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ZoomInfo Technologies (ZI)
NASDAQ:ZI
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ZoomInfo Technologies
(NASDAQ:ZI)
72Outperform
Positive Factors
Financial Performance
ZoomInfo announced an incremental $500M share repurchase, which will be funded by continued cash generation, demonstrating financial strength and commitment to shareholder value.
Product Performance
The uptake of CoPilot is ahead of expectations, providing a double-digit revenue uplift to ZoomInfo Technologies on an apples-to-apples basis.
Technology and Innovation
ZoomInfo's leading technology is winning new customers by leveraging AI and data to drive better sales.
Negative Factors
Growth Uncertainty
Lack of visibility into future growth trends leads to a Neutral rating with an $11 price target.
Market Segment Challenges
The down-market segment declined by 9% and remains a meaningful drag on growth, posing challenges to overall performance.
Revenue Challenges
Revenue growth is currently facing pressure due to downmarket softness, which comprises less than a third of total revenue.
ZoomInfo Technologies (ZI) vs. S&P 500 (SPY)
Market Cap
$3.73B
Dividend YieldN/A
Average Volume (3M)7.65M
Price to Earnings (P/E)130.0
Beta (1Y)1.39
Revenue Growth-2.03%
EPS Growth-68.59%
CountryUS
Employees3,508
SectorTechnology
Sector Strength47
IndustrySoftware
Share Statistics
EPS (TTM)0.08
Shares Outstanding342,292,200
10 Day Avg. Volume6,663,894
30 Day Avg. Volume7,649,336
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)3.07
Price to Cash Flow (P/CF)8.60
P/FCF Ratio10.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$11.93Price Target Upside9.55% Upside
Rating ConsensusHold
Number of Analyst Covering19
ZoomInfo Technologies Business Overview & Revenue Model
Company DescriptionZoomInfo Technologies Inc provides a cloud-based platform for sales and marketing teams. It provides information on the organizations and professionals of the target company. The services provided are contact & company search, buyer intent, social selling, web research, website visitor tracking, lead enrichment, database management, campaign optimization, webform optimizations, and others. Geographically, the company has its presence across the United States.
How the Company Makes MoneyZoomInfo Technologies generates revenue primarily through subscription-based services. The company offers its platform through various pricing tiers, allowing customers to access different levels of data and features based on their needs. Key revenue streams include subscription fees from its diverse client base, which consists of businesses ranging from small enterprises to large corporations across various industries. Additionally, ZoomInfo leverages partnerships with other technology and data providers to enhance its platform capabilities and expand its market reach, contributing to its overall earnings.
ZoomInfo Technologies Financial Statement Overview
Summary
ZoomInfo Technologies presents a solid financial position with strong gross profit margins and efficient cost management. However, declining revenue and net income impact profitability metrics. The balance sheet is stable with low leverage, though a decreasing equity ratio warrants attention. Robust cash flows support operational needs, but significant cash outflows in investing and financing could challenge future liquidity.Income Statement
ZoomInfo Technologies shows a strong gross profit margin, consistently above 80%, indicating efficient cost management. However, there is a decline in net income from $107.3 million in 2023 to $29.1 million in 2024, affecting the net profit margin negatively. Revenue growth has slowed, with a decrease in total revenue from $1.24 billion in 2023 to $1.21 billion in 2024. Despite these challenges, its EBIT and EBITDA margins are healthy, suggesting operational efficiency.75
Positive
Balance Sheet
