ZIP - Earnings call 3 2023 | ZipRecruiter, Inc.

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Operator

Thank you for standing by. My name is Aaron, and I will be your conference operator for today. At this time, I'd like to welcome everyone to the ZipRecruiter Q3 2023 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. now with turn Investor would to call I Haroldson Drew Relations. Instructions] like our to over [Operator Drew, please go ahead.

Drew Haroldson

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

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

statements to risks we performance made subject statements. can Before found quarterly of that could XX-Q some please the today events those website on future forward-looking available that ZipRecruiter's be of factors from for be discussion Form cause in SEC's anticipated report investor results our risk be financial ended uncertainties statements forward-looking and which to will could and the XXXX, and/or begin, reminded Actual forward-looking website. differ future September differ to materially of A these on XX, quarter relating results on the any actual materially are the ZipRecruiter. from

or a current of in or The the based revise on to and as whether no of call today, them, as are statements this ZipRecruiter developments update conference new assumes forward-looking otherwise. expectations obligation result

results. over Form are discuss GAAP and letter XX-Q. of In addition nearest should GAAP turn the These be in the our addition, to or the non-GAAP considered non-GAAP in I to Ian. metrics a we during Reconciliations And the today's will non-GAAP ZipRecruiter call, from in call will isolation in measures. metrics financial financial measures included to substitute now shareholder for

Ian Siegel

Good afternoon to today. Drew. Thank everyone joining you, us

few wanted ZipRecruiter's I about Aviv started, get Tel words we say employees. to a Before

health priority our Israel conflict the been our of people. the safety and in As number and unfolds, one Gaza has

to impacted some all them directly degree. been Unfortunately, Aviv-based have employees of have While been some impacted. Tel

ZipRecruiter of responsibilities so will The their watched them that we our of well-being team Israeli conditions region. pride and remain losses go care fellow in and hope operate. I as have members under gratitude mind for on hearts security employees the our prioritize proactively extra globe with of must as have they top their for families. now out taken the taking members peace to around and Our which the can team

Turning to our results.

than past labor a taking basis to has more financials economy. over rates XXX the approach adjusted The far increased adjusted grow. increase ZipRecruiter's Federal cautious quarter of leading as employers the for the despite that with is quarters the high Despite hiring demonstrate macroeconomic online hiring-related only ZipRecruiter these economic of XX% the hiring other soften. X.X% positive adjusted growth impacted a has line. slowdown industry-wide Notably, durability model dramatic unemployment as term. The of weather and and margin U.S. off-line business ZipRecruiter's investing in XXXX, businesses in has the market the such $XX show Third EBITDA in United EBITDA conditions to complicated data allowed picture QX XX Reserve's million all-time the further to interest were of maintain businesses, in point while a a of news, capital some resilient point still and resilience in cost has us change margin hiring 'XX highs few business guidance. EBITDA GDP States. for that weakening strong to of EBITDA EBITDA long and the of adjusted part and exceeded points our Adjusted along X.X% of September and months top profitability of real just

with to openings which manifest and those openings the This both need in number the job increased caution filled. itself be urgency of

period, will already quick a frequency. The flexibility for rates result, and recruiting hiring-related have of navigate, business returning and environment currently and jobs impacted operating over cyclical with protracted in those weather job work market employed product market business, change hiring U.S. levels. and of this invest while model with profitability continuing resignation businesses States. Over are are other has along create increasing short-term technological of find downturn changing us with to pre-COVID us labor the to in dynamic United brand. the any famous ZipRecruiter's our a off-line in seekers the to online This less nature rapid to As to is longer advancement the taking awareness great allowed innovation, the our

XXXX has number by margin the of XXXX increased by to expanded in X%. ZipRecruiter's total has While and employed has people of XX% EBITDA revenue from increased approximately QX from We QX States United the capture ever of more XX%. product market bigger and continue us been. the than X% has to in technological continuous through front advancement to believe it share is to adjusted innovation opportunity

