Cameron Hyzer: So I think I’ll kick off there. And thanks for your question. Again, I think we’ve talked about with a number of people in the past that our view is that peak negativity, particularly with respect to layoffs and many other factors kind of occurred in the Q1 [2003] period. And therefore, we do think we need to get through the renewals with our customers. And as I mentioned before, between September 2022 and March 2024, we’ll have transacted with approximately 90% of our ACV. And I think we really need to get through that period of having renewed or sold ACV with those customers ahead of time. The assumptions really are very focused on renewals. New business continues to be relatively strong. Obviously, the environment impacts that as well.
But the sales efficiency of our new business team and the demand that we see continue to be good out there, and we continue to bring on new customers to support that. So, we’re really focused much more on mitigating and getting through this renewal cycle that we’re in right now.
Henry Schuck: I think, the big things we’re doing from a process perspective, Michael, on renewals is, number one, we’re getting at them sooner. And so, we’ve built a robust set of health scores for our customers that take into consideration product engagement, product usage, provisioning of user licenses, integrations and usage of specific products and functionality. And so, we have a much clearer view of the health of an account, and we’re engaging with them. Our account managers and our CSMs are engaging with them based on those health scores. And so, we’ve been proactively reaching out to those clients who come up for renewal in Q4 and Q1 throughout the back half of this year. And then, I talked about this a bit on the last call, but we have a really broad product portfolio.
And so, we have opportunities within the customer base if one product got down sold or a customer had a big layoff and so they have less licenses that they need for SalesOS, we’re able to bring them into Chorus or OperationsOS or other parts of the product portfolio. And so, we’ve been leveraging that in renewal conversations as well.
Operator: Our next question comes from Brent Bracelin with Piper Sandler.
Brent Bracelin: Maybe we’ll start with Cameron, one quick follow-up for Henry. Cameron, you’re obviously talking about challenges here in Q4, guiding to a sequential decline in Q4, talking about continuation of challenges into the first half. Should we also think about small sequential declines into Q1, Q2 before you see a reacceleration? And then, one quick follow-up for Henry.
Cameron Hyzer: Yes. So, we’re not guiding to 2024 at this time. And frankly, I think for all software companies, it’s probably less visibility further out than there has been historically. We do continue to expect that this more challenging renewal environment will persist through at least Q1 of 2022 (sic) [2024] and will impact sequential revenue growth through the first half. Once we’re through this cohort of renewals, there is the opportunity to drive higher growth rates, but it remains a challenging operating environment. We certainly don’t want to get ahead of ourselves as to when exactly that reacceleration might occur.
Brent Bracelin: And then, Henry, for you, obviously, clearly, a challenging environment, you’re still finding ways to close large deals. My question is on the boomerang deal. Surprised to hear a customer switched 10 months later, they’re coming back. Can you just give color around what drove kind of the boomerang deal back to ZoomInfo and how should we think about that going forward? Thanks.
Cameron Hyzer: Brent, really quickly, I just wanted to clarify, I meant Q1 of ‘24 there in that response. I think I misspoke.
Henry Schuck: Yes. Thanks, Cameron. Brent, I think — when I started this business 17 years ago, I started it with the premise that high-quality data made a major difference in the way companies go to market. And there have been cheap alternatives to what we offer for the last 17 years. And if you’re not doing your diligence and you’re not an incredibly sophisticated buyer, you can make a switch and then you realize almost instantly that high-quality data does, in fact, make a difference in your go-to-market motion. And that’s what we saw here. We saw a customer who switched to a low-priced offering and then immediately came back and meaningfully increased their spend with ZoomInfo and did it across the platforms. We’ve always competed in a way that said, when you have high-quality data, whether you’re an account executive, an account manager, a sales development rep, marketing operations professional, CMO or CRO, that information makes a meaningful difference in the way that you acquire, find and grow your customer.
And customers see that. And so, there are a lot of boomerang customers that we find who go try something new and then immediately come back. And in this case, not only did they come back, but they meaningfully increased their spend with us.
Operator: Our next question comes from Koji Ikeda with Bank of America.
Koji Ikeda: Maybe a question for Cameron here. You mentioned from September to March of 2024, you’d gone through about 90% of your ACV leaving 10% that still needs to be renewed. But the way I understand the comment was that of that 10%, some of them have already down sold in the second quarter of this year. So maybe could you help us describe the composition of that remaining 10% of ACV post March of next year.
Cameron Hyzer: Yes. So, to be super clear, those are — about 90% are customers that we’ve transacted with from September of ‘22, and we began to see real significant headwinds from the macroeconomic environment through March of 2024. So, those are longer-term contracts that transacted sometime before September ‘22, and therefore, we’re likely in a more constructive environment when they initially entered into that contract. So, that remaining 10%, those do tend to be larger customers, but there is some risk for those customers that they would perceive a worse environment than when they transacted either in 2021 or the beginning of 2022 as they come up for renewal later in ‘24 or potentially even later than that.
Koji Ikeda: I wanted to ask a question, a follow-up here on the $100,000-plus ACV customers. As we look at that metric, this is the third straight quarter of sequential decline here. And if we continue to kind of pull forward at similar pace, it would actually imply a year-over-year decline in the fourth quarter. So maybe you could help us decompose this metric a little bit? And ex technology, did this metric grow? I mean that would be super helpful to understand.
Cameron Hyzer: Yes. I think, in every quarter this year, ex technology, and honestly, if you just strip out mid-market software — so these are kind of largely venture-backed software companies. If you strip out that, this metric has grown every quarter this year quarter-on-quarter and obviously would continue to show growth as a result.
