Go-to-market intelligence provider ZoomInfo (NASDAQ: GTM) announced better-than-expected revenue in Q1 CY2026, with sales up 1.5% year on year to $310.2 million. On the other hand, next quarter’s revenue guidance of $301.5 million was less impressive, coming in 2.8% below analysts’ estimates. Its non-GAAP profit of $0.28 per share was 8.7% above analysts’ consensus estimates.

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StockStory’s Take

ZoomInfo’s first quarter was marked by a significant negative market reaction, as management acknowledged a confluence of macroeconomic headwinds and customer uncertainty around artificial intelligence (AI) adoption. CEO Henry Schuck cited a “regression in our downmarket and upmarket growth trajectories” stemming from confusion about AI capabilities and the evolving buying landscape. This led to a pause in purchasing decisions, particularly among software customers, and prompted the company to announce a round of cost reductions impacting 20% of its workforce. Management emphasized that, despite meeting or exceeding their internal benchmarks for the quarter, shifting customer dynamics and increased complexity in decision-making cycles drove the need for immediate structural changes.

Looking ahead, ZoomInfo’s guidance reflects a transition period as the company pivots from seat-based pricing to a flexible, consumption-driven model. Management described this as a “proactive improvement measure” to align with how customers increasingly consume data in AI-powered workflows and large language model (LLM) environments. CFO Graham O’Brien explained that while near-term revenue will face pressure due to this evolution, ZoomInfo expects to emerge with higher operating margins and a more durable growth path. Schuck added, “Our strategy is to make ZoomInfo’s go-to-market data ubiquitous, available wherever go-to-market work gets done, including ChatGPT, Claude, Copilot, and internally built applications.”

Key Insights from Management’s Remarks

Management attributed the quarter’s outcomes to changing buyer behavior, increased AI-driven complexity, and a need to accelerate strategic transformation, particularly in pricing and product offerings.

• AI confusion stalls sales: Management highlighted that both upmarket and downmarket customers hesitated on purchasing decisions due to uncertainty around AI’s role in go-to-market workflows. This pause was especially acute among software clients, who weighed internal tool development against external solutions.

• Non-seat operations outperformed: The company’s non-seat-based Data-as-a-Service (DaaS) and operations business, targeted at larger enterprises, grew over 20% year-over-year. This segment now represents nearly 20% of overall business and is seen as a blueprint for ZoomInfo’s future direction.

• Pricing model transformation: ZoomInfo announced a formal shift away from traditional seat-based subscriptions to a hybrid model combining low annual platform fees and pre-purchased data credits. This move aims to reduce reliance on seats, align pricing with customer value, and better accommodate AI-driven usage patterns.

• Significant cost restructuring: The company initiated a reduction of approximately 600 roles, focusing on research & development and downmarket sales, and closed its Israel operations. Management expects these actions to lower annual operating expenses by about $60 million and support longer-term margin expansion.

• Key customer wins and integrations: Despite turbulence, ZoomInfo secured large-scale deals with companies like Sierra, Lyft, and Wyndham Hotels & Resorts, as well as major integrations with Salesforce, HubSpot, and several AI platforms, reinforcing the relevance of its proprietary data assets.

Drivers of Future Performance

ZoomInfo’s forward outlook is driven by its accelerated shift to data consumption models, cost containment, and adapting to evolving AI adoption patterns among enterprise customers.

• Shift to consumption-based pricing: Management plans to convert a significant portion of existing customers from seat-based to credit-based models over the next 12 to 18 months. While this introduces near-term revenue volatility, the company expects it to align monetization more closely with actual usage, especially as AI tools proliferate in enterprise environments.

• Focus on upmarket and data operations: The company is emphasizing its most profitable segment—non-seat, data-led operations for large enterprises—where demand remains resilient. This is expected to offset some softness in the software vertical and support healthier gross and net retention metrics over time.

• Ongoing macro and AI-related headwinds: Management anticipates continued uncertainty, particularly in the software vertical, as customers grapple with rapid technology change and budget scrutiny. This environment is reflected in more cautious guidance, with the company prioritizing profitability and operational efficiency during the transition.

Catalysts in Upcoming Quarters

In the upcoming quarters, the StockStory team will be watching (1) the pace at which ZoomInfo’s customers transition to the new consumption-based pricing model and the resulting impact on revenue recognition; (2) whether core upmarket data operations can continue to deliver strong growth and retention; and (3) the degree to which AI integrations and product-led growth initiatives gain traction, particularly as the company phases out downmarket sales resources. Further clarity around customer adoption of new pricing and product interfaces will be a key signpost for a return to growth.

ZoomInfo currently trades at $4.37, down from $6.06 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free).

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