ZoomInfo Applied sciences (ZI) Q2 2024 Earnings Name Transcript

ZoomInfo Applied sciences (ZI -5.86%)
Q2 2024 Earnings Name
Aug 05, 2024, 4:30 p.m. ET

Contents:

• Ready Remarks
• Questions and Solutions
• Name Members

Ready Remarks:

Operator

Good day, and thanks for standing by. Welcome to the ZoomInfo second-quarter 2024 monetary outcomes convention name. [Operator instructions] Please be suggested that right this moment’s convention is being recorded. I might now like handy the convention over to your speaker right this moment, Jerry Sisitsky, investor relations.

Please go forward.

Jerry Sisitsky — Investor Relations

Thanks, Amy. Welcome to ZoomInfo’s monetary outcomes convention name for the second-quarter 2024. With me on the decision right this moment are Henry Schuck, founder, and CEO of ZoomInfo; Cameron Hyzer, our CFO; and Graham O’Brien, who will grow to be our interim CFO. After Henry and Cameron’s remarks, we’ll open the decision to Q&A.

Throughout this name, any forward-looking statements are made pursuant to the protected harbor provisions of U.S. securities legal guidelines. Expressions of future targets, together with enterprise outlook, expectations for future monetary efficiency, and comparable gadgets, together with, with out limitation, expressions utilizing the terminology might, will, anticipate, anticipate, and consider, and expressions which mirror one thing apart from historic information are supposed to establish forward-looking statements. Ahead-looking statements contain numerous dangers and uncertainties, together with these mentioned within the threat elements sections of our SEC filings.

Precise outcomes might differ materially from any forward-looking statements. The corporate undertakes no obligation to revise or replace any forward-looking statements with a purpose to mirror occasions which will come up after this convention name, besides as required by legislation. For extra info, please discuss with the forward-looking statements within the slides posted to our investor relations web site at ir.zoominfo.com. All metrics on this name are non-GAAP, except in any other case famous.

A reconciliation may be discovered within the monetary outcomes press launch or within the slides posted to our IR web site. With that, I will flip the decision over to Henry.

Henry Schuck — Founder and Chief Government Officer

Thanks, Jerry. And welcome, everybody. Let me begin by discussing our monetary outcomes this quarter. In Q2, we noticed a degree of write-offs associated to prior interval gross sales that was larger than we had beforehand seen or had estimated for the quarter, significantly with SMBs.

Because of this, we performed a complete evaluation culminating in a cost in Q2, and we accelerated operational adjustments round promoting to small companies, all of which we anticipate to scale back the volatility round future write-offs. We’ve got revised our estimates for the collectibility of a portion of beforehand acknowledged income, which has led us to take a $33 million cost within the quarter. And consequently, we’re revising our full-year steering. Excluding this cost, our outcomes would have been extra consistent with our steering for the second quarter.

Inclusive of this cost, GAAP income for the second quarter was $292 million. And adjusted working revenue was $82 million, a margin of 28%. Our free money circulation was not impacted by this noncash cost. The underlying driver for the excessive write-off price is that in 2022 and 2023, we prolonged credit score to the next mixture of SMB clients, and the speed of nonpayment by these clients elevated all through the previous 24 months.

Accordingly, we now have made adjustments to the best way we promote, renew, and repair these purchasers. In April, we deployed a brand new enterprise threat mannequin to flag and require prepayment from prospects on the biggest threat of nonpayment. This transfer mitigates the danger of future write-offs and represents an funding within the long-term well being of our enterprise, creating some new enterprise ACV for higher-quality bookings and focusing our efforts on clients extra more likely to pay, renew, and develop with us over time. We transacted $11 million of ACV in Q2 by means of upfront prepayments.

And with our new mannequin in place, we turned away a significant quantity of recent enterprise from smaller, riskier organizations. I’m disenchanted that this cost has impacted our monetary outcomes. We consider this cost places the lengthy tail of those challenges behind us and lets us concentrate on the operational enhancements we now have been seeing within the enterprise, which, as I’ll describe, has positioned the corporate for future success. There have been numerous elementary enhancements we noticed this quarter.

As you realize, our focus over the previous 12 months has been to maneuver upmarket, stabilize and enhance web income retention, and launch and monetize ZoomInfo Copilot. With our funding upmarket, Q2 was the most effective new enterprise quarter in each the mid-market and enterprise ever. We meaningfully grew our $100,000 ACV buyer cohort in each dimension and whole ACV, the primary time we have seen sequential progress in $100,000 clients since This autumn of 2022. This buyer cohort now makes up 43% of our ACV.

And we once more grew our $1 million-plus buyer cohort on a sequential foundation with probably the most new million dollar-plus clients since This autumn of 2022. ACV progress for million-dollar clients accelerated this quarter and is up 17% 12 months over 12 months. Reflecting these developments, in combination, enterprise ACV was up 9% 12 months over 12 months, and total web new ARR was the most effective it has been in 4 quarters. This quarter was the primary one since This autumn 2021 the place we noticed web retention charges stabilize, which is a vital milestone pushed by stabilization of renewal charges and enchancment on upsells.

Over time, we anticipate to return to structurally larger ranges of NRR by means of enhancing fundamentals and blend shift as we develop our upmarket enterprise. In the course of the quarter, we closed transactions with main organizations corresponding to PwC, Deutsche Financial institution, MorningStar, and, Manulife, and we additionally signed our largest ever new enterprise transaction. This buyer is among the largest employers in the USA. They usually noticed our answer wealthy in knowledge, knowledge compliance, and knowledge integration capabilities as mission-critical to their B2B movement.

With the answer that match their exacting wants, we had what considered one of their workers described because the quickest transferring contract of their historical past. This new enterprise deal represents $1.4 million of ACV with a three-year dedication. Our operations and knowledge as a service choices, which are sometimes used to assist underpin an organization’s funding in AI, are additionally delivering outcomes, up 23% 12 months over 12 months and demonstrating robust 117% web retention price, now representing 13% of our ACV. As corporations look to put money into AI initiatives, they want a strong basis of extremely correct knowledge, and we’re steadily turning into the supply for that.

Consultant of that, we closed our first Knowledge-as-a-Service alternative in EMEA to help a worldwide community that permits monetary establishments to ship and obtain safe messages and details about monetary transaction. Leveraging ZoomInfo’s knowledge, the group’s operational and engineering groups are constructing an inside AI answer to establish fraudulent transaction. That is simply one of many many ways in which clients are ready to make use of our knowledge to proceed to innovate their world-class enterprise answer. In June, Google introduced ZoomInfo as a key associate in its technique to make generative AI extra dependable and correct for enterprise use.

