ZoomInfo Technologies (US:ZI)2024-08-06 20:47Revenue 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].