ZoomInfo Technologies Inc. (GTM) Earnings Call Transcript & Summary

Hello, and thanks for joining us today for ZoomInfo's 2022 Analyst Day. My name is Jerry Sisitsky, and I head Investor Relations for ZoomInfo. On behalf of the entire ZoomInfo team of more than 3,000 people around the world, we appreciate you spending a few hours with us to learn even more about the company. A lot has changed since our inaugural Analyst Day last year, and we're really excited to share with you updates from across the business. We have a great agenda planned for today. First, we're going to share some insights into what it means to be a salesperson today, the tools, technology and challenges to engaging with the prospect and the work that needs to be done to close the sale. We also put you directly in the shoes of different people who use our platform, showing firsthand how ZoomInfo impacts their day-to-day business. You'll hear from our Founder and CEO, Henry Schuck, as well as senior leaders from around the organization who will reinforce why ZoomInfo is truly unique and set up for long-term growth and success. We're also delighted that you'll have the opportunity to hear directly from customers and learn more about their experiences. And following the presentations, we'll have a short break in the action as we prepare to transition to the Q&A portion of the event. And if there are any questions that we don't address today, please e-mail [email protected], and we will follow up. Lastly, please review the safe harbor statement. Statements made today that are not historical facts, including expressions of future goals, business and market outlook and expectations for future financial performance are forward-looking statements and represent our outlook only as of today's date, June 2, 2022. These statements involve a number of risks and uncertainties, including those discussed in the Risk Factors sections of our filings with the SEC. Actual results may differ materially. Additionally, during this presentation, we will reference non-GAAP financial measures. You can find GAAP to non-GAAP reconciliations in the appendix to the slide deck, which will be available at the conclusion of today's presentation. With that, let's jump right in.

Ladies and gentlemen, thank you for joining us for our 2022 Analyst Day. The fun office of the future is integrated, data and insight-driven and leverages software to drive efficiency. ZoomInfo's RevOS is the only platform that can holistically inform and automate the go-to-market motions of companies of all sizes. See for yourself. [Presentation]

It's 2022, and most organizations are still going to market in a disjointed way. They lack the technology and data needed to effectively reach prospects. They don't know when prospects are in market and ready to act. Sales and marketing teams have to toggle between multiple systems that are riddled with stale, incomplete and erroneous data. It's a wonder that deals get closed at all. Our leading go-to-market solutions and experiences are powered by our underlying data assets that are indisputably the best in the world. And going to market is not just about exporting company and contact records to a CRM or engagement system. It requires accurate entity resolution, matching locations to headquarters, maintaining hierarchical relationships between entities, IP to company resolution, stitching tech stack profiles to appropriate companies, leveraging metadata to determine and classify company industries appropriately, knowing when a contact is hired or changes employers, assigning attributes based on artificial intelligence, bringing together pieces of evidence from multiple sources to validate and invalidate records or data points. Nearly 2 dozen PhDs and 80 master's degree holders work on models for this data asset every day. Data is messy, and no one understands more about it or has more proprietary knowledge about it than we do. When go-to-market motions break down, more often than not, it's because there are issues with data. And when they succeed, it's because high-quality data empowers sales and marketing teams to do what they do best, market and sell. With that conviction as the backdrop over the last 2 years, through consistent software innovation, new product launches, product improvements and integrated acquisitions, ZoomInfo has evolved from a leading data provider into a revenue technology leader with a fully integrated platform that revolutionizes how sales, marketing, operations and recruiting teams execute in a digital era. We are delivering a new ZoomInfo, a ZoomInfo that is driven by a revenue operating system that delivers the core intelligence every seller, marketer and recruiter needs to be successful and layers that intelligence into chat, conversation intelligence, lead routing, enrichment, display and social advertising, sales automation, automated go-to-market workflows and insight-driven campaigns. This new iteration of ZoomInfo that delivers indispensable data and the software to put that data in motion is the key to our future. And we're seeing real traction behind it, too, with over 75% of our revenue coming from customers leveraging advanced functionality. But our RevOS platform has to be more than just a portfolio of point solutions. Today's revenue teams need a seamlessly connected go-to-market platform. Most sales and marketing tech has an empty box problem. These solutions are built from the top down, resulting in an application and search of quality data. We take the opposite approach. Everything we build and acquire is integrated from the bottom up with the world's best data layer at the foundation. This vision has reframed the way our product and engineering teams think about the interconnected nature of what we are building to ensure that the platform is fully extensible and delivers better customer experiences and more insights than any stand-alone product could do. We build our products in a modular and shareable architecture that enables quick integration of new applications across operating systems. Here are a few examples of that holistic approach. Workflows, which originated as a highly successful feature in SalesOS was built as a shareable component, a micro service that also powers automated data-driven workflows for marketers and MarketingOS. This same component will enhance Engage, Chorus and OperationsOS and will integrate data and experiences across the entire platform. Our chat functionality is now fully embedded inside of SalesOS and MarketingOS. RingLead, our data orchestration software that ingests first and third-party data to create a unified view of any customer or prospect, surfaces that view throughout each operating system within the RevOS platform and engage our sales dialer, e-mail delivery functionality and sales flow additions are all now shareable inside of SalesOS as well as TalentOS. Within SalesOS, sellers are able to flag accounts for error cover, which is communicated across the MarketingOS where their marketing counterparts can trigger automated display, social or marketing automation campaigns. With unified login, our users now log in once and provision everywhere. And our admin portal gives administrators control over permissions and provisioning from one place across all platforms. These share components and the reusability of our software is a critical factor in our platform strategy. That platform strategy is articulated through RevOS, the modern revenue operating system for go-to-market professionals. RevOS consists of the 4 personas we target, SalesOS, MarketingOS, OperationsOS and TalentOS; in addition to 3 engagement layer solutions Chorus, Engage and Chat. When you use your phone, Mac or PC, the operating system enables you to discover and run your programs. ZoomInfo's revenue operating system is the foundational platform that our customers use to run their go-to-market programs, including ad campaigns, prospecting, website chat experiences, onboarding and coaching, enablement programs and much, much more. Let's take a closer look at each pillar under RevOS. SalesOS is our flagship operating system for B2B sales professionals. We have the most accurate and frequently refreshed database of insights, intelligence and in-market purchasing intent data about companies and contacts. We layer additional applications on top of that, like conversation intelligence, sales engagement, chat and data orchestration to drive data-driven engagement with prospects and customers. In February, we introduced MarketingOS, our new account-based marketing platform designed to give marketers new ways to reach target accounts and drive qualified leads for sales teams. We accomplished this first by building the platform on top of the ZoomInfo data cloud, enabling marketers to identify and target their highest value audiences, both anonymous and known. Marketers can then upload creative assets, sequence relevant messaging across display and social ads and intelligently engage anonymous and known prospects, both in their inboxes and beyond. And by leveraging our form complete and chat solutions, both built as part of SalesOS, but now natively configurable and deployable inside of MarketingOS, marketers increase conversion rates by instantly populating lead forms with accurate professional data and by engaging visitors with the right account executives and account managers through real-time chat. Finally, our analytics dashboards and built-in reporting allow for optimization of ad creative and nurture stream design through platform supported AB testing. MarketingOS also provides marketers with visibility into their total addressable market. The ability to build, cleanse, combine and manage first and third-party data, identify and prioritize best-fit audiences using intent and engagement data from anonymous website visitor identification. And because of the interoperability of our operating systems, marketing and sales teams work from the same data foundation and the same platform, which tightens key handoffs and unlocks cross-departmental alignment. OperationsOS is our Data-as-a-Service offering for enterprise data and operations teams. It includes data access, delivery and enrichment of data through APIs, web hooks and cloud data warehouse connectors. And it includes our suite of enterprise-grade data orchestration products from RingLead, including cleanse, enrich, score and route. Enterprise IT, analytics, data governance, data science and revenue operations teams all use our OperationsOS products and services. OperationsOS has become a major lever to our enterprise go-to-market strategy. After integrating the data and systems from the EverString acquisition, ZoomInfo now offers a modern day alternative to the antiquated company data providers currently in market. With these state-of-the-art data sets delivered when and how customers need them, our enterprise clients trust ZoomInfo as a source of truth for company intelligence. Acting as an additional catalyst for go-to-market effectiveness for the enterprise, RingLead's data orchestration solutions have streamlined the consumption of ZoomInfo data. We help organizations merge first and third-party data as well as manage multiple third-party data sources. As a result, our enterprise clients are turning data to value faster than ever before. We launched our recruiting platform, TalentOS in late Q1 of 2021. We've built a new sales team around TalentOS, and we continue to enhance the platform, building features that increase the recruiters efficiency by using AI to automatically suggest and expand the set of potential candidates, streamline outreach through automated engagement and manage the workflow of tracking candidates through different stages of their pipeline. Built on the common ZoomInfo data cloud, TalentOS is tailored to help recruiters find and engage with pockets of diverse and unique talent, even more critical in this hiring environment. Companies have never faced such a challenging environment for hiring and retaining talent. Roles that previously could have been filled through traditional job boards, now requires sophisticated direct sourcing. Candidates demand to work for companies with great cultures and expect an understanding of employee benefits and experiences before even applying to a job. Employers that have negative reputations online deservedly so or not, massively lose out on hiring top talent. In April, we acquired Comparably to empower every company to effectively identify, source, influence and hire for their most vital roles. Comparably adds a suite of popular SaaS solutions for employer branding and recruitment marketing combined with an employee review platform that reaches millions of candidates each month. With Comparably, TalentOS gives companies the ability to engage and hire candidates with much more sophistication and influence. TalentOS plus Comparably is a must-have combination for any company recruiting in today's digital, remote-first work environment. We are seeing tremendous success with our recent acquisitions. EverString and RingLead now anchor our operations OS offering. Chorus revenue nearly tripled in 2021, while attach rates continue to increase. Insent.ai has become a core component of MarketingOS and it's still gaining traction. And Clickagy, which supplies our intent data and serves as our B2B DSP, is now a foundational layer of both SalesOS and MarketingOS. In 2021, we published a go-to-market sales strategy book called 100 Pipeline Plays, the modern sales playbook. At the time, ZoomInfo customers could run automation and SalesOS on about a dozen plays. By the end of 2022, we aim to enable all 100 automated plays in both SalesOS and MarketingOS. We believe that our investment in our workflow suite provides the first place where go-to-market professionals are able to combine a robust set of third-party data, signals and insights with their own first-party data to launch automated go-to-market motions from display advertising to sales notifications. Now how does this impact our customers? FedEx has more than 4,000 ZoomInfo SalesOS licenses and consumes global data through our OperationsOS offering. FedEx can do business with tens of millions of companies. And so the data science team there becomes a critical input in deciding which companies they should be spending marketing and sales resources on. There's a meaningful synergy between the OperationsOS platform that we provide to the FedEx data science team and the actionability of their work and modeling as it flows back to the 4,000 SalesOS users. FedEx's data science teams leverage ZoomInfo's thermographic and technographic data feeds to build unique segmentations and uncover missed opportunities and unknown companies. By leveraging ZoomInfo's data, they've seen a 200% lift in model performance. Once the data science team identifies these high propensity to buy prospects, those get sent to the field, where because of their access to SalesOS, the teams surround those accounts with deep insights into their current shipping methods, e-commerce software suites, decision-makers, intent and Scoops data. Each seller is armed with a tremendous amount of insights before their first call. Morgan Stanley is leveraging SalesOS, TalentOS and OperationsOS. They have hundreds of sales in TalentOS licenses and they utilize our Data-as-a-Service functionality through our OperationsOS offering. Our data and insights help engage new private wealth management clients and the employer recruiting functionality to attract the best candidates. Through OperationsOS, they're able to map C-level executives at customer and prospect accounts, better define their total addressable market and identify white space expansion opportunities by engaging fast-growing entrepreneurs, operators at the largest private companies and executives in the Fortune 1000. And they target account identification at scale. Their central market data team leverages ZoomInfo's Scoops data to find companies that are in market for Morgan Stanley services and proactively shares them with bankers. These can be companies that have recently received funding, companies going through M&A, companies that are expanding into new geographies or opening new locations, companies that have hired their first CFO and many other key insights that drive their go-to-market motion. We deliver on behalf of our customers like FedEx and Morgan Stanley and thousands of other customers around the world. And we deliver on behalf of our team. I am proud that we have built an incredible culture at ZoomInfo, a culture of difference makers who share a common mindset of continuous improvement and who strive to get 1% better every day. As you will hear reinforce today, we look for talent everywhere, and we bring people into our organization based on their growth potential. We also invest aggressively behind our people to help them achieve their full potential. In 2021 alone, we invested over 80,000 hours in employee development and training. Over the course of this Analyst Day, you will hear from some of our senior leaders across the organization. Simon McDougall, our Chief Compliance Officer; Chris Hays, our President and Chief Operating Officer; Tim Strickland, our Chief Revenue Officer; and Cameron Hyzer, our Chief Financial Officer. You will hear how customers are using and getting value from the ZoomInfo platform and more about why our culture positions us for long-term success. We also hope you will leave us today with a better understanding of our platform evolution, our differentiated and industry-leading investments in privacy, the efficiency with which we operate and the durability of our growth and profitability. Following our presentation today, Cameron, Chris and I will be hosting a Q&A session. Let me turn it over to Simon.

