Q1 2025 ZipRecruiter Inc Earnings Call
Good afternoon, and thank you for standing by my name is John and I will be your conference operator today at this time I would like to welcome everyone to the Z Procrit or Inc. First quarter 2005 earnings conference call. All life have been placed on mute to prevent any background noise.
Speaker Change: After the Speakers' remarks, there will be a question and answer session. If you would like to ask a question. During this time simply press star followed by the number one on your telephone keypad to withdraw your question simply press Star One again I would now like to turn the conference over to indulge you start party VP of finance and Investor Relations. Please go ahead.
Speaker Change: Thank you operator and good afternoon. Thank you for joining us in our earnings conference call during which we will discuss the Pirquitas performance for the quarter ended March 31, 2025 and guidance for the second quarter 2025.
Speaker Change: Joining me on the call today are E M Siegel co founder and CEO, David <unk>, President and Tim Dr. Brown CFO.
Speaker Change: Before we begin please be reminded that forward looking statements made today are subject to risks and uncertainties relating to future events and or the future financial performance of Zip recruiter.
Speaker Change: Actual results could differ materially from those anticipated in these forward looking statements.
Speaker Change: A discussion of some of the risk factors that could cause actual results to differ materially from any forward looking statements can be found in ZIP recruiters quarterly report on Form 10-Q for the quarter ended March 31, 2025, which is available on our investor website and the secs website.
Speaker Change: The forward looking statements in this conference call are based on current expectations as of today and ZIP recruiter assumes no obligation to update or revise them, whether as a result of new developments or otherwise.
Speaker Change: In addition, during today's call, we will discuss non-GAAP financial measures. These non-GAAP financial measures should be considered in addition to not as a substitute for or an isolation from gap results.
Speaker Change: Reconciliation of the non-get metrics to the near-skat metrics are included in Ziprecruiter's shareholder letter and in our form 10Q. And now I will turn the call over to Ian.
Thank you and good afternoon to everyone joining us today.
Speaker Change: We believe Ziprecruiter is at the forefront of transforming the recruitment industry, an expansive opportunity that is primed for technology-driven solutions like ours.
Speaker Change: from innovative product features like Zip Intro, to our next generation resume database, to our acquisition of break room and to the expansion of our applicant tracking system integrations. The Ziprecruiter marketplace continues to get stronger, as we generate more engagement from both job seekers and employers alike.
Speaker Change: I am excited about the progress we are making towards our mission of actively connecting people to their next great opportunity.
Speaker Change: We were cautiously optimistic as we started 2025, being a stronger sequential increase in
Speaker Change: Q1 2025 quarterly paid employers increased by 10% sequentially, which is the highest Q4 to Q1 growth since 2021.
Speaker Change: Q1 revenue of 110 million declined by 1% sequentially for Q424, which represents a fairly typical seasonal pattern as employers resume hiring after the holiday slowdown.
Speaker Change: This compares to sequential declines of 13% and 10% in Q1 of 23 and Q1 of 24 respectively.
Speaker Change: However, uncertainty about the macroeconomic outlook has increased. While we've yet to see a pronounced pullback in employer hiring, we are also not seeing an acceleration in hiring activity as we enter the second quarter.
Speaker Change: This informs our Q2 revenue guidance of 111 million at the midpoint, representing a 1% increase quarter over quarter.
Speaker Change: Despite the macroeconomic uncertainty, when looking at the full year, we still believe achieving year-over-year revenue growth in the fourth quarter is a likely scenario, a view that we shared last quarter.
Speaker Change: We also continue to believe that a full-year adjusted EBITDA margins in that scenario would be in the mid-single digits as we maintain our investment behind long-term strategic initiatives.
Speaker Change: Our robust balance sheet and financial flexibility allow us to be prepared for a wide range of outcomes this year while still operating with a long-term focus to spur more meaningful interactions between employers and job seekers.
Speaker Change: We believe we are poised for outsized growth when the inevitable recovery in the labor market returns. I will now turn the call over to Dave to share business highlights. Dave?
Dave: Thank you, Ian, and good afternoon. As Ian touched on, despite the shifting economic environment, we continue to meaningfully improve our marketplace to deliver a better experience for both employers and job seekers. I'm excited to share a few highlights with you.
