Investing.com -- Jefferies downgraded ZoomInfo Technologies to Hold from Buy on Thursday, cutting its price target to $4 from $12, as the data and software company embarks on a shift away from subscription-based revenues toward a usage-based model, amid pressure from weakening client demand and the growing influence of artificial intelligence on enterprise software spending.

The broker now projects revenue will decline 4% in 2026 and a further 3% in 2027, a marked reversal from its prior expectations of low-single-digit growth. Analyst Surinder Thind cited a change in client behavior as the key driver, with customers increasingly choosing to build their own workflows around ZoomInfo’s data rather than paying for its software on a seat-license basis.

"AI is proving to be much more disruptive than initially expected," Thind wrote, leading ZoomInfo to lower its 2026 revenue outlook to a midpoint of roughly $1.195 billion, well below prior guidance of $1.247–$1.267 billion and consensus estimates of $1.259 billion.

The company’s management has outlined a three-part restructuring: transitioning clients to consumption-based pricing with a hybrid model set to begin rolling out in the third quarter, shifting its go-to-market approach to an almost exclusively product-led growth motion to reduce reliance on costlier sales-led processes, and cutting its workforce by 20%, or around 600 employees.

Restructuring charges are expected to total $45–$60 million, mostly in the second and third quarters, and are projected to generate more than $60 million in annualized cost savings.

On a more positive note, the company raised its adjusted operating margin guidance to 36.9–37.1% and reiterated adjusted EPS guidance of $1.10–$1.12 for the full year. Free cash flow is expected to remain above $400 million annually.

Thind said the timing of the downgrade was late relative to the stock’s decline — shares have declined roughly 64% this year — but said he saw no near-term catalyst. "Until we have better visibility on the transition and its likelihood of succeeding, our preference is to move to the sidelines and take a wait-and-see approach," he wrote.

The transition away from subscription-based revenues toward a usage-based model is expected to take 12 to 18 months, the analyst said.