ZoomInfo Technologies Inc Common Stock Piper Sandler 5th Annual Growth Frontiers Conference
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Should we jump right in?
Yeah, let's do it. Awesome.
Well, for those in the room, my name is Billy Fitzsimmons. I cover application software here at Piper Sandler. For those of you I haven't met, I started at the start of this year, right in the midst of the SaaS apocalypse, but cover everything from the hyperscalers, application software, vertical software, everything from mega cap to mid cap. I want to welcome Graham O'Brien, CFO of ZoomInfo. We're happy to have you here. Maybe to start, can you give a quick intro on ZoomInfo and the problem it solves for customers?
Yeah, sure. Thanks. And thanks, Billy. We're really happy to be here. ZoomInfo, we equip our customers with the critical data and technology to help them effectively go to market. What that means is solving the context gap for them. That means marrying our customer's first-party data with our proprietary data, and then using technology to do that foundational architectural work. Unifying internal systems, anchoring those systems to verified external intelligence to give go-to-market professionals and agents the coherent view of the world they need to go execute against.
Makes sense. There has been a lot of product innovation over the last 12 months. Can you walk through some of the product enhancements, new features, and initial customer reception to those?
Yeah, it has been a really exciting few quarters for us on the product innovation front. I describe it as a period of rapid innovation that is continuing through Q3, and we are really excited about what is to come on that front. The focus has really been on designing, building, and delivering products that serve our customers across an expanding go-to-market surface area. So whether it is Go-to-Market Studio, the unified application experience that we are going to be rolling out later this year, our operations business, Copilot. We have really been focused on designing those products in a way that customers can use them either in our ecosystem, in our platform, or outside of our ecosystem in a headless manner.
Expanding on this point, and I want to go through some of the products you guys have brought online, because there is GTM.AI, which is kind of your headless context layer. There is also GTM Studio and GTM Workspace. Can you just talk about the opportunities across those products, the early customer feedback, and how do you just think about pricing and pricing power of those products?
Sure. Yeah. I will start with Studio. Go-to-Market Studio you can think of as our almost like control tower for a RevOps leader or a go-to-market strategy professional, where they can go and orchestrate campaigns and push those out to the front lines using Studio. We had a really promising quarter in Q2 with Studio. I call it a quarter of significant traction, where we really started to see the month-over-month growth that we want to see with that product. Then if you think about ZoomInfo Copilot or Workspace, that is the execution layer. That is where the tip of the spear, your AEs, your SDRs, your account managers go out and execute some of that intelligence that can be pushed down or out of Go-to-Market Studio.
When I think about the pricing, this has become a feature topic for us, as with historically, a lot of our applications have been priced on a per-seat basis. We are shifting now towards a hybrid consumption model, where customers can effectively pre-buy a set of credits, and then they can use those credits across, again, whether it is in our ecosystem, across Copilot or Studio or our operations business, but also use those credits outside of our ecosystem. That is what we are testing with customers right now to really understand the diverse appetites of the variable side of credits versus the more fixed nature of a seat-based model.
I have a lot more questions on the shift to credits, but I want to start first on your own go-to-market efforts. If we think about the second quarter, I believe you closed your largest ACV deal ever. That was a multiyear renewal, large software customer. There are also a bunch of other enterprise customer wins cited on that call. Can we talk about the upmarket motion and the success you are seeing there? Can you talk about the changes you have made to your own sales force to drive that success?
Yeah. I think Q2 is just more evidence of our progress moving the business upmarket. We have shifted the ACV mix of our business more than 10 points upmarket over the last several years, and I am excited about our ability to continue to do that as we get into 2027. When I think about some of the, not only just shifting resources to focus more upmarket, we changed the talents that we wanted to hire for those upmarket positions. We changed comp plans to make sure that we were incentivizing specifically our AEs to invest in longer-term sales cycles and not really default to a quick land. That was evident in Q2 specifically. Q2 was our best 100K logo acquisition quarter on record from an ACV perspective. I expect that we will continue to invest behind those larger customer relationships.
On the lower end of the market, there has been a broader shift to reduce sales resources, and you are shifting to a PLG motion there. Just how do we think about that transition? Where are we, and potentially how do we think about that downmarket motion potentially bottoming?
Yeah. I think our goal continues to be to make the downmarket business a smaller and healthier version of itself. It's about 24% mix of the total business as of Q2. I'd expect that mix to continue to go down. We're going to deliberately make it smaller over the next several quarters. We've taken more resources out of that segment earlier in this year. We've also started to deprioritize revenue growth down there. That's still an important and valuable segment to us from a data acquisition and a logo acquisition perspective. If we can get that mix overall closer to 80/20 up market, down market, then I think we'll be a healthier overall business.
Makes sense. As we think about the different drivers of the business, let's talk about Operations for a second. That's been a healthy grower. It's a non-seat-based motion and has been for some time. How do we think about the resiliency of that business? What percent of it is it today of the overall business? Where are you seeing growth coming from in terms of your base?
Yeah. Our Operations business, basically our DaaS business or our Data as a Service business, it's not seat-based like you mentioned. Customers basically sign up and pay a data access fee for access to portions or significant portions of our data assets. It's about 20% of the total business today, and it's growing about 20% as well. When we look at the Operations business, we've taken that business and it has informed how we think about the rest of the business as we shift away from seats, whether we're shifting to more variable consumption for some of those customers or shifting more to just data access subscription. Our ability to get off of a seat-based driver and into that more hybrid consumption and data access model, is the goal.
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