Shares of ZoomInfo Technologies, now trading under the ticker GTM after dropping ZI, plummeted approximately 35% in Tuesday afternoon trading. The steep decline came after the company sharply reduced its 2026 growth forecasts, overshadowing a first-quarter earnings beat.
For the first quarter of 2026, ZoomInfo reported GAAP revenue of $310.2 million, up 1.5% year-over-year, and adjusted earnings per share of $0.28. However, management's revised full-year revenue outlook of $1.185 billion to $1.205 billion fell well short of the previous guidance range of $1.247 billion to $1.267 billion. The company also lowered its unlevered free cash flow forecast to $400 million to $420 million, down from $435 million to $465 million.
AI Disruption and Pricing Pressure
The primary culprit behind the guidance cut is what management described as AI-driven buying pauses. Clients are reevaluating their software needs as they determine how artificial intelligence can automate, replace, or reduce costs. CEO Henry Schuck noted on the earnings call that “AI has structurally changed how software is built, bought, and used.” Customers are moving away from traditional seat licenses and instead seeking data through APIs and AI platforms like Claude.
To adapt, ZoomInfo is transitioning to a hybrid pricing model that combines a smaller platform fee with pre-paid data credits. This shift, however, introduces pricing model risk and could compress annual contract values in the near term.
Restructuring and Job Cuts
In response to the changing landscape, ZoomInfo’s board approved a restructuring plan that includes laying off approximately 600 employees, or about 20% of its workforce as of the end of Q1. The company expects to incur pre-tax charges of $45 million to $60 million but anticipates annual run-rate cost savings of roughly $60 million once the restructuring is complete.
Analyst Downgrades and Competitive Pressure
Wall Street reacted swiftly. BTIG analyst Allan Verkhovski downgraded the stock to Neutral, warning that ZoomInfo is “unlikely to receive the benefit of the doubt” amid rising disruption risks. Stifel also flagged AI-driven disruption and extended sales cycles. Canaccord analyst David Hynes Jr. cut his rating to Hold and slashed the price target from $12 to $5, calling the stock “cheap absent a catalyst.”
Competition is intensifying from private companies like Apollo and Clay, as well as public peers. HubSpot fell about 5% on Tuesday, while Salesforce dropped roughly 3%, though ZoomInfo’s decline was far more severe and company-specific.
Bulls Still See Value
Despite the headwinds, some bulls point to ZoomInfo’s extensive B2B database as a key asset, especially as AI applications require high-quality company and contact data. Upmarket annual contract value rose 5% year-over-year and now represents 75% of total ACV. Net revenue retention stood at 90%, indicating that existing customers are largely sticking around, albeit with some contraction.
Nevertheless, the bear case is gaining traction. If customers increasingly shift workflows to AI platforms, ZoomInfo could find itself selling data at lower prices, losing leverage on its software. The company’s adjusted EPS guidance remains unchanged at $1.10 to $1.12, but that failed to reassure investors who are looking for evidence of demand recovery rather than cost-cutting measures.
ZoomInfo’s path forward hinges on whether enterprise buyers ramp up data spending for AI agents. Its move to consumption-based pricing could cushion the blow from shrinking seat licenses and potentially reignite growth. But if the current lull persists, the pricing transition might further depress valuations before any upside materializes.