Michael Wiggins De Oliveira is an inflection investor. This means buying into cheap companies at the moment when their narrative is changing and the business is on a path toward becoming significantly more profitable over the next year.With a focus on tech and “the Great Energy Transition (including uranium)”, Michael runs a concentrated portfolio with approximately 15 to 20 stocks and an average holding period of 18 months. Through his 10+ years analyzing countless companies, Michael has accumulated outsta ...

Financial Data and Key Metrics Changes - GAAP revenue for Q4 2024 was $309 million, with adjusted operating income of $116 million, representing a margin of 37%, both exceeding guidance expectations [9][36] - Net revenue retention (NRR) increased to 87% in Q4, marking the first sequential increase since Q1 2022 [18][37] - Unlevered free cash flow for Q4 was $94 million, with a margin of 30%, and for the full year 2024, it was $447 million, with a margin of 37% [41][42] Business Line Data and Key Metrics Changes - The operations business grew 27% year-over-year in Q4, driven by increased demand for data solutions [11][38] - Copilot, a key product, now has over $150 million in annual contract value (ACV), with significant growth in both new and existing customer segments [11][38] Market Data and Key Metrics Changes - Upmarket customers, defined as those with more than 100 employees, represent over two-thirds of the business and grew 2% in 2024, with expectations for mid-single-digit growth moving forward [14][16] - Down-market customers, those with fewer than 100 employees, declined 9% in 2024 but are stabilizing as a smaller, healthier portion of the business [15][16] Company Strategy and Development Direction - The company is focusing on upmarket growth, enhancing its product offerings and customer success initiatives to drive profitability [12][35] - Investments in AI and data solutions are expected to solidify the company's position as a leading provider of go-to-market data and AI for enterprise customers [12][35] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's momentum heading into 2025, with expectations for improved operating performance and profitability [46][47] - The company is discounting down-market contributions to guidance, focusing resources on upmarket opportunities [55][56] Other Important Information - The company has implemented a new business risk model that has improved customer onboarding and collection trends [37] - Share repurchases totaled 46.8 million shares at an average cost of $12, representing over 12% of total shares outstanding [39][40] Q&A Session Summary Question: Trends in SMB and enterprise segments - Management noted strength in the upmarket, particularly with operations and Copilot products, while the SMB segment is stabilizing but becoming a smaller part of the business [51][52] Question: Copilot ACV migration path - The company is migrating customers to Copilot both at renewal and off-cycle, with strong double-digit growth observed during migrations [66][67] Question: Drivers of NRR improvement - The improvement in NRR is attributed to better upsell opportunities in the upmarket and stabilization in the down-market [70][72] Question: Characteristics of the 100K customer cohort - The increase in the 100K customer cohort is driven by successful upselling and acquiring new customers, with a focus on maintaining quality [78][79] Question: Impact of layoffs on growth trajectory - Management remains optimistic about steady growth in the upmarket, driven by focused execution and product innovation [126][128] Question: Down-market disqualification of new business policies - The company does not anticipate changes to the $2 million a month headwind from down-market disqualifications [120][121]

Financial Performance - The company's Q4 2024 revenue was $309.1 million, a decrease of 2% year-over-year[53] - The company's FY 2024 revenue was $1.2143 billion, a decrease of 2% year-over-year[55] - Q4 2024 adjusted operating income was $115.9 million, a decrease of 8% year-over-year, with an adjusted operating income margin of 37%[53] - FY 2024 adjusted operating income was $428.5 million, a decrease of 14% year-over-year, with an adjusted operating income margin of 35%[55] - FY 2024 unlevered free cash flow was $446.9 million, a decrease of 4% year-over-year[50] Customer Metrics - The company has over 35,000 paying customers[48] - The company has 1,867 customers with greater than $100K in ACV as of December 31, 2024[7] - The company's net revenue retention rate was 87% for the trailing twelve-month period ended December 31, 2024[7] Future Outlook - The company expects 2025 revenue in the range of $1.185 billion to $1.205 billion[49] - The company expects 2025 adjusted operating income in the range of $426 million to $436 million[49] - The company expects 2025 unlevered free cash flow in the range of $420 million to $440 million[49] Capital Allocation - During the twelve months ended December 31, 2024, the company repurchased 46.8 million shares of common stock at an average price of $12.01, for an aggregate of $562.3 million[69]

