Q4 2021 ZoomInfo Technologies Inc Earnings Call
Good day, and thank you for standing by welcome to consume <unk> fourth quarter and full year 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 to ask a question. During this session you will need to press star one on your telephone.
Please be advised that today's conference may be recorded if you require any further assistance. Please press Star then zero I would now like to hand, the conference over to your host today Gerry.
<unk> Investor Relations. Please go ahead.
Great. Thanks, Michelle and welcome everyone to zoom into those financial results conference call highlighting our results for the fourth quarter and full year 2021 with me on the call today are Henry shock founder and CEO of human film camera and Hydro our Chief Financial Officer. After their remarks, we will open the call to Q&A.
During this call any forward looking statements are made pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act of 1095 expressions of future goals, including business outlook expectations for future financial performance and similar items, including without limitation expressions using the terminology may will expect.
Anticipate and 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 factor sections of our filings with the SEC actual results may differ materially from any forward looking statements.
Company undertakes no obligation to revise or update any forward looking statements and other reflect 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 will be posted to our Investor Relations website at IR Dot zoom info 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.
We will be participating in a number of industrial events. This quarter and we're excited that we're able to meet with more investors in person and lastly, we plan to host an investor event on Thursday June 2nd beginning at three PM Eastern time, we ask that you. Please save the date more details and registration information will be available through our Investor relations.
Website.
Look forward to your participation with that I'll turn the call over our CEO Henry shock.
Yeah.
Thank you Jeremy and welcome everyone.
This was the strongest fourth quarter in the company's history, we continue to drive growth across all our major initiatives enterprise international and our emerging products, while continuing to broaden and deepen our data about the.
The innovation, we deliver an enhanced value that we provide our customers drive the unique combination of world class revenue growth profitability.
Yes.
Good morning.
Okay.
Thank you.
Alright.
Comprehensive.
Okay.
Yes.
This year, we significantly expanded our offering by developing an application layer on top of our best in class data assets and acquiring quickly integrating chat conversation intelligence and orchestration technology into the platform.
Innovation has enabled us to add more new customers than ever before and drove increasing levels of sales to existing customers and record net revenue retention of 116% up from 108% in 2020.
In the fourth quarter, we delivered GAAP revenue of $222 million year over year growth.
Quarterly growth of 13% when adjusted for the number of days in the quarter for the full year, we delivered GAAP revenue of $747 million up 57% on the year organic growth greater than 50% operating income margin of 41% and Unlevered free.
Cash flow of $347 million up 42% euro per year and quickly approaching more than a dollar per share and free cash flow.
We are delivering our leading combination of growth profitability and free cash flow generation at scale.
We closed the quarter with 452 customers with greater than $100000, ACB up 70% year over year, while adding more new customers to the overall business than any other quarter in our history.
Growth across our newly introduced products was strong as well with Corus and bring lead leading the way at the time of acquisition, our conversational intelligence platform core it was growing 100% year over year, and we accelerated that growth in pulp for third and fourth quarters of 2021, we enabled more reps to sell the core solution and <unk>.
Accelerating investments in artificial intelligence transcription scalability and platform integration.
To innovate faster than the rest of the market.
We believe our accelerating growth rates on core to make it the fastest growing conversation intelligence provider in the market.
Another testament to the power of our go to market motion as demonstrated through <unk>, where in Q4, we've added more than two times the amount of ACD than it did independently in Q3, we.
We have consistently proven our ability to acquire well integrate quickly innovate on top up and accelerate the growth rates of the technology that we acquire.
As we exited 2021 international revenue eclipsed the run rate of $100 million.
And for the year International revenue was up 91%.
As Cameron will detail, we expect our momentum across all of these initiatives to continue into 2022 with our initial guidance for the year, calling for revenue growth of 36% and over $425 million in Unlevered free cash flow.
This month, we also launched <unk>, our modern operating system for revenue professionals and the future of go to market software Rev.
<unk> delivered the data insight software and integrations needed by businesses and professional.
Sure.
Yes.
Yes.
Okay.
Yes.
Through a new unified.
System rebels comprises four primary product pillars.
<unk> recruiting our operations, though at.
And our new account based marketing platform marketing.
Rebel last in the operating system framework help introduce customers to the breadth of our offering and the value of technology consolidate.
For improvement.
And net revenue retention rates and Asps as customers continue to adopt more functionality from more areas of our platform.
Today, our customers are using the full spectrum of the zoom Intel platform the go to market and scale their businesses.
Our platform provides the products.
And software that can help them power revenue at every phase of their growth journey.
Two different trillion dollar market cap companies are leveraging zoom info cross their sales team both using our data as a service offering identify their total addressable market and to score leads to power their outbound motion both are leveraging our API to update and enrich their customer data within their respective go to market systems as well.
Because they are a leading provider of unified management and security software for MSP and small businesses needed a more robust data provider for enrichment and account segmentation purposes.
Switch to the zoom info platform, including intense signals, giving them real time access to the businesses and market for security software and identifying previously anonymous visitors to their website through our robust IP to company graph.
They are innovative marketing team has invested in our new marketing Oss platform, while sales out west is being rolled out to the majority of their sellers and demand Gen teams across eight different business unit.
A leading provider of unified communications and communication.
Crease their usage of zoom info through product expansion extending access to new sales team and serving new datasets to marketing. They are now leveraging scale Bill last chorus, and das and getting value from zoom info across sales marketing and operations.
As a ring lead customer, we're able to provide them a unified set of enrichment tool tightly integrated into the <unk> platform.
Adult there they are able to better analyze engage and penetrate new markets, while aggressively growing their market reach and.
In addition to delivering success for commercial businesses, we're excited to extend our data to the government sector. As we recently announced the availability for government agencies to purchase zoom info through a GSA schedule, where we have already closed business and we anticipate unseating legacy vendors with hundreds of millions of dollars of existing contract value.
