- Earnings call transcript Q3 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and thank you for standing by. Welcome to the ZoomInfo Third Quarter Financial Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would like to hand the conference over to your speaker today, Jerry Sisitsky. Please go ahead.

Jerry Sisitsky

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

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

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

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

Henry Schuck

that a powerful beginning has transformation of and BXB solution that for do our Thank environment. business is only in companies ZoomInfo with for deliver the proven the of than generational go-to-market exactly a shift less, platform you, all ever, teams challenging digital are Jerry, and more looking to everyone. of welcome, more We're Today, sizes. the sellers can model even and macroeconomic at

We per million. in and XXX to are a and connecting most ZoomInfo's it This with and the points scale. free quarter bottom line, in every annualized is does QX, time nearly cash underpinning who full again Our approximately efficiency and operating the dollar largest the the -- QX them people up businesses another expectations their and and the the or basis of TCV purchase all-in-one expansion $XXX history, when solutions year of spent unlevered company's by leading they at represents deal raising $XXX client. million and that platform growth and giving in at $X year. XXX on sequentially engage delivered need likely adjusted drives In to basis guidance sold X-figure being flow XX% results profitability growth scrutinized, income revenue operating of beat our at basis, share quarter, GAAP scale. our $XXX an third once margin In year-over-year guidance. of approximately we of generated XX%, we points and income profitability again on full our combination adjusted year million last we're the from revenue top up an technology

to solutions the account-based this platform continue business and resonating, increasingly is million company OperationsOS, USI. conversation Ryder Taylor strategy in marketing Enrich sold and land new we with largest and Systems, $X did consolidate our The sales data also like leveraged. first We Engage deal to Corporation and being SalesOS, intelligence, quarter engagement, point exceed history, with across we

short pressure see to increased made well, macro we we're While sales This these modestly on do began to way elongation the QX and continued expect we deals our increase demonstrate level of through and review causing deals, that QX, deal execute to continuing to as the cycles growth the quarter, results. in late impacted only very we impact started it into in this Since further. has elongate trend to it QX, term.

how we macro, the economic environment, growth in and gains can we While we a deliver in of out business. control more that know And model our play margin form resiliency even we more stable control manage can't will the strong the we see driving consistent of the and earnings. could you

confident are to of many in growth, combination the scale. let quarter. highlight guidance sustainable We flow and of driving continue for a we raising With best-in-class that, in and successes customer me XXXX, the cash at profitability free expect some generation

year a up drove record the percent That's new expansion First, business year-over-year. in largest XX-plus customers We mentioned per we more earlier, than who quarter we ACV customer. the ended spend with with the X,XXX saw as and deal I $XXX,XXX again us. history. And company's

with stack transactions the real even transportation ever, deeper and across our represents industries. Advanced work insurance, to of verticals. result, ACV, we and full customers. close to and estate go value manufacturing want and organizations increase our logistics, growth to continue the of finance, to best-in-class now all is continue More strongest Seeing integrated a We more our functionality customers in more strategic strategic platform the partners. than And as fewer, relevant. with XX%

entertainment have from insights the teams accurate do sales and best. sales top deal. engagement ops not. dollar of highly it X mediocre cleansed to sales a going are that professionals team to a types Their close a that sales ZoomInfo digitization of with be to motion, opportunity wall-to-wall and right workflows reps plus went the to forward, sales and transaction and are news going with There needed the said team. and routed sales best teams a went and efficiently teams efficient that tools multimillion that example, automation, successful and win broadcasting given a their across This to an the their company accelerated rep demo data deal their As entire single

their best-in-class their global a Next, consulting Fortune infrastructure software with streamline further automation. company insights expanded XX and go-to-market strategy data, and licenses to

users across in As than our our XXX% they confidence X,XXX could to investment billion data with SalesOS the to full platform data for expansion them privacy environment. that the suite company. public with a more and a products, team large intent sales relationships. customers go-to-market professionals by efficiency They cap to telecommunications vendors in more services And their This by time stewardship their right expanding efficiency trust, they an stakeholders their tech enterprise orchestration X an improve allows more deal but We with gave face investments select and than million to company a ZoomInfo adding over them in they to when and right Their the needed unify them chat reach organization, consolidating use our vendor strategy was consolidate their expanded OperationsOS. them their already represented vendor data by financial across countries. and our rationalize market. while by wanted by decided at several SalesOS, growing XXx MarketingOS company spend XX $XX A looking X ZoomInfo market the ZoomInfo. are to losing the help in XX%. end-to-end of providing of and stack seats than uncertain without macro SalesOS go-to-market stack

one-click professionals our We to focus our development experience efficient efforts create deliver invest help behind the engagement sales SalesOS, to growth. platform unifying the In to workflows continue to to we for prospecting, continue and Core's engagement across by and integration drive integrated core data-driven SalesOS, customers Engage streamline experiences intelligence. entire onto engagement, intelligence, products. and prospecting integrating the closing sales single to of platform automation in in a our advanced using engagement and intelligence now Customers conversation deals sales conversation able are