Group 1: Earnings Performance - ZoomInfo reported quarterly earnings of $0.26 per share, exceeding the Zacks Consensus Estimate of $0.23 per share, with an earnings surprise of 13.04% [1] - The company posted revenues of $309.1 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 3.80%, although this represents a decline from year-ago revenues of $316.4 million [2] - Over the last four quarters, ZoomInfo has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times as well [2] Group 2: Stock Performance and Outlook - ZoomInfo shares have declined approximately 8.3% since the beginning of the year, contrasting with the S&P 500's gain of 1.7% [3] - The company's future stock performance will largely depend on management's commentary during the earnings call and the earnings outlook [4][6] - The current consensus EPS estimate for the upcoming quarter is $0.23 on revenues of $292.82 million, and for the current fiscal year, it is $0.94 on revenues of $1.18 billion [7] Group 3: Industry Context - The Computer - Integrated Systems industry, to which ZoomInfo belongs, is currently ranked in the top 33% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Total revenue for 2024 was $1,214.3 million, a decrease of 2.0% from $1,239.5 million in 2023[369]. - Gross profit for 2024 was $1,024.5 million, down from $1,061.0 million in 2023, reflecting a gross margin of approximately 84.3%[369]. - Net income for 2024 was $29.1 million, a significant decrease of 72.9% compared to $107.3 million in 2023[369]. - Comprehensive income for 2024 was $16.6 million, down from $94.9 million in 2023, reflecting a significant decline[372]. - Net cash provided by operating activities decreased to $369.4 million in 2024 from $434.9 million in 2023, indicating a reduction of 15%[377]. - The company reported a basic net income per share of $0.08 for 2024, down from $0.27 in 2023[369]. - Subscription revenue for 2024 was $1,200.4 million, down from $1,225.1 million in 2023, reflecting a decline of 2.0%[443]. Operating Expenses - Operating expenses for 2024 totaled $927.1 million, an increase of 15.7% from $801.5 million in 2023[369]. - Equity-based compensation expense for 2024 was $143.5 million, a decrease from $173.0 million in 2023[377]. - The company incurred total charges of $30.1 million related to legal settlements during the year ended December 31, 2024, all of which have been paid[498]. Assets and Liabilities - Total current assets decreased to $451.0 million in 2024 from $864.3 million in 2023, primarily due to a reduction in cash and cash equivalents[367]. - Total liabilities increased slightly to $4,774.1 million in 2024 from $4,749.0 million in 2023[367]. - Cash, cash equivalents, and restricted cash at the end of 2024 totaled $149.0 million, down from $456.2 million at the end of 2023[379]. - The total lease liabilities as of December 31, 2024, were $161.1 million, an increase from $101.1 million in 2023[517]. Debt and Financing - The company reported a total principal balance outstanding of $588.1 million on its first lien term loan as of December 31, 2024[341]. - The company has a substantial amount of debt, which may adversely affect its financial position and ability to raise additional capital[29]. - The effective interest rate on the first lien debt was 6.56% as of December 31, 2024, down from 7.83% in 2023[471]. - The company has a total of $1,238.1 million in expected future principal payments, with $655.9 million due in 2029[473]. Risk Factors - The company anticipates increasing operating expenses in the future, which may impact profitability[340]. - The company is exposed to market risks from interest rate fluctuations, which could affect its financial condition[341]. - The company has operations in multiple countries, exposing it to risks inherent in international operations[29]. - The company may face challenges in attracting new customers and renewing existing subscriptions, which could harm revenue growth[26]. - The company has noted that macroeconomic conditions, including inflation, may impact its business, financial condition, and results of operations[340]. Tax and Deferred Assets - Deferred tax assets amounted to $3,717.6 million as of December 31, 2024, compared to $3,707.1 million in 2023[367]. - The evaluation of the realizability of deferred tax assets was identified as a critical audit matter, with deferred tax assets primarily related to intangibles[360][361]. - The company recognized $1.9 million in research and development tax credits for the year ended December 31, 2024, reducing General and administrative expenses[435]. Share Repurchase and Equity - The total number of shares repurchased in 2024 was 46,801,742, resulting in a cash outflow of $567.0 million[377]. - The company authorized a share repurchase program with total authorizations of $600 million in 2023 and $500 million in 2024, with $137.6 million remaining available for repurchases as of December 31, 2024[506]. - Basic net income per share attributable to common stockholders was $0.08 in 2024, down from $0.27 in 2023[515]. Impairment and Lease Charges - The company experienced a significant asset impairment and lease abandonment charge of $57.4 million in 2024, compared to only $5.2 million in 2023[377]. - Impairment charges of $4.3 million were recognized to reduce the carrying value of right-of-use assets related to the third and fourth phases of the lease[522]. - Lease abandonment charges of $4.1 million were incurred for vacated spaces during the second quarter of 2024[522]. Currency and Interest Rate Management - The company has implemented a foreign currency hedging program to mitigate potential adverse effects from significant currency movements[344]. - In Q2 2024, the Company had outstanding interest rate derivatives designated as cash flow hedges with a notional amount of $500.0 million and an interest rate of 0.370% maturing on January 30, 2026[478]. - The fair value of the Company's interest rate swap contracts was $19.9 million as of December 31, 2024, compared to $36.8 million as of December 31, 2023[484].

