ZoomInfo Technologies Inc.

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Zoom Info second quarter year 2022 financial results conference call. At this time, all participants are on 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 need to press star 1 1 on your telephone keypad. At this time, I would like to turn the conference over to Mr. Jerry Sisitsky. Sir, please begin.

Thank you, Howard. Welcome to ZoomInfo's financial results conference call, highlighting our results for the second 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 will open the call to Q&A. 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 believe, and expressions which reflect something other than historical facts, are intended to identify forward-looking statements. Forward-looking statements involve a number of risks and uncertainties, including those discussed in the risk factor sections of our filings with the SEC. Actual results may differ materially from any forward-looking statements. 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. With that, I'll turn the call over to our CEO, Henry Shuck.

Thank you, Jerry, and hello, everyone. We appreciate you joining us for today's call. Zoom Info's Q2 results once again beat expectations on the top line and the bottom line. As we continue to execute against our unified all-in-one platform strategy, and set ourselves up to, again, raise our full-year financial outlook. In the second quarter, we delivered gap revenue of $267 million, year-over-year growth of 54%, and sequential quarterly growth of 9% when adjusted for the number of days in the quarter. And we did that efficiently and profitably with an adjusted operating income margin of 40% ahead of expectations and our highest levels of margin performance since Q2 of last year. Together, delivering a rule of 94 quarter. We quickly integrated acquisitions, drove them to profitability ahead of plan, and continued to invest in the business. We generated $108 million in unlevered free cash flow in the quarter, proving that even in an evolving macro environment, we can deliver a leading combination of growth, profitability, and free cash flow generation at scale. While we just crossed the $1 billion revenue run rate threshold, we are closing in on our next milestone of $2 billion. On our way there, we are committed to delivering best in class levels of both growth and profitability. We are convinced that the front office of the future is integrated, data and insight driven, and leverages software to drive efficiency. Zoom Info's RevOS is the only platform that can holistically inform and automate the go-to-market motions of companies of all sizes. This integrated experience is what customers want and what all businesses will need to succeed going forward. The integrated platform drives efficiency for our customers, helping them to do more with the sales teams they have, and helping our users succeed and drive more growth for their companies. We're delivering more functionality to the RevOS platform deepening the integration points and integrated experience, and making it easier to activate insights from our best-in-class data. We achieved a number of meaningful milestones in Q2. Advanced functionality now represents 29% of ACV, and ACV from advanced functionality more than doubled over the past 12 months, an acceleration of growth compared to the end of last year. Customers with advanced functionality now represent over 75% of our revenue, and are leveraging more and more of our platform, including intent, workflows, engage, chorus, data as a service, and more. We closed the quarter with 1,763 customers with greater than $100,000 in ACV, while the average revenue across these customers continues to grow. And we now have more than 30,000 total customers and are driving record levels of ACV per customer. Our new products and platforms are also gaining meaningful momentum across the board, creating a foundation for long-term durable growth across new markets. MarketingOS and TalentOS both added the most ACV ever in a single quarter, while nearly 50% of TalentOS customers are new to ZoomInfo. Chorus recorded the most new business sold in a single quarter, and we have nearly tripled the Chorus business since we acquired it a year ago. Engage had a record quarter. with the largest amount of ACV added ever as we increasingly landed engaged upmarket with 3x the number of deals with mid-market and enterprise accounts than in Q2 2021. And we have more than doubled ring lead revenue in the nine months since acquisition. In short, we are executing well and demand remains strong. We also continue to monitor the economic environment and look for signs of impact on our business. We listen to chorus calls, we speak with our sales reps, and we hear directly from our customers. We have seen sales cycles that are somewhat extended relative to sales cycles in Q1, driven by incremental finance and procurement review, but deals are still closing. While a more uncertain macroeconomic environment may create some elongating near-term sales cycles, our very efficient go-to-market motion and proven quick time to value for our customers will help insulate us. The market opportunity is huge, and we are executing against it. We are in the earliest days of what we believe is a generational transformation of how businesses go to market with data, insights, and a purpose-built software platform, a transformation that we are uniquely positioned to lead. We have the right platform, the integrated data and insights that power that platform, and we're delivering success to our customers as they look for efficiencies, and look to consolidate with fewer and fewer strategic vendors. We continue to deliver success to customers of all sizes across all industries, with customers increasingly choosing Zoom Info as a pillar of their go-to-market tech stack. As companies focus on efficiency, profitability, and unit economics, the most obvious path is to get more out of your existing sales and marketing resources. For two decades, we have been the trusted partner to deliver just that. I wanted to highlight a few of our Fortune 1000 wins in the quarter, each of which went through meaningful user, security, and privacy reviews before either expanding or becoming customers. These are customers at varying stages of sales and marketing maturity who are each using the ZoomInfo platform in ways that suit their current needs while providing them the flexibility to grow with us as they sophisticate their sales and marketing efforts over time. Caesars Entertainment, the largest casino entertainment company in the U.S., chose ZoomInfo to help drive more events at their properties around the world and to drive a more efficient and scalable way to go to market. Historically, their sales stack was primarily Salesforce and LinkedIn, but they needed to transform their CRM from a system of record to a system of insight. First, by making sure the data in Salesforce was up-to-date and accurate, and next to push insights directly inside of CRM. They did a short trial of Zoom Info, immediately saw positive results, and their sales team was ready and excited to rely on Zoom Info going forward. In addition to SalesOS and CRM enrichment, Caesars is also implementing Zoom Info chat functionality, which allows their events teams to respond and engage with prospects in real time, converting more of them to customers. A multinational financial services company that is