ITEM 1A. RISK FACTORS
We are subject to various risks that could have a material adverse effect on our business, financial condition, results of operations, or cash flows. Although it is not possible to predict or identify all such risks and uncertainties, they may include, but are not limited to, the factors discussed below. The risks described herein are not the only risks we may face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition, results of operations or cash flows. You should carefully review the information provided in this section before making an investment in our common stock.
Risks Related to Our Business and Industry
Our current and potential customers may reduce spending on sales, marketing, recruiting and other technology and information as a result of weaker economic conditions, which could harm our revenue, results of operations, and cash flows.
Our revenue, results of operations, and cash flows depend on the overall demand for and use of technology and information for sales, marketing, and recruiting professionals, which depends in part on the amount of spending allocated by our customers or potential customers for professionals engaged in such activities. This spending depends on various factors, including, but not limited to, macroeconomic and geopolitical conditions. Accordingly, the effect of significant macroeconomic and geopolitical downturns, including falling demand for a variety of goods and services, inflation (including wage inflation), labor market constraints, fluctuating or uncertain interest rates, liquidity constraints, volatility in credit, equity, and foreign exchange markets, bankruptcies, global pandemics, wars, trade tensions, and catastrophic events, could impact the demand for and use of our products. Market volatility, decreased consumer confidence, and diminished growth expectations in both the U.S. and global economy as a result of the foregoing events, or other unforeseen events, may affect the rate of information technology (“IT”) spending and adversely affect our current and potential customers’ ability or willingness to renew or expand subscriptions or purchase our services, delay prospective customers’ purchasing decisions and thereby elongate our sales cycles, reduce the value or duration of their subscription contracts, or affect attrition rates, all of which could adversely affect our future sales and operating results. Weaker economic conditions can result in customers seeking to utilize free or lower-cost information or services that are available from alternative sources. Prolonged economic slowdowns may result in requests to renegotiate existing contracts on less advantageous terms to us than those currently in place, payment defaults on existing contracts, elongated sales cycles resulting in delays and increased sales costs, or non-renewal at the end of a contract term.
In addition, as part of our growth strategy, we will continue to focus on expanding our enterprise customer base, which presents additional risks and challenges, including, but not limited to, longer and more complex average sales cycles and significant investments in sales talent, product capabilities, and operational infrastructure. Further, if the overall demand for and use of technology and information for sales, marketing, and recruiting professionals declines, or if there is a general decline of macroeconomic conditions, our revenue and cash flows may decline or grow less quickly than anticipated, which could have a material adverse effect on our business, financial condition, and results of operations.
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We may be unable to attract new customers, renew existing subscriptions, expand subscriptions of current customers, and collect revenue from our customers, which could harm our revenue growth, cash flows, and profitability.
To increase our revenue and cash flows, and to achieve and maintain profitability, we must attract new customers, renew existing subscriptions, grow the subscriptions of existing customers, and collect revenue from our customers. Our go-to-market efforts are intended to identify and attract prospective customers and convert them into paying customers. In addition, we seek to renew existing subscriptions and expand existing customer subscriptions by adding new users, additional data entitlements, or additional products or services, including through expanding the adoption of our platform into other departments of our existing customers. We cannot predict with any certainty whether we will continue to achieve similar client acquisition and customer subscription renewal and growth rates in the future as we have in the past, in particular as it relates to attracting new, and retaining existing, enterprise customers.
Numerous factors may impede our ability to add new customers, renew and grow existing customer subscriptions, and collect revenue from our customers, including, but not limited to, our ability to continually enhance and improve our platform and the features, integrations, and capabilities we offer, and to introduce compelling new features, integrations, and capabilities to our products and services; our customers’ creditworthiness and our ability to timely manage the collection of accounts receivable; our ability to maintain our strong brand recognition and reputation as a leader in modern go-to-market software, data, and intelligence; our failure to attract and effectively train new sales and marketing personnel despite increasing our sales efforts; our failure to retain and motivate our current sales and marketing personnel; our ability to develop or expand relationships with partners; our failure to provide quality customer experience, including our ability to provide effective training and educational support to enable our customers to maximize the utility of our platform; customer consolidation or decreases in the number of users at the organization; our pricing or pricing structure; the pricing or capabilities of the products and services offered by our competitors; to diversify our customer base across industries, geographies and among enterprise, mid-market, and small business customers; to expand our sales and operations outside the United States, or if we experience expanding or operating internationally; or our ability to ensure the effectiveness of our go-to-market programs. Additionally, in 2024, we deployed a new business risk model to flag and require upfront pre-payment from prospects at the risk of non-payment. While this model is intended to mitigate the risk of non-payment and reduce future write-offs, it could limit our total addressable market by excluding potential customers. If our model assesses risk or to properly balance risk mitigation with growth , our financial performance and competitive position may be affected. Additionally, as we strive to continue to expand both our existing and prospective enterprise customer base across various industries, such efforts require increasingly sophisticated and sales and account management efforts targeted at senior management and other personnel. Further, sales to enterprise customers often require longer sales cycles. If our efforts to sell to organizations are not , do not generate additional revenue, or require longer periods to realize revenue, then our business will . If customers do not renew their subscriptions or renew on less terms, including, but not limited to, price compressions, or to add more users, if we to expand subscriptions of existing customers, or if we to collect on our accounts receivable, our revenue and cash flows may or grow less quickly than anticipated, which would our business, results of operations, and financial condition.
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If we are not able to obtain and maintain accurate, comprehensive, or reliable data, we could experience reduced demand for our products and services, which would have a material adverse effect on our business, results of operations, and financial condition.
Our success depends on our customers’ confidence in the depth, breadth, and accuracy of our data. The task of establishing and maintaining accurate data is challenging and expensive. The depth, breadth, and accuracy of our data differentiates us from our competitors. Our standard contract with customers includes a quality guarantee pursuant to which a customer would have the right to terminate its subscription and we could be obligated to reimburse certain payments if the accuracy of our data were to fall below a certain threshold. If our data, including the data we obtain from third parties and our data extraction, cleaning, and insights, is not current, accurate, comprehensive, or reliable, or is otherwise actually, or perceived to be, of a lower standard than our competitors, it would increase the likelihood of negative customer experiences, which in turn would reduce the likelihood of customers renewing or upgrading their subscriptions and harm our reputation, making it more difficult to obtain new customers. In addition, if we are no longer able to maintain our high level of accuracy, we may face reimbursement or legal claims by our customers which could have an effect on our business, results of operations, and financial condition.
We also have a number of sources contributing to the depth, breadth, and accuracy of the data on our platform, including our contributory network. We provide a “freemium” product, ZoomInfo Lite, which provides users with a set amount of monthly credits to use to access our contact data and, if the user elects, they may also participate in our contributory network in order to receive additional monthly credits. Similarly, many of our paying customers participate in our contributory network to improve the quality of the data within their CRM and similar systems. ZoomInfo Lite users may cease to participate in our contributory network. Our paying customers, including those who have migrated from ZoomInfo Lite, may elect not to participate for various reasons, including their sensitivity to sharing information within our contributory network or their determination that the benefits from sharing do not outweigh the potential harm from sharing. If we are not able to attract new participants or maintain existing participants in our contributory network, our ability to effectively gather new data and update and maintain the accuracy of our database could be adversely affected. Additionally, state laws currently in effect and those coming into effect in 2026, as well as other legal and regulatory changes are making, or will make, it for individuals to opt-out of having their personal data collected and processed. Although we already opt-out requests globally, such legal and regulatory changes could increase public awareness of this option, resulting in higher opt-out rates. Further, certain third-party intermediaries have emerged with services that individuals to opt out of their personal data being collected at scale (i.e., from multiple platforms, including ours). Consequently, our ability to grow our business may be and our results of operations and financial condition could .
Other technology companies, including various small and medium-sized businesses who focus on B2B sales and marketing intelligence, have become, and larger and better-funded companies with significant resources may shift their existing business models to become, more competitive with us.
Technology companies, including those that operate in related industries, such as CRM, business software, or advertising, including Salesforce, Oracle, Google, or Microsoft/LinkedIn, may choose to compete with us in the B2B sales and marketing intelligence space, and in such an event, would have access to greater resources and benefit from greater brand recognition. We cannot anticipate how rapidly such a potential competitor could create products or services that would take significant market share from us or even surpass our products or services in quality. If a large, well-funded competitor entered our space, it could reduce the demand for our products and services and reduce the amount we could demand for subscription renewals or upgrades from existing customers, and the amount we could demand from new subscribers to our products and services, reducing our revenue and profitability.
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In addition, many of our potential competitors, particularly those with greater financial and operating resources, including larger sales and marketing budgets, as well as small and medium-sized businesses who focus on B2B sales and marketing intelligence, may have the ability to respond more quickly and effectively to new or changing opportunities, technologies, such as AI and ML, standards or customer requirements. Many of our potential competitors may have established relationships with independent software vendors, partners, and customers, greater customer experience resources, greater resources to make acquisitions, lower labor and development costs, larger and more mature intellectual property portfolios, and substantially greater financial, technical, and other resources. New competitors, mergers and acquisitions in the technology industry, or alliances among competitors may emerge and rapidly acquire significant market share due to these or other factors. Companies resulting from these possible consolidations may create more compelling product offerings and be able to offer more attractive pricing options, making it more difficult for us to compete effectively. As a result, even if our products and services are more than the products and services that our competitors offer, potential customers might select competitive products and services in lieu of our services.
In addition, existing and potential competitors in our industry may be able to offer more flexible pricing models that better align with the actual usage and realized value obtained by customers, including pay-as-you-go models or other bespoke pricing packages, that may be more desirable for small and mid-market customers who are more likely to be affected by budget constraints. Further, as AI-powered agents become more sophisticated, individual users may become substantially more productive, enabling customers to achieve similar outcomes with fewer seats accessing our platform. This AI-driven seat compression could result in customers reducing seat counts at renewal, negatively impacting our revenue even as they derive equal or greater value from our products and services.
Any of the foregoing risks could impact the demand for our products and services, and our ability to renew and/or grow our customer base, which could have an adverse effect on our business, results of operations, and financial condition.
We experience competition from other companies and technologies that allow businesses to gather and aggregate sales, marketing, recruiting, and other data, and we may in the future face competition from prominent large-language-model (LLM) providers and generative AI companies, and any of their competing products and services could provide greater appeal to our customers.