Dave: Support screening questions within the application flow and ensure more jobs utilize our zip applied product.
Dave: Employers, who use them apply received three times more applications for their roles and get their first five candidates four times faster.
Dave: This provides a seamless platform handoff experience that allows job seekers to stay on Zephyr tutor, while employers never has to leave the workday platform.
Dave: Following the launch of our next generation resume database in Q3 of 24, we continue to release improvements that build on its existing capabilities for employers of all sizes. In Q1 release features focused on enhancing collaboration between teams win proactively sourcing candidates now employers can share resin.
Dave: <unk> with other users transfer project ownership between users and move candidates between rules, they're hiring for employers have quickly embraced the new features for example.
Dave: The enterprise employers, who purchased RDP views, we saw a 9% increase in the resume unlock rate versus the prior quarter.
Dave: A key strategic focus for zipper tutor is driving and accelerating engagement between employers and job seekers. And example of this is lipid trail, which brings employers and job seekers together for face to face video conversations fast building.
Dave: Building on the momentum of the release of <unk> in 2024, we rolled out a new feature in Q1 that allows employers to schedule phone video and in person meetings with candidates directly in our messages at.
Dave: This feature helps employers engage with candidates even faster.
Dave: Riding a more efficient hiring experienced for employers and job seekers alike.
Dave: Employer adoption continues to increase with scheduled sessions growing 16% quarter over quarter in Q1.
Dave: And finally, we continue to drive better performance for enterprise customers or enterprise customers manage sophisticated hiring campaigns for different roles across multiple geographies. They rely on us to optimize their campaigns driving high quality candidates to their jobs.
Dave: In Q1, we improve the bidding model in our automated campaign optimization solution, resulting in a 7% month over month increase in applications delivered to enterprise customers in the first month of launch.
Dave: We are constantly developing and implementing ways to make our marketplace, better which positions us to deliver more value to job seekers and employers alike.
Tim: Now turn the call over to Tim to review financial results and guidance Tim.
Tim: Thank you, Dave and good afternoon, everyone. Our first quarter revenue of $110 million came in above the midpoint of our guidance still represents a 10% decline year over year and is down 1% quarter over quarter.
Tim: A sequential revenue decline of 1% represents a more typical seasonal cadence as employers resumed their hiring campaign after the holiday slowdown versus the sequential declines of 13% and 10% in Q1 'twenty three in Q1 dollars 24, respectively.
Tim: Quarterly paid employers were 63000, representing an 11% decrease year over year, but a 10% increase sequentially while the year over year decrease is reflective of continued uncertainty in the hiring market sequential growth represents our largest Q4 to Q1 sequential increase since 2021 and stands in contrast to the negative 2% in <unk>.
Tim: Positive, 1% quarter over quarter changes in Q1, 'twenty three in Q1 24, respectively.
Tim: Revenue per paid employer was $1734 up 2% year over year and down 10% sequentially. The increase year over year is primarily due to the slight mix shift from subscription revenue performance revenue, while the quarter over quarter decrease is consistent with the seasonal patterns. We have seen historically when quarterly paid employers grow after the holiday slowed.
Tim: And in Q4.
Tim: Net loss in the first quarter was $12 8 million compared to net loss of $6 $5 million in Q1, 24, and a net loss of $10 8 million in Q4 24.
Tim: Q1, 25, adjusted EBITDA was $5 $9 million equating to a margin of 5% compared to $20 8 million and a margin of 17% in Q1, 'twenty, four and $14 $4 million with a margin of 13% in Q4 of 24.
Tim: Net income and adjusted EBITDA decreased year over year, primarily driven by revenue declines while the sequential declines were primarily driven by higher marketing and personnel expenses.
Tim: Cash cash equivalents and marketable securities was $468 million as of March 31, 2025 in Q1, we purchased $4 6 million shares totaling $27 $4 million.
Tim: Moving onto guidance, our Q2 to 25% revenue guidance of $111 million at the midpoint represents a 10% year over year decline, though was up 1% quarter over quarter. Our Q2 guidance assumes a continuation of paid employer trends, we have observed to date.
Tim: We are prepared for a wider range of scenarios given the increased macroeconomic uncertainty versus last quarter. We remain cautiously optimistic employers are keeping hiring activity steady while navigating the volatile landscape created by the macro uncertainty.
