Earnings call transcript Q1 2023

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Operator

Ladies and gentlemen, good afternoon. My name is Abby, and I will be your conference operator today. At this time, I would like to welcome everyone to the ZipRecruiter Incorporated First Quarter 2023 Earnings Conference Call. Today's conference is being recorded. [Operator Instructions] Thank you.

turn over now Investor Drew will Relations. I the to conference Haroldson, And

may You begin.

Drew Haroldson

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

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

found quarter quarterly to risks forward-looking current conference we performance made available the subject the statements. results Before of the and in of forward-looking could risk some please differ assumes Form new today events ended will those future forward-looking that from be of ZipRecruiter as from expectations today, XX-Q discussion in our can anticipated of actual statements results financial update March SEC's to otherwise. materially investor in uncertainties for statements forward-looking and factors statements and/or begin, reminded Actual differ future be that to be developments materially report to of cause any a A on these related the are which them, and are the based whether obligation revise website The result ZipRecruiter. on XXXX, or ZipRecruiter's or as on website. call no XX, this could

in GAAP measures XX-Q. should in in metrics nearest results. ZipRecruiter's call, today's or during non-GAAP of GAAP metrics considered we will non-GAAP Form discuss letter be in addition, included Reconciliations to financial measures. to, In substitute from shareholder financial not non-GAAP addition are our isolation for a the the These

will call I Ian. over now to the turn And

Ian Siegel

end flexibility face Good $XX.X the us margin to profitability was adjusted the a and of business of macro our revenue rapidly of Drew. 'XX our of EBITDA of to high increases $XXX.X our conditions high guidance. point range million the but year-over-year, today. you, in EBITDA exceeded and This persistent million QX of above our the of and QX interest to joining both the model XX% is strong afternoon expenses. guidance. Thank rate deteriorating down adjust XX% testament ability of everyone adjusted

last highlighted the accelerated sharp broad-based softening to our would of the see trends year, slow economic demand plans call, we year. backdrop informed recruiting both beginning the has hiring deviation we the observed atypically recruiting budgets. response back slowdown as 'XX enterprise guidance have season the the industries. hiring normally outset in for predicted. as QX customers, off from conversations well of to In kick face. the of majority continue we marks The as with seasonal rest start employers now of across only across our showed and and From at has paring our which January their This the a decline. those been for and hiring annual with operate services QX SMBs employers refreshed we what to see uncertain the

providing we've are revenue anything years our unlike seen we these of are of Because in doing full which business, not trends, XX guidance. year

adjusted However, we outcomes, delivering of line on of against wide while a midpoint. focused million $XXX our possible there is remain range of guidance at top EBITDA the

several done market: from for an labor marketplace. joining conditions. within job ability our invitation key ZipRecruiter now there always to a to bearing job long-term of seeker seekers directly which an to in our softening a in spite are In decreasing rapidly XX% profitability. up traffic our is are deceleration, these fruit. new job Organic was QX, seven of apply employer macro investments, XX% advantages we've days We're doing received of of this to increase expenses what of One respond strategic changing

cooling and profitable flexible top-rated our technology to our while marketplace our industry-leading user model, to experiences. with operating allow in that sides matching this improving to both awareness all us our adapt of XX% aided brand It's market, hard-earned on continuing along invest

to pillars to turn I'll progress our over some talk marketplace through it our the against of of Dave Now strategy. three