As part of the operating system evolution, we have also launched marketing or our account based marketing platform designed to give marketers new ways to reach target accounts and drive qualified leads for sales.
Since the acquisition of <unk> in 2020, we have assembled a team of ABM experts and our product engineering strategy and customer success organization and have been diligently working to bring a broad suite of marketing software to market.
And all of our prelaunch diligence, we heard over and over again that the applications that marketers. We are leveraging to do account based marketing we're falling short for one main reason the data being leveraged in those platforms was both inaccurate and incomplete.
And Thats no surprise today's AGM platforms were all designed to leverage the company's own first party data that exist in their CRM or marketing automation system.
And then 15 years of running zoom info I've never heard of Rep manager. Our revenue leader described that type of data is either complete or accurate.
Yes, without accurate and complete data on marketers aim advertising dollars at the wrong company and target the wrong people at those companies they deliver fruit with leads to fail, which erodes confidence and failed to build alignment between sales and marketing.
So we built marketing the same way we build every application with our best in class data at the foundation of the application layer.
<unk> marketing <unk> allows marketers to engage their buyers directly through display and social advertising network to.
To create hyper targeted campaigns and integrated systems to identify and prioritize the best fit audiences using intense engagement and website visitor data and to programmatically.
Industry, leading data science algorithms to engage buyers when they are most likely to convert.
For today's VW revenue teams data insights technology and orchestration are core to the motion they used to market and sell their products.
These capabilities are siloed, some can be found in marketing tech or revenue operations, while others are in the sale Tech stack.
The launch of marketing OS puts best in class marketing technology.
Into the hands of innovative go to market professionals, and because new Minto has long been the standard for sales teams to target the right account and accelerate pipeline. It also breaks down the walls that keep marketing and sales from being aligned.
We've also continued to innovate across several key areas in our platform.
We built our bidirectional think with salesforce to allow our customers to leverage their own customer data alongside zoom info data to help them uncover more insights about their existing book of business.
And to be smarter and more data driven about their next go to market motion.
This functionality has been incredibly well received with a nearly 30% increase in adoption from Q3 to Q4.
Following the success of our Salesforce zinc, we have expanded the functionality to hotspot and Marc Cadieux.
We've introduced this advanced integration functionality to our sales and marketing OS platform to enhance the user's ability to marry first and third party data to build hybrid tailored audiences of their most ideal customers.
With engage our sales automation platform, we released our largest feature set to date, including a deep integration with Microsoft dynamics, CRM and significant investments in email and automation capabilities pre.
Prebuilt E mail template library deeper analytics to AI E mail assistant enabled customers to create better email that scale. All of this is available right in the Gmail interface to our new engage gmail plug in.
With this release engage is fully able to meet the sales automation needs of companies of all sizes.
On par with competitive point solutions, we believe that when combined with native integration to our best in class data and the most robust conversation intelligence product in court, we will continue to take market share and the engagement layer.
We also continue to hear from customers that the accuracy and the quality of the data and insights available on our platform differentiates us and we've doubled down on our investment there further widening our competitive moat around data quality, we re architected and modernize our data acquisition systems and infrastructure to leverage the most modern neuro.
Network and machine learning model as a result of our investment in software and machine learning and infrastructure. We grew international contact coverage by more than 20 million contact in Q4, while international company coverage grew more than 100% year over year and by more than $2 5 million companies in Q4.
We also continue to invest in our team having added approximately 1000 employees this year.
While growth is important our teams also expect us to commit to diversity and inclusion today. Our teams are more racially diverse than our SaaS peers, we are 10% greater Hispanic representation across our sales organization, 35% greater black representation across our sales and engineering organization, 70% greater black.
<unk> across our sales managers and 35% more women across our work force than the benchmarks across the software industry.
We also deliver on our promise of career growth with career mobility at zoom info coming in over two five times higher than the career mobility that can be found at other SaaS companies.
We strive to attract the best people, regardless of race gender orientation, and we insure pay quality throughout the organization.
This year, we're publishing our first ever sustainability report, which details our commitment to providing an environment where employees can grow and succeed our commitment to diversity and inclusion our commitment to privacy and transparency with respect to the data we collect our commitment to good corporate governance and our commitment to the environment.
Our goal is to identify areas that were most impactful to our business and report on relevant metrics, taking credit for our success and are holding ourselves accountable, where we can improve.
Over time, we expect to expand the level of reporting and we look forward to sharing our progress with you as we build a durable growth company for the long term.
In closing, we had a very strong finish to a year in which we saw broad based strength across all areas of the business. We delivered on behalf of our customers, helping them modernize their go to market efforts with data and insights and driving efficient growth in their businesses.
As a result, we drove a record customer additions and record retention rates in 2021.
Looking forward. We're excited about the continued strong demand environment that sets the stage for our continued growth and profitability as we extend our leadership position in our more than $70 billion market opportunity with that I'll hand, it over to our Chief Financial Officer, Cameron Hi, there.
Thanks Henry.
Pleased to say that we outperformed expectations across all areas of our guidance, we continue to execute against a strong demand environment and we expect our momentum to continue into 2022. Our initial 2022 guidance calls for revenue growth of 36% and we expect adjusted operating income in the range of 405 to 450.
<unk> million dollars.
Unlevered free cash flow between 425 and $435 million in Q4, we delivered GAAP revenue of $222 million up 59% year over year, which implies 13% sequential growth compared to Q3 2021, excluding the impact of products acquired within 12 months.
A acquisition our organic revenue growth for the quarter was 52% adjusted operating income in Q4 was $86 million a margin of 39% for.
For the full year, we delivered GAAP revenue of $747 million up 57% compared to 2020 with organic growth exceeding 50%.
