ZoomInfo Technologies Inc. opened down more than 33% on May 27 after cutting its full-year revenue guidance by $62 million, contradicting the chief executive officer's prior statements that the company's upmarket strategy was working. The reversal has prompted a securities fraud investigation by Levi & Korsinsky.
ZoomInfo Technologies Inc. opened down more than 33% on May 27 after slashing its full-year revenue guidance by $62 million.
One quarter ago, the company's chief executive officer told investors the "upmarket strategy is working." The company is now highlighting a "regression" to upmarket growth trajectories, according to the statement announcing the guidance cut.
The $62 million reduction to full-year revenue guidance marks a sharp reversal from the company's prior outlook. ZoomInfo did not disclose updated revenue ranges or earnings per share estimates in the announcement.
The guidance cut raises questions about demand for ZoomInfo's sales intelligence platform amid a broader slowdown in enterprise software spending. The securities fraud investigation will examine whether the company and its executives made materially false statements about the upmarket strategy's performance.
Levi & Korsinsky, a shareholder rights law firm, announced the investigation on May 27, focusing on whether ZoomInfo issued misleading statements about its business trajectory. The firm is seeking to recover losses for investors who purchased ZoomInfo securities.
The guidance revision comes as enterprise software companies face increasing scrutiny over growth sustainability. ZoomInfo's upmarket push — targeting larger enterprise customers with higher-value contracts — had been a central pillar of the company's growth narrative.
The 33% decline puts ZoomInfo on track for its worst single-day drop since going public. Investors will watch for the company's next quarterly filing for updated segment-level data on upmarket customer acquisition and retention rates.
This article is for informational purposes only and does not constitute investment advice.
