zi-20210331FALSE2021Q1000179451512/31us-gaap:ServiceMemberP4YP4YP1YP2Y00017945152021-01-012021-03-31xbrli:shares0001794515us-gaap:CommonClassAMember2021-04-230001794515us-gaap:CommonClassBMember2021-04-230001794515us-gaap:CommonClassCMember2021-04-23iso4217:USD00017945152021-03-3100017945152020-12-31iso4217:USDxbrli:shares0001794515us-gaap:CommonClassAMember2020-12-310001794515us-gaap:CommonClassAMember2021-03-310001794515us-gaap:CommonClassBMember2021-03-310001794515us-gaap:CommonClassBMember2020-12-310001794515us-gaap:CommonClassCMember2021-03-310001794515us-gaap:CommonClassCMember2020-12-3100017945152020-01-012020-03-310001794515us-gaap:CostOfSalesMember2021-01-012021-03-310001794515us-gaap:CostOfSalesMember2020-01-012020-03-310001794515us-gaap:SellingAndMarketingExpenseMember2021-01-012021-03-310001794515us-gaap:SellingAndMarketingExpenseMember2020-01-012020-03-310001794515us-gaap:ResearchAndDevelopmentExpenseMember2021-01-012021-03-310001794515us-gaap:ResearchAndDevelopmentExpenseMember2020-01-012020-03-310001794515us-gaap:GeneralAndAdministrativeExpenseMember2021-01-012021-03-310001794515us-gaap:GeneralAndAdministrativeExpenseMember2020-01-012020-03-310001794515us-gaap:CommonClassAMemberus-gaap:CommonStockMember2020-12-310001794515us-gaap:CommonClassBMemberus-gaap:CommonStockMember2020-12-310001794515us-gaap:CommonClassCMemberus-gaap:CommonStockMember2020-12-310001794515us-gaap:AdditionalPaidInCapitalMember2020-12-310001794515us-gaap:RetainedEarningsMember2020-12-310001794515us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310001794515us-gaap:NoncontrollingInterestMember2020-12-310001794515us-gaap:CommonClassAMemberus-gaap:CommonStockMember2021-01-012021-03-310001794515us-gaap:CommonClassBMemberus-gaap:CommonStockMember2021-01-012021-03-310001794515us-gaap:CommonClassCMemberus-gaap:CommonStockMember2021-01-012021-03-310001794515us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-310001794515us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-310001794515us-gaap:NoncontrollingInterestMember2021-01-012021-03-310001794515us-gaap:RetainedEarningsMember2021-01-012021-03-310001794515us-gaap:CommonClassAMemberus-gaap:CommonStockMember2021-03-310001794515us-gaap:CommonClassBMemberus-gaap:CommonStockMember2021-03-310001794515us-gaap:CommonClassCMemberus-gaap:CommonStockMember2021-03-310001794515us-gaap:AdditionalPaidInCapitalMember2021-03-310001794515us-gaap:RetainedEarningsMember2021-03-310001794515us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-310001794515us-gaap:NoncontrollingInterestMember2021-03-310001794515zi:PreAcquisitionZoomInformationIncMember2019-12-310001794515us-gaap:CommonClassAMemberus-gaap:CommonStockMember2019-12-310001794515us-gaap:CommonClassBMemberus-gaap:CommonStockMember2019-12-310001794515us-gaap:CommonClassCMemberus-gaap:CommonStockMember2019-12-310001794515us-gaap:AdditionalPaidInCapitalMember2019-12-310001794515us-gaap:RetainedEarningsMember2019-12-310001794515us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-310001794515us-gaap:NoncontrollingInterestMember2019-12-3100017945152019-12-310001794515zi:PreAcquisitionZoomInformationIncMember2020-01-012020-03-310001794515us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-012020-03-310001794515zi:PreAcquisitionZoomInformationIncMember2020-03-310001794515us-gaap:CommonClassAMemberus-gaap:CommonStockMember2020-03-310001794515us-gaap:CommonClassBMemberus-gaap:CommonStockMember2020-03-310001794515us-gaap:CommonClassCMemberus-gaap:CommonStockMember2020-03-310001794515us-gaap:AdditionalPaidInCapitalMember2020-03-310001794515us-gaap:RetainedEarningsMember2020-03-310001794515us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-03-310001794515us-gaap:NoncontrollingInterestMember2020-03-3100017945152020-03-31zi:office0001794515country:US2021-01-012021-03-310001794515country:IL2021-01-012021-03-310001794515us-gaap:IPOMemberus-gaap:CommonClassAMember2020-06-082020-06-080001794515us-gaap:IPOMemberus-gaap:CommonClassAMember2020-06-080001794515zi:ZoomInfoHoldCoMember2020-06-082020-06-080001794515zi:ZoomInfoOpCoMember2020-06-082020-06-080001794515zi:BlockerMergersMember2020-06-082020-06-08xbrli:pure00017945152020-06-082020-06-080001794515zi:ZoomInfoHoldCoMember2021-03-310001794515zi:ZoomInfoHoldCoMemberzi:ZoomInfoOpCoMember2021-03-31zi:agreement0001794515srt:MinimumMember2021-01-012021-03-310001794515srt:MaximumMember2021-01-012021-03-310001794515zi:AccruedLiabilitiesCurrentMember2021-03-310001794515us-gaap:OtherNoncurrentLiabilitiesMember2021-03-310001794515zi:AccruedLiabilitiesCurrentMember2020-12-310001794515us-gaap:OtherNoncurrentLiabilitiesMember2020-12-310001794515us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2021-01-012021-03-31zi:segment0001794515us-gaap:SubscriptionAndCirculationMember2021-01-012021-03-310001794515us-gaap:SubscriptionAndCirculationMember2020-01-012020-03-310001794515zi:EmailVerificationServiceMember2021-01-012021-03-310001794515zi:EmailVerificationServiceMember2020-01-012020-03-310001794515us-gaap:RevenueFromContractWithCustomerMemberus-gaap:GeographicConcentrationRiskMemberus-gaap:NonUsMember2021-01-012021-03-310001794515us-gaap:RevenueFromContractWithCustomerMemberus-gaap:GeographicConcentrationRiskMemberus-gaap:NonUsMember2020-01-012020-03-3100017945152020-10-01srt:MinimumMember2021-03-3100017945152020-10-01srt:MaximumMember2021-03-3100017945152020-10-012021-03-3100017945152021-10-012021-03-310001794515zi:A2020BusinessAcquisitionsMember2020-10-012020-12-310001794515zi:A2020BusinessAcquisitionsMember2021-01-012021-03-310001794515us-gaap:RestrictedStockUnitsRSUMemberzi:A2020BusinessAcquisitionsMember2020-10-012020-12-310001794515us-gaap:CommonClassAMemberzi:A2020BusinessAcquisitionsMember2020-10-012020-12-310001794515zi:A2020BusinessAcquisitionsMember2020-12-310001794515zi:BrandPortfolioMemberzi:A2020BusinessAcquisitionsMember2020-10-012020-12-310001794515us-gaap:TechnologyEquipmentMemberzi:A2020BusinessAcquisitionsMember2020-10-012020-12-310001794515us-gaap:DatabasesMemberzi:A2020BusinessAcquisitionsMember2020-10-012020-12-310001794515us-gaap:CustomerRelationshipsMemberzi:A2020BusinessAcquisitionsMember2020-10-012020-12-310001794515us-gaap:CorporateDebtSecuritiesMember2021-03-310001794515us-gaap:MoneyMarketFundsMember2021-03-310001794515us-gaap:USGovernmentAgenciesDebtSecuritiesMember2021-03-310001794515zi:OtherGovernmentalSecuritiesMember2021-03-310001794515us-gaap:CorporateDebtSecuritiesMember2020-12-310001794515us-gaap:MoneyMarketFundsMember2020-12-310001794515us-gaap:USGovernmentAgenciesDebtSecuritiesMember2020-12-310001794515us-gaap:ComputerEquipmentMember2021-03-310001794515us-gaap:ComputerEquipmentMember2020-12-310001794515us-gaap:FurnitureAndFixturesMember2021-03-310001794515us-gaap:FurnitureAndFixturesMember2020-12-310001794515us-gaap:LeaseholdImprovementsMember2021-03-310001794515us-gaap:LeaseholdImprovementsMember2020-12-310001794515us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2021-03-310001794515us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2020-12-310001794515us-gaap:ConstructionInProgressMember2021-03-310001794515us-gaap:ConstructionInProgressMember2020-12-310001794515zi:OfficeRelocationMember2021-01-012021-03-310001794515zi:OfficeRelocationMemberzi:OperatingLeaseRightOfUseAssetMember2021-01-012021-03-310001794515zi:OfficeRelocationMemberus-gaap:LeaseholdImprovementsMember2021-01-012021-03-310001794515zi:OfficeRelocationMemberus-gaap:FurnitureAndFixturesMember2021-01-012021-03-310001794515us-gaap:CustomerRelationshipsMember2021-03-310001794515us-gaap:CustomerRelationshipsMember2021-01-012021-03-310001794515us-gaap:TechnologyBasedIntangibleAssetsMember2021-03-310001794515us-gaap:TechnologyBasedIntangibleAssetsMember2021-01-012021-03-310001794515zi:BrandPortfolioMember2021-03-310001794515zi:BrandPortfolioMember2021-01-012021-03-310001794515zi:PreAcquisitionBrandPortfolioMember2021-03-310001794515zi:FirstLienTermLoanMemberus-gaap:SecuredDebtMember2021-01-012021-03-310001794515zi:FirstLienTermLoanMemberus-gaap:SecuredDebtMember2021-03-310001794515zi:FirstLienTermLoanMemberus-gaap:SecuredDebtMember2020-12-310001794515us-gaap:RevolvingCreditFacilityMember2021-01-012021-03-310001794515us-gaap:RevolvingCreditFacilityMember2021-03-310001794515us-gaap:RevolvingCreditFacilityMember2020-12-310001794515us-gaap:SeniorNotesMemberzi:A3875SeniorNotesMember2021-03-310001794515us-gaap:SeniorNotesMemberzi:A3875SeniorNotesMember2020-12-310001794515us-gaap:SeniorNotesMemberzi:ThreePointEightSevenFivePercentSeniorNotesDue2029Member2021-02-280001794515us-gaap:SeniorNotesMemberzi:PriorToFebruary12024Memberzi:ThreePointEightSevenFivePercentSeniorNotesDue2029Member2021-01-012021-03-310001794515zi:BeginningOnFebruary12024Memberus-gaap:SeniorNotesMemberzi:ThreePointEightSevenFivePercentSeniorNotesDue2029Member2021-01-012021-03-310001794515zi:PrincipalAmountRedeemedOnFebruary12025Memberus-gaap:SeniorNotesMemberzi:ThreePointEightSevenFivePercentSeniorNotesDue2029Member2021-01-012021-03-310001794515zi:PrincipalAmountRedeemedOnFebruary12026Memberus-gaap:SeniorNotesMemberzi:ThreePointEightSevenFivePercentSeniorNotesDue2029Member2021-01-012021-03-310001794515srt:MaximumMemberus-gaap:SeniorNotesMemberzi:PriorToFebruary12024Memberzi:ThreePointEightSevenFivePercentSeniorNotesDue2029Member2021-02-012021-02-280001794515us-gaap:SeniorNotesMemberzi:PriorToFebruary12024Memberzi:ThreePointEightSevenFivePercentSeniorNotesDue2029Member2021-02-012021-02-280001794515zi:FirstLienTermLoanMemberus-gaap:SecuredDebtMember2021-02-012021-02-280001794515zi:FirstLienTermLoanMemberus-gaap:SecuredDebtMember2021-02-280001794515us-gaap:LondonInterbankOfferedRateLIBORMemberzi:FirstLienTermLoanMemberus-gaap:SecuredDebtMember2021-02-012021-02-280001794515us-gaap:BaseRateMemberzi:FirstLienTermLoanMemberus-gaap:SecuredDebtMember2021-01-012021-03-310001794515us-gaap:LondonInterbankOfferedRateLIBORMemberzi:FirstLienTermLoanMemberus-gaap:SecuredDebtMember2021-01-012021-03-310001794515zi:FirstLienTermLoanMember2021-02-280001794515us-gaap:BaseRateMemberzi:FirstLienTermLoanMemberus-gaap:SecuredDebtMembersrt:MinimumMember2020-02-192020-02-190001794515us-gaap:BaseRateMembersrt:MaximumMemberzi:FirstLienTermLoanMemberus-gaap:SecuredDebtMember2020-02-192020-02-190001794515us-gaap:LondonInterbankOfferedRateLIBORMemberzi:FirstLienTermLoanMemberus-gaap:SecuredDebtMembersrt:MinimumMember2020-02-192020-02-190001794515srt:MaximumMemberus-gaap:LondonInterbankOfferedRateLIBORMemberzi:FirstLienTermLoanMemberus-gaap:SecuredDebtMember2020-02-192020-02-190001794515us-gaap:RevolvingCreditFacilityMember2020-03-250001794515us-gaap:RevolvingCreditFacilityMember2020-06-082020-06-080001794515us-gaap:RevolvingCreditFacilityMember2020-06-080001794515zi:FirstLienTermLoanMember2021-02-022021-02-020001794515us-gaap:InterestRateCapMemberus-gaap:NondesignatedMemberus-gaap:CashFlowHedgingMember2021-02-020001794515us-gaap:InterestRateCapMemberus-gaap:NondesignatedMemberus-gaap:CashFlowHedgingMember2021-03-310001794515us-gaap:ForwardContractsMemberus-gaap:NondesignatedMemberus-gaap:CashFlowHedgingMember2021-03-31zi:instrument0001794515us-gaap:InterestRateCapMