ZoomInfo (NASDAQ:ZI) Reports Upbeat Q1, Provides Strong Full Year Guidance

Kayode Omotosho /
2022/05/02 4:19 pm EDT
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Sales intelligence platform ZoomInfo reported results ahead of analyst expectations in the Q1 FY2022 quarter, with revenue up 57.6% year on year to $241.7 million. On top of that, guidance for next quarter's revenue was surprisingly good, being $254 million at the midpoint, 5.67% above what analysts were expecting. ZoomInfo made a GAAP profit of $6.2 million, improving on its loss of $33.9 million, in the same quarter last year.

Is now the time to buy ZoomInfo? Access our full analysis of the earnings results here, it's free.

ZoomInfo (ZI) Q1 FY2022 Highlights:

  • Revenue: $241.7 million vs analyst estimates of $227.9 million (6.03% beat)
  • EPS (non-GAAP): $0.18 vs analyst estimates of $0.15 (21% beat)
  • Revenue guidance for Q2 2022 is $254 million at the midpoint, above analyst estimates of $240.3 million
  • The company lifted revenue guidance for the full year, from $1.01 billion to $1.06 billion at the midpoint, a 4.92% increase
  • Customers: 1,623 customers paying more than $100,000 annually
  • Gross Margin (GAAP): 86.4%, in line with same quarter last year

Founded in 2007 as DiscoveryOrg and renamed after a merger in 2019, ZoomInfo (NASDAQ:ZI) is a software as a service product that provides sales departments with access to a database of prospective clients.

Companies need to be able to interact with and sell to their customers as efficiently as possible. This reality, coupled with the ongoing migration of enterprises to the cloud drives demand for cloud-based customer relationship management (CRM) software that integrate data analytics with sales and marketing functions.

Sales Growth

As you can see below, ZoomInfo's revenue growth has been exceptional over the last year, growing from quarterly revenue of $153.3 million, to $241.7 million.

ZoomInfo Total Revenue

This was another standout quarter with the revenue up a splendid 57.6% year on year. But the growth did slow down compared to last quarter, as the revenue increased by just $19.4 million in Q1, compared to $24.7 million in Q4 2021. We'd like to see revenue increase by a greater amount each quarter, but a one-off fluctuation is usually not concerning.

Guidance for the next quarter indicates ZoomInfo is expecting revenue to grow 45.9% year on year to $254 million, slowing down from the 56.8% year-over-year increase in revenue the company had recorded in the same quarter last year. Ahead of the earnings results the analysts covering the company were estimating sales to grow 31.3% over the next twelve months.

There are others doing even better than ZoomInfo. Founded by ex-Google engineers, a small company making software for banks has been growing revenue 90% year on year and is already up more than 150% since the IPO last December. You can find it on our platform for free.

Large Customers Growth

You can see below that at the end of the quarter ZoomInfo reported 1,623 enterprise customers paying more than $100,000 annually, an increase of 171 on last quarter. That is a bit less contract wins than we saw in the last quarter but quite a bit still above what we have typically seen over the last year, suggesting sales momentum is coming off slightly after a stronger quarter.

ZoomInfo customers paying more than $100,000 annually

Key Takeaways from ZoomInfo's Q1 Results

With a market capitalization of $19.1 billion, more than $406.8 million in cash and with free cash flow over the last twelve months being positive, the company is in a very strong position to invest in growth.

We were impressed by the exceptional revenue growth ZoomInfo delivered this quarter. And we were also glad that the revenue guidance for the next quarter exceeded analysts' expectations. On the other hand, there was a slight slowdown in new contract wins. Overall, we think this was still a really good quarter, that should leave shareholders feeling very positive. The company is flat on the results and currently trades at $49.2 per share.

ZoomInfo may have had a good quarter, so should you invest right now? It is important that you take into account its valuation and business qualities, as well as what happened in the latest quarter. We look at that in our actionable report which you can read here, it's free.

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The author has no position in any of the stocks mentioned.