ZoomInfo Technologies (ZI) - 2025 Q2 - Quarterly Results

Introduction and Q2 2025 Performance Overview Q2 2025 Financial Highlights ZoomInfo reported strong financial results for Q2 2025, with GAAP revenue increasing by 5% year-over-year to $306.7 million, achieving a GAAP operating income of $53.7 million and an Adjusted operating income of $104.7 million, demonstrating improved profitability and efficiency Q2 2025 Financial Highlights (in millions, except percentages) | Metric | Q2 2025 (GAAP) | Change YoY | Q2 2025 (Non-GAAP) | Change YoY | | :-------------------------------- | :------------- | :--------- | :----------------- | :--------- | | Revenue | $306.7 million | 5% | - | - | | Operating Income | $53.7 million | NM* | $104.7 million | 28% | | Operating Income Margin | 18% | - | 34% | - | | Net Income Per Share (Diluted) | $0.07 | - | $0.25 | - | | Cash Flow from Operating Activities | $108.9 million | (14)% | - | - | | Unlevered Free Cash Flow | - | - | $99.9 million | (17)% | *Change YoY as a percentage is not meaningful due to the change from operating loss to income Recent Business and Operating Highlights ZoomInfo continued its innovation roadmap focused on AI and data, leading to improved renewal and retention rates, expanded relationships with large customers, and accelerated Upmarket growth, alongside key product updates and leadership appointments - CEO Henry Schuck highlighted continued delivery on AI and data-focused innovation roadmap, leading to strong financial results, improved renewal and retention rates, expanded relationships with largest customers, and accelerated Upmarket growth[3] - Earned top ratings in TrustRadius' Customer-Verified Awards for AI-powered GTM solutions and product capabilities[4] - Updated Copilot solution to deliver AI-fueled account insights with improved signals, intelligence alerts, and automated account tracking agents[4] Key Operational Metrics (in millions, except percentages) | Metric | Q2 2025 | Change YoY | Change QoQ | | :------------------------------------ | :------ | :--------- | :--------- | | Customers with $100,000+ ACV | 1,884 | +87 | +16 | | Upmarket ACV | 72% | - | - | | Net Revenue Retention Rate (sequential) | 89% | - | Improved | | Shares Repurchased (Q2 2025) | 15.9 million | - | - | | Aggregate Repurchase Amount (Q2 2025) | $146.3 million | - | - | Business Outlook Q3 2025 Guidance ZoomInfo provided guidance for the third quarter of 2025, projecting GAAP Revenue between $302 million and $305 million, and Non-GAAP Adjusted Operating Income between $110 million and $113 million Q3 2025 Financial Guidance (in millions, except per share amounts) | Metric | Q3 2025 Guidance | | :------------------------------------ | :----------------- | | GAAP Revenue | $302 - $305 million | | Non-GAAP Adjusted Operating Income | $110 - $113 million | | Non-GAAP Adjusted Net Income Per Share (Diluted) | $0.24 - $0.26 | | Weighted Average Shares Outstanding | 342 million | Full Year 2025 Guidance For the full year 2025, ZoomInfo updated its guidance, expecting GAAP Revenue to be between $1.215 billion and $1.225 billion, and Non-GAAP Adjusted Operating Income between $433 million and $437 million Full Year 2025 Financial Guidance (in millions, except per share amounts) | Metric | Prior FY 2025 Guidance | Updated FY 2025 Guidance | | :------------------------------------ | :--------------------- | :----------------------- | | GAAP Revenue | $1.195 - $1.205 billion | $1.215 - $1.225 billion | | Non-GAAP Adjusted Operating Income | $426 - $436 million | $433 - $437 million | | Non-GAAP Adjusted Net Income Per Share (Diluted) | $0.96 - $0.98 | $0.99 - $1.01 | | Non-GAAP Unlevered Free Cash Flow | $420 - $440 million | $422 - $442 million | | Weighted Average Shares Outstanding | 352 million | 346 million | Corporate Communications and Information Conference Call and Webcast ZoomInfo hosted a conference call on August 4, 2025, to discuss its Q2 2025 results, with a live webcast available on its investor relations website - Conference call held on August 4, 2025, at 4:30 p.m. Eastern Time[8] - Live webcast and related presentation materials available on the Company's investor relations website: **https://ir.zoominfo.com/**[9](index=9&type=chunk) Upcoming Investor Events ZoomInfo executives are scheduled to participate in several investor conferences in August and September 2025, including KeyBanc, Canaccord, Stifel, Deutsche Bank, Goldman Sachs, and Piper Sandler events - ZoomInfo executives expect to participate in six investor events in August and September 2025[10] - Events include KeyBanc Technology Leadership Forum (Aug. 11), Canaccord Growth Conference (Aug. 12), Stifel Technology Executive Summit (Aug. 25), Deutsche Bank Technology Conference (Aug. 28), Goldman Sachs Communacopia and Technology Conference (Sep. 9), and Piper Sandler Growth Frontiers Conference (Sep. 11)[12] About ZoomInfo ZoomInfo is a Go-To-Market Intelligence Platform that leverages AI-ready insights, trusted data, and advanced automation to help businesses accelerate revenue growth, serving over 35,000 companies globally and recognized for its data privacy compliance - ZoomInfo (NASDAQ: GTM) is a Go-To-Market Intelligence Platform empowering businesses to