Q1 2021 ZoomInfo Technologies Inc Earnings Call
Good day and thank you for standing by welcome to the assuming full first quarter here of 2021 financial results Conference call. At this time all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session.
Ask the question during the session you will meet the press star one of your telephone.
Do you require any sort of assistance. Please press star zero I would now like to hand, the conference over to you speak of today, Gary sits escape Investor Relations. Please go ahead.
Thanks, Tom and welcome to the zoom in some of its financial results conference call highlighting our results for the first quarter of 2021 with me on the call today are Henry shocked CEO and founder of Zoom Info and Cameron Hiser, our Chief Financial Officer. After their remarks, we'll open the call to Q&A. During this call any forward looking statements are made pursuant to the safe Harbor provision.
Of the private Securities Litigation Reform Act of 1995 expressions of future goals, including business outlook expectations for future financial performance and similar items, including without limitation expressions using the terminology may will believe and expressions, which reflect something other than historical facts are intended to identify forward looking statements.
Forward looking statements involve a number of risks and uncertainties, including those discussed in the risk factors sections of our filings with the SEC actual results may differ materially from any forward looking statements. The company undertakes no obligation to revise or update any forward looking statements in order to reflect the events that may arise. After this conference call, except as required by law for more information.
Please refer to the cautionary statement included in the slides the we've posted to our Investor Relations website at IR, that's human for Dot com.
All metrics discussed on this call are non-GAAP unless otherwise noted a reconciliation can be found in the financial results press release or in the slides that we've posted to our Investor Relations website.
Lastly, we plan to be at a number of conferences and investor events over the course of the quarter, including our inaugural analyst Investor Day event, which we are hosting and of virtual format on Monday June 14th beginning at three P. M. Eastern time. This event coincides with our first ever user conference. There were also hosting that week.
Please save the date more details and registration information will be available through our Investor Relations web site over the coming weeks. We look forward of your participation with that I'll turn the call over to our CEO Henry shock.
Great. Thank you Jeremy and welcome everyone. The first quarter was marked by strong accelerating growth across all of our business lines, we delivered GAAP revenue of $153 million, representing 50% year over year growth and 12% sequentially when adjusted for the number of days in the quarter.
Adjusted operating income was $66 million, representing an operating margin of 43%. These.
These results were driven by dependable execution across the entire company from new business to product development to retention our focus on continuous improvement of the core cultural value and the execution. We build on top of that has allowed us to deliver our near term financial results consistently while setting us up for long term durable.
Growth.
We had strong results across all areas of the business and I want to specifically call out the we achieved our best ever Q1 results. This quarter on three dimensions, new business, new customer additions and retention of activity.
We doubled the number of new customers added this quarter compared to Q1 2020, we also had record renewals and up sells as a percentage of beginning a C V for our first quarter as we saw demand for our products continue to accelerate with companies looking to drive of digital data driven go to market motion.
While we continue to deliver on the near term promise of this business exceeding our quarterly financial guidance and raising our full year guidance. It is the conversations I'm, having with customers and prospects that makes me confident that our long term opportunity is even bigger than what we had first envisioned.
When we founded zoom himself sellers and marketers desperately needed a better view of their potential customers and we were of world class provider of company and contact data that could help them solve that problem.
Our data was and still is today a mission critical need for businesses.
Since then we've innovated and invested hundreds of millions of dollars behind that day to asset continuing to drive material improvements in the way, we gather normalize matching cleanse that data with the use of AI and machine learning.
And leveraging that is the foundation of our fully scalable platform that powers. The digitization of how companies go to market from sales to marketing to account management from the top of the funnel to the bottom of the funnel and from new sales to Upsells and cross sells to renewals.
Our platform starts with our market, leading and highly accurate data layer delivers critical scale of the insights and signals automates. The best of actions with our next generation of workflow software and are tightly integrated activation layer engage.
This integrated suite of data and software helps businesses of all sizes and across all industries activate targeted opportunities and an efficient scalable and repeatable way.
We continue to invest in automating work for it.
Expanding the coverage and quality of the data, we published and leveraging that data asset across our platforms application stack, where a building of wider and wider moat around the company.
And our data on platform grows so does the addressable market, where our solutions are making the net making an impact.
Today, we not only help salespeople and marketers, but we also help recruiters and data operations and technology teams, we not only work with small and midsized companies across the United States, but we also serve enterprise companies around the globe.
At our analyst day later this quarter, we anticipate providing a more granular and detailed view into our plants of target this large and growing market.
The quarter included new and expansion transactions from a diverse group of customers across a broad spectrum of industries from clean energy companies like da Vinci energy to direct to consumer firms like Keurig Uber of Vera desk, and the Carolina Panthers.
Even out of company that appears to be consumer only if you look a little further you will almost always find the growing beta be motion there we.
We also brought on experienced higher works in the IDC and of Great customer story comes from modern chemical which shifted from our growing and successful cold brew distributor.
Two of provider of hand, Sanitizers sold directly to businesses in the middle of the pandemic.
We're lucky to work with firms of all sizes from all industries, but we're especially proud to provide our solutions to companies that are able to leverage our data technology and insights to drive growth of new and unknown markets with entrenched competitors our platform leveled the playing field for how these companies are able to acquire them.
And the customers.
We also continued to successfully execute our large and growing.
Enterprise opportunity with a focus on driving more than.
With a focus on driving more from the greater than $1 billion of seat expansion opportunity, we've identified within our existing enterprise customers increasingly.
