Zoominfo Technologies Inc at Piper Sandler Growth Frontiers Conference Summary

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

Question: Brent Bracelin - Piper Sandler Companies - Analyst : <_ALACRA_META_ABSTRACT>Great. So maybe we'll start the discussion around the business. Obviously, you've built a pretty impressive business, over $1 billion in revenue, generating over 30% operating margins and free cash flow margins. I think the challenge here that people are trying to grasp with is the business is now contracting. And so maybe level set, what are the top three factors that have created this headwind for the business as you think about a business that we're expecting to decline this year?

Question: Brent Bracelin - Piper Sandler Companies - Analyst : So two years of some headwinds within one of the biggest verticals for you. How do you know that it stabilizes here, right? You have one quarter; one quarter doesn't quite make a trend yet. But is the composition of that 33% of business changing when you look at like the size of the software tech companies you're serving today versus, say, two years ago?

Question: Brent Bracelin - Piper Sandler Companies - Analyst : And as we double click into just that bad debt expense, it was $5 million a year. We're looking at $32 million in just the first half. What's the delta there? Are those customers that weren't paying their bills? Walk us through like the that lift from $5 million to $32 million in the first half. And what were the type of customers?

Question: Brent Bracelin - Piper Sandler Companies - Analyst : What portion of the business -- you talked about a third of the business now being tech related. How much of the business is SMB related?

Question: Brent Bracelin - Piper Sandler Companies - Analyst : Helpful. So maybe we'll go by vertical. Obviously, you talked about the business on the tech software side contracting. What are the customer mix verticals where you're seeing actually increases or stabilization?

Question: Brent Bracelin - Piper Sandler Companies - Analyst : I think about a traditional software company, particularly a start-up. They're tied directly to sales rep growth and oftentimes, a direct calling effort. You're obviously powering those efforts. How different is the financial services world or the insurance world or the manufacturing world? Is it a longer sales cycle to convince them, hey, there's a better way to leverage the database, leverage CRM, leverage the contact information, how to sell? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 11, 2024 / 3:30PM, ZI.OQ - Zoominfo Technologies Inc at Piper Sandler Growth Frontiers Conference

Question: Brent Bracelin - Piper Sandler Companies - Analyst : Maybe before we dive into the next discussion here on competition. Go-to-market, I know historically, it wasn't organized around verticals. It feels like maybe you're moving towards maybe a little more domain expertise. Where are we at in that process?

Question: Brent Bracelin - Piper Sandler Companies - Analyst : Okay. So segmentation has been a big focus this year. So let's talk about competition. I mean we get the question a lot, obviously, when businesses start to get challenged, it's not just macro, like people are trying to find other reasons. And Apollo has come up quite a bit as a competitor is getting very aggressive on price. So walk us through who do you see in that competitive landscape? Is it vary by segment? And then address the question we get all the time on Apollo?

Question: Brent Bracelin - Piper Sandler Companies - Analyst : Have you -- obviously, it's a full-feature product from a platform standpoint. There really isn't tiered functionality. Have you ever considered tiering the functionality at the low end with maybe a light version, the ZoomInfo Lite? Or is the goal like, hey, we're winning the back the business, we feel comfortable. We don't have to have multiple product SKUs to address that part of the market?

Question: Brent Bracelin - Piper Sandler Companies - Analyst : Almost in the 15-minute mark without talking about AI, but we've got to talk about AI. Copilot, new product, obviously, 18 million ACV, 1,000 new logos. Maybe walk us through the mix as you think about that business. How much of that is new customers like coming onboarding via the Copilot offering versus, let's say, existing customers that are migrating?

Question: Brent Bracelin - Piper Sandler Companies - Analyst : Okay. Great. It sounds like off to a really good here. Let's talk about pricing. There's different philosophies around how you price for AI and monetize AI and obviously, Microsoft. In some cases, is embedding the functionality. And in other cases, they're going to charge for it as an add-on. I know ZoomInfo in the past has replatformed, lots of acquisitions, lifted price as you replatformed. It sounds like Copilot is going to be more of like a replatforming where you have an uplift on -- Copilot as an embedded part of the whole entire platform. Walk us through how you're thinking about monetization. Will there be add-ons? Or is it more of a replatform price lift functionality for all?

Question: Brent Bracelin - Piper Sandler Companies - Analyst : Obviously, AI is a double-edged sword. In some cases, it improves productivity and potentially reduce the number of seat yourself. So how do you think about that equation of like, okay, we're adding a ton of value but also there might be fewer seats we sell?

Question: Brent Bracelin - Piper Sandler Companies - Analyst : to new cohorts. To new cohorts outside of the sales.

Question: Brent Bracelin - Piper Sandler Companies - Analyst : So you're pushing back on this notion that it's going to reduce the network seats because you see just a greater footprint opportunity beyond the sales footprint. And early evidence would suggest that's the case?

Question: Brent Bracelin - Piper Sandler Companies - Analyst : Great. Let's pivot a little bit to DaaS, and maybe just size the DaaS business today, the opportunity and maybe transitioning from a seat-based license model to DaaS, what does that spend look like for larger customers?

Question: Brent Bracelin - Piper Sandler Companies - Analyst : For a customer that was spending $1 on ZoomInfo before, if they migrate to DaaS, would they spend $1.20, you think? Will they spend $1.50? Is it different? I mean is that the right way to think about it? Or it's a different -- REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 11, 2024 / 3:30PM, ZI.OQ - Zoominfo Technologies Inc at Piper Sandler Growth Frontiers Conference

Question: Brent Bracelin - Piper Sandler Companies - Analyst : That's even an upsell on top of --

Question: Brent Bracelin - Piper Sandler Companies - Analyst : Two more questions here for me, and I'll open up the audience for questions there. Let's talk on go-to-market, right? There's been a lot of changes. You brought in some of the leadership. Walk us through the evolution of lot more products to sell. What's the biggest change that you've made? It sounds like segmentation,

Question: Brent Bracelin - Piper Sandler Companies - Analyst : Yes. Then my last question here for you. As you think about -- two parts, that's what we do. We ask multipart questions. Part one, what do you think investors, you had a lot of conversations with investors here over the last couple of days. What do you think investors don't appreciate maybe about ZoomInfo that based on the line of questioning and maybe my line of questioning, what's underappreciated? And then two, what are you most excited about for next year? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 11, 2024 / 3:30PM, ZI.OQ - Zoominfo Technologies Inc at Piper Sandler Growth Frontiers Conference