ZI - Earnings call transcript Q3 2024 | ZoomInfo Technologies Inc.

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Operator

Good day, and thank you for standing by. Welcome to the ZoomInfo Third Quarter 2024 Financial Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Jerry Sisitsky, Vice President, Investor Relations. Please go ahead.

Jeremiah Sisitsky

Victor. Thanks, financial for ZoomInfo's of third conference XXXX. results to the call quarter Welcome the Henry CFO. today CEO me call With on are and O'Brien, of Graham Schuck, our Interim ZoomInfo; and Founder

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

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

to statements With unless the otherwise let ir.zoominfo.com. press reconciliation refer this in me results non-GAAP, All to are please at posted or information, be call our slides found call to can the the the metrics website release slides more in posted noted. website. our Relations over forward-looking financial For on Investor to IR in the turn A that, Henry.

Henry Schuck

Thank you, Jerry, and welcome, everyone.

moving on while company and rates see these We executing for slate in financial that improved and believe and the QX retention to moving business QX and position we're new continue was with was net long-term initiatives the stabilization clean delivering to our about forward. initiatives results. forward a improvement about success, implementing

risk businesses volatility disqualified this future XX% doing of deployed the so, also than quarter, prepayments, write-offs. around reduced has through we applied our XX% and successfully successfully upfront which risky QX. up we than before. model, more QX, we opportunities in more business new small a from In broadly In third new more transacted model business ever In the

is business, absolutely the right to the our to do of long-term coming thing will our for a it of this headwind the durability in optics While remain growth quarters. health and the

ZoomInfo quarter, expected. the Copilot better In performed than

at stabilized accelerated for both delivering customer million consecutive growth dollar by shift enterprise strong our we quarter, our cohorts growing upmarket sequentially. and and XXX,XXX NRR Our third XX% and the plus

As a result, was the income quarter margin and $XXX of previously operating guidance. third GAAP XX%, our million, a revenue the above $XXX was for both end adjusted of provided high million,

to year, million approximately focus that million, we free of year-over-year. growing for we of We value efficiency remain drive share. we the flow shares We or share. through shares, approximately shares total shareholder a compounding when To quarter outstanding. in believe cash outstanding. end, unlevered repurchase on last our was free X% total million Since retired shares announced retired with and first March XX In levered committed flow share cash $XXX flow also of authorization, XX QX, per levered long-term free cash XX% have per up our the XX% to growth opportunity

do were quarter generation enterprise this cash to grow another quarter. and in the In for plan that we $X company count year, able to slower per cash grow number deliver with strong and XXXX expect term. our the combine we upmarket share the strong a to share expect our meaningfully at continue flow you seasonally When long will ongoing to levered it we over business, free reduction, of least

quarter the of XX, Our ending second quarter X,XXX, consecutive cohort grew sequential by with the growth, customers. greater than customer XXX,XXX $XXX,XXX

are in our ACV million We accelerating customers ACV. that ACV, growth An best turning increase increases cohort because their their customers XX% of XX% this approximately up with we're ROI represents helps demonstrable results driving now from had reduce which to business, sequential costs. and cohort. year-over-year from strong and now customers sequentially. ZoomInfo enterprise More revenue makes of Revenue plus our the X% that dollar of one drove grew

organizations audience with Claire added existing with ZoomInfo across execution to and of of sizes, all Sonesta quarter, closed XXX sales Copilot their data BambooHR, vendors, Hotels, deployed leading ops At marketing efforts for number Bentley, continue Bank, support marketing. team ZoomInfo we reps, such the their Samsung, rev During Commerce Premise as operations Amplitude, and a and we transactions and Health. consolidated building

$X in operations. entered Automation, licenses This data part bolster consolidate marketing decision successfully [indiscernible] and AI-driven million workflows. they And sales cohort to products into data-as-a-service firmographic customer through our and providers business multiyear a to gain intelligence customer our with our strategic and in our and to double accuracy, provider cohort. opportunities, investment access of $XXX,XXX as with efficient their strategies their efficiency XX an ABM legacy replaced grew economist the customer chose aims global Facing solutions Copilot and challenges intelligence. Recently, sales Process designed streamline drive to a operations a Fortune agreement and

