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    ZIPRECRUITER (ZIP)

    Q2 2024 Earnings Summary

    Reported on Jan 27, 2025 (After Market Close)
    Pre-Earnings Price$7.25Last close (Aug 7, 2024)
    Post-Earnings Price$8.07Open (Aug 8, 2024)
    Price Change
    $0.82(+11.31%)
    • ZipRecruiter experienced significant growth in organic job seeker traffic, increasing by 30% year-over-year in Q2 2024, with total web traffic up 22%, outpacing competitors by over 12 percentage points. This strong traffic growth reflects effective investments in product improvements and brand building, positioning the company well for future revenue growth.
    • The company is making strategic product improvements such as the acquisition of Breakroom and the initial rollout of ZipIntro, which are expected to enhance the user experience and attract more users. These initiatives demonstrate ZipRecruiter's commitment to innovation and may lead to increased market share.
    • Management is confident in their ability to navigate the current labor market softness, rapidly reacting to conditions and persistently investing in their product. They believe that growing job seeker traffic during the downturn optimally positions them to take market share when the labor market inevitably recovers.
    • The company is experiencing lower demand from SMBs and specific verticals, with underperformance in finance and technology sectors, and weakening demand in education, potentially leading to decreased revenue opportunities.
    • Recent trends in late June and July showed general softening, making management more cautious in their expectations for Q3, suggesting that the labor market downturn may continue to impact the company's performance.
    • The organic traffic growth decelerated from 65% last quarter to 30% this quarter, which could indicate a slowdown in job seeker engagement and may affect future growth prospects.
    1. Market Softness and Outlook
      Q: What trends in late June and July are making you more cautious compared to three months ago?
      A: In the early part of the quarter, we saw signs of stabilization similar to prior calls, but as we approached June and into July, we observed general softening trends. This softness is reflected in the light sequential decrease in paid employers over Q2. Our guidance assumes that this softness noted in June and July continues throughout the quarter.

    2. Verticals with Lower Demand
      Q: Which specific verticals are showing lower demand?
      A: While retail and government sectors are outperforming, verticals like finance and technology remain weak. Additionally, education, which was strong due to a catch-up in hiring after the pandemic, has started to weaken year-over-year. Overall, we're seeing challenges across sectors and geographies, with recent government data showing we're now 6% or 8% below the average monthly hires of pre-COVID 2019.

    3. Organic Traffic Growth
      Q: Organic traffic grew 30% year-over-year compared to 65% last quarter. Can you discuss this?
      A: The 30% growth in organic traffic this quarter results from long-term investments in product and brand building. Organic traffic growth doesn't stem from straightforward sequential actions taken in any given quarter. Our total traffic is up 22%, powered by the 30% organic growth, which is over 12% faster than our largest competitors. We feel great about the sustained momentum from these investments.

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