ZoomInfo Technologies Inc.

Good day, and thank you for standing by. Welcome to the Zoom Info First Quarter Year 2022 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star, then zero. I would now like to turn the conference over to today's speaker, Mr. Jerry Sositsky. Please go ahead.

Great. Thanks so much. Welcome to ZoomInfo's financial results conference call, highlighting our results for the first quarter of 2022. With me on the call today are Henry Schuch, founder and CEO of ZoomInfo, and Cameron Heiser, our chief financial officer. After their remarks, we'll open the call to Q&A. During this call, any forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Expressions of future goals, including business outlook, expectations for future financial performance, and similar items, including without limitation, expressions using the terminology may, will, 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 section of our filings with the SEC, Actual results may differ materially from any forward-looking statements. The company undertakes no obligation to revise or update any forward-looking statements in order to reflect events that may arise after this conference call, except as required by law. For more information, please refer to the cautionary statement included in the slides that we have posted to our investor relations website at ir.zoominfo.com. All metrics discussed on this call are non-GAAP unless otherwise noted. A reconciliation can be found in the financial results press release or in the slides that we have posted to our investor relations website. Lastly, we hope that you can join us for the virtual investor event we are hosting on Thursday, June 2nd, beginning at 3 p.m. Eastern Time. More information is available through our investor relations website, and we look forward to your participation. With that, I'll turn the call over to our CEO, Henry Shuck.

Thank you, Jerry, and welcome, everyone. The first quarter was a great start to the year. We continue to successfully execute our strategy and drive growth across all of our major initiatives. Our expanding RevOS platform, which is deeply integrated with our world-class data and insights layer, is resonating with customers. We are increasingly seeing customers embrace the integrated platform experience, running more and more of their sales stack on Zoom Info. In the quarter, we drove a more than 100 percent increase in customers using the combined SalesOS platform, Engage, and Chorus offering, reinforcing the value of an integrated solution. In the first quarter, we delivered GAAP revenue of $242 million, year-over-year growth of 58 percent, and sequential quarterly growth of 11 percent when adjusted for the number of days in the quarter. Adjusted operating income margin was 39 percent and we generated $126 million in free cash flow. We continue to deliver a leading combination of growth, profitability, and free cash flow generation at scale. We closed the quarter with 1,623 customers with greater than $100,000 in ACD, up more than 65% year over year, while the average revenue across these customers continues to grow. And we saw incredibly strong growth in new business, as the new customer team had their best Q1 ever on an ACV basis and the best quarter ever on a TCV basis. On the international side, we have maintained our investment in data quality and coverage, adding over 14.5 million non-U.S. professional profiles year-to-date and rolling out Euro currency support in our platform, while quadrupling the headcount in our London office. As a result of our continued focus here, we set a record high for new business ACV added in EMEA, and international year-over-year growth remains strong at 80% on a greater than $100 million revenue run rate business. Our international business is predominantly driven by Western Europe and Canada. We have virtually zero exposure to Eastern Europe. We continue to see solid traction with our enterprise clients. We signed deals with a number of leading enterprises, landing new firms, and expanding more with existing customers. The three customers I'll highlight have all been ZoomInfo customers for at least a decade. And as we have continued to build out our RevOS platform and offering, they have also continued to increase their relationships across those offerings with us. We signed an eight-figure deal with Alphabet in the quarter. Our recently released modern user provisioning now allows for anyone at Alphabet to quickly access the tremendous value of the ZoomInfo platform with automated self-provisioning. And since we are publishing ZoomInfo directly on Alphabet's intranet, understanding and getting comfortable with our privacy, security, data collection, and compliance practices was an important part of the sales process. Google's revenue acceleration team is also leveraging ZoomInfo's operations OS platforms. That team adjusts company data and company insights to help inform the way they go to market. By leveraging our enterprise APIs, data is matched and normalized, pulled into a data warehouse, and consumed directly in their Salesforce instance. A consolidated view of highly accurate data and insights streamlines their ability to provide data to their go-to-market team while delivering success to their sellers, allowing them to sell more effectively. This type of deal structure serves as a roadmap for future enterprise expansion opportunities at other large companies. With Hitachi, we recently expanded our relationship into their marketing department and grew into a million-dollar-plus ACV engagement that continues to leverage our SalesOS platform across their