ZoomInfo Technologies Inc. Q4 FY2024 earnings call

• ZoomInfo made meaningful progress in Q4 with better-than-expected financial results, including GAAP revenue of $309 million and adjusted operating income of $116 million. - Investments in upmarket include adding reps, developing data sets, expanding trial motion, and rebalancing account loads. - A brand survey found 99% of respondents had improved perception of ZoomInfo. - Partnerships with companies like CoStar, Lumen Technologies, etc. - Product innovation in data products, intent solution, and Copilot AI agents expanding to new personas (account executives, account managers, customer success managers). - Leadership changes, including additions to the board.

The company has two main segments: Upmarket and Downmarket. Upmarket constitutes more than two-thirds of the business, grew 2% in 2024, and is on track for mid-single-digit growth with higher margins. Downmarket is less than one-third of the business, declined 9% in 2024 but is stabilizing to a smaller and healthier portion. The Operations business grew 27% year-over-year in Q4. Copilot had over $150 million in ACV.

• Q1 2025 GAAP revenue expected in the range of $294 million to $297 million, adjusted operating income $96 million to $99 million, non-GAAP net income $0.22 to $0.23 per share. - Full year 2025 GAAP revenue expected in the range of $1.185 billion to $1.205 billion, adjusted operating income $426 million to $436 million, non-GAAP net income $0.95 to $0.97 per share, unlevered free cash flow $420 million to $440 million. - Discounting down-market contribution to guidance, focusing on upmarket growth.

• Forward-looking statements involve risks and uncertainties in SEC filings. - Down-market stabilization and its impact on guidance. - Q1 2025 having fewer days and margin impacts from payroll tax.

Q: Alex Zukin asked about trends in SMB and enterprise, pipeline, and growth rates.

A: Henry Schuck said upmarket is strong with Copilot and operations, while down-market is stabilizing but discounted. Graham O’Brien added on growth trajectories.

Q: Elizabeth Porter asked about Copilot ACV migration path.

A: Henry Schuck said migrating customers off cycle, using pilot to show ROI, monetizing in renewal or off cycle upsell.

Q: Tyler Radke’s team asked about 100K customer count uptick.

A: Graham O’Brien said it's due to better customer acquisition, upsell, and less down-sell.

Q: Brian Peterson’s team asked about 2025 guide and NRR.

A: Graham O’Brien talked about upmarket mid-single-digit growth and down-market discounting.

Q: Parker Lane’s team asked about DeepSeek’s impact.

A: Henry Schuck said DeepSeek could drive price down, but not a production LLM used yet.

Q: Michael Berg asked about NRR and seat environment.

A: Henry Schuck said upmarket has large seat expansion opportunity with Copilot expanding personas.

Q: Brent Bracelin asked about 100K cohort momentum.

A: Henry Schuck said it's due to proper resourcing and product fit in upmarket.

Q: Jackson Ader’s team asked about competition upmarket and macro perspective.

A: Henry Schuck talked about product market fit and durable competitive advantage; Graham O’Brien said no macro change expected.

Q: Rishi Jaluria’s team asked about down-market disqualification policy.

A: Henry Schuck said the headwind amount hasn't changed.

Q: Patrick Walravens’ team asked about upmarket growth durability and acceleration.

A: Henry Schuck said steady execution in upmarket, accelerated by Copilot and operations.