ZI - Earnings call 3 2023 | ZoomInfo Technologies Inc.

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Operator

Good day, and thank you for standing by. Welcome to ZoomInfo Third Quarter 2023 Financial Results Conference Call.

[Operator Instructions]

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

Jeremiah Sisitsky

With call Thank remarks, After you, and and for call XXXX. James call the financial CEO we results on Amy. Welcome, Hyzer, Q&A. Chief to everyone, will the to of ZoomInfo; Roth, third open our Schuck, our are their Henry today ZoomInfo's Cameron conference me Founder the CFO; quarter Officer. Revenue

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

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

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

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

Henry Schuck

Jerry, you, Thank welcome, everyone. Great. and

income $XXX the Revenue XX%. of and exceeded remains million, our While million a results guidance. was delivered margin operating $XXX was environment that the operating adjusted quarter for challenging, we QX

shares per approximately $XXX During X stock $XX average an of the for quarter, share. purchase price of we ZoomInfo repurchased representing million, million

our confidence meaningful buying positioned levels return uniquely for drive on which stock a will capitalize opportunity, economic that at ZoomInfo are gives market shareholders. tremendous to a long-term us these We

Since environment, and last of upsells, year, this operating down early the churn sales highlighted elevated fewer challenges include seat which levels. we have more

grow some have that overall and revenue serves As platform to come cycle customers profitability. as rebalance retention that we helps customers seen a growth industries, and net down and had our growth have one rates early

controllable we're levels companies is market and When continue while drive of growth, the will success positioned environment, spectrum a This long we in them cycle phenomenon are the just not controlling to looking to impacting be the office delivering be for normalized committed companies in operating to help across and of do industry-leading more company improve ends, the to environment, we applications a front our and the ZoomInfo. will uniquely In profitability, and unique customers' that. operating this and term. invest to we

industry-leading excellence customer AI, in We're more the customers MarketingOS globe. this the as and of data To increase quicker that value end, driving of platform prioritizing customers. on down building the XX% we more service product investments the product for and beginning while data a investing accuracy success, often. year, are to using time in of and a These improved ease doubling are have driven coverage doing across since and investments our engagement in our and use

our to growing we win And have of changes the and how of while packaging enabling simultaneously market our flattened closer the a them serve grow them. we rolled me and to of contributors. big announced number the customers, get and given leadership the We've organization the them, that opportunity end efficiently pricing to out and market new low more us at capture

Officer, International Officer. Expansion to here Senior the changes, the excited our been is us enterprise Chief of transitioned that Chief to leading customer and words. few new call Officer. on base I'm role Chief share into leadership As Justice James Revenue Operating the of of a into James him Roth, promoted new EVP President of to with has opportunity Hays, Sales, the Vice our part give of Growth James? role our the today transitioned Dave and wanted Chris

James Roth

that Thanks, today. glad because built. and I to Henry. the passionate early I'm joined in the be about the I'm here team XXXX vision product, the has culture Henry

and automated market the to ZoomInfo for was a go businesses our improvements we customer from in are and enterprises prior to I've the We Since understanding insights and massive the customers to delivering leadership to power data, what deep joining our need to of with years joining, in many customer see the most sophisticated I gotten world. how XX platform. a and of have workflows. largest want that AI-powered best-in-class the have team, value drive I the

data at room Google, the as the I've others go-to-market. and drive of future to teams that so with many market proud growth offer we technology the foundation revenue been Verizon to down in drives I've and of world's best globe. the of companies that that to build at Workday, insights been Amazon, the revenue same across the foundation partnered go-to-market company's

$X go-to-market we team Over million to past X the while off accounts traction that build million seeing and we we're in e-commerce put excited efficiencies for leadership, through large and growth. the in motion product-led portion enterprise. I'm with I've look our about years, of a and plus in that together $X recruit intend helped sales our the I particular, the and success, our

Henry Schuck

Great. Thanks, James.

closed Sage Franklin Health. more than Magellan [ Logistics, This we Health, Post, Lands' deal. enterprises, XXX than Tenet number with a ACV, deals quarter, deals and in multiple $XX Washington The ], signed million End, more Paramount including CBS, we QX, and Steam Kabi of best-in-class In Walmart, CDW, a TCV $XXX,XXX X-figure with transactions including Hospitality, Verizon,

they into to largest and in in us sophisticated way go insights Some world integrating the going the all data, on the companies automation, are of most our market. and directly

cubes. X-figure has and strong seen with we have services other subscription While relationship growth the a roughly impacted, verticals. their been software Today, intent potential Fargo to the to data segmentation well they further and in Wells to Financial data vertical Services, and and the opportunities intent with half In predict company enhanced vertical prioritization our business as leverages our pursue and as of for us firmographic identify additional use organization our churn. data expanded relationship

of into their a In plugging data their to mobility, motion, deliver large accounts. ensuring the their to telecommunications, with signed and go more global high-priority services the now they is engagement years which network provider directly X-figure key insight go-to-market By data come and ZoomInfo that they're able go-to-market have customers for retention quality to XG data support of market. to targeted nearly teams, X-year, as the and highest will ZoomInfo, source a services for they

the Another X-figure who a firm encompasses engagement process. with providers that DaaS, for our multiyear, including out expanded array mid-market had and platform a left competitor consolidating telecommunications and OperationsOS the offering SalesOS, multi in months of back XX boomeranged full multiple earlier, MarketingOS,

