ZI - Earnings call transcript Q2 2022 | ZoomInfo Technologies Inc.

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Operator

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the ZoomInfo Second Quarter Year 2022 Financial Results Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Jerry Sisitsky. Sir, please begin.

Jerry Sisitsky

Howard. you, Thank financial the ZoomInfo's call, our highlighting Welcome quarter results of for second XXXX. results to conference With me Chief on and the call today are ZoomInfo; Cameron CEO Henry and Hyzer, Officer. our Financial of Schuck, Founder we remarks, call open After their will to the Q&A.

statements call, will, Expressions including, to laws. the made this anticipate financial items, are may, goals, future the limitation, including provisions During expressions something reflect intended historical statements. expectations are U.S. performance for similar to harbor future of pursuant believe and and without using forward-looking forward-looking identify any which expect, securities of safe business than outlook, terminology and expressions other facts,

SEC. a reflect conference forward-looking revise discussed of Factors in or our undertakes Risk The Actual statements and uncertainties, statements order required differ to the events company may call, to after of except number materially that from results in involve law. statements. no may any the update including those this by obligation sections arise forward-looking Forward-looking with as any risks filings

our non-GAAP information, have For we included otherwise the on statement in to metrics website call cautionary A ir.zoominfo.com. the that discussed this are refer Investor noted. All to slides at our posted please in Relations unless more the Henry results in to found to be can Schuck. reconciliation that press the release we Investor website. CEO, financial the With over turn call or Relations slides our posted have that, I'll

Henry Schuck

profitably our for growth for revenue strategy you we up beat us million, financial year expectations as QX margin quarter, XX the generated the and we income levels ahead appreciate in them free and number second XX%, Thank again execute of of in bottom quarter. expectations continued delivering adjusted performance an efficiently days quarter, and of last line integrated We sequential We And quarter. we unlevered did to since in at year-over-year delivered platform proving cash and we a We drove of top with acquisitions, our of of and generation today's together, that highest ahead business. the in plan our ZoomInfo's the GAAP to XX% cash an evolving environment, when of to margin flow you, growth that and profitability quarterly million In even free of X% flow raise to outlook. $XXX the of the year, QX $XXX continue adjusted growth, all-in-one ourselves can quickly Jerry, hello, and operating of once against on joining call. set of results leading a again the everyone. and profitability in unified invest scale. macro combination deliver Rule line full

billion run our $X milestone we to there, are rate On revenue crossed committed our and While we just billion. the are profitability. on of of threshold, next best-in-class in delivering levels closing $X growth we way both

more businesses to them have will customers, our sales helping teams do going drive more and the of that efficiency drives are holistically office for want they need users the growth companies all future front customers integrated the that is platform their sizes. what to We drive for succeed software our ZoomInfo's data all platform inform only RevOS the and integrated is The motions go-to-market helping insight-driven is convinced and succeed what leverages with integrated, forward. can to and experience automate company. and and efficiency. This of of the

revenue Workflows, with $XXX,XXX Data the functionality making and our insights our over are more functionality Customers more deepening and of more. more to including more doubled greater milestones over revenue XX per of across end to grow. advanced with and more platform, ACV, growth than and We of are X,XXX leveraging Chorus, And than last average levels best-in-class it months, meaningful experience an from functionality continues customers of closed in number of year. our of driving of as Engage, total We compared quarter integration while customers ACV, and from a activate XX% XX,XXX We now easier represents now the XX% and we platform, now functionality data. than Advanced past these integrated to record RevOS are the Intent, delivering the represent achieved with Service customer. advanced the acceleration and in to points customers ACV the have QX. ACV a

a and single and and across ever of we added upmarket Engage landed mid-market Our most platforms the ACV Engage with acquired of long-term are new growth both foundation of QX we the as since and enterprise Chorus a gaining markets. new the doubled a it in than strong. year record remains tripled ZoomInfo. demand the products the the number also durable we deals are creating executing revenue had months in well added with single ever accounts to amount a while ACV recorded in with since XX% RingLead MarketingOS quarter In And have acquisition. than customers we largest more have X increasingly XXXX. nearly short, TalentOS the TalentOS Xx ago. business we new new nearly Chorus for board, across momentum meaningful the and quarter, a in business quarter, sold are most

We and the we with We and also our speak from monitor sales our we for customers. environment business. look our signs of impact Chorus directly hear to reps, economic to calls, continue listen on

seen have but and that QX, still relative are cycles in somewhat incremental closing. cycles review, finance are sales by deals We to extended sales procurement driven

efficient create and help a is to our our for macroeconomic cycles, motion value near-term sales elongating go-to-market insulate and customers against proven may it. uncertain very market The executing will environment time we opportunity quick some are While us. more huge,

that lead. platform, We are earliest we transformation go purpose-built a we transformation data, are in positioned a what how of a businesses to with the to is and generational of believe days uniquely market insights software

that We and customers power vendors. consolidate have and our are delivering the integrated platform, we and to to strategic data and efficiencies for they success fewer look right that platform, as with insights the look fewer

to all continue to customers sizes ZoomInfo of success as of choosing a deliver all industries pillar stack. increasingly customers tech with their go-to-market across We

As your to focus more profitability efficiency, economics, sales most and marketing is existing of and out unit get path the on obvious companies resources.

