Earnings call transcript Q4 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 Fourth Quarter and Full Year 2022 Financial Results. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. ‘Operator Instructions]

today’s is that recorded. advised be conference being call Please conference to your I like the over Sisitsky. would now Jerry hand to today, speaker for ahead. go Please .

Jerry Sisitsky

for ZoomInfo; full we call Thanks, fourth are on their Henry Welcome to remarks, and financial will Hyzer, today conference Lisa. to CEO our Founder of After ZoomInfo’s the call the quarter Cameron Q&A. XXXX. year call and Schuck, With and me open results the CFO.

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

number any uncertainties, Risk Actual statements risks from materially Factors Forward-looking of those the results our section of a SEC filings. forward-looking discussed differ in involve and statements. may including

company this undertakes reflect arise obligation may any update as that events order or after statements revise in call, by forward-looking law. to except required The conference to no

ir.zoominfo.com. to For refer the posted cautionary website to our at Investor statement more slides Relations on the please information,

website. metrics IR can All noted. posted or release call the unless financial press our A non-GAAP, be otherwise this on are reconciliation results in slides found in to the

the will I turn over call to that, With Henry.

Henry Schuck

challenging delivered income million cash the growth guidance move of through $XXX XX% XXXX. operating XX% you flow. delivered adjusted our and happened the efficiently, in with joined in Thank raise has for as you, economic call and We on initial more margin unlevered environment, and A than year growth continuously ago, for we welcome, a face that of guidance me growth our our XXXX. year and between that revenue for expectations talked year revenue we more the even XX% Jerry, A an in everyone. as earnings now, we about and lot free

a XXX delivered the basis QX basis operating fourth we than In margin, income quarter, points with was XXX up over million which sequentially more and points from in XX% year. last adjusted revenue $XXX up

Structurally, are that flow. driving growth committed and a combination have profitability profitability of with and topline free expanding while we to and growing to company, remain efficiently struggled a oriented This many growth from profitability. differentiates we companies software profitable cash clear path growth other us

a to We and and focus we have profitable with so. us generate always operated discipline, will growth efficiency allowed to do that continue

can we better. results, good doing be are these While

by vertical prospects the economy, current spending. are of state our Many off materially than a have Our challenged ago. did regardless they lower and growth within vertical, customers year size largest back laying the of are employees companies, or software, cutting companies

We look their transformation with efficiencies customers in for remain do a our spending. take and less. are BXB harder their they platform and sales All our while more of companies in reduce all budgets as headcount, to digital at the companies sales looking early drives all meaningful industries

our impacted the As more elongation increased scrutiny an challenging motions customer we year, cycles. causing earlier has sales environment and upsell had the in indicated cross-sell economic with of

enterprise be the economy right But priorities, excellence and product sure. grow this investing experiences impact be solutions, and to executing business and had direct four delightful continue we scale time, ourselves with our The with surrounding delivering has on to to will through focused efficiency. a people, intensely in on

in have priority. is driving energy dedicate every if I is to us to forward as And not it a initiatives, everyone company, continue the it across these communicated to day. those priorities my four I not

us team being helped leaving the great have week I has him is joined partner. from We ZoomInfo. days. the that our Nir strong a the announced made to leadership significant over to CTO, regard ZoomInfo want last months. very Keren changes team last a earliest Nir With its the and priority, first for engineering phase I in leader thank startup and grow to its few

strong success products. have These great The growth. help and scale experience, teams, hired scalable new phase others organization driving next world-class create customer foundation highly relevant we bring building leaders the the leading across the for need executives to we will and of

than scaling Technology from as Confluence, First, by where remarkably experience Work Ali best was the product recognized Trello, as He new of Officer Jira Head underlying coming companies. motion he growth us well having a our joins two and more Engineering led Management, universally an is Dasdan global Atlassian, supported of organization he technology for that Chief Atlas. from decades and brings integrated platform is

our We join lead innovation development the and him are have excited and efforts. company to

the as Also, than and Officer. Chief joining space, of he more Chief that that all Revenue with a leading ZoomInfo and enterprise in is I of in years. Dave Revenue sales. right Dave now. positions most Justice of need Salesforce focus decades roles experience matter we at on the past organization, sales on Between focus helped the the believe global things PagerDuty, as Cisco, three levels for two right Officer We our serving people has sales PagerDuty software has the particular the have

surveyed how their investing have users to are priority, their our the tools value enterprise on and With are that a productivity, hit responses platform. derive fewer ZoomInfo our time understand day-to-day the in essential business, companies impact just resources. of we to when recently underscore trying with they from at Their regard targets thousands to second the the data and corporate we

XX%. quota Sales than by AEs with higher XX%. half. targeting gains executives nearly managers and the XX% XX% ZoomInfo cycles after reduced increased by deal and using the time average and more than their ZoomInfo. XX%. to XX% of reduced Account due XX% quota spend representatives rates and more more than by attainment more the researching by increased average win of was ZoomInfo time reduced recruiter to development marketers attainment accurate STR’s, cut in prospects sales immediate leaders reported revenue account topline implementing

tell to target and mission-critical us time platform time data, ZoomInfo is leads With Sales and marketers and more more customers and that accurately. delivers spend less results ROI. rates. the tremendous response accurate than reduce more researching for our teams are selling, double more spend our platform, the These with able

get the better ZoomInfo efficient operating candidates their for ensure When continue door cement customers revenue and we to find them our as essential faster. win in we Recruiters system we win, businesses. will and as the success

a of Our of environment. our the a was retention The our cycles elongation which impacted lower year sales seats continued of was disappointment in in installed into and sell in difficult as driver XXXX the ability reflected more large to was net operating net more base. terms rep’s retention this part rate, XXX% upselling and lower more level biggest data

