Q3 2023 ZoomInfo Technologies Inc Earnings Call

Yes.

Yeah.

Good day and thank you for standing by welcome to Zoom Info third quarter 2023 financial results Conference call.

Speaker 1: 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 the session, you'll need to press star 11 on your telephone. You'll then hear an automated message, advise your hand is raised.

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 one on your telephone you will then hear an automated message advise your hand is raised to withdraw your question. Please press star one again.

Speaker 1: To a draw your question, please press star 1-1 again.

Speaker 1: Please be advised that today's conference is being recorded. I want to hand the conference over to your speaker today, Jerry Sysitsky, Investor Relations. Please go ahead.

Be advised that today's conference is being recorded I would now like to hand, the conference over to your speaker today, Gerry said ski Investor Relations. Please go ahead.

Speaker 2: Thank you, Amy. Welcome, everyone, to Zoom Info's Financial Results Conference call for the third quarter of 2020.

Thank you Amy welcome everyone because you've been for those financial results conference call for the third quarter 2023 with me on the call today are Henry shock founder and CEO of humans, though.

Speaker 2: With me on the call today are Henry Schuck, founder and CEO of ZoomInfo, Cameron Heiser, our CFO , and James Roth, our Chief...

Heizer.

And James Ross, our Chief revenue Officer.

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

Speaker 2: During this call, any forward-looking statements are made pursuant to the save harbor provisions of the U.S.

During this call any forward looking statements are made pursuant to the safe Harbor provisions of U S securities laws 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 believes.

Speaker 2: expressions of future goal, including business outlook, expectations for future financial performance and similar items, including without limiting.

Speaker 2: expressions using the terminology may will expect

Speaker 2: and expressions which reflect something other than historical facts are intended to identify forward looking states.

And expressions, which reflect something other than historical facts are intended to identify forward looking statements forward looking.

Speaker 2: forward-looking statements involve a number of risks and uncertainties, including those discussed in the risk factor sections of our SEC filings.

Statements involve a number of risks and uncertainties, including those discussed in the risk factors sections.

Our SEC filings.

Actual results may differ materially from any forward looking statements.

Speaker 2: The company undertakes no obligation to revise or update any forward-looking statements in order to reflect events that may arise after this conference call, except as required by law.

<unk> undertakes no obligation to revise or update any forward looking statements in order to reflect events that may arise. After this conference call, except as required by law.

For more information please refer the cautionary statement in the slides posted to our Investor Relations website at IR docs human so dot com.

Speaker 2: posted to our investor relations website at ir.zoominfo.com. All metrics on this call are non-GAAP unless...

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

Speaker 2: found in the financial results press release or in the slides posted to our IR website.

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

Speaker 3: Great, thank you, Jerry, and welcome everyone. While the operating environment remains challenging, we delivered results that exceeded our Q3 guidance. Revenue for the quarter was $314 million, and adjusted operating income was $126 million, a margin of 40%.

Great. Thank you Jeremy and welcome everyone. While the operating environment remains challenging we delivered results that exceeded our Q3 guidance revenue for the quarter was $314 million and adjusted operating income was $126 million a margin of 40% during.

Speaker 3: During the quarter, we repurchased approximately 9 million shares of ZoomInfo stock for $160 million, representing an average purchase price of $18 per share. We are uniquely positioned to capitalize on a tremendous long-term market opportunity, which gives us confidence that buying ZoomInfo stock at these levels will drive a meaningful economic return for our shareholders.

During the quarter, we repurchased approximately 9 million shares with zoom and plus stock for $160 million, representing an average purchase price of $18 per share. We are uniquely positioned to capitalize on a tremendous long term market opportunity, which gives us confidence to buying zoom info stock at these levels will drive that.

Meaningful economic return for our shareholders.

Speaker 3: Since early last year, we have highlighted the challenges of this operating environment, which include fewer upsells, more seat downsells, and elevated churn level.

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

Speaker 3: As a platform that helps customers grow and one that serves some early cycle industries, we have seen net revenue retention and our overall growth rates come down, as customers have had to rebalance growth and profitability.

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

Speaker 3: This is a market phenomenon impacting companies across the spectrum of front office applications and not unique to Zoom info. When the cycle ends and we are in a more normalized operating environment, companies will be looking to drive growth and we will continue to be uniquely positioned to help them do just that.

This is a market phenomenon impacting companies across the spectrum of front office applications and not unique to zoom info. When this cycle ends and we are in a more normalized operating environment companies will be looking to drive growth and we will continue to be uniquely positioned to help them do just that.

Speaker 3: In this operating environment, we're committed to controlling the controllable and delivering industry-leading levels of profitability while we invest in our customers' success and improve the company for the long-term.

In this operating environment, we're committed to controlling the controllable and delivering industry leading levels of profitability, while we invest in our customer success and improve the company for the long term.

Speaker 3: To that end, we are doubling down on product excellence and customer success, investing in improved ease of use and driving quicker time to value for our customers. These investments have driven a 20% increase in product engagement since the beginning of the year. Customers are using more of the platform more often.

And we are doubling down on product excellence in customer success and investing in improved ease of use and driving quicker time to value for our customers. These investments have driven a 20% increase in product engagement since the beginning of the year.

Customers are using more of the platform more often.

Speaker 3: We're doing this while prioritizing investments in AI, data as a service, and marketing OS and building our industry leading data coverage and accuracy across the globe.

We're doing this while prioritizing investments in AI data as a service and marketing and.

And building, our industry, leading data coverage and accuracy across the globe.

Speaker 3: We've rolled out new pricing and packaging at the low end of the market, enabling us to capture more of the market efficiently while simultaneously growing our day contribution.

We've rolled out new pricing and packaging at the low end of the market, enabling us to capture more of the market efficiently while simultaneously growing our contributors.

Speaker 3: And we announced the number of leadership changes that have flattened the organization and given me the opportunity to get closer to our customers and how we win them, serve them, and grow them.

And we announced a number of leadership changes that have flattened the organization and given me the opportunity to get closer to our customers and how we win them serve them and grow them.

Speaker 3: As part of the leadership changes, James Roth, our senior vice president of sales, leading our enterprise customer base, has been promoted to chief revenue off.

As part of the leadership changes James Roth, Our senior Vice President of sales, leading our enterprise customer base has been promoted to chief revenue officer.

Speaker 3: Chris Hayes, our chief operating officer, transitioned into the new role of EVP of International Expansion, and Dave Justice transitioned into the new role of Chief Growth Office.

Chris Hayes, our Chief operating officer transition into the new role of EVP of international expansion and Dave Justice transitioned into the new role of Chief growth Officer.

Speaker 4: I'm excited that James is here with us on the call today and wanted to give him the opportunity to share a few words. James. Thanks, Henry. I'm glad to be here today. I joined the team in early 2022 because I'm passionate about the product, the vision and the culture that Henry has built. We have the power to drive massive improvements in how businesses go to market with our best in class data, AI powered customer insights and automated.

I'm excited that James is here with us on the call today and wanted to give him the opportunity to share a few words James.

Thanks, Henry I'm glad to be here today.

I joined the team in early 2022, because I'm passionate about the product division and the culture that Henry is built.

We have the power to drive massive improvements in how businesses go to market with our best in class data.

AI powered customer insights and automated workflows.

Speaker 4: I was a ZoomInfo customer for 10 years prior to joining the leadership team, and I have a deep understanding of what our customers want and need from the platform.

I was assuming four customer for 10 years prior to joining the leadership team and I have a deep understanding of what our customers want and need from the platform.

Speaker 4: Since joining, I've gotten to see the value that we are delivering to many of the largest and most sophisticated enterprises in the world.

Since joining I've gotten to see the value that we're delivering to many of the largest and most sophisticated enterprises in the world.

Speaker 4: I've been in the room at Workday, Google, Amazon, Verizon, and so many others as we've partnered with the revenue teams to build a foundation of data and insights that drive the future of go-to-market.

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

Speaker 4: I've been proud to offer that same foundation of go-to-market technology that drives revenue, growth, at the world's best companies to companies down market.

Speaker 4: Over the past two years, I've helped recruit a large portion of our sales leadership and I'm excited about the team we put together and the traction that we're seeing.

Over the past two years I've helped recruit a large portion of our sales leadership and I am excited about the team we've put together and the traction that we're seeing in the enterprise I intend to build off that success in particular with our $1 billion and $5 billion plus accounts, while we look for efficiencies in our go to market motion through E Commerce and product led growth.

Speaker 4: I intend to build off that success, in particular with our million and $5 million plus accounts, while we look for efficiencies in our go-to-market motion through e-commerce and product-led growth.

Speaker 3: Great thanks James. This quarter we closed transactions with a number of best in class enterprises, including Verizon, Walmart, Paramount CBS , Sage Hospitality, Steam Logistics, CDW, Tenant Health, The Washington Post, Franklin Covey, Lands End, and Magellan Health.

Great. Thanks, James this quarter, we closed transactions with a number of best in class enterprises, including Verizon Walmart Paramount CBS Sage hospitality steam logistics CDW Tenet health, the Washington Post Franklin Covey Lands' end.

And Magellan health.

Speaker 3: In Q3, we signed more than 200 deals with more than $100,000 in ACV, including multiple seven-figure deals and a $15 million TCV deal. Some of the largest and most sophisticated companies in the world are going all in on our data, insights and automation, integrating us directly into the way they go to market.

In Q3, we signed more than 200 deals with more than $100000 in HCV, including multiple seven figure deals and a $15 million <unk> deal some of the largest and most sophisticated companies in the world are going all in on our data insights and automation integrating us directly into the way they go to Mark.

Yes.

Speaker 3: While the software vertical and roughly half of the business services vertical has been impacted, we have seen strong growth in other verticals. In financial services, Wells Fargo further expanded their relationship with us with a seven-figure subscription to our intent and company data.

While the software vertical and roughly half of the business services vertical has been impacted we have seen strong growth in other verticals and financial services Wells Fargo further expanded their relationship with us with a seven figure subscription to our intent and company data cubes today, the organization Leverages our firm a graphic.

Speaker 3: Today, the organization leverages our firmographic data for enhanced segmentation and prioritization, and they use our intent data to identify and pursue additional relationship opportunities as well as to predict potential churns. By plugging Zoom info data directly into their go-to-market motion, they're able to deliver more targeted services to their customers and support the retention of high priority accounts.

Data for enhanced segmentation and prioritization and they use our intent data to identify and pursue additional relationship opportunities as well as to predict potential churn by plugging zoom info data directly into their go to market motion. They are able to deliver more targeted services to their customers and support the retention of high <unk>.

40 accounts.

Speaker 3: Intelli Communications, a large global provider of mobility, network services, and 5G signed a five year, nearly eight figure engagement with Zoom info.

And telecommunications are large global provider of mobility network services and five G signed a five year nearly eight figure engagement with zoom info.

Speaker 3: which is now the key data and insight source for their go-to-market teams, ensuring for years to come that they will have the highest quality data as they go to market.

Which is now the key data and insights source for their go to market teams ensuring for years to come that they will have the highest quality data as they go to market.

Speaker 3: Another mid-market telecommunications firm who had left for a competitor 10 months earlier boomeranged back and expanded with a multi-year, multi-seven-figure engagement that encompasses the full array of our platform offering, including Sales OS, Marketing OS, Operations OS, and DAS, consolidating out multiple providers in the process.

And the other mid market Telecommuting communications firm, who had left for a competitor 10 months earlier boomeranged back and expanded with a multi year multi seven figure engagement that encompasses the full array of our platform offerings, including sales.

Marketing operations.

Operations OS and das consolidating out multiple multiple providers in the process.

Speaker 3: From a product perspective, we continue to focus on delivering customer success with easy to use features that drive quick time to value these investments are paying dividends in the form of improved customer satisfaction and higher engagement.

From a product perspective, we continue to focus on delivering customer success with easy to use features that drive quick time to value. These investments are paying dividends in the form of improved customer satisfaction and higher engagement.

Speaker 3: NPS rose 7.0 over a year with growth every quarter. Our recent AI enhancements to chorus have increased NPS for that product by 22.0 over a year. And overall product engagement has increased by more than 20% this year.

NPS rose seven points year over year with growth every quarter. Our recent AI enhancements to chorus have increased NPS for that product by 22 points year over year and overall product engagement has increased by more than 20% this year.

Speaker 3: We also continue to receive market recognition. Snowflake named ZoomInfo and Enrichment Data Category Leader in their 2023 Modern Marketing Data Stack Report. ZoomInfo obtained an AWS competency, relative to our expertise in digital customer experience. And we also stand in the top 0.01% of companies with the most number one rankings, being awarded 101 number one rankings in G2's Fall Report.

We also continue to receive market recognition snowflake named zoom info and enrichment data category leader in their 2023 modern marketing data stack report zoom.

Blumenthal obtained an AWS competency relative to our expertise in digital customer experience and we also stand in the top 0.01% of companies with the most number one rankings being awarded 101 number one rankings in G tube fall reports.

Speaker 3: We're leveraging new AI technologies and partners to create customer-facing insights and drive data collection and validation at scale. On the customer-facing side, we're now extracting strengths, weaknesses, opportunities, threats, and other insights from earnings calls and public filing, which when paired with our highly accurate data, scoops, intent, and other insights, provide sellers with the key insights they need to engage in account and close a deal.

We're leveraging new AI technologies and partners to create customer facing insights and drive data collection and validation at scale on the customer facing side, we're now extracting strengths weaknesses opportunities threats and other insights from earnings calls and public filings, which when paired with our highly.

Accurate data scoops intent and other insights provides sellers with the key insights they need to engage in account and close the deal.

Speaker 3: LLMs are also integrated into our existing profilers and data validation pipelines, helping us understand the validity of a human name, title, and educational data listed on a profile, and driving further improvements in our industry-leading accuracy, which sits at an all-time high coming out of Q3.

<unk> also integrated into our existing Profilers and data validation pipelines, helping us understand the validity of the human name title and educational data listed on a profile and driving further improvement in our industry, leading accuracy, which sits at an all time high coming out of Q3.

Speaker 3: We've also seen incredibly, we've also been incredibly focused on our international data offering. And following recent significant investments there, our customers now have access to over 200 million business contacts and markets outside of North America.

We've also seen incredibly we've also been incredibly focused on our international data offerings and following recent significant investments. There are customers now have access to over $200 million business contacts and markets outside of North America in the last two years, we have grown the number of global companies in our data.

Speaker 3: In the last two years, we have grown the number of global companies in our data platform by more than 6X, while tripling the number of global contacts and the number of global mobile phone numbers available to our customers.

That form by more than six X, while tripling the number of global contacts and the number of global mobile phone number is available to our customers and.

Speaker 3: And Continental Europe specifically, we've expanded our mobile numbers by 13X while growing mobile in the UK by 6X.

In Continental Europe, specifically, we've expanded our mobile numbers by 13 ex while growing mobile in the U K by six X.

Speaker 3: With this expanded coverage, global sales teams can count on zoom info when targeting international markets, while knowing that our commitment to ethical data collection and compliance remains front and center.

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

Operator: Good day, and thank you for standing by.

Operator: Welcome to ZoomInfo third quarter, 2023 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 to answer session task a question during the session. You'll need to press star 11 on your telephone. You will then hear an automated message. Advise your hand is raised. To draw your question, please press star 11 again.

Speaker 3: As we continue to move up market, the pace of innovation accelerates, and we've been closely partnering with our customers to push the envelope on what modern go-to-market looks like.

