Executive Summary / Key Takeaways

• ZoomInfo is strategically transforming into an AI-powered Go-To-Market (GTM) Intelligence platform, leveraging its proprietary data moat to drive reaccelerated growth and enhance shareholder value.
• The company's shift upmarket is yielding significant results, with upmarket ACV now representing 73% of total ACV and growing 6% year-over-year in Q3 2025, alongside a net revenue retention rate of 90%, the highest since Q2 2023.
• Innovation in AI-driven products like ZoomInfo Copilot and the newly launched GTM Studio is expanding use cases beyond traditional sales development, attracting new customers, and demonstrating measurable ROI for users.
• Financially, ZoomInfo delivered strong Q3 2025 results, with GAAP revenue of $318 million (up 5% YoY) and an adjusted operating income margin of 37%, returning the company to the Rule of 40 for the first time in six quarters.
• Management is committed to aggressive share repurchases, having used 116% of unlevered free cash generated since early 2024 to retire shares, underscoring confidence in the company's intrinsic value and future free cash flow per share growth.

The AI Imperative: ZoomInfo's Evolution into a Go-To-Market Powerhouse

ZoomInfo Technologies Inc. (NASDAQ:GTM) is at the forefront of a profound transformation in how businesses approach sales, marketing, operations, and recruiting. Founded in 2007, the company has evolved from a provider of B2B contact and company information into a comprehensive Go-To-Market Intelligence platform. This strategic pivot, underscored by its recent change in trading symbol to GTM in Q1 2025, reflects a deep commitment to unifying fragmented go-to-market data and leveraging artificial intelligence to drive tangible revenue outcomes for its customers.

The industry landscape is rapidly shifting, with the proliferation of AI and Large Language Models (LLMs) fundamentally altering how companies identify and engage prospects. While LLMs can process publicly available information, the true differentiator in go-to-market lies in proprietary, unique data not found on the public web. ZoomInfo's core strategy is to be the indispensable data foundation for any AI-driven go-to-market initiative, providing the "context" necessary for AI to be effective. This involves moving beyond mere data provision to actively powering execution and outcomes for revenue teams.

Technological Edge: The AI-Ready Intelligence and Orchestration Layers

ZoomInfo's competitive moat is built upon its multi-layered platform, starting with its Intelligence Layer. This foundation comprises best-in-class, curated data from first- and third-party sources, encompassing billions of data points on companies and contacts, including intent, hierarchy, location, and financial information. This unique data asset allows customers to identify highly specific targets, such as every non-franchised quick-service restaurant in a certain ZIP code or companies with a minimum number of vehicles in their fleet, which is crucial for standing out in competitive markets.

The Orchestration Layer integrates and enriches these diverse data sources, assigning and routing data, leads, and insights to the appropriate personnel. It connects seamlessly with major CRM systems, enabling sales operations professionals to ingest, match, enrich, and connect data feeds into multiple systems. This creates a continuously updated dataset that powers automated business workflows.

The Engagement Layer then allows sales, marketing, operations, and recruiting professionals to put these data-driven insights into action. This includes multi-touch and multi-channel sales engagement, web meeting recording, transcription, insight generation, and coaching. Marketers leverage this layer for account-based marketing (ABM), advertising, and onsite conversion optimization, including chat functionality.

Central to ZoomInfo's technological differentiation is its AI and Machine Learning (ML) powered engine. This engine gathers data from millions of sources, standardizes, matches to entities, verifies, cleans, and applies processed data to companies and people at scale. This capability ensures high-quality intelligence, a critical advantage in an era where AI solutions are only as good as the data they are trained on.

Innovation Driving Outcomes: Copilot and GTM Studio

Recent product innovations highlight ZoomInfo's commitment to AI-first solutions. ZoomInfo Copilot, launched in 2024, has rapidly exceeded expectations, accumulating over $150 million in ACV by Q4 2024. Copilot acts as an AI-powered execution engine, providing frontline go-to-market professionals with a "single pane of glass" to manage their daily workflows. Its tangible benefits are significant: customers report 25% of their total pipeline directly attributed to Copilot-identified opportunities, a 58% increase in prospect engagement rates, a 62% improvement in email response rates, and productivity gains of eight hours per week per user.

