Summary of ZoomInfo Technologies FY Conference Call Company Overview - **Company**: ZoomInfo Technologies (NasdaqGS: GTM) - **Date of Conference**: November 18, 2025 - **Key Speaker**: Graham O'Brien, CFO Key Points Industry and Business Performance - **Stabilization and Improvement**: The past year has shown stabilization in the business, with Q3 marking the beginning of improvement. [4] - **Revenue Growth**: Q3 revenue reached $318 million, representing a 5% year-over-year growth. [4] - **Net Revenue Retention**: Achieved 90% for the first time in several quarters, up from 89%. [4] - **ACV Growth**: Upmarket business ACV growth accelerated from 4% to 6%, while downmarket improved by 1%. [4] Upmarket Focus - **Shift to Upmarket**: The upmarket business now constitutes 73% of total ACV, up from 68% year-over-year. [5] - **Profitability**: The upmarket segment is more profitable than the downmarket segment, with 100% retention in upmarket customers for two consecutive quarters. [5] - **Operations Business Growth**: The operations business, primarily upmarket, is growing at 20% year-over-year and now represents over 15% of total business. [5] Product Development and AI Integration - **Operations Suite**: A data suite that allows customers to access proprietary data on a subscription basis, enhancing their go-to-market strategies using AI. [8] - **Customer Demand for AI**: There is a growing demand for AI-driven go-to-market solutions across various customer segments, with both large and small companies seeking assistance. [10] - **GTM Workspace and Studio**: New products designed to streamline sales processes and enhance productivity by reducing context switching for sales professionals. [21][27] Customer Retention and Renewal - **Copilot Product**: Launched in Q2 2024, showing better renewal outcomes compared to legacy products, with mid to high single-digit percentage improvements. [18] - **Renewal Strategy**: High utilization of products like Copilot leads to better renewal conversations, with customers advocating for continued use and expansion. [52] Financial Outlook - **Free Cash Flow**: The company generates significant free cash flow and has been aggressive in share buybacks, retiring 80 million shares since the program's initiation. [65] - **Future Growth**: Plans to accelerate free cash flow per share growth through top-line growth, margin expansion, and continued buybacks. [66] Market Dynamics - **Sales Hiring Trends**: There is a shift back towards hiring outbound sales personnel, particularly among upmarket customers. [35] - **AI Impact on Sales**: The integration of AI tools is expected to enhance sales efficiency, allowing companies to either increase headcount or improve productivity without additional hires. [33] Investor Sentiment - **Positive Feedback**: Investors expressed surprise and satisfaction with the upmarket acceleration and improvements in downmarket performance. [67] - **Future Expectations**: Investors are keen on understanding the evolution of products like GTM Workspace and the growth potential of the operations business. [67] Additional Insights - **Data Advantage**: ZoomInfo's proprietary data and extensive investment in data acquisition provide a competitive edge over competitors relying on publicly available data. [15] - **AI Action Credits**: Introduction of a consumption-based model for AI actions, allowing customers to pay based on usage, which is expected to become more common in the market. [44] This summary encapsulates the key insights and developments discussed during the ZoomInfo Technologies FY Conference Call, highlighting the company's strategic focus on upmarket growth, product innovation, and financial health.

