ZoomInfo Announces Third Quarter 2020 Financial Results

Nov 9, 2020

GAAP Revenue of $123.4 million Grows 56% year-over-year (41% Organic Growth)

GAAP Operating Margin of 15% and Adjusted Operating Income Margin of 47%

Cash Flow from Operations of $49.1 million and Unlevered Free Cash Flow of $59.8 million

VANCOUVER, Wash.--(BUSINESS WIRE)--Nov. 9, 2020-- ZoomInfo, (NASDAQ: ZI) a global leader in go-to-market intelligence solutions, today announced its financial results for the third quarter ended September 30, 2020.

“We delivered another quarter of record results, as more customers than ever modernized their go-to-market motions with ZoomInfo’s data and insights platform,” said Henry Schuck, ZoomInfo Founder and CEO. “In the third quarter, we added a record number of new customers, drove record expansion with our largest clients, and launched new platform enhancements. With a model that combines durable growth and profitability and a team that is executing on all fronts, we are seeing momentum across all areas of the business. This momentum gives us even more confidence that we can capitalize on the many growth opportunities ahead.”

Third Quarter 2020 Financial and Other Recent Highlights -

Financial Highlights:

  • Revenue of $123.4 million, an increase of 56% year-over-year
  • Sequential revenue growth of 10% as compared to the second quarter of 2020 (as adjusted for the relative days in the quarter)
  • Allocated Combined Receipts of $123.6 million, an increase of 41% year-over-year
  • Operating income of $18.4 million, or 15% of revenue, and Adjusted Operating Income of $58.5 million, or 47% of Allocated Combined Receipts
  • Cash flows from operations of $53.0 million, and Unlevered Free Cash Flow of $59.8 million

Business and Operating Highlights:

  • Launched ZoomInfo Engage, a sales engagement platform, designed to help sales teams maximize productivity by empowering them with an automated sales dialer, built-in email automation, and technology to manage and optimize sales workflows.
  • Increased the size of the total addressable market by more than $5 billion to more than $30 billion through expansion into the sales enablement market.
  • Grew our professional data set more than 30% since the beginning of the year, increasing the profiles under coverage to more than 132 million at the end of Q3.
  • Announced the acquisition of Clickagy, a leading provider of artificial intelligence-powered buyer intent data. As part of the acquisition, ZoomInfo is launching real-time Streaming Intent, an innovative solution that identifies companies with above-average search volume on business-to-business (B2B) topics within minutes of their web activity.
  • Announced the acquisition of EverString, a leading AI-powered business-to-business company data-as-a-service provider with industry-leading data coverage of small- and medium-sized businesses. This enables ZoomInfo to provide a more complete picture of the total addressable market for customers who target SMBs.
  • ZoomInfo closed the quarter with more than 720 customers with $100,000 or greater in annual contract value.

Q3 2020 Financial Highlights (Unaudited)

($ in millions, except per share amounts)

 

 

 

 

 

 

 

GAAP

Quarterly Results

Increase YoY

 

Non-GAAP

Quarterly Results

Increase YoY

 

 

 

 

 

 

Revenue

$123.4

56%

Allocated Combined Receipts

$123.6

41%

 

 

 

 

 

 

Operating Income

$18.4

41%

Adjusted Operating Income

$58.5

24%

 

 

 

 

 

 

Operating Income Margin

15%

 

Adjusted Operating Income Margin

47%

 

 

 

 

 

 

 

Net Income Per Share (Diluted)

$0.02

 

Adjusted Net Income per share (Diluted)

$0.11

 

 

 

 

 

 

 

Cash Flow from Operating Activities

$49.1

165%

Unlevered Free Cash Flow

$59.8

28%

 

The Company uses a variety of operational and financial metrics, including non-GAAP financial measures, to evaluate its performance and financial condition. The accompanying financial data includes additional information regarding these metrics and a reconciliation of non-GAAP financial information for historical periods to the most directly comparable GAAP financial measure. The presentation of non-GAAP financial information should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

Business Outlook:

Based on information available as of November 9, 2020, ZoomInfo is issuing guidance for the fourth quarter and full year 2020 as follows:

(in millions, except margin and per share data)

Q4 2020

 

Prior FY 2020

 

FY 2020

GAAP Revenue

$129 - $131

 

