thesis zoominfo

How ZoomInfo Gets Data: Top Privacy Misconceptions Debunked

Brianna Conley

Content Specialist

Concerns around data privacy have been on the rise in recent years — and for good reason. As consumers in a technology-driven world, our information has become a new form of currency. Consumer-oriented businesses collect data to create profiles that can, among other things, power more personalized marketing campaigns and introduce people to products that are more relevant to their needs and interests.

As a privacy-first company, ZoomInfo is aware of growing concerns surrounding data collection, processing, and usage. In an effort to promote transparency, we’re pulling back the curtain here to share our rigorous approach and commitment to privacy. 

Let’s unpack some of the most common myths surrounding ZoomInfo’s business data collection processes and walk through our commitment to privacy.

Data FAQ: Does ZoomInfo collect your sensitive personal information?

Answer: no. zoominfo only collects business-related data..

ZoomInfo is only interested in collecting business-related data about companies and their employees. We are not interested in sensitive personal data.

Sensitive personal data is data that an individual would rarely, if ever, share publicly, such as credit card information or social security numbers. It could also include information about their private life and behaviors, such as religious or political views, gender or sexual orientation, or health or financial information.

ZoomInfo does not collect this type of personal data.

The information ZoomInfo collects is business-related. Business-related data has to do with an individual’s professional status, such as where they work, their work email addresses and phone numbers, where their office is located, whom they report to, their education and employment history, and other work-related information. 

We are only interested in helping businesspeople speak to other business people about business. We collect business information to help organizations and the people who work at them, to connect on sales, marketing, and talent recruiting efforts.

Data FAQ: Does ZoomInfo notify you when we add you to our database?

Answer: yes. we send you a notification to your business email address before or shortly after your data first appears in our database..

ZoomInfo is committed to giving you control over your data. We proactively notify data subjects, with clear instructions on how to modify or delete their data that we’ve collected. We do this before or shortly after adding their information to our database. We also take steps to ensure that anyone who has removed their information from our database will not have their information re-added.

Our robust email notification process alerts individuals when their information is first added to our database. This is a global process, so individuals around the world receive a notification when their information is added to ZoomInfo’s database, regardless of whether local laws require us to provide this notice or not.

ZoomInfo sends out tens of millions of notification emails annually, as part of a process that we put in place back in 2017. Our dedicated email management team is always improving this process to ensure that not only are these emails being sent, but also that they arrive successfully in the individual’s inbox.

Data FAQ: Does ZoomInfo make opting out of its database difficult?

Answer: no. there are multiple ways to opt out of zoominfo’s database..

ZoomInfo respects the individual’s right to opt out of our database at any time. You can easily opt out of ZoomInfo’s database in one of three ways:

1. Click on the “Manage your Profile” tab within our Privacy Center to review your profile, see what data has been collected, and update or remove your profile.

2. Email us at [email protected] and request removal.

3. Call (833) 901-0859 and request removal. 

Data FAQ: Is ZoomInfo trying to intrusively profile me?

Answer: no. zoominfo uses business data to create business-focused profiles to connect business people to talk about business..

Our teams collect data that is relevant for business professionals to connect with one another. The profiles created within our database are business-focused and not extensive. They are what you would expect to find on a business card or a resume. 

We look for key data that can help the right people engage with one another at the right time to conduct business. We do not seek to discover other aspects of a contact’s personal life. 

Data FAQ : Does ZoomInfo align with privacy regulations in the US and around the world?

Answer: yes. zoominfo’s governance framework aligns with the regulations in our major markets, including the gdpr and ccpa, and we are iso 27701 certified..

Even before GDPR was enacted in 2018, we implemented a number of internal processes that aligned with compliance regulations in the US and Europe. For example, our Global Notification Plan ensures that we proactively notify contacts when they are added to our database and provide them with the ability to opt out of our database at any time. This aligns with Article 14 of the GDPR , which requires a notification process for data collection, processing, and storing.

In early 2022, we hired our first Chief Compliance Officer, Simon McDougall , a world-renowned privacy expert. McDougall previously worked as a privacy regulator for the Information Commissioner’s Office (ICO) , the UK’s independent authority set up to uphold information rights in the public interest, promoting openness by public bodies and data privacy for individuals.

At ZoomInfo, we maintain an active privacy compliance strategy . We have also been expanding our organization globally, welcoming more than 500 additional employees outside of the US. As we continue to grow into new markets, our teams work diligently to remain agile and refine compliance measures in accordance with evolving privacy regulations. 

