All right. One of these firesides, I'm going to have them keep the doors open so we can just look at the ocean during this. Guys, thanks for joining us today. Ryan MacWilliams, SMID-cap software analyst here at the Wells Fargo TMT Conference. With us today is the CFO of ZoomInfo, Graham O'Brien. Thanks for being here. Thanks, Ryan. I do not think we will be taking questions directly from the room. If you do have questions, please feel free to ping me at ryan.macwilliams@wellsfargo.com or ping me on Bloomberg. We can get those in. Graham, you know, we would love to kind of just start with maybe folks that are revisiting or newer to the ZoomInfo story. If you could just catch us up on, you know, kind of the last couple quarters and some of the upmarket momentum you have seen, and we can go from there. Yeah. I think over the past year, it's been a story of stabilization in the business. Q3 was the start of a story of improvement in the business. Highlights coming out of Q3 where we had a two-point acceleration in our upmarket business, ACV growth. We went from growing 4% to 6% in Q3. Our downmarket business saw a one-point improvement as well. Overall net revenue retention reached 90% for the first time in several quarters, improving from 89% in the period before. We had our highest revenue quarter ever, $318 million, with, you know, 5% year-over-year growth. We delivered a 37% AOI margin. Yeah, definitely a more solid quarter than investors were anticipating. We'd love to kind of unpack some of the components behind that. Maybe starting on, like, the upmarket momentum, it seems like that's been more of a focus for ZoomInfo and putting more, you know, wood behind the arrow there. Like, what were some of the changes that were made that have led to the improvement that you've seen? Yeah, we've been, you know, very focused on shifting our revenue-based upmarket over the last, really two years. Our upmarket business is now 73% of our total ACV. That was up one percentage point sequentially in the quarter. It's up five points year-over-year. It's actually up 10 points over the last two years. Our upmarket business is growing, like I said earlier. It's actually much more profitable than our downmarket business. The kind of upside that we got top line in Q3, you could think of coming from improvements in upmarket net retention where, in period, our upmarket business, our customers had retention activity that was at 100% again for the second quarter in a row. Our operations business, which is almost exclusively upmarket, think of this as our data foundation, is still growing 20% year-over-year. It's now more than 15% of our total business. This is a, you know, a product that is, you know, obviously an AI beneficiary as businesses of all sizes look to, kind of start to marry their first-party data with our best-in-class B2B third-party data so that they can deliver effective GTM outcomes using AI. Excellent. Actually, I want to double-click on that Operations suite. So very strong growth in the quarter. For investors, maybe who have heard newer to the story, can you just kind of overdo that product and, you know, how that makes sense in the generative AI world? Yeah. Operations is effectively our data suite for our core data asset, our proprietary data. What we've, you know, basically, customers purchase that on a subscription basis. It's not a seat-based model. Think of it as, like, a data access subscription where they get access to a geo set of data or all, you know, 100 million companies that are in that data set or all 500 million business professionals. We also layer signals and intent on top of that data asset. Then customers purchase it for a one or two or three-year subscription. We enrich that data for them. We route it. We go on with them, and we essentially help them marry it with their first-party data to create this kind of live, always-on, kind of data asset that then they can build application or agents on top of to have the context to go deliver those GTM outcomes that they're seeking to. It seems like, especially for customers and businesses that are newer to AI, go-to-market enrichment or kind of the Operations suite seems like the first step for them. What's, like, the customer reaction been so far? Has that kind of, like, you know, switched on for them, like, "Okay, now we need to do more here"? Yeah. I think the demand for AI for GTM is evident up and down our customer stack. Now, there's, like, sophistication curves of whether it's how sophisticated are they from an AI and kind of AI usage on a day-to-day basis. How sophisticated are their data operations? Some big companies are less sophisticated. We have a lot of great opportunity to kind of show them the way as partners in that. You actually have some more smaller, even AI-native companies that are just starting to build go-to-market after, you know, kind of an R&D phase. We're kind of the clear front runner to go in and help them build AI for GTM as they start to go-to-market. We were even talking before this about, you know, changes in, you know, go-to-market that we're seeing and, like, the complexity is getting a lot more challenging. Do you think, like, for businesses that are just getting started, it's like, "Hey, let's make sure our data is correct to start," and then we can start trying to build the fancier agents from there? Yeah. I mean, that is mission-critical, but it's really hard to