What happened
Shares of ZoomInfo Technologies (ZI 1.43%), which offers a B2B platform for businesses to use for sales and marketing, were taking a dive today after the company issued weaker-than-expected second-quarter results and cut its guidance for the year ahead.
As of 3:07 p.m. ET, the stock was down 26.1%.
NASDAQ: ZI
Key Data Points
So what
Revenue in the quarter rose 16% to $308.6 million, which was just shy of estimates at $310.9 million. The company topped 35,000 overall customers but said customers with at least $100,000 or greater in annual contract value shrunk from 1,905 in the first quarter to 1,893, a sign it's losing some of its higher-value customers.
Further down the income statement, the company reported strong operating margins with operating income of $59.6 million, or 19%, and adjusted operating income of $125.6 million, or 41%.
On the bottom line, its adjusted earnings per share rose from $0.21 to $0.26, which topped expectations at $0.23.
CEO Henry Schuck said, "In Q2 we delivered another quarter of revenue growth, increased profitability, and free cash flow generation ... Businesses in all industries are leveraging our platform as an integral part of their technology stack to modernize how they go to market."
Now what
Despite Q2 results that were mostly in line with estimates, guidance crushed the stock.
The company called for revenue of $309 million to $312 million in Q3, reflecting 11.5% growth, which was well below analyst estimates at $325.8 million. Adjusted earnings-per-share (EPS) guidance of $0.24 to $0.25 was in line with estimates at $0.25.
For the full year, the company cut its revenue guidance from $1.275 billion to $1.285 billion to $1.225 to $1.235 billion, or just 11.8% growth, indicating it expects the headwinds to pick up in Q4.
Zoominfo is well priced now at a forward price-to-earnings (P/E) ratio of just 19, but it's not surprising to see the stock down after the guidance cut as other tech companies have reported similar headwinds