gross $XXX,XXX up a opportunity. as retention in represents than more the approximately customers that There now second half. XX% the renew with ended remained and advanced ACV. a priority diminished with rate to but annually to opportunity opportunities customers even with continue we XXs, us, tremendous enterprise and to year are of who XX% were is the more of in upsell as spend year-over-year customers unlock We it functionality Customers making costs, particularly our X,XXX cut look

closed the Proctor, Barclays, Services, transactions ServiceNow, we Bank leading Jones, Goodwin Edward West, Amazon Cigna, Waste with of Panasonic, During Sodexo the organizations FedEx, Management. quarter, like Web and

and choose with platform and tech them stack. sophisticated optimize conversion teams sales can vendors grow it ZoomInfo because expand with go-to-market they their work and to looking increasingly fewer as a integrated more our aligns are They to marketing and Companies develop strategy. consolidate

that from company leading capital account after solutions they expanding of data a their ZoomInfo to the significant of leveraged delivered a traditionally only time, management of OS of in executives Sales use provider territory OS thousands pilot planning short rolled platform. activities, Sales out ROI human examples, to drive their As amount their a

financial and data adding One Sales largest institutions commercial the efforts. of world investment sales doubled to intent their their our for in the banking is data its unit, force seats leveraging now more targeting OS into while in improve ZoomInfo, integrating

on go-to-market a and from efficiencies platform experience, our in high delivering behind lead scalable investing opportunities. ZoomInfo directly on growth impact excellence, customers are the plays product extending data We development focusing led efforts drive that more enterprise our developing training and XXXX

our and search further our to continue in extend optimize and invest leadership will We accuracy data experience. coverage to

bidirectional We and of CRMs meet source signals the use the of needs and more and robust of in our that invest shared ZoomInfo mechanisms sync will needs enterprise holistic APIs with sales to teams data meet customers, in marketing and to also unified truth. their as scoring

of When I experience, a a building scalability to for product comes enterprise simplicity our and create to delightful down users. about think experience the it world-class

upmarket everyday automating our and deliver and enterprises our for workflows is for shifting serve performance move we simplifying focus As their our larger efficient and users admin. global tasks customers, to driving scalability, to product and predictable

a for value the simplified admin, for and permissions and integration, better settings onboarding enterprise-grade product dashboards to setups in along experience journey. more and in self-guided performance unlock help analytics invest will product We account and user leadership

In Grid number first the and in recent across as report, enterprise GX ZoomInfo ranked different the Winter XX one eight place sections. listed was grids solution in

accounts grids. all intelligence sales we enterprise and eighth led management straight four quarter, the account marketing the of data For intelligence, intelligence, lead

We Marketing are in also doubling down investments OS. on our

side capabilities We proprietary invest our BXB more capabilities expand functionality, mechanisms. related deeper our account out to in to platform, will reporting build marketing unified demand based scoring advertising continue and build

share more sales and we a and teams Sales upsell with is common want OS, to data, after marketing have processes. the and same foundational tools pathway OS customers who Marketing successfully seeing implemented are traction

or We Customers to action with go-to-market smaller able will that is teams to customers invest also and impact execute to advertising means on motion. do go-to-market timely high signal heavily are plays. sustainable less, whether our looking supporting key dollars. successful to more with take Being in fewer

organization-wide to companies management Marketing level to automate RingLead and OS. motion. workflows offerings DAS Scalable workflow through time supported consuming by our invest looking in become user OS, more have and enabled for been Sales integral workflow efficient OS will continue workflows and and Operations and both through We

and am data teams are and it positioned insights acquire use to I strategy A on the have we huge platform us win confident of ahead find, more the the to remains market. to this closing, and and more that grow capitalize and we opportunity well as customers. In team, sales

Our generating are and the users platform. reporting significant leverage as ROI our results are ZoomInfo customers phenomenal they

mentality enterprise to number first grow who us to scale, help of bring and leaders have a continue a will We who of and the added a organization. customer wealth experience and

we the and As that ensuring last from we manage in can’t team control I consistently we us. expect the are you the am all delivering how results come is we macro, that business. control we to while mentioned have quarter, can I all are in, the

with framework we our While Cameron share will you specific be year, our use next guidance guidance. I developing for sharing the will in

progressively get environment worse. the end better, guidance, at not does that have economic that assumed the get and low of have things we We assumed the

while that continue will new expand understand for to profitability may while the remain some we and to in long-term. will steadfast compounding see over long-term, flow cash continue is to free great gets We we that disruption We our team with our leadership focusing growth lead efficiency, on the up the we speed. belief

over that, Cameron. it With to will I hand

Cameron Hyzer

QX, of In we year-over-year, X% up implies to sequential which Henry. revenue growth XXXX. Thanks, delivered to X% million, $XXX QX XX% compared

growth up within of the quarter was acquired XXX last months, year. points to revenue of last compared was operating points basis quarter for fourth the Adjusted the products XXX XX%, XX%. sequentially Excluding XX up a and margin the in QX $XXX million, of impact basis our income organic

million, year better revenue revenue year, than operating XX% was meaningfully For in EPS $XX for GAAP of profitable delivered Adjusted was of of up $X.XX XX% year, guidance million We was billion, the and Non-GAAP $X.X million. growth. with per full Organic the XXXX income growth and XX%. GAAP XX% share. EPS income we of to unlevered $XXX $XXX compared our flow cash initial full of a XXXX $X.XX share. per margin were in free net was

for XXXX XX%, points the with at with implied compared at AOI XX% guidance growth XX an initiating up of to margin revenue are basis We midpoint, XXXX.