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

David Travers

Thank you, good afternoon. and

X growth seekers together. are QX in of stages we job to our 'XX. in come early on believe We advancements matching the using of smart our still make to and employers strategies continue technology We transform

the needs. value make the Our in revenue enterprise platform and customers large Growing revenue and to of first opportunity. significant from long-term a the a remains increasing and we continue customers' of incremental marketplace. our is number employees our enhance ZipRecruiter strategic pillar product And priority to meet employer per improvements paid

targets solution continue achieve managed. deployed to targets our continue campaign We the that campaign and using more mainly the hitting QX, is platform. improvements than we further consistent The and in optimization migrate onto XX% those likely campaigns finance were deploy customers first our solution solution to In were to showing their in quarter. more

in that hiring continue on the improvements friction to make eliminating focus process. also We

a effectiveness to for sending be would apply candidates the fit. take by believe eligible to of great hiring invite Our shifted the the invite dynamics further enhance candidates of have process to to text employers we out employers messages enabling features step apply initial employers reaching of started to the when they to potential

whom Labor an will opportunity the that present to using come. numbers to endure Moving many continue second to seekers for our pillar, marketplace. job ZipRecruiter the will loyalty downturns to marketplace. for We are build the years more job in side first of build the time, of on our increasing brand seeker market serving seekers job believe of

such features never We job to have only when for year-over-year career seekers see seeker the adviser grew awareness named to market the someone AI-driven optimization. In this better help search Phil, assist plus is job first we as continue XX% our quarter job ease XX% in company-specific equipped seekers, We process. In our a for year-over-year, in to or Whether is past, not from open the information salaries, consecutive seekers it third job job and search brand increased description, due organic the can as rolled searching but in labor products such pages, from details investments several to job company our used making using see competent ZipRecruiter who QX, out single been it time visits a see Jobseeker and activity with jobs. seekers job more. introduced has company also who growth. one-stop conditions, postings from our them in where more shop QX,

applicants, for jobs contextualize aid more We company industry discovery by also such company and adding to information further side.

pillar, emerged to information parsing deciding time years. a so retirement easily insurance, QX, decides for This when save which improvements among to jobs learning understanding AI apply and on product paid continue when a efforts is to job job our seekers for making to benefits many key be smarter presenting which health job easier and time our make I'll our important or technology viewable a reveal. central we of them that third also the them over helps benefits, off has considerations opportunities seekers, job to. such been good matching fit. listings, benefits focus started with job We making In may technology most seeker time. Machine as jobs packages conclude

Invite hiring efficient time further Our our the more our improved will residents to gives of job to matching seekers proprietary better better behavior, learning intelligence parsing from have smarter both and QX, the observing make from features our of employers process led interactions resume ZipRecruiter advance for seekers. In and provide improvements artificial data the and vast job candidate advantage algorithms, capabilities proprietary directly leveraging specialized as distinct parsing products employer to seekers algorithms AI-powered quality We employers over Improvements marketplace. our across billions techniques employers. millions resume data to to job information Apply. we believe our and us and match get learning and between like behavior machine in accuracy extracting to of job previews -- its our set observed and experiences in a to by enhance

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

Timothy Yarbrough

everyone. afternoon, good Thank you, Dave, and

securities QX $XX.X of year-over-year in driven stable QX margin cash period in where compared $XXX.X cash in equivalents consistent million September XX% and quarter-over-quarter financial EBITDA hiring million a revenue versus employers million, cohort 'XX. Net QX docked compared quarter QX a and equating is quarter-over-quarter, $X,XXX, with million. and the program XX% year-over-year was at Class in a history, stock income and to larger company's QX for primarily a personnel in 'XX. increase and a amongst of XXXX, year-over-year Cash, reflective product shares EBITDA our a compared provided cash operating XX% and make small- to business under XX% million reflective our and totaling margin trends pay $XX.X of both to $XX.X QX XX, is of medium-sized sequentially. adjusted third decrease which repurchase was X.X Our EBITDA of increase decline of was 'XX repurchases decrease were to our prior of expenses, our paid June repurchased QX and long-term XXXX. employers businesses X% in a $XX.X reduction related. XX% both strength QX employer continues XX% environment. activities. In cash majority to XX, by both as Quarterly our a $XX.X and $XX.X common operating to $XXX.X as quarter-over-quarter adjusted we million, 'XX, showcasing our weakness share XX% QX XX,XXX, income the 'XX. Net used were of as from grew employers. Revenue with versus model. represents 'XX marketable 'XX of offset margin the increases securities million 'XX paid year-over-year an million year vast in $XX.X is $XX.X was as of The margin and both per Cash, by paid $XXX improve. of adjusted marketing representing remain a This and marketable equivalents million EBITDA adjusted of million continued 'XX of willingness was and of million million largely A highest

long-term Given organic allocation returning our prioritizes growth investments to our in growth over M&A capital strategy outlook, capital shareholders.