The balance sheet reveals a stable equity base, with stockholders' equity standing at $1.69 billion in 2024. The debt-to-equity ratio is low, reflecting a conservative leverage approach. However, the equity ratio has seen a slight decline, suggesting a relative increase in liabilities compared to assets. Return on equity has decreased due to lower net income, which could be a concern if the trend continues.68
Positive
Cash Flow
Operating cash flow remains strong at $369.4 million in 2024, supporting robust free cash flow despite a decrease from 2023. The free cash flow to net income ratio is healthy, indicating effective cash generation relative to earnings. However, the cash flow from investing and financing activities shows significant outflows, which might impact future liquidity.72
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.21B | 1.24B | 1.10B | 747.20M | 476.20M | Gross Profit |
| 1.02B | 1.06B | 909.60M | 610.50M | 368.70M | EBIT |
| 97.40M | 259.50M | 246.30M | 176.30M | 66.30M | EBITDA |
| 156.30M | 514.60M | 330.00M | 214.20M | 85.20M | Net Income Common Stockholders |
| 29.10M | 107.30M | 63.20M | 116.80M | -36.40M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 139.90M | 529.30M | 545.70M | 326.70M | 300.40M | Total Assets |
| 6.47B | 6.87B | 7.14B | 6.85B | 2.33B | Total Debt |
| 167.00M | 1.33B | 1.31B | 1.30B | 784.50M | Net Debt |
| 27.10M | 886.40M | 895.90M | 994.20M | 514.70M | Total Liabilities |
| 4.77B | 4.75B | 4.86B | 4.86B | 1.39B | Stockholders Equity |
| 1.69B | 2.12B | 2.27B | 2.00B | 502.80M |
| Cash Flow | Free Cash Flow | |||
| 369.40M | 408.40M | 388.10M | 275.80M | 152.80M | Operating Cash Flow |
| 369.40M | 434.90M | 417.00M | 299.40M | 169.60M | Investing Cash Flow |
| 13.40M | 24.40M | -281.10M | -695.80M | -113.30M | Financing Cash Flow |
| -690.00M | -427.20M | -25.90M | 439.50M | 172.20M |
ZoomInfo Technologies Technical Analysis
Positive
10.89
Price Trends
10.47
Positive
10.67
Positive
10.70
Positive
Market Momentum
0.04
Positive
51.86
Neutral
45.54
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ZI, the sentiment is Positive. The current price of 10.89 is below the 20-day moving average (MA) of 11.01, above the 50-day MA of 10.47, and above the 200-day MA of 10.70, indicating a neutral trend. The MACD of 0.04 indicates Positive momentum. The RSI at 51.86 is Neutral, neither overbought nor oversold. The STOCH value of 45.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ZI.
ZoomInfo Technologies Risk Analysis
ZoomInfo Technologies disclosed 42 risk factors in its most recent earnings report. ZoomInfo Technologies reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
ZoomInfo Technologies Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $2.88T | 31.16 | 34.29% | 0.81% | 15.04% | 12.38% | |
75 Outperform | $169.44B | 25.50 | 47.28% | ― | 10.65% | 44.84% | |
75 Outperform | $268.15B | 43.86 | 10.26% | 0.57% | 8.72% | 51.47% | |
72 Outperform | $3.73B | 129.95 | 1.53% | ― | -2.03% | -68.59% | |
72 Outperform | $169.77B | 121.01 | 16.53% | ― | 22.44% | -18.31% | |
67 Neutral | $31.20B | 7,066.08 | 0.29% | ― | 21.07% | ― | |
58 Neutral | $21.91B | 10.52 | -19.51% | 2.38% | 4.81% | -25.47% |
* Technology Sector Average
Performance Comparison
ZI
ZoomInfo Technologies
10.89
-4.61
-29.74%
ADBE
Adobe
387.26
-119.97
-23.65%
MSFT
Microsoft
391.26
-28.40
-6.77%
CRM
Salesforce
280.62
-24.14
-7.92%
NOW
ServiceNow
827.75
53.11
6.86%
HUBS
HubSpot
606.27
-23.55
-3.74%
ZoomInfo Technologies Earnings Call Summary
Earnings Call Date: Feb 25, 2025 | % Change Since: 14.27% | Next Earnings Date: May 5, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong performance in the upmarket segment, growth in the operations business and Copilot, and an increase in high-value customers. However, challenges remain in the down-market segment and negative growth is forecasted for 2025. Despite these challenges, the overall sentiment leans towards optimism due to strategic focus on the upmarket and innovation in AI and data services.Highlights
Better-Than-Expected Q4 Financial Results
GAAP revenue for Q4 was $309 million and adjusted operating income was $116 million, with a margin of 37%, both above the high-end of guidance.
