Zoominfo Technologies Inc at Morgan Stanley Technology, Media & Telecom Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Elizabeth Porter - Morgan Stanley & Co LLC. - Analyst : <_ALACRA_META_ABSTRACT>So last week, you guys reported Q4 earnings. You had a nice speed to Q4 revenues, upside to guidance. Would you still have a little ways to go before that -- for the revenue guidance to kind of get back to where you would like the company to be. But Q4 was certainly a step in the right direction. And I'd love if you could highlight your view of the health of the company and the business in Q4 and the type of the macro environment that we're operating in today.

Question: Elizabeth Porter - Morgan Stanley & Co LLC. - Analyst : And there are some new metrics that you gave on Q4 kind of the splitting out of the enterprise and mid-market at 70%, SMB; downmarket about 30%. And you guys have made a lot of changes. One, just like better product market upfit -- better product fit upmarket have allowed you to really double down on that opportunity. And also you're looking to mitigate risk in the SMB downmarket piece as well. So could you just walk us through how the company has really fundamentally changed over the last year or so, both from a go-to-market and a product standpoint to capitalize on those two segments?

Question: Elizabeth Porter - Morgan Stanley & Co LLC. - Analyst : And on the product side, one of the big changes have been CoPilot. And CoPilot isn't just an add-on, but rather a full new platform that customers are getting access to. So what are some of the highlights of what CoPilot enables for customers that just wasn't fundamentally available on the traditional platform?

Question: Elizabeth Porter - Morgan Stanley & Co LLC. - Analyst : Yeah. And so going beyond just SDR, moving to these account executives, how big of an opportunity is that as you're addressing a larger persona by the -- beyond the traditional SDR base? And is there any sort of difference in the go-to-market strategy to address that new persona? And if so, how are you looking to invest behind that?

Question: Elizabeth Porter - Morgan Stanley & Co LLC. - Analyst : Great. And clearly, we've seen a lot of success with CoPilot. It needs now up to $150 million ACV in Q4. That's up from just $18 million in Q2. So how much is this a shift from existing customer spend to ZoomInfo from the traditional platform versus new logos that are new to ZoomInfo? And then maybe for Graham, how should we think about just the timeline of shifting customers over? And from a financial perspective, how does this start to flow through the model?

Question: Elizabeth Porter - Morgan Stanley & Co LLC. - Analyst : And I want to get back to the point on as customers upgrade, you have this on average double-digit increase in ACV. We are still sometimes working through the period of getting past those renewals when people were lowering their head count. I think the concern going forward is as sales become more efficient, do you maybe need less heads. So I guess there's kind of two questions. First one, are you seeing any sort of changes in seat demand as it relates to customers that may be buying CoPilot versus not buying CoPilot? Or anecdotally, what you may be hearing in the industry as it relates to lower seat count volume from AI efficiency. And then second, in the event that we do have lower fees, but with higher CoPilot spend, do we think of this as a net negative, neutral, net positive?

Question: Elizabeth Porter - Morgan Stanley & Co LLC. - Analyst : And I want to switch gears for a moment to go back to the Data-as-a-Service where you've seen a lot of good growth there. A lot of that is larger customers, there's demand for data, particularly as they may build their own AI solutions. Can you just unpack the increase of demand? Is that from existing customers engaging with ZoomInfo in new ways versus new customers? And how do we think about the durability and growth that you're seeing in DaaS? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 06, 2025 / 7:30PM, ZI.OQ - Zoominfo Technologies Inc at Morgan Stanley Technology, Media & Telecom Conference

Question: Elizabeth Porter - Morgan Stanley & Co LLC. - Analyst : Great. And so yes, you have this really strong foundational layer of data, but you've also been expanding into new use cases and functionality, particularly as it relates to the engagement layer in areas like we would see with Gong or Salesforce, I mean, Salesloft. So how do you see the overall market consolidation? And is AI a forcing function to drive a faster pace of consolidation? And how do you see the market playing out? Is this a winner take most?

Question: Elizabeth Porter - Morgan Stanley & Co LLC. - Analyst : And another question we've been getting a lot from more recently is around OpenAI and their demo of a sales agent. And so I would love to just get your view on the demo of the OpenAI Agent and how ZoomInfo is competitively differentiated. How should we think about those upmarket clients, particularly some of the more sophisticated ones, leveraging ZoomInfo versus OpenAI to get the high end.

Question: Elizabeth Porter - Morgan Stanley & Co LLC. - Analyst : Great. And I want to switch to a little bit over to the financial side. In Q4, your NRR improved 2 points sequentially to 87%. And it was the first quarter that we saw the NRR improvement for a couple of quarters now. So what were the key drivers behind the improvement. What's the outlook for how this trend is embedded in kind of the future quarters? And where do we ultimately get back to?

Question: Elizabeth Porter - Morgan Stanley & Co LLC. - Analyst : Okay. And the other side to the retention has been kind of a new business side. And I think investors have been a little bit overly focused on the retention side of the business. So can you just speak to a little bit more of what you're seeing on the new business trends? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 06, 2025 / 7:30PM, ZI.OQ - Zoominfo Technologies Inc at Morgan Stanley Technology, Media & Telecom Conference

Question: Elizabeth Porter - Morgan Stanley & Co LLC. - Analyst : I'm going to ask another question and then open up to the audience if there's any. More recently, we've been starting to really focus investors on free cash flow per share. And so --

Question: Elizabeth Porter - Morgan Stanley & Co LLC. - Analyst : (multiple speakers) But I think you guys do have some great cash flow generation and pointing to people in setting the floor for the dollar free cash flow per share as an example of just how you guys are highlighting the metric more. And so I wanted to ask just about the free cash flow generation business. And are the free cash flow margins more dependent on the expansion in operating? Or is this really just more of the opportunity to drive higher revenue starting to flow through that free cash flow margin.

Question: Elizabeth Porter - Morgan Stanley & Co LLC. - Analyst : Great. Are there any questions in the audience? So there has certainly been some noise in the financial statements just related to the accounting adjustment, that you had in terms of the write-down. And I wanted to ask on if there's any sort of metrics or given just the noise that you would highlight in financials that might be missed just given some of the more recent quarters? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 06, 2025 / 7:30PM, ZI.OQ - Zoominfo Technologies Inc at Morgan Stanley Technology, Media & Telecom Conference

Question: Elizabeth Porter - Morgan Stanley & Co LLC. - Analyst : Great. Awesome. With the minute left, what are some of the three things that we should be looking forward to in 2025?

Question: Elizabeth Porter - Morgan Stanley & Co LLC. - Analyst : Awesome. Great. Well, thank you so much for joining us today.