The market for sales, marketing, and recruiting technology and data requires continuous innovation. Our industry is highly competitive, rapidly evolving, and fragmented. There are low barriers to entry, shifting customer needs and strategies, and frequent introductions of new technologies and of new products and services. Many prospective customers have invested substantial resources to implement, and gained substantial familiarity with, competing solutions, and therefore may be reluctant or unwilling to migrate from their current solution to ours. Many prospective customers may not appreciate differences in quality between our products and services and those of lower-priced competitors, and many prospects and current customers may not learn the best ways to use our products and services, making them less likely to obtain them or renew their subscriptions. New technologies and products may be or become better or more attractive to current or prospective customers than our products and services in one or more ways. Many current or prospective customers may find competing products or services more attractive, and many may choose or switch to competing products even if we do our to and provide products and services.
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Our current competitors include:
• free online and offline sources of information on companies and business professionals, including government records, telephone books, company websites, and open online databases of business professionals, such as LinkedIn;
• our current and potential customers’ internal and homegrown business contact databases;
• third-party sales and marketing data providers, including platforms that offer integration with predictive analytics and customer data or sales and marketing vendors, which may specialize in appointment setting, online ad targeting, email marketing, or other outsource go-to-market functions;
• vendors of sales automation, conversation or other artificial intelligence, and chat software;
• providers of third-party company attributes, technology attributes, and business contact information;
• providers of online content consumption data for predictive sales and marketing analytics; and
• user-based networks of companies and/or business professionals.
In addition, the rapid advancement and widespread adoption of LLMs and generative AI technologies could result in new competitors in our industry. Prominent LLM providers and other leading generative AI companies, are developing increasingly sophisticated AI capabilities, and such technologies may incorporate business contact information, company intelligence and market insights directly into their models or make such data readily accessible through AI-enabled tools at substantially lower costs than our products and services, or even at no incremental cost to their end users. These LLM providers may aggregate and synthesize publicly available data sources, licensed datasets, or user-contributed information to generate business intelligence that overlaps with or competes directly with our products and services. As LLM capabilities improve, the quality, accuracy, and comprehensiveness of the business data they provide may approach or match levels that customers find acceptable for their go-to-market activities.
These risks could be exacerbated by weak macroeconomic and uncertain geopolitical conditions (including due to global pandemics or such as those related to the Russia-Ukraine war, and the conflict between Israel and Hamas, including after giving effect to the October 2025 Gaza Peace Plan, as well as related and other conflicts due to rising tensions in the Middle East and South America, including with respect to Iran, and U.S. relations with members of the European Union and Venezuela) and lower customer spending on sales and marketing. Weakened macroeconomic and uncertain geopolitical conditions could also disproportionately increase the likelihood that any given current or prospective customer would choose a lower-price alternative even if our products or services are superior. Some current and potential customers, particularly large organizations, have elected in the past, and may elect in the future, to rely on internal and homegrown databases, develop, or acquire their own software, programs, tools, and internal data quality teams that would reduce or eliminate the demand for our products and services.
If we fail to respond to changes in data technology, competitors may be able to develop products and services that will take market share from us, and the demand for our products and services, the delivery of our products and services, or our market reputation could be adversely affected. If demand for our platform declines for any of these or other reasons, our business, results of operations, and financial condition could be adversely affected.
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Our business is, and the markets in which we compete are, rapidly evolving, including with respect to AI and AI-enabled products, which make it difficult to forecast demand for our services and achieve an optimal resource allocation strategy, as we may not be able to effectively monetize our AI investments.
The markets in which we compete are rapidly evolving, accordingly our future financial performance will depend in large part on the allocation of spending in traditional software as a service (“SaaS”) products and our ability to adapt to new market demands. In recent years and continuing through today, an increasing number of customers have been allocating their spending toward AI, ML, and generative AI capabilities. The SaaS market for artificial intelligence, machine learning, and generative AI workloads is expected to be an intensely competitive and rapidly evolving market, and our future financial performance may depend on our ability to adapt to, and capture new spending, in this market. However, our estimates of the market opportunity, including our forecast of the demand for our products and our ability to capture new spending, are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate. In addition, if the markets in which we compete experience a shift in customer demand, or if customers in these markets focus their new spending on, or shift their existing spending to, public cloud solutions or other solutions that do not interoperate with our solutions more quickly or more extensively than expected, our solutions may not compete as effectively, if at all.
Our increasing reliance on, and continued capital investments in, AI and ML technologies exposes us to additional risks and uncertainties. The development and deployment of AI capabilities, including our Copilot, GTM Workspace and GTM Studio products, as well as other AI-enabled features, involves complex technical challenges and substantial infrastructure investments. If our AI models produce inaccurate, biased, or unreliable outputs, or if we fail to properly train or maintain these models, it could harm our reputation and customer relationships. Additionally, the costs of AI infrastructure, including computing resources and specialized talent, may increase more rapidly than anticipated, potentially affecting our margins and profitability. While we aim to maintain leadership in AI-driven go-to-market solutions, the AI technology landscape is rapidly evolving and highly competitive, with both established companies and new entrants making significant investments in competing technologies.
In addition, in order to maintain our market-leading position in AI-driven go-to-market products and services, we have invested, and will continue to invest, in the AI-capabilities of our workforce. As a result of this strategy, we have made substantial capital investments and have committed significant resources, including engineering personnel, to build AI-capabilities and scale the infrastructure required to enable our workforce to utilize and integrate such capabilities into their workflows. However, despite our substantial investments in the AI-capabilities of our workforce, we may not realize an expected return if the products our teams develop do not generate sufficient customer demand or incremental revenue to justify the costs, or if the productivity improvements from our AI-capabilities do not offset the costs of building and maintaining AI-capable teams.
Therefore, if we are unable to meet the demands of a rapidly evolving market, including as it relates to our AI capabilities, if our estimates of the market opportunity, including our forecast of the demand for our products prove to be incorrect, or if our workforce is unable to achieve the expected gains in productivity or innovation, our revenue and cash flows may decline or grow less quickly than anticipated, and we may not be able to achieve a return on our investment in our AI and AI-enabled solutions, which could have a material adverse effect on our business, financial condition, and results of operations.
Our platform integrates or otherwise works with third-party systems that we do not control.
Our technologies that allow our platform to interoperate with various third-party applications (which we call “integrations”) are critically important to our business. Many of our customers use our integrations to access our data from within, or send data to, CRM, marketing automation, applicant tracking, sales enablement, and other systems, including Salesforce, Marketo, HubSpot, Microsoft Dynamics, Oracle Sales Cloud, and a variety of other commonly used tools. The functionality of these integrations depends upon access to these systems, which is not within our control. Some of our competitors own, develop, operate, or distribute CRM and similar systems or have material business relationships with companies that own, develop, operate, or distribute CRM and similar systems that our platform integrates into. Moreover, some of these competitors have inherent advantages developing products and services that more tightly integrate with their CRM and similar systems or those of their business partners.
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Third-party systems are constantly evolving, and it is difficult to predict with certainty the challenges that we may encounter in developing our platform for use in conjunction with such third-party systems, including as it relates to any deficiencies caused by, or originated from, such third-party systems. We may not be able to modify our integrations to assure compatibility with the systems of other third parties following any of their changes to their systems. Some operators of CRM and similar systems may cease to permit our access to, or the integration of our platform with, their systems. For example, if Salesforce were to refuse to permit our integration to access its APIs, this integration would not function, and our customers’ experience would be hampered. Accordingly, this could leave our customers without a convenient way to integrate our products and services with the CRM.
Our business could be negatively affected by changes in search engine algorithms, including search engine optimization (SEO), artificial intelligence optimization (AIO), and other traffic-generating arrangements and dynamics.
We historically relied heavily on internet search engines, such as Google, including through the purchase of SEO tools that leverage sales and marketing-related keywords and the indexing of our public-facing directory pages and other web pages, to generate a significant portion of the traffic to our website. Search engines frequently update and change the logic that determines the placement and display of results of a user’s search, and our competitors may implement certain search engine optimization efforts, such that the purchased or algorithmic placement of links to our website can be negatively affected. In addition, a significant amount of traffic is directed to our website through participation in pay-per-click and display advertising campaigns on search engines, including Google. Pricing and operating dynamics for these traffic sources can change rapidly, both technically and competitively. Moreover, a search engine could, for competitive or other purposes, alter its search algorithms or results, which could cause a website to place lower in search query results or inhibit participation in the search query results.
In addition, in recent years, customer behavior and traffic acquisition dynamics have shifted, and may continue to shift, due to the increasing adoption of AI-powered search experiences and LLM models that provide responses without directing users to third-party websites, which could reduce click-through rates and materially diminish the value of traditional SEO strategies. If we are unable to ensure that our products and services, as well as our website and brand, continue to be visible and utilized by AI-powered search experiences and LLM models, or if we are unable to address and capitalize on online traffic dynamics resulting from AIO strategies, we may experience reduced inbound lead volume, higher customer acquisition costs, and greater reliance on more expensive marketing channels that may be less efficient or scalable. Any sustained decline in inbound demand could adversely affect our pipeline, customer acquisition costs, and revenue growth.
If a major search engine or LLM model changes its algorithms or results in a manner that negatively affects our website’s search engine ranking or AIO placement, respectively, or if competitive dynamics impact the costs or effectiveness of SEO and/or AIO, marketing efforts relating to SEO and/or AIO strategies, or other traffic-generating arrangements in a negative manner, our business and financial performance would be adversely affected.
We depend on our executive officers and other key employees, and the loss of one or more of these employees or an inability to attract, integrate, and retain these and other highly skilled employees could harm our business.
Our success depends largely upon the continued services of our executive officers and other key employees, including newly hired personnel. We rely on our leadership team in the areas of research and development, operations, security, analytics, marketing, sales, customer experience, and general and administrative functions and on individual contributors in our research and development and operations. From time to time, there have been, and may continue to be, changes in our executive management team resulting from the hiring or departure of executives, which could disrupt our business. The loss of one or more of our executive officers or key employees could harm our business. Changes in our executive management team, or failure or delay in integrating new members of the executive management team and other key employees into our business, may also cause disruptions in, and harm to, our business.
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The Company continues to be led by our CEO and co-founder, Henry Schuck, who plays an important role in driving the Company’s culture, determining the strategy, and executing against that strategy across the Company. If Mr. Schuck’s services became unavailable to the Company for any reason, it may be difficult or impossible for the Company to find an adequate replacement, which could cause us to be less successful in maintaining our culture and developing and effectively executing on our company strategies.
In addition, to execute our growth plan, we must attract and retain highly qualified personnel. Competition for highly skilled personnel in our industry can be intense. Competitors for technical and sales talent increasingly seek to hire our employees, and the availability of flexible, hybrid, or work-from-home arrangements has both intensified and expanded competition. Our increased emphasis on in-office work and associated hiring plans may reduce the talent pools from which we recruit and can increase the difficulty of hiring the highest quality personnel in efficient timeframes.
