ZoomInfo Technologies Inc. (GTM)
Interest coverage
| 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 |
| Interest expense | US$ in thousands | 39,300 | 45,200 | 47,600 | 43,900 | 69,300 |
| Interest coverage | 1.80 | 0.00 | 5.09 | 3.30 | 0.49 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $70,600K ÷ $39,300K
= 1.80
The interest coverage ratio of ZoomInfo Technologies Inc. exhibits notable fluctuations over the analyzed period from December 31, 2020, to December 31, 2024. As of December 31, 2020, the company’s interest coverage ratio was 0.49, indicating that earnings before interest and taxes (EBIT) were less than the interest expenses, reflecting a potentially precarious financial position with limited ability to meet interest obligations from operating income.
By December 31, 2021, the ratio experienced a substantial improvement, rising to 3.30. This suggests that the company's operating earnings significantly surpassed its interest expenses, signaling enhanced ability to service debt and a less risky financial profile. The positive trend continued into December 31, 2022, with the ratio increasing further to 5.09, reinforcing the notion of improved financial stability and strong coverage of interest obligations during this period.
However, a sharp decline is observed by December 31, 2023, with the ratio dropping to 0.00. This indicates that the company either reported no operating earnings capable of covering interest expenses or possibly reported a loss, thus rendering the interest coverage ratio meaningless or zero. Such a scenario raises concerns about the company's ability to sustain its interest commitments in that fiscal year and suggests significant financial distress or extraordinary circumstances that negated earnings from operations.
For the projected or reported figure as of December 31, 2024, the interest coverage ratio is indicated as 1.80. Although this is a recovery from the 2023 low, it still represents a relatively modest buffer, implying that earnings are only 1.8 times the interest expenses. While better than the previous year, this ratio indicates that the company's capacity to comfortably meet its interest obligations remains limited, and the financial situation may warrant close monitoring.
In summary, the interest coverage ratio of ZoomInfo Technologies Inc. demonstrates volatility across the analyzed years. The improvements in 2021 and 2022 reflect periods of stronger operating performance, while the significant decline in 2023 signals potential financial challenges. The partial recovery in 2024 suggests some stabilization but still underscores the importance of ongoing financial management and profitability to ensure sustainable debt servicing capacity.
Peer comparison
Dec 31, 2024