X are From drive perspective, we continue points in to on quick and investments quarter. higher NPS growth rose of product the features engagement. with form satisfaction value. a focus These improved year-over-year with customer every that to success dividends delivering time paying customer easy-to-use

points more than that NPS have course increased overall to this increased XX enhancements AI XX% year. recent by product by for and year-over-year, product Our has engagement

with in in XXXX companies obtained Snowflake in recognition, marketing report. awarded stack AWS in ZoomInfo top to named X.XX% enrichment the their an digital #X rankings category continue to also GX's the data receive modern We rankings of competency we data our an customer stand #X reports. experience. market relative being And expertise leader ZoomInfo also Fall XXX most

leveraging data and AI customer-facing partners We're and validation insights and collection scale. to at new technologies create drive

sellers further helping and insights filings side, from which, our of title our understand weaknesses, earnings deal. which the in close they educational also opportunities, QX. data an into need to extracting human scoops, paired at of the accuracy, LLMs profile out insights engage with and account intent driving key and threats highly existing on a and improvements we high our are pipeline, accurate us listed a coming On validation industry-leading other validity data when public all-time calls the now name, a insights and and integrated sits customer-facing profilers other data, and with strengths, are and provides

focused customers now our number also the our outside platform -- specifically, of contacts mobile the million also the and companies of mobile international have incredibly seen there, U.K. by we available we've of XXx, number global of phone recent numbers XXX numbers grown Continental business markets years, our X our while the global access over we've customers. data by incredibly in our data on to offering more been We have investments have and while growing the in In North In by tripling Xx, Xx. significant mobile global number last Europe, in contacts America. expanded to than following

coverage, With to on global our data knowing teams that ethical markets compliance commitment count while this expanded remains when and ZoomInfo and targeting collection can sales center. front international

teams sales analysts market. best such their and teams partnering holistic in planning, they envelope next the use CRM. push And no a go-to-market data accelerates, up go-to-market the customers As end traditional are actions data market, model, working as prioritization and our to then looks pace They move innovation longer Cutting-edge been take we've continue science of drive customer's systems with we to at and sales like. look the more. deploy closely to modern on account AI to what

data as good powering it. is the only as AI

of we and initiatives Google's resources to the more data So models business warehouse our BigQuery. the and reduces in This value data Google time Analytics make the to directly the these quickly AI decisions. help insights execute needed third quarter, integration ZoomInfo with within Hub science and Cloud unlock teams launched

In modern effectively their a market. cloud enterprises view understand addition must XXX-degree in go systems, to data customers of single to accessing to

integrated solution, Reltio, BXB enterprise. management within with integration new management of and a data data capabilities reference making Reltio, the more directly in the Our data master ZoomInfo's ZoomInfo actionable provides

master go-to-market Together, a data we for are joint management. also launching solution

fulfillment partnership expands advertising types partnership set Desk for with new the our world. opportunities enhanced ability DSP. our MarketingOS audiences This to customers' ad reach around Our opens within with of display to the Trade support new features publishers, next supports the the premium more generation ability campaign and and international

As our a for monthly highest result, record ad MarketingOS. September on spend was

capabilities robust e-commerce have size purchase that we've onboarding to to SalesOS self-service trials, been ability no data in-app self-service technology-driven motion Down seat, upgrades We've in paywalls built companies the investing a and ZoomInfo their the users. budget. any of to a streamlined matter our and pathways single ensure for access ability for improved market, more

we advantage, for delivering our and controllable. remain our economic results success. easier simplified data user growth a drive on environment are to will when making ways confident building investments us the for we investing with controlling improving Overall, upon improves, we're that the platform our By focused quality today and us, experience, transact and customers. position that these to long-term We're

call Before over I team to Cameron, turn to I Israel. the in acknowledge want members our

Tel than this incredibly and called been more their have whom been time, difficult in XXX and We our sure offices up have has member to #X or to We in Ra'anana to Aviv, safe. is priority stand are family they a that with many of of Israel serve. called duty families employees their during with up make and active them

