Ladies and gentlemen, thank you for standing by and welcome to the ZoomInfo Second Quarter 2020 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, that there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference to your speaker today, Jerry Sisitsky, VP of Investor Relations. Please go ahead, sir.

Thanks, Joelle, and welcome everyone to the ZoomInfo’s first ever financial results conference call highlighting our results for the second quarter of 2020. We are excited to have so many new shareholders joining us today after our successful initial public offering. With me on the call today are Henry Schuck, CEO and Founder of ZoomInfo; and Cameron Hyzer, our Chief Financial Officer. After their remarks, we will open the call to a question-and-answer session. I'd like to remind all participants that during this conference call any forward-looking statements are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Expressions of future goals including business outlook, expectations for future financial performance and similar items, including without limitation expressions using the terminology may, will and believe and expressions, which reflect something other than historical facts are intended to identify forward-looking statements. Forward-looking statements involve a number of risks and uncertainties, including those discussed in the risk factor section of our filings with the SEC. Actual results may differ materially from any forward-looking statements. The company undertakes no obligation to revise or update any forward-looking statements in order to reflect events that may arise after this conference call except as required by law. For more information, please refer to the cautionary statement included in the slides that we have posted to our Investor Relations website at ir.zoominfo.com. All metrics discussed on this call are non-GAAP unless otherwise noted. A reconciliation can be found in the financial results press release or in the slides that we have posted to our Investor Relations website. With that, I'll turn the call over to our CEO, Henry Schuck.

Great. Thank you, Jerry, and welcome everyone to ZoomInfo’s second quarter financial results conference call, our first as a publicly-traded company. First, let me acknowledge all of our employees on delivering a great quarter. I'm incredibly proud of our team and it's thanks to their hard work that ZoomInfo – that ZoomInfo’s leading go-to-market intelligence platform helps more than 16,000 companies worldwide sell in market more effectively and efficiently. In the middle of a pandemic, our team rallied to launch the first virtual software IPO in history and we capitalized on that excitement and momentum while delivering a great quarter for our shareholders. The outside validation provided by the IPO has increased morale across our team, and it's helped to validate what we've always believed that going to market digitally is more efficient and more effective than the analog motions most companies are still using to find their next customer. While every company during this pandemic grappled with how to prioritize investments, efficiently finding their next customer is at or near the top of the list forever executives. In the quarter, our team delivered 40% organic growth with 49% adjusted operating margins and $111 million of revenue. Year-to-date, we have delivered more than $100 million in unlevered free cash flow. That growth is driven on top of our customers leveraging our actionable insights and intelligence to drive account-based marketing initiatives, sales development plays, territory mapping, lead and demand generation campaigns, sales pipeline reviews, anonymous visitor tracking, ad retargeting campaigns, audience segmentation, and much, much more. ZoomInfo truly sits at the heart of all go-to-market motions. In June, our conviction that the ZoomInfo platform is truly best-in-class across a wide spectrum of go-to-market strategies was validated by G2 crowd, a well known reviewer of enterprise software solutions. And G2’s Summer 2020…

Thanks, Henry. I'm going to start with an overview of our business and financial model. Then review our financial results for the quarter and wrap up with guidance for Q3 and full year 2020. We are driving a high growth subscription business at scale, and we operate profitably, which allows us to reinvest operating leverage to drive durable long-term growth. In Q2, our organic growth plus adjusted operating margin was 89%. Moreover, as many of our software company peers aim to achieve profitability or some target margin in the future for operating leverage, we plan to harvest our operating leverage and reinvest it back into the business, continuing to build out new products, such as recruiting or expand upon our differentiation in AI and machine learning. We will also invest in adding sales capacity to fuel continued growth. We are able to achieve strong, sustainable growth at scale because our platform provides tangible and identifiable value and is significantly differentiated versus the competition based on the quality of our data and insights we are able to provide. We also operate in a very large and under penetrated addressable market, helping companies of all shapes and sizes achieve top line success. To take advantage of this significant opportunity in front of us, we have built a best-in-class, go-to-market engine driven by consistent internal use of our own platform. Our go-to-market motion drives sub 30-day sales cycles, which we combined with an almost immediate implementation to provide quick time to value for our customers. This has become even more important during times of economic uncertainty. To round out why we are excited about our business and financial model, our revenue comes almost entirely from subscriptions, typically one to three years in length, and generally billed annually in advance. Subscription prices are based…

Thank you. [Operator Instructions] Our first question comes from Siti Panigrahi with Mizuho. Your line is now open.

