ZoomInfo Q1 Earnings Preview: Can Revenue Growth Outpace Persistent Profit Challenges?

Investors are preparing for ZoomInfo’s (NASDAQ: ZI) first-quarter 2025 earnings report, due after the market close on May 12, which will test whether the B2B intelligence platform can sustain revenue momentum while addressing persistent profit pressures. With consensus estimates pointing to $295.3 million in revenue and $0.05 per share in earnings, the results will offer critical insights into the company’s ability to scale its AI-driven solutions amid a competitive and cost-conscious marketplace.

Key Metrics in Focus

ZoomInfo’s Q1 performance will be measured against two critical benchmarks: revenue growth and margin management. The company has consistently exceeded top-line expectations, with Q4 2024 revenue of $309.1 million—3.85% above forecasts. However, its struggle to meet earnings targets persists, as seen in Q4’s $0.04 EPS miss (-18.37% vs. estimates), which paradoxically sparked a 23% stock surge the following day. This disconnect highlights investors’ prioritization of revenue over near-term profitability, but patience may be wearing thin.

Note: This visualization would show a steep rise post-Q4 earnings, reflecting the market’s focus on revenue resilience.

The Profitability Puzzle

Despite strong sales, ZoomInfo’s path to profitability remains fraught. Analysts project full-year 2025 EPS of just $0.31, unchanged from earlier estimates, while 2026 projections have been downgraded from $0.39 to $0.35. This suggests skepticism about the company’s ability to control costs or boost margins. The culprit? Investments in AI and upmarket expansion, which fuel revenue but strain profit margins. For instance, its Copilot integration—a tool for sales teams—requires ongoing R&D spending, while targeting larger enterprise clients demands costly customer success teams.

Valuation Crossroads

ZoomInfo’s valuation reflects this tension. While a $11.05 average analyst price target implies a 19.6% upside from current levels (~$9.24), GuruFocus’ $22.07 estimate (139% upside) envisions a future where margins improve dramatically. The gap underscores divergent views: bulls bet on ZoomInfo’s 35,000+ clients and AI-driven moat, while bears cite low net retention rates (92% in Q4) and high sales and marketing costs (57% of revenue in 2024).

Strategic Imperatives for Q1

1. Revenue Growth Trajectory: A beat on $295.3M would reinforce ZoomInfo’s position as a leader in the $12B+ B2B intelligence market. Management’s guidance for FY2025 ($1.185B-$1.205B) leaves little room for slippage.
2. Margin Clarity: Gross margins (currently ~63%) need stabilization, while operating expenses must align with revenue growth.
3. Customer Metrics: Net retention rates and enterprise client wins will signal whether upmarket strategies are paying off.

Risks to Watch

• Competitive Pressure: Salesforce’s Data Cloud and LinkedIn’s Sales Navigator are intensifying competition.
• Economic Sensitivity: B2B software spending could soften if recession fears resurface.

Conclusion

ZoomInfo’s Q1 results will serve as a referendum on its dual mission: scale revenue without sacrificing long-term profitability. While its AI-driven platform and enterprise focus justify optimism, the stock’s valuation hinges on proving that margin expansion is achievable. With consensus estimates cautious and 2026 guidance downgraded, investors may demand more than just revenue growth to justify a sustained rally. A strong Q1 print could narrow the valuation gap—either by lifting the stock toward $11 or prompting analysts to reassess their bearish 2026 outlook. The market’s verdict, however, will ultimately turn on whether ZoomInfo can answer the question it’s been asking for years: Can the top line justify the bottom line?

Disclosure: This analysis is for informational purposes only and should not be construed as investment advice.