Cloud Stocks: ZoomInfo Lists Despite COVID-19

Not many companies would have chosen this time to go public. But go-to-market intelligence provider ZoomInfo (Nasdaq: ZI) had listed earlier this year and despite the current conditions has seen its stock perform well so far.

ZoomInfo’s Offerings

Vancouver, Washington-based ZoomInfo was originally set up as DiscoverOrg in 2007 by Henry Schuck and Kirk Brown who wanted to provide companies with access to marketing analytics on a SaaS-based model. ZoomInfo’s platform connects sales and marketing professionals with business information to help them identify, connect, and engage with qualified prospects.

In 2019, DiscoverOrg acquired Zoom Information and the entire organization was rebranded as ZoomInfo. Prior to the acquisition, Zoom Information had raised a modest $7 million in funding from investors including Vulcan Capital, Flagship Pioneering, Commonwealth Capital Ventures, Venrock, and Ascent Venture Partners.

ZoomInfo’s cloud-based platform is a leading go-to-market intelligence platform for sales and marketing teams. It’s “360-degree view” provides these teams with the ability to shorten sales cycles and increase win rates by delivering the right message, to the right person, at the right time. Its AI and ML capabilities help process billions of raw data events and refine them into unique and actionable insights.

Its platform continuously collects, enriches, curates, and verifies the data from millions of proprietary and public sources, including its contributory network, which captures data on approximately 50 million contact record events daily from its free Community Edition users and many of its paying customers. More than 202,000 paid users use ZoomInfo’s platform to identify the target customers and the right decision makers to drive sales.

ZoomInfo continues to upgrade its product offerings. Recently it announced that it strengthened its security and privacy capabilities by completing its International Organization for Standardization (ISO) 27001 and Service Organization Control (SOC) 2 Type II audits for selected services and global controls of the ZoomInfo platform. It earned its ISO 27001 certification for meeting the requirements of establishing, maintaining, and continually improving its information security management system.

In view of the current pandemic, it also announced the integration of the Paycheck Protection Program (PPP) loan data into its go-to-market intelligence platform. The data is available at the company level about organizations that have received a PPP loan as part of the COVID-19 relief package. It will allow customers to leverage this data to easily identify potential new customers that are more likely to have liquidity to spend on new products or services.

ZoomInfo’s Financials

ZoomInfo has recorded stellar growth in the past few years. When I had met with DiscoverOrg’s CEO, back in 2017, the company had just raised private equity financing and was expecting to grow to $100 million in annual revenues.

In 2018, DiscoverOrg had generated revenues of $144.3 million and Zoom Information had generated revenues of $72.5 million. In 2019, the combined entities had generated revenues of $303 million. The two entities had reported a net loss of $56.1 million in 2018, which grew to $77.2 million in 2019.

Recently, ZoomInfo announced its second quarter results. Revenues grew 62% to $110.9 million, surpassing the market’s forecast of $105.6 million. ZoomInfo reported an EPS of $0.07, again beating analysts’ estimate of $0.05.

Among key metrics, ZoomInfo now has more than 650 customers and $10,000 or greater in annual contract value.

ZoomInfo expects revenues in between $116-$118 million for the quarter, compared with the market’s expectations at $112.7 million. EPS is forecast to be $0.08-$0.09, compared with market expectations at $0.08 a share. ZoomInfo expected revenues of $451-$455 million for the year, with EPS of $0.29-$0.30, compared with previous expectations of $441 million and an EPS of $0.28.

ZoomInfo currently does not have an active PaaS strategy. It leverages the API route and through its Partner API allows companies to integrate ZoomInfo functionality and data into their CRM, Marketing Automation and other cloud-based data tools. The ZoomInfo Partner API is a set of web services that provide access to information via HTTP requests and consists of several query types that provide search functionality and easy access to data for people and companies to help identify and qualify prospects for your B2B marketing campaigns and sales activities.

Its stock is currently trading at $38.03 with a market capitalization of $14.3 billion. It was trading at a 52-week low of $32.10 in early August of this year. ZoomInfo went public in June when it raised $935 million at a valuation of $8.2 billion. It had priced its stock at $21 apiece. Soon after listing, the stock had soared to a high of $64.40. In its former avatar, DiscoverOrg had bootstrapped its way to success prior to raising private equity and debt funding.

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This segment is a part in the series : Cloud Stocks