Thanks, Henry. Hello. My name is Simon McDougall, and I joined ZoomInfo as Chief Compliance Officer in January this year. I've spent over 20 years working in privacy and data protection, and previously had the privilege of serving as Deputy Commissioner at the Information Commissioner's Office, the United Kingdom's privacy regulator. You've heard us say many times before that we are a privacy first company. From the earliest days of ZoomInfo, to the recent discussion of privacy in a digital world in our inaugural sustainability report, we have consistently recognized privacy as critical to our success, and we have invested behind it. Unlike business-to-consumer organizations who collect information about people's personal lives, profile them and sometimes seek to influence their behavior, we focus exclusively on business data. We work to support business processes and activities that are often exempt from data protection regimes intended to rightfully protect people's everyday lives. But that all said, maintaining trust in how we acquire and use data remains critical to our long-term success. And we strive to go beyond regulatory compliance to be a privacy leader in our industry. Since joining, I've met with customers of all shapes and sizes with operations around the world. Every company cares deeply about privacy today. And the larger and more international the business, the more they invest behind ensuring they have a solution they can trust. These multinational enterprise customers want to kick the tires on our operational privacy and security controls. We start by referring to recognized industry standards, such as in the world of security, where we are SOC 2 certified and ISO 27001 certified, or in privacy, where we are Trustee GDPR and CCPA validated and Trustee privacy certified. Now we continue to challenge ourselves in this area. And in the last few weeks, obtained our certification for ISO 27701, the international standard for privacy information management. Now most customers trust these independent security and privacy credentials. But we are very happy to have our specialists go much deeper. For example, many of our international customers are particularly interested in how we manage our notifications process. They understand that we collect and refine data from lots of different sources, and they know that privacy regimes around the world are strict about providing notice. Quite rightly, customers don't want to be building their go-to-market motion on dodgy data. We often surprise people in how proactive we are here. We want people to know they are on our platform, and we apply this principle globally. So we sent a notification to every net new business e-mail address we receive. Most of our customers use GDPR as a benchmark for global privacy compliance. And our notices are designed to be GDPR compliant. And we tell each individual about what information we process and why, the sources and recipients of the data, how long we hold the data for and the privacy rights they have. Our notice then provides links to ZoomInfo's privacy center to which a person can exercise those privacy rights, including requests to opt-out, make access requests and correct inaccurate information. We also provide an e-mail address, [email protected], and a phone number to which privacy requests can be submitted. We are the only company in our market, investing in this level of compliance at scale. In 2021, we sent over 60 million privacy notices. As a consultant in this area for many years, I've worked with a wide range of firms, and I'm impressed with how we automatically identify and validate new contacts and sent notification e-mails in real time. Customers also ask about our opt-out process. We understand people may want to opt-out of our platform. We respect that wish, and we don't want our customers offering business services to people who don't want to be contacted. Every opt-out request improves the quality of our data. That's why we have heavily automated our opt-out process to make it easy and quick for people to opt-out, correct their data and make other requests. The majority of our 140,000 opt-out requests in 2021 were matched automatically. And we have a full-time team that matches the rest, well within all regulatory deadlines. And I'm a stuck record here, but our processes are GDPR compliant and aligned with the various data subject rights regimes that exist around the world. I want to stress that we go well beyond simple regulatory compliance. We are respecting these requests anywhere in the world, not just in places that have established privacy law. In fact, over 80% of our requests came from outside the European Union. This transparency makes it simple for our customers to have confidence in what we do. But our customers are disinterested in our compliance, they understand that they have their own privacy obligations, and they want to know what we can do to support them. Many parts of the world have exemptions or lighter regulatory regimes for processing business conduct information, but there's a lot of variation by country. The configurability of our platform is helpful here, but we go further. We provide a comprehensive list of do not call registries that cover our major markets. We share the opt-out requests we receive with our customers. And we offer the compliance API solution to help customers achieve completeness when they receive opt-out requests themselves. But there's a more practical point here that really resonates with me as an ex-regulator. Data accuracy is a requirement of the GDPR and across most of the privacy regimes around the world. As a regulator, I saw lots of breaches that started with poor data quality. And I know it's a challenge for every company. Every ZoomInfo customer has more accurate data through using our service, which means better compliance. I have realized from my engagement with our customers that often their questions don't stem from a concern about ZoomInfo itself, but from broader concerns about what can be done with business contact data. So we will continue to challenge ourselves to be best-in-class and to improve the industry. In 2021, we founded the business contact preference registry, making a global database of opt-out requests processed by ZoomInfo available to other business-to-business data providers. And we have now founded the Business Information Coalition, convening our peers and competitors in one industry group to share best practices and develop an industry voice that can better explain how our industry works to the public, press and policymakers. Of course, improvements to the industry benefit us, our customers gain confidence and use our services more. By promoting high standards in the industry also benefits our customers, the economy and society overall. We are proud of our work to be a privacy-first company and we will continue to invest more behind our market-leading approach. In the next year, we are going to invest more in 3 critical areas: enhance the technology and automation around our notice and choice framework; improve customer education and support; and further develop industry standards and share best practice with others. Customer expectations and privacy regulations will continue to evolve, and we will continue to raise the bar for both us and the rest of our industry. Thank you. And with that, let's hear from one of our customers, SAP to get their perspective. [Presentation]

