ZoomInfo Technologies Inc.

ZI

US98980F1049

IT Services & Consulting

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ZOOMINFO TECHNOLOGIES INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)

May 02, 2022 at 05:19 pm EDT

The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with the financial statements and
related notes included in our 2021 Form 10-K, the information included under
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in Part II, Item 7 of our 2021 Form 10-K, and the unaudited
consolidated financial statements and related notes included in Part I, Item 1
of this Form 10-Q. In addition to historical data, the following discussion
contains forward-looking statements that involve risks and uncertainties. Our
actual results could differ materially from those discussed in our
forward-looking statements as a result of various factors, including but not
limited to those discussed under "Cautionary Statement Regarding Forward-Looking
Statements" in this Form 10-Q and under "Risk Factors" in Part I, Item 1A of our
2021 Form 10-K.

References in this Form 10-Q to "ZoomInfo Technologies Inc." refer to ZoomInfo
Technologies Inc. and not to any of its subsidiaries unless the context
indicates otherwise. References in this Form 10-Q to "ZoomInfo," the "Company,"
"we," "us," and "our" refer (1) prior to the consummation of the Reorganization
Transactions, to ZoomInfo OpCo and its consolidated subsidiaries, and (2) after
the consummation of the Reorganization Transactions, to ZoomInfo Technologies
Inc. and its consolidated subsidiaries unless the context indicates otherwise.
Numerical figures included in this Form 10-Q have been subject to rounding
adjustments. Accordingly, numerical figures shown as totals in various tables
may not be arithmetic aggregations of the figures that precede them.

Overview

ZoomInfo is a global leader in modern go-to-market software, data, and intelligence for sales, marketing, operations and recruiting professionals teams.



RevOS - our modern, cloud-based operating system for revenue professionals
allows sales, marketing, operations, and recruiting teams to shorten sales
cycles and increase win rates by delivering the right message to the right
person, at the right time, in the right way. We do this by delivering timely
competitive intelligence and offering services that make reaching prospects fast
and easy.

ZoomInfo, formerly known as DiscoverOrg, was co-founded in 2007 by our CEO, Henry Schuck. We have grown our company by developing innovative ways of gathering and improving our data and insights, and using intelligent automation to put those insights into action.

Today, our company defines the modern go-to-market technology stack across three distinct layers that build upon each other:



•Our Intelligence Layer is the foundation of our data-driven strategies. Our
best-in-class data, curated through first- and third-party sources, includes
billions of data points about companies and contacts, such as intent, hierarchy,
location, and financial information.

•Our Orchestration Layer stitches together and enriches our data sources. At
this stage, our products assign and route data, leads, and insights to the
appropriate people. This creates a "living" dataset that is continuously updated
and can be used to power automated business workflows. Our services connect with
major CRM providers.

•Our Engagement Layer allows sales, marketing, operations, and recruiting
professionals to put data-driven insights into action to reach, influence, and
communicate with prospects and customers. In MarketingOS, marketers drive
awareness, lead generation, and deal acceleration campaigns through
account-based-marketing, advertising, and onsite conversion optimization tools
as well as Chat for intelligent onsite experiences through live chat and
chatbots. In SalesOS, frontline teams, managers, and leaders use Engage for
multi-touch and multi-channel sales engagement as well as Chorus for call and
web meeting recording, transcription, insight generation and coaching.


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We generate substantially all of our revenue from sales of subscriptions to our
platform. Our subscription fees include the use of our platform and access to
customer support. Subscriptions generally range from one to three years in
length, and over 35% of our contracts (based on annualized value) are multi-year
agreements. We typically bill our customers at the beginning of each annual,
semi-annual, or quarterly period and recognize revenue ratably over the term of
the subscription period.

We sell our software to both new and existing customers. A limited number of
customers continue to renew their subscriptions to pre-acquisition versions of
the Pre-Acquisition ZI and DiscoverOrg solutions. We price our subscriptions
based on the functionality, users, and records under management that are
included in each product edition. Our paid platforms are SalesOS, MarketingOS,
OperationsOS, TalentOS (with add-on options for some platforms), and we have a
free Community Edition.

Recent Developments

COVID-19

The ongoing COVID-19 pandemic continues to have unpredictable and rapidly
shifting impacts on global financial markets, economies, and business practices.
The extent and continued impact of the pandemic on our operational and financial
condition will depend on certain developments, including, but not limited to:
the duration and spread of the outbreak, including the impact of new variants of
the COVID-19 virus; global government responses to the pandemic, including
continued vaccine availability, deployment, and efficacy; the impact on the
health and welfare of our employees and their families; the impact on our
customers and our sales cycles; the impact on customer, industry, or employee
events; delays in hiring and onboarding new employees; and the effects on our
partners, vendors, the labor market, and supply chains, all of which are
uncertain and cannot be predicted. Furthermore, because of our largely
subscription-based business model, the effect of the pandemic may not be fully
reflected in our results of operations and overall financial condition until
future periods, if at all.

To address the safety and health of our employees during the pandemic, in the
first quarter of 2020 we temporarily closed all of our offices and enabled our
entire workforce to work remotely. Throughout 2021 and the first quarter of
2022, most of our workforce continued to work remotely. The impact, if any, of
these and any additional operational changes we may implement is uncertain, but
changes we have implemented to date have not affected, and are not expected to
materially affect, our ability to maintain operations, including financial
reporting systems, internal control over financial reporting, and disclosure
controls and procedures. See "Human Capital" in Part I, Item 1 and "Risk
Factors" in Part I, Item 1A of our 2021 Form 10-K.

Corporate Structure Simplification Transactions



In August 2021, the Company completed a series of reorganization transactions to
simplify its corporate structure, including the distribution of shares of common
stock of RKSI Acquisition Corp ("RKSI") from ZoomInfo Holdings LLC to ZoomInfo
HoldCo, the merger of RKSI with and into ZoomInfo HoldCo with ZoomInfo HoldCo
surviving, and the merger of ZoomInfo HoldCo with and into the Company with the
Company surviving. Prior to the consummation of the HoldCo Merger, all holders
of HoldCo Units (other than the Company) exchanged their HoldCo Units and paired
shares of Class B common stock of the Company for shares of Class A common stock
of the Company pursuant to the terms of the limited liability company agreement
of ZoomInfo HoldCo.


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UP-C Corporate Structure and Multi-Class Voting Structure Elimination



In September 2021, the Board of Directors unanimously approved streamlining the
Company's corporate structure and governance by eliminating the Company's
umbrella partnership-C-corporation ("UP-C") and multi-class voting structure. In
October 2021, the Company implemented this reorganization, pursuant to which (i)
a subsidiary of ZoomInfo Technologies Inc. (formerly known as ZoomInfo NewCo
Inc.) ("New ZoomInfo") merged with and into ZoomInfo Intermediate Inc. ("Old
ZoomInfo"), formerly known as ZoomInfo Technologies Inc., which resulted in New
ZoomInfo becoming the direct parent company of Old ZoomInfo, and (ii)
immediately thereafter, another subsidiary of New ZoomInfo merged with and into
ZoomInfo Holdings LLC ("ZoomInfo OpCo"), which resulted in ZoomInfo OpCo
becoming a subsidiary of New ZoomInfo (the combined transaction described in (i)
and (ii), the "Holding Company Reorganization"). As a result of the Holding
Company Reorganization, New ZoomInfo became the successor issuer and reporting
company to Old ZoomInfo pursuant to Rule 12g-3(a) under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and replaced the Predecessor
Registrant as the public company trading on the Nasdaq Global Select Market (the
"Nasdaq") under the ticker symbol "ZI.".

After the consummation of the Holding Company Reorganization, the only class of
common stock of the New ZoomInfo remaining issued and outstanding is the Class A
common stock. We do not intend to issue any shares of Class B common stock or
Class C common stock of New ZoomInfo.

Key Factors Affecting Our Performance

We believe that the growth and future success of our business depends on many factors, including the following:

Continuing to Acquire New Customers



We are focused on continuing to grow the number of customers that use our
platform. The majority of revenue growth when comparing the three months ended
March 31, 2022 to the three months ended March 31, 2021 was the result of new
customers added over the last 12 months. Our operating results and growth
prospects will depend in part on our ability to continue to attract new
customers. Additionally, acquiring new customers strengthens the power of our
contributory network. We plan to continue to invest in our efficient
go-to-market effort to acquire new customers.

Delivering Additional High-Value Solutions to Our Existing Customers



Many of our customers purchase additional high-value solutions as they expand
their use of our platform. Customers add additional services and/or upgrade
their platform. We believe there is a significant opportunity for expansion with
our existing customers through additional solutions.