Financial Performance - GAAP revenue for Q4 2024 was $309.1 million, a decrease of 2% year-over-year[5] - GAAP operating income for Q4 2024 was $30.9 million, representing a 56% decline year-over-year[7] - Full-year 2024 GAAP revenue totaled $1,214.3 million, also a decrease of 2% year-over-year[9] - Adjusted operating income for FY 2024 was $428.5 million, a decrease of 14% year-over-year[9] - Total revenue for Q4 2024 was $309.1 million, a decrease of 2.1% from $316.4 million in Q4 2023[30] - Income from operations (GAAP) for Q4 2024 was $30.9 million, down from $70.5 million in Q4 2023, with a total for the year of $97.4 million compared to $259.5 million in 2023[43] - Adjusted Operating Income (Non-GAAP) for Q4 2024 was $115.9 million, a decrease from $126.5 million in Q4 2023, with a total for the year of $428.5 million compared to $498.6 million in 2023[43] - Revenue (GAAP) for Q4 2024 was $309.1 million, slightly down from $316.4 million in Q4 2023, with total revenue for the year at $1,214.3 million compared to $1,239.5 million in 2023[43] - Adjusted Net Income (Non-GAAP) for Q4 2024 was $93.6 million, down from $102.1 million in Q4 2023, with a total for the year of $363.8 million compared to $413.1 million in 2023[48] - Net income (GAAP) for Q4 2024 was $14.6 million, recovering from a loss of $5.5 million in Q4 2023, with total net income for the year at $29.1 million compared to $107.3 million in 2023[48] Customer Metrics - The company reported a net revenue retention rate of 87% as of December 31, 2024[5] - The company closed Q4 2024 with 1,867 customers with annual contract values of $100,000 or greater, an increase of 58 from the prior quarter[5] - Sales teams using ZoomInfo reported a 91% improvement in connect rates and booked 55% more meetings per month[5] Guidance and Expectations - For Q1 2025, the company expects revenue between $294 million and $297 million[11] - Full-year 2025 revenue guidance is set between $1.185 billion and $1.205 billion[11] Operating Expenses and Profitability - Operating expenses increased to $225.0 million in Q4 2024, compared to $201.3 million in Q4 2023, marking an increase of 11.8%[30] - Operating Income Margin (GAAP) for Q4 2024 was 10%, down from 22% in Q4 2023, with a total margin for the year at 8% compared to 21% in 2023[43] - Adjusted Operating Income Margin (Non-GAAP) for Q4 2024 was 37%, down from 40% in Q4 2023, with a total margin for the year at 35% compared to 40% in 2023[43] Cash Flow and Assets - Cash and cash equivalents decreased to $139.9 million at the end of 2024, down from $447.1 million at the end of 2023, representing a decline of 68.8%[32] - Total assets decreased to $6,467.6 million in 2024, down from $6,868.3 million in 2023, a reduction of 5.8%[28] - Total liabilities increased slightly to $4,774.1 million in 2024, compared to $4,749.0 million in 2023, an increase of 0.5%[28] - Unlevered Free Cash Flow for the twelve months ended December 31, 2024, was $446.9 million, a decrease of 3.6% from $463.5 million in 2023[38] - The company reported a net cash provided by operating activities of $369.4 million for the twelve months ended December 31, 2024, down from $434.9 million in 2023, a decrease of 15%[32] Equity and Compensation - ZoomInfo repurchased 46,801,742 shares of common stock, accounting for 12% of total shares outstanding, at an average price of $12.01, totaling $562.3 million[5] - Equity-based compensation expense totaled $138.0 million for the twelve months ended December 31, 2024, compared to $167.0 million in 2023, a decrease of 17.4%[30] - Equity-based compensation expense for Q4 2024 was $33.8 million, down from $40.7 million in Q4 2023, with total expenses for the year at $138.0 million compared to $167.6 million in 2023[48] Restructuring and Expenses - Restructuring and transaction-related expenses for Q4 2024 were $34.6 million, significantly higher than $0.4 million in Q4 2023, with total expenses for the year at $101.6 million compared to $10.3 million in 2023[48]