do. Like, the first-party data you have siloed across your organization, whether it's CRM or, you know, kind of collaboration tools or product telemetry, like, it is messy. And it's very difficult to marry it. So not only do we bring in this third-party data asset, we bring in, you know, the signals that are coming in live from, you know, news and research, and then we can actually marry it and unify it with that first-party data to create that context layer that you really can't do anything without. Like, the go-to-market fails without that data asset. And then we've built GTM Workspace, Go-to-Market Studio, essentially have these AI applications that sit on top of that data asset so that customers can subscribe to those too. I gotta get back to some of the net retention stuff in a second, but I just wanted to double-click on that data advantage because, you know, when I launched on ZoomInfo years ago, that was always what was interesting to me of, like, you know, how much better the data set was versus your peers and how, like, it wasn't just, like, getting the emails correct, but, like, having, you know, especially in multi-geos, like, you know, a lot more behind each individual contact. But, like, can you just talk about, like, you know, why that is such an important starting point, if you're looking to build, like, an AI use case, but then also, like, how distinct that data advantage is behind, like, "Okay, I just send an agent to try to grab, like, every email off the internet," right? Yeah. Like, how that wouldn't even come close to what you guys currently have? Yeah. So it's effectively a very distinct advantage because of the investment we've made over decades of building ZoomInfo combined with the scale. We can send our data teams out to go acquire or create data that folks are looking for. We have our contributory data network where customers can contribute their own data into our data network. And, like, that scale that we have, $1.2 billion of revenue, creates a massive competitive advantage. The idea that you can just go and kind of, like, scrape the internet to get this is, like, unrealistic. You know, most of our data is proprietary. It's not publicly available. We bring in that kind of scarce data, and then we are able to actually kind of rank it, clean it, enrich it, and then take that and provide the context when you marry it with the first-party data for those customers. It makes sense, right? Like, if you're sitting there and you're like, "Okay, let's build a go-to-market agent," it's like, and you get a couple outputs, then you're like, "I don't think we're building this off the right data." Like, that would be a good place to start. Just on your Copilot product, it seems like you've had some customers that have come up for renewal. Like, how does NRR look like on those early customer cohorts at this point? Yeah. So, like, a little history here. We released ZoomInfo Copilot in Q2 of 2024. At the time, we basically started featuring that as our new business product as well. We had a customer migration motion, and then we were selling it predominantly, or our new business was predominantly Copilot. If you think about in-market at the end of Q2, a lot of new business sold in Q3. Over that first year, we've been able to track utilization, frequency of usage, specific kind of actions that customers take. Those were all positive leading indicators that we were optimistic were going to lead to better renewal outcomes. We talked about this kind of in that interim period of customers, you know, having their first year on ZoomInfo. What we saw in Q3 was that we got to actually see the renewal outcomes for those customers. What we did is we said, "Okay, if we have a cohort of customers that came on Copilot as their first ZoomInfo experience, then we have a cohort of lookalike customers who came in on kind of our legacy Sales OS." What we saw is that the renewal outcomes on Copilot were mid to high single-digit better than the legacy Sales OS. That was true up and down the customer stack. Those positive lead indicators that we saw in Q1 and Q2 delivered better renewal outcomes in Q3. As more and more of our customer revenue base gets on Copilot, we're hopeful that that kind of trend continues against a larger population. As a CFO, that's great for your own visibility in terms of the renewal cohorts. I guess, like, from the customers that have renewed, is it just, like, that using Copilot has become a core part of their workflow? It's just, like, how can I give this up? Yeah. It's mission-critical for them. And, you know, we're not stopping with just kind of Copilot 1.0. We announced GTM Workspace, which you can think of as the evolution, or internally, we call it Copilot 2.0. And this is just, like, even incrementally more promising. So they get more and more functionality. We'll have another migration motion for this, at the end of this year and into 2026. And if you're thinking about kind of Copilot 1.0, it was really great at looking at your book of business account by account and telling you, "Here's your next best action. Here's an email to send out to this person. Here's a signal we brought in from an earnings call. You should reach out to this new leader at this company." What GTM Workspace does is it kind of provides a more holistic view of a full book of business. If I'm an account manager or I'm a SVP of sales, I can come in and say, "Across my