Shares of ZoomInfo (ZI 0.46%) were down nearly 19% this week as of Thursday's close, according to data provided by S&P Global Market Intelligence, after the cloud-based go-to-market platform company announced strong quarterly results, but followed with cautious forward guidance. To be sure, ZoomInfo fell more than 17% on Tuesday alone after its quarterly update hit the wires.
NASDAQ: ZI
Key Data Points
ZoomInfo's solid third quarter just wasn't enough
ZoomInfo's third-quarter 2023 revenue grew 9% year over year to $313.8 million, translating to non-GAAP (adjusted) net income of $105 million or $0.26 per share. Analysts, on average, were expecting earnings of $0.25 per share on revenue closer to $310 million. Both the top and bottom lines were also above ZoomInfo's previous guidance -- which, to be fair, underwhelmed the market and similarly sent shares tumbling in August.
ZoomInfo Founder and CEO Henry Schuck noted the company executed well despite a "more challenging operating environment," adding that they've continued to drive profitable growth while returning capital to shareholders. Indeed, ZoomInfo also repurchased 8.8 million shares of common stock for $160.1 million during the quarter, or an average price of $18.19 per share.
On guidance, what's next for ZoomInfo stock
For the fourth quarter of 2023, however, ZoomInfo told investors to expect revenue of $309 million to $312 million -- below consensus estimates of Q4 sales of $325.8 million -- with adjusted net income per share of $0.24 to $0.25 (versus estimates of $0.25 per share).
As such, for the full-year 2023, the company now expects revenue of $1.232 billion to $1.235 billion -- a modest increase from the bottom end of its previous outlook range (which called for 2023 revenue of $1.225 billion to $1.235 billion). ZoomInfo simultaneously reiterated its outlook for full-year adjusted earnings per share of $0.99 to $1.00.
In the end, that's not to say ZoomInfo's results were terrible. But in this market that's punishing underwhelming guidance more than it rewards quarterly revenue and earnings beats, ZoomInfo's share price responded accordingly. Until this difficult macroeconomic environment subsides and gives businesses like ZoomInfo more confidence to guide more aggressively for future growth, I suspect its stock will remain under pressure.