Adjusted operating income was $307 million, a margin of 41% and Unlevered free cash flow was $347 million for 2022, we expect to deliver more than a one dollar per share and unlevered free cash flow.
We delivered an acceleration of days adjusted sequential revenue growth in the quarter and another quarter of consistently strong organic growth. We also drove meaningful acceleration in growth for the businesses that we acquired earlier in 2021 for example, when we acquired <unk>. So it was growing just over 100% year over year with further investment in sales.
Enabling product functionality and deeper integration into the <unk> platform, we've accelerated course growth to 200% relative to year end 2020.
Our international and enterprise motions contribute continue to contribute to our overall growth as well our international business grew 91% in 2021 relative to 2020 and now generates more than $100 million in revenue on an annualized basis. We also ended the quarter with fortune 552 customers with more than 100.
K, an ACB with revenue from those customers up 80% year over year.
We continue to invest in customer engagement, improving usability and Onboarding. We also continued to successfully execute our robust land and expand strategy driving more seat expansion data consumption and further adoption of product functionality. As a result, we delivered an annual net revenue retention rate of 116.
<unk> up from 108% in 2020.
In order to continue to drive growth in the business. We further invested in growing our team and in a year with more than 2700 employees more than double the number from the time of our IPO.
We expect to continue to invest across the entire organization with particular focus on expanding our sales and marketing capacity as well as product and engineering investments to support <unk>.
<unk> growth.
Turning to the balance sheet and cash flow, we ended the year with $327 million in cash cash equivalents and short term investments.
Operating cash flow in Q4 was $71 million and for the full year, we generated $299 million in cash flow from operations, which included approximately $33 million of interest payments.
Unlevered free cash flow was $84 million for the quarter or 98% of adjusted operating income.
For the year, we generated $347 million of Unlevered free cash flow conversion of 113% of adjusted operating income.
We continue to expect that on an annual basis Unlevered free cash flow conversion will be in the range of 100% to 110% as a percentage of adjusted operating income.
Respect to liabilities and future performance obligations unearned revenue at the end of the quarter was $364 million and remaining performance obligations or RPM.
$864 million of which $672 million are expected to be delivered in the next 12 months.
We believe that calculated billings and <unk> and precise metrics to assess in period activity and forward momentum.
A result, we focus on days adjusted sequential revenue growth, we delivered 13% days adjusted sequential revenue growth in the fourth quarter up from 12% in the third quarter.
As of year end, we carried $1 billion to $5 billion of gross debt with continued growth. We saw approximately a half turn improvement in leverage in the quarter with a net leverage ratio of two nine times trailing 12 months adjusted EBITDA and $2. One times trailing 12 months cash EBITDA, which is defined as consolidated EBIT.
In our credit agreements.
With respect to our corporate structure, we completed the dissolution of the up C and eliminated multiple share classes in Q4.
As noted in every shift having an equal boat.
As a result of the restructuring and the tax receivable agreement with pre IPO shareholders, we expect to realize a net benefit of $1 billion over time.
Which is comprised of a deferred tax asset of $4 billion of a deferred tax receivable agreement liability of approximately $3 million.
Which will become due as we realize the deferred tax asset.
With that I will provide our outlook for the first quarter and our initial outlook for full year 2022 results for.
For Q1, we expect GAAP revenue in the range of 202000 $6 million to $228 million and adjusted operating income in the range of $86 million to $88 million.
non-GAAP net income is expected to be in the range of 14% to 15 per share.
Our Q1 guidance implies year over year, GAAP revenue growth of 48% at the midpoint and an adjusted operating margin of 38%.
We are providing initial full year 2022 guidance as follows we expect GAAP revenue to be in the range of one point or one to one 2 billion.
And adjusted operating income in the range of $405 million to $415 million, we expect non-GAAP net income in the range of 71 to 73 per share based on 410 million diluted weighted average shares outstanding.
For Unlevered free cash flow, we expect to generate between 425 and $435 million.
Full year guidance implies 36% GAAP revenue growth at the midpoint and adjusted operating income margin of 40% and Unlevered free cash flow margin of 42%.
With that let me turn it over to the operator to open up the call for questions.
Thank you if you have a question at this time. Please press Star then one on your Touchtone telephone. If your question has been answered or you wish to remove yourself from the queue. Please press the pound key.
First question comes from the line of Mark Murphy.
J P. Morgan Your line is open. Please go ahead.
Mark We can't hear you can you hear us okay.
Okay. It looks like his line disconnected, we'll move on to the next question, which will come from the line of Brad Zelnick with Deutsche Bank. Your line is open. Please go ahead.
Excellent. Thank you so much guys and congrats on a really strong finish to a great year.
Henry.
I know you've been asked this question a resilient different ways over the last year, but now that you've wrapped up Q4, and you look at your enterprise pipeline this year and what customers are saying as we enter 2022, how would you characterize the momentum in spending intentions from what it is that you offer.
Hey, Brad. Thank you for the question also I wanted to apologize for the tech issues, hopefully everyone can hear us loud and clear now.
We have we have built a stronger enterprise pipeline than we've ever had in the history of our business and that's coming from a number of different ways. I think first the natural tailwind in the enterprise as they continue to modernize their go to market system and they continue to leverage digital technology to go to market.
A very clear continued tailwind, but I think the second thing that we're seeing is that the platform story is really resonating I talked to an enterprise customer.
In Q4, who was using 12 different vendors to accomplish what they could do with just one zoom info subscription and that story.
With our comps.
Hum.
Having best in class products across that platform suite I think we're going to continue to take market share and continue to expand in the enterprise we have hired a great team.
Our enterprise sales that we feel really strongly about and so we continue to build really great pipeline within the enterprise and I would describe it as.
More demand within the enterprise than we've seen in our history.
