Earnings call transcript Q1 2023

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Operator

Good day, and thank you for standing by. Welcome to ZoomInfo First Quarter 2023 Financial Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Jerry Sisitsky, Investor Relations. Please go ahead.

Jerry Sisitsky

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

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

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

information, on For can financial metrics slides Relations All ir.zoominfo.com. please in found non-GAAP, reconciliation release otherwise the press website the in be to or posted our at noted. our IR the in cautionary posted unless A to statement call results Investor more slides are this to the refer website.

turn Henry. I'll the to that, call over With

Henry Schuck

Jerry, you, and Thank welcome, everyone.

cash of income In more QX, flow. we delivered than un-levered XX% profitability with XX% and margin free million revenue adjusted operating growth, an better-than-expected $XXX in

value that customers platform macroeconomic not environment, deals facing we our improved, on the we to can continued control and when backdrop are delivers everywhere. demonstrate financial manage results seen the can't we Even business, macro have against the our how efficiently. that While we control we executing the scrutiny

current from and are broader of to companies companies. leading the continue the software economic and venture-backed impacted our we profitability, When technology comes revenue drive being growth majority our space, a backdrop, approximately customers incorporate environment. you services, XX% that financial of while by of combination With the

We is levels certain we a when stronger there even economic stable growth higher that by of outlook, even more see are confident accompanied and will profitability.

executing than the and there, Until more for guidance, growth are free year. revenue cash billion and year for unlevered reaffirming we XX% in which the we our with get $X.X year calls plans our confidence flow against full for

While ACV more companies cohort approximately cohort of we down million logos grew our cohort XX% X,XXX for materially the continues that customers and with than churn grow. our $X consistent ACV, ended in first We as XXXK QX total up remains that to quarter-over-quarter, year-over-year. the quarter have software sold. customers XXXk in lost Gross

We also are continue side. side and to seeing we spots transportation in logistics strong and on markets less see manufacturing and the on the end new demand where growth bright accelerating customer business seat effective like

the market, quick positioned ROI to future we growing addressable our large we incredibly better the the to even growth, value the Given business to improves. continue deliver, and competitive strong drive and and economy time be moat invest when widen in

internal on capitalizing improve approach and We to are go-to-market efficiency. opportunities our our own seller evolve

renewal. PLG for motion behind us continuing effectiveness invest efficiency. organization from developing to and functions able product-led ways sales centers building support to greater of with all teams, of for entire specializing and further By first our excellence we're to a our transact the our for across optimize and segments, customer drive We're our roles customers persona-based to downmarket through additional motion more touch

customers more launch self-service stores customers since and via provision Today, leveraging enterprise its to seats. our including seats SalesOS more customers in per looking credits and XXXX. hundreds add can with is user buy This leverage easier self-service driving to of QX transactions of pathway additional to trials purchase quarter, self-submit and

allowing fully to our to to higher-value motion retention motion focus to more led on support growth product go-to-market expect expand able teams be our use and We complex, acquisition, cases.

levers high from platform Examples seeing engine maintaining pricing critical velocity, infrastructure, our are enterprise and and and leveraging high more dynamic we our first-party while field. behind our pricing to motions are include still market. a cross-sell rigorous to already us of synthesize down gains invest prescribe these and efficiency business upsell, the enabling These investments, which to data signals

The approach and an and methodology up-leveling sales to rollout talent of transparency our strategic upmarket, sales and a enterprise drive high-touch more new to sophisticated overall accountability customers. our

can as potential customers their leaders that can world-class we So they as potential unlock and unlock themselves. their that go-to-market

Those nearly leadership engagement investing we indicator core data leading are our to engagement are product, product We with expand SalesOS paying as a increasing experiences, upmarket. investments off reach-out. for increased retention. our our and metric extend Chrome and every In our view positive resources customer extension create delightful across

are added platform. in seller seconds leaving we SalesOS, ever We Revenue productivity for prospects without customers, out Chief capabilities, that attuned sales driving the our native to on something also especially reach are enabling sellers Officers to to today. Within laser-focused engagement

activities time. launch their campaigns log in simultaneously can real and Users multi-touch

the we use users XX% day-to-day our Over daily workflows. case users new experience as expand to active of centrally have more quarter, a become likelihood demonstrated this their higher into

to frontier With conversation account of continue push across intelligence productivity and executive, account and Chorus, seller management increase post-sales the AI we to team.

items produce productivity. move notes and follow-through automatically summaries sellers forward, meeting AI-powered generative consistent help and deals action meeting to new ensuring rep increased Our create

of my our ever call to the a words captures from with is AI notes take a Chorus' is detail relevant meeting the every no customers, There summary use action workflow. one reason again. it post-meeting items. completely during To along that's absolutely single feature of key changed

and we every tech stack. AI in continue as go-to-market to tool automation workflow expect become irreplaceable We in an investments

the forms deal enabling teams activities, place. into and all and that we same deal by MarketingOS, insights web influence single correspondence sales bringing marketing stories, account to deal a a intent account e-mail rally engagements, signals, introduced In around and

sales the entire access experience across complete time funnel, Now marketing to better to delivering customer teams have close. and information shortening and a

experience, this to reports multichannel of customers monitor allowing and campaigns. impact spend the released complement newly optimize Our their

Databricks partnership channel excited lake new data purchasing a a in marketplace. to platform, creating we're accessing comprehensive On ZoomInfo with and announce for BXB the data directly leading a sets provider Databricks, the bricks new partnership the data house through deliver ZoomInfo's to customers side, to

customers able seamlessly potential Our go-to-market workflow, to leverage their the and our AI modeling, data data to full learning machine analytics, will of powerful unlock be initiatives.