marketing user their becoming time. a market. while are For but to the drive efforts go a flexibility and to they providing platform company of and we to Caesars reviews with they Entertainment, of to ways each properties more I Salesforce grow events in to in needed wins X the and either stack system stages decades, current have casino U.S., went world in a trusted Fortune highlight the ZoomInfo varying These chose at and marketing through a more CRM entertainment as of sales and efficient largest of deliver to sophisticate the around that. scalable insight. few transform suit are just XXXX their privacy them using us sales needs Historically, partner been drive to record quarter, from and LinkedIn, way wanted the at meaningful their security to expanding which the before each who ZoomInfo or over customers their help maturity their a customers. to sales of was primarily our system that

a push Salesforce up-to-date and directly forward. sales insights on ZoomInfo, immediately trial did results, and ready positive data and and their ZoomInfo was that to sure and CRM. next making team to was rely accurate They inside of of short saw by excited going First,

single with user of as Data DAS as additional MSA, real functionality, leader ZoomInfo Enrichment, the Visitor and In A RingLead financial is those addition SalesOS and processing chat is converting X OperationsOS. SalesOS time, them and agreements as respond to multinational year, Identification teams Website consolidated implementing data, started and prospects of that across into Caesars mix and technology a payment CRM added last SalesOS additional in to which services within Intent Enrichment FormComplete, with also pioneer Service in we and a company seats, more subsidiaries. global their events well seats to allows a customers. engage In user a

and SalesOS incredibly prioritization intent. centralized We more that client data team all Stripe, M&A and as Stripe contacts now well our as deployment efforts, is attributes integration an a and hundreds spans a their including driving across data instances, as to combined data, science a business interaction normalizing across their new Salesforce every initially to what At grown modeling more sales motion. provide insightful. engineering is footprint professionals development build relationship go-to-market and for ensuring and across timely custom advanced on holistic of accounts professionals and enriching a go-to-market and technographics, efficient a approach small and and are is allowing their organization data-driven them started insights, that to integration and much of a to now deduping, and core driving has teams best-in-class

the the of largest with X,XXX across users communication team. their is and more than large business, SalesOS of sales, wireless, sales percentage and in enterprise a including their channels multiple One inside of reps global in sales companies using wireline world

the analytics Bank, of we States, a directly into regular XX banks of we of as we the instance part PNC top teams their of are SalesOS. deal, As will with quarter, data of in integrate also our their the data. delivery In and Scoops supporting the also one Salesforce, and added United customer

criteria and systems, and to and through synced records and SalesOS, merge from are seeing the go over used Chorus data filter high-quality number experience, customer a space into by ensure this to without In across marketing, data customers our targeted Engage online data billion marketers clients seeing system MarketingOS to motion. commercial is are In data SalesOS. we platform. view marketing use QX, create OperationsOS introduced the white think value meaningful dial, deploy best-in-class alongside functionality running to Salesforce, will and and to HubSpot they to sales as growth having and is similar to we synced SalesOS. able multiple from the our add capitalize campaigns highlights build This Engage audiences ZoomInfo ZoomInfo's in in audiences by the X bringing an SalesOS. the and top to account bank customers audiences DSP. leaving first-party professionals across their and now activity the in e-mail opportunities with for with launched feed data and social and now targeted account-based and to in multichannel with across these there notably, QX enable they're dozen can market. integrated Through their Most using teams with new on quarter team activity be building our I automation SalesOS, deploying for QX, ability targeted just Calls, with bidirectional create engaging ZoomInfo highlighting dynamic experiences backed their our data how for integrated display where most of become workload prospecting opportunity truly Through sync click ZoomInfo best-in-class click targeting new we is XXXX, that first-party a a prospecting ZoomInfo U.S. Engage network they to interactions to media activity audiences automation is powerful populate to SalesOS first-party intelligence data giving MarketingOS that Marketo, and First, And intelligence. e-mails average multi-touch account of RevOS. and expansion this meetings enhanced capabilities to and campaigns. capabilities can Xx and customers CRM we have customers us. The PNC much and that XX ads account records QX, to be prospects when

core new opportunities we integrate social create targeted enables share did in and with of standard certification. other that we motion and This streamlining coverage the ISO multiple advertising data privacy our raw rigorous reps rates. our our in campaign. place more we on deep to data a attribute. media ISO in California’s for year-over-year cross-functional SMB within us display to to and grown truly system for marketing achieved our finding looking further including data company's rep data processes QX, to technology security success sets machine account-based this This to data accuracy accuracy, fill is to surpassed XXX% learning up with And for our for them our key have in increase and qualifications in sales for company in contact detection organizations million of in by marketing our we a learning accounts and models instantly point data standpoint, monitors technology, coverage Incorporating of us XX than their a cloud. in intelligence to MarketingOS GDPR, directly identify team and entitled a support types valuable put percentage database and models, locations a changes quarter, We XXXXX with continue actively pomographic will privacy. our our SalesOS advance data, database released with faster with sales rate improve SalesOS increase that improvement records, and XXXXX and and XXX employment Xx and EU's of the and a privacy customers Meeting we with produced experiences sources see higher improving artificial a AirCover, developing In From compliance technology unify in Xx platform. by enabling aligned As to that commitment requirements. increase multiple approach. our models enabling SalesOS, XX% and detect machine us of match is coverage companies our strengthens a enabled CCPA a result Within look global contact database changes. to accuracy invest these to continue QX, introduced activate to and new and which

review, We as easy Center rebuilt profile. our possible as remove make to to update for have access, professionals also it or their Privacy

long-standing in beyond and a as opt in Our database, their remain renotifying that out claim wish. center again by are what can also with they does explains our ensuring platform our that they privacy-first compliance regulatory millions And our to our aware of customers individuals we're profile ZoomInfo yet be obligation they company going well. their they if privacy helps or

welcome She billion professional, I sales. Gleeson earliest our sales in $XX Cisco, true individual wrap Alison of is for annual days than was responsible holding previously of since at the the I having up, multiple quota. Before sales Board. to Americas to wanted more SVP roles been an in a Allison leadership