Increasingly our platform is becoming the strategic imperative for large organizations looking to transform their CRM from a system of record to a system of insights.
This imperative and strategy is driven from the C suite and has opened the door to have meaningful conversations for us across the enterprise, while also leading to larger more transformational engagements.
This quarter, we closed one of our largest ever transactions of multi year eight figure deal. While we also more than doubled the additions to the greater than $100000 ACB cohort year over year.
Of the March 31, we had more than 950 customers with $100000 or more in the ACB up for more than 850 last quarter.
While others trying to target the enterprise opportunity are still using F. T P sites to manually drop and enhance files, we released our new API webhooks, allowing our customers to programmatically receive a continuous stream of our data and insights technology that is of full generation ahead of F. T P enrichment and a material improvement.
To the more modern request and response method.
This new functionality allows us to deliver more value to enterprises and better target the data out of the service opportunity that were uniquely positioned to win in following our acquisition and integration of the ever strength.
Additionally, during the quarter, we added more resources to capitalize on the growing international opportunity, where we saw new customers join us from Dubai, Sydney, Vienna, Rio de Janeiro, Helsinki, and Berlin to name a few.
March was our strongest month ever in our international segment with increasing win rates and demand across Europe, and accelerating traction in the U K, Ireland, Australia, and New Zealand and Canada International.
<unk> revenue grew 14% on a days adjusted sequential quarter basis, as we continue to see for international customers embraced data to drive efficiencies in their sales and marketing processes.
On the product side, our investment to deepen our integration with Salesforce is paying off with rapidly increasing adoption of our new sales force sync capability. This capability allows users to Mary first party sales force data directly into zoom infill filters from account data to lead and contact data and now opportunity data.
We saw more we saw more than eight fold increase in the number of accounts that have enabled this bidirectional sync.
Our sales engagement and automation platform engage also continues to accelerate engage ACD doubled compared to Q4 2020, and we're seeing of 25% increase in user adoption of the core of zoom info platform when customers combine the use of zoom info and engage we also see the benefits of this adoption.
Within our retention and renewal numbers, where customers who are dual users of engage and zoom and felt have materially higher renewal and retention rates than those who are zoom info only customers.
This is one of the most exciting things about the engage platform. It has multi area of benefits customers by engage which increases the adoption of both engage and zoom info and investment behind engage has material benefits across our recruiter and international packages, where that product is a built in offering.
This quarter, we significantly expanded the integration points between engage and the zoom info platform enhancing the ability to search and import contacts from zoom info and sales force into engage and allowing users to configure target market buyer personas to receive an automated feed of recommended contacts to pursue.
More than 40% of active users of use. These features just one month after release.
We're also integrating our in our sales force zinc capability, enabling customers to automatically synchronize sales force data and engage well, while we're adding additional integrations into CRM and marketing tools like hub spot and building out enhanced administrative and managerial controls within our platform.
Our customers also continue to adopt the broad spectrum of our market, leading solutions, including our <unk> intent data, which get them closer to end market buyers by building automated workflows around intense spikes of topics relevant to their products and services.
These data driven motions have fueled the significant increase across our intent products with intent ACB doubling year over year.
Our inbox AI product, which automates the creation of an enrichment of contact lead and activity data from of sellers and box directly into CRM tripled year over year.
And from an overall platform engagement perspective, we saw a 12% sequential increases in monthly and daily active user adoption, demonstrating our ability to scale users, while also increasing their usage and adoption of our platform.
The market reaction to our platform continues to be incredibly positive since our last earnings call of Zoom Info was named a leader by Forrester research in the Q2, 2021 Forrester wave for BTB marketing data providers, receiving the highest possible scores in 18 categories, including data security and privacy data.
Acquisition and processing integrations, API and applications sales support solution packaging and pricing and product roadmap and vision.
Forrester stated that zoom info is the best fit for organizations looking for a comprehensive data solution with an expanding array of complementary applications built on a shared data foundation.
On top of that we also received 26 number one placements from G too and we earn the trust radius Top rated award for sales intelligence software for the fourth consecutive year.
Finally, we attained G D P R and C. C. P. A practices validation from trust dark the month long process to achieve this validation included deep audits of our privacy practices and reinforces both our data privacy leadership and our focus on being privacy forward to earn the trust of our customers.
Over the last 12 months, we grew our team by nearly 50%. While we have spent the last year working from home our focus on improving ourselves 1%. Every day has continued to drive an incredible amount of internal mobility as our employees challenge themselves to master new skills from promotions to cross functional moves.
The opportunities for career advancement at Zoom info far outpaced the industry average we encourage every member of our team to embrace new responsibilities to achieve both personal and professional growth and our employees are looking forward to getting into the office. Many for the first time ever and meeting their teammate in person.
Once again returned the audit and I'm excited.
Catherine.
Person with colleagues again as we're preparing our offices around the world to accommodate a hybrid returned of work model I'm confident that this team will continue to define new possibles. When we're all innovating collaborating and learning together in person again.
With that I'll hand, it over to our Chief Financial Officer Cameron Hydro.
Thanks Henry.
Q1 was a great quarter with strong financial results that exceeded our guidance, we saw broad based strength across the business and as Henri indicated we achieved our best ever Q1 results for new business, new customer additions and retention activity.
This quarter was also highlighted by our successful expansion with enterprise customers growing sales of our newer products and strong international growth.