whole book of business or across my whole team, tell me what is at risk. What do we need to be focusing on today?" It will actually build you collateral. It will memorialize artifacts and effectively do all that work for you, and it will write it back to CRM. If you think about a AMs or an account manager's kind of day-to-day, there's so much context switching. They're going from CRM to ZoomInfo to collaboration tool to a workbook here or a workbook there to email. What GTM Workspace really does is it keeps them in that one place to do their day-to-day go-to-market, and then it writes it back everywhere else. It's one pane of glass, that eliminates the hundreds or thousands of context switches or significantly decreases those context switches for go-to-market professionals. I have to double-click on that. I mean, like, you hear so often, like, you know, most of a salesperson's day is not selling or most of a developer's day is not coding, right? It's kind of doing a lot of things you described. I guess, like, under that framework of, like, how Go-to-Market Studio can help, folks, it's like, what do you think that means for what the average salesperson does? Yeah. I think it, you know, for example, it says if you if I'm going if I'm a CRO and I say, "Hey," to my VP of Sales, "Go, you know, what's I'm meeting with a different CRO today. Prep me for the meeting." Maybe that gets pushed down to the account manager. They go bring some research. They start writing up a doc. It takes a few hours. You know, it can take days, but it usually takes a few hours. If you think about the cost associated with, like, that many levels of folks getting involved, you know, you're talking, like, $20, $50, $100 of labor to go to go do that. GTM Workspace can effectively do that for you and do a better job of it. It will do it in one or two minutes. You can have an organic conversation versus an open prompt and say, "Okay, like, condense this into one page. Tell me the themes that we've, you know, we've kind of uncovered with this, prep for this meeting." Then say, "What would a good outcome or a great outcome look like for this meeting? Give me a list of things that said this was the best possible outcome or this was minimally viable for that meeting." All of that happens, you know, at the click of a button. Yeah. So you almost have, like, a sales playbook built for you for each meeting. Exactly. Instead of doing it yourself. I mean, we talked about your data advantage, but under kind of a situation you just described, like, you know, you could try to, like, you know, take an Excel list of emails and then use ChatGPT and, like, to try to, you know, build a sales playbook. But, like, how do you think, like, what the product that you just described would compare to something like that? Obviously, it's a lot easier to have it in one place, and there's a lot of, like, a build versus buy debate here. How would you think about deciding between those two? Yeah. I'd say that, like, GTM Workspace, which the user is an account manager or an SDR or a sales leader, like, that kind of workflow is already should be built in and teed up for them where it's doing that behind the scenes under the hood. If I'm a, let's say, kind of a leader of RevOps or a GTM strategist, Go-to-Market Studio would be where I could do that. If GTM Workspace is that activation layer, Go-to-Market Studio is really built for that practitioner. You know, it's going to be a power user. It's not going to be a large team of folks using it where they can have this works or a workbook view. They can bring in data that's siloed across the business. They can bring in product analytics. They can bring in, you know, their first-party CRM data. They can bring in ZoomInfo data, marry it all in one workbook, and essentially row by row enrich it so they can push out kind of bespoke GTM plays to the front line. If it's a, you know, a couple examples here would be you have an event coming up, and you have 100 targets that you want to go effectively get in touch with ahead of that. You can kind of bring them all in, rank them by propensity to buy, create row by row AI-created talking points, and then push that out to the right frontline folks to go execute. Oh, I love that answer. You know, I get the question a lot of, like, why can't X or Y do this? Under this example, it's that proactivity that's the differentiator, right? You know, if you just have a system that you say, you wake up every day and I want this and it gives it to you, but you're not going to have the best insights from people who run a sales enablement business at scale, right? You guys have thousands of people that all day they think about how can we make our customers more money and drive new features. That's also a difference here. It's not static is what I'm trying to get at. Always on. It's like GTM Workspace should be always on. GTM Studio allows kind of that more kind of bespoke back kind of strategic leader to create those custom plays and push them out kind of incremental to that always-on workspace motion. When I hear things like that, at least in the developer landscape, investors will say, "Okay, if developers get 25% more efficient, do we need as many developers?" Each company I talk to, they say, "Well, everyone's a developer now. And now we have way more use cases, and we can actually get to all these projects we wanted to." It seems like, across the companies