the Intelligence We footprint teams. into in executives, the We've also organization, review our via account ZoomInfo success go-to-market invest products customer continue integrated account pipeline Chorus. process to post-call and across for adding management and

without marketing. intelligence leaving our meetings by So risks includes contact focus our new sales In help on better alignment available customers' company run to Marketing key our between right the and competitive and deal is and customers pushing participants automating platform. to we highlights functionality brief along and that help inbox. meeting targeting company, marketers engagement engagement with activities This effective and achieve OS,

the As MarketingOS with end-to-end already omnichannel customers cases. who part their portion users motions expansion which the teams within an out get vision, deals. departmental customers to influence onto similar by personas resonating to target same are the capability, quarter, we better buying committee tools, multiyear go-to-market expand account strategy building of cross to allows SalesOS In the larger our a is audiences platform same data. same leveraging unlocking to customers. of multithreaded advertising Over the optimizes This product added use their XX% of lead that integrated want we're and

to integrated less rates the right XX%. people That's in buyer putting Additionally, market XX we in we our workflow to Slack know close by interested engine, prospects right that front of seconds. why increases responding seconds within than intelligence the into and conversion

you alert visits accounts on deal from account immediate can context of page example, For and relevant automatically we assigned a prospect your X attach for if outreach. a and website, high-value the your

capabilities any teams action such They companies relevant can their append campaign, all information reporting market account within triggers to data campaign CRM, to all helping streamline of insights ready detected creative to DSP continuously as addressable and they now new track and Customers data buying quick workflows. at static testing and which our to into supports or help operationalize changes updated, CRM. data capture through beyond expanded customers through sophisticated them changes AB accounts include quality allow committees scale. domain automatically we're signals their sales the In into dynamic OperationsOS, can and move routing. to inside take enrichment on predefined a also world placement We for and total can action inside

delivered capture introduce the at XX%. automatically rapidly to API complete a to area the rely and extremely of this but alert data data grown reducing organizations action transformation not the time the is in our marketing initiatives. we such doubling our reps a so to signals alone. teams the sales prioritizing important customers digital moving standpoint, key customers enterprise our sales systems performance And generating more that example, while provide QX access increasingly a was will APIs change contact to account The signals critical sales in we play from role capture with. API this applications as take a most of contact has provide to APIs, new APIs automatically can second engage with signal connecting they and and an For for into call Zoom and records company-wide replacement means by our and CRM. help new improvements on company year set. accounts with with right relevant the focus related then on a A data demand in only than market for massive actionable Intent often number

to customers intent to powerful of we the enabling sources intent data, intelligence layering intent GX the direct take with signals our signals GX company those advantage into quarter, starting of better ability This and action in intent by bring contact platform, introduced allows platform. our GX's top outside ZoomInfo signals against on their

addition, by page. signal page then offering to higher signals low customers and as medium our we've intent advertising than high, audiences be campaigns to a being careers individual buying website can leveraged web visit to In visits that improved to power so buying pricing pages, indicate create driven or such outreach. a a our can visit These high-intent sales

focus to of setup and area friction was third processes user admin. and for reduce management The

we As ZoomInfo's delivering for entire team, frictionless a deeper has setup. are with account RevO control solution focused platform on become go-to-market

months. updated We business revenue and data better Companies provisioning users customers, technology customers technographic even driving advantage. invested doubled acquisition technologies, teams distinct deepening than XXX our accounts set, data adoption learning, for platforms, manage of a and well ZoomInfo pairing media Nearly can codes. investments automate and the We and as locations credit company make further to SIC non-headquarter the of now CRM, can Chorus in or ability for X e-mail than travel our continued competitors' past technologies data classifications self-service additional matching industry headcount NACS XXX identify hardware they increasing to admins foundation, to and track for use. our determine their including and location-based back as corporate multiple And more companies, than gauge data across And management their XX% machine languages and purchasing data pairing their lastly, technologies, and list identify technographics between to their million relative From seats, to of we've companies We updates path displacement spend. locations. XX connect nearly a been made our company's the system. or more data the system made the management allowing we coverage and win case within ideal standpoint, competitive and coverage. advertising deprovisioning user their have enhanced XXX% of our sales to and also leverage data our including within base, categories, now for a customer we've and programming their performance expense across active our accompany sophistication expanded tech million profile. to more have

Before long-term across in added XXX efficiencies a security I wanted leaders we as all the marketing to short us, our their -- the I more the recently motion. of and ZoomInfo while continue motion, the employees term. and across sales on are members In and to our use the are wrap data teams support positioned more in sales, newest There and the that upgrade to hired we including clear closing, and to team, are up, QX. ahead companies platform we go-to-market looking welcome the go-to-market generational team outlook capitalize prudently than more to business drive the insights in shift HR, company remains in leader, huge industries growth well and opportunity to in we investing drive the of the

to small part group the an of and of and to long-term a efficiently, customers helping continue we're sustainable customer from platform drive businesses have the enterprise grow success, key that in growth to team the We plan. we amazing invest

committed remains we While performance. uncertain, the driving economic improved margin outlook remain to

