ZoomInfo Technologies (NASDAQ:GTM) saw its shares drop sharply in premarket trading on Tuesday, despite reporting fourth-quarter results that exceeded expectations on most headline metrics.
The stock was down more than 10% by 05:53 ET.
Revenue for the quarter increased 3% year on year to $319.1 million, topping the consensus estimate of $309.3 million. Non-GAAP earnings per share came in at $0.32, ahead of analysts’ expectations of $0.28. Non-GAAP operating margin was 38.4%, broadly in line with forecasts, while operating cash flow of $143.5 million and unlevered free cash flow of $135.2 million both beat consensus estimates.
However, some underlying indicators disappointed investors. Calculated billings declined 2% year on year to $277.6 million, coming in below expectations. The number of customers generating more than $100,000 in annual contract value rose 3% to 1,921, while current remaining performance obligations (cRPOs) increased 4% to $887.4 million.
Looking ahead, ZoomInfo forecast first-quarter 2026 revenue of $306 million to $309 million, implying 1% growth at the midpoint, with non-GAAP EPS expected between $0.25 and $0.27. For the full year 2026, the company guided to revenue of $1.247 billion to $1.267 billion, also indicating around 1% growth at the midpoint, and non-GAAP EPS of $1.10 to $1.12.
Following the earnings release, Citizens downgraded ZoomInfo to Market Underperform from Market Perform and set a price target of $6. Analysts led by Patrick Walravens pointed to “increasing competition” from vendors such as Clay, Gong and Salesforce, concerns over a “persistent 90% net retention rate,” and uncertainty surrounding the company’s new $1 billion share repurchase authorization, given its roughly $1.3 billion in debt and about $180 million in cash.