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2021-03-310001794515us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMember2021-03-310001794515us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:ForwardContractsMemberus-gaap:CashFlowHedgingMember2021-03-310001794515zi:AccruedLiabilitiesCurrentMemberus-gaap:InterestRateCapMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2021-03-310001794515zi:AccruedLiabilitiesCurrentMemberus-gaap:InterestRateCapMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2020-12-310001794515us-gaap:OtherNoncurrentLiabilitiesMemberus-gaap:InterestRateCapMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2021-03-310001794515us-gaap:OtherNoncurrentLiabilitiesMemberus-gaap:InterestRateCapMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2020-12-310001794515zi:AccruedLiabilitiesCurrentMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMember2021-03-310001794515zi:AccruedLiabilitiesCurrentMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMember2020-12-310001794515us-gaap:OtherNoncurrentLiabilitiesMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMember2021-03-310001794515us-gaap:OtherNoncurrentLiabilitiesMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMember2020-12-310001794515zi:DeferredCostsAndOtherAssetsNetOfCurrentPortionMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:ForwardContractsMemberus-gaap:CashFlowHedgingMember2021-03-310001794515zi:DeferredCostsAndOtherAssetsNetOfCurrentPortionMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:ForwardContractsMemberus-gaap:CashFlowHedgingMember2020-12-310001794515us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2021-03-310001794515us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2020-12-310001794515zi:AccruedLiabilitiesCurrentMemberus-gaap:InterestRateCapMemberus-gaap:NondesignatedMember2021-03-310001794515zi:AccruedLiabilitiesCurrentMemberus-gaap:InterestRateCapMemberus-gaap:NondesignatedMember2020-12-310001794515us-gaap:OtherNoncurrentLiabilitiesMemberus-gaap:InterestRateCapMemberus-gaap:NondesignatedMember2021-03-310001794515us-gaap:OtherNoncurrentLiabilitiesMemberus-gaap:InterestRateCapMemberus-gaap:NondesignatedMember2020-12-310001794515us-gaap:InterestRateCapMemberzi:DeferredCostsAndOtherAssetsNetOfCurrentPortionMemberus-gaap:NondesignatedMember2021-03-310001794515us-gaap:InterestRateCapMemberzi:DeferredCostsAndOtherAssetsNetOfCurrentPortionMemberus-gaap:NondesignatedMember2020-12-310001794515zi:DeferredCostsAndOtherAssetsNetOfCurrentPortionMemberus-gaap:ForwardContractsMemberus-gaap:NondesignatedMemberus-gaap:CashFlowHedgingMember2021-03-310001794515zi:DeferredCostsAndOtherAssetsNetOfCurrentPortionMemberus-gaap:ForwardContractsMemberus-gaap:NondesignatedMemberus-gaap:CashFlowHedgingMember2020-12-310001794515us-gaap:NondesignatedMember2021-03-310001794515us-gaap:NondesignatedMember2020-12-310001794515zi:FirstLienTermLoanMember2021-03-310001794515us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2021-03-310001794515us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2021-03-310001794515us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2021-03-310001794515us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2021-03-310001794515us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2021-03-310001794515us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2021-03-310001794515us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2021-03-310001794515us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2021-03-310001794515us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2021-03-310001794515us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberzi:OtherGovernmentalSecuritiesMember2021-03-310001794515us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberzi:OtherGovernmentalSecuritiesMember2021-03-310001794515us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberzi:OtherGovernmentalSecuritiesMember2021-03-310001794515us-gaap:FairValueInputsLevel1Memberus-gaap:InterestRateCapMemberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001794515us-gaap:InterestRateCapMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001794515us-gaap:FairValueInputsLevel3Memberus-gaap:InterestRateCapMemberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001794515us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberzi:ForwardStartingInterestRateSwapMember2021-03-310001794515us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberzi:ForwardStartingInterestRateSwapMember2021-03-310001794515us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberzi:ForwardStartingInterestRateSwapMember2021-03-310001794515us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:InterestRateSwapMember2021-03-310001794515us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:InterestRateSwapMember2021-03-310001794515us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:InterestRateSwapMember2021-03-310001794515us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:CorporateDebtSecuritiesMember2021-03-310001794515us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:CorporateDebtSecuritiesMember2021-03-310001794515us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:CorporateDebtSecuritiesMember2021-03-310001794515us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2020-12-310001794515us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2020-12-310001794515us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2020-12-310001794515us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2020-12-310001794515us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2020-12-310001794515us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2020-12-310001794515us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2020-12-310001794515us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2020-12-310001794515us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2020-12-310001794515us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberzi:ForwardStartingInterestRateSwapMember2020-12-310001794515us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberzi:ForwardStartingInterestRateSwapMember2020-12-310001794515us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberzi:ForwardStartingInterestRateSwapMember2020-12-310001794515us-gaap:FairValueInputsLevel1Memberus-gaap:InterestRateCapMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001794515us-gaap:InterestRateCapMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001794515us-gaap:FairValueInputsLevel3Memberus-gaap:InterestRateCapMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001794515us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:InterestRateSwapMember2020-12-310001794515us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:InterestRateSwapMember2020-12-310001794515us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:InterestRateSwapMember2020-12-310001794515zi:KomikoLTDMember2021-03-310001794515zi:ZoomInfoHoldCoMember2021-03-310001794515us-gaap:CommonClassAMember2021-01-012021-03-310001794515us-gaap:CommonClassCMember2021-01-012021-03-310001794515us-gaap:CommonClassAMemberzi:OpCoUnitsMember2021-01-012021-03-310001794515zi:ClassPUnitsMemberus-gaap:CommonClassAMember2021-01-012021-03-310001794515us-gaap:CommonClassAMemberzi:HSKBIClass1UnitsMember2021-01-012021-03-310001794515zi:HSKBIIClass1UnitsMemberus-gaap:CommonClassAMember2021-01-012021-03-310001794515us-gaap:PhantomShareUnitsPSUsMemberus-gaap:CommonClassAMember2021-01-012021-03-310001794515us-gaap:CommonClassAMemberzi:HoldCoUnitsMember2021-01-012021-03-310001794515us-gaap:RestrictedStockUnitsRSUMemberus-gaap:CommonClassAMember2021-01-012021-03-310001794515zi:LTIPUnitsMemberus-gaap:CommonClassAMember2021-01-012021-03-310001794515us-gaap:CommonClassAMemberus-gaap:EmployeeStockOptionMember2021-01-012021-03-310001794515zi:OpCoUnitsMember2021-01-012021-03-310001794515zi:HSKBIClass1UnitsMember2021-01-012021-03-310001794515zi:HSKBIIClass1UnitsMember2021-01-012021-03-310001794515us-gaap:PhantomShareUnitsPSUsMember2021-01-012021-03-310001794515zi:PreAcquisitionZoomInformationIncMember2021-01-012021-03-310001794515zi:PreAcquisitionZoomInformationIncMember2020-01-012020-03-310001794515us-gaap:CommonClassAMemberzi:OmnibusIncentivePlan2020Member2020-05-270001794515us-gaap:CommonClassAMemberzi:OmnibusIncentivePlan2020Member2020-12-312020-12-310001794515zi:ClassPUnitsMember2020-06-082020-06-080001794515zi:HoldCoUnitsMember2020-06-082020-06-080001794515us-gaap:EmployeeStockOptionMember2020-06-082020-06-080001794515zi:PreIPOAwardsMember2020-01-012020-06-070001794515us-gaap:ShareBasedCompensationAwardTrancheOneMemberzi:PreIPOAwardsMember2020-01-012020-06-070001794515zi:PostIPOAwardsMember2020-06-082020-06-300001794515us-gaap:ShareBasedCompensationAwardTrancheOneMemberzi:PostIPOAwardsMember2020-06-082020-06-300001794515zi:PostIPOAwardsMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2020-06-082020-06-300001794515us-gaap:RestrictedStockUnitsRSUMember2020-12-310001794515us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-03-310001794515us-gaap:RestrictedStockUnitsRSUMember2021-03-310001794515us-gaap:EmployeeStockOptionMember2020-12-310001794515us-gaap:EmployeeStockOptionMember2021-01-012021-03-310001794515us-gaap:EmployeeStockOptionMember2021-03-310001794515zi:HoldCoUnitsMember2020-12-310001794515zi:HoldCoUnitsMember2021-01-012021-03-310001794515zi:HoldCoUnitsMember2021-03-310001794515zi:OpCoUnitsMember2020-12-310001794515zi:OpCoUnitsMember2019-12-310001794515zi:OpCoUnitsMember2021-01-012021-03-310001794515zi:OpCoUnitsMember2020-01-012020-03-310001794515zi:OpCoUnitsMember2021-03-310001794515zi:OpCoUnitsMember2020-03-310001794515zi:ClassPUnitsMember2020-12-310001794515zi:ClassPUnitsMember2019-12-310001794515zi:ClassPUnitsMember2021-01-012021-03-310001794515zi:ClassPUnitsMember2020-01-012020-03-310001794515zi:ClassPUnitsMember2021-03-310001794515zi:ClassPUnitsMember2020-03-310001794515zi:LTIPUnitsMember2020-12-310001794515zi:LTIPUnitsMember2021-01-012021-03-310001794515zi:LTIPUnitsMember2021-03-310001794515zi:Class1UnitMemberus-gaap:CommonClassAMember2021-01-012021-03-310001794515zi:IncentiveUnitsMember2019-11-300001794515us-gaap:ShareBasedCompensationAwardTrancheOneMemberzi:IncentiveUnitsMember2019-12-012019-12-31zi:grantee0001794515zi:IncentiveUnitsMember2019-12-012019-12-310001794515zi:IncentiveUnitsMember2019-01-012019-09-300001794515zi:IncentiveUnitsMember2019-12-310001794515zi:IncentiveUnitsMember2020-12-310001794515zi:IncentiveUnitsMember2020-03-312020-03-310001794515zi:IncentiveUnitsMember2021-01-012021-03-310001794515zi:IncentiveUnitsMember2021-03-310001794515zi:A2019PhantomUnitPlanMemberzi:PhantomUnitsMemberzi:CommonUnitsMember2021-01-012021-03-310001794515zi:A2019PhantomUnitPlanMemberzi:PhantomUnitsMember2019-12-012019-12-310001794515zi:HSKBUnitsMember2021-03-310001794515zi:HSKBUnitsMember2021-01-012021-03-310001794515zi:PhantomUnitsMember2021-03-310001794515zi:PhantomUnitsMember2021-01-012021-03-31
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2021
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 001-39310
ZoomInfo Technologies Inc.