Thanks for taking my question. Congratulations of a public company. Just wanted to dig a little bit into your different segment, you talked about enterprise also. Could you talk about mid market and small business as well? What sort of trends do you see in Q2?

We continue to see strength really across all of the segments. From a small business perspective, I do think that in industries that are more impacted by COVID, we are seeing some headwinds related to that. I think, as we mentioned before, for some of our bigger ticket deals, no matter which segment that's in, we have seen an elongation of sales cycles from time to time. Although, as we wrapped up the second quarter, we didn't see many of those finally close.

Thank you.

Thank you. Our next question comes from Brad Zelnick with Credit Suisse. Your line is now open.

Cameron and [ph] Henry, you talk about the validation and excitement of becoming a public company. Can you maybe just share with us as we think about the impact in driving additional demand? Is there anything that you might be able to put numbers to in terms of the sales funnel, sales cycle times or any other observations that are impacting the business?

Yes. Hi Brad. Thanks for the question. I think that what we see most, or I think first is there was an uptick in leads that corresponded with the time of the IPO. But the trick there is, it's hard to disaggregate that between the COVID related tailwinds we were seeing, and also just the enhancements that we were already making in our go-to-market engine. The real impact we're seeing is that the validation that we got from the IPO has really opened the doors for us to have more strategic conversations with our customers. And we've put our go-to-market engine on display as part of the IPO. And that's really opened the door for our – how management teams and our customer success teams to be invited in to share best practices with key executives that are customers, in a way that we hadn't otherwise been provided the opportunity to do. And so we think that really over time, we'll be able to continue to leverage that – those open doors and that'll continue to drive our growth.

Thanks very much. It's helpful. And maybe just for you, Cameron, I appreciate your comments in the prepared remarks on COVID. Can you maybe just put a finer point to, how we should think about the headwinds and tailwinds, any sense if these new logos will stick around for a while or turn off when social distancing eases?

First, all of our contracts are one to three year contracts. So, I think that they'll certainly stick around for at least the contract period. And then, most of our customers do renew. I think that from a social distancing perspective, really COVID just emphasize many of the trends that we saw pre the pandemic and that businesses of all shapes and sizes were looking for ways to improve and digitize their go-to-market motions. So I think in any kind of transformation that you see, you always get an acceleration at this time, but then most of that continues kind of as the world returns to normal.

And one thing I would add there, Cameron too, is like, we believe this is a multi-year tailwind. That's just accelerating a trend towards digitizing sales and marketing motions that like Cameron mentioned were already happening. And we're sitting in the middle of a larger than $25 billion total addressable market where we're less than 2% penetrated. And what you really see is companies today are taking trade show and events and travel budgets and reallocating them to content syndication or online events and to ZoomInfo. And over time, as they see the tremendous ROI our platform provides, they're going to shift more and more dollars behind ZoomInfo. And as they – and when they shift those dollars, they'll be expanding from marketing use cases to sales use cases, to data cleansing, to intent data, to lead capture, and more and more.

Awesome. Thanks so much guys and congrats on strong first quarter out of the gate.

Thank you, Brad.

Thanks Brad.

Thank you. Our next question comes from Mark Murphy with JPMorgan. Your line is now open.

Yes, thank you. And I will add my congrats on the healthy results. Henry, when you project forward several years in the future, how aggressive are your ambition in the recruiting market? And I think we're wondering if there's a bit less urgency today, then there was pre-COVID just given the employment climate, or would you still be planning to move full steam ahead just as rapidly as you already have been?

