Summary
ZoomInfo closed fiscal 2022 with fourth quarter revenue of $301.6 million, up 35.7% from the prior-year quarter. Gross profit rose to $252.4 million, up 38.8%, and gross margin reached 83.7%, up 1.9 percentage points. Operating income of $52.1 million was up 115.3%, and operating margin climbed to 17.3%, up 6.4 percentage points. Adjusted operating income, a non-GAAP measure, was $127.0 million, up 47%, and the adjusted operating income margin was 42%. The margin gain came while spending on sales and marketing, research and development, and general and administrative all grew.
Full-year revenue was $1.10 billion, up 46.9%. Gross profit for the year was $909.6 million, up 49.0%, with gross margin of 82.8%, up 1.1 percentage points. Operating income was $175.8 million, up 55.2%, and operating margin was 16.0%, up 0.8 percentage points. Adjusted operating income for the year was $447.8 million, up 46%, at a 41% margin. Net income moved the other way. Full-year net income was $63.2 million, down 45.9%, and diluted EPS was $0.16, down from $0.43 a year earlier. The fourth quarter alone produced net income of $23.2 million, down 84.0% from the prior-year quarter. That drop reflects income tax expense in the quarter against a tax benefit in the year-ago period. Adjusted net income per share was $0.26 for the quarter and $0.88 for the year.
Cash generation held up. Operating cash flow was $120.1 million in the quarter, up 68.4%, and $417.0 million for the year, up 39.3%. Capital expenditures were $6.4 million in the quarter, down 17.9%, and $28.9 million for the year, up 22.5%. Unlevered free cash flow, a non-GAAP measure, was $122.4 million in the quarter and $456.5 million for the year. Deferred revenue ended 2022 at $419.9 million, up 15.3%, and remaining performance obligations were $1.11 billion, up 28.0%.
ZoomInfo reported a net revenue retention rate of 104% for 2022 and finished the year with 1,926 customers holding at least $100,000 in annual contract value. The company says it serves more than 30,000 companies, up from over 25,000 a year earlier and over 20,000 in 2020. Over 40% of customer contracts, based on annualized value, are multi-year agreements. A survey of 4,300 users found customers reported being 63% more productive overall because of the platform. The company also had $250.0 million available under its first lien revolving credit facility and a total net leverage ratio to adjusted EBITDA of 1.5x.
Guidance for the first quarter of 2023 calls for adjusted operating income of $118 million to $120 million and adjusted net income per share of $0.21 to $0.22. For the full fiscal year 2023, the company guides to adjusted operating income of $523 million to $533 million, adjusted net income per share of $0.98 to $1.00, and unlevered free cash flow of $507 million to $517 million. Revenue guidance was also issued for both the first quarter and the full year. Unlevered free cash flow is not guided for the first quarter.
The outlook assumes a softer demand environment. Management said the net retention rate will be affected by macroeconomic conditions in the near term. ZoomInfo also flagged the ongoing COVID-19 pandemic and general economic conditions as unpredictable. Its first lien debt carries a variable rate, and the effective interest rate on that debt rose to 7.38% from 3.41%. The credit agreement limits dividends, buybacks, and acquisitions, and a covenant breach could accelerate substantially all of the debt. Payments under the tax receivable agreements could also be substantial. Management also noted the risk that the business may not generate sufficient cash flow from operations or be able to raise additional liquidity on reasonable terms.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2022 | Q3 FY2022 | QoQ | Q4 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $301.6M | $287.6M | +4.9% | $222.3M | +35.7% |
| Gross profit | $252.4M | $239.4M | +5.4% | $181.9M | +38.8% |
| Gross margin | 83.7% | 83.2% | +0.5 pp | 81.8% | +1.9 pp |
| Research & development | $55.9M | $54.2M | +3.1% | $40.9M | +36.7% |
| Sales & marketing | $103.6M | $96.4M | +7.5% | $77.1M | +34.4% |
| General & administrative | $35.0M | $31.2M | +12.2% | $28.3M | +23.7% |
| Total operating expenses | $200.3M | $187.6M | +6.8% | $157.7M | +27.0% |
| Operating income (loss) | $52.1M | $51.8M | +0.6% | $24.2M | +115.3% |
| Operating margin | 17.3% | 18.0% | -0.7 pp | 10.9% | +6.4 pp |
| Net income (loss) | $23.2M | $17.9M | +29.6% | $144.9M | -84.0% |
| Net margin | 7.7% | 6.2% | +1.5 pp | 65.2% | -57.5 pp |
Risks
MD&A states the business and financial condition may be impacted by adverse macroeconomic conditions and that the net annual retention rate was 104% in 2022, with near-term retention expected to be impacted by macroeconomic conditions. Risk factors note weaker economic conditions could reduce customer spending, elongate sales cycles, and increase attrition.
Risk factors highlight that larger, better-funded companies such as Salesforce.com, Oracle, Google, or Microsoft/LinkedIn could enter the B2B sales and marketing intelligence space, with greater resources and brand recognition, potentially reducing demand and pricing for ZoomInfo subscriptions.
The platform depends on integrations with third-party systems including Salesforce.com, Marketo, HubSpot, Microsoft Dynamics, and Oracle Sales Cloud. The filing states that if Salesforce.com refused to permit API access, the integration would not function and customer experience would be hampered, harming renewals and upgrades.
New and expanding privacy laws, including the CPRA effective January 1, 2023, Virginia's Consumer Data Protection Act, the Colorado Privacy Act, the Utah Consumer Privacy Act, the Connecticut Data Privacy Act, China's PIPL, and FTC commercial surveillance rulemaking, may restrict data gathering and increase compliance costs.
Success depends on customer confidence in the depth, breadth, and accuracy of data. The standard contract includes a quality guarantee allowing termination and reimbursement if accuracy falls below a threshold, and opt-outs plus third-party opt-out services could reduce the contributory network.
The company depends on CEO and co-founder Henry Schuck and other key employees, and competition for engineers and sales professionals is intense. If the perceived value of equity awards declines, it may harm the ability to recruit and retain highly skilled employees.
The tax receivable agreements require payments of 85% of certain tax benefits and may be accelerated in a change of control. The filing states payments could be substantial, may exceed actual cash tax benefits, and could require additional indebtedness, affecting liquidity.
The company acquired Comparably and Dogpatch in April 2022 for $150.6 million in cash and a $10.0 million convertible note receivable. Risk factors cite integration difficulties, diversion of management, write-offs, and dilution from future acquisition financing.
In 2022 the company began implementing a new ERP software system to replace certain business, operational, and financial processes. Delays or disruptions from the implementation could materially impact financial condition, operating results, or accurate financial reporting.
The company relies heavily on internet search engines such as Google, including paid keywords and indexing of public directory pages, to generate significant website traffic. Algorithm changes or competitive dynamics could negatively affect traffic and financial performance.
MD&A states that in 2022 approximately 39% and 27% of customers, as measured by ACV, operated in the software and business services industries, respectively. A downturn in those verticals could disproportionately affect demand.
SaaS KPIs
All quarters →Adjusted Operating Income Margin
Unlevered Free Cash Flow
Adjusted Operating Income
Net Revenue Retention
Total customers
Customers > $100K ACV
Summary, forecast, risks and KPIs are extracted from ZoomInfo Technologies Inc.'s SEC filings for Q4 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 1, 2026.