Hello. I'm Chris Hays, President and Chief Operating Officer here at ZoomInfo. At ZoomInfo, we've always prided ourselves on developing talent and promoting from within. One of the primary entry points in the ZoomInfo was our sales development team. New employees are brought in as inbound SDRs, sales development reps and work their way through a progression of assignments culminating in the role as a senior outbound SDR. This journey over 8 to 12 months allows our employees to learn the skills necessary not only to be successful as an SDR but to prepare themselves for a variety of roles such as SDR management, account executive, account management, all the way to marketing and revenue operations. The knowledge obtained by talking to prospects and customers, learning our process and believing in our culture, arm these employees with a greater understanding of the everyday problems that we are supporting our customers in solving. ZoomInfo also benefits greatly from the progression as we are able to drive meaningful value even as they are still learning the business, and the returns compound as they grow in their career at ZoomInfo. My favorite part about this program is that when I look around the organization now, I see employees like Jessica Rogers, Zoe Hager, Kobie van Reisberg, Cole Hue, Sean Justice and Carolyn Murray. These individuals all started as SDRs and are now leading parts of the business from new business acquisition to revenue and growth, to customer success and learning and development. These are just a handful of examples of employees who started as entry-level SDRs and are now shaping the future of ZoomInfo. You'll have an opportunity to hear directly from Carolyn Murray next. The success of the SDR career path program has led us to evolve this into something not only reserve for those in selling roles, but across the entire go-to-market organization. In our experience, internally promoted employees not only ramp faster, but have had significantly greater long-term success than their externally hired counterparts. Career mobility is very high at ZoomInfo. Over 50% of our hires for account executive positions are being filled by internal candidates, and we are always looking to internal promotions for other senior positions in our go-to-market organization. Recognizing this trend, we have focused on improving and tailoring specific enablement towards external candidates that allows us to round out skills that they didn't pick up along their internal career progression. This tailored approach has allowed us to significantly close the gap in productivity between internal and external resources. Over time, our programs to develop talent internally have expanded from new business account management, organizations where we've been focusing on promoting our SDRs to AM's managing material books of business. We now have a repeatable process and pattern of reps moving to our higher-end SMB subsegments and graduating to our mid-market and enterprise segments from there. This tailored investment in our talent development programs demonstrates a strong commitment to the success of our organization, our employees and our customers. A huge benefit of this internal career path progression is that it allows the talent acquisition team to hires SDRs in a cost-effective and high-velocity manner. By leaning heavily on the sufficient motion to bring in and grow talent, the TA team has the opportunity to focus on filling more specialized roles with the best outside talent available. This balance of building and acquiring talent multiplies our ability to adapt as a business and ensures we can efficiently provide high-quality talent needed to support our growth. To build upon these development programs, we invest heavily in training programs created by a cross-functional team of sales enablement and revenue operations experts. We take our team on a journey that brings our sellers from beginner to mastery, regardless of where they start on that spectrum. Our operations team has created world-class processes that can be executed by the entire team and increase output throughout all parts of our GTM process. This focus on enablement and operational excellence results in a higher level of output for reps here at ZoomInfo. We feel that by continuing to up-level the capability and processes of all of our teams, we are better able to serve our customers and industry. We are confident that by constantly focusing on and investing and building talent at every level in the business, we can drive growth in our own business and help our customers accelerate their own growth. We are leading into this with the acquisition of Dogpatch, where we will offer services to drive successful execution for our clients under the ZoomInfo lab services offering. In 2022 and beyond, we will continue to expand these programs, adding certifications and courses embedded within these career paths to provide world-class training for our employees, leading to greater career growth and personal development. Our ability to bring in recent college graduates and provide them with the training and tools to become a world-class seller in only a few years gives us a great advantage. As ZoomInfo continues to grow, capitalizing on our own sales efficiency has been a primary focus. Our secret weapon to driving efficiency is using our own products internally. The products we offer are a direct reflection of the proven tools and practices we use every day to drive this business. ZoomInfo is the world's greatest tool to bring marketers, sellers and operations teams together to drive revenue. We are proud that we have over 1,000 sales and marketing employees leveraging our own data, our own tools to manage prospecting workflows, marketing efforts and customer success. We have further committed to the ZoomInfo and ZoomInfo program we have created a dedicated team focusing on driving GTM experimentation and proving out ideas before releasing to our customers. The hands-on experience and learnings from this program are used to improve our products further and ensure we are driving innovation and tackling the most complex business challenges. As an example, we leveraged our internal advertising platform and data prior to the lease of MarketingOS as a proof point for the power of ZoomInfo data paid with the advertising use case. Now this capability is available to our customers who leverage the full power of MarketingOS. This internal use and feedback has driven greater adoption and usage within our customers as our team is better able to anticipate the needs of our clients in onboarding and adoption based on our internal usage. In addition to using ZoomInfo internally, we are constantly looking for ways to improve our process and make sure that no opportunity or value is lost in our sales execution. We're always looking for innovative ways to recapture fall out in the funnel and accelerate the buying process. One such example is what we refer to as the Trojan AE program. One problem that comes with high growth is managing the high volume of demos and leads flowing through the funnel. We found that our AEs, while looking for the most valuable deals, would often overlook the value of less traditional fits or harder deal cycles. We needed to find a way to recapture the value and ensure that they were working these in an efficient way. We created a role we call the Trojan AE to address this. Trojan AEs only worked bad fits and listen to past sales calls to see where opportunity exists and pursue those deals. Every SDR promoted to an AE is required to sell $100,000 from this motion before being promoted to the demo router. This has many benefits as the SDR is able to listen to a large amount of demos, build the pipeline quickly, and for the business we are picking up lost value in the pipeline. This also builds some fun internal competition as AE sell what their more experienced colleagues cannot. I can remember when one of our best reps, a consistent President Club Achiever and top seller had to stand by and watch the same meeting that wasn't worth his time being closed on a 6-figure transaction by a newly promoted SDR. This is just one example of how building a culture of collaborative competition and creating an environment where everyone focuses on continuous improvement provides an optimized outcome for ZoomInfo. And with that, let's hear from Carolyn. [Presentation]