We excited she which welcome are product runaway to growth success. in look to will our to In the contribute are sales we her to market platform leadership. summary, forward the ways leader incredibly Board with our continued and many our and and

marquee We list have model customers, industry's the best a our unit with our integrations of given growing in leverage and powerful proven along economics.

the profitably. the current even environment, investing team, a with some continue created uncertainty grow We platform, the generational we we are And building are company. and economic by in investing in to of marketing teams sales do and to less. and are only more way goal being that more with is Sales the to pushed resource. dollar marketing And out to actually achieve every get

since inception Hyzer. just Financial small hand that, do and I'll to Chief been mission our to companies over it With has big help Cameron Our Officer, that.

Cameron Hyzer

and bottom-line another and was business which and another Companies guidance. our execution and the in top there QX all leading efficient Henry. insights their great Thanks, for of efficient outlook leadership looking are look drive quarter performance, go-to-market and of and and for remains growth, go-to-market terms strong, who continue high-quality to is motions. to is to sizes our increase shift improve in sales industries a more data for to to automated ways generational

we As transformation. elongated a result, demand by macro we are seeing continue cycles evidence to evolving sales some while driven digital environment, see the for strong of

relative growth margin $XXX million. and an billion XX%. to revenue billion adjusted the full to continue are we penetration, of $X.XX this customers operating At value XXXX guidance level $X.XX that narrow year income raising to adjusted $XXX tremendous to of we income We are provide revenue operating to drive and and midpoint, we'll current to our of Therefore, growth. confident market to XX% the represents given for durable our million

deliver free in expect QX, in $X to unlevered compared than growth cash XXXX in share of more delivered we X% flow per which GAAP revenue continue to implies for adjusted days year-over-year, as In XX% to the $XXX QX XXXX. up sequential We million, quarter.

the organic growth revenue XX%, months. of impact a million, last the QX XX $XXX the quarter in the performance last Adjusted of margin months, level was margin XX%. highest products our operating XX the was income for of Excluding acquired in within

to in the discussed have time. we past, adjusted we margins operating As expect increase over

ended to million $XXX interest $X QX flow. million, approximately and million short-term balance payments. quarter We investments. of in Turning and quarter cash the or XXX% Unlevered which free was $XXX cash million operating second equivalents sheet the the cash cash, Operating cash with in included of flow $XXX was flow for income. adjusted

the half in end will future in basis, free cash conversion range months. $XXX free in consistent million, was of XXX% unearned income momentum. RPO We We unlevered back continue that performance flow this to annual with on that XXX% obligations, XX down are of of year billings patterns. and With performance be are to metrics RPO, liabilities $XXX believe adjusted the the expect revenue of respect seasonal which with or million assess to at percentage activity flow forward as conversion $XXX to to and unlevered trending an in-period of a operating the imprecise million and quarter obligations, were the expected calculated and delivered remaining next cash be

trailing cash consolidated credit improvement adjusted leverage EBITDA, months an net improvement ratio and since turn XXXX. months our in leverage leverage is in trailing and result, which QX of in carried With we QX, sequential on at end adjusted a and profitability, second drove the revenue With delivered As we in adjusted $X.XX gross we represents EBITDA respect XX full EBITDA growth, focused to revenue defined our X.Xx sequential debt. quarter. a we as approximately a of in billion growth This debt, ratios the X.Xx days XX continued again with X% growth agreements.

largest this further to initiative. companies Global the the corporate of world's Lastly, Through sustainability have in first declaration, we Compact, UN States United to we signed XXX are one very the the be on commit corporate inclusion. the our year and to that, the full provide [XXXX]. stewardship quarter I our and outlook increased outlook With diversity environmental and focus ethical pleased for will for best-in-class governance, third

would macroeconomic our remainder I confident I and that Before meet are for the current to and or our exceed the we in note updated are environment, we do, of year. QX the of cognizant ability guidance

in to to to is of expect and of the $XXX $X.XX operating range $XXX income in per net million in range share. of be the For $XXX Non-GAAP million we to income million GAAP QX, $XXX expected $X.XX million. revenue adjusted range the

adjusted Our income QX midpoint guidance XX%. implies year-over-year and an the of margin GAAP of operating at growth XX% revenue

updated We XXXX providing guidance are year full as follows.

revenue billion, GAAP $X.XX $XXX range expect of guidance, guidance. up our operating from the We billion from in our of prior to adjusted the in million million, to $X.XX $XX up the range and at million $XXX million $XXX income prior midpoint of

non-GAAP range average diluted previously. of shares based million in $X.XX on share from XXX expect outstanding, per net up the at We income the weighted $X.XX to midpoint $X.XX

$XXX between For from million, unlevered we the free generate guidance. million expect midpoint our of cash and $XXX at million flow, prior up to $XXX