Tim: Our adjusted EBITDA guidance for Q2 to $25 $7 million at the midpoint or a 6% adjusted EBITDA margin, we remain disciplined in deploying marketing dollars towards campaigns. We believe we will drive strong ROI letting data guide our decision, making as we continue to build the ZIP recruiter branded marketplace.
Tim: Looking at the full year, we believe achieving year over year growth in the fourth quarter is a likely scenario consistent with the view we shared last quarter. We also still believe that in that scenario of full year adjusted EBITDA margins in the mid single digits would be a reasonable expectation as we continue to invest in long term strategic initiatives.
Tim: As the macroeconomic backdrop evolves, we continue to remain nimble, making ROI positive sales and marketing investments if the data show signs of recovery and Conversely, pulling back on spend in generating higher adjusted EBIT margins, if hiring demand further erodes Mr.
Tim: The strength of our balance sheet and the flexibility of our business model allows zip recruiter to navigate uncertain periods with a long term disciplined focus we remain confident in our ability to capture market share in the vast recruitment tam by investing in product and technology and fundamentally changing how employers and job seekers connect with that we can now open the line for questions operator.
Speaker Change: Thank you ladies and gentlemen, we will now begin the question and answer session. Once again, if you are dialed in and would like to ask a question. Please press star followed by the number one on your telephone keypad. If you will likely follow your question simply press Star one again.
Tim: Called the bump to ask your question and our listening via loudspeakers <unk> device. Please pickup your handset and ensure that your phone is not on mute and ask your question.
Tim: First question comes from the line of fraud Schuchart with William Blair. Please go ahead.
Fraud Schuchart: Hi, good afternoon. Thanks for taking the question first question just in terms of the wait and see attitude I think that you called out and talked about on the call here is that sort of I.
Fraud Schuchart: I guess widespread across geographies and I guess different verticals or would it be perhaps more focused on non tariff related.
Fraud Schuchart: I guess types of positions.
Fraud Schuchart: Hey, this is Dan. Thank you that is a great question.
Fraud Schuchart: What I would say about that is while the bounds of uncertainty on the macro are increasing.
Fraud Schuchart: What is true today is that our internal data shows that employers have not yet pulled back.
Fraud Schuchart: Player hiring activity is consistent with the trends that we observed coming into 2025 that informs both accordingly guidance that we've provided to you as well as the outlook of achieving European aircraft in Q4 of 2025.
Fraud Schuchart: We are watching this closely.
Fraud Schuchart: We have very sensitive measurement capabilities of what is going on with hiring demand and we have the ability to rapidly respond either way. So if we see hiring demand increasing we can increase investment rapidly if we see a decreasing we can pull back investment rapidly.
Fraud Schuchart: We're watching it closely obviously.
Fraud Schuchart: These are interesting times and so we will continue to monitor it but as of right now.
Fraud Schuchart: Data that we see internally and it does not.
Fraud Schuchart: Reflect any sort of pullback from employers.
Speaker Change: Great maybe just a follow up there.
Fraud Schuchart: You are having conversations with Smbs and enterprise alike.
Fraud Schuchart: What are the signs that they are waiting for it and maybe become a little bit more optimistic.
Fraud Schuchart: More aggressively into hiring trends I know you said that the quit rate is still relatively low, but just kind of curious what youre hearing from your customer base.
Ralph: Thanks, Ralph yes so.
Ralph: As you said when we talked to our customers of all sizes, all the time and what we hear from them consistent consistently when it comes to hiring decisions as well as Capex and other major investment decisions as the certainty is what helps them.
Ralph: So so understanding what the rules of the road are and having confidence that it will remain in the rules of the road for quarters and years to come is what we hear them talking about we've definitely noticed a change over the past few months in the tenure of some of those conversations as they talk about what they expect in the future, but there will be.
Ralph: Savior as Ian just referenced has been.
Ralph: System with what we talked about last quarter.
Bob: Okay. Thank you Bob.
Josh Chen: Your next question comes from the line of Josh Chen with UBS. Please go ahead hi.
Josh Chen: Good afternoon, and thanks for taking my questions.
Josh Chen: So I guess in light of your comments about the bounds of uncertainty within the macro how do you expect to manage your investment trajectory if the signals could change and even go back and forth. So I guess, how are you planning to adjust for an environment that could get better.
