Would you be interested in this company

ZoomInfo Picks Up Six Honors for Company Excellence from Comparably

Recognitions Include Best Sales Team, Best Engineering Team, Best Places to Work in Boston, and Best Company Outlook

https://www.businesswire.com/news/home/20210413005482/en/

BLancaster

2 Likes

So technically that seems to fall into the category of robocalls, but it seems less egregious than purely random, unrelated, scatter-shot junk calls, as it seems that the list comprises those who’ve already expressed some interest or buying intent as determined by the sales force.

That’s only slightly better. But then I’m a single data point. I will not respond positively to any telephone solicitation, even if I’m interested in the product. When I’m ready I will reach out. Having a salesman call me will just irritate me.

So, no, I would not be interested in this company (to answer the OP’s question). The “product” offends me, regardless of the financials. They are using my utilities that I pay for (i.e. phone) to conduct their business. I actually think that should be illegal.

1poorguy

33 Likes

We worry about zoominfo who uses multiple data sources to find ways to generate sales leads and direct marketing efforts at us, but we have no problems with google, trade desk, Facebook, countless others who direct ads at us and send us spam emails?

I guess I don’t see a moral issue here at all. Is increasing sales effectiveness bad? Doesn’t that ultimately serve society by generating more effective competition which ultimately reduces prices? Isn’t this what capitalism is all about?

Just curious about the righteous indignation…

Rob

17 Likes

Just curious about the righteous indignation…

This is wandering a bit off topic, so I’ll only answer this one question out of respect for board integrity. I do think it is still relevant to the business being discussed, even if I’m a single data point.

Google, for example, does not call me. Their ads target my online activities. They do not interrupt me in the middle of dinner, for example. Emails can wait for days before I look at them. I do have my issues with spam emails and auto-run ad videos. But, as near as I can tell, that’s not what ZoomInfo does, so I did not comment on that. They bother me, uninvited, demanding my attention (i.e. a ringing phone). They are as bad as door-to-door salesmen and proselytizers, except that it’s easier to use the phone than to come to my door. But each is an unwelcome interruption to my day.

I may be the exception, but if someone calls me (or door-to-door), even if I’m interested in the product or support the charity (i.e. I have the same rule for charities) I will not respond positively. I will reach out to whomever I want when I’m ready. Cold calling guarantees you won’t get a sale (or donation) from me.

1poorguy

47 Likes

We worry about zoominfo who uses multiple data sources to find ways to generate sales leads and direct marketing efforts at us, but we have no problems with google, trade desk, Facebook, countless others who direct ads at us and send us spam emails?

Who said we have no problems with the others? That’s a bit of a straw man setup.

My barrier is the time I have to spend to dismiss it. A google ad as a sidebar to a site I visit is no time at all, entirely irrelevant. It might even be humorous … as in “I already bought that 300mm lens, why are you trying to sell me another?” Spam emails are a minor inconvenience. If it makes it past the filter and I don’t recognize it, I click the spam button immediately, I do not waste time investigating.

Robo-calls are an entirely different thing. It’s an invasion of my space, requires my direct attention. It could be an emergency from a family member, so answering is important. But then I have to wait for the stupid dialer to detect “I got a live one”, and then I have to wait to be routed to the poor sap on the other end, or the automated recording to start. And then because the universe has a sarcastic sense of humour, the soup is probably boiling over just about then.

Everyone associated with the robo-call industry is either shady, creepy, stupid, or desperate. Should I tell you how I really feel?

I’m not going to judge anyone for investing in this…at its heart, the market is fundamentally amoral and we aren’t supporting or denying support for a company when we purchase or sell a stock. We’re really just buying from each other for a chance at growth. But there are times when I don’t want to be associated with a company, and this appears to be one.

26 Likes

I agree that “robocalls” are more irritating than Google, Trade Desk, Facebook, etc., ads. The difference is a matter of degree, however, not of kind. Even ads that appear peripherally on screen still command processing resources. But, the main point I wanted to make is that if these calls were so irritating, the business model would have failed long ago, and we wouldn’t be talking about ZoomInfo today

4 Likes

I think we’ve run this thread into the ground with 26 posts in the thread. Some people have made it very clear over and over that they have very negative emotional feelings about ZoomInfo. I won’t take phone calls asking for money either, and hate them. However I am following two things:

Following the money, I have seen few if any companies with better metrics, ever.

Following the awards validating the company that they get from almost everybody (Forrester Wave first place; Grid Reports first on 22 of 37 metrics; Awards from Comparably: Best Sales Team, Best Engineering Team, Best Places to Work in Boston, Best Company Outlook, Best Company for Women,; Fortune Magazine’s 40 best CEO’s Under 40; etc, etc.)

Just because I personally hate cold calls at home doesn’t mean I’d react negatively if I was a purchasing agent and a sales person called me to offer to sell me just the product I was looking for.

And I try to invest rationally, not depending on my personal feelings about the product. (Although I won’t invest in things I feel are immoral or dangerous. I wouldn’t invest in a company pushing diet pills, just as an example of what I’m talking about). But I try to invest based on how excellent I feel a company’s business is, and when I mentioned .

FURTHER POSTS ON THIS THREAD, PRO OR CON, WILL BE DELETED.

