ZoomInfo (ZI) Delivers
ZoomInfo (ZI) reported Q3 results yesterday that surpassed expectations. Revenue was up 60% to $197.6 million (54% organic growth). Growth with enterprise customers continues to shine as ZoomInfo now has over 1,250 customers (74% customer growth) with over $100K in annual contract value (ACV) and total ACV growth of 85% from these customers (ZoomInfo has over 25,000 total customers). Several customers have contracts worth over $1 million, and management indicated that the trend toward larger contracts with both new and existing customers is crystal clear. International growth accelerated from 75% in Q2 to 80% in Q3. Adjusted EPS grew by 18% to $0.13. Management raised full-year revenue guidance by around 4% and now sees $731 - $733 million (versus $703 - $707 million prior). Full-year adjusted EPS guidance is raised by a penny at the high end, to a range of $0.51 to $0.52.
Finally, the board approved eliminating the UP-C corporate structure, which means ZI will now have just one class of common stock and one vote per share. This will make it easier for ZI to be included in stock market indices, which is a good thing. All is going according to plan here as ZoomInfo continues to be at the top of the food chain when it comes to sales and marketing platforms.
Analysts are raising price targets, mostly into the mid-to-high 80s. Shares look like they will be strong this morning (indicated +6% pre-market). My best guess is ZI will trade up near 75 in the near term (if the broad market continues to be supportive) so I would try to be a buyer in the low 70s if you want to add to your position. We’ll have to evaluate further if ZI zooms past 75, or if it fails to get and hold above 70 (which would be very surprising). BUY