GAAP Revenue of $310.1 million Grows 3%
year-over-year
GAAP Operating Margin of 14% and Adjusted
Operating Income Margin of 39%
GAAP Cash Flow from Operations of $115.9
million and Unlevered Free Cash Flow of $122.7 million
ZoomInfo, (NASDAQ: ZI) the go-to-market platform to find,
acquire, and grow customers, today announced its financial results
for the first quarter ended March 31, 2024.
“We delivered another quarter of revenue growth, with
better-than-expected profitability, and stabilizing net revenue
retention,” said Henry Schuck, ZoomInfo Founder and CEO. “Our team
is innovating on the future of how companies will go-to-market with
ZoomInfo Copilot, and we look forward to bringing this
GenAI-powered solution to market shortly.”
First Quarter 2024 Financial Highlights:
- Revenue of $310.1 million, an increase of 3%
year-over-year.
- GAAP Operating income of $43.0 million and Adjusted operating
income of $119.4 million.
- GAAP Operating income margin of 14% and Adjusted operating
income margin of 39%.
- GAAP Cash flow from operations of $115.9 million and Unlevered
free cash flow of $122.7 million.
Recent Business and Operating Highlights:
- Was named a leader in The Forrester Wave™: Marketing And Sales
Data Providers for B2B, Q1 2024 report by Forrester Research, Inc.
ZoomInfo received the top scores in the Current Offering and
Strategy categories, and the highest possible score in the Market
Presence category.
- Published the Company’s 2023 sustainability report,
highlighting notable achievements in Environmental, Social, and
Governance matters. The full 2023 sustainability report is
available here: https://ir.zoominfo.com/sustainability/.
- Closed the quarter with 1,760 customers with $100,000 or
greater in annual contract value.
- The Board of Directors of ZoomInfo approved an additional $500
million under the share repurchase program, bringing the total
aggregate authorization to $1.1 billion, of which $546.8 million
remained outstanding as of quarter-end.
- During the three months ended March 31, 2024, the Company
repurchased 9,623,255 shares of Common Stock at an average price of
$15.90, for an aggregate $153.1 million.
Q1 2024 Financial Highlights
(Unaudited)
($ in millions, except per share
amounts)
GAAP Quarterly Results
Change YoY
Non-GAAP Quarterly
Results
Change YoY
Revenue
$310.1
3%
Operating Income
$43.0
(35)%
Adjusted Operating Income
$119.4
(1)%
Operating Income Margin
14%
Adjusted Operating Income Margin
39%
Net Income Per Share (Diluted)
$0.04
Adjusted Net Income per share
(Diluted)
$0.26
Cash Flow from Operating Activities
$115.9
7%
Unlevered Free Cash Flow
$122.7
1%
The Company uses a variety of operational and financial metrics,
including non-GAAP financial measures, to evaluate its performance
and financial condition. The accompanying financial data includes
additional information regarding these metrics and a reconciliation
of non-GAAP financial information for historical periods to the
most directly comparable GAAP financial measure. The presentation
of non-GAAP financial information should not be considered in
isolation or as a substitute for, or superior to, the financial
information prepared and presented in accordance with GAAP.
Business Outlook:
Based on information available as of May 7, 2024, ZoomInfo is
providing guidance for the second quarter and full year 2024 as
follows:
Q2 2024
Prior FY 2024
FY 2024
GAAP Revenue
$306 - $309 million
$1.26 - $1.28 billion
$1.255 - $1.27 billion
Non-GAAP Adjusted Operating Income
$114 - $116 million
$492 - $502 million
$488 - $495 million
Non-GAAP Adjusted Net Income per share
$0.23 - $0.24
$0.99 - $1.01
$1.00 - $1.02
Non-GAAP Unlevered Free Cash Flow
Not Guided
$445 - $465 million
$440 - $455 million
Weighted Average Shares Outstanding
392 million
399 million
394 million
Conference Call and Webcast Information:
ZoomInfo will host a conference call today, May 7, 2024, to
review its results at 4:30 p.m. Eastern Time, 1:30 p.m. Pacific
Time. To participate in the live conference call via telephone,
please register here. Upon registering, a dial-in number and unique
PIN will be provided to join the conference call.
