ZoomInfo Technologies Inc. (ZI): history, ownership, mission, how it works & makes money

A Brief History of ZoomInfo Technologies Inc.

ZoomInfo Technologies Inc. (ZI) has undergone significant transformations and financial fluctuations leading up to 2024. Founded in 2000, the company has established itself as a leading player in the business intelligence sector, providing data solutions for sales and marketing professionals.

Financial Performance Overview

As of June 30, 2024, ZoomInfo reported a net loss of $9.3 million for the first half of the year, a sharp decline from a net income of $82.6 million during the same period in 2023. This reflects a decrease of 111% year-over-year, primarily due to increased operational costs and litigation expenses.

Revenue Trends

Revenue for the first half of 2024 totaled $601.6 million, down from $609.3 million in the first half of 2023, marking a 1.1% decline. The decrease was attributed to changes in accounting estimates that reduced revenue recognition. The company’s gross profit for the same period was $512.3 million, with a gross margin of 85%.

Operating Expenses

Operating expenses surged to $489.3 million for the first half of 2024, up from $394.3 million in 2023, representing a 24% increase. This rise was driven by higher sales and marketing expenses, which totaled $200.1 million, and general and administrative expenses, which reached $186.4 million.

Equity-Based Compensation

Equity-based compensation expenses decreased to $67.6 million in the first half of 2024 from $84.0 million in 2023, reflecting lower grant date fair values. This reduction illustrates a strategic shift in managing employee compensation amidst fluctuating market conditions.

Cash Flow and Liquidity

As of June 30, 2024, ZoomInfo held $385.9 million in cash and cash equivalents, alongside $13.4 million in short-term investments. The company reported net cash provided by operating activities of $242.2 million, indicating strong operational cash flow despite the net loss.

Debt Obligations

ZoomInfo's total contractual maturity of outstanding indebtedness stood at $1.241 billion, with a net leverage ratio to Cash EBITDA of 1.8x. The company’s financial strategies include maintaining compliance with the covenants under their credit agreements, which allows for operational flexibility in pursuing growth opportunities.

Market Position and Strategic Initiatives

ZoomInfo continues to enhance its market position through strategic acquisitions and product innovations. The company maintains a focus on expanding its data solutions to meet the evolving needs of its client base, which has become increasingly reliant on data-driven insights for decision-making.

Overall, ZoomInfo Technologies Inc. has faced challenges in maintaining profitability amid rising operational costs and market pressures. However, its robust cash flow and strategic initiatives position it for potential recovery as it navigates the competitive landscape in 2024.

A Who Owns ZoomInfo Technologies Inc. (ZI)

Major Shareholders

As of 2024, the ownership of ZoomInfo Technologies Inc. (ZI) is comprised of various institutional and individual shareholders. The following table summarizes the major shareholders and their respective ownership percentages:

Market Capitalization

The market capitalization of ZoomInfo Technologies Inc. as of June 30, 2024, is approximately $4.0 billion. The stock price during this period was around $10.90 per share, leading to a total outstanding share count of approximately 366.8 million shares.

Recent Stock Performance

In the second quarter of 2024, ZoomInfo reported a stock performance decline of approximately 25% compared to the previous quarter. The stock had a 52-week range of $9.50 to $15.60.

Financial Overview

ZoomInfo Technologies Inc. reported the following key financial metrics for the six months ended June 30, 2024:

Insider Transactions

In 2024, insiders sold approximately 1.5 million shares as part of stock options and other transactions. The average selling price was around $11.00 per share.

Share Repurchase Program

ZoomInfo has initiated a share repurchase program, with a commitment to repurchase up to $100 million of its common stock. As of June 30, 2024, the company had repurchased approximately 10.8 million shares at an average price of $10.50 per share.

Conclusion on Ownership Structure

The ownership structure of ZoomInfo Technologies Inc. is characterized by a mix of institutional investors and insider holdings. The significant presence of institutional shareholders reflects confidence in the company's growth prospects and market position.

ZoomInfo Technologies Inc. (ZI) Mission Statement

Company Overview

ZoomInfo Technologies Inc. operates as a leading provider of go-to-market software and data for sales, marketing, and recruiting professionals. The company focuses on delivering comprehensive intelligence and analytics, enabling customers to enhance their decision-making processes.

Mission Statement

As of 2024, ZoomInfo's mission statement emphasizes its commitment to empowering organizations with high-quality data and insights. The goal is to enable teams to connect with the right prospects at the right time, thereby shortening sales cycles and increasing win rates.