that we cover, when we look at businesses, how they're handling changes in their go-to-market because of AI or large language models, they're saying, "We need to move up market, and we need to hire more salespeople," right? I guess, how do you kind of marry, like, we're seeing a lot of sales efficiency, but where the salesperson fits in regards to that? Yeah. Look, I think specifically at market, there's still going to be a person in the loop on this. You know, I think we are a great kind of place to test this because, like, we are, you know, we are the go, we should be the experts in go-to-market. I don't think you take a person out of the loop here. It's kind of business by business. You can elect to just take the productivity upside and invest in more sales account behind that because everyone's 20% or 25% more productive with tools like GTM Workspace. Or you could, you know, kind of keep the, you know, harvest that per, per head uplift, and you get some margin benefit. I think, you know, we're well-positioned to deliver either one. Yeah. You can capture either some of that labor spend with additional usage of your products, right? Or if people are hiring more, then more seats on either side. I guess this would probably be a good point, just, like, the health of that sales hiring market. We'll talk about AI natives in a second, but just for, like, your core customer base, kind of, like, what's that look like over the past few quarters and kind of what have you seen more recently? Yeah. I think there's pockets of growth, and there's pockets of, you know, generally flat headcount. I do think with some of the inbound disruption that a lot of companies are seeing to their, to their funnel with AI SEO disruption, that there is a shift back towards hiring outbound. Again, we're seeing that largely, kind of up-market customers that might have down-market customer bases are putting out more recs for outbound SDRs. That's a good thing for us. I do think that that's kind of been the new dynamic over the last couple quarters is that there's been a lean back into outbound. Excellent. As you think about the components of your improving net retention, Copilot helps and improving retention rates on Copilot customers help, shipped on market helps. We have touched on some of the things and, you know, maybe a better macro environment for sales personnel hiring as well. I guess, like, how would you disaggregate the pieces that have helped you there? Yeah. I think the getting further away from the downsell pressure that we went through in 2022 and 2023 from mostly in our software vertical, a lot of that was seat compression. You know, Operations is a big reason or a big contributor to our retention improvement. The customers that buy our Operations suite have very high operations retention. They tend to buy once and then buy a lot more, whether that's more data, or more services around that data. Getting, you know, shifting more and more customers off of legacy Sales OS onto Copilot. We talked about that earlier. Like, there's a better, there's a renewal tailwind from doing that. And just really diversifying kind of the nature of our revenue base. Like, we talked about Operations that is not seat-based. That's really just kind of a data access model where we've shifted incrementally towards more kind of ELAs where a lot of our customers say, "I use you for one for Copilot or I use you for ABM. I'd love to use you for everything." We kind of give, you know, get them onto one ELA on a two- or three-year deal that removes some of the seat barriers and other things and kind of gives them a lot more opportunity to really leverage ZoomInfo and then consolidate out a few other tools at the same time. I mean, that sounds like an example of a customer relationship that's going very well. Yeah. From a CFO standpoint, like, is there anything we should keep in mind, like, as you move up market for contracts like that? Like, you know, from a billings or seasonality standpoint or, like, just timing, like, how you can see fluctuations in your business in a good way in the long term, but just in the near term? You know, there isn't a significant kind of nuance around that. It does improve total RPO. If you look at our total bookings growth in Q3, it was, you know, significantly high, higher year- over- year. We had our largest TCV deal in history at the beginning of Q3, so that helped influence it. You might see our total RPO grow faster than current RPO as we shift more and more of our customer base onto these multi-year contracts. I think Q3 we talked about the we crossed the 50% threshold there where 50% of our ACV is now on a contract greater than one year. And, like, there's also a capacity unlock that comes with that. If I'm an enterprise account manager and I have a book of 10 logos, if I take one of my largest logos and get them on an ELA for three or four years, like, I still have to support and kind of, you know, manage that account. I get a lot of time unlocked over the next few years to go and grow other accounts. Absolutely. Just on kind of, like, the shifts in how customers are consuming, you know, sales enablement tools, and ZoomInfo more broadly, it sounds like there's more of a usage component that could be possible going forward. I guess, I mean, I have a couple other questions here, but, like, just initially, like, on its face, how do customers think about, like, we want