ZIPRECRUITER, INC. Q3 FY2024 earnings call

• ZipRecruiter continues to navigate a protracted labor market downturn. Q3 revenue was down 25% YOY, but both revenue and adjusted EBITDA came in above guidance. - Focused on winning job seeker market share via superior job search experience; job seeker traffic grew year-over-year at least 13 percentage points more than largest competitors. - Strategic pillars: Increasing employers and revenue per paid employer (launched ZipIntro and next-gen resume database); increasing job seekers (invested in job seeker experience, saw 21% US web traffic growth YOY); making matching technology smarter (improved email notifications for job seekers, saw 100% increase in clicks and 120% increase in applications).

In Q3 2024, ZipRecruiter's revenue was $117.1 million, a 25% year-over-year decline. Net loss was $2.6 million, while adjusted EBITDA was $15 million, equating to a 13% adjusted EBITDA margin. Quarterly paid employers were 65,000, a 27% decrease versus Q3 2023 and 7% sequentially. Revenue per paid employer was $1795, up 3% year-over-year and 2% sequentially.

• Q4 2024 revenue guidance midpoint is $107 million, a 21% YOY decline and 9% QOQ decline, reflecting prolonged labor market downturn and seasonal softness. - Adjusted EBITDA guidance for Q4 2024 is $9 million midpoint, 8% margin. - Full year 2024 adjusted EBITDA margin is expected to be 16%, within年初 expectations and leveling off in low to mid-teens.

Forward-looking statements are subject to risks and uncertainties relating to future events and/or future financial performance. Actual results could differ materially from forward-looking statements. Risks can be found in ZipRecruiter’s quarterly report in Form 10-Q for the quarter ended September 30, 2024.

Q: Just in terms of the verticals that you serve, any pockets of strength and early cycle verticals with softness?

A: Health care remained fairly robust compared to other verticals; transportation, storage, travel and leisure were weaker. Early verticals like finance and technology were in between.

Q: Update on enterprise customers?

A: Percentage of revenue from performance marketing driven by enterprise customers ticked up to 22%. Enterprise customers were more robust than SMBs; good execution and hiring needs in areas like health care.

Q: House view on when the 'great stay' will end and how it will unfold?

A: Quit rate has fallen from 3% in Jan 2022 to under 2% recently. Combination of factors like post-COVID rehiring perks and low interest rates on homes. Long-term, US labor economy is healthy and hiring will resume.

Q: Q4 guidance and seasonal slowdown?

A: Q4 guide takes into account seasonal decline from SMBs and continued soft labor market.

Q: Timeline for launch of Breakroom in the US and monetization?

A: Breakroom is performing well in the UK, work underway to launch in US in 2025. New products like ZipIntro and resume database are in value maximization phase now, expected to contribute more over time.

Q: Balancing investments for low to mid-teens margin profile?

A: Philosophy is to respond to dynamic environment, delivering margins in low to mid-teens consistent with long-term performance.

Q: Tailwinds from job seeker traffic growth?

A: Job seekers are foundational for the marketplace. Growth in job seeker traffic helps new business acquisition, matching technology, customer retention, and keeps value proposition strong.

Q: Employers coming back without marketing effort?

A: High brand awareness means marketing and sales can scale down over time. Top of mind brand recognition leads to organic business surge when hiring demand increases, providing operating leverage.