(Exact name of registrant as specified in its charter)
| | | | | | | | |
Delaware | | 84-3721253 |
(State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |
| | |
805 Broadway Street, Suite 900 | | |
Vancouver, Washington | | 98660 |
(Address of principal executive offices) | | (Zip Code) |
(800) 914-1220 |
(Registrant’s telephone number, including area code) |
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | |
Title of Each Class | Trading Symbol(s) | Name of each exchange on which registered |
Class A common stock, par value $0.01 per share | ZI | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| | | | | | | | | | | |
Large Accelerated Filer | ☐ | Accelerated Filer | ☐ |
Non-accelerated Filer | ☒ | Smaller reporting company | ☐ |
| | Emerging growth company | ☒ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of April 23, 2021, the number of outstanding shares of the registrant's common stock was:
103,199,260 shares of Class A common stock.
205,907,136 shares of Class B common stock.
82,253,336 shares of Class C common stock.
ZoomInfo Technologies Inc.
Quarterly Report on Form 10-Q
For the Quarterly Period Ended March 31, 2021
TABLE OF CONTENTS
GLOSSARY
As used in this quarterly report on Form 10-Q (this “Form 10-Q”), the terms identified below have the meanings specified below unless otherwise noted or the context indicates otherwise. References in this Form 10-Q to “ZoomInfo Technologies Inc.” refer to ZoomInfo Technologies Inc. and not to any of its subsidiaries unless the context indicates otherwise. References in this Form 10-Q to “ZoomInfo,” the “Company,” “we,” “us,” and “our” refer (1) prior to the consummation of the Reorganization Transactions, to ZoomInfo OpCo and its consolidated subsidiaries, and (2) after the consummation of the Reorganization Transactions, to ZoomInfo Technologies Inc. and its consolidated subsidiaries unless the context indicates otherwise.
•“2020 Form 10-K” refers to the Annual Report on Form 10-K of ZoomInfo Technologies Inc. for the fiscal year ended December 31, 2020 as filed with the SEC on February 26, 2021.
•“ACV” refers to annual contract value, or the total annualized value that a customer has agreed to pay for subscription services at any particular point in time under contract(s) that are or were enforceable at that point in time.
•“Blocker Companies” refers to certain of our Pre-IPO OpCo Unitholders that are taxable as corporations for U.S. federal income tax purposes.
•“Blocker Mergers” refers to the mergers described under “Reorganization Transactions” in Note 1 to our unaudited consolidated financial statements included in Part I, Item 1 of this Form 10-Q.
•“Carlyle” refers to investment funds associated with The Carlyle Group.
•“Class P Units” refers to Class P Units (including, without limitation, any indirectly held Class P Units) of ZoomInfo OpCo.
•“Continuing Class P Unitholders” refers to certain Pre-IPO Owners who continued to hold Class P Units following the consummation of the Reorganization Transactions and the IPO.
•“Continuing members” refers to Pre-IPO Owners who continue to hold HoldCo Units or OpCo Units following the Reorganization Transactions and the IPO.
•“Customers” refers to companies that have contracted with us to use our services and, at the time of measurement, maintain one or more active paid subscriptions to our platform. Paid subscriptions will generally include access for a number of employees or other affiliated persons of the customer.
•“Exchange Tax Receivable Agreement” refers to the tax receivable agreement entered into with certain Pre-IPO OpCo Unitholders.
•“Founders” refers to Henry Schuck, our Chief Executive Officer, and Kirk Brown.
•“HoldCo Units” refers to the class of units of ZoomInfo HoldCo.
•“HSKB” and “HSKB I” refers to HSKB Funds, LLC, a privately held limited liability company formed on February 9, 2016 for the purpose of issuing equity to certain persons who had performed and would continue to perform services for ZoomInfo OpCo.
•“HSKB II” refers to HSKB Funds II, LLC, a privately held limited liability company formed on May 28, 2020 for the purpose of effecting a reorganization of HSKB I at the time of the IPO and to issue equity to certain persons who had performed and would continue to perform services for ZoomInfo OpCo.
•“IPO” refers to the initial public offering of Class A common stock of ZoomInfo Technologies Inc.
•“LTIP Units” refers to a class of partnership units that are intended to qualify as “profit interests” in ZoomInfo OpCo for federal income tax purposes that, subject to certain conditions, including vesting, are convertible by the holder into OpCo Units.
•“OpCo Units” refers to the class of units of ZoomInfo OpCo and does not include Class P Units.
•“Pre-Acquisition ZI” refers to Zoom Information Inc.
•“Pre-IPO Blocker Holders” refers to the Pre-IPO Owners that held their interests in us through the Blocker Companies immediately prior to the IPO.
•“Pre-IPO HoldCo Unitholders” refers to the Pre-IPO Owners that held HoldCo Units immediately prior to the IPO.
•“Pre-IPO OpCo Unitholders” refers to the Pre-IPO Owners that held OpCo Units immediately prior to the IPO.
•“Pre-IPO Owners” refers collectively to the Sponsors, the Founders, and the management and other equity holders who were the owners of ZoomInfo OpCo immediately prior to the Reorganization Transactions.
•“Reorganization Tax Receivable Agreement” refers to the tax receivable agreement entered into with the Pre-IPO Blocker Holders.
•“Reorganization Transactions” refers to the transactions described under “Reorganization Transactions” in Note 1 to our unaudited consolidated financial statements included in Part I, Item 1 of this Form 10-Q.
•“SEC” refers to the Securities and Exchange Commission.
•“Secondary Offerings” refers to (i) the offering by certain selling stockholders, including entities affiliated with the Sponsors, of 17,179,135 shares of Class A common stock of ZoomInfo Technologies Inc. completed on August 24, 2020; and (ii) the offering by certain selling stockholders, including entities affiliated with the Sponsors, of 14,375,000 shares of Class A common stock of ZoomInfo Technologies Inc. completed on December 4, 2020, as applicable.
•“Securities Act” refers to the Securities Act of 1933, as amended.
•“Series A Preferred Units” refers to the Series A preferred units of ZoomInfo OpCo outstanding immediately prior to the IPO.
•“Sponsors” refers collectively to TA Associates, Carlyle, and investment funds associated with 22C Capital LLC and its predecessor.
•“TA Associates” refers to investment funds associated with TA Associates.
•“Tax Receivable Agreements” or “TRA” refers collectively to the Exchange Tax Receivable Agreement and the Reorganization Tax Receivable Agreement.
•“Topic 606” refers to Accounting Standard Update (“ASU”) 2014-09, Revenue from Contracts with Customers, later codified as Accounting Standards Codification (“ASC”) Topic 606.
•“ZoomInfo HoldCo” refers to ZoomInfo Intermediate Holdings LLC, a Delaware limited liability company, and a direct subsidiary of ZoomInfo Technologies Inc.
•“ZoomInfo OpCo” refers to ZoomInfo Holdings LLC (formerly known as DiscoverOrg Holdings, LLC), a Delaware limited liability company, and a direct subsidiary of ZoomInfo HoldCo and indirect subsidiary of ZoomInfo Technologies Inc.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
From time to time we make statements concerning our expectations, beliefs, plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements that are not historical facts. These statements are “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.
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, including forward-looking statements contained in this Quarterly Report on Form 10-Q:
•the COVID-19 pandemic, including the global economic uncertainty and measures taken in response, could materially impact our business and future results of operations;
•larger well-funded companies shifting their existing business models to become more competitive with us;
•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;
•the effects of companies more effectively catering to our customers by offering more tailored products or platforms at lower costs;
•adverse general economic and market conditions reducing spending on sales and marketing;
•the effects of declining demand for sales and marketing subscription platforms;
•our ability to improve our technology and keep up with new processes for data collection, organization, and cleansing;
•our ability to provide a highly accurate, reliable, and comprehensive platform moving forward;
•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;
•our ability to adequately fund research and development potentially limiting introduction of new features, integrations, and enhancements;
•our ability to attract new customers and expand existing subscriptions;
•a decrease in participation in our contributory network or increased opt-out rates impacting the depth, breadth, and accuracy of our platform;
•our failure to protect and maintain our brand and our ability to attract and retain customers;
•our failure to achieve and maintain effective internal controls over financial reporting;
•our ability to successfully integrate acquired businesses, services, databases and technologies into our operations;
•our substantial indebtedness, which could adversely affect our financial condition, our ability to raise additional capital to fund our operations, our ability to operate our business, our ability to react to changes in the economy or our industry, and our ability to meet our obligations under our outstanding indebtedness, and could divert our cash flow from operations for debt payments;
•the parties to our stockholders agreement controlling us and their interests conflicting with ours or our other stockholders in the future;
•our being a “controlled company” within the meaning of the Nasdaq rules and, as a result, qualifying for exemptions from certain corporate governance requirements, as a result of which our stockholders will not have the same protections afforded to stockholders of companies that are subject to such requirements; and
•other factors described under “Risk Factors” in Part I, Item 1A of our 2020 Form 10-K, and in other reports we file from time to time with the SEC.
