2. Zoominfo Technologies Inc. (NASDAQ:ZI)
Number of Hedge Fund Holders: 43
Share Price as of September 10: $9.64
Zoominfo Technologies Inc. (NASDAQ:ZI) is a software and data analytics company that provides sales and marketing intelligence for companies and business individuals. The main product is a commercial search engine, specialized in contact and business information, but generally, the platform helps businesses identify potential customers, gather information about them, and track their interactions.
The company recently signed deals with PwC, Deutsche Bank, MorningStar, and Manulife, with the largest-ever deal being a major US employer (worth $1.4 million over 3 years).
In June, Google chose Zoominfo Technologies Inc.’s (NASDAQ:ZI) as a partner to make GenAI more reliable, ZoomInfo Copilot, an AI-powered offering that combines company data with customer data to provide sales teams with better insights about their buyers. There is over $18 million in Copilot ACV and more than 1,000 customers.
Its data services are growing by 23%, and customer retention is strong at 117%. Companies investing in AI need accurate data, and this company becoming a key provider. There was a recent deal in EMEA to support a global network for financial institutions, using company data to build an AI solution to detect fraud.
Overall, the second quarter saw a 5.57% year-over-year decline in revenue. The earnings per share were still $0.17. Currently, 43 hedge funds are long in the company, with the highest stake amounting to $225,698,500 by HMI Capital.
It has achieved significant growth and financial success, despite facing challenges. The company’s focus on operational improvements and customer retention has led to positive results. While there have been short-term setbacks, its long-term prospects remain strong.
Baron Global Advantage Fund stated the following regarding ZoomInfo Technologies Inc. (NASDAQ:ZI) in its fourth quarter 2023 investor letter:
“We were too slow to sell when the probability of a likely thesis change dictated action over inaction. Each investment is like a puzzle. Different pieces are missing in different puzzles. Our process is deliberately slow and is built on collecting and analyzing as much information as possible and building conviction over time. In a highly stressful environment with a wide range of outcomes, a recognized lack of balance with emotions running high, postponing “bad decisions” is often the correct course of action except, when there is evidence of a potential or likely thesis change on the negative side in a bear market. We were often too slow and too timid in running for the exit. For example, when a company’s revenues prove to be less sticky during times of stress despite high average retention rates. ZoomInfo Technologies Inc. (NASDAQ:ZI), the business-to-business (B2B) sales data and software provider readily comes to mind, where we made a mistake selling the stock too slowly, as we did not fully appreciate the extent to which the company oversold unused licenses to its customers, which exacerbated the slowing demand environment, creating a whiplash effect as the license inventory was used up later on, causing revenue growth to decelerate materially.”