$451 - $455

 

$465 - $467

Non-GAAP Adjusted Operating Income

$58 - $60

 

$213 - $217

 

$220 - $222

Non-GAAP Adjusted Operating Income Margin

45%

 

47%

 

47%

Non-GAAP Adjusted Net Income per share

$0.09 - $0.10

 

$0.29 - $0.30

 

$0.31 - $0.32

Non-GAAP Unlevered Free Cash Flow

Not Guided

 

$206 - $210

 

$213 - $215

Weighted Average Shares Outstanding

404

 

403

 

403

Restatement of Second Quarter 2020 Financial Statements

In connection with the preparation of the Company’s financial statements for the third quarter of 2020, the Company reviewed its determination of a tax benefit of approximately $21.6 million related to the difference between the GAAP basis and tax basis of partnerships owned by corporations within the Company’s corporate structure recorded during the quarterly period ended June 30, 2020 in the Company’s unaudited condensed consolidated financial statements as of and for the periods ended June 30, 2020. In the Company's current judgement, it should not have recorded the tax benefit. The impact of this change is expected to (i) increase the Company’s net loss for the quarterly period ended June 30, 2020 from $56.2 million to $77.9 million; (ii) increase the Company’s net loss per share of Class A and Class C common stock for the periods ended June 30, 2020 from $0.21 and $0.22 per share, on a basic and diluted basis, respectively, to $0.30 and $0.30 per share, respectively; (iii) decrease the Company’s deferred tax assets as of June 30, 2020 by $62.3 million; (iv) decrease the Company’s tax receivable agreements liability as of June 30, 2020 by $11.0 million; (v) increase the Company’s deferred tax liabilities as of June 30, 2020 by $10.9 million; (vi) decrease the Company’s recorded additional paid-in capital as of June 30, 2020 by $40.5 million; (vii) decrease the Company’s retained earnings balance as of June 30, 2020 by $14.0 million; and (viii) decrease the Company’s non-controlling interests balance as of June 30, 2020 by $7.7 million. This change is not expected to impact the Company’s previously disclosed net cash provided by operating activities, net cash used in investing activities, net cash provided by financing activities, or historical non-GAAP financial metrics with respect to the three and six month periods ended June 30, 2020. The Company is working to complete the restatement of its unaudited condensed consolidated financial statements as of and for the periods ended June 30, 2020, and expects to file a Form 10-Q/A to amend its 2020 second quarter 10-Q, as well as the Company’s 2020 third quarter 10-Q, on or before November 16, 2020.

Conference Call and Webcast Information:

ZoomInfo will host a conference call today, November 9, 2020, to review its results at 4:30 p.m. Eastern Time, 1:30 p.m. Pacific Time. The call will be accessible by telephone: (833) 519-1261 (U.S.) or (914) 800-3834 (International) with the passcode: 9271597.

The call will also be webcast live on the Company’s investor relations website at https://ir.zoominfo.com/, where related presentation materials will be posted prior to the conference call. Following the conference call, an archived webcast of the call will be available for one year on ZoomInfo’s Investor Relations website.

Non-GAAP Financial Measures and Other Metrics:

To supplement our consolidated financial statements presented in accordance with GAAP, this press release contains non-GAAP financial measures, including Allocated Combined Receipts, Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted Net Income, Adjusted Net Income Per Share, and Unlevered Free Cash Flow. We believe these non-GAAP measures are useful to investors in evaluating our operating performance because they eliminate certain items that affect period-over-period comparability and provide consistency with past financial performance and additional information about our underlying results and trends by excluding certain items that may not be indicative of our business, results of operations, or outlook.​

​Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for the comparable GAAP measures, but rather as supplemental information to our business results. This information should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. There are limitations to these non-GAAP financial measures because they are not prepared in accordance with GAAP and may not be comparable to similarly titled measures of other companies due to potential differences in methods of calculation and items or events being adjusted. In addition, other companies may use different measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. A reconciliation is provided at the end of this press release for each historical non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP. We do not provide a quantitative reconciliation of the forward-looking non-GAAP financial measures included in this press release to the most directly comparable GAAP measures due to the high variability and difficulty to predict certain items excluded from these non-GAAP financial measures; in particular, the effects of stock-based compensation expense, taxes and amounts under the exchange tax receivable agreement, deferred tax assets and deferred tax liabilities, and restructuring and transaction expenses. We expect the variability of these excluded items may have a significant, and potentially unpredictable, impact on our future GAAP financial results.

