A securities class action has been filed in the USDC — E.D.WA. against ZoomInfo Technologies, Inc. (ZI) (“ZoomInfo” or the “Company”), on behalf of all persons or entities that purchased or otherwise acquired ZoomInfo Class A Common Stock between November 10, 2020 and September 4, 2024, both dates inclusive (the “Class Period”).
Founded in 2007, ZoomInfo is a software and data company that provides customer analytics and intelligence to sales and marketing teams. Its principal product is a data platform that provides customer contact and business information to its clients. ZoomInfo claims that its platform, data, and customer intelligence allows its clients to sell and market more effectively by enabling them to target organizations and personnel with optimal messaging and timing. ZoomInfo sells access to its platform through non-cancelable subscription contracts with terms ranging from one to three years. Subscription pricing is generally based on the number of users or “seats” accessing ZoomInfo’s applications, the amount of functionality sought by customer, and the amount of data utilized. Revenue is generally recognized ratably over the life of the contract beginning with when the service is first made available to the customer. Under ZoomInfo’s standard billing terms, customers are typically required to pay for services at the beginning of each annual, semi-annual, or quarterly period.
The Complaint alleges that defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose that:
(1) ZoomInfo’s financial and operational results during the Class Period had been temporarily inflated by the ephemeral effects of the COVID-19 pandemic, which had pulled-forward demand for ZoomInfo’s database of digital contact information;
(2) material portions of ZoomInfo’s existing customer base were attempting to either substantially reduce their use of ZoomInfo’s product or abandon it altogether;
(3) ZoomInfo had used manipulative and coercive auto-renew policies and threats of litigation to force customers into remaining with ZoomInfo for an additional contractual term even though such customers did not want to;
(4) ZoomInfo’s coercive customer retention tactics had materially damaged ZoomInfo’s customer relationships, client franchise, and competitive advantages, and created a hidden demand cliff for costumer contract renewals in future periods; and
(5) as a result of all of the above, ZoomInfo’s reported revenues, operating income, and customer and retention metrics were materially overstated, thereby harming investors.
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Lowey Dannenberg is a national firm representing institutional and individual investors, who suffered financial losses resulting from corporate fraud and malfeasance in violation of federal securities and antitrust laws. The firm has significant experience in prosecuting multi-million-dollar lawsuits and has previously recovered billions of dollars on behalf of investors.