Google chosen us due to our particular trusted and authoritative datasets. The tip objective is to assist enterprises combine extra correct knowledge into their AI fashions and provides customers extra related responses and higher experiences. The previous 12 months have marked some of the revolutionary intervals in our firm’s historical past as we efficiently launched ZoomInfo Copilot, our AI-powered providing that mixes our best-in-class proprietary dataset with first-party knowledge from our clients’ gross sales and advertising methods and digital shopping for alerts to supply gross sales groups the most effective perception about their consumers. June was our first full month promoting Copilot and have carried out solidly above our expectation.

We now have greater than $18 million of Copilot ACV throughout greater than 1,000 logos, up from nothing only a few months in the past, and we already see materials enhancements in engagement and utilization charges throughout Copilot customers. Enhancements in these charges have traditionally been carefully correlated to renewal and retention charges. Early indicators present that Copilot is increasing our worth past prime of funnel to help go-to-market groups alongside the whole thing of the funnel. And by doing so, it expands our worth proposition from gross sales improvement to account executives, account managers, buyer success managers, and income management.

Our dedication to unmatched proprietary third-party knowledge and alerts, a rising ecosystem, and steady investments in AI continues to feed an aggressive Copilot roadmap. That roadmap is driving pleasure throughout our buyer base and in new buyer conversations. Over 75% of our Copilot upsells had been with mid-market or enterprise accounts. With the traction we’re seeing on Copilot and our operations in Knowledge-as-a-Service merchandise, we consider we’ll be capable to proceed to win new clients and enhance upsells to our current base, a key driver of web retention.

At the moment, we additionally introduced a number of adjustments on the board degree. We thank Todd Crockett for his a few years of service, representing TA associates on our Board of Administrators, and we recognize the constructive affect he has had on the trajectory of the corporate. We welcome our latest board members who we consider can be instantly additive in serving to us execute our progress technique. Dominic Maida is a seasoned working government with expertise main scaled companies and a really robust background in knowledge and platforms.

Dom spent 25-plus years of Bloomberg, the place at completely different occasions he ran the terminal enterprise, all of engineering and was chief knowledge officer. And we additionally welcome Owen Wurzbacher, the chief funding officer of Excessive Stage Ventures, who brings a powerful public fairness investor perspective and capital markets background to our board. Over the past a number of years, we now have rebuilt our government crew, expanded our bench, constructed nice merchandise, leaned into AI, and diversified the management abilities underpinning our board. We’re targeted on bringing in more healthy new enterprise relationships and double down on our enterprise relationships, the place we all know we now have upside alternatives sooner or later.

And over the previous 4 quarters, we now have retired greater than 39 million shares of ZoomInfo, roughly 10% of whole shares excellent. We’ll proceed to run this enterprise effectively whereas repurchasing shares. We’ve got $400 million in an current share repurchase authorization remaining as of June 30, and we anticipate aggressively deploying that. Once you mix our robust — our continued robust money era with ongoing share rely discount, we consider the corporate will do at the least $1 of levered free money circulation per share this 12 months and that we’ll develop that quantity meaningfully in 2025.

I acknowledge that our constructive working momentum is overshadowed by the change in estimates we introduced right this moment and the elevated conservatism round our steering. Our intention is to totally put these challenges behind us and share the main points that it’s essential to perceive our monetary profile whereas additionally highlighting our dedication to rising free money circulation per share. To that finish, I intend to be a significant private purchaser of ZoomInfo inventory as properly. Earlier than I hand it over to Cameron to debate the leads to larger element, I wish to contact on the management information we introduced this afternoon.

As you noticed from our announcement, Cameron can be transitioning from his position as chief monetary officer. He’ll stick with us over the subsequent few months to assist guarantee a clean transition. Cameron, you’ve got been an incredible associate to me personally and the enterprise during the last practically six years. And on behalf of myself and the complete firm, I wish to thanks to your many contributions and to want you all the most effective.

We have initiated a seek for a everlasting successor and are lucky to have a deep bench of expertise all through our finance group throughout this transition interval. Graham O’Brien, our VP of FP&A, will tackle the interim CFO position. Graham is intimately acquainted with our strategic and monetary progress plans, and we’re assured this can be a seamless handoff. With the cost booked, we now begin with a clear slate.

With that, I will flip the decision over to Cameron.

Cameron Hyzer — Chief Monetary Officer

Thanks, Henry. Earlier than turning to our outcomes, I do wish to say a number of phrases about leaving ZoomInfo. First, I wish to thank the complete ZoomInfo crew and the board for his or her partnership all through my tenure. Over time, we have achieved spectacular progress with robust margins and free money circulation era.

We have navigated quite a few challenges collectively, and I am happy with what we have completed. I’ve full confidence in the way forward for ZoomInfo, and I am excited to see the corporate proceed to innovate and lead available in the market. Our monetary well being and strategic course stays robust, due to the collaborative efforts of our gifted crew and management. Thanks for the help and belief you’ve got positioned in me.

I stay up for monitoring ZoomInfo’s continued success. Now turning to our outcomes. We’ve got applied numerous operational enhancements to scale back the affect of write-offs. In Q2, we continued this progress by requiring riskier and smaller clients to pay by bank card or ACH previous to having access to the platform and segmenting our new gross sales crew to drive extra enterprise and mid-market enterprise.

As a part of these enhancements, we now have elevated our visibility and reevaluated our accounting estimates. We had been disenchanted and stunned to find out that our prior estimates for nonpayment from clients wanted to be elevated with a purpose to account for escalating write-offs that we incurred in June in addition to further write-offs that we now anticipate. This transformation in estimates, mixed with different discrete expenses, resulted in a complete $33 million cost in Q2, of which $15 million lowered income, $14 million elevated our unhealthy debt expense, and $4 million elevated different bills. The change in estimate pertains to beforehand acknowledged income primarily from 2023 and contains enough reserves to cowl potential nonpayment on our present receivables and associated income acknowledged up to now.

With these onetime expenses, we delivered GAAP income of $292 million and adjusted working revenue of $82 million, which represents a margin of 28%. The underlying efficiency of the enterprise excluding these expenses would have indicated income of $307 million and adjusted working revenue of $114 million. This GAAP accounting cost impacts income and profitability however doesn’t affect money circulation. Unlevered free money circulation for the quarter was $120 million.