Data FAQ: The CCPA and GDPR require consent for data processing. Is ZoomInfo compliant with these statutes?

Answer: it is a common misconception that consent is needed to process data under the gdpr and the ccpa. the two regimes differ, but consent is not required in either. .

The GDPR lays out six legal bases of processing, all of which are of equal standing. In order to lawfully process data under the GDPR, companies must utilize one of the six legal bases. One legal basis exists where the data subject has provided consent. Another basis exists for purposes of the “legitimate interests” pursued by the company or a third party, except where overridden by the interests or fundamental rights and freedoms of the data subject. ZoomInfo relies upon the legitimate interest legal basis for the processing of data subject to the GDPR. 

We think it is clear that ZoomInfo’s legitimate interest in processing business contact data, to organize and make it available to our customers for B2B sales, marketing, and recruiting purposes, is not outweighed by the fundamental rights and freedoms of the data subjects given the limited impact of this data on an individual’s private life, the fact that individuals would reasonably expect their business contact information to be shared for these purposes, and that this information is widely disclosed. 

Unlike the GDPR, the CCPA does not require a legal basis for processing personal data. Consent is required only in limited circumstances, such as when a business enrolls an individual into a financial incentive program (e.g., loyalty programs). However, consent is not required in order to collect, process, or sell personal data. ZoomInfo respects the applicable requirements of the CCPA, including the right for consumers to request to opt-out of the sale of their personal data.

Data FAQ: Does ZoomInfo support phone spammers?

Answer: no. zoominfo’s platform and contract agreements restrict spam calling..

We believe that every business call should be pertinent to all parties involved. We collect work phone numbers and, in some cases, mobile phone numbers, to help salespeople, marketers, and talent managers connect with the right people to have productive, meaningful conversations. ZoomInfo customer contracts also require that businesses only use our data to contact individuals for the purposes of B2B sales or marketing.

To further support individual privacy, our ZoomInfo Sales platform supports the suppression of phone numbers on nine global “Do Not Call” lists . When the Do Not Call suppression toggle is enabled in ZoomInfo’s platform, the phone numbers of individuals who have registered with one or more of these nine lists will not be included in any of the sales and marketing search results within our database. When salespeople or marketers try to access one of these contacts, a pop-up will appear with a message explaining that the contact has registered for a Do Not Call list and that their phone number is being suppressed from the search results.

Note: Some Do Not Call lists have B2B exemptions . This varies on a country-by-country basis.

Data FAQ: Can ZoomInfo read my emails via “ Community Edition”?

Answer: no. our community edition software only identifies contact information within email headers, signature blocks, and email contact books..

ZoomInfo’s Community Edition opens the door for many small businesses to access our platform and data without tapping into their budgets. In exchange for free access to Community Edition, Community Edition subscribers help populate the ZoomInfo database with the information contained in email headers, signature blocks, and email contact books, such as name, job title, company, email address, and phone number.

We have no visibility into, nor interest in, the actual content of subscriber emails. Subscribers run a program, in their own environment, that extracts only the email addresses in the header of the incoming emails (i.e., to/from/cc) and the contact information contained in email signature blocks and email address books. 

This email address data is then sent to ZoomInfo to match against existing contact information in our database. Our sophisticated Privacy Parser ensures that only business-related contact information is collected during this process.

____________________________________________________________________

As a privacy-first company, we will always work to support business conversations without compromising the privacy and security of individuals. If you have any additional questions about ZoomInfo’s data privacy practices and policies, please check out our newly refreshed Privacy Center for more information.

Please note that the above is provided for informational purposes only. ZoomInfo is not qualified to and does not intend to provide legal advice of any kind. The information provided by ZoomInfo should never be relied upon as a substitute for independent legal advice.

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• Contact Sales

B2B Data Quality You Won’t Find Anywhere Else .

ZoomInfo delivers exceptional data quality and coverage to ensure you have the most actionable business intelligence at your fingertips.

DATA DRIVES RESULTS

Essential Data, Exceptional Insights — Extraordinary Results

Only ZoomInfo provides you with a rich combination of foundational data and buying signals so you can target buyers who are ready to act now.

Power your GTM strategy on B2B data you can trust

Zoominfo collects, verifies, publishes and updates millions of contact and company profiles every day to help you power your go-to-market motions with the most accurate company and contact data., firmographics: understand your market, headcount and revenue, company locations and hierarchy, dynamic signals: act when it matters, web activity, news and initiatives, technographics, demographics: find your buyers, direct contact information, innovating the future of sales.

