ZoomInfo Technologies Inc. (GTM)
Return on total capital
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 70,600 | — | 242,200 | 144,900 | 34,300 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 1,693,500 | 2,119,300 | 2,271,800 | 1,997,900 | 502,800 |
| Return on total capital | 4.17% | 0.00% | 10.66% | 7.25% | 6.82% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $70,600K ÷ ($—K + $1,693,500K)
= 4.17%
The analysis of ZoomInfo Technologies Inc.'s Return on Total Capital (ROTC) over the period from December 31, 2020, to December 31, 2024, reveals noteworthy fluctuations in the company's capital efficiency.
In 2020, the ROTC stood at 6.82%, indicating a modest level of profitability relative to the total capital employed. This figure experienced a slight increase in 2021, reaching 7.25%, reflecting a marginal improvement in the company's ability to generate earnings from its capital base.
The most significant change occurred in 2022, when the ROTC increased sharply to 10.66%. This substantial rise suggests that ZoomInfo was able to significantly enhance its operational efficiency and effectively utilize its total capital to generate higher returns during that year.
However, the trend took a notable downturn by December 31, 2023, with the ROTC dropping to 0.00%. This decline indicates either a potential reporting anomaly, a significant deterioration in profitability, or a substantial shift in capital structure or business operations that adversely affected the company's ability to generate returns on its total capital.
By the end of 2024, the ROTC recovered modestly to 4.17%, implying some level of operational improvement relative to the previous year but remaining below the levels observed in 2020 through 2022.
Overall, the company's return on total capital exhibits a pattern of initial growth, reaching a peak in 2022, followed by a steep decline in 2023 and partial recovery in 2024. The sharp decrease to zero in 2023 warrants further investigation to understand underlying causes, such as operational challenges, extraordinary expenses, or possible accounting adjustments. The partial recovery suggests some stabilization or corrective measures but indicates that the company's efficiency in leveraging its total capital remains in a fragile state.
Peer comparison
Dec 31, 2024