As a result, we are raising our outlook for the year and now expect to deliver revenue growth of 41% in 2021 up from our prior guidance of 36% at the midpoint.
We're also guiding to adjusted operating income in the range of $290 million to $294 million up from our prior guidance of $280 million to $285 million in.
In Q1, we delivered GAAP revenue of $153 million. This exceeded our 144 to 146 million dollar of revenue guidance range and represents 50% year over year growth and 12% sequential growth is adjusted for days in the quarter.
In the first quarter adjusted operating income was $66 million. This also exceeded our guidance range of $61 million to $63 million and represents a margin of force.
During the first quarter, we continued to see strong new customer additions and positive momentum with respect to retention and up sell activity. We also continued to successfully execute against the large and growing enterprise opportunity.
We had strong enterprise renewals in our enterprise upsell motion is really hitting its stride in.
In the quarter, we doubled the number of greater than 100000 dollar a CV customers added as compared to the year ago period.
As a result as of March 31, we had more than 950 customers with $100000 or more in HCV.
For more than 850 last quarter.
We also continued to expand beyond software and business services with particular strength in finance insurance real estate and manufacturing verticals.
Additionally, during the quarter, we added more resources to capitalize on the growing international opportunity, which resulted in days adjusted sequential quarter international revenue growth of 14%.
With international revenue growing faster than the overall business, we now have over 10% of our revenue coming from international markets.
As we invest in additional growth sectors, our focus remains on delivering durable revenue growth and absolute levels of adjusted operating income.
As a result, as we drive elevated levels of growth. There is the potential of the margins may be impacted.
As we've outlined in the past calculated billings and our P. O can be imprecise metrics with noise obscuring the signal of in period activity as.
As a result, we focus on days adjusted sequential revenue growth, which is the growth in total revenue divided by the days in the quarter compared to the prior quarter.
We delivered 12% days adjusted the sequential revenue growth in the first quarter strong results relative to our expectations and great momentum for the remainder of the year.
This performance provides further confidence in our ability to raise our guidance for 2021.
As we move onto expenses, we increased our investment in research and development in the quarter as planned investing to expand our data advantage and further extend the workflow and activation capabilities of our platform.
We also continued to increase sales and marketing capacity to go after the large and expanding market opportunity as a result in Q1, we delivered adjusted operating income margins of 43% in line with guidance.
Turning to the balance sheet and cash flow, we ended the quarter with $356 million in cash cash equivalents of short term investments.
In the first quarter, we generated operating cash flows of $93 million, which included approximately $7 million of interest payments in the quarter.
As I indicated on our last call, we repaid part of our term loan and repriced the remainder while issuing a new senior unsecured bond in the first quarter contributing to the $34 million in cash used for financing activities.
We expect those transactions will reduce our cash interest expense by approximately $3 million from 2021.
Unlevered free cash flow was $98 million for the quarter almost 150% of adjusted operating income as both billings and collections were strong in the quarter.
Looking forward, we anticipate unlevered free cash flow conversion rates in the high nineties are one hundreds as a percentage of adjusted operating income on an annual basis.
With respect to the liabilities and future performance obligations unearned revenue at the end of the quarter was $262 million and the remaining performance obligations or our po or $592 million of which $461 million are expected to be delivered in the next 12 months.
As of March 31, we carried $750 million and gross debt at a net leverage ratio of one six times trailing 12 months adjusted EBITDA or 1.2 times trailing 12 month credit agreement EBITDA.
Lastly, before we turn to guidance I would like to welcome Prasad codon beat for the team we announced the Prasad was joining the company as Chief Accounting Officer in October and since then he has helped us clients of KPMG get through year end before joining us in March.
Led engagements with some of the with some of the largest software and subscription companies in the world, including Adobe and Salesforce.
With that I'll provide our outlook for the second quarter and updated outlook for the full year 2021.
For Q2, we expect GAAP revenue in the range of $161 million to $163 million and adjusted operating income in the range of $68 million to $70 million.
Non-GAAP net income is expected to be in the range of 11 to 12 cents per share.
Our guidance implies year over year revenue growth of 46% at the midpoint and an adjusted operating income margin of 43%.
We are updating our full year 2022 guidance as follows we now expect GAAP revenue in the range of 670, the $676 million.
An increase from our prior guidance of $645 million to $655 million and adjusted operating income of $290 million to $294 million, an increase from our prior guidance of $280 million to $285 million.
Non-GAAP net income for the year is expected to be 49 to 50 cents per share an increase from our prior guidance of 47 to 49 cents per share both amounts based on 405 million diluted weighted average shares outstanding.
And we anticipate unlevered free cash flow to be in the range of 290% of $295 million, an increase from our prior guidance of $270 million to $280 million, our full year guidance implies 41% revenue growth.
With that let me turn it over to the operator to open up the call for questions.
Thank you and as a reminder to ask the question Press Star one.
Of the Nikki and we do ask that you. Please limit your questions to one day.
The move yourself from the queue, Chris the account in our hash key.
The first question is from C Tech panic right with Mizuho. Please go ahead.
Thanks for taking my question Henry.
Henry you talked about the strong upsell and renewal I'm wondering what's the percentage of your customer and the enterprise customers are now using and gifts platform and also could you talk about you know because he and endless string you said last quarter.
<unk> completed the integration what sort of adoption of our cross selling you saw and the best.