performance, and addressable investment ZoomInfo high QX, on adoption segments in The They delivering driving on market segments. expectations, to mid-market will motion. efficient more also ZoomInfo Copilot accounts buy return behind dynamic In propensity better the that their audiences SMB our showed it total especially is outbound identify to understand expand to results to to offers. enterprise and and for exceeded measurable will our new, a They rely their strong activation. force mid-market in digital help leverage create ZoomInfo sales build and Copilot's

by activation a teams. Copilot, increase and productivity improvement a success asset Copilot unified response of is context the or to for strength foundation our from systems of customer's comes e-mail the from rates context relevant with Our with per week customers like best-in-class context The XX% CRM user. in combination Customer XX% engagement warehouses. customer for go-to-market business gains hours report per XX% of data data X pipeline attributed rates, of their a prospect in identified total directly opportunities

company leading contacts data, We're of against hundreds known for actionable insights millions of companies. provide and which and our contact

at Now into scale. our billions processing products new personalize of daily and data sets points engagement to expand of prioritize

increasing our quarter, Copilot innovation on product strengthening market fit. focused the and product During opportunities

we our to actionable insights to XXX ecosystem mission-critical legacy We every signals are of and process the neither go-to-market million First, CRM. daily member additional expanded team over faster. help capture nor exist now signal win go-to-market that

we sellers, executive enterprise tracking engaged added group person including previously expanded and trends, For buying moves updates contacts. hiring to or signals,

or sellers, and lean SMB transactional business SMB For signals data. we like origination added

intelligence, and unstructured selling, signals, competitive customer proof earnings And intent added expectations. financial into For added integrations pain points social value insight we platform or retention, deliver context, we and competitive to like analyst increase competitive relevant growth research assets GX, transcripts, data TechnologyAdvice. satisfaction that filings, podcast and transcripts TrustRadius with like including key for intelligence

and Copilot Slack. HubSpot Teams for the larger customers, be with for now by downmarket with to for signal customer technology SalesLoft in base, in integrations integrations and a of share can new Groove enterprise, activated Salesforce, companies, thanks Gong Microsoft ecosystem and Outreach, our to existing addition

will monitoring dormant for teams. customer forward, key cases support executives we expand Examples particularly account reactivating Early executives and driving expansion, success signal sales and driving segments. AI-powered through account account to risk marketing the and enterprise Copilot through beyond Copilot's prospecting include mid-market is teams teams execution demand planning, Copilot. management in to use managing renewal and using seats Going use results account for

innovation coming in -- year nod from heels Magic being for leader our a coming the a in on comes of Marketing recently customers. of being the of departments named this recently Quadrant from named the is leader speed demand Account-Based teams We believe and to serious market our XXXX marketing and This engineering this this Gartner the product the Platforms. a

The Copilot data. go-to-market and AI for require shows and high-quality, automation demand reliable that successful strategies

that language what models to CRM the the most engage every on every ZoomInfo Our customers to Copilot they care market, data falls and beyond a CRM their short. complete about account, have them addressable buyer, picture goes large effectively. realized create how of running

apart go-to-market, activation, sets across and This positioned a customer the shift. activation with our layer and unify to across of capitalize best What data journey ability on context and this drive ZoomInfo entire successful sales we're combination multichannel platform marketing. AI and is to contextual

turning things, to are Across organization, acknowledge accounting driving Before in and we're finance I Graham, the and thank team and over great innovation the work we to sales product, in the it want the to doing from to the team. beyond.

with are operating we aligned, are a urgency. We of and sense we focused, are

strong In for up financial took that to into the ensure this the performance future, steps pleased that set QX, am we very quarter. necessary operating we translated momentum well I our positive and were

to focus flow Copilot, free driving to driving continue per on consistently long-term through We customer value committed and cash levered growing creation with we're outcomes enterprise share. growth,

guidance navigate to out communications forward that transition. I'll While XXXX we SMB today, particularly With we very a I are the expect our Graham. to guiding conservative general, should as in approach over call you turn would to call not going that, this but