As we continue to move up market the pace of innovation accelerates and we have been closely partnering with our customers to push the envelope on what modern go to market looks like cutting.

Speaker 3: Cutting-edge go-to-market teams are no longer working in traditional sales systems, such as the CRM. They deploy data analysts and data science teams to take a holistic look at their customers and market, and then they use AI to drive sales planning, account prioritization models, next best actions, and more.

Cutting edge go to market teams are no longer working in traditional and traditional sales systems, such as the CRM. They deploy data analysts and data science teams to take a holistic look at their customers in market and then they use AI to drive sales planning account prioritization model next best actions and more.

Operator: Please be advised that today's conference is being recorded.

Jerry Sisitsky: I would like to hand the conference over to your speaker today, Jerry Sisitsky, investor relations. Please go ahead. Thank you, Amy.

Speaker 3: AI is only as good as the data powering it. So in the third quarter, we launched our integration with the Google Analytics Hub to help these data science teams unlock the value of Zoom info insights and models directly within Google's Cloud Data Warehouse BigQuery.

Jerry Sisitsky: Welcome everyone to ZoomInfo's Financial Results Conference Call for the third quarter, 2023. With me on the call today are Henry Schuck, founder and CEO of ZoomInfo, Cameron Heizer or CFO, and James Roth, our chief revenue officer. After their remarks, will you open the call to Q&A?

It is only as good as the data powering yet so in the third quarter, we launched our integration with the Google analytics hub to help these data science teams unlock the value of zoom info insights and models directly within Google's cloud data warehouse big query.

Speaker 3: This reduces the time and resources needed to execute AI initiatives and more quickly make business decisions.

This reduces the time and resources needed to execute AI initiatives and more quickly make business decisions.

Jerry Sisitsky: During this call, any forward-looking statements are made pursuant to the save harbor provisions of U.S, security laws, 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 SEC filings.

Speaker 3: In addition to accessing data in modern cloud systems.

In addition to accessing data in modern cloud systems.

Speaker 3: enterprises must understand a single 360-degree view of their customers to effectively go to market. Our new integration with Reltio, a data management solution, provides ZoomInfo's B2B reference data directly within the master data management capabilities of Reltio, making ZoomInfo more integrated and actionable in the enterprise. Together, we are also launching a joint go-to market solution for master data management.

Enterprises must understand a single 360 degree view of their customers to effectively go to market, our new integration with <unk> and data management solution provides zoom npls BW reference data directly within the master data management capabilities of <unk>, making zoom info more integrated and action.

On the enterprise together, we are also launching a joint go to market solution for Master data management.

Speaker 3: Our new partnership with the Trade Desk expands our customers' ability to reach more premium publishers, enhance campaign fulfillment, and opens display advertising opportunities around the world. This partnership supports the next generation of features for marketing OS with international audiences and the ability to support new ad set types within our DSP. As a result, the Tembra was our highest monthly ad spend on record for marketing OS.

Our new partnership with the trade desk expands our customers' ability to reach more premium publishers enhanced campaign fulfillment and opens display advertising opportunities around the world. This partnership support the next generation of features for marketing OS with international audiences and the ability to support new adds.

Jerry Sisitsky: 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 events that may arise after this conference call, except as required by law. For more information, please refer the cautionary statement in the slides posted to our Invest Relations website at ir. ZoomInfo.com. All metrics on this call are non-gap and less otherwise noted. A reconciliation can be found in the financial results press release or in the slides posted to our IR on website.

Set types within our DSP. Other result September was our highest monthly AD spend on record for marketing O S.

Speaker 3: Down market, we've been investing in self-service e-commerce capabilities to ensure that companies of any size have the ability to access Zoom info data no matter their budget. We've built more robust trials, the ability to purchase a single sale to West seat, improved pathways and pay walls for in-app upgrades, and a streamlined technology driven on-boarding motion for our self-service users.

Down market, we have been investing in self service e-commerce capabilities to ensure that companies of any size have the ability to access zoom info data no matter their budget, we built more robust trials the ability to purchase a single cell dose seat improved pathways in paywalls for in App upgrades and a stream.

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

Henry Schuck: Thank you, Jerry, and welcome everyone. While the operating environment remains challenging, we delivered results that exceeded our Q3 guidance. Revenue for the quarter was $314 million and adjusted operating income was $126 million, a margin of 40%. During the quarter, we repurchased approximately 9 million shares of the ZoomInfo stock for $160 million, representing an average purchase price of $18 per share. We are uniquely positioned to capitalize on a tremendous long-term market opportunity, which gives us confidence that buying ZoomInfo stock at these levels will drive a meaningful economic return for our shareholders.

<unk> technology, driven operating motion for our self service users.

Speaker 3: Overall, we remain focused on improving our platform and delivering results for our customers.

Overall, we remain focused on improving our platform and delivering results for our customers.

Speaker 3: By investing to drive a simplified user experience, easier ways to transact with us, and building upon our data quality advantage, we are controlling the controllable. We're confident that when the economic environment improves, these investments that we're making today will position us for long-term growth and success.

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

Henry Schuck: Since early last year, we have highlighted the challenges of this operating environment, which include fewer upsells, more seat downsells, and elevated turn levels. As a platform that helps customers grow and one that serves some early cycle industries, we have seen net revenue retention and our overall growth rates come down, as customers have had to rebalance growth and profitability. This is a market phenomenon impacting companies across the spectrum of front office applications and not unique to ZoomInfo.

Speaker 3: Before I turn the call over to Cameron, I want to acknowledge our team members in Israel. We have more than 400 employees in Israel with offices in Rana and Tel Aviv, many of whom have been called up to active duty or a member of their family has been called up to serve. We stand with them during this incredibly difficult time. And our number one priority is to make sure that they and their families are safe. With that, I'll...

Before I turn the call over to Cameron I want to acknowledge our team members in Israel, we have more than 400 employees in Israel with offices in Reno and Tel Aviv, many of whom have been called up to active duty or a member of their family has been called up to serve we stand with them. During this incredibly difficult time, and our number one up or.

Number one priority is to make sure that they and their families are safe.

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

Speaker 5: Thank you, Henry. In Q3, we delivered revenue of $314 million, up 9% year over year, and up 0.6% sequentially, as adjusted for days of revenue record.

Thank you Henrik and Q3, we delivered revenue of $314 million up 9% year over year and up <unk>, 6% sequentially as adjusted for days of revenue recognition.

Henry Schuck: When the cycle ends and we are in a more normalized operating environment, companies will be looking to drive growth and we will continue to be uniquely positioned to help them do just that. In this operating environment, we're committed to controlling the controllable and delivering industry leading levels of profitability while we invest in our customer success and improve the company for the long term. To that end, we're doubling down on product excellence and customer success, investing in improved ease of use and driving quicker time to value for our customers.

Speaker 5: We continue to believe that current momentum in the business is best measured by the sequential growth of the annualized revenue. And we do not anticipate material improvements in the macroeconomic environment that could provide a tailless.

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

Speaker 5: Adjusted operating income was $126 million, a margin of $40.

Adjusted operating income was $126 million a margin of 40% GAAP net income was $30 million and GAAP EPS was <unk> <unk> per share.

Speaker 5: Gap net income was $30 million and Gap EPS was $0.8 per share.

Henry Schuck: These investments have driven a 20% increase in product engagement since the beginning of the year. Customers are using more of the platform more often. We're doing this while prioritizing investments in AI, data as a service, and marketing OS, and building our industry leading data coverage and accuracy across the globe. We've rolled out new pricing and packaging at the low end of the market, enabling us to capture more of the market efficiently while simultaneously growing our contributors. And we announced the number of leadership changes that have flattened the organization and given me the opportunity to get closer to our customers and how we win them, serve them, and grow them.

non-GAAP EPS was <unk> 26 per share.

Speaker 5: We continue to experience pressure with respect to renewals, fee customers renewing at lower rates, despite improving utilization and...

We continue to experience pressure with respect to renewals see customers renewing at lower rates, despite improving utilization and engagement.

Speaker 5: Customers are upselling less and downselling more than we saw in the first part of

<unk> are up selling less than down selling more than we saw in the first part of the year. Additionally, our smallest customers continue to be challenged and their ability to pay which drove another quarter of elevated write offs.

Speaker 5: Additionally, our smallest customers continue to be challenged in their ability to pay, which drove another quarter of elevator.

Speaker 5: We continue to expect that this cycle of renewals will be challenging through at least the first quarter of 2024, impacting revenue growth.

We continue to expect that this cycle of renewals will be challenging through at least the first quarter of 2024 impacting revenue growth through the first half of next year.

Speaker 5: Our greater than $100,000 ECV customer cohort declined modestly in the quarters. We saw continued pressure from mid-market technology companies reducing spend to levels below 100%.

Our greater than $100000 HCV customer cohort declined modestly in the quarter as we saw continued pressure from mid market technology companies, reducing spend to levels below $100000.

Henry Schuck: As part of the leadership changes, James Roth, our senior vice president of sales leading our enterprise customer base, has been promoted to chief revenue officer.

Speaker 5: While non software customers over $100,000 continue to

Non software customers over $100000 continued to grow.

Henry Schuck: Chris Hayes, our chief operating officer, transitioned into the new role of EVP of international expansion, and Dave Justice transitioned into the new role of chief growth officer.

Speaker 5: We now have 1,869 customers with more than $100,000.

We now have <unk> hundred 69 customers with more than $100000 of ACD.

Speaker 5: Our million dollar plus customer co-oper continued to grow year over year and as Henry indicated, we signed multiple seven figure deals and a fifteen million dollar TCB deal.

Our million plus customer cohort continued to grow year over year and as Henri indicated we signed multiple seven figure deals and a $15 million GCB deal in the quarter.

James Roth: I'm excited that James is here with us on the call today and wanted to give him the opportunity to share a few words, James. Thanks, Henry. I'm glad to be here today. I joined the team in early 2022 because I'm passionate about the product, the vision, and the culture that Henry has built. We have the power to drive massive improvements in how businesses go to market with our best-in-class data, AI-powered customer insights, and automated workflows.

Speaker 5: Our largest customers continue to expand with functionality, seats, and data as we are increasingly integrating directly into their go-to-mars.

Our largest customers continue to expand with functionality seats in data as we are increasingly integrating directly into their go to market motions.

Speaker 5: Advanced functionality contributed approximately a third of our overall ACV and continues to grow.

Advanced functionality contributed approximately a third of our overall ECB.

And continues to grow and provide incremental value to our customers within advanced functionality. We are seeing the highest levels of growth for marketing OS enrichment in das offerings and automation capabilities.

James Roth: I was a Zoom info customer for 10 years prior to joining the leadership team, and I have a deep understanding of what our customers want and need from the platform. Since joining, I've gotten to see the value that we are delivering to many of the largest and most sophisticated enterprises in the world. I've been in the room at Workday, Google, Amazon, Verizon, and so many others as we partnered with the revenue teams to build the foundation of data and insight that drive the future of go-to-market.

Speaker 5: Within advanced functionality, we're seeing the highest levels of growth from marketing OS, enrichment and bass offerings, and automation keeps.

Speaker 5: Our efficient and high margin operating model with low capital requirements and upfront billing continues to drive substantial cash flow generation.

Our efficient and high margin operating model with low capital requirements and upfront billing continues to drive substantial cash flow generation.

Speaker 5: Operating cash flow in Q3 was $81 million, which included approximately $18 million of interest.

Operating cash flow in Q3 was $81 million, which included approximately $18 million of interest payments.

Speaker 5: Unleavored free cash flow for the quarter was $95 million, representing 75% of adjusted offers.

Unlevered free cash flow for the quarter was $95 million, representing 75% of adjusted operating income.

James Roth: I've been proud to offer that same foundation of go-to-market technology that drives revenue, growth, at the world's best companies to companies downmarket across the globe. Over the past two years, I've helped recruit a large portion of our sales leadership, and I'm excited about the team we put together and the traction that we're seeing in the enterprise. I intend to build off that success, in particular with our million and five million dollar plus accounts, while we look for efficiencies in our go-to-market motion through e-commerce and product-led growth.

Speaker 5: As Q3 is typically a lower conversion quarter, we continue to expect annual unlevered free cash flow conversion in the 90s as a percentage of adjusted up.

Q3 is typically a lower conversion quarter, we continue to expect annual Unlevered free cash flow conversion in the Ninety's as a percentage of adjusted operating income.

Speaker 5: We ended the third quarter with $568 million in cash, cash equivalents in short-term and

We ended the third quarter with $568 million in cash cash equivalents and short term investments at the end of Q3, we carried approximately $1 5 billion in gross debt all of which is fixed or hedged interest rates.

Speaker 5: The end of Q3, we carried approximately $1.25 billion in gross debt, all of which has fixed or hedged.

Speaker 5: We believe that the current environment provides us an opportunity to reduce our share count in a meaningful way, thereby giving remaining shareholders more ownership of the substantial compounding free cash flow growth that we are aiming for in the future.

Henry Schuck: Great. Thanks, James. This quarter, we closed transactions with a number of best-in-class enterprises, including Verizon, Walmart, Paramount CBS, Sage Hospitality, Steam Logistics, CDW, Tenet Health, The Washington Post, Franklin Covey, Lands End, and Magellan Health. In Q3, we signed more than 200 deals with more than $100,000 in ACV, including multiple seven figured deals and a $15 million TCV deal. Some of the largest and most sophisticated companies in the world are going all in on our data, insights, and automation, integrating us directly into the way they go to market.

We believe that the current environment provides us an opportunity to reduce our share count in a meaningful way, thereby giving our remaining shareholders more ownership of the substantial compounding free cash flow growth that we are aiming for in the future.

Speaker 5: We've also adjusted our stock based compensation strategy to include performance space units that are only issued if growth targets for free cash flow per share.

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

Speaker 5: During the third quarter, we repurchased 8.8 million shares of ZoomInfo stock at an average purchase price of $18.19.

During the third quarter, we repurchased $8 8 million shares of zoom info stock at an average purchase price of $18 19 per share.

Speaker 5: Through September 30th, we have deployed a total of $247 million of the $600 million share repurchase authorizations and have retired 12.7 million shares representing over 3% of the total diluted shares.

Through September 30, we have deployed a total of $247 million of the $600 million share repurchase authorizations and a retired $12 7 million shares representing over 3% of the total diluted shares outstanding.

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

Speaker 5: Given our strong free cash flow generation and healthy balance sheet, we expect to continue to opportunistically reproduce.

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

Speaker 5: Our net leverage ratio is 1.3 times trailing 12 months adjusted EBITDA and 1.2 times trailing 12 months cash EBITDA, which is defined as consolidated EBITDA on our credit.

Our net leverage ratio is one three times trailing 12 months adjusted EBITDA and one two times trailing 12 months cash EBITDA, which is defined as consolidated EBITDA in our credit agreements down from one nine times and one six times, respectively as of September 32022.

Speaker 5: Down from 1.9 times and 1.6 times, respectively, as of September 30th, 2000.

Henry Schuck: By plugging ZoomInfo data directly into their go-to-market motion, they're able to deliver more targeted services to their customers and support the retention of high priority accounts. Intelli Communications, a large global provider of mobility network services and 5G signed a five year nearly eight figure engagement with ZoomInfo, which is now the key data and insight source for their go-to-market teams. Ensuring for years to come that they will have the highest quality data as they go to market.

Speaker 5: With respect to liabilities and future performance obligations, unearned revenue at the end of Q3 was $403 million, and remaining performance obligations, or RPO, were $1.1 billion, of which $795 million are expected to be delivered in the next 12 months.