Wyndham market-leading practices. and During privacy Communications, not we recognized Hotels, Shaw and also software, the industry-leading Juniper the These notice and quarter, closed brands U.S. Networks, Chevron, many Jones, including because Panera turned Bank but with data world's brands to Choice strongest JPMorgan, data only of our our globally of transactions enterprises, Bread, leading of because and us Hotels. UKG, Dow

despite especially who partner economic with continue looking beyond. is in clients, multinational with success advantage faster to powerful our our and grow This to expand than we internationally, domestic where Europe are drives headwinds, business. our a stronger This trusted

data the we privacy In fruition our two the couldn't software providers because trust quarter, data practices. global compliance largest come set we legacy to to of as expanded and company from their they to cloud who switched world's saw this ZoomInfo away

customer standards with and rigorous industry-leading Our and of for aligned privacy trust compliance their integrity. were values

our a customer grew U.K.-based those, with multinational control In enterprise. footprint of one also EMEA we global with largest in our expansions addition pest to

provider on efficiency drive international an SalesOS of seller that worldwide. exhibitions to events, DMG with and And media brought

candidates. on remains and to companies, the market talent. pharmacies for demand for platform We life our very also to quickly insurance, who of platform recruit brought Fortune major We and now see largest one top two are property, enterprise strong for TalentOS competitive our a insurance in continue casualty XX that provider retail a leveraging hiring life

wanted businesses replaced of money education software their go company addressable to that A more number providers market a existing including switch entire to and and market to target provider efficiently. wanted and more Texas-based accurately to MarketingOS their global that a technology ABM save higher

MarketingOS also a looking ever sold services to effectively to target office. food companies transaction more We company our largest as return businesses to

been by and never data, and in platform powered our more insights triggered confident we're to the automation customers. accurate innovation In workflow value highly our activate the closing, data tremendous and delivers the and engagement. for drive that ROI delivering that The that I've

Despite transformation digital more discover power sales of continue more businesses BXB and provide. We as our current environment in that remain insights the and early the and data the to economic are go-to-market, invest our that growth the result, as will challenges and stabilizes, a outlook accelerate. we confident business to facing, as their customers continue buyers modernizing our economic in are the

With that, over Cameron. I'll hand it to

Cameron Hyzer

Henry. Thanks,

$XXX revenue year-over-year the two up million, X.X% and an annualized quarter. revenue XX% QX, first the of on delivered factoring when we up recognition of in sequentially fewer In in basis days

growth last months, XX Excluding products revenue organic XX%. the our acquired the quarter for was within impact the of

acquisitions QX beginning we the inorganic do next quarter. our we at that contribution Given not most XXXX, completed anticipate recent revenue of

share. per the net GAAP million, in million, the Adjusted was operating $XX built guidance. similar Overall, first a $X.XX we income EPS to the per XX%. environment EPS QX margin the in share. and $XXX quarter, was which was was $X.XX GAAP income of Non-GAAP assumptions upon degraded

The renewals operate challenging, financial NRR. by majority upsells across including downward customers This backdrop vendors. pressure of current technology in and our industries meaningfully the scrutinizing and and and makes point customers economic services. are the impacting putting spending on other software, environment, efficiency all starting impacted for overall more sales

reserves was better our related partially retention This contemplated write-offs to flat the new relative customers. sales was guidance. while among As than S&P net QX, QX we performance what XXXX, worse was activity by what in experienced sales increased slightly incrementally in guidance, to than roughly revenue offset contemplated our in we better

midpoint With our margin International which international at operating XX% this in XX% XX% the full remainder the and contributed performance XXXX, revenue we the to an revenue revenue quarter. customers year are XX%. the year, grew more previously reaffirming of and calls for the provided into relative implied QX of guidance, growth of adjusted visibility and