We define Allocated Combined Receipts as the combined receipts of our Company and companies that we have acquired allocated to the period of service delivery. We calculate Allocated Combined Receipts as the sum of (i) revenue, (ii) revenue recorded by acquired companies prior to our acquisitions of them, and (iii) the impact of fair value adjustments to acquired unearned revenue related to services billed by an acquired company prior to its acquisition. Management uses this measure to evaluate organic growth of the business period over period, as if we had operated as a single entity and excluding the impact of acquisitions or adjustments due to purchase accounting. Organic growth in current and future periods is driven by sales to new customers and the addition of additional subscriptions and functionality to existing customers, offset by customer cancellations or reduced subscriptions upon renewal. We believe that it is important to evaluate growth on this organic basis, as it is an indication of the success of our services from the customer’s perspective that is not impacted by corporate events such as acquisitions or the fair value estimates of acquired unearned revenue. We believe this measure is useful to investors because it illustrates the trends in our organic revenue growth and allows investors to analyze the drivers of revenue on the same basis as management. Since our Allocated Combined Receipts has converged over time with our GAAP revenue, we do not expect to continue reporting Allocated Combined Receipts following the third quarter of 2020.

We define Adjusted Operating Income as income from operations plus (i) impact of fair value adjustments to acquired unearned revenue, (ii) amortization of acquired technology and other acquired intangibles, (iii) equity-based compensation expense, (iv) restructuring and transaction-related expenses, and (v) integration costs and acquisition-related compensation. We define Adjusted Operating Income Margin as Adjusted Operating Income divided by the sum of revenue and the impact of fair value adjustments to acquired unearned revenue.

We define Adjusted Net Income as Adjusted Operating Income less (i) interest expense, net, (ii) other (income) expense, net, and (iii) income tax expense (benefit) including incremental tax effects of adjustments to arrive at Adjusted Operating Income and benefits related to the TRA. We define Adjusted Net Income Per Share as Adjusted Net Income divided by diluted weighted average shares outstanding.

We define Unlevered Free Cash Flow as net cash provided from operating activities less (i) purchases of property and equipment and other assets, plus (ii) cash interest expense, (iii) cash payments related to restructuring and transaction-related expenses, and (iv) cash payments related to integration costs and acquisition-related compensation. Unlevered Free Cash Flow does not represent residual cash flow available for discretionary expenditures since, among other things, we have mandatory debt service requirements.

Cautionary Statement Regarding Forward-Looking Information

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those expressed or implied by these statements. You can generally identify our forward-looking statements by the words “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “may,” “might,” “objective,” “outlook,” “plan,” “potential,” “predict,” “projection,” “seek,” “should,” “target,” “trend,” “will,” “would” or the negative version of these words or other comparable words. Any statements in this press release regarding future revenue, earnings, margins, financial performance, liquidity or results of operations (including, but not limited to, the guidance provided under “Business Outlook”), ZoomInfo’s ability to capitalize on its growth opportunities, the anticipated benefits of the Clickagy and EverString acquisitions to ZoomInfo and its customers, the expected impacts on our financial statements and other financial metrics as a result of the expected restatement of our unaudited condensed consolidated financial statements as of and for the periods ended June 30, 2020, the expected timing for future filings with the SEC, and any other statements that are not historical facts are forward-looking statements. We have based our forward-looking statements on our management’s beliefs and assumptions based on information available to our management at the time the statements are made. We caution you that assumptions, beliefs, expectations, intentions and projections about future events may and often do vary materially from actual results. Therefore, we cannot assure you that actual results will not differ materially from those expressed or implied by our forward-looking statements.

