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ZoomInfo (ZI) Q4 Earnings Beat Estimates, Revenues Up Y/Y

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ZoomInfo Technologies (ZI - Free Report) reported fourth-quarter 2020 adjusted earnings of 12 cents per share, beating the Zacks Consensus Estimate by 20%. The company had reported adjusted earnings of 11 cents per share in the previous quarter.

Revenues of $139.7 billion beat the consensus mark by 7%. Moreover, the top line jumped 53.4% year over year. The buyouts of Clickagy and EverString contributed $2 million to revenues in the reported quarter.

The top-line performance was primarily driven by the impressive customer acceptance of the ZoomInfo’s data, insights and automation platform, along with its user-facing applications and an expanding enterprise clientele.

Notably, international revenues surged more than 70% year over year on the growing traction of the company’s platform in Europe.

 

ZoomInfo Technologies Inc. Price, Consensus and EPS Surprise ZoomInfo Technologies Inc. Price, Consensus and EPS Surprise

ZoomInfo Technologies Inc. price-consensus-eps-surprise-chart | ZoomInfo Technologies Inc. Quote

Quarterly Details

Gross profit for the quarter came in at $113.1 million, up 55.8% year over year. In addition, gross margin expanded 130 basis points (bps) year over year to 81%.

Sales and marketing expenses flared up 66.2% year over year to $45.2 million. As a percentage of revenues, sales and marketing expenses expanded 250 bps year on year to 32.4% on capacity expansion and elevated commission costs.

General and administrative expenses soared 90.2% year over year to $17.5 million. As a percentage of revenues, General and administrative expenses expanded 243 bps year over year to 12.5%.

Research and development expenses shot up 70.6% year over year to $14.5 million. As a percentage of revenues, research and development expenses expanded 105 bps year on year to 10.4%.

Adjusted operating income climbed 34.3% year over year to $63.4million. Adjusted operating margin was 45% compared with the 49% reported in the year-ago quarter, on higher investments in research and development as well as sales and marketing, along with slightly negative impact of the Clickagy and EverString acquisitions.

Notably, for 2020, ZoomInfo’s annual net revenue retention rate was 108%. This was led by steady adoption and higher renewal rates of the company’s sales automation platform, Engage.

Furthermore, at the end of the year, the company had more than 20,000 paying customers, reflecting growth of more than 35% year over year. Customers with annual contract value of $100,000 and above grew 45% year on year to 850.

Balance Sheet & Other Details

As of Dec 31, 2020, ZoomInfo had cash and cash equivalents (including short-term investments and restricted cash) worth $301.6 million compared with $306 million as of Sep 30, 2020.

Long-term debt (net of current portion) as of Dec 31, 2020, was $744.9 million compared with $744.3 million as of Sep 30, 2020.

In the fourth quarter, ZoomInfo generated $66.8 million of cash flow from operations, compared with the year-ago quarter’s $17 million. The company’s quarterly unlevered free cash flow came in at $76.6 million, up 84.6% year over year.

Guidance

For first-quarter 2021, ZoomInfo projects revenues between $144 million and $146 million. Adjusted operating income is expected in the $61-$63 million band. Adjusted earnings are anticipated in the range of 10-11 cents per share.

For 2021, the company expects revenues between $645-655 million, indicating growth of 37% at the mid-point. Adjusted operating income is expected to be between $280 million and $285 million and adjusted operating income margin is likely to be 43% at the mid-point.

Further, adjusted earnings are likely to be in the range of 47-49 cents per share. Also, unlevered free cash flow is projected to be in the $270-$280 million band.

Zacks Rank & Key Picks

ZoomInfo currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the broader technology sector include Zoom (ZM - Free Report) , Workday (WDAY - Free Report) and Magnite (MGNI - Free Report) . All three stocks carry a Zacks Rank of #2 (Buy), currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Magnite, Workday and Zoom are scheduled to report their quarterly numbers on Feb 24, Feb 25 and Mar 1, respectively.

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