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

to to us some conversion the exhibited to make lower-than-normal to delayed of with QX in of QX prior flow seasonality relative banking certain billings quarter due at us that lower forced benefits schedule. and coupled end the payments ahead crisis AOI, payments Cash

to expect coming We these in the reverse quarters. impacts timing

balance $X.XX As we first unlevered billion equivalents XX% in terms which expect our quarter guidance, range in to the of of $XXX all gross the for of rates. ended flow million the to XXX% the with conversion to is free in or debt, we to cash sheet, and full reflected continue of With end in the respect year. continue hedged carry fixed in short-term QX, interest cash, we investments. cash At

in in is During completed the year of resulted credit We a lien defined at XX maturity net leverage agreement a a ratio which XX-basis interest. X.Xx, EBITDA four X.Xx, XXXX improvement reduction of agreements. point and consolidated with cash leverage which in par, a extension as an trailing EBITDA and to our ratios again months in adjusted repricing trailing the EBITDA quarter, and we first our XX drove credit our months

stock shares with announced During on the quarter, respect million repurchase common price approximately share. remain we per we we to authorization and deployed continue million million XX, to We $XX of repurchased $XX the a average market $XXX of of that we expect in at an In XXXX. repurchasing total to the X opportunistic March share aggregate, repurchase. of ZoomInfo shares, be

$X.X to and million With be quarter RPO, months. which the obligations, unearned forward bookings activity future $XXX in delivered at We to believe and the were the to metrics obligations, imprecise expected liabilities are momentum. XX calculated million end billion, in-period and respect are $XXX remaining was and revenue assess billings, performance RPO that next of performance or of

in inherent are and first the revenue we and second in focus in annualized quarter seeing we January is signals stabilize -- reflected better on sequential sometimes as growth, annualized revenue metrics, performance growth accelerate these given guidance. the to across quarter was efficiency in we begin which began noise expect conflicting than of that to April quarter. and revenue did, Because the Furthermore, our sales X.X% the sequential

net in share. income follows, million. million are QX, per million. of providing For of of $XXX the $XXX $XXX $XXX operating Adjusted as we in to income to $X.XX And the expect revenue $X.XX range range we to range guidance million non-GAAP in the

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

further confidence to have of exceed or quarter full we visibility, year guidance. ability achieve our our in Another

million calls full in range billion guidance, $X.XXX for to As are million. XXXX which $XXX income our to reaffirming revenue adjusted a operating in and of billion range result, we $X.XXX $XXX the of the year

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

We million. shares to million the expect range unlevered free cash flow $XXX of million in $XXX -- XXX

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

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

Operator

And our from with first Alex [Operator Wolfe Instructions] Zukin Research. is question

is line Your open.

Alex Zukin

guys, the retention question, businesses, underlying the the I maybe on Hi, impacted detail business, the like have a and some two upsell. business with well really It guess a thanks right? doing taking and are -- the that new start of for you're of for and You Henry. underlying of obviously business. appreciate on headwinds lot looks tale customers I the kind

are talk business business? new impacted if to to on maybe those kind of two we split And sales the cycle and you separately, kind we a where the you of to would you other where like impact look as talk out timeline them normal you what customers, of non-impacted Just into the start at rebase CEOs, on as that side? look versus

Henry Schuck

the a I quarter still in within doing are said of less companies. is companies little software Alex Even and it's our demand tech companies number Look, like like that we've tech past, is into true of from a that well the services. there about for bit then of which really or way this the software cohort and companies that think and products moved think is challenged. vertical, is million-dollar that lot our a What the were this, is are of to group group a a more there

add as there. get And affected to renewals because the by our quota-carrying our so same it also we're to headcount trying customer general trying to continue account on headcount to side upsell account and executive we management are of -- into out much cycles that's deals, to organization not longer, able there we're base, cross-sell as those our taking base, in so we out other and elongating sales customer for in

January to continuing and we in demand. opportunity hire even to Cameron So coming as hire impacted, as sales are the better -- back to could we're there compared the much what normal say state, iterate to or cycles was. quota-carrying to is which seeing reps continue April industries than that as start I'll those And said, is more and a off are what far January a

Alex Zukin

of We of any offerings anecdotes then the maybe overlapping competitive a on out-of-the comments fierce lot just -- competition, price And Perfect. increasingly coming of on hearing the space. environment? keep there's kind

where XX the you look As beyond, over and differentiation the next competitive the a incremental now? months and about offering, you right show you seeing of are through think

Henry Schuck

Yes.

So what changed. has the I'll landscape tell you not first competitive is

moving flat have and customer so way. Our feel roughly our from And been what and in per QX, changed to we rates away the ACV pressured we to as If competitors they we was competitors. not our was in win ourselves further that and relate in haven't consistent discounting saw anything, space. further

space, asset, the One, we're want continuing breadth think the our in ahead so it to we're data data there. anybody further data about to invest and leader further comes to obviously, of and think in there's I when the coverage, accuracy, you differentiation and our and think I pull things. in market very when two

platform, And you then this sales engagement saw the we when a experience, put we everything creates us interconnectivity with between core best-in-class by second, SalesOS systems doing assets. differentiation that quarter data as start into in really and as an together together platforms in our bringing bring long-term integrated think

Alex Zukin

Perfect. guys. Thank you,

Operator

Porter for is moment our next with from next question Stanley. our Morgan question. Elizabeth One And

open. is line Your

Elizabeth Porter

an uncertainty, rate comps lap QX little QX QX, in offset, it it's ask what's we guidance. that lot first. early Thank through difficult? NRR upsell you'd risk I on a on and from expected is little macro so a And quarters. Directionally, just to coming of is the Thank the a some bit the the either worse much. see there's there the NRR you improve versus weakness, in as bit the sounds like what you. which Directionally, your gets of Great. in got in NRR bit wanted while we a as to incremental that could still just year tough opportunity more