These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this Form 10-Q and our other filings with the SEC. 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.
You should not place undue reliance on our forward-looking statements. Each forward-looking statement speaks only as of the date of the particular statement, 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.
Website Disclosure
The Company 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. In addition, you may automatically receive email alerts and other information about the Company when you enroll your email address by visiting the “Email Alerts” section of our investor relations page at https://ir.zoominfo.com. The information on our website is not incorporated herein or otherwise a part of this Form 10-Q.
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INDEX TO FINANCIAL STATEMENTS
| | | | | |
| |
Unaudited Consolidated Financial Statements of ZoomInfo Technologies Inc. and Subsidiaries | |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| | | | | | | | | | | |
ZoomInfo Technologies Inc. |
Condensed Consolidated Balance Sheets |
(in millions, except share data) |
| | | |
| March 31, | | December 31, |
| 2021 | | 2020 |
| (unaudited) | | (*) |
Assets | | | |
Current assets: | | | |
Cash and cash equivalents | $ | 229.1 | | | $ | 269.8 | |
Short-term investments | 124.6 | | | 30.6 | |
Restricted cash, current | 0.1 | | | 1.2 | |
Accounts receivable | 115.2 | | | 121.2 | |
Prepaid expenses and other current assets | 15.5 | | | 14.3 | |
Income tax receivable | 1.0 | | | 2.4 | |
Total current assets | 485.5 | | | 439.5 | |
| | | |
Property and equipment, net | 30.5 | | | 31.0 | |
Operating lease right-of-use assets, net | 30.6 | | | 32.0 | |
Intangible assets, net | 354.1 | | | 365.7 | |
Goodwill | 1,000.1 | | | 1,000.1 | |
Deferred tax assets | 584.9 | | | 415.7 | |
Deferred costs and other assets, net of current portion | 59.3 | | | 43.4 | |
Restricted cash, non-current | 2.0 | | | — | |
Total assets | $ | 2,547.0 | | | $ | 2,327.4 | |
| | | |
Liabilities, Temporary, and Permanent Equity (Deficit) | | | |
Current liabilities: | | | |
Accounts payable | $ | 13.8 | | | $ | 8.6 | |
Accrued expenses and other current liabilities | 56.7 | | | 81.5 | |
Unearned revenue, current portion | 260.6 | | | 221.3 | |
Income taxes payable | 3.8 | | | 3.4 | |
Current portion of tax receivable agreements liability | 6.2 | | | — | |
Current portion of operating lease liabilities | 7.1 | | | 6.0 | |
| | | |
Total current liabilities | 348.2 | | | 320.8 | |
| | | |
Unearned revenue, net of current portion | 1.3 | | | 1.4 | |
Tax receivable agreements liability, net of current portion | 384.0 | | | 271.0 | |
Operating lease liabilities, net of current portion | 32.6 | | | 33.6 | |
Long-term debt, net of current portion | 738.7 | | | 744.9 | |
Deferred tax liabilities | 89.7 | | | 8.3 | |
Other long-term liabilities | 5.6 | | | 7.8 | |
Total liabilities | 1,600.1 | | | 1,387.8 | |
| | | |
| | | |
Commitments and Contingencies (Note 11) | | | |
| | | |
Permanent Equity (Deficit) | | | |
| | | |
Class A common stock, par value $0.01 | 1.0 | | | 0.9 | |
Class B common stock, par value $0.01 | 2.1 | | | 2.2 | |
Class C common stock, par value $0.01 | 0.8 | | | 0.9 | |
Additional paid-in capital | 549.6 | | | 505.2 | |
Accumulated other comprehensive income (loss) | 1.6 | | | (2.4) | |
Retained Earnings | (0.8) | | | (4.0) | |
Noncontrolling interests | 392.6 | | | 436.8 | |
Total equity (deficit) | 946.9 | | | 939.6 | |
| | | |
Total liabilities, temporary, and permanent equity (deficit) | $ | 2,547.0 | | | $ | 2,327.4 | |
________________
(*) The Condensed Consolidated Balance Sheet as of December 31, 2020 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.
| | | | | | | | | | | |
ZoomInfo Technologies Inc. |
Consolidated Statements of Operations |
(in millions, except per share amounts; unaudited) |
| | | |
| Three Months Ended March 31, |
| 2021 | | 2020 |
| | | |
Revenue | $ | 153.3 | | | $ | 102.2 | |
| | | |
Cost of service: | | | |
Cost of service(2) | 21.4 | | | 14.8 | |
Amortization of acquired technology | 6.7 | | | 5.6 | |
Gross profit | 125.2 | | | 81.8 | |
| | | |
Operating expenses: | | | |
Sales and marketing(2) | 48.8 | | | 34.1 | |
Research and development(2) | 20.4 | | | 9.9 | |
General and administrative(2) | 18.8 | | | 10.0 | |
Amortization of other acquired intangibles | 4.8 | | | 4.6 | |
Restructuring and transaction related expenses | 4.4 | | | 2.9 | |
Total operating expenses | 97.2 | | | 61.5 | |
Income (loss) from operations | 28.0 | | | 20.3 | |
| | | |
Interest expense, net | 6.5 | | | 24.5 | |
Loss on debt extinguishment | 5.9 | | | 2.2 | |
Other (income) expense, net | (0.2) | | | (0.1) | |
Income (loss) before income taxes | 15.8 | | | (6.3) | |
Income tax expense (benefit) | 49.7 | | | (0.4) | |
Net income (loss) | (33.9) | | | (5.9) | |
Less: Net income (loss) attributable to ZoomInfo OpCo prior to the Reorganization Transactions | — | | | (5.9) | |
Less: Net income (loss) attributable to noncontrolling interests | (37.1) | | | — | |
Net income (loss) attributable to ZoomInfo Technologies Inc. | $ | 3.2 | | | $ | — | |
| | | |
Net income (loss) per share of Class A and Class C common stock(1): | | | |
Basic | $ | 0.02 | | | N/A |
Diluted | $ | 0.02 | | | N/A |
________________
(1)Basic and diluted net income (loss) per share of Class A and Class C common stock is applicable only for periods after the initial public offering ("IPO") and related Reorganization Transactions (as defined in Note 1 to the Unaudited Consolidated Financial Statements). See Note 13 for the number of shares used in the computation of net income (loss) per share of Class A and Class C common stock and the basis for the computation of net income (loss) per share.
(2)Amounts include equity-based compensation expense, as follows:
| | | | | | | | | | | |
| Three Months Ended March 31, |
| 2021 | | 2020 |
Cost of service | $ | 3.5 | | | $ | 1.7 | |
Sales and marketing | 8.4 | | | 6.4 | |
Research and development | 2.6 | | | 1.6 | |
General and administrative | 3.6 | | | 1.6 | |
Total equity-based compensation expense | $ | 18.1 | | | $ | 11.3 | |
| | | | | | | | | | | |
ZoomInfo Technologies Inc. |
Consolidated Statements of Comprehensive Income (Loss) |
(in millions; unaudited) |
| | | |
| Three Months Ended March 31, |
| 2021 | | 2020 |
| | | |
Net income (loss) | $ | (33.9) | | | $ | (5.9) | |
Other comprehensive income (loss), net of tax | | | |
Unrealized gain (loss) on cash flow hedges | 10.1 | | | (7.4) | |
Realized loss (gain) on settlement of cash flow hedges | 1.5 | | | 0.7 | |
Amortization of deferred losses related to the dedesignated Interest Rate Swap | — | | | — | |
Other comprehensive income (loss) before tax | 11.6 | | | (6.7) | |
Tax effect | (1.4) | | | — | |
Other comprehensive income (loss), net of tax | 10.2 | | | (6.7) | |
Comprehensive income (loss) | (23.7) | | | (12.6) | |
Less: Comprehensive income attributable to ZoomInfo OpCo prior to the Reorganization Transactions | — | | | (12.6) | |
Less: Comprehensive income (loss) attributable to noncontrolling interests | (30.9) | | | — | |
Comprehensive income (loss) attributable to ZoomInfo Technologies Inc. | $ | 7.2 | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
ZoomInfo Technologies Inc. Consolidated Statements of Changes in Equity (Deficit) (in millions, except share data; unaudited) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | ZoomInfo Technologies Inc. Stockholders' Equity | | | | |
| | | | | Class A Shares | | Class B Shares | | Class C Shares | | | | Class A Amount | | Class B Amount | | Class C Amount | | Additional paid-in capital | | Retained Earnings | | AOCI | | Noncontrolling interests | | Total Equity |
Balance, December 31, 2020 | | | | 87,697,381 | | | 216,652,704 | | | 86,123,230 | | | | | $ | 0.9 | | | $ | 2.2 | | | $ | 0.9 | | | $ | 505.2 | | | $ | (4.0) | | | $ | (2.4) | | | $ | 436.8 | | | $ | 939.6 | |
Effect of LLC Unit Exchanges | | | | 14,500,582 | | | (9,776,683) | | | (3,869,894) | | | | | 0.1 | | | (0.1) | | | (0.1) | | | 37.2 | | | — | | | — | | | (20.1) | | | 17.0 | |
Issuance of Class A common stock upon vesting of RSUs | | | | 20,439 | | | — | | | — | | | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
Shares withheld related to net share settlement and other | | | | (30,936) | | | — | | | — | | | | | — | | | — | | | — | | | (1.6) | | | — | | | — | | | — | | | (1.6) | |
Exercise of stock options | | | | 24,758 | | | — | | | — | | | | | — | | | — | | | — | | | 0.5 | | | — | | | — | | | — | | | 0.5 | |
Forfeitures / cancellations | | | | — | | | (7,852) | | | — | | | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
Net income (loss) | | | | — | | | — | | | — | | | | | — | | | — | | | — | | | — | | | 3.2 | | | — | | | (37.1) | | | (33.9) | |
Other comprehensive income | | | | — | | | — | | | — | | | | | — | | | — | | | — | | | — | | | — | | | 4.0 | | | 6.2 | | | 10.2 | |
Paid and accrued tax distributions | | | | — | | | — | | | — | | | | | — | | | — | | | — | | | — | | | — | | | — | | | (3.0) | | | (3.0) | |
Equity-based compensation | | | | — | | | — | | | — | | | | | — | | | — | | | — | | | 8.3 | | | — | | | — | | | 9.8 | | | 18.1 | |
Balance at March 31, 2021 | | | | 102,212,224 | | | 206,868,169 | | | 82,253,336 | | | | | $ | 1.0 | | | $ | 2.1 | | | $ | 0.8 | | | $ | 549.6 | | | $ | (0.8) | | | $ | 1.6 | | | $ | 392.6 | | | $ | 946.9 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| ZoomInfo Holdings LLC (Prior to Reorganization Transactions) | | | | ZoomInfo Technologies Inc. Stockholders' Equity | | | | |
| Members' Deficit | | | | Class A Shares | | Class B Shares | | Class C Shares | | | | Class A Amount | | Class B Amount | | Class C Amount | | Additional paid-in capital | | Retained Earnings | | AOCI | | Noncontrolling interests | | Total Equity |
