ZoomInfo’s Full-Year Forecast Cut Causes 18% Stock Plunge
ZoomInfo, the leading provider of database information for corporate sales and marketing teams, experienced a significant decline in its stock value after lowering its full-year financial guidance. The company’s decision not to provide an explanation for the revised forecast has left investors and analysts questioning the motives behind the more cautious outlook.
Late trading on Monday saw ZoomInfo’s stock plummet by 18%, with shares trading at $21. This sharp decline in value reflects investor concerns about the company’s performance moving forward.
In its second quarter report, ZoomInfo announced a revenue of $308.6 million, showcasing a 16% increase compared to the same period last year. While this result was slightly below Wall Street’s consensus of $310.9 million, the company still achieved profitability with adjusted profits of 26 cents per share, surpassing the expected 23 cents. However, under generally accepted accounting principles, ZoomInfo’s earnings amounted to only nine cents per share.
CEO Henry Schuck expressed optimism about the company’s performance in a statement, highlighting revenue growth, increased profitability, and the generation of free cash flow during the quarter.
Despite these positive indicators, ZoomInfo reduced its projected revenue for the September quarter to a range of $309 million to $312 million, with adjusted profits of 24 to 25 cents per share. This revision falls short of analysts’ expectations of $325.8 million in revenue and 25 cents per share in adjusted profits. ZoomInfo also lowered its full-year guidance, forecasting a revenue range of $1.225 billion to $1.235 billion, down from the previous estimate of $1.275 billion to $1.285 billion.
Additionally, ZoomInfo adjusted its non-GAAP free cash flow guidance to $445 million to $455 million, compared to the earlier forecast of $507 million to $517 million. The company’s non-GAAP EPS outlook also experienced a minor revision, narrowing the range from 99 cents to $1.01 per share to 99 cents to $1 per share. To reassure investors, ZoomInfo revealed plans to expand its stock repurchase program by $500 million.
The announcement of a downward revision in ZoomInfo’s financial forecast has raised concerns among shareholders, who had previously been optimistic about the company’s future prospects. The lack of an explanation from ZoomInfo has further fueled speculation about the factors influencing this decision.
ZoomInfo’s stock decline serves as a cautionary reminder of the volatility of the market and the importance of providing clear and transparent guidance to investors. The company will need to address investors’ concerns and regain their trust to regain confidence in its ability to deliver long-term growth and value.