Michael O'Brien

growth million QX, as took In for in $XXX was QX operating second in we quarter revenue the and revenue X%. When income for of charge of adjusted Henry. QX, we negative adjusting million, we better QX impact well the the end day the than Thanks, guidance top sequential both its $XXX on as delivered the and provided. in additional

in number model As a implemented business the quarter. the as of small expected, as signs of write-offs are The we business abating results showed at but delivering operational risk exited QX, elevated transactions improvements continued in high-risk qualified we quarter. levels record our just

exit benefits the time, which QX, sales refined month, write-offs disqualifying over revenue that more of trade-off $X over per us than anticipate we the higher will As we quality that of is long motion risk sales term. reduce and SMB near-term new a million improve

of and seeing and to challenges the different growth number in behind are a stable QX believe are in We areas of signs us, accounting of early invasion the that led business. charge the we

third retention As XX% net revenue the for was indicated, quarter. consecutive at stable Henry

acceleration cohort. we ACV growing enterprise We to cohort. dollar our to are We with customer added We We for million-dollar-plus customer are and traction drove an seeing Copilot. customers, added XXX,XXX the growth in our early million strong business.

controlling are control, business, back approximately approximately path grew X% in on business growing of are of well the mid-single enterprise or short, and with mid-market our a now executing Enterprise strength, sequentially to very our key we the continued is quarter, against and In can X/X priorities. in which we ACV, stabilization represents XX% better. digits we what

riskier and aggressively smaller and expect percentage smaller SMB enterprise, our businesses As more to in a business. from turnaround and we mid-market smaller overall become we the of platform, the disqualify grow

favorable for higher a As up that happens, mix growth. we the business is and and of more set a durable of more revenue have levels

operations we companies momentum, saw AI. leverage as with helping their to business increased continued data look year-over-year foundation Our they XX% as

expectations. functionality success Copilot XX% ACV from million Taken up driving with the QX, in quarter, business exceeding XX% increased our our of in overall Copilot, advanced $XX the to together QX. of surpassed in

on successfully innovation rapid the the platform, to migrations renewal. to on addition sales, Copilot off-cycle we new-to-the-platform upsells In and continue drive

We uplift majority continue renewal to trending of Utilization with accounts. transition see believe revenue them of Copilot leading higher, and satisfaction mid-market migrations meaningful and net as improving a in we these the into enterprise on is retention. is we up, coming higher customer and indicator trends which is experience, a accounts

In by than took repurchases dislocation outstanding twice program. we than XX an price shares as shares many These of in ever shares more the of repurchase retired through advantage stock total share X%. QX, million, in million quarter reduced and for share $XXX part before, the ZoomInfo approximately repurchasing accelerated in

As with $XXX in remaining had outstanding shares we of QX, of authorizations. XXX repurchase end million million the

on as opportunistic QX and Waltham on indicated value rightsize the Operating real is cash buyers our and estate fee and highest the as We was in returns financial of QX. and the market best footprint. enthusiastic the will early wide capital. restructured we our our value and based continue current gap results paid $XX ZoomInfo between stock, intrinsic our last agreement million to one we conference it And because continue we of of be see flow in we a on call, $XX million termination our lease to

forward. million We estimate that going more $XXX than save this us will

for with And $XXX free in Unlevered a of levered liabilities. the debt. we million we settlement future million, flow, XX%. relative related right margin and lawsuits, billion Additionally, cash interest of in quarter. $XX carried of $XX providing million the cash quarter gross quarter flow [indiscernible] cash in avoidance $XXX incurred was We equivalents, the to $X.XX litigation cash funded million cash costs we in of free ended a and and to QX,

of a $XXX date senior The of million February a and million the remaining X.XXX% $XXX of first XXXX. in notes maturity have February maturity term lien date in loans balance XXXX as

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

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

sequential metric business, the know While best the you growth evaluate look we to metrics. other to some remains of

balance For that practices than those of mix prepayment looking you risk trajectory. businesses quarter, sheet to made the from much this growth higher drove we too at and caution billings reserves in growth relative higher and extrapolating our from changes billings, in the advance, the I in would requiring billings normalized

With to turn that, me for let guidance QX.

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

range $X.XXX year GAAP for income to the in $XXX to the expect range billion revenue of operating the of million. adjusted and in we a $XXX As full million result, billion $X.XXX XXXX,

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

and free payments We with $XXX excludes the impact historical unlevered flow reporting, which restructuring in of settlement the in expect quarter. million, the the to cash consistent $XXX range million of

XX% guidance X% year revenue range. full growth midpoint the of adjusted guidance negative operating margin at and our a Our implies

Now to call open I the will for questions. operator turn it to over the

Operator

of [Operator Research. Instructions] from will the question Wolfe from Alex come Our line first Zukin

Aleksandr Zukin

kind core. I demand on the in the I kind sectors new one. it's of your just Maybe seeing to can first what would noticed adjacent just exiting a customers into [indiscernible] you very were you're of QX, Henry, how comment couple say, the changed? quarter of environment,

follow-up that how those ROCE course expansion? the So kind over [ of of getting as a the see it that And retention And Is ]? you about Is maybe talked X you was interesting. gross next then kind on of both? that retention, Is trending better. quarters?

