Investment Summary - Previous investment thought for ZoomInfo Technologies (ZI) was a sell rating due to relatively expensive valuation compared to peers experiencing similar growth weakness [2] - ZI's share price has fallen from approximately $12 to $9, with valuation multiple revised from 4.4x forward revenue to 3.6x [2] 2Q24 Performance - ZI reported a total revenue decline of 5.6% year-over-year, down from a 3.1% growth in 1Q24, totaling $291.5 million [3] - Adjusted EBIT margin decreased from approximately 40% in 2Q23 to 28% in 2Q24, leading to adjusted EPS of $0.17, down from $0.26 in 2Q23 [3] - Poor performance in the SMB segment resulted in elevated write-offs, with a $33 million incremental charge recognized this quarter [3] Demand Stabilization - Customer growth metrics have turned positive after multiple quarters of decline, with the number of customers with over $100k in annual contract value (ACV) growing 2.1% sequentially [4] - ZI signed its largest new business deal of $1.4 million in ACV, marking 2Q24 as the best new business quarter in the mid-market and enterprise [4] - The dollar-based net retention rate (DBNRR) stabilized at 85%, indicating potential recovery in the upmarket segment [5] Product Performance - ZI's Copilot product has been adopted by the majority of customers, contributing $18 million in ACV from over 1,000 logos, showing improvements in engagement and utilization rates [5] - Management noted opportunities for pricing uplift from Copilot, indicating a focus on monetization as adoption increases [5] Guidance and Valuation - Management's FY24 guidance appears conservative, not assuming any upfront prepayment from riskier SMB customers and a higher rate of write-offs for 2H24 [6] - ZI has a history of beating its own adjusted EPS and revenue guidance, suggesting potential for upside surprises [6] - A hold rating is maintained as more evidence of demand growth is awaited, with potential for significant upside if demand recovers [7] Conclusion - ZI's 2Q24 performance was mixed, facing headwinds in the SMB segment but showing signs of stabilization in customer growth metrics and product traction [9] - Ongoing uncertainties in the SMB market warrant caution before turning bullish [9]

Core Viewpoint - Pomerantz LLP is investigating potential securities fraud or unlawful business practices involving ZoomInfo Technologies Inc. and its executives, following disappointing financial results and a significant stock price drop [1][2][3]. Financial Performance - ZoomInfo reported adjusted earnings per share of $0.17 for Q2 2024, which was below the analyst consensus estimate of $0.24 [2]. - The company experienced a year-over-year revenue decline of 6%, totaling $291.5 million, which also fell short of the expected $307.68 million [2]. Executive Changes - ZoomInfo announced the departure of its Chief Financial Officer, Cameron Hyzer, effective September 6, 2024 [2]. Stock Market Reaction - Following the announcement of the financial results, ZoomInfo's stock price decreased by $1.79 per share, representing an 18.27% drop, closing at $8.01 per share on August 6, 2024 [3].