for the cash of unlevered implies million For guidance, in than XXXX, cash midpoint deliver free million in year. at which $XXX more the flow to flow free expect we $XXX

continue the of sector layoffs go-to-market vertical cut believe being are tech that It pressured an drive has customers, focus and efficient ROI revenue in our this the secret is and growth is challenging for our even We deliver near verticals and strong profitability of to us platform across our leading and a motion no regardless on costs efficiency. and to companies to median that environment. driving more combination provides enabled from seeing

expansion of the meaningful and increased revenue in driver our has existing cycles sales the spending growth ability reps on a was our time Longer upsell to customers, past. which and net impacted are retention and cross-sell renewals

approximately our upsell. As points challenging in environment. as from Henry XXX% was for biggest driver, of prior indicated, net the retention, year economic more the net change Bridging revenue revenue operate was driven reduced retention this the we by XX

our more upsell customers. to than other they and companies, time deals Similar have renewals their limiting spend to past, many to software drive the sales in continue opportunities more reps with existing ability on

to adding to end capacity, potential potential tasks, addition have resources In account shifted automated reallocated hire efficiency. low customers and more improve loads, we creating the to

these believe are we we ongoing sentiment and offset will behavior. buyer of While efforts positive results, acknowledge in could by that challenges and yield the improvements macro further our cognizant deterioration be

the result, prudent to we levels think a As retention lower future. model is revenue at for it net foreseeable

true in growth our New in XXXX is of will and be continue that customer additions driver to XXXX. remain expectation a revenue larger

are grew XX% economic environment to U.S. a and similar the relative QX markets in to of contributed some which International customers relative International revenue XXXX. cases quarter, the worse seeing in XX%

year, was bar positions. In the approximately moderated we base XX%, respect than to eliminated our the with and growth, revenue grew slower intentionally second performance headcount the During employee half, we raised pace the some which of growth.

at we ended a below result, currently are where a level we As headcount September.

overall leverage while we operating to revenue adding continue the expect our as than we XXXX, realize in on less capacity. sales business to quickly grow focusing In team

in operating flow, flow $XXX of Turning payments. $X cash operating was the QX flow or included for quarter Unlevered free $XXX million, cash million which million to interest adjusted of XX% income. was approximately cash

XXX% operating adjusted yielding or income, cash flow $XXX XX%. of For million the was free margin a of unlevered year, full

the expect for the Going flow forward, of XX% range year. unlevered we in free to conversion cash XXX%

has remainder With XXXX. $XXX coming short-term respect $X.XX fourth gross of QX, half in to and about that the which quarter in all rates, million XXXX debt, the investments. due the end balance interest due hedged sheet, continue we equivalents ended or in to with the of of cash, in At billion coming we cash fixed with carry and

Additionally, we to the successfully during SOFR transitioned from quarter. LIBOR

trailing represents We again improvement improvement agreement. to leverage defined a approximately times XX ratio the our months EBITDA EBITDA months an credit net EBITDA, which adjusted This XX our as the turn times a cash from in is year. X.X drove consolidated ratios, leverage with and beginning X.X of trailing of full

the remaining in year million performance billion, the obligations months. or of end to was to respect unearned future and RPO With liabilities expected $XXX obligations, million and next revenue $X.X $XXX are the at delivered XX performance of were be which

and We in focus believe noise in metrics the X% which sequential calculated that fourth are Because growth, forward was RPO inherent adjusted billings, bookings on imprecise momentum. the and metrics, we to assess quarter. those days in-period activity revenue of

environment deterioration we includes well we move guidance macro an some leaders. we as assumptions. sentiment The near-term that prudent a expectation of the low to disruption is of onboard As developed as guidance, end XXXX, of a further set and new there in buyer have as

the full initial that, for outlook With first will XXXX. our year for the provide and outlook quarter I

in of the -- For $XXX recognition to in to recognition of days million reflecting QX. QX, QX fewer range we the $XXX expect relative million, revenue revenue

expect non-GAAP We per the million income the range $X.XX share per of income $XXX $X.XX in to -- net and share. adjusted $X.XX in $XXX range of operating million to

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

guidance are XXXX as initial year We providing follows. full

based to operating and to billion average in million share million the net the shares expect range diluted share $X range income non-GAAP of range XXX $XXX the per in to $X.XX $X.XXX $X.XXX million weighted on in of We revenue billion, of income adjusted outstanding. per $XXX

between and cash million. $XXX free expect to we million For generate $XXX unlevered flow,

adjusted implies margin above margin free operating unlevered guidance income XX% the midpoint or year at growth at and flow XX%. and cash full both revenue Our

turn over me let to open that, to call With the it Operator the questions. for

Operator

moment for you. our we session. while Thank prepare Q&A One

from Mark First question of that I have coming is JPMorgan. Murphy

open. is line Your

Mark Murphy

Yeah. Thank you very much.

that you guidance I do wanted We What ARR. of the your through the this XX% wave to given hear in, to assume let level it’s you there? put into follow-up. have quarters? couple In pressure would I being words, and I of that drill And you see teams do vertical, go perhaps expansions would vertical where kind more just year? off around in a sometime believe the on SDR a to seat of or of next the continues are software scenario So intensify that into that other software layoffs exposure then the quick embedding of

Cameron Hyzer

and challenging be think Yeah. through to macro Thanks, environment that go in a that you Mark. see contemplates imagine, And the can a did to am I of QX, we guidance assumes certainly get worse that would sure we continuing as things will as layoffs see experience bunch occur. the that We I continue and guidance our year.

Mark Murphy

Okay.

kind some there consume that that had where there we But the challenged companies data with the bulk seat sluggish, vertical. growth bulk entire very, follow-up if software or to toggle a As something pretty trajectories out growth or aligns -- your obviously of we do very across credits, that credit think are the very the the observations is cases you that credits broadly and feedback continuing the seat are growth? heard similar is between that are

Henry Schuck

see at plus Snowflake performing NEC AWS. better for our the Data-as-a-Service and at offerings, strategy that our offerings, better that you of performing are been BigQuery or think seat available Google bulk at environment. our Those look enrichment Databrick growth the and has are usage on is Amazon the our than XXXX I this to So RingLead inside -- focus and in internally the look credit part downsell results, that when of we or

Mark Murphy

Okay.

to actually flow model. XXXX. out preserve underpinning Could above cash the your we us guiding flow free the to such believe is and drive know challenges it’s in margin rest Cameron, industry remind the on final this there cash And sorry, is you I are it free our one the what even when for question environment? you. like better of for ability above than I you have that unlevered

Cameron Hyzer

We operating by margin. XXXX. income as our business are better on continually think, in a of driving Overall, focusing XX I revenue points and managing that, kind of about basis expectation is increase percentage the will

conversion. been free on obviously, since efficiency little laser of business, be we has less core to continuing and drive efficient ours We But, flow the a in a I which expecting have are focused cash are thesis bit been here. overall,

Mark Murphy

Excellent. Thank you very much.