Josh Chen: Worst at anytime I guess.
Tim: Hey, Josh Thanks for the question. This is Tim So we let the data drive our decisions. So even when the bounds of uncertainty remain fairly wide. We're prepared because we have a very flexible.
Tim: Operating structure. So we can dial up our sales and marketing investment to take advantage of opportunities as they materialize fairly quickly and thats because we.
Tim: We retain a lot of flexibility across multiple channels marketing.
Tim: And on the other side, if things erode and we can cut back on spending significantly because we have strategically not committed.
Tim: Inefficient amounts of capital into future periods. So as we reflect on Q1 and we look forward to Q2, we're letting all of the data that we see right now guide our decisions, but again retain that flexibility to be prepared for a wide range of scenarios.
Speaker Change: Great Thanks for that color.
Tim: Could you remind us what the typical seasonality is going from Q1 to Q4 and is that what gives you confidence that Q4 getting grow year over year is just assuming normal seasonality kind of continues from here. Thank you.
Tim: Sure, Yes, so normal seasonality would show something like sequential growth from Q1, Q3, and then oftentimes they go.
Tim: Going from Q3 to Q4.
Tim: Our.
Speaker Change: Yes, when we talk about the likely scenario achieving growth by Q4.
Speaker Change: Based on the trends that we've seen so far continuing throughout the course of the year.
Speaker Change: Great and thank you for the color on the good luck rest of the year. Thank.
Speaker Change: Thank you.
Speaker Change: Once again, if you are dialed in we would like to ask a question. Please press star followed by the number one on your telephone keypad.
Speaker Change: Your last question for today comes from the line of Trevor Young with Barclays. Please go ahead.
Speaker Change: Great. Thanks, just two for me first just related to kind of employer behavior I appreciate youre not seeing a sharp pullback nowhere an acceleration, but are you seeing any other behaviors that would be indicative of some increased hesitancy.
Speaker Change: I'm thinking things, maybe like reviewing candidates longer or fewer candidates or maybe taking longer to fill a job.
Speaker Change: That would be kind of indicative of like I had a higher bar to hire a candidate than previously and then second on the marketing side are you finding new opportunities to deploy dollars attractively and some marketing channels. The other advertisers pullback I think historically, you've said you try to be opportunistic when there are some dislocations happen I'm just wondering if that opportunity.
Speaker Change: <unk> has presented itself yet.
Dave: Great. Thanks, Trevor this is Dave I'll take the first one unemployed.
Speaker Change: Behavior, we have seen a change in employer behavior during the post COVID-19 period.
Dave: Employers don't feel the pressure to move as fast as they did.
Dave: Thanks.
Dave: Great resignation in 'twenty, one and 'twenty, two and so they have felt.
Dave: The ability to take slightly longer wave, a little bit longer to see which candidates come in on the margins.
Dave: That said Theres still moving fairly quickly with them.
Dave: Relative.
Dave: Good dose of confidence when they decided to hire.
Dave: But that really that change in the rush to hire has really been much more correlated with the quit rate than anything about recent.
Dave: Changes in macro outlook and the sort of overall sentiment about how the shape of the macro economy may go over to Europe. So we have seen over a few years a shift but nothing over the past few months that looks notable are different the main thanks Lucy.
Dave: You gave your has been quite steady.
Dave: Wake of notable uptick in future oriented qualitative confidence in November December January and a notable downturn since then.
Dave: Qualitative confidence, but throughout that period consistent with the guidance Tim talked about we've seen steady behavior.
Dave: Yeah on the marketing point SDN.
Dave: We've seen a.
Dave: Relatively consistent.
Dave: Slate of competitors in the media channels in which we advertise that said we are definitely seeing some of them pull back to some degree in some of those channels. However.
Dave: The demand, we're seeing from employers and the response, we're getting to the advertising. We're running has been consistent since we entered the year and is not explained by or fully bolstered by the fact that competition and competitive levels are changing it looks more endemic to the overall market itself.
Dave: And the level of appetite employers have for hiring and the eagerness and the frequency with which they are looking for solutions.
Dave: Okay.
Dave: Thank you both.
Dave: And since we have no further questions at this time that does this the question and answer session and today's conference call. Thank you for your participation. You may now disconnect your lines have a blissett they everyone.
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