ZipRecruiter(ZIP) - 2024 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q2 2024, revenue was $124 million, down 27% year-over-year, but increased 1% quarter-over-quarter, marking the first sequential increase since Q2 2022 [5][16] - Net income for Q2 2024 was $7 million, compared to $14 million in Q2 2023 and a net loss of $7 million in Q1 2024 [16] - Adjusted EBITDA was $28 million with a margin of 23%, down from $43 million and a margin of 25% in Q2 2023, but up from $21 million and a margin of 17% in Q1 2024 [16] Business Line Data and Key Metrics Changes - Quarterly paid employers were 70,000, representing a 31% decrease year-over-year and a 2% decrease sequentially, primarily due to reduced demand from SMBs [16] - Revenue per paid employer was $1,755, up 5% year-over-year and 3% sequentially, attributed to a mix shift from subscription revenue to performance revenue [16] Market Data and Key Metrics Changes - Total ZipRecruiter web traffic in the U.S. grew by 22% year-over-year, with organic job seeker traffic increasing by 30% year-over-year, outperforming competitors by at least 12 percentage points [6][11] - The labor market remains challenging, with seasonally adjusted hires declining year-over-year since August 2022, and the quit rate falling 9% below the average rate in 2019 [6][16] Company Strategy and Development Direction - The company aims to eliminate friction in the job search process and believes its brand, proprietary data, and technology position it to disrupt the industry further [4] - Strategic pillars include increasing the number of employers and revenue per paid employer, expanding job seeker traffic, and enhancing matching technology [8][10][14] - The acquisition of Breakroom, a U.K.-based employer review site, is part of the strategy to empower job seekers with insights [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the labor market, noting softening trends in late June and July, which influenced their guidance for Q3 [20] - Despite current challenges, the company remains committed to long-term investments in product, technology, and marketing to capture market share during recovery [17][18] Other Important Information - Cash, cash equivalents, and marketable securities totaled $523 million as of June 30, 2024 [16] - The company plans to launch Breakroom in the U.S. to provide job insights for frontline workers [12] Q&A Session Summary Question: Trends in the labor market and cautious outlook - Management noted that trends in late June and July showed general softening, leading to a more cautious outlook for Q3 [20] Question: Organic traffic growth dynamics - Organic traffic growth of 30% year-over-year was attributed to sustained investments in product and brand, with total traffic up 22% [21][22] Question: Demand variations across verticals - Demand from SMBs was lower, with retail and government performing better, while finance, technology, and education sectors showed weakness [26]