Shares of ZoomInfo Technologies Inc. experienced a significant decline during Tuesday's trading session, falling approximately 9.5% to $6.63. This drop occurred despite the company reporting fourth-quarter financial results that surpassed analyst expectations. The sell-off was primarily driven by investor disappointment with the firm's forward-looking revenue guidance, which projected minimal growth for the fiscal year 2026.
Flat Revenue Outlook Overshadows Quarterly Beat
For the final quarter of 2025, ZoomInfo posted revenue of $319.1 million, with adjusted earnings coming in at $0.32 per share. Both metrics exceeded consensus forecasts. However, the market's focus swiftly shifted to the company's projection for the full year 2026. Management guided revenue to a range of $1.247 billion to $1.267 billion, a figure that essentially mirrors the $1.2495 billion expected for 2025. This indication of stagnant top-line growth prompted a sharp reassessment of the stock's valuation by institutional investors.
The cautious stance extends to the immediate quarter as well. For the first quarter of 2026, ZoomInfo anticipates revenue between $306 million and $309 million and adjusted earnings per share of $0.25 to $0.27. Founder and CEO Henry Schuck emphasized the company's strategic priority for the coming year is to scale its platform for customers, with a particular focus on enhancing workflow tools and automation capabilities.
Board Authorizes Major Share Repurchase Program
In a concurrent announcement, ZoomInfo disclosed that its board of directors approved a new $1 billion share repurchase authorization in February. This move follows the company's repurchase of $407 million worth of its own stock throughout 2025. The substantial buyback program highlights a strategic tension common among mature software firms: robust cash generation and capital return to shareholders juxtaposed against challenges in reigniting revenue expansion.
The company also provided insights into its customer base dynamics, noting an upmarket shift. ZoomInfo concluded 2025 with 1,921 customers generating annual contract value (ACV) of at least $100,000. These larger accounts now constitute 74% of the company's total ACV. Furthermore, the net revenue retention rate—a key metric measuring spending growth from existing customers over a twelve-month period—stood at 90% at year-end.
Wall Street Reacts with Downgrades and Price Target Cuts
The financial community reacted negatively to the earnings report and guidance. Analysts expressed concerns over execution risks associated with re-accelerating sales growth. Citizens downgraded the stock to "market underperform" and established a price target of $6. RBC Capital Markets maintained its "underperform" rating but reduced its target price to $7. The prevailing sentiment suggests that if enterprise customer spending remains subdued or if customer churn increases, ZoomInfo could face difficulties in achieving even its flat revenue plan, thereby placing greater emphasis on share buybacks to drive per-share earnings growth.
Looking ahead, investors are expected to seek further clarity on the company's trajectory beyond the provided guidance. ZoomInfo management is scheduled to present at several upcoming industry conferences, including the Raymond James Institutional Investors Conference on March 2, the Morgan Stanley Technology, Media & Telecom Conference on March 3, and the Stifel Technology Conference on March 10. These appearances will likely be scrutinized for any additional commentary on market conditions, product adoption, and long-term growth levers.
The episode underscores a critical dynamic in equity markets, where future expectations often carry more weight than recent historical performance. While ZoomInfo's operational execution in the fourth quarter was solid, the lack of a visible growth catalyst for 2026 created a valuation overhang that triggered the sell-off. The company now faces the challenge of demonstrating its ability to monetize its upmarket customer base and new product initiatives to restore investor confidence in its growth narrative.