Henry Schuck

Alex. Thanks, Yes.

SMB demand and and strategic upmarket, particularly particularly Copilot in in relatively Copilot. unchanged segment. on of segment, of OperationsOS environment, business. we're in mid-market retention for strong of really strategic from strong and it's I seeing think seeing the a We're the enterprise seeing our QX, end segment net the the and continues lowest demand particularly enterprise lot and perspective. In we're mid-market, the in a the to The challenged, demand our DaaS from enterprise segments. SMB in the be

commentary And so unchanged QX. is that from

Michael O'Brien

was row, top I'll so that. And Yes. of on the just for third add there. a reflecting quarter retention Net stabilization in revenue XX%

that We also much we we're operations mid-market, up enterprise. then Copilot upsell are less in downsell past from over and seeing But and pressure, specifically more in the years. where we have experienced a the -- expansion lot of opportunity X

Operator

question Canaccord And Hynes line the our DJ next from from of comes Genuity.

David Hynes

$X 'XX. share in So target for Henry, this there per levered cash you free have flow out

you 'XX growth? there free get meaningfully You also How to growth grow the can expect share line? on said per 'XX. that mean you bounce back in in top of that that in much in a is revenue I recovery flow cash a predicated without

Michael O'Brien

The about I prioritize is that which to line. that. is aren't flow this then to free meaningful it the growing then lever for levers that consider. margin going retire a resourced continuing top achieving continue shares, expansion If We're think the Graham. to lever cash few to levered we becomes we'll there's and is growth that, way a we're drive in share. per This Yes. And

David Hynes

then, And have Graham, Okay. I what you.

X% normalized growth minus is So sequential in QX.

think point positive conservative expect minus And part the next in growth at return that next year? Is of do good guiding guidance early posture? you X% way to sequential year any new You're given to to the a QX. to about

Michael O'Brien

And with to in-period really guidance in we're our be an our quarter And from QX guidance be momentum that assumptions going conservative largest That's activity, continue period. the conservative We're very going in but to level about positive we're when approach. to again perspective, had exiting from we QX. operational the -- Yes. we to in expiring be of going quarter. conservative a

Henry Schuck

I sense. think Yes, makes that

Operator

the Deutsche Our Brad from of next will Zelnick from line come Bank. question

Brad Zelnick

changes the behind you conservative in largely guys, also guidance methodology But you the a Graham, your can say talking about are Henry, SMB approach hoping, you. help I'm next But that into Because SMB more just clarify year. dynamics. you're

guess questions. in revenue hit it related in speak, to as I of two that so cleared And was a cleanup. your thought for QX, to the had So you segment. I smallest it deck, QX, and charge-offs bit a customer

credit that of not and charge-offs effect to are we perform are thought And you is the seeing that there as impact that paying QX? segment than you stricter would customers more as are forward? still that we of And consistent you in came a then that QX? when Are you're as it perhaps related additional applying think upon QX that in hitting you saw and that, about expected pronounced in segment, what expected? the is Or renewal practices credit thought that having have out are

Michael O'Brien

in Yes. The as but the QX in estimate deck Thanks. is growth at sales P&L until we or do clear no does that next QX high-risk it is not lap there, What headwind that we something did of volatility QX. charge year. a disqualify SMB is QX. higher create I'll impact in There's happening new rate, that in start. persisted transactions in change the real from a continued

about thinking per the million So was $X in per is month in to up from up way plus $X that this we're that month disqualification QX, million QX.

about until ACV percentage actually period introduction the SMB we of model of new the time SMB, in a to potentially year. expect And that of business a business lap as from we for we and think decrease as last decline risk

And believe we against the reserved capturing the as in high elevated with. of we QX. efficiently P&L write-offs the and write-offs, segment level level again, abate a of then but SMB saw in We can business that an prescriptively we on continue exited QX, is impact. we demand there's still have that focus processing level to our quality grow that So and