to pay a per seat or, you know, like, a set per month basis versus, like, an individual, like, usage portion? Yeah. I think there is a consumption or usage component that's going to become increasingly more common in the market. We've been, so with GTM Workspace, with GTM Studio, for the first time, we'll be essentially pre-packaging these, what we call AI Action Credits, where we're performing AI actions for these customers. We're passing the cost through to those customers. We've been kind of testing this internally with our own teams to be like, one, what is the cost of these actual actions? Two, what does the usage look like? As we design this for the earliest customers that are moving on to these products, we really wanted, kind of, we had kind of two guiding principles. One was simplicity and what's best for the customer to get them on the product. Two, don't artificially constrain customer usage. We want to go learn over the next three or four months what this usage curve could look like. You know, with that comes some AI costs. Potentially we get some growth margin suppression. I think we feel pretty confident that we can offset that with efficiency across G&A and R&D and sales and marketing. We are really excited about kind of this curve potential for the consumption side of our products that we have not really had before. Under that dynamic, like, customers feel more comfortable, like, starting with, like, a set plan amount, and then, you know, you go over that, you could start paying more. Yeah. It's actually really fascinating. Like, some of them want you to set them a hard limit. Some of them want to set their own hard limit. Some of them want a limit that is, you know, pooled or rep by rep. I think we've done a lot of research on this and tried to figure out what is the best thing to get customers on it without them having to fear that they're going to go over the limit and get, you know, post-billed or that they're going to go one rep is going to run through all the credits in a given month. I do think that we found kind of an optimal place to start, but we're going to learn a lot over the next couple quarters. I'm really excited to, you know, come back in Q1 and Q2 next year and have an update on what these AI Action Credit trends look like. This is so early, so it's almost like an unfair question, but you talked about higher early renewal rates on Copilot, right? Like, as your customers start using more consumption, like, do you feel like this changes the renewal conversation of, like, we can see how much activity you had and, like, you know, you would have went over this on this month and, you know, you have more bursting around, you know, Christmas or whatever. So, you know, why don't we just—it's more negotiated with more metrics behind the renewal process. Does that make sense? Yeah. Like, it starts, like, two or three years ago when we built these, you know, when we started thinking about Copilot or we, you know, we were investing behind Operations. We wanted to build products that were aimed at delighting the customer and optimizing for retention, not just that initial sale, but we want them to be, you know, we want to optimize for that first and second-year experience when they're showing up for renewal. Part of that was to actually see if we can show them what we think the ROI would be ahead of the transaction. Yeah, exactly to your point, if we walk into a renewal conversation, you know, hopefully three or six months ahead of a renewal and we have, you know, high utilization across Copilot seats or Workspace seats, we've got incredibly high consumption in Go-to-Market Studio, like, then basically our biggest champions are already in the company, you know, advocating for that renewal and advocating for expansion. I think to the extent that we see, like, really promising trends here, it makes the renewal conversations, you know, much more fruitful. Absolutely. And just because I have the CFO here, like, that's, like, kind of, like, the icing and the good part of the AI story. You know, you definitely want to see that utilization and to have the customer uptake on those products. You did mention, like, you know, gross margins do have some impact as a result of, like, AI token usage. I guess, like, how do you think about, like, you know, more revenue and more consumption on the top line side and then the gross margin side from those new use cases? Yeah. I rank the revenue higher. Yeah. Sure. I really, you know, I really am excited to see what those trends look like. Like, we'll have, you know, guardrails, but I'm not going to approach this from a, this is a little bit more dilutive maybe to a gross margin perspective than other products and we should be cautious. Like, this is a, let's get this in front of our customers. We're really excited about it. You know, the gross profits, it's all upside. Gross margin, you know, we feel really good about the efficiency we have across the business. And we already have, you know, really high overall margins. If we've got a great product, we should get it out there. Yeah. Absolutely. That makes sense. Just on, like, what you've done internally with AI, like, we're asking everybody today, like, is there anything that, you know, you have one of the best sales forces I've ever seen. I always talk about, like, I sign up for free trials for all these companies. When I first started covering ZoomInfo, they