Skip to content
    GTM
    Earnings call· Jun 2026(Q2 FY26)

    ZoomInfo Technologies Q2 FY26 earnings call GTM

    Aug 5, 2026 Source

    Executive summary

    ZoomInfo Q2 FY26 — Exceeds Guidance, Focuses on Profitability and AI-Driven Solutions

    ZoomInfo exceeded its Q2 FY26 guidance, demonstrating continued focus on profitability and free cash flow generation amidst a challenging software market. The company is strategically shifting towards enterprise-grade, AI-driven solutions and flexible consumption models, aiming for durable long-term growth while maintaining a conservative financial posture. Capital allocation prioritizes shareholder returns and debt reduction, with a significant restructuring underway to enhance efficiency.

    Highlights

    5

    • Exceeded Q2 guidance, with GAAP revenue reaching $310 million, up 1.2% year-over-year.

    • Adjusted operating income margin improved to 35%, up 130 basis points year-over-year.

    • Unlevered free cash flow increased 7% year-over-year to $107 million.

    • Operations business (non-seat based) continued strong performance with 20% ACV growth year-over-year.

    • Successfully repurchased $28 million in stock and retired $58.5 million of senior notes at a discount, reducing future interest payments by $2.3 million annually.

    Concerns

    5

    • Net revenue retention declined to 89% in Q2, a step down from 90% in the prior three quarters.

    • Downmarket ACV declined 12% year-over-year, with resources intentionally shifted away from this segment.

    • Customers with at least $100,000 in ACV decreased by 9 sequentially, concentrated in the software vertical.

    • Incurred a non-cash goodwill impairment charge of $651 million due to market capitalization decline.

    • Incurred a $35 million charge for severance and employee benefits related to restructuring, with headcount reduced by 350 sequentially.

    Guidance & targets

    8
    CategoryTargetConfidence
    GAAP Revenue
    $298 million to $301 million
    high materiality
    High
    Adjusted Operating Income
    $113 million to $115 million
    high materiality
    High
    Non-GAAP Net Income per Share
    $0.28 to $0.29
    high materiality
    High
    GAAP Revenue
    $1.207 billion to $1.217 billion
    high materiality
    High
    Adjusted Operating Income
    $446 million to $451 million
    high materiality
    High
    Non-GAAP Net Income per Share
    $1.12 to $1.13
    high materiality
    High
    Unlevered Free Cash Flow
    $403 million to $423 million
    high materiality
    High
    Adjusted Levered Free Cash Flow per Share
    at least $1.25
    high materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Upmarket
    Upmarket mix of ACV is now 76%. Upmarket ACV grew 3% year-over-year. The sequential decline in $100k+ ACV customers was concentrated in software, while non-software cohorts posted solid growth.
    ACV Mix: 76%Customers with $100k+ ACV: 1,891 (YoY increase of 9, sequential decrease of 9)ACV from $1M+ customer cohort: up 16% YoY
    		—3%——
    Downmarket
    Downmarket ACV declined 12% year-over-year in Q2. The company intentionally reduced sales resources in this segment, shifting to a PLG-led motion. Gross retention improvements helped mitigate further decline.
    		—-12%——
    Operations Business
    The operations business, primarily data and not tied to seats, continued to perform well, delivering 20% ACV growth year-over-year.
    		—20%——

    Operational metrics

    18
    Adjusted Operating Income
    $110 millionup 5% year-over-year
    Q2 FY26

    Adjusted operating income and margin for the quarter.

    Interest Paid in Cash
    $10 million
    Q2 FY26

    Cash interest payments made during the quarter.

    Goodwill Impairment Charge
    $651 million
    Q2 FY26

    Non-cash goodwill impairment charge primarily driven by market capitalization decline. Does not affect cash, taxes, liquidity, debt covenants, or non-GAAP results.

    Restructuring Charge
    $35 million
    Q2 FY26

    Charge incurred for the restructuring program announced in May.

    Gain on Debt Extinguishment
    $11 million
    Q2 FY26

    Gain recognized from retiring senior notes at a discount to par.

    Future Cash Interest Payments Reduction
    $2.3 million
    per year

    Expected annual reduction in interest payments due to lower outstanding principal after debt retirement.

    GAAP Stock-Based Compensation Expense
    $25.7 milliondown 13% year-over-year
    Q2 FY26

    GAAP stock-based compensation expense for the quarter.

    Cash, Cash Equivalents and Investments
    $151 million
    end of Q2 FY26

    Balance of cash and investments at quarter-end.

