ZoomInfo’s first quarter was marked by a significant negative market reaction, as management acknowledged a confluence of macroeconomic headwinds and customer uncertainty around artificial intelligence (AI) adoption. CEO Henry Schuck cited a “regression in our downmarket and upmarket growth trajectories” stemming from confusion about AI capabilities and the evolving buying landscape. This led to a pause in purchasing decisions, particularly among software customers, and prompted the company to announce a round of cost reductions impacting 20% of its workforce. Management emphasized that, despite meeting or exceeding their internal benchmarks for the quarter, shifting customer dynamics and increased complexity in decision-making cycles drove the need for immediate structural changes.
Is now the time to buy GTM? Find out in our full research report (it’s free for active Edge members).
ZoomInfo (GTM) Q1 CY2026 Highlights:
- Revenue: $310.2 million vs analyst estimates of $308 million (1.5% year-on-year growth, 0.7% beat)
- Adjusted EPS: $0.28 vs analyst estimates of $0.26 (8.7% beat)
- Adjusted Operating Income: $109.7 million vs analyst estimates of $106.8 million (35.4% margin, 2.7% beat)
- The company dropped its revenue guidance for the full year to $1.20 billion at the midpoint from $1.26 billion, a 4.9% decrease
- Management reiterated its full-year Adjusted EPS guidance of $1.11 at the midpoint
- Operating Margin: 18.7%, up from 16.5% in the same quarter last year
- Annual Recurring Revenue: $1.22 billion vs analyst estimates of $1.22 billion (flat year on year, in line)
- Billings: $311.6 million at quarter end, in line with the same quarter last year
- Market Capitalization: $1.14 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From ZoomInfo’s Q1 Earnings Call
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Mark Murphy (JPMorgan) asked about demand differences between software and traditional industries. CFO Graham O’Brien said retention improvements stalled in software, while finance, real estate, and manufacturing showed stronger growth.
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Taylor McGinnis (UBS) inquired about the decline in $100,000+ customer cohort and contract revenue performance obligations. O’Brien explained the cohort saw fewer upsell opportunities, but overall performance remained solid except for incremental purchases.
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Lucas Cerisola (Morgan Stanley) questioned whether Q2 would represent a growth trough and what’s needed for improvement. O’Brien said Q2 is expected to be weak, but shifting customers to high-consumption interfaces is key for recovery in later quarters.
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Aleksandr Zukin (Wolfe Research) queried the split between headwinds from software, downmarket restructuring, and pricing model transformation in guidance. Schuck and O’Brien responded that downmarket rightsizing was the largest factor, with pricing model shifts becoming more significant in subsequent years.
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William Fitzsimmons (Piper Sandler) asked about balancing R&D investment post-layoffs and the impact on AI priorities. O’Brien said AI-powered engineering efficiencies allow the company to maintain velocity while focusing resources on back-end data infrastructure rather than front-end applications.
Catalysts in Upcoming Quarters
In the upcoming quarters, the StockStory team will be watching (1) the pace at which ZoomInfo’s customers transition to the new consumption-based pricing model and the resulting impact on revenue recognition; (2) whether core upmarket data operations can continue to deliver strong growth and retention; and (3) the degree to which AI integrations and product-led growth initiatives gain traction, particularly as the company phases out downmarket sales resources. Further clarity around customer adoption of new pricing and product interfaces will be a key signpost for a return to growth.
ZoomInfo currently trades at $3.91, down from $6.04 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).
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