With respect to liabilities and future performance obligations unearned revenue at the end of Q3 was $403 million and remaining performance obligations. Our RP O were $1 1 billion of which $795 million expected to be delivered in the next 12 months.

With that let me turn to guidance.

Speaker 5: For Q4, we expect revenue in the range of $309 to $312 million.

For Q4, we expect revenue in the range of $309 million to $312 million adjusted operating income in the range of $122 million to $124 million and non-GAAP net income in the range of $24 25 per share.

Speaker 5: Adjusted operating income in the range of $122 to $124 million. And non-gaff net income in the range of 24 to 25 cents.

Henry Schuck: Another mid-market telecommunications firm who had left for a competitor ten months earlier, boomeranged back and expanded with a multi-year multi-seven figure engagement that encompasses the full array of our platform offering, including sales OS, marketing OS, operations OS, and DAS, consolidating out multiple providers in the process. From a product perspective, we continue to focus on delivering customer success with easy to use features that drive quick time to value. These investments are paying dividends in the form of improved customer satisfaction and higher engagement.

Speaker 5: For the full year 2023 we now expect revenue in the range of 1.232 to $1.235 billion and adjusted income adjusted operating income in the range of 494 to 496.

For the full year of 2023, and we now expect revenue in the range of one to three two to one to three 5 billion in.

And adjusted income adjusted operating income in the range of 494% to $496 million.

Speaker 5: We expect non-Gap net income in the range of $0.99 to $1 per share based on 412 million weighted average distributed shares.

We expect non-GAAP net income in the range of <unk> 99 to $1 per share based on 412 million weighted average diluted shares outstanding.

Speaker 5: We expect unlevered free cash flow in the range of $445 to $455 million.

We expect Unlevered free cash flow in the range of $445 million to $455 million.

Speaker 5: Our adjusted full year guidance implies 12% revenue growth at the midpoint and an adjusted operating margin of 40%. With that, let me turn it over to

Our adjusted full year guidance implies 12% revenue growth at the midpoint and an adjusted operating margin of 40%.

Henry Schuck: NPS rose seven points year over year with growth every quarter. Our recent AI enhancements to chorus have increased NPS for that product by 22 points year over year, and overall product engagement has increased by more than 20% this year.

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

Speaker 1: As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please be sure to limit to one question and one question only. Please stand by while we compile the Q&A roster.

Okay.

As a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.

Henry Schuck: We also continue to receive market recognition. Snowflake named ZoomInfo and enrichment data category leader in their 2023 modern marketing data stack report. ZoomInfo obtained an AWS competency relative to our expertise and digital customer experience. We also stand in the top 0.01% of companies with the most number one rankings being awarded 101 number one ranking in G2's fall report. We're leveraging new AI technologies and partners to create customer facing insights and drive data collection and validation at scale.

Please be sure to limit to one question and one question only please standby, while we compile the Q&A roster.

Speaker 1: Our first question comes from Mark Murphy with JP Morgan. Your line is open.

Our first question comes from Mark Murphy with Jpmorgan. Your line is open.

Speaker 6: Well, thank you very much, Henry. I believe you mentioned a $15 million to CV deal that closed in Q3. And it's such a rarity in this environment. I'm wondering if you could possibly shed a little light. First of all, on the contract duration, so we can try to analyze it. And also, just what vertical is it that's moving forward to a vat scale of a commitment in this environment that I have a quick follow up?

Well. Thank you very much Henry I believe you mentioned a $15 million.

<unk> TV deal that closed in Q3 and as such a rarity in this environment I'm wondering if you could possibly shed a little light.

Henry Schuck: On the customer facing side, we're now extracting strengths, weaknesses, opportunities, threats, and other insights. From earnings calls and public filing, which when paired with our highly accurate data scoops intent and other insights provide sellers with the key insights they need to engage in account and close a deal. LLMs are also integrated into our existing profilers and data validation pipeline, helping us understand the validity of a human name, title, and educational data listed on a profile and driving further improvement in our industry leading accuracy, which sits at an all time high coming out of Q3.

First of all on the contract durations. So we can try to annualize it and also just what vertical is it that's that's moving forward with that scale of a commitment in this environment and then I have a quick follow up.

Speaker 3: It's thanks Mark, I'm happy to take that but since James is here with me I'm gonna have him talk to that.

Hi, Thanks, Mark I'm happy to take that but since James James is here with me I'm going to have him talk to that.

Speaker 4: Yes, so it was a three year agreement with a large software company. So the annualized revenue is about 5.3 million. It was actually 15.9 million total contract value.

Yes. So it was a three year agreement with a large software company.

So the annualized revenue was about $5 3 million was actually $15 9 million total contract value.

Speaker 4: And what's interesting about the deal itself is that, you know, it confirms the centralization of data strategy. They've consumed multiple contact cubes.

And what's interesting about the deal itself is that it confirms the centralization of data strategy, they've consumed multiple contact cubes company cubes from a graphic information and really just going all with zoom info is the foundational data provider and that's where we landed it we ended up growing it.

Henry Schuck: We've also seen incredibly we've also been incredibly focused on our international data offering and following recent significant investments there, our customers now have access to over 200 million business contacts and markets outside of North America. In the last two years, we have grown the number of global companies in our data platform by more than 6X, while crippling the number of global contacts and the number of global mobile phone numbers available to our customers.

Speaker 4: company cubes from a graphic information and really just going on with zoom info as the foundational data provider. And that's where we landed it. We ended up growing it and locking it in for a three year, $5.3 million deal.

And locking it in for three year $5 $3 million deal.

Speaker 6: Okay, wonderful. Thank you for that detail. And as a follow-up camera, and I don't believe Zoom Info's revenue has ever declined sequentially in a Q4. I'm wondering if we maybe we should sense some conservatism in that forecast, or should we figure that you experienced kind of a sufficient downsell.

Okay wonderful thank you for that detail and as a follow up Cameron I don't believe zoom info as revenue has declined sequentially in Q4 I'm wondering.

Henry Schuck: In continental Europe specifically, we've expanded our mobile numbers by 13X while growing mobile in the UK by 6X. With this expanded coverage, global sales teams can count on ZoomInfo when targeting international markets, while knowing that our commitment to ethical data collection and compliance remains front and center.

If we maybe we should send some conservatism in that forecast or should we should we figure that you experienced kind of a sufficient down itself towards the end of Q3, such that it would reduce the kind of top line trend there that.

Speaker 6: toward the end of Q3 such that uh... it would reduce uh... kind of top-line trend there that uh... that uh... you know potentially you do end up kind of just with a with a modest down to

That.

Potentially you do end up kind of just with a modest down to four.

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

Speaker 5: Thanks Mark. So you know, the environment does continue to be challenging and we are expecting net retention for the year to be below 90.

Thanks, Mark so the environment does continue to be challenging and we are expecting net retention for the year to be below 90%.

Speaker 5: Yeah, as a result in Q4, which is our highest period for renewals, you know, that net retention below 100% creates a headwind that's amplified by the higher concentration of renewals. So as we've discussed, we believe that this renewal cycle, at least through the first quarter of 2024, will be challenging. I think, you know, if we look...

As a result in Q4, which is our highest period for renewals.

Net retention below a 100% creates a headwind thats amplified by the higher concentration of renewals. So as we've discussed we believe that this renewal cycle at least through the first quarter of 2024, it will be challenging.

Henry Schuck: AI is only as good as the data powering it, so in the third quarter we launched our integration with the Google Analytics hub to help these data science teams unlock the value of ZoomInfo insights and models directly within Google's Cloud Data Warehouse BigQuery. This reduces the time and resources needed to execute AI initiatives and more quickly make business decisions. In addition to accessing data in modern cloud systems, enterprises must understand a single 360 degree view of their customers to effectively go to market.

Speaker 5: Beyond that, and you look at our renewal cycles 90% of our ACP will have transacted between September 2022 and March 2024.

If we look beyond.

And that and you look at our renewal cycles, 90% of our ACB will have transacted between September 2022, and March 2024.

Speaker 5: So, you know, we're really focused on getting through this cycle. And while there is some tale of longer term agreements after that, we'll work for most of the space by the end of the first quarter. Thank you very much.

So we're really focused on getting through this cycle.

And while there is some tail of longer term agreements. After that we'll have worked through most of this space by the end of the first quarter.

Thank you very much.

One moment for our next question.

Speaker 1: Our next question comes from Tyler Radke with City. The line is open.

Our next question comes from Tyler Radke with Citi. Your line is open.

Henry Schuck: Our new integration with RELTO, a data management solution, provides ZoomInfo's B2B reference data directly within the master data management capabilities of RELTO, making ZoomInfo more integrated and actionable in the enterprise. Together we are also launching a joint go-to-market solution for master data management. Our new partnership with the trade desk expands our customers ability to reach more premium publishers, enhance campaign fulfillment, and opens display advertising opportunities around the world. This partnership supports the next generation of features for marketing OS with international audiences and the ability to support new ad set types within our DSP. As a result, the timber was our highest monthly ad spend on record for marketing OS.

Yes, thanks for taking the question so.

Speaker 2: I'm just curious what you've seen so far in the month of October . And, you know, specifically within the software and business services vertical. It sounded like that largely performed in line with your expectation. But just any updated thoughts, if you're seeing any green shoots emerging or things are getting better or worse. Thank you.

I'm just curious what you've seen so far in <unk>.

The month of October and spin.

Specifically within the software and business services vertical it sounded like that largely performed in line with your expectation, but just any updated thoughts.

If youre seeing any green shoots emerging or or if things are getting better or worse. Thank you.

Speaker 7: Thanks Tyler. You know October looks a lot like September and Q3 looks. So we haven't seen any improvement in the environment. I think overall in the business we continue to have more success outside of the software and business services verticals. And so we're seeing that in October as well but nothing different than what we saw in the Q3.

Thanks Tyler.

October looks a lot like September and Q3 look so we haven't seen any.

Improvement in the environment I think overall in the business. We continue to have more success outside of the software and business services verticals.

Henry Schuck: Down market, we've been investing in self-service e-commerce capabilities to ensure that companies of any size have the ability to access ZoomInfo data no matter their budget. We've built more robust trials, the ability to purchase a single sales OS seat, improved pathways and paywalls for in-app upgrades, and a streamlined technology driven on-boarding motion for our self-service users. Overall, we remain focused on improving our platform and delivering results for our customers. By investing to drive a simplified user experience, easier ways to transact with us, and building upon our data quality advantage, we are controlling the controllable. We're confident that when the economic environment improves, these investments that we're making today will position us for long-term growth and success.

So we're seeing that in October as well, but nothing different than what we are saying what we saw in Q3.

Thank you.

One moment for our next question.

Speaker 1: Our next question comes from Brad Felnick with Deutsche Bank. Your line is open. Great. Thank you.

Our next question comes from Brad Zelnick with Deutsche Bank. Your line is open.

Great. Thank you very much for taking my questions. Henry it's cleared youre leaning in on AI and hearing the enhancements and chorus driving your NPS score 22 points higher is really impressive but in a world where Microsoft has sales co pilot Salesforce has sales GPT. How do you ensure zoom info is front and center as the interface sales.

Speaker 8: Henry, it's clear you're leaning in on AI and hearing the enhancements in chorus, driving your NPS score 22 points higher is really impressive. But in a world where Microsoft has sales co-pilot, sales force has sales GP.

Speaker 8: How do you ensure Zoom Info is front and center at the interface sales professionals continue to use for the grub...

<unk> continue to use for the greatest insights and productivity and helping them hit their number.

Speaker 7: Thanks, Brad. I think this all comes down to the data and insights that we provide. And it's one thing to be able to provide

Thanks, Brad I think this all comes down to the data and insights that we provide.

Henry Schuck: Before I turn the call over to Cameron, I want to acknowledge our team members in Israel. We have more than 400 employees in Israel with offices in Rana and Tel Aviv, many of whom have been called up to active duty, or a member of their family has been called up to serve. We stand with them during this incredibly difficult time, and our number one priority is to make sure that they and their families are safe.

And it's one thing to be able to provide.

Speaker 7: insights on data that exists in your CRM or data or insights that exist on the public web, the vast amount of proprietary, non-publicly available data and insights that we collect and are able to use AI and LLMs again.

Insights on data that exists in your CRM, our data are insights that exist on the public web, but the vast amount.

Proprietary non publicly available data and insights that we collect and are able to use AI and <unk> against that's what will doubts what is making our product.

Speaker 7: That's what is making our product even more relevant for sales users. And without that proprietary data, without the information that sellers need to actually engage with their customers and know when to engage with their customers.

Cameron Heizer: With that, I'll turn the call over to Cameron. Thank you, Henry. In Q3, we delivered revenue of $314 million, up 9% year over year, and up 0.6% sequentially, as adjusted for days of revenue recognition. We continue to believe that current momentum in the business is best measured by the sequential growth of the annualized revenue.

Even more relevant for sales users and without that proprietary data without the information that Ah.

That sellers need to actually engage with their customers and know when to engage with their customers.

Speaker 7: NEAI you put on top of just generic data doesn't spit out relevant insights for a sales rep. So we're really confident that the underlying foundation of data and insights that we have at ZoomInfo which is proprietary and not available publicly is what will drive that pain of glass for sales rep.

You put on top of just generic data doesn't spit out relevant insights for a sales rep and so we're really confident that the underlying foundation foundation of data and insights that we have at zoom info, which is proprietary and non available publicly is what will drive.

Cameron Heizer: We do not anticipate material improvements in the macroeconomic environment that could provide a tailwind to activity in the near future. Adjusted operating income was $126 million, a margin of 40%. Gap net income was $30 million, and Gap EPS was 8 cents per share. Non-Gap EPS was 26 cents per share. We continue to experience pressure with respect to renewals, fee customers renewing at lower rates despite improving utilization and engagement. Customers are upselling less and downselling more than we saw in the first part of the year. Additionally, our smallest customers continue to be challenged in their ability to pay, which drove another quarter of elevated write offs.

Dot pane of glass for sales reps.

Speaker 8: Thank you for that color, and maybe just for you, Cameron, with RPO and CRPO down sequentially amidst everything that's going on, how much of that might be duration or anything else maybe to call out, and what needs to happen to see booking stabilize? Thank you, guys.

You for that color and maybe just for you Cameron with <unk> down sequentially amidst everything thats going on how much of that might be duration or anything else maybe to call out and what needs to happen to see bookings stabilize thank you guys.

Speaker 5: You know, as we mentioned, we do focus on sequential growth and annualized revenue.

Yes, so as.

As we mentioned, we do focus on sequential growth in annualized revenue as the primary metric to assess in period activity and momentum.

Speaker 5: as the primary metric to assessing period activity momentum. Yeah.

Cameron Heizer: We continue to expect that this cycle of renewals will be challenging for at least the first quarter of 2024, impacting revenue growth through the first half of next year. Our greater than $100,000 ACV customer cohort declined modestly in the quarters. We saw continued pressure from mid-market technology companies reducing spend to levels below $100,000. While non-software customers over $100,000 continued to grow. We now have 1869 customers with more than $100,000 in ACV.

Speaker 5: That was down at 0.6% in Q3. So it is reflective of the challenges that we're seeing from the environment. Other metrics can be influenced by other factors, including changes in the mix of contract lengths, and billing terms, and write-off assumptions. Probably the biggest one of those that you know.

That was down at zero.

0.6% in Q3, so it is reflective of the challenges that we're seeing from the environment.