Our growth unlevered margin that, it over XX% full to year let guidance to of With operating the implies turn midpoint an flow call XX% and free me open the income questions. and XX%. of margin at GAAP cash revenue adjusted for the operator

Operator

Mizuho comes Siti Our comment Instructions] Panigrahi or from of from first Group. question [Operator line the

Siti Panigrahi

relevant software one and other application insights you're Could during that can cross-sell ZoomInfo cross-sell seeing you share Henry, have can your top talk into have on data And seen? made you that how about recession, also, economic you base? just the your you this of what are also you workflow last you now opportunity environment. experience data comment past about and

Henry Schuck

question, Yes. Siti. for the Thanks

transformation. of in they I be efforts, elongating had was digital what needed cycle larger investing in think realize their today teams they and sales same of of kind seeing their to go-to-market their elongation And sales immediately deals I international then and marketing the They the drives resources. companies they in We're some on to for a they more But that we if specifically continue investing to larger sales that to kind needed seeing invest an need of that software positioned need companies to similar. think that. specifically COVID that cycles their deals, see sales in we specifically afterwards, to go-to-market by behind days to is be for realized somewhat get But with early then that mile We to in sales similar. deals. saw going motion. resources are we best just their continue for be deals. their are are resources, in And productivity, invest we provider also out what

Operator

from -- comes Zelnick from the Our Bank Brad next question or sorry. of Deutsche I'm comment line

Our next from comes the line comment Turrin Michael from Fargo. question Mr. Wells of or

Michael Turrin

team from on Look, the nice here. job results the

a of we models. ones Henry, couple me. testing Just some everyone's fielded recently, quick just for questions stress

can business, in you. the you had diversification you just Is you be just some the or the Cameron, just environment anything else similar from account year? front are of standpoint in on help to And Or elongation so of there? can penetration the for you commentary guide, white space terms potential in us mindful half And what that's type exposure understand you're industry you're into something of added on currently? of wondering, seeing of or of? the just to I'm taking a it add the back assuming just something then,

Henry Schuck

Yes.

I inside sales penetration accounts majority, by of, in accounts. get that asked add ability vast feel happens if think from On the you overwhelming we across still the the the majority user we're often innings. operate a very, to Are just very hiring early team. like not seats? sales I in your we're wall-to-wall these what we of perspective, limited slows

this sales we have we're organizations within so that And tremendous opportunity executing against. growth

the the we so innings incredible we're in like And opportunity. early of feel still

And so we exposure segment. across or industry customer don't any special feel any side

CameronHyzer

wide seeing macroeconomic that we exceed. when that today. feel we and be level worse what certainly, range confident guidance the and we'll potential be environment meet to guidance, develop outcomes than our to Great. includes that And we examine a set to outcomes wide we're of our a able respect could guide, And with the of range that potential

Operator

Zelnick comment comes Brad from Deutsche Bank. the or question of from next Our

Brad Zelnick

at a up the disclosing results in the and to particular, the mark particular, in anything, on crossing tough guys earlier are with least that about made wanted environment Henry, said have. think sales environment, I weathering your I in or on international XX,XXX-customer follow to you you that seeing own and question, guys, mind, tough how to the you in just that well you in elongate. navigating and a And Congrats, and if doing are in uncertain you what, But terms some the larger environment? more cycles adapt deals. of comments go-to-market

Henry Schuck

Yes.

think our need I keeping share to what understand the that environment, they they around customers, we're give efficiency street. the sellers that and on unable heads of to tracks focused continuing the narratives that to on sell is are the that talk that increase internally material making and you're sure with collateral through this sell to them they

So and we're of account management enablement very sales advancing ability teams, on focused teams. the our our really

I incredibly areas. efficiency. think in those areas in we're invest hire that's our a big to in of continue motion, and one. looking high go-to-market And We'll continue look, especially to invest to

Brad Zelnick

follow-up Cameron, but customer segment it's on given the today? can Maybe might worth for any for to retention are changes retention calling specific or NRR any steady, what in just good trend out that's gross just a how you Cameron. visibility there expectations to see see

CameronHyzer

Yes.

we're better think, a really creating seeing still to else. as and anything pressure environment customers isn't some or continue for there segments to our terms look do worth invest in macroeconomic enabling create headwinds So calling specific retention, could I but anything we their sellers. into with want forward, respect to out net of

we're set gives see retention $X even what So confidence to continue and I drive billion to the our continue target over in seeing for ourselves term to us think improve. more long revenue that run towards that today rate we've ability

Henry Schuck

one within teams I help that to and platform is enterprise-grade the one there, place reprioritize too. I that already and best, sales continuing we but would mean where to get to are go-to-market. better spend, most they're they're companies the have looking go-to-market reported and heard Brad, look within better thing add you've rationalize to other What outcomes. from And is invest

them drives behind the areas. not And they're invest part of Instead, with hearing business closes to those so messing part demand the that from of their that demand. you're this they'll continue that and what business, is

Operator

Our from Murphy next question of the or Morgan. JP comment Mark line from comes

Mark Murphy

year. Congrats the guide the on raising for

software of recession Or Henry, that as headlines. companies are Is I They're would cutting hiring. due all environment? the need you're So have provisional And say of many well? that to that doing some follow-up. contemplating step that their lower-priority see a in the would change as investments. then back something quick to the now I doing you slowing bigger pace on the a a They're

CameronHyzer

into Sure, Mark. that. Maybe I'll jump

consistently I investments all focused think we've within on efficiency of our historically.