Strong Performance in Upmarket Segment
Upmarket, comprising more than two-thirds of the business, grew 2% in 2024 and is on a path to mid-single-digit growth, with higher margins than the down-market.
Operations Business and Copilot Growth
Operations business grew 27% year-over-year in Q4. Copilot exceeded expectations with over $150 million in ACV.
Increase in High-Value Customers
ZoomInfo now has 1,867 customers with more than $100,000 in ACV, a sequential increase of 58 customers, and a year-over-year increase of 47 customers.
Improved Net Revenue Retention
Net revenue retention increased to 87% in the fourth quarter, marking the first sequential increase since Q1 2022.
Successful Customer Partnerships
Closed transactions with major organizations such as CoStar, Athenahealth, and Cox Media, and partnered with Lumen Technologies for Copilot deployment.
Lowlights
Decline in Down-Market Segment
Down-market, which comprises less than one-third of the business, declined 9% in 2024 and is expected to decline further in 2025.
Negative Growth Forecast for 2025
The company expects GAAP revenue for 2025 to be in the range of $1.185 billion to $1.205 billion, representing negative 1.6% annual growth at the midpoint of guidance.
Challenges in Down-Market Customer Acquisition
Implemented disqualification policies for new down-market business, leading to an estimated $2 million per month headwind.
Company Guidance
During the ZoomInfo Fourth Quarter and Full Year 2024 Financial Results Conference Call, several key metrics and guidance details were provided for 2025. GAAP revenue for Q4 2024 was reported at $309 million, with an adjusted operating income of $116 million, representing a margin of 37%. The company has seen notable growth in its upmarket segment, which now comprises more than two-thirds of the business and grew by 2% in 2024. In contrast, the down-market segment, representing less than one-third of the business, declined by 9% in the same year. For 2025, ZoomInfo projects GAAP revenue between $1.185 billion and $1.205 billion, with adjusted operating income ranging from $426 million to $436 million, and anticipates non-GAAP net income between $0.95 and $0.97 per share. The company is also focused on expanding its presence in the upmarket, driven by offerings like Copilot, which exceeded $150 million in ACV. As of the end of 2024, ZoomInfo had 1,867 customers with more than $100,000 in ACV, and net revenue retention improved to 87% in Q4. The guidance reflects a strategic emphasis on upmarket growth and a cautious stance on down-market contributions.ZoomInfo Technologies Corporate Events
Executive/Board ChangesStock BuybackFinancial Disclosures
ZoomInfo Technologies Announces Board Changes and Share Buyback
Neutral
Feb 25, 2025
On February 25, 2025, ZoomInfo Technologies announced the appointment of Rob Giglio to its Board of Directors, effective March 1, 2025, following the resignation of Patrick McCarter. Additionally, the company reported its financial results for the fourth quarter and full-year 2024, showing a 2% year-over-year decrease in GAAP revenue. Despite this, operational improvements led to better-than-expected revenue, profitability, and free cash flow. The company also approved a $500 million share repurchase program in February 2025, indicating a strategic focus on enhancing shareholder value.
Executive/Board ChangesBusiness Operations and Strategy
ZoomInfo Appoints Katie Rooney to Board of Directors
Positive
Jan 16, 2025
On January 16, 2025, ZoomInfo announced the appointment of Katie Rooney to its Board of Directors, effective February 1, 2025. Rooney, a seasoned CFO and COO, brings over 20 years of experience in finance and operations, and will contribute to the Board’s Nominating and Corporate Governance and Audit Committees. Her appointment is seen as a strategic move to enhance ZoomInfo’s growth and operational insights, aligning with its commitment to customer satisfaction and market leadership.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.