Yes, we believe we're in the midst of building our platform to be – to build a recruiting focused product. And so we continue to believe that's going to be a large growth area for us. Obviously, the pandemic has slowed hiring in some places, but there are also many companies that continue to hire in the midst of the pandemic. And our platform gives recruiters and talent acquisition professionals a very robust database of professionals with the contact information and experience information and education experience information that they need to be able to recruit effectively. What we really believe is that recruiting and talent acquisition is going to become much more like a go-to-market motion that it is today where you build a pipeline and you nurture and you close. And we're going to be able to deliver the data and insights that allow that motion to happen in a more sophisticated way than it's happening today.

Okay, great. As a followup Cameron, you had previously filed the monthly net new ARR numbers, and we know that was a onetime disclosure and we learned that April was your best first month of a quarter ever on the new business side. And I think you mentioned in the script that for Q2, it's the most new customer, ACV in your history. So I guess I'm curious, did that trend continue? Did it continue such that June was the best third month of a quarter ever, or if you can't answer that way, could you maybe just help us understand the shape of linearity at a high level for Q2?

I think the trends that we saw in Q2 continued throughout the quarter. And I'd say that June was a inline or maybe even a modest acceleration relative to what we saw in April compared to other quarters. Realistically, I think we saw solid demand from our customers throughout.

Very good. Thank you.

Thank you. Our next question comes from Alex Zukin with RBC Capital Markets. Your line is now open.

Hey guys. Thanks for taking my questions and congrats on both the quarter and the IPO. I guess, Henry first for you, if you think about what you've learned so far kind of selling through the pandemic, you mentioned earlier about having more time to make the case that the enterprise customers being invited into to make that strategic value proposition. Walk us through kind of how that's both trended even into the month of July and where you see that kind of peeking, does that set up for a different kind of linearity or trajectory in Q4? And then any puts and takes that you've seen or changes that you've made as a result of COVID on your go-to-market motions? I have a quick follow-up.

Yes. I mean, if you look back, I think, first we were surprised that the downward activity that we saw in March rebounded in the quarter, we felt really good about that. And in March our customers, we felt like a lot of our customers were deer in headlights. They didn't know how the pandemic was going to affect them. So they paused in spending. And in the quarter we saw much more of that rebound. We saw slow-to-evolve companies that were coming to us with a new imperative to change. We've got companies that used to have a hundreds of salespeople out in the field saying that they needed to find a way to make them productive and find ways to make their field sales teams able to continue to grow pipeline and closed business while they're working from home. And what that really to us indicates is a real shift from analog to digital sales motion and an acceleration of that shift. And the speed at which those organizations pivoted during the early days of COVID changing their business models, going to market in new ways. It never ceases to amaze me the fortitude and the resilience of small businesses. And it was great to see dozens of businesses and affected industries also sign on in the quarter. And I think what we'll continue to see is customers and companies who were slow to evolve, raise their hands and look for opportunities to make their sales and go-to-market motions more effective and more efficient. And I think what we're excited about is that today we are much more the organization to call to help with that transformation than we've ever been.

Got it. That makes sense. And then Cameron, maybe just one or two metrics questions for you. You mentioned in the script, seeing an improvement in the retention both sequentially and year-over-year, I guess I was wondering if there's any way to quantify on a dollar based net expansion metric, kind of how Q2 compared to Q1 or last year? And then on billings, you mentioned a duration headwind from more customers signing up for quarterly billings terms rather than annual, is there any way to quantify than the size of that headwind on billings in the quarter?

Yes. So to start with on the annual net retention, we do view that as an annual metric and obviously calculated on an annual basis. In the quarter, the activity around retention, certainly saw an improvement. So, we had more customers increasing their spend with us. In fact, we had close to 2,000 customers increased spend with us during the course of the quarter. So, overall we expect that we'll continue to see kind of solid net retention through the year. In terms of the billing shift, when I look at unearned revenue as an example. The shift into quarterly payments, how it’s impact of more than $10 million if we were at a similar mix to what we saw at the end of Q1.

