NEW YORK, Sept. 26, 2024 (GLOBE NEWSWIRE) -- The law firm of Kirby McInerney LLP reminds investors that a class action lawsuit has been filed in the U.S. District Court for the Western District of Washington on behalf of those who acquired ZoomInfo Technologies Inc. (“ZoomInfo” or the “Company”) (NASDAQ: ZI) securities during the period of November 10, 2023 to August 5, 2024, inclusive (“the Class Period”). Investors have until November 4, 2024 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
[Click here to learn more about the class action]
On November 1, 2022, ZoomInfo reported its third quarter 2022 financial results, revealing that increased customer scrutiny during contract renewals negatively affected its performance. This led to a retracement in Net Revenue Retention (NRR) gains from 2021. The company also reported a decline in total Remaining Performance Obligations (RPOs) to $979 million, down from $985 million the previous quarter, and a decline in current RPOs to $757 million, from $764 million. On this news, the price of ZoomInfo Class A common stock fell more than 29%. On November 16, 2022, ZoomInfo disclosed that the scrutiny during contract renewals persisted into the fourth quarter, which would impact its revenue growth for fiscal year 2023. On this news, the price of ZoomInfo shares declined by $12.69 per share, or approximately 29.2%, from $43.50 per share on November 1, 2022, to close at $30.81 on November 2, 2022.
On July 31, 2023, ZoomInfo announced financial results for the second quarter of 2023, revealing that ZoomInfo customers with annual contract values of $100,000 or greater had declined. ZoomInfo reduced its annual revenue guidance from a range of $1.275 billion to $1.285 billion to a range of $1.225 billion to $1.235 billion. On this news, the price of ZoomInfo shares declined by $6.90 per share, or approximately 30%, from $25.57 per share on July 31, 2023, to close at $18.67 on August 1, 2023.
On May 7, 2024, ZoomInfo announced financial results for the first quarter of 2024, disclosing that it had a large pool of small business customers that exhibited weakness during renewals in the period, which had caused NRR to decline to 85% from the 87% reported in the fourth quarter. ZoomInfo further reduced its annual revenue guidance. On this news, the price of ZoomInfo shares declined by $3.88 per share, or approximately 24.2%, from $16.02 per share on May 7, 2024, to close at $12.14 on May 8, 2024.
On August 5, 2024, ZoomInfo announced financial results for the second quarter of 2024, disclosing that it was incurring a $33 million charge due to non-payments from customers and had been forced to implement a new business risk model to reduce write-offs. In connection with its new risk model, ZoomInfo stated it was altering its operational procedures to require up-front payments from small business customers, indicating that many of ZoomInfo’s previous customers had been unable to afford ZoomInfo’s products and services. As a result, ZoomInfo further reduced its annual revenue guidance by $65 million at the midpoint, from a range of $1.255 billion to $1.27 billion to a range of $1.19 billion to $1.205 billion. On this news, the price of ZoomInfo shares declined by $2.40 per share over two trading sessions, or approximately 23.1%, from $10.41 per share on August 2, 2024 to close at $8.01 on August 6, 2024.
The lawsuit alleges that: (i) ZoomInfo’s financial results during the Class Period had been inflated by the ephemeral effects of the COVID-19 pandemic, which had pulled-forward demand for ZoomInfo’s database of digital contact information; (ii) material portions of ZoomInfo’s existing customer base were attempting to either reduce their use of ZoomInfo’s product or abandon it altogether; (iii) ZoomInfo had used manipulative and coercive auto-renew policies and threats of litigation to force customers into remaining with ZoomInfo for an additional contractual term; and (iv) ZoomInfo’s coercive customer retention tactics had materially damaged ZoomInfo’s customer relationships, client franchise, and competitive advantages.
If you purchased or otherwise acquired ZoomInfo securities, have information, or would like to learn more about this investigation, please contact Thomas W. Elrod of Kirby McInerney LLP by email at investigations@kmllp.com, or by filling out this CONTACT FORM, to discuss your rights or interests with respect to these matters without any cost to you.
Kirby McInerney LLP is a New York-based plaintiffs’ law firm concentrating in securities, antitrust, whistleblower, and consumer litigation. The firm’s efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling billions of dollars. Additional information about the firm can be found at Kirby McInerney LLP’s website.
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.
Contacts
Kirby McInerney LLP
Thomas W. Elrod, Esq.
212-699-1180
https://www.kmllp.com
investigations@kmllp.com
