ZoomInfo (GTM) Q4 2025 earnings review
Beat Across the Board, But FY26 Guidance Says Growth Has a Speed Limit
ZoomInfo closed 2025 on a high note, beating Q4 guidance on every metric: revenue of $319M (+3% YoY), AOI margin of 38% (Rule of 40 again), and unlevered free cash flow of $135M. Upmarket growth hit 6%, tripling the year-ago rate. But the FY26 revenue guide of $1.247-$1.267B implies just ~1% growth at the midpoint—a deceleration from the 3% delivered in 2025—with zero revenue contribution assumed from new products like GTM Studio. Management is signaling conviction via a $1B buyback authorization (~50% of market cap) rather than through a growth-oriented guide.
🐂 Bull Case
Upmarket ACV grew 6% in Q4—triple the rate a year ago—and now represents 74% of the business. The $100K+ customer cohort hit 1,921 (a record), and million-dollar-plus customers are at an all-time high with double-digit ACV growth. Over 50% of ACV is on long-term contracts, up 5 points in 2025. This shift structurally improves revenue quality, margin profile, and durability.
Copilot now exceeds 20% of total ACV after more than doubling in 2025, with mid-single-digit renewal uplift over legacy SalesOS. GTM Studio, MCP server integrations, and AI action credits open entirely new budget lines (enterprise AI initiatives) that ZoomInfo never accessed before. Management deliberately excluded these products from FY26 revenue guidance, creating potential upside.
A new $1B authorization on a ~$2B market cap. The company has retired nearly 25% of shares since early 2023. At ~20% free cash flow yield, management views the stock as deeply disconnected from fundamentals. Levered FCF per share grew 12% in 2025 and should continue compounding via buybacks even with modest top-line growth.
🐻 Bear Case
Revenue guidance of ~1% YoY growth at the midpoint represents a deceleration from the 3% achieved in 2025. Q1 guide of $307.5M midpoint implies just 0.6% YoY growth. Even accounting for management conservatism, the direction is slowing, not accelerating—raising questions about whether upmarket gains can outpace downmarket decay fast enough.
Net revenue retention at 90% means the installed base is still contracting in dollar terms. While upmarket NRR is ~100%, the blended figure remains well below the ~110%+ typical of healthy SaaS businesses, limiting organic growth without persistent new logo wins.
Gross debt rose to $1.32B from $1.23B after drawing $100M on the revolver. With interest rate swaps expiring in January 2026, the company now faces variable rate exposure on its first lien term loan. Guided cash interest expense of $60-65M in FY26 is up from $45.8M in FY25—a 31-42% increase that directly reduces levered free cash flow available for buybacks.
⚖️ Verdict: ⚪
Neutral. The quarter was clean—beats on revenue, margins, and cash flow with accelerating upmarket momentum. But FY26 guidance tells a story of a company still unable to break out of low-single-digit growth territory despite heavy product investment. The massive buyback signals management conviction in value, but also that organic growth alone won't move the needle near-term. The bull case rests on new products delivering revenue that isn't in the guide.
Key Themes
Upmarket Growth Tripled to 6%, Now Majority of Revenue
The upmarket strategy delivered its strongest quarter yet. ACV from customers with 100+ employees grew 6% YoY in Q4, triple the 2% rate in Q4 2024. Upmarket now represents 74% of total ACV, up from 68% at the start of 2024 and on track to reach 80% by end of 2027—several years ahead of plan. The $100K+ ACV cohort added 34 net customers sequentially to 1,921, and now contributes more than 50% of total company ACV. The million-dollar-plus cohort hit a record with double-digit logo and ACV growth. Over 50% of total ACV is on multi-year contracts, up 5 points in 2025, providing greater revenue visibility.
Copilot Exceeds 20% of ACV with Proven Retention Uplift
Copilot ACV more than doubled in 2025 and now represents over 20% of total company ACV. Approximately 30%+ of the SalesOS-eligible base has been migrated. The critical proof point: the first cohort of Copilot customers that came up for renewal showed mid-single-digit better renewal outcomes versus legacy SalesOS. This pattern held in both Q3 and Q4. Copilot also expanded ZoomInfo's addressable user base from SDRs to Account Executives, Account Managers, and CSMs—a 3x seat opportunity—with AE/AM users showing engagement levels comparable to SDRs. About 90%+ of new-to-franchise ACV is landing on Copilot.
Operations Business Growing 20%+ as AI Data Infrastructure
The Operations/Data-as-a-Service segment grew over 20% YoY again in Q4 and now represents nearly 20% of total company ACV. Enterprise customers increasingly need high-quality third-party data to power AI agents, enrich CRM systems, and feed data warehouses. CEO Schuck emphasized that AI amplifies data quality issues—agents operating at scale on 70%-accurate data create compounding problems that can't be managed manually. This makes ZoomInfo's data quality a stronger differentiator in the AI era. New logo acquisition in DaaS grew 24% YoY and average ACV per customer grew ~10% YoY in earlier quarters.