Hello. My name is Tim Strickland, and as ZoomInfo's Chief Revenue Officer, I'm here to speak with you today about ZoomInfo's enterprise sales opportunity. The opportunity is immense, as indicated by the growth of our $100,000 and $1 million plus customer cohorts. Exiting Q1 of 2022, the ACV growth of our $100,000 customers increased by 75% year-over-year and now accounts for more than 40% of our business, and we continue to grow our largest customers with more than 40 customers generating greater than $1 million in ACV. As we look at the back half of 2022, we are excited about the position we are in to drive continued growth in these areas. And while several opportunities exist across the enterprise, we are focused on further penetrating our existing customers with advanced functionality across our SalesOS, MarketingOS, OperationsOS and TalentOS offerings. I've selected a few recent deals to illustrate the potential enterprise expansion opportunity. Coupa has been a customer since 2014 and has steadily grown its relationship with us over time. In Q4 of '21 and in Q1 of '22, Coupa accelerated its investment with ZoomInfo, expanding with the SalesOS platform and with Chorus, our conversation intelligence solution, with a license expansion of over 600% across 2 transactions. Our sales organizations worked with Coupa to identify the conversation intelligence opportunity originally in Q4 '21 when an active evaluation took place. ZoomInfo's combined sales platform strategy was a main driver of winning the relationship, and we were able to successfully showcase our ability to serve a multitude of use cases across business lines, including faster rep ramp time, deal acceleration, deal qualification and improved meeting conversion rates. During this expansion cycle, we relied on our product level specialists to help drive the deal to completion and we leveraged our core sales team with our prior executive relationships in an orchestrated way. The sales process, while still relatively new to ZoomInfo has proven successful in many scenarios, as outlined by our advanced functionality growth rates. To round out the Coupa deal, early success in Coupa's usage of Chorus, allowed us to successfully drive a secondary expansion to more users in Q1 of '22. This is a similar motion to what we see in our next customer example, Adobe, where we were able to successfully balance transactional business and strategic deals on our way to large customer growth. Adobe has been a customer for more than a decade. We recently moved Adobe to a 3-year enterprise license agreement that increased their total contractual relationship with us by 600%, making them our third largest customer. This expansion doubled their core SalesOS license count to 2,800 users, added hundreds of new users to Chorus, and it also added our data enrichment application to run automated data cleansing efforts globally, unlocking what was once a small marketing relationship and turning it into a strategic one. Adobe has centralized its sales, marketing and deal intelligence initiatives on ZoomInfo's platform, but this did not happen overnight. At the end of 2020, Adobe's relationship with ZoomInfo was centered largely around the sales use case with several hundred reps receiving access in a disjointed way to several of our legacy product SKUs. Over the course of 2021, we worked successfully with Adobe to engage several teams in our strategic workshop program, our value consulting practice, and worked with Adobe on a technology consolidation road map, which enabled us to displace current vendors with new ZoomInfo technology assets. While these activities were taking place at a senior executive level inside Adobe, ZoomInfo's transactional sales process was running as it always has. ZoomInfo successfully transacted 17x with Adobe over a 12-month period leading up to the successfully executed ELA. One of the ways we know we can drive towards larger customer relationships is by building and executing on demand across organizations while also navigating up the executive sphere of influence. Adobe is a good example of that process, but equally important, we are building that strategic muscle across the organization to ensure that the successful enterprise motion is both repeatable and scalable. Now Adobe uses ZoomInfo across a number of different teams and the ZoomInfo platform has enabled Adobe to align marketing and sales teams, which has delivered results in short order. We're very excited about their strategic partnership and we are equally excited about the future opportunities we have to partner more closely with Adobe in 2022 and beyond. I appreciate your time today. Now let's take a few moments to hear directly from Bob at Adobe about their perspective of the relationship. [Presentation]

I'm Cameron Hyzer, CFO. At ZoomInfo, we've approached building our growth engine differently than many other high-growth software and SaaS businesses, and the results have been fantastic. We are a top grower in the public SaaS company universe based on 2022 consensus estimates. We also accelerated growth from 2020 to 2021 and are excited about the opportunities that still lie ahead of us. This quarter we'll exceed $1 billion in run rate revenue, and we are only at the beginning of our journey in helping businesses that sell to other businesses, be more successful and effective at selling. While growth is our goal, what makes us unique is our focus on efficiency and scalability. I'm sure many of you have invested in high-growth software and SaaS companies that drive growth through brute force. Many high-growth companies spend more than half their revenue on sales and marketing. And for many of these companies, the magnitude of spend on sales and marketing in any given year is more than the incremental subscription revenue generated in that year. They drive growth by throwing more money at the problem and hope to eventually create profit based on scale when growth is no longer their goal. We believe there's a better way. Instead of just throwing more money at growth, we view our sales and marketing expenses and investment, and we focus on getting the best return out of every dollar that we invest. We use our own platform to drive efficiency for our sales and marketing teams and are continually looking to improve ourselves and our motions. We continually measure the investments that we make in aggregate, driving over 10x LTV to CAC, but also in each step of the pipeline along the way, measuring and optimizing conversion rates and performance on a daily basis. We will continue to grow our sales and marketing capacity and invest more aggressively over time in proven motions. And by focusing on efficiency, we believe we can scale and compound the returns of those investments to grow sustainably over the long term. At ZoomInfo, the balance between growth and profitability has always been an [ end ] statement, not an or question. If you look at growth and profitability, we are in a league of our own. Using 2022 consensus figures, our revenue growth and unlevered free cash flow margins are both above 40%. And in 2021, we delivered 51% organic revenue growth and 46% unlevered free cash flow margins. Given the massive opportunity in front of us and the strong execution over the past year, we are accelerating our target goal for $2 billion in revenue. At last year's Analyst Day, we set a target of $2 billion in revenue by 2025. And now we believe we will exceed $2 billion in run rate revenue by the end of 2024. Why do we have the confidence that we will get there faster? While acquisitions have played a part, the primary driver is continued execution. We have built a culture laser-focused on efficiency and performance. Our growth algorithm combines landing new customers onto the platform and then expanding those customers over time as they sophisticate their go-to-market motions. Given the light penetration into our overall market, we're less than 5% of the 700,000-plus businesses that sell to other businesses are already customers, we believe there is a lot of room to continue to drive new customer growth. Most of our new customer sales are greenfield opportunities where we begin customers on a journey to digitize their sales and marketing motions with high-quality data and insights and workflow tools. New customers contributed to more than 35% growth in 2021, and we continue to see opportunities to expand our customer base. Additionally, we are driving strong positive momentum with respect to existing customer sales and improved net expansion by 8 points in 2021. We continue to execute on opportunities to expand our footprint within customers in terms of seats and data integrations, which drive the majority of our upsells. And we are seeing significant momentum in customers' appetite for additional functionality that we offer. Based on our continued investment in the platform, we believe that there is opportunity to continue to improve the functionality upsell to customers. In terms of sales capacity in Q1, we organically added roughly $100 million in net new annualized revenue in a single quarter, calculated based on days of revenue recognition. In Q2, we will exceed $1 billion in run rate revenue after 15 years of building ZoomInfo. With the sales capacity we have in place today, we expect to comfortably exceed $2 billion in run rate revenue within 10 quarters, by the end of 2024, all because of our efficient investment in sustainable growth. And we don't plan to stop there. We are continuing to invest in our sales and marketing capacity and are already focused on the path to deliver $5 billion and then $10 billion in revenue annually. The growth algorithm for driving sustainable long-term growth and delivering multiple billion dollars of annual revenue is supported by the breadth of opportunity that we can attack. At the time of IPO, we estimated that our TAM was $24 billion. which we derived by using the ZoomInfo platform to identify specific customers and apply our then current ASP to that universe. Last July, we recalculated our TAM at $70 billion based on new internally developed functionality like Engage and Recruiting and acquired functionality from EverString, Incent and Chorus. Since that last update, we've been busy. We've continued to build out our RevOS platform and added functionality to address specific personas in sales, marketing, revenue operations and talent management. Through the internal development of our ABM platform and MarketingOS and the acquisitions of RingLead and Comparably to expand our OperationsOS and TalentOS, today, we estimate our potential TAM to be $100 billion. With applicability to every business that sells to other businesses, regardless of size, industry or geography, we are still in the early chapters of growth. Not only will we continue to add new customers as we help improve go-to-market motions across industries and geographies, but now, we have a comprehensive platform to drive marketing, sales, revenue operations and talent management efforts inside each organization. The expansion of our TAM is reflected by the expansion of our platform and customer usage of advanced functionality, addressing more than just contacts and companies. Over the past 3 years, we've transformed from a company that predominantly provided information about contacts and companies to a platform that serves a variety of use cases for sales, marketing, revenue operations and talent management functions. When we combined DiscoverOrg and ZoomInfo at the beginning of 2019, the vast majority of our combined revenue was derived from clients that used solely company and contact information, with only 5% of our revenue being generated by customers that used Intent or other advanced functionalities. Today, customers with advanced functionality now represents 75% of our revenue and are leveraging broad parts of our platform, including Intent, Workflows, Engage, Chorus, Data as a Service, et cetera. Additionally, the implied average uplift from using advanced functionality is almost 50% and trending higher. As customers leverage more features in the platform, almost 1/4 of our overall revenue can be attributed to our investments in advanced functionality. This is exciting progress as we execute our platform strategy and continue to help our customers grow from using just company and contact data to combining our best-in-class data and insights with more and more advanced use cases. Even more exciting is the fact that customers who utilize advanced functionality exhibit 8 to 10 points better retention on average relative to customers that only employ company and contact data from the platform. This growing usage of advanced functionality is also reflected in the growth of our larger customers. As of today, we have over 1,600 customers that generate over $100,000 in annual revenue, almost quadrupling the number over the past 3 years. And as Tim mentioned, we now have over 40 customers that spend over $1 million annually on our platform. These customers are spending across various personas, continuing to grow by expanding functionality and reach within their organizations. Returning to our financials. We deliver consistent best-in-class growth. Most recently in Q1, we delivered GAAP revenue of $242 million. This represented 58% year-over-year growth and 11% sequential growth as adjusted for days in the quarter. During the first quarter, we continued to see strong new customer additions and positive momentum with respect to retention and cross-sell activity. We also continue to successfully execute against the large and growing enterprise opportunity. In the quarter, we added over 150 customers with greater than $100,000 in ACV, and our sustainable growth is driven by efficient investments. In the first quarter, adjusted operating income was $96 million, which represented a margin of 39%. We continue to focus on investing in growth based on the construct we laid out last year, whereby we expect to deliver mid-40s margins at 40-ish percent growth rates, roughly the growth at the time of our IPO. At elevated growth rates where we operate today, we expect to generate margins in the high 30s or low 40s. As we continue to grow off a larger and larger base, our margins will drift back upwards as the growth rates moderate. We increased our investment in sales and marketing in the quarter, as planned, investing to fuel growth and sell the full RevOS platform. We expect to maintain the combination of R&D, cost of service and G&A expenses in the low 30s on an adjusted basis as a percentage of revenue. This will have the effect of increasing our investments in R&D for long-term growth as we realize operating leverage in other areas. Unlevered free cash flow in Q1 was $126 million, representing a conversion rate of 132% as a percentage of adjusted operating income as both billings and collections were strong in the quarter. Looking forward, we anticipate unlevered free cash flow conversion rates in the range of 100% to 110% as a percentage of adjusted operating income on an annual basis. Our performance in Q1 and historically demonstrates our ability to execute our vision of durable growth and profitability at scale. Moving on to our target financial profile. As with every other part of our business, we focus on maintaining an efficient capital structure. We have low-cost debt given our profitability profile and fixed rates through bond issuances and swap contracts initiated during low-rate environments, so we are well positioned to withstand rising interest rates. Our $600 million term loan is priced at LIBOR plus 300, and our 8-year $650 million senior notes are priced at 3.875%, one of the lowest levels achieved by a single B-rated company at the time. In recognition of our improving financial profile, we were upgraded in March by both Moody's and S&P to BA3 and BB, respectively, at the corporate level. As of March 31, our net debt to cash EBITDA ratio was 1.8x. And our gross debt and net debt are both low single digits as a percentage of enterprise value. As demonstrated, we have a prudent approach to leverage. We are targeting an upward ratings trajectory and credit profile consistent with investment grade over the next several years, given our expected scale, growth and profitability profile. We focus on maintaining strong liquidity for strategic acquisitions and organic growth initiatives between cash on the balance sheet and revolver capacity. We'll continue to focus our investments on organic and inorganic growth opportunities, and we aim to maintain dilution for stock compensation below 2% annually. Given our successful M&A track record and our plan to continue to expand our value proposition to customers through internal development and selective acquisitions, I'll briefly discuss our philosophy and approach to M&A. First, we target high value-added offerings that fit cleanly into our RevOS platform, adding value to SalesOS, MarketingOS, TalentOS and OperationsOS personas and customers. Second, we aim to leverage our leading go-to-market organization to drive significant growth. With an LTV to CAC well over 10x across our scaled go-to-market team touching tens of thousands of customers and prospects, we have a proven, highly efficient go-to-market engine with a track record of bringing solutions to market. Third, we look for products that are tightly integrated with our data and insights to create a value proposition to customers that competition cannot match with more software point solutions alone. And finally, from a financial perspective, we look for transactions that will be accretive to our growth and adjusted operating income in the near to medium term. Thank you all for joining us for our Analyst Day on the eve of our second anniversary of the IPO. We have accomplished a lot over the past 2 years but are even more excited about where we can go from here. With that, we'll get ready to open it up for questions from our research analysts. [Presentation]

