ZoomInfo Technologies (ZI) Goldman Sachs Communacopia + Technology Conference 2024 summary

Business transformation and growth strategy

• Focused on transforming the growth algorithm and moving upmarket to mid-market and enterprise segments, resulting in record new business performance and improved customer quality.

• Net retention rates have stabilized and improved, especially in mid-market and enterprise, with a goal to further increase retention into the 90%+ range for double-digit growth.

• Committed to efficient operations, ongoing share buybacks with $400 million remaining in authorization, and a target of $1 per share in leverage-free cash flow for 2024, growing in 2025.

• SMB segment remains under pressure, but risk mitigation measures like upfront prepayment have been implemented to improve predictability and customer health.

• Leadership is bullish on returning to growth, with internal and personal investment in shares signaling confidence.

Product innovation and AI integration

• Launched Copilot, an AI-driven platform, with $18 million in ACV at quarter-end, aiming to migrate all customers to this platform over the next three years.

• Copilot differentiates by integrating first-party and third-party data, including intent signals, earnings call transcripts, and job postings, to drive sales productivity and personalized engagement.

• Copilot is built on multiple LLMs (OpenAI, Anthropic, Gemini, and proprietary models), with cost efficiency and performance as selection criteria.

• Data as a Service (DaaS) and OperationsOS are fastest-growing segments, providing data cleansing, enrichment, and AI readiness for enterprise customers.

• Double-digit uplift in revenue and engagement is observed when customers migrate to Copilot, with high adoption among new customers and expanded use cases across go-to-market roles.

Market trends and customer priorities

• Customers are prioritizing generative AI initiatives to drive productivity and efficiency, starting with customer support and expanding to go-to-market functions.

• Effective AI for sales requires enriched third-party data, which is not available in most CRM systems, making integrated solutions essential.

• Early Copilot adopters are primarily in the mid-market tech segment, with plans to expand as functionality grows.

• Software and tech verticals, previously under pressure, are showing signs of stabilization and improved retention.

• Investments in Copilot are already accounted for in the cost structure, with ongoing focus on reducing go-to-market friction and increasing signal-to-action conversion.