Expanding Relationships with Existing Customers



Many of our customers increase spending with us by adding users or integrating
incremental data as they increase their use of our platform. Several of our
largest customers have expanded the deployment of our platform across their
organizations following their initial deployment. We believe there is a
significant opportunity to add additional users and data integration within our
existing customers.


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We believe that expanding the value that we provide to our customers and the
corresponding revenue generated as a result is an important measure of the
health of our business. We monitor net revenue retention to measure that growth.
Net revenue retention is an annual metric that we calculate based on customers
that were contracted for services at the beginning of the year, or, for those
that became customers through an acquisition, at the time of the acquisition.
Net revenue retention is calculated as: (a) the annual contract value ("ACV")
for those customers at the end of the year divided by (b) ZoomInfo ACV at the
beginning of the year plus the ACV of acquired companies at the time of
acquisition. Our net annual retention rate was 116% for the year ended
December 31, 2021. We also measure our success in expanding relationships with
existing customers by the number of customers that contract for more than
$100,000 in ACV. As of March 31, 2022, we had 1,623 customers with over $100,000
in ACV.

Factors Affecting the Comparability of Our Results of Operations



As a result of a number of factors, our historical results of operations are not
comparable from period to period and may not be comparable to our financial
results of operations in future periods. Set forth below is a brief discussion
of the key factors impacting the comparability of our results of operations.

Impact of the Reorganization Transactions

ZoomInfo Technologies Inc. is a corporation for U.S. federal and state income
tax purposes. Our accounting predecessor, ZoomInfo OpCo, was and is treated as a
flow-through entity for U.S. federal income tax purposes, and as such, only
certain subsidiaries that were organized as corporations for U.S. federal income
tax purposes have been subject to U.S. federal income tax at the entity level
historically. Accordingly, unless otherwise specified, the historical results of
operations and other financial information set forth in this Form 10-Q only
include a provision for U.S. federal income tax for income allocated to those
subsidiaries that were organized as corporations for U.S. federal income tax
purposes. Following the completion of the Reorganization Transactions, ZoomInfo
Technologies Inc. pays U.S. federal and state income taxes as a corporation on
its share of our taxable income.

ZoomInfo OpCo is the predecessor of ZoomInfo Technologies Inc. for financial
reporting purposes. As a result, the consolidated financial statements of
ZoomInfo Technologies Inc. recognize the assets and liabilities received in the
reorganization at their historical carrying amounts, as reflected in the
historical consolidated financial statements of ZoomInfo OpCo, the accounting
predecessor.

In addition, in connection with the Reorganization Transactions and the IPO, we
entered into the tax receivable agreements described in Note 17 - Income Taxes
to our unaudited consolidated financial statements included in Part I, Item 1 of
this Form 10-Q.

Initial Public Offering

In June 2020, the company completed its IPO which significantly impacted our
cash, first and second lien indebtedness, and temporary and permanent equity
balances. See "-Recent Developments." The IPO, driven by the associated first
and second lien term loan repayments, significantly reduced our interest expense
relative to historical results.

Impact of Acquisitions



We seek to grow through both internal development and the acquisition of
businesses that broaden and strengthen our platform. Our recent acquisitions
include Insent in June 2021, Chorus.ai in July 2021, RingLead in September 2021,
and Comparably, Inc. and Dogpatch Advisors, LLC in April 2022. As discussed
below under "-Results of Operations," these 2021 acquisitions have been a driver
of our revenue, cost of service, operating expense, and interest expense growth.
Purchase accounting requires that all assets acquired and liabilities assumed be
recorded at fair value on the acquisition date, including unearned revenue.
Revenue from contracts that are impacted by the estimate of fair value of the
unearned revenue upon acquisition will be recorded based on the fair value until
such contract is terminated or renewed, which will differ from the receipts
received by the acquired company allocated over the service period for the same
reporting periods.


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Equity-Based Compensation

New awards and modifications that took place as part of the Reorganization Transactions and the IPO contributed to elevated equity-based compensation expense in 2020 relative to 2019 and 2021 relative to 2020. See Note 15 - Equity-based Compensation for unamortized equity-based compensation costs related to each type of equity-based incentive award.

Impact of the Holding Company Reorganization



In September 2021, the Board of Directors unanimously approved streamlining the
Company's corporate structure and governance by eliminating the Company's UP-C
and multi-class voting structure. In October 2021, the Company implemented the
Holding Company Reorganization. As a result of the Holding Company
Reorganization, New ZoomInfo became the successor issuer and reporting company
to Old ZoomInfo pursuant to Rule 12g-3(a) under the Exchange Act, and replaced
Old ZoomInfo as the public company trading on the Nasdaq under Old ZoomInfo's
ticker symbol "ZI." In addition, New ZoomInfo changed its name to "ZoomInfo
Technologies Inc." and Old ZoomInfo changed its name to "ZoomInfo Intermediate
Inc."

Accordingly, upon consummation of the Holding Company Reorganization, Old
ZoomInfo stockholders automatically became stockholders of New ZoomInfo, on a
one-for-one basis, with the same number and ownership percentage of shares they
held in Old ZoomInfo immediately prior to the effective time of the Holding
Company Reorganization.

Old ZoomInfo is the predecessor of New ZoomInfo for financial reporting
purposes. As a result, the consolidated financial statements of New ZoomInfo
recognize the assets and liabilities received in the reorganization at their
historical carrying amounts, as reflected in the historical consolidated
financial statements of Old ZoomInfo, the accounting predecessor.

Non-GAAP Financial Measures



In addition to our results determined in accordance with U.S. GAAP, we believe
certain non-GAAP measures are useful in evaluating our operating performance.
These measures include, but are not limited to, Adjusted Operating Income,
Adjusted Operating Income Margin, Adjusted EBITDA, Adjusted Net Income, and
Adjusted Net Income per diluted share and are used by management in making
operating decisions, allocating financial resources, internal planning and
forecasting, and for business strategy purposes. We believe that non-GAAP
financial information is useful to investors because it eliminates certain items
that affect period-over-period comparability, and it provides consistency with
past financial performance and additional information about our underlying
results and trends by excluding certain items that may not be indicative of our
business, results of operations, or outlook.

We view Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted
EBITDA, Adjusted Net Income and Adjusted Net Income per diluted share as
operating performance measures. We believe that the most directly comparable
U.S. GAAP financial measure to Adjusted Operating Income is U.S. GAAP operating
income. We believe that the most directly comparable U.S. GAAP financial measure
to Adjusted Operating Income Margin is U.S. GAAP operating income divided by
U.S. GAAP revenue. We believe that the most directly comparable U.S. GAAP
financial measure to Adjusted EBITDA and Adjusted Net Income is U.S. GAAP Net
Income, and the most directly comparable U.S. GAAP financial measure to Adjusted
Net Income per diluted share is U.S. GAAP net earnings per diluted share.


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Non-GAAP financial measures are not meant to be considered in isolation or as a
substitute for the comparable GAAP measures, but rather as supplemental
information to our business results. This information should be read only in
conjunction with our consolidated financial statements prepared in accordance
with GAAP. There are limitations to these non-GAAP financial measures because
they are not prepared in accordance with GAAP and may not be comparable to
similarly titled measures of other companies due to potential differences in
methods of calculation and items or events being adjusted. In addition, other
companies may use different measures to evaluate their performance, all of which
could reduce the usefulness of our non-GAAP financial measures as tools for
comparison. A reconciliation is provided below for each non-GAAP financial
measure to the most directly comparable financial measure stated in accordance
with GAAP.

Adjusted Operating Income, Adjusted Operating Income Margin, and Adjusted Net Income



We define Adjusted Operating Income as income from operations plus (i) impact of
fair value adjustments to acquired unearned revenue, (ii) amortization of
acquired technology and other acquired intangibles, (iii) equity-based
compensation expense, (iv) restructuring and transaction-related expenses, and
(v) integration costs and acquisition-related compensation. We exclude the
impact of fair value adjustments to acquired unearned revenue and amortization
of acquired technology and other acquired intangibles, as well as equity-based
compensation, because these are non-cash expenses or non-cash fair value
adjustments and we believe that excluding these items provides meaningful
supplemental information regarding performance and ongoing cash-generation
potential. We exclude restructuring and transaction-related expenses, as well as
integration costs and acquisition-related compensation, because such expenses
are episodic in nature and have no direct correlation to the cost of operating
our business on an ongoing basis. Adjusted Operating Income is presented because
it is used by management to evaluate our financial performance and for planning
and forecasting purposes. Additionally, we believe that it and similar measures
are widely used by securities analysts and investors as a means of evaluating a
company's operating performance. Adjusted Operating Income should not be
considered as an alternative to operating income as an indicator of operating
performance.