The call will also be webcast live on the Company’s investor
relations website at https://ir.zoominfo.com/, where related
presentation materials will be posted prior to the conference call.
Following the conference call, an archived webcast of the call will
be available for one year on ZoomInfo’s Investor Relations
website.
Non-GAAP Financial Measures and Other Metrics:
To supplement our consolidated financial statements presented in
accordance with GAAP, this press release contains non-GAAP
financial measures, including Adjusted Operating Income, Adjusted
Operating Income Margin, Adjusted Net Income, Adjusted Net Income
Per Share, and Unlevered Free Cash Flow. We believe these non-GAAP
measures are useful to investors in evaluating our operating
performance because they eliminate certain items that affect
period-over-period comparability and provide consistency with past
financial performance and additional information about our
underlying results and trends by excluding certain items that may
not be indicative of our business, results of operations, or
outlook.
Non-GAAP financial measures are not meant to be considered in
isolation or as a substitute for the comparable GAAP measures, but
rather as supplemental information to our business results. This
information should be read only in conjunction with our
consolidated financial statements prepared in accordance with GAAP.
There are limitations to these non-GAAP financial measures because
they are not prepared in accordance with GAAP and may not be
comparable to similarly titled measures of other companies due to
potential differences in methods of calculation and items or events
being adjusted. In addition, other companies may use different
measures to evaluate their performance, all of which could reduce
the usefulness of our non-GAAP financial measures as tools for
comparison. A reconciliation is provided at the end of this press
release for each historical non-GAAP financial measure to the most
directly comparable financial measure stated in accordance with
GAAP. We do not provide a quantitative reconciliation of the
forward-looking non-GAAP financial measures included in this press
release to the most directly comparable GAAP measures due to the
high variability and difficulty to predict certain items excluded
from these non-GAAP financial measures; in particular, the effects
of stock-based compensation expense, taxes and amounts under the
exchange tax receivable agreement, deferred tax assets and deferred
tax liabilities, and restructuring and transaction expenses. We
expect the variability of these excluded items may have a
significant, and potentially unpredictable, impact on our future
GAAP financial results.
We define Adjusted Operating Income as income (loss) from
operations adjusted for, as applicable, (i) the impact of fair
value adjustments to acquired unearned revenue, (ii) amortization
of acquired technology and other acquired intangibles, (iii)
equity-based compensation expense, (iv) restructuring and
transaction-related expenses, (v) integration costs and
acquisition-related expenses, and (vi) legal settlement. We define
Adjusted Operating Income Margin as Adjusted Operating Income
divided by the sum of revenue and the impact of fair value
adjustments to acquired unearned revenue.
We define Adjusted Net Income as net income (loss) adjusted for,
as applicable, (i) the impact of fair value adjustments to acquired
unearned revenue, (ii) loss on debt modification and
extinguishment, (iii) amortization of acquired technology and other
acquired intangibles, (iv) equity-based compensation expense, (v)
restructuring and transaction-related expenses, (vi) integration
costs and acquisition-related expenses, (vii) legal settlement,
(viii) TRA liability remeasurement (benefit) expense and (ix) tax
impacts of adjustments to net income (loss). We define Adjusted Net
Income (Loss) Per Share as Adjusted Net Income (Loss) divided by
diluted weighted average shares outstanding used for adjusted net
income (loss) per share.
We define Unlevered Free Cash Flow as net cash provided by (used
in) operating activities less (i) purchases of property and
equipment and other assets, plus (ii) cash interest expense, (iii)
cash payments related to restructuring and transaction-related
expenses, (iv) cash payments related to integration costs and
acquisition-related compensation, and (v) legal settlement
payments. Unlevered Free Cash Flow does not represent residual cash
flow available for discretionary expenditures since, among other
things, we have mandatory debt service requirements.