FY26 Guidance Implies Growth Deceleration to ~1%
Full-year 2026 revenue guidance of $1.247-$1.267B implies +0.6% growth at the midpoint, decelerating from 3% in FY25. Q1 2026 guide of $306-$309M implies just +0.6% YoY from $305.7M. Graham O'Brien stated the guide 'conservatively assumes that upmarket growth stays where it is or decelerates' and that downmarket 'gets worse.' No revenue contribution from GTM Studio or other new 2026 products is included. While management has a track record of beating guides (they outperformed initial 2025 guidance by ~$50M), the starting point is notably cautious. Current calculated bookings grew mid-single digits for the year, and billings were flat—both suggesting low-single-digit underlying growth.
Downmarket Business Declining 10%, AIO Headwinds Persist
The downmarket segment (<100 employees) represents 26% of ACV and declined 10% YoY for the second consecutive quarter. AIO/SEO changes continue to impact top-of-funnel inbound demand, particularly in the PLG-oriented downmarket. CEO Schuck acknowledged the negative impact 'has stepped down modestly' but 'hasn't returned to prior levels.' Management expects this segment to get 'a little bit worse' before comparisons ease in mid-2026. While the upmarket mix shift dilutes the impact (26% and shrinking), this business still represents ~$325M in annual revenue and its decline directly offsets upmarket gains.
Net Revenue Retention Stuck at 90%
NRR improved from 87% at year-end 2024 to 90% at year-end 2025, but it stalled in Q4 after Q3 also reported 90%. Graham noted 'the pubco NRR of 90% did get better, it just didn't round.' Upmarket in-period NRR is ~100%, still below the 105% target management has set. Getting overall NRR above 100% requires both continued upmarket improvement and downmarket stabilization, which remains uncertain. At 90%, the existing base contracts by ~10% annually before new logo additions—meaning ZoomInfo needs to add approximately $125M in new business just to stay flat.
GTM Studio and MCP Opening New Enterprise AI Budgets
ZoomInfo launched GTM Studio (an orchestration layer unifying CRM and third-party data for RevOps teams) and MCP server integrations (allowing customers to plug ZoomInfo data into Claude, ChatGPT, and custom AI applications). These products access a budget line—enterprise AI initiatives—that ZoomInfo historically couldn't tap. A large financial services firm is implementing ZoomInfo's MCP server to power an internal AI research application. Monday.com's enterprise demand generation team described GTM Studio as 'a game changer' for reducing campaign build time. Importantly, these products use consumption-based pricing (AI action credits), which could drive usage upside but also introduces gross margin pressure Graham estimated at 1-2 points.
Pricing Model Shifting from Seats to Consumption
Seat-based pricing contribution peaked in 2022 and has decreased every year since. AI action credits, DaaS consumption, and platform access fees are growing as a share of revenue. CFO O'Brien said he's 'very confident that mix will continue to go down' for seats. This shift toward value-based pricing better aligns ZoomInfo's economics with actual customer usage and reduces exposure to headcount-driven seat pressure. However, consumption models introduce revenue variability and require customers to actively use the platform—a double-edged sword for a company still working to prove the ROI of newer products.
$1 Billion Buyback Signals Deep Conviction—or Limited Growth Options
The new $1B share repurchase authorization represents ~50% of the company's market capitalization. Combined with existing capacity, ZoomInfo now has board authorization to retire over 50% of outstanding shares. Since early 2023, the company has already retired nearly 25% of its share count. Levered free cash flow per share grew 12% in 2025 to $1.20, and management targets continued FCF/share growth via the combination of revenue growth, margin expansion, and buybacks. At a ~20% FCF yield, the math is compelling—but the aggressive buyback-first capital allocation strategy also implies management sees limited opportunities to invest in organic growth at a higher return.
Interest Expense Jumping as Rate Swaps Expire
ZoomInfo's interest rate swap contracts matured on January 30, 2026, exposing the full $1.32B debt balance to variable SOFR-based rates. FY26 cash interest expense is guided at $60-65M, up significantly from $45.8M in FY25. This comes on top of drawing $100M on the revolving credit facility during 2025, bringing gross debt to $1.32B. Net leverage held at 2.4x trailing adjusted EBITDA, but 2.4x trailing cash EBITDA (up from 2.2x a year ago). Every dollar of additional interest expense directly reduces the levered free cash flow available for the buyback program.
Unearned Revenue and Billings Growth Both Flat
Unearned revenue ended Q4 at $478M, essentially unchanged from $478M a year ago. Calculated billings were flat for the full year, and current calculated bookings grew only mid-single digits. Graham cautioned against extrapolating from these metrics due to noise from billing terms and reserve changes, but when adjusted, he conceded both metrics 'more closely mirror each other in the positive low-single-digit range.' This confirms that underlying new business momentum remains modest and consistent with the ~1% revenue growth guided for FY26.