Henry Schuck

Yes. Thanks, Elizabeth.

see of our into as are QX, QX. to we even yes, in upsell and we move but So, starting so among clients, many more opportunities Yes.

continues a pressure started well, of we and really renewals opportunity harder and there where more the really hang there little being the as -- number retention QX in That many to as potential a I the seeing -- think we're is gross significant to a of software of year. upsell in think start see for and bit to we sector pretty for that particularly even down-sell, layoffs. well. there is said, are lap, I But last we down-sell in

renewals As we the and those as to feel the start we software space of further into to those may further better start renewals, that many lap actually in year. get go we

Elizabeth Porter

then And as just a Great. follow-up.

recent the from was announcements, about if should worse what so, impact think for how QX? the any remainder changes the leadership And And than see better year? disruption did it the expected? any in the guys you Given we or of you

Henry Schuck

Yes. impact the Company. Ally's seen from real Dave Look, a we've and positive entering

them any coming And we QX didn't see in. in so disruption from

I Dave, on the both their on and they're improving up-market increasingly org productivity and anything and feel execution. was think impact if for organization, focused positive we design,

far. And so feel about their really we good contribution so

Elizabeth Porter

you. Okay. Thank

Operator

our from One Bank America. next our with moment comes Koji next for Ikeda And question question. of

open. is line Your

Koji Ikeda

Thanks ask for wanted a couple questions. taking guys. to here. my Hi, just Yes. I

month you April about a and even the like just linearity, better or February better than maybe March kind to First one being the being back January stated. sales of than going

does of exactly there's that more in the that case, sales productivity? what today that And than of is that a better? it more? of beginning sense. so capacity bit little more maybe a that kind department mean, the sales on I sales pipeline generation April little versus being how about mean? is I that's If year, know kind the or the better the bit the guess, talk months. you mean I makes could is color Does So previous

Cameron Hyzer

Yes.

gives April little But than oftentimes in of the which month. third so have was month than January. better where -- level we January sales. sales So less actual in in of feel on it within the linearity, has momentum month, second been a terms a adjusted specifically, confidence from is good month, pipeline a an and typically dynamic linearity QX. is the close first the and a certainly going. think do improvement that -- do that's of perspective, to Yes, comparing basis seeing us From we're than And we I less QX some similar

Koji Ikeda

got follow-up to on that, question a And wanted No, it. it, Got Cameron. thanks RPO. ask for I then here

RPO bit the slowed the first and in quarter high-teens quarter, RPO, current in last the a Just down it and growth mid-to-high the first quarter. the even the was sequentially XXs to from

call co-terming? better? caught metric to So of a could on anything maybe through Thanks, that little mechanics the that Or us some the bit help on specifically walk there? maybe guys. duration us you ARPU understand underlying out or Anything to

Cameron Hyzer

Sure. at kind Well, versus RPO certainly, we contracts see you're difference are that. looking can seeing when fewer RPO, in you that the and long-term of current

than a are haven't write-offs through the is think been quarter I often flows contracts we had and those does related in yet. other of to RPO some we clients impact that The more that dramatically built because that small-business RPO greater number mentioned that

Koji Ikeda

Got for my questions. taking Thanks it.

Operator

next our for question. One moment

Murphy from question Mark JPMorgan. next with is Our

is open. line Your

Mark Murphy

we've some Alteryx you you we've I very it. the much. layoff But announcements think noticed Red week and from and Hat Thank to and Lenovo and Cameron, seen a and Dropbox FX. In alluded it last and half, incremental

the it pipeline the at possible would continue term? of trend, to over contracting that, was on April more and expect of cohort event? customer Or in near how If is based is comments kind you that one-time started, XXXK a look the that it you

Cameron Hyzer

which XXXK I value portion degradation that degradation the as continue said, focus a most for still more largest came That the and our going we're companies software higher. all customer clients, is on being from comprise So a think or on good of our to of to the customers. expectation result, driving cohort XXXK focused driving

extent that sell the that close degradation software those in are to companies to down them so for layoffs So is, largely under. those ends up concentrated are a us small of number, particularly, the pushing that companies, XXXK kind

companies So you're focused and if that kind most actually risk $XXX,XXX it's the the of have level. small on we software that purely mid-size

Mark Murphy

seats TalentOS and And Fortune said think sense. for then makes products? marketing those just you surprised mentioned if couple XX Can you of transactions are of they compare a me follow-up. as that either and just terms you core how I selected Okay, a a of in Henry, to bit. or little needle that some recruiting, many companies sales movers you dimensionalize the it

Henry Schuck

think you them point the dollar -- they're -- Yes. enter sales as also a wouldn't continue for XXXK starting figure mean much than they're go the to I transactions, not you those often high-five to mid-five should an sort into when cohort, or acquisition transactions, transactions of or organization, these organizations. are good of million but inside but smaller because us figure of they team smaller grow those a talent and are team, mainly

those opportunity then the to we or spread acquiring get for are and IT pharmacists, are there. have -- you -- So folks contracts an talent out talent acquisition where for you that's get from who

Mark Murphy

you Understood. much. very Thank

Operator

for moment our next one And question.

with comes Our Kash from Sachs. Rangan next question Goldman

is line Your open.