Balance, December 31, 2019 | $ | (207.8) | | | | | — | | | — | | | — | | | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | (6.0) | | | $ | — | | | $ | (213.8) | |
Net income (loss) | (5.9) | | | | | — | | | — | | | — | | | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (5.9) | |
Member distributions | (5.0) | | | | | — | | | — | | | — | | | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (5.0) | |
Other comprehensive income | — | | | | | — | | | — | | | — | | | | | — | | | — | | | — | | | — | | | — | | | (6.7) | | | — | | | (6.7) | |
Equity-based compensation | 11.3 | | | | | — | | | — | | | — | | | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 11.3 | |
Balance at March 31, 2020 | $ | (207.4) | | | | | — | | | — | | | — | | | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | (12.7) | | | $ | — | | | $ | (220.1) | |
| | | | | | | | | | | |
ZoomInfo Technologies Inc. |
Consolidated Statements of Cash Flows |
(in millions; unaudited) |
| Three Months Ended March 31, |
| 2021 | | 2020 |
Cash flows from operating activities: | | | |
Net income (loss) | $ | (33.9) | | | $ | (5.9) | |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | | | |
Depreciation and amortization | 15.5 | | | 12.2 | |
Amortization of debt discounts and issuance costs | 0.5 | | | 1.4 | |
Amortization of deferred commissions costs | 8.7 | | | 5.4 | |
Asset impairments | 2.7 | | | — | |
Loss on early extinguishment of debt | 5.9 | | | 2.2 | |
Deferred consideration valuation adjustments | 0.2 | | | 0.9 | |
| | | |
Equity-based compensation expense | 18.1 | | | 11.3 | |
| | | |
Deferred income taxes | 47.0 | | | (0.1) | |
| | | |
| | | |
Provision for bad debt expense | 0.7 | | | 0.6 | |
Changes in operating assets and liabilities, net of acquisitions: | | | |
Accounts receivable | 5.1 | | | 3.3 | |
Prepaid expenses and other current assets | (0.9) | | | (5.9) | |
Deferred costs and other assets, net of current portion | (9.8) | | | (6.3) | |
Income tax receivable | 1.4 | | | (0.3) | |
Accounts payable | 5.2 | | | 5.5 | |
Accrued expenses and other liabilities | (12.6) | | | (10.0) | |
Unearned revenue | 39.2 | | | 14.0 | |
Net cash provided by (used in) operating activities | 93.0 | | | 28.3 | |
| | | |
Cash flows from investing activities: | | | |
Purchases of short-term investments | (103.6) | | | — | |
Maturities of short-term investments | 9.5 | | | — | |
Purchases of property and equipment and other assets | (4.7) | | | (4.1) | |
| | | |
Cash paid for acquisitions, net of cash acquired | (0.2) | | | — | |
Net cash provided by (used in) investing activities | (99.0) | | | (4.1) | |
| | | |
Cash flows from financing activities: | | | |
Payments of deferred consideration | (9.2) | | | (24.0) | |
Proceeds from debt | 350.0 | | | 35.0 | |
Repayment of debt | (356.4) | | | (2.2) | |
Payments of debt issuance and modification costs | (5.7) | | | (0.9) | |
Proceeds from exercise of stock options | 0.5 | | | — | |
Taxes paid related to net share settlement of equity awards | (2.2) | | | — | |
Repurchase outstanding equity / member units | — | | | (5.5) | |
| | | |
| | | |
Tax distributions | (10.8) | | | (5.0) | |
Net cash provided by (used in) financing activities | (33.8) | | | (2.6) | |
| | | |
Net increase (decrease) in cash, cash equivalents, and restricted cash | (39.8) | | | 21.6 | |
Cash, cash equivalents, and restricted cash at beginning of period | 271.0 | | | 42.5 | |
Cash, cash equivalents, and restricted cash at end of period | $ | 231.2 | | | $ | 64.1 | |
| | | |
Cash, cash equivalents, and restricted cash at end of period: | | | |
Cash and cash equivalents | 229.1 | | | 63.0 | |
Restricted cash, current | 0.1 | | | 1.1 | |
Restricted cash, non-current | 2.0 | | | — | |
Total cash, cash equivalents, and restricted cash | $ | 231.2 | | | $ | 64.1 | |
| | | |
Supplemental disclosures of cash flow information | | | |
Interest paid in cash | $ | 6.8 | | | $ | 23.3 | |
Cash paid for taxes | $ | — | | | $ | — | |
| | | |
| | | |
| | | |
| | | |
ZoomInfo Technologies Inc.
Notes to Unaudited Consolidated Financial Statements (Unaudited)
(In millions, except share/unit data and per share/unit amounts, unless otherwise noted)
Note 1 - Organization and Background
Business
ZoomInfo Technologies Inc., through its operating subsidiaries provides a go-to-market intelligence platform for sales and marketing teams. The Company’s cloud-based platform provides accurate and comprehensive information on organizations and professionals to help users identify target customers and decision makers, obtain continually updated predictive lead and company scoring, monitor buying signals and other attributes of target companies, craft messages, engage via automated sales tools, and track progress through the deal cycle. Unless otherwise indicated or the context otherwise requires, references to “we,” “us,” “our,” “ZoomInfo,” and the “Company” refer (1) prior to the consummation of the Reorganization Transactions, to ZoomInfo OpCo and its consolidated subsidiaries, and (2) after the consummation of the Reorganization Transactions, to ZoomInfo Technologies Inc. and its consolidated subsidiaries.
Organization
ZoomInfo Technologies Inc. was formed on November 14, 2019 with no operating assets or operations as a Delaware corporation for the purposes of facilitating an initial public offering (“IPO”) and other related transactions in order to carry on the business of ZoomInfo Holdings LLC (“ZoomInfo OpCo”) (formerly known as DiscoverOrg Holdings, LLC), a Delaware limited liability company. Following consummation of the Reorganization Transactions (as described below), ZoomInfo OpCo became a direct subsidiary of ZoomInfo Intermediate Holdings LLC (“ZoomInfo HoldCo”), a Delaware limited liability company and an indirect subsidiary of ZoomInfo Technologies Inc.
The Company headquarters are located in Vancouver, WA, and we operate in eight offices throughout the U.S. and one office in Israel.
Initial Public Offering
On June 8, 2020, ZoomInfo Technologies Inc. completed the IPO, in which it sold 51,175,000 shares of Class A common stock (including shares issued pursuant to the exercise in full of the underwriters’ option to purchase additional shares) at a public offering price of $21.00 per share for net proceeds of $1,019.6 million, after deducting underwriters’ discounts (but excluding other offering expenses and reimbursements). ZoomInfo Technologies Inc. used all of the proceeds from the IPO to (i) purchase 48,528,783 newly issued HoldCo Units from ZoomInfo HoldCo for approximately $966.9 million (which ZoomInfo HoldCo in turn used to purchase the same number of newly issued OpCo Units from ZoomInfo OpCo); (ii) purchase 2,370,948 OpCo Units from certain Pre-IPO OpCo Unitholders for approximately $47.2 million; and (iii) fund $5.5 million of merger consideration payable to certain Pre-IPO Blocker Holders in connection with the Blocker Mergers (as defined below).
Reorganization Transactions
In connection with the IPO, the Company completed the following transactions (“Reorganization Transactions”):
•ZoomInfo OpCo effected a four—for—one reverse unit split;
•ZoomInfo Technologies Inc. formed a new merger subsidiary with respect to each of the Blocker Companies through which certain of our Pre-IPO Blocker Holders held their interests in ZoomInfo OpCo, each merger subsidiary merged with and into the respective Blocker Companies in reverse-subsidiary mergers, and the surviving entities merged with and into ZoomInfo Technologies Inc. (such mergers, the “Blocker Mergers”), which Blocker Mergers resulted in the Pre-IPO Blocker Holders receiving a combination of (i) shares of Class C common stock of ZoomInfo Technologies Inc. and (ii) a cash amount in respect of reductions in such Pre-IPO Blocker Holders’ equity interests, based on the initial offering price of the Class A common stock in the IPO;
Note 1 - Organization and Background (continued)
•certain Pre-IPO Owners acquired interests in ZoomInfo HoldCo as a result of the merger of an entity that held OpCo Units on behalf of such Pre-IPO Owners into ZoomInfo HoldCo (the “ZoomInfo HoldCo Contributions”) and the redemption of some OpCo Units pursuant to which the holders of such OpCo Units received HoldCo Units; and
•the limited liability company agreement of each of ZoomInfo OpCo and ZoomInfo HoldCo was amended and restated to, among other things, modify their capital structure by reclassifying the interests held by the Pre-IPO OpCo Unitholders, the Continuing Class P Unitholders, and the Pre-IPO HoldCo Unitholders, resulting in OpCo Units of ZoomInfo OpCo, Class P Units of ZoomInfo OpCo, and HoldCo Units of ZoomInfo HoldCo, respectively (such reclassification, the “Reclassification”).
We refer to the Reclassification, together with the Blocker Mergers and the ZoomInfo HoldCo Contributions, as the “Reorganization Transactions.” Following the Reorganization Transactions, ZoomInfo Technologies Inc. became a holding company, with its sole material asset being a controlling equity interest in ZoomInfo HoldCo, which became a holding company with its sole material asset being a controlling equity interest in ZoomInfo OpCo. ZoomInfo Technologies Inc. will operate and control all of the business and affairs, and consolidate the financial results, of ZoomInfo OpCo through ZoomInfo HoldCo and, through ZoomInfo OpCo and its subsidiaries, conduct our business. Accordingly, ZoomInfo Technologies Inc. consolidates the financial results of ZoomInfo HoldCo, and therefore ZoomInfo OpCo, and reports the non-controlling interests of the Pre-IPO HoldCo Units and Pre-IPO OpCo Units on its consolidated financial statements. As of March 31, 2021, ZoomInfo Technologies Inc. owned 99% of the outstanding HoldCo Units, and ZoomInfo HoldCo owned 48% of the outstanding OpCo Units.