Net revenue retention is a metric that we calculate based on
customers of ZoomInfo at the beginning of the twelve-month period,
and is calculated as: (a) the total annual contract value ("ACV")
for those customers at the end of the twelve-month period, divided
by (b) the total ACV for those customers at the beginning of the
twelve-month period.
Cautionary Statement Regarding Forward-Looking
Information
This press release contains “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of
1995. Actual results may differ materially from those expressed or
implied by these statements. You can generally identify our
forward-looking statements by the words “anticipate”, “believe”,
“can”, “continue”, “could”, “estimate”, “expect”, “forecast”,
“goal”, “intend”, “may”, “might”, “objective”, “outlook”, “plan”,
“potential”, “predict”, “projection”, “seek”, “should”, “target”,
“trend”, “will”, “would” or the negative version of these words or
other comparable words. Any statements in this press release
regarding future revenue, earnings, margins, financial performance,
cash flow, liquidity, or results of operations (including, but not
limited to, the guidance provided under “Business Outlook”), and
any other statements that are not historical facts are
forward-looking statements. We have based our forward-looking
statements on beliefs and assumptions based on information
available to us at the time the statements are made. We caution you
that assumptions, beliefs, expectations, intentions and projections
about future events may, and often do, vary materially from actual
results. Therefore, we cannot assure you that actual results will
not differ materially from those expressed or implied by our
forward-looking statements.
Factors that could cause actual results to differ from those
expressed or implied by our forward-looking statements include,
among other things: future economic, competitive, and regulatory
conditions, potential future uses of cash, the successful
integration of acquired businesses, and future decisions made by us
and our competitors. All of these factors are difficult or
impossible to predict accurately and many of them are beyond our
control. For a further list and description of these and other
important risks and uncertainties that may affect our future
operations, see Part I, Item 1A - Risk Factors in our most recent
Annual Report on Form 10-K filed with the Securities and Exchange
Commission, which we may update in Part II, Item 1A - Risk Factors
in Quarterly Reports on Form 10-Q we have filed or will file
hereafter. Our forward-looking statements do not reflect the
potential impact of any future acquisitions, mergers, dispositions,
joint ventures, investments, or other strategic transactions we may
make. Each forward-looking statement contained in this presentation
speaks only as of the date of this press release, and we undertake
no obligation to update or revise any forward-looking statements
whether as a result of new information, future developments or
otherwise, except as required by law.
About ZoomInfo
ZoomInfo (NASDAQ: ZI) is the trusted go-to-market platform for
businesses to find, acquire, and grow their customers. It delivers
accurate, real-time data, insights, and technology to more than
35,000 companies worldwide. Businesses use ZoomInfo to increase
efficiency, consolidate, technology stacks, and align their sales
and marketing teams - all in one platform. ZoomInfo is a recognized
leader in data privacy, with industry-leading GDPR and CCPA
compliance measures and numerous data security and privacy
certifications. For more information about how ZoomInfo can help
businesses grow their revenue at scale, please visit
www.zoominfo.com.
Website Disclosure
ZoomInfo intends to use its website as a distribution channel of
material company information. Financial and other important
information regarding the Company is routinely posted on and
accessible through the Company’s website at
https://ir.zoominfo.com/. Accordingly, you should monitor the
investor relations portion of our website at
https://ir.zoominfo.com/ in addition to following our press
releases, SEC filings, and public conference calls and webcasts. In
addition, you may automatically receive email alerts and other
information about ZoomInfo when you enroll your email address by
visiting the “Email Alerts” section of our investor relations page
at https://ir.zoominfo.com/.
ZoomInfo Technologies
Inc.
