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ZT

ZoomInfo Technologies Inc. (ZI)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered better-than-expected results versus company guidance: revenue $305.7M, adjusted operating income $100.9M, adjusted diluted EPS $0.23; revenue and AOI came in above the high end of guidance, EPS at the high end .
  • Upmarket mix reached 71% with upmarket revenue growth of 3% YoY; $100k+ ACV customers rose to 1,868 (+108 YoY) and net revenue retention improved sequentially while rounding to 87% .
  • FY 2025 guidance raised at the low end for revenue to $1.195–$1.205B and adjusted EPS increased to $0.96–$0.98 (driven by share count reductions); AOI and UFFCF maintained; Q2 2025 guide: revenue $295–$298M, AOI $101–$104M, adjusted EPS $0.22–$0.24 .
  • Strategic catalysts: launch of Go-To-Market Studio (GTM Studio) and change of trading symbol to “GTM” effective May 13, 2025, reinforcing platform repositioning toward enterprise go-to-market intelligence .

What Went Well and What Went Wrong

What Went Well

  • Upmarket momentum: upmarket grew 3% YoY and now represents 71% of ACV; enterprise wins include Stripe deploying Copilot across 300+ sellers and expansions at Intuit and other large logos . “ZoomInfo will be synonymous with enterprise go-to-market… much like Workday for HR and ServiceNow for IT” .
  • Product innovation: launched GTM Studio to unify first- and third-party data and orchestrate revenue plays, positioning ZoomInfo as “the only vendor with natively integrated data orchestration, AI and frontline execution” .
  • Strong cash generation and capital returns: CFFO $119.2M and UFFCF $124.5M; repurchased 8.6M shares for $95.0M at $11.05 average, with additional repurchases post-quarter and $543M authorization remaining at Q1 close .

What Went Wrong

  • Top-line contraction persists: GAAP revenue declined 1% YoY, and adjusted operating income fell 15% YoY; adjusted operating margin compressed to 33% from 39% YoY .
  • Downmarket headwinds: downmarket declined 10% YoY; management continues to intentionally shrink and “qualify risk out” of this cohort, implying ongoing drag to consolidated growth in 2025 .
  • Cautious outlook despite beats: management layered incremental caution into Q2 and FY guidance due to macro uncertainty (not company-specific demand issues), limiting flow-through from the Q1 beat .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$303.6 $309.1 $305.7
GAAP Operating Income ($M)$43.5 $30.9 $50.3
Adjusted Operating Income ($M)$111.7 $115.9 $100.9
GAAP Operating Margin %14% 10% 16%
Adjusted Operating Margin %37% 37% 33%
GAAP Diluted EPS ($)$0.07 $0.04 $0.08
Adjusted Diluted EPS ($)$0.28 $0.26 $0.23
Cash Flow from Operations ($M)$18.2 $109.0 $119.2
Unlevered Free Cash Flow ($M)$110.7 $93.6 $124.5

Segment/KPI breakdown:

  • Upmarket vs Downmarket growth (Q1 2025 YoY): Upmarket +3% ; Downmarket −10% .
  • KPI trajectory:
    • $100k+ ACV customers: 1,809 (Q3’24) → 1,867 (Q4’24) → 1,868 (Q1’25) .
    • Upmarket ACV mix: 71% (Q1’25) .
    • Net Revenue Retention: “stable” (Q3’24) → 87% (Q4’24) → improved sequentially while rounding to 87% (Q1’25) .
    • RPO and Unearned Revenue: RPO $1.13B with $837M current; unearned revenue $484M (Q1’25) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Billions)FY 2025$1.185 – $1.205 $1.195 – $1.205 Raised low end by $0.010B
Adjusted Operating Income ($M)FY 2025$426 – $436 $426 – $436 Maintained
Adjusted EPS (Diluted) ($)FY 2025$0.95 – $0.97 $0.96 – $0.98 Raised (share count reduction)
Unlevered Free Cash Flow ($M)FY 2025$420 – $440 $420 – $440 Maintained
Weighted Avg Diluted Shares (M)FY 2025362 352 Lower shares
Revenue ($USD Millions)Q2 2025N/A$295 – $298 New quarterly guide
Adjusted Operating Income ($M)Q2 2025N/A$101 – $104 New quarterly guide
Adjusted EPS (Diluted) ($)Q2 2025N/A$0.22 – $0.24 New quarterly guide
Weighted Avg Diluted Shares (M)Q2 2025N/A350 New quarterly guide

