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

Great. Thanks, Josh. I appreciate it. Welcome to ZoomInfo's financial results conference call, highlighting our results for the fourth quarter and the full year 2020. 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'll open the call to Q&A. During this 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 Factors 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 just 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 on the slides that we have posted to our IR website. With that, I'll turn the call over to our CEO, Henry Schuck.

Thank you, Jerry, and welcome, everyone. As a dip in many companies, 2020 presented a unique set of operating circumstances for ZoomInfo. Our team managed past headwinds and tailwinds, stay-at-home orders and virtual work mandates and through it all, we adapted, moved fast to find new possibles and stepped up to deliver the strongest fourth quarter and the strongest year in our company's history. During the quarter, we set company growth records for new sales, new customers added, customers over $100,000 in ACV, efficiency metrics such as LTV to CAC and we saw broad-based strength across all areas of the business, a truly impressive end to our first year in the public market. At ZoomInfo, we are building the modern go-to-market platform from the foundational level up, starting with the market leading, robust and accurate data layer that fuels a suite of next-generation workflow software. This is delivered across a purpose-built interface that powers go-to-market efforts for companies of all sizes in all industries all over the world. Our vision to fully digitize go-to-market is resonating more today than ever before and is reflected in the momentum we see in every aspect of our business from new customer acquisition to customer retention to end-user engagement and new product adoption. In Q4, we delivered GAAP revenue of $140 million, up 53% year-over-year and sequential quarter growth of 13%. Our Clickagy and EverString acquisitions contributed $2 million to revenue in the quarter, implying organic sequential quarter growth of 12%. We delivered that strong organic revenue growth with an adjusted operating income margin of 45%. For the full year, we achieved GAAP revenue of $476 million, up 62% and adjusted operating income of $226 million. Our financial performance reflects our goal to not only build the best suite of go-to-market tools imaginable, but…

Thanks, Henry. We are very pleased with our financial performance for both Q4 and the full year, which well exceeded our guidance for revenue, profits and cash flow. Based on market demand, our strong execution and our strategy of continuing to reinvest back in the business, we expect to continue delivering a strong combination of revenue growth and profitability in 2021. Our full year guidance calls for revenue growth of 37% and continued investment in sales and marketing capacity and innovation to drive sustained growth going forward. We expect this to yield operating margins of 43% with our long-term -- within our long-term target range of adjusted operating margins in the mid- to high 40s. With this performance, we expect to deliver $270 million to $280 million in unlevered free cash flow. In Q4, we delivered GAAP revenue of $140 million, up 53% year-over-year and up 13% compared to Q3 2020. The excluding the impact of the acquisitions completed in Q4, our organic sequential quarter growth was 12%. In the fourth quarter, adjusted operating income was $63 million, yielding a margin of 45%. Margins were modestly impacted by the acquisitions in the quarter and reflect a higher investment in R&D to take advantage of our leadership position in the market and drive longer-term growth and TAM expansion. For the full year, we delivered GAAP revenue of $476 million, up 62%, and adjusted operating income of $226 million, a 47% margin. As we move through 2020, economic uncertainty related to the global pandemic proved to be a headwind in the first half of the year, particularly impacting large upsell deals and seat expansion opportunities. In the second half of the year, we caught more of a tailwind as the new virtual environment for sellers accelerated the longer-term trend toward digitization and…

[Operator Instructions] Our first question comes from Raimo Lenschow. You may proceed with your question.

Congrats. That was a strong end to the year and a great outlook. Henry, I just wanted to talk about the HR or recruiting opportunity. That sounds very, very exciting. Like how do you think about framing this in terms of size? Like is that is that like a small fraction of what you see on the sales side? If I think about like LinkedIn, who is like obviously doing some of that already, like it seems like a very, very big opportunity. But I was just trying to see like how you would frame it. And then I have one follow-up.