Other metrics can be influenced by other factors, including changes in the mix of contract lengths in billing terms and write off assumptions, probably the biggest one of those that.

Speaker 5: showed some volatility was right off assumptions, which have increased during the course of this year, and specifically impact RPO in a negative way.

Showed some volatility was write off.

Assumptions, which have increased during the course of this year.

Specifically impact our <unk> in a negative way.

Understood. Thank you.

Cameron Heizer: Our $1,000,000 plus customer cohort continued to grow year over year, and as Henry indicated, we signed multiple seven bigger deals and a $15,000,000 TCV deal in the quarter. Our largest customers continue to expand with functionality, seats, and data as we are increasingly integrating directly into their go-to-market motions. Advanced functionality contributed approximately a third of our overall ACV and continues to grow and provide incremental value to our customers. Within advanced functionality, we are seeing the highest levels of growth from marketing OS, enrichment and bass offerings, and automation capabilities.

One moment for our next question.

Speaker 1: Our next question comes from Michael Turin with Wells Fargo. Your line is open.

Yes.

Our next question comes from Michael <unk> with Wells Fargo. Your line is open.

Speaker 9: Hey, great thanks. I appreciate you taking the question and Cameron. Appreciate some of the color you're making on on a return.

Hey, great. Thanks. Appreciate you taking the question and Cameron appreciate some of the color you are making on our retention rates and the impacts that you're seeing.

Speaker 9: Is that comment you made around the challenges you're seeing potentially lingering until the first half of next year is that mostly a function of getting through this heavier renewal period and

Is that comment you made around the challenges you're seeing potentially lingering until the first half of next year is that mostly a function of getting through this heavier renewal period and is it similar to what youre assuming for our as to what you would expect for the first half.

Speaker 9: Is it similar to what you're assuming or as to what you'd expect for the first half from a retention or sequential growth perspective if that holds? And maybe just for Henry as a compliment to that question are there certain processes you're able to put in place to help with those renewal conversations as you're having more of those and have had more time to build response or maybe anything new you're doing on the good market side just as you work through the renewal period at the end of the day.

Retention or sequential growth perspective, if that holds and maybe just for Henry as a complement to that question are there are there certain processes youre able to put in place to help with those renewal conversation because you are having more of those and have had more time to build response or maybe anything you're doing on the go to market side.

Cameron Heizer: Our efficient and high margin operating model with low capital requirements and up for billing continues to drive substantial cash flow generation. Operating cash flow in Q3 was $81 million, which included approximately $18 million of interest payments. Unlearned free cash flow for the quarter was $95 million, representing 75% of adjusted operating income. As Q3 is typically a lower conversion quarter, we continue to expect annual unlearned free cash flow conversion in the 90s as a percentage of adjusted operating income.

Just as you work through the renewal period at the end of the year.

Speaker 5: So I think I'll kick off there and thanks for your question.

So I think I'll kick off there and thanks for your question.

Speaker 5: Again, I think we've talked about with a number of people in the past that our view is that

Again, I think we've we've talked about with a number of people in the past that our view is that peak negativity, particularly with respect to layoffs.

Cameron Heizer: We ended the third quarter with $568 million in cash, cash equivalents and short-term investments. At the end of Q3, we carried approximately $1.25 billion in gross debt, all of which has fixed our hedged interest rates. We believe that the current environment provides us an opportunity to reduce our share count in a meaningful way, thereby giving remaining shareholders more ownership of the substantial compounding pre cash flow growth that we are aiming for in the... Future.

Speaker 5: peak negativity, particularly with respect to layoffs and many other factors kind of occurred in the Q1 2003 period. And therefore, we do think we need to get through the renewals with our...

And the other factors kind of occurred in the in the Q1 2003 period and therefore, we do think we need to get through the renewals with our customers and as I mentioned before.

Speaker 5: customers and as I mentioned before, you know, between September 22 and March 2024, we'll have transacted with approximately 90% of our ACV.

Between September 22, and March 'twenty, 'twenty, four will have transacted with approximately 90% of our.

Cameron Heizer: We've also adjusted our stock based compensation strategy to include performance space units that are only issued if growth targets for free cash flow per share or achieve. During the third quarter, we were purchased 8.8 million shares of ZoomInfo stock and an average purchase price of $18.19 per share. Through September 30th, we have deployed a total of $247 million of the $600 million share repurchase authorizations and have retired 12.7 million shares, representing over 3% of the total diluted shares outstanding.

Speaker 5: And I think we really need to get through that period of having renewed or sold ACV with those.

And I think we really need to get through that period of having.

Having renewed or sold.

With those customers ahead of time.

Speaker 5: The assumptions really are very focused on renewals. New business continues to be relatively strong. Obviously, the environment impacts that as well, but the...

The assumptions really are very focused on renewals new business continues to be.

The relatively strong obviously, the environment impacts that as well, but the.

Speaker 5: The sales efficiency of our new business team and the demand that we see continue to be good out there and we continue to bring on new customers to support that. So we're really focused much more on mitigating and getting through this renewal cycle.

The sales efficiency of our new business team and the demand that we see continue to be.

Good out there and we continue to bring on new customers to support that so we're really focused.

Cameron Heizer: Given our strong free cash flow generation and healthy balance sheet, we expect to continue to opportunistically repurchase shares. An out leverage ratio is 1.3 times trailing 12 months adjusted EBITDA on 1.2 times trailing 12 months cash EBITDA, which is defined as consolidated EBITDA on our credit agreements, down from 1.9 times and 1.6 times respectively as of September 30th, 2022. With respect to liabilities and future performance obligations, honored revenue at the end of Q3 was $403 million in remaining performance obligations or RPO were 1.1 billion of which 795 million are expected to be delivered in the next 12 months.

Much more on mitigating.

Getting through this renewal cycle that we're in right now.

Speaker 7: Thanks, Cameron. I think the big things we're doing from a process perspective, Michael, on renewals is number one, we're getting at them sooner. And so we've built a robust set of health scores.

Thanks Kamran.

I think the big things, we're doing from a process perspective, Michael on renewals is number one were getting at them sooner and so we built a robust set of health scores for our customers that take into consideration.

Speaker 7: For our customers that take into consideration product engagement, product usage, provisioning of user licenses, integrations, and usage of specific products and functionality. And so we have a much clearer view, the health of an account, and we're engaging with them, our account managers and our CSMs are engaging with them.

Product engagement product usage provisioning of user licenses integrations and usage of specific products and functionality and so we have a much clearer view.

The house of an account and we're engaging with them are account managers and our CSM are engaging with them.

Speaker 7: based on those help scores. And so we've been proactively reaching out to those clients who come up for renewal and Q4 and Q1 throughout the back half of this.

Cameron Heizer: With that, let me turn to guidance. For Q4, we expect revenue in the range of $309 to $312 million, adjusted operating income in the range of $122 to $124 million, and non-gaff net income in the range of $24 to $25 per share. For the full year 2023, we now expect revenue in the range of 1.232 to 1.235 billion and adjusted income, adjusted operating income in the range of $494 to $496 million.

Based on those health scores and so we've been proactively reaching out to those clients who come up for renewal in Q4 and Q1 throughout the back half of this year and then I talked about this a bit on the last call, but we have a really broad product portfolio and so we have opportunities within the customer base.

Speaker 7: And then I talked about this a bit on the last call, but we have a really broad product portfolio. And so we have opportunities within the customer base. If one product got downsold or a customer had a big layoff and so they have less licenses that they need for sales, we're able to bring them into chorus or operations or other parts of the product portfolio. And so we've been leveraging that in renewal conversations as well.

One product got down sold or a customer had a big layoff and so they have less licenses that they need for sales, though as we're able to bring them into core assets or operations or <unk> or other parts of the product portfolio and so we've been leveraging not in renewal conversations as well.

Cameron Heizer: We expect non-gaff net income in the range of $0.99 to $1 per share based on 412 million weighted average diluted shares outstanding. We expect unleivered free cash flow in the range of $445 to $455 million. Our adjusted full year guidance implies 12% revenue growth at the midpoint and an adjusted operating margin of 40%.

Thank you.

One moment for our next question.

Speaker 1: Our next question comes from Brent Braceland with Piper Sandler. Your line is open.

Our next question comes from Brent <unk> with Piper Sandler Your line is open.

Speaker 10: Thank you. Good afternoon. Maybe we'll start with Cameron. One quick follow-up for Henry. Cameron, you're obviously talking about challenges here in Q4, guiding to a sequential decline in Q4, talking about continuation of challenges into the first half. Should we also think about small sequential declines into Q1, Q2 before you see a re-acceleration? And then one quick follow-up for Henry, thanks.

Thank you good afternoon, maybe I will start with Cameron one quick follow up for Henry Kamran, you're obviously talking about challenges here in Q4 guiding to a sequential decline in Q4 talking about continuation of challenges into the first half.

Operator: With that, let me turn it over to the operator to open the call for questions. As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please be sure to limit to one question and one question only. Please stand by when we compile the Q&A roster.

Should we also think about small sequential declines into Q1 Q2 before you see a reacceleration and then one quick follow up for Henry Thanks.

Speaker 5: Yeah, so, you know, we're not guiding to 2024 at this time. And, you know, frankly, I think for all software companies, it's probably less visibility further out than there is than there has been historically.

Yes.

Yes, so we're not guiding to 2024 at this time in the year frankly, I think for all software companies, it's probably less visibility further out then there is then there has been historically.

Mark Murphy: Our first question comes from Mark Murphy with JP Morgan. Your line is open. Thank you very much, Henry. I believe you mentioned a $15 million QCV deal that closed in Q3 and it's such a rarity in this environment. I'm wondering if you could possibly shed a little light. First of all, on the contract durations so we can try to analyze it. And also, just what vertical is it that's moving forward with that scale of a commitment in this environment that I have a quick follow-up. Thanks, Mark.

Speaker 5: You know, we do continue to expect that this more challenging renewal environment will persist through at least Q1 of 2022 will impact sequential revenue growth through the first half. Once we're through this cohort of renewals, there is the opportunity to drive higher growth rates, but it remains a challenging operating environment. We certainly don't want to get ahead of ourselves as to when exactly that acceleration.

We do continue to expect that this more challenging renewal environment will persist through.

At least Q1 of 2022 and will impact sequential revenue growth through the first half.

Once we're through this cohort of renewals there is the opportunity to drive higher growth rates, but it remains a challenging operating environment. We certainly don't want to get ahead of ourselves.

As to when exactly that.

Speaker 10: makes sense and then Henry for you obviously clearly challenging environment you're still finding ways to close large deals my questions on the boomerang deal. Yeah, surprise to hear a customer switched 10 months later they're coming back. Can you just give color around what drove kind of the boomerang deal back to zoom info and actually think about that going forward thanks.

Acceleration might occur makes sense and then Henry for you, obviously clearly challenging environment you are still finding ways to close large deals. My question is on the Boomerang deal.

James Roth: I'm happy to take that, but since James is here with me, I'm going to have him talk to that. Yes, so it was a three year agreement with a large software company. So the annualized revenue is about 5.3 million is actually 15.9 million total contract value. And what's interesting about the deal itself is that it confirms this centralization of data strategy. They've consumed multiple contacts. And that's where we landed it. We ended up growing it and locking it in for a three year, 5.3 million dollar deal. Okay, wonderful. Thank you for that detail.

Surprised to hear our customer switched 10 months later theyre coming back can you just give color around what drove kind of the boomerang deal back to presume info and how should we think about that going forward. Thanks.

Yeah, and Brian sorry, it really quickly.

Speaker 5: Brent, really quickly, I just wanted to clarify, I'm at Q1 of 24.

Brent really quickly I just wanted to clarify I meant Q1 of 'twenty four there.

That response, I think I misspoke.

Okay.

Speaker 7: I think you know, yeah, thanks. Yeah, I'm in front. I think.

I think center.

Yes, Thanks, Kamran front I think.

Speaker 3: When I started this business 17 years ago, I started it with the premise that high quality data made a major difference in the way companies go to market. And there have been cheap alternatives to what we offer for the last 17 years.

When I started this business 17 years ago I started with the premise that high quality data made a major difference in the way companies go to market and there've been cheap alternatives to what we offer for the last 17 years.

Cameron Heizer: And as a follow-up, Cameron, I don't believe ZoomInfo's revenue has ever declined sequentially in a Q4. I'm wondering if we, maybe we should sense some conservatism in that. The forecast or should we should we figure that you experienced kind of a sufficient downsell toward the end of Q3 such that it would reduce the kind of top line trend there and that that potentially you do end up kind of just with a modest down date for.

Speaker 3: And if you're not doing your diligence, and you're not an incredibly sophisticated buyer, you can make a switch. And then you realize almost instantly that high quality data does in fact make a difference in your go-to-market motion. And that's what we saw here. We saw a customer who switched to a low-priced offering and then immediately came back and meaningfully increased their spend with ZoomInfo and did it across the platforms. And

And if you're not doing your diligence and you are not an incredibly sophisticated buyer you can make a switch and then you realize almost instantly that high quality data does in fact make a difference in your go to market motion and that's what we saw here.

We saw customer who switched to a low priced offering and then immediately came back and meaningfully increase their spend with new menthol and did it across the platforms and.

Cameron Heizer: Thanks Mark. So, you know, the environment does continue to be challenging and we are expecting net retention for the year to be below 90%. Yeah, as a result in Q4, which is our highest period for renewals, you know, that net retention below 100% creates a headwind that's amplified by the higher concentration of renewals. So as we've discussed, we believe that this renewal cycle, at least through the first quarter of 2024 will be challenging.

Speaker 3: We've always competed in a way that said, when you have high quality data, whether you're an account executive, an account manager, a sales development rep, a marketing operations professional, CMO, or CRO, that information makes a meaningful difference in the way that you acquire, find, and grow your customers, and customers see that.

We've always competed in a way that said when you have high quality data, whether you are an account executive and account manager or a cell development wrap a marketing operations professionals CMO or CRO that information makes a meaningful difference in way that you acquire find and grow your customers.

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

Speaker 3: There are a lot of boomerang customers that we find who go try something new and then immediately come back. And in this case, not only did they come back, but they meaningfully increased their spend with us. Helpful color there, thanks.

Cameron Heizer: I think, you know, if we look beyond that, and you look at our renewal cycles 90% of our ACV will have transacted between September 2022 and March 2024. So, you know, we're really focused on getting through this cycle. And while there is some tail of longer term agreements after that will work for most of the space by the end of the first quarter. Thank you very much. One moment for our next question.

Helpful color there thanks.

One moment for our next question.

Speaker 1: Our next question comes from Koji, Akeda with Think of America. Your line is open.

Yes.

Our next question comes from Koji Ikeda with Bank of America. Your line is open.

Yes, Hey, guys.

Speaker 11: be a question for Cameron here. You mentioned

Thanks for taking the question maybe a question for Cameron here.

You mentioned from September to March of 2024, you had gone through about 90% of your ECB, leaving 10% that still needs to be renewed but the way I understand the comment was that of that 10% some of them have already down.

Speaker 11: 10th of March, 2024, you'd gone through about 90% of your

Tyler Radke: Our next question comes from Tyler Radke with city. The light is open. Yeah, thanks for taking the question. So, I'm just curious what you've seen so far in the month of October. And, you know, specifically within the software and business services vertical sounded like that largely performed in line with your expectation. But just any updated thoughts. If you're seeing any any green shoots emerging or things are getting better and worse. Thank you.

