Wire
ZoomInfo Technologies Faces Top-Line Growth Execution Risk, RBC Says
ZoomInfo Technologies (GTM) reduced its workforce and shifted to consumption-based pricing, but execution risk around a material re-acceleration in top-line growth persists, while the lower full-year 2026 guidance is discouraging, RBC Capital Markets said in a note emailed Tuesday.The company announced nearly 20% workforce reduction, which is expected to generate $60 million in annualized operating expense savings, at a one-time cost of $45 million to $60 million to be incurred in Q2 and Q3. Management believes this restructuring will help margins reach nearly 40% over time, according to the note.The brokerage said management noted a regression in growth near the end of Q1, driven by a pause in purchasing due to "AI and agentic confusion" as customers faced build versus buy decisions.The Q2 guidance for revenue and non-GAAP operating income was below consensus, while non-GAAP earnings per share were in-line. ZoomInfo also lowered its full-year 2026 guidance, which is now below consensus across all metrics except EPS, according to the note.RBC kept an underperform rating on ZoomInfo Technologies and lowered the price target to $4 from $7.Shares of the company were down more than 33% in Tuesday trading.Price: $4.05, Change: $-2.00, Percent Change: -33.03%
$GTM