We covered a lot in the session today and hope that you found it to be a valuable use of your time. At this point, we're going to transition to a question-and-answer session with Henry, Cameron and Chris. [Operator Instructions] And with that, let's open it up to questions.

Before we go into questions, we've had some investors inquire about our operating model, and I would like to clarify that for everyone. We plan to continue to operate the business at adjusted operating income margins between the high 30s and the high 40s. Where we fall in that range will be dependent on our investments to drive organic growth. Where elevated growth will require incremental investment, yield margins at the lower end of that range. And as growth moderates as we grow off a larger and larger base, we expect to move into the higher end of that range. Given this model, our expectation is that under no circumstances do we expect adjusted operating income margins to go below 37% on an annual basis. So with that, we'll open it up to questions.

Okay. Great. Our first question comes from Mark Murphy with JPMorgan.

So last week, you had mentioned -- only because I asked, you had mentioned that some of your sales reps were seeing deal cycles take a little longer, but they were still closing. And you also mentioned that you feel very strongly about the demand environment. I'm curious if you could just shed a little more light, how isolated are those deal situations? And should we be thinking that there is some kind of an offset here, where you have these large enterprise contracts closing. And you actually mentioned they're continuing to close in Q2 in the presentation. Or I'm just trying to understand if we should think of this as having any kind of tangible net effect?

Yes. I think, look, not a lot has changed since the last week, Mark, but I think the first thing to think about is our business, which we sell to other businesses. So we're more insulated than your typical B2C company. In addition to that, we provide quick time to value, fast ROI for our clients who are investing in the solution. And this is a solution that helps you sell and makes your sellers more efficient and makes your go-to-market motion more effective. And in times where you're looking to get the most out of the resources that you have, ZoomInfo is a solution that can get you a lot in a quick time and turn into high ROI. Like I mentioned at the conference we have heard from some isolated sellers that some deals are taking longer to close, but that they're still closing. And so essentially, there's another hoop to jump through, but those deals are still coming to close. And we feel really good about the demand environment that we're in, about the solutions that we have to take to market around the platform. And so we still feel really good about our ability to operate.

As Henry mentioned, I mean, we still -- demand is still really strong for the product, for the offering. And there are a little bit more back and forth as people are just questioning things. But because we're so close to revenue, so close to value, the business part of the organizations we work with are bringing us through, and those deals are still getting done. And that's across the whole spectrum. So as Henry mentioned, it's just we're so close to revenue and the opportunity we deliver, it's a really good environment for us.

Our next question comes from Keith Weiss with Morgan Stanley.

Really impressive, the expansion of the solution portfolio in a relatively short period of time. Can you talk to us a little bit about the order of operations, if you will? There's a lot of new solutions for customers to take on. Is there a typical cadence with which they sort of take on the new solution? And some interesting sort of data points on the percentage of ACV coming from advanced solution and sort of the uplift. Can you give us a sense of, if somebody wants a wall-to-wall and took on the entire platform, how that -- like what type of uplift you would get from that sort of wall-to-wall implementation, if you will, of the complete OS as you guys describe it?

Okay. It would be any of three of us. Do you want to start?

You can go ahead.

Okay. I think, Keith, to start to answer that question, really, where we often start is giving our customers a view of their total addressable market. That starts with our company data, our contact data and the insights that come off around it. Almost immediately, our customers are asking us, "Okay, great, I have all of this data, what do I do with it? How do I activate it? How do I know who to contact and when?" And that gives us an ability to move them from lower packages up the package stack. And so maybe I want to have website visitor identification on my website. I want to know every company that comes to my website, and then I want to run an automated go-to-market motion behind that. The step to get to the website visitor identification is one step-up package and a step to get to the workflow solution that lets you automate outreaches another step up the packaging. The next thing that you may want to do is say, hey, I need a solution to actually go out and line up e-mails and set up phone calls for my reps to take advantage of that data and advantage of that insight, and then they'll buy Engage. So at the front end of the sales cycle, where we're landing, you're kind of landing across those 3 areas. Give me the data that I need, point me to the right companies that are in market for my products and services, either through website visitor identification or intent data. And then, give me the tools to automate and reach out to those people in real time as those insights are coming off of the data. From there, the next most obvious addition is Chorus, our conversation intelligence solution. What happens there is, okay, great, now I'm generating all of these leads at the top of the funnel now. I put in a new motion that's generating appointments and opportunities for our sellers. I want to optimize the conversion rate from that opportunity or that demo to close. And the way that you do that primarily is you understand what's happening in your calls. And what Chorus does is it transcribes, analyzes and pulls together the key moments in a call so that a sales manager or a sales rep or a VP of Sales can have insight into those key moments that are happening inside of their sales cycle. They can coach better, they can improve their reps better and they can increase conversion with Chorus. As you go into the enterprise, what you see a lot of -- the place you see a lot of extension happening is our customers come to us and they say, look, my CRM is full of messy, outdated stale data. My marketing automation system is full of messy, outdated data. I'm doing territory management planning inside of Snowflake or Big Query, and that data is not up to date or accurate. It's missing a number of additional fields. Can we get enrichment using your APIs? Can we get enrichment inside of Snowflake or BigQuery or Salesforce or HubSpot or Marketo? Can we do enrichment of that data with your API tools? That's kind of where you see the more sophisticated companies start growing after land, and that's where you see them expanding. And then ancillary to that, you might bring in RingLead to help them route and score the leads to orchestrate a motion that's a little bit more sophisticated in the upper end of the mid-market and the enterprise. What would you add there, Chris?