Speaker 11: renewed but the way I understand the comment was that of that 10% some of them have already down down sold in the second

Tyler Radke: Thanks Tyler. You know, October looks a lot like September and Q3 looks. So we haven't seen any improvement in the environment. I think overall in the business, we continue to have more success outside of the software and business services verticals. And so we're seeing that in October as well, but nothing different than what we saw in Q3. Thank you. One moment for our next question.

<unk> sold in the second quarter of this year. So maybe could you help us describe the composition of that remaining 10% of ACB.

Speaker 11: So maybe could you help us describe the composition of that remaining.

Post March of next year.

Speaker 5: Yeah, so to be super queer, those are about 90% are customers that we've transacted with from September of 22, and we began to see real significant headwinds from the macroeconomic environment through March of 2024. So those are longer term contracts that transacted.

Yes, so to be Super clear those are about 98% are customers that we've transacted with from September of 'twenty, two and we began to see.

Real significant headwinds from the macroeconomic environment through it through March of 2024, so those are longer term contracts.

Transacted.

Speaker 5: that sometime before September 22 and therefore we're likely in a more constructive environment when they initially entered into that contract.

Sometime before September 22, and therefore were likely in a.

A more constructive environment when they initially entered into that contract.

Speaker 5: So that remaining 10%, those do tend to be larger customers, but there is some risk for those customers that they would perceive a worse environment than when they transacted either in 2021 or the beginning of 2022, as they come up for renewal later in 24, potentially.

So that remaining 10%.

Those do tend to be larger customers, but there is.

Some risk for those customers that they would.

Brad Zelnick: Our next question comes from Brad Zelnick with Deutsche Bank. Your line is open. Great. Thank you very much for taking my questions. Henry, it's clear you're leaning in on AI and hearing the enhancements in chorus, driving your NPS score 22 points higher is really impressive. But in a world where Microsoft has sales co-pilot, Salesforce has sales GPT.

Perceive a worse environment than when they transacted either in 2021 or the beginning of 2022.

As they come up for renewal later in 'twenty, four or potentially even later.

Got it no that makes a lot of sense and I wanted to ask a question a follow up here on the 100, K plus ACB customers as we look at that metric. This is the third straight quarter of sequential decline here.

Speaker 11: And I wanted to ask a question, follow up here on the 100K plus ACV customer.

Speaker 11: As we look at that metric, this is the third straight quarter of sequential decline here. And if we continue a kind of pull forward a similar pace, it would actually imply.

Henry Schuck: How do you ensure ZoomInfo is front and center as the interface sales professionals continue to use for the greatest insights and productivity in helping them hit their number. Thanks, Brad. I think this all comes down to the data and insights that we provide. And it's one thing to be able to provide insights on data that exist in your CRM or data or insights that exist on the public web. But the vast amount of proprietary non-publicly available data and insights that we collect and are able to use AI and LLMs against.

If we continue kind of pull forward of similar pace it would actually imply.

Speaker 11: over your decline in the fourth quarter. So maybe you could help us decompose this metric a little bit and X technology.

Our year over year decline in the fourth quarter. So maybe you could help us decompose this metric a little bit and X technology did this metric grow I mean that would be super helpful to understand.

Speaker 5: Yeah, I think in every quarter this year, X technology, and honestly, if you just strip out mid-market software, so these are kind of largely venture-backed software companies. If you strip out that, this metric has grown every quarter this year, quarter on quarter, and obviously would continue to show growth as a result.

Yes, I think in every quarter this year X technology and honestly if you just strip out mid market software. So these are yes.

Kind of.

Largely venture backed.

Henry Schuck: That's what that's what is making our product even more relevant for sales users. And without that proprietary data, without the information that that sellers need to actually engage with their customers and know when to engage with their customers. Any AI you put on top of just generic data doesn't spit out relevant insights for a sales rep. And so we're really confident that the underlying foundation foundation of data and insights that we have at ZoomInfo, which is proprietary and not available publicly. Is what will drive that pain of glass for sales reps.

Software companies if.

If you strip out that this metric has grown every quarter this year.

Quarter on quarter, and obviously would continue to show growth as a result.

Got it thanks for taking the questions. Thank you.

One moment for our next question.

Speaker 1: Our next question comes from Alex Zukin with Wolf Research. Your line is open.

Our next question comes from Alex Zukin with Wolfe Research Your line is open.

Speaker 9: Hey, guys, thanks for taking the question. I guess on the same vein, I wanted to ask about NRR can be mentioned. It was sub 90%. Are we do does this feel like a bottom? And now we're kind of taking that right over a larger cohort here into Q4 or is this something that, you know, gets to the mid 80s or the low 80s in Q4 and Q1?

Hey, guys. Thanks for taking the question I guess on the same vein I wanted to ask about NR. Kim you mentioned it was sub 90%.

Does this feel like a bottom and now we're kind of taking that rate over a larger.

Cameron Heizer: Thank you for that color and maybe just for you Cameron with with our PO and CRPO down sequentially amidst everything that's going on. How much of that might be duration or anything else maybe to call out and what needs to happen to see booking stabilized. Thank you guys. Yeah, so as we mentioned, we do focus on sequential growth and annualized revenue as the primary metric to assessing period activity and momentum. Yeah, that was down at 0.6% and Q3.

Cohort here into Q4 or is this something that gets to the mid <unk> to low <unk> in Q4 and Q1.

Speaker 9: And then just on the margins, can you remind us, given I think that there was a slight tick down on the guide on operating margins, like what's the, it sounds like the first half will be just continually challenged from a revenue growth perspective. Are you gonna grow op-ex by more than or less than revenue growth during this period?

And then just on the margins just can you remind us given I think that there was a slight tick down on the guide on operating margins like what's the it sounds like the first half of which continually challenged from a revenue growth perspective or are you going to grow opex by more than or less than revenue growth. During this period.

Speaker 5: So with respect to net retention, it continues to be a tough world out there. I think when we've set up the guidance, we do assume that it continues to have an impact and a negative impact on net retention. And then with respect to margins, our goal right now is to maintain margins in that 40% level on an annual basis. I think

So with respect.

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

Retention continues to be a tough world out there and I think when we've set up the guidance, we do assume that it continues to.

Operator: One moment for our next question.

Have an impact in a negative impact on net retention.

And then with respect to margins our goal right now is to maintain margins in that 40% level on an annual basis.

Speaker 5: Historically, if you look at seasonality of margins, we do tend to have somewhat lower margins in, you know, Q1 and Q2 just based on the way that revenue recognition sets up and, you know, typical. You know merit cycles and so forth so yeah realistically, I think we're.

<unk>.

Historically, if you look at seasonality of margins, we do tend to have somewhat lower margins in Q.

Q1, and Q2, just based on the way the revenue recognition sets up and typical.

Michael Turin: Our next question comes from Michael Turin with Wells Fargo. Your line is open. Hey, great. Thanks. Appreciate you taking the question and Cameron appreciate some of the color you're making on retention rates and the impacts that you're seeing. Is that comment you made around the challenges you're seeing potentially lingering until the first half of next year? Is that mostly a function of getting through this heavier renewal period and is it similar to what you're assuming or as to what you'd expect for the first half from a retention or sequential growth perspective if that holds and maybe just for Henry as a compliment to that question.

Merit cycles, and so forth so yes.

Realistically I think we are.

Speaker 5: aiming to keep the annual margin at that 40% level, but I think we should...

Aiming to keep the annual margin.

At that 40% level, but I think you should we should.

Speaker 5: continue to think about seasonality and how the historical seasonality of.

Continue to think about seasonality and how the historical seasonality of margins.

It has played out.

Speaker 9: Got it. And then just a clarifying follow up. Just I know we're not guiding to next year at this point, given the lack of visibility. But again, if you just take the second half of days of justice sales revenue growth or sales of standing, is that the right way that we should at least start to conceptualize the first half for next year, just so we can kind of all get our models.

Got it and then just a clarifying follow up just I know, we're not guiding to next year at this point given the lack of visibility, but again, if you just take the second half.

Of days adjusted sales revenue growth.

Sales outstanding.

Michael Turin: Are there certain processes you're able to put in place to help with those renewal conversations as you're having more of those and have had more time to build response or maybe anything you're doing on the good market side just as you work through the renewal period at the end of the year.

The right way that we should at least start to conceptualize the first half.

For next year.

So we can kind of all get our models.

In the zone.

Yes, so I think we've consistently said that.

Cameron Heizer: So I think I'll kick off there and thanks for your question. You know, again, I think we've talked about with a number of people in the past that, you know, our view is that peak negativity, particularly with respect to layoffs and, you know, many other factors kind of occurred in the Q1 2003 period and therefore, you know, we do think we need to get through the renewals with our customers. And, you know, as I mentioned before, you know, between September 22 and March 2024, we'll have transacted with, you know, approximately 90% of our, you know, ACV.

We continue to see.

Speaker 5: We continue to see challenges with respect to the environment and, you know, we'll can see, we'll see challenges through at least, you know, Q1 of 2024. So, you know, in my mind, the range of sequential growth that we've seen in 2023 is a good starting point for.

We continue to see challenges with respect to the environment and we will.

You can see we will see challenges through at least Q1 of 2024 or so.

In my mind, the range of sequential growth that we've seen in the.

2023 is a good starting point for.

Speaker 12: for that time period. Certainly, we think that there's the opportunity to accelerate after that, but I don't want us to get ahead of ourselves as to when that acceleration will occur, just based on the uncertainty in the market. Perfect.

For that time period.

Certainly we think that there is the opportunity to accelerate after that but I don't want us to get ahead of ourselves.

When that acceleration will occur just based on the uncertainty in the market.

Cameron Heizer: And, you know, I think we really need to get through that period of having, having renewed or sold ACV with those customers ahead of time. The assumptions really are very focused on renewals, you know, new business continues to, you know, be relatively strong. Obviously, you know, the environment impacts that as well, but the The sales efficiency of our new business team and the demand that we see continue to be, you know, good out there and we continue to bring on new customers to support that. So we're really focused, you know, much more on mitigating and, you know, getting through this renewal cycle that we're doing right now. Thanks, Cameron.

Perfect. Thank you guys.

One moment for our next question.

Speaker 1: Our next question comes from Elizabeth Porter with Morgan Stanley . Your line is open.

Our next question comes from Elizabeth <unk> with Morgan Stanley. Your line is open.

Speaker 13: Hi, thank you. You have Ryan Brestman on for Elizabeth Porter. Thanks for taking the questions. Now on the sale efficiency, you mentioned in Q2 that trends tick down slightly and do and after showing signs of stabilization in Q1. Any update on maybe on how this particular metric performed in the quarter and what steps you can take to kind of help this into a better demand environment going forward.

Hi, Thank you, yeah, Brian Restauranteur Elizabeth quarter.

Thanks for taking the question on sales efficiency, you mentioned in Q2 that trends.

Ticked down slightly in June after showing signs of stabilization in Q1 any update on maybe on how this particular metric performed in the quarter and what steps you can take to kind of help this into a better demand environment going forward.

Okay.

Speaker 5: Yeah, sure. So, you know, the, the environment does continue to get more challenging and that particularly impacts sales efficiency, more so existing customer sales efficiency than anything else. So, you know, that efficiency with our existing customers does continue to be, you know, challenged and, you know, is more challenging.

Yes sure so.

The environment does continue to get more challenging in that particularly impacts sales efficiency more so existing customer sales efficiency than anything else, so that efficiency with our existing customers does continue to be chat.

Henry Schuck: I think the big things we're doing from a process perspective, Michael, on renewals is number one, we're getting at them sooner. And so we've built a robust set of help scores for our customers that take into consideration, product engagement, product usage, provisioning of user licenses, integrations and usage of specific products and functionality. And so we have a much clearer view of the health of an account and we're engaging with them, our account managers and our CSMs are engaging with them based on those help scores.

Challenged and it was more challenging in Q3 relative to Q2.

Speaker 5: Q3 relative to Q2, new sales efficiency continues to hold in there reasonably well.

New sales efficiency continues to hold in there reasonably well.

Speaker 5: I think as we've talked about before, we do see a much higher concentration of our new sales with companies outside of the technology space.

I think as we've as we've talked about before we do see much much higher concentration of our new sales with companies.

Companies outside of.

Outside of the technology space.

Speaker 12: Um, which has helped us, you know, basically go after customers that, uh, that, you know, are more.

Henry Schuck: And so we've been proactively reaching out to those clients who come up for renewal and Q4 and Q1 throughout the back half of this year. And then I talked about this a bit on the last call, but we have a really broad product portfolio. And so we have opportunities within the customer base if you have one product got down sold or a customer had a big lay off. And so they have less licenses that they need for sales OS. We're able to bring them into chorus or operations OS or other parts of the product portfolio. And so we've been leveraging that in renewal conversations as well. Thank you.

Which has helped US basically go after customers that.

That are more where theres more demand right now.

Operator: One moment for our next question.

Speaker 13: Helpful. Thank you. Maybe it's a quick follow up. You made a few recent changes at a leadership level. Can you just any quick comments on any changes or impacts, we should expect from these going forward.

Helpful. Thank you, maybe just a quick follow up.

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

Speaker 3: Yeah, look, I think I talked about it in the call. I think the big opportunity for me and for the business is a flattening of the organization that gets me closer to our customer base, closer to revenue and customer success and customer support. I, over the last

Yes look I think.

And I talked about it in the call I think the big opportunity for me and for the business is a flattening of the organization that gets me closer to our customer base.

Closer to revenue and customer success and customer support.

Or am I over the last 60 days have met with over 200 of our account executives and account managers in round tables across the company.

Brent Braseland: Our next question comes from Brent Braseland with Piper Sandler. Your line is open. Thank you.

Speaker 7: 60 days, have met with over 200 of our account executives, and account managers, and roundtables across the company. I'm constantly meeting with our customers, and I don't anticipate any meaningful changes that come from these leadership changes. Helpful, thank you.

Cameron Heizer: Good afternoon. Maybe we'll start with Cameron. One quick follow up for Henry Cameron. You're obviously talking about challenges here at Q4. Guy into a sequential declining Q4 talking about continuation of challenges into the first half. Should we also think about small sequential declines into Q1 Q2 before you see a re acceleration. And then one quick follow up for Henry. Thanks. Yeah. So, you know, we're not guiding to 2024 at this time.

Constantly meeting with our customers and I don't anticipate any meaningful.

Changes that come from these leadership changes.

Helpful. Thank you.

One moment for our next question.

Speaker 1: Our next question comes from Cash Rangan with Goldman Sachs. Your line is open.

Yeah.

Our next question comes from Kash Rangan with Goldman Sachs. Your line is open.

Speaker 14: Thank you very much for the color of your guys. How seriously is the company taking...

Hi, Thank you very much for the color guys. So how seriously is the company taking the.

Cameron Heizer: And, you know, frankly, I think we're all software companies. It's probably less visibility further out than there is than there has been historically. We do continue to expect that this more challenging renewal environment will persist through at least Q1 of 2022. It will impact sequential revenue growth through the first half. Once we're through this cohort of renewals, there's the opportunity to drive higher growth rates, but it remains a challenging operating environment. We certainly don't want to get ahead of ourselves as to when exactly that acceleration might occur. Make sense.

Speaker 14: The attrition rates, which seem to have spiked, especially among, as you characterized, the mid-market businesses, some of it is not controllable.

The attrition rates, which seem to have.

Mike, especially among as you characterized as mid market businesses. Some of it is not controllable if somebody is going out of business or just adding fewer salespeople are letting go of salespeople completely understand but.