David Travers

job Thank Ian. no current we of the that shape doubt headwinds employers impacting an large are will you, in firmly seekers is increasingly market our play the or ZipRecruiter plans. Regardless together. duration in cycle, that macroeconomic customers' hiring role believe There this environment of bringing and labor

and together how end, seekers we've to I'm the industry-leading to with share enables to generational some excited that progress technology our in come using you of To a shift employers job made technology. drive matching

first long our the investments in term. the pillar, have is current employer great will employers muted in though our in revenue with progress our KPIs bear Even our for that marketplace. per fruit of start will the and paid these sequentially, headwinds which moving number building increasing We we're macroeconomic strategic employers in confident products temporarily

focus ZipRecruiter. improving We enterprise creation creating now a simplifies requiring the campaigns time tasks customer remain take to Our customers. to eliminating of creating hiring QX that process customers previously hours customers. process in these a tool on faster of introduced new activating the minutes. campaign revenue the creation tool us priority, driving new in and for top which campaigns, a we for faster enterprise experience much In larger resulted for The estimate friction simultaneously 'XX, new and

the process, budgets. will that In to employers addition their able we increased spend certainty enterprise hiring to be reducing the also friction in

Our than manual XX% automated achieves solution processes. previous targets campaign the campaign more optimization often

QX generative this even but job job searchable 'XX, employers often new launch the process hiring Not to employers, process love for struggle also new of X,XXX over pages. only Finally, these the does leveraged template descriptions. further laborious in reduce friction with seekers pages. AI job writing we In

number more I'll It's marketplace. that looking seekers our of Now surprise pillar: the job are in to for seekers increasing move no second job our work.

in current more time important. backdrop in need of innovative an provides for all for be the makes the doing This the and XX% saw build to ZipRecruiter we QX. work job visits a job organic fact, world's most from to In job-seeking increase in opportunity we're their seekers tools seekers there

improvements we We've seekers regular the personal across make curate the process, job search about We're with seekers. put their onboarding face job products. sales we experience. providing real-time job expanding our for updates We're been engages our excited on Phil, uses reach search recruiter AI job to human feedback navigating Phil to because during about the and their job seeker continually

our to launched onboarding apps. mobile, flow is as previously QX users, also of web Phil's one rated 'XX now While was of native both desktop and number in featured Phil our

on articles seekers process to help advice job insights 'XX, information understand on information Job new seekers employers a love is the job a contributor which out. job more by seekers addresses hundreds the for and help of articles career new way. looking asymmetry how and their the ZipRecruiter what with the stand useful QX. the in inherent containing in In applications large them in are QX journey. content, hiring to traffic increase launched with helpful to their hub These make equipping we seeker

Salary estimated impressions, prediction the a we form the of we now than in provide In our listings criteria high remains when pay by job. any XX% most new ranges and get pay job out pay the estimate. for more when and directly data. jobs seekers looking for confidence have one those for either rolled QX clicks employer These 'XX, important the rates, marketplace of or doesn't show ZipRecruiter the without provided in applies Over via of info. employer the

time. our our conclude matching I'll smarter technology pillar: with third over our progress making around

one retrained as job smarter and have get 'XX, job invite we apply from of Phil different within XX% seekers XX% increased marketplace. seekers their getting algorithms seekers job Our XX%. day. seekers our an jobs for of received This and these new interact to less in to earlier days who their matching first are our job e-mail our models in In activity marketplace. an in new QX Over the with percentage seven journey within

I'll Tim quarter to Tim? and guidance. first Now through it turn the our to results talk over

Tim Yarbrough

and Dave, afternoon, good you, Thank everyone.

February. the of decline represents we quarter million of market. the year-over-year continued This revenue first in hiring and reflective is XX% end a and $XXX.X softening Our high guidance provided primarily of the accelerating in exceeded

Additionally, QX challenging comparisons we we when year-over-year. XX% 'XX grew against faced particularly

versus reflective XX% in XX% sequential reduced lower paid increase XX%. QX was make enterprise-driven among 'XX Quarterly hiring the vast up resulted 'XX. representing majority in weakness SMBs. $X,XXX, of in primarily was Revenue this of a paid businesses, were enterprises decrease and and QX QX. years, by demand decrease trend of versus prior This X% our strength is year-over-year employer from 'XX, but In of has QX both a QX decrease employers. an employers exacerbated small- paid growth a sequential which XXX,XXX, In and medium-sized per

the growth over the seen years our that term. long the confident continue However, will we remain all of we've in in cohorts trends

million expansion which research XX% partially net reduced XXXX. reflects GAAP million $X.X to lower first marketing in The the adjusted was in XX% and increases to equating expenses. $X a and income margin and by adjusted of of offset we compared macroeconomic QX the $XX.X development EBITDA a compared of to million, to was year-over-year primarily of 'XX. QX in response QX EBITDA million, $XX.X in expenses, margin sales margin quarter in changing landscape, 'XX XXXX