Awesome and a quick one for Cameron Cameron I think you said the way you guys look at the business you saw 13% in terms of growth and sequential growth if I got that right and days adjusted sequential revenue growth versus 12% or an acceleration in Q3 can you just maybe just.
Make sure I've got that right and can you remind us exactly why it is that you look at the business that way.
So with our business Thats predominantly are almost exclusively a subscription business.
The revenue that we're recognizing in the quarter is actually the best indication of that in period activity and momentum that we see so the calculation for that is essentially taking revenue recognized in the quarter and dividing by the number of calendar days given that that's how we recognize revenue and so.
So.
With 92 days in both Q3 and Q4.
You get that revenue per day, and you compare them and that gets you to that 13% growth on a sequential basis.
Alright, Thank you guys.
Thank you and our next question comes from the line of Mark Murphy with Jpmorgan. Your line is open. Please go ahead.
Yes. Thank you very much I apologies for the phone issues congratulations on AR.
Very strong finish to the year.
So Henry I was wondering if you could just revisit the comments you made about <unk>.
Look sector and GSA is I think you said something about you anticipate unseating legacy vendors with hundreds of millions of dollars of contract value and so that was pretty specific I'm curious are there agencies approaching you asking to migrate to zoom info or any other details on that.
Just the time frame to convert on that opportunity.
Yes.
Hey, Marc Thank you for the question.
Look we are obviously new into the government space and so we are introducing ourselves currently.
And that vertical I think the thing that I would tell you that we've already closed business with government agencies on the contract vehicle that we announced we feel really good about that there are a number of places throughout government agencies that take advantage of data like.
Doctor, which our customers on the enterprise side take advantage of and they are using it for validating businesses to make sure that when they're when they're giving a procurement contract.
Those businesses are validated companies they use it to reach out and conduct business surveys into the private sector.
There are a number of really unique government use cases that we're going after.
But I would tell you it's super early and in our endeavors, there, but we feel good about that use case and we feel good about the early successes we have seen.
Okay understood and then as a quick follow up.
Perhaps for you Henry.
Indoor Kamran.
Your diversity and inclusion.
<unk> are terrific.
You're driving you're driving this incredible growth I think you are guiding to rule of 82 initially for this year.
So youre doing it with so much free cash flow production, we're hearing from some of the software companies.
Yes, they are kind of thinking about this ability to handle tight labor markets and wage inflation rate.
So because thats a key input on your enterprise initiatives I was just wondering if you could comment on that how you are feeling about the ability to hire and to navigate any.
Kind of.
Inflation of your cost inputs.
Sure.
Thanks, Mark, but I think one of the really unique things about zoom info from a talent perspective is that we built this incredible talent engine internally at the company I mentioned that internally, we have two five times the career mobility of our SaaS peers and SaaS is not a slow space and so to have.
<unk> that much more career mobility for our staff really says something about our ability to bring in entry level employees train them coach them develop them and let them move up within the organization, we doubled down on that strategy in 2021, we continue to see it most remarkably in our sales organization.
We're able to bring in entry level SDR, then within a year have them promoted into account executives, who who often are on average outperform our external hires and so when you see that trend you really want to invest more and more into the talent development motion here at the company and that's what we.
Been doing that.
It's been a huge advantage for US then on top of that we put together in this last year, an incredibly compelling benefits program for our staff.
We continue to.
And we continue to provide an incredibly good place for people to work and grow and it's culturally one of the best places.
In the world to work and we think that will continue to be an advantage for us as we continue to grow our teams and so we feel really good about where we stand from a recruiting perspective today and talent.
Thank you very much.
Yes.
Thank you and our next question comes from the line of Phil Winslow with Credit Suisse. Your line is open. Please go ahead.
Hey, Thanks for taking my question and congrats on a great quarter, just wanted to focus in on net revenue retention, obviously, a 116% versus one way last year I Wonder if you could help us unpack that are you seeing improvements in gross churn acceleration and see growth or.
Call. It up so all of these incremental incremental modules and how are you thinking about that in the coming year, particularly in the.
In the context of Revo ex us with expanded its called specialized packages and then just one follow up to that.
Sure Phil.
So we are really excited about what we've been able to do with our net revenue retention part of that.
Let's call. It half is a part of that increase is related to the additional.
Functionality that we've been able to rollouts of customers over the past year. So we have seen that really helped the other half is really related to.
The operational improvements that we've put in place and we've been able to improve.
Our gross retention as a result of those and.
Lower down sell than we saw in 2020, which at least partially related to that initial shock of COVID-19 , but also to the.
Operational improvements that we've put in place as well.
Okay.
Yep.
I was just going to say going forward I do think that the.
The rates that we.
Established in 2021 are sustainable and something that we'll look to improve upon.
As we look into next year and the following years.
Great and just a follow up to that I get this question from investors a lot, but obviously theres a lot of focus on deprecation of idea far in sort of a future call it could be free world.
Can I get is how impacted.
Could you remember it would be by this in terms of the data side wondering if you give some color and then frankly on the opposite end of that.
Is that actually sort of a potential, particularly with account based marketing <unk>.
Yeah.
Thanks, Phil we actually do not rely on any cookies.
To put our product together and so our account based marketing platform marketing.
Or VA intent assets that we have through the <unk> acquisition in 2020, do not rely on cookies and won't be affected by the.
The coming IBSA.
Changes and on the on the positive side, we do feel like the marketing Oss platform actually puts us in a really good place to help marketers navigate those upcoming changes and so feel like we're in the right place at the right time with that offering.
Alright, thanks, guys.
Thank you and our next question comes from the line of stanza Lasky with Morgan Stanley . Your line is open. Please go ahead.
Perfect. Thank you so much guys.
Wanted to dig in a little bit on the investment side of the business we're in.
