Summary
ZoomInfo posted first quarter revenue of $310.1 million, up 3.1% from $300.7 million in the prior-year quarter. Gross profit climbed to $266.7 million from $255.2 million, and gross margin widened to 86.0% from 84.9% as cost of service efficiencies took hold. The profit lines moved the other way. GAAP operating income dropped 35.1% to $43.0 million, operating margin fell to 13.9% from 22.0%, net income declined 66.1% to $15.1 million, and diluted EPS came in at $0.04 versus $0.11 a year ago.
The gap between revenue growth and profit decline traces to two items. General and administrative expense rose 99% to $75.1 million, driven by $30.2 million of charges tied to the Class Actions and higher bad debt accruals. A $9.4 million TRA remeasurement loss also weighed on results, flipping from a $10.1 million gain a year earlier. The effective tax rate rose to 48.8% from 34.8%. Management attributed the net income decline primarily to the Class Actions costs and the TRA remeasurement loss, partly offset by higher revenue.
Non-GAAP results held up better. Adjusted operating income was $119.4 million, down 1% from $120.3 million, with an adjusted operating income margin of 39% against 40%. Adjusted net income was $100.5 million versus $99.5 million, and adjusted net income per diluted share was $0.26 versus $0.24. Cash generation stayed solid. Operating cash flow rose 6.7% to $115.9 million, and unlevered free cash flow was $122.7 million. Capital expenditures doubled to $12.8 million from $6.4 million on higher capitalization of development expenses and the timing of facilities projects.
Customer metrics show where the pressure sits. Net revenue retention was 85% as of March 31, 2024, and the company ended the quarter with 1,760 customers carrying $100,000 or more in annual contract value. Deferred revenue slipped 1.6% to $444.3 million from $451.4 million. Remaining performance obligations rose 3.7% to $1.13 billion from $1.09 billion. The balance sheet held $405.9 million of cash and cash equivalents, $34.3 million of short-term investments, and $250.0 million of availability under the first lien revolving credit facility. Total net leverage to Adjusted EBITDA was 1.5x.
ZoomInfo returned capital aggressively. The board added $500 million to the share repurchase program, lifting total authorization to $1.1 billion, with $546.8 million still available at quarter end. The company repurchased 9,623,255 shares during the quarter at an average price of $15.90 for $153.1 million. Guidance for the second quarter of 2024 calls for non-GAAP adjusted operating income of $114 million to $116 million. For the full year 2024, the company guides to adjusted operating income of $492 million to $502 million, adjusted net income per share of $0.99 to $1.01, and unlevered free cash flow of $445 million to $465 million.
The main risks are familiar ones. Management points to adverse macroeconomic conditions and expects net revenue retention to stay under pressure in the near term. Revenue growth in the quarter came from new customers added over the past 12 months, partly offset by cancellations and reduced spend among existing customers. The Class Actions remain a live cost, and the TRA liability, $2,796.0 million as of March 31, 2024, can be remeasured when tax law or apportionment factors change, producing swings in other income. The credit agreement carries restrictive covenants, and the company also flagged $228.1 million of anticipated undiscounted future lease payments for office space that has not yet commenced.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2024 | Q4 FY2023 | QoQ | Q1 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $310.1M | $316.4M | -2.0% | $300.7M | +3.1% |
| Gross profit | $266.7M | $271.8M | -1.9% | $255.2M | +4.5% |
| Gross margin | 86.0% | 85.9% | +0.1 pp | 84.9% | +1.1 pp |
| Research & development | $43.7M | $48.2M | -9.3% | $42.3M | +3.3% |
| Sales & marketing | $99.4M | $98.3M | +1.1% | $103.2M | -3.7% |
| General & administrative | $75.1M | $49.0M | +53.3% | $37.7M | +99.2% |
| Total operating expenses | $223.7M | $201.3M | +11.1% | $188.9M | +18.4% |
| Operating income (loss) | $43.0M | $70.5M | -39.0% | $66.3M | -35.1% |
| Operating margin | 13.9% | 22.3% | -8.4 pp | 22.1% | -8.2 pp |
| Net income (loss) | $15.1M | -$5.5M | +374.5% | $44.5M | -66.1% |
| Net margin | 4.9% | -1.7% | +6.6 pp | 14.8% | -9.9 pp |
| Diluted EPS | $0.04 | — | — | $0.11 | -$0.07 |
Risks
Charges related to the previously disclosed Class Actions totaled $30.2 million in the quarter ended March 31, 2024, driving general and administrative expense up 99% and net income down 66% versus the prior-year quarter. The company also recorded $0.2 million of litigation settlement payments in the quarter.
Net revenue retention was 85% as of March 31, 2024, and management states it expects the net retention rate to be impacted by macroeconomic conditions in the near term. Revenue growth of 3.1% in the quarter was partly offset by cancellations and reduced spend among existing customers.
The company carried a $2,796.0 million liability for projected obligations under its Tax Receivable Agreements as of March 31, 2024, and paid $31.6 million to TRA holders during the quarter. A $9.4 million TRA remeasurement loss contributed to other loss, net of $3.4 million in the quarter, and the company notes minor changes in deferred tax assets can materially affect its tax provision.
Deferred revenue declined 1.6% to $444.3 million versus the prior-year quarter, and revenue growth of 3.1% was attributed to new customers added over the past 12 months partially offset by cancellations and reduced spend among existing customers. The company had 1,760 customers with over $100,000 in ACV as of March 31, 2024.
General and administrative expense excluding equity-based compensation rose 120% in the quarter, primarily due to Class Action charges as well as incremental bad debt accruals. Provision for bad debt expense was $9.2 million in the quarter, up from $6.1 million in the prior-year quarter.
The credit agreement governing the first lien term loan contains restrictive covenants limiting dividends, stock repurchases, acquisitions, investments and asset dispositions, and failure to comply could accelerate substantially all debt. Total contractual maturity of outstanding indebtedness was $1,242.5 million with a total net leverage ratio of 1.5x as of March 31, 2024.
SaaS KPIs
All quarters →Adjusted Operating Income Margin
Unlevered Free Cash Flow
Net Revenue Retention
Customers with $100,000 or greater in annual contract value
Summary, forecast, risks and KPIs are extracted from ZoomInfo Technologies Inc.'s SEC filings for Q1 FY2024 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 1, 2026.