Also, as we continue to grow, we face challenges of integrating, developing, training, and motivating our employee base, and maintaining our company culture around the world. If we fail to hire and retain highly skilled employees or fail to manage organizational change in a manner that preserves our efficacy and the key aspects of our corporate culture, the quality of our products and services may suffer, which could negatively affect our brand and reputation and harm our ability to attract users, employees, and organizations.
If we fail to maintain, upgrade, or implement adequate operational and financial resources, including our IT systems, we may be unable to execute our business plan.
We have experienced, and expect to continue to experience, growth, which has placed, and may continue to place, significant demands on our management and our operational and financial resources. One area of growth has been in the number of customers using our products and services and in the amount of data in our databases. In addition, our organizational structure has become more complex as we have scaled our operational, financial, and management controls, as well as our reporting systems and procedures, and expanded internationally.
To manage growth in our operations and personnel, we will need to continue to grow and improve our operational, financial, and management controls and our reporting systems and procedures, including our IT systems. We will continue to require significant capital expenditures and the allocation of valuable management resources to grow and change in these areas. Our expansion has placed, and our expected future growth will continue to place, a significant strain on our management, customer experience, research and development, sales and marketing, administrative, financial, and other resources.
We anticipate that significant additional investments will be required to scale our operations and increase productivity, to address the needs of our customers, to further develop and enhance our products and services, to expand into new geographic areas and to scale with our overall growth. If additional investments are required due to significant growth, this will increase our cost base, which will make it more difficult for us to offset any future revenue shortfalls by reducing expenses in the short term.
We also depend on IT systems to operate our business, and issues with maintaining, upgrading or implementing these systems could have a material adverse effect on our business. Our business has grown and continues to grow in size and complexity, which places significant demands on our IT systems. To effectively manage this growth and to ensure interoperability of our IT systems, our information systems and applications require an ongoing commitment of significant resources to maintain, protect, enhance and upgrade existing systems and develop and implement new systems, some of which may be costly, to keep pace with changing technology and our business needs.
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If the information we rely upon to run our business is found to be inaccurate or unreliable, if we fail to maintain or protect our IT systems and data integrity effectively, if we fail to develop and implement new or upgraded systems to meet our business needs in a timely manner, or if we fail to anticipate, plan for or manage significant disruptions to these systems, our competitive position could be harmed, we could have operational disruptions, we could lose existing customers, have difficulty preventing, detecting, and controlling fraud, have disputes with customers, have regulatory sanctions or penalties imposed or other legal , incur increased operating and administrative expenses, revenues as a result of a data privacy or theft of intellectual property or other consequences, any of which could have a material effect on our business, results of operations, financial condition or cash flows.
As we acquire and invest in companies or technologies, we may not realize expected business or financial benefits and the acquisitions or investments could prove difficult to integrate, disrupt our business, dilute stockholder value, and adversely affect our business, results of operation, and financial condition.
As part of our business strategy, from time to time we make investments in, or acquisitions of, complementary businesses, services, databases, and technologies, and we expect that we will continue to make such investments and acquisitions in the future to further grow our business and our product and service offerings. Our strategy to make selective acquisitions to complement or expand our platform depends on our ability to identify, and the availability of, suitable acquisition candidates. We may not be able to find suitable acquisition candidates and we may not be able to complete acquisitions on favorable terms, if at all.
Acquisitions and other transactions, arrangements, and investments also involve numerous risks and could create unforeseen operating difficulties and expenditures, including, but not limited to:
• potential failure to achieve the expected benefits on a timely basis or at all;
• difficulties in, and the cost of, integrating operations, technologies, services, and platforms;
• diversion of financial and managerial resources from existing operations;
• the potential entry into new markets in which we have little or no experience or where competitors may have stronger market positions;
• potential write-offs of acquired assets or investments and potential financial and credit risks associated with acquired customers;
• increasing or maintaining the security standards for acquired technology consistent with our other services;
• currency and regulatory risks associated with foreign countries and potential additional cybersecurity and compliance risks resulting from entry into new markets;
• tax effects and costs of any such acquisitions, including the related integration into our tax structure and assessment of the impact on the realizability of our future tax assets or liabilities; and
• potential challenges by governmental authorities, including the Federal Trade Commission (the “FTC”) and the Department of Justice, for anti-competitive or other reasons.
Any of these risks could harm our business. In addition, to facilitate these acquisitions or investments we may seek additional equity or debt financing, which may not be available on terms favorable to us or at all, which may affect our ability to complete subsequent acquisitions or investments and may affect the risks of owning our common stock. For example, if we finance acquisitions by issuing equity or convertible debt securities or loans, our existing stockholders may be diluted, or we could face constraints related to the terms of, and repayment obligation related to, the incurrence of indebtedness that could affect the market price of our common stock.
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Sustainability and related reporting obligations, expose us to risks that could adversely affect our reputation and performance.
U.S. and international regulators, investors and other stakeholders are increasingly focused on sustainability matters. We have established and publicly announced certain sustainability goals. Our ability to achieve any sustainability objective is subject to numerous risks, many of which are outside of our control. Examples of those risks include our ability to accurately track Scope 1, 2 and 3 greenhouse gas emissions, the evolving regulatory requirements affecting environmental and sustainability standards or disclosures and our ability to recruit, develop and retain diverse talent in our workforce. These statements reflect current plans and aspirations and are not guarantees that the Company will be able to achieve them. The failure to accomplish or accurately track and report on these goals on a timely basis, or at all, could adversely affect our reputation, financial performance, and growth, and expose the Company to increased scrutiny from the investment community and enforcement authorities.
Risks Related to Privacy, Technology, and Security
Changes in laws, regulations, and public perception concerning data privacy, or changes in the patterns of enforcement of existing laws and regulations, could impact our ability to efficiently gather, process, update, and/or provide some or all of the information we currently provide or the ability of our customers and users to use some or all of our products or services.
The business contact information and other data we collect and process are an integral part of our products and services. Regulators around the world have adopted or proposed requirements regarding the collection, use, transfer, security, storage, destruction, and other processing of personal data. Our products and services rely heavily on the collection and use of information to provide effective insights to our customers and users. In recent years, there has been an increase in attention to and regulation of data protection and data privacy across the globe, including the enactment of the GDPR, the United Kingdom’s transposition of GDPR into its domestic laws following Brexit in January 2021, India’s Digital Personal Data Protection Act passed in August 2023, the California Consumer Privacy Act as amended by the California Privacy Rights Act, and similar comprehensive privacy laws adopted in a growing number of other states (approximately twenty as of January 2026). For example, as a result of such initiatives aimed at data protection and data privacy, California established the Delete Request and Opt-out Platform (DROP) following the state’s enactment of the Delete Act SB 362, which launched on January 1, 2026, allowing consumers to submit a single deletion request to all registered data brokers, and other states, including New Hampshire, have already or are likely to adopt similar programs. Meanwhile, around the world there are ongoing discussions about how best to revise and modernize existing laws in jurisdictions such as Canada and Australia. Laws such as these give rise to an increasingly complex set of compliance obligations on us, as well as on many of our customers. These laws are not always uniform in the way they define and treat certain data types, including business-to-business data, biometric data, sensitive data, and we must often update our consumer notices and adapt our compliance programs to account for the differences between applicable laws. These laws can impose restrictions on our ability to gather personal data and provide such personal data to our customers, provide individuals with additional rights around their personal data, and place downstream obligations on our customers relating to their use of the information we provide.
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Domestically, as members of the Republican Party now control both the White House and Congress, the national landscape has shifted. It is unclear whether members of Congress will have enough votes to pass a Federal privacy law and while AI remains a major topic of discussion in Congress, members of the Republican Party and the White House have indicated a pivot from comprehensive regulations in favor of fewer restrictions. In particular, on December 11, 2025, the Administration signed Executive Order 14365, “Ensuring a National Policy Framework for Artificial Intelligence”, that seeks to limit the ability of states to regulate AI under their existing legal frameworks, and to deter them from passing new AI laws. Pursuant to the Executive Order, the Administration has stated that it will seek to establish an AI Litigation Task Force which will be responsible for challenging any state-level AI laws inconsistent with the policy set forth in Executive Order. Nevertheless, at Federal agencies, it remains unclear as to what the current Administration’s enforcement priorities will be and how the push to move away from additional regulations will be reflected at each relevant agency, including the extent to which agencies emphasize established statutory authorities (e.g., children’s privacy and data security) versus broader theories. As a result, certain states will continue to pursue both AI and privacy legislation. As of December 31, 2025, twenty states have implemented comprehensive privacy laws, and recently, additional states have pending legislation for both AI and privacy.
These complex laws may be implemented, interpreted, or enforced in a non-uniform, inconsistent, or a rapidly evolving way across jurisdictions and we may not be aware of every development that impacts our business in a timely manner. These laws may also require us to make additional changes to our services in order for us or our customers to comply with such legal requirements. It may also increase our potential liability as a result of higher potential penalties for noncompliance.
These and other legal requirements could reduce our ability to gather personal data used in our products and services. They could reduce demand for our services, require us to take on more onerous obligations in our contracts, require us to add new provisions in our customer contracts related to the processing of personal information, and restrict our ability to store, transfer and process personal data. In some cases, it may impact our ability or our customers’ ability to offer our services in certain locations, to deploy our solutions, to reach current and prospective customers, or to derive insights from data globally. One area of particular risk remains data transfers between the United States and the European Union. On July 10, 2023, the European Commission adopted its adequacy decision for the EU-US DPF, 18 months after its predecessor, the EU-US Privacy Shield, was invalidated. While this does, for the time being, assert that entities operating in the United States who have certified to the DPF ensure an adequate level of protection for transferring personal data from the European Union to the United States, the DPF has already been tested in court and remains subject to ongoing legal and regulatory scrutiny. On September 3, 2025, the EU General Court dismissed an action seeking to annul the adequacy decision (Latombe v. Commission), and an appeal to the Court of Justice of the European Union has been reported, creating continued uncertainty. The privacy advocacy organization NOYB, which previously and facilitated the of both the Safe Harbor (Schrems I) and Privacy Shield (Schrems II) has already the DPF for not doing enough to provide non-US citizens with reasonable privacy protections afforded to US citizens, and has publicly indicated its intent to pursue further to the DPF. The NOYB has more recently called the validity of the DPF into in light of changes the White House is making to the members of the U.S. Privacy and Civil Liberties Oversight Board, which is tasked with overseeing U.S. surveillance practices and addressing from EU citizens under the DPF. ZoomInfo is certified under the DPF, however, it still utilizes Standard Contractual Clauses as its cross-border transfer mechanism due to the uncertain future of the DPF and the possibility that the DPF could be modified, , or by regulators or courts. In the event that any court blocks personal data transfers to or from a particular jurisdiction on the basis that certain or all such transfer mechanisms are not legally adequate, this could give rise to operational in the performance of services for customers and internal processing of employee information, costs to implement alternative data transfer mechanisms that are still permitted, regulatory liabilities, or reputational .