    Gross Debt
    $1.27 billion
    end of Q2 FY26

    Total gross debt at quarter-end.

    Net Leverage Ratio
    2.3xvs 2.4x as of Q1
    trailing 12 months

    Net leverage ratio at quarter-end, showing improvement from the prior quarter.

    Unearned Revenue
    $465 million
    end of Q2 FY26

    Unearned revenue balance at quarter-end.

    Remaining Performance Obligations (RPO)
    $1.17 billion
    end of Q2 FY26

    Total remaining performance obligations at quarter-end.

    GAAP Revenue
    $310 millionup 1.2% year-over-year
    Q2 FY26

    Consolidated GAAP revenue for the quarter.

    Net Revenue Retention
    89%step down from 90% in prior 3 quarters
    Q2 FY26

    Net revenue retention for the quarter, impacted by software challenges and longer sales cycles.

    Gross Retention
    —held in well
    Q2 FY26

    Gross retention remained strong, particularly in non-software verticals, benefiting from more selective customer onboarding in downmarket.

    Customers with at least $100,000 ACV
    1,891year-over-year increase of 9 customers, decreasing by 9 sequentially
    Q2 FY26

    Count of large ACV customers, with sequential decline concentrated in software.

    Weighted Average Diluted Shares Outstanding
    314 million
    Q2 FY26

    Used for calculating non-GAAP diluted EPS.

    Non-GAAP Share Count Exiting Quarter
    316 million
    end of Q2 FY26

    Non-GAAP share count at the end of the quarter.

    Industry KPIs

    6
    MetricValueDetails
    Family dap dau—
    CAPEX compute commitments—
    Advertising revenue by segment—
    Share buyback capital returned$28 millionUSD
    Ai feature adoption monetization—
    Custom silicon ai infrastructure—

    Product announcements

    3
    ProductTypeDetails
    GTM.AIlaunch
    Flexible Pricing and Packagingupdate
    GTM Studio and Agent Teamsmilestone

    Deals & partnerships

    7
    Preeminent software customerLargest ACV deal ever, multiyear renewal and expansionmultiyear

    Closed the largest ACV deal ever, a multiyear renewal with a preeminent software customer. This deal expanded their ZoomInfo implementation to include both data and seats, integrating ZoomInfo's data natively inside their headless experience.

    LegoraUpmarket opportunity closed

    Legora, an Agentic operating system for legal work, was mentioned as an upmarket opportunity closed during the quarter.

    CohereUpmarket opportunity closed

    Cohere, a leading enterprise AI company developing foundation models, was mentioned as an upmarket opportunity closed during the quarter.

    Bank of MontrealUpmarket opportunity closed

    Bank of Montreal, one of North America's largest financial institutions, was mentioned as an upmarket opportunity closed during the quarter.

    Korn FerryUpmarket opportunity closed

    Korn Ferry, a global organizational consulting firm, was mentioned as an upmarket opportunity closed during the quarter.

    Leading financial services company (>$2T assets)Expansion beyond existing relationship

    Expanded an existing relationship with a leading financial services company (with over $2 trillion in assets) from their commercial banking department into their investment banking division. The expansion was attributed to the strength of the relationship and consistent satisfaction with ZoomInfo's data and platform.

    Leading cloud connectivity companyStrengthened partnership after vendor review

    After a data breach, a leading cloud connectivity company conducted a full vendor review. Due to ZoomInfo's investments in data governance, compliance, and security, they emerged as a stronger and more trusted partner.

    Risks & headwinds

    6
    Challenged Software VerticalNear-term

    Sequential decrease of 9 customers with $100k+ ACV concentrated in software; headwinds in the lower end of upmarket.

    Mitigation: Maintaining a conservative posture in guidance; focusing on non-software verticals which show consistent performance.

    Longer Sales CyclesOngoing

    Persisting trend, impacting upsells and net revenue retention.

    Mitigation: Introducing flexible pricing and packaging options to help improve retention longer term.

    Downmarket Business DeclineOngoing

    Downmarket ACV declined 12% year-over-year.

    Mitigation: Intentionally making downmarket a smaller piece of the overall business by reducing sales resources and shifting to a PLG-led motion; gross retention improvements are helping.

    Net Revenue Retention DeclineQ2 FY26

    89% in Q2, down from 90% in prior three quarters.

    Mitigation: Flexible pricing and packaging options are expected to provide retention improvements longer term; gross retention held well, supported by non-software improvements.

    Goodwill ImpairmentQ2 FY26

    Non-cash charge of $651 million.

    Mitigation: This charge does not affect cash position, taxes payable, liquidity, debt covenants, or non-GAAP results.