Yeah, Great I think first a very engaged is still very very new and so its a tiny tiny percentage of our customer base. That's using gauge today and so we feel really good about the upside opportunity. There we're getting great feedback from the customers who are on it like I mentioned, we're seeing high renewal and retention rate.
<unk>.
From the customers who are using both of the menthol and age and then every investment dollar range engage doesn't just go to enhance engage but it also goes to enhance our offerings internationally and our recruiter offering where engages built into those packages and so we feel really good about the investments there, but it's still really early innings for that.
On a click of G and ever strength, what we did with the clicker Geos that is that we built it into the industry's first streaming intent product and that product is growing tremendously across our base. It's also built into our elite package and so we're driving driving more per.
Prospects and customers from our advanced and professional versions of our platform into the elite version of our platform, where they get intent and streaming intent within that platform and and that asset from a data perspective, it's feeding our intent offering which we think is one of the the operating that will be here for you.
Years and years to come our customers want to be in front of their prospective customers. When they are in market for their products and services and in turn gives them visibility into what their perspective customers and prospects are doing and researching online and so we feel really good about that offering and the click of G asset as being.
Leveraged for that.
Thank you on the ever strength side, sorry city on the on the average string side.
The fully integrated the average stream data asset into our data out of the service offering and that's the key offering within our enterprise customers and in the larger and the and the very large deal that I talked about in the prepared remarks that customers also taking advantage of enrichment, that's being fed through the combination of the average string of zoom info data.
Assets.
Andrew Thanks for the color.
Okay.
Our next question comes from Mark Murphy with JP Morgan.
Yeah. Thank you congrats on a terrific start for the year.
I wanted to ask you the I think mathematically Cameron, there's $8 million of revenue upside in Q1, but the fiscal year guidance is moving higher I think by about $23 million.
Are you seeing something different in the pipeline, that's driving greater confidence in the rest of the year.
In other words.
Maybe this international strength is.
The that are flowing through or is it more.
The agent recruiter offerings, starting to feather in in the back half.
So yeah I think for.
First off certainly the the.
C V that was generated in Q1 above our kind of initial model and guidance as more of than the 8 million revenue that was recognized so that certainly contributes the we'll continue to see that revenue kind of throughout the year and I do think that from an execution standpoint, we are.
Firing on all cylinders with respect to many of the <unk>.
Expansion opportunities that we have both internationally and with engage and the other new products.
So it does provide us with a healthy baseline to bring up our growth assumptions.
Okay, if I could sneak in just a very quick second one.
Henry the can.
Can you just explain why is international growing faster than domestic just given you know theres the stronger economic rebound domestically than we have more of the COVID-19 flare ups that are still have it happening internationally.
Yeah, Mark I think a couple of things first internationally, there's obviously lower penetration there than there is domestically I think it's the first thing I think the second thing is there really isn't an offering internationally that can bring together data coverage and technology for go to market team.
The way that we can't we are the the way that we can and so when were going there, it's largely evangelistic, but the.
But the customers are really excited about the opportunity to use data oftentimes for the first time.
Two impact of go to market effort and so the market is.
The market is ready for this type of solution internationally. They haven't seen a package solution the way that we can bring it.
Before and so when we're able to show them, how they can actually truly digitize the way. They go to market. The response has been overwhelmingly positive.
Excellent. Thank you very much.
Our next question comes from Alex Zukin with Wolfe Research.
Hey, guys. Thanks for taking my question and congrats on the quarter. So maybe it's just the first of all for Henry.
Obviously, the standout numbers with the 50 plus percent growth in and of 100000 dollar of customers and you called out in the eight figure deal. So can you maybe talk about the pipeline for the rest of the year comment on it depend emmick is actually driving some shortening of sales cycles for you given the pull from the demand environment and even the push from your brand equity are really coming together post.
P O as well.
Yeah, I think actually and thanks Alex.
I think actually one of the things to think about what that eight figure deployment is really how it came together and this was a company that for years ago had come to US with just 300 users. They were on one of our legacy platform. They continue to add seats over time and then in 2019, they migrated to our combined platform. So the.
The new platform is what they were on and really once they got there much like many of our other customers that really started in the acceleration of what was possible with all of the other data assets and technology and software tools. We had built in to the new platform and so this was a customer of that then started adding new seats because of the legacy platform.
<unk> didn't have as much data coverage.
The new platform. So they started adding new users to the platform and then they baked us into their CRM system, and then they audit and tech data and then they upgraded to the Elite addition, where they were able to get where they were able to get in pet and workflows and lead scoring and routing and account enrichment and then they added inbox AI to their.
Air to the offering and so this is a customer that you had been a customer for with us for years, but once they are gone onto the new platform and migrated over there they were able to really open the opus to all of these other features and functionality and data sets that we can offer them and so we're seeing more.
And more customers in the enterprise, but also across our customer base come to that same realization and start taking us up on all of the enhanced the offerings that we're able to provide them and in the enterprise really the.
The other sort of tailwind for US there is the acquisition of average strength significantly broadened the data coverage, we're able to provide further for enterprise clients, which means we're enriching more data for that and when we plug into CRM, we're resolving back to an entity in contact.
The contact records with the within zoom into them more often than we ever were and so we're seeing enhanced the opportunity within the enterprise really the.
To finish that transformation from CRM being that the system of record to CRM being a system of insight and then we've invested really for the last year behind the go to market motion in the enterprise as well not that comes from a product perspective, where we continue to enhance the offerings that we offer in the enterprise, but also from a go to market.