And so to the places put for best dollars. always or I incremental think looking what we're resources are incremental invest

way have on the had. I that so think pressure cut the that And that to we same don't in back certain things maybe they performing weren't

move to invest also and going have our R&D we in but to And support forward. historically, as business. in as investments respect growth with as think to continue continued invest well to capacity to continue infrastructure innovation, grow, underlying marketing the we as like continue focus we're sales I the to all we to

Mark Murphy

as that swing Henry, employment just portions and trying bit this on of to the then on or you might a some us ebbs could flows little understand factor how follow-up, of data-based a might your bit, but customers. you possibly I for when a see be you much cycle know, based touched we're just versus the what stream revenue quick seat-based And portion of on or update API-based something a else? is the

CameronHyzer

Yes.

deploy set number of we they scale seats So with customers our the pay is a and platform have model as that that there our up as taking our we systems. of so start well customers that that with, into based then up fee out as on to on more in as data integrating And well. they all the placed more might and gets that amount obviously, of functionality, they're be

or I we disaggregate the is less disaggregate go versus stream just that overall. and art back the go -- more at but half of and seats additional or think platform for there bit functionality, science, to than data are we when than look that, when revenue back little and probably a seats

Operator

Rangan comment line question next comes from Our Kash of Sachs. the from Goldman

Kash Rangan

you Can me hear Okay. now?

Operator

sir. Yes,

Henry Schuck

Yes.

Kash Rangan

like the sequential is you tribulation, some guys going of and in back RPO, haven't -- interested of What looks at acquisitions looks see through more And expected. to CRPO -- you what evident come that you finding saying unfold are in it like than just reengage out on look better firstly. So postponed? If secondly, need it's or rates see it. can to level change, order are doing sales happening the I'm -- is your like with deals customers it dislocation in And those everybody it's they that of the to your cycles. deals,

synergies seem You distribution. to in very have good your

certification back So next But Maybe or here. at obviously your curious what the QX thoughts is really as close to something stand where deals of I'm is and your you And working. get assumption QX work to ZoomInfo slip on deals, with Is you year? come is it or when these the them. for guys.

Henry Schuck

of just seeing deals. we're is an elevated what scrutiny those in think level I

those approvals extra level level procurement so deals at approvals of in end And extra and the of finance. an up with and C-suite

deals, in in cycles. those elongating retention QX. that both new close number in, early and already to are were I on side you business a that have those of the so the slated can And and come June, July tell

and value, realizing completion. something most deals And is proposition has on I are scrutiny, deploy. changed. obvious conversations the is what to we that's especially is looking feel not deploy that The think value the when time international are deals, we there companies quick more larger good to But solution elongating. to where get you're are getting deals changed. cycle about not But the just those to as So

a a this and cases, your Your you're and on in and in on up hands sales many actionability. buy Monday, of running driving Friday fully teams is immediate the immediately efficiency

can And so we software They're and to the the same quick company or deployment. companies through every for we to or has are hoops jumping are hoops software multiyear that for looking other additional not looking through deliver that projects today. ZoomInfo. But with do same value, time

Kash Rangan

kind et recovery as customers, U-shaped this factoring of know you be and so permanently whatever, me. higher do markets? that And some recovery but still these So follow-up interest what, in growth another it pressures cost attractive you next get just this inflation, year? and could we either I'm it that, create a that's a in cetera, rate to then or could the year is think just for lower of your Or organic

CameronHyzer

I Kash, So question. think a that's great

number I overall. the I said, of future, potential crystal think That clearer be think isn't reasonably recover other ball that able our certainly to of people. of quickly. as look look than the are being prospects growth number overall for growth, And that, relatively the people to the in companies as think will -- impact to stays we'll are that as you economic forward their in that lower continuing longer that invest a of that much -- we if kind there's just at I period time, continuing a

Operator

comes the Weiss comment of Stanley. from line question next Keith Our from Morgan

Elizabeth Porter

the functionality, a longer I be to for This complicated. advanced wanted bit can implications more is these can double-click that deals on drive Elizabeth as and strong on Keith. larger just Congratulations sales cycles Porter the just assuming those quarter. for on

in a of clearly, efficiency. in drive to you about So as there's should advanced think versus this under the need come uptake IT just functionality more the year? for little adoption scrutiny? functionality terms seeing specifically ramp a advanced budgets what we are bit how And earlier for But

Henry Schuck

Yes.

things a couple think I of here.

number one, we the only the market. I consolidation play think, in have

ZoomInfo happening. and an were and a a customers, the our ZoomInfo's RevOS vendors different all platform, conversation saw And vendor account where We so and they our it it across them automation to vendor that platforms intelligence multiple RevOS. across sales enterprise consolidate intelligence sales our either have ability into We to customers. is consolidating go numerous into on SMB saw

you think with that I see Engage upmarket. going

foundation base, those more able have enterprise We've mid-market into consolidation with bring of core. at nearly plays We our Chorus Xx solution. tripled we're our its automation growth to the deals data in our doubled, rate and the sales RingLead with and all Engage, are customer that

consolidation would one that looking out investments to for they're growth that and and about now those they're so have the making think I that Street. in And on sure is are with and they a right then and that, that prioritizing at so. opportunity the making to then company that -- that provide And is second they're that that say drive makes and I our are consolidate sure get sales provide every heads of repackage thing that The thing opportunities areas strategic if lucrative, there stepping cares working great vendors -- customers do package up a we to more them

