ZoomInfo at Almost $1 BILLION in ARR!! How They Do It!

Hey, everybody wanted to take a few minutes to share five interesting learnings from ZoomInfo. And ZoomInfo is a product, a suite of products really, that you probably use at your startup. Your sales team, and maybe your marketing team uses it at least to enrich your database, to find out where your contacts are. And its original core product has become table stakes for at least for some of bigger companies. And we'll chat about that in a minute. How Zoom Info's gone up market, but you need to follow your context work. Where have they gone? I mean with Saster Annual, with our sponsors and the CMOs we talked to, half of them are gone each year by the next Saster Annual, so we gotta track them to their next gig. You need to do the same with your prospects and your customers or you'll lose track of them and your competitors will steal your prospects and steal your customers away from you if you don't even know who works where any longer. So that's part of the original core of Zoom Info, but it's radically expanded into a whole suite for sales professionals in particular that we'll talk about. But it's a product you probably have used or seen used at your company, but as a business, you probably didn't know how incredibly impressive it was unless you follow public SaaS and cloud stocks. But boy, this is a good one. ZoomInfo is coming up on a billion in air. A billion in error, folks, growing 60%. Whoa. And in fact, it is accelerating. You can only accelerate so much, but it is accelerating. It was growing 57% the quarter before at now 60% plus as it approaches a billion in AR. That's crazy. But it's even crazier. It is wildly profitable. It has 39% operating margins and 37% free cash flow. So of that billion in AR, we're coming up on 370 million of it turns into cash. So there are folks that say B2B and SaaS isn't profitable. Well, ZoomInfo says it is. Now it's lean and it is. It is a data company, which we'll talk more about. There are pros and cons of data. When it really works, it can scale like Zoom Info, but it also traditionally has churn rates if the data isn't good, if it doesn't work, marketers especially, but also sales leaders and sales ops leaders will just shoot it and buy another product if it doesn't work. But zoomingfo has made it all work at scale. And let's dig in and how they've Done it at a billion and ARR. So point number one is going up market. And on the five interesting learning series, we've looked at folks like Asana that have gone somewhat upmarket. We've looked at folks like Slack that have gone quite upmarket. Half their revenue as enterprise. And then there's folks like Shopify and Zoom that have not only they've gone up market a bit, they all have enterprise offerings. But the SMBs have been so strong that actually at Zoom and Shopify, their SMBs have grown even faster than their enterprises. But ZoomInfo now has gone more traditionally upmarket. Back in the day, actually, a different company that Henry was the CEO of bought ZoomInfo, their top competitor and renamed themselves after that. And they learned to go more up market and have more of a sales motion from this and fast forwards today, go to Zoom and the pricing's all Contact me. Okay, that's the classic sign of enterprise. We can talk about whether contact me works, but obviously Zoom has decided free trials and free versions don't work for them because they've got 25,000 customers. At a billionaire, it's not that many. And of that 1250 are 100k and up customers. And that's their sweet spot. That's what they want to be their engine of growth, 100k up customers. And the way they've done that in part is to build up their core core, which we'll talk about more and more products and more and more value for those customers and really focus on the mid market and up folks that have bigger teams where everyone needs data and tools for sales. So pretty crazy growth, pretty crazy profitability. I'm focused on these 100k and up deals. Now point two, which we already chatted about, which is, wow, this one is profitable. And not only is it profitable at 37% free cash flow on almost a billion AR, but it didn't get there overnight. It has been there for as long as there is data in there. Public finance disclosures for over four years. Zoominfos had these incredible margins and has been minting cash. And some of it is discipline, some of it is the fact that you can resell data many times if you do it right. But boy, it's a challenge to anyone that thinks you can't have a sales driven motion. And it's very sales driven and be wildly profitable and cash flow positive. Because Zoom info certainly is point 3 NRR of 108% and this is an important number to unpack here for 100k deals on its own 108% NRR is not impress 110, 120, 130 or more in the enterprise, sometimes higher. Big companies just buy more and more seats user products more and more big companies they just, they just proliferate across the company if you do it right. But for data it can be harder. Folks scrutinize the product more and you'll often see knox that data. Data focused products can grow very quickly. But the NRR is sometimes bad 70, 80%, 90% because folks will again shoot it if they don't see that super high ROI that maybe they're not expecting from from a salesforce or a project management platform. They're not always directly focused on ROI and the way they are from data they procure. But zooming for has done it right and it has worked up to there over the years. But by building a product portfolio which is point four we'll talk about, they've