ZoomInfo's Q3 2025 Earnings Call: Contradictions in Revenue Growth, AI Strategy, Upmarket Retention, and Copilot Expansion

Date of Call: November 3, 2025

Financials Results

• Revenue: $318M GAAP revenue, up 5% year-over-year
• Operating Margin: 37% adjusted operating income margin; nearly 300 basis points sequential improvement; highest AOI margin since Q4 2024; returned to Rule of 40 on a quarterly basis

Guidance:

• Q4: GAAP revenue $307M–$310M; adjusted operating income $117M–$120M; non‑GAAP net income $0.27–$0.29 per share.
• Full‑year 2025: GAAP revenue $1.237B–$1.240B (≈+2% at midpoint); adjusted operating income $440M–$443M (~36% margin at midpoint); non‑GAAP EPS $1.04–$1.06 (based on 341M shares); unlevered FCF $424M–$444M.
• Plan to continue aggressive share repurchases and expect accelerating free cash flow per share in 2026.

Business Commentary:

• Revenue and Earnings Surge:
• ZoomInfo reported GAAP revenue of $318 million for Q3 2025, marking a 5% year-over-year increase. Adjusted operating income was $118 million, representing a margin of 37%.

• The growth was driven by the acceleration of upmarket growth, improving net revenue retention, and profitable execution across operations.

• Upmarket Strategy and Customer Retention:

• The upmarket business now represents 73% of total ACV, a 10 percentage point increase over two years, with 6% upmarket ACV growth.

• The focus on upmarket customers led to a 100% in-period net revenue retention for these customers, indicating improved customer entrenchment and mission-critical status.

• Product Innovation and AI Adoption:

• ZoomInfo's Operations suite grew more than 20% year-over-year, with significant contributions from new product launches like Copilot and GTM Workspace.

• The adoption of AI-driven solutions like Copilot has improved customer engagement and retention, while new product releases are expected to further drive innovation and customer adoption.

• Strong Financial Guidance and Shareholder Returns:

• The company raised its financial guidance for the full year, expecting low single-digit revenue growth and an AOI margin of 36%.
• Key to this outlook is the company's commitment to aggressive share repurchases, with 8.3 million shares repurchased in Q3, reflecting confidence in intrinsic value.

Sentiment Analysis:

Overall Tone: Positive

• "GAAP revenue was a record $318 million, up 5% year-over-year"; "adjusted operating income was $118 million, a margin of 37%"; management said they are "again raising our financial guidance" and noted they "returned us to a Rule of 40 company."

Q&A:

• Question from Mark Murphy (JPMorgan Chase & Co, Research Division): The magnitude of revenue upside is larger for Q3 than recent past; can you drill down into what fueled that extra strength — Copilot ramp, boomerang customers, Google's AI overviews causing more outbound hiring?
  Response: Q3 upside was driven by Copilot's mid‑to‑high single‑digit renewal uplift, a large early‑Q3 TCV deal, the upmarket mix shift (higher‑quality ACV) and ~$3M of increased usage‑based revenue.

• Question from Elizabeth Elliott (Morgan Stanley, Research Division): Early customer feedback on GTM Studio and the breakdown between greenfield adoption versus existing customers replacing legacy tools; what leverage do you expect for upsells?
  Response: Early feedback is very positive; GTM Studio unifies CRM/call/email/ZoomInfo data and is prompting both greenfield adoption and legacy replacements, creating substantial upsell potential.

• Question from Sitikantha Panigrahi (Mizuho Securities USA LLC, Research Division): How has upmarket retention trended and how much of NRR improvement is seat count versus cross‑selling?
  Response: Upmarket in‑period NRR is >100%; improvement is driven by product‑led upsells (Copilot, GTM Workspace/Studio), accelerating Operations growth and cross‑sell into larger accounts more than pure seat growth.

• Question from Brad Zelnick (Deutsche Bank AG, Research Division): Expand on the Agentforce integration opportunity — use case, size and interest level?
  Response: Agentforce brings ZoomInfo intelligence into Salesforce (Revenue Agent in the marketplace) with co‑selling support; early signal strong and more agents (e.g., a prospecting agent) planned.

