ZoomInfo Technologies Inc. (ZI) delivered a strong performance in its third quarter, exceeding analysts’ revenue and earnings expectations. The company reported revenue of $303.6 million, surpassing the anticipated $299.4 million, and adjusted EPS of 28 cents, outpacing the consensus of 22 cents. While ZoomInfo’s total revenue decreased by 3% year-over-year, the company saw significant growth in its customer base, with 1,809 customers generating $100,000 or more in annual contract value, an increase of 12 customers from the previous quarter. This growth in high-value customer cohorts signifies a positive trend for ZoomInfo’s long-term revenue prospects. ZoomInfo’s CEO, Henry Schuck, highlighted the company’s sustained net revenue retention, stating that it remained stable for the third consecutive quarter. This consistent retention rate further reinforces the strength of ZoomInfo’s customer relationships and the value its services provide. Looking ahead, ZoomInfo has painted a positive picture for the fourth quarter and fiscal year 2024. The company anticipates revenue in the range of $296 million to $299 million for the fourth quarter, surpassing estimates of $296.8 million. Additionally, it projected adjusted EPS between $0.22 and $0.23, exceeding the consensus of $0.23. For the full fiscal year 2024, ZoomInfo revised its revenue outlook to between $1.201 billion and $1.204 billion, compared to the previous estimate of $1.190 billion to $1.205 billion. The company also raised its adjusted EPS guidance to $0.92 to $0.93, up from the previous range of $0.86 to $0.88. Despite the positive outlook, ZoomInfo’s stock took a significant hit on Wednesday, falling over 16% to trade at $10.87. This decline may be attributed to a combination of factors, including overall market sentiment and investor expectations. Following the earnings announcement, several analysts adjusted their price targets for ZoomInfo. Piper Sandler analyst Brent Bracelin maintained a Neutral rating on ZoomInfo Technologies but raised the price target from $10 to $11. Mizuho analyst Siti Panigrahi also maintained a Neutral rating but increased the price target from $9 to $11. Meanwhile, Needham analyst Joshua Reilly reiterated a Buy rating on the stock and kept a $15 price target. While the market’s immediate reaction to ZoomInfo’s earnings was negative, the company’s strong performance and optimistic outlook suggest that its long-term growth potential remains intact. Investors will be watching closely to see how the company’s stock price responds to these recent developments and the overall market conditions in the coming months.
ZoomInfo Beats Earnings Estimates, But Shares Dip Despite Upbeat Outlook