Kash Rangan

dollars new be net you, you thank business Cameron, to last guidance. flat how it -- flat, hit the some it I to also flat? staying and see understand at QX, in about we QX when a business guys, I'm to Did that to QX. go-forward of net-new to was look acceleration flat trajectory. sequential in negative numbers need on the Hi, being new compare amount for you And to the or I on talked basis, think QX Can trying question the your color. added, going of was QX year? in

growth accelerating the you second sequential to that that revenue we a much. are on the you things in versus drive a get way half that QX? rate rate the up growth so subscription based annualized growth that numbers can what in revenue Thank the put such in So

Cameron Hyzer

Sure.

relative So up QX QX to kind in flat. so a 'XX that's 'XX, new deceleration being sales of of were modest modestly

We the side to and are in capacity that. continue sales drive in existing continuing to new both order add customer to the

guidance what focusing As shape possibilities. assumptions, are does sales of upsell as on we our sales as we look in the expirations forward of renewals and and terms our we look and looks like what capacity like new and develop well

capacity that expirations ability so bit in growth and added that certainly, seeing And see we're guidance. start gives good to as very with into that have we to the order shape revenue accelerating as sales little the us sequential compared of already in good our support to confidence QX, visibility give forward, well. us hit January And obviously, going April that more to a we're in where

Kash Rangan

you business easier net Could of is? in like say seems relative half comps year second it What new to this year last

Cameron Hyzer

hear I you. Can that? repeat quite didn't Sorry. you

Kash Rangan

year last new you It comps net like would versus of easier this have in seem year. ACV half second

Cameron Hyzer

absolutely. started got talked that creates we more achieve QX We so to year, and in easier retention pressure QX and that but when last an -- pressure which Yes, obviously QX, comparable about forth that. net materially to impacted see obviously

Kash Rangan

Brilliant. you much. so Thank

Operator

One next moment question. for our

is question next UBS. from with Our Taylor McGinnis

Your line is open.

Taylor McGinnis

gives can does NRR piggyback those in the And macro further? new risk you break full-year to in implying there sequential existing? a my you your accelerate different question. the bit with there bit variables? I much more two down the maybe is Yes. compare little what guide further what question for versus Maybe How guide? maybe year. comfort throughout further that down taking so last Hi. Cameron, a the And into came growth little that quarter. specifically, the just this embedded Thanks And off last any deteriorates is if guess on to to

Cameron Hyzer

Yes.

net we based do as which some that year. throughout do the renewals We have support upsells. that grow sales growth in also potential move support as the we in, of the as through as is on of you of actually do we explorations shape activity have terms year, continue sales that seasonality to the the new higher course are that will expect that historically, actually and well coming -- retention So team

And well. so help that that all as

Taylor McGinnis

Great. Thank much. so you

Operator

One Barclays. Lenschow our next moment from next And is question. with question for our Raimo

line Your open. is

Raimo Lenschow

you What Thank you. you you're talk of is, few terms quality? of I'm to like into extra go referring from down-sell like have you beginning kind And seeing follow-on. seats, little the what bit a out me. appetite Thanks of obviously add for the there you squeezing at higher-value in of about of can Team, crisis, I you. one offerings kind the seeing -- et kind a But solutions people's quite what of of Thank to in terms pipeline are their people guys? then the cetera. have

Henry Schuck

Raimo, I think we're -- thanks, Raimo.

and higher we're I think in mid-market customers. where seeing really great our results is

of and numerous strategic products. mid-market our customers, platforms they coupling are our So together enterprise,

about closed multi-platform QX, almost were of I And them so big deals. think that all the in when deals

They a And our They leverage so SalesOS offering. with and offering contact they brought added data our of service our OpsOS TalentOS Snowflake. SalesOS. data and offering brick as together company inside our and

deals our saw we more more of we see the combining seeing strategy, we we're executing that of that to And platforms and our that think continue multiple think happening. a when that iterate account together. as and against And that we'll on I strategy are so base. we're employing is And throughout

Raimo Lenschow

situation you're Okay, comps, in at obviously, pressure, remind level? about How moment? what Because buybacks the you're this easier Thank -- the under and pressure stabilizing. the of perfect. about And buyback Cameron, you. cetera, think maybe us and thinking you're shares like but then that or under is terms at as in et of were your thinking like we second-half kind it looks

Cameron Hyzer

Sure.

repurchase as mid-March, $XXX we end $XX April a in million authorized of through well. repurchased did about we continue We So the to buyback quarter. million the in and

in Our of opportunistically and to had have Board additional further about to quarter. the expectation the million. conversations repurchase market kind buybacks shares the $XXX in be second continue after or we here with is agreed And not

Raimo Lenschow

you. Okay. Thank

Operator

moment our One for next question.

with Turrin Michael Wells Our is Fargo. question from next

line Your is open.