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

Peter Hyzer

Henry. you, Thank

revenue X% adjusted for and of up we delivered of revenue recognition. QX, and X.X% as million, up days sequentially year-over-year In $XXX

by the in term. do the provide to environment in the and continue near momentum material We the activity current to business sequential improvements macroeconomic measured in growth anticipate revenue, is we a of could that that tailwind not best annualized believe

net income GAAP million, and income million, was Non-GAAP per operating XX%. was $X.XX was $XXX share. EPS margin per GAAP share. EPS a Adjusted of $X.XX was $XX

less pressure experience Customers with despite at the in engagement. the to we first downselling improving rates renewals, saw to customers upselling more utilization see than year. of and continue We lower part and renewing respect are

to smallest quarter elevated pay, challenged of our be drove Additionally, continue in customers which another write-offs. their to ability

through year. and XXXX, expect the next of renewals will this revenue least that growth first challenging to at half of the first continue quarter We be impacting of cycle through

below ACV have customers than in non-software modestly levels $XXX,XXX more grow. than continue to cohort customer ACV. while We greater $XXX,XXX technology $XXX,XXX saw $XXX,XXX reducing continued pressure to Our now from over in the with quarter as declined X,XXX customers mid-market we companies spend

$XX cohort continued as Henry in signed And customer grow million-plus million X-figure $X year-over-year. we the and Our a indicated, multiple deal to TCV deals quarter.

provide ACV expand our continue customers grow overall customers. incremental we largest functionality to functionality, value directly and and go-to-market integrating X/X of seats with motions. their data contributed are to approximately Our to as continues and increasingly Advanced into our

capabilities. seeing growth DaaS advanced we and MarketingOS, offerings automation highest in of enrichment Within the functionality, are levels from

Our capital cash and substantial to $XX included interest upfront million, was payments. efficient cash generation. requirements in $XX model continues which operating and billing of with million QX low Operating drive flow high-margin flow approximately

flow Unlevered the million, free for of $XX XX% quarter adjusted income. representing cash was operating

quarter, is conversion of ended million QX free cash unlevered and with in quarter as typically lower a we income. continue the expect a We As adjusted $XXX third operating investments. in short-term flow equivalents to percentage XXs cash, conversion annual cash the

aiming are the ownership in in the way, to substantial end our of believe of cash us compounding future. a current carried of share interest QX, count hedged rates. the reduce growth an approximately shareholders remaining giving we which At more opportunity free flow gross meaningful or for that We in thereby that all has billion we fixed environment $X.XX the debt, provides

have that cash achieved. are performance-based issued growth stock-based to free adjusted flow are We our if units also for per include share strategy only targets compensation

quarter, During X.X stock million repurchased shares of the third ZoomInfo at average per price $XX.XX we of share. purchase an

XX, of the share authorization repurchase Through and total have a diluted shares representing have $XXX X% of million we million XX.X total the of shares, outstanding. deployed over million $XXX retired September

and Given our flow healthy shares. repurchase sheet, strong to generation free opportunistically expect we to continue cash balance

EBITDA September Our as X.Xx as months net consolidated cash trailing agreements from X.Xx months is X.Xx, is credit down in XX our XX EBITDA, and and trailing XXXX. leverage EBITDA adjusted of ratio respectively, XX, which defined X.Xx

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

me With guidance. turn that, let to

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

billion revenue For $XXX operating to million. to range adjusted and the full year income $X.XXX of in billion of range XXXX, the -- million the in now expect adjusted we $X.XXX income $XXX

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

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

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

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

Operator

Instructions] [Operator

with Our JPMorgan. comes from first Murphy question Mark

Mark Murphy

contract also, is such closed duration, Henry, ] with And TCV of if $XX shed try mentioned wondering a to QX. moving of we could environment? that's I can this analyze scale a environment, so I first in have the this in believe rarity million quick possibly vertical then you I'm you in a that deal commitment light, what And it it. a follow-up. And it's little a all, just forward [ that on

Henry Schuck

have But since I'm to with take that. happy him James to I'm that. going here is to me. talk

James Roth

Yes.

a with a So large agreement software X-year it was company.

what's itself they've is contract multiple interesting strategy, it $XX.X value. consumed cubes, And confirms revenue company all ended the it. data the as provider. the million, firmographic going So cubes, foundational the total about that in annualized a it $X.X in up about locking actually of is it deal. centralization information is it we And data and contact $X.X really million that's just with ZoomInfo for landed growing where X-year We million deal and

Mark Murphy

just of modest reduce there do X. downsells you trend it with QX. into we kind of end in of I'm believe figure down that conservatism we maybe end As in Or up kind declined should would take ZoomInfo's QX, forecast? experienced a of -- sense line a we toward such some ever that wondering don't the has a kind sequentially you I follow-up, should revenue Cameron, if the top that sufficient that potentially,

Peter Hyzer

to So the net be we are be XX%. challenging, environment for does expecting below and year to continue retention the

period in a As higher retention highest a for that result, QX, net that's our by headwind which creates concentration renewals. below renewals XXX% of amplified is the

least of through this quarter that challenging. cycle, discussed, XXXX renewal first will as believe we we've at be So the

if look XXXX. our March and I we that cycles, ACV between XXXX our beyond and renewal transacted have September you look XX% will at of think

cycle. the on the we'll focused end of quarter. first really agreements getting through the some through work most that, longer-term of we're while there after by tail of is So this And space