In connection with the Reorganization Transactions and the IPO, ZoomInfo Technologies Inc. entered into two tax receivable agreements. See Note 16.
Note 2 - Basis of Presentation and Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) pertaining to interim financial information. Certain information in footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP” or “GAAP”) has been condensed or omitted pursuant to those rules and regulations. The financial statements included in this report should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2020.
The results of operations for the three months ended March 31, 2021 are not necessarily indicative of the operating results that may be expected for the full fiscal year ending December 31, 2021 or any future period.
The accompanying unaudited consolidated financial statements contain all adjustments necessary for a fair statement of financial position as of March 31, 2021, and results of operations for the three months ended March 31, 2021 and 2020, and cash flows for the three months ended March 31, 2021 and 2020. The Condensed Consolidated Balance Sheet as of December 31, 2020 was derived from the audited consolidated balance sheets of the Company but does not contain all of the footnote disclosures from those annual financial statements. Accordingly, certain footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted.
Note 2 - Basis of Presentation and Summary of Significant Accounting Policies (continued)
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires us to make certain estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements, as well as the reported amounts of revenue and expenses during the reporting period. These estimates relate to, but are not limited to, revenue recognition, allowance for doubtful accounts, contingencies, valuation and useful lives of long-lived assets, fair value of tangible and intangible assets acquired in business combinations, equity-based compensation, and income taxes, among other things. We base these estimates on historical and anticipated results, trends, and other assumptions with respect to future events that we believe are reasonable and evaluate our estimates on an ongoing basis. Given that estimates and judgments are required, actual results may differ from our estimates and such differences could be material to our consolidated financial position and results of operations.
Principles of Consolidation
The consolidated financial statements include the accounts of ZoomInfo Technologies Inc. and its subsidiaries that it controls due to ownership of a majority voting interest or pursuant to variable interest entity (“VIE”) accounting guidance. All intercompany transactions and balances have been eliminated in consolidation.
ZoomInfo Technologies Inc., through our intermediate holding company ZoomInfo HoldCo, owns a minority economic interest in, but operates and has the power to control all of the businesses and affairs of, ZoomInfo OpCo. ZoomInfo Technologies Inc. has the obligation to absorb losses of, and receive benefits from, ZoomInfo OpCo, that could be significant. We determined that, as a result of the Reorganization Transactions described above, ZoomInfo OpCo is a VIE. Further, ZoomInfo Technologies Inc. has no contractual requirement to provide financial support to ZoomInfo OpCo and, for the three months ended March 31, 2021, ZoomInfo Technologies Inc. did not provide support to ZoomInfo OpCo. Accordingly, ZoomInfo Technologies Inc. is considered the primary beneficiary and consolidates ZoomInfo OpCo in the Company’s consolidated financial statements.
The Reorganization Transactions were accounted for consistent with a combination of entities under common control. As a result, the financial reports filed with the SEC by the Company subsequent to the Reorganization Transactions are prepared “as if” ZoomInfo OpCo is the accounting predecessor of the Company. The historical operations of ZoomInfo OpCo are deemed to be those of the Company. Thus, the financial statements included in this report reflect (i) the historical operating results of ZoomInfo OpCo prior to the Reorganization Transactions; (ii) the consolidated results of ZoomInfo Technologies Inc. and ZoomInfo OpCo following the Reorganization Transactions; (iii) the assets and liabilities of ZoomInfo OpCo and ZoomInfo Technologies Inc. at their historical cost; and (iv) ZoomInfo Technologies Inc. equity structure for all periods presented. No step-up basis of intangible assets or goodwill was recorded.
ZoomInfo OpCo has been determined to be our predecessor for accounting purposes and, accordingly, the consolidated financial statements for periods prior the Reorganization Transactions have been adjusted to combine the previously separate entities for presentation purposes. The Company’s financial position, performance and cash flows effectively represent those of ZoomInfo OpCo as of and for all periods presented.
Revenue Recognition
The company derives revenue primarily from subscription services. Our subscription services consist of our SaaS applications and related access to our databases. Subscription contracts are generally based on the number of users that access our applications, the level of functionality that they can access, and the amount of data that a customer integrates with their systems. Our subscriptions contracts typically have a term of 1 to 3 years and are non-cancelable. We typically bill for services annually, semi-annually, or quarterly in advance of delivery.
Note 2 - Basis of Presentation and Summary of Significant Accounting Policies (continued)
The Company accounts for revenue contracts with customers through the following steps:
(1)identify the contract with a customer;
(2)identify the performance obligations in the contract;
(3)determine the transaction price;
(4)allocate the transaction price; and
(5)recognize revenue when or as the Company satisfies a performance obligation.
We recognize revenue for subscription contracts on a ratable basis over the contract term based on the number of calendar days in each period, beginning on the date that our service is made available to the customer. Unearned revenue results from revenue amounts billed to customers in advance or cash received from customers in advance of the satisfaction of performance obligations. Determining the transaction price often involves judgments and estimates that can have a significant impact on the timing and amount of revenue reported. At times, the Company may adjust billing under a contract based on the addition of services or other circumstances, which are accounted for as variable consideration. The Company estimates these amounts based on historical experience and reduces revenue recognized.
Cash, Cash Equivalents, and Short-term Investments
Cash equivalents consist of highly liquid marketable debt securities with remaining maturities of three months or less at the date of purchase. We classify our investments in marketable securities as “available-for-sale.” We carry these investments at fair value, based on quoted market prices or other readily available market information. Unrealized gains and losses, net of taxes, are included in accumulated other comprehensive income, which is reflected as a separate component of stockholders’ equity in our Condensed Consolidated Balance Sheets. Gains and losses are determined using the specific identification method and recognized when realized in our Consolidated Statements of Operations. If we were to determine that an other-than-temporary decline in fair value has occurred, the amount of the decline related to a credit loss will be recognized in income.
Fair Value Measurements
The Company measures assets and liabilities at fair value based on an expected exit price, which represents the amount that would be received on the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. The following are the hierarchical levels of inputs to measure fair value:
Level 1 - Observable inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities
Level 2 - Other inputs that are directly or indirectly observable in the marketplace
Level 3 - Unobservable inputs that are supported by little or no market activity, including the Company’s own assumptions in determining fair value
The inputs or methodology used for valuing financial assets and liabilities are not necessarily an indication of the risk associated with investing in them.
Note 2 - Basis of Presentation and Summary of Significant Accounting Policies (continued)
Concentrations of Credit Risk and Significant Customers
Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash and cash equivalents, short-term investments, and accounts receivable. The Company holds cash at major financial institutions that often exceed Federal Deposit Insurance Corporation (“FDIC”) insured limits. The Company manages its credit risk associated with cash concentrations by concentrating its cash deposits in high-quality financial institutions and by periodically evaluating the credit quality of the primary financial institutions holding such deposits. The carrying value of cash approximates fair value. Our investment portfolio is comprised of highly rated securities with a weighted-average maturity of less than 12 months in accordance with our investment policy which seeks to preserve principal and maintain a high degree of liquidity. Historically, the Company has not experienced any losses due to such cash concentrations. The Company does not have any off-balance-sheet credit exposure related to its customers. Concentrations of credit risk with respect to accounts receivable and revenue are limited due to a large, diverse customer base. We do not require collateral from clients. We maintain an allowance for doubtful accounts based upon the expected collectability of accounts receivable. The Company performs ongoing credit evaluations of its customers and maintains allowances for possible losses, which, when realized, have been within the range of management’s expectations. No single customer accounted for 10% or more of our revenue for the three months ended March 31, 2021 and 2020, or accounted for more than 10% of accounts receivable as of March 31, 2021 and December 31, 2020. Net assets located outside of the United States were immaterial as of March 31, 2021 and December 31, 2020.
Accounts Receivable and Contract Assets
Accounts receivable is comprised of invoices of revenue, net of allowance for doubtful accounts and does not bear interest. We consider receivables past due based on the contractual payment terms. Management’s evaluation of the adequacy of the allowance for doubtful accounts considers historical collection experience, changes in customer payment profiles, the aging of receivable balances, as well as current economic conditions, all of which may impact a customer’s ability to pay. Account balances are written-off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have significant bad debt experience with customers, and therefore, the allowance for doubtful accounts is immaterial as of March 31, 2021 and December 31, 2020.
The assessment of variable consideration to be constrained is based on estimates, and actual consideration may vary from current estimates. As adjustments to these estimates become necessary, they are reported in earnings in the periods in which they become known. Changes in variable consideration are recorded as a component of net revenue.
Contract assets represent a contractual right to consideration in the future. Contract assets are generated when contractual billing schedules differ from revenue recognition timing.
Property and Equipment, Net
Property and equipment is stated at cost, net of accumulated depreciation and amortization. All repairs and maintenance costs are expensed as incurred. Depreciation and amortization costs are expensed on a straight-line basis over the lesser of the estimated useful life of the asset or the remainder of the lease term for leasehold improvements. Qualifying internal use software costs incurred during the application development stage, which consist primarily of internal product development costs, outside services, and purchased software license costs, are capitalized and amortized over the estimated useful life of the asset. Estimated useful lives range from 3 years to 10 years.
Note 2 - Basis of Presentation and Summary of Significant Accounting Policies (continued)
Deferred Commissions
Certain sales commissions earned by our sales force are considered incremental and recoverable costs of obtaining a contract with a customer. These sales commissions for initial contracts are capitalized and included in Deferred costs and other assets, net of current portion in our Condensed Consolidated Balance Sheets. Deferred sales commissions are amortized on a straight-line basis over the estimated period of benefit from the customer relationship which we have determined to be 1 and 3 years for renewals and new clients, respectively. We determined the period of benefit by taking into consideration our customer contracts, our technology, and other factors. Amortization expense is included in Sales and marketing expense on the Consolidated Statements of Operations.
Commissions payable at March 31, 2021 were $19.7 million, of which the current portion of $17.4 million was included in Accrued expenses and other current liabilities in our Condensed Consolidated Balance Sheets, and the long-term portion of $2.3 million was included in Other long-term liabilities in our Condensed Consolidated Balance Sheets. Commissions payable at December 31, 2020 were $25.6 million, of which the current portion of $23.3 million was included in Accrued expenses and other current liabilities in our Condensed Consolidated Balance Sheets, and the long-term portion of $2.3 million was included in Other long-term liabilities in our Condensed Consolidated Balance Sheets.
Certain commissions are not capitalized as they do not represent incremental costs of obtaining a contract. Such commissions are expensed as incurred.
Advertising and Promotional Expenses
The Company expenses advertising costs as incurred. Advertising expenses of $3.9 million and $2.9 million were recorded for the three months ended March 31, 2021 and 2020, respectively. Advertising expenses are included in Sales and marketing on the Consolidated Statements of Operations.
