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ZT

ZoomInfo Technologies Inc. (GTM)·Q3 2025 Earnings Summary

Executive Summary

  • Beat-and-raise quarter: Revenue $318.0M (+5% y/y) and Adjusted Operating Income (AOI) $117.7M (37% margin) were above guidance; GAAP diluted EPS $0.12; Adjusted EPS $0.28. Results exceeded S&P Global consensus on revenue ($303.8M*) and EPS ($0.256*) with a clean beat; management raised FY25 guidance modestly on revenue, AOI and EPS . Q3 consensus from S&P Global noted in Estimates Context below.*
  • Mix improved: Upmarket ACV reached 73% (+10 pts in two years), upmarket ACV grew 6% y/y; net revenue retention (NRR) improved to 90% (up 5 pts y/y) with in-period upmarket NRR >100%. 100K+ ACV customer count was 1,887 (+78 y/y; +3 q/q) .
  • Profitability and cash: GAAP operating margin 21% and AOI margin 37% (return to Rule of 40 on a quarterly basis). Cash from ops $93.8M; unlevered FCF $95.3M (30% margin). Continued buybacks: 8.3M shares at $10.46 ($86.6M) in Q3 .
  • Catalysts/narrative: Momentum in AI-led GTM suite (Copilot renewals, GTM Studio, GTM Workspace), Salesforce Agentforce integration, and visible upmarket displacement. Guidance philosophy stays conservative; seasonality higher as mix shifts upmarket .

What Went Well and What Went Wrong

  • What Went Well

    • Upmarket acceleration and retention: Upmarket ACV +6% y/y; mix 73% of ACV; in-period upmarket NRR >100%; company-wide NRR rose to 90% (fifth straight quarterly improvement) .
    • Profitability and execution: AOI margin 37% (highest since Q4’24), Rule of 40 achieved on a quarterly basis; management raised FY guide again .
    • Product and partnerships: “It is only a matter of time before ZoomInfo will be synonymous with AI and go-to-market,” with Operations Suite >20% y/y, GTM Studio/Workspace launched, and Salesforce Agentforce integration featured (Revenue Agent in marketplace) .

  • What Went Wrong

    • Down-market headwinds persist: Down-market ACV declined 10% y/y (improved from -11% in Q2), still a drag albeit shrinking mix; management remains focused on making it smaller/healthier .
    • Seasonality and sequential optics: Mix shift upmarket increases seasonality; sequential revenue trends will be less indicative, complicating near-term modeling .
    • Cash conversion vs prior year: Q3 unlevered FCF $95.3M was below Q3’24 ($110.7M) on lower litigation cash add-backs and higher capex; margin 30% .

Financial Results

MetricQ3 2024Q2 2025Q3 2025
Revenue ($M)$303.6 $306.7 $318.0
GAAP Operating Income ($M)$43.5 $53.7 $67.5
GAAP Operating Margin (%)14% 18% 21%
Adjusted Operating Income ($M)$111.7 $104.7 $117.7
Adjusted Operating Margin (%)37% 34% 37%
GAAP Diluted EPS ($)$0.07 $0.07 $0.12
Adjusted Diluted EPS ($)$0.28 $0.25 $0.28
Cash from Operations ($M)$18.2 $108.9 $93.8
Unlevered Free Cash Flow ($M)$110.7 $99.9 $95.3
  • Estimates vs Actuals (S&P Global consensus)
    • Revenue Q3: $318.0M vs $303.8M consensus → beat by $14.2M (4.7%)* .
    • Adjusted EPS Q3: $0.28 vs $0.256 consensus → beat by ~$0.02 (≈9%)* .
    • Q4 consensus revenue $309.3M* vs company guide $307–$310M; Q4 consensus EPS $0.2825* vs guide $0.27–$0.29 .
    • FY25 consensus revenue $1.2397B* vs guide $1.237–$1.240B; FY25 consensus EPS $1.046* vs guide $1.04–$1.06 .

KPI and mix trends

KPIQ1 2025Q2 2025Q3 2025
Customers ≥$100k ACV (count)1,868 1,884 1,887
Upmarket ACV Mix (%)71% 72% 73%
Upmarket ACV Growth (y/y)3% 4% 6%
Net Revenue Retention (%)87% 89% 90%
RPO ($B)1.13; NTM $0.837 1.15; NTM $0.842 1.17; NTM $0.824
Unearned Revenue ($M)$484 (Q1 end) $473 (Q2 end) $432 (Q3 end)
Share Repurchases (shares/$/avg px)8.6M; $95M; $11.05 15.9M; $146.3M; $9.22 8.3M; $86.6M; $10.46