CameronHyzer

terms actually half functionality, terms of this rate last in year growth what we the add, advanced the the said relative actually end of the change I'd rate that of in accelerated in of And at of Elizabeth, to year. it's Yes. first of

retention So more throughout continuing advanced our that's value, them thing ultimately really consolidation we're It drives a of more the is discussions to it those and on and base. that functionality exciting with even delivers drive customers. better that focusing enables more that

Elizabeth Porter

could context hear. the then And a I for Great. That's if as was great business just some performed quick provide follow-up. you quarter. to in wondering new how

the there quarter, given helpful. is macro customer would bit. color comments uncertainty about a new are that just super some the team last new to think segment and changed how new be I customer and now provide performing on records has Any hitting

CameronHyzer

Yes.

continues what slightly just well. right team to new the quarter, as So sales at same did the They we were below. perform level last

new second capability. ever So customers. about terms I to And of we've excited think in we're it's sales that the quarter that certainly, had best

Operator

comes comment America. Bank or question of from next line Koji Ikeda the Our from of

Koji Ikeda

through kind you shift the a ask of kind little we've to executive on that wanted a of question seeing some gears of I releases. press the and been bit hires new

really then we was So as this a security. And last compliance Gershoni, Simon and brought at Officer, on Day. focusing you Analyst Compliance hear McDougall got Earlier Officer, in. and year, to new compliance brought lot the kind Chief Security him speak of about Chief on week, Tomer

but hires these course, of it's stay the because just the to for secure in compliance So the it company reason and very up a compliance to as just leadership brings grow. and is are being we, increased question, also appreciative kind of in continues security, of challenging becoming really

for hires security. just on your and the really executive hear thoughts to So some these on big compliance curious of reasons

Henry Schuck

us. always team Look, world-class around a looking build to we're scale and

privacy. that to care about important that about us seeing security, do is are I customers you're invest areas customers what And care think our in customers.

Simon bring customers, you're that we And Tomer seeing we And an the our of areas. the think the so world-class to when we're behind in a in have to us know I and do into important those those willing beginning invest that's today. opportunity that's marketplace then year leader roles, what at to with step for and

Koji Ikeda

just follow-up, then And one here. if may I

ZoomInfo new here: kind levers of X of kind enterprises initiatives. like other consolidating about sales for that these of optimization tools sounds future thinking just strategic then big-picture to Just with new the the there's opportunities consolidation and growth. It spend on

X coming to expecting So levers, the between are split the I is XX from the those X guess to growth thinking about XX growth where from? months? really Or those for you that drive growth how the here next

CameronHyzer

Yes.

to of than in the see. of continues be growth new -- think growth, seen strong we year, we've half a I sales historically what the it's with throughout more So see to really continue driver consistent and that and

we in penetration Ultimately, overall do get. better over business can terms we're and another potential innings early customers and every should job the that There that's the to think in of are customers XXX of can we such And business that. a today. have of market. to use selling out that go ZoomInfo I XX,XXX

to whether have them space is continue whether of we to play there's lever lot data customers on to teams consolidation and of new go to the a out new help an excitement white users it's adding be customers, honestly, tremendous the important really same our expansion wall-to-wall, that it's on At go successful. get we existing time, lot our the continue and can about advanced their bring also within So amount data think I to revenue macroeconomic I think is consolidating other are And use. of easiest out more us. helping But white where or, double, lot a well. a within higher-quality within over replacement way a customers, those there. that in opportunity number thing market. for out existing a triple, nascent that getting of quadruple large a opportunity opposed as our space offer enterprise we're functionality we the environment, term, long as challenging space for the can be But still that's customers spend customers in white of the might in a we relatively to that the the amount there's there And ability

Operator

from line Zukin question from the Our Alex of next Wolfe or Research. comes comment

Alex Zukin

guys a So macroeconomic It current question seems maybe are tailwinds of you in I different Henry, I'll in combination ask everybody's guess definitely asking a like the way. and seeing the headwinds environment.

suite. to deliver you the quite other mentioned versus deals but software the in more it companies other even Europe, of more seeing takes lengthening enterprise And consolidation your in is sales time then large those are the headwinds think ROI. accounts tailwinds to I in you're cycles sales of low where buying enterprise solutions solutions time from ROI and terms

net sell I And of or effect to difficult a those bit -- easier this little seeing more the into then what's a So is quick those because got of crosscurrents? Are difficult? factors environment you -- follow-up.

Henry Schuck

Yes.

pretty way raised and to about I feel quarter. up a quarter think we We that, up the our raised this we put good -- about we guidance. full pretty Rule the We've Alex, put quarter. been quarter, think we're of year the XX

so we to to And environment. ability our execute in good feel pretty about continue this

Alex Zukin

there? still you are Guys,

CameronHyzer

Yes.

Henry Schuck

Yes.

Sorry.

