ZoomInfo Technologies Inc.

Ladies and gentlemen, thank you for standing by, and welcome to Zoom Info Second Quarter 2025 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 this session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. We do ask that you please limit to one question. And to withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would like now to turn the conference over to Jerry Sosinski, Vice President of Investor Relations. Please go ahead, sir.

Thanks, Michelle. Welcome to Zoom Info's Financial Results Conference Call for the second quarter 2025. With me on the call today are Henry Shuck, founder and CEO of Zoom Info, And let me be one of the first to congratulate Graham O'Brien, who is also on this call, who is our newly named Chief Financial Officer. 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 factors section of our SEC filings. 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 forward-looking statements in the slides posted to our Investor Relations website, at ir.zoominfo.com. 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. With that, I'll turn the call over to Henry.

Thank you, Jerry, and welcome, everyone. We executed well across our strategic priorities, delivered another quarter of strong financial results, accelerated upmarket growth, and raised our guidance for the year, which now calls for positive revenue growth in 2025. We're delighting our customers and feel closer to them than ever. We're positioned to play offense with accelerating product innovation, a strengthening competitive position across our solutions, and a team that is laser-focused and has an ownership mentality. All these inputs should drive accelerating free cash flow per share growth over the next few years and beyond. During the quarter, GoToMarket Studio went live and has a growing set of customers. ZoomInfo co-pilot continued on a strong growth trajectory, and our suite of operations solutions again grew more than 20% year over year, validating that our customers are increasingly recognizing that they must make an infrastructural investment in data if they want to win in an AI world. All three solutions are driving stickier workflows and more habituated engagement across our customer base. In Q2, gap revenue was $307 million and adjusted operating income was $105 million, a margin of 34%, both above the high end of guidance. Q2 is a quarter that typically skews more up markets. and we leveraged that opportunity with an increasing number of our largest customers embracing workflows, automation, and data as they expand their usage of our overall platform. We now have 1,884 customers with more than $100,000 in ACV, a sequential increase of 16 customers, and a year-over-year increase of 87 customers. ACV growth in the quarter from that cohort was materially higher than last Q2, as our largest customers continue to expand and embed more of our data and agents in their workflows. We added customers to our million-dollar cohort, driving sequential and year-over-year growth in total ACV, as well as the average ACV per million-dollar customer. ACV for the million-dollar cohort was up more than 25% year-over-year. Upmarket ACV accelerated from 3% year-over-year growth in Q1, to 4% year-over-year growth in Q2. 72% of our business is now upmarket. Net revenue retention improved to 89% in the quarter, up 4 percentage points in three quarters, with upmarket retention the highest it has been in several years. During the quarter, we closed upmarket opportunities with Avis, Open Exchange, Spectrum, SWIFT, and the Washington Commanders. Additionally, a multinational provider of finance, HR, and payroll software doubled its spend with us and is now leveraging a wide swath of our data-as-a-service products within their data science teams to build foundational data with company firmographics, technographics, hierarchy data, and signals across funding announcements, intent topics, and product scoops. The customer expects its investment to have an immediate impact on market reactivity, win rates, and hard costs on FTEs across their go-to-market organization. At UKG, we identified and unlocked an opportunity to transform their territory planning, account scoring, and first-party data enrichment by improving data integrity across the organization using Zoom Info Lab, data as a service, and our AI-powered signals. We expanded our relationship with a leading spend management platform to develop a custom Data as a service solution that amplifies their go-to-market engine and accelerates their initiative to grow their customer base of companies with more than 10 employees. By partnering with their business systems, engineering, and business intelligence teams, we analyzed company records and contacts against their ideal customer profile, identified white space opportunities, and delivered a new universe of data that integrates seamlessly into their existing go-to-market workflows. These accounts were all already in our 100K cohort of customers, and all three more than doubled their spend year over year. This is a trend that we expect to continue to see within our customer base. Our go-to-market motion is now designed to drive increased platform adoption and expansion across our existing upmarket customers. And while not reflected in our Q2 financial results, shortly after the close