$XX.X The million was XX, Cash, $XXX.X of $XXX.X to cash securities XX, million due December to repurchases. marketable decrease equivalents million of was share XXXX. as primarily March quarter-over-quarter compared and XXXX, of as

Additionally, program. is Directors that Company's increase of of We million a in Board repurchase we has that previous not this authorized to commitment. total. to authorization authorizations $XXX This million the is note share in our the announced a addition $XXX

capital environment. flow, We free continue recognizing while macroeconomic of will the generating remain also diligent allocators we cash as uncertain

recent on has our weeks. last guidance. we increased in The during softness atypical Moving call noted to

enterprises reduce can While down This QX XX% considerable number with both spend advertising. trends, for contraction which to April year-over-year. in post both our revenue. these was reflective was XX% in impact have an If down and guidance, they on amount SMBs to our job XXXX a jobs macroeconomic revenue continuing of negative positive year-over-year, the and they remains is 'XX uncertainty of demand and and changes, continue the inform revenue

'XX QX year-over-year. guidance $XXX represents million revenue a of XX% decline midpoint the Our at

Given the revenue not increasingly uncertain macroeconomic environment, are providing we annual guidance.

impacting that opportunities to direct to our have are win new take advantage business and existing impact macroeconomic relationships employers fluctuations customers with a continue will top performance. our of on recognize will with line the deepen that employers, but further our We

XX% EBITDA margin the adjusted solutions moderating sales marketing labor our funded reflects fully and market, of midpoint million $XX during investments for guidance the quarter the simultaneously new continued investments into Our our adjusted EBITDA slowdown. while at for or the

scenarios $XXX million. and EBITDA XXX ability foresee generate to the between reiterate we adjusted can we reasonably of Finally, our majority in XXXX

to this a of of EBITDA our While there model the for range. range paths are adjusted flexibility wide line possibilities, many business allows top

will As range continued the respond our environments. a the which on business environment we always, further of and model and of our shareholders during conserving across broad quickly, demand commitment an from increased focus employers. decreased of capital profitability over term long means demonstrates to our to economic value times delivering to This flexibility

now we for can With line open that, the Operator? questions.

Operator

Instructions] We Ralph with Blair. [Operator question William Schackart from first our take will

Ralph Schackart

Just first quarter. talking down question about for being the on, I XX% the acceleration downwards revenue, guess, year-over-year for

that on color down be it next maintain the or the EBITDA QX leverage XX%. well. confidence continuing, that's sort then is just XX% acceleration just in Just last, is you more quarter as was is have April Maybe think I to then to, year speak the down through of helpful pronounced any range, kind for guidance guide and here? that that full of the obviously, of and that? -- And

Ian Siegel

has we recruiting for an of today, the deceleration what summarized have the been is I is Thanks you demand in acceleration And the there for question. shared that which Ian. think accurately This services.

clearly historically pattern. standardized left seasonal behind been predictable have had what and highly a We hiring

we our somewhat of large on focus decline the nimbleness the on which deliver we for company in confident to product still the so But reasserted we're we as historical hit range that, think we there our can predict that impaired by remain that history specificity, financial with well both the short the and, fact thanks in is precedence we where to the term, the with model And year. can seeing for in set why we and improvements, spite the ongoing our our that what of ability as is in said target stop no accuracy part now. will have is right EBITDA,

