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No. of Recommendations: 101
Would you be interested in investing in this medium-small SaaS company?

Last quarter it had Revenue of $140 million, which was up 53% yoy.


But HERE COMES the interesting stuff:

It had adj operating income of $63 million, which was 45% of revenue!!!! Yes, that was 45% of revenue!!! Have you heard of any other companies with adjusted operating income at 45% of revenue??? And growing at 53%?

Its operating cash flow of $67 million was 48% of revenue! Yes, you heard me right!

Its adj free cash flow of $77 million was 55% of revenue!!! That gave it a Rule of 40 of 53+55=108!!! Did you ever hear of a score on the Rule of 40 of 108? Or free cash flow of 55%?


Now let’s look how they did for the Full-Year:

Revenue of $477 million, was up 62%,

Adj operating income of $226 million was 47% of revenue

Op cash flow of $170 million was 36% of revenue

Adj free cash flow of $244 million was 51% of revenue. (That’s a Rule of 40 of 113, and is positively indecent).


They closed the year with over 20,000 customers, including more than 850 $100k customers.


Forrester Wave rated them highest in what they do. There are two axes with Current Offering going up and Stronger Strategy going right, so the idea is to be in the top right corner of the graph. Well on Current Offering they were a little higher than anyone else, which is good, but on Stronger Strategy they were way better than anyone else, which is even better, pressed against the right hand edge of the graph. (I’m not sure I’ve ever seen a company pressed against the edge or the top before).


Their CEO is a co-founder, and was recognized in 40 Best CEO’s Under 40, and in another Best Twenty CEO’s.

The only softer point is that they only had an annual net retention rate of 108, presumably because they only had one platform which they sold up front. Now they have released more bells and whistles and an entirely new companion platform.


Okay, are you interested? Do you want to know who they are?

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Okay, the company is ZoomInfo (ZI). I suggest you learn what they do from their website and from Burt Hochfeld’s current article on Seeking Alpha (currently public), which I won’t bother repeating now that I have your interest. https://seekingalpha.com/article/4419018-zoominfo-technologi...

I’d also suggest you subscribe to Bert’s newsletter (Ticker Target). One recommendation like this is worth at least 20 years of subscription cost.

Saul
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