Whereas this cost displays challenges related to transactions we signed, primarily in 2023, adjustments in estimates are mirrored below GAAP within the interval when new info turns into obtainable, which on this case is Q2 2024. We stay dedicated to driving excessive ranges of profitability and rising free money circulation per share, and we’re taking steps to regulate our degree of expense commitments to mirror present ranges of progress. Because of this, we took impairment expenses within the quarter associated to numerous current services, accounting for present market charges as we exit sure leases and consolidate our actual property footprint. Along with the fees we’re taking this quarter, in July, we restructured our Waltham lease settlement, the place we paid a $59 million termination charge, and we anticipate to acknowledge that $59 million in accelerated lease expense mirrored as restructuring prices over the subsequent six months as we transition to a smaller footprint.

In combination, we’re eliminating 126,000 sq. ft of house and anticipate to sublease an extra 250,000-plus sq. ft, decreasing our whole total facility footprint by roughly 40%. Moreover, in July, we funded the $30 million settlement quantity associated to the right-of-publicity lawsuits following preliminary approval in June. The ultimate approval listening to is ready for November, and we’re wanting ahead to placing these lawsuits utterly behind us. Whereas we frolicked in Q2 to deal with historic offers and rightsize our services, we’re additionally seeing enhancements within the underlying operations of the enterprise.

In Q2, we stabilized web income retention at 85%. And as Henry indicated, that is the most effective efficiency with respect to alter in NRR since This autumn 2021. Retention in our software program vertical, the place we have seen probably the most materials decline during the last two years, stabilized in Q1 and improved in Q2 for the primary time since 2021. From a reporting perspective, we’re together with Copilot and Superior Performance.

Superior Performance had grown to one-third of our total ACV in 2023. And in Q2, it elevated to 35% of total ACV as we skilled early traction from Copilot and drove progress in our operations and advertising options. Working money circulation in Q2 was $126 million, up from $116 million in Q1 and included roughly $3 million of curiosity funds. We accomplished a repricing of our first lien credit score settlement to SOFR plus 175, which resulted in a 50-basis-point discount in curiosity and is predicted to scale back our annual curiosity expense by roughly $3 million per 12 months.

Unlevered free money circulation for the quarter was $120 million. We ended the quarter with $399 million in money, money equivalents, and short-term investments. And we carried $1.24 billion in gross debt, the overwhelming majority of which has fastened or hedged rates of interest by means of 2025. In the course of the quarter, we repurchased 10.8 million shares of ZoomInfo’s inventory for $147 million.

And as Henry indicated, we had $400 million of current capability remaining as of June 30 that we anticipate aggressively deploying. Our web leverage ratio is 1.8 occasions trailing 12 months adjusted EBITDA and 1.8 occasions trailing 12 months money EBITDA, which is outlined as consolidated EBITDA in our credit score agreements. With respect to liabilities and future efficiency obligations, unearned income on the finish of Q2 was $440 million. And remaining efficiency obligations or RPO had been $1.13 billion, of which $830 million are anticipated to be delivered within the subsequent 12 months. There are clearly numerous transferring items with respect to accounting this quarter.

We took this motion to create a contemporary slate for the enterprise and place the corporate for long-term progress and profitability with a concentrate on persistently rising free money circulation per share. Searching to Q3 and the rest of 2024, our steering incorporates the affect from right this moment’s cost and elevated conservatism associated to our working efficiency. With that, let me flip to steering for Q3. We anticipate GAAP income within the vary of $298 million to $301 million, adjusted working revenue within the vary of $107 million to $109 million, and non-GAAP web revenue within the vary of $0.21 to $0.22 per share.

For the full-year 2024, we now anticipate GAAP income within the vary of $1.19 billion to $1.205 billion and adjusted working revenue within the vary of $412 million to $418 million. We anticipate non-GAAP web revenue within the vary of $0.86 to $0.88 per share primarily based on 375 million weighted common diluted shares excellent. We anticipate unlevered free money circulation within the vary of $420 million to $430 million, which, in step with historic reporting, excludes the affect of restructuring and settlement funds. Our full-year steering implies damaging 3% income progress and 35% adjusted working margin on the midpoint of our steering vary, inclusive of the second-quarter expenses.

We’re as dedicated to ever to driving environment friendly operations and excluding the discrete gadgets impacting this quarter, our steering signifies adjusted working margin of 37% for the 12 months. We anticipate to develop annual margins from right here. And as Henry famous, we view $1 per share of levered free money circulation as a flooring of on which we will construct and compound progress into the longer term. We’re additionally aware of share rely, and we now have continued the shift to performance-based fairness grants triggered on free money circulation per share progress as we consider it is very important align the shares issued to executives with enterprise efficiency and shareholder worth creation.

Lastly, please notice that within the prime half of our steering vary, the sequential income progress implied within the fourth quarter is roughly flat to down 1%, and we consider that that is probably the most indicative view of our trajectory as we exit 2024. With that, let me flip it over to the operator to open the decision for questions.

Questions & Solutions:

Operator

[Operator instructions] And our first query comes from the road of Elizabeth Porter of Morgan Stanley. Your line is open.

Elizabeth Porter — Morgan Stanley — Analyst

Nice. Thanks a lot for the query. After Q2, the EBITDA, we should always largely be by means of the renewal threat, which has pressured the enterprise for some time now. So I am simply hoping to get a greater understanding of the decline for the again half of the 12 months.

Are you assuming a second spherical of downsells? Or has new enterprise outlook modified materially? So if we may simply get some colour on type of the place the incremental stress is coming from and the belief on NRR within the again half of the 12 months, that may be nice. Thanks.

Cameron Hyzer — Chief Monetary Officer

Certain. Thanks, Elizabeth. I feel there are a selection of things that go into the steering as we give it some thought. And definitely, we have elevated our assumptions with respect to continued write-off potential within the thought that the operational enhancements that we have applied in all probability will not actually take maintain till the top of this 12 months or extra so at the start of subsequent 12 months.

Moreover, the working atmosphere below which we’re working continues to be fairly fluid. So we have inserted incremental conservatism with respect to the steering. And I feel that in case you look out on the planet as we see it, there’s quite a lot of uncertainty each for corporations, but in addition for the individuals making choices when it comes to the expansion of these corporations.