    Restructuring Costs and Headcount ReductionQ2 FY26, with remaining charges over next 6 months

    $35 million charge for severance and benefits; headcount lower by 350 sequentially, down 15% YoY.

    Mitigation: Aimed at driving efficiencies across the organization and prioritizing profitability and free cash flow generation; expected to lead to a more efficient business.

    What to watch in Q3 FY26

    5

    Impact of Flexible Pricing & Packaging

    Q3 FY26 and into 2027
    CurrentInitial rollout for new business at end of Q3 FY26; no significant revenue impact expected in Q3.
    TargetObserve impact on new business and initial customer migrations, particularly on retention and growth.

    Why it matters

    This strategic shift is central to the company's long-term growth and retention strategy, moving from a per-seat to a consumption-based model.

    When we think about the updated pricing and packaging and then some of the product changes, we'll largely be rolling that out starting with new business at the end of Q3 and then approaching the customer base kind of opportunistically and when those customers are ready to migrate later this year and into 2027. So we would not expect significant impact to revenue from that in Q3.

    Q&A highlights

    5

    What is driving the lower-than-expected deceleration in the second half and the confidence to raise full-year guidance?

    The raised guidance reflects the overperformance in Q2. The company is maintaining conservative assumptions for downmarket growth and software headwinds, rolling the Q2 overperformance into the back half of the year without baking in significant upside from new products or GTM.AI.

    “So really, we're just taking overperformance in Q2, maintaining kind of a consistent thought pattern as we develop that guidance and rolling that over into the back half of the year.”

    asked by Jaiden Patel · answered by Michael O'Brien

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Shift to AI-Driven Solutions and Flexible Pricing

    ZoomInfo is undergoing a significant strategic transition, focusing on building innovative enterprise-grade solutions that leverage AI. This includes the launch of GTM.AI, a headless GTM context layer for API and other connectors, enabling seamless embedding of data into Agentic workflows. The company is also testing new flexible pricing and packaging models based on pre-bought consumption, moving away from the traditional per-seat model, with initial rollout for new business expected at the end of Q3 FY26.

    02

    Upmarket Focus and Customer Expansion

    The company's strategy emphasizes an upmarket shift, with 76% of its business now derived from this segment, contributing to a healthier and more resilient customer base. ZoomInfo reported 1,891 customers with at least $100,000 in ACV, a year-over-year increase of 9. ACV from the $1 million customer cohort grew 16%, indicating strong expansion among its largest clients, including a multiyear renewal with a preeminent software customer and new deals with Legora, Cohere, Bank of Montreal, and Korn Ferry.

    03

    Profitability and Free Cash Flow Generation

    ZoomInfo continues to prioritize profitability and cash flow, achieving an adjusted operating income margin of 35%, up 130 basis points year-over-year, and $107 million in unlevered free cash flow, a 7% increase year-over-year. The company expects to run rate at least $1.25 of adjusted levered free cash flow per share as it enters 2027, driven by cost discipline and capital structure opportunities. GAAP stock-based compensation expense decreased 13% year-over-year to $25.7 million, representing 8% of revenue.

    04

    Capital Allocation and Debt Management

    In Q2, ZoomInfo actively managed its capital structure, repurchasing 6.3 million shares for $28 million at an average price of $4.51 per share. The company also retired $58.5 million in aggregate principal of senior notes for $48 million, resulting in an $11 million gain on debt extinguishment and an expected annual reduction of $2.3 million in future cash interest payments. The net leverage ratio improved to 2.3x trailing 12 months adjusted EBITDA, down from 2.4x in Q1.

    05

    Workforce Restructuring and Efficiency Gains

    The company incurred a $35 million charge for severance and employee benefits as part of a restructuring program announced in May. Headcount was reduced by approximately 350 people sequentially and 15% year-over-year, with further reductions expected. This initiative aims to enhance operational efficiency and contribute to the company's path back to sustained growth, with the remaining charges and cash outflows associated with the restructuring expected over the next six months.

    06

    Competitive Landscape and Product Differentiation

    Management acknowledges a noisy competitive environment but expresses confidence in ZoomInfo's differentiated product offerings, particularly GTM Studio and Agent Teams. These solutions enable customers to build unique audiences with specific data attributes, integrate with 300 data sources, and leverage AI agents. The company emphasizes its proprietary data assets, which allow for meaningfully lower pricing for enrichment and Agentic workflows compared to competitors, aiming to be at the center of all go-to-market work.

    AI-generated summary of the company’s earnings call. Not investment advice.