Operator

you. next coming from And for our of we Porter be Elizabeth One Stanley. our question prepare while next will Thank question. moment Morgan

Elizabeth Porter

Thank how ask question. to expected first changes. you to us through so from sales more some or work to something greater much organization it quarter clarity take we the is wanted for about the management you I Can the change to about should Is just extend Thank a the Dave impact of on what it going the period and provide think within is disruptions? might that through you. time?

Henry Schuck

Yeah.

So here. we having Dave are excited super about

building tenure followed was If Dave growth. really and where and for an you believe his re-architecting amount He tremendous strong long PagerDuty, that’s business leadership has that we land-and-expand enterprise of tenure at known motion area a have opportunity. a a for of we

driving the customer think we from where get within quick that are enterprise. within motion really opportunity our our Dave driving to is going base really land-and-expand we and So impact

excited especially that. are We about

impact, That before he’s the From the we quickly forward, sometime are here. his are away. and perspective, we making feeling right we guide a are impact ground impact tenure a that really we that conservative or being timing disruption about said, and full when hopeful running being of Dave we are of assuming disruption an hits

Elizabeth Porter

of just new the over side last what trends But follow-up, of on that funnel it. expansion kind headwinds more if outlook well demand is three I some as on the the think, you pretty then months the guidance? give a Got that’s and of seats on could into are color was hoping top the I and kind changes particularly customer incorporated the of And understood. just

Cameron Hyzer

Yeah. Sure.

we we with we in both expecting are new environment side, includes and are what flat as lower as where in versus XXXX the in to we customer XXXX. challenging that expecting sales well that respect side, what guidance, sales becomes to So new the XXXX more had a

pipeline modestly see more we to had, we have seen think are I improve continue actually relative and to from at a rates to than perspective, starting previously. look we what win have ever QX pipeline we if

Elizabeth Porter

Thank you.

Operator

One prepare while Thank moment our you. we for next question.

Raimo Lenschow from Barclays. coming is of question next Our

Your line open. is

Raimo Lenschow

or Thank renewal. the kind seasonality bit Hey. little kind for Could is the guys should up issue upsell that the expecting something we of as kind the people come are a upsell on out talk play less of you. year? you that about So for of missing

and there should I of kind kind QX, big think there the this of of that QX, just we So factors kind through you QX, being of like should year renewals think one go until or that’s about are about? QX other a is then we

Cameron Hyzer

second that you upside when about of or firm the year. sold, through a down down there’s I we think as into half we I restructuring sold seasonality, Raimo, maybe the that as think, So potential have people their get went for think of another lap they reason because

But that’s explicitly guidance. of in terms our contemplated not

I year. see wouldn’t yet, growth don’t we don’t this driver while and are big upside, -- on -- not I being of happening we it a that that counting of certainly, evidence be may So

Raimo Lenschow

at internal -- et we an announcement kind cetera. then obviously, levels, every about the where internal looking investment of almost Yeah. you week like kind people day have or cost of are if think like And every their

much of like the You, better obviously, dynamic about do build. you internally? as always think about Henry, revisiting as of Like were and more stuff kind you much said, profitable how you this some

Henry Schuck

a trajectory have do on our kind monthly plans and moves process on of quarterly we make basis and We a where basis. bigger a revisit

in the kind why drive the of of adjustment of hiring into an business our exiting and and of I year. end investments, QX to as yeah, able and we through improvement a look reason to think our got part were that’s we plans at the were to So, big as the QX, we

Raimo Lenschow

you. Thank Okay.

Operator

our next from question coming we while And Panigrahi question. Thank of for Siti will our next prepare you. be Mizuho. One moment

ahead. go can You

is line Your open.

Siti Panigrahi

Panigrahi. Thanks taking my question. for Siti Hi.

it so looking your that ask years? built XXX%, Are platform last you demand, strategy Just do upsell opportunity? on demand driving changes can given want view is or on company you to couple to opportunity, upsell RevOS Henry, upsell what can that more of the go-to-market more the the seeing on at upsell -- drive what’s improve NRR the you

Henry Schuck

Yeah.

I think are we our part that where around And DAS the the opportunity tremendous customer see opportunity do of see way within where the about the and thinking we this a in product. our do we -- is, it our our base. Marketing products most enterprise, we see OS

And is of organization, go-to-market sure to and so so sure is really data resources are and use to drive after made we drive that higher a about the half dollar efficiency in resourced we drive our will go number making make it thinking that customer back year think of have best. are our as of organization, opportunities We designed the OS, are to ships that to enterprise how a base. which will mid-market we and our ASP service, the that those into end Marketing upper the

ASP When our ASP buy sales OS over our Marketing our is pricing. is OS average over OS Sales the our by our prospects platform, pricing. is the customers When Xx our Xx platform, Marketing

have where sure investment return and on highest looking so is dedicated our areas. we to that And those it’s for resources the making opportunities the our resource

Siti Panigrahi

stand, expansion for right when the front? And that color. now thanks international you what about you seeing -- are does where international growth on And think opportunity,

Cameron Hyzer

and have areas But a environment we there were driving business team international more particularly the the to challenging be new in expansion. certainly, that’s in I are might than where focused U.S. economic most strong Europe continue We think,

of to for a that be not short-term. but opportunity in I see long-term, revenue, that a real larger the something think percentage I we So that’s there’s international much think overall

Siti Panigrahi

Great. Thank you.