The count and talent perspective, where we brought we brought in new Enterprise leader then.
And reorganize the segmentation of accounts in the enterprise. So that we can make sure that we're we're really articulating the value we can provide across the organization and so youre seeing a lot of that come to fruition now.
Got it that's Super helpful. And then the Cameron just maybe one for you I know you're all of these questions, but if I look at the Delta in kind of the the patterns around the calculated billings versus current RP O you're seeing sequential trends improve and calculated billings for Q1 versus Q4, but if I look at the sequential change in Qunar.
It's about the same roughly on a dollar basis in terms of the amount of current RP O added from Q4 to Q1. So just walk can you walk us through was there anything different in the billings calc that made that bigger vs depressed the CRP o'callaghan or any help there would be appreciated.
So I'll start with billings is an imprecise metric as well as RP O. As you kind of think through interest based on the the amount of noise you get from timing of billings duration of billings expiration of contracts et cetera, and you know that.
That occurs within the ERP O based metrics as well.
One of the things to consider is the Q4, just seasonally is our strongest quarter from a.
From an in period of activity perspective, So you know the the number of or the the amount of bookings that you get in terms of RP O tends to be largest in Q4 and that.
That kind of pull forward as you think about the expiration of contracts and in Q1 tends to sort of work that comparison, a little but again I think if you're looking at in period activity and how to best gauge. The the cleanest metric there is always going to be.
The sequential growth on the revenue as you adjust for days.
And if you look at that the Q1.
Sequential growth relative to Q4 once you get out the acquisitions was actually a modest improvement.
Understood. Thank you guys.
Yes.
Our next question is from Michael <unk> with Wells Fargo Securities.
Hey, there. Thanks, good afternoon, Cameron the Unlevered free cash flow number certainly stands out as well more than 60% of margin is certainly impressive you mentioned just in the prepared remarks, some billings and collections related commentary, but is there anything else from a seasonal profile perspective for us to be mindful of as we model that line out through the course.
Of the year, given the upside I think it was more pronounced than we were modeling. Thank you.
Yes sure Great question.
Look Q1 is always strong from an unlevered free cash flow of perspective, just based on the normal seasonal strength of sales activity in Q4. So we collected on what was of great.
Quarter in Q4, plus we have continued to implement operational improvements around collections that have yielded.
Really strong results and if you think about you know.
In the SaaS business I was thinking about it as days billings outstanding as opposed to the days sales outstanding and if you take days billings outstanding we've actually improved to a level, that's even better than our pre pandemic levels had been.
Which helped to drive cash flow in Q1, and then certainly we did have a.
Really great.
Quarter from a sales and billings perspective in Q2 as well that also helped to drive.
Incremental cash flow.
So overall as a result of the operational improvements and improving growth.
We do expect that are for.
Free cash flow of conversion.
Will be improved in 2021, and the as I mentioned in my prepared remarks that we expect to be in the the high nineties are hundreds of as a percentage of adjusted operating income for the year.
Helpful. Thanks, Nice start for the year.
Thanks.
Our next question is from spans not skewing of Morgan Stanley.
Perfect. Thank you so much guys.
I wanted to go back to the question of international opportunity.
The <unk>.
Certainly very impressive start to the year in that part of the business. How are you thinking about it for the remainder of the year what are some of your initiatives.
Hoping to implement.
As we as we go forward.
Sure I'll jump in and Henry can add color of if he wants to but we're really excited about the momentum and success from the early investments we've made in international markets from.
We expect to put more wood behind that effort.
One of the exciting things is that the effectiveness and efficiency and scalability of our international teams has been similar to that that we've seen in the U S.
And so I think the for all of our perspective, the the hardest part is really the travel restrictions.
And so.
And so forth that we've experienced if we would've had an office open in Europe, and probably Australia already if it weren't for COVID-19, but as the world opens up to a foreign visitors and lending teams to seed.
A team in those.
Regions, we do plan to often open offices internationally to further pursue the strength of that we're seeing there.
So just to piggyback on that Kamran. So as we think about the back half of the year are you figuring in a greater amount of TNT.
Just between returning to the office of domestically and potentially also the other international locations opening up.
And it'll be modest at best.
It's clear our sales motion doesn't rely on.
A heavy amount of in person visits there will be some training, but our expectation is the will yes, and some experienced folks that are deeply ingrained in the culture over there to start offices, and then ramp with local hires and and the.
The success that would follow.
Got it thanks guys.
Thanks, Dan.
Thank you. Our next question is from Terry Tillman with choice.
Yes, Thanks for taking my question and congrats as well and Hey, Henry of Cameron and Jerry maybe in terms of Henry the sales force zinc.
The innovation of the bidirectional data feed you know what.
The revenue do you actually get from that and whether it's sales force or other isd the.
The second part of this is I would think as you're starting to get the seven figure eight figure transactions people are gonna take notice. So I'm curious what you're seeing now in the ecosystem development side. Thank you.
Yeah, Thanks, Terry I think the on.
On sales force synced up the capability that we've opened up and are advanced in our lead packages.
And so customers will need to migrate from the professional addition, which is kind of our starter edition two advanced can of leaped to take advantage of the sales force thing capability. We obviously believe this is an incredibly valuable feature because it allows you to take your first party sales force data and then Marietta zoom info.
Data, they get tighter filters and better views on where your opportunities are what what accounts you should be engaging with which contact from leads are no longer at their firms and you can see that with a couple of clicks inside of the zoom info platform and so really powerful technology and we're using it out of the lever to migrate migrate.
