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Sales intelligence platform ZoomInfo reported revenue ahead of Wall Street’s expectations in Q1 CY2025, but sales fell by 1.4% year on year to $305.7 million. Guidance for next quarter’s revenue was better than expected at $296.5 million at the midpoint, 1.5% above analysts’ estimates. Its non-GAAP profit of $0.23 per share was in line with analysts’ consensus estimates.

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ZoomInfo (ZI) Q1 CY2025 Highlights:

• Revenue: $305.7 million vs analyst estimates of $295.5 million (1.4% year-on-year decline, 3.5% beat)

• Adjusted EPS: $0.23 vs analyst estimates of $0.22 (in line)

• Adjusted Operating Income: $100.9 million vs analyst estimates of $97.73 million (33% margin, 3.2% beat)

• The company slightly lifted its revenue guidance for the full year to $1.2 billion at the midpoint from $1.20 billion

• Management raised its full-year Adjusted EPS guidance to $0.97 at the midpoint, a 1% increase

• Operating Margin: 16.5%, up from 13.9% in the same quarter last year

• Free Cash Flow Margin: 40.7%, up from 30.3% in the previous quarter

• Customers: 1,868 customers paying more than $100,000 annually

• Market Capitalization: $3.16 billion

“We delivered another quarter of better-than-expected financial results and Upmarket momentum,” said Henry Schuck, ZoomInfo Founder and CEO.

Company Overview

Founded in 2007 as DiscoveryOrg and renamed after a merger in 2019, ZoomInfo (NASDAQ:ZI) is a software as a service product that provides sales departments with access to a database of prospective clients.

Sales Growth

A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last three years, ZoomInfo grew its sales at a 13.1% annual rate. Although this growth is acceptable on an absolute basis, it fell short of our standards for the software sector, which enjoys a number of secular tailwinds.

This quarter, ZoomInfo’s revenue fell by 1.4% year on year to $305.7 million but beat Wall Street’s estimates by 3.5%. Company management is currently guiding for a 1.7% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to decline by 1.2% over the next 12 months, a deceleration versus the last three years. This projection doesn't excite us and implies its products and services will see some demand headwinds.

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