of the quarter, we signed the largest TCV deal in the history of ZoomInfo. reinforcing our upmarket growth potential. This is a nearly eight-figure annual contract across four years with an existing upmarket customer that materially extends their use of the ZoomInfo platform. This customer has been using ZoomInfo for over a decade, during which time they have increased annual spend by 40x. What started as a simple contact lookup contract has evolved into a long-term partnership that leverages our data, signals, and workflow activation layer with custom DAS deliveries becoming embedded into their critical go-to-market workflows. Customers like this one underscore how critical we are to organizations as they transform the way they go to market. Today, 72% of our ACV is coming from larger upmarket customers, an area where we see higher levels of profitability and accelerating revenue growth. As we successfully execute on our transition up market, we continue to invest behind this strategic shift. During our last earnings call, we made clear our intention to build a go-to-market intelligence platform. We continue to see great momentum on that journey throughout Q2 as enterprises move beyond accessing data to demanding AI-powered systems that can think, predict, and act on their behalf. positioning our solutions and platform as the intelligent backbone of their go-to-market operation. First, with Copilot, our AI for frontline seller productivity. In the quarter, the first set of customers who adopted Copilot a year ago came up for their first renewal on the product. Though it's still early, we're observing renewal rates that are materially better than on legacy Zoom Info sales and are performing better than expected. Since Q4 2024, active users have increased their number of monthly AI actions by more than 40%, showing increasing adoption in daily workflows. We also expect continued traction upmarket as upgraded Copilot features and agents launch later this year. Second, GoToMarket Studio is our operational counterpart to Copilot, enabling sales leaders and revenue operations teams to architect campaigns and strategies while Copilot executes against those strategies at the front line. They're designed to work together, driving expansion across different personas and new use cases within the same enterprise account. GoToMarket Studio went into early access in July with the first set of customers from our oversubscribed waitlist. We will be GAing GoToMarket Studio ahead of schedule And as it continues to scale across our customer base, we have an unprecedented opportunity to enable go-to-market leaders to actually deliver results with AI and automation. Early customers are using go-to-market studios to generate insights faster than ever with just a fraction of the effort. Account scoring and prioritization, automated research and enrichment, turn prediction modeling, and competitive intelligence are some of the first features that our early users are embedding into their AI-enabled workflows. We're eliminating data silos, automating manual tasks, and delivering real-time buyer intelligence, ensuring every seller is engaging with the right account at the right time with the right message. With Go-To-Market Studio, Copilot, and DAS, our Go-To-Market Intelligence platform is creating the unified data foundation for Go-To-Market AI. In Q2, we continue to automate the downmarket experience, and where we're able to reduce and, in some cases, reallocate downmarket resources. In this rapidly changing technology landscape, we will continue to be ahead of the curve in our internal adoption of AI, resourcing smaller but more productive teams. In one instance, we were able to restructure a team from more than 25 employees to two, leveraging AI to support the automated creation of content and the workflow to connect that content across the business. We deployed some of that excess headcount into upmarket sales roles where we continue to add headcount. We see these changes leading to better customer experiences while capturing efficiencies in the process and have a number of additional areas around the business where we believe we can reinvent our operating model powered by AI, resulting in better customer experiences, faster decisions, reduced headcount by leveraging AI, and improved margin performance. In the quarter, we were also able to be aggressive against our share buyback program, retiring 15.9 million shares of common stock at an average price of $9.22. I'm committed to driving durable positive revenue growth, faster AOI growth, and even faster free cash flow per share growth via opportunistic and price-sensitive buyback. Before I turn the call over to Graham, we announced today that we are naming him CFO. Graham first joined us as part of the ranking acquisition in 2017 and has had a great track record over his eight-plus years at ZoomInfo. He has done a fantastic job serving as our interim CFO, a period of time when we consistently delivered on expectations, redoubled our focus on profitable growth, and continued our shift up market. He has been a great partner to me and to the investor community, and I'm confident he is perfect for the job. It has been a highlight of my career to watch him grow into this role. With that, I'll turn the call over to our Chief Financial Officer, Graham O'Brien.