You guys really focused on for 2022, and just on a global basis and maybe specifically how are you thinking about investing into your international business in to 2022, and then I have a quick follow up.
So when we look at the international opportunity, we think that there's real opportunity there for us to continue to invest we have.
Opened an office are going to win people in London as we talked about we'll continue to hire behind that.
Those those folks will be tasked with not just the UK and Ireland, but also reaching out and building business.
The rest of Europe , I think as we continue to look into 'twenty, two we're going to evaluate other potential areas to move into whether that Australia or APAC or with him we will evaluate those over time and as we.
Continue to build out.
<unk> go to market motion and follow up with the data assets behind that will be it will continue to attack the large international opportunity that's out there.
Got it and Kevin just for you on the.
The margin guidance for 2022, how did you approach setting the profitability targets both on the operating income side in the free cash flow side for the year any changes or maybe just how did you think about the broader.
Growth margin equation into 'twenty, two that you've contemplated in your initial guidance. Thank you.
Sure.
Our guidance methodology has not changed we continue to evaluate a wide range of potential outcomes.
<unk> set our guidance at a level that we're comfortable that we will meet and exceed.
Certainly as we think about the margin guidance in particular, we are planning to invest into.
The upside that we see in the business. So I think our investments into our go to market and sales and marketing capacity as well as the R&D innovation.
We're really focused on.
A higher target than necessarily what we've guided to and certainly from our adjusted operating income perspective, we're really focused on the absolute dollar value as guidance and ideally will be.
Be able to outperform on the topline and certainly able to outperform.
On that.
Salute dollar value as well.
Got it thank you so much.
Thank you and our next question comes from the line of Michael <unk> with Wells Fargo Securities. Your line is open. Please go ahead.
Hey, there. Thanks, good afternoon I wanted to first go back to the Rev OS opportunity.
Comprehensive offering given the number of use cases, you can enable certainly makes sense.
I'm just wondering specifically if there is anything you can share from initial observations perspective around what that could maybe do for seat adoption or cross sell or maybe just removing friction from the initial purchasing decisions or decisions versus what the prior product structure enabled.
Yes, I think that what we're seeing mainly Michael is that when we're going into these conversations or his or over 2021. When we had this conversation we had a number of these solutions, but they werent organized in a way that customers could understand the breadth of the solution.
<unk>.
What we're what <unk> does for us and what the different platform and product pillars do for US is it gives us a cohesive story that we can tell all across our business from.
From our enterprise business, so our mid market business, our SMB business and we believe that the products that we've put together have applicability across customers of all sizes and so or.
So what it does from an enablement perspective is it gives our sellers.
The ability to go into those conversations.
Way that allows them to articulate the broad spectrum of the platform in a way that our customers are understanding much more clearly and we've tested this we actually tested this in December and January and we actually saw an uptick in both win rate and ASP.
On the new business side as we continue to present, the offering through the lens of <unk>.
And a new packaging structure, we've put together alongside it so we feel really good about the future of being able to tell about broader story with this structure.
That all makes sense Cameron you mentioned, 52% organic growth in Q4 can you just expand on what Youre, assuming there and the full year guide and remind us when you start to anniversary some of those contributions as well. Thank you.
Sure well, we certainly anniversary the contributions from <unk> in Q4 so.
That created a bigger base off which we were growing off of.
As we look forward into 2022 I think were.
We're focused on continuing to grow the entire business I think realistically you have.
We integrate our businesses very quickly and therefore.
There is a little bit of.
Of.
Kind of mixing of the chorus product or the <unk> product with our existing products, when we're going out and selling so we don't specifically.
Make assumptions around those but those will be anniversaried, obviously if of course in July and for regulated in September .
Thank you.
Thank you and our next question comes from the line of Alex Zukin with Wolfe Research. Your line is open. Please go ahead.
Hey, guys. Thanks for taking the question maybe.
Maybe Henry first for you I'm going to ask the dollar based net expansion question a little bit differently. If you think about the 116 from one away last year, obviously, a big improvement and a big jump versus kind of the movements you had been making previously how do we think about like what's the right aspirational rate that can be sustainable.
For the company and what are the products that you feel like incrementally from here, assuming that you've kind of made a lot of improvements on the gross retention side and the incremental from here is going to be on the expansion, particularly on the enterprise, what's the right way to think of what products are you. Most excited about to get you there.
Yeah. Thanks, Alex So I think when we look at the.
The net retention rate today, we obviously feel like there is room for improvement, it's not a metric that we're going to specifically guide to.
But we do believe there is room for improvement in that number.
One interesting stat is the average number of our products owned by customers, who have been with us longer than a year grew by over 25% year over year and over 45% in our enterprise customers and that's being driven by the newly introduced products are screaming in custom and tap product our engage product court.
Bring lead and so I think that what.
<unk>.
Going forward is still very similar I think on one end of the spectrum you have companies that are not fully utilizing our core product set and so we can expand the licenses the seats across the sales enterprise they use of enrichment and API cost of marketing and.
And revenue operations organization, but then additionally, our sellers are enabled now to sell and gauge and chorus and recruiter into those into those companies as well and so I would say if you take a step back and you say, where our biggest opportunities is scale and expanding our footprint across the enterprise expanding our.
Footprint internationally, but then we have this added arsenal of chorus engaged ringley chat that we're able to sell in a cohesive way into those companies and so I think we have a.
Ill.
Sort of.
Two headed motion into the customer base that we think is going to.
The backdrop of that improvement as we go forward.
Perfect and then Cameron maybe for you on the international side I think you guys. You made a really interesting hire in the UK geography, I think also the fact that you are actually putting resources in market rather than selling EMEA are from.
The U S probably carries a pretty impactful cost envelope that you're including in the guidance I just wanted to get a sense for as we think about 'twenty two and we think about international revenue growth. Both as you know from the topline perspective and the incremental.