We define Adjusted Net Income as Adjusted Operating Income less (i) interest
expense, net (ii) other (income) expense, net, excluding TRA liability
remeasurement expense (benefit) and (iii) income tax expense (benefit) including
incremental tax effects of adjustments to arrive at Adjusted Operating Income
and current tax benefits related to the TRA. Adjusted Net Income is presented
because it is used by management to evaluate our financial performance and for
planning and forecasting purposes. Additionally, we believe that it and similar
measures are widely used by securities analysts and investors as a means of
evaluating a company's operating performance. Adjusted Net Income should not be
considered as an alternative to cash flows from operating activities as a
measure of liquidity or as an alternative to operating income or net income as
indicators of operating performance.


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The following table presents a reconciliation of Net income (loss) to Adjusted
Net Income and Income (loss) from operations to Adjusted Operating Income for
the periods presented:

                                                                           Three Months Ended
                                                                                March 31,
($ in millions)                                                                      2022                2021
Net income (loss)                                                                $      6.2          $    (33.9)
Add (less): Expense (benefit) from income taxes                                        13.0                49.7
Add: Interest expense, net                                                             11.8                 6.5
Add: Loss on debt modification and extinguishment                                         -                 5.9
Add (less): Other expense (income), net(a)                                              1.4                (0.2)
Income (loss) from operations                                                          32.4                28.0

Add: Impact of fair value adjustments to acquired unearned revenue(b)

                                                                              1.1                 0.6
Add: Amortization of acquired technology                                               11.2                 6.7
Add: Amortization of other acquired intangibles                                         5.3                 4.8
Add: Equity-based compensation                                                         42.5                18.1
Add: Restructuring and transaction-related expenses(c)                                  2.5                 4.4
Add: Integration costs and acquisition-related expenses(d)                              0.6                 3.4
Adjusted Operating Income                                                        $     95.7          $     66.1
Less: Interest expense, net                                                           (11.8)               (6.5)

Less (add): Other expense (income), net, excluding TRA liability remeasurement (benefit) expense

                                                        (0.6)                0.2
Add (less): Benefit (expense) from income taxes                                       (13.0)              (49.7)
Less: Tax impacts of adjustments to net income (loss)                                   3.5                40.6
Adjusted Net Income

$ 73.8 $ 50.7



Shares for Adjusted Net Income Per Share(e)                                             409                 404
Adjusted Net Income Per Share

$ 0.18 $ 0.13

__________________


(a)Primarily represents revaluations on tax receivable agreement liability and
foreign exchange remeasurement gains and losses.
(b)Represents the impact of fair value adjustments to acquired unearned revenue
relating to services billed by an acquired company, prior to our acquisition of
that company. These adjustments represent the difference between the revenue
recognized based on management's estimate of fair value of acquired unearned
revenue and the receipts billed prior to the acquisition less revenue recognized
prior to the acquisition.
(c)Represents costs directly associated with acquisition or disposal activities,
including employee severance and termination benefits, contract termination fees
and penalties, and other exit or disposal costs. For the three months ended
March 31, 2022, this expense related primarily to transition and retention
payments related to 2021 acquisitions, For the three months ended March 31,
2021, this expense related primarily to impairment and accelerated depreciation
related to the Company's Waltham office relocation.
(d)Represents costs directly associated with integration activities for
acquisitions and acquisition-related compensation, which includes transaction
bonuses and retention awards. For the three months ended March 31, 2022, this
expense related to retention awards from the acquisitions of Clickagy and
Everstring, and professional fees relating to integration projects.For the three
months ended March 31, 2021, this expense related primarily to cash vesting
payments from the acquisition of Pre-Acquisition ZI. This expense is included in
cost of service, sales and marketing expense, research and development expense,
and general and administrative expense as follows:

                                                                         Three Months Ended
                                                                             March 31,
($ in millions)                                                                    2022                2021
Cost of service                                                                $      0.1          $      0.5
Sales and marketing                                                                   0.1                 0.6
Research and development                                                              0.3                 1.8
General and administrative                                                            0.1                 0.5
Total integration costs and acquisition-related compensation                   $      0.6          $      3.4



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(e)Diluted earnings per share is computed by giving effect to all potential
weighted average Class A common stock, Class C common stock, and any securities
that are convertible into Class A common stock, including options and restricted
stock units. The dilutive effect of outstanding awards and convertible
securities is reflected in diluted earnings per share by application of the
treasury stock method, excluding deemed repurchases assuming proceeds from
unrecognized compensation as required by GAAP. Shares and grants issued in
conjunction with the IPO were assumed to be issued at the beginning of the
period.

We define Adjusted Operating Income Margin as Adjusted Operating Income divided
by the sum of revenue and the impact of fair value adjustments to acquired
unearned revenue.

                                                                      Three Months Ended
                                                                           March 31,
($ in millions)                                                                 2022                2021
Income (loss) from operations                                               $     32.4          $     28.0
Adjusted Operating Income

$ 95.7 $ 66.1



Revenue                                                                          241.7               153.3
Impact of fair value adjustments to acquired unearned revenue                      1.1                 0.6
Revenue for adjusted operating margin calculation                           $    242.8          $    154.0
Operating Income Margin                                                             13  %               18  %
Adjusted Operating Income Margin                                                    39  %               43  %


Adjusted Operating Income for the three months ended March 31, 2022 was
$95.7 million and represented an Adjusted Operating Income Margin of 39%.
Adjusted Operating Income for the three months ended March 31, 2021 was
$66.1 million and represented an Adjusted Operating Income Margin of 43%. The
increase of $29.6 million, or 45%, was driven primarily from the growth in
revenue driven by additional customers and increasing revenue from existing
customers. Adjusted Operating Income Margin decreased to 39% in the three months
ended March 31, 2022 from 43% in the three months ended March 31, 2021 due to
incremental investment in research & development relative to sales related to
new services and acquisitions and incremental investment in sales & marketing
capacity that has helped accelerate revenue growth, as well as general and
administration costs to support incremental public company related requirements.

Adjusted EBITDA



EBITDA is defined as earnings before debt-related costs, including interest and
loss on debt modification and extinguishment, provision for taxes, depreciation,
and amortization. Management further adjusts EBITDA to exclude certain items of
a significant or unusual nature, including other (income) expense, net, impact
of certain non-cash items, such as fair value adjustments to acquired unearned
revenue and equity-based compensation, restructuring and transaction-related
expenses, and integration costs and acquisition-related compensation. We exclude
these items because these are non-cash expenses or non-cash fair value
adjustments, which we do not consider indicative of performance and ongoing
cash-generation potential or are episodic in nature and have no direct
correlation to the cost of operating our business on an ongoing basis. Adjusted
EBITDA is presented because it is used by management to evaluate our financial
performance and for planning and forecasting purposes. Additionally, we believe
that it and similar measures are widely used by securities analysts and
investors as a means of evaluating a company's operating performance. Adjusted
EBITDA should not be considered as an alternative to cash flows from operating
activities as a measure of liquidity or as an alternative to operating income or
net income as indicators of operating performance.


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The following table presents a reconciliation of net income (loss) to Adjusted EBITDA for the periods presented:



                                                                           Three Months Ended
                                                                                March 31,
($ in millions)                                                                      2022                2021
Net income (loss)                                                                $      6.2          $    (33.9)
Add (less): Expense (benefit) from income taxes                                        13.0                49.7
Add: Interest expense, net                                                             11.8                 6.5
Add: Loss on debt modification and extinguishment                                         -                 5.9
Add: Depreciation                                                                       3.5                 3.9
Add: Amortization of acquired technology                                               11.2                 6.7
Add: Amortization of other acquired intangibles                                         5.3                 4.8
EBITDA                                                                                 51.0                43.6
Add (less): Other expense (income), net(a)                                              1.4                (0.2)

Add: Impact of fair value adjustments to acquired unearned revenue(b)

                                                                              1.1                 0.6
Add: Equity-based compensation expense                                                 42.5                18.1

Add: Restructuring and transaction related expenses (excluding depreciation)(c)

                                                                        2.5                 3.2
Add: Integration costs and acquisition-related expenses(d)                              0.6                 3.4
Adjusted EBITDA                                                                  $     99.1          $     68.8


