ZI - Earnings call 4 2023 | ZoomInfo Technologies Inc.

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Operator

[Audio Gap]

Thanks, Amy. Welcome, everyone to ZoomInfo's financial results conference call for the Fourth Quarter And Full Year 2023. With me on the call today are Henry Schuck, Founder and CEO of ZoomInfo; and Cameron Hyzer, our CFO.

After their remarks, we will open the call to Q&A.

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

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

statements please slides ir.zoominfo.com. information, refer the our Relations forward-looking the to website in Investor more at to posted For

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

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

Henry Schuck

and fourth was a ahead was and of of our Thank on provided. the guidance. year we that revenue, . positive for both cash note We $XXX with Revenue million, the ended a Jerry, welcome, profitability million exceeded income everyone. $XXX and you, adjusted XX%, more operating flow quarter margin the guidance

$X.XX delivered converting nearly generating revenue, year, $XXX adjusted in cash full that of XX% and billion into operating in the income we unlevered For flow. million free

a return our growing will aggressively take profitable confident our ZoomInfo disconnects flow as business. for purchased repurchase quarter, advantage we $XXX intrinsic of we of economic continue our million. the price We're for drive these will shares value approximately share that and cash stock and between and to we XX generative the shares million of shareholders repurchases During meaningful

industry, have which XXXX, our particularly impacted said, being early macro software environment, the the all since Overall, contracted other software has a has of through are weaker been while we largest growing. managing vertical. That challenges industries

has vertical our the upsells NRR resulting while well, downsells. software in declined performed disproportionately in impacted businesses seat more the pullback as and New existing customer fewer base has

best However, for the in our logos closed was new most QX. our demand sales record We on new ever. business velocity and

use and shortened rate single December we've significantly said Our in-month create sales for a median coverage networks the ever cycle make would that on data the by in year, and doubling highest keep Last win accurate. and to contributory we fresh and accuracy key investments our closed was year-over-year. in our AI down data and month, data we Learning Machine had I growing and

a Today, in we in to more X our deliver data looks year-over-year by of resulted of That's of XX XX%. up times customer XXXX. Score, X disproportionately NPS start our Those contact, asset than times a investments XX Net Promoter for from out match. the a increased a at increase while out XX% attributed

XXX QX quotas. customers to our platform. breadth significant advocates teams in back tools quarters hit were us than with our record, biggest to having and Our data on win didn't who best the Sales 'XX customer quality improve sentiment. and their QX both more for just left returning investment [indiscernible]

provider. quality, buy that is ZoomInfo of just makes cheap, winning promise enough are the to per a low-cost who using a rep they worth ultimately XXX realized than more potential far cost deal to management when savings incremental low decision just And customers for X buy forced Those from left good any twice. data

They just driving model the to whose us that quality critical night inputs test to companies. success. perform day and [indiscernible] back built compare Data Another demand is difference to data is platform this a example and us tried Ultimately, technology generation that leaving are business on so appointments, This was after of and is to they marketing company entire data the dissatisfied dials save cheaper out a competitor to ours. sales that head-to-head money. a their demand they even hoping couldn't business for told a integrations quality. months came direct provider from and were

turned While the could was that missed traded cheaper was have multinational countless for alternative. elsewhere, publicly as A on cheaper had. off the extraordinarily out sales the MSP leaving provider of a technology actual and the reps high price of cost opportunities ZoomInfo customer solutions ZoomInfo their

their decision integrations low-quality CRM us. and over bought workflows, cheap, automation. extensive then quality, are most They key demand waste. location and go-to-market efficiency so return change switched sales new sales insisted and bought necessitate they of world integrations, account A executives, at they your to came to coverage got with firmographic and much ZoomInfo data amount the a with data accurate around preparing them our realized that able ramping right leveraging high-growth process scale, the they the As and and insights to an and company companies frustrations to all data on we of with their driving conducted economic They because increasing it phone going to of sophisticated made low-cost that alignment Many all marketing an initiatives to in their when RFP find and started sales for the months, Within diagnostic immense the a to creates were needed in on to new efficiency they mobile strategy. from year, largest for challenging. twice. solution. leadership their efforts change go-to-market as environment provider help workflows success, boiled generation they fundamentally seamless actually the go-to-market AI. doing From easy sales and and ZoomInfo more industrial back

XX% XXXX. One than and of we & are more expanded world most the XXX capitalization the the X use of we added Brown, quarter. Fortune enterprise currently in customers. out FIS, Capital all And plus companies who enterprise Altice, new Amazon market existing since in the and Brown customers largest S X-figure QX, customers growth Four have the in ZoomInfo, Uber,

white meaningful within this space have to continue customer set. We

with transactions a Equitable closed Heinz, Peach and registry, companies, Bank, verticals, Financial of including and small large and Tree First sole across all Group, Hotel Johnson cycle, also group nurse Controls, Apple. Kraft advisers We OpenAI diverse