Michael Turrin

for the good the like trade-offs side? or Hi, you're flow for productivity mixed of sales to you're terms need on I through the And of and in detail question, dial sounds quickly mindful given coming on dial up just should update impacts Maybe else may. on through the are and seeing? assumed. cash thanks it seeing thinking based How capacity sales margin, what margin thinking for in we in and taking Cameron, ramping for what's how around macro able terms if afternoon, free anything between you what and some one all of Any down year? signals be you're the Thanks.

Cameron Hyzer

Yes.

add go and hiring is to down So in focused on that folks. relative we're slightly points very easy, I dial highest-quality through programs dialing up dialing where up We moving of or sales our people up. Yes, dial to do we're into the basis folks expectation in our XXXX we high-quality sales we relatively folks, to were need can capacity different, out our hire and roughly ability margin down training XX think and is that to going XXXX. and

that we just to -- year. with focused time. we teams I and long-time being over as we we is able we've that not think build we'll on this but the think something efficient, sales continue comfortable move be capacity, very through capacity are also I feel how But And the a done add those to for

Michael Turrin

one. at Thanks, leave guys. I'll

Cameron Hyzer

Thank you.

Operator

question. our moment next for One

with Brad Our next Zelnick Bank. question Deutsche is from

open. is line Your

Brad Zelnick

are capabilities the very new was about generative to I to you you've taking direct AI maybe could portfolio, if of other perhaps that for talked wondering perhaps competitors well, question. much out and related broader Chorus. breed from Thank you about the AI generative there. Henry, the as and across opportunities speak ZoomInfo Great.

Henry Schuck

Hi, of making Look, we two are really kind think we in about is intelligence and what accelerate more I to automation leadership doing, these big and do business think thanks, we the expect language ways. ZoomInfo Brian. when our go-to-market models productive, in in of large

we're for and steps products, to own our our users. going be for automate to First, mundane manual able

and companies, those you the AI who best to same be trying out figure finding So for going platform. select customer conversion all on we opportunity, then and content example, into to And use instead teams channel people. we're know signals, have the with your we're triangulate engage our should because the own, incorporating of create this to those able personalized you what highest already be about to pick to working and next be of to engaging companies actually should to technology signals on context best the multiple then parse

The other tell is. thing I that, would you

tend your always is that system. those, all And efficiency, issues. saying downstream sorts highlight bad be For around been getting rep we've segmentation, where we planning, out our CRM of of territory data, CRM customers, insights those to creates

But generative of that just into problems big bad on really CRM. shies market coming like a data AI the the your creates inside

the they rely models get And upside so issue and these is get increasing AI efficiency their expected on can't offering. into CRM that into as of exponentially that companies generative realize to the awareness you're your the to data and put from that incorporating

it's to we data AI expecting coming. And their you go-to-market. for benefits work, I'll share a And intended, data leading out system your then, are importance this need generative companies them this in AI by the have to that And Forbes help constantly provider CRM that the future. helping the quote, coming data. to in needs elevate of far that, by generative that, them see going do cleansed. to AI enriched, helping the fully do recently that them to CRM all It's of are get and fully are of to of because going about So I system quote that read to

Brad Zelnick

helpful and Maybe Thanks. Any plans changes housekeeping tracking for color. are Cameron. full-year year-to-date? item quick where headcount Really just to you a

Cameron Hyzer

can continuing we to areas still where ended drive on we're of going And point, we mostly rest for forward. 'XX, throughout that efficiencies this that in September had making. are in the the important, we're on and but well to we're looking and focus it's below organization think we are investments within sales, at focused also of going hiring most tactically areas where and And we all we the efficiency but investments where sales where the we'll support obviously capacity the hire feel warranted,

Brad Zelnick

for All guys. taking Thanks questions right. the

Operator

moment next One for our question.

is Our with next Raymond Peterson from James. question Brian

is open. line Your

Unidentified Analyst

keep This on for to Brian. thanks for one. just taking We'll [Jonathan it question. the is McCarry] Hi,

other the partnerships to or about guys potential software, Can talk newer recently. you new expansion in but XX% seen think verticals exposure build some you've into go-to-market Thanks. traction think necessary also some investments to about on you I So you further mentioned, verticals? that how

Cameron Hyzer

Sure. Yes.

ways field I that -- understand calculators couple they that to putting industries. the up a about consumption, of think So One, have companies, out to where on these time of so the usage growth sizes, we cross-sell, we're new types going sort talked based on based to to these of of rate, that and we're non-affected tech the looking new and we've usage, pricing and the verticals. industries, show up-sell and in most that's opportunities data

plays pricing own based data based prescribing we're on activities. data, data, run the so product our to on field on to and Company's the upsell growth based And cross-sell,

unlock our thing think to I historically motion to able down-market, product-led unlock that we to invest the sell we is, continue efficiencies efficiencies be the in to second in to. growth in industries

customers we're a new in building an platform then then to ever transact and onboard without to become interact ability the And having the and efficient with seller, them us way. customers to direct in ability contact for for so and with

we're drive are couple of industries. using in the sort growth so initiatives And our of other to a the those

Unidentified Analyst

Great. Thanks.

