Barclays has increased its price target for ZoomInfo (ZI, Financial) from $9 to $11 while maintaining an Equal Weight rating. The adjustment follows a strong first quarter where the company exceeded expectations in both revenue and profitability. ZoomInfo is making strides by shifting its focus to larger market opportunities and leveraging cross-selling strategies. However, investors remain somewhat cautious due to a conservative revenue forecast for fiscal 2025, which has tempered enthusiasm despite current momentum.
ZI Key Business Developments
Release Date: May 12, 2025
- GAAP Revenue: $306 million for Q1 2025.
- Adjusted Operating Income: $101 million, with a margin of 33%.
- Net Revenue Retention: Improved, rounding to 87% for the second consecutive quarter.
- Customers with ACV over $100,000: 1,868 customers, a sequential increase of 1 and a year-over-year increase of 108 customers.
- Upmarket Business Growth: Grew 3% year over year, representing 71% of the business.
- Operating Cash Flow: $119 million in Q1.
- Unlevered Free Cash Flow: $125 million, a margin of 41%.
- Share Repurchases: 8.6 million shares repurchased at an average price of $11.05, totaling $95 million.
- Cash and Debt: $143 million in cash, cash equivalents, and investments; $1.24 billion in gross debt.
- Q2 2025 Revenue Guidance: $295 million to $298 million.
- Full Year 2025 Revenue Guidance: $1.195 billion to $1.205 billion.
- Adjusted Operating Income Guidance for Full Year 2025: $426 million to $436 million, with a 36% margin at the midpoint.
- Non-GAAP Net Income Guidance for Full Year 2025: $0.96 to $0.98 per share.
- Unlevered Free Cash Flow Guidance for Full Year 2025: $420 million to $440 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- ZoomInfo Technologies Inc (ZI, Financial) delivered better-than-expected financial results for Q1 2025, with GAAP revenue of $306 million and adjusted operating income of $101 million, both above guidance.
- The company has successfully expanded its go-to-market intelligence platform, integrating sophisticated AI-powered applications to enhance customer revenue growth.
- ZoomInfo Technologies Inc (ZI) reported a sequential and year-over-year increase in customers with more than $100,000 in ACV, marking the fourth consecutive quarter of improvement.
- The company has seen strong traction with its Copilot product, which is expanding beyond SDR prospecting into account executive and account manager use cases.
- ZoomInfo Technologies Inc (ZI) has launched Go-To-Market Studio, enabling revenue leaders to unify go-to-market data and leverage AI for more effective targeting and execution.
Negative Points
- Despite strong financial performance, the company has added an incremental layer of caution to its guidance due to the uncertain economic environment.
- Net revenue retention remains at 87% for the second consecutive quarter, indicating room for improvement in customer retention.
- The downmarket segment of the business continues to decline, with a 10% year-over-year decrease in Q1 2025.
- The company is experiencing a shift in business mix, with a focus on moving upmarket, which may involve higher customer acquisition costs.
- ZoomInfo Technologies Inc (ZI) has not seen significant changes in customer behavior, but remains cautious about potential impacts from the broader economic environment.