We build are opportunity the sure industry-leading tailwind, long-term when win. But we intelligence optimize -- quality fails economic will not levels Every what a we go-to-market for headwind of are the is we to of own the its that organization but today. flip from highest will profitability a invest crush in to company [indiscernible]. sure see to maintaining massive are to we while ability to continue environment but the

amounts is marketing you're with is and weak. random to Territories campaigns If in random to road go flows. time predictably hit inefficient is poorly inordinate CRM and money systemic time successfully marketing researching, Targeting data your with blocks professional, sales or out companies a spent incomplete month month Sellers mapped. of and ways. the out number inaccurate. is and at horribly are ability in ripe and

isn't my I chorus. This and in type to hit contribution That Stepped there keep of got only are quarter. go-to-market and universal. competitor pipeline can't right in sales just company It contacts this at anymore. this floor sales Marketing you'll Angeles. Or numbers. didn't quiet? right. is CEO XXX so The wonder company Los targetable be their worse, acquired. hear new why use -- nothing, this account. companies sales without a and at hear our any territory the the marketing pain intelligence or don't even disconnected calling have This I familiar to out you'll is access on

data A miss and and customers married on loss numbers, sand lack low signals to inaccurate of career into and best starts every to floors sales quiet insights morale, outright go-to-market with deals, throw prospects of key stale door. or the out reps function. the gears walking leads slumps your It and incomplete

this through and are into best-in-class now We focused best them, impactful to likely to introducing personalized close. sellers biggest do are our seller CoPilot of copilot the biggest top and remove every want. AI-powered their the on solving their and to AI and deals on engagement bring the generative high-quality internal for identify data craft noise that research, advanced applies data best professionals. The seller. the risks to their problem and enables their energy stay innovator They customer turns And companies for ZoomInfo's your with most most customers we innovation sift go-to-market are together sellers next generative on focus move actually close. inside that to

by We a examining these CoPilot of copilot accounts closed closed have loss customer's built to our ideal deals. advanced AI history X best-in-class fit identifies versus replicate into activities.

identify buying budgets department against of and likely scans attributes additional tech [ accounts in the to data And proprietary collect fit that dense proprietary like addition of presence. then industry ideal our fit, to That tens At our basics running ] accounts. of like sophisticated characteristics identify market in thousands AI and stack size we company to includes to purchase. executive most signals set

Lastly, will identify by to be. contextual reach the what them, channel should and exactly action right exactly the pinpointing engage next message sellers to out the it what take best when to buyer, should on

their pain committee. ad might For of against tell buying decision a an context message to e-mailer It main all the the maker then history our or example, have start a to we create contact, uses CoPilot AI to generative hyper-personalized about campaign display account, them and points. e-mail incorporating the

starts with power potential to layered identify our personalization. precision on executive website from our product of of insights and opportunity and proprietary prospects including to data this websites, intent changes, set press pulls releases job top transcripts, CoPilot data billions call then and for That's our data promotions expanded value Scoop highly points, have portfolios opportunities. earnings of pain points, and intent personalization. level unique and We opportunity scoops data existing propositions and asset, visits

XX% revenue, deployed productive. a using Co-Pilot including XX% in CoPilot anticipate be is We thousands a monetization second track annual customer in a way increase end-market rates, available marketing operations rates. of XX-point report and They copilot XX% XX% find position year. attainment. in pulled users our customer of sales, They to AI already a win XX% and will the generally with the and growth platform. of a costs migration Overall, middle fit XX% reduction customers in users marketing recently variety they go for innovated our our and a seat market. improvement of our creating acquisition see In every and customer account drove net new in quota retention across growth in saw countries than increase to of in how are out CSM we customers XX survey, X,XXX more increase innovating ZoomInfo. more currently pipeline, tens AI-enabled proven AI and scores, our across packaging other our to features teams opportunity the of on in hundreds a record revenue deepens in

business tool to just abundantly Every make us motions our new it efficient the customer will Co-Pilot customers our strong their and in base. customer clear go-to-market to wants provide and with them. ZoomInfo another make that more motion already fight enhance and downsell for expansion drive does that

built Finally, we've take by continually talk relentlessness about I to commitment, at and resilience a level team every ZoomInfo. the of here. competence, I'm want person and exhibited incredible moment the by impressed

growth, who are We to anticipated. certainly our customers. tougher we reaccelerate ZoomInfo both at and a entrepreneurs motivated was XXXX year are than for innovate and

a well change growth, customers. the technology growth revenue in Zoominfo many the and our As that efficient from would of we insulated drives platform trajectory thought layoffs be

upsells throughout by or While strong impacted remained our with were alternatives. technology layoffs the customers as renewals triggered cells pause seat expansion lower-quality experimented new by year, growth fewer down and customer

detail, of were half is the our XXXX. impacted verticals from coming that As ACV around in Cameron will most

profitability And growth, of delivered year free we still and flow. yet cash a

building the while term. We continue controllable to for the long control

profitability cash with innovating driving are executing return our ROI level our are flow continuing shareholders. of while others leading customers. are we and free delivering We a we to while efficiency, and in cash to to shrinking, growing tremendous space are and

us We have win that the in market confidence term. the team, and our platform long opportunity the to gives ability