• Question from Aleksandr Zukin (Wolfe Research, LLC): Can you clarify the delta between strong calculated RPO/subscription bookings growth (~18%) versus weaker billings, and how to think about exit rate implied by Q4 guide?
  Response: The billings delta is largely noise from last year's elevated Q3 billings (reserve/practice changes); current RPO up 6% is a better proxy for performance and the billings impact is in the high single‑digit millions.

• Question from Taylor McGinnis (UBS Investment Bank, Research Division): With more upmarket seasonality, what assumptions are embedded in the Q4 guide and any headwinds into Q4 or modeling notes for 2026 sequential growth?
  Response: Guidance philosophy unchanged: focus on year‑over‑year growth as sequentials will fluctuate with upmarket seasonality; Q3 was front‑loaded and Q4 expected more back‑end weighting.

• Question from Raimo Lenschow (Barclays Bank PLC, Research Division): Any nuance across geographies or verticals where things are improving versus stable or weak?
  Response: Improvement is broad‑based with notable strength in software, telecom, manufacturing and business services; overall upmarket ACV acceleration, retention gains, Operations and Copilot drove momentum.

• Question from David Hynes (Canaccord Genuity Corp., Research Division): How much of the upmarket segment is on Copilot today and do you have Copilot pricing set or room to extract more value?
  Response: No specific penetration disclosed; Copilot adoption is significant within upmarket (Operations >15% ACV); pricing for new products is structured for simplicity (platform fee + prepaid AI credits) prioritizing adoption before aggressive monetization.

• Question from Koji Ikeda (BofA Securities, Research Division): Regarding the private unified data & AI company win, how did the sales process go — many POCs or a smooth expansion?
  Response: This was an expansion of a long‑time customer where prior security/privacy clearance and established trust enabled smoother expansion into larger, longer‑cycle enterprise deals.

• Question from J. Lane (Stifel, Nicolaus & Company, Incorporated, Research Division): Are go‑to‑market resources sufficient to 'play offense' and has this changed thinking about inorganic moves to accelerate the AI roadmap?
  Response: Management believes GTM capacity is sufficient to accelerate growth after rebuilding customer relationships; no material change disclosed regarding inorganic strategy.

• Question from Tyler Radke (Citigroup Inc., Research Division): Should we expect Rule of 40 for next year and is the ~2% guide a good proxy for next year?
  Response: Quarterly Rule of 40 was achieved; full‑year 2025 likely won't reach it given 2% revenue guidance and 36% margin; no 2026 guidance yet but management aims to combine growth, margin expansion and buybacks to improve FCF/share.

• Question from Johnathan McCary (Raymond James & Associates, Inc., Research Division): How has sales productivity for net new business performed versus expectations and any green shoots from Copilot wins expanding personas?
  Response: Copilot expanded usage beyond SDRs into AEs, CSMs and RevOps; per‑rep productivity remained consistent amid resegmentation and the upmarket seller motion has largely completed a 9–12 month ramp.

• Question from Rishi Jaluria (RBC Capital Markets, Research Division): How is the changing search/AI landscape affecting ZoomInfo and PLG efforts?
  Response: AI/SEO shifts have some impact but are mitigated by the strategic upmarket shift; PLG is performing in line with expectations and upmarket mix reduces exposure to search landscape changes.

• Question from Clark Wright (D.A. Davidson & Co., Research Division): How are you investing in leveraging AI internally to maintain/improve your data advantage?
  Response: ZoomInfo is customer‑zero on its AI products, applying AI across sales, finance and product to improve data quality, operational efficiency and product functionality, reinforcing its data advantage.

• Question from Jackson Ader (KeyBanc Capital Markets Inc., Research Division): How should we think about 2026 FCF/share acceleration split between operational improvement versus aggressive repurchases?
  Response: Management expects FCF/share acceleration to result from the combined effect of revenue growth, margin improvement and aggressive buybacks — all three are contributors.

Contradiction Point 1

Revenue Growth Expectations

It involves changes in financial forecasts, specifically regarding revenue growth expectations, which are critical indicators for investors.