Summary of Conference Call Company and Industry - **Company**: ZoomInfo - **Industry**: Technology and AI-driven go-to-market solutions Core Points and Arguments 1. **Future Vision**: ZoomInfo aims to be synonymous with AI and go-to-market strategies within five years, having changed its ticker from ZI to GTM to reflect this focus [5][6] 2. **Revenue Growth**: The company expects to accelerate revenue growth and expand margins while continuing to buy back shares, particularly when stock prices are below intrinsic value [6] 3. **Upmarket Focus**: Currently, 72% of ZoomInfo's business is upmarket, growing at 4% annually. The company is shifting its focus to this segment while enhancing self-service and AI-driven services in the downmarket [8][49] 4. **Data Importance**: ZoomInfo's proprietary data is crucial for AI-driven initiatives in go-to-market strategies, with operations numbers growing 20% year-over-year [9] 5. **CRM Limitations**: CRM data is static and often outdated, lacking comprehensive insights necessary for effective go-to-market strategies. ZoomInfo aims to integrate first-party CRM data with third-party data to provide a more complete view [11][12] 6. **Go-To-Market Studio**: The company has developed a unified go-to-market data warehouse that combines various data sources to support AI automation and insights for sales and marketing professionals [14][20] 7. **AI Integration**: ZoomInfo has embedded AI throughout its product organization, enhancing the speed and efficiency of product development [20] 8. **Customer Demand**: There is a growing demand for personalized interactions, with customers seeking row-by-row personalization in their messaging based on detailed engagement data [25][26] 9. **Market Dynamics**: The industry is experiencing a cycle of overconsumption, with many companies having purchased numerous technologies without fully utilizing them. ZoomInfo aims to help customers rationalize their technology stacks [39][40] 10. **Downmarket Strategy**: The downmarket segment is currently 28% of the business and is expected to decline to about 20% over the next few years, focusing on maintaining valuable customer relationships [49][46] Additional Important Content 1. **Customer Engagement**: ZoomInfo has seen record win-back performance, indicating a return of customers who previously opted for lower-quality providers [65] 2. **Sales Development**: Customers are hiring more sales development representatives (SDRs) to compensate for decreased website traffic and demand generation [68] 3. **Copilot Adoption**: Over 10% of the customer base is now using ZoomInfo Copilot, which integrates various functionalities to streamline workflows for sales professionals [73] 4. **Unit Economics**: The unit economics of Copilot are similar to the rest of the business, with high margins and positive indicators for retention and customer lifetime value [75] 5. **Foundation Models**: The company is leveraging various AI models (e.g., Anthropic, OpenAI, Google Gemini) to optimize costs and enhance functionality across different tasks [78][79] 6. **Software's Future**: There is a belief that software will continue to be essential, as building effective software requires deep understanding of customer workflows and domain knowledge [88][89]

Financial Data and Key Metrics Changes - In Q1 2025, GAAP revenue was $306 million and adjusted operating income was $101 million, representing a margin of 33%, both exceeding the high end of guidance [8][18] - Annualized sequential revenue growth for the quarter was 1.1% and net revenue retention improved to 87% for the second consecutive quarter [18][9] - The company ended the quarter with $143 million in cash and cash equivalents, and carried $1.24 billion in gross debt, with a net leverage ratio of 2.5 times trailing twelve months adjusted EBITDA [24] Business Line Data and Key Metrics Changes - The upmarket segment grew 3% year over year, now representing 71% of the business, while the downmarket segment declined 10% year over year [9][19] - The million-dollar cohort saw sequential and year-over-year growth in total ACV and average ACV per customer [9] - The operations business grew double digits year over year, with data as a service solutions showing strong traction, new logos up 24% year over year, and average ACV per customer up approximately 10% year over year [21] Market Data and Key Metrics Changes - The company reported that 80% of its marketing revenue now comes from upmarket clients, indicating a strategic shift towards higher-value customers [15] - The company is seeing improved retention in the software vertical, with a focus on understanding potential impacts from tariffs and the evolving economic environment [22] Company Strategy and Development Direction - The company is committed to building a go-to-market intelligence platform, changing its trading symbol from ZI to GTM to reflect this focus [7][15] - The launch of Go-To-Market Studio aims to unify go-to-market data and enhance operational efficiency for revenue teams [12][13] - The strategy includes reallocating resources upmarket, which has shown better growth and profitability outcomes compared to the downmarket business [16][20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the business trajectory, noting no significant impact on customer behavior from the current economic environment, but