Operator

for our next moment One question.

from Our is Bracelin Brent with Piper next Sandler. question

Your is line open.

Brent Bracelin

there to to understand still into? wanted some puts to Any and you the expires chunk upside Is into base, of more big optimism see a it clearly we were little expansion I about I some the particularly talk expiry Cameron, software about takes. have to the second the color start upsell afternoon. weighted? there opportunities then as exposure risk in you renewals a in is also bit QX and on actually renewals, the renewal too. well but Good year, talked could little given seasonality discussion double-click you back that software. the that half to to of renewals, the a If go here visibility QX the that to

be So helpful. Thanks. any more color there would

Cameron Hyzer

Sure.

renewal with more a software So QX is another other than to weighted quarters. as our little weighted QX rest to bit from quarter the relative seasonality, QX heavily is the for perspective most software our and big to respect of certainly, is the a business well. of business, towards

through So placed impacted last the macroeconomic than when quarters, pressure be the they and we impacted more think gone more environment. two or if materially were perhaps might about you're upon result QX as that's being by QX software a having of focusing business the on software the

Brent Bracelin

Is the getting a for that upside of upsells? then a potential on on optimism more you're and segments renewals little And optimistic clarify was to software commentary better. of just outside that more

Cameron Hyzer

of see think I it we -- it software. see we definitely outside

more efficient within to they starting we're even larger is more can on what think customers that do software less. where see I focusing are and for be with

We a sales opportunity to there relative are see more of starting on to QX.

were now more for I running a optimize more for focused can and people little bit their where looking think cover they costs ways on to infrastructure. people go-to-market I where think to cut are start

opportunities as pipeline really see bigger And that execute mentioned, that opportunities, data to places well in against. we're as are Data-as-a-Service some we where and particularly, as do in are the OperationsOS, both things MarketingOS, starting there Henry and

Brent Bracelin

Very clear. Thank you.

Operator

question. next for One our you. moment Thank

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

is line open. Your

Rishi Jaluria

questions. for Wonderful. I Thanks so taking much appreciate time. the my

in ask given from and if how terms be but color additional just on uptake. question like, of of kind terms you should prepared think disclosed seeing adoption functionality of uncertainty what one mistaken, here, wondering of advanced budgets. in terms what to give just Thanks. I'm you me. Just I in macro looks thinking not in us the the scrutiny the about we remarks, Wanted from If and are adoption some you there on future

Cameron Hyzer

Yes.

so faster an are to the in about overall continues of upsells and we're, And the the to So opportunities. able there But grow portion bigger executing yes, those customers are scenarios. the business. that's upsell value advanced and we stream, those than area to bigger against a those where functionality -- to seeing be provide continues overall that and revenue excited we're

Rishi Jaluria

Thank All you. right, perfect.

Operator

our for next moment question. One

Parker Stifel. Our next with question comes from Lane

Your is open. line

Parker Lane

Thanks improvement the Yes. out you of customers the million $X for a material in Hi, taking questions. guys. Henry, called quarter-over-quarter. cohort

these those I'm vertical are if range average, composition been wondering the customers long of perspective, how million that us of you So sense longstanding a the plus then they a a can Are just opportunities $X see starting more to from themselves customers? from present on or you with ZoomInfo? perspective. product give working in have And onset,

Henry Schuck

Yes.

that Chief Dave things kind to fintech companies, up-market excited are predictable textile customers -- They process there. of from higher of that group it's a Officer bring strategically to of expand really to number a And really Revenue companies tech we couple the them and look, in. go these how that's then think and So of services of want diverse customers, into up financial are rental being to cohort. we bringing longer-standing that velocity I to us go the market, prospects companies, the one as methodology, about about way. that in build is more the help Justice bring think we moved a pretty company, a a want are customers in is And to company,

so find that cohort. increase we'll that companies and continue motion into expect And to to we move that continue to to

Parker Lane

I one plus $XXX your the a in for here. Got just follow-up of housekeeping guidance, reported to cash free any mean it. you, million flow. free unlevered the quick And flow change then, of question Cameron, underlying cash context assumption

Cameron Hyzer

That there No. remains unchanged.

Parker Lane

Got Thank you. it.

Operator

One next moment our for question.