The following are some of the factors that could cause actual results to differ from those expressed or implied by our forward-looking statements: (i) the COVID-19 pandemic, including the global economic uncertainty and measures taken in response, could materially impact our business and future results of operations; (ii) larger well-funded companies shifting their existing business models to become more competitive with us; (iii) our ability to provide or adapt our platform for changes in laws and regulations or public perception, or changes in the enforcement of such laws, relating to data privacy; (iv) the effects of companies more effectively catering to our customers by offering more tailored products or platforms at lower costs; (v) adverse general economic and market conditions reducing spending on sales and marketing; (vi) the effects of declining demand for sales and marketing subscription platforms; (vii) our ability to improve our technology and keep up with new processes for data collection, organization, and cleansing; (viii) our ability to provide a highly accurate, reliable, and comprehensive platform moving forward; (ix) our reliance on third-party systems that we do not control to integrate with our system and our potential inability to continue to support integration; (x) our ability to adequately fund research and development potentially limiting introduction of new features, integrations, and enhancements; (xi) our ability to attract new customers and expand existing subscriptions; (xii) a decrease in participation in our contributory network or increased opt-out rates impacting the depth, breadth, and accuracy of our platform; (xiii) our failure to protect and maintain our brand and our ability to attract and retain customers; (xiv) our ability to successfully integrate acquired businesses, services, databases and technologies into our operations; and (xv) other factors described under “Risk Factors” in ZoomInfo Technologies Inc.’s Quarterly Report on Form 10-Q for the period ended June 30, 2020 filed with the Securities and Exchange Commission (the “SEC”), and in other reports we file from time to time with the SEC, including our Form 10-Q for the third quarter of 2020. These factors should not be construed as exhaustive. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, our actual results may vary in material respects from those projected in our forward-looking statements. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, investments, or other strategic transactions we may make. Each forward-looking statement contained in this press release speaks only as of the date of this release, and we undertake no obligation to update or revise any forward-looking statements whether as a result of new information, future developments or otherwise, except as required by law.

About ZoomInfo

ZoomInfo (NASDAQ: ZI) is a Go-To-Market Intelligence Solution for more than 15,000 companies worldwide. The ZoomInfo platform empowers business-to-business sales, marketing, and recruiting professionals to hit their number by pairing best-in-class technology with unrivaled data coverage, accuracy, and depth of contacts. With integrations embedded into workflows and technology stacks, including the leading CRM, Sales Engagement, Marketing Automation, and Talent Management applications, ZoomInfo drives more predictable, accelerated, and sustainable growth for its customers. For more information about our leading Go-To-Market Intelligence Solution, and how it helps sales, marketing, and recruiting professionals, please visit www.zoominfo.com.

Website Disclosure

ZoomInfo intends to use its website as a distribution channel of material company information. Financial and other important information regarding the Company is routinely posted on and accessible through the Company’s website at https://ir.zoominfo.com/. Accordingly, you should monitor the investor relations portion of our website at https://ir.zoominfo.com/ in addition to following our press releases, SEC filings, and public conference calls and webcasts. In addition, you may automatically receive email alerts and other information about ZoomInfo when you enroll your email address by visiting the “Email Alerts” section of our investor relations page at https://ir.zoominfo.com/.

ZoomInfo Technologies Inc.

Condensed Consolidated Balance Sheets

(in millions, except share data)

 

 

 

 

 

September 30,

 

December 31,

 

2020

 

2019

 

(unaudited)

 

 

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

304.9

 

 

 

$

41.4

 

 

Restricted cash

1.1

 

 

 

1.1

 

 

Accounts receivable

90.4

 

 

 

86.9

 

 

Prepaid expenses and other current assets

10.2

 

 

 

8.3

 

 

Deferred costs

10.7

 

 

 

6.6

 

 

Income tax receivable

4.1

 

 

 

3.9

 

 

Total current assets

421.4

 

 

 

148.2

 

 

 

 

 

 

Property and equipment, net

28.4

 

 

 

23.3

 

 

Operating lease right-of-use assets, net

34.0

 

 

 

36.8

 

 

 

 

 

 

Other assets:

 

 

 

Intangible assets, net

340.0

 

 

 

370.6

 

 

Goodwill

966.8

 

 

 

966.8

 

 

Deferred tax assets

238.1

 

 

 

 

 

Deferred costs, net of current portion

19.8

 

 

 

16.2

 

 

Total assets

$

2,048.5

 

 

 

$

1,561.9

 

 

 

 

 

 

Liabilities, Temporary, and Permanent Equity (Deficit)

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

9.7

 

 

 

$

7.9

 

 

Accrued expenses and other current liabilities

52.5

 

 