And when we'd call from we as X quality from higher X and SMB the to write-offs. road, new we benefit get that QX the start lower that's months where months, maybe risk new expect model, it, away further implemented business sales to down see

Operator

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

Elizabeth Elliott

made. the about, improvements XXXX? estate I of wanted margin on operational should of look we have reductions some real way early on you've changes first guys the as talked that of we Any you rails that guide to about think including some some cost the into

Michael O'Brien

I free know we for we guide QX is timing grow of the XX% the at some just were those is framework X not grow XX%. rather that, expand QX, in to way flow share. about think levered in is the than and growing next trajectory. the between that to of year There cash quarters this to margin. ways And per But one that if

Elizabeth Elliott

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

most Copilot given driving just across is side, across renewals that despite of the On we're the those just seeing the up opportunity Or to some broader flat that it's adoption the understand I it? Copilot is that still adoption to an headwinds? right are taking some of kind see there. macro, so now sizes customers want good keep deal of just average to headwinds as viewed it of

Henry Schuck

migrations. grow are we to our those growth do ASP we're we are seeing on customers, seeing Copilot. that we Today, When double-digit migration when migrating

Operator

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

Frank Surace

This on Raimo. for Frank is

to in that? another Copilot, way one about last think with up for best net QX? retention around the from that Following what's customers what's market feedback the the to that in incremental contributing And been quarter on

Michael O'Brien

customers sentiment seen from on positive really Copilot. We've our

flagged e-mails of our more pipeline meetings, opportunities telling through to Copilot. are them XX% are customers e-mailer. that engagement Our their were is through the to AI that generated attributed from that being more XX% us

of and rates And engagement we're so seeing in -- Copilot customers our higher on versus the solution. utilization legacy

about And we're building. so the really good that we feel product

product amount as continue a of to well. We functionality add the to tremendous

that additional friction drive go-to-market take And all customers integrations, our away additional signals will so engagement additional upfront. and by

so Copilot. And really good to momentum see QX through we continue from

Operator

of Parker come Our the Stifel. will Lane next from line from question

J. Lane

set and growth at Wondering the an sales on of in for Henry, about number you long XXXX the emphasis just you maybe absolute further segment, the you as the look talk or changes enterprise NRR resources up you could see business? how sales you term. start thinking less can approach have year-end of if be about SMB stabilization, any best

Henry Schuck

Yes.

digital then a been and and to manage in into up XXXX continue to segments market I where think growth more and our drive resources and a more We resources PLG resources our our to segments and to and that on we've journey into opportunity enterprise segments enterprise from then business our into want and up -- our segments. move upmarket motion have SMB we go lowest up mid-market we're much the self-serve think continued move in phased capitalize of success and with mid-market digital efficiently a lowest the segments to we business SMB seeing on. into meaningful free QX

Operator

from will from next the Sandler. question line Brent Piper Our come of Bracelin

Unknown Analyst

This on for is today. Brent Hannah Rudoff

I want like you're me. with ask about sounds product. solid Just the business. momentum Copilot really your seeing data-as-a-service It one for to

equally Just you're wondering product? with if momentum the data-as-a-service strong seeing

Michael O'Brien

Yes.

XXXX. The in strategic and our segments XX% CRMs where continue its cleanse asset that's and business in really strong data strong think good really We to solutions their enterprise a see marketing about growing And that build their that that. momentum data-as-a-service, that in feel data and and warehouses going is AI automation systems. they're year-over-year. We into will we to business adoption is their our to really continue leveraging momentum that

Operator

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

Koji Ikeda

previous I on growth XXXX. thinking about rate follow up and exit a the question wanted about XQ for to

But not a that understand year? X, us XQ, part of give could we XXXX prior what maybe even really be flat it would next during more the -- that. the I in that's momentum, little get a in help And giving it's little growth that And bit than lower or do drivers at exit X business confidence maybe here guide. negative us us growth to the was underwrite revenue the so X we bit when rate look could conservative positive

Henry Schuck

focused drivers market up that The really on Yes. are positive we're right now.

continue growing quarters to sequentially improve of business. to the a decline. that an really where quarter the for row vertical. So we the X-plus downsell We we're And have retention specifically pressure we software in over last mid-market, in second years. further That's enterprise multiple opportunity had in saw most reaccelerate after our the

really finding just being between in right that we're growth segments. and the So balancing with X selective SMB balance the the

Michael O'Brien

good seeing be and momentum we're November, with while in conservative into continue October And we're our going to to continue guidance.