Operator

question next Our from with Citi. Radke Tyler comes

Tyler Radke

things in any you've emerging of if so getting green software or or it vertical, business curious and with your services like Just And are worse? you're line October. specifically seen updated largely far that what the just seeing better if month the but expectations, within sounded performed thoughts shoots any in

Henry Schuck

looks and QX lot looked. October a like September

any So improvement environment. the seen we haven't in

business outside the the in have business, and services overall think of continue we verticals. success to software more I

October And than so what saw as nothing in we're we different in that QX. well, but seeing

Operator

Our from Zelnick Brad next Bank. comes question with Deutsche

Brad Zelnick

do AI Microsoft you're your XX the is center points greatest how SalesGPT, a them Henry, Copilot, is clear on and driving really helping impressive. front has has continue the higher hit insights Chorus in Salesforce in But productivity and for as sales score their interface it's and use ensure professionals to leaning in NPS the hearing you enhancements where Sales and ZoomInfo number. world

Henry Schuck

non-publicly all we'll relevant data that the that the able the AI what we for that's engage collect LLMs with and customers. making to with and engage when more without data, are customers users. their product sales know sellers proprietary -- actually is And and that thing our exist your be insights provide able without need this to down exists that's against, that to what available or even insights use data information their CRM or amount that it's to but on public one in the comes data provide. and to think vast I insights data web, And on that insights to and of we proprietary

spit a of put just relevant out sales AI generic insights top on for data doesn't Any you rep.

that ZoomInfo, and the at have data and underlying pane is confident for will of glass insights what really we're publicly is which that that reps. foundation of we available not so And sales proprietary drive

Brad Zelnick

CRPO that's Cameron, see you, that sequentially else might going bookings for and maybe to amidst on, just happen to RPO everything be call what Maybe down stabilize? to much out? needs And of or duration with how anything

Peter Hyzer

Yes.

at So primary was as we the activity momentum, QX. sequential growth mentioned, period we revenue focus and in annualized assessing as down metric that to do on in X.X%

lengths and the reflective the it be that and by seeing So Other other billing is changes challenges terms of can influenced the in including factors, from metrics contract we're of environment. write-off assumptions. those mix impact of the was and way. showed in which some write-off during Probably have course assumptions, the year volatility biggest increased one of this negative that a RPO specifically

Operator

question next Michael Fargo. Turrin from comes Wells with Our

Michael Turrin

Cameron, Is I first seeing. a appreciate rates heavier the challenges some you're around impacts year. next the Is the you're through half period? of that making made mostly that getting of function and potentially color retention comment lingering you of you're that until on renewal the seeing this

what to with renewal the maybe build renewal in go-to-market conversations more to at similar you're of place you're it on there is just And half had for those the retention to a complement end as anything if as assuming And put doing you sequential processes growth and a as that certain able or Or to to help as expect question, first response? the you'd of Henry, maybe to what the perspective you're from work period side for holds. having year. through just are you're a have for time the that more those

Peter Hyzer

a mentioned kick occurred of number kind think that in off I'll negativity, and to that talked XXXX of of to we with And our our as about XX% we'll people [ XXXX, particularly with many customers. Again, in ACV. March before, do So therefore, the respect transacted layoffs I view we've the there. is approximately 'XX through ] and the renewals past And with ] factors we between [ peak our have other I with September think period. think need I QX get

customers sold to And really of period are with of time. assumptions I get having The renewed really need that on ahead those think we through ACV very renewals. focused or

team to strong. and be on to our be of Obviously, as environment demand support relatively the we bring efficiency business continue the that new But there, to that continues we good and business new continue sales to the out see well. customers impacts that. New

cycle So we're really in now. we're getting right this and through mitigating focused much renewal more that on

Henry Schuck

number I we're process we're one, think from the renewals a big sooner. getting Michael, on is, perspective, things them at doing

built and product that provisioning our robust customers we've product products take usage so functionality. health licenses, into engagement, And for a integrations of of consideration user set and usage, of scores specific

health them. have And so with and a account, we the we're much of of clearer view engaging an

Our them engaging account CSMs those scores. with health our managers based and are on

so who we've out up of and clients reaching QX come back to for year. proactively half in renewal QX been throughout And those this the

about really the talked this I have a portfolio. we call, last then on but a product bit And broad

product we're and to the they or got And or within so licenses if of the they less bring need layoff OperationsOS other sold down big had parts we have able opportunities have for base customer product a so a one SalesOS, that Chorus or portfolio. customer into them

And so that as we've renewal been leveraging well. conversations in

Operator

Sandler. Our from Brent next with Bracelin Piper question comes

Brent Bracelin

see with then start QX, challenges talking about first half. you guiding Henry. before one declines a one small we'll in sequential about continuation talking obviously for into Maybe here QX, QX to also sequential for decline Henry. challenges And Cameron, about re-acceleration? Should think of QX, in you're quick a the we into quick follow-up Cameron, follow-up

Peter Hyzer

Yes.