And ongoing just year. is of those a our remain to thanks term, industry. is multitude our long ability between about I thousands face. the are over an further, the grow affecting we them And companies board, to hire confident businesses of largest in their last thousands economic optimistic tens had players in enterprise macroeconomic improvements, very market in a have phenomenon. summit, to our These share. the hiring product the of spoke America. employers that week, where per their clearly reduced downturn This of the and and This we XX plans of of hirers all uncertainty Across face

Tim Yarbrough

Yes. And I'll question Tim. OpEx answer Ralph, on it's the levers.

have several item. the far largest variable the pull on, levers most marketing we sales we by can line So being different that and and

in So million spent periods. committed that highly of marketing. very future QX, and we is only [$XX] But A our into not portion sales that's over lever. not in variable spend and large

entertainment, services, a just at on already additional many focusing have look discretionary positions. like professional highest-impact more travel, hiring, back also pulled our cetera. the et We've We on of taken tech expenses

levers to different have that revenue $XXX can that in adjusted range pull So achieve a of many we're wide scenarios. million in EBITDA order -- we we under

David Travers

Ralph. moment Dave, organic at we're is add for our this experience And they term what value would years other need and will be dividends come would over is right the more XX% than an now. to meeting One challenge expect to to better. that years. seeing to is a needed that job get that, for us able seekers pay continues for just us job I for we is us they seekers This job product as in will us traffic long we're in the prove This to growth exactly thing scenario like opportunity to that see seeker

so that one of what matches, for needed job, our to the within apply experience going what those years invited Phil like now be to to week. can for of of to them, And us the couple a a are do haven't power time most great it's

what's brand to of so and us side investments power the we've going when back. on that in all is employers making come both through those And been product marketplace

Operator

from And we with Mahaney will take Mark Evercore. question our next

Mark Mahaney

Two questions, please.

seeing about extra home. of so on you weakness that the from back of kind more assume? that of work Could of now from going You the equal color in that we've impact environments, still the little give home having enterprises. talked but kind accelerated out maybe nursing, I your like as are thought may And that on showing that but and of kind of resilience increasing coming SMBs verticals I business and complexity that some in, then algorithms some kind that's Is valuable, secondly, terms us any then a a material. less of back across gone we're or work not whole? of make deceleration the work verticals they're matching to more normal we're maybe

that, on comment Just please.

Ian Siegel

which Well, I'll first, from take is question second on the work home.

advertise are of number or the hybrid that work than remotely less terms format. those they So the of XX% of listings receive. jobs opportunity Interestingly, our winners in in applicants to a runaway

overall minimis However, market. hiring it the portion de of a is

on impact major business. a have our doesn't it So

We experts jobs. delivering are from have candidates those tuned our algorithms at such anywhere to that we

shifts, as that XX% spite has advantage, way more that an job market some of overall fully remote choice. the or work seekers than in not will continue their to for market tipped So looking but of be or still of theoretically, form the first hybrid as having

David Travers

continues less that Yes. and as slowdown. an Mark. of impacted healthcare verticals, to an And in indicated, seems is This to industry example of then the cyclicality Thanks, less you is Dave. terms be show by

travel On well. leisure and that -- still holding for seems the to be up side flip yes, matter, and reasonably

across and has from that and as industry fairly imagine, from whole. We of to a despite like standpoint, that side, other both geographic we maybe technology, the overall, headlines, broad-based and categories. bit, sticks particularly these impacted banks those That's But as yet trend -- the it's a surprising, see been we stick the seem little look the finance an is any out on impacted. is and more out more does a economy, flip be the here main based But one particularly that don't might there. not the headlines -- to On economy things. overindex but not patterns little is about you recent a main

strong, or enterprises year we their among And hearing theme about started they small, annual do with as they're -- also the seeing as tend slowdown slowdown and budget to pretty large June customers, is see to But we this there. the we saw cautious impacted remain the we that talk noted, out talked SMBs. last broad to on the based and that cycles, by feel now. about starting you to And had how but businesses of what evolution quarter, to you whether slowdown