What I would add is when we get into the opportunity to talk about the RevOS story, what that does is it allows the client and the interaction for us -- for them to tell us where their pain points are, where they need our help. And we can plug it in one place, so we can plug it in all, as Henry mentioned. And then as they become a client and we start to work with them, all those other opportunities open up for us. So as they grow, as pain comes in, we can plug into the RevOS story and actually help them solve it. So it really depends on the client and what their needs are, and then we can plug in and move them along. It's a really great story, the RevOS story.

And to give you a sense of the...

Any sense you could give us -- sorry, go ahead.

So to give you a sense of the numbers, Keith, if that's where you were going, is if we were to take a typical client, let's say, they were buying 25 to 50 seats, that might be a $50,000-type deal for our advanced platform. If they move up to Elite, that could be $15,000 to $20,000 uptick, so call it, $65,000 to $70,000 on Elite. And then if they start adding Engage or Chorus, Engage might be a 15% to 20% uptick. Chorus might be a 30% to 50% uptick. That client could already be a $100,000 client just on RevOS, without adding any additional seats. And then, when we think about OperationsOS, in many cases, our OperationsOS could be an even larger ticket than what the RevOS is, so that could be another 6 figures on top of that. MarketingOS often starts in that range as well and could be another 6-figure deal. And as we add TalentOS, that could probably be another -- it's going to range based on how much hiring that company is doing. But it could be another $15,000, $25,000 or maybe even more. So you can imagine a customer that starts out with a $50,000 ticket in the advanced part of our functionality that's only using company and contact information, and that could be a $300,000-plus customer over time.

Our next question comes from Alex Zukin with Wolfe Research.

Thanks for taking the time today, guys. Really informative. I guess I'll ask the macro and margin question. If we look at the use cases and the case studies presented today, a lot of tech and software use cases with SAP, Adobe and Coupa, remind us what the revenue exposure is to software, given we're going through a cycle where every recent headline is less VC funding, layoffs, hiring. How much of a headwind -- or is that a headwind at all in your minds to the business from a revenue perspective? And then, Cam, from a margin perspective, you talked about high 30s, low 40s if you're growing at these rates. Can you be a little bit more specific? And kind of what's the fine line or the red line of a margin you won't go below? And how does that kind of factor into a more recessionary playbook, if you will?

So from a software concentration perspective, around 40% of our revenue comes from software companies. Most of that is from larger companies like the SAPs and Adobes of the world. We went back and finally looked at our customer base. And for customers that are venture-funded or received venture funding over the last few years, it's actually less than 10% of our overall revenue coming from those customers. So given the fact that most of our growth is actually coming from other industries, whether that's manufacturing or financial services, pharmaceuticals, health care, transportation and logistics like, you name it, there are many of these other customers that are now coming around to after those early adopters in software, now coming around to digitizing and modernizing their go-to-market motions. That we feel that there's a ton of opportunity out there in terms of all the businesses that could be modernizing their go-to-market motions. If we think about the operating construct, I think that we'll continue to invest into sales and marketing capacity and R&D innovation. I think at the end of the day, we're really focused on efficiency with respect to our sales and marketing teams. So in a world where we're growing off a larger and larger base, we expect that the efficiency of our teams will be maintained at certain levels, and therefore, we'll be spending less of our dollars as a percentage of that based on sales and marketing, but still generating really great growth off of that. In a more challenging operating environment, I think that we'll have that opportunity to continue to invest into R&D and continue to invest into our sales and marketing teams in order to really take share in the market and drive growth over the long term.

But in no circumstance...

In no circumstance do we expect margins to go below that 37% level. So that is the bright red line that, on an annual basis, we'll always have margins at a minimum at the -- in the high 30s. And certainly, we expect that over time, those will move up and potentially all the way into the high 40s.

Our next question comes from Pat Walravens with JMP Securities.

[indiscernible] you new hired [indiscernible]. Right now, he's been there for a while, you've had lots of chances to talk to him. What are the 2 or 3 biggest challenges from a privacy perspective for you guys?

Yes. Pat, you were cutting out a bit, but I think the last part of the question...

Two or 3 biggest challenges from a privacy perspective.

Yes, great. So -- and we hired Simon McDougall, you mentioned that in the beginning of your question. A couple of things to touch on with Simon. A couple of the things he's done since he's gone here. First, we achieved ISO 27701 certification. That's the international standard for privacy management, which is another place where we're innovating from a data privacy perspective in our industry. We re-architected our privacy center to reduce fulfillment times and to be able to, in a more automated way, respond to data privacy requests that come in through our automated privacy center. When I think about data privacy, the first thing I think about and the first place that people's head goes is around the contact information essentially that we collect. And couple of things to remember there. We collect only business contact information, the information that can be found on a business card or a resume. And that information that we collect, that business contact information makes up a very small amount of the data in our overall platform. The data that we collect includes technographic data, includes hierarchy and locations data. It includes revenue numbers, employee numbers. It includes Intent data and Scoops data and website visitor data. So there's a tremendous amount of data that our customers are consuming outside of the contact information, which is a part of it. Within the regulatory construct, when you think about business contact information, in every single data privacy bill, business contact information used for business purposes has been carved out of that legislation. Across the country in California and Colorado and Connecticut and Virginia, it has been carved out. In Canada, Canada's PIPEDA specifically calls this type of information, nonsensitive data. The GDPR includes a legitimate interest to collect this information for direct marketing purposes. Now we go a step further, and we appreciate that the regulations haven't regulated this data, but we feel like we need to be really good stewards from a data privacy perspective. And so a few years ago, we instituted a notice and choice program that actually proactively goes out and gives notice to anybody whose contact information we've collected. We've done -- we've sent out hundreds of millions of these notices to give people access to their profiles in an automated way, give them the ability to review, update those profiles or remove them from our platform in an automated way. And so we feel really good about really driving the industry forward with these innovations that we're doing around data privacy. We expect Simon to continue to push our company forward from a data privacy perspective, from an industry-leading perspective. We expect to continue to innovate here. Over the last year, we've also had a number of innovations from a data privacy perspective in our industry. We rolled out the Business Contact Preference Registry, where we share opt-outs from the ZoomInfo platform with other industry participants and invite them to share their opt-outs with us as well so that there can be a consolidated place that our industry removes or updates contact information. We added do-not-call lists across 8 different countries into our platform. And so our customers can now easily filter phone numbers on the do-not-call list across 8 different countries. And so we continue to look for ways to innovate and provide our customers with a safe place to leverage business contact information to go to market. Business contact -- the B2B economy, like we mentioned in the video, is a $30 trillion economy. When you think about why this data is treated differently, think about any company's go-to-market motion, when you think about their CRM systems, their marketing automation systems, their sales automation systems, those are filled with business information that allows them to drive this $30 trillion part of our economy. So we feel really good about our stances there. We feel really good about how we're innovating around data privacy. And we're really excited that Simon is going to continue to help us lead the way there.

Our next question comes from Brent Bracelin with Piper Sandler.

Great to see you virtually here. I look forward to actually hanging out in person at some point in the near future. I wanted to double-click on the enterprise go-to-market approach. Little surprised to hear after a 10-year relationship with Adobe in the last year, you turned that into a top 5 customer for the company, expanding it from hundreds of seats to thousands of seats here. So something seems to be working here. Maybe go back and rewind, what changed relative to the enterprise go-to-market ELA approach in the last 2 years? And then maybe can you frame the number of ELA opportunities in the pipeline today versus what you were looking at relative to the ELAs in the pipeline 1 year ago. I just -- I ask because even within the software tech vertical, it seems like you could have a lot more than $40 million-plus customers. So I'm just trying to understand that enterprise opportunity.

Yes. I think from the enterprise space, if we rewind it, it's really a culmination of the platform that we've built out, whether that's us building or it's acquiring along the way. It's also been an investment in talent. So we've been investing and bringing talent from both inside and outside of ZoomInfo and bringing that together around the RevOS story. When we go out and we talk to a client like Adobe or like Alphabet, and we show them what we're able to do, we're able to take those -- the user or the data or the process they were running and show them this larger story. And they want to be part of that, and they start to lean in. The really interesting thing about companies like Adobe and Alphabet is, those are accounts that started small. We -- they might have been $100,000. They might have started at 30,000. And then over the years, through merit and through the platform that we built out, we grew that relationship to a point in time where we're now considered to be a strategic partner. And we're having strategic conversations about solving their problems. And when we're able to do that, that unlocks a tremendous amount of value. And the really exciting part about that for us is, you heard Cameron mention, we've got over 1,600 clients spending over $100,000 with us. And that's a growing stat. So I think you're right. When you look out across that universe, the opportunity to unlock those clients to turn them into multimillion dollars is real. And we're starting to see the culmination of all of those investments come together.