With delivering that, companies the free it Our expanded of Financial over Hyzer. in Cameron scale. flow Chief financial Officer, that category hand cash us at model our high-growth puts I'll and profitability elite are to software

Cameron Hyzer

quarter profitability in profile in again delivered expectations expense showing leverage another our consistent model. quarter was QX that results the guidance. driving our We the Henry. and of Thanks, adjusted execution we inherent exceeded and and our better-than-expected prudently

to bottom raise pleased position year. be guidance top for and line are again to a We in the our

are secular from the many towards in to more the challenges are macroeconomic environment and digitization, relative not benefit long-term we trends insulated macro we we to While companies from term. short immune

of an a including saw sales the Towards are effort outcome, of we further requiring greater QX, as elongated and buyers, All segments. to QX sales entered our from and which deals, team scrutiny straight reach more level end which renewals capacity. we financial stretches

becoming As their of a time reps renewals, that factor to on to growth we upsells are limiting customers. spending more existing capacity see incremental drive is

we expectations in more the are retrace As a result were in expect to we signs for raising QX we deliver achieve able that to now said, we are still customers. that retention until see prudent the guidance environment and of more our XXXX. of value year XXXX are we the the for that environment, challenging near-term short, dollar-based economic in proposition XXXX net That improving. and growth confident our the view gains In we taking a the to definitive is

in be range billion revenue For now $X.XX expect XXXX, billion. $X.XXX to to we the of

delivered million to XXXX. QX, the than free implies in more of sequential year-over-year, for share XXXX million, adjusted revenue X% per cash margin and range to represents of growth operating operating $XXX and XXXX of to $X XX% of in GAAP revenue expect expect relative unlevered $XXX growth up we deliver in In adjusted days the the midpoint, this compared We million. flow income as QX XX% to to quarter. income $XXX which in adjusted XX%, be At we

maintained the the of revenue a XX%, impact in of of XX months. the organic months, margin QX $XXX with acquisitions QX. Adjusted the margin the in quarter performance was income highest last XX first we for consistent level at operating XX%, in Excluding growth million,

over an profitability increase to on adjusted emphasis We expect margins we time. efficiency operating continue place and to

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

macro and of billings, RPO, be million, were While calculated quarter metrics liabilities flexibility believe the million related delivered $XXX we the are our potential of forward next which We terms to this the expectations in performance assess in term end short activity the in in unearned more flow $XXX With a revenue bookings seasonal remaining and the expected both to are was was worsening patterns, obligations, with environment. adjusting in-period $XXX respect months. XX at payment obligations, to to future or that reflect million RPR and precise and performance to cash for consistent momentum.

credit the coming XXXX an leverage continued profitability, XXXX. remainder XXXX. consolidated our a leverage If you trailing months adjusted X% half noise due metrics, X.Xx our days XXXX for of XX important we of QX third growth inherent and $X.XX quarter. due sequential billion and Because revenue and on with acquisitions. With in our in comparative hedged in agreement. in quarter growth. sequential of to With debt, coming revenue increased of will with that net is days ratio the of be the debt, adjusted ratios adjusted in carried and our all outlook are respect has EBITDA, remember fourth it delivered growth analyzing focus about for again gross of improvement the which defined I in or that, adjusted that should the X.Xx We provide end period drove similar for metrics, we QX, which the months rates, those as XX full EBITDA trailing we is to year in cash at outlook With the EBITDA fixed interest

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

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

the are $XX sorry, of to $XXX We at prior of follows: XXXX $X.XXX $XXX expect of adjusted the -- guidance prior in from the up providing $X.XX billion $XXX operating guidance. midpoint and up as our range full we million revenue year million billion guidance the updated billion, $X.XXX million from in at GAAP range midpoint to million, income to our

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

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

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

Operator

[Operator first from Instructions] comes question Canaccord. Our Hynes from DJ

DJ Hynes

So with Cameron, you. I'll start

to comments, sub-XX% alluded but CRPO based you So this XX% billings in calculated getting calcs. so bookings, growth, we're your

I'm mentioned in bookings given curious, should we that's signals data these You this can kind that Or growth? this, but barometer kind organic for aware of in there impacting be false points. slowdown of is of the these kind something you're talking about, metrics case, decent glean the sometimes from is we of just a quarter?