 

62.9

 

 

Unearned revenue, current portion

175.3

 

 

 

157.7

 

 

Income taxes payable

5.1

 

 

 

0.5

 

 

Current portion of operating lease liabilities

4.9

 

 

 

4.0

 

 

Current portion of long-term debt

 

 

 

8.7

 

 

Total current liabilities

247.5

 

 

 

241.7

 

 

 

 

 

 

Unearned revenue, net of current portion

0.7

 

 

 

1.4

 

 

Tax receivable agreements liability, net of current portion

182.6

 

 

 

 

 

Operating lease liabilities, net of current portion

37.0

 

 

 

40.7

 

 

Long-term debt, net of current portion

744.3

 

 

 

1,194.6

 

 

Deferred tax liabilities

7.9

 

 

 

82.8

 

 

Other long-term liabilities

8.0

 

 

 

14.3

 

 

Total liabilities

1,228.0

 

 

 

1,575.5

 

 

 

 

 

 

Series A Preferred Units

 

 

 

200.2

 

 

Commitments and Contingencies

 

 

 

 

 

 

 

Permanent Equity (Deficit)

 

 

 

Members' equity (deficit)

 

 

 

(207.8

)

 

Class A common stock, par value $0.01

0.7

 

 

 

 

 

Class B common stock, par value $0.01

2.3

 

 

 

 

 

Class C common stock, par value $0.01

0.9

 

 

 

 

 

Additional paid-in capital

402.1

 

 

 

 

 

Accumulated other comprehensive income (loss)

(2.9

)

 

 

(6.0

)

 

Retained Earnings

(29.5

)

 

 

 

 

Noncontrolling interests

446.9

 

 

 

 

 

Total equity (deficit)

820.5

 

 

 

(213.8

)

 

 

 

 

 

Total liabilities, temporary, and permanent equity (deficit)

$

2,048.5

 

 

 

$

1,561.9

 

 

ZoomInfo Technologies Inc.

Consolidated Statements of Operations

(in millions, except per share amounts; unaudited)

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2020

 

2019

 

2020

 

2019

 

 

 

 

 

 

 

 

Revenue

$

123.4

 

 

 

$

79.1

 

 

 

$

336.5

 

 

 

$

202.2

 

 

 

 

 

 

 

 

 

 

Cost of service:

 

 

 

 

 

 

 

Cost of service(2)

21.2

 

 

 

11.2

 

 

 

64.2

 

 

 

30.5

 

 

Amortization of acquired technology

5.5

 

 

 

6.6

 

 

 

16.7

 

 

 

19.6

 

 

Gross profit

96.7

 

 

 

61.3

 

 

 

255.6

 

 

 

152.1

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Sales and marketing(2)

46.1

 

 

 

24.2

 

 

 

139.7

 

 

 

63.0

 

 

Research and development(2)

10.6

 

 

 

7.5

 

 

 

36.9

 

 

 

21.6

 

 

General and administrative(2)

17.1

 

 

 

9.1

 

 

 

45.3

 

 

 

25.9

 

 

Amortization of other acquired intangibles

4.6

 

 

 

4.6

 

 

 

13.9

 

 

 

12.9

 

 

Restructuring and transaction related expenses

(0.1

)

 

 

2.8

 

 

 

12.3

 

 

 

11.8

 

 

Total operating expenses

78.3

 

 

 

48.2

 

 

 

248.1

 

 

 

135.2

 

 

Income (loss) from operations

18.4

 

 

 

13.1

 

 

 

7.5

 

 

 

16.9

 

 

 

 

 

 

 

 

 

 

Interest expense, net

9.7

 

 

 

26.5

 

 

 

59.3

 

 

 

76.9

 

 

Loss on debt extinguishment

 

 

 

 

 

 

14.9

 

 

 

18.2

 

 

Other (income) expense, net

(3.8

)

 

 

 

 

 

(3.8

)

 

 

 

 

Income (loss) before income taxes

12.5

 

 

 

(13.4

)

 

 

(62.9

)

 

 

(78.2

)

 

Benefit (expense) from income taxes

(1.4

)

 

 

1.0

 

 

 

(9.8

)

 

 

5.7

 

 

Net income (loss)

11.1

 

 

 

(12.4

)

 

 

(72.7

)

 

 

(72.5

)

 

Less: Net income (loss) attributable to ZoomInfo OpCo prior to the Reorganization Transactions

 

 

 

(12.4

)

 

 

(5.1

)

 

 

(72.5

)

 

Less: Net income (loss) attributable to noncontrolling interests

6.2

 

 

 

 

 

 

(38.1

)

 

 

 

 

Net income (loss) attributable to ZoomInfo Technologies Inc.