Henry Schuck — Founder and Chief Government Officer

And I might simply add right here. Once we set the steering right here, our — what we wished to ensure we did was to take away the volatility going ahead within the enterprise. And whereas we see quite a lot of operational enhancements, I talked about progress within the $100,000 cohort, stabilization of web retention for the primary time since — in numerous years, enchancment in our enterprise and upmarket enterprise, we’re not assuming any of that pattern proceed within the again half of the 12 months, and we’re assuming that even with the operational enhancements that we have performed round taking upfront prepayment from our clients and the transfer upmarket in new enterprise that these developments additionally do not — that these do not make an affect to the write-off charges within the again half of the 12 months as properly.

Elizabeth Porter — Morgan Stanley — Analyst

Thanks.

Operator

Our subsequent query comes from the road of Mark Murphy of J. P. Morgan. Your line is open.

Mark Murphy — Analyst

Thanks. I am curious if the amount of newly introduced layoffs within the know-how trade since June and July may need stunned you in any respect as a result of, Henry, I feel you simply mentioned that you simply’re not assuming that any of those enhancements that you simply did see in Q2 are going to proceed within the second half. So we had these bulletins from UiPath, and Intuit, and OpenText, Salesforce, and Intel, and others since then. And so I am simply curious in case you — if one thing is inflicting you to sense a second wave of layoffs that is perhaps affecting go-to-market headcount within the final say, 5 to eight weeks somewhat greater than you may need anticipated, and I’ve a fast follow-up.

Henry Schuck — Founder and Chief Government Officer

The factor to recollect about our enterprise is 2 issues. One, there’s a significant portion of our enterprise that is not seat-based, that’s usage-based. We talked in regards to the Knowledge-as-a-Service and OperationsOS enterprise, which now makes up 13% of our ACV. That is not a seat- or usage-based enterprise.

It is also rising 23% 12 months over 12 months. After which on the seat-based a part of our enterprise, we aren’t absolutely penetrated throughout any of our — actually any of our enterprise or mid-market clients, and so we do not want the incremental seat from a hiring perspective so as to add to — for us to develop inside our buyer base. The opposite factor that I might add there is among the locations the place we’re bullish about, Copilot, is that it is increasing our use case past simply prime of the funnel prospecting to the total funnel, and so we’re now seeing open alternatives the place we’re bringing in units of customers that had been in any other case or previously pre-Copilot weren’t clients of ours or weren’t customers of ours. And so we now have quite a lot of alternative, each from a usage-based perspective and from a seat-based perspective to develop regardless of the — regardless of layoffs in tech or shrinking go-to-market crew.

Mark Murphy — Analyst

OK. After which, Cameron, is it potential — are you able to remind us on the non-collectability receivables? How typically is it stemming from enterprise failures versus one thing like a contract dispute or buyer claiming that providers weren’t supplied? And then you definitely did allude to some incremental write-off potential. I feel going ahead, is it potential to place any steadiness on that? And simply assist us perceive, have you ever factored one thing in there as an ongoing sort of income offset within the second half as we simply noticed in Q2?

Cameron Hyzer — Chief Monetary Officer

Sure. So actually, we now have factored in continued escalation when it comes to write-off charges, and the write-offs that we do see do stem from numerous various factors. Actually, one of many bigger ones is corporations shutting down. And I feel in a tougher atmosphere and an atmosphere the place entry to capital is tougher to get to, that’s driving a few of that enhance.

There are additionally situations the place, significantly within the small enterprise that when clients do not feel that they’ve achieved the worth that they thought they had been going to, that we find yourself in a degree of dispute with them. And so I feel in a world the place it is tougher to make gross sales, type of getting that tangible worth can be typically tougher for them and that escalation. So our view is that whereas we’re making operational adjustments to affect this, largely requiring prepayment upfront from a lot of these smaller and riskier clients in addition to simply usually shifting the enterprise upmarket, we really feel the prudent view is to imagine that the write-off scenario will get worse, significantly because the — there are questions in regards to the power of the economic system over the subsequent few quarters.

Mark Murphy — Analyst

Understood.

Henry Schuck — Founder and Chief Government Officer

So, Mark, I will add right here, too. We did assume that the write-off charges — the escalated write-off charges proceed by means of the again half of the 12 months. I feel the most important — the large factor to recollect right here is we prolonged credit score to SMBs that weren’t creditworthy, and we have modified our practices now to require upfront prepayments towards our riskier clients. And within the quarter, we had $11 million of our ACV transacted by means of upfront prepayments.

That was up from $1 million in any of our earlier quarters, and so we have made a dedication each operationally and in the best way that we estimate for these collectibles to do away with one of these volatility in our enterprise.

Mark Murphy — Analyst

Understood. Thanks.

Operator

Our subsequent query comes from the road of Brad Zelnick of Deutsche Financial institution. Your line is open.

Brad Zelnick — Analyst

Nice. Thanks a lot for taking the query. Henry, it is little question it is a powerful atmosphere, and ZoomInfo has outsized publicity to among the harder segments of the market. However as we take into consideration atmosphere versus execution versus product market match, how a lot of what we’re seeing within the numbers do you are feeling is inside your management? And possibly only a fast one for Cameron.

Cam, are you able to touch upon the pricing developments that you simply noticed within the quarter? Thanks a lot, guys.

Henry Schuck — Founder and Chief Government Officer

Yeah, I feel that is truly the irritating half about this quarter is that there is an unbelievable quantity of operational enchancment that we’re seeing within the enterprise: the $100,000 cohort progress, the primary time we have seen that since This autumn of 2022; stabilization and web retention charges, the primary time we have seen that since This autumn of ’21; stabilization in our software program vertical web retention charges; our enterprise enterprise grew 9% 12 months over 12 months; operations OS; and our DaaS enterprise grew 23% 12 months over 12 months with 117% web retention; copilot offered solidly above our expectations within the buyer base, and we’re monetizing AI now all through our clients. Once we’re monetizing that, we’re additionally seeing that occur 75% of the time in mid-market and enterprise clients, and we proceed to innovate there as properly. And so there’s this great quantity of operational momentum and operational execution occurring within the enterprise, the place I truly consider our product market match is getting stronger, our gross sales movement is getting higher within the upmarket. We’re monetizing Copilot within the base, and also you’re seeing that operational efficiency come by means of within the enterprise.