Cameron Hyzer

And indicator certainly, we revenue focus activity. in-period better on as a growth sequential of

when you last adjusted unearned bookings get for And and for year. an particularly I those as acquired XXXX, at think that closer was number looking I example, acquired of billing to matter, growth things adjust to it needs QX growth for adjust acquired be if acquired need close the you're QX million in overall. to in similarly, I RPO a revenue billings for. to of $XX and those RPO XX% of that's

DJ Hynes

Okay.

maybe commentary. follow-up as And you. Okay. a That's Henry, then, more for helpful strategic

more have slower Or your you a continue kind spend, you invest? getting And do advantage? you how about investing measured you perhaps best-in-class your environment? a curve? use you to growth investment of to about I behind mean the that think margins. do do Do Just bit of strategy little already the demand maybe more in think with kind

Henry Schuck

Yes.

a you to slows, prudently. to growth perspective continue to where base. management our a business. manage to will continue as as the in to think, be to expect in the continue us see sales That will said leverage point from margin increase, business. We and before, I to being philosophy we're invest margins business is the account guiding said, continue build And going we grow capacity we've that as to and our customer see I capacity think that first,

where to And would we invest. continue so that area be the

Operator

with question Sandler. next Our Bracelin Piper from Brent comes

Brent Bracelin

Cameron, here. you we'll start with

renewal about wondering deals renewals. You of provide the new and from could the perspective? the are Or to hear layers talked size layer if discussions. downsize Is to customers on Are a surprising to additional Certainly you looking it close longer terms of flexible given just around another that renewals? they of the But taking scrutiny just detail for not timing environment. a more current looking payment renewal?

Cameron Hyzer

Yes.

we're continued actually seeing of So retention. from gross a renewals levels really perspective, high

renewals for So we're we might places, other happen. I expect, those as see And in you flexibility think, looking -- continuing customers terms. are to are payment including

X we're think remember value the about our individual that of important business, is an to I really for that's things salesperson. driving

little the further that we're be a decision value might sometimes maker away providing. that pain or the from And

So from in a think and sales are how are bit users terms motions. on is hearing those success all scrutiny more that it time this us of little and effort takes in the efficiency themselves marketing make decision-makers when additional the of sure and within a to for their I important on driving layering vendors, their people

go So team slack go and that to really upsell to efforts we're that impacts after. a our effort, then the obviously the already in necessarily is incremental of just able on out that's in weighing have system doesn't team, put effort which some and that incremental efficient

Brent Bracelin

you're that And of strong then Helpful software expand tech certainly color wins encouraged Henry, see to outside and in. so the several vertical there.

Ryder, ZoomInfo vertical? that outside can of Bank, What the tech to Unilever. FactSet, I software you core about to do accelerate talked of further think you M&T adoption

Henry Schuck

immune there changes. seeing One are of much more is macroeconomic in are environment we're the things that to that industries and this that the macro companies

it see You in financial services. in see insurance, that you

and transportation in logistics. it and You banking see

those making the us during within identified focusing sure mainly opportunity and those capacity sales we're across are a it's period additional so increase companies and industries, companies around our sales really this capacity we've industries. time. that those to And of industries teams And those for

Operator

question next Zukin Wolfe Alex from from Our comes Research.

Alex Zukin

I Cameron, exiting talk some Maybe things. few first, were was seemly just $XXX guess, track a that these expansion more couple to this about this on close sales year -- deals net quarter? me. deals? or can the was days Was for more they a growth on bit to September, pushed, little million the guess then $XXX And dollar X before? renewal -- renewals that of are outstanding of the just commentary I the you specific of color can year very this maybe of couple retracing from -- and rate? large you a million of that be the on last a end Is the

Henry Schuck

take me the have number that had a closed. from first We've of Let part. already slipped into deals QX already that QX

in to the come those already saw We slipped larger that of have QX And quarter. sort of out similar are in. QX. trend deals a Some

so elongation stayed deals, the these that and gross to we're fruition have rates seeing largely same. And retention again, our come of the cycle

taking those of them so seen come close, a we've through. And longer closing. are to number They're just already and

Cameron Hyzer

that little about upfront see less think We payments. payment do bit way Yes. kind terms. we The of a annual

in bit of sales more a XXX% and from But the retention, that terms to to is in we payments most additionally. contribution, are When our a these we've the the Ashley, on last previously, of think we're that that in terms outstanding, outstanding We number improved X% about from of of single about could little think digits we've those saw deteriorate mid- year XXX%. customers behind we cash of expecting where percentage of as we think are and down upfront a expectation over billings where up kind it's I total have. that we previously. net in focusing were had annual of XXXX So been prudently deals high

that historically to what digits What I than we gross will a strong, to retention single in of think different that is little XX%. complexion saw are retention mid- kind be we bit of be over the seeing over high really continues XXX%. that

had in seat that and are respect seen to have data of we expansions pressure where acceleration we functionality the seeing feel on we're expansions general. more team isn't as of still So they're seen an with historically. that spending time after in able given renewals customers opportunity terms That's that and our we incremental have much upsells. the the go deals is the area and to Where we renewing, upsell

XX% than a we data point, respect kind to conversations used to effort to any our to are As of respect with be. with an required that overall, get outcome found NBOS higher it to