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The cost of complying with existing or new data privacy or data protection laws and regulations may limit our ability to gather the personal data needed to provide our products and services. For example, on January 13, 2026, the Commonwealth of Virginia introduced VA HB638, a bill that seeks to regulate data brokers by the end of the second quarter of 2027, requiring companies to provide, among other things, detailed information relating to their data collection practices, as well as mandating a $100,000 registration fee. Compliance requirements and their associated costs could negatively impact the use or adoption of our products and services or products and services similar to ours; reduce overall demand for our products and services, or products and services similar to ours; make it more difficult for us or competitive solutions to meet expectations from or commitments to customers and users; lead to significant fines, penalties, or liabilities for noncompliance; impact our reputation; or slow the pace at which we close sales transactions, any of which could harm our business.
Furthermore, the uncertain and shifting regulatory environment and trust climate may cause concerns regarding data privacy and may cause our vendors, customers, users, or our customers’ customers to decline to provide the data necessary to allow us to offer our services to our customers and users effectively, or could prompt individuals to opt out of our collection of their personal data. Even the perception that the privacy of personal data is not satisfactorily protected or does not meet regulatory requirements could discourage prospective customers from subscribing to our products or services or discourage current customers from renewing their subscriptions.
In addition, the regulatory landscape is particularly complex and rapidly evolving with respect to AI technologies. New regulations specifically targeting AI development, deployment, and data usage are being proposed and implemented across various jurisdictions. These regulations may impose additional obligations related to algorithmic transparency, bias testing, and specific data protection measures for AI systems. Our AI-driven products and services may be subject to increased scrutiny under these new frameworks.
Compliance with any of the foregoing laws and regulations can be costly and can delay or impede the development of new products or services. We may incur substantial fines if we violate any laws or regulations relating to the collection or use of personal data. Our actual or alleged failure to comply with applicable privacy or data protection laws, regulations, and policies, or to protect personal data, could result in enforcement actions and significant penalties against us, which could result in negative publicity or costs, subject us to claims or other remedies, and have a material adverse effect on our business, financial condition, and results of operations.
We may be subject to litigation for any variety of claims, which could harm our reputation and adversely affect our business, results of operations, and financial condition.
There is considerable patent and other intellectual property development activity in our market, and litigation, based on allegations of infringement or other violations of intellectual property, is frequent in software and internet-based industries. We may receive communications from third parties, including practicing entities and non-practicing entities, claiming that we have infringed their intellectual property rights.
In addition, we may be sued by third parties for breach of contract, defamation, negligence, unfair competition, data breaches, privacy compliance, or copyright or trademark infringement or claims based on other theories. We could also be subject to claims that the collection or provision of certain information, including personal information by us or by third-parties with whom we interact breached laws or regulations relating to privacy or data protection. As a result of claims against us regarding suspected infringement, our technologies may be subject to injunction, we may be required to pay damages, or we may have to seek a license to continue certain practices (which may not be available on reasonable terms, if at all), all of which may significantly increase our operating expenses or may require us to restrict our business activities and limit our ability to deliver our products and services and/or certain features, integrations, and capabilities of our platform. As a result, we may also be required to develop alternative non- technology, which could require significant effort and expense and/or cause us to alter our products or services, which could affect our business. In addition, many of our subscription agreements require us to indemnify our customers for third-party intellectual property , so any by us resulting in such customers would increase our liability.
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Our exposure to risks associated with various claims may be greater if we acquire other companies or technologies. For example, we may have a lower level of visibility into the development process with respect to intellectual property or the care taken to safeguard against infringement risks with respect to the acquired company or technology. In addition, third parties may make claims after we have acquired a company or technology that had not been asserted prior to our acquisition.
In the ordinary course of business, we may be involved in and subject to litigation for a variety of claims or disputes and receive regulatory inquiries. These claims, lawsuits, and proceedings could include labor and employment, wage and hour, commercial, data protection and privacy, intellectual property, antitrust, alleged securities law violations or other investor claims, and other matters. The number and significance of these potential claims and disputes may increase as our business expands. Any claim against us, regardless of its merit, could be costly, divert management’s attention and operational resources, and harm our reputation. In addition, we have entered into indemnification agreements with each of our directors and officers, pursuant to which we have agreed to indemnify our directors and officers to the fullest extent permitted by Delaware law. As a result, any for indemnification by our directors and officers may reduce our available funds to third-party us and may reduce the amount of money available to us. As is inherently , we cannot you that any potential or will not have a material effect on our business, results of operations, and financial condition. Any or , even if fully indemnified or insured, could make it more to compete effectively or to obtain adequate insurance in the future.
In addition, we may be required to spend significant resources to monitor and protect our contractual, property, and other rights, including collection of payments and fees. Litigation has been and may be necessary in the future to enforce such rights. Such litigation could be costly, time consuming, and distracting to management and could result in the impairment or loss of our rights. Furthermore, our efforts to enforce our rights may be met with defenses, counterclaims, and countersuits attacking the validity and enforceability of such rights. Our inability to protect our rights, as well as any costly litigation or diversion of our management’s attention and resources, could have an adverse effect on our business, results of operations, and financial condition or injure our reputation.
New or changing laws and regulations may diminish the demand for our platform, restrict access to our platform, constrain the range of services we can provide, or require us to disclose or provide access to information in our possession, which could harm our business, results of operations, and financial condition.
Our platform depends on the ability of our users to access the internet and our platform could be blocked or restricted in some countries for various reasons. Further, it is possible that governments of one or more foreign countries may seek to limit access to or certain features of our platform in their countries, or impose other restrictions that may affect the availability of our platform, or certain features of our platform, in their countries for an extended period of time or indefinitely. In addition, governments in certain countries may seek to restrict or prohibit access to our platform if they consider us to be in violation of their laws (including privacy laws) and may require us to disclose or provide access to information in our possession. If we fail to anticipate developments in the law or fail for any reason to comply with relevant law, our platform could be further blocked or restricted and we could be exposed to significant liability that could harm our business. In the event that access to our platform is restricted, in whole or in part, in one or more countries or our competitors are able to successfully penetrate geographic markets that we cannot access, our ability to add new customers or renew or grow the subscriptions of existing customers may be affected, we may not be to maintain or grow our revenue as anticipated and our business, results of operations, and financial condition could be affected.
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New laws and regulations in the area of AI may also impact our business. For example, the European Union’s Artificial Intelligence Act (“AI Act”), which went into effect on August 1, 2024 (with phased application dates beginning in 2025), introduced a regulatory landscape that businesses need to navigate with caution. The AI Act's stringent measures against certain AI applications may impact businesses in our sector. Such measures include prohibitions on AI technologies that utilize sensitive personal attributes for biometric categorization, restrictions on indiscriminate collection of facial images for recognition databases, and limitations on emotion recognition systems that could be employed in consumer analysis or employee monitoring. Businesses must also be aware of the comprehensive transparency requirements mandated for general-purpose AI systems. This entails maintaining detailed technical documentation and ensuring compliance with EU copyright laws, with even more rigorous standards for high-impact general AI models, including provider transparency and copyright-related obligations (which begin to apply in 2025), as well as even more rigorous standards for general-purpose AI models with systemic risk. These models require exhaustive evaluations, risk assessments related to systemic impacts, adversarial testing, and reporting on aspects like energy , indicating a significant compliance for businesses. The scale of for non-compliance range up to €35 million or 7% of global turnover, underscoring the importance of adherence to the new regulations where applicable. The AI Act demands a approach to regulatory compliance, risk management, and an investment in infrastructure to align with the EU’s vision of a safe and ethical AI environment.
We may not be able to adequately protect or enforce our proprietary and intellectual property rights in our data or technology.
Our success is dependent, in part, upon our ability to protect and enforce our intellectual property rights, including in our proprietary information and technology. No assurance can be given that our confidentiality, non-disclosure, or invention assignment agreements with employees, consultants, or other parties will not be breached and will otherwise be effective in controlling access to and distribution of our platform, or certain aspects of our platform, and proprietary information. Further, these agreements may not prevent our competitors from independently developing technologies that are substantially equivalent or superior to our platform. Additionally, certain unauthorized use of our intellectual property may go undetected, or we may face legal or practical barriers to enforcing our legal rights even where unauthorized use is detected.
Current laws may not provide for adequate protection of our platform or data. In addition, legal standards relating to the validity, enforceability, and scope of protection of proprietary rights in internet-related businesses are uncertain and evolving, and changes in these standards may adversely impact the viability or value of our proprietary rights. Some license provisions protecting against unauthorized use, copying, transfer, and disclosure of our platform, or certain aspects of our platform may be unenforceable under the laws of certain jurisdictions. Further, the laws of some countries do not protect proprietary rights to the same extent as the laws of the United States, and mechanisms for enforcement of intellectual property rights in some foreign countries may be inadequate. To the extent we expand our international activities, our exposure to unauthorized copying and use of our data or certain aspects of our platform, or our data may increase. Further, competitors, foreign governments, foreign government-backed actors, criminals, or other third parties may gain unauthorized access to our proprietary information and technology. Accordingly, our efforts, we may be to prevent third parties from upon or our technology and intellectual property.
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To monitor and protect our intellectual property rights, we may be required to spend significant resources, and we may or may not be able to detect infringement by our customers or third parties. Litigation has been and may be necessary in the future to enforce our intellectual property rights and to protect our trade secrets. Such litigation could be costly, time consuming, and distracting to management and could result in the impairment or loss of portions of our intellectual property. Furthermore, our efforts to enforce our intellectual property rights may be met with defenses, counterclaims, and countersuits attacking the validity and enforceability of our intellectual property rights. Our inability to protect our proprietary technology against unauthorized copying or use, as well as any costly or of our management’s attention and resources, could further sales or the implementation of our platform, the functionality of our platform, introductions of new features, integrations, and capabilities, result in our substituting or more technologies into our platform, or our reputation. In addition, we may be required to license additional technology from third parties to develop and market new features, integrations, and capabilities, which may not be available on commercially reasonable terms, or at all, and our to license this technology could our ability to compete.
Investing in our AI capability introduces risks, which, if realized, could adversely impact our business.
