ZoomInfo Technologies Q2 Earnings Call Highlights

Key Points

• Q2 performance exceeded guidance: Revenue rose 1.2% year over year to $310 million, while adjusted operating income increased 5% to $110 million and unlevered free cash flow climbed 7% to $107 million.
• AI and enterprise focus are central to ZoomInfo’s strategy: The company launched GTM.AI and plans to introduce consumption-based pricing alongside seat-based subscriptions. Upmarket and data-driven Operations growth offset weakness among software and downmarket customers, with net revenue retention slipping to 89%.
• Full-year outlook was raised: ZoomInfo now expects 2026 revenue of $1.207 billion to $1.217 billion, adjusted operating income of $446 million to $451 million, and unlevered free cash flow of $403 million to $423 million, despite restructuring-related headcount reductions and ongoing software-sector pressure.

ZoomInfo Technologies NASDAQ: ZI reported second-quarter revenue of $310 million, up 1.2% from a year earlier, as the company emphasized profitability, free-cash-flow generation and product development aimed at embedding its data in AI-driven go-to-market workflows.

Founder and CEO Henry Schuck said the company exceeded the guidance it issued after the first quarter. Adjusted operating income rose 5% year over year to $110 million, producing a 35% margin, while unlevered free cash flow increased 7% to $107 million.

“We exceeded our guidance coming out of Q1 and are making good progress on our path forward,” Schuck said, citing the company’s enterprise-focused product strategy, profitability efforts and goal of returning to durable growth.

AI product expansion and pricing changes

During the quarter, ZoomInfo launched GTM.AI, which Schuck described as a “headless GTM context layer” that provides API, MCP and other connectors for embedding ZoomInfo data and insights into agentic workflows. The company has integrated its tools with platforms including Codex, Cursor, Claude, Gemini, Amazon Q, Copilot, Vercel, Perplexity and Zapier, he said.

Schuck said customers increasingly want to use ZoomInfo’s data in both traditional seat-based software environments and in large language models, coding agents and internally developed applications. ZoomInfo plans to begin offering more flexible pricing and packaging later in the third quarter, allowing customers historically served through per-seat subscriptions to access data, applications and agents through pre-purchased consumption.

The company is testing migration approaches with selected customer groups and has not finalized the timing, pricing or packaging of the new model. Chief Financial Officer Graham O’Brien said the company’s third-quarter outlook assumes little impact from the rollout, as it expects to begin primarily with new business near the end of the quarter and migrate existing customers later in 2026 and into 2027.

In response to analyst questions, Schuck said the intended behavior behind the hybrid pricing model is “consumption.” He also said the company is seeing healthy consumption growth among customers using GTM.AI tools, though ZoomInfo is not incorporating upside from new products or GTM.AI growth into its financial outlook.

Upmarket growth offsets software weakness

ZoomInfo said 76% of annual contract value, or ACV, now comes from upmarket customers. Upmarket ACV grew 3% from a year ago, though O’Brien said a substantial software customer base, especially in the lower half of the upmarket segment, remained a headwind.

The company’s ZoomInfo Operations business, which is primarily data-driven and not tied to seats, delivered 20% ACV growth year over year. ZoomInfo ended the quarter with 1,891 customers generating at least $100,000 in ACV, nine more than a year earlier but nine fewer than in the prior quarter. ACV from customers spending at least $1 million grew 16% year over year.

O’Brien said non-software verticals continued to show healthy growth and improved gross retention, while software remained challenged. Longer sales cycles that began in the first quarter continued to pressure upsells and net revenue retention. Downmarket ACV declined 12% year over year, and ZoomInfo is reducing downmarket sales resources while shifting more toward a product-led growth motion.

Net revenue retention was 89%, down from 90% in each of the prior three quarters. Gross retention remained relatively strong, supported by improvement outside the software sector, O’Brien said. Schuck added that retention improved year over year among the company’s largest enterprise customers, while smaller upmarket software customers continued to face pressure.

Schuck said ZoomInfo completed its largest ACV deal to date during the quarter, a multiyear renewal with a software customer that expanded both its data and seat deployment. The company also cited upmarket wins with Legora, Cohere, Bank of Montreal and Korn Ferry.

Restructuring, capital allocation and balance sheet

The quarter included a $651 million non-cash goodwill impairment charge, primarily tied to a decline in ZoomInfo’s market capitalization after its first-quarter results. O’Brien said the charge did not affect cash, taxes payable, liquidity, debt covenants or non-GAAP results.

ZoomInfo also recorded a $35 million charge, primarily related to severance and employee benefits under the restructuring announced in May. Headcount declined by approximately 350 employees sequentially and was down 15% from a year earlier. O’Brien said headcount is expected to fall by several hundred additional employees as transition plans are completed later this year.

The company repurchased 6.3 million shares for $28 million during the quarter, at an average price of $4.51 each. It also retired $58.5 million in aggregate principal of senior notes for $48 million, recording an $11 million gain on debt extinguishment and expecting to reduce annual cash interest expense by $2.3 million.

ZoomInfo ended the quarter with $151 million of cash equivalents and investments, $1.27 billion of gross debt and a net leverage ratio of 2.3 times trailing-12-month adjusted EBITDA. O’Brien said the company was comfortable with its debt maturity profile and had sufficient liquidity and cash generation to manage its obligations.

Outlook raised after second-quarter outperformance

For the third quarter, ZoomInfo expects revenue of $298 million to $301 million, adjusted operating income of $113 million to $115 million, and non-GAAP net income of $0.28 to $0.29 per share.

For full-year 2026, the company raised its outlook following second-quarter outperformance. ZoomInfo now expects:

• GAAP revenue of $1.207 billion to $1.217 billion, representing a 3% year-over-year decline at the midpoint;
• Adjusted operating income of $446 million to $451 million, for a 37% margin at the midpoint;
• Non-GAAP net income of $1.12 to $1.13 per share; and
• Unlevered free cash flow of $403 million to $423 million.

O’Brien said the higher outlook primarily reflects second-quarter outperformance while maintaining the company’s prior assumptions on downmarket pressure, software-sector weakness and uncertainty surrounding the rollout of new pricing and packaging.

About ZoomInfo Technologies (NASDAQ:ZI)

ZoomInfo Technologies Inc is a cloud-based software company specializing in business-to-business (B2B) intelligence and go-to-market solutions. Its platform aggregates firmographic, demographic, technographic and intent data to help sales, marketing and recruiting professionals identify, engage and close on high-value prospects. Subscribers gain access to a proprietary database of company and contact information, enabling targeted outreach and data enrichment across various workflows.

Founded in 2007 and headquartered in Vancouver, Washington, ZoomInfo has expanded its capabilities through both internal development and strategic acquisitions.

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