__________________
(a)Primarily represents revaluations on tax receivable agreement liability and
foreign exchange remeasurement gains and losses.
(b)Represents the impact of fair value adjustments to acquired unearned revenue
relating to services billed by an acquired company, prior to our acquisition of
that company. These adjustments represent the difference between the revenue
recognized based on management's estimate of fair value of acquired unearned
revenue and the receipts billed prior to the acquisition less revenue recognized
prior to the acquisition.
(c)Represents costs directly associated with acquisition or disposal activities,
including employee severance and termination benefits, contract termination fees
and penalties, and other exit or disposal costs. For three months ended March
31, 2022, this expense related primarily to transition and retention payments
related to 2021 acquisitions, For the three months ended March 31, 2021, this
expense related primarily to impairment and accelerated depreciation related to
the Company's Waltham office relocation.
(d)Represents costs directly associated with integration activities for
acquisitions and acquisition-related compensation, which includes transaction
bonuses and retention awards. For the three months March 31, 2022, this expense
related to retention awards from the acquisitions of Clickagy and Everstring,
and professional fees relating to integration projects.For the three months
ended March 31, 2021, this expense related primarily to cash vesting payments
from the acquisition of Pre-Acquisition ZI. This expense is included in cost of
service, sales and marketing expense, research and development expense, and
general and administrative expense as follows:
                                                                 Three Months Ended March
                                                                            31,
($ in millions)                                                                      2022       2021
Cost of service                                                                     $ 0.1      $ 0.5
Sales and marketing                                                                   0.1        0.6
Research and development                                                              0.3        1.8
General and administrative                                                            0.1        0.5
Total integration costs and acquisition-related
compensation

$ 0.6 $ 3.4




Adjusted EBITDA for the three months ended March 31, 2022 was $99.1 million, an
increase of $30.3 million, or 44%, relative to the three months ended March 31,
2021. This increase was driven primarily from the growth in revenue and
additional customers in 2022 and 2021.


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Components of Our Results of Operations

Revenue



We derive 99% of our revenue from subscription services and the remainder from
recurring usage-based services. Our subscription services consist of our SaaS
applications. Pricing of our subscription contracts are generally based on the
functionality provided, the number of users that access our applications, and
the amount of data that the customer integrates into their systems. Our
subscription contracts typically have a term ranging from one to three years and
are non-cancelable. We typically bill for services in advance either annually,
semi-annually, or quarterly, and we typically require payment at the beginning
of each annual, semi-annual, or quarterly period.

Subscription revenue is generally recognized ratably over the contract term
starting with when our service is made available to the customer. Recurring
usage-based revenue is recognized in the period services are utilized by our
customers. The amount of revenue recognized reflects the consideration we expect
to be entitled to receive in exchange for these services. We record a contract
asset when revenue recognized on a contract exceeds the billings to date for
that contract.

Unearned revenue results from cash received or amounts billed to customers in
advance of revenue recognized upon the satisfaction of performance obligations.
The unearned revenue balance is influenced by several factors, including
purchase accounting adjustments, seasonality, the compounding effects of
renewals, invoice duration, invoice timing, dollar size, and new business timing
within the period. The unearned revenue balance does not represent the total
contract value of annual or multi-year, non-cancelable subscription agreements.

Cost of Service



Cost of service, excluding amortization of acquired technology. Cost of service,
excluding amortization of acquired technology includes direct expenses related
to the support and operations of our SaaS services and related to our research
teams, including salaries, benefits, equity-based compensation, and related
expenses, such as employer taxes, allocated overhead for facilities, IT,
third-party hosting fees, third-party data costs, and amortization of internally
developed capitalized software.

We anticipate that we will continue to invest in costs of service and that costs
of service as a percentage of revenue will stay consistent or modestly decrease
as we realize operating leverage in the business.

Amortization of acquired technology. Amortization of acquired technology includes amortization expense for technology acquired in business combinations.

We anticipate that amortization of acquired technology will increase if we make additional acquisitions in the future.

Gross Profit and Gross Margin



Gross profit is revenue less cost of service, and gross margin is gross profit
as a percentage of revenue. Gross profit has been and will continue to be
affected by various factors, including leveraging economies of scale, the costs
associated with third-party hosting services and third-party data, the level of
amortization of acquired technology, and the extent to which we expand our
customer support and research organizations. We expect that our gross margin
will fluctuate from period to period depending on the interplay of these various
factors.

Operating Expenses

Our operating expenses consist of sales and marketing, research and development,
general and administrative, restructuring and transaction expenses, and
amortization of acquired intangibles (other than acquired technology). The most
significant component of our operating expenses is personnel costs, which
consists of salaries, bonuses, sales commissions, equity-based compensation, and
other employee-related benefits. Operating expenses also include overhead costs
for facilities, technology, professional fees, depreciation and amortization
expense, and marketing.


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Sales and marketing. Sales and marketing expenses primarily consist of employee
compensation such as salaries, bonuses, sales commissions, equity-based
compensation, and other employee-related benefits for our sales and marketing
teams, as well as overhead costs, technology, and marketing programs. Sales
commissions and related payroll taxes directly related to contract acquisition
are capitalized and recognized as expenses over the estimated period of benefit.

We anticipate that we will continue to invest in sales and marketing capacity to
enable future growth. We anticipate that sales and marketing expense excluding
equity-based compensation will fluctuate from period to period depending on the
interplay of our growing investments in sales and marketing capacity excluding
equity-based compensation, the recognition of revenue, and the amortization of
contract acquisition costs.

Research and development. Research and development expenses support our efforts
to enhance our existing platform and develop new software products. Research and
development expenses primarily consist of employee compensation such as
salaries, bonuses, equity-based compensation, and other employee-related
benefits for our engineering and product management teams, as well as overhead
costs. Research and development expenses do not reflect amortization of
internally developed capitalized software. We believe that our core technologies
and ongoing innovation represent a significant competitive advantage for us, and
we expect our research and development expenses to continue to increase as we
invest in research and development resources to further strengthen and enhance
our solutions.

We anticipate that we will continue to invest in research and development in
order to develop new features and functionality to drive incremental customer
value in the future and that research and development expense as a percentage of
revenue will modestly increase in the long term.

General and administrative. General and administrative expenses primarily
consist of employee-related costs such as salaries, bonuses, equity-based
compensation, and other employee related benefits for our executive, finance,
legal, human resources, IT, and business operations and administrative teams, as
well as overhead costs. Additionally, we incur expenses for professional fees
including legal services, accounting, and other consulting services, including
those associated with operating as a public company.

We expect general and administrative expenses as a percentage of revenue to stay consistent or modestly decrease as we realize operating leverage in the business.



Amortization of other acquired intangibles. Amortization of acquired intangibles
primarily consists of amortization of customer relationships, trade names, and
brand portfolios.

We anticipate that amortization of other acquired intangibles will increase if we make additional acquisitions in the future.



Restructuring and transaction-related expenses. Restructuring and transaction
expenses primarily consist of various restructuring and acquisition activities
we have undertaken to achieve strategic or financial objectives. Restructuring
and acquisition activities include, but are not limited to, consolidation of
offices and responsibilities, office relocation, administrative cost structure
realignment, and acquisition-related professional services fees.

We anticipate that restructuring and transaction expenses will be correlated
with future acquisition activity or strategic restructuring activities, which
could be greater than or less than our historic levels.

Interest Expense, Net

Interest expense represents the interest payable on our debt obligations and the amortization of debt discounts and debt issuance costs, less interest income.

We anticipate that interest expense could be impacted by changes in variable interest rates or the issuance of additional debt.

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Loss on Debt Modification and Extinguishment



Loss on debt modification and extinguishment consists of prepayment penalties
and impairment of deferred financing costs associated with the modification or
extinguishment of debt, as well as new fees incurred with third parties in
connection with debt modifications.

We anticipate that losses related to debt extinguishment will only occur if we extinguish indebtedness before the contractual repayment dates.

Other (Income) Expense, Net



Other (income) expense, net consists primarily of the revaluation of tax
receivable agreement liabilities and foreign currency realized and unrealized
gains and losses related to the impact of transactions denominated in a foreign
currency.

Changes to existing tax law including changes to the corporate income tax rates
and the Company's state tax footprint could lead to substantial revaluations of
the tax receivable agreement liability recorded through other income and
expense, net.

The magnitude of other income and expenses, net may increase as we expand operations internationally and add complexity to our operations.