Kind of front end loaded spend profile that that growth is going to carry how do we think about that in the context of your guidance in the context of whether its outperformance or whether it's conservatism anything there would be super helpful.
And certainly.
Do you think about developing our forward looking models and guidance, we are thinking about the efficiency of our sales and marketing teams.
Having a new office in ramping up in London and in thinking about other geographies internationally.
Certainly comes at a lower initial efficiency then.
Then just adding folks in the U S.
I do think.
And based on our discussions internally that that efficiency will pick up relatively quickly.
Based on the the motions that we have in place to bring people on board get them up and running quickly give them the tools and.
And.
And kind of training that they need and based on the fact that we have been in the international markets for.
Some time and really investing into onshore teams selling out into Europe by shifting there.
To align with European time zones, I think we feel that our methodologies and motions around bringing those people on will enable us to do that relatively relatively quickly but certainly.
When we set our guidance we do.
Mid range of potential outcomes and can certainly set it at a level that.
So we feel comfortable that we can exceed.
Perfect. Thank you guys.
Thank you and our next question comes from the line of Brent Price line with Piper Sandler. Your line is open. Please go ahead.
Thank you good afternoon.
Continue to feel some questions from investors around this port.
Pull forward in direct selling efforts kind of post Covid Henry for you maybe can you just frame the the expansion potential that you see for sales OS press in particular across just the existing enterprise base, how much kind of room still do you have to expand that would be helpful. Thanks.
Okay.
Thanks, Brent I have not had a single enterprise call with a single enterprise customer, where there isn't double digit expansion opportunity within those accounts from a sales outlets perspective, they're just we still continue to be.
Really early in our penetration across the enterprise.
And so we continue to make headway there, but it's still really really early and lots and lots of opportunity.
And the core sales or less motion I'll tell you we're constantly looking at the data the historical data we look at win rates funnel conversion top of funnel activity and we spent we spent a real amount of time looking for anomalies that we could tie back to some relation to COVID-19 and we didn't see anything that would.
I believe that the current strong demand trends, we're seeing wouldnt continue or one off fee or a pull forward.
And we wanted to be confident about back to the wood.
That's the way we operate the business, we didn't see any anomalies like that that made us think that COVID-19 caused the pull forward and that the demand environment that we're seeing today wouldn't continue.
Helpful color there and then just Cameron quick follow up relative to the land you have.
A broader portfolio of product repackaging layers in marketing and sales are less than and obviously it sounds like there is acceleration of course as well are the land deals changing relative to the size of the lands as you start to bundle or is it still a relatively consistent land more.
Meaningful expand over time, just trying to understand as you think about.
Our bigger product set is that is that changing the size of the lands that youre seeing so far.
And then I think that.
On the on the margin, we do see slightly larger lands.
Particularly as we're packaging things together and providing more value to the customers but.
I will point out that.
The.
Kind of existing zoom info customer base of over 25000 customers.
Those tend to be customers that have leaned into digitizing their go to market motions over time and generally the first thing that they would've bought was zoom info they are focusing on making insight driven decisions.
Improving their their go to market teams through.
High quality data and insight to them and they tend to add on additional applications.
In addition to that so I think we're we've developed or acquired additional applications. Most of those sales or are kind of following the wave of people that are initially invested into digitizing their go to market motion and now they're leaning into adding additional functionality in those.
More often than not are already customers of ours as opposed to the people that we're selling.
Selling outright a brand new solution. So I think there's opportunity for us to continue to bring that initial land up higher but.
Those existing relationships that we have with customers are really the place where we're seeing more and more of the additional functionality go into folks and really being able to accelerate that.
That net expansion that we have.
Helpful color and certainly great to see the third straight quarter of 50% plus organic growth. Thanks.
Thank you and our next question comes from the line of cash Randan with Goldman Sachs. Your line is open. Please go ahead.
Hi, Thank you very much congratulations on a superb.
Quarter.
Curious to get your perspective, I think I asked this question in the last quarter or so.
It seems to me that you are becoming really a zero co pay of course without the system of record the pipeline management and all that but all the leading indicators and all the things that precede something going to the system of record. So certainly seems like the vision is much broader than what the company has been doing in the past we can see that can be acquisitions of course.
And you engage platform intent platform et cetera questions.
A question for you is.
Have you started to do deals and maybe you did and you have talked about it but I would love to get that level of.
Edification on the deal profile with customers that are not choosing zoom in for the core data platform, but are actually intrigued by what you have to offer outside of the core data platform so as to gauge.
Starting to hit the big leagues, and you're not just a data platform, but something bigger than that.
Do you have what it takes to go up against the more established CRM in the industry. Thank you. So much I mean that in a positive way by the way.
Thanks Kash.
First we do not have today aspiration to be a CRM.
Platform, that's not in our roadmap or the way that we think about the forward progress at the business.
Obviously, CRM, our core hub for how businesses operate whether its go to market or finance or.
Configure price quote those are key functionalities that businesses need from their CRM.
We've realized is that there are just a number of activities that take place outside of the CRM.
Go to market teams are.
Are using today to target and sell and market their products and solutions.
Think about course in conversational intelligence and the insights that come from that you think about rang lead and orchestration and routing and deduplication you think about chat on your website and even the core of what you meant though does which is the ability to build really hyper targeted audiences and bring in a number of third.
Signals to build those audiences and those are all activities that every go to market team is doing that don't happen inside of the CRM and so our perspective.
Ron.
On the on the direction that we're going is to really own that set of activities that doesn't happened natively inside of CRM and be best in class around node now what's interesting about those offerings that they're all tied into the data asset.
We build the application layer, we build that first and foremost with the data asset at its core because we believe that all of those applications actually get meaningfully better and differentiate it when the data asset is sitting at its core and so theyre hard to like pull apart and say.