Yes. I think, look, first, we do view the recruiting opportunity as a very big opportunity for us. We're obviously really early stages just coming out of a beta launch and into a soft product launch, but that launch has gone really well for us. I think what we're most excited about there is the opportunity to bring real software, technology and workflow tools to HR and talent acquisition professionals who have largely found candidates through an incredibly manual bespoke process. And so the recruiter product really ward this -- our robust company and contact data asset with workflow and technology tools that allow town acquisitions, professionals to identify their universe of candidates then build an automated set of e-mail and call communications to them and then integrate those activities back to their ATF system. And so in a lot of ways, we feel like we're bringing real enterprise scale technology to the HR and talent acquisition space. And so we view that as an incredibly large opportunity, especially as hiring ramps up as we come out of the pandemic.

Okay. Yes, makes sense. And then one for Cameron, like if I think about the international expansion, especially Europe sounds really interesting. Like how do you think about that investment cadence that you will have here? Is that kind of a lot of upfront investment this year that we need to see? Or like how do you kind of bridge that gap?

Sure. Thanks for the question. We don't see a ton of upfront investment. I think we look at our sales and marketing teams, in particular, but also our support teams as continuing to make short-term returns on the incremental investments that we're making. So in Europe, in particular, we've segmented out specific teams that due to travel restrictions and so forth, sit in our East Coast offices. And specifically, take inbound leaves or prospect on an outbound basis into Europe. And that's shown really strong momentum, and we'll continue to invest behind those. But that momentum tends to be generated within months and quarters. It's not a long-term payback.

Our next question comes from Stan Zlotsky with Morgan Stanley. You may proceed with your question.

Congratulations on a very strong quarter. A couple of questions from my end. First one, the international growth number that was actually very impressive. Where -- which geographies are you looking to really focus on in 2021? And then I have a quick follow-up.

Yes, great. Hey, Stan, I think, first, we saw our biggest strengths in Europe, particularly English-speaking Europe. We saw strong demand in U.K. and Germany, and we're seeing strong demand across Australia and New Zealand. We're going to continue to invest dedicated sales resources to go after this opportunity and capture that international opportunity, obviously, strong growth there. But we see an incredibly nascent market. There's a lack of good cohesive products to solve the same go-to-market problem that U.S. companies are struggling with. There's a confusing regulatory environment to navigate. And there's a lack of a vision for how to go-to-market digitally that's being presented there. So we bring this evangelistic vision for digital go-to-market internationally. We help customers navigate the regulatory environment. And we believe that international is going to continue to increase as a percentage of revenue as we continue to invest there.

Perfect. That's great. And then a quick follow-up for Cameron. The overall net revenue retention at 108%, obviously, very strong results, given everything that we've been through this year. But underneath the covers, right? If you were to look at the cohorts of enterprise, mid-market, SMB, how did those do through the year? And how do those finish up versus where you finished in 2019?

Yes. Thanks, Stan. So look, 2020 was really a tale of two halves. In the first half, we saw headwinds and those headwinds largely impacted our upsell opportunities and seed expansion opportunities. Naturally, those are more concentrated within larger customers. And in the second half, we saw improvements across the board. So if you break down the $108 million, it is very similar to what we saw in 2019 in terms of the net retention with a little bit more pressure in the midsize and enterprise markets. But as we got to the end of the year, across all of those routes, we saw better momentum than we had in 2019.

Our next question comes from Siti Panigrahi with Mizuho. You may proceed with your question.

Very impressive quarter, congratulations. I want to ask you about the acquisition you did, a couple of decision. Any update on that? And then when you think about the investment going forward, internal development versus acquisitions. So what are the areas you could potentially expand through this kind of tuck-in acquisitions?