Condensed Consolidated Balance
Sheets
(in millions, except share
data)
March 31,
December 31,
2024
2023
(unaudited)
Assets
Current assets:
Cash and cash equivalents
$
405.9
$
447.1
Short-term investments
34.3
82.2
Restricted cash, current
—
0.2
Accounts receivable, net
223.5
272.0
Prepaid expenses and other current
assets
72.1
59.6
Income tax receivable
4.4
3.2
Total current assets
$
740.2
$
864.3
Restricted cash, non-current
$
8.9
$
8.9
Property and equipment, net
74.6
65.1
Operating lease right-of-use assets,
net
106.8
80.7
Intangible assets, net
319.8
334.6
Goodwill
1,692.7
1,692.7
Deferred tax assets
3,694.3
3,707.1
Deferred costs and other assets, net of
current portion
116.6
114.9
Total assets
$
6,753.9
$
6,868.3
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable
$
18.0
$
34.4
Accrued expenses and other current
liabilities
123.1
113.8
Unearned revenue, current portion
443.0
439.6
Income taxes payable
1.5
2.0
Current portion of tax receivable
agreements liability
60.4
31.4
Current portion of operating lease
liabilities
12.1
11.2
Current portion of long-term debt
6.0
6.0
Total current liabilities
$
664.1
$
638.4
Unearned revenue, net of current
portion
$
1.3
$
2.3
Tax receivable agreements liability, net
of current portion
2,735.6
2,786.6
Operating lease liabilities, net of
current portion
115.4
89.9
Long-term debt, net of current portion
1,225.4
1,226.4
Deferred tax liabilities
2.1
1.9
Other long-term liabilities
4.1
3.5
Total liabilities
$
4,748.0
$
4,749.0
Stockholders' Equity:
Common stock, par value $0.01
$
3.7
$
3.8
Additional paid-in capital
1,676.3
1,804.9
Accumulated other comprehensive income
27.5
27.3
Retained earnings
298.4
283.3
Total stockholders' equity
$
2,005.9
$
2,119.3
Total liabilities and stockholders'
equity
$
6,753.9
$
6,868.3
ZoomInfo Technologies
Inc.
Consolidated Statements of
Operations
(in millions, except per share
amounts; unaudited)
Three Months Ended March
31,
2024
2023
Revenue
$
310.1
$
300.7
Cost of service:
Cost of service(1)
$
33.9
$
35.0
Amortization of acquired technology
9.5
10.5
Gross profit
$
266.7
$
255.2
Operating expenses:
Sales and marketing(1)
$
99.4
$
103.2
Research and development(1)
43.7
42.3
General and administrative(1)
75.1
37.7
Amortization of other acquired
intangibles
5.3
5.6
Restructuring and transaction-related
expenses
0.2
0.1
Total operating expenses
$
223.7
$
188.9
Income from operations
$
43.0
$
66.3
Interest expense, net
$
10.1
$
9.9
Loss on debt modification and
extinguishment
—
2.2
Other loss (income), net
3.4
(14.0
)
Income before income taxes
$
29.5
$
68.2
Provision for income taxes
14.4
23.7
Net income
$
15.1
$
44.5
Net income per share of common stock:
Basic
$
0.04
$
0.11
Diluted
0.04
0.11
__________________
(1) Amounts include equity-based
compensation expense, as follows:
Three Months Ended March
31,
(in millions)
2024
2023
Cost of service
$
2.5
$
4.1
Sales and marketing
11.8
19.5
Research and development
8.8
6.9
General and administrative
8.1
7.2
Total equity-based compensation
expense
$
31.2
$
37.7
ZoomInfo Technologies
Inc.