ZoomInfo Copilot delivers first-mover advantage. Sellers can engage faster knowing which accounts are ready to listen, with better messaging from interactive chat summaries and better connections with AI-scripted emails to achieve higher win rates.

Data Coverage Outside of North America

Broaden your global reach and perfect your go-to-market strategy with our expanded data coverage outside of North America. We’re not just keeping pace, we’re setting the standard for global data access.

Company Profiles Outside North America

Professional Profiles Outside North America

Mobile Phone Numbers Outside North America

Sources & Process

See how we source data for go-to-market success

Every data point that enters our database goes through the FuZIon data collection system. This sophisticated collection machine ensures that your business data is accurate, actionable and data-privacy compliant.

Source & Curate Raw Data

ZoomInfo gathers and organizes broad business information and buying signals from multiple sources.

We source our business data from across the web using advanced technologies, niche third-party providers, community contributors, and a robust research team.

Transform & Verify B2B Data

ZoomInfo’s greatest differentiator is its ability to transform billions of unstructured data points into actionable insights.

We verify the data through a multi-layered, real-time verification process using Natural Language Processing (NLP), Artificial Intelligence (AI), Machine Learning (ML), and highly skilled data scientists.

Monitor & Update GTM-Ready Data

Go-to-market teams face the challenge of getting access to accurate data.

ZoomInfo ensures you receive fresh data by testing, updating and monitoring every data point. When we detect a data change, we adjust, add or remove the information.

SECURITY & PRIVACY STANDARDS

Why our data privacy practices matter.

Our data collection and protection practices ensure you receive the most compliant business data. Learn about the data privacy and security practices we follow.

What are you waiting for?

ZoomInfo RevOS is a multiplatform operating system that revenue teams rely on to deliver business growth.

Market intelligence and prospecting solutions for high-performing sales teams determined to crush quotas.

Hit Your Number

ABM, demand generation, and conversion tools for modern marketers obsessed with how to turn leads into pipeline.

Accelerate Your ROI

No-code data management and orchestration tools for Ops heroes to seamlessly deliver engagement-ready data.

Increase Speed-to-Lead

Custom solutions for data teams wanting more ways to access and integrate industry-leading B2B data.

Master your Data

Candidate database and engagement tools for savvy recruiters focused on solving hiring needs.

Reach Qualified Candidates

Frequently Asked Questions

How frequently do you update your data.

At Zoominfo we verify every single data point before publishing it to our platform. We check data points for frequency of mentions, recency of mentions and reliability of data sources.

We use different evidence-based algorithms for each of our data attributes to ensure the most accurate results. As soon as we detect a change, we will add, adjust or remove data points from our system. Only large data providers backed by strong funding and large teams have both the technical know-how and resources to follow such a stringent verification process.

Is your data compliant?

Yes.  ZoomInfo’s governance framework aligns with the regulations in our major markets, including the GDPR and CCPA, and we are ISO 27701 certified.

In fact, ZoomInfo follows stricter privacy, security and compliance practices than stipulated by the government and regulatory agencies.  No other provider has as many self-enforced restrictions.

How can I integrate your data into my systems?

We offer a wide variety of data access solutions including APIs, Webhooks and our Data Cubes .  Learn more here: https://www.zoominfo.com/solutions/operations

Ready to own your market?

ZoomInfo: A Premium Price For Decelerating Growth Rates

• ZoomInfo Technologies Inc. provides sales and marketing solutions by offering detailed profiles of individuals and businesses, facilitating outreach to potential leads.
• Despite its alluring narrative, ZoomInfo's stock carries a premium valuation, while its growth rates appear to be decelerating.
• The company has acknowledged worse net retention activity in Q1 compared to the previous quarter, indicating potential challenges in customer retention.
• ZoomInfo's revenue growth rates have significantly moderated, raising questions about the justification for its premium multiple.
• Looking for a helping hand in the market? Members of Deep Value Returns get exclusive ideas and guidance to navigate any climate. Learn More »

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Investment Thesis

ZoomInfo Technologies Inc. ( NASDAQ: ZI ) provides solutions to help organizations with their sales and marketing efforts.

ZoomInfo puts together all types of company and key personnel data, creating detailed profiles of individuals and businesses. They pride themselves on having up-to-date clean contact information on professionals and companies, allowing sales and marketing people to reach out to potential leads. Essentially, a convenient business-to-business platform.