Income Tax Expense (Benefit)



ZoomInfo OpCo is currently treated as a pass-through entity for U.S. federal
income tax purposes and most applicable state and local income tax purposes.
Income tax expense (benefit), Deferred tax assets, Deferred tax liabilities, and
liabilities for unrecognized tax benefits reflect management's best assessment
of estimated current and future taxes to be paid by our corporate subsidiaries
and, to the extent paid directly by our limited liability companies and
partnerships that are treated as partnerships for tax purposes, our
partnerships. Our corporate subsidiary, RKSI Acquisition Corporation, was
subject to income taxes in the United States and held a noncontrolling interests
in our subsidiary, ZoomInfo Technologies LLC. ZoomInfo Technologies LLC was
treated as a partnership for U.S. federal and most applicable state and local
income tax purposes. Any taxable income or loss generated by ZoomInfo
Technologies LLC is passed through to and included in the taxable income or loss
of its partners, including ZoomInfo LLC and RKSI Acquisition Corporation.
However, because RKSI Acquisition Corporation is subject to income taxes in the
United States, income allocated to such corporate subsidiary for tax purposes
reduced the taxable income allocated to and distributions made to ZoomInfo OpCo.
During the three months ended September 30, 2021, RKSI Acquisition Corporation
was distributed up to ZoomInfo HoldCo followed by the merger of RKSI Acquisition
Corporation with and into ZoomInfo HoldCo and the merger of ZoomInfo HoldCo with
and into ZoomInfo Technologies Inc. Significant judgments and estimates are
required in determining our consolidated income tax expense. Refer to Note 2 -
Basis of Presentation and Summary of Significant Accounting Policies to our
unaudited consolidated financial statements included in Part I, Item 1 of this
Form 10-Q for additional information. During the three months ended December 31,
2021, ZoomInfo Technologies LLC made an election to be taxed as a corporation.
Therefore, taxable income from the operations will no longer flow up to ZoomInfo
Intermediate Inc.


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After consummation of the Reorganization Transactions, ZoomInfo Intermediate
Inc. became subject to U.S. federal income taxes with respect to our allocable
share of any U.S. taxable income of ZoomInfo OpCo, and is taxed at the
prevailing corporate tax rates. ZoomInfo Technologies Inc. is treated as a U.S.
corporation for U.S. federal, state, and local income tax purposes. Accordingly,
a provision for income taxes will be recorded for the anticipated tax
consequences of our reported results of operations for federal income taxes. In
addition to tax expenses, we also will incur expenses related to our operations,
as well as payments under the tax receivable agreements, which we expect to be
significant. In addition, because RKSI Acquisition Corporation (prior to its
merger with and into ZoomInfo HoldCo) and Zebra Acquisition Corporation (prior
to its merger with RKSI Acquisition Corporation) will continue to be subject to
income taxes in the United States, income allocated to such corporate
subsidiaries for tax purposes will reduce the distributions made to ZoomInfo
OpCo, thereby reducing our allocable share of U.S. taxable income of ZoomInfo
OpCo. See "Risk Factors - Risks Related to Our Organizational Structure" in Part
I, Item 1A of our 2021 Form 10-K.

Results of Operations

The following table presents our results of operations for the three months ended March 31, 2022 and 2021:



                                                                           Three Months Ended
                                                                                March 31,
($ in millions)                                                                      2022                2021
Revenue                                                                          $    241.7          $    153.3

Cost of service:
Cost of service(1)                                                                     32.8                21.4
Amortization of acquired technology                                                    11.2                 6.7
Gross profit                                                                          197.7               125.2

Operating expenses:
Sales and marketing(1)                                                                 84.1                48.8
Research and development(1)                                                            45.6                20.4
General and administrative(1)                                                          27.8                18.8
Amortization of other acquired intangibles                                              5.3                 4.8
Restructuring and transaction-related expenses                                          2.5                 4.4
Total operating expenses                                                              165.3                97.2
Income (loss) from operations                                                          32.4                28.0

Interest expense, net                                                                  11.8                 6.5
Loss on debt modification and extinguishment                                              -                 5.9
Other (income) expense, net                                                             1.4                (0.2)
Income (loss) before income taxes                                                      19.2                15.8
Income tax expense (benefit)                                                           13.0                49.7
Net income (loss)                                                                       6.2               (33.9)

Less: Net income (loss) attributable to noncontrolling interests                          -               (37.1)
Net income (loss) attributable to ZoomInfo Technologies Inc.                     $      6.2          $      3.2



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__________________

(1)Includes equity-based compensation expense as follows:



                                                     Three Months Ended March 31,
($ in millions)                                                                2022        2021
Cost of service                                                              $  4.6      $  3.5
Sales and marketing                                                            16.1         8.4
Research and development                                                       15.6         2.6
General and administrative                                                      6.2         3.6
Total equity-based compensation expense

$ 42.5 $ 18.1

Three Months Ended March 31, 2022 and Three Months Ended March 31, 2021

Revenue. Revenue was $241.7 million for the three months ended March 31, 2022, an increase of $88.4 million, or 58%, as compared to $153.3 million for the three months ended March 31, 2021. This increase was primarily due to the addition of new customers over the past 12 months and net expansion with existing customers. Products acquired within the last 12 months contributed $13.0 million for the three months ended March 31, 2022.



Cost of Service. Cost of service was $44.0 million for the three months ended
March 31, 2022, an increase of $15.9 million, or 57%, as compared to
$28.1 million for the three months ended March 31, 2021. The increase was
primarily due to additional headcount and related salaries and benefit expenses,
increased hosting expense to support new and growing customers, increased
amortization of acquired technology related to prior year acquisitions, and
increased equity-based compensation expense.

Operating Expenses. Operating expenses were $165.3 million for the three months
ended March 31, 2022, an increase of $68.1 million, or 70%, as compared to
$97.2 million for the three months ended March 31, 2021. Excluding equity-based
compensation expenses, operating expenses were $127.4 million for the three
months ended March 31, 2022, an increase of $44.8 million, or 54%, as compared
to $82.6 million for the three months ended March 31, 2021. The increase
excluding equity-based compensation was primarily due to:

•an increase in sales and marketing expense (excluding equity-based
compensation) of $27.6 million, or 68%, to $68.0 million for the three months
ended March 31, 2022, due primarily to additional headcount and related salaries
and benefits expenses added to drive continued incremental sales and support
acquired products, as well as additional commission expense and amortization of
deferred commissions related to obtaining contracts with customers, and
advertising expenses;

•an increase in research and development expense (excluding equity-based
compensation) of $12.2 million, or 69%, to $30.0 million for the three months
ended March 31, 2022, due primarily to additional headcount and related salaries
and benefits expenses added to support continued innovation of our services and
acquired products;

•an increase in general and administrative expense (excluding equity-based
compensation) of $6.4 million, or 42%, to $21.6 million for the three months
ended March 31, 2022, due primarily to additional headcount and related salaries
and benefits expenses to support the larger organization;

•an increase in amortization of acquired intangibles expense of $0.5 million, or 10%, to $5.3 million for the three months ended March 31, 2022, due to amortization expense related to intangible assets from 2021 acquisitions; and



•restructuring and transaction-related expense of $2.5 million for the three
months ended March 31, 2022, primarily due to transition and retention payments
and other costs incurred related to 2021 acquisitions. This represented a
decrease of $1.9 million, or 43%, as compared to expense of $4.4 million for the
three months ended March 31, 2021, which largely represented impairment and
accelerated depreciation related to the Company's Waltham office relocation.


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Interest Expense, Net. Interest expense, net was $11.8 million for the three
months ended March 31, 2022, an increase of $5.3 million, or 82%, as compared to
$6.5 million for the three months ended March 31, 2021. The increase was
primarily due to increases in the amount of total debt, attributable to the
February and July 2021 issuances of Senior Notes.

Income Tax Expense (Benefit). Expense from income taxes for the three months
ended March 31, 2022 was $13.0 million, representing an effective tax rate of
67.6%, as compared to expense from income taxes of $49.7 million for the three
months ended March 31, 2021, representing an effective tax rate of 314.5%. The
decrease in the effective tax rate was primarily due to the recognition of
non-cash tax expense in Q1 2021 resulting from a shift in GAAP basis from a
non-taxable entity to a taxable entity.

Liquidity and Capital Resources



As of March 31, 2022, we had $394.4 million of cash and cash equivalents, $12.4
million of short-term investments, and $250.0 million available under our first
lien revolving credit facility. We have financed our operations primarily
through cash generated from operations and financed various acquisitions through
cash generated from operations supplemented with debt offerings.

We believe that our cash flows from operations and existing available cash and
cash equivalents, together with our other available external financing sources,
will be adequate to fund our operating and capital needs for at least the next
12 months and for the foreseeable future. We are currently in compliance with
the covenants under the credit agreements governing our secured credit
facilities and we expect to remain in compliance with our covenants.

We generally invoice our subscription customers annually, semi-annually, or
quarterly in advance of our subscription services. Therefore, a substantial
source of our cash is from such prepayments, which are included on our Condensed
Consolidated Balance Sheets as unearned revenue. Unearned revenue consists of
billed fees for our subscriptions, prior to satisfying the criteria for revenue
recognition, which are subsequently recognized as revenue in accordance with our
revenue recognition policy. As of March 31, 2022, we had unearned revenue of
$406.1 million, of which $403.8 million was recorded as a current liability and
is expected to be recorded as revenue in the next 12 months, provided all other
revenue recognition criteria have been met.

