agency that began piloting Zeta in 2025. Spend was material, call it little less than 2 million. But that new agreement that was signed is more than 10x that size. So both the independent as well as the large agency continues to have a lot of Runway. In fact, amongst the five large hold codes the number of brands are working with year over year grew by 50%.
David (CEO)
And I just want to say, Matt, we're actually big fans of the agencies. They provide incredible services to their clients and we've had clients approach us to go direct and you know, we always try to bring the agency back into it because we think it's a very healthy relationship when it's the three of us. And listen, we're good if the agencies make their money because they're providing meaningful services. But as it relates to our business, I'll remind you, none of the agencies really focus on the retain, which as of last quarter is about 60% of our business. So we have real greenfield opportunity there. As it relates to the activation which, you know, which you know, sort of create customers, monetize customers. We're very, very happy to partner and give, you know, give the credit to the agencies because they've built incredible businesses and we're very excited now to be working with pretty much all of the large hold cos I think now it's all and well, certainly, certainly the biggest ones and then to be partnering with a select number of independent agencies. There's a lot of them out there but we want to work with only the best. Thank you.
OPERATOR
Our next question comes from Navid Khan with B. Riley.
Ethan Waddell
Hi, this is Ethan Waddell calling in for Naved. Thanks for taking my questions. To start, can we talk about the ideal customer profile for Athena? I'd imagine there are two kind of distinct value propositions there. A where Athena can drive efficiency gains for your larger enterprises that already have sophisticated marketing teams and whatnot. Be more small and mid market players where Athena creates access capabilities that these customers don't necessarily have in house. So like which of these is management releasing more of early traction wise and what's kind of the ideal customer size that you're leaning into with your early, you know, sales motion?
David (CEO)
Well, it's interesting you put it that way. I mean today to be honest Ethan, we don't focus on mid size, we're really just focused on very large enterprise. Although Athena opens up the mid sized market to us at some point because you're very intuitive to understand that the cost of layering Athena out to mid sized companies is so de minimis to us that would allow us to move into that vertical, vertical or I'm sorry, into that sort of category without having to meaningfully hire people to do it. But Today we focus solely on very large enterprise. So I would tell you the two things very large enterprises have really focused on is a, and you're totally right, efficiency. What they're finding is it takes 70% less labor to manage the Zeta marketing platform with Athena than it did with hands on keyboard. So you're effectively able to take 70% of your marketing workforce and retask them into other functions where they can be more valuable to your organization. We're also seeing that because, and this is something I talk about a lot, Ethan, but when you buy software, whether it's us or it's Bloomberg or somebody else, you're buying a stealth fighter. Right? We're all spending to build a stealth fighter of a platform. And most of our clients know how to fly a Cessna with, I mean, think about a Bloomberg terminal. The vast majority of their customers only use 5 to 10% of the capabilities. As you look at our platform being able to fly that Cessna, we're still delivering a 600% return on marketing spend. As clients are able to use Athena as their copilot, they can get right into the cockpit of that stealth fighter and they can then fly the entire platform, which is driving meaningfully higher return on marketing spend than even that 600%.
Ethan Waddell
Got it. That makes a lot of sense. Thank you. And then, you know, coming out of first quarter, I think you mentioned 9 out of 10 top industries grew more than 20%. I know you spoke to some customer consolidation being a benefit there, but are there any verticals that you see showing any signs of softening, particularly anything sensitive to the macro and geopolitical risk going on right now on the timber? Discretion? Yeah. Short answer.
David (CEO)
No, Ethan. The nine out of the ten were effectively the same nine out of ten that ended last year. The one out of ten that wasn't growing over 20% is 4% of revenue. So it really gives you a sense for the vast, vast majority of revenues on all of the verticals we support are performing in a very healthy way.
Ethan Waddell
Got it. That's really helpful. Thank you.
OPERATOR
Our next question is from Terry Tillman with Truist.
Terry Tillman (Equity Analyst)
Yeah. Hey, thanks for fitting me in. Hi, David, Chris, Matt, and. Hi, Athena. I'll just keep it to one question because I know we're running over time and maybe I'm getting too far ahead of myself, but I like hearing about 40% increase. 40% plus increase in the sales pipeline. And I think you said your discretionary markets, where you have a lot of activity is even higher. Is it too early to start to say? Because of the emphasis on agentic and AI in general, that's in the market. Plus you have Athena that's now credibly in the market and in production. Could it start to tip the scales and move in some of this funnel activity faster and you actually close new deals quicker? Or is it just too early or just way too optimistic?
Chris
I don't think you're too optimistic, but I do think it's from an expectation setting perspective and frankly from a data driven perspective. And this is a multi quarter statement I'm about to make. Our deal cycles in good times and in less good times have stayed consistent. What we're seeing is more opportunities in RFPs, many more at bats. The first we were given a year ago and certainly two years ago. Those by nature take longer. But again our strategy many times is to work around those processes through pilots and proof of concepts. Those deals are getting bigger, as David said. So, you know, yesterday's 100k pilot is, today's a million. But I wouldn't say right now it's an accelerant, but it's in addition to the pipeline.
David (CEO)
And I would concur. But you know, I do want to be clear, Terry. We're getting at bats that we would have never gotten a few years ago. So it's sort of, it's working really, really well. That's great to hear.
Terry Tillman (Equity Analyst)
Thank you.
OPERATOR
Thank you. This concludes the Q and A session and our call. You may disconnect your lines at this time and have a wonderful day.
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