attractive given shares strength to and our continue repurchase flow, believe sheet an potential and price. free of when dislocations we the balance our in there's However, ROI stock the cash we opportunistically

to guidance. on Moving

represents softness in QX The are at a Our guidance XX% hiring $XXX and into yet patterns 'XX million year-over-year. QX. abated, heading the a we revenue season of not decline soft midpoint has

guidance to at Our adjusted to guidance range adjusted X This margin. to year and XXXX low the year-over-year million for points the of $XX favorably margin compares in is EBITDA implies provided August. midpoint the XX% increase an EBITDA X adjusted and mid-XX% EBITDA of to an XX% approximately percentage or full XX%

business continuing during conserve to a also this is We result, respond the industry. growth. And of as invest financial Navigating of downs variety the unprecedented of in to ups market we slowdown of technology and continue model to capital built the the while demonstrate flexible market labor long-term reality drivers structured and a a to our discipline conditions.

focused control, nimble cycles on mindset ROI-focused what action. speed approaching to same are can we with the all and We orientation,

to for cost advantage, we for continue press well our questions. the technology can calls environment positioning now ZipRecruiter to With up in current the come. the Operator? for While we growth economic line that, cycles open optimization,

Operator

is with question of line Trevor Instructions] first from our Young [Operator And the Barclays.

Trevor Young

of cadence B can versus quarter? guess a of guys the a first guide. There's one, I the little bit talk growth throughout Great. revenue you about obviously

and So November, or on much data August things enterprise campaign And little a that managed just worsening some question than implying trended is stats then solution, expected. optimization that of many And how in points some October the in all any would on bit so trends how implies second September spend to customers available obviously that going better widely enterprise encouraging now that. Is customers or how have far helpful. solution and there. on be through enterprise

Timothy Yarbrough

QX for what On Trevor, is seeing Thanks, revenue we're Yes. so Tim. this trends far.

in was So we of X Despite down being the than a it that couple month trended overall. with a up roughly at kind quarter. towards same The came of to we QX we of the revenue what time. better end the our when guidance trends the follow bit million suggested dollars issued within guidance little line that,

right seeing what return past. not Hence, with we're we're a showing right of conditions. Basically, little of As the generally we've far we in to far, than sequential that in what what so the in reflects guide decline, as that now. seasonality we've previous would be the we're now but current kind bit seen any seen normal have seen seeing kind that steeper line QXs,

David Travers

campaign on and click per then hires like looking available to but or to largely sophisticated on employers vast metrics goals, ability or with yes, can different for optimization, toward really majority then the cost things for. customers our we on of drive it a And or have set whether Trevor. of Thanks, enterprises to campaign number agree they're are not it's cost is and so of them businesses, relevant our who the like different depends that the that larger small a they're yes, hire goals per

it So and expect spoke customers. and we critical promising and can more understanding hitting are we increasing so are get as up goals, that to we to, and improve more solution in optimization employers their extremely early to and But that out to there that's results continue the really of to that number on, rolls as running.

Operator

Okay. Great.

from of is Blair. Ralph question William with the next Our line Schackart

Ralph Schackart

could. if I Two,

growth look tough you're First, cycle does a platform, back just philosophically, in on optimize job side, the the are obviously business but as does more the the job would cycle side. and introduced sort lot And return acquiring turn, to there right now, people as brand demand margins, is just seekers we a -- speak obviously, market what this certain that maybe a some getting it's a also, during of that cycle maybe then cycle of seekers, of when the to to the to environment as wait on for to you're level sort through phase. the you

Timothy Yarbrough

for the Ralph, this is Thanks question. Tim.

