ZipRecruiter Announces Net Income of $14 Million for Second Quarter 2023 Results
SANTA MONICA, Calif., Aug. 8, 2023– ZipRecruiter, a leading online employment marketplace, announced financial results for the quarter ended June 30, 2023.
“Against a challenging macroeconomic backdrop, ZipRecruiter was able to deliver $14 million of net income and $43 million of Adjusted EBITDA in the second quarter of 2023,” said Ian Siegel, CEO of ZipRecruiter. “The number of job openings and employers’ willingness to pay for those job openings has been declining significantly from the peaks of prior years. Despite this dynamic we remain focused on creating new and better ways for employers and job seekers to connect to their next great opportunity. We believe our technology innovation and investments, coupled with ZipRecruiter’s substantial brand awareness and strong balance sheet, are delivering great experiences to job seekers and setting us up for success when employers’ appetite for hiring recovers.”
Financial Discussion
Revenue
Revenue for Q2’23 was $170.4 million, down 29% year-over-year and down 7% quarter-over-quarter. A softening hiring environment resulted in fewer Quarterly Paid Employers, driving the decreases in revenue year-over-year and sequentially.
Quarterly Paid Employers
ZipRecruiter had 101,634 Quarterly Paid Employers in Q2’23, down 35% year-over-year and down 4% sequentially. A cooling labor market drove the sequential decrease as employers continued to feel the impact of rising operating expenses and other macroeconomic headwinds.
Revenue per Paid Employer
Revenue per Paid Employer for Q2’23 was $1,677, up 9% year-over-year but down 3% sequentially. The sequential decrease was driven by employers’ willingness to pay being unfavorably impacted by overall macroeconomic conditions.
Gross Profit and Margin
Gross profit for Q2’23 was $154.7 million, down 29% year-over-year and down 5% sequentially. The decrease year-over-year and decrease quarter-over-quarter were both driven by the respective changes in revenue. Gross margin remained strong at 91%.
Operating Expenses
Total operating expenses for Q2’23 were $132.2 million, compared to $193.1 million in Q2’22 and $152.2 million in Q1’23. The decrease in total operating expenses year-over-year and quarter-over-quarter was primarily driven by lower sales and marketing expenses as we adjusted marketing investment levels given the current macroeconomic conditions, partially offset by one-time charges of $8.3 million resulting from our restructuring plan announced on May 31, 2023 to reduce our global workforce by approximately 20%. The restructuring costs totaled $3.9 million in sales and marketing, $3.4 million in research and development, and $1.0 million in general and administrative expenses for the three and six months ended June 30, 2023.
Net Income and Adjusted EBITDA
Net income in Q2’23 was $14.4 million, compared to net income of $13.1 million in Q2’22 and net income of $5.0 million in Q1’23. Adjusted EBITDA was $43.3 million, equating to an Adjusted EBITDA margin of 25%, in Q2’23, compared to $45.4 million, with a margin of 19%, in Q2’22, and $35.3 million, with a margin of 19%, in Q1’23. Net income and Adjusted EBITDA remained relatively flat year-over-year, as lower revenue was mostly offset by lower operating expenses. The increases in net income and Adjusted EBITDA quarter-over quarter were primarily due to lower operating expenses.
Fully Diluted Shares
As of June 30, 2023, ZipRecruiter had a fully diluted capitalization of 114 million shares of Class A common stock and Class B common stock. This fully diluted capitalization share count includes (a) the shares of Class A common stock and Class B common stock outstanding and (b) all shares of Class A common stock and Class B common stock reserved for issuance to settle outstanding stock options and restricted stock units, but does not include shares of Class A common stock and Class B common stock reserved for future issuance of award grants under ZipRecruiter’s equity compensation plans. As of June 30, 2023, the remaining amount available to repurchase under the previously authorized $550 million share repurchase program was $100 million.
Cash, Cash Equivalents and Marketable Securities
Cash, cash equivalents and marketable securities was $497.2 million as of June 30, 2023 compared to $699.9 million as of June 30, 2022, and $519.1 million as of March 31, 2023. The decrease in cash, cash equivalents and marketable securities year-over-year was primarily due to repurchases of Class A common stock under our share repurchase program partially offset by cash flow from operations. The decrease in cash, cash equivalents and marketable securities quarter-over-quarter was primarily due to repurchases of Class A common stock under our share repurchase program. In Q2, we purchased 3.2 million shares totaling $50.5 million.
About ZipRecruiter
ZipRecruiter is a leading online employment marketplace that actively connects people to their next great opportunity. ZipRecruiter’s powerful matching technology improves the job search experience for job seekers and helps businesses of all sizes find and hire the right candidates quickly.
SOURCE ZipRecruiter
