ZoomInfo stock tanks 27% on cut to free-cash-flow forecast
Yahoo Finance Live anchors discuss why ZoomInfo stock has plunged in early trading.
Video Transcript
- Speaking of tech stocks, let's check in on shares of Zoom Info Technologies. Those shares are trading down by 26% this morning. The company did beat earnings estimates. Revenue grew 46% year over year. But the company cut its free cash flow forecast for the remainder of this year.
And we've talked to Henry Schuck, the CEO of Zoom Info multiple times. This is a company that has prided itself on its profitability, right. And it was so profitable in the quarter. But when you cut that cash flow forecast, causes some concerns.
- Yeah, this is not a good day for Henry. He's a friend of our show. We really enjoyed watching him as he continues to build this business. Definitely an up and comer in the software space. When I talked to him-- I was thinking about last night too when I talked about the Goldman Sachs conference in mid-September, it did sound like some of these deals that they were trying to push through, a little bit of delay, a little more scrutiny. He told us that.
And now, I think those comments were echoed on that conference call last night saying, some macro pressures are causing some deal delays. They are closing, just not I think as fast as he would have liked.
- Well, of course, the company is that you're going out and trying to either upsell to or sell into as net new customers are all looking across the spends that they have or the cost structures and all of the different applications that they lean into, whether that be a Slack application or whether that be a data center spend that they have to continue to maintain.
And with that, that comes down to the different services that you decide to either trim or just kind of remain at the same credence of that spending and say, you know what, we're just going to allow lesser access within the organization to this particular type of software.
And I think in the larger ERP landscape, that's the decision that some of those portfolio clients are going to make is to say, do we need as many licenses? Can we have a core kind of license holder administrator to say that, you know what, we operate with this one license, this one license amount actually, and decide not to kind of build up off that? And that's similar to what Zoom Info is probably having to navigate through right now too.
- Yeah. So indeed not a good day for Henry.