Henry Schuck

Thank you, Siti.

Operator

One question. you. our moment next while we Thank for prepare

Deutsche Our Brad will coming Zelnick be of question Bank. from next

open. Your line is

Brad Zelnick

Hi. me? Can hear you guys

Henry Schuck

Brad. Yeah, Yeah.

Cameron Hyzer

Yeah.

Brad Zelnick

Excellent. you much Oh! for so Thank question. the

you, for Cameron. First

at QX to sequential look I guide, have sequential adjusted. the growth we believe days X% guided you if Just

that and or year? terms anything view what are if seeing in January this inform curious, budgets view has just in changed your into you really trends customer of So downtick your

Cameron Hyzer

Yeah.

two So reasonably less well. impacting things. activity January I that year weeks think there of is are in to well. the was respect We with had of in less partially linearity where change couple gone actually as the QX last has QX, there

And some that management have we additionally, that QX of as where we are we I well. with are think, disruption and certainly, sure the we want and at therefore, contemplating to kind executed, timeframe is -- respect guide the from make the prudent least there changes to

Henry Schuck

would in I pipeline our MQLs it’s generated been. our strongest in ever that add have history. ever than We was the more we January

market decisions the products. demand what are real there they ago. for out waiting, seeing there’s So are as levels in velocity our is the the level ultimately, not purchase they But were we are customers up ending -- making at year a

But there is real demand out there.

We are generating it.

as to in accelerate we the great so are do that be a will uncertainty position will that. like feel through phase that and and to pipeline generating We continue really

Brad Zelnick

way, external to for an Henry, saying headwinds past? the be other a worked frankly, opportunity, new macro experiences by potentially your been are right I to bring which disruptive. in the now outside, is got a Dave under more say your going guess But the you somebody color. CRO bringing hire, some or complete faced in that CRO message That’s has which are you could now are makes helpful sense. And from maybe the you consistent fairly for to date Why especially you, follow-up to be their he’s the given unique risk of externally companies your what’s modify the great that’s the like You go-to-market and to go-to-market? related,

Henry Schuck

know real we customers. there and growth customer base. we is enterprise a we real is driving the enterprise today Today, thing that, across within big our growth XX,XXX I our think that customers opportunity have are

across we Revenue But we Chief significantly when of experience look this right think accelerate and enterprise, Officer the time within the expand ton land a to the significant had growth within so we who in to like enterprise. felt who the bring bringing and can a do in biggest it. has enterprise, We the that see in we that and especially motion experience somebody segment that opportunity and wanted as

Brad Zelnick

you much. Thank so

Operator

moment our Raymond while One Brian Peterson be will And you. our prepare next of question. we for from James. next question Thank coming

Your line is open.

Brian Peterson

Cameron. One for

forward, Just third upsell, that you of guys. linearity the should on mentioned of the I down-sell on the versus that, be clear you you modeling magnitude lower want understand what to we Thanks, of what referenced. sure can we dynamic the how a that to the quarter, NRR And I trend? is are just that going quarter, point make kind that think all did given I’d any reference meant? XX provide love points XXX%? fourth changes comment was

Cameron Hyzer

Yeah.

a macroeconomic seeing we reference is against the of for are which the net I reflects kind of -- be that that year. last and are case of could -- months is XXXX the I So think, get the we we base of Certainly, backlog the saw at therefore, perhaps is, lower expecting retention and when lot in most expectation from will quarter worse the pressure, four in that that, activity our most of there continue so XXX%, that, that XXXX. revenue XXXX, expired in point least think our the is

Brian Peterson

quarter of Thanks. trended the third on could Anything the linearity that over if fourth on course course comment I know year? don’t over how how of versus you that the quarter the the of year, or progressed

Cameron Hyzer

as of the a environment, bookings last were certainly XXXX are four are it being or months, That as the you said, waiting those we those if four months from half worse almost renewing good And our XXXX in when well. of last indication of particularly in Yeah. is year. contracts got which the

Brian Peterson

Understood. Thanks, Cameron.

Cameron Hyzer

Yeah.

Operator

while for moment we you. One prepare our next question. Thank

is question Hynes DJ next of Genuity. from Canaccord Our coming

Brent sorry, open. is I Sandler. Bracelin Your of am Piper line

Your open. line is

Brent Bracelin

hear Can Hello. you me?

Henry Schuck

Brent. Yeah,

Cameron Hyzer

Yeah.

Brent Bracelin

you little Okay. there. will with here. A I Perfect. confusion start Cameron Maybe

sounds about As I going the the enterprise an smaller think mix overall is focus generating What opportunity forward, think the then over customers follow-up enterprise one split $XXX,XXX. could. customers? And are you like for, if what they quick we of about as increasing what versus and today revenue Henry,

Cameron Hyzer

Yeah.

the highest customer level on per the customers of of that, have think revenue. $XXX,XXX the is And customers the a I has overall So roughly we grown, also seen. XX% yeah, number revenue but generate basis

Brent Bracelin

the how dollar Got the to that Cameron, it. color How new really I helpful of pipeline besides that Super software what you are facto and in guess, else pipeline great the you software? software how here and build accelerate do fast contemplating de Clearly, question of really the and million have CRO And ecosystem. you there. quickly is pivot? replicate of business, standard outside a kind you outside built can then,

Henry Schuck

Management and first, the technology and think, of Industries, are our Capital We growing large software One. we rest industries who ABM ours, than companies are. customers. of like software clients of I of Barclays are base about talked outside Waste faster The and

the focused continue that so in And we to really grow we enterprise in us for share companies. present a are also non-tech opportunity our large They on.

services and first We the as in who do financial well vertical. customer and vertical who aligned have time, vertical services business will some to base account will so to a mapping a for specific managers the account are we are aligned managers

service -- specialized the non-tech base. customer relationships that that more upsell in customer non-tech So customers a little those within to continue it’s ourselves with where put bit they can a position to and in build

Brent Bracelin

color. sense. Make Thank Helpful you.