Operator

Our next from line question McGinnis the of from will Taylor UBS. come

Taylor McGinnis

Maybe on the SMB side.

more mentioned of renewals? million customer know sales on I to But is you million $X per higher So month just $X qualifying existing Or that clarify, than risk new is prior. versus that towards Because in just we existing maybe the I expansions sales? being how curious guess, term the I'm versus new think near about should growth algorithm, logo weighted more new logos?

headwind in quickly guide SMB just guide, embedded been? of the terms changes was about in XQ from that any then there and of how what were as might the you're terms the have And a in follow-up, thinking that

Michael O'Brien

Yes. Thanks numbers, logo the question. That for driven. new business, those new are disqualification

tailwinds we as of So quality same the the to revenue QX pay, on a ACV, that higher million that were have very XXXX. guide, a sales new midterm time, will updated unlikely per that customers and is high-risk that at number model new QX. to in in And increased we're quickly turn in that $X and either but headwind of into near-term $X disqualifying month with a business our to then has million ACV disqualification yes, then

Operator

Our the come next of [indiscernible] from question from line will JPMorgan.

Unknown Analyst

was, But is investing in of This base, of maybe hiring companies Murphy. are pieces and kind solutions for in that moving any of the on My across across behind you installed these your really seeing hiring there's larger installed I for in benefit terms are know that customers? a the question of Mark lot a base. kind that, of of some

Henry Schuck

are it I the make or sorry, The this market building cases? want are just sure Is to building for companies I broader their solutions own who for the that -- question. understand use

Unknown Analyst

out reps correct. that's for of Yes, broader to that. sales it market there and sell Building the go kind and hiring

Henry Schuck

Got it.

seeing For we're come not customers types of the broader in. market, those

customers internal our we where building those think is usage their for solutions the foundational internal solutions. where benefit use solutions own sellers their I large are where are data they're to own be component that leveraging for AI DaaS to seeing to

Operator

the from KeyBanc next Jackson will come Our Ader Capital question from of Markets. line

Jackson Ader

kind I had of difference between SMBs and a mid-market. about question just the the the

curious keeping is at I'm that on and the the kind -- customer that a what from the like of just moment? ZoomInfo SMBs So with platform it expanding SMBs are that's why mid-market staying value them aren't seeing would the

Michael O'Brien

of I to is we can really value think grow This customers. customers. cash with we high-risk a big question, end extending portion SMB is want base our SMB seeing the make and sure lower those we a not of that to are credit

to those sell broad and we to with those customers. and customers want where go grow a swath there's SMB, So of

Jackson Ader

wider? for kind we of I And right, we noise follow-up. guess pandemic -- noise from Okay. take of think -- -- the the quick if your data then the how competition? Is mode, about I to the a few to last life about should thinking it versus about it your Or relative the years, today right, mean, out all our same? Is it is be -- pre-pandemic we think today, a narrow?

Henry Schuck

feel our We about mode. data good really

We network. contributory continue to our grow

mode that We're of data community and a that variety continue with grow expanding We platform. we're to now into our ingesting signals integrating our network. new

integrating licensing our Copilot signal product. there's And that a perspective, they're we're more so contributors, more more and members, community they're data data into from

that ecosystem getting And so is larger.

I feel the good mode continuing so data really And about to expand.

Operator

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

Michael Berg

Turrin better some lot And but sense maybe then on incremental Michael there. get I a to write-downs for You Michael follow-up. the better macro, is got got incremental wanted characterization conservatism Berg Congrats the I color about a including quick ongoing the maybe of a the here. on You talked what and here? quarter. a of

Michael O'Brien

Sure. We guide, meet with and the value exceed can that guidance to ranges consistency expectation craft an with provided. we the we're or going

And forward. wide information approach take on communications at indicated, we of have general at a conservative quarters. is and The to outcomes we Henry As the the from model discounting part consider philosophy all positive we a to of hand momentum operating that intend based going our that is recent guidance time. range

Michael Berg

Got incremental it. Is in you total months saw? $XX Copilot, X then ACV. since terms QX launch? $XX million the Helpful. Or is And million it mentioned to the you in that of in

Michael O'Brien

total. been That's exiting

$XX the includes that So million.