Revenue and Customer Metrics - ZoomInfo's net revenue retention rate was 85% as of June 30, 2024, indicating a focus on expanding customer relationships [193]. - The company added new customers over the last 24 months, contributing incremental revenues for the three months ended June 30, 2024, compared to the same period in 2023 [192]. - As of June 30, 2024, ZoomInfo had 1,797 customers with over $100,000 in annual contract value (ACV) [193]. - Over 45% of customer contracts are multi-year agreements, reflecting a stable revenue model [187]. - Revenue for the three months ended June 30, 2024 was $291.5 million, a decrease of $17.1 million, or 6%, compared to $308.6 million for the same period in 2023 [221]. - Revenue for the six months ended June 30, 2024 was $601.6 million, a decrease of $7.7 million, or 1%, compared to $609.3 million for the same period in 2023 [230]. - The company reported unearned revenue of $440.4 million as of June 30, 2024, with $438.9 million expected to be recognized as revenue in the next 12 months [257]. Expenses and Profitability - Operating expenses increased to $265.6 million for the three months ended June 30, 2024, an increase of $60.2 million, or 29%, compared to $205.4 million for the same period in 2023 [222]. - General and administrative expenses for the three months ended June 30, 2024 were $111.3 million, an increase of $69.2 million, or 164%, compared to $42.1 million for the same period in 2023 [224]. - Net loss for the three months ended June 30, 2024 was $24.4 million, a decrease of $62.5 million, or 164%, compared to net income of $38.1 million for the same period in 2023 [229]. - Adjusted Operating Income for the three months ended June 30, 2024, was $81.6 million, representing an Adjusted Operating Income Margin of 28%, down from $125.6 million and 41% for the same period in 2023 [248]. - Adjusted Net Income for the three months ended June 30, 2024 was $66.0 million, down $40.4 million, or 38%, compared to $106.4 million for the same period in 2023 [251]. - Adjusted EBITDA for the three months ended June 30, 2024 was $87.4 million, a decrease of $43.0 million, or 33%, from $130.4 million in the same period of 2023 [254]. Cash Flow and Financing - Net cash provided by operating activities for the six months ended June 30, 2024 was $242.2 million, resulting from a net loss of $9.3 million adjusted by non-cash charges of $242.6 million [261]. - Cash flows from investing activities for the six months ended June 30, 2024, provided $44.6 million, primarily from maturities of short-term investments of $69.0 million [266]. - Net cash used in financing activities for the six months ended June 30, 2024, was $348.2 million, including $299.2 million for common stock repurchase [267]. - As of June 30, 2024, the company had $385.9 million in cash and cash equivalents, $13.4 million in short-term investments, and $250.0 million available under its first lien revolving credit facility [256]. Debt and Interest Rates - The company entered into an amendment to its First Lien Credit Agreement in June 2024, reducing the applicable rate for loans by 50 basis points [191]. - As of June 30, 2024, the total contractual maturity of outstanding indebtedness was $1,241.0 million, with a net contractual maturity of $832.8 million after accounting for cash and cash equivalents [273]. - The total net leverage ratio to Adjusted EBITDA as of June 30, 2024, was 1.8x, with Adjusted EBITDA for the trailing twelve months at $474.7 million [272]. - Interest expense, net for the six months ended June 30, 2024, was $19.9 million, a decrease of $2.0 million, or 9%, compared to $21.9 million for the same period in 2023 [236]. - Interest paid in cash for the six months ended June 30, 2024, was $20.3 million, compared to $24.6 million for the same period in 2023 [263]. Operational Changes and Risks - The company recorded an incremental charge impacting reported revenue and general and administrative expenses due to a new business risk model implemented in Q2 2024 [196]. - The company incurred restructuring and transaction-related expenses of $50.0 million for the three months ended June 30, 2024, compared to $4.7 million in the same period of 2023 [253]. - Future capital resource demands may be impacted by changes in reference interest rates and potential additional debt for acquisitions or corporate purposes [265]. - The company has implemented a hedging strategy to mitigate interest rate risk through derivative instruments [291]. - The company initiated a foreign currency hedging program in the second quarter of 2024 to mitigate potential adverse effects from significant currency movements [294]. Market and Economic Conditions - Inflation has not had a material direct effect on the company's business or financial condition [290]. - The company believes that currency fluctuations will not be significant in the future, although there is no guarantee of this [295]. - The functional currency of foreign subsidiaries is the U.S. dollar, and a stronger dollar could reduce demand for solutions outside the U.S. [293]. - The company manages credit risk by concentrating cash deposits with multiple high-quality financial institutions [297]. - The investment portfolio consists of highly rated securities with a weighted-average maturity of less than 12 months [297].

Bank of America analyst Koji Ikeda downgraded ZoomInfo (NASDAQ:ZI) stock this morning after the company's disappointing second-quarter earnings call yesterday. Indeed, Koji lowered ZI stock's rating from "buy" to "underperform" while also dropping the price target to just $8 per share from $23. Not alone, scores of investment banks are lowering their estimations of ZoomInfo's worth following the company's earnings miss. This includes the likes of Mizuho, RBC Capital, Needham, Piper Sandler, Deutsche Bank an ...