Great. Siti, thank you. Look, I think -- well, the two acquisitions, Clickagy and EverString, I'll talk about both of them. At this point, we've completed much of the heavy lifting from an integration perspective. We feel really good about where we're at there. On the Clickagy side, we already launched our in-market with our streaming intent offering. The EverString acquisition is already opening doors to substantially larger opportunities in the enterprise, where the combination of our contact company, technographic and intent assets make us incredibly uniquely positioned to win, and it's an area that we're just starting to really focus on. I'll share a couple of interesting anecdote there. One, once we were fully integrated with Clickagy's intent asset into our platform, we saw intense signals attached to companies increased 3x. So our customers are now seeing intense signals on significantly more of their targets across their total addressable market. And then on the EverString side, one of the things we were especially excited about with the acquisition was the opportunity to take the EverString data asset into a much larger swath of our enterprise customers by leveraging our go-to-market motion and our sales and account management teams. So in just the first month post acquisition, we've more than quadrupled the number of opportunities ever string was a part of as compared to the stand-alone entity. And you can see that within our $100,000 customer, we've significantly grown that space too, and EverString been a driver for that. So both of those acquisitions are performing really well. I think if you think about where the opportunities are in the future, number one, we have the capacity in the bandwidth and feel really comfortable that if the right value-creating deal came along, that we'd be in a position to execute against it. But philosophically, we're looking for software or data assets that play in the go-to-market or recruiting spaces, platforms that sales and marketing and talent acquisition professionals are leveraging every day to hit their numbers. And we look for that software to be something that can be meaningfully enhanced by our data assets that we can sell across our go-to-market team and that will be accretive in the short term. So you should expect us to be acquisitive, but we're not going to do M&A for M&A stake. We have this framework and a philosophy around M&A, and you should expect us to adhere to that.

Our next question comes from Brad Zelnick with Crédit Suisse. You may proceed with your question.

It's Bob on for Brad. Congratulations on a strong end to an impressive year. One for Henry and one for Cameron. Henry, just wanted to dive further into the enterprise expansion opportunity. Where are you in terms of having the proper product and go-to-market strategy in place to meaningfully capture that $1 billion opportunity that you talked about. Any insights you can give in terms of the pipeline and how that's expanded since you made this more of a priority.

Yes. So thanks for the question. We spent a lot of 2020, making sure that our we were making the right investments, both from a talent perspective and a product perspective to really be able to get as much out of the enterprise opportunity as we could. And so we feel really good about the team we've put together or the resegmenting of the customer base that puts the right accounts into the hands of the right people on our team. The product changes that we've made to really harden our APIs and make our solutions enterprise ready. And so we feel like we're very well positioned to go after that opportunity in a really big way.

And then Cameron, just in terms of guidance, can you insight into the assumptions you're making regarding the macro and any potential for reopening?

Sure. I mean, our guidance is really less about COVID being a headwind or a tailwind and more about the secular trends around digitization. So we did see some headwinds in the first half of the year, but we've seeing those headwinds really dissipate in the second half of the year. We are much more focused when we think of guidance on a broad range of potential outcomes. And what our base case is that secular trend towards digitization continues and that the economic environment is relatively consistent with what we see today. Henry highlighted a company called safety services, which is a leading provider of workplace safety and training solutions. And in the middle of this pandemic, they needed to focus on accounts that were still in market with their solutions for their solutions. And by leveraging our intent data, they were able to see an increase to their marketing qualified leads by 200% in the first month. So that sort of time to value really enables us to quickly change to a changing environment and also allows us to continue to push forward with our go-to-market motion.

Thank you. Our next question comes from Mark Murphy with JPMorgan. You may proceed with your question.

I'll add my Congrats on a very robust finish to the year. Henry, I'm interested in what you believe your most forward-looking and most sophisticated customers are doing today with ZoomInfo, that's helping them generate better leads and grow faster where you'd say your customers who are kind of lower on the sophistication curve could see a leap forward as they get deeper into the platform this year and sort of move up that curve.