Copilot's success extends beyond traditional Sales Development Representative (SDR) prospecting, expanding into Account Executive (AE) and Account Manager (AM) use cases, a user base three times larger than SDRs. These users are now as active on the platform as SDRs, leveraging AI for automated account planning, account expansion, and deal acceleration. The company has also enhanced its intent solution with persona-level website identification, leading to a 15% lift in action rates, and developed AI agents that automate seller workflows, creating dynamic account plans and identifying deal risks.

Further solidifying its platform strategy, ZoomInfo launched Go-to-Market Studio (GTM Studio) in Q1 2025 and GTM Workspace in Q3 2025. GTM Studio is a data management platform designed for revenue leaders and operators to architect go-to-market strategies. It unifies disparate data—CRM, call transcripts, email, ZoomInfo's proprietary data, and even product usage insights—into a dynamic, AI-ready workspace. This addresses a critical customer need to bridge the gap between strategic ideas and execution, as historically, such initiatives were often trapped in long queues with IT and data science teams. GTM Workspace then enables frontline sellers to directly execute campaigns derived from GTM Studio.

The company's Operations suite is its fastest-growing product, accelerating even as it scales, demonstrating growth of over 20% year-over-year in Q3 2025. This segment, which includes data-as-a-service solutions, is proving mission-critical for any AI-driven initiative touching go-to-market, with new logos up 24% year-over-year and average ACV per customer up approximately 10% year-over-year in Q1 2025.

Strategic Shift and Financial Performance

ZoomInfo's strategic pivot towards the upmarket segment (companies with over 100 employees) is a core driver of its improving financial performance. This segment now represents 73% of total ACV, an increase of 10 percentage points in two years, and grew 6% year-over-year in Q3 2025. The net revenue retention (NRR) rate improved to 90% as of September 30, 2025, marking the fifth consecutive quarter of improvement and the highest level since Q2 2023. In-period NRR for upmarket customers is notably over 100%. The number of customers with over $100,000 in ACV reached 1,887, a 4% year-over-year increase, while ACV for the $1 million cohort accelerated by over 30% year-over-year.

Conversely, the downmarket business (fewer than 100 employees) declined 10% year-over-year in Q3 2025, a sequential improvement from the prior quarter's 11% decline. The company has actively managed this segment by deploying a new business risk model in Q2 2024, leading to a 45% reduction in invoice write-offs and a shift towards requiring upfront prepayments for higher-risk small businesses. This intentional strategy, while creating a near-term headwind to growth optics, is expected to result in a healthier, albeit smaller, downmarket business and improve overall revenue quality.

For the third quarter ended September 30, 2025, ZoomInfo reported GAAP revenue of $318 million, an increase of 5% year-over-year. Adjusted operating income reached $118 million, representing a robust 37% margin, which allowed the company to return to the "Rule of 40" for the first time in six quarters.

Net income for the quarter was $38.7 million, a significant increase from $23.8 million in the prior year period. For the nine months ended September 30, 2025, revenue was $930.4 million, and net income was $89.5 million.

Operating expenses saw a decrease, primarily due to lower lease impairment and abandonment charges in the comparative period and reduced equity-based compensation. Cost of revenue, however, increased by 9% due to higher hosting and infrastructure expenses and increased depreciation on internally developed capitalized software, reflecting investments in its core platform and AI capabilities.

Competitive Landscape and Differentiated Moats

ZoomInfo operates in a competitive landscape with both direct and indirect rivals. Direct competitors include established players like Salesforce (CRM) with its comprehensive CRM suite, Microsoft (MSFT) through LinkedIn Sales Navigator, HubSpot (HUBS) with its inbound marketing and CRM focus, and Dun & Bradstreet (DNB) specializing in global business data.

ZoomInfo's competitive advantages, or "moats," are primarily its proprietary data aggregation, network effects, and specialized AI-driven platform. The company's data quality and accuracy are a significant differentiator; it demonstrated a 25% improvement in coverage rates for a large company compared to an existing provider, with superior coverage in SMB and startup spaces. This data advantage is increasingly displacing legacy vendors providing stale and low-quality data.