Operator

Our will come from Raymond next Brian line from the Peterson of question James.

Johnathan McCary

Johnathan Brian. for is This on McCary

stabilizing about you or traction in performing? of how stabilizing. one But software this can broadly, Is us outside how you is software ARR call ARR software -- share about answered hear in if Graham, more Just by give and update can and to you here. the that's anything curious on the NRR exposure from there? any the tech building there split the vertical part

Michael O'Brien

had after Yes, the row sequentially end improved Sure. software back we quarter for in second declining the of through, think, XXXX. retention a I

other manufacturing if in continuing wanted growth. at couple highlight had as them growth, finance, verticals, not growth least to high and we One, some strong did that were The logistics. double-digit to of of them across QX we're see transportation single-digit a

Operator

Citi. Tyler next come from will question Radke Our the of from line

Tyler Radke

some sounds a focus walk seeing just enterprise on through takes the there? provide that. presumably you customers at business like can the us you are positive look higher-quality the It momentum If out and and puts to NRR, should on benefit you

room you base. think higher? the Or Is XX% that you of customers. I kind then do restrictions think secondly, there's to lower when initiative the the starts as think the to to enforcements quality go? reduce as as of prepayment you think do believe you about further kind you'll you extending talked to improve? that that that for of about customer and take So And high

Michael O'Brien

Sure.

the getting mid-market above and takes the big that retention, puts then that improving like getting On of closer certainly enterprise retention getting XXX%, XXX% -- and into and maintaining those back time. to drivers over are

year-over-year a One to that XX-month call of want this or retention out the is we things view. in trailing is

and up optimistic activity there. show longer So in the little we're takes about that in-period bit view, effectively to a trajectory the year-over-year

to -- level and characterize of pipeline that that to And a level would new portion the run coming this the it clip we at $X guess, moving we at risk forward I the have is as continuing this business out plus right our through expect disqualification, continue on then new the greater sales million QX. that that's I of model. would now minimum

Henry Schuck

it you're we just add if from an mid-market have and perspective there, gaining base. about if momentum an about I'm or where I where the It our in mitigate ability perspective, business, real where thinking There see we're our downsell. attach when that I thinking from helping Copilot, on to the renewal -- think we with segments places of think perspective. a it's this -- if just I where I also customer think, on the opportunity first, in enterprise I us are helps upsell opportunity to us take NRR

in to software interest to there build with mid-market, we're able to is think able internally segment improvement our continue that I back in upmarket do leverage seeing to get DaaS particularly AI assets we're growth. Copilot be accurate seeing complete and as then sector, the in strategic our in And we're data cleansed our what they And that. the where more segment, that need segment, to solutions much and and to they I think way

mid-market pushing and enterprise. And Copilot on we're in so

great from perspective see to segment. in continue We strategic a and the operations DaaS growth

paying the healthier today And upfront. segment, then on bringing in us SMB much customers we're who are

customer And healthier we disqualified and write-offs. have the that this a next of moment get base in anyways. who have that have that lap headwind -- we that and cohort year we churn doing won't we of once we the where then highest see riskiest, us dual we've of of a customers year. in of time out benefit at this so so started that in upfront We'll where the QX And we paid QX

so And enterprise customers end up we customers. new group with upfront. business, a in of we're and mid-market selling more healthier And

next And base you the lap year. QX installed much is when healthier so of

Operator

line Our will next of Jaluria RBC Markets. from come Capital from question the Rishi

Rishi Jaluria

do the you intend integrate about you out especially hit of Copilot. win generic to that feel your about Just argument their some right understand Do how you some on really you Copilot of of [indiscernible] about that? versus AI, if to whole maybe the think build talk kind are potential And help can capabilities? quickly, I again more want of maybe neutral data? platforms in Copilot can Maybe us to versus

Henry Schuck

Yes. a I think Look, couple of things.