Alex Zukin

for potential you that, The free payment in less and margins M&A that starting maybe follow-up, focus kind any -- I strategic of guess, software. is there recessionary payment was allocations? from Cameron, cash that capital perspective, COVID, situation, opportunity any anticipate either flexibility be, on with hear some already to the I extent companies say, to during certain from we're flow also other playbook or enterprise term To headwind around either you more any, incremental flexibility? then happening And for terms margins would do or would or a from customers,

CameronHyzer

what we nowhere some us part the terms, near we've It's of with it's of payment So our we're to the customers in back cash XXXX. with question, flexible there free here would a seen while terms for more And just be different flow opportunities to to more be how help that. could in respect discussion successful. certainly approach completely be

second but that. you really potential we about if say free recessionary a half always to of modest, cash to with that, on company. as the in playbook, it ton tremendously a And a operated I'd call year want flow not respect we've So the of then think efficient

we've I focused to you hard XX% always level. And software get companies of to that's companies, other lot really on. something to think talk that that fast-growing if it's that a are margin

So to and we're ROI that higher operating the in as level. bring growth marketing focus think going in upfront on clients as investments margins moderates and creating going out to continue and capacity efficiency. growth we I in way and are larger we're a to the for run best maintain through of when requirements increase helping sales terms drive a to most can will the on to the the And base larger positive growing in demonstrated a leverage naturally that service past, future, and we company less where that see costs we're off capacity client at around we've

Operator

Raymond from comes from of question Brian comment James. the line Our next Peterson

Brian Peterson

to We've some comments M&A. on also for just get linearity third the anything linearity. execution how curious of sales on get progressed? linearity has in the that better? say of on one the we As on extending, Did some really me things the Did be you worse? quarter I'd terms cycle get the things just can throughout strong heard So and month quarter. July,

CameronHyzer

Yes.

the pretty I it quarter, was throughout stable. think

execute. just we before that think early those. things much sales talked particularly one we a focus rate that as And to of causes short really cycles. we're -- in problem. environment we're to begin I I same about think pretty second saw to the which And seen to talking the quarter, guess cycles. some is close oftentimes, of that throughout about started we've good relatively sales I on They're continuing be And really of about is, we change to to July able the people the I've it's feel with, and part of that elongation instrumented that our some on, the really

surprised make decisions when by quickly. are So the people macroeconomic to they tend less environment,

a a in us. stability see environment, I we for that tailwind view that As modest actually macroeconomic as

Operator

from of question next Our comes the comment from Lenschow Barclays. or Raimo line

Raimo Lenschow

areas well. the Congrats little in of about you environment. the you as see expansion European shifting this like have focusing this way, resources planned in execution bit a with we for that for The the in great two side. like, accounts? of are terms is that mid-market it Is in products or more the get one. question what do question the see other you mid-market regions, what terms other uptake geographies, on kind maybe? the -- on the me you Like And macro in can other That's talk there? of progress newer year? enterprise the What's on By I environment, on side?

CameronHyzer

to drive So European continue office and capacity into our European expansion, to invest continue on there. we'll the

up really mid-market, core acquire that's we our the functionality stepping better Realistically, platform. go-to-market are number to great opportunity And real have of better of there to historically as and see are that similarly drive short-term advanced motions. excited clients easy a some like And we're there. and develop advanced think cross-wins. serious over I I about Europe, term with term think is path think opportunity growth long may having But in the long for there to the functionality, us. respect right be to right there capacity drive really and use efforts been data focus our to the I the in then the the

drive or into enterprise or step really good spectrum. seen a whether And quickly, we've think a I to client. uptake the so very easy you're really an it's step Engage for into business and throughout midsize Chorus And value small clients or really business

Henry Schuck

in did uptake the SMB, a of now we're market. think bunch competitors we get a about we kind Engage, continued rolled mid-market. Engage QX we out inside XXXX, to to many year talked product parity deals of we and enterprise is than actually then real Xx last seeing the mid-market the in to And learning, with compared for I where what saw the in saw, the Engage to of

significant there sits take more and easier easier to as products on companies becomes into platform what are the you'll as that, is rolled do us it inside new I core do functionality for continue platform the and see also it used as to closely continue just out think they we we integrate core centrally to of Engage to using. to

Operator

the Tillman question next of comment Truist line from from Company. Our comes Terry

Unidentified Analyst

Robert on Terry. This is for

in of Just about motion. consistent And over one Cameron, share past, fairly company’s Has mentioned from you can little for anything this time? believe been statistic I inbound you’ve trends sales me. that the that a that come half the in quarter? over

A –CameronHyzer

terms time, was over of Yes. continue we in QX. see growth solid been consistent pipeline. That’s pretty in and inbound consistent to that It definitely

that’s motion both sales inbound So out demand capacity really we’re generation in our there. as continuing and market large the drive to as continue well that outbound new invest and to attack to as well

Operator

Our from of from line Rishi question comes next Markets. Capital RBC the Jaluria comment

Rishi Jaluria

In is, the software within given maybe that I even least slowing that much the question, Or just seeing the help as very it existing companies think opportunity companies, putting mostly think is, the the vertical on hiring, you software still understand VC-backed hiring, at your look, not sales you issue? you including ones, impact vertical, definitely level. with we time, the there? at which growth that's interest not larger is hiring sales -- come But base how so of Can talked one your an algorithm, about much within of especially think us of reps customer I'll the should specifically there important software greenfield right? are make down ones. freezes how down too about just XX% of business slowing we from or

Henry Schuck

me in. take see chime from a and if level high it to Let Cameron wants

there deployed across not teams. I customers first wall-to-wall of overwhelming our is point think majority are the their sales the

upfront And land accounts an the so efficient and we management account those side. incredibly have where motion, in then we grow we on land-and-expand this way

better of And one today a sort that would so we going we we more become That and run when of more incremental to arguably as center. they've next front more software us to it. are motion, software never focused The seats been. go-to-market more the customer to then most companies are they a is great asking coming industry, efficiency And look get do and we are efficient because and than the economics and value go-to-market RevOS unit ever I us, wall-to-wall customers. almost we is say sign prove any gives how we us and opportunity thing out where more put and

CameronHyzer

it have much we're We grow. it's Yes. add, I number faster growing do have much less of still well. to I to grow worth because software noting be customers a continuing might don't almost But are think that although other every continues that penetrated. in industry, to

actually, number So your little is think outdated. a XX% I

bigger terms we're And the more we software the to grow, in continues to think below a and XX% while of become they'll of that to even continue industries of are concentration. portion I quickly, see other all today continue growing pie.