So and but those big part hiring term. short it's Their we'll the their of impacting needs. certainly build teams, as be ambitions they in intact back remain to they're long-term pulling short-term ambitions need a

Operator

next We'll JPMorgan. question take our with from Anmuth Doug

Wes Sanford

Wes It's on for Doug.

with I of declining. macro job layoffs, tailwinds, broader going lot what openings kind seeing, and the seeker a in but of think just you're what's on

on well Just how the competition smaller think nice enterprise traction the have get as and some getting And updated maybe I ones side. more broadly on things larger evolved. the secondly, with you thoughts have been guys players to two of as

that bit I given progress How XX% the quarter, for terms thinking think are this of about that macro marker throughout you stepped least this segment. kind revenue back little in share at of that backdrop? year a that the of towards

David Travers

question. Great Yes.

the What not over we've X,XXX seeing on competition with different offline before, economy-wide customers clearly one, of sites, are as job is front, big players ZipRecruiter-specific. ours. many talked we're just about So the we work of

to the like is investments competitive aggressive people had big the forward driving us, and roll terms in they we than earlier, pulling that. the that them standpoint, from term, the what in standpoint, some And attempting we're front. customer we've of extent And and Those our want our excuse they're things we we've from We like -- also me, from hearing year. -- the things short and so more labor what a economy see customer -- investing marketing been about a confident in about of rather been where back them pulling on they're seen the what pricing the And is go-to-market, big competitor thinking out earlier in back of play in seen time cautiousness; a health to ambitions go, term, the long-term I spend feel over in competitors. customers we'll term. role from a the long to in of which the U.S. long our really that to is most referred have

terms enterprise, great In of question.

is it's You're seeing theme than for SMBs. part more enterprise But was board and business, of we're it creeping terms pullback exactly into across the job The big in short-term openings. a demand not of right. in hiring just our broad-based

component So of of was last was came -- that last revenue down XX%. to quarter, our marketing quarter, performance enterprise XX% that revenue

So more, they bigger this. to nothing it workforce efficient normal for further big infrastructure A, need of has lines by thousands cetera. was in they're get them looking you expand lot into they foundationally replace ahead, to they're of new grow B, and projects enterprises, business, ways budget talk people When more within as just thousands decreased efficiencies, have have churn, their they to, for more that's much more, a and, hiring we the the And to locations need they looking with their fact But environment slightly changed when about across-the-board et to an to to people. have like they trend but plan trend. the needs to help hire

us we we last from Ian of our indication them Ian customers that with as we to heard about referenced, and and their going part long-term I talent. of largest have time we're long-term like those need And spent and establish we just week XX every with be and alignment -- for great loud and relationships that clear and

our in of and aspect customers, enterprise, on we'll itself we're competition continue and that's to will when that focus our out just the So close we work to customers. we see this confident fine feel what

Operator

with [Operator next will question take Instructions] Patterson KeyBanc. our from We Justin

Justin Patterson

more, Just kind we growth as come per the think revenue paid job to have employer, of ability labor thinking sustain in previously? takes postings different puts the and of revenue of per about a the employers we the don't and employer and we that how should bit had paid about drivers, just same just as scarcity

Tim Yarbrough

is Tim. Justin, this Yes.

