Zoominfo Technologies Stock Earnings Reports

ZoomInfo reported Q1 2026 revenue of $310M (+1.5% YoY) and adjusted operating income of $110M (35% margin), both above the high end of guidance. Upmarket now represents ~75% of the business; operations and Data-as-a-Service (non-seat, upmarket, high-margin) grew >20% YoY and now comprise ~20% of revenue. Net revenue retention was 90% for the third consecutive quarter. Management observed increasing customer pause and “AI/agentic confusion” in late March/April—particularly among software customers—prompting a strategic acceleration toward a consumption-first, data-led model and a downsizing of downmarket seat-based go-to-market resources. As a result, management revised FY2026 revenue guidance to $1.185B–$1.205B (midpoint down ~4% YoY) but raised adjusted operating income guidance to $437M–$447M (37% margin at midpoint, +130 bps YoY). They announced a workforce reduction impacting ~600 roles (~20% of employees), restructuring charges of $45M–$60M (mostly cash, Q2–Q3), and expect ~$60M annual run-rate OpEx savings. Key strategic moves: (1) transition away from seat-based pricing toward hybrid platform fee + pre-purchased consumption credits (formal rollout in Q3), (2) broaden data availability via APIs/MCPs and integrations with major LLM/AI platforms (ChatGPT, Claude, Copilot, Gemini, Perplexity), (3) pivot R&D investment from front-end apps toward data, AI-enabled engineering and LLM interfaces. Financial position: $175M cash, $1.3B gross debt, net leverage ~2.4x; Q1 unlevered FCF $120M (39% margin); repurchased $90M of stock in Q1 with >$1B remaining authorization. Management expects to be closer to a 50/50 split of seat vs non-seat ACV within 12–24 months and to return to sustainable YoY growth by H2 2027, with an eventual target of roughly 40% adjusted operating margin when growth resumes.