The introduction of AI technologies into new or existing products may result in new or enhanced governmental or regulatory scrutiny, litigation, privacy, confidentiality or security risks, ethical concerns, legal liability, or other complications that could adversely affect our business, reputation, or financial results. The intellectual property ownership and license rights, including copyright, surrounding AI technologies has not been fully addressed by laws or regulations, and the use or adoption of third-party AI technologies into our business operations, products and services may result in exposure to claims of copyright infringement or other intellectual property misappropriation, as well as potential liability to customers.
AI technologies may use algorithms, datasets, or training methodologies that may be flawed or contain deficiencies that may be difficult to detect during testing. AI technologies, including generative AI, may create content that appears correct but is factually inaccurate, flawed or biased. Use of such content may be to the detriment of the user, or it may lead to discriminatory or other adverse outcomes, which may expose us to brand or reputational harm, competitive harm, and/or legal liability (including regulatory investigations, enforcement actions, or private claims). The use of AI technologies presents emerging ethical and social issues (including concerns regarding transparency, explainability, accountability, and intellectual property) that may result in brand or reputational , competitive , and/or legal liability.
Our customers or unauthorized parties could use our products and services in a manner that is contrary to our values or applicable law, which could harm our relationships with consumers, customers, or employees or expose us to litigation or harm our reputation.
Because our data includes the direct contact information for millions of individuals and businesses, our platform and data could be misused by customers, or by parties who have obtained access to our data without authorization, to contact individuals for purposes that we would not permit, including uses unrelated to B2B communication or recruiting, such as to harass or annoy individuals or to perpetrate scams. Our customers could use our products or services for purposes beyond the scope of their contractual terms or applicable laws or regulations. Our customers’ or third parties’ misuse of our data in any manner that is inconsistent with its permitted use, could result in reputational damage, adversely affect our ability to attract new customers and cause existing customers to reduce or discontinue the use of our platform, any of which could harm our business and operating results.
Our brand may be negatively affected by the actions of persons using our platform that are hostile or inappropriate, by the actions of individuals acting under false or inauthentic identities, by the use of our products or services to disseminate information that is misleading (or intended to manipulate opinions), by perceived or actual efforts by governments to obtain access to user information for security-related purposes or to censor certain content on our platform or by the use of our products or services for illicit, objectionable, or illegal ends. Further, we may fail to respond expeditiously or appropriately to any of the foregoing misuses, or to otherwise address customer and individual concerns, which could erode confidence in our business.
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Cyber-attacks and security vulnerabilities could result in serious harm to our reputation, business, and financial condition.
Threats to network and data security are constantly evolving and becoming increasingly diverse and sophisticated and have increased in scope and frequency. Our products and services, as well as our servers and computer systems and those of third parties that we rely on in our operations could be vulnerable to cybersecurity risks and threats or other events that could disrupt our IT systems and/or subject us to liability, such as manmade or natural disasters (including those as a result of climate change) or software vulnerabilities. In addition, many of our employees work remotely, which increases our cyber security risk, creates data accessibility concerns, and makes us more susceptible to security breaches or business disruptions (including through compromised credentials or the use of unmanaged or personal devices and networks).
We have in the past been the target of attempts, and experienced incidents of attempts, to identify and exploit system vulnerabilities and/or penetrate or bypass our security measures in order to gain unauthorized access to our systems, including to use our platform and data for purposes other than its intended purpose or to create products that compete with our platform. We employ multiple methods at different layers of our systems designed to defend against intrusion and attack, to protect our systems and to resolve and mitigate the impact of any incidents. Despite our efforts to keep our systems secure and to remedy identified vulnerabilities, future attacks could be successful and could result in substantial liability or business risk. We expect that third parties will continue to attempt to access to our systems or facilities through various means, including hacking into our systems or facilities, or those of our customers or vendors, or attempting to induce our employees, customers, vendors or other users of our systems into sensitive information, which may in turn be used to access our IT systems. Our cybersecurity programs and efforts to protect our systems and data, and to prevent, detect and respond to data security , may not prevent these or provide adequate security. We may experience of our security measures due to human , , system or , or other including attempts by former, current or future employees to their authorized access and/or access to our systems.
Such events could result in the release to the public of confidential information about our operations and financial condition and performance. Actual or perceived breaches of our security could subject us to regulatory investigations and orders, litigation, indemnity obligations, damages, penalties, fines and other costs in connection with actual and alleged contractual breaches, violations of applicable laws and regulations and other liabilities. Moreover, a security compromise or ransomware event could require us to devote significant management resources to address the problems created by the issue and to expend significant additional resources to upgrade further the security measures we employ to guard personal and confidential information against cyber-attacks and other attempts to access or otherwise compromise such information and could result in a disruption of our operations, particularly our digital operations. Any such could also materially our reputation and our business, results of operations and financial condition. We maintain , , and cyber liability insurance policies covering certain security and privacy . However, we cannot be certain that our coverage will be adequate for liabilities actually incurred or that insurance will continue to be available to us on economically reasonable terms, or at all. Further, we may be subject to additional liability risks associated with data security or other by virtue of the private right of action granted to individuals under certain data privacy laws for actions arising from certain data security .
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Technical problems or disruptions that affect our customers’ ability to access our services, or the software, internal applications, database, and network systems underlying our services, could damage our reputation and brands and lead to reduced demand for our products and services, lower revenues, and increased costs.
Our business, brand, reputation, and ability to attract and retain users and customers depend upon the satisfactory performance, reliability, and availability of our websites, which in turn depend upon the availability of the internet and our service providers. Interruptions and slowdown in these systems, whether due to system failures, computer viruses, software errors, physical or electronic break-ins, or malicious hacks or attacks on our systems (such as denial of service attacks), could affect the security and availability of our services on our mobile applications and our websites and prevent or inhibit the ability of users to access our products or services. In addition, the software, internal applications, and systems underlying our products and services are complex and may not be error-free. We may encounter technical problems when we attempt to enhance our software, internal applications, and systems. Any , , or technical with our software, internal applications, and systems could reduce the quality of our products and services or with our customers’ use of our products and services, which could reduce demand, lower our revenues, and increase our costs.
Our systems and operations, and those of vendors critical to our services, are vulnerable to damage or interruption from fire, flood, earthquakes, power loss, security breaches, computer viruses, telecommunications failures, terrorist attacks, acts of war, electronic and physical break-ins and similar events. The occurrence of any of the foregoing events could result in damage to or failure of our systems and hardware. These risks may be increased with respect to operations housed at facilities outside of our direct control, and the majority of the communications, network, and computer hardware used to operate the cloud for our platform are located at facilities maintained by Google or Amazon, which we do not own or control.
In addition, problems faced or caused by our IT service providers, including content distribution service providers, private network providers, internet providers, third-party web-hosting providers, third-party data center hosting facilities, and cloud computing platform providers. or with the systems by which they allocate capacity among their customers (as applicable), could adversely affect the experience of our users.
Risks Related to Financial, Accounting and Credit Matters
We generate revenue from sales of subscriptions to our platform and data, and any decline in demand for the types of products and services we offer would negatively impact our business.
We have historically derived substantially all of our revenue from subscription services and expect to continue to generate revenue from the sale of subscriptions to our platform and data. As a result, the continued use of telephones and email as a primary means of B2B sales, marketing, and recruiting, and the continued use of internet cloud-based platforms to access telephone, email, and related information for such purposes, is critical to our future growth and success. If the sales and marketing information market fails to grow, or grows more slowly than we currently anticipate, or if there is a decrease in the use of telephones and email as primary means of B2B communication, demand for our platform and data would be negatively affected.
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Changes in user preferences for sales, marketing, and recruiting platforms may have a disproportionately greater impact on us than if we offered disparate products and services. Demand for sales, marketing, and recruiting platforms in general, and our platform and data in particular, is affected by a number of factors, many of which are beyond our control. Some of these potential factors include:
• awareness and acceptance of the sales, marketing, and recruiting platform categories generally, and the growth, contraction and evolution of the categories;
• availability of products and services that compete with ours;
• brand recognition;
• pricing;
• ease of adoption and use;
• performance, features, and user experience, and the development and acceptance of new features, integrations, and capabilities;
• customer support;
• accessibility across several devices, operating system, and applications;
• integration with CRM and other related technologies; and
• the potential for the development of new systems and protocols for B2B communication.
The market is subject to rapidly changing user demand and preference trends. If we fail to successfully predict and address these changes and trends, meet user demands or achieve more widespread market acceptance of our platform and data, our business, results of operations, and financial condition could be harmed.
Our failure to raise additional capital or generate cash flows necessary to expand our operations and invest in new technologies in the future could reduce our ability to compete successfully and harm our results of operations.
We may require additional financing, and we may not be able to obtain debt or equity financing on favorable terms, if at all. If we raise equity financing to fund operations or on an opportunistic basis, our stockholders may experience significant dilution of their ownership interests. Our existing senior secured credit facilities restrict our ability to, and the terms on which we may, incur additional indebtedness, and our ability to, and the terms on which we may, make certain restricted payments, including investments. See “ We have a substantial amount of debt, which could adversely affect our financial condition and our ability to raise additional capital and prevent us from fulfilling our obligations ” below. The terms of any additional debt financing may be similar or more restrictive.
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Failure to maintain effective internal controls over financial reporting in accordance with Section 404 of SOX could impair our ability to produce timely and accurate financial statements or comply with applicable regulations and have a material adverse effect on our business.
As a public company, we are required by Section 404 of the Sarbanes-Oxley Act of 2002 to evaluate and determine the effectiveness of our internal controls over financial reporting and provide a management report on the internal controls over financial reporting, which must be attested to by our independent registered public accounting firm. The process of designing and implementing effective internal controls is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to expend significant resources to maintain a system of internal controls that is adequate to satisfy our reporting obligations as a public company. We have previously identified and reported a material weakness, and we may identify additional material weaknesses in internal controls in future periods, which could have a material adverse effect on our business, financial condition, and results of operations. Specifically, if we were to have another material weakness in our internal controls over financial reporting, we may not detect errors on a timely basis and our financial statements may be materially misstated. There could also be a reaction in the financial markets due to a of investor confidence in us and the reliability of our consolidated financial statements, and we could be subject to sanctions or by the SEC or other regulatory authorities. to remedy any material in our internal control over financial reporting, or to implement or maintain other control systems required of public companies, could also restrict our future access to the capital markets.
Because we recognize subscription revenue over the subscription term, downturns or upturns in new sales and renewals are not immediately reflected in full within our results of operations.