Speaker 14: or just adding fewer salespeople or letting go of salespeople, completely understand. But when you isolate those instances out, what are you learning from?

Can you isolate those incentives out.

What are you learning from the engagement with the product itself that you can make it.

Speaker 14: engagement with the product itself, that you can make it a stickier proposition that is really part of a complete loop that it's impossible to get unhinged from the data source that you guys have built up.

<unk> proposition that is really part of a complete loop that it's possible to get an.

Henry Schuck: And then Henry for you, obviously, clearly challenging environment. You're still finding ways to close large deals. My question is on the boomerang deal. Yeah, surprised to hear a customer switched 10 months later. They're coming back. Can you just give color around what drove kind of the boomerang deal back to zoom info and actually think about that going forward. Thanks. Yeah, look, really quickly, Brent, really quickly, I just wanted to clarify, I met Q1 of 24 there in that response.

Unhedged from the data source that you guys have built up.

Speaker 14: it seems to me that the attrition should be contained better than what you experienced.

Because it seems to me that the attrition should be contained better than what you're experiencing.

Speaker 14: but I'm curious to get your thoughts on how you plan to fix this. Thank you so much.

But I'm curious to get your thoughts on how you plan to fix this thank you so much.

Hey, Kash thanks for the question.

Right.

Speaker 3: And I think that's right. I think the way that we've been thinking about, we think about this in a number of ways. And if I think about it departmentally, if I start with product.

And if that's right I think the way that.

We've been thinking about when we think about this in a number of ways and if I think about it departmental Lee if I start with product.

Speaker 7: and engineering. We've been working really hard to simplify the user experience in our platform and make sure that our customers are not just using ZoomInfo as a lookup tool, but actually plugging it in through our workflow solution to an ongoing workflow. What we've seen this year is NPS scores are up every quarter.

And engineering, we've been working really hard to simplify the user experience on our platform and make sure that our customers are not just using zoom menthol is a lookup tool, but actually plugging it into our workflow solution to an ongoing workflow what we've seen this year. The NPS scores are up every quarter.

Henry Schuck: I think I was. I think, you know, yeah, thanks, Yemen, Brent, I think when I started this business 17 years ago, I started it with the premise that high quality data made a major difference in the way companies go to market. And there have been cheap alternatives to what we offer for the last 17 years. And if you're not doing your diligence and you're not an incredibly sophisticated buyer, you can make a switch.

Henry Schuck: And then you realize almost instantly that high quality data does in fact make a difference in your go to market motions. And that's what we saw here. We saw a customer who switched to a low priced offering and then immediately came back and meaningfully increased their spend with zoom info and did it across the platforms. And we've always competed in a way that said, when you have high quality data, whether you're an account executive and account manager or sale development wrap a marketing operations professional CMO or CRO.

Speaker 7: In course, our NPS score was up 20 plus points on our core sales OS platform. It's up seven points year over year and product engagement is also up meaningfully. And so we're focused on making the product easier to use, and then also plugging that product into an ongoing sales or marketing person's workflow. We think obviously those two things drive a meaningful amount of stickiness in the customer base.

And of course, our NPS score was up 20 plus points on our core selves OS platform, that's up seven points year over year and product engagement is also up meaningfully and so we're focused on making the product easier to use and then also plugging that product into an ongoing sales or marketing person's workflow.

I think obviously those two things drive a meaningful amount of stickiness in the customer base on the customer success in Onboarding and implementation side, we made a number of changes in June on the way in the way that we onboard and implement and deploy our customers to ensure that our customers are seeing quicker quicker time to value.

Speaker 3: On the customer success and onboarding and implementation side, we made a number of changes in June on the way in the way that we onboard and implement and deploy our customers to ensure that our customers are seeing quicker, quicker time to value.

Speaker 3: And those are netting out really positively for us. The numbers of customers who are using the product and using the product quicker post implementation have significantly increased. And so we feel really good about that as well. And we've materially grown our customer success team.

And those are netting out really positively for us the numbers of customers, who are using the product and using the product quicker post implementation have significantly increased and so we feel really good about that as well and we are.

Henry Schuck: That information makes a meaningful difference in a way that you acquire, find and grow your customers. And customers see that. And so there are a lot of boomerang customers that we find who go try something new and then immediately come back. And in this case, not only did they come back, but they meaningfully increase their spend with us. A helpful color there. Thanks.

Operator: One moment for our next question.

Materially grown our customer success team to make sure that we're giving our customers sharing with our customers best practices solving support issues for them in a timely manner and we will continue to invest across all three of those areas.

Speaker 14: to make sure that we're giving our customers, sharing with our customers best practices, solving support issues for them in a timely manner, and we'll continue to invest across all three of those areas. Got it. Thanks, Henry. And also give us a divergence between the retention of large customers versus...

Got it thanks, Henry and also given the diversions between the retention of large customers versus the middle of the curve.

Koji Ikeda: Our next question comes from Koji, Aketa with Think of America. Your line is open. Yeah, agrarize. Thanks for taking the question. Maybe a question for Cameron here. You mentioned from September to March of 2024, you'd gone through about 90% of your ACV leaving 10% that still needs to be renewed. But the way I understand the comment was that of that 10% some of them have already down, downsold in the second quarter of this year.

Speaker 14: How do you find when those customers back in the ground that you had that one big boomerang the other customers in the middle of the bell curb?

Hi.

Or would you plan to windows customers back in and granted that you had that one big Boomerang to other customers in the middle of the Bell curve that have defected what's the company's plan if any to bring them back. Thank you so much with that.

Speaker 14: have defected. What's the company's plan, if any, to bring them back? Thank you so much.

Speaker 5: Yeah, I think it's worth noting here that, you know, the churn rate has actually not significantly improved. It's a little worse than it was, you know, say in 2022 or 2021, but the big driver of the net retention.

Yes, yes.

I think it's worth noting here that the.

The churn rate has actually not significantly improved it's it's a little worse than it was.

Say in the 2022 or 2021, but the big driver of the net retention.

Koji Ikeda: So maybe could you help us describe the composition of that remaining 10% of ACV post March of next year. Yeah, so to be super queer, those are about 90% are customers that we've transacted with from September of 22 and we began to see, you know, real significant headwinds from the macro economic environment through what through March of 2024. So those are longer term contracts that, you know, transacted, and sometime before September 22, and therefore we're likely in a more constructive environment when they initially entered into that contract.

Speaker 5: change is much more that we're seeing reduced upsell and, you know, more downsell. So, yeah, I'd say that the biggest difference is not that we're losing these

Change is much more of that we're seeing reduced upsell.

And more down sell so I would say that the the biggest difference is not that we're losing these customers.

Speaker 5: is that they're spending less with us. A bunch of that has to do with lower seats. Some of it has to do with tighter budgeting, but realistically, I think for the vast majority of cases.

They are spending less with us a bunch of that has to do with lower seats.

Some of it has to do with tighter budgeting.

But realistically I think for the vast majority of cases, it's not a loss of a customer it's a reduction in the spend with those customers that's changing.

Speaker 5: It's not a loss of a customer. It's a reduction in the spend with those customers that's changing the net return.

The net retention.

Koji Ikeda: So that remaining 10%, those do tend to be larger customers, but there is some risk for those customers that they would perceive a worse environment than when they transacted either in 2021 or the beginning of 2022. As they come up for renewal later in 24 or potentially even later than that. Got it. No, that makes a lot of sense. And I wanted to ask a question, I'll follow up here on the 100 K plus ACV customers, as we look at that metric, this is the third straight quarter of sequential decline here.

Thank you one moment for our next question.

Yeah.

Speaker 1: Our next question comes from D.J. Hines with Canaccord Genuity. Your line is open.

Our next question comes from D. J Hynes with Canaccord Genuity. Your line is open.

Speaker 13: Hey, guys, thank you for taking the question. Henry, I feel like you've talked a bit more about data as a service or enrichment of late and the potentially favorable economics that accrue there. My question is how recurring those DAS agreements generally are. I mean, is it a situation where customers spend a lot on the effort up front and then less in maintenance in subsequent years? Or is there an ongoing commitment to enrichment that makes those revenue streams more linear or recurring in nature? Like, how does that typically work?

Hey, guys. Thank you for taking the question.

Henry I feel like you've talked a bit more about data as a service or enrichment of late and the potentially favorable economics.

That accrue there my question is how recurring those das agreements generally or I mean is it a situation where.

Customers spend a lot on the effort upfront and then less in maintenance in subsequent years or is there an ongoing commitment to enrichment that makes those revenue streams more linear are recurring in nature like how does that typically work.

Koji Ikeda: And if we continue a kind of pull forward a similar pace, it would actually imply a year over your decline in the fourth quarter. So maybe you could help us decompose this metric a little bit and X technology, you know, did this metric grow? I mean, that would be super helpful to understand. Yeah, I think in every quarter this year, X technology, and honestly, if you just strip out mid-market software, so these are, you know, kind of largely venture backed software companies.

Speaker 7: Yeah, so those are, thank you Jay, those are recurring subscriptions to our data and our data to live alongside their CRM data, their snowflake or Databricks data. Obviously, one of the key

Yes. So those are thanks T. J those are recurring subscriptions to our data and our data to live alongside.

Their CRM data Theyre snowflake or data breaks data obviously.

Koji Ikeda: If you strip out that, this metric has grown every quarter this year, you know, quarter on quarter and obviously would continue to show growth as a result. Got it. Thanks for taking the question. Thank you. One moment for our next question.

One of the key.

Speaker 7: parts of our offering centers around the fact that this data is constantly changing. There's no company that looks the same on December 31st as it did on January 1st.

Parts of our offering centered around the fact that this data is constantly changing.

There is no company that looks the same on December 31st as it did on January 1st.

Speaker 3: And over 30 plus percent of people are changing jobs, are getting promoted, are getting into new roles. We're tracking all of these changes at scale. And not to mention there's the influx of new companies being started and incorporated that we're staying on top of. And so we're feeding those changes in a real time way into our customers' systems of record, whether those are marketing systems.

And over 30 30 plus percent of people are changing jobs are getting promoted or getting into new roles. We're tracking all of these changes at scale and not to mention there is the influx of new companies being <unk>.

Started and incorporated that we're staying on top of and so these were feeding those changes in a real time way into our customers' systems of record whether those are marketing systems.

Alex Zuchen: Our next question comes from Alex Zuchen with Wolf Research. Your line is open. Hey, guys, thanks for taking the question. I guess on the same vein, I wanted to ask about NRR. I can be mentioned, it was 70%.

Speaker 3: enterprise data warehouses, or CRM. And so those are ongoing contracts for us. You know, one of the things.

Enterprise data warehouses, our CRM and so those are ongoing contracts for us one of the things.

Speaker 3: that's worth mentioning here is when you hear about me talking about this.

Alex Zuchen: And are we, does this feel like a bottom? And now we're going to take that right over a larger cohort here into Q4? Or is this something that, you know, gets to the mid 80s or the low 80s in Q4 and Q1?

That's worth mentioning here is when you hear about me talking about that.

Speaker 3: It is largely about us being super excited about the AI opportunity that we're seeing. And what our customers are saying to us, and they're showing up at our doorstep saying, the sea level wants us to drive generative AI in our outbound prospecting motion. They want us to be using AI and LLMs in the way that we contact. And.

It is largely about us being super excited about the AI opportunity that we're seeing and what our customers are saying to us and they're showing up at our door stop saying the C level wants us to drive generative AI in our outbound prospecting motions they want us to be using AI in our labs and the way that we contact.

Cameron Heizer: And then just on the margins, just can you remind us, given, I think that there was a slight tick down on the guide on operating margins, like what's the, it sounds like the first half will be just continually challenged from a revenue growth perspective. Are you going to grow up X? By more than or less than than revenue growth during this period. So with respect to, you know, net retention, it continues to be a tough world out there.

Speaker 3: and prospect and communicate with our customers. But the data that we have in the system.

And and prospect and communicate with our customers, but the data that we have and the systems are just not robust enough theyre just not accurate enough for us to actually take advantage of that and so when we show up and we talk about data out of the service, we have the opportunity to come and really drive their <unk>.

Speaker 3: are just not robust enough, they're just not accurate enough for us to actually take advantage of that.

Speaker 7: And so when we show up and we talk about data as a service, we have the opportunity to come and really drive their AI motion. And we've had these conversations all across the enterprise. We have them in the mid-market. And in the SMB, we're able to drive a lot of that workflow directly from our platform. And so we think the AI opportunity and the focus on AI really gives our data as a service offering the spotlight. Yeah, appreciate the color. Thank you.

Cameron Heizer: I think when we've set up the guidance, we do assume that, you know, it continues to have an impact and a negative impact on that retention. And then with respect to, you know, margins, you know, our goal right now is to maintain margins in that, you know, 40% level on an annual basis, you know, I think historically, if you look at seasonality of margins, we do tend to have somewhat lower margins in, you know, Q1 and Q2, just based on the way that revenue recognition sets up. And, you know, typical, you know, merit cycles and so forth.

AI emotion and we've had these conversations all across the enterprise.

Cameron Heizer: So, you know, realistically, I think we're aiming to keep the annual, you know, margin at that 40% level, but I think you should, we should, and continue to think about seasonality and how the historical seasonality of margins has played out. Got it. And then just a clarifying follow-up.

Have them in the mid market and in the SMB, we're able to drive a lot of that workflow directly from our platform and so we think the AI opportunity and the focus on AI really gives our data as a service offerings the spotlight.

Yes, I appreciate the color. Thank you.

One moment for our next question.

Speaker 1: Our next question comes from Joshua Riley with Needham, your line is open.

Our next question comes from Joshua Reilly with Needham Your line is open.

Speaker 2: Yeah, thanks for taking my questions and nice job executing here in that tough environment. You mentioned the expanded international coverage. How are you prioritizing the expansion of the company and contact database internationally? Are you going by geography or some other way of expanding that? And then what inning are you in in terms of getting the international database where you want it to be to kind of properly monetize it?

Yeah.

Hi, yes, thanks for taking my questions and nice job executing here in that tough environment.

You mentioned the expanded international coverage how are you prioritizing the expansion of the company and contact database internationally, you're going bad geography, or some other way of expanding that and then what inning are you in in terms of <unk>.

Cameron Heizer: I know we're not guiding to next year at this point given the lack of visibility. But again, if you just take the second half of days of justice sales revenue growth or sales of standing. Is that the right way that we should at least start to conceptualize the first half? For next year, just so we can kind of all get our models in the zone. Yeah, so I think we've consistently said that we continue to see challenges with respect to the environment and we'll see challenges for at least 2-1 of 2024.

The International database, where you want it to be the kind of properly monetize it.

Yeah, Great question. Thank you.

Speaker 3: We are going where our customers go. And so we have a tremendous amount of telemetry built into our platform. And so we're able to see how our customers are searching.

We are going where our customers go and so we have had a tremendous amount of telemetry built into our platform and so we're able to see how our customers are searching across our platform, what theyre looking for and what countries what size companies.

Speaker 3: our platform, what they're looking for, and what countries, what size companies.

Speaker 3: And then we're doing a number of user surveys to understand, you know, when we do have the information, what else would they like to see? And so when you see the growth in contact information, mobile phone numbers, whatever that is, it's being driven specifically from where we see our customers searching and where we see our customers telling us they want deeper, more robust coverage and actionability.

And then we're doing a number of user surveys to understand when we do have the information what else would they like to see and so when you see the growth in.

Contact information mobile phone numbers, whatever that is it's being driven specifically from where we see our customers searching.