Got it. That's super helpful. Thank you guys. And congratulations again.

Thanks.

Thank you. Our next question comes from Stan Zlotsky with Morgan Stanley. Your line is now open.

Perfect. Thank you so much gentlemen for taking my question. A couple from my end. First one, on the international selling motion with the success that you're having in the U.S., and at the same time considering the COVID situation globally how are you thinking about expanding your selling presence outside of the U.S., and then I have a quick followup for Cameron.

So in the – one of the things that we did in the quarter, also hi Stan, sorry.

Hi.

One of the things we did in the quarter was we just focused some go-to-market efforts on international. So if a lead came into our funnel, there were set from an international country, there were a set group of sales development reps and account executives who owned those leads. And what we saw was that we can absolutely affect our conversion and win rates in the international market by focusing on that. And so we we've embarked on an initiative to rescan and reorganize the platform to be focused on the international market. And you'll see us in that market much more heavily in the back half of this year. And so in short, our plans around the international market haven't changed and we're excited to enter them.

Okay, perfect. And then a quick followup for Cameron, just expanding on Alex's question right before, if we make the adjustment that $10 million impact of billings from payment shifting to more quarterlies, you get to about 15% “billings growth” in the quarter. Help us to kind of close the gap between the 15% billings growth and the 40% revenue growth that we're seeing on your top line. That's it for me? Thank you.

So the – if you make that adjustment relative to Q2, I think your 15% number is probably a little light, realistically in Q2 on a calculated billing spaces last year, it was [indiscernible] million, but I think one of the things that you just need to kind of be careful of is there's always going to be shifts and some noise around the calculated billings number which is why, given our kind of completely subscription business, you end up, getting a better sense of the real growth and kind of forward-looking capabilities of the business based on what's actually being recognized as revenue. I'd have to say go and kind of do a pro forma view of what the full billings growth would look like, but I can get back to you. But I do think it's much closer to the organic growth that we stated than 15%.

Okay, perfect. Thank you.

Thank you. Our next question comes from Michael Turrin with Wells Fargo Securities. Your line is open.

Hey there. Thanks. Good afternoon. And I'll go my congrats on the big milestones as you continue to tick them off. Maybe to start off with just, is there any update or added commentary you can provide around how usage is trending both on the platform overall and with those fanatic users, are you seeing more traction here with those power type users that you've called out in the past just within the current environment?

Yes. Hey Michael, this is Henry. I think first across our customers, we saw low to mid 20% increases in our DAU/MAU metric since the start of the pandemic, which is the number of monthly active users who engage with our product in a single day window. And we continue to see growth in our fanatic users, across the platforms as well.

Okay, great. And maybe given this is your first earnings call. Cameron, can you walk us through just the overall approach to guidance here? What kind of assumptions go into the second half forecast and maybe how much visibility do you have into the rest of the year at this point in time. Thank you.

Yes. So given the fact that we're a completely subscription business, we do feel very comfortable with the visibility that we have into the coming quarters. Obviously with the pandemic, we believe that there's a broader range of potential outcomes. And obviously, we've contemplated that in the guidance that we've provided.

Thanks guys.

Thank you.

Thank you. Our next question comes from Jennifer Lowe with UBS. Your line is now open.

Great, thank you. I wanted to double back on the 2,000 customers that expanded in the quarter. And I'm curious if there is any notable trend there on how that expansion looked relative to prior periods in terms of the drivers of expansion, whether it's more seats or more customers upgrading to higher tiers of usage or buying additional products. Did it look any different in terms of what does driving that expansion? And how people are using the product?

And I do think that, historically, the additions in terms of customers have been more seats driven as we've rolled out more and more functionality I think that that's becoming a bigger portion of the revenue that we're able to generate.