The issue I have is that aside from an alluring narrative, ZoomInfo Technologies Inc. stock already carries a premium valuation, while its growth rates appear to be decelerating.

All in all, I'll stick to the sidelines.

Rapid Recap

ZoomInfo Technologies is a technology platform that empowers sellers and recruiters to reach the entities that make sales happen.

In my previous analysis, I said ,

It appears that as of late, ZoomInfo's net retention figures have been moving lower.

Recall, a high retention rate means that you don't have a lot of churn.

And more importantly, you are able to upsell to your existing customer base. Put in other words, if you have a net retention rate of say 10%, that would mean that all else equal, you'd have 10% growth rates next year, without having to spend more to acquire another single customer. Clearly, you want a high retention rate. But you don't want it too high, where you are crushing your customer base with rising bills, and they end up exiting your platform.

That being said, even though ZoomInfo doesn't typically report its retention rates each quarter, ZoomInfo did acknowledge that in Q1 net retention activity was incrementally worse than what they had experienced in Q4.

With that in mind, let's discuss ZoomInfo's financials.

Revenue Growth Rates Moderate

ZI revenue growth rates

What you see above is a company whose revenue growth rates have fizzled out. Indeed, it's difficult to imagine that this time last year ZoomInfo was growing at more than 50% CAGR.

With this in mind, allow me to ask you this perhaps uncomfortable question.

Do these revenue forecasts correspond with those of a rapidly growing company? And if not, can we make the case that ZoomInfo should carry a premium multiple? I don't believe that is a reasonable conclusion. But more on that soon. Before that, let's get to the next section, where we discuss ZoomInfo's profitability profile.

ZoomInfo's Cash Flows Are In High Demand

In the first instance, let's discuss ZoomInfo's balance sheet . ZoomInfo holds about $700 million of net debt. While in practical terms, ZoomInfo's balance sheet is a reasonably leveraged balance sheet, it's not prohibitively restrictive.

However, what this does mean, is that the ability for ZoomInfo to deploy significant capital toward share repurchases is encumbered, at least in the near term.

Even though ZoomInfo did repurchase $25 million worth of stock in Q1 2023, I can't imagine there will be significantly more buybacks coming. What makes me say so?

I believe that ZoomInfo will seek to reinvest aggressively back into its business, rather than repurchasing shares. Basically, ZoomInfo will seek to attempt to reignite its growth rates, rather than buy back its shares. But more importantly, I believe that ZoomInfo will probably seek to pay down $600 million of its term loan that becomes due in 2026.

My ultimate contention is this, ZoomInfo's cash balance is in high demand, and I don't envision ZoomInfo returning to repurchasing shares any time soon.

To sum up my thesis, what we see above is that in the past 3 months, the multiple that investors have been willing to pay for ZoomInfo has expanded by nearly 30% from a forward P/Sales of 6 to a P/Sales of 8 - and yet, I can't see much justification for this expansion.

The Bottom Line

ZoomInfo Technologies Inc. offers sales and marketing solutions by providing comprehensive business and personnel data.

However, despite its appealing narrative, the stock already carries a premium valuation, while its growth rates are slowing down. As a result, I remain cautious and prefer to stay on the sidelines. ZoomInfo's net retention rates have declined, and its revenue growth has moderated from the previous year's high levels.

Additionally, the company's balance sheet carries a considerable amount of net debt, limiting its ability to allocate capital for share buybacks. Given these factors and the expanding valuation multiple, I find it challenging to justify the current market sentiment towards ZoomInfo Technologies Inc. stock.

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This article was written by

Michael Wiggins De Oliveira is an inflection investor. This means buying into cheap companies at the moment when their narrative is changing and the business is on a path toward becoming significantly more profitable over the next year.

With a focus on tech and “the Great Energy Transition (including uranium)”, Michael runs a concentrated portfolio with approximately 15 to 20 stocks and an average holding period of 18 months.

Through his 10+ years analyzing countless companies, Michael has accumulated outstanding professional experience in tech and energy and a following of over 40K on Seeking Alpha.

Michael is the leader of the investing group

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Features of the group include: Insights through his concentrated portfolio of value stocks, timely updates on stock picks, a weekly webinar for live advice, and "hand-holding" as-needed for new and experienced investors alike. Deep Value Returns also has an active, vibrant, and kind community easily accessible via chat.

Seeking FCF is an associate of Michael Wiggins De Oliveira

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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