We recognize revenue from subscriptions to our platform on a ratable basis over the term of the contract subscription period beginning on the date access to the platform is granted, provided all other revenue recognition criteria have been met. Our subscription arrangements generally have contractual terms requiring advance payment for annual or quarterly periods. As a result, much of the revenue we report each quarter is the recognition of deferred revenue from recurring subscriptions entered into during previous quarters. Consequently, a decline in new or renewed recurring subscription contracts in any one quarter will not be fully reflected in revenue in that quarter but will negatively affect our revenue in future quarters. Accordingly, the effect of significant downturns in new or renewed sales of our recurring subscriptions are not reflected in full in our results of operations until future periods. Our subscription model also makes it difficult for us to rapidly increase our revenue through additional sales in any period, as revenue from new customers is typically recognized over the applicable subscription term. By contrast, a majority of our costs are expensed as incurred, which could result in our recognition of more costs than revenue in the earlier portion of the subscription term and result in our inability to in any given period.
We anticipate increasing operating expenses in the future, and we may not be able to maintain profitability.
We may not continue to achieve or maintain profitability in the future. Because the market for our platform is rapidly evolving, it is difficult for us to predict our future results of operations or the limits of our market opportunity. We expect our operating expenses to increase over the next several years as we aim to hire additional personnel, expand our partnerships, operations and infrastructure, both domestically and internationally, continue to enhance our platform and develop and expand its features, integrations, and capabilities, and expand and improve our platform. We also intend to continue to build and enhance our platform through both internal research and development and selectively pursuing acquisitions that can contribute to the capabilities of our platform. In addition, as we grow, we will incur additional significant legal, accounting, and other expenses. If our revenue does not increase to offset the expected increases in our operating expenses, we may not be profitable in future periods. In future periods, our revenue growth could slow or our revenue could for a number of reasons, including any to increase the number of organizations on our platform, any to increase our number of paying customers, a decrease in the growth of our overall market, our , for any reason, to continue to capitalize on growth , demand for our platform, additional regulatory , or increasing competition. As a result, our past financial performance may not be indicative of our future performance. Any by us to sustain on a consistent basis could cause the value of our common stock to .
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We have a significant amount of goodwill and intangible assets on our balance sheet, and our results of operations may be adversely affected if we fail to realize the full value of our goodwill and intangible assets.
Our Consolidated Balance Sheets reflect significant amounts of goodwill and intangible assets. In accordance with U.S. GAAP, goodwill and intangible assets with an indefinite life are not amortized but are subject to a periodic impairment evaluation. Goodwill and acquired intangible assets with an indefinite life are tested for impairment at least annually or when events and circumstances indicate that fair value of a reporting unit may be below their carrying value, including for example, as a result of sustained periods of declines in our stock price and market capitalization. Acquired intangible assets with definite lives are amortized on a straight-line basis over the estimated period over which we expect to realize economic value related to the intangible asset. In addition, we review long-lived assets, including operating lease right-of-use assets, for impairment whenever events or changes in circumstances indicate that the carrying value of an asset might not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the undiscounted future cash flows expected to be generated by the asset or group of assets. Our ability to realize the value of the goodwill and intangible assets will depend on the future cash flows of the businesses we have acquired, which in turn depend in part on how well we have integrated these businesses into our own business. Judgments made by management relate to the expected useful lives of long-lived assets and our ability to realize undiscounted cash flows of the carrying amounts of such assets. The accuracy of these judgments may be affected by several factors, including significant:
• underperformance relative to historical or projected future operating results;
• changes in the manner of our use of acquired assets or the strategy for our overall business;
• negative industry or economic trends; or
• declines in our market capitalization relative to net book value for a sustained period.
These types of events or indicators and the resulting impairment analysis could result in impairment charges in the future. If we are not able to realize the value of the goodwill and intangible assets, we may be required to incur material charges relating to the impairment of those assets. Such impairment charges could materially and adversely affect our business, results of operations, and financial condition.
We have a substantial amount of debt, which could adversely affect our financial condition and our ability to raise additional capital and prevent us from fulfilling our obligations.
As of December 31, 2025, we had total outstanding indebtedness of $1,332.2 million consisting of outstanding borrowings under our first lien credit facilities and senior notes. Additionally, we had $150.0 million of availability under our first lien revolving credit facility as of December 31, 2025. Our substantial indebtedness may:
• make it difficult for us to satisfy our financial obligations, including with respect to our indebtedness;
• limit our ability to borrow additional funds for working capital, capital expenditures, acquisitions, or other general business purposes;
• require us to use a substantial portion of our cash flow from operations to make debt service payments instead of other purposes, thereby reducing the amount of cash flow available for future working capital, capital expenditures, acquisitions, or other general business purposes;
• expose us to the risk of increased interest rates as certain of our borrowings, including under our secured credit facilities, are at variable rates of interest;
• limit our ability to pay dividends (although we historically have not paid, and currently do not anticipate paying, any cash dividends on our common stock (see the section entitled “Dividend Policy”);
• limit our flexibility to plan for, or react to, changes in our business and industry;
• place us at a competitive disadvantage compared with our less-leveraged competitors;
• increase our vulnerability to the impact of adverse economic, competitive, and industry conditions; and
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• increase our cost of borrowing.
In addition, the credit agreement governing our secured credit facilities contains, and the agreements governing our future indebtedness may contain, restrictive covenants that may limit our ability to engage in activities that may be in our long-term best interest. These restrictive covenants include, among others, limitations on our ability to pay dividends or make other distributions in respect of, or repurchase or redeem, capital stock, prepay, redeem, or repurchase certain debt, make acquisitions, investments, loans, and advances, or sell or otherwise dispose of assets. Our failure to comply with those covenants could result in an event of default which, if not cured or waived, could result in the acceleration of substantially all of our debt.
Furthermore, we may be able to incur substantial additional indebtedness in the future. The terms of the credit agreements governing our indebtedness limit, but do not prohibit, us from incurring additional indebtedness, and the additional indebtedness incurred in compliance with these restrictions could be substantial. These restrictions will also not prevent us from incurring obligations that do not constitute “Indebtedness” as defined in the agreements governing our indebtedness. If new indebtedness is added to our current debt levels, the related risks that we now face could intensify.
We may not be able to generate sufficient cash to service all of our indebtedness, and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.
Our ability to make scheduled payments due on our debt obligations or to refinance our debt obligations depends on our financial condition and operating performance, which are subject to prevailing economic, industry, and competitive conditions and to certain financial, business, legislative, regulatory, and other factors beyond our control, including those discussed elsewhere in this “Risk Factors” section. We may be unable to maintain a level of cash flow sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness.
If our cash flow and capital resources are insufficient to fund our debt service obligations, we could face substantial liquidity problems and could be forced to reduce or delay investments and capital expenditures or to dispose of material assets or operations, seek additional debt or equity capital or restructure or refinance our indebtedness. We may not be able to implement any such alternative measures on commercially reasonable terms or at all and, even if successful, those alternative actions may not allow us to meet our scheduled debt service obligations.
If we cannot make payments on our debt obligations, we will be in default and all outstanding principal and interest on our debt may be declared due and payable, the lenders under our secured credit facilities could terminate their commitments to loan money, our secured lenders (including the lenders under our secured credit facilities) could foreclose against the assets securing their borrowings, and we could be forced into bankruptcy or liquidation. In addition, any event of default or declaration of acceleration under one debt instrument could result in an event of default under one or more of our other debt instruments.
Interest rate fluctuations may affect our results of operations and financial condition.
Because a substantial portion of our debt is variable-rate debt, fluctuations in interest rates could have a material effect on our business. During 2022 and 2023, the United States Federal Reserve raised interest rates significantly, and has maintained such increased interest rates generally through the fourth quarter of 2025, as compared to pre-2022 levels, in an attempt to combat historically high inflation. While the U.S. Federal Reserve has started to, and signaled its intention to continue to, lower interest rates, macroeconomic circumstances may change, resulting in delays or reversal of such actions, including by central banks around the world, which may result in a prolonged high-interest rate environment. As a result, we may incur higher interest costs if interest rates were to increase again in the future or if high interest rates continue to be maintained. We currently utilize, and may in the future utilize, derivative financial instruments such as interest rate swaps to hedge some of our exposure to interest rate fluctuations, but such instruments may not be effective in reducing our exposure to interest fluctuations, and we may discontinue utilizing them at any time. Further, there can be no assurance that the United States Federal Reserve will not raise rates in the future, and any such increase in interest costs could have a material adverse effect on our financial condition and the levels of cash we maintain for working capital.
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Changes in our credit and other ratings could adversely impact our operations and lower our profitability.
Credit rating and other rating agencies continually revise their ratings and ratings methodologies for the companies that they follow, including us. These rating agencies also evaluate our industry as a whole and may change their credit and other ratings for us based on their overall view of our industry. Failure to maintain our credit ratings on long-term and short-term indebtedness could increase our cost of borrowing, reduce our ability to obtain intra-day borrowing, which we may need to operate our business, and adversely impact our results of operations.
Risks Related to Taxation
We are a multinational organization faced with increasingly complex tax issues in many jurisdictions, and global tax developments may have a material impact to our business, cash flows, tax liabilities and results of operations.
As a multinational organization, we may be subject to taxation in several jurisdictions around the world with increasingly complex tax laws, the application of which can be uncertain. The amount of taxes we pay in these jurisdictions could increase substantially as a result of changes in the applicable tax principles, including increased tax rates, new tax laws or revised interpretations of existing tax laws and precedents, or challenges to our tax positions by tax authorities, any of which could have a material adverse effect on our liquidity, financial condition or operating results. In addition, the authorities in these jurisdictions could review our tax returns and impose additional tax, interest and penalties, and the authorities could claim that various withholding requirements apply to us or our subsidiaries or assert that benefits of tax treaties are not available to us or our subsidiaries, or assert that we are subject to tax in a jurisdiction where we believe we have not established a taxable nexus, often referred to as a “permanent establishment” under international tax treaties, any of which could have a material adverse effect on our business, financial condition or cash flows.
Global tax developments applicable to multinational businesses may have an adverse effect to our business, including certain approaches in addressing taxation of the digital economy. Rules proposed or enacted by the Organisation for Economic Co-operation and Development (“OECD”), the European Commission or tax authorities in the jurisdictions in which we operate or may operate in the future could have a material adverse effect to our profitability, cash flows, or results of operations. The OECD in particular has proposed significant changes to the international tax law framework in the form of the Pillar Two model rules which seek to implement a global minimum tax of 15%. While it is uncertain whether the United States will enact legislation to adopt Pillar Two, certain countries in which we operate have adopted legislation, and other countries are in the process of introducing legislation to implement Pillar Two. The potential effects of Pillar Two may vary depending on the specific provisions and rules implemented by each country that adopts it.