On the philosophy. margin

So approach our we of from decisions the bottom up. all go-to-market

or the function very within QX saw guidance. So we cycle. confident strong still of on that our based continues in that's in we don't at the the well very margins margin to we're different, any of grow target EBITDA our opportunities that QX scale. we XX%, a it, period. But we very as to as within especially look our have at point EBITDA adjusted looking margins and could on company are response at, was a up the the investment XX% long-term down come see what in based

Ian Siegel

as term. And reality isn't all our the Yes, the I we years, And the growth. which we done just the And midterm seeker last is, the now product drives in of of in what remain and seeing a well rated been and in mobile over that as Ian. continued these we for investments, had like like job things validation strategy we is we and AI and to larger right for we've pay the these about as our investments map. particular, as the We job in this to term, our awareness this mid consecutive work from long and the long it investment and that, that quarter would on we're on ongoing better, focused to paying Phil, that marketplace is the really now as fundamentally, job doing past pursuing, XX% Android basis, building year that growth. becomes the term, product am current I our over and well a the couple long seeker in that and industry, been long-term more job things It's an in personal our the invest road brand our organic recruiting similar seekers is quarter work as iOS have have excited growth off where is payoff to of #X macro that will has seekers. anticipate third liquid gets swoon assistant far our made app. aided have so in driven similar dividends investments The the the the

Operator

Our next question of comes JPMorgan. line from Doug Anmuth with the

Dae Lee

Doug. for is This Dae Great. on

get are to needed at, kind first like you Fed XXXX. And from the messaging employers up So you guys for businesses to that confidence? that way And be again the more terms easing what's of the in in are plans hiring it? think signs one, sounds looking is what right of other about growing curious looking going more is it rate plans to any confidence getting hearing for into get their and there might

David Travers

Yes. Dae. Thanks,

their we is talk time about time of uncertainty businesses obviously, clear So the that the level to hiring profound. outlook all their and so this what at is needs about is

they're about people and more what from the people. Even their And though reading their downturns again, They're in for dramatic in in we long for cases, where and to hear example, so less which in their headlines. downturns other in the results more wanting talking about to businesses COVID, feeling over their many more other dramatically uncertainty falling is is and term and of deserve businesses them invest uncertain. it, business different business we heard like over about

deliver of whatever outlook people, the and -- level or waiting other in other from that market of. The are it's first human, better employers who turn than twist cycle for we technology to unprecedented delivering that a better in have increased job hear ZipRecruiter through market job be confidence and point when headlines single it is, so quarter not what organic this from bet amazing or there spirits that's Ian's when they as when, be seekers confident animal mechanism improve and it to couple for years cycles case and is capital needed that the and a better by strength may if, bigger that make macro relentlessly that for is, Fed to them ago duration to what smarter will the through product history, and are we we whatever when better increased as over last better talking more many turns, time the U.S. cause experiencing coming we're again we continue it's we're of has very either macro for the in is, that the as business confidence more the an of so news than of good to product and whether it's safe it's next of make and a the and every it And seekers turns more better it, employers, of these cost throughout over that continue earlier, ever. an

Ian Siegel

I to addition in sort of availability of funds on and/or the that, markets capital And perceived to market. just would add outlook investment for

the confidence job a business it's of We a were are think as and sense drives sorry, being within impacted is on businesses recruiting of great longer we amongst their factor and become I we're that. tenured but is owners a currently ramped urgency -- now definitely right parent, over in where have the rate trained, hires quit is a that so ago. they employees posture only who by course, resignation what of changing turnover. not to Another fully significant And around year and and seeing compared the lot employed reduction that is, it's

Operator

the Our Kunal line of from Instructions] UBS. comes next Madhukar [Operator with question

Unknown Analyst

couple for is This from of me questions A on well. from as Jason UBS. Kunal

lower us X on we this but in give been a can The items. expense mentioned seasonality. on QX typical first different Can of lumpy, the going seasonality what in line you is R&D a forward OpEx that expect of And lot environment? letter personnel-related charges. came because also in pretty lower the seasonality OpEx you guys refresher kind of It's

now, done explain that $XXX guys cash to above what means? the repo million. that assume opportunistically. pretty separately, share And capital But returning reasonable more would stock you on return, back well please given running $XXX investors. you Could will that have really anything it been be is you consistently at be level levels, to cash I guys current understand right

Timothy Yarbrough

This Jason. these. is Tim. Thanks, I'll take

far as since OpEx seasonality typical of So more thing as that we've the while bad it's seen is seasonality. say one a I'll been

to and top the that's have, marketing, very a very expenses flexible very I strokes, sales before to seasonality So XXXX back kind that that will in and at market quite of But operating seen have life understand we're comes really and the during back and haven't of we in hiring we of specifically typical go October that steady down lull just responsive picture. we that fairly have ourselves. the pattern. then to to our ramp broad to into question, after holiday But basically while. in a January into oftentimes, holidays. And similar flat said, through a back that because the QX relatively for that find balance motion follow picking the the a of demand September, go-to-market the then up and And and QX, we environment to kind like then

operating no thing. the so, are because and bit, expenses have that a And is we doing bumped around very little

first responding we're bit. in your reduction is the question, to did R&D demand QX. environment we see. back expense We To little a a second that So down coming

what And is the the of so that rolling QX seeing through you're in impact full P&L.