People to the to the more advanced solutions solution packages I think from an ecosystem perspective.
Last quarter, we announced a partnership with snowflake and their data marketplace next quarter, you'll see us announce a couple of new partnerships with cuts.
What the customers, where our data and our platform can be embedded in a number of different go to market platforms and systems, we really do believe that not only should our customers be engaging with our platform on.
On zoom on zoom info the application, but that we should also be embedding those solutions inside of the systems that theyre going to market with the weather that sales automation of our CRM or marketing automation and so really expanding that ecosystem has always been a goal of ours.
And you'll see us continue to do that over the next the next quarters.
Thank you.
Our next question is from Raimo lanes Shah with of Barclays. Please go ahead.
Hey, Thanks for squeezing me in.
The Henry can you talk a little bit of bounce.
The.
The the evolution on the recruiting side, so where are you in terms of like your ability to cross sell.
In terms of sales engineering et cetera, and what momentum you're seeing there. Thank you.
Hey, Raimo. Thank you for the question what I would tell you is we're still really early with the recruiter platform. We are in market. We do have paid users of the platform. We expect to do a much larger launch in June and we expect that launch to start with focus on existing customers, particularly.
With the <unk> in the enterprise in the upper mid market and ultimately what we're building.
Throughout this quarter and throughout the rest of the year is really of digital motion from candidate sourcing to.
The candidate engagement to interview and so the ability to give recruiters a suite of not just data, but technology and tools that let them.
That let them interact with that data and then feed that that interaction and activity into their ATF systems and so we're working on a number of new Ats integrations for the recruiter package and we expect to have a dedicated go to market motion on the recruiter product this quarter and then we expect to access.
The rate that in the back half of the year as well.
Okay, Perfect and then one follow up for Cameron. So I saw the debt refinance could you just maybe remind us like the benefits you get from that and what's the next steps, including the next steps going forward. Thank you.
Sure.
There are a couple of benefits that we get from that one is we did take advantage of.
Of the really strong rate environment in February so we lowered our rate across the board between both the term loan and the the new bond.
Additionally, it gives us added flexibility going forward so the.
The unsecured bonds, obviously has.
Sure of covenants and whatever also it also enables us to take on more.
Term loan debt, if we needed it going forward for potential acquisitions or other gross growth initiatives and then finally, we also increased the size of our revolver to $250 million again to give us more flexibility going forward. If we find good opportunities for continued investment.
Perfect. Thank you congratulations.
Thanks very much.
Thank you. Our next question is from Brent <unk> with Piper Sandler.
Good afternoon, Henry I wanted a follow up on a common threat that's being asked here just around the of the amazing strength of the business.
The dividend.
Italy recall the conversation with an investor just nine months ago, where we had this heated debate around whether or not you could sustain 30% from 2021.
Q1 marks the third straight quarter of accelerating growth of 48 five per cent of the gets the highest in more than two years. My question here, what's changed over the last six to nine months where of the expected growth rate of your business.
Would improve from what 27% Kinston consensus used to now 41% that is the material change last time I checked I think we're still in the global pandemic. So it feels like a lot of small things seem to be working maybe it's just the power of the the platform. That's resonating I don't know, but any additional color.
You can give us here because the magnitude of the pace of change in the growth rate certainly seems much much stronger than anyone's thinking just nine months ago.
Hey, Brett. Thank you for the question I think you know I wish I could tell you there was like a one silver bullet here there really is and I think the thing that I see in this business every day. It goes back to that cultural focus on best in class execution, getting 1% better every year and what you see in every department over the last nine months.
Is that they don't even look like the like for like day look nine months ago. We've advanced in every area of the business. We have sophisticated in every area of the business. We brought in new talent and stronger talent in every area of the business. We've pushed our employees to improve in every area of the business and this is going to be a business that consistently executes further.
Long term, we're building a durable growth business, that's focused on best in class execution, and you're just seeing that come through.
So the in all here for sure Cameron just quickly on the non tech vertical you called out financing insurance real estate and the manufacturing are you seeing of those as incremental kind of helping drive the logo strength year on top of the really strong adoption in tech or are those the new <unk>.
Areas kind of helping offset maybe as a slowdown in just the the traditional tech market, where you are really strong.
Yeah, no I really poses incremental there.
They are coming off of a relatively small base, but even within the software and business services segments that we have traditionally been the early adopters for for business.
We continue to see really strong growth really strong enterprise.
Growth and those parts of our businesses are still growing in the.
And this quarter in the <unk> as a percent. So they continue to do really well and then we're picking up incremental growth from some of those newer verticals that have traditionally been.
A little slower in terms of adoption.
Great well impressive thank you.
Okay.
Our next question is from Tom Roderick with Stifel.
Great Hi, gentlemen, thank you for taking my questions of Henry.
As this business continues to scale and I think we've all sort of many people on the call them in on the the eight figure deal you talked about and certainly a big lift in hundred K plus deals. It certainly seems like there's a lot of things you need to be.
Adding in investing and supporting in the in the go to market function can you talk a little bit more about you know what what functions you put in place.
In sales too to support larger deals to support the nurturing of those relationships as they continue to get bigger and ultimately how you know would be intent of your old customers on when they're ready to pull the trigger on much bigger deals and then secondarily how is the competitive landscape changing as you're finding your way into those seven and even eight figure deals.