Operator

you. And Hynes is Thank moment our next Genuity. for of One Canaccord question. question from DJ while next prepare coming we our

open. is line Your

DJ Hynes

right. All

are We guys. Hey, back.

happening? front in NRR in partial Any that So, customers color like you to you what that would to stave back we off layoffs like, are is on look, trim are we commitments, of preserve their place how think levers helpful on space, additional context in churn, looking the to to modules tech the that in are ACV, dynamics. the seeing as about throwing coming you the be often have have when you,

Cameron Hyzer

Yeah.

QX. that downsells a and occurred in definitely that we both upsells and seats reduction So, driven seen impacts layoffs and and in by have certainly,

We are pockets of always to benefit looking those from our include that run the additional plays that organization obviously and functionality software. could other for or looking against plays

in people plays team. want I’d fragile of many worried that. see are much work, that, haven’t that kind moment own in but about when impact restructuring cases, a in that as But more an QX, here related realistically, worked some cases, particularly we their buyer say as there But to and well do the particularly was we given executing those in behavior to, that is

DJ Hynes

Yeah.

you follow-up peers sure you what’s or make Henry, in the how catches, some down then, do consolidator mean challenges? appetite for in And batten you, opportunistic XXXX? for of order your I I house want am M&A do first to is as the okay. Okay, it be similar a of facing a sure are

Henry Schuck

there’s just nothing driving Look, Short-term, we on the are business. the focused from near-term on perspective. horizon M&A really an

bar but tell you short- to the experience go-to-market and accretive the fits improving around is same, the medium-term. a much within so this in higher criteria customer the Our M&A we the criteria around around have motion I’d remains

nothing We meaningfully executives making environment, these topline profitably. again, sure selective more on and driving the and am that doing growing this be business, are pretty and we are focused near-term I on the and the landing horizon going to in

DJ Hynes

it. Thank color. Got for the Yeah. guys you

Operator

our Thank question. One you. for we moment next while prepare

am coming next Taylor Our participant just It’s sorry, McGinnis of Wolfe. Alex from Zukin of jumped. question I is UBS. the

Taylor McGinnis

question. much so Hi. for Thanks the taking

sounds business to expected this that hold in like it drivers So terms up. new year of growth is

you can this versus year maybe how just that Cameron, what this on in compare seen logo existing mix color give we historically? or So, year guide last new the implied growth to of and have might some

Cameron Hyzer

the that net when quarter look the that, of from Well, remainder growth implies retention came business XX% roughly organic at that XXXX. in XXX% revenue new the at you in XX% and of obviously

our challenged. retention guidance new both and certainly revenue business will I think net be contemplates

likely behavior net that new level retention based business and buyer is the deteriorating macro flat that expect I’d to similarly as be well. and on environment, down a challenged of more So revenue will

Taylor McGinnis

investments the and mentioned just that if as you risk continued deteriorate about so the on potential of year, just at guess follow-up on upside all And in capacity. this the a talk to and side margins, that of with margin you offset? NRR an Thanks. and some risks is leverage sales Does to serve it. just for can serve the that Got the one areas maybe I not,

Cameron Hyzer

Yeah.

efficient being always leverage harvesting operating focused on and So more the are we that’s business. natural the in

the mentioned, from with be leverage other impacts sales that, with challenging expect to of business. to marketing, environment and our more you areas to -- we realize operating As able efficiency but do obviously, a respect

revenue, some R&D expect be but of from from cost as the percentage I G&A as leverage, further and we and probably, even operating year. a get biggest will the we into driver decrease get of to of also revenue

Taylor McGinnis

Thanks. Great.

Operator

Thank you. One moment while we prepare for our next question.

Next Wolfe. question is from Alex of coming Zukin

open. Your is line

Alex Zukin

guys. environment, to having have do competitive sales But, uncertainty on kind uncertainty respect terms like at and time peak Operator we getting better you cycles, it Hi, demand a respect is or real to the an or of It deal today. with kind actually question for reached And mentioned of trouble you Yeah. had Henry, guess, first like in you, demand as feel have the getting the is I particularly as sounds least in trough some often level to the more cost is persisting in the it market? issue still done? intensity, of deals calls with with of

Henry Schuck

macroeconomic to hasn’t Yeah. been or the buyer uncertainty seeing in any are we market Look, in the relates there environment. that material out change it as behavior

you ever change we saw perspective. from any have haven’t I that. So seen January, a we in will we generated. and largest What our pipeline generation demand pipeline tell

had than in generating more have MQLs are history. our We we

quarter room end is ever an month of are primarily topline delivering strong are And in perspective, seeing highest me we so are less competition the really where improvement execution buying seeing When in decisively business, we while from that of all that for back a us at and environment do and we segment the for deals win QX. broader buying, customer’s competition are our and growth. SMB buyers they there economic the uncertainty is see in ASPs in it about more from the holding rate month our of that’s non tells

a that am be that out, uncertainty yet. So fades will haven’t the to in accelerate great we confident as position seen we I stating

Alex Zukin

Cameron, with they and Perfect. us leverage, And there. the previously. margin through for cash guide margins at from exceeded the it what see been you the in little they leverage, when to growth is general, modulating margin on or Historically, margin have assumptions margins, walk that are is, side, you, I margin do if the are not? the versus free the operating And is kind decision inverted kind flow of then look guide, point so cash what to greater but -- you potentially we extent then where a all the cards in free unlock operating of the just moderating obviously, love that flow margin have

Cameron Hyzer

Sure.

to to real cash flow XXX%. year our free And free customers annually or the bit a at kind part more in quarterly lower cash has additionally, weighting big least on year. the to upfront. to the conversion impact So XXX% that expecting historically that That impact XX% flow with respect A, half shifting opposed the unlevered the to pay the really, rose second free not factors of payments of above conversion. are as upfront of at certainly cash that of impacts And flow those little we conversion, cash are an flow the be are growth this

is another that impact. So

stabilization us that expectation to harvest we over time, or accelerate that more margin when bit that either be as of the get would the marketing the we that efficiency growth, leverage expect sales particularly point a and unlocking ultimate will to is, improve growth operating able respect sales our little to certainly, that you on With is stabilizes and will side. to enable and more marketing environment

Alex Zukin

you, Thank guys. Perfect.