We environment. impact I guiding don't to this re-acceleration than occur. through as of ourselves this the all ahead growth exactly of when half. growth of more So And QX further XXXX a and to do challenging opportunity that through certainly persist software it companies, less Once higher remains that continue to environment least but through think cohort frankly, get is We there out challenging has at at time. revenue will renewals, to the rates, sequential there to expect not for drive it's want probably visibility will we're renewal this we're first might historically. XXXX been operating

Brent Bracelin

XX should on customer question boomerang ZoomInfo hear give close later, about the Surprised just back obviously, you to large they're forward? clearly, how environment, we still a finding you, think My then, ways of drove months boomerang back. going and is switched that deal color Can what for a And deals. to kind the around challenging coming Henry, deal. you're to

Peter Hyzer

-- there 'XX response. to quickly, I clarify, I in really Brent of just meant that wanted QX

think I I misspoke.

Henry Schuck

years years. Cameron. I with And premise alternatives diligence XX when difference not almost what instantly I Brent, Yes. made a fact, realize market. companies major and that cheap your it we think doing the if Thanks, buyer, high-quality the high-quality started started last the does, data you're ago, XX then that's there I you're to can -- business what difference a you this have make you your we that not and to And here. data saw an go sophisticated for And make incredibly offer go-to-market in in in a way motion. switch been

the a customer account find development or when an and a that data, customers rep, marketing a then difference We competed information the meaningfully we've ZoomInfo that. that across increased switched CRO, makes your whether offering have executive, you came saw you're and in low-priced account see customers. in an back who meaningful always immediately their CMO way And a and said, manager, grow professional acquire, a and to you that platforms. it way did with And high-quality spend sales operations,

did come us. they meaningfully we of something their come but customers immediately in they find back, with not there are a only boomerang that who then new this And try and spend lot so back. case, go increased -- And

Operator

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

Koji Ikeda

question for here. Cameron a Maybe

sold gone quarter of You them of second mentioned of be to was comment But some leaving that year. from of XX%, still down XX% way that understand you'd have September your through the about renewed. this ACV to March that the the needs of XX% XXXX, already in I

So that maybe of of ACV of the post describe composition next year. help could us March you remaining XX%

Peter Hyzer

Yes.

to that from the super environment real significant XXXX. see be September customers and of through 'XX, from headwinds we about transacted clear, we've macroeconomic of began to XX% are March So with

'XX, likely when entered a contract. longer-term that in sometime initially September and are we're more those before environment therefore, transacted constructive contracts into So they that

there So later either larger 'XX that that is transacted remaining do or worse a those be customers that. even of they in they than environment in or to up they for for risk XXXX but those XX%, potentially perceive tend XXXX come would as renewal customers, when later the than beginning some

Koji Ikeda

$XXX,XXX-plus I ask the question, a follow-up a wanted ACV customers. to here on

third that similar we quarter straight pull in we of here. a to kind fourth continue if decline sequential pace, look As And quarter. a actually the the would is forward year-over-year it at metric, of decline this imply

to a So Did you maybe could be would bit I ex grow? and decompose technology. us mean metric super this this that help metric little helpful understand.

Peter Hyzer

Yes.

quarter every and mid-market technology, in largely think these software I ex of so are out this you companies. just software, year, strip and -- honestly, venture-backed if kind

result. has metric every If continue you this that, a as quarter-on-quarter out this strip quarter grown year and would obviously, growth to show

Operator

with question Zukin comes next Wolfe Research. Alex Our from

Aleksandr Zukin

can the there QX? margins, was this that from first wanted mentioned feel during given revenue slight cohort a on than Are about a just rate growth or you to in less the gets of XXs continually I to low sounds QX Like more going -- a be margins. in NRR. and you something just it perspective. the I larger the like And Or we're mid-XXs vein, was now the ask a QX? like sub-XX%. bottom over that this guess kind then I we Henry, to this on does or into is growth taking that by it period? us, same think you and the revenue grow half -- tick Are challenged remind what's than OpEx operating guide will down the on here

Peter Hyzer

to it net a be world tough to retention, So with out continues respect there.

margins an annual that margins, assume impact on an basis. is guidance, up I right the with And we've to we do impact in net think goal our when negative on and have to set XX% that retention. respect level a then maintain to it now continues

forth. sets I margins, based think revenue on margins QX and at historically, that we typical of and recognition you merit just QX lower way to seasonality cycles so up if the in tend look and do have somewhat

we're the about to to that think margin continue level, -- seasonality think of keep you aiming I but we has and I how realistically, seasonality should should out. the So played think at margins annual XX% historical

Aleksandr Zukin

And Got clarifying follow-up. a just then it.

sales the we know our second revenue to take is half next again, just we're should year not if can just point the lack -- I Just visibility. year, adjusted the zone. of growth or at right start half that conceptualize way all kind least outstanding, days so next of in we guiding to sales But given at the this you get of for the models that first

Peter Hyzer

Yes.