Key Financial Metrics (2024)

Customer Engagement

ZoomInfo focuses on acquiring and retaining customers by providing a robust platform that features tools for sales intelligence, marketing automation, and data enrichment. The company reported a net revenue retention rate of 85% as of June 30, 2024, indicating a healthy level of customer engagement and satisfaction.

Subscription Model

ZoomInfo primarily generates revenue through subscription services, with contracts typically ranging from one to three years. In 2024, over 45% of customer contracts were multi-year agreements, showcasing customer commitment to the platform.

Recent Developments

In June 2024, ZoomInfo amended its First Lien Credit Agreement, resulting in a decrease in applicable rates for loans by 50 basis points. This financial maneuver is expected to enhance liquidity and support ongoing operations.

Market Position

ZoomInfo positions itself as a key player in the sales and marketing technology landscape, with a focus on providing actionable insights derived from its extensive database. The company leverages advanced analytics and machine learning to maintain a competitive edge.

Employee Engagement

As part of its mission, ZoomInfo also invests in its workforce, offering equity-based compensation and fostering a culture of innovation and collaboration. In the first half of 2024, the company recorded equity-based compensation expenses amounting to $67.6 million.

Conclusion

Overall, ZoomInfo Technologies Inc. remains dedicated to its mission of providing exceptional data-driven solutions that empower sales, marketing, and recruiting teams to achieve their goals effectively.

How ZoomInfo Technologies Inc. (ZI) Works

Business Model

ZoomInfo Technologies Inc. operates as a subscription-based platform that provides data and insights for sales, marketing, and recruitment professionals. The company offers access to a comprehensive database of business contacts and companies, enabling clients to identify potential customers and enhance their marketing strategies.

Financial Performance

As of June 30, 2024, ZoomInfo reported the following financial metrics:

Revenue Breakdown

Revenue primarily comes from subscription fees, which are billed annually, semi-annually, or quarterly in advance. As of June 30, 2024, the company had unearned revenue of $440.4 million, indicating future revenue recognition from these prepayments.

Cost Structure

The cost of service for Q2 2024 was $45.9 million, a 5% increase from Q2 2023. Operating expenses increased significantly, primarily due to higher general and administrative costs, which were $111.3 million for Q2 2024, up from $42.1 million in Q2 2023.

Cash Flow and Liquidity

ZoomInfo's cash flow metrics for the six months ended June 30, 2024, are as follows:

Market Position and Competition

ZoomInfo competes with other data analytics and sales intelligence platforms. Its unique selling proposition lies in its extensive database and the ability to provide actionable insights, which are crucial for effective lead generation and customer engagement.

Outlook

The company's future performance will depend on its ability to retain existing customers, acquire new ones, and manage operational costs effectively amid changing market conditions.

How ZoomInfo Technologies Inc. (ZI) Makes Money

Revenue Generation Model

ZoomInfo Technologies Inc. primarily generates revenue from subscription services. For the three months ended June 30, 2024, the company reported total revenue of $291.5 million, which represents a 6% decrease from $308.6 million in the same period of the previous year. For the six months ended June 30, 2024, total revenue was $601.6 million, down from $609.3 million in the prior year.

The revenue is mainly derived from sales of subscriptions to its data and software platform, which includes access to various functionalities. Subscription contracts typically range from one to three years, with over 45% of customer contracts being multi-year agreements. Payment is usually required upfront, with revenue recognized ratably over the subscription term.

Cost Structure

For the three months ended June 30, 2024, the cost of service was $45.9 million, an increase of 5% compared to $43.6 million in the same quarter of 2023. The gross profit for the same period was $245.6 million, yielding a gross margin of 84%.

The overall operating expenses for the three months ended June 30, 2024, amounted to $265.6 million, reflecting a 29% increase from $205.4 million in the previous year. Notably, the general and administrative expenses surged to $111.3 million, up from $42.1 million.

Adjusted EBITDA

Adjusted EBITDA for the three months ended June 30, 2024, was $87.4 million, a decline of 33% from $130.4 million in the same period of 2023. For the six months ended June 30, 2024, the adjusted EBITDA was $212.0 million, down from $255.5 million.

Customer Metrics

As of June 30, 2024, ZoomInfo had a net revenue retention rate of 85%. The company reported having 1,797 customers with an annual contract value (ACV) exceeding $100,000.

Financial Summary Table

Market Position and Future Outlook

ZoomInfo's business model is heavily reliant on subscription services, which provide a stable revenue stream. The company continues to focus on acquiring new customers, enhancing platform usage, and maintaining a robust customer retention strategy. The impact of macroeconomic conditions remains a critical factor influencing future performance.