Hey, Tom Thanks for the question I think what you. If you look today at the way our go to market organization is organized and you compare that with two years ago, we really have sophisticated the way we go to market, especially in the enterprise and so today, we have a really robust solution sales team.
This is the team that comes in for more sophisticated engagement more sophisticated solutions that we're selling into when we bring that team into deals we see material upside on the size of the deals we're able to close and the and the the sales cycles, we're able to.
We're able to shrink when we bring that team in we inherited us very strong sales engineering team with our acquisition of average strength, that's being led by the former COO of ever strength is now running that full motion for us here at zoom info its an incredibly strong motion they're integrated.
<unk> into our sales motion so again, when we get into the enterprise. It's not just an account executive and account executive on that deal or an account manager you have an account executive and account manager of solution sales person.
And then someone from sales engineering, who is focused on the data aspect of the business and we're really able to do consultative selling in those in those situations and that all of those things that I just outlined they just werent here two years ago, and so we've been really thoughtful about where we hire how we support our enterprise sellers with the right resources that non.
Only make them successful, but that make the enterprise customers excited to engage with us and consultative ways and we're seeing that pay off across the enterprise.
And then do you want to remind me the second part of that question. Just the follow up is just as the competitive landscape changing any of these deal opportunities get larger.
Not really the competitive landscape of the deals get larger is still pretty unchanged.
Got it and then you know this is a little bit of a follow on to that very question and you sort of answered it with the with the ever string example, but you've had some really nice success, making tuck in acquisitions that are becoming sort of critical components of the product offering.
You know as I asked the question about go to market. How are you you know again supporting the.
The corporate development function as you make these acquisitions and making sure. The great effectively is that team getting larger you prepare to do larger deals here going forward just give us your sense on that going forward as well.
Yes, we think we continue to believe that M&A is going to be a strong growth driver for us, particularly where we can find a solution that gets.
Remarkably better with our data asset at the shared foundation that we can sell across all of our go to market teams and so we do view M&A as a strategic differentiator for our business. So we are going to continue to grow that corporate development team.
Thank you will see us continue to do M&A deals throughout the throughout 2021, I think the way we look at deals is and.
And we don't tend to get fixated on size I think what we get what we stay focused on is is this an asset that all of our sellers can sell can we quota it out to our quota carrying representatives can we enable them to sell those solutions can they become core parts of our offering and can they become strategically defer.
<unk> because of our data and so if we can line those things up and we can see M&A transactions that are accretive in the short term I think those are acquisitions, we're going to be really excited to do and we're going to be you know to the extent that we can be we're gonna be sides agnostic to them.
Wonderful congratulations on the results. Thank you.
Yeah.
Thank you. Our next question is from David Hynes with kind of coin.
Hey, guys congrats on the results.
So Tom was just asking about the quality of ads as you go up market I'll ask you about the quantity of if you had the characterize.
The the record number of new customers that you're adding.
Would you attribute it more to top of funnel strength or improving win rates.
And I guess I'll have to follow up while I'm at it so.
If you don't win which I'm sure happens on occasion, what's typically the top reason.
The.
The last deal with site.
So I'll hit the first question and then all of Henry to talk about.
Why are we don't potentially win.
You know at the top of the funnel we are seeing.
You know more leads and more qualified leads than we've ever seen before we are also we do continue to see our win rates inch up over time as well. So again I think a lot of that is we are focused on being just 1% better every day and when you apply that across.
Multiple layers within the funnel.
Really starts to compounds on itself for real success across the board and I think that's what we're seeing in Q1.
Yes.
Really strong momentum there.
In the DJ I think when we lose.
In most in almost all cases, we're not losing two of competitor or a different solution, we're really losing to no decision.
And so what we're focused on doing internally from an enablement perspective is to ensure that when we're engaged with the company that we're engaged with all of the right decision makers, who can make a purchase so so that we get all of the right people to the table and we're best able to articulate the value of what our solution brings to the entire spend marketing.
Asian, but we're not seeing anything.
Specific around when we're losing or a lack of of certain product feature or data coverage. I think we're just we're losing today to no decision yet that makes sense. Thanks guys.
Thank you. Our next question is from Kash Rangan with Goldman Sachs.
Alright, Thank you very much congratulations on the quarter and congrats on the hiring per sub as well I have two questions for you of Henry one is Oh.
As we get past the vaccination patient hopefully we open up.
Is there a possibility that that you're contemplating that the fair amount of.
Selling activity will actually shift of in person meetings, and therefore digital engagement as source of getting leads et cetera.
That probably takes a bit of a back seat people go out to meet clients in person and secondly, as you look at engage if you can talk about how much more white space. There is for engage before you bump into other established categories in the CRM space. Thank you so much.
Yes, Thanks cash I think look first we really do believe the digitization of the go to market motion of the one one way door and really of the durable change that's not going to go back and so we don't view.
We don't view this as like a temporary reallocation of T. N E R conference spend or or anything like that there is strong secular tailwind that are of walk across companies of all sizes that were at work before the pandemic hit and were really strong secular tailwind for us there too and so we feel this tailwind we feel like the market is.
Growing that more and more people are raising their hands to want to go to market in the data driven way and really the that's happening with customers of all sizes from the largest enterprises.
For the smallest of small businesses and that we play a critical part in their ability to go to market in an efficient and scalable way.
