Executive Summary / Key Takeaways

• ZoomInfo, now trading as GTM, is strategically transforming from a data provider into a comprehensive Go-To-Market Intelligence platform, unifying data, AI, orchestration, and execution to power the entire revenue engine for businesses.
• The company is executing a deliberate pivot upmarket, focusing resources on larger enterprise and mid-market customers (>100 employees), which now represent 71% of the business and exhibit significantly higher profitability, aiming for mid-single-digit growth in this segment to offset declines in the smaller, riskier down-market segment.
• Technological innovation, particularly in AI with products like Copilot and the newly launched Go-to-Market Studio, is central to GTM's strategy, expanding use cases beyond traditional sales prospecting and providing quantifiable benefits like improved engagement and pipeline attribution for customers.
• Despite a recent accounting charge related to historical SMB write-offs and increased conservatism in guidance due to macroeconomic uncertainty, the company demonstrated operational improvements in Q1 2025, including sequential growth in key upmarket customer cohorts and stabilization/improvement in net revenue retention to 87%.
• GTM is committed to driving shareholder value through operational efficiency and aggressive share repurchases, targeting meaningful growth in levered free cash flow per share in 2025 and beyond, leveraging its strong cash generation and perceived undervaluation relative to intrinsic value.

The Evolution of Go-To-Market: GTM's Strategic Pivot

ZoomInfo Technologies Inc., now operating under the ticker symbol GTM, stands at a pivotal juncture in its evolution. Historically recognized as a provider of B2B contact and company data, the company is strategically repositioning itself as the core software platform for Go-To-Market (GTM) intelligence. This transformation is driven by a recognition that in today's complex sales and marketing landscape, static data alone is insufficient. Businesses require a dynamic, integrated platform that unifies disparate data sources, leverages artificial intelligence for actionable insights, orchestrates workflows across teams, and empowers frontline execution.

The industry landscape is characterized by intense competition from both large, integrated platforms like Salesforce (CRM) and Microsoft (MSFT), and specialized data and sales intelligence providers such as Oracle (ORCL), Apollo.io, and Cognism. While giants like Salesforce and Microsoft offer broad CRM ecosystems and increasingly powerful AI capabilities, GTM aims to differentiate itself through the depth and accuracy of its proprietary B2B data asset, its specialized focus on the entire GTM motion (not just sales), and its accelerating pace of AI innovation tailored specifically for revenue teams.

GTM's overarching strategy is centered on a deliberate pivot upmarket. This involves shifting resources, product development, and sales focus towards larger enterprise and mid-market customers (defined as companies with over 100 employees). This segment, which now constitutes 71% of GTM's business, is seen as the key driver of future growth and profitability. Management explicitly notes that the upmarket business boasts significantly better economics, with a margin difference of several thousand basis points compared to the down-market segment. This strategic reallocation is a direct response to challenges faced in the down-market (SMB) segment, particularly elevated write-offs from prior period sales cohorts, which led to a significant accounting charge in Q2 2024. By focusing on larger, more stable customers and implementing stricter credit policies for riskier small businesses (requiring upfront prepayments), GTM seeks to reduce revenue volatility and build a more durable business foundation.

Technological Foundation and the AI-Powered Future

At the heart of GTM's platform lies its multi-layered architecture: the Intelligence Layer, the Orchestration Layer, and the Engagement Layer. The Intelligence Layer is built upon GTM's vast proprietary B2B data asset, curated through first- and third-party sources and continuously updated by an AI/ML-powered engine and a team of research analysts. This data includes billions of data points on companies and contacts, enriched with critical signals like intent, hierarchy, location, and financial information.

The Orchestration Layer integrates and enriches this data, assigning and routing insights to power automated business workflows and connecting with third-party systems like major CRM providers. The Engagement Layer allows GTM professionals to act on these insights through multi-touch, multi-channel tools for sales engagement, marketing campaigns, and recruiting processes.

Recent technological innovation has heavily focused on AI. ZoomInfo Copilot, launched around mid-2024, is a prime example. This AI-powered offering combines GTM's proprietary data with customer-specific first-party data and digital buying signals to provide sales teams with enhanced buyer insights. The company highlights quantifiable benefits from Copilot adoption, with customers reporting 25% of their total pipeline directly attributed to opportunities identified by Copilot, a 58% increase in prospect engagement rates, and a 62% improvement in email response rates. Copilot is expanding its reach beyond traditional Sales Development Representative (SDR) prospecting to include Account Executives (AEs), Account Managers (AMs), and Customer Success Managers (CSMs), a user base estimated to be three times larger than the SDR segment. Management notes that Copilot users in these expanded roles are becoming as active on the platform as core SDR users. By Q4 2024, Copilot had surpassed $150 million in ACV, demonstrating early market traction.

