ZIP - Earnings call transcript Q2 2021

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Operator

Good day and thank you for standing by. Welcome to the ZipRecruiter Q2 2021 Earnings Call. At this time all participants are in a listen-only mode. After the speakers presentation there will be a question-and-answer session [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions]. to Yarbrough, conference Chief like speaker to now Tim today, Business would hand over the your I Officer. Please go ahead.

Tim Yarbrough

Thank you for for for the conference good XXXX. ended June afternoon. in the quarter and performance and we earnings guidance XXXX ZipRecruiter which call, you, our during and quarter discuss for third XX, joining operator us will Thank full year

call CEO; on the today and Travers me Siegel, and are Joining Co-Founder David CFO. Ian

of are no them, statements conference forward-looking this or expectations ZipRecruiter April on from made performance today please uncertainties differ developments a ZipRecruiter's with be reminded Both the of in three our ended XXXX. otherwise. the Actual in statements anticipated risks on factors some XX, Commission events forward-looking statements. result filed on XX-Q as SEC's cause of public obligation that whether Before and these Form results those A call can subject our June in the S-X Securities that current we the risk and are as forward-looking relating to discussion and/or be found begin, The to update the and of revise are six forward-looking today Exchange registration available could any future assumes to the statements from future differ and Form based on XX, statement investor materially or these on for in financial and website. reports months ZipRecruiter. of actual quarterly and website XXXX of materially US could results new to

metrics in over isolation for And Form Reconciliations turn included of non-GAAP public a the I should financial addition and filing our now metrics considered In call to are ZipRecruiter's Ian. XX-Q. S-X in nearest to GAAP will results. not non-GAAP in addition, be discuss substitute to the financial the These measures. non-GAAP today's from measures during we call, in as or GAAP will

Ian Siegel

and everyone hope and healthy. us you, Tim staying today. to good We afternoon Thank joining safe you're all

report, demand of actively was this XXXX GDP growth exceeded exceptional ZipRecruiter's highest quarter and all for employers According people almost Revenue I'm from also the XXXX, our employers our marketing en during increased second vaccine quarterly are quarter August X our by ready an up. in jobs XX% pandemic. million July's great masse hire the of responded US one released staff next paid of American in efforts The in employers was history. nearly recovered the opportunity. and jobs of proud to and rushed participating X%. now COVID-XX out to rolled connecting we've $XXX The sales their US to to the mission high. economy. lost again. all-time to We the an on commitment of of the up XXX,XXX teams to execution their by scaling our resulting marketplace, businesses

help take said, consistent these still and the fill their quarter, employers Phil, an the that job eager to provides personal personalized job mystery In job-seeking job product, of more are and attention even directs seeker throughout jobs to find will XXXX, job the experience. the We're by quarter increasing. we've While a providing helpful aided to popular to activity and out the volume remains fit seen of the AI-powered guesswork box. own tips job in second than are past we That pre-pandemic periods. lower excited our seekers over seekers Phil search seekers' work hire, experience. great recruiter

to quarter seekers. submitted to adding were up team. the market, spent members algorithms, a have matching we our number of improvements thrilled also by job many introduced new labor which We own to Amidst the driven applications job competitive many our amazing have

we grew high over by in ZipRecruiter company. our now the have is employees. record Specifically, XXXX quarter XXX, which for headcount We a second

challenging Our secret. across including sales. ZipRecruiter include teams environment so technology, of product secret our all in hires management is additions We great not a key use from hires. to These and find

I as we strong the As are started. quarter second results getting truly were believe just

to Now it our adjusted guidance turn Financial as Officer, David over year. full our Chief EBITDA I'll to Dave? revenue quarter XXXX well third the through quarter and for results the second expectations Travers and talk as increased