Alex Zukin

surprise in what for -- Understood. And any Or is the kind I was incremental previously issues particular this from is of macro you some it If vertical, broad-based? others broader concentration guess tech a maybe like -- software? Is of than about it question X think geography then Henry. that of weaker these for may we just a have like where there thinking? what were been or

Henry Schuck

the more the environment we of materialize Europe I of materialize quarter, larger in and in this think saw second in or more deals. pressure

these in really elongate board, QX, you then the cycles I specific of concentration. this. were saw industries so and that area there isn't largely immune saw to of sort an you across But think

And so largely you saw here. transportation and unaffected services stay media and and and financial logistics insurance

teams And sales opportunity areas on of that of on the that focusing from we our immune away are now. to right so less are there sort areas focusing are shift

Operator

comes Winslow Suisse. question of Credit from next Phil Our

Phil Winslow

of comments appreciate on about up and extra components follow sort Or be the board? vertical, of industry really deals. across level would Any but your geography RevOS? Are anything the else I of these sort the to push sort push want just that's deals, are multiproduct they of for a of the there is from there multiple I consistent them. product deals helpful. color amongst kind

Henry Schuck

cycle consolidated platform, we're is as sales displacing numerous longer selling we're a a there sure, For when solutions. point slightly

so if look engagement, irrespective take do those those -- the platforms macro conversation environment. sales USI, at more Ryder, account-based we data X That's consolidations. a time talked takes and intelligence, you a bit about marketing those it to throughout Corporation, Taylor and So consolidated of accounts, of sort companies I providers,

I levels as here scrutiny of macro based macro the additional of we're of think of changes the what seeing and broader is part just environment sort -- review.

but And deal account deal U.S.-based we're executive a director capacity and also calls, see ability to so done only our managers instead affect more VP the More deal a to within spending than limits upsell our to level, seeing of a business drags their you not deal. a way. time that CFO go drags effort that or level base. It a the e-mails, that global customer the out, CFO. at are really That reviews. getting more what that's per in continue And it

Phil Winslow

just in sort it. color spend in some a and to use and of expectations sort off sort could both margin elevated deceleration that. on and point follow-up Got of your on of marketing growth And of of capacity. of context managing QX, the your organic you about sort and efficiency QX a and levels. obviously sales organic if marketing of wonder we Cameron, and sales saw Obviously,

Cameron Hyzer

Yes.

we're a from investments. kind getting capacity. get continuing to natural improvements of that in terms of invest marketing. So we'd of that those love Obviously, sales is operating of those see out and we marketing leverage Certainly, we're there into level to the and efficiency continue sales to

continuing to So revenues. and as in this new more down, move is and marketing Sales drive but to that we want percentage more see revenue We're forward. net of to quarter, continue a

Operator

Our from Mark with next JPMorgan. Murphy question comes

Mark Murphy

or came much. speaking Yes. to you're when come I confident? know Thank you would up I'm For business out customers, kind recently, more you with curious, or you that think Henry, see macro to there waiting Or do instance, see pivot on? very Fed in think think they're inflation what but is some there waiting still nerves waiting other of lower of that kind their this just indicators you they're a numbers? do that

Henry Schuck

you levels environment. they're executive waiting and similar additional ZoomInfo and to a X those largest count in -- the more And a don't additional for than use more is saying, in what their don't next sales know the And businesses. customers and if and I know more experiencing effective. invest or efficient indicator I coming again. tell the I entire Mark. We are over is over team thanks, of X to going in perspective. productive, they think business I'm in listen, us deal that to reviews What the from new I'm looking macro -- change our and those own I that expansion are the and history, they're more on their make dollars largest will forego going deal hear scrutiny to head

productive. more to And rest historical add without do team to count, XX efficient more need X and How that just teams prospects. headcount, to we're another another of count? around all more the And Where base grow our throughout I grow I so land head of are I I head another been, world more everybody headcount, the our how do do how is new throughout I view that's How that customer customer trying across I I think team with starting adding as saying, efficient of efficient? do my my the base materialize well. the make think message has how business make make thinking our do and I

Mark Murphy

-- down of the potential of what QX? something spending I'm do that a you you see IT dragging follow-up, guess Is is And that but be activity lower figure? I flush the your that, even kind will at for despite of Okay. that that X% flush feel curious, compressed, year-end here would budget a compress days bit maybe quick on Presumably, some that gut would activity? kind that as in budget think adjusted lower

Cameron Hyzer

And IT as companies. software don't the directly don't budget in Mark, historically, we many we say as I'd play that

largely at we saying, opposed the looking leader and purchased that's are as can pool that's team think budget beginning a of his this creating make dipping at effective sales a the how into and by to efficient. There effectively I I year. more set

or worry I that the [Technical that in that think kind the to people much like where So and to more environment feel exist necessarily step have this past. expect seriously as that before, everything it on folks Difficulty] of that budget are much they for this budget we've has driver same year. in I don't as scrutinizing than doesn't focused happen flush I need do Honestly, don't a other historically