called me on a Saturday as soon as I signed up for a product. We'll have to start there. Just maybe on your own sales side, any AI efficiencies that you've seen and then maybe for the broader business as well. Yeah. Look, I think we are our first and best customer of Copilot, of GTM Workspace, Go-to-Market Studio. You know, I think we've been able to kind of right-size our down-market investment while reallocating some of that up-market. And a lot of that has come by leveraging our own products. And then even outside of sales and marketing, you know, whether it's what you would expect kind of in R&D world, in finance, there's been a lot of specific kind of AI use cases that we've built from a revenue accounting risk perspective. We use Copilot to do collections and accounts receivable. It's like a really valuable use case. So, you know, we've been leveraging our own products across our teams at ZoomInfo. They're utilizing, like, agentic coding tools. Yes. Okay. So, like, do you think, like, across the industry you could just see, like, you know, a pickup in product development velocity as a result? Yeah. I mean, we're seeing it internally. Like, I think we've gone, you know, I think our team, our R&D team is probably smaller than it was a few years ago and just more talent. And a lot of that is just informed by moving faster. You're able to, you know, leverage AI for a lot of kind of the non-critical work that used to go into a product roadmap. And our velocity has to be faster than it's been in probably ever. Excellent. As we kind of close out the end here, if anyone does have any questions, please email me at ryan.mcwilliams@wellsfargo.com and get those in. We have to ask CFO on capital allocation and free cash flow share growth. Let me just kind of hear, like, any updated thoughts on either of those two. Yeah. Like, we generate a lot of free cash flow. We've been very aggressive buying back our own share, which we, you know, view as a really attractive price for buybacks right now. We've retired 80 million shares of ZoomInfo since we initiated the program a few years ago. In 2026, we're really excited about accelerating our free cash flow per share growth. You know, when I think about the levers to free cash flow per share, I've got top-line growth, I've got expanded margins, and I've got buybacks. You know, I think we're going to be aggressive across all of those, and we're going to, you know, hopefully get to a spot where we're kind of, you know, doing all three and compounding that effect. Remain confident that we can grow, accelerate the top line, expand margins, continue to be really aggressive buying back shares at these prices, and you get kind of that outsized impact on free cash flow per share. Excellent. Just to kind of wrap things up here on my side, your conversations post the quarter with investors, what of those, like, are they touching on anything that was interesting or you had not thought of before, or is there an area of focus that it seems like a pain point or just, like, investors are, you are getting more questions than not on? Yeah. I think conversations, you know, after we released earnings and had the call were really positive. I think folks were pleasantly surprised by the up-market acceleration. I think that was, you know, generally above and beyond expectations. It was good to see some improvement in down-market. A lot of what our, you know, investors are kind of digging in on is, like, GTM Workspace, what that next evolution of Copilot looks like, the excitement around Operations. Like, that's still growing 20%, and it's accelerating, and it's 15% of the business. What could the future of that business look like in two to five years? It is generally, you know, positive, exciting conversations. I mean, you have to think that, like, the role of a salesperson changes so much over the next two years, right? Like, the amount that you would, like, have to pre-build and pre-research before you had a prospect meeting, right? Or what you can even do within the prospect meeting itself has changed a lot. Like, for me, like, I always say, like, we've seen in coding where people utilize something like, you know, Claude Code, like, 50-60 times a day to build something for them or create something for them. It would make sense that, like, the salesperson, like, given the interface that they're used to, right, will have that, like, a level of creation as well where they guys do things on their behalf in tandem. At least, like, for my life, I would love to just have, like, the emails that come in for me pre-written or, like, an attack plan each day. It makes sense that, like, you know, kind of, like, the day-to-day will be shifting going forward. Every AI action in GTM, we should be in the loop on and delivering value. Yeah. I think that's, like, the distinction. Like, if you view AI as, like, you know, a replacement, then I think you'll be disappointed with where the features are today. But if you view it as an assistant or, like, you know, a great teammate to be a part of what you're doing in sales or whatever use case, then it's like, oh, this is amazing, right? Like, I didn't have to, you know, go through my notes for two hours and then build a plan. So guys, thanks so much for joining the ZoomInfo, you know, fireside here with me and Graham. If you have any questions, feel free to get them over and get them to Jerry and the team. Thanks so much.