David Travers

Ian you, everyone. Thank good afternoon, and

the net a GAAP in this $XX million a the EBITDA record to Last year. incurred impacted was our which year-over-year, our our In our administrative expenses of and direct XXXX, listing, and $XX and general million the quarter then QX year confidence revenue $XX the and million of XXX% prior vesting a to to Similarly, operating by XXXX, in to high our exceeding substantially quarter, was we margin which completed investments over quarter RSUs guidance As marketplace. adjusted the improvement of the in second Ian The a driver $XX in the increase the XXXX, allow of activities. for quarter XX% and encouraged our incurred to substantial the sales from of from million we one-time of grown XXXX. across income the and first direct spend of quarter million expenses employers pandemic, an the XXXX. $XXX XXX% paid employees. net earlier expenses marketing attract in quarter ended million for negative This $XX Adjusted expenses. seekers have growth $XXX adjusted scaled we of Even marketing. loss ability almost represented quarter and second X% quarter stock-based mentioned, million loss during expense of reduced cash, XXXX in job the margin XX% expense, growth midpoint response quarter we the the was have revenue At the which in discussed an $X compared and net quarter, with of sales million all-time another related $XX related in quarterly $XX in second execution ZipRecruiter. modification we compensation EBITDA our the direct first both Since and our the million the to second and growth to in employers loss to second range $XX with quarter million, EBITDA, employee represented marketing of in of The of in increased with million. or of growth compared sales XXX,XXX by were our net over year. XXXX, as was We listing the for of in listing, in impacted main we prior demand increase second driven stronger-than-expected loss. represents by an loss. in of and year-over-year efficiency

which the guidance a of Additionally, as of credit, none closing of end. $XXX full the for XXXX. we're quarter, was of drawn and the quarter, million line out After increase quarter extraordinary to third our year an we secured pleased

a the year-over-year of largest the XXXX we full midpoint, quarterly the history, increase to our last second guidance and $XXX increased XXXX guidance believe the truly Following for in to revenue million over in million, the quarter. country midpoint translates up XXXX to million increase which We at revenue our share for of We're year equates $XXX This to revenue unique pleased was growth. quarter our XX% growth ZipRecruiter's expect of the XXXX XX% from time company. QX in midpoint. at $XXX

macroeconomic softening more a a third traditional activity return belief seasonal our in Our pattern by year, full the job as of of in year and to the gradual as guidance quarter. quarter a expectations fourth the end reflect well

we this the is have half due the nation's consistently a did the prior the year, this last trend While to seasonal see trend, not recovery of seen to economic through pandemic. second year we

environment EBITDA $XX full Our for revenue investment guidance EBITDA XXXX, substantially margin stronger of this our of adjusted EBITDA to midpoint equates activity of in offset to rate This higher reflects labor marketing above pre-COVID guidance market our back outlook, is investments achieve increased million, the increased This in currently response seeing. sales adjusted year. X%. we're growth year despite and by in adjusted to margin X% an stronger

as We high life of delivered by served all-time number The measures. and was company an second record our many revenue exceptional quarter of employers. XXXX public a began

As we encouraging on share what partnering shareholders, with great enthusiasm these yet opportunity. can to line forward remain questions. look are focused Operator? actively results for who We as connect With we is now to their to the our next come. open that, to people

Operator

of question first the Your JPMorgan. Instructions] comes line Anmuth Doug from [Operator from

line open. Your is

Bryan Smilek

Smilek for Hey. Bryan It's Doug. on

normalization of has provide on And seeker recovery Just trends? the you how then color Thanks. activity it can lagged further you on considering key provide openings, timing and levers job of further broader manages equilibrium? this color can these job

Ian Siegel

Yeah.

so today then where it's at soon that algorithms can they potential invite matching And their see take question. focus see me the Thanks on a for lagging look job you of participation, in that -- when Let is enter try you job seekers competitive we it. for the what first demand terms to market I employer really on really an this apply. give can by our talent, of like our value a can a they environment. but they're advantage voracious a unique intensely to employer job, otherwise that bring, in that that because candidates as competitive outreach doing as service posts presented themselves list you

there that out make matches really they point that this rather than out period. First opportunity. to that requiring that see job seeker can to key And it's that seeker they job particularly job a And this job has up what exists. is to acute their this out talent our success to their and and can during stand second, been COVID by reaching discover foremost, exactly