Now on the identical time, the write-offs escalated. We’ve got to extend that estimate. And we now have to take this accounting cost this quarter to place that every one behind us, to maneuver ahead with a clear slate, and to remove this volatility from our enterprise.

Cameron Hyzer — Chief Monetary Officer

And, Brad, I feel with respect to the pricing adjustments in Q2, we did not proactively make any adjustments to pricing. And we do proceed to see some downsell stress, significantly on the decrease ends of the market. However we’re beginning to see some actually good inexperienced shoots of pricing alternative when individuals are taking Copilot. So Henry talked about the monetization of copilot.

There are a selection of alternatives the place we’re starting to see pricing uplift from that, and that is one thing that we’re targeted on having the ability to proceed as we transfer into Q3 and This autumn.

Brad Zelnick — Analyst

Very useful colour. Thanks a lot, guys.

Operator

Our subsequent query comes from the road of Raimo Lenschow of Barclays. Your line is open.

Raimo Lenschow — Analyst

Thanks. Cameron, like — if you concentrate on the power to gather from purchasers, like how does this present atmosphere type of examine to what you’ve got seen earlier than? As a result of like we had just like the — within the COVID 2020, the place it was powerful, 2022, this appears to be both you modified the way you type of wrote in 2023 or it is getting worse? Are you able to simply examine and distinction like how this type of feels in comparison with the time earlier than? As a result of it’s considerably stunning given that you’ve got been in powerful markets earlier than. Thanks.

Henry Schuck — Founder and Chief Government Officer

Raimo, it is Henry. Look, I feel there are two issues that occurred or one huge factor. We did see these charges elevate towards from the 2020 and 2021 charges. We noticed this pattern escalate and elevate within the 2022 and 2023 cohorts.

They’re writing off extra, clearly greater than what our historic charges had been. That is why we have made — we have elevated the estimates this 12 months, and we have taken this accounting cost. We have accounted for these collectibility points. The opposite factor that I might let you know is the best way that you simply remedy this transferring ahead is what we did with these upfront prepayments.

When a dangerous or small SMB buyer comes by means of, they’ll obtain quite a lot of worth from ZoomInfo, however we require upfront prepayment from them now and going ahead. That is a elementary change in the best way that we function, and so we’ll considerably make a dent within the collectibility of our future contracts by doing that.

Raimo Lenschow — Analyst

OK. Obtained it. Thanks.

Operator

Our subsequent query comes from the road of Parker Lane with Stifel. Your line is open.

Parker Lane — Stifel Monetary Corp. — Analyst

Hello, guys. Thanks for taking the query. Simply to stay on the concept of the brand new enterprise threat mannequin, Henry. Are the parameters there merely in regards to the dimension of the shopper that you simply’re speaking about? Or is it additionally primarily based on the variety of seats or merchandise they’re adopting from you guys on the onset?

Henry Schuck — Founder and Chief Government Officer

Sure, it takes into — the brand new enterprise threat mannequin takes into consideration numerous firmographic-related knowledge factors after which a mannequin that appears again on the collectibility of different accounts that appear like these accounts. However you’ll be able to give it some thought as dimension, trade, variety of salespeople, after which a examine towards look-a-likes who paid or did not pay us previously. We’re utilizing numerous key knowledge factors to evaluate the danger of the purchasers who come by means of. Dimension is clearly considered one of them.

Parker Lane — Stifel Monetary Corp. — Analyst

Understood. Thanks.

Operator

Our subsequent query comes from the road of Alex Zukin of Wolfe Analysis. Your line is open.

Alex Zukin — Analyst

Thanks, guys. Apologize for the background noise, and thanks for taking the query. Simply possibly two fast ones. I am attempting to swear simply, Henry, possibly your feedback round enhancing retention charges within the quarter, significantly within the software program components however then additionally rising charge-off charges, and possibly simply touch upon the linearity that you simply noticed of those will increase as a result of I might say the type of non-retaining clients or clients are going to exit and do one thing completely different.

Are you able to simply assist us perceive — like this leads me to my second query, mechanistically, in case you have a look at your bookings, which I feel on a reported foundation, CRPO bookings was all the way down to 11%, like how a lot of this unhealthy debt can we type of take out of that bookings to tell or one thing that may sq. us to that remark that Cameron made about flat to successfully low single-digit declines type of when you begin getting again a few of this [Technical difficulty].

Henry Schuck — Founder and Chief Government Officer

Alex, we had quite a lot of — we had a tough time listening to you. So in case you may — if we may simply take a second and see how a lot of that we may acquire within the room.

Cameron Hyzer — Chief Monetary Officer

All proper. Thanks, Alex. I feel that — hopefully, I will be capable to reply most of your questions, and we’ll get by means of this. I feel, first off, when it comes to the linearity, actually because it pertains to retention, we had been seeing a stabilization of retention, and that continued all through the quarter. I feel one thing that we had been proud of.

And I feel that is significantly true within the mid-market and enterprise, the place we noticed enhancements in retention. I feel because the quarter went on, we proceed to see extra stress on SMBs. And definitely, with respect to the write-offs themselves, these did speed up in June, and so the affect of these was actually an finish of quarter problem greater than it was all through the quarter. And then you definitely had requested in regards to the bookings.

Actually, the bookings get impacted by the write-offs as a result of we’re principally impairing a few of that remaining efficiency obligations. So after we’re writing off a contract, clearly we’re writing off the continued efficiency allegation of that in addition to any of the present income or receivable that is on the market.

Henry Schuck — Founder and Chief Government Officer

And, Alex, I will simply add, this information doesn’t take into — doesn’t assume that any of the development that we noticed within the quarter, the stabilization of the online retention charges, or the affect of the upfront prepayments, we do not — we’ve not anticipated any enchancment from both of these on this information.

Alex Zukin — Analyst

Understood. Thanks, guys. And I apologize for the audio problem if you cannot hear me higher now.

Operator

Our subsequent query comes from the road of Kash Rangan of Goldman Sachs. Your line is open.

Unknown speaker — — Analyst

Hello. That is Philippa Ann Vizzone on for Kash. Thanks for taking the query and all the colour supplied on the decision. I had two fast ones for you.

How has your gross sales cycle length actually examine this quarter versus prior intervals? And second, what classes do you are taking away from the massive buyer win and mid-market enchancment? And it appears additionally enterprise that you simply noticed this quarter to shut remaining offers in your pipeline?

