ZIPRECRUITER, INC. (ZIP)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 revenue was $110.1M, down 10% y/y and 1% q/q, but the sequential decline was notably smaller than typical Q1 seasonality in recent years; management framed the setup as “cautious optimism” amid a “wait‑and‑see” employer stance and macro uncertainty .
• Quarterly Paid Employers rose 10% q/q to 63.5K (highest Q4→Q1 growth since 2021), while Revenue per Paid Employer was $1,734 (+2% y/y, −10% q/q), reflecting both seasonal mix and a slight mix shift toward performance revenue (22% of revenue) .
• Q2 2025 guidance: revenue $108–$114M (midpoint +1% q/q, −10% y/y) and Adjusted EBITDA $4–$10M (4–9% margin), with management still expecting a likely scenario of y/y revenue growth in Q4 and mid‑single‑digit full‑year Adjusted EBITDA margins in that scenario .
• Versus S&P Global consensus, Q1 revenue modestly beat, and EPS materially beat; EBITDA comparisons are complicated by differing definitions (company reports Adjusted EBITDA, while SPGI “EBITDA” reflects a different construct)* .
• Key stock narrative catalysts: smaller‑than‑typical seasonal revenue decline, sequential Paid Employers inflection, Workday certified integration (enterprise distribution/ZipApply throughput), and management’s reiterated view of a Q4 y/y growth setup .

What Went Well and What Went Wrong

What Went Well

• Sequential execution: Quarterly Paid Employers +10% q/q to 63,466—the strongest Q4→Q1 increase since 2021; revenue down just 1% q/q versus −10%/−13% in Q1’24/Q1’23 .
• Enterprise integration: Achieved Workday Certified Integration; enhanced ATS capabilities (ZipApply, screening questions) and improved campaign bidding led to a 7% m/m increase in applications in the first month post‑launch .
• Engagement/product momentum: ZipIntro scheduled sessions +16% q/q; Resume Database collaboration features drove +9% resume unlock rate among enterprise RDB buyers; management emphasized “driving even greater engagement” as a strategic focus .

What Went Wrong

• Revenue and profitability compression: Revenue −10% y/y; net loss widened to ($12.8M) with Adjusted EBITDA $5.9M (5% margin) as higher marketing/personnel spend weighed on sequential margins .
• Hiring demand softness: Continued SMB demand reductions y/y and macro uncertainty; Quits Rate remains near lows since 2015, restraining backfill hiring velocity .
• Category traffic headwinds: Online recruiting sites focused on job seekers saw −17% y/y traffic in Q1 per SimilarWeb; ZipRecruiter was better at −5% but still faced top‑of‑funnel pressure, requiring product‑driven engagement to offset .

Financial Results

Note: Company reports Adjusted EBITDA; SPGI “EBITDA” is defined differently and not directly comparable to company’s Adjusted EBITDA .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We started the year with cautious optimism… employers adopting a ‘wait‑and‑see’ attitude… we are poised for outsized growth when hiring activity rebounds.” — Ian Siegel, CEO .
• “Quarterly Paid Employers increased by 10% sequentially, which is the highest Q4 to Q1 growth since 2021.” — Prepared remarks .
• “ZipRecruiter achieved Workday Certified Integration… employers who use ZipApply receive 3x more applications and get their first five candidates 4x faster.” — David Travers, President .
• “We let the data drive our decisions… flexible operating structure to dial sales and marketing investment up or down.” — Tim Yarbrough, CFO .
• “Our Q2 revenue guidance of $111 million at the midpoint… we still believe achieving year‑over‑year growth in the fourth quarter is a likely scenario.” — Prepared remarks .

Q&A Highlights

• Macro stance and behavior: Employers have not pulled back; behavior steady despite increased uncertainty; management monitoring closely and ready to adjust .
• Investment flexibility: CFO reiterated variable marketing spend and rapid response ability to changing signals across channels .
• Seasonality and outlook: Typical pattern (Q1→Q3 up, Q3→Q4 dip); confidence in Q4 y/y growth driven by trends continuing .
• Employer behavior details: Post‑COVID shift to slower decision cadence correlated with Quits Rate; no notable change in recent months .
• Competitive/marketing: Some competitor pullback in channels; demand and ad response remain consistent; opportunistic approach continues .

Estimates Context

• Q1 2025 results vs S&P Global consensus: Revenue beat (actual $110.1M vs $109.13M*), EPS beat (actual $0.0183* vs −$0.156*). EBITDA comparisons are not apples‑to‑apples given company reports Adjusted EBITDA ($5.9M) while SPGI “EBITDA” is defined differently* .
• Implications: Consensus likely to recalibrate EPS trajectory higher near‑term and acknowledge improved seasonal dynamics; revenue path remains tied to hiring demand/Quits stabilization and SMB reactivation* .

Key Takeaways for Investors

• Sequential improvement matters: The 1% q/q revenue decline and 10% q/q Paid Employers growth indicate a turn versus the last two Q1 comps, supporting management’s Q4 y/y growth scenario .
• Enterprise channel strengthening: Workday certified integration plus improved bidding models should support enterprise throughput and monetization over time .
• Marketing optionality: Variable, ROI‑driven spend provides downside protection and upside leverage as signals improve .
• Product‑led engagement: ZipIntro and RDB enhancements drove measurable engagement gains—critical with top‑of‑funnel traffic under pressure .
• Balance sheet supports flexibility: $468M in liquidity at quarter‑end and ongoing buybacks provide strategic and capital allocation flexibility .
• Watch macro/Quits Rate: Stabilization would unlock backfill-driven hiring volume; management commentary continues to anchor on this dynamic .
• Near‑term trading lens: Modest beat, reiterated Q4 growth scenario, and enterprise integration progress are positive; margin trajectory will track marketing intensity and demand recovery .

S&P Global disclaimer: Values marked with an asterisk (*) were retrieved from S&P Global (Capital IQ) via the GetEstimates tool.