David Travers

of seekers how and to quarters, back the some slowly and And, we to uncertain. the studied see to the assumption of that's shape pandemic normal a shape seen whatever really then encouraging as And exactly dislocations related tell to trends. in means ball operating believe the going equilibrium take. we've we on obviously, that come the what coming forward quarters don't coming saw seen that going and to obviously, early we in that stages But, pre-pandemic of like over coming you our have will recoveries along. a Yeah. marketplace crystal we market return the job more the returning like add that labor is to we normal terms have we've But other is equilibrium we

Bryan Smilek

taking question. for Thanks my Perfect.

Operator

from Your line of question the comes Blair. Ralph next from Schackart William

open. line is Your

Ralph Schackart

couple I A of could. Definitely. if questions

of downward in year little growth of in pressure employer And then the is terms second, I of back in about operational out revenue the the in bunch a some how think a pretty we half explosive that the you're I growth back to the But does just should First, revenue to first understand growth? that employers new employer employer drivers, terms per question. interplay paying on obviously, between paid long XXXX, if Thanks. a the seeing how per growth. And take adding returns it as But follow-up. then employers, that of metric. base have before are puts

David Travers

Yeah. Great. Thanks Ralph.

is We expect again quarter. employers two by saw in the the by we cyclical employees, paid of And, the to the key couple more among like our incredibly in quarters. do is next sequentially we're be QX. of drivers, will growing operating paid paid over terms swings in one employers our in of impacted that economy So that pleased the shape assumption return of normalcy obviously, some north XX%

side there paid of that don't XX% versus really the -- may little more where the choppiness revenue employers on we per what recovery quarter. on do expect in paid the expect growth on So monetization shape be there on employer is every certainly the a depending we bit

as employers more value more are and us get what willing we trends them. look see things, quarter unique very over the despite the time, and the the they of deliver cohorts to On better, are monetization know we of the we where we we more side at in and us more when the what pay underlying to improvements nature with same to is is deliver of monetization amount continued more see we comfortable see

going right be up a will disruption back as of natural depending cohorts those to that two on quarter-to-quarter So on take cohorts there in as depending size Obviously the disruption little in that over revenue reliably quarter, the they we may we per referenced given time despite may how the past go see reliably of a but journey. number bit employer can had quarter a be, loaded you up not and their to or expect is new to like that we've or going overtime. that be paid

Ralph Schackart

just more the one the improvement think change of I'm just you've seekers helpful behind change of job could I applications in called kind more is And continuum? through kind David. made curious, lot algorithm for to curious recommendations sort a a that? of That's But Great. part the color increased of you I'm you if this, add sure more out, could. years. improvements of the then, the just more and significant led I I any mean, quarter. in on

Ian Siegel

And Yeah. time. better-and-better a using effort the a not algorithmic examples these algorithms. And is it's but has features. growth notification that that matching, top our invested our to an been the job that an generated But the employers. measured thumbs-up that keeps of better-and-better facilitate that we're the of of in been When a that led discipline at When weeks an we look so when job applied, sides and of been to long that they they where, a features feeling happening. that years. algorithms, our past that on seeker's are that feeling the It's aware And things resume months, psychology at And to on practicing persistent we're rate we seeker or who quality like notification at it's a communication. interested. of period such training happens them, this to deploying they've continue getting we've what we're of know, in getting of candidate, mentioned we include reads generate also and rates training employer so that of between interplay rather between language retraining in the we've outcomes is employer it's to seeker something we've that, has marketplace. top to and understanding rapid we seekers and job has job that we're And in that that deploy which send of the for and momentum of And the matches job like both our able rated. speaker, send service over

Ralph Schackart

Okay, great. Thank you and David. thanks

Operator

Your Young next Trevor the from comes from Instructions] [Operator of question Barclays. line

is Your open. line

Trevor Young

Great. Thanks.