Henry Schuck — Founder and Chief Government Officer

Nice. Thanks for the query. Gross sales cycles have stayed largely the identical. We segmented the shopper — the gross sales power in new enterprise within the quarter.

And so our enterprise offers clearly take longer than our SMB or mid-market offers, however they arrive in at two, three, 4 occasions the worth of these offers. And so nothing that we did not anticipate within the new enterprise house, and so gross sales cycles have stayed largely the identical and throughout these completely different segments. I feel the factor that we have discovered throughout the biggest deal that we closed in our historical past and continued enchancment in mid-market and enterprise is that segmenting the brand new enterprise gross sales reps after which allocating sources to the upmarket is popping into outcomes for us. We’ve got the best mid-market and enterprise new enterprise quarter on file, and that got here from an elevated focus in segmentation of the gross sales rep base towards these completely different segments.

And we predict that that is going to — we consider that is going to proceed all year long and arrange a extremely robust basis for us sooner or later as enterprise and mid-market clients develop extra with us and retain at larger charges.

Operator

Our subsequent query comes from the road of Brent Bracelin of Piper Sandler. Your line is open.

Brent Bracelin — Analyst

Thanks. I wished to go simply again to type of framing how a lot publicity you must SMB. I feel it seems like unhealthy debt accruals had been $33 million, $34 million final 12 months. You are at that comparable mark right here on the first six months of this 12 months.

What portion of that SMB enterprise would you body as nonetheless type of being in danger versus how a lot you are type of pre-baking in as further weak point? Simply attempting to suppose by means of, at what level may we make a mark that type of worst is behind you? I feel we thought {that a} 12 months in the past, clearly not occurring now. However possibly simply body total that SMB publicity, I feel, can be useful. Thanks.

Cameron Hyzer — Chief Monetary Officer

So SMB continues to be round one-third of our enterprise. We have seen enterprise proceed to develop when it comes to combine, in order that’s up above 40% at this level. Our focus has actually been not on — simply not serving SMB anymore however actually taking the credit score threat out of SMB and forcing these clients which might be smaller or riskier to prepay upfront and in the end do this. All of our product focus and actually gross sales funding at this level goes upmarket, so that could be a clear focus of us — of ours, however we’re not going to essentially flip away smaller clients which might be — proceed to get actual worth out of the system and proceed to make use of the system to drive their gross sales motions as properly.

Henry Schuck — Founder and Chief Government Officer

However, Brent, I additionally suppose you must take into consideration the actions we took right this moment with the cost and the rise in estimates. We absolutely intend on placing this volatility in our enterprise behind us. And going ahead, we do not anticipate after this cost and after the elevated estimates towards the again half of the 12 months that write-offs will create volatility in our information going ahead.

Brent Bracelin — Analyst

Useful colour. Thanks.

Operator

Our subsequent query comes from the road of Koji Ikeda with Financial institution of America. Your line is open.

Koji Ikeda — Analyst

Hey, guys. Thanks for taking the questions. A pair from me right here. Perhaps the primary one for Cam.

Simply wished to grasp somewhat bit extra on the write-downs headwind to the steering for the total 12 months. And I do know you guys aren’t guiding 2025, however simply serious about the write-downs and potential impacts heading into 2025. Is it a full 12 months of affect? Does it have an effect on 1Q ’25? And does it probably bleed into the second quarter of 2025, too?

Cameron Hyzer — Chief Monetary Officer

So actually, the write-downs that we realized now had been eliminating threat of nonpayment on receivables that we now have that we have already acknowledged income towards. After which one other huge portion of the change in steering was taking out the income that we might have earned from these clients that we have written down or written off as we undergo the rest of the 12 months. Our expectations at this level or the best way we have outlined steering is to imagine that these write-offs proceed to escalate and that they’d proceed to have an effect on our outcomes. However in the end, the operational enhancements that we have put in place, requiring prepayment upfront from smaller and extra dangerous clients, in addition to shifting the gross sales crew to focus extra on mid-market and enterprise clients ought to ultimately, and we’re targeted on making certain, that they eradicate quite a lot of the volatility associated to these small companies.

And so if you concentrate on the offers that we’re promoting right this moment that we might probably write off in six to 9 months, so on the finish of the 12 months, as we transfer into the start of subsequent 12 months, we’re aiming to considerably scale back the danger of these write-offs when it comes to progress.

Henry Schuck — Founder and Chief Government Officer

I might add right here, after we take into consideration the remainder of this 12 months and 2025, what we’ll let you know is we’ll end this 12 months with $1 of free money circulation per share, and we anticipate to meaningfully develop that in 2025. And I am assured in that we — primarily based quite a bit round the truth that within the quarter, we had our greatest web new ARR add in additional than a 12 months.

Koji Ikeda — Analyst

Obtained it, Henry. And only one follow-up, if I’ll right here, Henry, for you. In prior quarters, you will have talked about clients, and I will name them boomerang clients that left ZoomInfo which have come again to you. I do not suppose you actually talked about it a lot in your ready commentary.

So any type of colour on possibly some greater clients which have returned to the ZoomInfo platform? Thanks.

Henry Schuck — Founder and Chief Government Officer

Yup. This quarter was our greatest win-back quarter on file ever.

Operator

Our subsequent query comes from the road of DJ Hynes of Canaccord Genuity. Your line is open.

DJ Hynes — Analyst

Hey, guys. Thanks for taking the query. Henry, one for you. So quite a lot of your knowledge right this moment is being piped into CRM methods.

The CRM distributors are additionally attempting to construct Copilots that assist with activating intelligence, prompting subsequent finest motion. What provides you confidence that the AI-driven performance will reside with ZoomInfo versus the system of file or the CRM distributors that you simply associate with?

Henry Schuck — Founder and Chief Government Officer

Yeah, I might take into consideration the information that will get piped into CRMs as type of contact or firm knowledge. And the information that you simply truly have to win from a Copilot perspective is an amazing quantity of sign knowledge that you simply use to establish which clients to achieve out to right this moment, tomorrow, and the the reason why. And so you’ll be able to consider that as intense alerts, or new rent alerts, or funding alerts, or visiting your pricing web page alerts, or visiting a competitor’s evaluation web page sign, or researching your competitor. And all of these alerts, these are proprietary to ZoomInfo, and so they do not reside in CRM, and that sign is important so that you can interact with the appropriate clients on the proper time.

