ZoomInfo Technologies Inc (ZI)

Interest coverage

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	434,000	327,400	317,900	289,300	242,200	193,700	150,900	138,400	166,800	134,200	131,400	105,300
Interest expense (ttm)	US$ in thousands	45,200	46,300	46,000	45,700	47,600	48,500	50,800	49,200	43,900	40,500	36,300	51,300
Interest coverage		9.60	7.07	6.91	6.33	5.09	3.99	2.97	2.81	3.80	3.31	3.62	2.05

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $434,000K ÷ $45,200K
= 9.60

The interest coverage ratio measures a company's ability to pay interest on its outstanding debt obligations from its operating income. ZoomInfo Technologies Inc.'s interest coverage has shown a consistent increasing trend over the past eight quarters, indicating a strengthening ability to cover its interest expenses.

In Q4 2023, the interest coverage ratio was at 5.97, the highest level in the provided data series. This suggests that ZoomInfo's operating income was almost six times greater than its interest expenses during that quarter, indicating a strong financial position and a reduced risk of defaulting on debt payments.

The gradual increase in the interest coverage ratio from Q1 2022 to Q4 2023 reflects an improvement in the company's earnings relative to its interest costs. This positive trend signifies that ZoomInfo's profitability has been increasing, providing a higher buffer to cover its interest obligations.

The notable improvement in the interest coverage ratio over this period reflects positively on ZoomInfo's financial health and ability to manage its debt obligations efficiently. It indicates a reduced financial risk for creditors and investors, suggesting a stable and potentially promising outlook for the company's financial performance.