Financial Data and Key Metrics Changes - In Q2 2024, the company recorded GAAP revenue of $292 million, with adjusted operating income of $82 million, representing a margin of 28% [8][33] - A $33 million charge was taken due to higher-than-expected write-offs, particularly from SMBs, which led to a revision of full-year guidance [8][32] - Unlevered free cash flow for the quarter was $120 million, and the company ended the quarter with $399 million in cash and short-term investments [39][40] Business Line Data and Key Metrics Changes - The company saw significant growth in its $100,000 ACV customer cohort, which now constitutes 43% of total ACV, marking the first sequential growth since Q4 2022 [12] - The $1 million-plus customer cohort also grew sequentially, with a 17% year-over-year increase in ACV [12] - Operations and Data-as-a-Service offerings grew 23% year-over-year, with a net retention rate of 117% [16] Market Data and Key Metrics Changes - The enterprise ACV increased by 9% year-over-year, and net new ARR was the best it has been in four quarters [12] - The company closed transactions with major organizations, including PwC and Deutsche Bank, and signed its largest new business transaction, valued at $1.4 million ACV [14][15] Company Strategy and Development Direction - The company is focusing on moving upmarket and stabilizing net revenue retention, with operational changes aimed at reducing write-offs from SMBs [9][11] - A new business risk model was deployed to require prepayment from high-risk prospects, which is expected to mitigate future write-offs [9][10] - The launch of ZoomInfo Copilot, an AI-powered offering, has been successful, generating over $18 million in ACV across more than 1,000 logos [19][21] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by increased write-offs and a fluid operating environment, leading to conservative guidance for the remainder of the year [49][50] - The company expects to stabilize net revenue retention rates and improve operational performance, despite not assuming continued trends in the second half of the year [50][64] - Management is committed to driving free cash flow per share and has plans for share repurchases, with $400 million remaining in the authorization [24][44] Other Important Information - The company announced changes at the board level, welcoming new members with strong backgrounds in data and capital markets [22][23] - A significant restructuring of real estate was undertaken, with plans to reduce the facility footprint by approximately 40% [35] Q&A Session Summary Question: Understanding the decline for the back half of the year - Management indicated that operational improvements may not take hold until late this year or early next year, leading to conservative guidance [48][49] Question: Impact of layoffs in the technology industry - Management noted that a portion of the business is usage-based, which may mitigate the impact of layoffs, and they see opportunities for growth despite market challenges [53][54] Question: Comparison of current collectibility environment to past periods - Management acknowledged that write-off rates have escalated compared to historical rates, prompting changes in credit practices [67][68] Question: Sales cycle duration and lessons from large customer wins - Sales cycles have remained consistent, and the segmentation of the sales force has led to improved results in mid-market and enterprise segments [78] Question: Write-downs impact on guidance for the full year - Management expects write-offs to continue impacting results, but operational improvements should reduce volatility moving forward [86][88]

| --- | --- | |-----------------------------------------------|-------| | | | | | | | | | | Investor Overview | | | August 5, 2024 Q2 2024 Financial Results DATE | | Q2 2024 EARNINGS CALL > SAFE HARBOR STATEMENT Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Forward-looking statements in ...

A decent first-quarter report is overshadowed by a weak outlook.Stock investors tend to be a picky lot, and one item they're picky about is a company's financial guidance. It's all well and good to post quarterly results that beat estimates. However, since most market participants are -- sensibly -- more concerned about the future than the past, if a business's forecasts come in under expectations, it can be punished by Mr. Market.That was the case this week with customer acquisition and management-software ...

ZoomInfo Technologies Inc. (NASDAQ:ZI) Q1 2024 Earnings Conference Call May 7, 2024 4:30 PM ET Corporate Participants Jerry Sisitsky - Investor Relations Henry Schuck - Founder and Chief Executive Officer Cameron Hyzer - Chief Financial Officer Conference Call Participants Koji Ikeda - Bank of America Elizabeth Porter - Morgan Stanley DJ Hynes - Canaccord Genuity Mark Murphy - JPMorgan Jackson Ader - KeyBanc Alex Zukin - Wolfe Research Michael Berg - Wells Fargo Securities Brad Zelnick - Deutsche Bank Brent ...

ZoomInfo (ZI) came out with quarterly earnings of $0.26 per share, beating the Zacks Consensus Estimate of $0.24 per share. This compares to earnings of $0.24 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 8.33%. A quarter ago, it was expected that this company would post earnings of $0.25 per share when it actually produced earnings of $0.26, delivering a surprise of 4%.Over the last four quarters, the company has surpassed ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-39310 ZoomInfo Technologies Inc. (Exact name of registrant as specified in its charter) Delaware 87-3037521 (I.R.S. Employer Identification ...