been able to get that NRR up to 108% which is pretty darn impressive for data and it shows it can be done. If you add again what we've seen across all of our five interesting learning series is the key to to especially with SMBs data and mid market to TE in the NRR up. Yes, it's customer success that's important but adding truly more value for the customers, making them stickier. And for build.com with the smallest SMBs as they added more and more finance and fintech and payments it became stickier. And Bill.com's NRR even for SMBs crossed 120% as they added that. We saw it with Shopify as they added merchant services. So you've got to add more value to your customers in many cases to drive that NRR up. If you're not hyper enterprise. Zoominfos done it as again we'll talk about next with its portfolio. Shopify and many others have done it and it's not easy. It's not easy in data or SMB to go above 100% but the best leaders in clouds and cloud have shown us we can. Okay, point four, they've aggressively expanded their product portfolio. If you may have noticed recently that that that ZoomInfo bought both Chorus and Ringlead but they've done a ton of acquisitions again. Even the original company ZoomInfo bought ZoomInfo. So it has been. It has combined organic and inorganic growth quite successfully. Quite successfully. And what is interesting is how rich a product portfolio it has now. Some of that is still in process. But you know, first when I saw ZoomInfo by chorus, I'm like, why did they buy the number two to Gong and probably the distant number two for I don't know what it was, $600 million. I didn't get it at first, but it's because I didn't really understand where the company was going. Tracking conversations, getting data from conversations between sales folks and their customers and reps is so powerful. That's why Gong has exploded to a $7 billion valuation. It's become, it's gone from a niche product to core part of every sales reps stack. And that's what Zoom wants to do. Zoom wants to become and be a core part of sales's stack, but just focus it from a data focus. And apps like Salesforce start from Workflow and many others and plug in, but Zoom Info starts from Data. But it's adding all those pieces. It's added chat, it's added voice analytics with Chorus, it's added ring lead, it's added more on intent and engagement and pieces of ABM and others. And we're going watch Zoom become a bigger and bigger suite and become more valuable for its customers, which lets it get up to these six figure deals and this higher nr. And importantly, you've got to do it. And what we've seen across the series is almost no one can cross 100 million in ARR unless you're very enterprise without a second product starting to kick in. And even in the enterprise we've seen folks like Viva and certainly with Salesforce develop multi product. Salesforce is six plus clouds now and its CRM product is the slowest growing one. So you've got to be multi product. And Zoom has done rather. ZoomInfo has done a very interesting way to do that with its platform, which is data first, but building the rest of the suite on top of it. Because if you're in sales, I mean your data is your life, right? The quality of your data being able to reach your potential customers is so critical. And so Zoom is building out its product suite from that factor and it's pretty interesting. Okay, last point. Point five, a smaller point, but still interesting. I think for all cloud founders it's international revenue and I track this because ultimately if you do it right, it can be such a growth engine for you. Because if you start in the US or maybe Europe or geographies and you stay too local, you're doing yourself a disservice. And especially if you have a B2B app that can be used anywhere and is localized because you're going to hit headwinds if you don't localize your app early. The earlier you do it, the easier it is to do. But if you do it right and you're a workflow app, you can be adopted everywhere. And so we look at apps like Asana that are well over 30% international. 30, 30 folks like Monday, that started there even higher. And you should aim for that. You should aim for a third of your revenue to be outside the US if you localize early. And your app can be used everywhere. But in fintech, in regulatory spaces and in data, it's harder because a lot of that is localized. So like on the finance side, build.com like ZooInfo waited till after its IPO to really start going international. We see that with others. And data is tough too, because data becomes localized. The rich body of data that you might have in the US or UK or France or Australia, it's not portable. And so ZoomInfo is late to going global, but now it's 11% of the revenue and it's going to keep growing and that will become a core part of their engine. So it's just interesting to track our public comps and see how international they go and when everyone gets there. The ones that have natural challenges to expand and beyond the us, the fintechs, the folks with the fintech esque element and the folks with data, they're often pretty low in terms of their penetration past 100 million ARR. But the folks that are B2B the folks can use everywhere, just translate your app, localize it and you may see as early as 10 million ARR, 20, 30% or more of your revenue coming from outside the US and you don't want to give that up. So wow, zoom info. Amazing, amazing story. Almost A billion growing 60% and just minting cash with 108% NRR. Even with the data play folks, it can be done and there's a pret impressive one.