Cameron Hyzer

Alex. Thanks,

Henry Schuck

Alex. Thanks,

Operator

next prepare Thank One for you. while we moment our question.

from Our next Stifel. Lane Parker is question of coming

open. Your line is

Parker Lane

Yeah. a cohort us have of Hi, think give Can or the that referenced that you timeframe earlier? you quarter, for renewal evenly plans. and the spread about or be up quarter we skewed the you XXXX, the year have that impact sense as fourth come share more Cameron, them guys. third for of renewals taking those the at cost questions. when Thanks of do reduction already look towards the customers through of announced layoffs you

Cameron Hyzer

of kind the more into of timing QX. renewals think slightly those are of maybe kind set that I

cohort So we have companies of I that’s bigger when think are software renewing. a that

like something So that in we for renewing are or a already might that, people and who come renewal expectation with seen an bunch announced that either that some happen. people up cases, of have then

our in kind that that to expect year eight that renewing months customers the and But, in overall, the of four to first it’s year. months similar QX, last of half weighted percentage I’d almost so a remaining the the not of it’s heavily renew the of the are

Parker Lane

the Thanks. here, Got that that particular the to pretty And year back areas across degree September the a trimming? evenly that were you did there quick you to reductions headcount then circling distributed headcount a of follow-up during that timeframe. faced Was or it. higher said organization end

Cameron Hyzer

focused expectations. continuing performance in super to bar We are terms on our raise the of

it around Board it consistent across making really may growth R&D in us that areas, the have pretty terms overall supporting of members we been are or we while focused in of have sure best company. G&A and the somewhat the was team more the have So areas that team that

Parker Lane

Understood. Thanks, guys.

Cameron Hyzer

Yeah.

Operator

question. Thank you. our Koji next question we for prepare our Bank will be from And Ikeda while moment America. coming of One next of

open. Your is line

Koji Ikeda

go Thanks back Hey, to guys. questions. revenue I Yeah. net to for retention. wanted the taking

would growth I an I where are mid-teens fourth categorize thinking I from about perspective as of drivers to vertical MRR exit Your retention, it, improvement a you products growth what And revenue maybe is rate most a the XXXX? XX% place assuming software a excited question outside for XXX%. question that, tableau You ended so the said year tableau don’t know, that then is, XXXX, for at Thanks, first new about net that there. coming And maybe quarter? customers, start the the the as you guess maybe most guide you XXXX, call for from from or guess good you believe low I guys. that for are a single-digit excited XXX%,

Cameron Hyzer

part. I Koji, first start with Yeah. So, will the

what’s relation implied than certainly, be our XXX% guidance, higher that, think to there. would I in

that verticals. worsening I let think environment most I retention will we see the will kind that. in into we exciting are go other a below expecting, particularly Henry of

Henry Schuck

Yeah.

in across areas a seeing are success see we there. the the services. one side opportunity That’s financial lot have continuing specialists of think I management of reorganized and on that we key account

gap it, that the we You they from a be huge and their will included business, strategy of sales integral in slides ZoomInfo the part an without quotes applies Capital sentiment sells think really there out in One on capitalize would see to company that, that. services we become can will to how and to figure any other fill. We that be we scrambling to that enablement businesses so think financial same

prospect have at addition I the the the side our platform, that, mentioned OS customer Marketing on new Sales seeing Xx side think are seeing are at we ABM OS in are OS, new side, we Sales on over where customer seeing and average ASP I Xx pricing. to success in ASPs pricing over we the

get when people value an OS so when the align really get you that you and and you understanding unlock OS. the also with you on are Sales ABM sales on And deploy marketing sales unlock together platform, but marketing Marketing

And in products. with retention continue and stats our we platform Data-as-a-Service addition net better to see to that,

those. the that of Marketing a uptake drivers those to in DAS, meaningful upper so see our ABM about of and enrichment RingLead we the focus environment behind good products enterprise mid-market in on includes which and feel will those and as platform. our solutions We inside so we continue and continue And see economic good to invest today’s we OS and we

Koji Ikeda

Cameron. Thanks, Henry. Thanks,

Operator

we while question And next coming moment is our from of prepare for Turrin our question. One Fargo. you. Thank next Michael Wells

open. is line Your

Michael Turrin

Hey. Thanks. Appreciate you question. the taking

in is return from flat relative pieces QX optics the are sequential guide growth I So moving a year the there mean in growth. are full some QX. The to to sequential than

but macro. You little have days talked bit, adjusted also a worsening about

should maybe through help days the be year? QX out we trend from how for So growth beyond by just sequential and can out of impacts account a taking the perspective us and into thinking else much model the spelling you just adjusted the rest of what portion

Cameron Hyzer

Sure.

of revenue there fewer days to are there the QX, will are XX QX, because that absolute headwind versus days a days X% roughly that’s in see. in So XX level you

doing improvement, growth our would of different seasonality QX expectation a particularly given the is the then, latter will guide linearity year XX% that, math, you what to a And sequential the based midpoint in have you I the on different normally the at better revenue in normally growth. it historically. of implies growth a would be seen QX is that than think, the that see sequential the little So slightly the is than X% and getting just part overall by

Michael Turrin

And improving squaring macro. with growth I the mean just the sequential -- worsening just

-- understand inputs I what just just your are So so that on just the you clear using just informs us think and call. the help it’s so

Cameron Hyzer

Yeah.