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

Peter Hyzer

sequentially. was $X.XXX revenue Annualized based delivered XX up million, up days X% X.X% in Henry. we billion, of QX, QX on year-over-year. Thanks, In $XXX revenue

XX%. We $X.XX better-than-expected annualized million, of improving relative and growth a revenue loss to net sequential was share. was pleased to Adjusted The GAAP with million are income was than margin QX. loss of have GAAP and better guidance per EPS operating represented revenue $X $XXX delivered a

Non-GAAP $X.XX share. EPS was per

EPS EPS XX% $XXX for billion, was was million, XXXX. to cash net the revenue income margin million. XX% were year, of profitable with Adjusted was income $X.XX non-GAAP For GAAP unlevered operating was We share. compared share, per free the $XXX $XXX full and year of $X.XX and up $X.XX of again a and million GAAP flow per

implied XXXX X% implied are over guidance in X% -- just an revenue an XX%. margin of as We of adjusted with operating initiating for operating growth to

expect of cash For free deliver XXXX, at unlevered of to midpoint guidance. $XXX we flow the million

environment gives us ability continue large to an opportunity curtailed the that term. is the to While growth businesses go extremely to has way operating market, which the growth transform we believe confidence revenue currently, accelerate in our over to there long

Given additional being mid-market drive future. margins XX% nature those XXXX. tailwinds these have companies, particularly When unchallenged. most we Net year, potential higher of the realize technology was realize uncertainty subscription guidance in not software would economic and business, incorporated for expect the environment potential we in for higher the to levels operating revenue to in of growth, business with we leverage the and into space do our in the retention

few downsell impacted that on economic at that most other creating a last years. in through the In retention. tail the experienced levels contracts recently as from net the customers the multi-annual expect in we we most negativity customers environment. different and churn were generated we to QX maintain lapping by from We transacted net a are of downsells year we outsized a very long peak anticipate environment last working drag over term, near pressure from upsell customer in the XXXX, still of operating additional The

that will return move to see the net to Our as begin is expectation structurally year, and retention higher we levels. stabilize opportunities to we through

at meaningfully the of end now XXXX, the it X,XXX prudently for guidance assumes that range with retention and low more get ACV. not than $XXX,XXX net Our better, full have for guidance, that the retention declines of year. revenue does We customers assumes in

XX% in with quarter, our declined While for has customers, increased. cohort as average success the expanding belies that by this it metric revenue larger

XX% of highs, out points up investments the XX last the cohort. portion X fallen mid-market over the our enterprise customers ACV represents under of of record while have this overall overall Our now business, Enterprise to drive business have helped just years. approximately

of and We of with challenged X/X functionality, advanced perspective, technology From with which also an continue our see now to operations than more our overall roughly contributes from particularly XXXX. customers XX% in strength ACV our software industry success contributes ACV. OS, which particular were

customers. layoffs from Software, our as now we down as a see largest growth down an continue sales than and drove opportunities and penetration. on industry overall of vertical XX% year-over-year nontechnology of was less greater our increased represents for basis among to as absolute ACV has percentage

This last business part XX% of approximately continued our as grew pay. QX ability customers smallest in Write-offs impact year. in to of remains their us QX to to our many in relative challenged

impact to revenue. addition similarly with increase associated a in we've the bad write-offs, In sized to debt experienced

paid functionality customers, to write-offs Our roll is over of attenuate expectation is which enterprise our more to checkout. that will time the continues revenue from as mix shift to and impact we smaller product-led customers, out for

] plus December, $X.X of of interest XXX our interest by we result the XXX loan [ This ]. $X was payments. rate In million, million. at the in income. flow for XXX% to points par free reduced cash payment million, Operating basis in another will adjusted of cash annual [ plus completed SOFR term flow savings quarter which was Unlevered approximately interest $XXX approximately representing we included of operating where SOFR QX XX $XXX from million repricing

cash investments which debt, cash, carried gross interest fixed equivalents in $X.XX million we has billion rates. in approximately $XXX with year of hedged the ended We and or short-term all

total diluted XX price all X% million per an During repurchased $XXX XXXX, average fully stock, we of repurchased outstanding. shares shares the the ZoomInfo of in stock $XX.XX we fourth share. of shares representing ZoomInfo repurchased, XX.X million over quarter, retiring approximately million In at

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

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

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

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

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

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

implies guidance X% to growth revenue operating margin XX%. year and full over Our just an X% adjusted

range million we we offices relative certain the have would $XX outgrown in as XXXX, $XX build-outs million the facilities anticipate X% CapEx additional capital to revenue year, an For of where leases. of expenditures by to driven X% expect with in expiring we to

low expect of We as the in a conversion continue flow income. free operating adjusted to percentage cash XXs

Our non-GAAP to tax be rate expected for XXXX is XX%.

