Jefferies downgraded ZoomInfo Technologies to Hold from Buy and reduced its price target to $4 from $12 as the data and software provider begins a strategic shift in how it charges customers. The brokerage firm said the company is moving away from traditional subscription, seat-license revenue toward a usage-based pricing structure amid softer client demand and growing disruption tied to artificial intelligence.
Analyst Surinder Thind now expects ZoomInfo's revenue to fall 4% in 2026 and an additional 3% in 2027 - a substantial reversal from the broker's prior expectation of low-single-digit growth. Thind identified a change in customer behavior as the central driver: clients are increasingly building their own workflows around ZoomInfo's data instead of buying access to its software on a per-seat basis.
Thind wrote that "AI is proving to be much more disruptive than initially expected," and pointed to the company lowering its 2026 revenue outlook to a midpoint of roughly $1.195 billion. That midpoint sits well below the company's earlier guidance range of $1.247 billion to $1.267 billion and below consensus estimates of $1.259 billion.
Management has announced a three-part restructuring plan to address these challenges:
- Transitioning customers to consumption-based pricing, with a hybrid model scheduled to begin rolling out in the third quarter;
- Shifting the go-to-market motion to an almost exclusively product-led growth strategy to reduce reliance on more expensive, sales-led processes;
- Implementing a workforce reduction of roughly 20 percent, or about 600 positions.
Restructuring-related charges are expected to total between $45 million and $60 million, primarily in the second and third quarters. Management projects these moves will generate more than $60 million in annualized cost savings.
On the margin and earnings front, the company raised its adjusted operating margin guidance to a range of 36.9 percent to 37.1 percent and reiterated full-year adjusted earnings-per-share guidance of $1.10 to $1.12. Free cash flow is forecast to remain above $400 million annually.
Thind acknowledged the downgrade came after a pronounced share-price decline - noting that shares have fallen roughly 64 percent year-to-date - and said the timing was late relative to that drop. He added that he saw no near-term catalyst to change the view and wrote, "Until we have better visibility on the transition and its likelihood of succeeding, our preference is to move to the sidelines and take a wait-and-see approach."
The analyst expects the shift away from subscription revenue toward a usage-based model to take approximately 12 to 18 months to complete.