Okay, great. And just one more for me in a quick one, and going back to some of the questions around guidance and for free cash flow. So you talked about the impact from customers moving from quarterly to annual or annual to quarterly in period. But if we look at the free cash flow guidance for the year, what sort of assume they're in terms of payment frequency?

So, obviously, the assumptions do contemplate payment frequency going forward. We do expect that we're going to – and we are seeing a shift back towards the annual payments now that we've gotten out of the shock of the immediate COVID crisis.

Okay, great. Thank you.

Yes.

Thank you. Our next question comes from David Hynes with Canaccord. Your line is now open.

Hi, thanks guys. I’ll echo everyone else's congrats. Henry, I want to ask about intent data. You called out some nice growth in terms of adoption in the quarter and I think as part of the secret sauce of the platform. Can you just remind investors a) how you get that data, b) where you are in terms of adoption, and then c) what happens to customers spend when they take on that intent data?

Hi, DJ. Thank you for the questions. So our intent data is available in our elite package, or it could be bought ad hoc until one of our lower packages. So one we're driving emotion to the highest end packaging that we provide through the intent offering that data comes from unique proprietary sources that we own and integrate in. And then we also licensed data from multiple different vendors that comes into a data science team – a data science and innovation team here at ZoomInfo, who take all that data, normalize it, using our IP to company dataset to be able to associate traffic to specific websites back to a company's IP address. And we're able to take that and then create a baseline for consumption of certain topics or actually thousands of different topics. And then the data science team has built algorithms that look for spikes in consumption of specific topics.

Got it. Okay, that's super helpful. Thanks guys.

Thank you. Our next question comes from Terry Tillman with Truist Securities. Your line is now open.

Yes. Thanks for taking my question and I'll echo the congrats on the IPO and the results. Henry, maybe just a question about non-traditional industries. I think you mentioned a farmer earlier that signed up. What I'm curious about is as you all have looked through the data in 2Q, for these nontraditional customers or industries, what is their buying patterns like in terms of the sales cycle as well as the deal size? And just do you see longevity in these nontraditional industries going forward? Thank you.

Yes. Thanks, Terry. I think first we're –our business is growing across all different – all of our different industry segments. And so, we're seeing growth in these sort of nontraditional segments. One of the other types of companies that we've seen is financial services companies, who have traditionally been a much more face to face, or even in some situations door to door go-to-market motion. And so, we've seen them come to us and say look this face to face door to door motion doesn't really work for us anymore. And then we often see if it's just our overall growth motion is to sign companies up with a modest ASP and then the enterprise really grow them through our land and expand strategy. And so, we're – the motion that you'll see is we'll sign an enterprise company at a relatively lower ASP that might be our product that gets rolled out to 20 or 50 or 100 out of 1,000 different sales and go-to-market professionals. We prove ROI in that segment and then we grow beyond that. And that motion is consistent in both our traditional and nontraditional industries. And yes, we do see real success happening within those accounts. I gave an example during our IPO of a company called TentCraft that sells event tents. That's a manufacturing business, who has completely changed their go-to-market motions using ZoomInfo. I gave the example of Kaeser Compressors, which is an air products and services company. That's based in Germany. That's come onto us for our digital platform to drive their go-to-market efforts. And so – and we're already seeing early success from those companies in those nontraditional industries. The last example was I mentioned a large hotel chain that came on. And that example is really interesting because before they signed up for ZoomInfo, they did a small pilot. They booked $80,000 of revenue in the short pilot or $80,000 of bookings in the short pilot. And then – and with hundreds of thousands of dollars of pipeline built as well and so then they expanded and came on with us. And so we're seeing real ROI across both traditional and nontraditional industry then we think that's going to drive the retention rate in the future.

Great. Operator, Joelle, maybe we can take the next question, please.

Thank you. And our next question comes from Brent Bracelin with Piper Sandler. Your line is now open.