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
AI/Copilot adoptionCopilot enhancements, integrations; early users saw engagement gains; NRR stable third quarter “AI innovation” helping performance; strong 2025 momentum Copilot rolling out broadly to AE/AM; Stripe deployment; governance hurdles manageable upmarket Broadening adoption across roles; deepening enterprise penetration
Go-To-Market StudioNot mentionedNot mentionedLaunched GTM Studio to unify first/third-party data and orchestrate plays New platform layer; strategic expansion
Upmarket vs Downmarket$100k+ customers +12 QoQ; upmarket focus $100k+ customers +58 QoQ; NRR 87% Upmarket +3% YoY, 71% mix; downmarket −10% YoY Mix shift accelerating to upmarket
Capital allocationBuybacks: 24.5M shares, $242.1M in Q3 46.8M shares, $562.3M in FY; +$500M authorization 8.6M shares, $95M in Q1; >$50M repurchased in Q2-to-date Aggressive repurchases continue
Macro/tariffsNot highlightedNot highlightedMonitoring tariffs/macro; added caution to guidance despite no customer behavior changes Conservative guide posture
RPO/BookingsRPO not disclosedRPO not disclosedRPO $1.13B ($837M current); bookings trajectory improving, expected to turn positive post-lap Stabilizing; likely improvement ahead

Management Commentary

  • “We delivered another consecutive quarter of better-than-expected financial results… Much like Workday is synonymous with Enterprise HR and ServiceNow for Enterprise IT, ZoomInfo will be synonymous with enterprise go-to-market” (Henry Schuck) .
  • “GTM Studio… positions us as the only vendor with natively integrated data orchestration, AI and frontline execution” (Henry Schuck) .
  • “Operating cash flow was $119M in Q1 and unlevered free cash flow… $125M… We expect to continue to primarily use the cash flow we generate to retire shares” (Michael O’Brien) .
  • “Down market will be more reactive to macro slowdown… we feel… in probably the best shape… upmarket/downmarket mix perspective to weather something” (Michael O’Brien) .
  • “The upmarket business is meaningfully more profitable than our downmarket business” (Henry Schuck) .

Q&A Highlights

  • Copilot enterprise rollouts: Management is increasingly adept at navigating data privacy/security and AI governance; Q1 saw the most upmarket Copilot deals to date .
  • NRR dynamics: Improvement driven primarily by upmarket retention; downmarket expected to remain pressured; mix tailwind grows as upmarket share rises .
  • Guidance conservatism: No change in customer behavior; incremental caution added due to broader macro uncertainty, not company-specific inputs .
  • Downmarket outlook: Intentional contraction likely to continue in 2025; mix milestones targeted at ~75% then ~80% upmarket .
  • Bookings/RPO: Current bookings trajectory improving; expected to turn positive after lapping prior downmarket cohort qualification changes .

Estimates Context

  • S&P Global/Capital IQ consensus estimates were unavailable due to a mapping issue for ticker ZI in the CIQ dataset; therefore, comparisons to Street estimates cannot be provided at this time. Values would normally be retrieved from S&P Global; the data was unavailable in this instance.
  • As a proxy, results exceeded the company’s own guidance ranges: revenue $305.7M vs $294–$297M, AOI $100.9M vs $96–$99M, adjusted EPS $0.23 vs $0.22–$0.23 .

Additional Press Releases Relevant to Q1 Context

  • PathFactory x ZoomInfo integration (April 1, 2025): Integration leverages ZoomInfo’s Reverse IP Lookup to enrich anonymous visitors and enable real-time personalization, supporting the GTM Studio narrative of unified data and activation .

Key Takeaways for Investors

  • Mix shift upmarket is the core driver: with 71% ACV upmarket and 3% YoY growth there, expect steadier retention and superior margins versus downmarket; management targets ~75% then ~80% upmarket mix over time .
  • Platform expansion: GTM Studio plus Copilot broadens TAM into RevOps and AE/AM personas, increasing seat penetration and supporting multi-product expansion at large enterprises .
  • Capital returns remain a priority: robust UFFCF ($124.5M) and low net leverage enable continued buybacks; post-quarter repurchases indicate opportunistic use of dislocation .
  • Guidance posture is conservative: despite beats and stable demand, management inserted macro caution; near-term trading likely sensitive to evidence of bookings and NRR improvement translating to reacceleration .
  • Watch operating leverage: as upmarket mix rises, AOI margins should benefit given “several thousand basis points” margin advantage vs downmarket, even as investments support growth .
  • KPIs to monitor: $100k+ customer growth trajectory, NRR progression in upmarket, RPO/current performance obligations, Copilot adoption in enterprise cohorts .
  • Symbol change to GTM is more than optics: it signals category leadership ambitions in go-to-market intelligence, a potential narrative catalyst alongside product launches .

Appendix: KPIs and Operating Metrics

KPIQ3 2024Q4 2024Q1 2025
$100k+ ACV Customers (count)1,809 1,867 1,868
Upmarket ACV Mix (%)——71%
Net Revenue RetentionStable 87% Improved sequentially; rounds to 87%
RPO ($USD Billions)——$1.13
Current RPO ($USD Billions)——$0.837
Unearned Revenue – Current ($USD Millions)$417.0 $473.8 $480.8
UFFCF ($USD Millions)$110.7 $93.6 $124.5
CFFO ($USD Millions)$18.2 $109.0 $119.2
Shares for Adjusted EPS (M)371 358 355

Notes:

  • Company changed trading symbol from ZI to GTM on May 13, 2025; references above relate to the period prior to and including the change .
  • All non-GAAP measures reconciled in the 8-K exhibits; management emphasizes non-GAAP AOI, adjusted EPS, and UFFCF for performance evaluation .