We are also subject to tax examinations in multiple jurisdictions. While we regularly evaluate new information that may change our judgment resulting in recognition, derecognition, or changes in measurement of a tax position taken, there can be no assurance that the final determination of any examinations will not have an adverse effect on our operating results and financial condition. As our brand becomes increasingly recognizable both domestically and internationally, our tax planning structure and corresponding profile may be subject to increased scrutiny and if we are perceived negatively, we may experience brand or reputational harm.
Changes in tax laws or regulations applicable to our business, including for example, the enactment of the One Big Beautiful Bill Act on July 4, 2025, have in the past, and may in the future, result in a material adverse effect on our results of operations, cash flows and financial condition.
We are subject to income taxes in the United States and various other jurisdictions. Our income tax obligations are generally determined based on our business operations in each jurisdiction. Significant judgment is often required in the determination of our worldwide provision for income taxes. Our effective tax rate could be impacted by changes in our earnings and losses in countries with differing statutory tax rates, changes in non-deductible expenses, changes in excess tax benefits of stock-based compensation, changes in the valuation of deferred tax assets and liabilities and our ability to utilize them, the applicability of withholding taxes, effects from acquisitions, changes in accounting principles, and tax laws in jurisdictions where we operate.
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New income, sales, use, value add or other tax laws, statutes, rules, regulations, or ordinances could be enacted at any time. Further, existing laws, statutes, rules, regulations or ordinances could be interpreted, changed, modified or applied unfavorably to us. These actions could apply on either a retroactive or prospective basis and could give rise to additional tax liabilities, fines, interest and/or penalties, causing harm to our global business operations, financial results, and financial condition. If we raise our prices to offset the cost of these changes, existing and potential future customers may elect not to purchase our products and services in the future. Additionally, new, changed, modified, or newly interpreted or applied tax laws could increase our compliance, operating, and other costs, as well as the cost of our products and services.
Additionally, the application of U.S. federal, state, local, and international tax laws to services provided electronically is vague and continually evolving. Existing tax laws, statutes, rules, regulations, or ordinances could be interpreted or applied adversely to us, possibly with retroactive effect, which could require us to pay additional tax amounts, as well as require us to pay interest, fines or penalties for amounts deemed past-due. If we are unsuccessful in collecting such taxes due from our customers, we could be held liable for such costs, thereby adversely affecting our future cash flows and results of operations.
We may also be subject to additional tax liabilities and penalties due to changes in non-income based taxes resulting from changes in federal, state, or international tax laws. Changes in taxing jurisdictions’ administrative interpretations, decisions, policies and positions, results of tax examinations, settlements or judicial decisions, changes in accounting principles, changes to the business operations, including acquisitions, as well as the evaluation of new information that results in a change to a tax position taken in a prior period can result in an increase in our tax obligations or cash taxes paid, adversely affecting our cash flows and financial results. In addition, the authorities in these jurisdictions could review our tax returns and impose additional tax, interest, and penalties, and the authorities could claim that various withholding requirements apply to us or assert that benefits of tax treaties are not available to us, any of which could harm us and our results of operations.
Furthermore, as our employees continue to work remotely from geographic locations across the United States and internationally, we may become subject to additional taxes and our compliance burdens with respect to the tax laws of additional jurisdictions may increase. Any of the foregoing tax related impacts could have a material adverse effect on our results of operations, cash flows and financial condition.
Our results of operations may be adversely affected if we are required to collect sales or other related taxes for purchases of our products and services in jurisdictions where we have not historically done so.
State, local, and non-U.S. jurisdictions have differing rules and regulations governing sales and use, value added, digital service and other taxes. The rules regarding tax nexus are complex and related regulations are subject to varying interpretations that may change over time. The application of the rules and regulations to products and services provided electronically is evolving and uncertain. We collect and remit U.S. sales tax, value-added tax (“VAT”), and goods and services tax (“GST”) in a number of jurisdictions. It is possible that we could face sales tax, VAT, or other tax audits and that our liability for these taxes could exceed our estimates if tax authorities assert that we are obligated to collect additional tax amounts from our customers and remit those taxes to the government. We could also be subject to audits in states and international jurisdictions for which we have not accrued tax liabilities. A successful assertion that we should be collecting additional sales or other taxes on our services in jurisdictions where we have not historically done so and do not accrue for sales taxes could result in material tax liabilities for past sales, as well as the imposition of interest and penalties. This could have the effect of discouraging organizations from subscribing to our products and services, or otherwise harm our business, results of operations, and financial condition. Any action by state, foreign, or other authorities to compel us to collect and remit sales tax, VAT, or other taxes, either retroactively, prospectively, or both, could have a material effect on our results of operations, cash flows and financial condition.
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Risks Related to Geopolitical and Macroeconomic Factors
Operations and sales outside the United States expose us to risks inherent in international operations.
Our success depends in part on our ability to expand our sales and operations outside of the United States. Any new markets or countries into which we attempt to sell subscriptions to our platform may not be as receptive to our products and services as we anticipate. We may also experience challenges expanding and operating internationally. A significant increase in international customers or an expansion of our operations into other countries, either directly or through third parties, could create additional risks and challenges, including:
• a need to localize our products and services, including translation into foreign languages and associated expenses;
• competition from local incumbents that have a better understanding of the local market, customs, and culture, which may allow them to market and operate more effectively, resulting in greater local affinity or awareness;
• a need to comply with foreign regulatory frameworks or business practices (including with respect to data privacy and security), which among other things may favor local competitors;
• evolving domestic and international tax environments;
• foreign currency fluctuations and controls, which may make our products and services more expensive for international customers and could add volatility to our operating results;
• vetting and monitoring internal or external sales or customer experience resources in new and evolving markets to confirm they maintain standards consistent with our brand and reputation;
• different pricing environments;
• different or lesser protection of our intellectual property;
• potential or actual violations of domestic and international anti-corruption laws, export controls, anti-bribery laws, and sanctions regulations, which likelihood may increase with an increase of sales and operations in foreign jurisdictions;
• changes in diplomatic and trade relationships, including the imposition of new trade restrictions, trade protection measures, including tariffs and retaliatory tariffs, as well as any direct and indirect economic effects on the domestic and international markets, import or export requirements, trade embargoes, and other trade barriers; and
• other factors beyond our control, such as terrorism, war, natural disasters, climate change and pandemics, could result in restrictions on business activity, or materially affect our targeted return to operations timeline after one of these declared incidents, which may vary significantly by region.
Any of these factors could negatively impact our business and results of operations.
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Global economic uncertainty and catastrophic events, including global pandemics, continued hostilities between Russia and Ukraine, and Israel and Hamas, as well as other geopolitical conflicts, have and may disrupt our business and adversely impact our business and future results of operations and financial condition.
Macroeconomic events, including significant global inflation, liquidity events affecting financial institutions, supply chain disruption, the Russia-Ukraine war, the conflict between Israel and Hamas, including after giving effect to the October 2025 Gaza Peace Plan, as well as related and other conflicts due to rising tensions in the Middle East, including with respect to Iran, and U.S. relations with members of the European Union, have adversely impacted and may continue to adversely impact global financial markets, economies, and business practices. These types of unpredictable events have adversely affected and could adversely affect our business and future results of operations, our ability to access funds from financial institutions and capital markets, and our financial condition due to cancellations and reductions in spend from customers in impacted industries, increases in our costs, or other disruption to our business. We experienced and may continue to experience longer sales cycles and more intense , particularly for larger purchases and upgrades as customers and prospects re-assess their growth trajectory in light of the changing economic environment.
If global economic uncertainty and catastrophic events harm our business and results of operations, many of the other risks described in this Part I, Item 1A of this report may be heightened.
Risks Related to Our Organizational Structure
ZoomInfo Technologies Inc. is a holding company, its only material assets are its interests in ZoomInfo Intermediate Inc. and ZoomInfo Holdings LLC, and ZoomInfo Technologies Inc. is accordingly dependent upon distributions from ZoomInfo Intermediate Inc. and its subsidiaries to pay taxes, make payments under the Tax Receivable Agreements, and pay dividends.
ZoomInfo Technologies Inc. is a holding company and has no material assets other than its ownership of common stock of ZoomInfo Intermediate and of units of ZoomInfo Holdings. ZoomInfo Technologies Inc. has no independent means of generating revenue. Although we have no current plans to pay cash dividends on our common stock, deterioration in the financial condition, earnings or cash flow of ZoomInfo Intermediate and its subsidiaries for any reason could limit or impair their ability to pay such distributions in the future. Additionally, to the extent that ZoomInfo Technologies Inc. needs funds, and ZoomInfo Intermediate or its subsidiaries are restricted from making such distributions under applicable law or regulation or under the terms of our financing arrangements, or is otherwise unable to provide such funds, it could materially adversely affect our liquidity and financial condition.
We have no current plans to pay cash dividends on our common stock. Payments of dividends, if any, will be at the discretion of our Board of Directors after taking into account various factors, including our business, operating results, and financial condition, current and anticipated cash needs, plans for expansion, and any legal or contractual limitations on our ability to pay dividends. Our existing secured credit facilities include, and any financing arrangement that we enter into in the future may include, restrictive covenants that limit our ability to pay dividends. In addition, ZoomInfo Midco LLC is generally prohibited under Delaware law from making a distribution to a member to the extent that, at the time of the distribution, after giving effect to the distribution, liabilities of ZoomInfo Midco LLC (with certain exceptions) exceed the fair value of its assets. Subsidiaries of ZoomInfo Midco LLC are generally subject to similar legal limitations on their ability to make distributions to ZoomInfo Midco LLC.
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ZoomInfo Technologies Inc. is required to pay our Pre-IPO Owners for most of the benefits relating to any additional tax deductions and tax attributes that we may claim as a result of the ZoomInfo Tax Group’s share of existing tax basis acquired in the IPO and increases in its share of existing tax basis, including tax basis received in connection with sales or exchanges of units of ZoomInfo Holdings LLC that occurred after the IPO.