a global pioneer and leader in payment processing and technology started with a mix of sales OS user seats and data as a service across six subsidiaries. In the last year, we consolidated those agreements into a single MSA, added additional sales OS user seats, additional DAS enrichment, as well as intent data, form complete, website visitor identification, and ring lead within operations OS. We are now deduping, normalizing, and enriching all accounts and contacts across their core Salesforce instances, allowing them to build custom modeling and driving a much more efficient M&A integration and combined go-to-market motion. At Stripe, what initially started as a deployment across a small team of business development professionals has grown to a relationship that spans hundreds of sales professionals on SalesOS, as well as a new footprint across their data science and engineering teams, to provide our best-in-class data and insights, including technographics, advanced attributes, and intent. Stripe is an incredibly data-driven organization and is now driving a more centralized and holistic approach to data, integration, and prioritization for their go-to-market efforts, ensuring that every client interaction is timely and insightful. One of the largest communication companies in the world is using SalesOS across more than 1,000 sales reps and multiple channels of their business, including inside sales, wirelined, and wireless, with a large percentage of users in their global enterprise sales team. As part of the deal, we will integrate directly into their instance of Salesforce, and we are also supporting their data and analytics teams with regular delivery of our scoops data. In the quarter, we also added PNC Bank, one of the top 10 banks in the United States, as a customer of SalesOS. First, I think seeing a top 10 bank in the US become a new customer this quarter highlights just how much truly white space opportunity there is for us. PNC is deploying Zoom info across their commercial account teams to capitalize on growth opportunities and to ensure that when they are engaging with clients and prospects, that they're having high quality interactions backed by data and intelligence. In Q2, we introduced meaningful new integrated experiences across RevOS. Most notably, we integrated the most powerful sales automation capabilities of Engage with our best-in-class data targeting and workflow capabilities in SalesOS. Through this experience, SalesOS and Engage customers will be able to click to dial, click to email, and add professionals to multi-touch, multi-channel prospecting campaigns without leaving SalesOS. And teams can now view first-party activity data from Chorus and Engage alongside Zoom Info data in Sales OS. Calls, emails, and online meetings populate an activity feed in Sales OS, and that activity data can be used as filter criteria to create dynamic audiences for targeted prospecting and account expansion motions. This enhanced functionality is similar to our bi-directional sync with Salesforce, HubSpot, and Marketo. where we enable customers to merge their first-party CRM and marketing automation data with Zoom Info Sales OS, Marketing OS, and Operations OS platforms. Through Q2, customers have synced over 2 billion records from these systems, four times the number of records synced through Q2 2021, highlighting the value our customers are seeing by bringing their first-party data into Zoom Info to create targeted audiences in the system they use to go to market. In Q1, we launched Marketing OS for account-based marketing, giving marketers the ability to build targeted audiences with Zoom Info's best-in-class intelligence and to deploy ads across social media and display networks using our DSP. The average account is now building a dozen audiences and running multiple campaigns. As we did with Sales OS, We continue to look for opportunities to integrate and unify experiences within our platform. Within Marketing OS this quarter, we introduced AirCover, enabling sales reps to identify key accounts in Sales OS and share them directly with their marketing team to instantly create and activate targeted social media and display advertising campaigns. This cross-functional motion sets up a sales rep for success and enables a truly aligned account-based marketing approach. and we continue to invest in developing new technology, finding new valuable data sources, and streamlining processes to advance coverage and accuracy in our data cloud. In Q2, our contact database surpassed 220 million records, and our SalesOS customers will see a 4x increase in SMB coverage and a 2x increase in company locations with a 10 percentage point improvement in match rates. Incorporating multiple machine learning models enabled us to improve our company database with 100% fill rates on core firmographic attributes. We released multiple artificial intelligence models, enabling us to increase the accuracy of our data, including machine and deep learning models that have grown our technology data coverage by more than 30% year over year, and that detect employment changes for contacts in our database faster and with higher accuracy, which is a result of us improving our detection of companies and titles and raw data produced by our technology that actively monitors for these types of changes. From a privacy standpoint, in Q2, we achieved ISO 27701 certification. This is a global standard for organizations looking to put in place a system to support compliance with the EU's GDPR, California's CCPA, and other data privacy requirements. Meeting the rigorous qualifications of ISO 27701 further strengthens our commitment to data security and privacy. We have also rebuilt our privacy center to make it as easy as possible for professionals to access, review, update, or remove their profiles. Our center also explains what ZoomInfo does to be a privacy-first company, and helps our customers with their privacy compliance as well. And we're yet again going beyond our regulatory obligations by re-notifying millions of long-standing individuals in our database, ensuring they remain aware that they are in our platform, that they can claim their profile, or opt out if they wish. Before I wrap up, I wanted to welcome Allison Gleason to our board. Allison was previously the SVP of Americas at Cisco, responsible for more than $25 billion in annual sales. She's a true sales professional, having been in multiple sales leadership roles since her earliest days of holding an individual quota. We are incredibly excited to welcome her to our board and look forward to the many ways in which she will contribute to our continued growth and success. In summary, we are the runaway market leader with our product platform and sales leadership. We have the industry's best integrations and a marquee list of growing customers, along with proven leverage in our model, given our powerful unit economics. We are building a generational company, and even with some uncertainty created by the current economic environment, we are investing in the platform, investing in the team, and we continue to grow profitably. Sales and marketing teams are being pushed to do more with less, and the only way to actually achieve that goal is to get more out of every marketing dollar, and sales resources. Our mission since inception has been to help companies big and small do just that. With that, I'll hand it over to our Chief Financial Officer, Cameron Heiser.