In the context of AI, ZoomInfo's B2B data asset is a "necessary component" for successful go-to-market AI agents. Relying solely on internal CRM or data warehouse data for AI initiatives often leads to "pretty bad AI solutions" because such data is often static, stale, and lacks the dynamic, comprehensive market picture provided by ZoomInfo's constantly updated signals. This positions ZoomInfo uniquely against broader CRM providers like Salesforce, whose AI tools, while powerful, may lack the specialized, dynamic third-party data foundation that ZoomInfo offers for go-to-market specific AI.

Compared to HubSpot, which excels in user-friendly interfaces and affordability for smaller clients, ZoomInfo offers greater depth in enterprise-level data analytics and predictive tools. Against Dun & Bradstreet, ZoomInfo's real-time, predictive tools and workflow integration provide a more dynamic solution compared to Dun & Bradstreet's more traditional data repository approach. The company's product market fit and differentiation are "meaningfully stronger upmarket," allowing it to compete effectively against larger, more diversified players.

Liquidity, Capital Allocation, and Outlook

ZoomInfo maintains a solid liquidity position. As of September 30, 2025, the company held $135 million in cash, cash equivalents, and investments, with $1.3 billion in gross debt. Its net leverage ratio stood at 2.6x trailing 12 months adjusted EBITDA and 2.4x trailing 12 months cash EBITDA. Management believes its cash flows from operations and existing capital resources will be adequate for its needs for at least the next 12 months and the foreseeable future.

The company is committed to aggressive capital allocation strategies, particularly through share repurchases. In Q3 2025, ZoomInfo repurchased 8.3 million shares for $87 million. Since the start of 2024, 116% of unlevered free cash generated has been used for share repurchases, reducing weighted average shares outstanding by approximately 80 million over two years. This reflects management's conviction in the "wide gap" between ZoomInfo's intrinsic value and its current market value, viewing repurchases as a high-return use of capital.

For the full year 2025, ZoomInfo has raised its GAAP revenue guidance to a range of $1.237 billion to $1.240 billion, representing positive 2% annual growth at the midpoint. Adjusted operating income is projected between $440 million and $443 million, implying a 36% margin at the midpoint. Non-GAAP net income per share is expected to be $1.04 to $1.06, with unlevered free cash flow in the range of $424 million to $444 million.

Management anticipates cost of service to slightly increase in the near term due to rising AI consumption costs and customer onboarding for new offerings. Research and development expenses are expected to modestly increase short-term as the company invests in new features, then modestly decrease long-term due to efficiencies.

The company is committed to delivering revenue growth, margin expansion, and aggressive share repurchases in 2026, supporting an expectation of accelerating free cash flow per share growth relative to 2025.

Risks and Challenges

Despite the positive momentum, ZoomInfo faces several risks. The rapidly evolving AI market makes demand forecasting challenging. Changes in data privacy laws and regulations could impact the company's ability to gather and provide information. The company carries a substantial amount of debt, which could affect its financial flexibility. Geopolitical and macroeconomic uncertainties, including ongoing global hostilities, may disrupt business operations.

The strategic shift upmarket also introduces seasonality, making year-over-year growth a more critical metric than sequential growth, which is expected to fluctuate. The downmarket business remains more reactive to macro slowdowns, and while the transition to a healthier segment is beneficial long-term, it creates a near-term headwind to reported growth. Management has explicitly layered an "incremental amount of caution" into its guidance due to the uncertain economic environment, even without observing direct impacts on customer behavior.

Conclusion

ZoomInfo is undergoing a significant transformation, repositioning itself as the essential AI-powered Go-To-Market Intelligence platform. Its proprietary data assets, combined with innovative solutions like Copilot and GTM Studio, are proving critical for businesses seeking to leverage AI for revenue acceleration. The strategic focus on the higher-margin upmarket segment, coupled with disciplined management of the downmarket business, is yielding tangible financial improvements, as evidenced by reaccelerated NRR, strong customer growth in key cohorts, and a return to the Rule of 40.

While macroeconomic uncertainties and competitive pressures persist, ZoomInfo's technological differentiation in providing a robust data foundation for AI, alongside its commitment to shareholder value through aggressive share repurchases, positions the company for continued growth and enhanced free cash flow per share in the coming years. The company's ability to execute on its AI roadmap and further penetrate the vast enterprise market will be key determinants of its long-term success.