Mark Murphy

Yes.

here some X% mean, the lower be just will is? form, maybe given And all there? then bit days you a think Okay. compressing figure think in I adjusted do at little that, point similar just do that out you that headwinds a macro

Cameron Hyzer

degradation spectrum we're in that obviously potential wide And that. certainly, our guiding variety the that overall a would of guidance or to environment drive there's include level a kind a And that outcomes lower that. of contemplates than

Operator

of comes question Porter Elizabeth from next Stanley. Our Morgan

Elizabeth Porter

us happen that up any noted. is follow payment way impacting could be size that's payment what from sort to incremental something of something wanted impact Is QX? for Or that on that could that QX? to flexibility? potentially the flexibility I the you in And

Cameron Hyzer

Yes.

has the it year roughly always are payments of seeing seen that additional more versus looking than certainly, and this payments QX. -- we total could QX expectation So it to far has including impacted Historically, we're the our that impact flexibility. or had part is this been. year. for guidance We've down as even be percentage Certainly, total, than we've our of X% it are where of far, of the requiring annual that seen a but annual so that kind that's it half more customers

Elizabeth Porter

whether . as that the or then anything doing it's or would the to are opportunity new focusing you that to moderating Any strategy, transportation, current the existing you else Europe? guys be environment, And more Got to to just it color market adapt go verticals impacted, helpful. on there but -- it. relates go-to-market on focus you focus some the mentioned weren't like as to

Henry Schuck

Yes.

management sure the account personnel to account capacity organization made building of things make we've across number One team. done, for the management a in we're that we've moves our more of

able they're our by instead like to being drive overlay the solely teams. of additional cross-sell enablement drive sell owned of So Engage to and that team more to our function full our ability management account Chorus leveraging products those upsell base. We're and into our

And so we'll products. get a Those bigger impact by having a full set X of account additional managers big areas. are selling these

Operator

Zelnick from of question comes next Our Bank. Brad Deutsche

Brad Zelnick

September, the training, which the you about Henry, Senior announced playbooks was Development. of of you Business release, in a the process, hiring talked and ZoomInfo's Vice him “redefining” press President In of of go-to-market surprising unique very always the need to to understand little me special why seemed continuously but a your us. need And has evolve, given many the to to I go-to-market can and redefine? end

Henry Schuck

being to are from market addressable $XXX in billion mean I data total addressable domestic we I billion that $XX think -- and that's focused total shifting market conversation a That go-to-market on includes and full on best-in-class global playing platform like and automation data our a operations revenue an BXB suite. intelligence of end-to-end asset. a solutions and sales drives account-based marketing chat top

we more so shift our way. I enable conversations. platform-related more think as going having a sellers And We're robust to in to

most more that that require within can we land XX% And and accounts, and tell of it holistic customers and sales to buying may we they data much searched SalesOS a does SalesOS MarketingOS core landing story. expand those that upfront, selling alignment they're than on unlock sales focused our companies. MarketingOS of is our also -- sales for Now sort marketing But intelligence, so customers But our with that see us story. we broader more are expansion so together motion often platform intelligence. a as is XX%

we release. what with getting were in that's so press at the And comment that

Brad Zelnick

no win rates and just a changing. for that. sense, follow-up makes a you, Cameron. appreciate of of lot That Maybe I mention There was

in more when But if and also and line you about being across the could would market churn or you Is assume talked think it as more that's less with I'll well, limited. on different what historically. about retracing great expansion change worth we they've that there So segments any be gross in confirm been they're noting?

Henry Schuck

Yes.

deals taking longer. think I are So

continuing we've taking seen. time. but more longer and the those, win see do highest we So it's effort levels to more We're of that demand

have to frame I that win competitive you're order to over expand terms and analysis. time rates the of rates in mean win win-loss defining the So in

Cameron Hyzer

the Yes. From pushing kind on they of a number back of our a competitive perspective, competitors that we into the actually resources are see pulling market.

to So win continue we the strong second was? I overall. that see rates part think And then your of competitive question really

Brad Zelnick

Gross churn?

Cameron Hyzer

Gross churn.

very in hung the environment. actually well despite churn gross macroeconomic So

to XX%. or So they're to be and] renew when well gross people retention gross Zoom rate, continues were churn using over continuing the

the I just go and and to therefore, renewals So feel scrutiny by based getting do push to our those expansion that seen those out opportunities NRR aspect applied that's upsells on is good more about really getting we've spending much seat-based we think customers. The is being has greater change historically. less opportunities our more team that really that. that with those time in

Operator

with comes America. from Ikeda question Koji Bank next Our of

Koji Ikeda

like about to shifting the also question to organization, up you're resources account over sounds thinking higher wanted kind I on management resources Mr. here. follow sales And some it level sales but of the shifting Zelnick’s processes. to some

sound for it? the completed mean, So like way the sales pretty right that to it's it I next the sales are does big XX about a kind the shifts growth strategy months? of all XX so, to is And reorganization. if reorgs for think

Henry Schuck

and renewals reorganization. had time not the managers a magnitude nowhere reorganization. of than are who cross-sells account upsells client inserting It's capacity more some and sales It's back near the they major team more time It's on historically. some on account to spending management major really into the and to customer resources additional a No. give base sales base just and the the

Koji Ikeda

to up Got I the it. quick management wanted And real just on here follow then account focus.