softer big the So both revenue employer, that vast than our QX, but the in employers and paid typically would April KPIs, well. the expected particularly on per in that were QX numbers. primarily employers KPIs trend employer because make continued saw paid two side already as they and of as paid per employer drivers in we on noted, we've for The from up paid majority paid revenue be what come in SMBs

to will So in SMBs have affect then KPI, if they already posted about, by revenue decreased paid revenue which broad-based number of that enterprise. hiring has the disproportionately Ian revenue hiring enterprise whereas paid reduce demand employer. was -- employer. drop the the employer per and jobs per per from affected directly both will reduce that tend obviously they pullback spoken Dave them not that altogether, they impact SMBs within and marketplace, reduces that And do

muted see paid it we what with employer in was per will -- think QX. I revenue

the by that years macro to same driven of I climb true over cohort in play confidence continue we've winds. to that continue well. these metric that number seeing. trough over temporarily even be thing to That and over of disrupted that's number is we're to economically down And demand have many will think we that we have trough, run lot in a has peak if based borne from the macroeconomic paid bit well. more reduction think little and long-term peak that will on out the seen the that we as data -- trends of going out will as that time, for a to dipped up But long employers the kind

Operator

Sheridan Eric final Goldman from question We with will take our Sachs.

Eric Sheridan

picture a to want ask one. I big

some very investments was for do as going investors aside And investments of to question Ralph's the about and you medium and continuing to to of technology over outside made some guys make could where how in quantifying about competition. and early out think be where the competitive control positioning out the on some you've leaving another things to platform about folks as were to play that? that, even talked you platform are macro looking try AI You of position the But be that to the And medium of term, think and sort 'XX? of in should how an to coming question your the a long term. on short back area you're whether catch-up or 'XX that and of the differentiators share dynamic we you taker earlier thinking

Ian Siegel

thanks, this about exactly because the three I the job the in question industry is And Yes, time spend eras. thinking is Ian. really my Eric. mind, gone This most has through

the third be no having mistake, quality and real future large of talking make the strong my in brand technology the was more a was experimentation that about one get than even each era improving hired? can but so make mind, the awesome should the and experience them? and matching this hire lies the matching volume can the in so in and a with that hopefully, provide competition enthusiasm explicitly, which a then can we algorithms those is actually them generate to Can converse player we with then candidates a then marketplace are to in deploy us now order the parties algorithms And prerequisites first between get second The one other awesome begin engagement sort space. other. where matching in tell of we two on experience, to becoming we competitive have But all major you to and each and rapidly

much and future at we where Not that's want the more R&D is it's do can't that It's on we all them, both our employers optimizing Why now quarter. right things and highly rated, going job and sure but things we quality in that you we experience listings our focus the seekers because seekers. so job that of as out stuff all on And those we to applicants of like them it have why only generates going opposed innovations of something ZipRecruiter to we give be so of be looking continue are to are is data laser-focused do things have for that making can rolled information. see, the employers that see. XX% of which because that you this salary when past XX% place,

in getting a is employer directly invited order a -- true. our will apply employers for who a it make to our to quantum And it using generating a talk differentiated get are by others. and to the job matching about job of That's kind seekers also deliver It's It platform experience service new an that experience within to an to they with That's XX% to nontrivial awesome days. that of experience. requires seeker. job of in seven excellence

our think am confident I to still product I about grow, and going advantages those are only and road excited map.

well not on we're just it. but to think something, I into

'XX. excited and 'XX very I'm so for And

David Travers

Dave. is this Eric,

to a are from add in trained been employer increasingly to about past Just search to that the hear over a is The whole two results search response in who query. expect to often have a I technology expect seekers think job getting or to great them on thing And to response is series allowing a to of that. is decade do as person. us to what they

to from have what job to of to technology connect using it's lives. to set years, impact how major set connect an for bring the AI to years. you so how can that for coming you're algorithms, is about on general of and exactly is of have that, this data people's that's set There's people's power great the focus over amazing see and broad incredible over if we a and We're some as built even seekers -- questions. opposed we then us they hard deeply lot incredible us this is AI that deeply as which to we part And lives, we that one data opportunity we thinking problem of to employers apply and really preview replicate going

Operator

thank gentlemen, And today's concludes conference ladies participation. this your you We for call. and

You may now disconnect.

ZipRecruiter (ZIP) 9 May 232023 Q1 Earnings call transcript