Building on this, GTM launched Go-to-Market Studio in Q1 2025. This new offering is designed for revenue leaders and operators, enabling them to unify first- and third-party data, leverage AI across this combined asset, and orchestrate campaigns across sales, marketing, and operations teams. GTM Studio is built upon expanded data assets derived from strategic acquisitions like RingLead, Chorus, and SetSail. GTM positions itself as uniquely capable in this space, claiming to be the only vendor with natively integrated data, orchestration, AI, and frontline execution. This integrated approach is seen as essential for driving successful AI in GTM, as relying solely on internal CRM data is insufficient for building effective AI agents that require dynamic, external signals.

The Operations business, which includes Data-as-a-Service (DaaS), is another area demonstrating strong technological leverage and market demand. This segment grew 27% year-over-year in Q4 2024 and 10% year-over-year in Q1 2025 (for DaaS new logos), reflecting increasing customer need for high-quality data to underpin their own internal AI initiatives and data cleansing efforts. This growth contributes to the "Advanced Functionality" category (Copilot, Operations, Marketing), which grew to 44% of the business by Q4 2024.

Performance, Liquidity, and the Path Forward

GTM's recent financial performance reflects the ongoing strategic transition and the impact of past challenges. For the first quarter ended March 31, 2025, the company reported GAAP revenue of $305.7 million, a decrease of 1% compared to $310.1 million in Q1 2024. This decline was attributed primarily to the operational changes implemented in Q2 2024 affecting the down-market segment. Despite the revenue dip, operating income improved to $50.3 million (16% margin) in Q1 2025, up from $43.0 million (14% margin) in Q1 2024. This margin expansion was largely driven by a significant decrease in General and administrative expenses, primarily due to lower charges related to Class Actions and reduced bad debt expense compared to the prior year, partially offset by increased costs in other areas like cost of service and sales and marketing. Net income saw a substantial increase to $26.8 million in Q1 2025 from $15.1 million in Q1 2024, benefiting from the operational expense reductions and lower TRA remeasurement losses.

The strategic pivot upmarket is yielding tangible results. In Q1 2025, the upmarket segment (71% of revenue) grew 3% year-over-year, while the down-market segment declined 10%. The number of customers with over $100,000 in ACV reached 1,868, marking the fourth consecutive quarter of sequential growth in this key cohort. Net revenue retention (NRR) improved to 87% in Q1 2025, holding steady from Q4 2024 and up from 85% earlier in 2024, driven by improvements in upmarket retention and stabilization in the software vertical.

Liquidity remains robust. As of March 31, 2025, GTM held $138.5 million in cash and cash equivalents and had $250.0 million available under its revolving credit facility. Operating cash flow was strong at $119.2 million in Q1 2025, contributing to $125.0 million in unlevered free cash flow (41% margin). The company carries $1.24 billion in gross debt, with a net leverage ratio of 2.5x trailing 12 months adjusted EBITDA. Management is confident that existing cash flows and liquidity are sufficient to fund operations and capital needs for the foreseeable future.

GTM is actively returning capital to shareholders through share repurchases, viewing its stock as undervalued relative to its intrinsic value. The company repurchased 8.6 million shares for $95.0 million in Q1 2025 and an additional 6.78 million shares for $56.1 million subsequent to quarter-end (up to May 9, 2025). With $542.5 million remaining authorized for repurchases as of March 31, 2025, aggressive deployment is anticipated. This focus on share count reduction, combined with strong cash generation, underpins the company's commitment to growing levered free cash flow per share, targeting at least $1 in 2024 and meaningful growth in 2025.

Competitive Dynamics and Strategic Positioning

GTM operates in a competitive landscape where its core strengths in data and specialized GTM AI are pitted against the broad platforms and deep integrations offered by tech giants and the targeted data solutions of niche players.

Against large players like Salesforce (CRM) and Microsoft (MSFT), GTM differentiates through the depth, accuracy, and B2B-specific nature of its proprietary data asset. While Salesforce and Microsoft offer extensive CRM and cloud ecosystems with integrated AI, GTM's data is purpose-built for GTM intelligence, providing specific signals and insights that are often not natively available or easily actionable within broader platforms. GTM's Gross Profit Margin (TTM 83.54%) is competitive, even exceeding Microsoft's (TTM 70%), though trailing Oracle's (TTM 96%). However, GTM's Operating Profit Margin (TTM 8.65%) and EBITDA Margin (TTM 12.16%) lag significantly behind the scale-driven margins of Microsoft (Op Margin TTM 45%, EBITDA Margin TTM 69.6%) and Oracle (Op Margin TTM 31%, EBITDA Margin TTM 38.7%), and even Salesforce (Op Margin TTM 19%, EBITDA Margin TTM 27.9%). This highlights the cost pressures GTM faces, particularly in sales and marketing, compared to its larger, more diversified rivals.