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

Operator

[Operator Instructions] with Mark first line from Murphy JPMorgan. the question And our comes of

Mark Murphy

looks continuing XX,XXX So past and you beyond tech. the DocuSign months Pure Snap tech a have year. like believe and elongating it look I then layoffs, so period? announced XXX And ago you over are have this like looks I expected? And trend It Or likely what in layoff announced the layoffs were think and Storage in was companies do that quick that peak far all Is back still follow-up. XX might have week. workers

Henry Schuck

year A the were of year I less around now seeing much of panic-driven the ago, are than right thoughtful. type weren't saw surgical more -- tech ago. are I year that you're in were and or meaningfully layoffs what is the a ago. amount And somewhat a happening think is seeing they that layoffs we're layoffs total the of all, think first layoffs we than

to a seeing you're off. is what approach lay much surgical think more today I

I down, so overall for protecting and think surgical the nature companies people those the go-to-market of that function driving are amount and is customers. executives in layoff many growth And the our account is the are

Mark Murphy

if Yes. sounds is every shed my prop. thinking about In second an question Henry. other said value and product. at is there per we on you it product? adoption It you your the opportunity that credit how user I it And per to how out just it little is light pricing using a Can And you'll then picture and the you Do month? level, a road. on across a like broadly attractive going And seat be there. monetization base the about you down for could tokens? think copilot might high user sketch the to a be out think were words, you believe several migration years you're if

Henry Schuck

you testing if we're different this. right packaging now -- of look, number a pricing Think of for in and market models

in And year. customers. I well years, is that can about our begin going you stretch to this half opportunity customers. nice with the -- to you it of what for believe with of of if migrating out our back we the in be the CoPilot our to our enterprise go you on SMB every think an I think We're and if think terms lands there's this in is as tell expect it it years. terms as platform of AI-enabled customers of does our one you customers thing just out about when

at customers us were XXXX new in of run board very successfully, that here. onto times acquisition successful Ranking repeat built. monetization we we motion the of That in had we run before X when of Those is to acquisition ZoomInfo, opportunity for XXXX. expect motion. to least thereafter, made that we've and the we so migrated have a that in all motions And Shortly platforms. migration this we the our across very the the ZoomInfo of history and

We for it. have a playbook

Operator

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

Koji Ikeda

XX% cash look margins. about flow wanted the cash I we flow it flow free on guidance, cash to at like free and for generation ask on free XX% year. this looks the -- When

free sort the be trying revenue upside I of just upside to this better function So helpful. flow collections? cash to within organization, to would a it better Is help leverage levers the of drive year. there any mean, understand of

Peter Hyzer

Sure. headwinds up. different face Thanks do for the leases. CapEx And we Certainly, your dependent being on timing question, of Koji. obviously, some with that's

But through conversion last cash will then the that start adjusted next off. against rate fall and year this about year flow, So and certainly, income. as to a think operating of it's we beginning largely

conversion growth very adjusted those well. that's the rate on improve and and that going as time, a income we that improving so actually improves of a of our should, improvement. focused collections will percentage And otherwise, customers And upfront, that outward, over reducing improve our us drive function which as ultimately pay more write-offs, operating would of are having as

Operator

Kash And our the from Rangan Sachs. of comes line next Goldman question with

Kasthuri Rangan

customers you've back, on improvements all regain Henry. Congrats the the to taken your

a you If When that, backs. think that talked on little becomes more expand can do a trend bit of you you flurry win pronounced. about

new of retention improved Congrats. company. effect compounding business can the to the and So have the of impact rate growth material a

Henry Schuck

Kash. Thanks,

through. are QX I look, we we're think, that headwind have we retention managing meaningful -- still a in

out so fully a that And are get from that's our it set get there. But what as there actually than are solutions, quarter. out from wouldn't I and competitive this very you experiencing attenuate I they ZoomInfo different realizing quality lower expect in you is what customers to think

pick And And steam, back that think through bring And so the customers get motions that up happen. and expect win continues went improving. to motion we I to I as them we more that -- think running we're see elsewhere back you'll then against quarter see are those we seeing as specific in. to win-back that

Operator

next our Jefferies. the Surinder line comes with And . Thind question of from

Surinder Thind

the there of the reductions of around maybe differences versus any In at of terms the at just around of Just in level of color just kind magnitude. the the forward, the you as SMB how what in larger you're distribution the look clients? at churn is seeing pure this NRR terms much point terms