Best,

Saul

37 Likes

Unfortunately, ZI is guiding for $645-$655m revenue in 2021 which represents a large deceleration from 62% to 38%. Shouldn’t that be a cause for concern with its relatively high valuation? It does look like QoQ revenue growth is re-accelerating slightly:


        $ Q Rev  QoQ     YoY
4Q18	40.8			
1Q19	54.6	34%		
2Q19	68.5	25%		
3Q19	79.1	15%		
4Q19	91.1	15%	
1Q20	102.2	12%		
2Q20	110.9	9%		
3Q20	123.4	11%		
4Q20	139.7	13%	62%
							
4Q21	655	        38%

The business makes sense to me and I can understand this being really helpful to those in sales but why is it decelerating so much so soon?

1 Like

I looked at ZI around IPO last summer. The main point for me (not to buy at that time) was that organic growth was in low 40s if my memory serves me well. The rest was acquisitions. Compared to our other companies - it was worse. So, I passed.

I haven‘t dug into it now, but can respect and understand both decisions - invest or not - into this company as a lot of good things like high gross margin, profitability etc are there. But I was not impressed by organic growth rates.

Best,
V

1 Like

Unfortunately, ZI is guiding for… a large deceleration in revenue growth from 62% to 38%.

Hi buylower,
If you look at any of our companies, their guidance is always ridiculously low. No one believes it. In fact, no one is meant to believe it, but it gives the company a chance to beat guidance by a lot every quarter, and also to raise annual guidance each time, which gives the reporting company great headlines four times. That’s just the way the game is played.
Saul

26 Likes

If you look at any of our companies, their guidance is always ridiculously low.

Thanks Saul, that is part of my concern. ZI does not have enough history of giving guidance for me to make this assumption. What qualifies to you as ridiculously low guidance? They have given guidance twice so far that we can compare to and they came in pretty close to what they were guiding towards.


     Guidance vs Actual
2Q20 455         476     (4.4%) 
3Q20 467         476     (1.9%) 

Guidance here is for the FY2020. So as you get closer to the close of the year you should be able to predict FY revenues better so I can understand them not beating by as much.

So let’s say they continue with their history and will beat FY2021 by 5%. That puts them with revenues of $688m and would make their YoY growth rate 44.5% down from 62%. That’s better but still a fairly large deceleration, no? I guess that’s what makes it more of a middle position for you as the other metrics are very strong and you have some optionality if the recruiting portion gains any traction.

21 Likes

Was that 62% fully organic? DiscoverOrg acquired ZoomInfo in 2019, some of the growth booked in 2020 is therefore inorganic (especially in the beginning of the year, the merger was announced on 4 Feb 2019 but probably not closed until several months later)

1 Like

As for guidance always being low, I noticed companies will always guide the year very low and raise it up as time goes on, but the next quarter, you can typically take what they come in at vs. what they predicted and get a guideline on how much over guidance they typically come in at to get a “real” estimate what they will do the next quarter.

As for organic vs. inorganic, this is what I was able to find looking at their earnings transcript. I am not really interested in this company so am not really going to try and find more numbers.

Q3: revenue up 53% YOY, 10% sequentially. Organic growth up 41% YOY.

Q4: revenue up 53% YOY, 13% sequentially. organic revenue up 12% sequentially. I can’t find yoy organic growth. Nor have I looked into when the acquisitions lapse.

They had the following to say in their Q4 earnings call:
Our full-year guidance implies 37% revenue growth and an adjusted operating income margin of 43% at the midpoint of the range.

or Q1, we expect GAAP revenue in the range of $144 million to $146 million and adjusted operating income in the range of $61 million to $63 million.

I show they did $102m in Q1 last year. So as you can see, they are guiding for 42% growth next quarter but 37% for the full year. This is very common to forecast lower growth for the full FY but the next quarter forecast higher growth. So based on your history you show, they may come in at high 40’s for Q1 growth.

In Q2 they had the following to say:
While every company during this pandemic grappled with how to prioritize investments, efficiently finding their next customer is at or near the top of the list forever executives. In the quarter, our team delivered 40% organic… GAAP revenue in Q2 was $111 million, up 62% year-over-year.

In Q2 they said:
We expect GAAP revenue in Q3 to be $116 million to $118 million and adjusted operating income between $53 million and $55 million. This implies 34% organic revenue growth and 46% margin at the midpoint of the range. The non-GAAP net income is expected to be $0.08 to $0.09 per share.

For the full year 2020, GAAP revenue is expected to be between $451 million and $455 million. And adjusted operating income between $213 million and $217 million. This guidance implies 35% organic growth and a 47% margin at the midpoint of the range.

Here’s what really happened:
In Q3, our team has delivered 41% organic growth over the last year, up 40% from last quarter.

Also: GAAP revenue in Q3 was $123 million, up 56% year-over-year.
So they were $6m higher than they guided.

We expect to generate GAAP revenue in Q4 between $129 million and $131 million and adjusted operating income between $58 million and $60 million. This guidance implies 43% annual revenue growth or 35% growth relative to the previously reported allocated combined receipts figure for Q4 2019; and a 45% adjusted operating margin at the midpoint of the range.

Then what really happened: In Q4, we delivered GAAP revenue of $140 million, up 53% year over year and sequential-quarter growth of 13%

You can see they will continue to raise the Annual Guidance every quarter and overshoot each quarter by, in this case, they came in at 5% more revenue they guided for in Q3, and 7.7% more revenue they guided for in Q4. So taking this, that’s roughly 6-7% higher revenue PER QUARTER for the next quarter than they predict, and of course they will raise the guidance for the year each quarter.

So I expect them to be somewhere around 55% growth next quarter, given their history of beating estimates. Also, they’re going to raise the annual revenue forecast every quarter. In other words, don’t worry about trying to calculate growth off their annual forecast they are giving, because it’s going to change throughout the year.

As for how much organic vs. inorganic, I’m not sure.

30 Likes