ZoomInfo (GTM): Dividend Sustainability on Thin Ice – Time to Bail Before the Cut?

Investors chasing dividends in ZoomInfo (GTM) are dancing on a powder keg. With earnings stagnation, a shrinking downmarket business, and a post-2025 outlook shrouded in fog, this "go-to-market" stock is a riskier bet than its frothy valuation suggests. Let’s pull back the curtain on why income investors should think twice—especially with the ex-dividend date looming on May 19.

Earnings Stagnation: The Cash Flow Squeeze

ZoomInfo’s Q1 2025 results reveal a troubling pattern. While GAAP revenue held steady at $305.7 million, this was a 1% year-over-year decline. Worse, the company is aggressively scaling back its downmarket business—a segment that once fueled growth—to focus on higher-value "Upmarket" clients. This pivot, which now accounts for 71% of ACV, may sound strategic, but it’s a risky move. Downmarket customers, though smaller, provided cash flow diversification. Now, ZoomInfo is doubling down on fewer, larger clients—a model that could backfire if retention falters.

And retention is already weakening. The net revenue retention rate improved to 87% in Q1, but that’s down sharply from the 90%+ levels of prior years. This metric is the lifeblood of SaaS businesses, and a slip here means fewer recurring dollars to fund dividends.

Post-2025 Guidance: A Black Hole of Uncertainty

Here’s the kicker: ZoomInfo hasn’t provided any post-2025 financial guidance. The company’s full-year 2025 outlook is conservative, with GAAP revenue projected to grow just 0.4% to $1.205 billion. Non-GAAP operating income is expected to drop 3% year-over-year. Management is so gun-shy about the future that they’ve avoided even hinting at 2026 targets.

This lack of visibility is a red flag. Cash flow, while positive, is under pressure. Unlevered free cash flow grew a meager 1% in Q1 to $124.5 million, and the company spent $95 million on share buybacks—money that could’ve gone toward dividends. With $138.5 million in cash as of March 2025, ZoomInfo isn’t broke, but its balance sheet is weighed down by $2.74 billion in tax receivable agreements—a legacy of past acquisitions that’s a silent drain on flexibility.

Valuation: Overpriced for a Dividend Reliant on Hope

ZoomInfo’s stock trades at a nosebleed valuation. Analysts’ average price target of $11.05 implies a 7% premium to its May 12 close of $10.31—but that’s based on rosy assumptions about AI-driven growth. The reality? The company’s price-to-sales ratio of 3.2x is well above peers like Salesforce (1.8x) or HubSpot (2.1x), despite slower revenue growth.

And dividends? The current yield is a paltry 0.6%, and there’s no room for error. If earnings miss targets, this payout could be the first thing slashed. Just look at peers: Veeva Systems cut its dividend in 2024 after growth stalled, and Palantir has never paid one. ZoomInfo’s management isn’t immune to similar pressures.

Ex-Dividend Date: A Final Call to Exit

The ex-dividend date on May 19 is a critical juncture. Investors who own GTM before this date get the payout, but those holding after don’t. The problem? ZoomInfo’s dividend is already under strain. The payout ratio (dividends relative to earnings) has crept upward as earnings shrink, and with no post-2025 clarity, this trend will worsen.

The Bottom Line: Bail Before the Music Stops

ZoomInfo’s dividend is a house of cards. Stagnant earnings, a risky pivot away from growth markets, and a lack of long-term visibility make this a terrible bet for income investors. With the ex-dividend date approaching, now’s the time to sell—before the payout gets slashed and the stock tanks. This isn’t a "buy the dip" story; it’s a "sell the hope" cautionary tale.

Action Item: Sell GTM before May 19. Income investors: Look elsewhere for safer dividends. Growth investors? Wait for a clearer path post-2025—or risk being left holding the bag when the music stops.