So I we least we've QX to through challenges see environment, think respect at to that and we'll of XXXX. continue see consistently challenges said with the

in sequential starting is point growth ourselves the in don't So on us XXXX the opportunity think accelerate I that the we we've acceleration based seen mind, ahead uncertainty time range Certainly, to as that, to that for after when my there's good the period. but that to occur will just that in of of want market. a get

Operator

with Our Elizabeth next question comes Morgan Stanley. from Porter

Ryan Bressner

demand steps to metric showing that on performed efficiency, mentioned in in kind Elizabeth Bressner Ryan update better stabilization ticked going of forward. QX Porter. how this a help in sales Any down slightly take particular of have into in on this signs trends quarter? after you And maybe what You you On can for the June QX. environment

Peter Hyzer

Yes, sure.

efficiency to else. customer particularly impacts So continue more sales efficiency, get sales that And challenging. so anything does existing the than environment more

challenged be customers challenging with continue QX efficiency to QX. and that relative is existing more in to So does our

continues well. hold there in reasonably to efficiency sales New

-- there's technology a we've helped with talked more higher are that as after about us has as do now. go space, companies I see concentration more customers we've before, new think of of -- our demand outside where right the basically much sales which we

Ryan Bressner

quick Maybe just follow-up. a

any made few at any leadership you You Can or quick forward? level. -- changes a just on the impacts expect we recent should changes these comments from going

Henry Schuck

roundtables for Yes. think of in leadership across call, me And our the meeting our any over gets come customer account XX the success that account I the have Look, company. meaningful and that revenue and and opportunity with to I, and support. I these customers. constantly closer customer organization the don't closer XXX I'm customer it executives business think I anticipate and base, the talked -- days, over with and of the to about from a flattening met is changes. me I for managers changes big last our

Operator

with from Sachs. next comes question Goldman Rangan Our Kash

Kasthuri Rangan

attrition So mid-market the spiked, the especially as company you the among taking how seem have characterize rates, to is which seriously business.

Some of if letting salespeople completely somebody going or understand. fewer of or salespeople adding controllable business not it out is is just of go

part experiencing. that to instances source a the what But learning complete with proposition contained the you're how when itself I'm to isolate those it is that from you the what really you it loop it's have can from impossible you that unhinged on make that you are plan product to that you get guys curious data attrition a of stickier better fix out, than the built But this. be should get Because thoughts seems up? me your to engagement

Henry Schuck

think right. I that's

it simplify And our just departmentally, I been are solution the workflow. if as make hard think in we've that tool, thinking our we've and think this a using not of workflow and start through in user been product, platform about ongoing it ways. plugging with to customers number lookup ZoomInfo an think to sure but in if engineering, really I a experience I actually we working about -- about our

up points In meaningfully. our XX-plus up was this It's What NPS Chorus, score and core is quarter. year-over-year up also [ the product our year platform. engagement we've up every seen SalesOS points NPS is ] scores on are X

and the making workflow. person's customer a things to on product base. ongoing X the We that also stickiness those an focused easier drive product obviously, use into then we're marketing or meaningful of amount think, so And in sales plugging

value. we in of number netting time to for quicker are the are seeing really the way using in the are us, the have in customers a who positively and implementation side, using June quicker and implementation onboard post significantly we our changes of out and On success product the those numbers increased. customers made customer And product that deploy to that and customers ensure onboarding implement our

those grown practices, we'll manner, And sure and we're to success our with so areas. customers our to of issues team X well. -- And sharing invest really we've in them feel materially solving a for make best across that our continue good support we about timely as that all customers customer giving

Kasthuri Rangan

How middle big And them retention it. bring defected, planning one between you you given if of the have to of the curve. the also customers had win other Got granted that customers boomerang, are versus plan, the to company's that any, middle the divergence of back. large that back. those what's the And the in customers bell the curve

Peter Hyzer

churn XXXX big say, It's it of actually reduced the the worse change is little it's was, that But much net noting we're rate has significantly here than that downsells. not XXXX. or improved. driver more I more a worth and retention upsell in think the seeing

biggest is less the that that to that do with spending it's us. bunch lower with has say they're I'd these seats. we're So of losing that A not customers, difference

has in realistically, it's Some customer, to not of the loss retention. with a I majority the do those a spend of vast budgeting it a the changing with of think cases, that's -- reduction for but tighter customers net it's

Operator

with Our comes next DJ Hynes from Canaccord question Genuity.

