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ZoomInfo (ZI) Q1 Earnings Beat Estimates, Revenues Rise Y/Y

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ZoomInfo Technologies ZI reported first-quarter 2022 adjusted earnings of 18 cents per share, which beat the Zacks Consensus Estimate by 20% and increased 38.5% year over year.

Revenues of $241.7 billion beat the consensus mark by 6.25%. Moreover, the top line jumped 57.7% year over year. Excluding the impact of products acquired within the last 12 months, organic revenue growth for the quarter was 49%.

The top-line performance was primarily driven by the impressive customer acceptance of ZoomInfo’s data, insights and automation platform, along with its user-facing applications and an expanded enterprise clientele.

Notably, international revenues surged more than 80% year over year while revenues from international customers accounted for 12% of total revenues as the company expanded its sales operations in London.

ZoomInfo Technologies Inc. Price, Consensus and EPS Surprise

ZoomInfo Technologies Inc. Price, Consensus and EPS Surprise
ZoomInfo Technologies Inc. Price, Consensus and EPS Surprise

ZoomInfo Technologies Inc. price-consensus-eps-surprise-chart | ZoomInfo Technologies Inc. Quote

Quarterly Details

Adjusted gross profit for the quarter came in at $214.7 million, up 57.3% year over year. Gross margin however contracted 20 basis points (bps) year over year to 88.8%.

Adjusted research and development expenses shot up 86.3% year over year to $29.8 million. As a percentage of revenues, research and development expenses expanded 190 bps year on year to 12.3%.

Adjusted sales and marketing expenses flared up 69.9% year over year to $67.8 million. As a percentage of revenues, sales and marketing expenses expanded 200 bps year on year to 28.1% on capacity expansion and elevated commission costs.

General and administrative expenses soared 46.3% year over year to $21.5 million. As a percentage of revenues, general and administrative expenses contracted 70 bps year over year to 8.9%.

Adjusted operating income climbed 44.8% year over year to $95.7 million. As a percentage of revenues, the adjusted operating margin contracted 350 bps year over year to 39.6%.

For the first quarter of 2022, ZoomInfo’s annual net revenue retention rate was 116%. This was led by steady adoption and higher renewal rates of the company’s sales automation platform, Engage and further penetration of the company’s recently expanded MarketingOS and TalentOS offerings.

In the first quarter, the company witnessed a more than 100% increase in customers using the combined SalesOS platform, Engage and Chorus offerings, reinforcing the value of an integrated solution.

The company closed the first quarter with 1,623 customers with $100,000 or greater in annual contract value, up 65% year over year.

Over the past 12 months, the company has closed an average of 1 deal per month with an average contract value of $190,000 with ZoomInfo.

Balance Sheet & Other Details

As of Mar 31, 2022, ZoomInfo had cash and cash equivalents (including short-term investments and restricted cash) worth $406.8 million compared with $326.7 million as of Dec 31, 2021.

Long-term debt (net of current portion) as of Mar 31, 2022, was $1.23 billion, the same as the previous quarter.

In the first quarter, ZoomInfo generated $105 million of cash flow from operations, compared with the year-ago quarter’s $93 million. The company’s quarterly unlevered free cash flow came in at $125.9 million, up 29.1% year over year.

Guidance

For second-quarter 2022, ZoomInfo projects revenues between $253 million and $255 million. Adjusted operating income is expected in the $98-$100 million band. Adjusted earnings are anticipated in the range of 17-18 cents per share.

For fiscal 2022, the company expects revenues of $1.06 - $1.07 billion and adjusted operating income in the range of $418 - $424 million, up from the prior guidance of revenues in the range of $1.01 - $1.02 billion and adjusted operating income in the range of $405 - $415 million. At the midpoint, this represents revenue growth of 43% and an adjusted operating income margin of 40%.

Further, adjusted earnings are likely to be in the range of 75-77 cents per share. Also, unlevered free cash flow is projected to be in the $435-$445 million band.

Zacks Rank & Key Picks

ZoomInfo currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader technology sector are Semtech SMTC, Gogo GOGO and Analog Devices ADI. Semtech and Gogo sport a Zacks Rank #1 (Strong Buy), while Analog Devices carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Semtech's first-quarter fiscal 2023 earnings has been revised to 76 cents per share from 70 cents over the past 60 days. For fiscal 2023, earnings estimates have moved north by 8% to $3.38 per share in the past 60 days.

Semtech's earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 2.8%. Shares of SMTC have fallen 7.8% in the past year.

The Zacks Consensus Estimate for Gogo's first-quarter 2022 earnings has been revised downward by a penny to 13 cents per share over the past 30 days. For 2022, Gogo's earnings estimates have moved north by 25% to 65 cents per share in the past 60 days.

Gogo's earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 65%. Shares of GOGO have soared 78.8% in the past year.

The Zacks Consensus Estimate for Analog Devices' second-quarter fiscal 2022 earnings has been revised upward by 4 cents to $2.12 per share over the past 30 days. For fiscal 2022, earnings estimates have moved north by 11 cents to $8.43 per share in the past 30 days.

Analog Devices' earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 6%. Shares of ADI have increased 4.5% in the past year.


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