again because see marketing see to we some invest where well marketing something opportunities. a in sales interest other G&A, other to -- although primarily of similar as to -- came efforts expenses increasing our and extent, and you down lesser then so And

our strategy philosophy the about cycle. allocation to last question, hasn't in all then And parts during changed your our of capital general,

still is, cash So investments, that good. and we feel flow by very at priority, away, look when organic far we and positive. We're first our

well funded we're So there. clearly,

acquisition interesting the for world Secondly, targets. we are scurrying

actively staying your we're repurchasing on So been then we've returns, point, over the to shares capital there. And years. diligent

approach is the a when -- there in and as so stock invest with investments, we with we longer-term we i.e. the same the price. And see to a spanning dislocation in do that happy mindset shares, the own mindset same we years. organic with We're positive our

just participating organic being I'll we're priority with investments on inorganic it So say share and investments. do opportunistically in still we but repurchases

Operator

Our next question comes Justin Markets. with the from Patterson of line Capital KeyBanc

Unknown Analyst

seasonality Great. there How Jacob Justin. thinking employer between and on to the of clients anything how deviate revenue of Is employers, paid from you're paid XQ big 'XX? into employer saw pace seeing This cause typical should in paid is are for specific XQ? approach about you XQ revenue paid we to and dynamics employers in the so decline the far the would that tech per lap you

Timothy Yarbrough

Jacob. This Tim is again. Thanks,

for enterprise they see quarters. quite hire paid degree. to And go paid small bit to less tend reduce the comprised of down materially holiday the employers that ticked not whereas typically, same fact we typically little So spending in employers, they more our of bit other they as is are but would nearly larger the is the QX, to due employers into vast what and businesses, also than a season, that medium-sized and a majority

shift from per employer up, mix going also will the largely paid into during enterprise due that lot and to period. so means a QX And that of typically SMBs towards that that is revenue go

but reasons up reasonable while, said ticking employers per with employer pretty a earlier in revenue down QX QX for seen expectation like an seems sequentially to seasonality that I've for we've paid paid time question trend around. So for in that came those a not this very typical

Operator

have from a follow-up Trevor with of We line question the Barclays. Young

Trevor Young

away near-term trends. picture bigger the from more Just

seekers can color on like growth share frequency or of or in website, spent any mobile visits, across Is of app, noticeable between time significant any those engaging of services? the job seekers, those the web which applying the job on flagged mobile different You likelihood in app terms surfaces. in you where differentiation it desktop, are

on that. curious Just

David Travers

our and exciting long-term Thanks, The the very is of -- Yes. of the organic part job such obviously strength business jobs strong a in of Trevor. a seekers market. indicator growth

they're something your onboard obviously, plays join, all, can us the on a to to build go role. start right to of they we Phil they jobs. away, give And profile a on where of So central question First sort intervening, and have and matching right when so

So the of they're smarter and better, of process the which as human difficult we scariest as filling in the and that continue process easy form often to iterate as and and started, getting and as a for out make of that than a part continuing job as most making seekers dialogue is rather to process that process natural making get possible. the and

getting And see. that of XX% Two get speakers so have going the so much just so they and known brand coming more to moment a we just awareness a level in keep X% they're over that. better in at is trust that brand brand awareness. over can you well being from leaning decade started Job the are from

it, really of seeking major do isn't terms a factor. mobile is they In job Desktop a where activity.

our sort terms as app mobile marketplace. of into and So web of in both mobile access points

there's great that this working apply a to for for invited you're Phil on App and fundamental But fit which is in feeling place et us and a real being browser the regardless of how platform, where of form using, real cetera. you mobile feedback et like get are rooting that of on started cetera, you, getting which experience a really which find what's you Store, you That's jobs the very come immediately us. human you where quick to

Operator

Call. today's that joining. QX ZipRecruiter gentlemen, you Earnings will XXXX for Ladies and conclude Thank

a now may Have disconnect. You great all evening.

ZipRecruiter (ZIP) 8 Nov 232023 Q3 Earnings call transcript