ZoomInfo Technologies Inc. Discusses Q1 2025 Performance and Strategic Focus on AI and Upmarket Growth at JPMorgan Global Technology Conference

Key Takeaways

TL;DR: ZoomInfo (GTM) highlighted +3% YoY upmarket growth (71% of rev), expects mid-SD upmarket growth in 2025, and stabilizing software vertical exposure (~31%). AI-driven Copilot and new GTM Studio target expanded seat penetration (account managers, execs) and Data-as-a-Service (fastest-growing segment). Mgmt signaled continued buybacks and bullish LT outlook amid disciplined guidance.

1. Business Performance & Strategy

• Upmarket vs. Downmarket Dynamics:
  • Upmarket (71% of rev): Accelerating to +3% YoY growth in Q1 (vs. +2% in Q4), guided to mid-SD growth in 2025. Higher retention, profitability, and LT value driver.
  • Downmarket: Declined 10% YoY in Q1 (vs. -8% in Q4) due to stricter qualification, reducing ~$2M/month in high-risk deals. Expect recovery in upmarket-weighted Q2/Q4.
• Software Vertical Stabilization:
  • Mix at 31% (floor), with 4 straight quarters of retention improvement. Expected to stabilize in mid-30s as growth resumes.
• Revenue Diversification:
  • 70% non-software exposure (insurance, retail, manufacturing), with Data-as-a-Service (+AI tools) as key growth lever.

2. Product & AI Innovation

• GTM Studio & Copilot:
  • GTM Studio (launched May 2025): Unifies first-party CRM data + third-party signals to orchestrate go-to-market strategies, targeting rev ops/sales leadership.
  • Copilot: Expanded seat penetration beyond SDRs to account managers/execs (3x SDR TAM), driving 55%+ Fortune 1000 adoption. Q1 was "best enterprise quarter" for Copilot.
• AI Differentiation:
  • GenAI deeply embedded in data cleansing, prioritization, and workflow automation. Competitors lack third-party intent signals (e.g., earnings call insights) critical for accurate AI execution.
  • R&D focus: ~12% of rev (~13–14% in 2025) allocated to GenAI, data science, NLP.

3. Macro & Competitive Positioning

• Resilience to Layoffs: Despite software industry cuts (e.g., Microsoft -3%), ZoomInfo’s upmarket focus + non-seat DaaS growth mitigates exposure.
• AI Adoption Tailwinds: Enterprise demand rising for "perfected" data layers (CRM + external signals) to enable AI agents. Prioritizing "AI certainty" over macro uncertainty.

4. Capital Allocation

• Share Buybacks: Mgmt reiterated aggressive buybacks, citing "best-priced stock" view. Levered FCF at +$1B/year supports ongoing repurchases.

5. Guidance & Sentiment

• Conservative Guidance: Embedded assumptions for macro uncertainty, but confident in meeting/exceeding targets. Monitoring oppt'y-to-close rates for demand shifts.
• Upmarket net retention improved to 87% (vs. 85% trough in Q2 2024), expected to climb further.