Summary
ZoomInfo reported third-quarter revenue of $287.6 million, up 45.5% from the prior-year quarter. Year-to-date revenue reached $796.4 million, up 51.7%. Gross profit was $239.4 million, up 49.9%, and gross margin improved to 83.2%, up 2.4 percentage points. Year-to-date gross profit was $657.2 million, up 53.3%. Operating income rose to $51.8 million, up 156.4%, lifting operating margin to 18.0%, up 7.8 percentage points. Year-to-date operating income was $123.7 million, up 38.8%. Net income was $17.9 million, a swing to a profit, and diluted EPS was $0.04. For the first nine months, net income was $40.0 million and diluted EPS was $0.10, both swings to a profit. Year-to-date operating margin was 15.5%, down 1.4 percentage points. On a non-GAAP basis, adjusted operating income was $118.4 million and adjusted operating margin was 41%. Adjusted net income per share was $0.24.
Cash generation remained strong. Operating cash flow was $85.7 million, up 84.3% from the prior-year quarter. Year-to-date operating cash flow was $296.9 million, up 30.2%. Capital expenditures were $7.7 million, up 60.4%. Unlevered free cash flow, a separate non-GAAP measure, was $99.8 million. Deferred revenue was $381.2 million, up 32.4%, and remaining performance obligations were $978.8 million, up 37.4%. Those forward-looking metrics suggest the company continues to add contracted business.
Operationally, ZoomInfo closed the quarter with 1,848 customers that have $100,000 or greater in annual contract value. The company said its global contact database grew by 60 million in 2022 to more than 235 million B2B professional profiles, including more than 145 million contacts outside the U.S. It also reported detailed data on more than 100 million companies worldwide, with 100% coverage of revenue, headcount, and industry classifications, plus technology usage insights for more than 30 million companies. ZoomInfo joined the AWS Partner Network and renewed the TRUSTe Enterprise Privacy Seal for the third consecutive year. It also joined SAFECode, a software security sharing nonprofit.
Management provided guidance for the fourth quarter and full year 2022. For the fourth quarter, revenue is expected to be $298 million to $300 million, adjusted operating income $121 million to $123 million, and adjusted net income per share $0.21 to $0.22. For the full year 2022, revenue is guided to $1.094 billion to $1.096 billion, adjusted operating income to $442 million to $444 million, and adjusted net income per share to $0.83 to $0.84. Full-year unlevered free cash flow is guided to $430 million to $435 million, while fourth-quarter unlevered free cash flow was not guided.
The quarter's growth came primarily from new customers added over the past 12 months and net expansion with existing customers. The company continued to invest in machine learning, data acquisition, and enhanced location-based data matching technologies. Risks include the ongoing COVID-19 pandemic, integration of acquired businesses, and future economic, competitive, and regulatory conditions. The company also faces restrictive debt covenants that may limit dividends, acquisitions, and other activities, as well as substantial potential payments under its tax receivable agreements. Those factors could affect future results and cash needs.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2022 | Q2 FY2022 | QoQ | Q3 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $287.6M | $267.1M | +7.7% | $197.6M | +45.5% |
| Gross profit | $239.4M | $220.1M | +8.8% | $159.7M | +49.9% |
| Gross margin | 83.2% | 82.4% | +0.8 pp | 80.8% | +2.4 pp |
| Research & development | $54.2M | $49.5M | +9.5% | $34.4M | +57.6% |
| Sales & marketing | $96.4M | $95.2M | +1.3% | $65.3M | +47.6% |
| General & administrative | $31.2M | $29.2M | +6.8% | $23.4M | +33.3% |
| Total operating expenses | $187.6M | $180.6M | +3.9% | $139.5M | +34.5% |
| Operating income (loss) | $51.8M | $39.5M | +31.1% | $20.2M | +156.4% |
| Operating margin | 18.0% | 14.8% | +3.2 pp | 10.2% | +7.8 pp |
| Net income (loss) | $17.9M | $15.9M | +12.6% | -$40.6M | +144.1% |
| Net margin | 6.2% | 6.0% | +0.3 pp | -20.6% | +26.8 pp |
| Diluted EPS | $0.04 | $0.04 | ±$0.00 | -$0.15 | +$0.19 |
| Customers | 1,848 | 1,763 | +4.8% | 1,250 | +47.8% |
Risks
As of September 30, 2022, the company had a liability of $3,042.0 million related to projected obligations under the Tax Receivable Agreements, with payments equal to 85% of realized cash tax benefits and acceleration upon breach or change of control.
The ongoing COVID-19 pandemic continues to have unpredictable and rapidly shifting impacts on global financial markets, operations, customers, sales cycles, hiring, the labor market, and supply chains, and because of the largely subscription-based model the effect may not be fully reflected until future periods.
The first lien credit agreement contains restrictive covenants limiting dividends, acquisitions, investments, debt prepayment, and asset sales, and failure to comply could result in acceleration of substantially all debt. Total net leverage ratio to Adjusted EBITDA was 1.9x as of September 30, 2022.
First lien term debt has a variable interest rate at Base Rate or LIBOR plus an applicable rate; the effective interest rate on first lien debt was 5.83% as of September 30, 2022 versus 3.41% as of December 31, 2021, and interest expense could be impacted by changes in variable rates.
The April 2022 acquisitions of Comparably and Dogpatch for $150.6 million in cash and $10.0 million in a convertible note receivable have purchase accounting not yet finalized, and acquired products contributed $7.8 million for the three months ended September 30, 2022 and $40.7 million for the nine months then ended, affecting comparability and requiring integration.
Expense from income taxes was $32.1 million for the three months ended September 30, 2022, representing an effective tax rate of 64.2%, largely exceeding the U.S. federal statutory rate due to state law changes and certain compensation expense that will not have a corresponding tax deduction.
As of September 30, 2022, cash and cash equivalents were $406.3 million, short-term investments were $32.4 million, and $250.0 million was available under the first lien revolving credit facility, but liquidity is subject to general economic, financial, and other factors beyond the company's control and additional liquidity may not be available on reasonable terms.
SaaS KPIs
All quarters →Adjusted Operating Income Margin
Unlevered Free Cash Flow
Total customers
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 Q3 FY2022 (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 2, 2026.