Here is a solution thats just purely software no data asset and how are we competing with that against that.
Against a competitor or against that.
CRM because all of those solutions. The first thing we do when we build them is that we're just embed that data asset right inside of them. What I will tell you is there are customers. There are of course customers and <unk> customers and chat customer, who we haven't yet converted to court zoom info customers and so those solutions do standalone.
Some opportunities too.
But we really do believe that once the data is embedded and youre getting the entire platform from us, but that's where things get really competitively differentiate it.
So.
Great remarkable transformation and repositioning. Thank you so much congrats.
Thank you Kash.
Thank you and our next question comes from the line of Sandy Pentagon with Mizuho. Your line is open. Please go ahead.
Thanks for taking my question I wanted to ask you about recruitment.
That's one area you have been focusing on last year, what sort of.
Progress you have seen and not only we see recruiting with that.
That's probably the branded or something could you talk about like what's the uptick so far and what's your expectation for this year.
Absolutely. Thanks City I think first of all there is no better time in history to be selling our recruiting platform.
And so we think timing into the space Couldnt have been better for our platform.
Revenue on the recruiter platform nearly doubled between Q3 and Q4, we now have close to 1000 customers who are currently leveraging our recruiting.
Platform that platform continues to have real momentum, we built a sales team around it we've enabled our sales teams to understand how to take it to market. So we feel really good about that momentum continuing into 2022.
Thank you.
Thank you and our next question comes from the line of Raimo <unk> with Barclays. Your line is open. Please go ahead.
Hey, this is Frank on for Raimo, Congrats on a strong into the year.
Just one for Cameron it was great to see the inflection in quarters from a revenue perspective, so I guess with that how should we think about the inorganic contribution to billings in the quarter.
So I would say that the inorganic contribution to billings as obviously you can see the revenue piece.
Around $10 million of revenue.
On the inorganic side.
In terms of the.
Unearned revenue chain.
Change I would say that it's.
A similar percentage to the revenue.
The revenue contribution that comes from those entities. So.
I'd say, it's relatively small at the end of the day, but certainly we don't we have bundled a lot of these skills together so be it.
We don't break out the <unk> revenue specifically.
Perfect. Thank you.
Thank you and our next question comes from the line of Parker Lane with Stifel. Your line is open. Please go ahead.
Yeah.
Alright.
We disconnected so we will move to the next question, which will come from the line of Taylor Mckinnis with UBS. Your line is open Sir. Please go ahead.
Yeah, Hi, Thanks for taking my question you talked a lot about the emerging opportunities with international course in others and it seems like those are growing really fast so.
As we look at the 2022 guide and assuming you see continued momentum with those parts of the business can you maybe talk a little about your expectation for the core U S state of business and what that contribution could look like for the full year based on what Youre seeing with your customers.
So we're really.
Really excited about the demand.
The environment overall for the business and I think that's true and continuing to expand the U S data business as well as those emerging products.
<unk>.
Developed or acquired.
As we think about guidance, we're certainly looking at a broad range of outcomes.
We set the guidance at a level that we are confident that we can meet or achieve.
Herb meter exceed certainly the.
The what we're aiming for is to maintain the momentum across all of the different vectors of growth which includes.
The domestic core business, our international business, the enterprise versus the business and all of the new products that we have.
Brought on this past year.
Great. Thanks.
Thank you and our next question comes from the line of Kurt <unk> with Bank of America. Your line is open. Please go ahead.
Oh, Hey, great. Thanks for taking my question guys I wanted to ask you a question on the international expansion I noticed that you had the London expansion kind of your first bullet point here in the press release. So first question what level of senior executives are planning to move out there I mean, Henry and Cameron are you guys moving out to London, how do I think about that and.
What other kind of senior roles are you looking to hire within that region and is there any particular region in Europe that you are targeting first.
Yeah.
Well first I would tell you we are sending I'm not.
Now moving to London.
While we are studying a number of our key executives out there we have a senior VP, who is relocating there obviously Simon macdougal, our chief compliance officer will be based there will continue to build out our sales team and sales leadership there as well, we really do think it's an credit culture zoom. It though is really unique.
And it's special and its fast pace and especially in the go to market organization. It's an incredibly unique go to market Amgen and so we really do want to infuse the culture from the states into that office.
London, and so we will continue to look for opportunities to move sort of core U S based.
Go to market leadership.
Other leadership into that office I think we're still focused on a pretty large opportunity in English speaking Europe .
And Australia, and New Zealand and so I think there are still there's still tremendous opportunity in the UK and Ireland, Australia New Zealand.
So we'll continue to advance the platform there.
And thats, what thats going to be our focus in the near term.
Got it got it thanks, Henry I, just one quick follow up if I may.
No theres been a couple of questions on NR.
I was just wondering I know you guys give it on an annual update right now, but going forward is there any thought of maybe giving a mid year update or a quarterly update or maybe you could eclipse another milestone say like a 120% on the net revenue retention announcing that mid year.
And we really think of any.
<unk> is being an annual metric obviously starts at the beginning of the year ends at the end of the year.
We do plan to an <unk>.
In the past given directional updates in the quarters of how the actual activity within those quarters.
As compared to the prior year and I think that's your expectation going forward as well.
Got it got it thanks guys.
Thank you and our next question comes from the line of Parker Lane with Stifel. Your line is open. Please go ahead.
Yes, thanks for taking the question guys and congrats on the quarter. Henry If you look at the orchestration side of the business specifically ring lead a lot of traction seemingly there right. Now can you just give us a better sense. If you look out across the customer base, what processes or solutions those customers in your target markets are replacing with your orchestration tools are a lot of them.
Mid market and smaller enterprises leaning in on orchestration for the first time or the handful of solutions that youre going after and displacing with your more full featured platform. Thanks.