-- on is focus how And into on question maybe renewals. were if of sort could from You sales, a retaining licenses lot kind sales unused of marketing it recruiting I investors area kind maybe spend? heading periods? get talking And focusing that this is an talk of departments. customer are about you Is and time renewal X more of in teams about any so,

Henry Schuck

what that's huge think don't see. we I Look, Yes. part of a

more capacity were management drag account taking leadership frontline means end historically. longer is to a outcome and of on getting the team. -- we really materialized over I first those Those with think more thing changes. see actually sales last meaningful cycle sales some same and but and with there we're macro-related drive what the reviews been big ultimately, elongation up the is have that Deals just longer that deal quarters, more the e-mails seeing X calls meetings, cycles that causing we our

our the has And seen stayed so more retention has gross our while motion upsell largely macro same, headwinds. those

to We're the at ACV history. SalesOS seeing new largest in closed to see the our deal spent buy the RevOS our our USI largest they and closed who We ZoomInfo's sellers. consolidated multiple platform. creates And creates seeing our and the capacity meaningful quarter, story. unlock point ultimately, a new MarketingOS also that's business customers elongation history. in same be We're macroeconomic platform Ryder platform. solutions sales Taylor time company's sales the Xx MarketingOS SalesOS, the more majority business of ACV our drag. can Now by on deal situation consolidation of with company's so of elongation, like time, expansion Corporation, that platform on We the our uplifts we ultimately, close all customers But

make make we're to of trying we're an organization as sure sure that that making right from we're relieving much to as so perspective the And that decisions possible. drag

Operator

Our next question.

Siti from comes from question next Panigrahi Our Mizuho.

Siti Panigrahi

for the you in trend sales elongation. of wondering on just I'm you funnel? do Henry, about talk you the mainly SalesOS, pressure your expect newer you to and talked but slowdown? offset macro seeing of data expansion, also what MarketingOS. pressure you Do top if like sort product, kind macro what about any expansion of worsened state And that and pipeline are the demand expect on

Henry Schuck

In demand. and sales the organization. the think leads the highest I qualified we strong really to first, delivered see account to we're continuing marketing management quarter, had

about think, is, to portion those product of even is we really fastest-growing though a still small really Today, business. platform longer strong seeing environment, we're our the that. in the MarketingOS seeing demand get I fastest-growing a -- deals we're what We're excited close. taking believe. again, just are it's to

anticipate of more conversational more portions more MarketingOS, and small on orchestration still overall revenue intelligence lead, those while we'll we ring continue our base. are sell So cores data to that

Siti Panigrahi

sort then on point, doing a of at your are driver. expansion you all uncertainty progress these that's this in Europe? follow-up of opportunity, And given X your What Okay. international growth geopolitical

Cameron Hyzer

an international to the than we've we situation. the growth particularly in stronger relative from from still of the certainly, seen headwinds our again, accelerated rest growth, geopolitical so And business. perspective, are Europe, seeing

to that XXXX. We're opportunity other So we're take and as some in international customers and not advantage of we long-term at growing continuing did venues our order as invest point. in to quickly in Europe

Operator

from comes Michael question Wells Securities. of next Fargo Our Turrin

Michael Turrin

Great.

confident some margin, to what still meaningfully have on ability margin starts some you of and resilience remains between offsets been free QX conversion, and currently? the in back the flow than anything QX levels targeted cash op the areas. we're just the to other have terms and payment the I the in there around in return just the can are in Just target is comments below levels. offsets. seeing around just adjustments more you we're And what comments But confident if around the you can you're for Cameron, to margin of There go some add the moderate making seeing we if that growth and to then there implied case. think

Cameron Hyzer

Sure.

growth continuing think push expect operating along natural had path So we're to in I perspective, over time. margins the a leverage margin laid continue the up the to business that moderates, this we originally for out from we

of as marketing go and but we're we just sales that in do a growth part to And we in marketing leverage realize steady is the the step expect operating see see where should I side up, think that of the that, that the a not leverage. I -- margins and natural a revenue function that's go when continue we margins that but in we increase happens. to as operating moderates, expectation down going think have, certainly as percentage sales

flexibility of certainly terms in payment short asking has or seeing term free of the we requiring cash unlevered free that some And flow the for operating conversion of customers are in that an from terms are schedules. cash income. In impact adjusted on flow,

normal be think that a more And see environment. expect could -- that setting expectations operating in we're would so prudently we've we what than rate I we conversion lower little a

Michael Turrin

That's helpful.