grow faster with AI-ready insights, trusted data, and advanced automation[21] - Solutions provide over 35,000 companies worldwide with a complete view of their customers[21] - Recognized leader in data privacy, with industry-leading GDPR and CCPA compliance and numerous data security and privacy certifications[21] Website Disclosure and Contacts ZoomInfo uses its investor relations website (https://ir.zoominfo.com/) as a primary channel for material company information, including financial data, press releases, SEC filings, and webcasts, also providing contact information for investor and media inquiries - ZoomInfo uses its investor relations website (https://ir.zoominfo.com/) as a distribution channel for material company information[22] - Investors can enroll for email alerts on the investor relations page[22] - Investor Contact: Jeremiah Sisitsky (ir@zoominfo.com); Media Contact: Meghan Barr (pr@zoominfo.com)[23] Non-GAAP Financial Measures and Other Metrics Rationale and Limitations ZoomInfo presents non-GAAP financial measures to provide investors with additional insights into its operating performance by excluding certain items that affect period-over-period comparability, acknowledging these measures have limitations as they are not prepared in accordance with GAAP and may not be comparable to those of other companies - Non-GAAP measures (Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted Net Income, Adjusted Net Income Per Share, Unlevered Free Cash Flow) are used to evaluate operating performance by eliminating items affecting comparability and providing consistency with past financial performance[11] - Non-GAAP financial measures are supplemental information, not substitutes for GAAP measures, and have limitations due to potential differences in calculation methods and adjusted items compared to other companies[13] - Quantitative reconciliation of forward-looking non-GAAP measures to GAAP is not provided due to high variability and difficulty in predicting certain excluded items like stock-based compensation, taxes, and restructuring expenses[13] Key Non-GAAP Definitions This section provides the specific definitions for key non-GAAP financial measures used by ZoomInfo, including Adjusted Operating Income, Adjusted Net Income, Unlevered Free Cash Flow, and Net Revenue Retention, outlining the adjustments made to their GAAP counterparts Adjusted Operating Income - Adjusted Operating Income is defined as income (loss) from operations adjusted for amortization of acquired technology and other acquired intangibles, equity-based compensation expense, restructuring and transaction-related expenses, integration costs and acquisition-related expenses, and legal settlement[14] Adjusted Net Income - Adjusted Net Income is defined as net income (loss) adjusted for loss on debt modification and extinguishment, amortization of acquired technology and other acquired intangibles, equity-based compensation expense, restructuring and transaction-related expenses, integration costs and acquisition-related expenses, legal settlement, TRA liability remeasurement (benefit) expense, other (income) loss, net, and tax impacts of adjustments to net income (loss)[15] Unlevered Free Cash Flow - Unlevered Free Cash Flow is defined as net cash provided by (used in) operating activities less purchases of property and equipment and other assets, plus cash interest expense, cash payments related to restructuring and transaction-related expenses, cash payments related to integration costs and acquisition-related compensation, and legal settlement payments[16] Net Revenue Retention - Net revenue retention is calculated as the total ACV for customers at the end of a twelve-month period divided by the total ACV for those same customers at the beginning of the period[17] Cautionary Statement Regarding Forward-Looking Information This section serves as a cautionary statement regarding forward-looking statements, emphasizing that actual results may differ materially from projections due to various factors, including economic conditions, regulatory changes, and integration of acquired businesses, with the company disclaiming any obligation to update these statements - The press release contains forward-looking statements, and actual results may differ materially from those expressed or implied[19] - Factors that could cause actual results to differ include future economic, competitive, and regulatory conditions, potential future uses of cash, successful integration of acquired businesses, and decisions by the company and competitors[20] - The company undertakes no obligation to update or revise any forward-looking statements, except as required by law[20] Condensed Consolidated Financial Statements (Unaudited) Condensed Consolidated Balance Sheets As of June 30, 2025, ZoomInfo reported total assets of $6,452.8 million, a slight decrease from $6,467.6 million at December 31, 2024, with total liabilities increasing to $4,900.8 million and total stockholders' equity decreasing to $1,552.0 million Condensed Consolidated Balance Sheet Highlights (in millions) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Cash and cash equivalents | $171.0 | $139.9 | | Total current assets | $439.0 | $451.0 | | Total