Research and Development
Research and development expenses consist primarily of compensation expense for our employees, including employee benefits, certain IT program expenses, facilities and related overhead costs. We continue to focus our research and development efforts on developing new products, adding new features and services, integrating acquired technologies, and increasing functionality. Expenditures for software developed or obtained for internal use are capitalized and amortized over a four-year period on a straight-line basis.
Restructuring and Transaction-Related Expenses
The Company defines restructuring and transaction related expenses as costs directly associated with acquisition or disposal activities. Such costs include employee severance and termination benefits, contract termination fees and penalties, and other exit or disposal costs. In general, the Company records involuntary employee-related exit and disposal costs when there is a substantive plan for employee severance and related costs that are probable and estimable. For one-time termination benefits for key members of management (i.e., no substantive plan), transaction related bonuses and employee retention costs, expense is recorded when the employees are entitled to receive such benefits and the amount can be reasonably estimated. Contract termination fees and penalties and other exit and disposal costs are generally recorded when incurred.
Note 2 - Basis of Presentation and Summary of Significant Accounting Policies (continued)
Business Combinations
We allocate purchase consideration to the tangible assets acquired, liabilities assumed and intangible assets acquired based on their estimated fair values. The purchase price is determined based on the fair value of the assets transferred, liabilities assumed and equity interests issued, after considering any transactions that are separate from the business combination. The fair value of equity issued as part of a business combination is determined based on grant date stock price of the Company. The excess of fair value of purchase consideration over the fair values of the identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets and contingent liabilities. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired customer bases, acquired technology and acquired trade names, useful lives, royalty rates, and discount rates.
The estimates are inherently uncertain and subject to revision as additional information is obtained during the measurement period for an acquisition, which may last up to one year from the acquisition date. During the measurement period, we may record adjustments to the fair value of tangible and intangible assets acquired and liabilities assumed, with a corresponding offset to goodwill. After the conclusion of the measurement period or the final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to earnings.
In addition, uncertain tax positions and tax-related valuation allowances assumed in connection with a business combination are initially estimated as of the acquisition date. We reevaluate these items based upon the facts and circumstances that existed as of the acquisition date, with any revisions to our preliminary estimates being recorded to goodwill, provided that the timing is within the measurement period. Subsequent to the measurement period, changes to uncertain tax positions and tax-related valuation allowances will be recorded to earnings.
Goodwill and Acquired Intangible Assets
Goodwill is calculated as the excess of the purchase consideration paid in a business combination over the fair value of the assets acquired less liabilities assumed. Goodwill is not amortized and is tested for impairment at least annually or when events and circumstances indicate that fair value of a reporting unit may be below its carrying value. The company has one reporting unit.
We first assess qualitative factors to evaluate whether it is more likely than not that the fair value of a reporting unit is less than the carrying amount or elect to bypass such assessment. If it is determined that it is more likely than not that the fair value of the reporting unit is less than its carrying value, or we elect to bypass the qualitative assessment, we perform a quantitative test by determining the fair value of the reporting unit. If the carrying value of the reporting unit exceeds the fair value, then an impairment loss is recognized for the difference.
Acquired technology, customer lists, trade names or brand portfolios, and other intangible assets are related to previous acquisitions (see Note 7). Acquired intangible assets are amortized on a straight-line basis over the estimated period over which we expect to realize economic value related to the intangible asset. The amortization periods range from 2 years to 15 years. Any costs incurred to renew or extend the life of an intangible or long-lived asset are reviewed for capitalization.
Indefinite-lived intangible assets consist primarily of brand portfolios acquired from Pre-Acquisition ZI and represent costs paid to legally register phrases and graphic designs that identify and distinguish products sold by the Company. Brand portfolios are not amortized, rather potential impairment is considered on an annual basis in the fourth quarter, or more frequently upon the occurrence of a triggering event, when circumstances indicate that the book value of trademarks are greater than their fair value. The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of the indefinite-lived intangible asset is less than the carrying value as a basis to determine whether further impairment testing is necessary. No impairment charges relating to acquired goodwill or indefinite lived intangible assets were recorded for the three month periods ended March 31, 2021 and 2020.
Note 2 - Basis of Presentation and Summary of Significant Accounting Policies (continued)
Impairment of Long-lived Assets
Long-lived assets, such as property and equipment and acquired intangible assets, are reviewed for impairment whenever events or circumstances indicate that the carrying value of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the undiscounted future cash flows expected to be generated by the asset or group of assets. If the carrying amount of the asset exceeds the estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the estimated future cash flows of the asset.
Leases
We determine if an arrangement is or contains a lease at contract inception. Determining if a contract contains a lease requires judgement. In certain of our lease arrangements, primarily those related to our data center arrangements, judgment is required in determining if a contract contains a lease. For these arrangements, there is judgment in evaluating if the arrangement involves an identified asset that is physically distinct or whether we have the right to substantially all of the capacity of an identified asset that is not physically distinct. In arrangements that involve an identified asset, there is also judgment in evaluating if we have the right to direct the use of that asset.
We do not have any finance leases. Operating leases are recorded in our Condensed Consolidated Balance Sheets. Right-of-use assets and lease liabilities are measured at the lease commencement date based on the present value of the fixed minimum remaining lease payments over the lease term, determined using the discount rate for the lease at the commencement date. Because the rate implicit in our leases is not readily determinable, we use our incremental borrowing rate as the discount rate, which approximates the interest rate at which we could borrow on a collateralized basis with similar terms and payments and in similar economic environments. Some leases include options to extend or options to terminate the lease prior to the stated lease expiration. Optional periods to extend a lease, including by not exercising a termination option, are included in the lease term when it is reasonably certain that the option will be exercised (or not exercised in the case of termination options). Operating lease expense is recognized on a straight-line basis over the lease term. We account for lease and non-lease components, principally common area maintenance for our facilities leases, as a single lease component. Short term leases, defined as leases having an original lease term less than or equal to one year, are excluded from our right-of-use assets and liabilities.
Unearned Revenue
Unearned revenue consists of customer payments and billings in advance of revenue being recognized from our subscription services. Unearned revenue that is anticipated to be recognized within the next 12 months is recorded as Unearned revenue, current portion and the remaining portion is included in Unearned revenue, net of current portion in our Condensed Consolidated Balance Sheets.
Debt Issuance Costs
Costs incurred in connection with the issuance of long-term debt are deferred and amortized as interest expense over the terms of the related debt using the effective interest method for term debt and on a straight-line basis for revolving debt. To the extent that the debt is outstanding, these amounts are reflected in the consolidated balance sheets as direct deductions from a combination of current and long-term portions of debt. Upon a refinancing or amendment, previously-capitalized debt issuance costs are expensed and included in loss on extinguishment of debt, if the Company determines that there has been a substantial modification of the related debt. If the Company determines that there has not been a substantial modification of the related debt, any previously-capitalized debt issuance costs are amortized as interest expense over the term of the new debt instrument. The company performs assessments of debt modifications at a lender-specific level for all syndicated financing arrangements.
Note 2 - Basis of Presentation and Summary of Significant Accounting Policies (continued)
Tax Receivable Agreements
In connection with our IPO, we entered into two Tax Receivable Agreements ("TRAs") with certain non-controlling interest owners (the “TRA Holders”). The TRAs generally provide for payment by the Company to the TRA Holders of 85% of the net cash savings, if any, in U.S. federal, state and local income tax or franchise tax that the Company actually realizes or is deemed to realize in certain circumstances. The Company will retain the benefit of the remaining 15% of these net cash savings.
Amounts payable under the TRA are accrued by a charge to income when it is probable that a liability has been incurred and the amount is estimable. TRA related liabilities are classified as current or noncurrent based on the expected date of payment and are included in the Company’s Condensed Consolidated Balance Sheets under the captions Current portion of tax receivable agreements liability and Tax receivable agreements liability, net of current portion, respectively. Subsequent changes to the measurement of the TRA liability are recognized in the statements of income as a component of other income (expense), net. See Note 16 for further details on the TRA liability.
Income Taxes
ZoomInfo Technologies Inc. is a corporation and is subject to U.S. federal as well as state income tax related to its ownership percentage in ZoomInfo Holdings LLC. ZoomInfo Holdings LLC is a limited liability company treated as a partnership for U.S. federal income tax purposes and files a U.S. Return of Partnership Income. Consequently, the members of ZoomInfo Holdings are taxed individually on their share of earnings for U.S. federal and state income tax purposes. However, ZoomInfo Holdings is subject to the Texas Margins Tax. Additionally, our operations in Israel are subject to local country income taxes. See Note 17 for additional information regarding income taxes.
Deferred taxes are recorded using the asset and liability method, whereby tax assets and liabilities are determined based on the differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. We regularly evaluate the valuation allowances established for deferred tax assets for which future realization is uncertain. In assessing the realizability of deferred tax assets, we consider both positive and negative evidence, including scheduled reversals of deferred tax assets and liabilities, projected future taxable income, tax planning strategies and results of recent operations. If, based on the weight of available evidence, it is more likely than not that the deferred tax assets will not be realized, a valuation allowance is recorded.
Equity-Based Compensation Expense
The Company periodically grants incentive units to employees and non-employees, which generally vest over a four-year period. Incentive units may be in the form of various equity-based awards such as restricted stock and restricted stock units, Class A stock options, and awards in one of the Company’s subsidiary partnerships which are typically in the form of profits interests. Profits interests are an interest in the increase in the value of the entity over a participation threshold. Prior to the IPO, the participation threshold was based on the valuation determined by the Board of Managers of OpCo Units on or around the grant date. Subsequent to the IPO, the participation threshold is determined by reference to the closing price of our Class A Common Stock from the preceding trading day. The holders of profits interests have the right to participate in distributions of profits only in excess of the participation threshold.
Compensation expense for incentive units is measured at the estimated fair value of the incentive units and is included as compensation expense over the vesting period during which an employee provides service in exchange for the award.
Note 2 - Basis of Presentation and Summary of Significant Accounting Policies (continued)
The Company uses a Black-Scholes option pricing model to determine the fair value of stock options and profits interests, as profits interests have certain economic similarities to options. The Black-Scholes option pricing model includes various assumptions, including the expected life of incentive units, the expected volatility and the expected risk-free interest rate. These assumptions reflect the Company’s best estimates, but they involve inherent uncertainties based on market conditions generally outside the control of the Company. As a result, if other assumptions are used, compensation cost could be materially impacted.
The Company measures employee, non-employee, and board of director equity-based compensation on the grant date fair value basis. Equity-based compensation expense is recognized over the requisite service period of the awards. For equity awards that have a performance condition, the Company recognizes compensation expense based on its assessment of the probability that the performance condition will be achieved.
The Company classifies equity-based compensation expense in its Consolidated Statements of Operations in the same manner in which the award recipient’s salary and related costs are classified or in which the award recipient’s service payments are classified.
