ZoomInfo Stock Plunges Despite Q3 Beat As Traders Fret Over Shrinking Revenue: Retail Remains Wary

ZoomInfo Technologies, Inc. ($ZI), a B2B platform that offers a commercial search-engine for companies and businesses, reported third-quarter results that exceeded expectations and issued fairly in-line guidance for the fourth quarter and the full year.

Vancouver, Washington-based ZoomInfo reported third-quarter non-GAAP earnings per share of $0.28, up from $0.26 earned a year-ago. The bottom-line result exceeded the consensus estimate of $0.22.

Revenue, however, fell 3% year-over-year (YoY) to $303.6 million and yet surpassed the $299.36-million consensus estimate.

Henry Schuck, ZoomInfo founder and CEO, said, "We continued our move up-market, fueled by ZoomInfo Copilot and Operations growth, and we delivered strong financial results while improving the quality of new customers that we are bringing in."

"The entire company is more focused than ever on delighting both our new and existing users via robust product innovation and customer obsession."

The company noted that net revenue retention was stable for the third consecutive quarter, as it grew its $100,000 and million-dollar customer cohorts yet again. 

Looking ahead, the company narrowed its full-year revenue guidance from $1.19 billion-$1.205 billion to $1.201 billion-$1.204 billion. It raised its non-GAAP EPS guidance from $0.86-$0.88 to $0.92-$0.93. 

Analysts, on average, expect revenue of $1.2 billion and non-GAAP EPS of $0.90.

ZoomInfo guided to fourth-quarter revenue of $296 million-$299 million and non-GAAP EPS of $0.22-$0.23. This compares to the consensus estimates of $296.91 million and $0.23, respectively.

Following the results, Mizuho raised the price target for the stock from $9 to $11 while maintaining a Neutral rating, the Fly reported. The firm described the quarter as "healthy," and also noted that the management sees small business write-offs abating. 

The company was seeing traction with its artificial intelligence offerings and the CoPilot solution, especially with mid-market and enterprise segments, the firm added.

Retailers on the Stocktwits platform were mixed about the stock. One of them said the company is struggling in one of the best macro environments in history.

Another termed the stock as a “catch-up play” and noted that the short interest was high.

In premarket trading as of 8:40 am ET, the stock was down a steep 12.84% to $11.40.

Read Next: CAVA Stock Soars As Tasty Q3 Results Earn Wall Street Cheers, But Retail Appetite Mixed

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