Think there will be more travel hopefully in the back half of this year, but that's not going to change our position from a from a growth perspective, we don't believe that that's going to impact our customers and prospects the dire to really big begin their their digital transformation from a go to market perspective.
Sure.
And on engage.
Yeah.
Lots of White space I think we're super early and that category. So a lot of white space around sales automation and getting the most out of your seller then automating their their daily tasks and integrating that back into their CRM systems and their systems of record and I don't view that as a as the.
The product that's bumping in to CRM or that will run out of white space and start bumping into CRM, we see a really big market. There that we're really really early in and see no signs of of real penetration across our customer base.
Thank you very much.
Thank you. Our next question is from Koji Ikeda with Bank of America.
Hey, guys really nice quarter question for Henry or Cameron Big Big Picture question here.
I guess, how much of the Q1 bookings outperformance and the pipeline build during the quarter, especially with the bigger deals is coming from organizations that are still operating with the pandemic mindset versus organizations that are now really ramping up for the post pandemic world. Thank you.
Yes, I think we.
I think it's a pretty Ah.
Yes.
I don't think we see.
Organizations.
Sort of correcting for the pandemic World anymore, we think that's largely behind us and so what we're seeing mostly is organizations trying to bring the life, especially in the enterprise their CRM systems their marketing automation systems their sales automation system.
They're trying to get high ROI and real engagement out of those systems and they view us as the strategic partner to be able to fill those systems with insights and really drive adoption and engagement from the frontline sellers and their marketing teams through those systems and so I don't really I don't think anyone is focused on the <unk>.
Pandemic mindset, everybody is focused today on really digitizing their motion.
Got it thank you for taking my questions in the cause.
That's on a great quarter. Thank you.
Thank you.
Our next question is from Robert Simmons with RBC capital markets.
Yes.
Hi, Thanks for taking my question I was wondering could you talk about what youre seeing from the more impacted the industries.
Sure. So historically those more impacted industries are.
Smaller kind of portion of our of our business of pre pandemic. It was only 4%, but we are seeing that.
In certain areas the that they're starting to come back a little more strongly. So if you think about retail there are a number of retail customers that are coming on even in industries like sports and hotels, we're starting to see an uptick we signed the.
The New York Giants and Carolina Panthers in the in the quarter and we also signed some larger hotel chains as well. So I think we're starting to see those come back, but again, a very small part of the business and.
It's not a material driver to growth of at this point.
Got it great. Thank you very much.
Our next question is from Brian Peterson with of Raymond James.
Great. Thanks. This is Alex Sklar on for Brian Henry Henry just one for you and it's actually follows up on your answer the cash from cogent questions, but I wanted to ask about the time the value of your platform for customers. Obviously go to market models of clearly changes during the pandemic and I'm curious at the time the value was changed from blocks are with that and if there's certain verticals that are there.
Adding faster rois. Thank you.
Yeah, I think we've always been really proud of our really quick time to value of the zoom into the solution.
This is a solution that you can buy on a Monday the onboard it on a one day and really be seeing value on a Friday now there are differing types of implementations getting this and your sales teams hands and having that sales team.
Really seeing value and return on that investment that happens in a really short period of time, if we want to do a deeper implementation potentially with a data science team that is building complicated model for a territory planning exercise or an account prioritization motion.
It might take six.
Six to eight weeks, but even there we feel like we're adding value across those six day weeks and we're getting to a full deployment by the end of that eight weeks, but mostly in the process. We're also getting sales teams ramped up on the product and Theyre seeing value right away. So really quick time to value with our solution across companies of all sides.
Yes.
Alright, great. Thank you.
Yeah.
Thank you and our last question will be from Pat Walraven from JMP.
Oh, great. Thank you and let me add my congratulations.
So the Henry can you give us an example of something that you would like your platform to be able to do in the future of that it can't do today.
Okay.
Sure.
I think one of the areas, where we have a lot of opportunity is something that you've heard in the sales and marketing tech space for the last decade, which is the concept of aligning sales and marketing together and today, we have a number of solutions that serve both marketers and sales people and.
In the future.
I think in the future tying together of those use cases and aligning them in our platform is an area of huge opportunity and so if you think about our websites tool of our form complete tool. These are tools that are helping the market or drive top of funnel conversions, having that top of funnel conversion feed into an <unk>.
STR view of notification of inside of the zoom info platform that drives the next best action based on automated workflow motions at the marketer of set up that lead come then it automatically assigns to an SDR. The STR of in our view inside of zoom info, where they see the leads that are assigned to them. The one click to a more.
<unk> to drive an outbound call or an automated.
E Mail flow and then analytics are provided underneath that so that marketers and sellers are fully aligned from the top of the funnel to the bottom of the funnel I think that's a really big.
Big alignment that we're best positioned to you because we already have the eyes of marketers and sellers within our platform and so really aligning those two sides of the house I think it's the big opportunity for us in the future where today, we have a lot of the pieces to do that and we need to tie them all together.
That's cool so would that get rid of this problem of the marketing qualified lead versus the sales qualified lead.
Yes, it would certainly align those two.
Stakeholders under one umbrella for sure.
That would be cool thank you.
Great well, thank you everybody.
Thank you everybody we're excited to be hosting our first ever analyst day on June 14th and really hope that you'll join us as we do a deeper dive on the business and the durability of our growth and profitability model I'm confident that it'll be a fun and engaging event and we hope to see you all of their June 14th.
<unk>.
Thank you and this concludes today's conference call. Thank you for your participation and you may now disconnect.
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