$

4.9

 

 

 

$

 

 

 

$

(29.5

)

 

 

$

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share of Class A and Class C common stock(1):

 

 

 

 

 

 

 

Basic

$

0.03

 

 

 

 

 

 

$

   

 

 

 

 

Diluted

$

0.02

 

 

 

 

 

 

$

   

 

 

 

 

(1)

Basic and diluted earnings per share of Class A and Class C common stock is applicable only for the period from June 4, 2020 through September 30, 2020, which is the period following the initial public offering ("IPO") and related Reorganization Transactions.

(2)

Amounts include equity-based compensation expense, as follows:

Cost of service

$

6.8

 

 

$

1.0

 

 

$

23.8

 

 

$

2.9

 

Sales and marketing

15.2

 

 

3.1

 

 

53.6

 

 

7.2

 

Research and development

1.8

 

 

0.5

 

 

11.9

 

 

3.4

 

General and administrative

4.6

 

 

0.9

 

 

14.9

 

 

3.6

 

Total equity-based compensation expense

$

28.4

 

 

$

5.5

 

 

$

104.2

 

 

$

17.1

 

ZoomInfo Technologies Inc.

Consolidated Statements of Comprehensive Income (Loss)

 

(in millions; unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2020

 

2019

 

2020

 

2019

 

 

 

 

 

 

 

 

Net income (loss)

$

11.1

 

 

$

(12.4

)

 

$

(72.7

)

 

$

(72.5

)

Other comprehensive income (loss), net of tax

 

 

 

 

 

 

 

Unrealized gain (loss) on cash flow hedges

(1.5

)

 

(1.4

)

 

(11.1

)

 

(7.3

)

Realized loss (gain) on settlement of cash flow hedges

1.7

 

 

0.1

 

 

4.0

 

 

0.1

 

Amortization of deferred losses related to the dedesignated Interest Rate Swap

 

 

 

 

3.0

 

 

 

Other comprehensive income (loss)

0.2

 

 

(1.3

)

 

(4.1

)

 

(7.2

)

Comprehensive income (loss)

11.3

 

 

(13.7

)

 

(76.8

)

 

(79.7

)

Less: Net income attributable to ZoomInfo OpCo prior to the Reorganization Transactions

 

 

(13.7

)

 

(12.8

)

 

(79.7

)

Less: Comprehensive income (loss) attributable to noncontrolling interests

6.3

 

 

 

 

(35.7

)

 

 

Comprehensive income (loss) attributable to ZoomInfo Technologies Inc.

$

5.0

 

 

$

 

 

$

(28.3

)

 

$

 

ZoomInfo Technologies Inc.

Consolidated Statements of Cash Flows

(in millions; unaudited)

 

Nine Months Ended September 30,

 

2020

 

2019

Cash flows from operating activities:

 

 

 

Net income (loss)

$

(72.7

)

 

 

$

(72.5

)

 

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

 

 

 

Depreciation and amortization

37.0

 

 

 

36.7

 

 

Amortization of debt discounts and issuance costs

3.2

 

 

 

3.6

 

 

Amortization of deferred commissions costs

17.5

 

 

 

4.5

 

 

Loss on early extinguishment of debt

14.9

 

 

 

9.4

 

 

Deferred consideration valuation adjustments

1.2

 

 

 

1.0

 

 

Equity-based compensation expense

104.2

 

 

 

17.1

 

 

Deferred income taxes

4.5

 

 

 

(6.1

)

 

Tax receivable agreement remeasurement

(3.9

)

   

   

Provision for bad debt expense

1.1

 

 

 

0.4

 

 

Changes in operating assets and liabilities, net of acquisitions:

 

 

 

Accounts receivable

(4.6

)

 

 

(7.4

)

 

Prepaid expenses and other current assets

(2.7

)

 

 

(1.3

)

 