Thank you and good afternoon. I guess one for Henry and a follow-up for Cameron. Henry, I wanted to talk a little bit about the broader ambitions relative to this digital go-to-market motion shift in the industry. The reason I ask is the intent solutions, I think, you didn't talk about that being over 60% growth in InboxAI, that was through their Komiko acquisition, not so long ago, but that sounds like that doubled year-over-year as well. So walk us through, has your ambitions or appetite changed post-COVID relative to the scope of opportunity you're going after? And again, one quick follow-up for Cameron.

No, I don't think our ambition has changed. I think, ultimately, what we believe is that today sellers and marketers are trapped inside of legacy CRM and marketing automation systems that provide them no insight outside of the four corners of their website or what a sales rep put into their CRM system. And that – and the whole world outside of the four corners of your website is what's driving significant amounts of insights, whether that's intent data or a company's growing or shrinking or making acquisitions or moving locations or hiring new executives, the world of insights that happen – that happens outside of your CRM and marketing automation system is much more robust than what's inside. And we think sellers and marketers need to be able to grasp it those insights that happened outside of the four corners of their websites, and then drive go-to-market motions based on those. And so, what we're building is the ability to automate the go-to-market motions and orchestrate the go-to-market motions of every company by leveraging both their first party insights that exist in their CRM and marketing automation systems, but coupling that with a broad world of insights that happened outside of those four corners and outside of those legacy systems and combining those to build the most efficient and effective automated go-to-market motion, and that continues to be our vision.

Got it, helpful color there. And then I guess, Cameron, you talked about the new platform 10 accounting for, I think, over 50% of ARR. Do you have any kind of comparable stat with your last quarter? What the platform 10 mix was of ARR or perhaps last year?

And certainly the new platform rolled out in October of last year, so it's gone from 0% to 50% in the last eight months. If we look at the end of Q1 – and if we look at the end of the Q1, it was less than a third of the revenue.

Got it. So, a strong uptake there. Great. That's all I had. Thank you guys.

Thank you.

Thanks.

Thank you. Our next question comes from Brian Peterson with Raymond James. Your line is now open.

Hi, gentlemen. Thanks for taking the question and congrats on the strong results. So, maybe a follow up to Terry's question, but I know you guys had a lot of exposure to software and business services. I'm curious of the ACV added this quarter, what did that mix look like versus your existing business? And anything in the pipeline that suggests that there are certain end markets that are really ramping up? I'm just curious on that. Thank you.

And as has been the case, historically, the markets that we're less penetrated in continue to see higher growth rates. So while we continue to grow very well within the software and business services world, other of the industries like professional services and manufacturing and so forth continue to grow faster. That's a continuation of a trend that we saw pre-COVID, but saw it through this quarter. I'd say that the one big change is that certainly industries that were more heavily impacted by COVID, whether that's hospitality or retail or travel, those did not grow as quickly within the quarter.

Great, thank you.

Thank you. Our next question comes from Raimo Lenschow with Barclays. Your line is now open.

Hi, thank you. Thanks for squeezing me and then congrats from me as well. A quick question on competition like what are you seeing in terms of customers understanding like your broader value proposition against something like LinkedIn? And anything out of the legacy guys like Dun & Bradstreet since the public, now again that kind of changes anything? Thank you.

Hi, Raimo. Thank you for the question. One of the things that we do is we use a call recording software internally, and we flag competitor mentions across all new sales and customer calls. And most competitors are mentioned less than 1% of the time. And the most referenced competitors mentioned in the single digits. And I, actually, this morning took a look at the most recent report since you asked about D&B, the most recent report, which covered July on the mentions of D&B have actually declined since February, so ultimately no changes in the competitive landscape.

Okay, perfect. Thank you. Okay, that’s it.

Thanks, Raimo.

Thank you. Our next question comes from Tom Roderick with Stifel. Your line is now open.

Hi gentlemen. Thanks for taking my question. So I wanted to just build on, I think, it was Brent's question, just asking about platform 10 and making great progress and getting customers converted there. Henry, do you sort of have any more anecdotal data as to what customer's feedback has been on the platform? It seems like you're combining breadth of data with intelligence and data across the Discover Oregon ZoomInfo platforms by putting them together. And then, Henry a side of – or Cameron a side of that question for you is what sort of tailwind are you seeing with respect to the ARR lift that you're seeing from customers that are converting, whether it's in pricing or additive data being purchased? Thanks.

