ZoomInfo Becoming An Essential Tool For Sales & Marketing Teams

ZoomInfo reported Q3 revenue growth of 60%, an acceleration from growth of 57% in the previous quarter and 50% in Q1.

ZoomInfo (ZI, $57.45), a provider of a cloud-based sales and marketing intelligence platform, is benefiting from the digitization of manual sales processes, a trend propelled by the remote selling environment. The company’s platform is increasingly seen as an essential tool for sales and marketing teams, offering insights that turn leads into successful deal closures.

Shares of ZoomInfo are down 16% since the company in early November reported Q3 revenue growth of 60%, an acceleration from growth of 57% in the previous quarter and 50% in Q1. The stock has retreated 27% from its record high of $79.17 reached in the middle of November. In 2021, the shares were up 33%.

In Q3, revenue of $197.6 million topped the high end of the guidance range of $182 million to $184 million and beat the consensus estimate by 7.5%, better than the 7.2% beat from Q2.

For 2021, the company now expects revenue of $731 million to $733 million (above the previous outlook of $703 million to $707 million), representing 50% organic growth at the midpoint. The 2022 consensus revenue estimate stands at $981.4 million (growth of 33.7%), while the Street-high estimate is $1.03 billion.

*ZoomInfo Q3 Highlights*

—EPS of 13 cents beat the consensus by 1 cent

—Free cash flow: $73.3 million (margin = 37%)

—RPO of $712.3 million rose 9.9% sequentially (cRPO: $552 million, +9.2% sequentially)

—Enterprise customers (ACV of $100k+) rose 74% to >1,250

—Enterprise represents >40% of total ACV (with cohort ACV +85%)

—Landing with larger deals and building a pipeline of larger deals

—International expansion continues—In Europe, contact data coverage up ~80% YTD

—Elite package includes real-time Streaming Intent (AI-powered buyer intent data)

—Engage product building momentum—added record ACV (now has >2,000 customers)

—ZI Recruiter added Recruiter Pipeline Management to track candidates through stages

ZoomInfo wants to transform customer relationship management (CRM) into a system of insights from a system of record. This involves automating tasks and using AI to process/refine billions of raw data events into unique and actionable insights. ZoomInfo provides a detailed view into 100 million+ companies and more than 150 million business professionals.

ZoomInfo argues that a system of insights is needed for smart selling. While CRM systems offer sales cycle visibility and pipeline management, they often contain inaccurate and incomplete customer data. The ZoomInfo platform gathers data from a variety of sources, including a contributory network that registers 100 million contact record events on a daily basis. There’s also unstructured public information from the monitoring of 50 million web domains.

The platform enables users to identify target customers, get direct (up-to-date) contact information, rank best targets, monitor key buying signals and track deal progress. There are software integrations with Salesforce, HubSpot, Oracle and Microsoft.

Customers like that they see a quick time to value with ZoomInfo. A key aspect of the platform is that it sifts through all of the data to identify signals (such as an executive change or funding round) that tell users that a potential customer might be in a position to purchase, which should trigger a go-to-market sales motion.

ZoomInfo’s solutions are sticky, as about 80% of enterprise customers that leave return within a year. Even as sales reps resume in-person meetings, they’re not going to back away from embracing digital solutions that boost productivity and give them a competitive advantage.

One promising component of the ZoomInfo platform is Engage, a sales automation engagement solution that helps B2B sales teams maximize productivity. Engage enables users to better manage sales workflows via an automated sales dialer and built-in email automation. Engage debuted in Q3 2020, so it’s still building momentum. There’s plenty of upside potential for the product, which boosted the company’s TAM by more than $5 billion.

The Engage solution is also driving up overall engagement levels on the ZoomInfo platform—the company has seen a 25% increase in user adoption of the core platform when customers combined usage with Engage. Plus, Engage users have materially higher retention and renewal rates than standard customers.

In July 2021, ZoomInfo completed its $575-million acquisition of Chorus.ai, a provider of conversation intelligence solutions. This is middle-of-the-funnel intelligence. Chorus uses AI to capture and analyze prospect/customer calls, meetings and emails, revealing insights that enable sales teams to win new business based on analysis of past interactions. Chorus simplifies the process of onboarding and training new sales reps. Full integration into the ZoomInfo platform is expected before the end of the first half of 2022.