David Hynes

feel talked as Henry, situation a DaaS where are. does recurring customers there potentially in mean enrichment about how in is an effort that to and recurring it or Like late how years? there. work? I less is of like bit the nature? streams upfront typically economics that commitment maintenance or subsequent spend those the that is data linear and more ongoing enrichment question then more My a service revenue those generally agreements on a I you've favorable a in Or makes accrue lot

Henry Schuck

fact it on of data at CRM staying companies data, to looks of XX-plus on There's the started or the into offering being Snowflake Obviously, December to influx one are mention of. or their recurring the these percent we're of did their live not key and getting and our that And Databricks changing our or parts new of new same jobs all centers alongside on And our no January promoted people as this data. changing. roles, scale. X. there's Those changes constantly that is are company around tracking to top the data we're getting over data of incorporated that subscriptions XX

we're feeding CRM. those are whether of record warehouses real-time those -- systems, in our way marketing changes systems and into or these enterprise a customers' So data

those so And ongoing are us. contracts for

data me about generative that's to mentioning us customers our C about things that are our hear wants we're talking showing worth us AI seeing. doorstep saying, this, and when to the what level about drive is being it One AI have super largely and is They in AI accurate the here prospecting want in up not robust the of you they're take us And us opportunity saying and the advantage systems at excited to actually the the about and outbound not just prospect to enough in our contact us customers, motion. just communicate enough, way be are but using that we LLMs our of we that they're with for that.

we talk show as So really the when and come these and the opportunity their we've a and about across service, conversations up had to we AI have all we data drive enterprise. motion

our lot able SMB, and mid-market a of directly the that to We in the platform. have we're drive workflow them from in

offering focus And Service opportunity the so really spotlight. we think the gives our and Data on as a AI the AI

Operator

Needham. Joshua question comes with from next Our Reilly

Joshua Reilly

executing job environment. a here tough Nice in

company getting what international properly the you You geography way that? in, where monetize prioritizing expanding it are want the it? mentioned be going of the database of some you And in kind or Are you coverage. terms to you a by of inning and are How contact of to the expansion other database internationally? international expanded then

Henry Schuck

Yes. Great question.

go. going are where our We customers

we tremendous our amount built And telemetry a so of have platform. into

when what they the do And countries, for how to would what and size of our have surveys And so companies. see we else looking see. we're user searching what like information, number a are we're able what customers across platform, our they're to then doing understand to

the so when deeper, being robust specifically see they from and you is, numbers, it's we information, coverage see phone a customers mobile searching where our in our want growth whatever us we driven customers And see contact where that more actionability. and telling

country region. done that country, we've so region And by by

that that I competitively, we're even the are solutions we in would and monetizing away this is solution. internationally obviously We have probably anything are you, better or tell Europe we -- solution a internationally. native than think solution far

think we still the enhance about great there's a asset. So feel really that. to strongly We opportunity data

somewhere would you I So we're like seventh stretch. inning the tell

Joshua Reilly

several back still given think over in quarters And leaning it. fairly you depressed the you stock near the with further in million bought authorization. How here current about stock we X.X obviously, amount the shares. Got next have term, into and healthy then price, should the repurchase a the

Peter Hyzer

Yes.

trading we long-term is plan value. based our the to opportunistically repurchase continue it's So on to as what where stock to perceive relative

fair we've So we do We we'll at continue authorizations forward. in going the levels, yes, we'll these that to but and October, I a on continued to think in. amount buy currently lean have continue left stock do to have, that

Operator

with Our question UBS. from next Taylor comes McGinnis

Taylor McGinnis

past renewing I So part renewed customers who the last know quarter, of lower. lower in was hit still the had

did So quarter some on you comment you any those lay thoughts we're better just conversations the down of still take fourth Is are progressing? up in who year, seeing the at So on those than trending now are them further? just for curious and activity, can Would layoff bigger coming lapping there? love speed expected? how that time off this last that

Peter Hyzer

environment. that purchases a to tough to their year. We lower last continue at continuing have customers renewed to Overall, year, be respect pressure to it continues see this levels do with

So of we've most customers made kind I'm the year. really layoffs not convinced through of that October last big that that way seen

customers a compare or that they're happened given for didn't out layoffs. coming exactly or the cycle through March, it's that where multiple that their comps are many really had February those little in of we're for that those cases of know lapping So layoffs hard in yet. later their kind of negativity rounds I to easiest in -- don't get cycle customers until particularly

Operator

Lenschow Raimo from comes question next Our Barclays. with

Raimo Lenschow

about last quarter question. the quarter quarter, That's your Where how we comments your first that Or to till it this Two out already slightly those quick did ones. Is you and the sense there? headwinds QX year. better, about Compared last you changed? come talked Cameron, QX slightly worse? have same? you expected next has

and James Henry. for question second And

thinking cutting. not we are yet cost sales you the cost-cutting, is oh, now I level early about, and or it everyone at think you downturn, about yet? stages usually, about about suffer at people usually my then downturn, And of now you see those growth, at conversations there a think at a did and I again, If sales start least later the

Peter Hyzer

things or I terms in better. I by where see some we think of the is than operating get to think some customer has the I think that are quarter, getting environment we any by trends And segment don't the were think currently last end gotten it compared In segment worse last I to people of of instances, kind it's environment we than they kind point more worse. expected of at quarter. worried customer frankly, are this were largely that, a there at that