Operator

next the DJ or Our comment Canaccord line from of question comes from Hynes Genuity.

DJ Hynes

me. for one Just

time change material like seen coming the all the customers new for the any any and faster and follow-on with they personas, the you in to So the advanced wondering, of functionality additional flavor transacting sale? I'm getting now? introduction In line and words, are ZoomInfo have other a first back typical

Henry Schuck

material again. fast transact I change into with don't in seen think any we've they us how Yes. --

over a time. for are there Chorus, don't examples adding Engage but think or customers on think metrics I then of number and on of signing changed I SalesOS overall the immediately

Operator

Our from line Taylor from or UBS. of comes comment McGinnis the next question

Taylor McGinnis

looks flexible Cameron, know can I Comparably be at some have X I you And past quarters. aren't And would quarter metric. mentioned payment Dogpatch. But gotten terms the billings have this moment. these a that an and from earlier much like impact sequentially billings calculated benefit noisy of think it having declined

can anything income? might here relative that? there's And like on you if metric, So that the be to anything there's cash just read-through operating to any free any add co-terming impacting raise if flow or what lighter

CameronHyzer

Yes.

got a perspective flexibility billings was before bookings that last quarter realistically imprecise So of provided just that. but back really you from to you in if I not at the we think need remember, real XXXX can to and because said that benefit customers everything to compare, payment metrics, And first XXXX. as the of billings half the look you be really happening

I again, the So be, that activity. much would about thinking with certainly revenue of growth and terms more on careful in in-period sequential focus

we're certainly, I As but about flow outcomes. unlevered think would a yet look customers. some free as include potential free incremental seeing And at flow, wide need our outcomes And we cash that those guidance to flexibility well. we think may that not certainly, influenced to of cash range provide unlevered

Operator

comment comes or from the from of next Our question Stifel. Parker line Lane

Parker Lane

user provide some on could impact lastly, of a context expect you trend does the what slow that ability recession? down, the Edition base. just expand recent to you'd if Curious company's And the does Community How in on that growth the if asset? then core to have data that

Henry Schuck

Community seen addition sources the is results that one Yes. use We've out to of build of data consistent Community Look, we data many the just members. pretty different asset.

so changing. or we that slowing don't And down anticipate

number platform. our Edition data to there in of Community come are the the that think I additional together with data a sources that deliver

No data comes data pretty mosaic majority one together. it's And that that big our data much the source a of comes is into platform. so a of

Operator

Brent Bracelin comes from from of Our question next line Sandler. the Piper comment or

Brent Bracelin

I new coming back wanted new to the from Henry, particularly to go the products. ACV build,

Is of that new new around products change a that sales called out potential kind Chorus on ACV build to driving sustainable these just certainly months? or X that's And to is out it X the What's how MarketingOS. it SalesOS the offset Is next in internally? Engage headwinds customers? the momentum of and RingLead resonating incentives driving kind as an seat over looking You improvement from side? with and and

Henry Schuck

Yes.

integrated that a to one that product product vast Chorus Engage conversation conviction was is when we want. going we or had need it motion? are And Engage, to focused when to about this is, we these or either near were our a when platforms go every with tremendous and out to majority to make on line, new think the piece Is about think software critical acquisition built use of the in the and team line we're into things this the go-to-market that that a product you Chorus of a acquired an you going we think of future. really when intelligence, I a relatively product, that sales software customers is build

so add do next Engage do funnel, and Chorus using just the actually want the a and to they to thing fruition. you're that bottom And to they're and And into seeing to makes optimize come the activate the those do data, that they're is going is what thing the SalesOS core to that to we When products, want intelligence next and when an using is company that. to platform, sales middle they're to that. do the just the of funnel of investment

lot alpha have market. And bring We and use beta them customers. around so to first the products conviction we of a We're we internally. the

of innings numbers products. those sort And effective so and get And selling. that than in even our sales in way, the once of those to it with the platform you're in take intelligence seeing we are our reps, earlier incredibly able in we're sales that hands they're to an market core

Operator

questions I'm Mr. I'd time. the back queue Schuck remarks. showing for to closing additional at no any Henry the turn this over conference like in to

Henry Schuck

number companies in have Great. opportunities, a we lately and their Thank are technology you. of are growing, I looking people the But plans. for hiring. know been that news are out about we if hiring there

winning zoominfo.com/careers. to everyone We to you -- team. And should Thanks visit Come great place everyone are join for our a work. tonight.

Operator

you for in thank This gentlemen, concludes and conference. participating today's program. Ladies the

day. disconnect. have You Everyone, a may wonderful now

ZoomInfo (ZI) 2 Aug 222022 Q2 Earnings call transcript