And so Copilot’s simply constructed off of knowledge that sit inside a CRM, we’ll all the time be lacking the mandatory sign for Copilots to truly work and be helpful. And so we have invested quite a bit in ensuring that we now have the most effective sign round corporations and folks, however we have additionally gone out and began constructing a sturdy ecosystem of sign suppliers that we have constructed into our Copilot providing as properly. And the gross sales of Copilot, the monetization of Copilot in our buyer base was solidly above our expectations. It places us far forward of any competitor within the house and we really feel actually good in regards to the innovation we have been in a position to ship there within the final 12 months.

DJ Hynes — Analyst

Yeah. Nice to listen to. Thanks for the colour.

Operator

Our subsequent query comes from the road of Taylor McGinnis of UBS. Your line is open.

Taylor McGinnis — Analyst

Yeah. Hello. Thanks a lot for taking my query. So if I have a look at the 3Q rev information, it assumes a sequential enhance, which is a reversal from among the latest developments we have seen.

Now I might think about a few of that is perhaps because of the write-downs in softer new enterprise adjustments that is perhaps having an affect there. However Cameron, are you able to assist us bridge that hole? I feel you talked about adjusted income of $307 million within the quarter. So are you able to quantify the items that make up the distinction between that and what was reported? And as we glance into 3Q and 4Q, can you quantify the write-down in new enterprise affect that is embedded? Thanks.

Cameron Hyzer — Chief Monetary Officer

So within the second quarter, we took a cost associated to the change of estimates that we had, and people are estimates across the collectibility of receivables from clients. So with respect to income, that was $15 million of the cost, and that is income that we have successfully acknowledged traditionally, however because of the change in estimates wanted to run that by means of Q2. So the income that we generated in Q2 from a GAAP perspective was $292 million, however that included $15 million of write-downs that should not recur as we have actually targeted on figuring out every little thing that we felt was in danger, modified our estimate round these, put it into Q2. And due to this fact, going ahead, we wish to begin with a clear slate.

So primarily based on that, I feel in Q3, whereas it is going to be progress in comparison with the $292 million, it might nonetheless be a lower relative to the $307 million, in case you had been to again out that $15 million of write-down.

Taylor McGinnis — Analyst

Nice. Thanks a lot.

Operator

Our subsequent query comes from the road of Jackson Ader with KeyBanc Capital Markets. Your line is open.

Jackson Ader — Analyst

Hello. Thanks for taking our questions, guys. Actually, the one for me is, Henry, on the developments or the constructive developments within the enterprise that aren’t anticipated to proceed or are being type of faraway from steering going ahead. I am simply curious, are you already seeing among the enterprise momentum gradual right here as we — like as we’re right here in early August? Or is that this simply true conservatism? Or is it truly occurring and that is why you take it out of steering? Thanks.

Henry Schuck — Founder and Chief Government Officer

No, we’re not seeing the momentum within the enterprise decelerate the enterprise or upmarket momentum. We really feel actually good in regards to the operational enhancements and the operational success that we have seen and anticipate that we’ll proceed to execute towards that.

Jackson Ader — Analyst

Obtained it. Thanks.

Operator

Our subsequent query comes from the road of Michael Turrin of Wells Fargo. Your line is open.

Michael Berg — Wells Fargo Securities — Analyst

Hey. Michael Berg on for Michael Turrin. After I take into consideration the margin affect of the write-offs, how can you concentrate on how that flows by means of the remainder of fiscal ’24 on a margin proportion affect? After which how can I take into consideration that rolling by means of into fiscal ’25? Then I’ve a fast follow-up.

Cameron Hyzer — Chief Monetary Officer

Certain. So we did have numerous discrete occasions. These are specified by the press launch in addition to within the 10-Q. Once you look previous these particular expenses, the margins would have been materially larger, nearly 10 factors larger, and I might anticipate that we can’t have further expenses like that.

So I feel the — in case you professional forma these expenses out, that may be the type of underlying efficiency of the enterprise that I might begin with from a modeling perspective.

Michael Berg — Wells Fargo Securities — Analyst

Useful. And a fast follow-up for Henry right here. You made some extent on the decision to say that you simply plan to be aggressively shopping for shares right here. What can be your key issues to level to that is driving your confidence in scooping up extra shares transferring ahead? Thanks.

Henry Schuck — Founder and Chief Government Officer

Look, I feel that the powerful half about this quarter is that we had an amazing quantity of operational enhancements that we noticed. We noticed web income retention stabilize for the primary time since This autumn ’21. We noticed our DaaS enterprise rising — DaaS and operations enterprise rising 23% 12 months over 12 months. We noticed progress in our $100,000 cohort for the primary time since This autumn of ’22.

We proceed to develop our $1 million cohort. We’re addressing the write-off problem by taking a big quantity of our new enterprise ACV by means of upfront prepayments. Copilot is solidly above our expectations from a gross sales perspective into the shopper base. I feel that we now have great product market match there, and that is going to be actually laborious for lots of buyers to see due to this accounting cost and the best way that we’re serious about steering for the remainder of the 12 months.

That being mentioned, I’ve great confidence in ZoomInfo, and I am excited to be a purchaser.

Operator

Our subsequent query comes from the road of Surinder Thind of Jefferies. Your line is open.

Surinder Thind — Analyst

Thanks. Simply, Henry, any colour on breaking down the NRR between SMBs and mid-market? After which possibly if you have a look at the brand new enterprise that you simply’re successful, so what’s that blend between the SMBs and mid and enterprise? And possibly how does that examine to your present ARR combine?

Henry Schuck — Founder and Chief Government Officer

Yeah. You possibly can take into consideration on the brand new enterprise facet, on the brand new enterprise facet, we had excessive watermarks for enterprise and mid-market new enterprise, and so these are considerably larger as a proportion within the quarter than we have seen traditionally. That was pushed by segmenting the gross sales rep base into SMB, mid-market, and enterprise reps, after which allocating sources correctly throughout that group. Cameron mentioned it, within the buyer base, you’ll be able to take into consideration the breakout as type of 40% enterprise, round 30% — somewhat below 30% mid-market and the remainder in SMB.

And our intention is to maneuver the enterprise considerably upmarket within the mid-market and enterprise.

Surinder Thind — Analyst

Obtained it. And only one fast clarification query on Copilot. The ARR determine you supplied, I feel it was $18 million. Was that as of quarter finish or is that as of a unique time frame?

Henry Schuck — Founder and Chief Government Officer

That was as of quarter finish.