Other KPIs
Up 2% from $446.9M in FY24, representing a 36% margin on revenue. Q4 was exceptionally strong at $135.2M (42% margin, 110% conversion from AOI), driven by favorable timing of customer payments. Graham explicitly warned that Q1 conversion will moderate as a result, and the Q4 overperformance is embedded in FY26 UFCF guidance of $435-465M. The slight YoY decline in FY26 UFCF guidance midpoint ($450M vs $455M) partly reflects the higher cash interest expense ($60-65M vs $46M).
Declined from $138.0M (11.4% of revenue) in FY24, dropping below 10% of revenue for the first time. This 16% absolute reduction improves the quality of adjusted earnings relative to GAAP. Management is also shifting equity compensation toward performance-based plans tied to growth and FCF targets—dilution only occurs if rigorous objectives are met. Gross share dilution remains low in absolute terms.
Repurchased 40.5 million shares at $10.06 average for $407M in FY25. Weighted average diluted shares dropped from 377M (FY24) to 340M (FY25), guided at 325M for FY26. Since early 2023, nearly 25% of shares outstanding have been retired. The new $1B authorization at current prices could retire another ~100M shares, or roughly a third of remaining float. Total shareholder returns (buybacks + TRA payments) consumed the majority of operating cash flow.
Up 75% from $30.9M in Q4 2024. FY25 GAAP operating income of $225.7M was up 132% from $97.4M, driven by the $62M reduction in restructuring expenses ($40.3M vs $101.6M) and lower SBC ($116.2M vs $138.0M). The gap between GAAP and adjusted operating income ($225.7M vs $445.9M) remains wide, largely due to $116.2M SBC, $58.5M intangible amortization, and $40.3M restructuring. This gap is narrowing but still represents a significant quality-of-earnings consideration.
Guidance
Stable. Midpoint of $307.5M implies +0.6% YoY from Q1 2025's $305.7M, and -3.6% sequentially from Q4's $319.1M. The sequential decline is partly explained by 2 fewer days in Q1 vs Q4. This is consistent with the cautious full-year stance and seasonal margin reset (payroll taxes, benefit resets).
Decelerating. Midpoint of $1.257B implies +0.6% YoY, down from +2.9% in FY25. Management stated this is the 'most conservative guide from a full-year perspective' they'll issue for 2026 and includes zero revenue from new products (GTM Studio, MCP integrations). Base assumptions: upmarket growth 'stays where it is or decelerates,' downmarket 'gets worse.' In FY25, the initial guide was beaten by ~$50M, so there is a pattern of conservative initial guidance.
Accelerating vs FY25's $445.9M (36% margin). Midpoint of $461M implies +3.4% YoY growth and ~1 point of margin expansion. The improvement comes from the upmarket mix shift (several thousand basis points better margins), partially offset by 1-2 points of gross margin pressure from new AI products with consumption-based pricing. AOI margins expected to decline sequentially in Q1 from Q4 (payroll resets) then build through the year.
Stable to slightly declining. Midpoint of $450M is roughly flat vs FY25's $454.9M. The guide absorbs $15-20M of higher cash interest expense ($60-65M vs $45.8M in FY25) from swap expiration, the pull-forward of Q4 2025 collections into FY25, and restructuring cash outflows for subleased office space. CapEx expected at ~5% of revenue (~$63M). Implies levered FCF of ~$385-400M available for buybacks and TRA payments.
Stable. Midpoint of $1.11 is +1.8% from FY25's $1.09. The modest EPS growth despite essentially flat UFCF comes entirely from the lower share count (325M vs 340M). Non-GAAP tax rate expected at 12% (vs implied ~13% in FY25). The low EPS growth rate highlights the challenge: buybacks can only do so much without accelerating top-line revenue.
Key Questions
New Product Revenue Expectations
You excluded GTM Studio, MCP, and Workspace revenue from the FY26 guide while including their costs. What would need to happen for you to start including them in formal guidance? Can you quantify early pipeline or deal activity for these products?
Path from 90% to 100%+ NRR
NRR has improved from 87% to 90% but stalled for two quarters. Upmarket NRR is at 100% with a 105% target. What specific levers—Copilot migration, GTM Workspace upsell, consumption pricing—will close the gap, and over what timeline?
Buyback vs. Debt Reduction Trade-off
With interest rate swaps expired and cash interest rising to $60-65M from $46M, why prioritize another $1B in buyback authorization over debt reduction? At what leverage ratio would you shift priorities?
Downmarket Endgame
Downmarket ACV is declining 10% and management expects it to get worse before stabilizing. At what point does this segment become too small to meaningfully drag on growth? Is there a floor where the remaining downmarket customers are high-quality and stable?