Consolidated Statements of
Cash Flows
(in millions; unaudited)
Three Months Ended March
31,
2024
2023
Operating activities:
Net income
$
15.1
$
44.5
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
20.0
20.9
Amortization of debt discounts and
issuance costs
0.5
0.7
Amortization of deferred commissions
costs
17.4
18.8
Loss on debt modification and
extinguishment
—
2.2
Equity-based compensation expense
31.2
37.7
Deferred income taxes
13.2
27.9
Tax receivable agreement remeasurement
9.6
(10.1
)
Provision for bad debt expense
9.2
6.1
Changes in operating assets and
liabilities, net of acquisitions:
Accounts receivable, net
39.3
1.3
Prepaid expenses and other current
assets
(11.9
)
(9.9
)
Deferred costs and other assets, net of
current portion
(17.6
)
(16.4
)
Income tax receivable
(1.2
)
(2.3
)
Accounts payable
(16.9
)
(10.3
)
Accrued expenses and other liabilities
5.5
(34.0
)
Unearned revenue
2.5
31.5
Net cash provided by operating
activities
$
115.9
$
108.6
Investing activities:
Purchases of short-term investments
$
—
$
(63.6
)
Maturities of short-term investments
48.2
50.4
Purchases of property and equipment and
other assets
(12.8
)
(6.4
)
Net cash provided by (used in) investing
activities
$
35.4
$
(19.6
)
Financing activities:
Payments of deferred consideration
$
(0.7
)
$
—
Repayment of debt
(1.5
)
(1.5
)
Payments of debt issuance and modification
costs
(0.8
)
(2.0
)
Proceeds from exercise of stock
options
—
0.2
Taxes paid related to net share settlement
of equity awards
(7.1
)
(4.1
)
Tax receivable agreement payments
(31.6
)
—
Repurchase of common stock
(151.0
)
(21.9
)
Net cash used in financing activities
$
(192.7
)
$
(29.3
)
Net increase (decrease) in cash, cash
equivalents, and restricted cash
$
(41.4
)
$
59.7
Cash, cash equivalents, and restricted
cash at beginning of period
456.2
424.1
Cash, cash equivalents, and restricted
cash at end of period
$
414.8
$
483.8
Cash, cash equivalents, and restricted
cash at end of period:
Cash and cash equivalents
$
405.9
$
474.0
Restricted cash, non-current
8.9
9.8
Total cash, cash equivalents, and
restricted cash
$
414.8
$
483.8
Supplemental disclosures of cash flow
information
Interest paid in cash
$
17.7
$
18.7
Cash paid for taxes
3.3
1.7
Supplemental disclosures of non-cash
investing and financing activities:
Property and equipment included in
accounts payable and accrued expenses and other current
liabilities
$
2.1
$
0.8
Equity-based compensation included in
capitalized software
1.5
—
ZoomInfo Technologies
Inc.
Reconciliation of GAAP Cash
Flow from Operations to Unlevered Free Cash Flow
(in millions; unaudited)
Three Months Ended March
31,
2024
2023
Net cash provided by operating
activities (GAAP)
$
115.9
$
108.6
Purchases of property and equipment and
other assets
(12.8
)
(6.4
)
Interest paid in cash
17.7
18.7
Restructuring and transaction-related
expenses paid in cash
0.4
0.2
Integration costs and acquisition-related
compensation paid in cash
1.3
—
Litigation settlement payments(1)
0.2
—
Unlevered Free Cash Flow
(Non-GAAP)
$
122.7
$
121.1
__________________
(1) Represents payments associated with
certain legal settlements. For the three months ended March 31,
2024, these payments related to legal costs incurred due to the
Class Actions.
ZoomInfo Technologies
Inc.
Reconciliation of GAAP Income
from Operations to Non-GAAP Adjusted Operating Income
(in millions; unaudited)
Three Months Ended March
31,
2024
2023
Income from operations (GAAP)
$
43.0
$
66.3
Impact of fair value adjustments to
acquired unearned revenue(1)
—
0.1
Amortization of acquired technology
9.5
10.5
Amortization of other acquired
intangibles
5.3
5.6
Equity-based compensation expense
31.2
37.7
Restructuring and transaction-related
expenses(2)
0.2
0.1
Litigation settlement(3)
30.2
—
Adjusted Operating Income
(Non-GAAP)
$
119.4
$
120.3
Revenue (GAAP)
$
310.1
$
300.7
Impact of fair value adjustments to
acquired unearned revenue
—
0.1
Revenue for adjusted operating margin
calculation (Non-GAAP)
$
310.1
$
300.8
Adjusted Operating Income Margin
(Non-GAAP)
39
%
40
%
__________________
(1)
Represents the impact of fair value
adjustments to acquired unearned revenue relating to services
billed by an acquired company, prior to our acquisition of that
company. These adjustments represent the difference between the
revenue recognized based on management’s estimate of fair value of
acquired unearned revenue and the receipts billed prior to the
acquisition less revenue recognized prior to the acquisition.