Yes. Mark, thank you. So a couple of different ways. If we think about some of our most sophisticated customers, they are often using our workflow solution or architecting a motion that mimics that functionality. So what they're doing is they're identifying a set of key moments or signals, that mean something to their business. And that's different for all of our customers. That might be a funding round. It might be the addition of a technology, it might be a new executive that's come on board. It might be a new location opening or a new product launch or a new partnership that's announced. So they're articulating a set of signals and then they're loading into ZoomInfo or using our Salesforce sync product to identify the target companies that they want to see those signals from. Once they marry those two together, then they're building the ideal prospects at those companies. For our customers, it could be everything from a CIO to a Chief Financial Officer to integrations engineer or a cybersecurity architect. And then they're architecting a system that says, when you see this signal at these companies, capture these specific professionals and then run this go-to-market motion. And in that go-to-market motion can be everything from a marketing automation campaign to a display ad campaign, to an SDR calling campaign behind it. But the key part of this is it's fully automated. So that workflow from signal to action is being automated by our most sophisticated customers. And so they're mirroring that first-party data, their best customers, accounts that they don't have already with our third-party data, the data from ZoomInfo to automate that go-to-market motion. So most sophisticated customers are taking advantage of our platform that way. On the lower sophisticated side or on the least sophisticated side, you can see them using the platform by identifying a target audience. So saying, "Hey, look, every company with over 100 employees that's based in these 5 metro areas, I want to run a campaign against the VPs of information technology." And so it's giving that level of access and screening to their sales reps, that would be on the lesser sophisticated side of the -- of our customer base. And we have a really strong customer success team that we've made a lot of investments in, in 2020 to really increase the level of sophistication across the customer base because we want our customers doing more with the platform.

Okay. Pretty fascinating. Cameron, as a follow-up, I wanted to ask you, the guidance for 2021 is really materially above what we were thinking and consensus was thinking. I'm just curious, if you think you're seeing any noticeable improvement in the seat expansion plans for your customers? In other words, their own sales and marketing teams as they reinvest into the recovery. So in other words, is it more expansions or do you feel like that's yet to come and the upside driver here is really more the traction with the new logos and the enterprise logos. I think Henry had mentioned Toyota and Honeywell sort of industries we might not think of first. To what extent is that being driven?

So currently, we're seeing real strength on both sides, both from new logos and customers coming on as well as from the expansion opportunity within our existing customer base. And if you look at our largest customers, we had a record quarter in terms of the addition of new customers that are above $100,000 at this point. Our guidance is more focused on continuing to reinvest in the platform and seeing both of those areas move. We have not seen particularly outside of this kind of seed expansion opportunity yet. But certainly, that creates some upsides for us in 2021 as the economy opens at that point.

Our next question comes from Michael Turrin with Wells Fargo.

Michael, you might be on mute.

Josh, why don't we go ahead and take the next question.

Our next question comes from Jennifer Lowe with UBS. You may proceed with your question.

Maybe just to start, Henry, on the recruiting side, if I look at the evolution of what you're doing on the sales side, it's gone from being just a way to find the right person to call on to having all these additional and arguably more valuable capabilities around intent and figuring out the right time to call or the right person to call it at a given point in time based on the dynamic set of circumstances. Do you see similar opportunities in recruiting over time to not just offer sort of who might be like-for-like of what you're looking to hire, but also maybe for whatever reason, more inclined to pursue other opportunities. I'm just curious how you see that intent piece, if there's an intent opportunity in recruiting like you've observed on the sales side.

Yes, absolutely. We are thinking about how to incorporate better algorithms for identifying when someone is most likely to leave. We have a data science team who's engaged in building that out today. I think the other thing that we're pretty confident about is that this is an industry that is hungry for workflow automation. And so 1 of the key elements of the platform was not just to have the data asset available, but also to have that data asset tightly integrated into our engage solution. And building that engaged solution in a purpose purpose-built way for recruiters. And so not only do I have that contact data asset and company data asset at my fingertips, but I can also now automate the way that I engage with potential candidates. And then feed that activity data back into my ATS system. That's just something that recruiters and talent acquisition professionals don't have at their fingertips today. And so we're excited about not just bringing that sort of raw data, but marrying that with insight-driven algorithms and data we layer on top of that and then building workflow automation around those assets.

And just a quick one for Cameron. I know you called out the $2 million impact the acquisition in Q4 and a modest impact on margins. I'm assuming that's a modestly negative impact on margins, given how high your margins are. Is there any sort of color that you can give us on the calendar '21 guidance and what the assumptions there might be in terms of the acquisitions from a revenue or margin impact?

