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This statistic highlights ZoomInfo’s Revenue by Segment, split between Subscription and Usage based segments, reported on a quarterly basis from Q2 2019 onwards.
ZoomInfo’s Revenue by Segment
Each year, ZoomInfo derives almost 99% of its revenue from subscription services and the remainder from recurring usage-based services. Even in Q2 2021, $171.9 million was generated from subscriptions as compared to $2.1 million from usage-based revenue. The following table highlights ZoomInfo’s Revenue by Segment in some of its recent quarters.
|Segment||Q2 2020||Q1 2021||Q2 2021||Contribution in Q2 2021|
(All figures in millions, except percentages. ZoomInfo’s fiscal year ends December 31st)
The company derives revenue primarily from subscription services. ZoomInfo sells its platform to both new and existing customers. Their paid product editions are:
Apart from these, they even have a free Community Edition. However, some existing customers continue to renew their subscriptions to pre-acquisition versions of DiscoverOrg solutions and the Pre-Acquisition ZI (Zoom Information and not ZoomInfo).
The subscription services consist of SaaS applications and related access to their databases. These contracts are generally based on the number of users that access their applications, the level of functionality that they can access, and the amount of data that a customer integrates with their systems. The subscription contracts typically have a term of 1 to 3 years and are non-cancelable. These are invoiced annually, semi-annually, or quarterly in advance of delivery. Over 30% of ZoomInfo’s ACV(annual contract value), are multi-year agreements.
The company records a contract asset when revenue recognized on a contract is more than the billings to date for that contract. Unearned revenue includes billed fees for subscriptions, received before satisfying the criteria for revenue recognition. These are subsequently recognized as revenue in accordance with their revenue recognition policy. The unearned revenue balance is influenced by several factors such as:
This balance does not represent the total contract value of annual or multi-year, non-cancelable subscription agreements. As of Q2 2021, unearned revenue of $276.0 million was recorded.
On a QoQ basis, the company’s revenue from subscriptions increased by 13.5%. However, on a YoY basis, there was a 56.7% increase in this segment. As we can derive from the graph, over the past three years, there has been a linear growth in the revenue generated.
Apart from the revenue growth, ZoomInfo even faces challenges. One of the biggest challenges that they face is competition. If a larger and well-funded company with significant resources and sophisticated technology enters the market, then, its business model may become competitive. Furthermore, the uncertain and shifting regulatory environment and trust climate cause concerns regarding data privacy. Even the perception that the privacy of personal data is not satisfactorily protected, discourages prospective or existing customers from subscribing to their products.
Moreover, being a subscription-based business, the customers are not obligated to renew their subscriptions. If ZoomInfo fails to expand subscriptions, then revenue may decline or grow less quickly than anticipated, which would harm their financial condition.
Usage-based revenue is comprised largely of email verification and intent-driven audience and targeting services, which are charged to customers on a per-unit basis based on their usage. The customers integrate this service into their internal workflows on an ongoing basis. This revenue is recognized when the services are consumed by the customer.
Unlike subscription revenue, this segment does not have linear growth. During FY2020, there has been a downfall in the revenue generated. However, in absolute terms, usage-based revenue has increased by 110%. On a QoQ and YoY basis too, there has been a significant increase. A 10.5% increase was witnessed on a QoQ basis, as compared to a 16.67% YoY increase.
About the company
ZoomInfo is a prominent go-to-market intelligence platform. The sales and marketing teams use this based go-to-market data and insights platform delivers comprehensive and high-quality intelligence and analytics. This provides its users accurate information and insights on the organizations and professionals they target enabling them to shorten sales cycles. This also ensures that the right message is delivered by the sellers and marketers to the right person and at the right time.
ZoomInfo, formerly known as DiscoverOrg, was co-founded in 2007 by its CEO, Henry Schuck. DiscoverOrg achieved significant growth since its founding and continued to acquire Zoom Information, Inc. (“Pre-Acquisition ZI”) in February 2019. This helped in further expanding the breadth of their go-to-market intelligence, industry coverage, and addressable market opportunity. This business was incorporated as ZoomInfo Technologies Inc. in November 2019 facilitating the IPO. The IPO was completed On June 8, 2020, listed on NASDAQ with stock ticker ZI.
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