Thanks for the question. I think what we see is it depends on which legacy platform our customers are migrating from. If they're migrating from the DiscoverOrg legacy platform to the new platform, what they're telling us is that the coverage is immensely – is much, much more than they had access to in the DiscoverOrg platform. And so, they're seeing 20x the coverage of companies and contacts in the new platform than what they had access to in DiscoverOrg. And we've already integrated the breadth of the DiscoverOrg solution inside of the new combined platform. So they have all of that at their fingertips as well. If they're migrating from the legacy ZoomInfo platform, then they comment about the organizational charts, the intent data, the scoops and initiatives, the funding data that we've made available, the workflow that we've built, the anonymous website tracking that we've built into the platform. And so, they're seeing the breadth and robustness of the solution while the DiscoverOrg migrations are seeing a much broader coverage than they've ever seen.

Yes, tremendous. That's really good. Go ahead, Cameron. Thank you.

Yes. In terms of the kind of pricing and uplift, the transition or migration to the new platform hasn't really been a significant driver of growth. And obviously that's evidenced by the fact that the most of our growth actually comes from new customers and not from existing customers, but in terms of pricing, if a customer is migrating for like for like functionality and seats that tends to be a kind of my – that tends to be like a renewal like prices change, so call it kind of mid to low single digits. Obviously, one of the things that the platform does do is it allows us to more easily provide increased functionality to folks. So, in those cases we do see kind of somewhat more substantial uplift, but again, it's not super material to our growth so far.

Wonderful, really good. A quick follow on, but just thinking about the bigger picture of your margin structure, it's tremendous, it'd be hard to imagine a software company being much higher than where you're at. When you look at the 25%, 26% of [indiscernible] being spent on sales and marketing, and also evaluate other markets you want to go into the opportunity to move upstream, to do more enterprise deals, move international. What happens with that line sales and marketing as a percentage of revenue over the next coming years? Can you maintain the leverage in it and hold it kind of flattish? Or does that sort of naturally go higher as you embrace bigger deal opportunities and international properties?

And I think that we can maintain the leverage in that. And part of what we focus on is really finally tuning and leveraging our own system to drive an efficient go-to-market motion. As we continue to grow – and I think based on guidance and so forth, it would imply that we're going to need to grow our sales and marketing capacity as well as other parts of the organization north of 30%. So we think that that level of continuing to grow the sales and marketing capacity is a good level where we can continue to take advantage of the opportunity in front of us and drive efficiency going forward.

That's great. Thank you guys. Nice job. I appreciate it.

Thank you.

Thanks Tom.

And Joelle, maybe we'll take one last question. We'll do time for just one more, please.

Thank you. And that question comes from Taylor McGinnis with Deutsche Bank. Your line is now open.

Hi. Thanks for squeezing me in and congrats on the first quarter as a public company. So I know that you talked about retention rates having improved in 2Q relative to past quarters, but I'm curious that churn in particular trended relative to historic rates. And if there's anything you can provide on the kinds of levels of churn or retention that you're embedding in your guide as we look forward.

Yes, so churn was pretty consistent relative to where it was historically. Obviously, I think, the mix is shifting a little where we are seeing companies and more heavily impacted industries kind of more likely to churn. But, overall, I think there is a broad recognition for the value that we're providing among our customers. And, it continues to be at very nice level. Absolute churn numbers aren't something that we're overall providing, but certainly the levels that we're seeing and continued headwinds from COVID or things that we have considered in our guidance.

Great. Thank you.

Thanks again, everybody. In closing, I would just like to reinforce how excited we are. We have a massive opportunity ahead of us, a track record of driving growth and profitability, a team of employee owners who are fired up and driven to execute. This is the starting line for us. I appreciate you all joining us today. Thank you and good night.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect. Goodbye.