Just small if question, I may. follow-on a to a prior

around you've that what around the seeing that you? duration and front versus just you in how average or you prior anything payments add a few have had And maybe currently in periods. mix stats of from you've seen you Do can changing laid been compares what prior You out is in periods. duration annual it duration

adding it's the it? context have on impacts if you think for I some helpful of just

Cameron Hyzer

Yes.

So the attitude payments. and challenges. upfront move we've historically, the to changes that, duration saw annual And the time. as that the mix, with obviously potential mix. is looking X which half for example, they flexibility, than decrease is terms smaller annual dealing has QX payments that of XXXX. decreased as QX do we've has more we are say, of received of points, they're payments is of decrease that that percentage think the I are around seen we customers about the over that, certainly, seen far percentage an But to well of What by of that a macroeconomic similar over in we in pressures overall

Operator

next Our Capital with Markets. Jaluria question from Rishi RBC comes

Rishi Jaluria

Wonderful.

this of are go from up I about last of the slightly the at seems right be First, it QX wanted XX%. with of that when advanced metric if year, back just to was was continues to end numbers start my ACV in you -- XX% it talked that right direction, but XX%. only coming to from functionality, And

we can maybe worried So follow-up. have And walk the as core. seems something dynamics at indicator slowdown be growth you about Maybe a a what think, why shouldn't I the have that could through too spread us this quickly. leading there be? there and rate quick pretty on very down, the going slowed a Then I to might to

Cameron Hyzer

Sure.

see while And most it we upsold is impacted leads existing that overall. functionality, think data, discussed to I just the our in strong than capacity it's customers. that continue issue advanced less to but is the of a So uptake by impacted we've

as a to So it just of well growth continue core the long-term bigger as being off functionality. the a also intelligence as indicator advanced make absolute of smaller bases see don't well. business little terms of percentage, gets over and of Certainly, and changes, going number a time that bigger continued of I is in those so growth the as

Rishi Jaluria

quick point. And That's Got helpful. Okay. then just very it. a

want I uncertainty is we prevent that, environment flip of that that licenses there in to the were outright to take that unused. more from Another kind limit any had maybe heading license about could question macro you worry see Or happening? sitting sharing? there mentioned into that or are I measures

Henry Schuck

that sharing, and Yes. all a measures There avoid time. are we've in long implementations to for put technical done sorts we and that license of

Operator

And comes our UBS. from Taylor question next McGinnis with

Taylor McGinnis

business Can of you're you related new assuming your in was the of just with growth at here? what attributed And average And come impact logo of activity coming And with guys to down, second expansion new rates and all than years? some lands? much how on you I out-year recent the comment coming size like that to outlook softness rev the question, the lighter a seeing targets are needs does had you more guess, comfort that as from with trends?

Cameron Hyzer

continue side. to we So see the new on business strength

and QX continue strong functionality. to in we're As to actually business some customers, we've able are see And the we activity. of larger new ASP attach as more seen advanced up go seeing

So the macroeconomic a say much obviously the I see to would capacity raise the to well, short-term that is to historical from business that continuing our think, on whereas I continues we're do impact But better, AM side we new expectations. the challenges. trend, relative

go macroeconomic back situation expect that think I challenge, it's last, as but to stabilizes don't the I would overall, rates time. we know do buyers going up, expect over long that for would that, we retention those how

Operator

question is Terry from next Our with Truist Securities. Tillman

Terry Tillman

multipart weak, it is going to up Henry, like of maybe, big continues a vendor questions. seem as and to macro I know the picture question just I questions probably consolidation, related me guess, had pick the to a does worsen. lot you've of for not if be theme steam that's

So on million-plus able for consolidation? lot is a $XXX more of to point into vendors. broad-based just What a engagement plays tool consolidation right think to bit -- potentially relates are macro? something now? just do tipping tipping more under Is vendor CI sales you mean, kind there's big What win to Or be that point picture out you seeing opportunity? in on the question all more a a you vendor of little think I my 'XX that that you

Henry Schuck

in the people about innings vendor think early thinking I look, that And of we're consolidation. really

I They're that not here think consolidation we've good driven. the around they're stories business macro platform, outlined vendor the the just driven.

gain take mind was share wins we this that as to wins seriously, companies seeing macro the And achieved much continues have so a strategic more that lot there and of a I or think or happens. the macro whether you're But and proud that the really a pushes consolidating will today, as of I not. idea think macro of environment we'll would uncertainty the vendor we're

And position value around so to that to accelerate, as expect and especially ways to we we'd consolidation. sellers our continue a the tracks the enable around full top

Operator

I would now like it to closing over to for turn remarks. Henry

Henry Schuck

Thank everybody, your you, for time tonight.

the all coming have speaking and up, with We we forward weeks. active next everyone an look several the calendar IR of over and seeing to you course

Operator

participation today's Thank you the does conclude for conference. This in your program.

disconnect. now may You

ZoomInfo (ZI) 2 Nov 222022 Q3 Earnings call transcript