Recent Accounting Pronouncements
Recent Accounting Pronouncements Not Yet Adopted
In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued because of reference rate reform, if certain criteria are met. The standard applies to contract modifications that replace a reference rate affected by reference rate reform and contemporaneous modifications of other contract terms related to the replacement of the reference rate. Further, the standard provides exceptions to certain guidance in ASC 815, Derivatives and Hedging, related to changes to the critical terms of a hedging relationship due to reference rate reform and provides optional expedients for fair value, cash flow, and net investment hedging relationships for which the component excluded from the assessment of hedge effectiveness is affected by reference rate reform. The standard is effective for us as of March 12, 2020 through December 31, 2022, and we may elect to apply the provisions of the standard as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020 up to the date that the financial statements are available to be issued. Once elected, the provisions of the standard must be applied prospectively for all similar eligible contract modifications other than derivatives, which may be applied at a hedging relationship level. The standard would apply to our existing variable rate financing and derivatives designated as hedges if elected in the future. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.
Recently Adopted Accounting Pronouncements
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes will result in more timely recognition of credit losses. The guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company adopted ASU 2016-13 and ASU 2019-05 effective January 1, 2020. The adoption of this guidance was on a modified retrospective basis and did not have a material impact on the Company's consolidated financial statements.
In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820), which amends disclosure requirements for fair value measurements by requiring new disclosures, modifying existing requirements, and eliminating others. The amendments are the result of a broader disclosure project, which aims to improve the effectiveness of disclosures. ASU No. 2018-13 is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. The Company adopted ASU 2018-13 on January 1, 2020, and the adoption did not have a material effect on the Company’s financial statements or disclosures.
Note 3 - Revenue from Contracts with Customers
Revenue comprised the following service offerings:
| | | | | | | | | | | |
| Three Months Ended March 31, |
(in millions) | 2021 | | 2020 |
Subscription | $ | 151.4 | | | $ | 101.2 | |
Usage-based | 1.9 | | | 1.0 | |
Total revenue | $ | 153.3 | | | $ | 102.2 | |
Go-To-Market business intelligence tools are subscription services that allow customers access to our SaaS tools to support sales and marketing processes, which include data, analytics, and insights to provide accurate and comprehensive intelligence on organizations and professionals. Our customers use our platform to identify target customers and decision makers, obtain continually updated predictive lead and company scoring, monitor buying signals and other attributes of target companies, craft messages, engage via automated sales tools, and track progress through the deal cycle.
Usage-based revenue is comprised largely of email verification and intent-driven audience and targeting services, which are charged to our customers on a per unit basis based on their usage. We regularly observe that customers integrate our usage-based services into their internal workflows and use our services on an ongoing basis. We recognize usage-based revenue at the point in time the services are consumed by the customer, thereby satisfying our performance obligation.
Of the total revenue recognized in the three months ended March 31, 2021 and 2020, $108.3 million and $79.9 million were included in the unearned revenue balance as of December 31, 2020 and 2019, respectively. Revenue recognized from performance obligations satisfied (or partially satisfied) in previous periods was not material.
Revenues derived from customers and partners located outside the United States, as determined based on the address provided by our customers and partners, accounted for approximately 10% and 9% of our total revenues for the three months ended March 31, 2021 and 2020, respectively. We have no Company sales offices located in a foreign country as of March 31, 2021, and contracts denominated in currencies other than U.S. Dollar were not material for the three months ended March 31, 2021 and 2020.
Contract Assets and Unearned Revenue
The Company’s standard billing terms typically require payment at the beginning of each annual, semi-annual or quarterly period. Subscription revenue is generally recognized ratably over the contract term starting with when our service is made available to the customer. Usage-based revenue is recognized in the period services are utilized by our customers. The amount of revenue recognized reflects the consideration the Company expects to be entitled to receive in exchange for these services.
The Company records a contract asset when revenue recognized on a contract exceeds the billings to date for that contract. Unearned revenue results from cash received or amounts billed to customers in advance of revenue recognized upon the satisfaction of performance obligations. The unearned revenue balance is influenced by several factors, including seasonality, the compounding effects of renewals, invoice duration, invoice timing, dollar size, and new business timing within the quarter. The unearned revenue balance does not represent the total contract value of annual or multi-year, non-cancelable subscription agreements.
As of March 31, 2021 and December 31, 2020, the Company had contract assets of $2.2 million and $2.4 million, respectively, which are recorded as current assets within Prepaid expenses and other current assets in the Company’s Condensed Consolidated Balance Sheets. As of March 31, 2021 and December 31, 2020, the Company had unearned revenue of $261.9 million and $222.7 million, respectively.
Note 3 - Revenue from Contracts with Customers (continued)
ASC 606 requires the allocation of the transaction price to the remaining performance obligations of a contract. Transaction price allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes unearned revenue and unbilled amounts that will be recognized as revenue in future periods. Transaction price allocated to remaining performance obligations is influenced by several factors, including seasonality, the timing of renewals, and disparate contract terms. Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes unearned revenue and backlog. The Company's backlog represents installment billings for periods beyond the current billing cycle. The majority of the Company’s noncurrent remaining performance obligations will be recognized in the next 13 to 36 months.
The remaining performance obligations consisted of the following:
| | | | | | | | | | | | | | | | | |
(in millions) | Recognized within one year | | Noncurrent | | Total |
| | | | | |
As of March 31, 2021 | $ | 461.3 | | | $ | 130.3 | | | $ | 591.6 | |
Note 4 - Business Combinations
2020 Acquisitions
The Company acquired all of the assets of Clickagy, LLC in October 2020 and all of the membership interests in EverString Technology, LLC in November 2020 for a total purchase consideration of $71.9 million. During the first quarter of fiscal year 2021, the Company recorded immaterial post-close net working capital adjustments. The preliminary purchase price allocation was updated to reflect the $0.2 million increase in consideration paid as well as to reflect the $0.2 million measurement period adjustment to unearned revenue. The Company included the financial results of these businesses in the consolidated financial statements from each date of acquisition. Transaction costs associated with each acquisition were not material. As part of the acquisitions, the Company agreed to issue $2.1 million of RSUs and agreed to pay $4.8 million of incentive compensation to acquired employees, subject to continued employment, to be recognized in the post-combination periods. The Company classifies compensation expense in its Consolidated Statements of Operations in the same manner in which the award recipient’s salary is classified.
The acquisition date fair value of the total consideration transferred was comprised of the following (in millions):
| | | | | |
Cash | $ | 61.8 | |
Purchase consideration liabilities | 7.2 | |
Issuance of 67,075 Class A shares | 2.9 | |
Total Purchase Consideration | $ | 71.9 | |
Note 4 - Business Combinations (continued)
The following table summarizes the aggregate fair values of the assets acquired and liabilities assumed, as of the date of the acquisitions (in millions):
| | | | | |
| |
Cash and cash equivalents | $ | 2.9 | |
Accounts receivable | 3.0 | |
Prepaid expenses and other assets | 1.1 | |
Intangible assets | 37.0 | |
Accounts payable and other | (2.2) | |
Unearned revenue | (3.2) | |
Total identifiable net assets acquired | 38.6 | |
Goodwill | 33.3 | |
Total consideration | 71.9 | |
Issuance of 67,075 Class A shares | (2.9) | |
Cash acquired | (2.9) | |
Cash paid for acquisitions | $ | 66.1 | |
The excess of purchase consideration over the fair value of net tangible and intangible assets acquired was recorded as goodwill. The fair values assigned to tangible and identifiable intangible assets acquired and liabilities assumed are based on management’s estimates and assumptions. The fair values of assets acquired and liabilities assumed may be subject to change as additional information is received, including the finalization of tax assets and liabilities.
The following table sets forth the components of identifiable intangible assets acquired and the estimated useful lives as of the dates of acquisition (in millions):
| | | | | | | | | | | |
| Fair Value | | Weighted Average Useful Life |
Brand portfolio | $ | 2.0 | | | 6.5 years |
Developed technology | 29.6 | | | 7.0 years |
Database | 2.0 | | | 4.0 years |
Customer relationships | 3.4 | | | 9.3 years |
Total intangible assets | $ | 37.0 | | | |
Developed technology represents the fair value of the technology portfolios acquired. The goodwill is primarily attributed to the expanded market opportunities when integrating technology with the Company’s technology and the assembled workforce. The goodwill balance from both acquisitions is expected to be deductible for U.S. income tax purposes.
Pro forma information related to the acquisitions has not been presented as the impact was not material to the Company’s financial results.
Note 5 - Cash, Cash Equivalents, and Short-term Investments
Cash, cash equivalents, and short-term investments consisted of the following as of March 31, 2021:
| | | | | | | | | | | | | | | | | | | | | | | |
(in millions) | Amortized Cost | | Unrealized Gains | | Unrealized Losses | | Estimated Fair Value |
Current Assets: | | | | | | | |
Cash | $ | 153.6 | | | $ | — | | | $ | — | | | $ | 153.6 | |
Cash equivalents | | | | | | | |
Corporate debt securities | 35.8 | | | — | | | — | | | 35.8 | |
Money market mutual funds | 39.7 | | | — | | | — | | | 39.7 | |
| | | | | | | |
Total cash equivalents | 75.5 | | | — | | | — | | | 75.5 | |
Total cash and cash equivalents | 229.1 | | | — | | | — | | | 229.1 | |
Short-term investments: | | | | | | | |
Corporate debt securities | 108.9 | | | — | | | — | | | 108.9 | |
Securities guaranteed by U.S. government | 6.6 | | | — | | | — | | | 6.6 | |
Other governmental securities | 9.1 | | | — | | | — | | | 9.1 | |
Total short-term investments | 124.6 | | | — | | | — | | | 124.6 | |
Total cash, cash equivalents, and short-term investments | $ | 353.7 | | | $ | — | | | $ | — | | | $ | 353.7 | |
Cash, cash equivalents, and short-term investments consisted of the following as of December 31, 2020:
| | | | | | | | | | | | | | | | | | | | | | | |
(in millions) | Amortized Cost | | Unrealized Gains | | Unrealized Losses | | Estimated Fair Value |
Current Assets: | | | | | | | |
Cash | $ | 100.4 | | | $ | — | | | $ | — | | | $ | 100.4 | |
Cash equivalents | | | | | | | |
Corporate debt securities | 72.0 | | | — | | | — | | | 72.0 | |
Money market mutual funds | 91.0 | | | — | | | — | | | 91.0 | |
Securities guaranteed by U.S. government | 6.4 | | | — | | | — | | | 6.4 | |
Total cash equivalents | 169.4 | | | — | | | — | | | 169.4 | |
Total cash and cash equivalents | 269.8 | | | — | | | — | | | 269.8 | |
Short-term investments: | | | | | | | |
Corporate debt securities | 24.0 | | | — | | | — | | | 24.0 | |