sales team and adds OperationsOS to leverage ZoomInfo to enrich, append, and clean across a historically inaccurate database of leads and prospect data for marketing campaigns. While Hitachi leverages next-generation software across marketing automation, data lakes, and CRM, the value promised by that software has been unrealized as a result of the lack of high-quality data flowing through those systems. We intend to change that. Finally, Shopify signed a multi-year deal expanding ACD by more than 5X, growing to hundreds of users for the SalesOS platform and adding automated data enrichment from OperationsOS. Shopify's expansion enables them to improve outbound prospecting effectiveness, automatically enrich inbound lead information, and build propensity to buy scores from that auto-enrichment. Customers are increasingly embracing functionality beyond just looking up a lead in the platform. More than 75% of our active users are using more advanced functionality, including intent and website visitor identification analytics, leveraging workflow rules, or configuring saved search or email alerts. Following the close of the quarter, we completed two acquisitions, one to bolster our capabilities and market share on the recently rebranded TalentOS platform, and the other expanding our enterprise opportunity, both areas where we already see tremendous growth and are excited to invest behind. On the TalentOS side, companies have never faced such a challenging environment for hiring and retaining talent. Roles that previously could have been filled through traditional job boards now require sophisticated direct sourcing. Candidates demand to work for companies with great cultures and expect an understanding of employee benefits and experiences before even applying to a job. Employees that have negative reputations online massively lose out on hiring top talent. In April, we acquired Comparably to empower every company to effectively identify, source, influence, and hire for their most vital roles. Comparably adds a suite of popular SaaS solutions for employer branding and recruitment marketing, combined with an employee review platform that reaches millions of candidates each month. With Comparably, TalentOS gives companies the ability to engage and hire candidates with much more sophistication and influence. TalentOS plus Comparably is a must-have combination for any company recruiting in today's competitive work environment. In enterprise go-to-market, we know that the best-performing enterprise companies are leveraging data, insights, and software for their revenue operations. And they are significantly outperforming go-to-market teams early on in their digitization journey. Access to high-quality relevant data provides significant competitive advantages for all sales and marketing organizations. We've acquired Dogpatch Advisors to launch Zoom Info Labs, a new go-to-market thought leadership team driving go-to-market data analysis, product enhancements, and strategy for our enterprise customers. Dogpatch is an in-demand go-to-market consultancy with expertise in scaling revenue teams and building modern sales and marketing systems. Dogpatch has a proven track record of significantly increasing revenue for organizations by modernizing their go-to-market operations and workflows. As part of the acquisition, Ben Salzman, Dogpatch's CEO, will join ZoomInfo to lead ZoomInfo Labs. This will immediately expand our capabilities for enterprises and drive enhancements across our suite of products. Over time, we expect ZoomInfo Labs to put the modern go-to-market playbook within reach of every company. We continue to innovate and deliver new and improved functionality across our RevOS platforms. In order to better reflect the evolving nature of our solutions for HR, recruitment, and talent management professionals, and the breadth of the capabilities we offer, we rebranded RecruitingOS as TalentOS. We are extremely pleased with the early success we've seen with our TalentOS offering. Both ACV and customer count grew more than 50% compared to Q4, and we've doubled the percentage of our customers using TalentOS from just six months ago. adding Workday, the Cheesecake Factory, Sanford Rose, management recruiters, Redfin, and several leading financial institutions onto the TalentOS platform to drive their hiring needs. As our customer base continues to grow, we have continued to make investments in a world-class user experience, adding a guided onboarding journey to the platform and launching a new experience for quickly starting a user's first email automation campaign. For our power users, we release advanced Boolean search capabilities, as well as an entirely new experience that provides AI-powered, similar company recommendations to narrow in on companies to recruit candidates from. Operations OS is powered by our leading data as a service offering and our RingLead data orchestration platform, and is a key lever as we expand within enterprise accounts. In Q1, we expanded our support for enterprise-scale data and intelligence needs, with new large-scale data products, Contact Databricks, Hierarchy Databricks, and Bulk Search APIs. Customers can now build out a complete set of Zoom Info intelligence directly in the systems they work in. Databricks are accessible via Snowflake, Google BigQuery, Amazon S3, or SFTP, or Bulk APIs, enabling integration to any system or workflow. Finally, we announced a partnership with Google Cloud to power business businesses with ZoomInfo's data and intelligence in the systems where they work. Through our integration with Google BigQuery, joint customers