ZoomInfo’s Earnings Call: Strong Results Amid Caution

ZoomInfo Technologies, Inc. ((GTM)) has held its Q1 earnings call. Read on for the main highlights of the call.

ZoomInfo Technologies, Inc. recently held its earnings call, revealing a strong performance with positive financial results and strategic advancements. The sentiment was largely optimistic, underscored by successful upmarket expansion and innovative product launches. However, there was a note of caution due to the challenging economic environment and a decline in the down-market segment.

Better-than-Expected Financial Results

ZoomInfo reported impressive financial results, surpassing expectations with GAAP revenue of $306 million and an adjusted operating income of $101 million, achieving a 33% margin. These figures were above the high end of their guidance, showcasing the company’s robust financial health.

Expansion in Upmarket Segment

The company has made significant strides in the upmarket segment, now boasting 1,868 customers with over $100,000 in annual contract value (ACV). This marks a year-over-year increase of 108 customers and represents 71% of their business, highlighting four consecutive quarters of sequential improvement.

Successful Product Launches

ZoomInfo has successfully launched the Go-To-Market Studio and expanded its data assets into core enterprise operations. These enhancements, alongside the integration of acquisitions like RingLead and Chorus, have strengthened their platform and broadened their market appeal.

Strong Customer Wins and Deployments

The company celebrated significant enterprise wins, including deals with Lionbridge and Wipro. Additionally, Stripe has deployed ZoomInfo Copilot across more than 300 sellers, and a major food delivery vendor is using the platform for international expansion.

Improved Retention and NPS Scores

ZoomInfo’s net revenue retention remained stable at 87% for the second consecutive quarter. Furthermore, they achieved record levels of Net Promoter Scores (NPS), with enterprise NPS increasing by more than six points year-over-year in Q1.

Share Repurchase Program

The company executed a share repurchase program, buying back 8.6 million shares at an average price of $11.05. An additional buyback of nearly 7 million shares was completed at $8.27 per share post-quarter, reflecting confidence in their stock value.

Down-market Business Decline

ZoomInfo’s down-market segment saw a 10% year-over-year decline, with expectations for further contraction into 2025. This reflects a strategic pivot towards a healthier, albeit smaller, down-market presence.

Economic Environment Caution

Despite no direct impact from the current economic environment on customer behavior, ZoomInfo has incorporated an incremental layer of caution into its guidance. This is due to broader economic uncertainties, although the company remains confident in its long-term strategy.

Forward-Looking Guidance

Looking ahead, ZoomInfo provided positive guidance for 2025, projecting GAAP revenue between $1.195 billion and $1.205 billion, with an adjusted operating income margin of 36% at the midpoint. Non-GAAP net income per share is expected to range from $0.96 to $0.98. The company remains cautiously optimistic, emphasizing its upmarket strategy and long-term growth potential.

In summary, ZoomInfo’s earnings call highlighted a strong performance with positive financial outcomes and strategic advancements. While there is caution due to economic uncertainties and a declining down-market segment, the company remains optimistic about its upmarket growth and future prospects.