And has that materially changed relative to the pipeline? Are you seeing a material change in the pipeline yet? Or is that -- do you think that's still to come when it's early into really trying to identify those big ELA expand opportunities?

We are driving pipeline. We're being very thoughtful about who we go out and have these conversations with. And the team is generating pipeline, and we're progressing those transactions. So it's not -- we're not just getting started, we're in that pipeline build stage right now.

Our next question comes from Michael Turrin with Wells Fargo Securities.

Okay. I appreciate that. Nice to see everyone. Cameron, you presented us with a useful growth margin framework. One of the questions we often get is, does the move of software and the engagement layer come at all at the expense of margin, just given the efficiencies of the core data assets? This question is more on the longer-term structural margin perspective. The 37% level you're giving is also very useful. But it sounds like you're saying no longer term as well with that mid-40s target. So maybe you can just expand on what it is that you have that's going to allow you to keep the margin structure at those levels, even as your product mix changes and assuming you tuck in additional assets. How you'd just kind of keep that framework in place.

Can I start and answer? The thing that I would start with is, even in the core data asset, we're single-digits penetrated across our customer base. Everywhere you look across our customer base, there are opportunities for us to be a bigger partner from a data perspective and from a data asset perspective. And so there's still a lot of runway there. And then I'll let Cameron talk about the longer-term margin profile.

Sure. So in terms of the margin profile and as it relates to the data that we've offered. Historically, and now, more and more software that comes along with that, I think that there are really 2 things that are important when you think about that. One is the R&D that we're investing into the product. And we've already increased that R&D investment as a percentage of revenue. And I think in the low teens, that's a level that, as we continue to scale even as a software company, that's where a lot of software companies aim to be. So when we're mixing software and data in terms of the revenue, that's actually a fairly robust level in terms of investment into R&D. And I think that, that will enable us to continue to grow that functionality and continue to provide value to our customers. The other big piece of that is sales and marketing. I think we're really focused on providing services to our customers that are easy to understand, easy to see the value of and easy to implement in a short period of time. And so that sales cycle is very similar to what we see -- what we've historically sold with respect to today. And we're seeing that with respect to Chorus and with respect to Engage, that the efficiency that we're able to affect in terms of sales and marketing is very similar when we're selling any sort of software that's closely related to our data as opposed to just the data. And so a good example of that is that we've been able to -- after acquiring Chorus, who had a far less sufficient go-to-market infrastructure, we were able to accelerate the sales that Chorus was making. They were more than doubling year-over-year when we acquired them, and now, we're more than tripling that business year-over-year. And we've been able to do it while bringing the efficiency of the sales and marketing team in line with what we do on our own. So I think the efficiency with respect to sales and marketing is much more about how we run the business as opposed to selling data or software or something else. So long as we are staying close to what we do and really focusing on selling solutions that have a high and are obvious ROI for our customers.

Our next question comes from Kash Rangan with Goldman Sachs.

Nice Analyst Day presentation. Clearly, the value proposition of ZoomInfo is very strong as you add multiple layers of value on top of the data platform. But I'm just curious to get your take on the hiring environment, which has been really robust the last couple of years during the pandemic, labor in short supply, I think. We can all conclude that with inflation and rates, who knows, the labor market might soften a little bit. As you zoom into your business, how do you think ZoomInfo is positioned for a potentially softening labor market, particularly in software, where you do have good concentration, where a company is increasingly talking about having to slow down hiring, et cetera. Maybe your penetration is so low that you don't see that at all, but have you given thought to those variables and how ZoomInfo is positioned in that kind of an environment, which certainly was not the case since you went public the last 2 years? Very different, obviously.

Thanks, Kash. I think the first thing is your point around penetration, which is, we are just not a wall-to-wall penetrated in just about any of our customers. And so the next incremental seat that we're going to sell to an existing customer is not driven by their hiring. It doesn't -- it almost never is just, "Hey, we hired 10 people, so let's go get those 10 licenses". For us, we're very lightly penetrated within the accounts that we have. And so even stopping hiring in every one of our accounts, we'd still have a long runway of growth within those accounts to get ZoomInfo deployed. The other thing that I would say is, for 2 years, we didn't have much of a platform story. And because we didn't have much of a platform story, we didn't have much of a consolidation story. And at a time where the labor market is softening or companies are tightening their belts, we presented an incredible consolidation opportunity. Companies are buying data from a technographics vendor, data from an intent vendor, data from a website visitor vendor. They're buying conversation intelligence, sales automation, data orchestration from a vendor, chat from another vendor. And these systems, they're very hard to get to talk to each other. It takes really sophisticated management to get that. And the story we're able to tell today that we also haven't been able to tell, really, for the last 2 years is, look, we provide you an integrated experience across all of those solutions that you're buying. We put it in one place, the systems talk to each other. It's best-in-class across all of those categories. If you look at how we rank from a G2 perspective or Forrester perspective or a Gartner perspective, in each of those categories, we're showing up really, really well. And so we have this opportunity during a slowdown to really talk to our customers about consolidation. That gives them the opportunity to save money, to reduce complexity and to consolidate with us. And so that is a new thing that we haven't had historically. And that's really helpful in a time like this.

And Henry, I think the other point I'd add to that is that our whole story has always been about being more effective and efficient with your sales team, and being efficient means that we're able to actually help our customers do more with less. So whether that's expanding within a customer that we already have or frankly, bringing on new customers, that ability to help people do more with less is a great selling point in any environment, but particularly in a more challenging one.

Our next question comes from Phil Winslow with Credit Suisse.

Really appreciate some of the incremental data you shared, specifically related to the contribution of advanced features. I wanted to focus my question on the OperationsOS. Can you talk to the opportunity and really the feedback from customers in terms of your capabilities in data orchestration. Obviously, you mentioned via the RingLead acquisition earlier, your data cleansing, enrichment, et cetera. And also, can you provide some color on the success that you're seeing with integrations with the third-party data warehouse vendors you've mentioned, such as the recent announced partnerships with Snowflake, Google BigQuery. Are you able to discover any new use cases that you could then package on top of your platform that you're seeing your customers having to DIY with either OperationsOS or those marketplace integrations?

Yes. I mean, like Henry mentioned, territory management is a great example of that. So when we think about or talk about OperationsOS, when we're able to have that conversation with the client, whether it's mid-market, SMB or enterprise, we talk about unlocking the data asset, the information asset that they have in their organization, combining it back with ZoomInfo and bringing it to meaningful use cases like territory management, like a TAM analysis. Overall using it for quota building. It's just -- you start to be able to unlock all of these different conversations that are different than the conversations that we were having 2 years ago. And the RingLead asset, at the heart of that OperationsOS layer, allows data to move through the enterprise, through the organization to become meaningful to the users where they live, whether that might be in the marketing automation, Marketo, Eloqua, whether it's a CRM, Salesforce or Dynamics, and allow that to move and be meaningful to the people along the way. So those conversations unlock a tremendous amount of potential. And with the OperationsOS piece, being able to have those conversations is something that's super exciting for us to be able to do now.

How's Snowflake?

Snowflake piece is amazing. So like with the integration with Snowflake, if you think about that or with GCP, we were providing clients data back to them. And that might have been in their CRM or it might have been to be a flat file. And now, with the Snowflake integration, we're able to actually go in and natively in their Snowflake instance, provide that enrichment real time, which then unlocks that data for all different use cases within the enterprise. Data modeling is a great example of that. So if somebody wants to go back and see a propensity to buy model or a propensity to leave model, bringing our data back in, allowing that to intermingle back with their customer first-party data and build those models that are actionable and bringing that back to where they need to have that data to make it useful, the Snowflake integration, GCP, Amazon just unlocks that and it makes it a lot seamless, a lot easier for us and for our clients.

Our next question is from Raimo Lenschow with Barclays.

Slightly bigger-picture question. As you evolve as a company, you kind of start going to sell higher and higher in the organization. And it's more for Chris, but also for Henry as well. In terms of what are you seeing in terms of the customer understanding that the value that you're providing, how you're getting more strategic? And then for Chris, in the same vein, like where are we on the evolution of the sales force? Chris, as you presented earlier, showed a really nice progression from kind of starting low and moving higher. But as you go towards more enterprise ELAs, et cetera, there's obviously going to be a need for some very senior guys coming in. Where are we in that evolution of the organization towards that?