Peter Hyzer

Sure.

market. meaningfully but and driven remained part the so. is of saw down 'XX, So lower by equation they our churn are 'XX, have of end we not largely the stable Obviously, little levels the in from fairly what actually that a

downsells And where write-offs And we've do see impact if the the upsell so of requirements. has on impacted other SMBs, we downsell. are really to lower we're a end seen customers look much in some pressure that while software-related are in technology customers. bigger increase enterprise, tend or mid-market particularly net on a seeing. that particularly we in price retention Where have our by meaningful been see that kind you and and environment, at and of around churn the don't has meaningful seen that which downsell most those is, economic in we've be and that been in the spaces, the fact, outstripped We seen

XXXX. we the we'll potentially I that improve there pressure biggest respect those But forward. been think to and going as still see has that past look at least we look is And first to I stabilize, for so And see we opportunity quarter, in year downsells. at impact an this hopefully that the as some think -- with forward,

Operator

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

David Hynes

I space look want paying to pricing an paying the implications leaving? Are can are customers they kind did just Are kind broader on of we the those and read-throughs less? basis, I'm that coming folks. more? from go derive same prior it's impressive curious they If in the we as paying around Obviously, to backs. win back of economic back? to question those at on it Are right, they number. they like-for-like, an Kash's

Peter Hyzer

of what the you that board. kind And is that across see the experience is think I --

realize do entire customers and much see that across kind then their what go something even ticket in and lean You that try rolling they're bigger [indiscernible] for else, universe. of more missing and sizes

anyways. that competitor lower-priced to and of the down back customers gotten down came with sold also ZoomInfo out have they a spend went that would sold smaller might they or then rolled that to. You probably see have They amount on

say else then ZoomInfo. it's solution dependent where spend So where with kind been how with a how should in therefore, really customer to of with and willing more their they spot, more is have thought of the to they they than -- extent, terms I'd the of anything bad that lower-priced what natural an experience some had their and it

David Hynes

Yes.

Okay. don't any follow just with implications realize you, And the bit. particularly enterprise, but at I play guys thoughts if you of business. competitive of then, your end Henry, there. curious much up I HubSpot have could in low the those clear maybe

Henry Schuck

this, come or our always we bit in talking HubSpot but as about of company or a across not haven't level fundamentally Yes. clear recent seen Look, to enriching data HubSpot we've any prospect deals. seems attention data. been competitor contact level be paying to and

acquisition of acquisition, post radar our in competitor wasn't sales on was that a meaningfully Clear haven't . the And Before bit the anywhere. them we processes. seen come up

Operator

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

Brian Peterson

and we're and shortened February. how non-software, and enterprise, know kind to do is that broad SMB the into in thinking So of you linearity that? I that mentioned guys how about sales median on when cycle think software January the I the And materialize, quarter. wanted understand maybe that you . about to started

Henry Schuck

stat meaningful allow a median . a in making also the our thought cycles sales. we we've salesperson sales customers cycle And across connect that an new sales the to in cycles. We're about for allow that, just we've But across overall, think a new meaningful that board, impact a I sales on business way the sales those shorten. seen board, medium the that we've Brian, we investment it's our track year-over-year behind cycles users PLG times will in [ become no sales impact friction, year-over-year, self-service, to obviously team no as us That will seen customers business way. well. ] with --

Operator

Mussio. Siti of comes the Our Panigrahi from next question with line

Sitikantha Panigrahi

talked early to about winning quarter. wanted I enterprise third of business remember said share the ask the mind I selling, you going year, about top-down that last you C-Suite.

on understand the go-to-market us have that's progress you changes the help on you side now? So that helping made

Henry Schuck

so to intentional loads to business enterprise And now are segmented and that the on our growth. the a to our that that account perspective where but put us and fit market new where we in new privacy our And strongest tenured both position base focus accounts segmented we the the business. customer in investments we so an we enterprise data enterprise-specific also perspective, have made from investments the a way across the sellers base our from win then a reps from enterprise. are the on we've right Yes, reps where quality data who we've have business, customer data our enterprise go have perspective, enterprise a market right in drive product accuracy and

we where see place a no competition. almost That's

really we're the that customer area And investing new off good is the a team and on in an the it's so And new, business behind, base. pretty start. traction but side, seeing to we're

Operator

question of next Porter comes Elizabeth Stanley. the line Morgan Our with from

Elizabeth Porter

I a last the non-software QX. wanted believe I moderated in little mentioned bit growth to ask side. you had on quarter,

just of So trended I a get you and it healthy, know QX? 'XX. to growth but for outlook into mentioned QX remained any fiscal in QX qualification sort sense wanted I how on versus