(2)
Represents costs directly associated with
acquisition or disposal activities, including employee severance
and termination benefits, contract termination fees and penalties,
and other exit or disposal costs. For the three months ended March
31, 2024, this expense is primarily related to the accelerated
expense of obsolete software purchase commitments. For the three
months ended March 31, 2023, this expense is primarily related to
costs pursuant to the 2021 and 2022 acquisitions.
(3)
Represents charges associated with certain
legal settlements. For the three months ended March 31, 2024, these
charges related to costs incurred due to the Class Actions.
ZoomInfo Technologies
Inc.
Reconciliation of GAAP Net
Income to Non-GAAP Adjusted Net Income
(in millions, except per share
amounts; unaudited)
Three Months Ended March
31,
2024
2023
Net income (GAAP)
$
15.1
$
44.5
Impact of fair value adjustments to
acquired unearned revenue(1)
—
0.1
Loss on debt modification and
extinguishment
—
2.2
Amortization of acquired technology
9.5
10.5
Amortization of other acquired
intangibles
5.3
5.6
Equity-based compensation expense
31.2
37.7
Restructuring and transaction-related
expenses(2)
0.2
0.1
Litigation settlement(3)
30.2
—
TRA liability remeasurement expense
(benefit)
9.4
(10.1
)
Tax impacts of adjustments to net
income(4)
(0.4
)
9.2
Adjusted Net Income (Non-GAAP)
$
100.5
$
99.5
Diluted Net Income Per Share
(GAAP)
$
0.04
$
0.11
Impact of fair value adjustments to
acquired unearned revenue per diluted share
—
—
Loss on debt modification and
extinguishment per diluted share
—
—
Amortization of acquired technology per
diluted share
0.02
0.03
Amortization of other acquired intangibles
per diluted share
0.02
0.01
Equity-based compensation expense per
diluted share
0.08
0.09
Restructuring and transaction-related
expenses per diluted share
—
—
Litigation settlement per diluted
share
0.08
—
TRA liability remeasurement expense
(benefit) per diluted share
0.02
(0.02
)
Tax impacts of adjustments to net income
per diluted share
—
0.02
Adjusted Net Income Per Share
(Non-GAAP)
$
0.26
$
0.24
Shares for Adjusted Net Income Per
Share(5)
392
415
__________________
(1)
Represents the impact of fair value
adjustments to acquired unearned revenue relating to services
billed by an acquired company, prior to our acquisition of that
company. These adjustments represent the difference between the
revenue recognized based on management’s estimate of fair value of
acquired unearned revenue and the receipts billed prior to the
acquisition less revenue recognized prior to the acquisition.
(2)
Represents costs directly associated with
acquisition or disposal activities, including employee severance
and termination benefits, contract termination fees and penalties,
and other exit or disposal costs. For the three months ended March
31, 2024, this expense is primarily related to the accelerated
expense of obsolete software purchase commitments. For the three
months ended March 31, 2023, this expense is primarily related to
costs pursuant to the 2021 and 2022 acquisitions.
(3)
Represents charges associated with certain
legal settlements. For the three months ended March 31, 2024, these
charges related to costs incurred due to the Class Actions.
(4)
Represents tax expense associated with
GAAP Net income excluded from Adjusted Net Income (Non-GAAP). This
includes the tax effects associated with equity compensation,
remeasurement of deferred tax assets for the effect of state law
changes, and TRA liability remeasurement.
(5)
Diluted earnings per share is computed by
giving effect to all potential weighted average Common Stock, and
any securities that are convertible into Common Stock, including
options and restricted stock units. The dilutive effect of
outstanding awards and convertible securities is reflected in
diluted earnings per share by application of the treasury stock
method, excluding deemed repurchases assuming proceeds from
unrecognized compensation as required by GAAP.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240507876197/en/
Investor Contact: Jeremiah Sisitsky VP of Investor
Relations IR@zoominfo.com Media Contact: Erin Hendrick
Senior Director, Communications PR@zoominfo.com
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