United States securities and exchange commission logo
March 26, 2021
Ian Siegel
Chief Executive Officer
ZipRecruiter, Inc.
604 Arizona Avenue
Santa Monica, CA 90401
Re: ZipRecruiter, Inc.
Amendment No. 1 to
Draft Registration Statement on Form S-1
Submitted March 10,
2021
CIK No. 0001617553
Dear Mr. Siegel:
We have reviewed your amended draft registration statement and
have the following
comments. In some of our comments, we may ask you to provide us with
information so we
may better understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments. Unless otherwise noted, where prior comments are referred to
they refer to our letter
dated March 25, 2021.
Amendment No. 1 to Draft Registration Statement on Form S-1
Management's Discussion and Analysis of Financial Condition and Results
of Operations
Key Operating Metrics and Non-GAAP Financial Measures, page 64
1. We note your response
to prior comment 9. Please reconcile your response with your risk
factor that states it
is important that employers enter into paid time-based job posting
plans, renew their
plans when the contract term expires, and purchase performance-based
services from you. This
disclosure seems to indicate that subscriptions renewals are an
important aspect of
your business. Please advise.
2. We note your response
to prior comment 11. Please revise to disclose the number of
Ian Siegel
FirstName LastNameIan Siegel
ZipRecruiter, Inc.
Comapany
March NameZipRecruiter, Inc.
26, 2021
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clicks or job applications and the cost-per click or job application
for each period
presented. Price and volume disclosures such as the number of clicks
or job applications
and revenue per-click or job application including an analysis of any
trends or
uncertainties appears to be important information necessary to
understanding your results
of operations. We refer you to Item 303(a) of Regulation S-K and
Section III.B of SEC
Release 33-8350.
Quarterly Paid Employers, page 64
3. Please clarify your response to prior comment 11 that indicates you
not classify individual
customers as, or track the portion of your business represented by,
small-and medium-
sized businesses and large enterprise businesses in a formal and
consistent manner.
Explain in detail how you how track the portion of your business
represented by small-and
medium-sized businesses and large enterprise businesses, and tell us
how management
uses this information to manage the business. Describe the
dramatically different spend
profiles that large enterprise and smaller businesses have over time.
Tell us how you
define a large enterprise business and small-and medium-sized
businesses. In this respect,
we note from your website that you define a small-and-medium sized
business as 1-5,000
employees and a large enterprise business as 5,000 or more employees.
Tell us the
number of paid employers and the associated revenues generated from
sales to small-and
medium-sized businesses and your large enterprise businesses for each
period presented.
Critical Accounting Policies and Estimates
Determination of the Fair Value of Common Stock on Grant Dates, page 87
4. Please provide us with a breakdown of all equity awards granted to
date in fiscal 2020 and
leading up to the initial public offering including the fair value of
the underlying common
stock used to value such awards as determined by your board of
directors. To the extent
there were any significant fluctuations in the fair values from
period-to-period, please
describe for us the factors that contributed to these fluctuations,
including any intervening
events within the Company or changes in your valuation assumptions or
methodology.
Plan of Distribution, page 145
5. We note your disclosure that there has not been a sustained recent
history of trading of
your Class A common stock in a private placement market prior to
listing on the NYSE.
Please tell us the time periods and trading used to make this
determination and whether
such determination included all private market trading and private
placements/financing
rounds involving ZipRecruiter s common stock whether on registered
ATSs or other
systems) including during first quarter of 2021. Also, tell us whether
such private market
trading information was included as part the independent common stock
valuation report
regarding the fair value per share/stock price that is required to be
submitted in
accordance with NYSE s direct listing rules.
6. We note your statement that the company has not engaged the financial
advisors to
Ian Siegel
FirstName LastNameIan Siegel
ZipRecruiter, Inc.
Comapany
March NameZipRecruiter, Inc.
26, 2021
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facilitate or coordinate price discovery activities or sales of the
Class A common stock.
As this is not a traditional firm commitment IPO, please clarify on
whose behalf the
financial advisors would be facilitating and coordinating such
activities/sales.
7. Please identify the specific provision of the NYSE direct listing
rules that requires the
DMM to facilitate an orderly market rather than a fair and
orderly opening for the
Class A common shares. Also, identify the specific rule(s) you are
referring to in your
statement that the NYSE will consult with Goldman Sachs and J.P.
Morgan to effect a fair
and orderly opening of your Class A common stock. In addition, please
explain why the
financial advisors are obligated to provide the fair value per
share information to the
DMM when the fair value per share (along with the other independent
common share
valuation report information) is already provided to the NYSE and
included in various
sections of the prospectus for the direct listing.
Note 2. Basis of Presentation, Principles of Consolidation and Summary of
Significant
Accounting Policies
Revenue Recognition
Performance-based Revenue, page F-11
8. Please clarify your response to prior comment 17 that indicates for
performance-based
revenue contracts, you infrequently exceed the customer s
contractual maximum for a
recruitment campaign. Please clarify how infrequently this event
occurs. It appears that
this occurrence is a price concession that should result in the
transaction price being
variable. Please advise of your accounting for providing free
products. We refer you to
ASC 606-10-32-5 and 55-45.
Note 16. Income Taxes, page F-33
9. You disclose as a result of your profitability in 2020 and estimates
of future taxable
income, you determined that it was more likely than not the deferred
tax assets will be
realized, and accordingly, released the valuation allowance of $37.7
million against the
deferred tax assets during 2020. Please provide us with a
comprehensive explanation as
to how you determined it is more likely than not that you will realize
the total deferred tax
assets. In this respect, explain the nature of the positive and
negative evidence that you
considered, how that evidence was weighted, and how that evidence led
you to determine
it was appropriate to release these valuation allowances. In addition,
describe the
anticipated future trends included in your projections of future
taxable income and the
amount of pre-tax income that you need to generate to realize these
deferred tax assets.
We refer you to ASC 740-10-30-16 through 25.
You may contact Joan Collopy at (202) 551-5743 or Elizabeth Sandoe at
(202) 551-5736
in our Division of Trading and Markets if you have questions regarding comments
appearing
under "Plan of Distribution." You may contact Morgan Youngwood, Staff
Accountant, at (202)
551-3479 or Stephen Krikorian, Accounting Branch Chief, at (202) 551-3488 if
you have
Ian Siegel
ZipRecruiter, Inc.
March 26, 2021
Page 4
questions regarding comments on the financial statements and related matters.
Please contact Jeff
Kauten, Staff Attorney, at (202) 551-3447 or Larry Spirgel, Office Chief, at
(202) 551-3815 with
any other questions.
Sincerely,
FirstName LastNameIan Siegel
Division of
Corporation Finance
Comapany NameZipRecruiter, Inc.
Office of
Technology
March 26, 2021 Page 4
cc: Katherine K. Duncan, Esq.
FirstName LastName