Sure. Thanks, Jen. And yes, in Q4, this were a modestly negative impact on margins. Realistically, two acquisitions are pretty small. Do you expect that by the end of the year that they'll be neutral to our margins overall. But certainly in the kind of first quarter or two, we talked about the spectrum to continue to be a modest drag.

Our next question comes from Brent Bracelin with Piper Sandler. You may proceed with your question.

And I guess, Henry, I'll start with you, and then one quick follow-up for Cameron. The number of new customer adds in Q4 here, I think it nearly exceeded all of the new customer adds in all of 2019. And I guess my question here is the momentum in Q4, from a customer perspective, the bullish outlook for 2021, at least from the outside in, it looks like there is some sort of inflection here happening. So help us understand how broad-based was the number of new customer adds in Q4, it was strong across the enterprise, looks like a strong process SMB. It sounds like it was strong across all verticals, but just trying to understand why you're seeing some more much momentum now? Or was it just a little bit of a catch-up from in the prior year? It feels like a big change, but love to get your view on what's driving just the number of customers coming to the platform right now?

Thanks, Brent. I think what you're seeing is us getting momentum from all of the investments we made post the acquisition of ZoomInfo in February of 2019. We made that acquisition, and we dove headlong into combining two salesforces, two marketing teams and really building out a next-generation platform for sales and marketers. And so that platform was just released in October of 2019. And so what you're seeing is the organization really getting its feet under itself around how to sell that platform around the broadness of opportunity we have in the marketplace. And so you see customers from all sorts of industries now coming to us, and we have a solution that can serve all of their needs. It doesn't matter if you sell into an IT decision-maker or a medical director, if you're selling in France or you're selling in California, the solution can serve up better go-to-market efficiencies for your sales teams, regardless of what kind of company you are. And I think what you're seeing is companies, one, making the realization, the digitization of their go-to-market efforts is a must and two, you see really the investments that we made over the last two years in our go-to-market teams and our product really paying off. And so we saw a broad based momentum, again, from all industries across the world across sizes. And that's the momentum that we don't think is a blip or something that short lived or short term, we think that's here to stay.

And Brent, I think pointing out superfast. The numbers that you see are net customers. So not only did we have a strong new sales and new logos coming on. But we also saw an improvement throughout the year in terms of retention activity. So we also saw less customers facing financial issues in Q4 than we did earlier in the year than where they might have canceled.

Got it. Totally makes sense. And Cameron, obviously, internationally, you've called out the last couple of quarters. Can you just remind us what percentage of revenue is from international? And then maybe just talk through the number of countries where you have inside sales reps coverage of today? Just a little level set there would be helpful.

Sure. So international revenue is for the year going to be turn up 10%. Overall, all of our reps are in the U.S. right now. We do set it them out, including parts of our sales team to focus on different markets. At this point, that's largely be focused on Europe. And then other markets they call it, whether that's from Asia or Australia or somewhere else, they get routed into our kind of normal feel that way.

Got it. So it sounds still pretty early, but good momentum so far.

Our next question comes from Tom Roderick with Stifel. You may proceed with your question.

Congratulations on a fantastic finish to what was a pretty crazy year, so well done on that. Henry, you've gotten a number of questions on this just regarding sort of new customer additions and a number of people were marking on what a remarkable finish to the year wasn't that front. I'd love to hear kind of your thinking and strategy relative to getting customers moving along that path a little faster. I think you might have mentioned that 70% of new ACV is on the new platform now. And yet, it seems like you're putting more and more tools in place, maybe like and additional modules that might move people on this upgrade path a little sooner than perhaps they previously would have. Can you talk a little bit about your strategy and moving people along that curve more -- perhaps more quickly than historically they have?

