GTM Q2 2025: 8-Figure ACV Deal Propels 5% Revenue Growth
- Robust Upmarket Expansion: ZoomInfo’s largest-ever TCV deal—just below 8 figures—underscores its ability to drive significant upsell with large, high-margin enterprise customers, while the growing proportion of upmarket revenue (72%) and improved retention rates indicate a durable revenue base.
- Strong Product Innovation & Copilot Traction: The enhanced Copilot product is gaining early renewal momentum and expanding usage beyond SDRs to broader sales and customer success functions, suggesting potential for accelerated net revenue retention and additional customer stickiness.
- Improving Operating Efficiency & Margin Expansion: Strategic shifts including a reduced headcount, efficient resource reallocation from downmarket to higher-margin upmarket segments, and ongoing share repurchase efforts are expected to bolster operating leverage and margins over time.
- Q4 and 2026 guidance uncertainties: Some questions highlighted an implied Q4 slowdown (even a near negative exit growth rate) compared to street expectations for 2026, raising concerns about sustaining near-term momentum.
- Downmarket segment weakness: The downmarket business declined 11% YoY, and its continued contraction may offset gains from the upmarket shift if stabilization efforts fall short.
- Reliance on product innovation and adoption: Heavy reliance on new product launches (like Copilot enhancements and go-to-market studio) poses execution risks—if customer adoption and renewal outcomes don’t meet expectations, overall growth and margins could be adversely affected.
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
GAAP Revenue | Q3 2025 | $295 to $298 | $302 to $305 | raised |
Adjusted Operating Income | Q3 2025 | $101 to $104 | $110 to $113 | raised |
Non-GAAP Net Income per Share | Q3 2025 | $0.22 to $0.24 | $0.24 to $0.26 | raised |
GAAP Revenue | FY 2025 | $1,195 to $1,205 | $1,215 to $1,225 | raised |
Adjusted Operating Income | FY 2025 | $426 to $436 | $433 to $437 | raised |
Non-GAAP Net Income per Share | FY 2025 | $0.96 to $0.98 | $0.99 to $1.01 | raised |
Unlevered Free Cash Flow | FY 2025 | $420 to $440 | $422 to $442 | raised |
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Large TCV Deal
Q: What's behind largest TCV deal & 6% RIF?
A: Management highlighted a nearly 8-figure ACV deal that standardizes ZoomInfo’s solutions across key customer segments, while a 6% reduction in force is a proactive step aimed at driving better margins for next year. -
Margin & Revenue Mix
Q: How does segment mix impact revenue growth?
A: They explained that upmarket growth at 4% offsets a downmarket decline of 11%, resulting in a roughly 5% overall revenue increase with margins benefiting from higher-value contracts. -
Retention & Guidance
Q: What are current upmarket retention levels?
A: Upmarket net revenue retention is now in the high 90s, with management targeting a sustained move above 90% to support future growth and profitability. -
Pipeline & Software Vertical
Q: What’s the outlook for pipeline and software vertical?
A: Leadership showed confidence in a strong pipeline, noting Q2’s upmarket momentum and a return to growth in the software vertical with consecutively improved net retention figures. -
AI Endurance
Q: What sets apart ZoomInfo’s AI offerings?
A: They stressed that a robust, innovation-first product roadmap combined with unique, proprietary data delivers durable value beyond generic AI models. -
Down Market Efficiency
Q: How is the downmarket segment evolving?
A: With the new business risk model and reallocation of resources, the downmarket segment is stabilizing, while higher-margin upmarket deals increasingly drive overall profitability. -
CoPilot Renewals
Q: Will CoPilot renewals grow faster than initial sales?
A: Early renewal results for CoPilot are promising, suggesting that long-term contracts could strengthen net revenue retention even further. -
Net New Business
Q: How is net new business performing?
A: Upmarket customer acquisition remains robust, and stricter qualification in the downmarket is expected to lead to a more sustainable, steady growth engine. -
AI SDR vs Copilot
Q: How do AI SDRs compare with Copilot?
A: Management dismissed AI SDRs as largely a passing trend due to regulatory and effectiveness issues, emphasizing that Copilot serves multiple roles and delivers stronger, more versatile outcomes. -
Industry Consolidation
Q: Is consolidation driving customer wins?
A: There’s a clear trend of customers consolidating their go-to-market tech by adopting comprehensive solutions like ZoomInfo, uniting sales, marketing, and rev ops functions. -
ACV Growth in Deals
Q: How does the new deal’s ACV compare historically?
A: The latest large deal shows a marked increase in ACV, with contract values nearly doubling prior agreements, reflecting significant upmarket expansion opportunities. -
Exit Rate & Future Guidance
Q: What about Q4 exit rate vs. 2026 estimates?
A: While Q4 figures are under review, management maintains that their consistent guidance approach and strong Q3/Q4 performance will better shape 2026 growth estimates. -
Operational Efficiency
Q: How are operational efficiencies being achieved?
A: By leveraging AI internally, they’ve significantly reduced headcount and optimized processes, paving the way for improved margins without sacrificing growth. -
Standardized Data Deals
Q: Are customers making larger, standardized data deals?
A: Customers are now investing in more comprehensive data solutions to enhance internal AI initiatives, leading to larger and more standardized deals compared to the past.
Research analysts covering ZoomInfo Technologies.