ZoomInfo Funds Allege RPO Practices Masked Customer Risks as Executives Sold $1.2 Billion in Stock

The central question in the Harbor Capital funds’ complaint against ZoomInfo Technologies is whether remaining performance obligations gave investors a misleading picture of the company’s subscription business. The funds allege that ZoomInfo overstated the health of that business while senior executives sold more than $1.2 billion in personal stock. The claims have not been tested, and no court has ruled on their merits.

Remaining performance obligations, or RPO, represent the value of subscription contracts that have not yet been recognized as revenue. Analysts use the measure to assess contracted demand and customer relationships. But the complaint argues that its value as a business signal depended on whether customers could pay, stayed engaged and renewed their subscriptions.

Harbor Capital Appreciation Fund, Harbor Capital Appreciation CIT and Harbor Capital Group Trust for Defined Benefit Plans say they relied on ZoomInfo’s public financial disclosures when buying shares through their subadvisor, Jennison Associates. Their complaint was filed October 30 in the US District Court for the Western District of Washington and names ZoomInfo and three senior leaders.

What the funds say about subscriptions

The complaint describes four practices it says inflated the appearance of subscription demand: selling to customers without credit checks, failing to account for customers unlikely to pay, leaving delinquent accounts on the books for as long as 360 days instead of writing them off, and using automatic renewals that allegedly made it harder for customers to leave as demand weakened.

Those allegations point to a basic accounting and operating question: how much confidence should investors place in contracted revenue when a company’s customer screening and collection practices are in dispute? A signed subscription can support an RPO figure, but the complaint contends that the figure did not adequately reflect the risk that some customers would not pay or continue their service.

The filing says ZoomInfo’s CEO directed employees to sign up as many customers as possible before the company’s June 2020 IPO. The offering raised approximately $1 billion through the sale of 44.5 million shares at $21 each. Former employees quoted in the complaint describe a sales operation with no credit checks and a “get it done, we'll deal with [any problems] later” attitude, as one former manager put it.

Another former employee characterized the sales floor as a “boiler-room” environment, where the names of underperformers appeared on office television screens. These accounts are presented as support for the funds’ allegations about the company’s sales culture; they have not been established as facts by a court.

The complaint also describes renewal practices that could affect how long subscription revenue remained on the books. It alleges account managers were told to contact customers one day before a 60-day opt-out deadline, potentially leaving little time to avoid another year of service. One former employee called the policy “entrapment,” according to the filing. Another said renewal opt-out emails were designed to be caught by spam filters. A former revenue operations employee said staff “felt like they were a collections agency.”

Stock sales and later disclosures

The funds also focus on executive stock sales. The CEO allegedly sold 21,617,859 shares for approximately $1.1 billion in proceeds. The then-CFO allegedly sold 609,343 shares for proceeds exceeding $35 million, while the then-president and COO sold more than 1,154,296 shares for nearly $66 million.

According to the complaint, many sales occurred outside the executives’ pre-arranged Rule 10b5-1 trading plans. It further alleges that some plans were adopted after the executives already knew material nonpublic information about ZoomInfo’s financial condition. These claims place the timing of the sales alongside the funds’ account of the company’s customer and revenue practices.

The complaint says the market received partial disclosures between November 2022 and August 2024, with each one followed by a significant share-price decline. The largest move it cites came on August 5, 2024. ZoomInfo announced a $33 million bad-debt charge tied to customer non-payment, reduced its revenue guidance by approximately $65 million and announced that its CFO was leaving. At an investor conference later, the CEO reportedly acknowledged that the company had “extended credit historically to customers who weren't creditworthy.”

By then, the stock had fallen from a high of $77.35 to $8 per share, a decline of approximately 90%, according to the complaint. The scale of that decline gives the allegations weight for investors who held shares during the period, while the complaint’s account of causation and responsibility remains to be tested.

Claims remain unresolved

The funds bring five causes of action under the Securities Exchange Act and common law, and seek compensatory and punitive damages. The complaint also points to a related class action, State Teachers Retirement System of Ohio v. ZoomInfo Technologies, Inc. (No. 3:24-cv-05739-TMC). In October 2025, the same court denied part of the defendants’ motion to dismiss in that case, finding that substantially similar allegations had been adequately pleaded. That ruling concerned the sufficiency of the allegations, not whether they were true.

For investors assessing the dispute, the key issues are whether ZoomInfo’s reported RPO adequately reflected collection and renewal risks, what senior executives knew when they sold shares, and how the company’s later disclosures relate to the earlier figures. The answers will determine how much the complaint’s account changes the understanding of ZoomInfo’s customer base and financial performance during the period in question.