Surinder Thind — Analyst

Thanks.

Operator

Our subsequent query comes from the road of Brian Peterson of Raymond James. Your line is open.

Brian Peterson — Analyst

Hey, guys. Thanks for taking the query. So, Cameron, simply on the $33 million in expenses you talked about this quarter, simply to make clear, how a lot of that’s embedded within the 2Q NRR determine? Or is a few of that may have been impacted prior intervals or future intervals? I simply wish to be sure that I perceive how the fees are impacting the NRR. Thanks.

Cameron Hyzer — Chief Monetary Officer

Yeah. So a lot of the enhance in write-offs and adjustments which have gone by means of the estimates, actually extra of the brand new enterprise that we have introduced on than they do to NRR. So the NRR is de facto not impacted by these expenses.

Operator

Our subsequent query comes from the road of Siti Panigrahi with Mizuho. Your line is open.

Siti Panigrahi — Analyst

Thanks for taking my query. I simply wish to make clear, you talked about in case you have a look at your steering second half, you take down $50 million in revenues, if I exclude that $15 million write-off. So how a lot of that — the $50 million that you are taking out, how a lot of is a write-off versus any type of softer new gross sales or downsells or any cannibalization you are going to see on condition that This autumn one other robust renewal quarter?

Cameron Hyzer — Chief Monetary Officer

So the best way I take into consideration that, Siti, is that of the complete change in steering, so the total $60 million, roughly half of that has to do with write-offs that we have incurred. So a part of that’s the cost. One other half is the income that we might have acknowledged from these clients that we wrote off over the second half of the 12 months. The opposite half of that’s actually a rise in conservatism when it comes to the market total.

A part of that conservatism is a rise within the assumptions round ongoing write-offs. So seeing these write-off charges escalate going ahead in addition to simply conservatism across the gross sales and retention atmosphere.

Siti Panigrahi — Analyst

Thanks for that colour.

Operator

Our subsequent query comes from the road of Joshua Reilly with Needham. Your line is open.

Joshua Reilly — Needham and Firm — Analyst

Thanks for taking my query. Only one fast one for me. You talked about on the finish of the month of June is if you noticed elevated write-offs for SMBs. I suppose possibly what do you suppose modified in that time frame relative to what we had been seeing within the first quarter? As a result of it appeared just like the renewals weren’t nice for SMBs within the first quarter.

Was there some interval the place it was somewhat bit higher for a time frame, after which it acquired dramatically worse? Or what macro issue possibly got here into play there or another issue that we must be contemplating? Thanks, guys.

Cameron Hyzer — Chief Monetary Officer

So, actually, we did see a rise within the charges and a rise within the income related to these write-offs. A part of that’s the timing and catching up of write-offs. Write-offs do not occur instantly. We’re clearly chasing fee for people, and it does take us in a time frame earlier than we absolutely get to the purpose the place we’re prepared to jot down one thing off.

We’ve got additionally seen additional stretching of small companies when it comes to their entry to capital. So that you see the will increase in corporations shutting down. I feel that is occurred extra as we have gotten into the summer season. And so I might say that these two elements actually modified as we acquired into June.

If we glance again on the pattern from Q3 to This autumn to Q1, we truly noticed enhancements in our write-off charges, after which we noticed these reverse as we acquired by means of the top of the quarter.

Joshua Reilly — Needham and Firm — Analyst

Obtained it. Thanks, guys.

Operator

Our subsequent query comes from the road of Pat Walravens of Residents JMP. Your line is open.

Austin Cole — JMP Securities — Analyst

Nice. That is Austin Cole on for Pat Walravens right here. Respect you taking my query. I simply wished to ask in regards to the DaaS enterprise, 13% of ACV.

Are you able to simply discuss what you are doing to drive success there? And the way huge do you suppose it could get? Thanks.

Henry Schuck — Founder and Chief Government Officer

Yeah. Thanks for the query. We — final 12 months, constructed a crew of DaaS specialists who’re accountable for serving to our clients combine our knowledge inside their workflows and get that behind workflows like territory planning, or account scoring, or new AI workflows that they are constructing. We anticipate this may be — can proceed to develop on the charges that it is rising and be an actual significant a part of our enterprise going ahead.

Austin Cole — JMP Securities — Analyst

Nice. Thanks.

Operator

And I’m displaying no additional questions presently. I want to flip the decision over to Henry for closing remarks.

Henry Schuck — Founder and Chief Government Officer

Thanks, everybody, for becoming a member of us tonight. I might identical to to take a second to reiterate what I feel are a very powerful key takeaways from tonight’s name. First, we have taken crucial and complete accounting expenses this quarter to deal with our write-off. And whereas they absolutely circulation by means of Q2 outcomes and negatively affect the quarter and our full-year steering, this motion units us up very properly for the longer term.

Moreover, we have made the mandatory operational changes in the best way that we prolong credit score to our clients to make sure that write-offs don’t proceed to be a headwind in our enterprise. Second, we delivered robust operational efficiency, NRR stabilized. We’ve got the most effective web new ARR quarter in a 12 months. We’re rising our $100,000 and $1 million clients.

Copilot gross sales had been solidly above our expectations, and we see data-as-a-service progress alternatives pushed by AI use circumstances, and we’re dedicated to driving long-term worth creation by means of persistently rising free money circulation per share. I stay up for talking with you and seeing you in particular person as we take part in numerous investor occasions over the approaching weeks. Thanks.

Operator

[Operator signoff]

Length: 0 minutes

Name individuals:

Jerry Sisitsky — Investor Relations

Henry Schuck — Founder and Chief Government Officer

Cameron Hyzer — Chief Monetary Officer

Elizabeth Porter — Morgan Stanley — Analyst

Mark Murphy — Analyst

Brad Zelnick — Analyst

Raimo Lenschow — Analyst

Parker Lane — Stifel Monetary Corp. — Analyst

Alex Zukin — Analyst

Unknown speaker — — Analyst

Brent Bracelin — Analyst

Koji Ikeda — Analyst

DJ Hynes — Analyst

Taylor McGinnis — Analyst

Jackson Ader — Analyst

Michael Berg — Wells Fargo Securities — Analyst

Surinder Thind — Analyst

Brian Peterson — Analyst

Siti Panigrahi — Analyst

Joshua Reilly — Needham and Firm — Analyst

Austin Cole — JMP Securities — Analyst

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