added caution in guidance due to uncertainty [18][41] - The company anticipates continued growth in the upmarket segment while managing the downmarket business to a smaller, healthier version [19][48] - Management highlighted the importance of leveraging AI and data to drive efficiency and effectiveness in sales teams [30][50] Other Important Information - The company repurchased 8.6 million shares at an average price of $11.05, with an additional $500 million share repurchase authorization approved [22][23] - Operating cash flow was $119 million in Q1, with unlevered free cash flow of $125 million, representing a margin of 41% [23] Q&A Session Summary Question: Why now on the change around the name, the ticker, category? - Management indicated that the platform has expanded to serve a broader range of roles beyond just sales, necessitating the change to reflect the comprehensive solutions offered [27][28] Question: Can you bifurcate NRR by upmarket versus downmarket? - Upmarket retention continues to improve, while downmarket remains impaired but not significantly worse [31][32] Question: What is the growth trajectory for CoPilot? - CoPilot is growing at an expected rate, with significant upmarket deals being closed [35][36] Question: How do you see the downmarket business contracting? - The downmarket business is expected to contract in 2025, with a focus on achieving a healthier mix between upmarket and downmarket [83][84] Question: What is the appetite for M&A versus share buybacks? - The company will be opportunistic with M&A, particularly tuck-in acquisitions, while aggressively reducing share count due to perceived undervaluation [86]

Financial Data and Key Metrics Changes - In Q1 2025, GAAP revenue was $306 million and adjusted operating income was $101 million, representing a margin of 33%, both exceeding the high end of guidance [7][17] - Annualized sequential revenue growth for the quarter was 1.1% and net revenue retention improved to 87% for the second consecutive quarter [17][18] - The company ended the quarter with $143 million in cash and cash equivalents, and carried $1.24 billion in gross debt, with a net leverage ratio of 2.5 times trailing twelve months adjusted EBITDA [24] Business Line Data and Key Metrics Changes - The upmarket segment grew 3% year over year, now representing 71% of the business, while the downmarket segment declined 10% year over year [18][19] - The million-dollar cohort saw sequential and year-over-year growth in total ACV and average ACV per customer [8] - The operations business grew double digits year over year, with data as a service solutions showing strong traction, with new logos up 24% year over year [20] Market Data and Key Metrics Changes - The company reported that 80% of its marketing revenue now comes from upmarket clients, indicating a strategic shift towards larger enterprises [14] - The downmarket business is expected to contract further, with guidance indicating a decline in the high negative teens for 2025 [81] Company Strategy and Development Direction - The company is focused on building a go-to-market intelligence platform, changing its trading symbol from ZI to GTM to reflect this commitment [6][14] - The launch of Go-To-Market Studio aims to unify go-to-market data and enhance operational efficiency across sales and marketing teams [12][29] - The strategy includes reallocating resources from downmarket to upmarket, which is expected to yield better growth and profitability outcomes [15][19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the trajectory of the business, noting no significant impact from the current economic environment on customer behavior [17][41] - There is a cautious approach in guidance due to broader economic uncertainties, but confidence remains in the upmarket growth potential [24][94] - The company is seeing improved retention rates in the upmarket segment, which is expected to drive future growth [89][110] Other Important Information - The company repurchased 8.6 million shares at an average price of $11.05, with an additional $500 million share repurchase authorization approved [21][22] - Operating cash flow for Q1 was $119 million, with unlevered free cash flow at $125 million, a margin of 41% [22] Q&A Session Summary Question: Why now on the change around the name and ticker? - Management indicated that the platform has expanded to serve a broader range of roles beyond just sales, necessitating a change in branding to reflect this evolution [27][28] Question: Can you bifurcate net revenue retention by upmarket versus downmarket? - Upmarket retention continues to improve, while downmarket remains impaired but stable [31][32] Question: What is the current status of CoPilot's ACV? - CoPilot is growing at an expected rate, with significant upsell opportunities [35] Question: How is the company managing the downmarket business? - The downmarket business is expected to contract further, but management is comfortable with the current trajectory [81][82] Question: What is the appetite for M&A versus share buybacks? - The company will be opportunistic with M&A but is currently focused on share buybacks due to undervaluation [84] Question: How is the company addressing the evolving go-to-market landscape? - The company is leveraging AI and third-party data to enhance its offerings and improve customer engagement [50][105]