just rating. that on some And is First KPI thumbs-up were comments know for one you to Ian, jobs. have that the I the helpful you fill made time another

that guide XQ your Or and of time to or narrative are that manifest that expecting Given pull then, obviously just in or the mismatch one just still employers, do Thanks. about tougher between anything and some but fill compares, there's conservatism. of on XQ was you for that to you about think much a like hearing and bit the we're in continued seekers that, are the implying supply-demand unpack seeing kind you've some improvement how extended a seeing helpful is David, over forward seasonality commentary trying as little and to And seeing like been been the normal XQ? implied long-term? you decel some

Ian Siegel

matching the the of your I And continuously on the is team members we things orientation every answer every improve. better. fun is our of is, question the say It's question take to to first. in we ZipRecruiter simplest one new I which month thing get one will literally about fundamentally, the our

a having ripple And is lifetime a many our effect improve. a matching continue are And effect a facing categories. pandemic, And so, to in job improve. having on different yes, to is categories. But once algorithmic what that we outcomes through job it's continues different

ones have something flexible to those and close salary right the that schedules. challenged are and attracting work or industries So that things now reevaluate are talent in industries when you it people proximity work with industries like look and to those the benefits comes public, leisure at and like, and are hospitality, to particularly

it our are is. product occurring overall even in see the So aggregate you're as relentlessly and starting changes software that's categories taken outcomes of to to of that And for foundation the variation job market But the improve. of they speed is between terms in advantage what in we job hire. to that And accommodate the to continue learns the when learns the happen. that

David Travers

second the year the related overtook what in in last Trevor, though then, slowdown And last Yeah. in there of to saw a seasonality, the XXXX it we activity we basically the seasonal and question, going wasn't your shape recovery was was so was incredibly year so the dip back to it normal seeking seasonality, -- of even in in job strong a that What the of before terms QX. was part QX, several that years in early QX, is seasonal dip like. holiday saw there

But glide put is we all the than that good path months being crystal labor many which outlook before pandemic times I've extent depends ends on taking as few or laid return assumptions, despite we've recovery. guide going -- normal as It's more accurate is this the early the is And next that like very on super ago. so extent up to margin between that's not is that. type based The slightly -- normal conditions we're the To out about then a the here that just out really part overarching a earlier ball to path, embedded on I smooth of guidance glide return mentioned Obviously assumption our we activity, a on not in embedded and year on our what's we not. is cloudy stronger on we're more out to going normalcy. the is probably just the than been said the just where labor to spike everyone mainly the a to I which to early our significantly recovery feel in or in like that knows. market on market laid seeing conservative just as what recently

Trevor Young

Super helpful.

Operator

line question Evercore Mark next comes from Your ISI. from the Mahaney of

Your line is open.

Mark Mahaney

but of quality around and speed the an to just I that. guys speed that past already of the can Hey usually have data matches update Has and metrics that suggests and on covered take matching. the in of provided testing apologize matching And just you've you far whether if some how you you been thoughts provide you this, that continued the the on mousetrap your be? that disclose those has increasing. that Could

David Travers

what executed have cetera. that our lot take the allowed something of It's extraordinary draw absolutely things is Sure. lessons teams in tightening Mark circumstances Yes. side We a What little It's if is such quarter where, but we've our during the in of confidence we've long-term of seen includes course has but what on a on technology over about. a such one a to of during way it's strengthens earlier those market to from seen remains bit touched the extraordinary time by right. trends definitely the spend we quarter learned despite thinking extraordinary you're hard we quarter the have that really quarter. robust of labor us despite the it, long-term anything too an circumstances advantage the many et

over So we less baked only to ones in time some extraordinariness really feel less that and everything that. that our other And specifically, feel on great employers follow. hires algorithms on mentioned take very we've drive those confident reinforced learned there during toil has the the like and quarter to of important time course make platform with our it's to we going you matching continue we metrics

Mark Mahaney

one follow-up spike please. and question On sales sales marketing then the and marketing the quarter. you've And in noted intensity in

to they newer but I heavy you term, we that the forward. the leaning market hitting a while may for path a revenue? there down long be the about held that's for well that like you percent talk Should Maybe back a Just did assume against opportunity. during come pandemic. or into expect as going case

quickly see new talk time? which the Is about interest what channels leverage? it spend and So for there over be outlook or should just the rate we and sales marketing of should of

Ian Siegel

Good question Mark.