Our Siti from Mizuho. question comes with next Panigrahi

open. is line Your

Siti Panigrahi

wanted Thanks guidance. for taking my level you in question. confidence sales ask in business your your new that I embedded to XXXX

your selling motion? So terms improve your in what to you of what doing are what's - sort changes top-down your self-sufficiency? expectation And are of

Cameron Hyzer

sales So we continue in have new confidence to assumption. the good

more QX, even we're that continuing and with given I that. capacity. that always Certainly, we very in to that to outperformed on high us in been team, greater gives respect In invest focused efficiency confidence respect with think fact, to ensuring we've

think is set can of motion sales the a I to after. the diversified things with good is we really respect it new that, customer more that that a is of One go fact underlying

which macroeconomic means If investing company, go-to-market you industry drive can their to by those think that we they more really by one they about in sells their benefits environment. for not impacted on another were focus can another really that motions business, where the and constrained any business being or are businesses

And to able happening. we've advantage in a environment we've new economic of take that's industries. that's the rotated continued around different seen seen of activity that stages been in little and We've different sales

Siti Panigrahi

Cameron. Thanks,

Operator

next moment our question. One for

with from Canaccord question DJ Hynes next Genuity. Our comes

Your line is open.

David Hynes

terms can is alternatives Hi, you're the renewal if just Cameron, threat in guys. renewals? like-for-like any creating lower-priced talk lower-quality pressure of of the what seeing curious of I'm about you cycle. pricing kind on on

Cameron Hyzer

cycle the in low-end tend for to see of that don't renewal except very We customers. at the

that go downgrade that having else getting, product they're if that cash-strapped them lower-price. another But for many they hit and pay to are that willing or less. willing whatever particularly customers, of customers issues find in could some provider to can larger and take order give of and cases, quality our So in out quality or businesses the they they're the small aren't to

just today world more alternative more software isn't quality from or layoffs. people down-sell -- we're don't of value a yes, a change kind while see tends that in renewal are just So perspective, seats and taking lower the on where end, at typical the from kind the functionality it, seeing where the taking asking the, we call there some out coming of and price to particularly But us. happen getting is out in And they're downside or pressure, there of comes people a that little because most bit the reducing from either for

David Hynes

Yes.

hear. then, you. to good for that's Okay, And Henry, one

PLG talked I of more to standalone kind about at low a market? earnings that thinking about can saw intended the you So kind foot question. to are that an it Is that be answer the a product is product more an to you a deck. a in Or little end of Lite of of strategically? that in the process? leads bit door How sales the ZoomInfo in earlier formal

Henry Schuck

the Thanks Yes. question. for

that their about broader it and or using to get get There a we're sell and ways. see people as us ZoomInfo through an maybe transact to offering, like companies limited and Lite to gives ZoomInfo multiple direct both opportunity for ZoomInfo agreement thinking come at in mid-market packages full ZoomInfo elite in sales I advanced and into a then it the that where with an think then leadership or sign-up are an cycle in opportunity Lite also come of a enterprise small we're company, the Lite a businesses can version

And directly building then in enterprise to to within the give technology will underlying in customers provision addition way that, that a platform. us to able to drive be auto enterprise ability we're able to the Lite also to charge ZoomInfo users seamless be the

And and international customers with that our agreement. wouldn't into larger can motion, wouldn't through so technology I think then building. down -- that actual from then to the we we funnel PLG that get the regular we we're also and get leverage in multiple we're get And customers users demand mid-market companies then benefits both market to we going that enterprise to capture can we that

David Hynes

you, Thank color. Helpful it. Got guys.

Operator

our for question. moment One next

Our next from question Securities. Truist comes with Tillman Terry

Your open. is line

Joe Maeres

Joe is taking Great. the questions. appreciate Maeres I Terry Tillman. you on for This

more removing or just the seats that to resilient You more downside if I'm the that are on customers functionality are ones likely most coming taken just be the change pieces is and out mentioned there functionality. that from are renewals of or of any out? taking curious

Henry Schuck

perspective. then from Well, more I their would influx say, time downsell sales the are where members be laying teams, look, user of actually seats a in customers off tend to a

go-to-market sales going licenses XX% up to not go force, going like I'm want then I to for if that forward. XX%, So pay of my

happen a workflow a into to DAS unplug, they're and functionality using record. the leveraging customer are is Those of our customer user-based. systems plugged seen you've And I say their very, our solution, renewal not where would so solution is advanced that cycles. during that very difficult leveraging where

So...

Joe Maeres

helpful Super answer.

GX. Just intent the websites. I onto ability ability intent the And you've in think to recently platform's as customers sources a bring the updated follow-up, from introduced outside from similarly, to engage you platform then

like just I'm so seen you that much. may here, Thanks have successes. curious any customer early of So usage

Henry Schuck

Yes.

you we're automation we pulling look niche exciting. with and integrations. which the first-party of your can third-party going that CRM future see your adopting in And was marry or sort, GX data systems plug with is for data data it integration platform that what to intersection with that in we where anywhere, data, really, first which fastest think the the think workflow allow one marketing and marry stage through unique modernized data we of ZoomInfo's that from that the really platform But the our of think data, build will I that sets is like? that, is sources a across then go-to-market

Joe Maeres

Thanks.

Operator

I am showing no -

Henry Schuck

at We for seeing virtual look Thank you us many our joining to or of events. tonight. you, Thank one you. upcoming in-person investor everyone, forward

Operator

this you conference for today's call. And Thank concludes participating.

disconnect. You may now

ZoomInfo (ZI) 1 May 232023 Q1 Earnings call transcript