After the consummation of the Reorganization Transactions, ZoomInfo Intermediate
Inc. (formerly known as ZoomInfo Technologies Inc.) became a holding company
with no material assets other than its ownership of HoldCo Units, and ZoomInfo
HoldCo became a holding company with no material assets other than its ownership
of ZoomInfo OpCo Units. During the quarter ended September 20, 2021, ZoomInfo
HoldCo was merged with and into ZoomInfo Intermediate Inc. During the quarter
ended December 31, 2021, ZoomInfo Intermediate Inc. became a wholly owned
subsidiary of ZoomInfo Technologies Inc. ZoomInfo Technologies Inc. and ZoomInfo
Intermediate Inc. have no independent means of generating revenue. In the event
ZoomInfo Technologies Inc. declares any cash dividend, we expect that ZoomInfo
Technologies Inc to cause ZoomInfo MidCo LLC to make distributions to ZoomInfo
Technologies Inc. in part through distributions to ZoomInfo Intermediate Inc.
and ZoomInfo OpCo, in an amount sufficient to cover such cash dividends declared
by us. Deterioration in the financial condition, earnings, or cash flow of
ZoomInfo MidCo LLC and its subsidiaries for any reason could limit or impair
their ability to pay such distributions. In addition, the terms of our financing
arrangements contain covenants that may restrict ZoomInfo MidCo LLC and its
subsidiaries from paying such distributions, subject to certain exceptions.
Further, 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), as applicable, 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.
See "Risk Factors - Risks Related to Our Organizational Structure" in Part I,
Item 1A of our 2021 Form 10-K.


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Our cash flows from operations, borrowing availability, and overall liquidity
are subject to risks and uncertainties. We may not be able to obtain additional
liquidity on reasonable terms, or at all. In addition, our liquidity and our
ability to meet our obligations and to fund our capital requirements are
dependent on our future financial performance, which is subject to general
economic, financial, and other factors that are beyond our control. Accordingly,
our business may not generate sufficient cash flow from operations and future
borrowings may not be available from additional indebtedness or otherwise to
meet our liquidity needs. If we decide to pursue one or more significant
acquisitions, we may incur additional debt or sell additional equity to finance
such acquisitions, which would result in additional expenses or dilution. See
"Risk Factors" in Part I, Item 1A of our 2021 Form 10-K.

Historical Cash Flows

The following table summarizes our cash flows for the periods presented:



                                                                      Three Months Ended
                                                                           March 31,
($ in millions)                                                                 2022                2021
Net cash provided by (used in) operating activities                         $    105.0          $     93.0
Net cash provided by (used in) investing activities                               (8.6)              (99.0)
Net cash provided by (used in) financing activities                              (10.3)              (33.8)

Net increase (decrease) in cash and cash equivalents and restricted cash

$ 86.1 $ (39.8)

Cash Flows from (used in) Operating Activities



Net cash provided by operations was $105.0 million for the three months ended
March 31, 2022 as a result of net income of $6.2 million, adjusted by non-cash
charges of $89.3 million and the change in our operating assets net of operating
liabilities of $9.5 million. The non-cash charges are primarily comprised of
equity-based compensation of $42.5 million, depreciation and amortization of
$20.0 million, amortization of deferred commission costs of $14.1 million, and a
decrease in deferred tax assets net of deferred tax liabilities of $10.7
million. The change in operating assets net of operating liabilities was
primarily the result of an increase in unearned revenue of $41.9 million, and a
decrease in accounts receivable of $20.1 million, partially offset by a decrease
in accrued expenses and other liabilities of $29.4 million, and an increase in
deferred costs and other assets of $18.6 million.

Net cash provided by operations was $93.0 million for the three months ended
March 31, 2021 as a result of a net loss of $33.9 million, adjusted by non-cash
charges of $99.3 million and partially offset by the change in our operating
assets net of operating liabilities of $27.6 million. The non-cash charges were
primarily comprised of depreciation and amortization of $15.5 million,
equity-based compensation of $18.1 million, loss on early extinguishment of debt
of $5.9 million, amortization of deferred commission costs of $8.7 million, and
a decrease in deferred tax assets net of deferred tax liabilities of
$47.0 million. The change in operating assets net of operating liabilities was
primarily the result of an increase in unearned revenue of $39.2 million, an
increase in accounts payable of $5.2 million, and a decrease in accounts
receivable of $5.1 million, partially offset by a decrease in accrued expenses
and other liabilities of $12.6 million and in deferred costs and other assets of
$9.8 million.


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Restructuring and transaction-related cash costs for the three months ended
March 31, 2022 primarily related to transaction costs related to 2021
acquisitions and tax payments related to entity conversions, which are not
expected to recur. However, we may continue to make future acquisitions as part
of our business strategy which may require the use of capital resources and
drive additional future restructuring and transaction-related cash expenditures
as well as integration and acquisition-related compensation cash costs. During
the three months ended March 31, 2022, and 2021, we incurred the following cash
expenditures:

                                                                           Three Months Ended March 31,
($ in millions)                                                              2022                   2021
Cash interest expense                                                 $           19.5          $      6.8
Restructuring and transaction-related expenses paid in cash(a)        $            8.0          $      1.1
Integration costs and acquisition-related compensation paid in
cash(b)                                                               $              -          $      1.3


$19.5
(a)Represents cash payments directly associated with acquisition or disposal
activities, including employee severance and termination benefits, contract
termination fees and penalties, and other exit or disposal costs. For the three
months ended March 31, 2022, these payments related primarily to transition
bonuses paid related to 2021 acquisitions. For the three months ended March 31,
2021, these payments related primarily to settlement of accrued accretion on the
Pre-Acquisition ZI deferred consideration balance.
(b)Represents cash payments directly associated with integration activities for
acquisitions and acquisition-related compensation, which includes transaction
bonuses and retention awards. For the three months ended March 31, 2021, these
payments related primarily to cash vesting payments from the acquisition of
Pre-Acquisition ZI.

Future demands on our capital resources associated with our debt facilities may
also be impacted by changes in reference interest rates and the potential that
we incur additional debt in order to fund additional acquisitions or for other
corporate purposes. Future demands on our capital resources associated with
transaction expenses and restructuring activities and integration costs and
transaction-related compensation will be dependent on the frequency and
magnitude of future acquisitions and restructuring and integration activities
that we pursue. As part of our business strategy, we expect to continue to
pursue acquisitions of, or investments in, complementary businesses from time to
time; however, we cannot predict the magnitude or frequency of such acquisitions
or investments.

Cash Flows from (used in) Investing Activities



Cash used in investing activities for the three months ended March 31, 2022 was
$8.6 million, consisting of purchases of short-term investments of $11.1
million, the purchase of a convertible note receivable of $10.0 million, and
purchases of property and equipment and other assets of $6.6 million, partially
offset by maturities of short-term investments of $17.0 million, and cash
received for acquisitions of $2.1 million.

Cash used in investing activities for the three months ended March 31, 2021 was $99.0 million, consisting of purchases of short-term investments of $103.6 million and purchases of property and equipment and other assets of $4.7 million, partially offset by maturities of short-term investments of $9.5 million.

As we continue to grow and invest in our business, we expect to continue to invest in property and equipment and opportunistically pursue acquisitions.

Cash Flows from (used in) Financing Activities



Cash used in financing activities for the three months ended March 31, 2022 was
$10.3 million, primarily comprised of payments related to our tax receivable
agreements of $5.0 million, payments of taxes related to net share settlement of
equity awards of $3.8 million, payments of deferred consideration of $1.1
million, payments of issuance fees from prior transactions of $0.7 million,
partially offset by proceeds from exercise of stock options of $0.3 million.

Cash provided by financing activities for the three months ended March 31, 2021
was $33.8 million, consisting of payments on long-term debt of $356.4 million,
tax distributions to equity partners of $10.8 million, and payments of deferred
consideration of $9.2 million, partially offset by proceeds from debt of $350.0
million.

Refer to Note 8 - Financing Arrangements of our consolidated financial statements for additional information related to each of our borrowings.

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Debt Obligations



As of March 31, 2022, the aggregate remaining balance of $600.0 million of first
lien term loans is due, in its entirety, at the contractual maturity date of
February 1, 2026. As of March 31, 2022, the aggregate remaining balance of
$650.0 million of 3.875% Senior Notes is due, in its entirety, at the
contractual maturity date of February 1, 2029. Interest on the Senior Notes is
payable semi-annually in arrears beginning on August 1, 2021. The foregoing
currently represent the only existing required future debt principal repayment
obligations that will require future uses of the Company's cash.