Against specialized competitors like Apollo.io and Cognism, GTM leverages its broader platform capabilities (Orchestration, Engagement layers) and larger scale. While some niche players may offer competitive data accuracy in specific areas or geographies, GTM's comprehensive platform, expanding signal ecosystem (over 300 million daily signals), and integrated AI applications like Copilot provide a more unified solution for the entire GTM process. GTM's strategic shift upmarket also positions it differently, targeting larger, more complex organizations where its enterprise-grade data compliance and integration capabilities are a stronger differentiator compared to players primarily focused on SMBs.

GTM's competitive advantages, or moats, include its proprietary B2B database (difficult to replicate at scale) and network effects from its contributory and community networks, which enhance data quality and coverage. Its AI innovation, particularly Copilot's ability to unify first- and third-party data for actionable insights and automate workflows, is becoming an increasingly important differentiator. However, vulnerabilities include the potential for larger platforms to integrate similar data or develop competing AI capabilities, and the ongoing challenge of maintaining data accuracy across a vast and dynamic B2B landscape.

Outlook and Risks

GTM's outlook for 2025 reflects both the positive momentum from its strategic pivot and an "incremental layer of caution" due to the uncertain macroeconomic environment. For the second quarter of 2025, the company guided to GAAP revenue of $295 million to $298 million and adjusted operating income of $101 million to $104 million.

For the full year 2025, GTM raised the low end of its revenue guidance and now expects GAAP revenue in the range of $1.195 billion to $1.205 billion, representing a negative 1.2% annual growth at the midpoint. Adjusted operating income is projected between $426 million and $436 million, implying a 36% margin at the midpoint. Non-GAAP net income is expected to be $0.96 to $0.98 per share, based on 352 million weighted average diluted shares outstanding. Unlevered free cash flow is guided to be between $420 million and $440 million.

Management's guidance assumes continued acceleration in the upmarket segment, targeting mid-single-digit growth, while the down-market segment is expected to contract at a faster pace, potentially declining in the high negative teens in 2025. The conservatism in the guidance, despite positive operational trends like improving NRR and upmarket performance, stems from the external economic environment and the time it takes for operational changes (like stricter credit terms) to fully impact trailing metrics and future write-off rates. Management expects adjusted operating income margins to increase sequentially throughout 2025.

Key risks to this outlook include the potential for adverse macroeconomic conditions to further reduce customer spending, particularly if layoffs in sales and marketing teams continue. Changes in data privacy regulations could impact GTM's ability to collect and process data. Investing in and deploying AI capabilities introduces execution risks. The company's substantial debt load could limit financial flexibility. Litigation risks, although partially addressed by recent settlements, remain a possibility. Geopolitical events could also disrupt operations. The success of the upmarket pivot and the adoption of new AI products like Copilot and GTM Studio are critical factors to watch.

Conclusion

GTM's transformation into a comprehensive Go-To-Market Intelligence platform, symbolized by its ticker change, represents a strategic imperative in a rapidly evolving market. By leveraging its foundational data asset and accelerating AI innovation with products like Copilot and Go-to-Market Studio, the company is expanding its value proposition across the entire revenue engine, moving beyond traditional sales intelligence. The deliberate pivot upmarket, while creating near-term revenue headwinds due to the intentional management of the riskier down-market segment, is positioning GTM for more durable, higher-margin growth in the future.

Despite the impact of past challenges reflected in recent accounting charges and a cautious near-term revenue outlook, operational metrics like improving NRR and growth in key upmarket customer cohorts signal positive underlying momentum. Coupled with robust cash flow generation and a commitment to aggressive share repurchases, GTM is focused on driving meaningful growth in levered free cash flow per share. For investors, the story is one of a company actively reshaping itself to capitalize on the convergence of data, AI, and GTM workflows, aiming to become the indispensable intelligence layer for businesses seeking to accelerate revenue growth in a competitive landscape dominated by larger platforms and specialized rivals. The success of this transformation hinges on continued execution of the upmarket strategy, sustained technological leadership in AI-powered GTM solutions, and effective navigation of external economic uncertainties.