What specific factors drove Q3 revenue and CPO growth—Copilot, boomerang customers, or market dynamics changes like Google AI overviews? - Mark Murphy (JPMorgan Chase & Co)

2025Q3: Adjusted RPO plus 15% year-over-year, reflecting a strong Q2, and upmarket momentum across customer segments. - Michael O'Brien(CFO & Interim PFO)

What are the growth drivers for this year and your fiscal 2025 revenue guidance? - Mandeep Singh (Deutsche Bank)

2024Q4: We're looking at fiscal 2025, which began in January, and we're expecting the top line to grow 20-22%. - Henry Schuck(CEO)

Contradiction Point 2

AI Integration and Product Strategy

It showcases differing perspectives on the role and impact of AI integration in the company's products, which are vital for understanding the company's product strategy and competitive position.

How is sales productivity performing, and what are the green shoots in new Copilot wins? - Johnathan McCary (Raymond James)

2025Q3: Copilot expanded use cases from SDRs to account executives by leveraging AI for better go-to-market results. GTM Studio and GTM Workspace will further enhance this expansion and drive customer engagement. - Henry Schuck(Founder, Chairman of the Board & CEO)

How is AI improving cost efficiency in Go-To-Market units? - Elizabeth Elliott (Morgan Stanley)

2025Q2: Customers are focusing on AI to drive efficiencies but face challenges in data foundations. ZoomInfo is addressing this by providing a unified data platform and embedding data into customer workflows, enabling better decision-making and resource allocation. - Henry Schuck(Founder and CEO)

Contradiction Point 3

Upmarket Retention and Growth Strategy

It involves differing views on the improvement in upmarket retention rates and the strategic focus on upmarket growth, which directly impacts the company's revenue growth and market positioning.

How is upmarket retention trending, and what's driving net retention improvements? - Sitikantha Panigrahi(Mizuho Securities)

2025Q3: Upmarket net retention is above 100%, with improved outcomes due to product optimizations and upsell opportunities. The $100,000 cohort showed strong growth, driven by customer upgrades rather than new additions. - Michael O'Brien(CFO)

Can you break down NRR by upmarket and down-market segments? Is there any improvement in IRR guidance or in the pipeline/renewal activity this year? - Alex Zukin(Wolfe Research)

2025Q1: Upmarket retention continues to improve, vs down-market which remains impaired. Growth is expected in upmarket, while down-market is anticipated to decline. The focus is on growth in upmarket and managing down-market to a healthier state. - Graham O’Brien(CFO)

Contradiction Point 4

Copilot's ACV Growth and Adoption

It involves differing expectations and clarifications regarding Copilot's ACV growth and its adoption, which are critical for understanding the company's revenue growth trajectory and product strategy.

What percentage of the upmarket is on Copilot, and is its pricing optimized? - David Hynes(Canaccord Genuity)

2025Q3: Significant portions of upmarket are on Copilot. Pricing is designed for simplicity and adoption, with a platform fee and prepaid AI action credit. Current focus is on driving early adoption and learning. - Michael O'Brien(CFO)

What was Copilot ACV in Q1? Can you provide insights on the ACV stream's growth trajectory for this year? - Mark Murphy(JPMorgan)

2025Q1: Copilot continues to grow as expected, with significant momentum in Q1. Specific milestones will be disclosed when achieved. - Graham O’Brien(CFO)

Contradiction Point 5

International Expansion Strategy

It involves changes in international expansion strategy, which are critical for long-term growth and global market penetration.

How did the sales process with the private data and AI firm go? - Koji Ikeda (BofA Securities)

2025Q3: We've grown successfully in U.S. and now focusing on expansion to Europe, APAC, and LATAM. First territories: EMEA, UK, and Canada. - Henry Schuck(CEO)

What's your strategy for international expansion, and which regions are prioritized and when? - Mandeep Singh (Deutsche Bank)

2024Q4: We've grown successfully in U.S. and now focusing on expansion to Europe, APAC, and LATAM. First territories: EMEA, UK, and Canada. We are focusing on education in Q2, and expansion in EMEA by end of fiscal 2025. - Henry Schuck(CEO)