Henry Schuck

those There thing the the or today, of a is the other companies to to is would or there, in and boardrooms you're increase think push forward add profitability cut venture capital-backed for profitability. still if businesses private not I faster. for to push I to Raimo, grow get there costs equity pull a is companies

their investors back corner private members companies get don't to turned to Board where growth. So that think we've and pushing I are

they're either to still the you've cut or mentality. continue maintain a think costs I cut cost in --

Operator

from Our next with James. Raymond Peterson question comes Brian

Johnathan McCary

This is for Johnathan on McCary Brian.

that quarter. last the category So how the the clip Is XXs And figure? non-software piece ballpark? then business, broader of growing I low would you non-software versus think that for NRR you categorize of still right mentioned kind at of that the the

Peter Hyzer

kind to to in we in So new what retention it non-software those demand confined the the overall Nonsoftware decline. in there. challenging was particularly not It's saw environment do certainly, above is I growth expected, just see and That -- but weakness of well [ operating is business side. did to continue on continues the We year-over-year. non-software think this QX. And XX% is, year industries, challenges as mentioned, the software. than ] quarter, be worse this we below continue average to or see as

Operator

next Markets. from our comes Jaluria with question And Capital RBC Rishi

Rishi Jaluria

road Can bit your expand how about talked like? what these your map e-commerce self-service doing capabilities. on leaning reception initiatives? with in a bit has or as a as a will a bit from efforts little been well of you're PLG What little you prepared customer more look And you remarks, there? early Henry, both traction on kind little

Henry Schuck

Yes.

think that out build this has what in year testing infrastructure capabilities focused downmarket really the been self-service sell e-commerce And our I way really quarter-over-quarter, to be quarter in self-service grown our has market down good base. on to traction year. and we've ability been with customer this market seen every and we've a e-commerce

And so as we that feel really we strongly XXXX. into we about as go

the lowest the on build taking Today, focusing out the offering of we've market And motion. where -- that built to and a end drive sales rep we of we're can efficiencies by build onboarding. we'll continue then technology

innings, of noticed up been we self-serve our can continue about platform of and And impacts able in to meaningfully and so adoption but with we and growth ability to a that market. onboarding, we we're and product early a usage customers efficiencies you, confidence its think can We've also the make in self-service drive technology we've way. have to that and onboard in our drive tell lot I'll there. down

Operator

Securities. with Tillman Truist next Terry Our comes from question

Unknown Analyst

I'm Dion customer related SalesOS, existing resilient different new et the the Bobby MarketingOS, are activity for wins? or cetera, across OS curious, of all is segments than to more you This others Terry. any solutions, seeing customer

Peter Hyzer

Obviously, of really we done growth. well, and but it's the encompassing is place mentioned see the and is newer we add-ons SalesOS. the SalesOS growing. which before, product MarketingOS to was within as functionality, that has where a Certainly, continue advanced functionality to in really a XXXX, outside

are our as Henry Engage, or either primarily part automation as a et of lot as capabilities, capabilities, DaaS which well whether in a in the of and has enrichment Workflows that's SalesOS. see, mentioned, also those capabilities or OperationsOS We lot automation the land cetera, growth of

from interest those I that parts of it's So we're more really think OSs customers. seeing

for of and driven efficiency they think as as where their through part automate be is looking can. driven of or about thinking them is by people of mentioned to that I Henry looking AI the at AI. preparation And part that may data strategies And their teams

Operator

with Stifel. Our comes Jack next McShane from question

John McShane

curious ask step in in James, see your biggest McShane, Lane's priorities Stifel. and changes are at the Jack to some is you you do to Parker I'd be new looking as team what go-to-market you're This make the ZoomInfo. of where the role? I'm top And of opportunities from

James Roth

Jack. Yes. Thanks,

in customer big into lower onetime So ability opportunity. was on Cameron. upmarket just the see, we What being we value customers. DaaS success biggest take the the enterprise lot into earlier in. well seeing to spoke that of and as led to terms motion see, of the end our it's did Henry an there is mid-market recurring. cohort, the this a The in centricity it of question to the opportunities seeing or X-figure as the we're we're DaaS that a Getting a Overall,

ingest that data, in folks more see. buy of it When we that every single they example

growth leaning motion, it. And into full motion, success are that as so showing ingesting and platform, doing. into to we when making use that a Those their of priorities our because with they're all top the customer sure success what breadth how continued it that, data folks activate see lakes, them continued

just those So a handful. are

do we've world-class continuing is that the over team, XX out to enterprise I about and across we're months, overall a extremely success last seeing organization. get and there. I built excited the the what think

Operator

to time. over for to this would at call the remarks. closing questions further turn no showing I I'm like Henry

Henry Schuck

it. appreciate We really Thank joining you, for us. everybody,

Operator

conference concludes Thank This call. today's participating. for you

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ZoomInfo (ZI) 30 Oct 232023 Q3 Earnings call transcript