Cameron Heizer: So yeah, in my mind, the range of sequential growth that we've seen in 2023 is a good starting point for that time period. Certainly, we think that there's the opportunity to accelerate after that, but I don't want us to get ahead of ourselves as to when that acceleration will occur just based on the uncertainty in the market. Perfect. Thank you guys.

And where we see our customers telling us they want a deeper more robust coverage and action ability and so.

Speaker 7: And so we've done that country by country, region by region. I would tell you, you know, we're probably

<unk> done that country by country region by region I would tell you we're probably.

Operator: One moment for our next question.

Speaker 7: We are obviously monetizing the solution. We think the solution that we have internationally is far in a way a better solution than anything competitively, even solutions that are native in Europe or internationally. So we feel really strongly about that. We think there's still a great opportunity to enhance the data asset. So I would tell you we're somewhere like the seventh inning.

We are obviously monetizing this solution, we think the solution that we have internationally is far and away a better solution than anything competitively even solutions that are native in Europe or internationally. So we feel really strongly about that we think there is still a great opportunity to enhance the data asset.

Elizabeth Porter: Our next question comes from Elizabeth Porter with Morgan Stanley. Your line is open. Hi, thank you. You have Ryan Brezmer on for Elizabeth Porter. Thanks for taking the question.

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

Speaker 2: Got it. And then, you know, with the stock price, obviously depressed here in the near term, and you bought back 8.8 million shares, how should we think about leaning further into the stock repurchase?

Got it and then with the stock price obviously.

Pressed here in the near term and you bought back $8 8 million shares.

Operator: On sale efficiency, you mentioned in Q2 that trends tick down slightly and do not are showing signs of stabilization in Q1 any update on maybe on how this particular metric performed in the quarter and what steps you can take to kind of help this into a better demand environment going forward. Yeah, sure. So, you know, the environment does continue to get more challenging and that particularly impacts sales efficiency more so existing customer sales efficiency than anything else.

How should we think about leaning further into the stock repurchase.

Speaker 2: over the next several quarters given you still have a fairly healthy amount in the current authorization. Thanks.

Over the next several quarters, given you still have a fairly healthy amount in the current authorization.

Speaker 5: Yeah, so, you know, our plan is to continue to opportunistically repurchase stock based on

Yes.

Our plan is to continue to Opportunistically.

Repurchase stock based on.

Speaker 12: based on where it's trading relative to what we perceive as the long-term value. So yeah, I think at these levels, we'll continue to lean in. We do have a fair amount left on the authorizations that we currently have, but we've continued to buy stock in October , and we'll continue to do that going forward.

Based on.

Where it's trading relative to what we perceive as the long term value.

So yes, I think at these levels, we'll continue to lean in.

Operator: So, yeah, that efficiency with our existing customers does continue to be, you know, challenged and, you know, is more challenging in Q3 relative to Q2. New sales efficiency continues to hold in there reasonably well. Yeah, I think as we've, as we've talked about before, we do see, you know, much, much higher concentration of our new sales with, you know, companies outside of outside of the technology space, which has helped us, you know, basically go after customers that are more, where there's more demand right now. Helpful. Thank you. Maybe just a quick follow up. You made a few recent changes at a leadership level.

We do have a fair amount left on the authorizations that we currently have.

Continuing to buy stock in in.

October and we'll continue to do that going forward.

One moment for our next question.

Speaker 1: Our next question comes from Taylor McGinnis with UBS. Your line is open.

Our next question comes from Taylor Mcguinness with UBS. Your line is open.

Speaker 15: Yeah, hi, thanks for taking the question. So last quarter, I know part of the hit was customers who had renewed lower in the past still renewing lower. So now that we're in the fourth quarter and coming up on lapping some of the bigger layoff activity, just curious for those who did layoffs at this time last year, can you comment on how those conversations are progressing? So are you still seeing them take down seeds further? Is that trending better than expected? Would love just any thoughts there. Thanks.

Yeah, Hi, Thanks for taking the question so last quarter I know part of the hit with customers, who had renewed lower in the past still renewing lower so now that were in the fourth quarter and coming up on lapping some of the bigger layoff activity just curious for those who did lay out at this time last year can you comment on how those.

Henry Schuck: Okay, just any quick comments on any changes or impacts we should expect from these going forward. Yeah, look, I think the, I talked about it in the call. I think the big opportunity for me and for the business is a flattening of the organization that gets me closer to our customer base closer to revenue and customer success. And customer support. I over the last 60 days have met with over 200 of our account executives and account managers and roundtable across the company. I'm constantly meeting with our customers and I don't anticipate any meaningful changes that come from these leadership. One moment for our next question.

<unk> are progressing so are you still seeing them take down further is that trending better than expected, we'd love just any any thoughts there. Thanks.

Yeah.

Speaker 12: So overall, it continues to be a tough environment. We do continue to see customers that renewed at lower levels last year continuing to have pressure with respect to their purchases this year. So, yeah, I'm not convinced that, you know.

So overall it continues to be a tough environment and we do continue to see customers that renewed at lower levels last year continuing to.

Have pressure with respect to there.

Purchases this year so.

Not convinced that.

Speaker 5: most of the way through October that we've seen.

Most of the way through October that we've seen.

Speaker 12: you know, kind of customers that, you know, made really big layoffs last year. So it's a little hard to, you know, compare for those customers that are, you know, didn't really get through their cycle of negativity.

Kind of.

Customers that made really big layoffs last year, so it's a little hard to.

Compare for those customers that are.

Kasthuri Rangan: Our next question comes from Kasthurangan with Goldman Sachs. Your line is open. Hi, thank you very much for the color of your guys. So how seriously is the company taking the the attrition rates which seem to have spiked, especially among as you characterize the mid-market businesses. Some of the things that I'm going to talk about is that they're not going to be the same. If it is not controllable, if somebody is going out of business or just adding fewer salespeople or letting go of salespeople completely understand, but in you isolate those instances out, what are you learning from the engagement with the product itself, that you can make it a stickier proposition that is really part of a complete loop that it's impossible to get unhinged from the data source that you guys have built up.

Didn't really get through their cycle of negativity.

Speaker 5: and until February or March, where exactly they're coming out given that those layoffs in many cases.

Until.

February or March.

Where exactly.

They are coming out given that those layoffs in many cases happening.

Speaker 16: you know, later in their cycle, or particularly for customers within multiple rounds of layoffs. You know, I don't know that we're kind of lapping the easiest trumps yet. Great.

Later in the cycle.

Particularly for customers within multiple rounds of layoffs.

I don't know that were kind.

Kind of lapping the easiest comps yet.

Great. Thanks for answering my question.

One moment for our next question.

Speaker 1: Our next question comes from Ramo Linchow with Barclays. Your line is open.

Our next.

Question comes from Raimo <unk> with Barclays. Your line is open.

Speaker 17: Well, thank you. Thanks for squeezing me in at two quick ones. Cameron, you talked last quarter already about.

Thank you. Thanks for squeezing me in two quick ones Cameron you talked last quarter already about.

Speaker 17: those headwinds that we have until Q1 next year. Compared to your comments last quarter and this quarter, how has your sense changed? Is it about the same, what you expected Q2?

Those headwinds.

You have until Q1 next year.

Kasthuri Rangan: Because it seems to me that the attrition should be contained better than what you're experiencing, but I'm curious to get your thoughts on how you plan to fix this. Thank you so much. Hey, Cash. Thanks for the question. And I think that's right. I think the way that we've been thinking about, we think about this in a number of ways. And if I think about it departmentally, if I start with product and engineering, you know, we've been working really hard to simplify the user experience in our platform and make sure that our customers are not just using Zoom info as a lookup tool, but actually plugging it in through our workflow solution to an on.

And to your comments last quarter and this quarter. How high is your sense changed is it about the same or do you expected Q2.

Speaker 17: Slightly better, slightly worse, where did you come out there? So that's the first question. And the second question for James and Henry, if you think about a downturn, usually everyone is about cost cutting. And then you suffer, and you see it now. At this later stages of a downturn, people usually start thinking about, oh, I did my cost cutting, and now I think about sales and sales growth again. Are we at those conversations, at least at the early level yet, or not there yet? Thank you.

Slightly better slightly worse, where do you come out there.

That's the first question and second question for James and Henry.

If you think about a downturn you usually everyone's about cost cutting.

And are you suffering you see it now at the latest stages of a downturn people do you actually start thinking about Oh I did my cost cutting I think about sales and sales growth again.

Conversations or at least the early level, yet or not there yet thank you.

Speaker 5: So thanks, Ramo. In terms of kind of where we were compared to the last quarter, I think we expected the environment to get worse and it has gotten worse.

Thanks, Raimo in terms of kind of where we were compared to last quarter.

Kasthuri Rangan: And going workflow, what we've seen this year is NPS scores are up every quarter. In course, our NPS score was up 20 plus points on our core sales OS platform. It's up seven points year over year and product engagement is also up meaningfully. And so we're focused on making the product easier to use. And then also plugging that product into an ongoing sales or marketing persons workflow. We think obviously those two things drive a meaningful amount of stickiness in the customer base.

We expect the environment to get worse and it has gotten worse.

Speaker 12: Yeah, I don't think we see any trends currently that the operating environment's getting better. And in some instances, I think it's largely a customer by customer.

Yes, I don't think we see any trends currently that the operating environment getting better.

And then in some instances I think it's largely a customer by customer at this point.

Speaker 12: um, or kind of segment by segment that, you know, there are some things that, you know, frankly, I think people are more worried than they were at the end.

Or kind of segment by segment.

There are some things that.

Frankly, I think people are more worried than they were at the end of last quarter.

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

Okay.

Speaker 7: The other thing I would add there, Ramo, is, you know, if you're in the boardrooms of private equity or venture capital backed businesses today.

The other thing I would add there raimo.

You're in the boardrooms of private equity or venture capital backed businesses. Today, there is not a push for the companies to grow faster. There is a push still for those companies to cut costs and get to prop up to pull profitability forward or to increase profitability.

Speaker 7: there is not a push for the companies to grow faster. There is a push still for those companies to cut costs and get to pull profitability forward or to increase profitability. So I don't think we've turned that corner where investors and board members are pushing their private companies to get back to growth. I think they're still in a, either maintain the costs you've cut or continue to cut costs mentality. Okay, thank you.

I don't think we've turned that corner, where investors and board members are pushing their private companies to get back to growth I think they are still in a in a either maintain the costs you've cut or continue to cut costs mentality.

Kasthuri Rangan: And we've materially grown our customer success team to make sure that we're giving our customers sharing with our customers best practices, solving support issues for them in a timely manner. And we'll continue to invest across all three of those areas. Got it. Thanks, Henry. And also give us the divergence between the retention of large customers versus the middle of the curve. How how are you planning to win those customers back in the ground that you had that one big boomerang the other customers in the middle of the bell curve that have defected what's the company's plan if they need to bring them back.

Okay perfect. Thank you.

One moment for our next question.

Speaker 1: Our next question comes from Brian Peterson with Raymond James. Your line is open.

Yeah.

Our next question comes from Brian Peterson with Raymond James Your line is open.

Speaker 13: Hi, Jim, and thanks for taking the question. This is Jonathan McCary on for Brian . So I think you mentioned non-software growing at a low 20s clip last quarter. Is that still kind of the right ballpark? And then for that non-software piece of the business, how would you categorize the NRR of that category versus the broader figure? Thank you.

Yes.

Hi, gentlemen, thanks for taking the question. This is Jonathan to carry on for Brian.

I think you mentioned non software growing it at a low 20 click last quarter is that still kind of the right ballpark and then for that non software piece of the business. How would you categorize the NR that category versus the broader figure. Thank you.

Kasthuri Rangan: Thank you so much with that. Yeah, it's worth noting here that the churn rate has actually not significantly improved. It's a little worse than it was, you know, say in 2022 or 2021, but the big driver of the net retention. Change is much more that we're seeing reduced upsell and more downsell. So, I'd say that the biggest difference is not that we're losing these customers is that they're spending less with us.

Kasthuri Rangan: A bunch of that has to do with lower seats. Some of it has to do with tighter budgeting. But realistically, I think for the vast majority of cases, it's not a loss of a customer. It's a reduction in the spend with those customers that's changing the net retention. Thank you, one moment for our next question.

Speaker 5: So I think it's been some the operating environment continues to be challenging and

Sure. So I think it was mentioned in the operating environment continues to be challenging.

Speaker 5: As expected, it was worse than we saw it in Q2. That weakness is not just confined to software. You know, non-software growth did decline. It's, you know, below 20% this year, year, or this quarter, year over year. We do continue to see demand in those non-software industries, particularly on the new business side. And, you know, certainly the retention in non-software is.

As expected it was worse than we saw in Q2 that weakness is not just confined to software non software growth did decline it's below 20%. This.

This year year or this quarter year over year.

We do continue to see demand in those non softer industries, particularly in the new business side and certainly the retention and non software is.

Speaker 16: you know, well above what the, you know, overall average is, but we continue to see, you know, kind of challenges there.

Well above what the.

Overall averages, but we continue to see.

Kind of challenges there.

Thank you one moment for our next question.

Speaker 1: And our next question comes from Rishi Jalluria with RBC Capital Markets. Your line is open.

And our next question comes from Rishi Galeria with RBC capital markets. Your line is open.

Speaker 8: Oh, wonderful. Thanks, guys, so much for taking my question. I'll keep it to one. Henry, you talked a little bit about in your prepared remarks your efforts with both PLG as well as leaning a little bit more on self-service e-commerce capabilities. Can you expand a little bit on what you're doing there, what kind of a roadmap will look like, and how early traction or customer reception has been from these initiatives? Thanks.

DJ Hynes: Our next question comes from DJ Hynes with Canacority, your line is open. Hey guys, thank you for taking the question. Henry, I feel like you've talked a bit more about data as a service or enrichment of late, you know, the potentially favorable economics that accrue there. My question is how recurring those doubts, agreements generally are. I mean, is it a situation where customers spend a lot on the effort upfront and then less in maintenance and subsequent years or is there an ongoing commitment to enrichment that makes those revenues streams, you know, more linear or recurring in nature?

Wonderful thanks, guys. So much for taking my question.

I'll keep it to one.

Henry you talked a little bit about in your prepared remarks, your efforts with both <unk> as well as <unk>.

Leaning a little bit more on self service E. Commerce capability can you expand a little bit on what youre doing there what kind of a roadmap will look like and how early traction or a customer reception has been from these initiatives. Thanks.

Speaker 7: Yeah, thanks, Rishi. I think what we've been focused on this year.

Yeah. Thanks, Rishi I think what we've been focused on this year.

DJ Hynes: Like how does that typically work? Yeah, so those are, thanks DJ, those are recurring subscriptions to our data and our data to live alongside their CRM data, their snowflake or Databricks data. Obviously, one of the key parts of our offering centers around the fact that this data constantly changing, there's no company that looks the same on December 31st as it did on January 1st. And over 30 plus percent of people are changing jobs or getting promoted or getting into new roles, we're tracking all of these changes at scale and not to mention there's these influx of new companies being started and incorporated that we're staying on top of.

Speaker 7: has been really to build the infrastructure and be out in market testing self-service and e-commerce capabilities with our down-market customer base.

Has been really to build the infrastructure and be out in market testing self service and e-commerce capabilities.

Capabilities with our down market customer base, and we've seen really good traction the our ability to sell in a self service E Commerce way down market has grown quarter over quarter every quarter. This.