Yes, absolutely. Thanks, Tom. I think, first, we never really viewed the product as a mechanism to drive further sales for us. And I think in the last year, one of the evolutions you've seen us do from a product perspective is really think about how the product can drive more upgrade more seed expansion, more purchases of enrichment functionality. So then the enriched help scan is a really interesting one that we built, where customers in our platform can click a button and immediately see what impact our data and insights can have on their existing CRM or marketing automation instances. And so in an instant, they click a button, we can tell them, look, you have this much bad information inside of your CRM. All of these accounts have the wrong employee sizes that are in the wrong industry. These thousands of people have already left their positions and your sellers are still calling on them, your marketers are still selling campaigns to them. And that's an entry point into a larger enrichment discussion for our customers. We think about automated user provisioning and automated trials as another way to take an enterprise customer or a group of users at an enterprise customer and get them limited access to ZoomInfo and then use the momentum we build across those users to have a larger conversation at the enterprise level. We've made significant investments in our customer success team and our account management teams over the last year to make sure that they're in front of their customers when an opportunity presents itself. But also making sure that they're capable of having conversations about all of our solutions. And so a big investment behind sales enablement as fell and ensuring that our sales teams and our account management team are best-in-class when they're having consultative conversations with our customers. And we really do rely on that expand motion and that upsell motion within the account management and customer success teams to drive the growth of the company. And so you'll continue to see us making investments there as well.

And Henry, one quick sort of follow-on question relative to go to market. So nicely deserved promotions across your executive ranks and as today, specific to Chris' role taking on COO. Any other changes to the sales organization that are worth pointing out or any need to backfill this CRO responsibilities? Or is this just yet another hat that Chris gets to wear here?

I think a couple of things. We did sort of organize the management team underneath Chris. In a couple of different ways to make sure that we were optimizing the organizational structure there but nothing material. Really, we're excited about the opportunity to marry both sales and marketing underneath one leader. We think you get all sorts of alignment and synergies by having everything under Chris, and we're excited about the momentum we'll see from that alignment.

Our next question comes from Patrick Colby with Deutsche Bank. You may proceed with your question.

This is Dan Cielo on for Patrick Colville. I thought it was pretty interesting that disclosure you made about $1 billion upsell opportunity in your existing customers. And I'd be curious if you could kind of talk about the assumptions a into that. And you guys kind of talk about sometimes having 7-figure customers. And I'm just curious kind of where you see customers, I guess, kind of reaching and maxing out when they kind of reach maturity on the platform?

Yes. So the analysis that went into that $1 billion-plus opportunity. Was looking at the total seats available within our enterprise customers and where we are today. In terms of where we maxed out, we continue to see our largest customers push the bounds. And I think earlier in the year, our largest customer it's $2 million. It's up to like 3.5 on at this point. And it continues to grow. So we think that there are significant opportunities to ultimately get well above where we are today with some of the largest customers that are fully integrating our capabilities to really drive more sophisticated go-to-market fortunes.

Our next question comes from Pat Walravens with JMP Securities. You may proceed with your quesiton.

This is Joan Marintek on for Pat. I just wanted to dig in on the adoption to see engaged and maybe how you're seeing that pay out in 2021.

Yes. So it's still really early on the engage solution, but we believe there continues to be a ton of white space in the sales engagement space. And we're most often we're evangelizing our solution to customers. And I think what we're especially excited about is the difference that our data asset makes from a value perspective in the engage solution. And so really early, but we're seeing good traction of the product, and we're also seeing, as I mentioned, meaningfully higher renewal rates for customers who are using the engage product. So we think it will add value in a number of different ways for the company.

Our next question comes from David Hynes of Cannacord. You may proceed with your question.

This is Luke on for DJ. So you guys recently launched targeted audiences, which hasn't gotten much love on the call, but it seems like a strong step forward in terms of expanding the scope of the platform into marketing and advertising. Now thinking long term, with incremental solutions like that, is it fair to imagine that marketing and advertising teams and budgets could leverage your platform to the same extent that sales orgs are today? Or I guess, in other words, what could be the ratio of spend between sales teams and marketing teams longer term? Is it one to one or how could we think about that?