The first lien term debt has a variable interest rate whereby the Company can
elect to use a Base Rate or LIBOR plus an applicable rate. The applicable rate
is 2.00% for Base Rate loans or 3.00% for LIBOR Based Loans, depending on the
Company's leverage. The first lien revolving debt has a variable interest rate
whereby the Company can elect to use a Base Rate or LIBOR plus an applicable
rate. The applicable margin is 1.00% to 1.25% for Base Rate loans or 2.00% to
2.25% for LIBOR Based Loans, depending on the Company's leverage. The effective
interest rate on the first lien debt was 3.51% and 3.41% as of March 31, 2022
and December 31, 2021, respectively.

Our total net leverage ratio to Adjusted EBITDA is defined as total contractual
maturity of outstanding indebtedness less cash and cash equivalents, restricted
cash, and short-term investments, divided by trailing twelve months Adjusted
EBITDA. Adjusted EBITDA for the 12 months ended March 31, 2022 was $348.6
million. Our total net leverage ratio to Adjusted EBITDA as of March 31, 2022
was 2.4x.

($ in millions, except leverage ratios)
Total contractual maturity of outstanding indebtedness              $

1,250.0

Less: Cash and cash equivalents, restricted cash, and short-term investments

412.6


Net Debt                                                            $

837.4


Trailing Twelve Months (TTM) Adjusted EBITDA                        $

348.6


Total net leverage ratio to Adjusted EBITDA                                            2.4x


Our consolidated first lien net leverage ratio is defined in our First Lien
Credit Agreement as total contractual maturity of outstanding First Lien
indebtedness less cash and cash equivalents and short-term investments, divided
by trailing twelve months Cash EBITDA (defined as Consolidated EBITDA in our
Credit Agreements). Cash EBITDA differs from Adjusted EBITDA due to certain
defined add-backs, including cash generated from changes in unearned revenue;
see table below for reconciliation. Cash EBITDA for the 12 months ended
March 31, 2022 was $475.6 million. Our consolidated first lien net leverage
ratio as of March 31, 2022 was 0.4x.

($ in millions, except leverage ratios) Total contractual maturity of First Lien indebtedness $ 600.0 Less: Cash and cash equivalents, and short-term investments 406.8 Net Debt

$ 193.2
Trailing Twelve Months (TTM) Cash EBITDA                       $ 475.6
Consolidated first lien net leverage ratio                          0.4x



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Our total net leverage ratio to Cash EBITDA (defined as Consolidated EBITDA in
our Credit Agreements) is defined as total contractual maturity of outstanding
indebtedness less cash and cash equivalents, restricted cash, and short-term
investments, divided by trailing twelve months Cash EBITDA. Cash EBITDA for the
12 months ended March 31, 2022 was $475.6 million. Our total net leverage ratio
to Cash EBITDA as of March 31, 2022 was 1.8x.

($ in millions, except leverage ratios)
Total contractual maturity of outstanding indebtedness              $

1,250.0

Less: Cash and cash equivalents, restricted cash, and short-term investments

412.6


Net Debt                                                            $

837.4


Trailing Twelve Months (TTM) Cash EBITDA                            $

475.6


Total net leverage ratio to Cash EBITDA                                                1.8x


                                                                          Trailing Twelve Months as of
(in millions)                                                                    March 31, 2022
Net income (loss)                                                        $                      135.0
Add (less): Expense (benefit) from income taxes                                                 (30.6)
Add: Interest expense, net                                                                       49.2
Add: Loss on debt modification and extinguishment                                                 1.8
Add: Depreciation                                                                                13.2
Add: Amortization of acquired technology                                                         39.8
Add: Amortization of other acquired intangibles                                                  20.8
EBITDA                                                                                          229.2
Add (less): Other expense (income), net(a)                                                      (37.6)

Add: Impact of fair value adjustments to acquired unearned revenue(b)

                       5.0
Add: Equity-based compensation expense                                                          117.3

Add: Restructuring and transaction related expenses (excluding depreciation)(c)

                                                                                 21.0
Add: Integration costs and acquisition-related expenses(d)                                       13.7
Adjusted EBITDA                                                                                 348.6
Add: Unearned revenue adjustment                                                                128.9
Add: Pro forma cost savings                                                                       1.9
Add (less): Cash rent adjustment                                                                 (0.3)
Add (less): Pre-Acquisition EBITDA                                                               (4.7)
Add (less): Other lender adjustments                                                              1.2
Cash EBITDA                                                              $                      475.6


__________________
(a)Primarily represents revaluations on tax receivable agreement liability and
foreign exchange remeasurement gains and losses.
(b)Represents the impact of fair value adjustments to acquired unearned revenue
relating to services billed by an acquired company prior to our acquisition of
that company. These adjustments represent the difference between the revenue
recognized based on management's estimate of fair value of acquired unearned
revenue and the receipts billed prior to the acquisition less revenue recognized
prior to the acquisition.
(c)Represents costs directly associated with acquisition or disposal activities,
including employee severance and termination benefits, contract termination fees
and penalties, and other exit or disposal costs. For the trailing twelve months
ended March 31, 2022, this expense related primarily to deferred acquisition
cost revaluations.

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(d)Represents costs directly associated with integration activities for
acquisitions and acquisition-related compensation, which includes transaction
bonuses and retention awards. For the trailing twelve months ended March 31,
2022, this expense related primarily to cash vesting payments from the
acquisition of Pre-Acquisition ZI. This expense is included in cost of service,
sales and marketing expense, research and development expense, and general and
administrative expense as follows:

                                                                           Trailing Twelve Months
                                                                                   as of
(in millions)                                                                  March 31, 2022
Cost of service                                                           $                 1.7
Sales and marketing                                                                         5.7
Research and development                                                                    4.3
General and administrative                                                                  2.0
Total integration costs and acquisition-related compensation              $                13.7


In addition, our credit agreement governing our first lien term loan contains
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. The
Company may be able to incur substantial additional indebtedness in the future.
The terms of the credit agreements governing our first lien term loan limit, but
do not prohibit, the Company from incurring additional indebtedness, and the
additional indebtedness incurred in compliance with these restrictions could be
substantial. These restrictions will also not prevent the Company from incurring
obligations that do not constitute "Indebtedness" as defined in the agreements
governing our indebtedness.

Tax Receivable Agreements

We have entered into two tax receivable agreements. We entered into (i) the
Exchange Tax Receivable Agreement with certain of our Pre-IPO OpCo Unitholders
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 such Pre-IPO Owners and certain Pre-IPO HoldCo
Unitholders 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 OpCo Unitholders and certain Pre-IPO
HoldCo Unitholders 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 will increase the tax basis of the
tangible and intangible assets of the ZoomInfo Tax Group as a result of sales or
exchanges of OpCo Units for shares of Class A 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 Intermediate Inc. to Pre-IPO
Blocker Holders and certain Pre-IPO HoldCo Unitholders 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, including tax benefits
attributable to payments under the Reorganization Tax Receivable Agreement. In
each case, these increases in existing tax basis and tax basis adjustments
generated over time may increase (for tax purposes) the ZoomInfo Tax Group's
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, although the IRS may challenge all or part of the validity of that tax
basis, and a court could sustain such a challenge.


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The ZoomInfo Tax Group's allocable share of existing tax basis acquired in the
IPO and the increase in the ZoomInfo Tax Group's allocable share of existing tax
basis and the tax basis adjustments upon exchanges of OpCo Units for shares of
Class A common stock may also decrease gains (or increase losses) on future
dispositions of certain capital assets to the extent tax basis is allocated to
those capital assets. The payment obligations under the tax receivable
agreements are an obligation of members of the ZoomInfo Tax group, but not of
ZoomInfo OpCo. The ZoomInfo Tax Group expects to benefit from the remaining 15%
of realized cash tax benefits.