Speaker 3: And we've seen really good traction, our ability to sell in a self-service e-commerce way down market has grown quarter over quarter, every quarter of this year. And so we feel really strongly about that as we go into 2024. Today, we're focusing that offering on the lowest end of the market, where we can drive efficiencies by taking a sales rep out of the motion. And then we've built

This year and so we feel really strongly about that as we as we go into 2024 today, we're focused on we're focusing that offering on the lowest end of the market, where we can drive efficiencies by taking a sales rep out of the.

Out of the motion.

Speaker 7: We've built and will continue to build technology onboarding. And so customers can also onboard in a self-service way. We've noticed that we've been able to meaningfully drive up usage and adoption of our platform with our technology and self-serve onboarding. And we think we can continue to make impacts there. I'll tell you, we're in early innings, but we have a lot of confidence about that product and its ability to drive efficiencies and growth in the down market.

And then we built we've built and we'll continue to build build technology onboarding and so customers can also onboard in a self service way, we've noticed that we've been able to meaningfully drive up the usage and adoption of our platform.

DJ Hynes: And so these, we're feeding those changes in a real time way into our customers systems of record, whether those are marketing systems, enterprise data warehouses or CRM. And so those are ongoing contracts for us. You know, one of the things that's worth mentioning here is when you hear about me talking about this, it is largely about us being super excited about the AI opportunity that we're seeing. And what our customers are saying to us and they're showing up at our doorstep saying the sea level wants us to drive generative AI in our outbound prospecting motion.

With our technology and self serve Onboarding and we think we can continue to make impacts there I would tell you. We're in early innings, but we have a lot of confidence about that product and its ability to drive efficiencies and growth in the downmarket.

Wonderful thank you.

DJ Hynes: They want us to be using AI and LLMs in the way that we contact and prospect and communicate with our customers, but the data that we have in the systems are just not robust enough, they're just not accurate enough for us to actually take advantage of that. And so when we show up and we talk about data as a service, we have the opportunity to come and really drive their AI motion.

One moment for our next question.

Speaker 1: Our next question comes from Terry Pillman with true securities. Your line is open.

Our next question comes from Terry Tillman with true Securities. Your line is open.

Speaker 13: Great, thanks so much for taking the question. This is Bobby Deon for Terry. I'm curious, across the different OS solutions, sales OS, marketing OS, etc., are you all seeing any of the segments more resilient than others related to existing customer activity or new customer wins? Thank you.

Great. Thanks, so much for taking the question. This is Bobby Dr. Terry I'm curious across the different OS solution sales <unk> marketing et cetera are you all seeing any of the segments more resilient than others related to existing customer activity or new customer wins. Thank you.

Speaker 5: And certainly as we, as we mentioned before, you know, within the advanced functionality, which is really encompassing.

And certainly as we as we mentioned before.

Within the advanced functionality, which is really encompassing.

Speaker 12: functionality outside of the sales OS and the add-ons to sales OS. Marketing OS has done really well, and it's growing. Obviously, that was a newer product in 2022, but is a place where we continue to see.

DJ Hynes: And we've had these conversations all across the enterprise, we have them in the mid market and in the SMB, we're able to drive a lot of that workflow directly from our platform. And so we think the AI opportunity and the focus on AI really gives our data as a service offering the spotless. Yeah, appreciate the color. Thank you. One moment for our next question.

Functionality outside of the sales OS and the add ons to sales.

Marketing has done really well and it's growing obviously that was a newer product in 2022, but is a place where we continue to see growth.

Speaker 5: We also see, as Henry's mentioned, a lot of growth in our DAS and enrichment capabilities as well as automation capabilities, which, you know, those, you know, land either primarily in the operations OS or, you know, a lot of the automation capabilities, whether that's workflows or

Also see as Henry has mentioned a lot of growth in our SaaS enrichment capabilities as well as automation capabilities, which.

Joshua Reilly: Our next question comes from Joshua Reilly with Needham. Your line is open. Yeah, thanks for taking my questions and nice job executing here in that tough environment. You mentioned the expanded international coverage. How are you prioritizing the expansion of the company and contact database internationally? Are you going by geography or some other way of expanding that? And then what ending are you in in terms of getting the international database where you want it to be to kind of properly monetize it? Yeah, great question. Thank you.

Those.

Lynn either primarily in the operations OS or lot of the automation capabilities, whether that's workflows or engage et cetera are part of sales or less so I think it's parts of those OS is that we.

Speaker 16: Engage, et cetera, are part of sales OS. So yeah, I think it's.

Speaker 16: parts of those OSs that, you know, we're really seeing, you know, more interest from customers. And I think.

We're really seeing more interest from customers and I think as Henry mentioned part of that is driven.

Speaker 16: As Henry mentioned, part of that is driven by people looking at their data strategies as maybe driven through AI or preparation for AI, and part of that is them thinking about the efficiency of their teams and looking to automate where they can.

Driven by people looking at their data strategies.

Maybe driven through AI or preparation for AI and part of that is that I'm thinking about the efficiency of their teams and looking to automate where they can.

Henry Schuck: We are going where our customers go. And so we have a tremendous amount of telemetry built into our platform. And so we're able to see how our customers are searching across our platform, what they're looking for and what countries, what size companies. And then we're doing a number of user surveys to understand, you know, when we do have the information, what else would they like to see? And so when you see the growth in contact information, mobile phone numbers, whatever that is, it's being driven specifically from where we see our customers searching and where we see our customers telling us they want a deeper, more robust coverage and action ability.

Henry Schuck: And so we've done that country by country, region by region. I would tell you, you know, we're probably, we are obviously monetizing the solution. We think the solution that we have internationally is far in a way a better solution than anything competitively, even solutions that are native in Europe or internationally. So we feel really strongly about that. We think there's still a great opportunity to enhance the data asset. So I would tell you we're somewhere like the seventh inning stretch. Got it.

Thank you.

Thank you one moment for our next question.

Speaker 1: Our next question comes from Jack McShane with Cefal. Your line is open.

Our next question comes from Jack Mcshane with Stifel. Your line is open.

Speaker 18: Yeah, hi guys, this is Jack McShayne, I'm from Parker Lane's team. It's Steve Bull. Thanks for taking my question. I'd be curious, that's James. What are some of your top priorities and changes you're looking to make in the go-to market of Zoom and Tvo? Where do you see the biggest opportunities as you step in on the new role?

Yes, Hi, guys. This is Jack Shang from Parker Lane team at Stifel. Thanks for taking my question I'd be curious as James order some of your top priorities and changes Youre looking to making a go to market of <unk> and where do you see the biggest opportunities as you stepping in the new role.

Speaker 4: So in terms of the biggest opportunities we see, this DAS led motion that we're seeing in the seven figure upmarket cohort, we're seeing a lot of success in.

Yes, Thanks Jack.

So in terms of the biggest opportunities we see.

Gas led motion that we're seeing in the seven figure up market cohort, we're seeing a lot of success in the ability to take that into the lower end of the enterprise and into mid market as well as a big opportunity overall, it's just the customer Centricity Henry spoke to it as did kamran.

Speaker 4: The ability to take that into the lower end of the enterprise and into mid market as well is a big opportunity.

Speaker 4: Overall, it's just the customer centricity. Henry spoke to it, as did Cameron. Getting the value to our customers, what we see, there was an earlier question on, you know, the DAS being a one-time or recurring. When folks ingest that data, they buy more of it in every single example that we

Getting the value to our customers what we see there was an earlier question on the das being a onetime or recurring when folks ingest that data they buy more of it in every single example that we see and so leaning into that as emotion, making sure that that customer success motion ingesting it into their day.

Speaker 4: And so leaning into that as a motion, making sure that that customer success motion ingesting it into their data lakes, showing them how to activate it. Those are all top priorities because when folks use the full breadth of our platform, we see continued success and continued growth with what they're doing.

Cameron Heizer: And then, you know, with the stock price, obviously, depressed here in the near term and you bought back 8.8 million shares. How should we think about leaning further into the stock repurchase over the next several quarters given you still have a fairly healthy amount in the current authorization? Thanks. Yeah. So, you know, our plan is to continue to opportunistically repurchase stock based on based on, you know, where it's trading relative to what we perceive as the long term value.

<unk> showing them how to activate it those are all top priorities because when folks use the full breadth of our platform. We see continued success and continued growth with what theyre doing.

Speaker 4: So those are just a handful. I think over the last 18 months, we've built out a world-class enterprise team and we're seeing the success there. And continuing to do that is what I get extremely excited about across the overall organization.

So those are just a handful I think over the last 18 months, we've built out a world class enterprise team and we're seeing the success there and continuing to do that is what I get extremely excited about across the overall organization.

Yeah.

That's great. Thank you.

Cameron Heizer: So, yeah, I think at these levels, we'll continue to lean in. You know, we do have a fair amount left on the, you know, authorizations that we currently have, but we've continued to buy stock in, in October and, you know, we'll continue to do that going forward. One moment for our next question.

Speaker 1: I'm showing no further questions at this time. I would like to turn the call over to Henry for closing remarks. Thank you.

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

Thank you everybody for joining us we really appreciate it.

Speaker 1: And this concludes today's conference call. Thank you for participating. You may now disconnect.

And this concludes today's conference call. Thank you for participating you may now disconnect.

Okay.

Taylor McGinnis: Our next question comes from Taylor McGinnis with UBS. Your line is open. Yeah. Hi. Thanks for taking the question. So last quarter, I know part of the hit was customers who had renewed lower in the past, still renewing lower.

Okay.

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

Cameron Heizer: Thanks. Overall, it continues to be a tough environment. We do continue to see customers that renewed at lower levels last year, continuing to have pressure with respect to their purchases this year. So, I'm not convinced that most of the way through October that we've seen customers that made really big layoffs last year. So, it's a little hard to compare for those customers that didn't really get through their cycle of negativity until February or March. We're exactly, they're coming out given that those layoffs, in many cases, happen later in their cycle, or particularly for customers within multiple rounds of layoffs.

Okay.

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Operator: I don't know that we're kind of lapping the easiest trumps yet. Great. Thanks for answering our questions. One moment for our next question.

Yes.

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Yes.

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Yes.

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Yeah.

Raimo Lenschow: Our next question comes from Raimo Lenschow with Barclays. Your line is open. Well, thank you.

Raimo Lenschow: Thanks for squeezing me in two quick ones. Cameron, you talked last quarter already about those headwinds, you know, that we are still Q1 next year compared to your common last quarter in this quarter. How has your sense changed? Is it about the same or do you expect it to slightly better, slightly worse? Where did you come out there?

Henry Schuck: That's the first question and the second question for James and Henry. If you think about it downturn, usually everyone is about cost-cutting. You know, and then you know, you suffer and you see it now. At this latest date is over downturn. People usually start thinking about, oh, I did my cost-cutting. You know, I think about sales growth again. Are we at those conversations at least at the early level yet or not there yet?

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

Henry Schuck: Okay. I think the other thing I would add there, Raimo, is, you know, if you're in the boardrooms of private equity or venture capital backed businesses today, there is not a push for the companies to grow faster. There is a push still for those companies to cut costs and get to pull profitability forward or to increase profitability. So I don't think we've turned that corner where investors and board members are pushing their private companies to get back to growth. I think they're still in a, in a, either maintain the cost you've cut or continue to cut costs mentality. Thank you. One moment for our next question.

Operator: Our next question comes from Brian Peterson with Raymond James. Your line is open. Thank you for our category versus the broader figure. Thank you.

Operator: I think as mentioned, the operating environment continues to be challenging. And as expected, it was worse than we saw it in Q2. That weakness is not just confined to software. We do continue to see demand in those non software industries, particularly in the new business side. And certainly the retention in non software is well above what the overall averages, but we continue to see challenges there. Thank you.

Rishi Jaluria: One moment for our next question.

Rishi Jaluria: And our next question comes from Rishi Jaluria with RBC capital markets. Your line is open. Oh, wonderful. Thanks, guys. So much for taking my question.

Henry Schuck: I'll keep it to one. Henry, you talked a little bit about your prepare remarks, your efforts with both POG as well as leading a little bit more on self service ecommerce capabilities. Can you expand a little bit on what you're doing there? What kind of the roadmap will look like and how early traction or customer reception has been from these initiatives. Thanks. Yeah, thanks, Rishi. I think what we've been focused on this year.

Henry Schuck: It has been really to build the infrastructure and be out and market testing self service and ecommerce capabilities with our down market customer base. And we've seen really good traction that our ability to sell in a self service ecommerce way down market has grown quarter over quarter every quarter this year. And so we feel really strongly about that as we as we go into 2024 today, we're focused on we're focusing that offering on the lowest end of the market where we can drive efficiencies by taking a sales rep out of the out of the motion.

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

Operator: Wonderful. Thank you.

Operator: One moment for our next question.

Terry Tillman: Our next question comes from Terry Tillman with true securities. Your line is open. Great. Thanks so much for taking the question.

Bobbie Dion: This is Bobbie Dion, Terry.

Cameron Heizer: I'm curious, across the different OS solutions, sales OS, marketing OS, etc. Are you all seeing any of the segments more resilient than others related to existing customer activity or new customer wins? Thank you.

Jack McShane: And certainly as we, as we mentioned before, you know, within the advanced functionality, which is really encompassing, you know, functionality outside of the sales OS and the add-ons to sales OS, you know, marketing OS has, you know, done really well and it's growing. Obviously, that was a newer product in 2022, but is is a place where we continue to see growth. We also see, as Henry's mentioned, a lot of growth in our DAS and enrichment capabilities, as well as automation capabilities, which, you know, those, you know, land either primarily in the operations OS or, you know, a lot of the automation capabilities, whether that's workflows or engage, etc., are part of sales OS.

Jack McShane: So I think it's, it's parts of those OS's that, you know, we're really seeing, you know, more interest from customers. And I think the Henry mentioned part of that is, you know, driven by, you know, people looking at their data strategies as, you know, maybe driven through AI or, you know, a preparation for AI. And part of that is, you know, them thinking about the efficiency of their teams and, you know, looking to automate where they can.

Jack McShane: Thank you. One moment for our next question. Our next question comes from Jack McShane with people. Your line is open. Yeah, hi guys. This is Jack McShane. I'm from Parker Lane's team. It's people. Thanks for taking my question. I'd be curious. That's James.

James Roth: What are some of your top priorities and changes you're looking to make in the go to market of Zoom info. Where do you see the biggest opportunities as you step into the new role? Yeah, thanks Jack. So in terms of the biggest opportunities, we see, you know, this death led motion that we're seeing in the seven figure up market cohort, we're seeing a lot of success in. The ability to take that into the lower end of the enterprise and into mid market as well is a big opportunity.

James Roth: Overall, it's just the customer centricity Henry spoke to it as did Cameron. Getting the value to our customers, what we see. There was an earlier question on, you know, the desk being a one time or recurring. When folks ingest that data, they buy more of it in every single example that we see. And so leaning into that as a motion, making sure that that customer success motion ingesting it into their data lakes, showing them how to activate it.

James Roth: Those are all top priorities because when folks use the full breadth of our platform, we see continued success and continued growth with what they're doing. So those are just a handful. I think over the last 18 months, we built out a world class enterprise team and we're seeing the success there and continuing to do that is is what I get extremely excited about across the overall organism. I'm showing no further questions at this time.

Henry Schuck: I would like to turn the call over to Henry for closing remarks. Thank you everybody for joining us. We really appreciate it. And this concludes today's conference call. Thank you for participating. You may now disconnect.