So, ramped certainly, starting sales do in a have I mix year, of think, the we higher folks. out

to And get to have over the through of out and capacity then has go pipeline the continue that we to ability will improved -- the course our and that year. So see grow an we instituted. we the guidance, that early disruption in management have embedded the then changes year some we within assumption but but related do we the will part have the of

Michael Turrin

helpful. That’s you. Okay. Thank

Henry Schuck

Okay.

Operator

for is prepare Terry And next Thank of question our coming you. One from we question. Truist. next moment Tillman our while

Your line is open.

Joe Meares

Hi, guys. for is the Meares Terry. This taking on Joe question. Thanks for

weaker drive and give areas intelligence vendors sales engagement? Just the solution first the vendor can thoughts one, of point displaced ability in conversational the consolidation us economy, you in your context some updated to like and on

Henry Schuck

Yeah. Definitely.

opportunities. meaningful so drive that They are an February ancillary consolidation our sales engagement, we releasing and data as about things, continuing ancillary integrated engagement partners. a three conversation are We OS in intelligence then see look that to experience engagement those natively so We to products providers. and XXXX and are Sales and particularly we we in and conversation consolidation, continuing that drive data are and be providers, intelligence inside platform providers, for brings of the and of part excited conversation around strategy intelligence, will data sales around sales

Joe Meares

size. quarter, how successes just Thanks macro largest logos? eight-figure was and expansion, the you your the and I had does And am helpful. land your million a That’s Great. a then plus curious fourth are the size any like of speak just the in more first your effect there again. if quarter of you land, an and noted also you which that as Last $X ever ever follow-up. expansion

Henry Schuck

transaction account give in that the an That expansion, was across happened a That name grew we lot too. seven-figure Yeah. talked the additional the their a quarter. sales for leaves that room We seats about and company of didn’t of of teams. but company, executive HCM thousands

would you typical that deal, it, saw that QX X,XXX what a across, you seen have In in or would seats across X,XXX be was instead being have transaction X,XXX on of seats. call

to tremendous we but see So it still QX, back grow in there. ratchets upside

the transactions we of quarter. one that’s large the examples sort saw So of in of

Operator

your you our of One we Jacob Thank question. Satel for coming the will be And for moment from question next prepare [ph] question. Sachs. next Goldman while

open. Your line is

Unidentified Analyst

you and Hi. very Henry Cameron. much, Thank

Their probably intention arguably when is are the impact the to You guys and are to because of first see they the back the downturn, cutting on announced people even sales layoff. freeze office your But to of the really has the activity it tools. statistics. side product lot clearly also We a same productivity love time. relates productivity as tremendous front on at

up see early right? start holding let’s the especially the be the see that is you in because XXXX back customer, to go the we start have shouldn’t benefit, economy, first layoffs, to it in So QX business the logic in very is we to easy especially, and because because cutoffs shouldn’t of I show coming to signs what your it comps of CRPO quarter. is Secondly, a since the you are that useful, this useful, see start struggle? just third So with look to very improvement too, some at new

stabilizes. cycled next over will have probably the industry of layoffs, the through the hopefully, quarters, We couple

wouldn’t know? this Thank me let see based second I conditions the or please logic if half in am you. with out business on this, better you lunch to So

Cameron Hyzer

think we upside. hope outlines upside the that is of business way certainly case, operate And kind I an logic our necessarily but for the we don’t

see think is behavior teams. that, but ultimately, to efficiency of also in more macro drive in I terms that of us we our to we are better looking think largely I the the opportunity environment and there accelerate. an do as do And buyer stabilization for

that this definitely ball upside I the to to I realize else. don’t are order when have will But that’s company in I so, think, really into whenever certainly, it. Got see QX at I just coming crystal point when necessarily the we occurs. or investing -- stabilizes. But environment the potential have that think, the we say in to that

Henry Schuck

add, that an would which it’s early category, still still it’s in I look, And means sale. really evangelistic this

Our not category is line Gartner-blessed a item. budget

tech us. base stakes exposure in challenging And are isn’t companies, our think their have we for slowdown selling into we and of condition executives environment the are So there a table within value-add in customer to unique as organization. then to our

we to you confident companies space a last to as similar slowdown. organization, at If are accelerate expect that don’t we uncertainty and be our through it. away sales obviously look BXB able to to We you forever that slowdown products other are in that who incredibly going and see fades sell trajectory

Unidentified Analyst

Got and it Cameron, you slice there much how remaining net for XX%, if business, to it. is business take or growth better so new which revenue me. relative is for the of it and What your Henry Thank ACV there much. the you XX%. That’s guidance company? the overall and trends what rate the are is your non-tech

Cameron Hyzer

Yeah.

you outcome. totally it is different that and meaningfully wouldn’t so would better, that, So, better a I say it’s expect

particularly vertical. cut seen manage challenging looking it’s that, impacted, perceived think is we looking They really what is QX for QX of that’s layoff are coming, but are is companies have into in perspective, recession think more costs. to and all regardless from to I I software a so

Unidentified Analyst

if big have so? a hope going So we a be you recession, to pickup, which don’t there’s

Cameron Hyzer

the do yeah, I look, macroeconomics. on more on buyer mean, definitely I I behavior focus than

more economy. changes But, in what year, throughout think they past buyer it’s happens of have aligned. just the this behavior been than I question a whether yeah,

Unidentified Analyst

useful. Very it. Got

Operator

you. Q&A This closing Henry would back today’s Thank I call over for to to turn remarks. concludes like Schuck session. the

Henry Schuck

joining for you progress our events. our you you. with look everyone us at sharing continued Thank investor upcoming Thank tonight. Great. We forward to

Operator

conference for today’s joining you Thank call.

You and day. of everyone all disconnect may rest your the enjoy

ZoomInfo (ZI) 6 Feb 232022 Q4 Earnings call transcript