For purposes of the tax receivable agreements, the realized cash tax benefits
will be computed by comparing the actual income tax liability of the ZoomInfo
Tax Group (calculated with certain assumptions) to the amount of such taxes that
the ZoomInfo Tax Group would have been required to pay had there been no
existing tax basis, no anticipated tax basis adjustments of the assets of the
ZoomInfo Tax Group as a result of exchanges and no utilization of certain tax
attributes of the Blocker Companies (including the Blocker Companies' allocable
share of existing tax basis), and had ZoomInfo Intermediate Inc. not entered
into the tax receivable agreements. The term of each tax receivable agreement
will continue until all such tax benefits have been utilized or expired, unless
(i) ZoomInfo Intermediate Inc. exercises its right to terminate one or both tax
receivable agreements for an amount based on the agreed payments remaining to be
made under the agreement, (ii) ZoomInfo Intermediate Inc. breaches any of its
material obligations under one or both tax receivable agreements in which case
all obligations (including any additional interest due relating to any deferred
payments) generally will be accelerated and due as if ZoomInfo Intermediate Inc.
had exercised its right to terminate the tax receivable agreements, or (iii)
there is a change of control of ZoomInfo Intermediate Inc., in which case the
Pre-IPO Owners may elect to receive an amount based on the agreed payments
remaining to be made under the agreement determined as described above in clause
(i). Estimating the amount of payments that may be made under the tax receivable
agreements is by its nature imprecise, insofar as the calculation of amounts
payable depends on a variety of factors. The amount of existing tax basis and
the anticipated tax basis adjustments, as well as the amount and timing of any
payments under the tax receivable agreements, will vary depending upon a number
of factors, including our blended federal and state tax rate and the amount and
timing of our income.

We expect that as a result of the size of the ZoomInfo Tax Group's allocable
share of existing tax basis acquired in the IPO, the increase in the ZoomInfo
Tax Group's allocable share of existing tax basis and the tax basis adjustment
of the tangible and intangible assets of the ZoomInfo Tax Group upon the
exchange of OpCo Units for shares of Class A common stock and our possible
utilization of certain tax attributes, the payments that ZoomInfo Intermediate
Inc. may make under the tax receivable agreements will be substantial. As of
March 31, 2022, the Company had a liability of $3,052.2 million related to its
projected obligations under the Tax Receivable Agreements in connection with the
Reorganization Transactions and OpCo Units. During the three months ended March
31, 2022, we paid a total of $5.0 million pursuant to the Tax Receivable
Agreements. There were no payments in the three months ended March 31, 2021. The
payments under the tax receivable agreements are not conditioned upon continued
ownership of us by the exchanging holders of OpCo Units. Refer to Note 16 - Tax
Receivable Agreements to our unaudited consolidated financial statements
included in Part I, Item 1 of this Form 10-Q for additional information.

Contractual Obligations and Commitments



As of March 31, 2022, we had additional operating leases for office space that
have not yet commenced with anticipated undiscounted future lease payments of
$331.4 million. Refer to Note 14 - Leases of the notes to our unaudited
consolidated financial statements included elsewhere in this Quarterly Report on
Form 10-Q for further details.

Except as set forth above and in Note 11 - Commitments and Contingencies of the
notes to our unaudited consolidated financial statements included elsewhere in
this Quarterly Report on Form 10-Q, there have been no material changes outside
of the ordinary course of business in the contractual obligations and
commitments disclosed in our Annual Report on 10-K for the year ended December
31, 2021.


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Critical Accounting Policies and Estimates



Critical accounting policies and estimates are those accounting policies and
estimates that are both the most important to the portrayal of our net assets
and results of operations and require the most difficult, subjective or complex
judgments, often as a result of the need to make estimates about the effect of
matters that are inherently uncertain. These estimates are developed based on
historical experience and various other assumptions that we believe to be
reasonable under the circumstances. Critical accounting estimates are accounting
estimates where the nature of the estimates are material due to the levels of
subjectivity and judgment necessary to account for highly uncertain matters or
the susceptibility of such matters to change and the impact of the estimates on
financial condition or operating performance is material.

There have been no material changes to our critical accounting policies and estimates as compared to the critical accounting policies and estimates described under "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our 2021 Form 10-K.

Recently Issued Accounting Pronouncements



Refer to Note 2 - Basis of Presentation and Summary of Significant Accounting
Policies of our consolidated financial statements included in Part I, Item 1 of
this Form 10-Q regarding recently issued accounting pronouncements.


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Latest news about ZoomInfo Technologies Inc.

Morgan Stanley Cuts Price Target on ZoomInfo Technologies to $18 From $20, Keeps Equalweight Rating	Apr. 17	MT
Barclays Trims Price Target on ZoomInfo Technologies to $19 From $20, Maintains Equal-Weight Rating	Apr. 15	MT
Zoominfo and Trustradius Partner to End Revenue Anxiety	Apr. 09	CI
ZoomInfo Technologies Inc. Announces Not Stand for Re-Election of Mitesh Dhruv to the Board of Directors	Mar. 29	CI
KeyBanc Initiates ZoomInfo Technologies at Overweight With $20 Price Target, Sees 'More Than Just Attractive Valuation'	Mar. 21	MT
ZoomInfo Technologies Inc.(NasdaqGS:ZI) dropped from FTSE All-World Index	Mar. 17	CI
Transcript : ZoomInfo Technologies Inc. Presents at Morgan Stanley?s Technology, Media & Telecom Conference 2024, Mar-06-2024 02:05 PM	Mar. 06
Transcript : ZoomInfo Technologies Inc. Presents at 45th Annual Raymond James Institutional Investors Conference 2024, Mar-05-2024 11:35 AM	Mar. 05
ZoomInfo Technologies Inc. Announces Executive Changes	Feb. 23	CI
ZoomInfo Technologies Inc. (NasdaqGS:ZI) announces an Equity Buyback for $500 million worth of its shares.	Feb. 21	CI
Tranche Update on ZoomInfo Technologies Inc. (NasdaqGS:ZI)'s Equity Buyback Plan announced on July 31, 2023.	Feb. 15	CI
ZoomInfo Technologies Inc. authorizes a Buyback Plan.	Feb. 14	CI
ZoomInfo Technologies' Q4 Performance Exceeds Initial Concerns, But Consistency in Execution Needed, UBS Says	Feb. 13	MT
ZoomInfo Technologies Likely to See Revenue Growth Reacceleration in 2024, BofA Securities Says	Feb. 13	MT
Deutsche Bank Raises Price Target on ZoomInfo Technologies to $20 From $17, Maintains Hold Rating	Feb. 13	MT
Wells Fargo Adjusts Price Target on ZoomInfo Technologies to $28 From $24, Maintains Overweight Rating	Feb. 13	MT
Canaccord Genuity Adjusts Price Target on ZoomInfo Technologies to $22 From $21, Maintains Buy Rating	Feb. 13	MT
Raymond James Adjusts Price Target on ZoomInfo Technologies to $24 From $20, Maintains Outperform Rating	Feb. 13	MT
DA Davidson Adjusts Price Target on ZoomInfo Technologies to $27 From $25, Maintains Buy Rating	Feb. 13	MT
Deutsche Bank Adjusts ZoomInfo Technologies Price Target to $20 From $17, Maintains Hold Rating	Feb. 13	MT
Jefferies Adjusts Price Target on ZoomInfo Technologies to $24 From $20, Maintains Buy Rating	Feb. 13	MT
JPMorgan Adjusts Price Target on ZoomInfo Technologies to $25 From $22, Maintains Overweight Rating	Feb. 13	MT
Goldman Sachs Adjusts Price Target on ZoomInfo Technologies to $19.50 From $17, Maintains Neutral Rating	Feb. 13	MT
BofA Securities Raises Price Target on ZoomInfo Technologies to $28 From $25, Maintains Buy Rating	Feb. 13	MT
Barclays Adjusts Price Target on ZoomInfo Technologies to $20 From $18, Keeps Equalweight Rating	Feb. 13	MT

Chart ZoomInfo Technologies Inc.

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Company Profile

ZoomInfo Technologies Inc., through its subsidiaries, provides a go-to-market intelligence and engagement platform for sales and marketing teams. The Companyâs cloud-based platform provides workflow tools with integrated, accurate, and comprehensive information on organizations and professionals to help users identify target customers and decision makers. Its cloud-based operating system for revenue professionals delivers comprehensive and intelligence and analytics to provide sales, marketing, operations, and recruiting professionalâs accurate information and insights on the organizations and professionals they target. It delivers intelligence at scale by leveraging an artificial intelligence (AI) and machine learning (ML)-powered engine that gathers data from millions of sources and standardizes, matches to entities, verifies, cleans, and applies the processed data to companies and people at scale. The Company aggregates and extracts distinct types of data.

Sector

IT Services & Consulting

Calendar

2024-05-07 - Q1 2024 Earnings Release

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Income Statement Evolution

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Ratings for ZoomInfo Technologies Inc.

Trading Rating

Investor Rating

ESG Refinitiv

C+

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Analysts' Consensus

Sell

Buy

Mean consensus

OUTPERFORM

Number of Analysts

Last Close Price

15.77 USD

Average target price

21.74 USD

Spread / Average Target

+37.86%

Consensus

EPS Revisions

Estimates Revisions

Quarterly earnings - Rate of surprise

Company calendar

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