from if that's CRM total they of internal just of constantly solid expert any It's accurate, they go-to-market data your data. information postings calls. data of potentially data job top that we're your on lives the inside all, systems your and dynamic data to and can't of with and that of releases news top we just you're record, that data this build build not those market not you the a really that's AI assets, build changing that in picture market. addressable your customers, only or you and your you're to solutions of data AI AI you. our trying calls do give First in with trying and cleansed believe or earnings lives of an don't warehouse, on if hearing Not need complete front interviews, It's but go-to-market

not information is CRM your and warehouse. that's constantly your changing, or a that way of data appearing All in of inside dynamic

other And so to you're solution static top try data, and on side build a go-to-market the bad when of AI to pretty AI going you always go outdated of it. scale almost get on

that go-to-market. have start we to for so best the of order AI data that build that BXB world a confidence in in And the with need you foundation the are foundation the lot asset is we

after ends roadblock else anybody just than who roadblock. then roadblock up different foundation a that's And any with at starts that after

the of absolutely win adding us and XX of that platform to that the years, we're so all that the together right AI believe over go-to-market BXB new we the data addition And on in data to signals to last AI go-to-market we've the be or asset, top the that of gives asset put future.

view When manager, in platform, the foundation every including company's move you would an first, foundation prospect this signals about then account doing the those the move in you we customers, it that we out you to the account not, the to is, gives that research, planning, we total think the SDR building way an to or to reach building follow-ups think market there that out companies, any companies, to day, we reach an is tasks people the out whether to executive, customer at from communications with they're have a account start to to use market, we of to the risk start flagging base addressable additions about different customers. data to full building tell and that the we demonstrating that they're

taking only capabilities SDR, op that you automate AI to actually of foundation an an tasks account on we're every out building those we're build go-to-market professional an so on the top slice executive, and and ops what And account the day-to-day, a rev sales manager, data of their and does, a can of. we're using AI

Operator

from from Our Walravens next question line will Patrick the of Citizens JMP. come

Patrick Walravens

Henry, [indiscernible] there's how Outreach, over conversational Gong, do I and the next like at feel enablement revenue like consolidating segments. engagement few step like you look years? back and see there's there's like space revenue X there's Claire. data, the seismic, I it, SalesLoft If forecasting there's like There's

of have lot a already. these guys bit a does Where You this -- all go? categories of little

Henry Schuck

competitors a to enabled and a of that go-to-market belief said, to first, new gun opportunity. generative we going to back and be how to went teams fundamental the see market, or plays We when put teams. in And AI out." "Oh, the we space leaned investments between our and off people laid engineering of And a behind this came lot into leaned product our we this we're race. I'm bunch AI Listen, a in, rearchitected and our Copilot. and platform We the

to constant, the the I every in like all one constant next to that foundation of of solutions data that is of think today will see the those going changed fundamentally the X X its for segments AI need as the so build highest you And over the quality that all is be to years. But future.

fundamentally think different foundational I a asset AI. we're players things, space from lot need that you to different build lot a the of so benefited that this with And with doing we start the fact of in

only we in time, space, scale right you AI build going can We data and at around we're have the in leaned foundation AI the this build to continue around. to go-to-market the

Patrick Walravens

follow-up. If I could ask a

interesting remarks dormant an in reactivating with little explain comment seats that made your You more? a Can Copilot. you about

Henry Schuck

Sure.

done in it's us then what for base, are are number the any think is -- customers being we not. who users that like users we across day-to-day platform week-to-week our they there I and a are as there their historically or -- has reactivated as and we doing or sending are who leveraging of would seats users day-to-day, user key our motion, are And And frequently a to unused like on signals are day, now them have use. that seen are we're target accounts. because every were sending Copilot

they accounts we're care so And to about. AI able target We're accounts to our within understand happening those understand their be that through who able would target are. would what

moments and we're our to messages, that then those Slack to that intent through through mobile. and Teams posting job identify of deliver notifications customers earnings interviews, all key call podcast on e-mail, at using and transcripts, then -- data, through data, those that so And target accounts

buyers front right one putting at we're and the their happening engage key then so at click to giving And them in the companies. moments of them customers with right those

Operator

for it turn I'll closing Henry back to over any Now remarks.

Henry Schuck

you, quarters everyone, Thank and in joining trend number momentum X the business are make for Great. tonight. not seeing. do We that excited a we us of about realized green but X line, we or shoots the are operating the

and do per Thank and we We expect best shareholder doing so, to levered believe continue to you, path night. good delight our creation cash flow by grow the value share, to that and free that. to continue long-term for is customers,

ZoomInfo (ZI) 12 Nov 242024 Q3 Earnings call transcript