Deferred costs and other assets

(22.3

)

 

 

(13.2

)

 

Income tax receivable

(0.2

)

 

 

(1.9

)

 

Accounts payable

1.8

 

 

 

4.7

 

 

Accrued expenses and other liabilities

6.9

 

 

 

6.2

 

 

Unearned revenue

16.8

 

 

 

46.2

 

 

Net cash provided by (used in) operating activities

102.7

 

 

 

27.4

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

Purchases of property and equipment and other assets

(11.8

)

 

 

(9.3

)

 

Cash paid for acquisitions, net of cash acquired

 

 

 

(714.9

)

 

Net cash provided by (used in) investing activities

(11.8

)

 

 

(724.2

)

 

 

 

 

 

Cash flows from financing activities:

 

 

 

Payments of deferred consideration

(24.7

)

 

 

(0.3

)

 

Proceeds from debt

35.0

 

 

 

1,220.8

 

 

Repayment of debt

(510.9

)

 

 

(647.6

)

 

Payments of debt issuance costs

(1.0

)

 

 

(16.7

)

 

Repurchase outstanding equity / member units

(332.4

)

 

 

(11.9

)

 

Proceeds from equity offering, net of underwriting discounts

1,023.7

 

 

 

200.2

 

 

Payments of IPO issuance costs

(7.2

)

 

 

 

 

Tax distributions

(9.9

)

 

 

(16.5

)

 

Net cash provided by (used in) financing activities

172.6

 

 

 

728.0

 

 

 

 

 

 

Net increase (decrease) in cash, cash equivalents, and restricted cash

263.5

 

 

 

31.2

 

 

Cash, cash equivalents, and restricted cash at beginning of period

42.5

 

 

 

9.0

 

 

Cash, cash equivalents, and restricted cash at end of period

$

306.0

 

 

 

$

40.2

 

 

 

 

 

 

Supplemental disclosures of cash flow information

 

 

 

Interest paid in cash

$

56.8

 

 

 

$

70.7

 

 

Cash paid for taxes

$

0.8

 

 

 

$

 

 

 

 

 

 

Supplemental disclosures of non-cash investing and financing activities:

 

 

 

Deferred variable consideration from acquisition of a business

$

 

 

 

$

33.2

 

 

ZoomInfo Technologies Inc.

Reconciliation of GAAP Operating Cash Flow to Unlevered Free Cash Flow

($ in millions; unaudited)

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2020

 

2019

 

2020

 

2019

 

 

 

 

 

 

 

 

Cash flow from operations

$

49.1

 

 

 

$

18.5

 

 

 

$

102.7

 

 

 

$

27.4

 

 

Purchases of property and equipment and other assets

(3.6

)

 

 

(3.1

)

 

 

(11.8

)

 

 

(9.3

)

 

Interest paid in cash

9.7

 

 

 

23.0

 

 

 

56.8

 

 

 

70.7

 

 

Restructuring and transaction-related expenses paid in cash

2.5

 

 

 

2.0

 

 

 

11.7

 

 

 

10.4

 

 

Integration costs and acquisition-related compensation paid in cash

2.2

 

 

 

6.4

 

 

 

7.6

 

 

 

12.9

 

 

Unlevered Free Cash Flow

$

59.8

 

 

 

$

46.7

 

 

 

$

167.0

 

 

 

$

112.1

 

 

ZoomInfo Technologies Inc.

Reconciliation of GAAP Revenue to Allocated Combined Receipts

($ in millions; unaudited)

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2020

 

2019

 

2020

 

2019

Revenue

$

123.4

 

 

$

79.1

 

 

$

336.5

 

 

$

202.2

 

Impact of fair value adjustments to acquired unearned revenue

0.2

 

 

8.1

 

 

1.9

 

 

27.3

 

Pre-Acquisition ZI revenue

 

 

 

 

 

 

9.7

 

Impact of fair value adjustments to acquired unearned revenue recorded by Pre-Acquisition ZI

 

 

 

 

 

 

0.1

 

Pre-acquisition revenue of other acquired companies

 

 

0.2

 

 

 

 

0.6

 

Allocated Combined Receipts

$

123.6

 

 

$

87.5

 

 

$

338.4

 

 

$

239.9

 

Growth

41

%

 

 

 

41

%

 

 

ZoomInfo Technologies Inc.