Luke, thank you for the question. Look, we are very excited about the targeted audiences product. We've known for a while that our business and contact data has the ability to make a difference for marketers in the advertising space. And so with that product, marketers can now use ZoomInfo to target business professionals using data points that were not available before we brought this product to market. I think much like all of the other areas that we think about expanding to either internally or from an M&A perspective. We look for opportunities where our data asset can significantly change the game for sellers or marketers or recruiters. And within advertising, we think that we have a big opportunity to leverage that contact and company data asset to provide an incredibly differentiated solution to the market. We've spent a lot of time and energy on the marketing use case, whether it's our enriched product or website product, our intent product, those are all solutions, our form complete product. Those are all solutions that are leveraged by marketers. I think what you'll see us do as we evolve, is get better at speaking a marketer's language, build more products that are tied together with what a marketer and an advertiser are looking to do. And really wedge our way into that share of wallet within our customer base and within new customers as well. And so we see getting more entrenched into the marketing use case as a meaningful growth opportunity for us.

Our next question comes from Robert Simmons with RBC Capital Markets -- Terry Tillman with Truist. You may proceed with your question.

This is David filling in for Terry Tilman. Congrats on a great quarter. And thank you for taking time. So just a big picture question for you guys. Your revenue, customer growth has been a true testament. To power your products and demand for these actual insights for sales folks to go out there, sell more than they would have about the product. So I'm just curious if you're seeing any new entrants coming into the market lately. That's it for me.

Great. Thank you for the question. The competitive environment is largely unchanged. We have call recording software that we use and we flat customer mentions I'm sorry, competitor mentions across all of the calls are sellers and our account managers take. And competitors are still, on average, mentioned less than 1% of the time. And competitor mentions were actually down Q4 versus Q3. So to the extent that there are market alternatives in the marketplace, we are pulling away from everybody.

Our next question comes from Brian Peterson with Raymond James. You may proceed with your question.

Kevin here on for Brian. Just a quick one for me. Can you talk about some of the trends you've seen for new ACV mix or pipeline generation, maybe specific to some of your smaller verticals and I'm curious if you have any thoughts on how that could trend as you look out over the next few years.

So when we think about our verticals, a big portion of our business comes from software and business services. But you heard Henry talk about wins and pharmaceuticals, manufacturing, finance, insurance, real estate, transportation, logistics, all of these verticals are important to us. Bottom line is that any business that selling to another business can and should provide real value from using high-quality data like ours to drive their go-to-market motions. But we're just in the early stages of addressing what's a really big TAM software and business services were the initial innovators. But now we're seeing continued growth from a broader set of early adopters in the early majority across the whole industry.

Our next question comes from Michael Turrin with Wells Fargo. You may proceed with your question.

Some useful commentary around the switch from headwinds to tailwinds you saw throughout the course of the year. Is there anything you can add around what's assumed to the initial outlook you're providing for next year? Is that somewhat similar levels on things like customer adds and retention and those trends persist? And then maybe on margin too, it just looks like you're expecting those to maybe walk back a touch, which certainly makes sense given the demand environment you're seeing. Is that a fair characterization, a bit more of towards growth given the opportunity you're now seeing in front of you? Or just any additional context you can provide there is helpful.

Sure. I guess there's one takeaway from this call is that we are seeing a positive momentum across all areas of the business. And we're coming off the strongest quarter and the strongest year we've ever had. Our initial guidance is while higher than consensus. It is our expectation that these guidance levels take account a wide range of potential outcomes. And certainly, 2020 is to us anything, is that we need to plan for that broad range of potential macroeconomic outcomes. And the methodology is consistent with what we've done in the past. In terms of margins, we do feel that there's a real opportunity here in the market for us and to build upon our competitive advantage and build the moat that we have. We're continuing to invest heavily into R&D. As well as our sales and marketing capacity to continue to take advantage of that. And if you think about some of the successes that we've had with products like engage, we're continuing to significantly put additional wood behind those investments so that we can continue to attack those markets and drive additional growth and competitive advantage in the future.

And I'm not showing any further questions at this time. I would now like to turn the call back over to Henry Schuck for any further remarks.

Great. Thanks again, everyone. We remain really excited by the opportunity out there, and we're excited to continue to successfully execute against our plan. So thank you very much. Thank you for joining the call.

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