Core Viewpoint - Bragar Eagel & Squire, P.C. is investigating potential claims against ZoomInfo Technologies Inc. due to a class action lawsuit alleging breaches of fiduciary duties by the board of directors during a specified class period [1] Company Overview - ZoomInfo is a software and data company that provides customer contact and business information to its clients [2] Class Action Allegations - The class action lawsuit claims that ZoomInfo made false or misleading statements and failed to disclose critical information, including: - Financial results were temporarily inflated due to COVID-19, leading to pulled-forward demand [3] - Significant portions of the customer base were reducing or abandoning the use of ZoomInfo's products [3] - Use of manipulative auto-renew policies and threats of litigation to retain customers against their will [3] - Coercive retention tactics damaged customer relationships and created a hidden demand cliff for future renewals [3] - Reported revenues and customer metrics were materially overstated as a result of these practices [3] Financial Performance and Stock Impact - On November 1, 2022, ZoomInfo reported increased customer scrutiny during contract renewals, leading to a decline in Remaining Performance Obligations (RPOs) to $979 million from $985 million, causing a stock price drop of over 29% [4] - On November 16, 2022, continued scrutiny negatively impacted revenue growth for fiscal year 2023, resulting in a stock price decline of approximately 17% [5] - On July 31, 2023, ZoomInfo reported a decline in customers with annual contract values over $100,000 and reduced annual revenue guidance by $50 million, leading to a stock price drop of about 28% [6] - On May 7, 2024, a decline in Net Revenue Retention (NRR) to 85% from 87% was reported, along with a revenue guidance reduction, causing a stock price fall of more than 24% [7] - On August 5, 2024, ZoomInfo announced a $33 million charge due to non-payments and a new risk model requiring upfront payments, further reducing revenue guidance by $65 million, resulting in an 18% stock price drop [8]

Core Insights - ZoomInfo partners with Telmai to enhance data quality monitoring across its data ecosystem, utilizing machine learning for proactive management and integration with open table formats [2][3][4] Group 1: Partnership and Technology - Telmai is an AI-powered data observability platform that will help ZoomInfo manage data integrity and quality at scale [2][7] - The integration aims to improve customer experience through full-volume data quality monitoring, automated anomaly detection, and streamlined remediation workflows [4][6] Group 2: Data Management and Operations - ZoomInfo processes over 1.5 billion data points daily for over 35,000 businesses, necessitating high accuracy and timely delivery to maintain customer trust [3] - The company’s data is distributed across various platforms, including Snowflake, BigQuery, S3, and GCS, which require effective monitoring solutions [4] Group 3: Implementation and Efficiency - Telmai's user-friendly interface allows for quick adoption by ZoomInfo's teams, reducing setup time from weeks or months to just minutes [5] - During the pilot phase, Telmai's anomaly detection identified issues among billions of data points, enabling rapid response and resolution [6]

Group 1 - Michael Wiggins De Oliveira is an inflection investor, focusing on buying undervalued companies at pivotal moments when their profitability is expected to improve significantly over the next year [1] - The investment strategy emphasizes technology and the Great Energy Transition, including uranium, with a concentrated portfolio of approximately 15 to 20 stocks and an average holding period of 18 months [1] Group 2 - Michael has over 10 years of experience analyzing companies in the tech and energy sectors, and has built a following of over 40,000 on Seeking Alpha [2] - He leads the investing group Deep Value Returns, which offers insights through a concentrated portfolio of value stocks, timely updates, weekly webinars for live advice, and support for both new and experienced investors [2]

Core Viewpoint - The stock market is currently near all-time highs, and individual stock selection is becoming increasingly important, with expectations of a 10-15% correction in the S&P 500 [1] Group 1: Market Analysis - The S&P 500 is anticipated to experience a correction of 10-15%, indicating potential volatility ahead [1] - The importance of individual stock selection is emphasized as the market fluctuates [1] Group 2: Analyst Background - Gary Alexander has extensive experience in covering technology companies and has worked in Silicon Valley, providing insights into current industry themes [1] - He has been a contributor to Seeking Alpha since 2017 and has been featured in various web publications, indicating a strong presence in the investment community [1]