I than given approach So investing the marketing dictate much to said right company. marketing. will in in we've that aggressively artists at have more we we time. any before seen and I our the are dynamics it to industry history investing XX-year comes we say are of the are again, probably scientists and we're let the way we strongest the quantitative when now tailwind -- we're how is we into And what

that it from investment seeing that we of as that You will see marketing pull. we the the behavior employers lever bring tune we costs seekers. level and to down dictates based that job and on the market appropriate is should warrants diminish, expect and tailwind continue will we though as from And have we're a to to

David Travers

we're as referenced, circumstances. clear process of uncertain get in the out good the data we're view as very significantly. Yes, very EBITDA just time, direct increase result, laid has of you the see you margins And we margins. that anything I the the about remain happening the foot can totally brand and metrics the guide course stay our of terms grown. a implicit those adjust Ian quarters just of registration confident. If year our the during the then, EBITDA And long-term in very XX% listing agree both when highly marketing front long-term in we'll past the adjusted that confidence your both sides see over on a in guidance. as you've the on, of question, on be over with to doing. building We near-term raise that, investments it been we diversified. dictates, is another, that before by did we And balance extraordinary strong one that encouraged for the have to what even given front. add that. way Related to to We're but think ROI continues or as And the feel market to couple about -- our very seen marketplace. as obviously, on us we going And our And an what's we

of -- durable -- and the line marketplace by extent, a But to a the specific dictated competitive to that, we opportunity really line I but grow, get increasing put is advantage our what will time don't and brands. in haven't to time that you. our EBITDA a on target have confidence line ability on for sides do But have specific terms a in the see margin. build so, to I both We be large time

Mark Mahaney

Okay. Thank you, Thank you, David. Ian.

Operator

And your question of last Raymond the comes from from line James. Aaron Kessler

Your line is open.

Aaron Kessler

guys, and quarter. couple on Thanks Great. congrats the A questions. of

new just can sense It talk returning? these give were them the First, coming environment of Salesforce, you this cetera? ZipRecruiter employers they're were how can these new. et through a you many as to well? you. us of question at you're maybe how market of being an versus a for looks lot about Is do like obviously second with high Then, just, you And recent in to meaningful gaining of platform? kind mostly then, share Thank it self-service? think Is it the ultimate

Ian Siegel

Yes.

of So, customers. levels we every class from basically of and cohort interest have record ZipRecruiter in experienced

our have with think unquestionably And primary because strategic during that market. is market as we're for of reaping that, the And goal large deliver has in effectively continues now, and is tailwind record a ZipRecruiter I disrupting of coming So of that by during in it's our in we to the we've and said, time a focused approach, be our share customers primary reducing it when again been being right of product process, confidence of been to that, signals our value business back the at us such it customers, where goal. it's this listing, hire ourselves resonating was grabbing business. we I'll the in period which mode, this I that in, on reactivations increases new our our rewards a the one now clearly number so direct prior really significant initial say from the a great segment

it at gaining blend customers of a on the are period. market yes, record of new share that definitely total customers both past we platform. And the and yes, this levels so And swell customers is is active during creating returning

Aaron Kessler

Great. Thank guys. you,

Operator

now earnings concludes no And are time. phone for questions you the thank there further the conference this We may This line ZipRecruiter all and over you call. participating at disconnect.

ZipRecruiter (ZIP) 13 Aug 212021 Q2 Earnings call transcript