ZoomInfo Technologies (NASDAQ:ZI) shares climbed ~23% premarket on Tuesday after the infrastructure software firm reported higher-than-expected fourth quarter earnings.
The company generated adjusted operating income of $126.5M, representing a margin of 40%. Adjusted net income per share came to $0.26, surpassing Wall Street estimates.
Revenue of $316.4M grew 5% year-over-year, while annualized revenue based on 92-days in Q4 was $1.255B, up 0.8% sequentially.
“We ended the year strong, with better-than-expected sequential revenue growth, while we delivered another year of profitability and free cash flow,” said Henry Schuck, ZoomInfo founder and CEO.
ZoomInfo (ZI) ended the year with $529M in cash, cash equivalents and short-term investments, and carried approximately $1.24B in gross debt, all of which has fixed or hedged interest rates. For full-year 2023, revenue grew 13% Y/Y to $1.24B. Adjusted operating income was $498.6M, representing a margin of 40%, and unlevered free cash flow was $463.5M.
Looking ahead, the company estimates revenue of $1.26B-$1.28B (consensus: $1.27B) and adjusted net income per share of $0.99-$1.01 (consensus: $0.99) for full-year 2024.
The guidance assumes that net revenue retention will not meaningfully improve in 2024. Net revenue retention was 87% last year, with mid-market companies, particularly those in software and technology space, being most unchallenged.
“The outsized down sells from customers most impacted by the economic environment exceeded the net upsell that we generated from other customers in 2023, creating a drag on net retention,” the management noted in the post-earnings call.
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