Peter Hyzer

It's QX, remained area of It the healthy that's in but consistent. of at that mid-teens versus for down were little where pretty business. we maybe a kind growth,

serve of interact unfolds situation that how impacted than stays think non look by just forward, I we're that As pretty anything kind consistent. the be retention macroeconomic between technology businesses the else. that overall businesses technology we likely that will the more net expecting we How and

stability in that of while underpenetrated think kind And those do respect I But push businesses in there. with nontechnology I haven't in exciting insights good customers. those customers natural our expectations, a is low. ability pretty pretty really we're because it to is usage the to to sellers, see those I of to some see industries. those AI think opportunity coming probably with built we our of still into respect just think so yes, we We And new lot terms of

Operator

Our Brad with Bank. Deutsche the next Zelnick from comes line question of

Brad Zelnick

And feel make that to for well. had just organization, have right some made you changes the revisit year? the moved quick Just that new now you, follow-up the in any are you you wanted you people making into I and field. the players for to in First if Henry, configuration. out the as sales Cameron sure a to you the What tweaks year right last also flatten around. key

Henry Schuck

are go-to-market engineering really I lot Brad. partners brought the across business from across question, them. really the great a business, and like we're around perspective really today. execute great feel that me. product that's feel Yes. from have and about And together the I they have The great team we team an Thanks perspective. for a expecting now they we the . I -- to from have opportunity a

Brad Zelnick

XXXX is Cool. still the guidance Okay. And taking? write-offs, expectations you it contained lastly, relative out for And how been been SMB playing bad to as assuming customers? and debt. reserves relates the it has And to it in what are you've Cameron, to

Peter Hyzer

on. -- lowest So out many that we're product-led the out fall of as getting collecting think avoiding expected. on or it into and of upfront. need motion it later playing spending those those payment say to be have, focused to almost has And tends as really a we've ACH sales us, for the is I been where folks see which, payment expect It customers either them an entirely go or kind where customers we're largely a chase to we it we that's

write-off catch which For bad similar there's XXXX, we're as up had activity, terms slightly as a as of on from -- to might be in had our much level lower absolute ultimately in not expecting of is previous XXXX. periods we've in expectations number debt we a

Operator

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

Michael Turrin

QX discussions in and anything the it's to year if to seasonal to go is combined about just how side, to where signals, around back Cameron, you sounds maybe guide just the at are it given pressures what declining they're segmentation the just like you of those there periods prior potentially given visibility over do the moderating like still if can coming and in some to assumes base some impacts, want the relative sounds all can rates talking renewal set are compares to software And mid-February, fleet I in you saw of year. level past the and terms add the step-down the commentary. the cycle prior the of you we've year spent coming stable on just stabilizing time or renewal with retention into this any commentary the top

feed the is happening on there commentary base what's further helpful. Just and

Peter Hyzer

we certainly, color. out think terms out, then just in that year, add and coming some I trend Michael, Henry I'll into let the visibility do start of seen Sure. we've coming But feel that more seats in of thinking our about where they're stable and QX they're investments that sorts being is customers are how and putting surgical things. much terms QX and of more of their and those

get about guidance of So worse think we fact let I visibility it's as prudent good think on to and I'll could color. other the could get the frankly, Henry our in retention I worse about feel world kind think about any and that it. for that the jump makes us think develop and us

Henry Schuck

dollar say have just every I would of constraints spending. and customers continue that budgetary they're our scrutinizing to

the way. managing hasn't we're still that so half back through That of of material that the changed . hasn't inside in XXXX against base. any -- customer And

Operator

And Sandler. Piper our of Brent Bracelin from next line question the comes with

Brent Bracelin

and A to lot have the wanted asked double-click the OS. answered questions demand. into I of on operations been

at are broader XX% drive be lever the of that and is in how there double think today? adoption, driving what into just year? potential rates revenue shift quick is much you enterprise attach any Henry, for space? segment the levers you OS, operations that to an particularly there I flagged Could upside this to mix What's now. mix to the

Henry Schuck

small go-to-market that thing operations enterprise. account question. our tremendous a to still is we're that in real using Yes. up way, or the fits solution most that perspective, into, accounts particularly service. then inside every struggling accounts as OS AI my piece how and obvious first problem. that and OS to and And accurate just with and I generative DAS operations do fastest-growing of do data the at looking get a data operations Thanks in DAS also haven't amount gotten a the of are for operation one OS that our not OS, the white a space, we There's products, continues product of but be data they're it that keep is with something from of date to to

across And a meaningful really this customers. on -- to strong a to into so that immensely think the have and around an continues message be There's grower year. taking team enterprise focused that sellers be in together put still and going our our area we're their portfolio are that's that

Operator

Zukin question Wolf with next Our from comes of Research. the Alex line

Aleksandr Zukin

maybe maybe of in the the pipeline a unpack But a saw quick strength pockets geographic you And I or from one, follow-up that verticals you that quarter can just and first you saw [indiscernible] perspective? the have then vertical and in