Yes, thank you. It's a great question. So when we talk about the RevOS story and we go in, and if you think about our general go-to-market, it's been -- we'll go in, we'll land in 1 or 2 places, and then we'll start to grow on merit. We talked about that a little bit earlier. And as we grow on merit in the overall expense and value that we're adding grows, we're able to unlock the conversations at a very strategic level, C levels. And we have an offering now that I can talk to a CMO about the MarketingOS use case. I can talk to a CRO about SalesOS. I can talk to a COO about OperationsOS or a CIO about OperationsOS. And I can talk to the Chief People Officer or the Chief Human Resource Officer about TalentOS. So when we go in and we have those conversations and we lay out the vision of what we're able to provide, what they'll end up doing then is they'll get excited for lots of different reasons, unlocking the value. Also as Cameron and Henry mentioned, that consolidation play is real. Like they've bought point solutions along the way to do much of what we were able to do now. So they get excited not only unlocking the value, but also potentially unlocking value and maybe saving some money or eliminating some of these vendors. And so that they push us back down maybe a level in the organization, where we go have those conversations to develop a plan and come back with an overall point of view and a proposal about how we can start to deploy that. And when we wrap it around the value that we've added, the value that we're going to add and maybe some cost savings around pushing out a different vendor, people get excited about those conversations. And it's been a big part of our success. We mentioned some of the clients. We have some of the clients on the call earlier. When you think about the talent, it's a great question. So we have been able to take people that were maybe lower-end sellers or smaller sellers and move them up and have them able to have a conversation like this in ELA. We talked about the Alphabet deal. That deal was sold with somebody that we brought up through the organization. She pulled that transaction together. Was able to bring that consortium together and move that deal forward. That's somebody who's been here and started off as kind of a mid-market seller. But in places where we don't have that talent, we go out and we bring talent in. And when we talk to people, when I interview people and we show them what we're able to do as a software sales organization and we show them the growth story, people want to come work here. The level of talent that we're able to attract right now in the market is amazing. So we are able to grow it, which is great. I love that part of our business. But where we can't grow it, we can go out and bring it in and they're excited to come here.

Our next question is from DJ Hynes with Canaccord Genuity.

So Henry, when you do due diligence, ahead of building out Chorus and -- Engage and acquiring Chorus, I'm just curious, what kind of white space did you see in your enterprise customer base? These are pretty competitive markets. My guess is your large customers are probably a little bit more tech forward. Trying to think about like how much growth for these add-ons, particularly at the high end of the market, is going to come from first-time buyers versus consolidation of competitive point solutions?

Yes. Thanks, DJ. Good to see you, too. I think actually, in the enterprise space, that's where you see the most white space. I think, where there's more -- where more Engage or Chorus has landed is more in that mid-market tech space. And our customer base, like Cameron mentioned, 60% is not software. And so we have all of that as white space. And in the enterprise, especially, there -- they tend to be -- well, it depends on the enterprise customer. But by and large, they're less sophisticated in their go-to-market motion. And so we see a lot of white space in our enterprise clients to land Chorus, to land Engage. The diligence that we did around that really is what gave us the confidence to build Engage and what gave us the confidence to acquire Chorus. If you look at the universe of companies that use conversation intelligence today, you can kind of think of it as right around 7,000 companies total. And we have over 25,000 companies that use ZoomInfo today. And I can tell you of the next -- when we made the acquisition of Chorus, I can tell you the next 10,000 customers of conversation intelligence, if you look at the overlap between Chorus and ZoomInfo, you can be really confident that 8,000 of the next 10,000 customers of conversation intelligence that are already ZoomInfo customers. And so there's this tremendous white space where we already have relationships, where we're accelerating our way into those conversations around conversation intelligence. We feel largely the same with Engage. And so lots of white space. I would say lots of white space, especially in the enterprise where we see a lot of continued opportunity in the future. It's hard to imagine a universe 5, 10 years from now, where every sales team is not deploying sales automation, where every sales team is not using conversation intelligence. And company that's not, in the future, is going to be at a significant disadvantage against their competitors. Those technologies are going to be table stakes for years and years to come.

Our next question comes from Brad Zelnick with Deutsche Bank.

Thanks for a great presentation today. It was really helpful, guys. Cameron, in your prepared remarks, you talked about new customers accounting for, I think, it was 35% of your growth last year. Can you talk about how that's trended over time? And how you balance and throttle the go-to-market investment across new logo versus expansion? And are there any goals or thresholds we shouldn't think about as it relates to new logo mix and as an indicator of the health of your business?

Sure. So the -- that level in the mid-30s of new customer growth has accelerated really modestly over time. But it's been in that ballpark for at least a few years. And I think that, that's an area where we're continuing to invest in the go-to-market team. Really, for us, the investments in the go-to-market team are about bringing people in, ramping them up quickly, continuing to grow that team in a sustainable way. So we'll continue to grow that team and focus on driving sustainable growth over the long term. When we think about the balance between new customers and existing customers, that's really a question of where we think the opportunity is and where we can continue to drive efficiency. So in our mind, there is a balanced approach where we're going to add capacity both on the new sales side and on the existing customer side. I think as we continue to grow, there might be a little bit of a shift towards more opportunity on the existing customer side, particularly as we bring on more and more of those large logos and the ability to upsell functionality, in addition to reach within the organization, is starting to enable us to really drive better net retention among our customers. And you saw that in the net retention in 2021 compared to 2020. So there might be a little bit of a shift over time, but realistically, our goal is to grow sustainably over the long term. And in order to do that, we feel that there are balanced investments that we need to continue to grow that sales and marketing capacity.

Our next question comes from Taylor McGinnis with UBS.

Maybe going off of the question that Brad just asked. Cameron, I guess, you mentioned just the significant improvement that we saw, dollar-based net expansion rate last year. And it seems like in this presentation, there was a lot of talking about the strong upsells that you're seeing to date and a lot of like the newer opportunities. So just as we think about that new out-year revenue target, I guess, how should we think about how dollar-based net expansion could evolve over time, especially as you move into some of these larger deals as well? And what that could look like, and if there's any ranges or levels that you're thinking of?

Yes, so great question. And as we think about the dollar-based net retention, we really believe that there's opportunities for us to continue to grow the upsells that we're providing to customers. That being said, we do have a relatively balanced revenue stream between enterprises and mid-market companies and small businesses. And it's roughly 1/3, 1/3, 1/3 in terms of mix. So there is a bit of a natural ceiling to where we think dollar-based net retention could go given the mix that we have. Because while enterprises expand really nicely, well above 130% net retention, it's hard to achieve that in the small business world given that those businesses are -- there's not as much opportunity to expand, and there's not as much sophistication to continue to provide additional functionality. So given the mix, I think that I wouldn't expect the net retention number to get all the way to 130% or 140%, obviously. I think over time, there's an opportunity for perhaps that mix to shift. But I think within the time frames that we've been talking about, we continue to see a ton of opportunity in the small business segment as well as in the mid-market. Because there are just so many businesses out there that are still thinking about modernizing their go-to-market motions, and that we'll continue to see growth across the entirety of the business, not just in enterprise or a different segment.

Our next question comes from Parker Lane with Stifel.

Henry, you've significantly grown the data asset quantity and quality over the last year internationally. How would you assess the traction that you're gaining in seat additions with existing multinationals that are starting to gain an awareness of those advancements you've made in the platform?

Yes, great question. I'm going to have Chris answer most of it. And I'll just say, SAP is one where we've seen that expansion from a seat perspective. We're seeing it across all of our customer -- or all of our multinational customers. We're having those conversations with them. Do you want to talk about what it's unlocked?

Yes. I mean, to Henry's point, the people that we've had these relationships before, who are using us domestically, when we start showing them and having those conversations around the asset internationally, EMEA and otherwise, they get excited about it. And it's unlocked opportunities with enterprise, with mid-market. We've got sellers on the ground there now. So even on the new logo acquisition, we're having tremendous success internationally, because of the growth of that asset, because of the strength and quality of the data. So it's unlocking doors, not only in our existing customers, those multinationals. It's also a unlocking doors just natively within the internationally-based companies.

Thanks, Parker. That was our last question. So I want to take a minute to thank both Adobe and SAP, our customers, for spending time with us today and giving everybody a little bit of a look into how they're leveraging ZoomInfo to go to market. I hope that when you leave here today, you walk away with a better understanding of our vision, a better understanding of our platform approach, how we're leading the way from a privacy perspective, our differentiated culture and our unique financial model. We'd love to hear your feedback, so if you have any, we'd appreciate it if you could e-mail [email protected]. And we really appreciate you joining us today. Thanks a lot.

Thank you.