ZoomInfo Technologies Inc (NASDAQ:GTM) reported financial results for the fourth quarter and full year of 2025 that surpassed analyst expectations on the top and bottom lines. However, the market's initial reaction in after-hours trading was notably negative, with shares declining over 7%, as investors appeared to focus on the company's tempered growth outlook for the coming year.
Earnings and Revenue Versus Estimates
The go-to-market intelligence provider delivered a solid finish to 2025, exceeding consensus estimates for the quarter. Revenue growth, while modest, came in ahead of forecasts.
- Q4 2025 Revenue: $319.1 million, a 3.2% year-over-year increase.
- Analyst Revenue Estimate: Approximately $312.5 million.
- Q4 2025 Non-GAAP EPS: $0.32 per share.
- Analyst EPS Estimate: $0.286 per share.
For the full year 2025, the company reported revenue of $1.25 billion, also representing 3% growth compared to 2024.
Market Reaction and Forward Guidance
The positive earnings beat was overshadowed by the company's guidance for 2026. Management's revenue outlook for the first quarter and full year aligns closely with, but does not significantly exceed, current analyst expectations, suggesting a continuation of the current low-single-digit growth trajectory.
- Q1 2026 Revenue Guidance: $306 to $309 million.
- Analyst Q1 2026 Revenue Estimate: Approximately $311.2 million.
- FY 2026 Revenue Guidance: $1.247 to $1.267 billion.
- Analyst FY 2026 Revenue Estimate: Approximately $1.271 billion.
This guidance appears to be the primary driver behind the after-hours stock decline. In a market environment where high-growth software valuations have been under pressure—a trend referenced in recent news about a "SaaSpocalypse" sell-off—investors may have been hoping for signs of accelerating growth. The company's forecast, while stable, did not provide that catalyst.
Key Highlights from the Earnings Release
Beyond the headline numbers, ZoomInfo's earnings report highlighted several areas of operational strength and strategic focus:
- Profitability and Cash Flow: The company expanded its profitability metrics significantly. Full-year GAAP operating income surged 132% to $225.7 million, while unlevered free cash flow reached $454.9 million. The adjusted operating income margin remained robust at 36% for the year.
- Customer Base Shift: ZoomInfo continues to move upmarket. The number of customers with an Annual Contract Value (ACV) of $100,000 or greater increased by 54 year-over-year to 1,921, and these larger customers now represent over 50% of total company ACV.
- Capital Return Program: The company aggressively returned capital to shareholders in 2025, repurchasing 40.5 million shares (12% of shares outstanding) for $407 million. In February 2026, the Board approved an additional $1 billion share repurchase authorization.
- AI Platform Focus: CEO Henry Schuck emphasized the company's focus on building an "all-in-one AI platform for go-to-market teams," aiming to integrate data, intelligence, and workflow automation directly into customer operations.
Conclusion
ZoomInfo's fourth-quarter performance demonstrated its ability to deliver consistent profitability and strong cash generation while slightly outperforming revenue and profit expectations. The market's negative reaction, however, underscores the current investor sentiment in the software sector, where future growth expectations are heavily scrutinized. The company's guidance for 2026, which points to steady but slow growth, coupled with its powerful cash flow and commitment to shareholder returns, paints a picture of a maturing business optimizing for efficiency and capital return rather than rapid expansion.
For a detailed look at upcoming earnings dates and analyst estimates, you can review more information here.
Disclaimer: This article is for informational purposes only and does not constitute financial advice, nor does it recommend buying or selling any securities. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.
