ZoomInfo Technologies Inc. reported its financial results for the third quarter and the nine months ended September 30, 2024, revealing significant changes in revenue and profitability compared to the previous fiscal period.
For Q3 2024, the company generated revenue of $303.6 million, a decrease of $10.2 million (3%) from $313.8 million in Q3 2023. Subscription revenue also declined, totaling $300.4 million compared to $309.8 million in the prior year. For the nine months ended September 30, 2024, total revenue was $905.2 million, down from $923.1 million in the same period of 2023. The reduction in revenue was attributed to a change in accounting estimates affecting collectibility of accounts receivable, leading to increased bad debt expense.
Net income for Q3 2024 was $23.8 million, a decrease of $6.4 million (21%) from $30.2 million in Q3 2023. For the nine months, net income plummeted to $14.5 million from $112.8 million in the previous year, primarily due to lease impairment and abandonment charges, restructuring activities, and legal costs associated with class action lawsuits. The effective tax rate for Q3 2024 was 31.7%, down from 49.0% in Q3 2023, while the nine-month effective tax rate increased to 63.4% from 38.1%.
Operating expenses for Q3 2024 rose to $212.8 million, an increase of $6.9 million (3%) from $205.9 million in Q3 2023. General and administrative expenses surged by 20% to $60.6 million, reflecting higher costs associated with legal settlements and restructuring. The company also reported restructuring and transaction-related expenses of $16.8 million for Q3 2024, compared to $5.1 million in the same period last year.
In terms of strategic developments, ZoomInfo executed a lease restructuring agreement in July 2024, making a payment of $59.1 million related to its Waltham, Massachusetts office. The company also engaged in an accelerated share repurchase agreement in August 2024, repurchasing $125.0 million of common stock, which included 12,431,216 shares at an average price of $10.06 per share.
As of September 30, 2024, ZoomInfo reported total stockholders' equity of $1,668.4 million, down from $2,250.4 million a year earlier. The company had cash and cash equivalents of $147.7 million, with an additional $250.0 million available under its first lien revolving credit facility. The net cash provided by operating activities for the nine months ended September 30, 2024, was $260.4 million, compared to $306.1 million in 2023.
Overall, ZoomInfo's financial performance reflects challenges in revenue generation and profitability, alongside strategic adjustments in its operational framework.
About ZoomInfo Technologies Inc.
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