Kunal Madhukar

Kunal Madhukar sought clarification on the Q4 slowdown and subsequent Q1 recovery, questioning why the Q1 recovery doesn't fully restore previous levels. He also asked if employers are shifting away from traditional resumes in candidate sourcing, specifically regarding the 'Be Seen First' feature.

Answer

President David Travers clarified that Q1 typically builds from a lower seasonal starting point due to holiday slowdowns, especially in SMBs, making the current recovery a steeper climb from a weaker late November/December. Co-founder and CEO Ian Siegel stated that resumes remain essential, but 'Be Seen First' allows job seekers to differentiate themselves with enthusiasm, providing employers with additional signals to assess candidates beyond qualifications, leading to higher engagement.

Kunal Madhukar from UBS inquired about the Q4 slowdown and Q1 recovery dynamics, specifically why the Q1 recovery doesn't fully restore previous levels, and whether employers are shifting away from traditional resumes in candidate sourcing.

Answer

David Travers, President of ZipRecruiter, attributed the Q1 outlook to a lower starting point from the Q4 holiday slowdown, particularly in SMBs. Ian Siegel, Co-founder and CEO, confirmed resumes remain crucial but highlighted Be Seen First as a novel way for job seekers to show enthusiasm and provide additional signals to employers.

Asked for details on the MVNE opportunity, including revenue timeline and economics; the distribution strategy for the large inventory of SIM cards; the path to reaching 100,000 retail locations; and progress on the Lifeline business in higher-revenue states.

Answer

The company expects MVNE revenue to begin in Q2, with a target margin of 20-30% per subscriber, though modeling is difficult due to partner variability. SIM cards will be distributed across all business lines (retail, wholesale, government) to fuel growth. The goal of 100,000 locations by the end of 2026 is based on a strong sales pipeline with distributors like HT Hackney. The company is moving 'full steam ahead' on Lifeline, targeting high-revenue states first and anticipating a potential government enhancement to the program.

Kunal Madhukar of Water Tower Research asked about the revenue timeline and economics for the new MVNE business, the distribution strategy for its large SIM card inventory, the path to achieving the 100,000 retail location goal, and progress in high-revenue Lifeline states.

Answer

President and CEO Brian Cox explained that MVNE revenue should appear in Q2, featuring a high-margin, recurring model. He detailed that the SIM inventory is being strategically distributed across all business lines, including government-subsidized programs, LinkUp retail, the 'Phone in a Box' concept, and new MVNE partners. Cox affirmed the 100,000 store goal is based on a strong pipeline with partners like HT Hackney and that the company is moving 'full steam ahead' on Lifeline expansion into high-revenue states, supported by recent financing.

Kunal Madhukar asked about trends on the seller side of the business, particularly in light of eroding consumer confidence and potential tariffs. He also followed up on the 5% decline in average revenue per order, questioning if it was due to pricing pressure or other factors.

Answer

CEO James Reinhart reported continued good momentum on the seller side, which is crucial for supporting buyer growth. He highlighted growth in the premium consignment offering and the rapid adoption of a new feature allowing sellers to include items with their returns. Regarding the average revenue per order, he clarified that the decline was not due to pricing pressure but was a direct result of the mix shift from the explosive growth in new buyers, who receive a promotional discount on their first order.

Kunal Madhukar asked about the potential impact of new tariffs on advertising costs and ThredUp's strategy for balancing growth investment versus margin improvement, and followed up on the flexibility of their pricing algorithm.

Answer

CEO James Reinhart identified potential tariffs as a net positive. He explained that lower ad costs (CPCs) would be a tailwind, allowing for more investment to drive buyer growth. He also noted that rising costs for new apparel would make secondhand more attractive. Reinhart confirmed ThredUp's pricing algorithms are dynamic and can adjust in real-time to capitalize on market price changes.

Kunal Madhukar from Water Tower Research inquired about the contribution of direct revenue to the 2025 growth forecast and questioned the size of the fixed G&A cost base, asking about potential leverage opportunities.

Answer

CFO Ajay Gopal stated that direct revenue has been rightsized to about 10-15% of total revenue and is expected to remain stable with gross margins around 15%. Regarding G&A, he clarified that the fixed cost base includes corporate functions and public company costs. He emphasized that this infrastructure is now built and will be a significant source of operating leverage as the business scales without requiring major new investment.