Peter Hyzer

Sure.

services vertical of outside and perspective, things software. those a to be IT technology all from tends and So

to U.S.-centric they're Manufacturing the see transportation continues we see areas industries frankly, to services those of more financial in strength, strength. continues build. a some our to up. of are more in European all cases, where continue or, Geographically, seen teens don't be grow, think all of kind little And retail, So businesses lower tends logistics, areas. They much traditional bit percent to either I continue we've it XX-plus growth area. to pick but still. penetration they're kind

say same that historically. we've don't seen sort as internationally, So we I'd acceleration see of the

Aleksandr Zukin

maybe maybe uncertainty, for rate help potential revenue of up a QX? and looks about from And go for And half attenuating open just year as the in exit like then we through let's QX Perfect. maybe guidance. call sources But back it, we the we of in the as the a think macro it some reacceleration. perspective, how growth guide terms period of in the should bridge, upside of those for think mild this, about sets

Peter Hyzer

Yes.

will downsell that some is QX And we're we be kind continuing as to certainly, expectation tough. expect our certainly, pressure peak to see QX negativity of lapping still. in continue So the

at growth would of high I this to out at low year QX and mid end end be low end low a the think the And relative the mid-single would of with range. be the the Obviously, build range. you'll if of QX model, exit you rate up to the digits. more much

get year, So a widens if that spread guidance. about we as little further think as you the out into

Aleksandr Zukin

great [ on Congrats quarter ].

Operator

comes Our line Tyler Radke next the from with of question Citi.

Tyler Radke

you've If continue And that revenue business, did you primarily to last the and the strength could the driven couple in about by you the of the slightly Or just of talk quarters, seen was create then strength to strength business? linearity the the in the close it better quarter? than January of create quarter, and closed unpack over first into and . February? the part specifically were

Peter Hyzer

Yes.

in year linearity in of a reasonably towards saw I good, say, in than December the was the in So maybe would the little end October. stronger we quarter what

businesses Although, come honestly, do to lot mix of in. the a that has with different what of

see seeing be where is traction and tend tends So the we right December now. we're with most that customers to do enterprise-weighted, that to more

created we're not That's helps and weeks. certainly enterprise much So that improvement closed going does I business that be the to within think enterprise of with. that motion tend more

renewal about that's quarters. of better frame, QX, tends and one think we it tend does expiring be worse, QX As more continued into for how or our a to biggest SMB-focused to time be

mix makes segment little we So a segment, experienced even of what The tougher while by in than we've QX in QX. continuation QX. actually saw what a shift in seen we

Tyler Radke

product. then quick helpful. the And on follow-up That's copilot a

When going kind a you folded as the that Or CoPilot it offering. price it I is of possible of into perform Are question. to base upgrades? clarification these you a level -- about Just be the talk doing tailwind guess, these upgrades. just you is gets

to you you I guess, path? as going charging upsell point upgrade about So at that think be -- it is this are an

Henry Schuck

Yes.

We are the anticipating monetizing path. upgrade

Operator

Our Joshua next question Needham comes of with Reilly Company. from the line

Joshua Reilly

single feet this of a any customer are low in released retention of I QX, seat just last to been on us terms was believe deployed prospects? the or either into the early SKU? seeing or you can you very end widely has the And now positively SKU single quarter from then give how impact customers sense

Henry Schuck

QX month released QX it. we customers in and we've released number a seen up with of the late SKU last tick really since single-seat the early every revenue year, or QX. of them And We associated

on super So SKU, early on buy PLG a the we that it's that, feel -- through good can about single-speed still only but motion. you which

the And but trajectory is so really positive. . it's really early,

Operator

next Our McGinnis comes Taylor with from question UBS.

Unknown Analyst

the that mid-single I Taylor. in believe, I for press a same XX%, customers, has If on from wanted digits Gerdes more. imply Claire decline to grow XXXX a assume to the is remains NRR last This at year. then we there that new would little in

that in things outlook for mentioned of level give and the that new you what comfort new customer help XQ give saw you logo could maybe record One comment that saw visibility Could bookings. you the was would of growth year. you what

Henry Schuck

customers We on had new stayed left motion. and I'll business new the around that the And as then demand great to year. customer well. we new Throughout had who the many most throughout the start Cameron. close to the we We brought we've had end quarter. of back And the us continue base, in year, saw then a strong. had the logos year, relative metrics sales at come to

continuing new we feel ability our on side. business throughout the pretty to ahead, and good strength forecast it demand see So Cameron. about XXXX. Go

Peter Hyzer

of I the of then based And mix AEs and dynamic is significantly course company, from what other Yes. think market is the where that 'XX. is up done it ramps our the on that we've was the within during interesting

