ZoomInfo Technologies (US:ZI)2025-02-25 22:16Financial 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].