Why ZoomInfo Technologies Stock Dived by Almost 33% Today
Key Points
Rather, investors didn't take kindly to management's guidance cuts at all.
A sequential decline in a crucial customer segment also raised concerns.
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The stock of ZoomInfo Technologies (NASDAQ: GTM) was zooming in the exact opposite direction that investors wanted on Tuesday. On the back of a poorly received earnings report, market players aggressively traded out of the enterprise database company, leaving its shares with a nearly 33% loss on the day.
Two beats weren't enough
In its first quarter, ZoomInfo reported revenue of slightly over $310 million, up 1.5% year over year. Net income not under generally accepted accounting principles (GAAP) saw a more dramatic rise of almost 7% to $87.5 million, or $0.28 per share.
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Analysts tracking the stock had slightly underestimated ZoomInfo. They were collectively modeling revenue of just under $308 million and a non-GAAP (adjusted) net income figure of $0.26 per share.
ZoomInfo's count of large customers, defined as those with annual contract value (ACV) exceeding $100,000, increased by 32 year over year to 1,900. However, the tally dropped by 21 sequentially, a trend surely noted by bearish investors.
Time for the scissors
What really put the kibosh on ZoomInfo stock was management's downward revisions to certain full-year 2026 guidance items. This included revenue, which is now anticipated to range from just under $1.19 billion to slightly more than $1.2 billion. The previous forecast was notably higher, at almost $1.25 billion to nearly $1.27 billion.
Similarly, adjusted net income received a chop. ZoomInfo now expects this to land at $437 million to $447 million, down from the preceding range of $456 million to $466 million.
While it's discouraging to see the specialty tech company reduce such estimates and report a quarter-over-quarter drop in big clients, I don't feel this is an emergency, abandon-ship moment for ZoomInfo investors. Still, I'd keep a sharp eye on that large enterprise segment, as it's the one that drives consistency, growth, and profitability for the company.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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