assets | $6,452.8 | $6,467.6 | | Total current liabilities | $619.4 | $652.1 | | Total liabilities | $4,900.8 | $4,774.1 | | Total stockholders' equity | $1,552.0 | $1,693.5 | Consolidated Statements of Operations For the three months ended June 30, 2025, ZoomInfo's revenue grew to $306.7 million, up from $291.5 million in the prior year, achieving a net income of $24.0 million, a significant improvement from a net loss of $24.4 million in Q2 2024 Consolidated Statements of Operations Highlights (in millions, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $306.7 | $291.5 | $612.4 | $601.6 | | Gross profit | $257.2 | $245.6 | $515.6 | $512.3 | | Income (Loss) from operations | $53.7 | $(20.0) | $104.0 | $23.0 | | Net income (loss) | $24.0 | $(24.4) | $50.8 | $(9.3) | | Diluted Net income (loss) per share | $0.07 | $(0.07) | $0.15 | $(0.02) | | Total equity-based compensation expense | $29.7 | $36.4 | $59.3 | $67.6 | Consolidated Statements of Cash Flows For the six months ended June 30, 2025, net cash provided by operating activities was $228.1 million, a decrease from $242.2 million in the prior year, with investing activities resulting in a net cash outflow of $43.3 million and financing activities using $153.3 million, primarily due to common stock repurchases Consolidated Statements of Cash Flows Highlights (in millions) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $228.1 | $242.2 | | Net cash provided by (used in) investing activities | $(43.3) | $44.6 | | Net cash used in financing activities | $(153.3) | $(348.2) | | Net increase (decrease) in cash, cash equivalents, and restricted cash | $31.5 | $(61.4) | | Cash, cash equivalents, and restricted cash at end of period | $180.5 | $394.8 | | Repurchase of common stock | $(244.3) | $(299.2) | Reconciliation of Non-GAAP Financial Measures (Unaudited) Reconciliation of Unlevered Free Cash Flow The reconciliation shows that Unlevered Free Cash Flow for Q2 2025 was $99.9 million, derived from GAAP net cash provided by operating activities of $108.9 million, after adjustments for capital expenditures, interest paid, and restructuring/litigation payments Reconciliation of Unlevered Free Cash Flow (in millions) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :------------------------------------------------ | :------------------------------- | :------------------------------- | | Net cash provided by operating activities (GAAP) | $108.9 | $126.3 | | Purchases of property and equipment and other assets | $(22.0) | $(11.1) | | Interest paid in cash | $5.0 | $2.6 | | Restructuring and transaction-related expenses paid in cash | $7.5 | $1.7 | | Litigation settlement payments | $0.5 | $0.5 | | Unlevered Free Cash Flow (Non-GAAP) | $99.9 | $120.0 | Reconciliation of Adjusted Operating Income Adjusted Operating Income for Q2 2025 was $104.7 million, a 28% increase year-over-year, resulting in an Adjusted Operating Income Margin of 34%, reconciled from a GAAP operating income of $53.7 million by adding back items such as amortization, equity-based compensation, and restructuring expenses Reconciliation of Adjusted Operating Income (in millions) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | | Income (Loss) from operations (GAAP) | $53.7 | $(20.0) | | Amortization of acquired technology | $9.4 | $9.6 | | Amortization of other acquired intangibles | $5.3 | $5.5 | | Equity-based compensation expense | $29.7 | $36.4 | | Restructuring and transaction-related expenses | $5.1 | $50.0 | | Litigation settlement | $1.5 | $0.0 | | Adjusted Operating Income (Non-GAAP) | $104.7 | $81.6 | | Operating Income Margin (GAAP) | 18% | (7)% | | Adjusted Operating Income Margin (Non-GAAP) | 34% | 28% | Reconciliation of Adjusted Net Income Adjusted Net Income for Q2 2025 reached $86.1 million, up from $66.0 million in Q2 2024, leading to an Adjusted Net Income Per Share of $0.25, with this reconciliation from GAAP net income including adjustments for various non-cash and non-recurring items, as well as their tax impacts Reconciliation of Adjusted Net Income (in millions, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :------------------------------------------------ | :------------------------------- | :------------------------------- | | Net income (loss) (GAAP) | $24.0 | $(24.4) | | Amortization of acquired technology | $9.4 | $9.6 | | Amortization of other acquired intangibles | $5.3 | $5.5 | | Equity-based compensation expense | $29.7 | $36.4 | | Restructuring and transaction-related expenses | $5.1 | $50.0 | | Litigation settlement | $1.5 | $0.0 | | TRA liability remeasurement expense (benefit) | $(14.6) | $(0.2) | | Tax impacts of adjustments to net income (loss) | $25.8 | $(9.0) | | Adjusted Net Income (Non-GAAP) | $86.1 | $66.0 | | Diluted Net Income (Loss) Per Share (GAAP) | $0.07 | $(0.07) | | Adjusted Net Income Per Share (Non-GAAP) | $0.25 | $0.17 | | Shares for Adjusted Net Income Per Share | 343 | 387 | - Tax impacts of adjustments to net income (loss) for Q2 2025 primarily relate to recognizing $15.2 million of tax benefit from amortization of corporate structure simplification costs, adjusting out $14.6 million of tax expense from state tax law changes, and $4.0 million from non-deductible stock-based compensation[42]