Zoominfo (ZI -1.43%↓) Q4 2022 revenue topped $300mn and registered an annual growth rate of 36%. Adjusted operating income margins exceeded 40%, which puts Zoominfo in a rare category of meaningful profitability among higher-growth technology companies. But the key issue with last evening’s financial report had to do with its outlook: 2023 is only projected to grow at high teens. Not bad for any company to be forecasting double digit growth in a recessionary environment, but expectations for Zoominfo had been higher, especially in the light of historical performance.
Key Highlights from Q4 2022 Report
The technology sector has been laying off employees since early-to-mid 2022 to reduce overheads and prepare for potentially weaker business volumes. Even giants like Salesforce (CRM -2.15%↓) and Meta (META -2.25%↓) could not avoid the fate as recessionary pressures continued unabated and markets demanded to see higher profitability.
With 40% of its customer base originating from the software vertical and a largely seat-base revenue model, Zoominfo faced increasingly stacked odds in 2022. While it had enjoyed extraordinary growth in tandem with prevalent hiring in the technology sector back in 2021, those tailwinds recently turned into headwinds. Trying to retain accounts and win new ones when customers (exiting and potential) were retrenching became a tall order.
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