Despite a tough business environment, ZoomInfo’s revenue exceeded expectations in the most recent quarter, continuing to grow over last quarter and last year. But executives aren’t predicting much growth going into the end of the year.
The Vancouver company’s revenue rose to $313.8 million in its third quarter, a 9 percent increase over the third quarter last year, ZoomInfo reported Monday. Revenue was $308.6 million in the second quarter.
“As a platform that helps customers grow — and one that serves some early cycle industries — we have seen net revenue retention and our overall growth rates come down as customers have had to rebalance growth and profitability,” said Henry Schuck, ZoomInfo founder and CEO, in the company’s investor call Monday.
ZoomInfo executives expect next quarter’s revenue to be between $309 million and $312 million, the same range they predicted for this most recent quarter.
“This is a market phenomenon impacting companies across the spectrum of front office applications and not unique to ZoomInfo,” said Schuck.
He said the company will be uniquely positioned to help customers drive growth when a more normal operating environment returns.
ZoomInfo offers subscriptions for marketing, operations and sales software all incorporating the company’s extensive contact database.
Despite the company’s fourth quarter generally having the highest numbers of subscription renewals, ZoomInfo’s executive team is expecting its revenue to decline in the next quarter.
“We believe this renewal cycle, at least through the first quarter of 2024, will be challenging,” said Cameron Hyzer, ZoomInfo’s chief financial officer, in Monday’s call.
More customers have cut their budgets with the company. Some small customers have struggled to pay their bills. And others have switched to ZoomInfo competitors. Though, Shuck said, some customers who left have returned.
Hyzer said the company’s executives expected the business environment to get worse these past few months.
“And it has gotten worse,” he said, adding that the operating environment isn’t expected to get better soon.
The company’s leadership is committed to “controlling the controllable,” Schuck said.
In the past few months, ZoomInfo’s executives have invested more in the company’s products, made leadership changes and purchased more ZoomInfo stock.
“We’re confident when the economic environment improves, these investments that we’re making today will position us for long-term growth and success,” said Shuck.
Between July and September, ZoomInfo bought nearly 9 million shares of its stock. And it will likely buy more.
“At these levels, we’ll continue to lean in,” said Hyzer, pointing to the company’s depressed stock value.
ZoomInfo stock peaked at just over $77 per share in November 2021. But it’s been trading at less than $20 per share since August.
The company’s leadership also shifted this quarter, which Schuck said has flattened the organization and allowed him to be more connected with customers and staff.
The executives also invested in more artificial intelligence initiatives for ZoomInfo products, such as its AI-generated meeting summaries and draft follow-up emails.
ZoomInfo trades on the Nasdaq as ZI. Its stock closed Tuesday at $12.96 per share, down from $15.51 where it closed Monday.