can eliminate cumbersome B2B data ingestion processes and get more mileage out of the data in Google Cloud by seamlessly accessing ZoomInfo data and intelligence directly in BigQuery. In February, after months of planning and building, we launched MarketingOS, our new account-based marketing platform built on top of our shared data cloud and designed to give marketers new ways to reach target accounts and drive qualified leads for sales teams. Just as we revolutionized the future of selling, our product teams have been working hard to imagine a new platform for marketers. MarketingOS leverages our robust professional and company data to allow marketers to execute campaigns throughout the display ad network, social media network, and through marketing and sales automation channels. The Zoom Info Data Cloud enables marketers to identify and target their highest value audiences, upload creative assets, sequence relevant messaging across display and social ads, and intelligently engage prospects both in their inboxes and beyond. And by leveraging our form-complete and chat solutions, both originally part of SalesOS but now natively configurable and deployable inside of MarketingOS, Marketers increase conversion rates by instantly populating lead forms with accurate professional data and by engaging visitors with the right account executives and account managers through real-time chat. Finally, our built-in reporting allows for optimization of ad creative and nurture stream through platform-supported A-B testing. And because of the interoperability of our operating system, marketing and sales teams work from the same data and platform foundation, which tightens key handoffs and unlocks cross-departmental alignment. We acquired Chorus in July of last year, and since then, we have nearly tripled the number of Chorus customers. We are seeing increasingly higher attach rates with both new and existing customers and are now recording, analyzing, and surfacing insights on close to 500,000 meetings each month with Chorus. Behind the success on the go-to-market front are the ongoing development efforts driving category leadership in conversation and revenue intelligence. In Q1, we introduced deal signals to help sales teams monitor and manage their deal pipeline. Deal signals surface at-risk deals, allowing a salesperson and their manager to quickly scan what's in the pipeline and easily identify factors that could slow or derail deals. For example, when a deal gets stuck in a certain opportunity stage, or prospects are unusually slow to respond to rep outreach. We also rolled out a new Microsoft Dynamics CRM integration and strengthened our HubSpot CRM integration. Both now include bidirectional sync with Chorus, which allows our customers to pull information from their CRM into Chorus's pipeline visibility tool, Momentum. This allows Chorus users to parse through everything from conversation transcripts to how many contacts are engaged to the number of emails flowing between themselves and their prospects. And they can use all of that information to drive better forecasting accuracy and next best actions in the sales cycle. We continue to lead the way on privacy and compliance as it relates to all of our offerings. And of course, we embedded our patented flow for GDPR compliant meeting recording into Google Calendar. Reps now just need a single click to ensure their scheduled meetings are fully compliant and recorded in Chorus, while organizations continue to have the tools to ensure compliance across all their users and meetings. Finally, in a really busy quarter for Chorus, we released a Chorus mobile application on the iOS and Google Play stores, which now has thousands of downloads and a 100% five-star rating. At our upcoming analyst day, you'll hear even more about the persona-driven approach to our RevOS platform. where we will share more about the expanding multi-product adoption and attraction in our emerging product portfolio. Additionally, we will share more about the durability of growth and the efficiency of our model and have a great lineup of Zoom Info executives and key customers who will be joining us to share more about their experiences using our platform. Before I wrap up, I wanted to take a moment to acknowledge two of our departing board members, Patrick McCarter and Jason Mironov. As Carlyle's and TA's ownership in Zoom Info has trended down since the IPO, the number of board seats represented by each firm is reduced. As a result, Patrick and Jason have recently stepped off the board. Jason joined us in 2014 as part of TA Associates' investment in the company and was the first investor to see promise in both Zoom Info and in me. Over the last eight years, I came to rely on him for an endless amount of advice and counsel, but mostly for his friendship and loyalty. His presence at board meetings will be missed, but I expect him to continue to be a loud advocate for our success. Patrick joined us in 2018 as part of Carlisle's investment and has served as an important mentor and an unrelenting advocate for our growth. Patrick embodied what every founder looks for in a sponsor. He is smart, strategic, takes feedback, and has the company's best interest as the focal point of all of his decisions. In closing, we continued our strong momentum from 2021 and had a great start to the year. We're in the earliest stages of activating a large and growing market opportunity, and the team continues to exemplify strong and consistent execution. We're extremely confident in the opportunity ahead, and with that, I'll hand it over to our Chief Financial Officer, Cameron Heiser.