Reconciliation of GAAP Net Income (Loss) to Adjusted Net Income and Income (Loss) From Operations to Adjusted Operating Income

(in millions, except per share amounts; unaudited)

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2020

 

2019

 

2020

 

2019

Net income (loss)

$

11.1

 

 

 

$

(12.4

)

 

 

$

(72.7

)

 

 

$

(72.5

)

 

Benefit (expense) from income taxes

1.4

 

 

 

(1.0

)

 

 

9.8

 

 

 

(5.7

)

 

Interest expense, net

9.7

 

 

 

26.5

 

 

 

59.3

 

 

 

76.9

 

 

Loss on debt extinguishment

 

 

 

 

 

 

14.9

 

 

 

18.2

 

 

Other (income) expense, net

(3.8

)

 

 

 

 

 

(3.8

)

 

 

 

 

Income (loss) from operations

18.4

 

 

 

13.1

 

 

 

7.5

 

 

 

16.9

 

 

Impact of fair value adjustments to acquired unearned revenue

0.2

 

 

 

8.1

 

 

 

1.9

 

 

 

27.3

 

 

Amortization of acquired technology

5.5

 

 

 

6.6

 

 

 

16.7

 

 

 

19.6

 

 

Amortization of other acquired intangibles

4.6

 

 

 

4.6

 

 

 

13.9

 

 

 

12.9

 

 

Equity-based compensation expense

28.4

 

 

 

5.5

 

 

 

104.2

 

 

 

17.1

 

 

Restructuring and transaction related expenses

(0.1

)

 

 

2.8

 

 

 

12.3

 

 

 

11.8

 

 

Integration costs and acquisition-related expenses

1.5

 

 

 

6.1

 

 

 

6.0

 

 

 

14.3

 

 

Adjusted Operating Income

58.5

 

 

 

47.0

 

 

 

162.6

 

 

 

120.0

 

 

Interest expense, net

(9.7

)

 

 

(26.5

)

 

 

(59.3

)

 

 

(76.9

)

 

Other (income) expense, net

3.8

 

 

 

 

 

 

3.8

 

 

 

 

 

Benefit (expense) from income taxes

(1.4

)

 

 

1.0

 

 

 

(9.8

)

 

 

5.7

 

 

Tax impacts of adjustments to net income (loss)

(4.6

)

 

 

(1.8

)

 

 

(3.4

)

 

 

(7.4

)

 

Adjusted Net Income

$

42.8

 

 

 

$

19.7

 

 

 

$

89.9

 

 

 

$

41.4

 

 

 

 

 

 

 

 

 

 

Shares for Adjusted Net Income Per Share(1)

403

 

 

 

 

 

403

 

 

 

 

Adjusted Net Income Per Share

$

0.11

 

 

 

 

 

$

0.22

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

($ in millions)

2020

 

2019

 

2020

 

2019

Adjusted Operating Income

$

58.5

 

 

$

47.0

 

 

$

162.6

 

 

$

120.0

 

 

 

 

 

 

 

 

 

Revenue

123.4

 

 

79.1

 

 

336.5

 

 

202.2

 

Impact of fair value adjustments to acquired unearned revenue

0.2

 

 

8.1

 

 

1.9

 

 

27.3

 

Revenue for adjusted operating margin calculation

$

123.6

 

 

$

87.2

 

 

$

338.4

 

 

$

229.5

 

Adjusted Operating Income Margin

47

%

 

54

%

 

48

%

 

52

%

____________________________________________

  1. Diluted earnings per share is computed by giving effect to all potential weighted average Class A common stock, Class C common stock, and any securities that are convertible into Class A common stock, including options and restricted stock units. The dilutive effect of outstanding awards and convertible securities is reflected in diluted earnings per share by application of the treasury stock method, excluding deemed repurchases assuming proceeds from unrecognized compensation as required by GAAP. Shares and grants issued in conjunction with the IPO were assumed to be issued at the beginning of the period.

 

Investor Contact:
Jeremiah Sisitsky
VP of Investor Relations
617-826-2068
IR@zoominfo.com

Media Contact
Steve Vittorioso
Director, Communications
978-875-1297
PR@zoominfo.com

Source: ZoomInfo

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