In connection with the IPO, we entered into two tax receivable agreements. We entered into (i) the Exchange Tax Receivable Agreement with certain of our Pre-IPO Owners of equity units of ZoomInfo Holdings and (ii) the Reorganization Tax Receivable Agreement with the Pre-IPO Blocker Holders. These tax receivable agreements provide for the payment by members of the ZoomInfo Tax Group to certain Pre-IPO Owners and Pre-IPO Owners that held HoldCo Units immediately prior to the IPO of 85% of the benefits, if any, that the ZoomInfo Tax Group is deemed to realize (calculated using certain assumptions) as a result of certain tax attributes and benefits covered by the tax receivable agreements. The Exchange Tax Receivable Agreement provides for the payment by members of the ZoomInfo Tax Group to certain Pre-IPO Owners of equity units of ZoomInfo Holdings and certain Pre-IPO Owners that held HoldCo Units immediately prior to the IPO of 85% of the benefits, if any, that the ZoomInfo Tax Group is deemed to realize (calculated using certain assumptions) as a result of (i) the ZoomInfo Tax Group’s allocable share of existing tax basis acquired in the IPO and (ii) increases in the ZoomInfo Tax Group’s allocable share of existing tax basis and tax basis adjustments that increased the tax basis of the tangible and intangible assets of the ZoomInfo Tax Group as a result of sales or exchanges of units of ZoomInfo Holdings for shares of common stock after the IPO, and certain other tax benefits, including tax benefits attributable to payments under the Exchange Tax Receivable Agreement. The Reorganization Tax Receivable Agreement provides for the payment by ZoomInfo Technologies Inc. to Pre-IPO Blocker Holders and certain Pre-IPO Owners that held HoldCo Units immediately prior to the IPO of 85% of the benefits, if any, that the ZoomInfo Tax Group is deemed to realize (calculated using certain assumptions) as a result of the ZoomInfo Tax Group’s utilization of certain tax attributes of the Blocker Companies (including the ZoomInfo Tax Group’s allocable share of existing tax basis acquired in the Reorganization Transactions), and certain other tax benefits.
In each case, these increases in existing tax basis and tax basis adjustments generated over time may increase (for tax purposes) depreciation and amortization deductions and, therefore, may reduce the amount of tax that the ZoomInfo Tax Group would otherwise be required to pay in the future. The U.S. Internal Revenue Service (the “IRS”) may challenge all or part of the validity of that tax basis, and a court could sustain such a challenge. Actual tax benefits realized by the ZoomInfo Tax Group may differ from tax benefits calculated under the Tax Receivable Agreements as a result of the use of certain assumptions in the TRAs, including the use of an assumed weighted-average state and local income tax rate to calculate tax benefits. The payment obligations under the TRAs are an obligation of members of the ZoomInfo Tax Group, but not of ZoomInfo Holdings. While the amount of existing tax basis, the anticipated tax basis adjustments, and the actual amount and utilization of tax attributes, as well as the amount and timing of any payments under the TRAs will vary depending upon a number of factors, including the amount and timing of our income, we expect that as a result of the size of the transfers and increases in the tax basis of the tangible and intangible assets of ZoomInfo Holdings and our possible utilization of tax attributes, including existing tax basis acquired at the time of the IPO, the payments that the members of the ZoomInfo Tax Group may make under the TRAs will be substantial. The payments under the TRAs are not conditioned upon continued ownership of us by the exchanging holders of units of ZoomInfo Holdings or the prior owners of the Blocker Companies.
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In certain cases, payments under our Tax Receivable Agreements may be accelerated and/or significantly exceed the actual benefits the ZoomInfo Tax Group realizes in respect of the tax attributes subject to such agreements.
Members of the ZoomInfo Tax Group’s payment obligations under the TRAs may be accelerated in the event of certain changes of control and will be accelerated in the event such members elect to terminate the TRAs early. The accelerated payments will relate to all relevant tax attributes that would subsequently be available to the ZoomInfo Tax Group. The accelerated payments required in such circumstances will be calculated by reference to the present value (at a discount rate equal to a per annum rate of the lesser of (i) 6.5% and (ii) LIBOR, or its successor rate, plus 100 basis points) of all future payments that holders of units of ZoomInfo Holdings or other recipients would have been entitled to receive under the TRAs, and such accelerated payments and any other future payments under the TRAs will utilize certain valuation assumptions, including that the ZoomInfo Tax Group will have sufficient taxable income to fully utilize the deductions arising from the increased tax deductions and tax basis and other benefits related to entering into the TRAs and sufficient taxable income to fully utilize any remaining net operating losses subject to such agreements on a straight line basis over the shorter of the statutory expiration period for such net operating losses and the five-year period after the early termination or change of control. In addition, recipients of payments under our Tax Receivable Agreements will not be required to reimburse us for any payments previously made under such agreements if their tax basis and the ZoomInfo Tax Group’s utilization of certain tax attributes is by the IRS (although any such would be taken into account in future payments under the Tax Receivable Agreements). The ZoomInfo Tax Group’s ability to benefits from any existing tax basis, tax basis adjustments or other tax attributes, and the payments to be made under the Tax Receivable Agreements, will depend upon a number of factors, including the timing and amount of our future income. As a result, even in the of a change of control or an election to the Tax Receivable Agreements, payments under such agreements could be in excess of 85% of the ZoomInfo Tax Group’s actual cash tax benefits.
Accordingly, it is possible that the actual cash tax benefits realized by the ZoomInfo Tax Group may be significantly less than any corresponding Tax Receivable Agreement payments or any payments under the Tax Receivable Agreements that may have been made years in advance of the actual realization, if any, of the anticipated future tax benefits. There may be a material negative effect on our liquidity if the payments under the Tax Receivable Agreements exceed the actual cash tax benefits that the ZoomInfo Tax Group realizes in respect of the tax attributes subject to the Tax Receivable Agreements and/or payments to ZoomInfo Technologies Inc. by ZoomInfo Midco LLC are not sufficient to permit ZoomInfo Technologies Inc. to make payments under such agreements after it has paid taxes and other expenses. We may need to incur additional indebtedness to finance payments under the Tax Receivable Agreements to the extent our cash resources are insufficient to meet our obligations under such agreements as a result of timing discrepancies or otherwise, and these obligations could have the effect of delaying, deferring, or preventing certain mergers, asset sales, other forms of business combinations, or other changes of control.
The acceleration of payments under our Tax Receivable Agreements in the case of certain changes of control may impair our ability to consummate change of control transactions or negatively impact the value received by owners of our common stock.
In the case of certain changes of control, payments under our Tax Receivable Agreements may be accelerated and may significantly exceed the actual benefits the ZoomInfo Tax Group realizes in respect of the tax attributes subject to the Tax Receivable Agreements. We expect that the payments that we may make under the Tax Receivable Agreements in the event of a change of control will be substantial. As a result, our accelerated payment obligations and/or the assumptions adopted under the Tax Receivable Agreements in the case of a change of control may impair our ability to consummate change of control transactions or negatively impact the value received by owners of our common stock in a change of control transaction.
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Risks Related to the Ownership of Our Common Stock
Certain parties to our stockholders agreement continue to have influence over us, and their interests may conflict with ours or yours in the future.
Pursuant to the terms of our stockholders agreement, Henry Schuck, our Chief Executive Officer, and Kirk Brown (collectively, our “Founders”), have the right to designate at least one member of our Board of Directors for so long as they beneficially own at least 5% of the voting power of all shares of our outstanding capital stock entitled to vote generally in the election of our directors. As of the Company’s fiscal year ended December 31, 2025, our Founders continue to have such designation right, and have designated Mr. Schuck to serve as a director on our Board of Directors. For so long as our Founders have a designee continuing to serve on our Board of Directors, our Founders will be able to significantly influence our management, business plans, and policies, including the appointment and removal of our officers, the composition of our Board of Directors, and decisions about whether to enter or not enter into significant transactions. The rights provided under the terms of the stockholders agreement could deprive you of an opportunity to receive a premium for your shares of our common stock as part of a sale of our Company and ultimately might affect the market price of our common stock.
Anti-takeover provisions in our organizational documents and Delaware law might discourage or delay acquisition attempts for us that you might consider favorable.
Our second amended and restated certificate of incorporation and amended and restated bylaws contain provisions that may make a merger with or acquisition of our Company more difficult without the approval of our Board of Directors. Among other things, these provisions:
• provide that our Board of Directors is divided into three classes, as nearly equal in size as possible, with directors in each class serving three-year terms and with terms of the directors of only one class expiring in any given year;
• provide for the removal of directors only for cause and only upon the affirmative vote of the holders of at least 66⅔% in voting power of the outstanding shares of our capital stock entitled to vote if the parties to our stockholders agreement beneficially own less than 50% of the total voting power of all then-outstanding shares of our capital stock entitled to vote generally in the election of directors;
• allow us to authorize the issuance of shares of one or more series of preferred stock, including in connection with a stockholder rights plan, financing transactions, or otherwise, the terms of which series may be established and the shares of which may be issued without stockholder approval, and which may include super voting, special approval, dividend, or other rights or preferences superior to the rights of the holders of our common stock;
• prohibit stockholder action by written consent by holders of our common stock from and after the date on which the parties to our stockholders agreement cease to beneficially own at least 50% of the total voting power of all then-outstanding shares of our capital stock entitled to vote generally in the election of directors unless such action is recommended by all directors then in office;
• provide for certain limitations on convening special stockholder meetings;
• provide (i) that the Board of Directors is expressly authorized to make, alter, or repeal our bylaws and (ii) that our stockholders may only amend our bylaws with the approval of 66⅔% or more of all of then-outstanding shares of our capital stock entitled to vote if the parties to our stockholders agreement beneficially own less than 50% of the total voting power of all then-outstanding shares of our capital stock entitled to vote generally in the election of directors;
• provide that certain provisions of our second amended and restated certificate of incorporation may be amended only by the affirmative vote of the holders of at least 66⅔% in voting power of then-outstanding shares of our capital stock entitled to vote if the parties to our stockholders agreement beneficially own less than 50% of the total voting power of all then-outstanding shares of our capital stock entitled to vote generally in the election of directors; and
• establish advance notice requirements for nominations for elections to our Board of Directors or for proposing matters that can be acted upon by stockholders at stockholder meetings.
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Further, as a Delaware corporation, we are subject to provisions of Delaware law, which may impede or discourage a takeover attempt that our stockholders may find beneficial. These anti-takeover provisions and other provisions under Delaware law could discourage, delay, or prevent a transaction involving a change in control of our Company, including actions that our stockholders may deem advantageous, or negatively affect the trading price of our common stock. These provisions could also discourage proxy contests and make it more difficult for you and other stockholders to elect directors of your choosing and to cause us to take other corporate actions you desire. For further discussion of these and other such anti-takeover provisions, see “Description of Capital Stock—Anti-Takeover Effects of Our Second Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws and Certain Provisions of Delaware Law” in Exhibit 4.1 to this Form 10-K.
In addition, our second amended and restated certificate of incorporation provides that the Delaware Court of Chancery will be the exclusive forum for certain types of legal action and, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Exchange Act or the Securities Act of 1933. This provision may make it more difficult for you and other stockholders to challenge certain corporate actions we take, by limiting your and other stockholders’ ability to obtain favorable or convenient judicial forums for disputes with us or our directors, officers, employees, agents or other stockholders.