Segment/other highlights

  • Operations Suite >20% y/y growth; accelerating in Q3 .
  • Usage-based and other revenue +$3M y/y, aiding the revenue beat .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
GAAP RevenueFY 2025$1.215–$1.225B $1.237–$1.240B Raised
Adjusted Operating IncomeFY 2025$433–$437M $440–$443M Raised
Adjusted Diluted EPSFY 2025$0.99–$1.01 (WASO 346M) $1.04–$1.06 (WASO 341M) Raised; lower WASO
Unlevered Free Cash FlowFY 2025$422–$442M $424–$444M Raised (midpoint)
GAAP RevenueQ4 2025n/a$307–$310M New
Adjusted Operating IncomeQ4 2025n/a$117–$120M New
Adjusted Diluted EPSQ4 2025n/a$0.27–$0.29 New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025, Q2 2025)Current Period (Q3 2025)Trend
AI/Technology initiatives (Copilot, GTM Studio/Workspace)Copilot expanded beyond SDRs; GTM Studio launched; enterprise NPS up; Ops suite double-digit growth Ops Suite >20% growth; GTM Workspace launched; GTM Studio early interest; Salesforce Agentforce integration live (Revenue Agent) Improving
Upmarket shift & retentionUpmarket 71–72%; upmarket growth 3–4%; NRR improved to 87–89% Upmarket 73%; upmarket ACV +6%; NRR 90%; in-period upmarket NRR >100% Improving
Down-market/PLGTightened qualification; down-market to shrink/be healthier; more self-serve Down-market -10% y/y (better than -11%); continued risk modeling and packaging changes Stabilizing
Partnerships & ecosystemNone as materialSalesforce Agentforce showcased; co-selling incentives; upcoming prospecting agent Positive
Macro/seasonality & modelingCaution in guide; seasonality evolving with mix Sequential growth less indicative; year-over-year lens preferred Persistent
Cash allocationAggressive buybacks; revolver used in Q2 to accelerate Continued buybacks; share count reducing; FCF/share acceleration expected in 2026 Positive

Management Commentary

  • Strategy: “We are building and delivering the best solutions we’ve ever put in front of customers… I believe it is only a matter of time before ZoomInfo will be synonymous with AI and go-to-market.”
  • Data moat: “It is unique data, not available on the public web, that go-to-market teams require… we tie that data asset to our contact and signal data and put them in a position to execute.”
  • Execution and profitability: “We delivered a nearly 300 basis points sequential improvement in margins and are raising our growth expectations for the year.”
  • Guidance philosophy: “We remain committed to properly managing expectations… delivering revenue growth, margin expansion, and aggressive share repurchases in 2026.”

Q&A Highlights

  • Drivers of upside: Revenue beat bridged by Copilot renewal uplift (mid- to high-single digit), the largest TCV deal in company history (closed early Q3), mix shift upmarket, and +$3M y/y in usage-based/other revenue .
  • Billings vs CRPO/bookings: CRPO up 6% y/y; implied current calculated bookings ~+18% y/y; billings compares noisy due to elevated Q3’24 baseline from practice changes (impact high single-digit millions) .
  • Seasonality and guidance: Increasing upmarket mix means more seasonality; Q3 front-end loaded, Q4 back-end loaded; company continues conservative guidance methodology .
  • Salesforce Agentforce integration: Revenue Agent featured with co-selling incentives; more agents coming; thesis that GTM AI must be grounded in ZoomInfo intelligence .
  • Pricing/monetization: Copilot penetration significant in upmarket; GTM Studio/Workspace pricing designed for adoption (platform fee + prepaid AI action credits), with focus on retention and expansion .

Estimates Context

  • Q3 2025: Revenue $318.0M vs $303.8M consensus*; Adjusted EPS $0.28 vs $0.256 consensus* → clear beat on both .
  • Q4 2025 guidance vs consensus: Revenue guide $307–$310M vs $309.3M consensus*; EPS guide $0.27–$0.29 vs $0.2825 consensus* → guide brackets consensus .
  • FY 2025 guidance vs consensus: Revenue guide $1.237–$1.240B vs $1.2397B consensus*; EPS guide $1.04–$1.06 vs $1.046 consensus* → essentially in-line to slight raise on revenue/EPS .
  • Implications: Street models should lift for Q3 actuals; FY25 likely nudged higher on AOI/EPS given lower share count and raised AOI. Sequential modeling should de-emphasize q/q due to seasonality .

Values marked with * were retrieved from S&P Global.

Other Q3 2025 Press Releases

  • A shareholder law firm announced an investigation alleging historical issues (COVID pull-forward, auto-renew practices) unrelated to the current quarter’s operations. This is third-party litigation PR noise; no operational impact cited by the company this quarter .

Key Takeaways for Investors

  • Beat-and-raise on both top and bottom line with improving quality of revenue (higher upmarket mix, better NRR) should support multiple stabilization/expansion near-term .
  • AI-led product cycle (Copilot renewals, GTM Studio/Workspace, Agentforce integration) is driving deeper seat expansion beyond SDRs, underpinning retention and ACV growth upmarket .
  • Profitability remains a strong pillar (37% AOI margin); management reiterates FY AOI 36% and targets FCF/share acceleration in 2026 via growth, margin expansion, and buybacks .
  • Watch seasonality and sequential optics as mix shifts upmarket; prioritize y/y growth and NRR trajectory when gauging momentum .
  • Down-market is still a drag but shrinking/stabilizing; risk models and packaging changes are improving write-offs and collections, reducing revenue volatility .
  • Capital allocation remains shareholder-friendly; continued repurchases lowering share count provide EPS/FCF/share leverage, especially if fundamentals continue to improve .

Appendix: Guidance Snapshot (as provided)

  • Q4 2025: Revenue $307–$310M; AOI $117–$120M; Adj. Diluted EPS $0.27–$0.29; FY 2025: Revenue $1.237–$1.240B; AOI $440–$443M; Adj. Diluted EPS $1.04–$1.06; uFCF $424–$444M; WASO 341M .