Great. Thanks for the question.
I think that what we've seen up often is that the orchestration capabilities of an organization are tied up in the hands of a couple of developers.
Somewhere in the it organization and they don't operate at the speed of the go to market organization and so when you want to make a routing change or you wanted to make an orchestration changer. Your territory. It's changed all of a sudden you get way back in the queue in the ticketing process to try to get those changes for a developer to make directly.
Inside of whatever your go to market system that and what <unk> is able to do is it revolutionized the revolutionizing that process and it puts the power inside of our revenue operations professionals hand, marketing operations professional time, so they're able to build the routing logic through a very simple Gui to have the same statistics.
<unk>.
What it would take.
From 10 months to build.
So we're putting that capability back into go to market professional pan because they operate at a different speed, we expect them to be operating at a different speed than than other parts of their business and so that's what we end up replacing when we're replacing something as were getting them out of this sort of very slow ticketing process.
<unk> tends to be tied up in the it department.
Got it very helpful response, Thanks, Andrew.
Thank you and our next question comes from the line of Brian Peterson with Raymond James Your line is open. Please go ahead.
Hey, gentlemen, thanks for taking the question. So Henry you mentioned in your testing volumes that you saw an ASP uplift I'm curious if you can share any details on how significant that may be as we think about the <unk> figure going forward, how should we think about the impact of ASP expansion as a driver of internet expansion going forward.
Okay.
Yes, So I think what we saw in December and January we were testing with new packaging and pricing.
Structure was small, but we expect our we expect the ASP lift to expand that.
We continue to roll that out the full sales team.
I think what you see us able to do at the front end of the new business sale is really attach more of the.
The newly introduced products and so where we can attach engage in chorus and bring lead at the front end that the platform works well seeing expanded ASP.
And then.
And then the real opportunity for the newly introduced solutions is really into the account base.
So we've enabled our sellers and built a structure that will allow us to.
We will allow us to get in front of our customers to share the platform story and get these new solutions into their hands.
That will be a driver of net retention in 2020, I don't think we're giving specific guidance on how much of a point.
Understood. Thank you.
Thank you and our next question comes from the line of Rishi <unk> with RBC capital markets. Your line is open. Please go ahead.
Hi, This is Richard on duration.
Just a quick question on the vertical go to market.
<unk> earlier, you discussed the government vertical and.
Last quarter you touched on in your efforts around the health care vertical. So I was just wondering if maybe you could talk about other opportunities where you see potential.
Potential to vertical is the platform and maybe just an update on.
The demand trends youre seeing in the verticals that you are currently addressing.
Yes.
Thanks, Richard I think what we're seeing from a go to market perspective is that it's less about vertical <unk> and more about specialization and so where we have an opportunity to specialize.
Our sales motion, we're going to specialize it so we do that in our recruiter OS platform.
We do that in our marketing Oss platform, we do it across all.
And then we built the solution sales team that we can bring into a number of our other opportunities you can help us specialized knowledge around the different platforms with a different offering.
But from a vertical perspective, there isn't like one specific vertical that were re architect the business around its more aligned around personas that we sell to and so the new packaging.
Models that we're rolling out are aligned around persona, so a sales per selling our marketing persona and operations persona and a recruiter and talent acquisition persona and Thats. The way, we really think about our offering and the way that we take them to market.
Okay perfect. Thanks.
Thank you and our next question comes from the line of Terry Tillman with true. Your line is open. Please go ahead.
Hey, guys. Thanks for taking the question. This is Joe Meares on for Terry.
I think last quarter, you noted that you had 2000 customers on the engage platform I'm just wondering if you could quantify how many you added sequentially.
And then just like a bigger picture perspective.
Type of penetration can just platform get it get across your 25000 plus customers over the next several years.
So I really on engage I really do believe that every one of our customers has an opportunity to be leveraging our engage platform.
And we in the quarter, we released the most features we've released against that platform, including at Gmail plug in and native integration with Microsoft dynamics, CRM and a number of additional features that we really believe this.
<unk> platform now up to competitive parity in the market and so we're excited about taking that all the way up and down our customers from our large enterprise customers to.
So our F&B customers and it's a tremendous attach rate, we do a really great job of attaching engage in the new business side.
And then we're expanding that now to attaching engage on our on.
On our existing customer side, as well, but a real opportunity for all of our customers to be leveraging engage theres no pocket of customers that don't have a use case for the engage platform.
That's helpful. Thanks, and then I think last year, you had a target to add 30% sales capacity do you have a similar target for 2022, and then I guess, just if you could qualitatively split that across North America and your international initiatives that would be helpful. Thanks, So much.
Yeah. So.
I would say that the 30% group is really.
Long term target over time as we look into the shorter periods we are.
Roughly aiming too.
Increase our sales and marketing capacity in line with with revenue.
So I think that.
Based on our guidance that would be a 36% growth rate. Although I think we're in the short term investing even more aggressively into that.
Looking for those investments pay off.
In terms of the split domestic versus international certainly the international.
The growth rate is higher because it's.
Moving out from effectively zero.
At the end of the year, but it's still I think we're still looking to invest in both domestically and internationally aggressively as we move forward.
Yes.
Thank you and Im showing no further questions at this time I would like to turn the conference back over to Henry for any further remarks.
Great. Thank you everyone for joining us and thanks again to the entire <unk> team for all the hard work that went into making 2021, such a tremendous year, we feel great about what we delivered this past year, we're even more excited for the year ahead, and we're looking forward to seeing you at the Investor events. We have scheduled for this quarter. Please save the date for our virtual analyst day scheduled for.
At June 2nd at three PM Eastern Thank you.
This concludes today's conference call. Thank you for participating you may now disconnect everyone have a great day.
[music].