They had strongest players the we're as in excited good So field I something about. . think remarks. think that Henry seeing kind with are our in continue of I we mentioned QX, seeing as earlier that us. And stay a his

Operator

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

Frank Surace

important forth. change AI value a the That investment, into I there Frank to and for one functionality Raimo. we and we to where How guide. of that think a the our That margin. think actual there? going points So engineering are the takes of to hundred with are mix we really puts so the full rep margin that investment basis we've should And to any forward. probably advanced or year deliver about infrastructure heavily we invest the well that's few models can of continuing frankly, and LOM put between out as as there, is functionality factor on customers in that, productivity includes for margins, the the assuming ask on respect This is wanted you guide?

identified value business of we've efficient areas way. that, can other we of and drive where we Most more that be feel

So we're we'll leverage I'd early that an that as But grows, to focus there's a of as able say particularly related with platform, the cost be investment kind that, operating that. against on biggest that. that is CoPilot the there's is harvest then to

Operator

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

Rishi Jaluria

economics embrace comments one, back maybe that, get we've sort and the to on go the around get wouldn't tone PLG. self-service at wanting what that? And of like you the on Wonderful. and still bit said to there's on. I you investments or the talked unit just about this I to a maybe to on in different past, to It little least more do when people part work make guess, can't just of ZoomInfo. changed? And maybe seems self-service trial, it's to public wanted has need alongside get themselves product What made through you pricing you gone that. in packaging and whether when sales still through a have pricing go we've to

just in through you like that's could still that progress. progress looks that to. what where and intend work So I'm us assuming you Maybe if to a walk get

Henry Schuck

Great.

salesperson think our opened a to traffic motion is touch, set the no website. of has up I a to today, certain It live. certain just no

PLG We're through person nurture is not who on as motion. that the website up model. every shows So a lead guided treating the

. of geographies certain rep certain sales as being we'll So sizes the of a a today. score motion, to and below industries certain and if self-service the limited to because into can't the a it that score, lead get lead threshold, that it's put and exists

more into about about more learn specific the the conversion we that As to rates, the increase continue traffic learn motion. we'll motion,

seeing through we But that's we've probably not QX. transactions increasing. self-service in are that launched come number transactions since have that Those it. why of you're a this are had so And

trajectory and more about into our less we the continue we're product way motion. see there. a building fulsome so It's good eating And to there, PLG

all [indiscernible] motion. of in end that one more into would releasing highest specific of It's about a In from that has fact, our traffic NPS gain users motion you our access and product sales-led that to the away more and motion more across scores products.

Operator

of line Our from Pat the comes Securities. JMP Walravens with next question

Unknown Analyst

architecture, tell a question to as there's for on the the if connecting to by ask context? part wanted anything you powered detail vector data Cole understand there I how I a Is are about of your guys it's I Austin can would Pat. are database you with how product-related is CoPilot. architecture. about Any us to This anthropic you helpful. more getting wanted ask an guys there be thoracic.

Henry Schuck

a own is one also We've open [ product of AI in our insights we're also fully partners motions operated CoPilot. The with places. by. of not different [indiscernible] Anthropic that our ] of different a we're built leveraging We're running leveraging. into variety number internal is AI LLM that Yes. plugged that's and

we run things run certain -- across And we're X we run certain against own so balancing LLM, AI, things open we those anthropics, internally constantly our places. and certain things have that against we different certain are against we

that about leveraging respective so so, we in each and And far, its X pretty structure good feel area.

Operator

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

Terrell Tillman

I'll easy. copilot line in ask I'll the really what upgrade path. is question, it's top it of in terms just in in, X end maybe mean, baked the then meaningful the growth make Well, And half. year, the Cameron, of end, as for terms having secondly, the low to second the success high I

traction, If back-end it would XQ? you're success be fully loaded or in have more to going

Peter Hyzer

year. middle And make until planning not the certainly, the generally of we're copilot to available

any in range. anywhere success that back-end success would guidance would the we reality, So kind meaningful did have certainly, we incorporate from be of loaded not CoPilot

the closer to bottom. that the obviously, I able it to think more world is And the guidance not through gets impact gets worse, co-pilot. we're range

well kind the as At to larger selling given business down customers the starting tailwind tend much as is in consistent that better. of they've think us to of on down sold some other stays historically bit of little a of of range, the mix factors its that's top our as it's not terms a well renew based people better end I slightly of the for to create

peg little, top range, us that driver. So it helps the range Obviously, it going push if said I the but even be a on anything, much, copilot. closer with will within of big the a haven't wouldn't to meaningful if the success to we it's

Operator

for participating. Thank time. conference this concludes And I'm further showing call. all today's no you at questions This

disconnect. now may You .

ZoomInfo (ZI) 12 Feb 242023 Q4 Earnings call transcript