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ZI

ZIPRECRUITER, INC. (ZIP)·Q2 2025 Earnings Summary

Executive Summary

  • Revenue was $112.2M, up 2% QoQ and down 9% YoY; Adjusted EBITDA was $9.3M (8% margin), and net loss was ($9.5M) with an (8)% margin .
  • Quarterly Paid Employers rose 4% sequentially to 66.3K, while Revenue per Paid Employer declined 2% QoQ to $1,693 (down 4% YoY) .
  • Management guided Q3 2025 revenue to $110–$116M and Adjusted EBITDA to $3–$9M (3–8% margin); if achieved, Q2→Q3 revenue growth would occur for the first time since 2021, supporting the view of modest YoY growth in Q4 .
  • Board authorized a $100M increase to the share repurchase program (aggregate authorization to $750M), signaling capital allocation confidence .
  • Versus S&P Global consensus, Q2 revenue modestly beat (~$0.52M), and “Primary EPS” beat; Adjusted EBITDA outperformed internal guidance midpoint. Values retrieved from S&P Global*.

What Went Well and What Went Wrong

What Went Well

  • Quarterly Paid Employers grew for the third consecutive quarter, up 4% QoQ to 66,302; management cited stabilization and momentum across SMB and enterprise .
  • Product/AI initiatives delivered tangible gains: ZipIntro sessions up 90% QoQ; AI bidding nearly 20% more effective QoQ; generative AI-driven visits up 58%; SMB resume unlocks up 12% QoQ .
  • Quote: “These trends reinforce our belief that a return to modest year-over-year revenue growth in the fourth quarter is an increasingly likely scenario.” — CEO Ian Siegel .

What Went Wrong

  • Top-line pressure persisted: revenue fell 9% YoY; Revenue per Paid Employer down 4% YoY and 2% QoQ; Adjusted EBITDA margin compressed to 8% vs 23% a year ago .
  • Sales & Marketing intensity elevated: S&M was $58.1M (52% of revenue) vs 42% in Q2’24, reflecting investment despite a tempered hiring market .
  • Category headwinds: education jobs were “down significantly” YoY despite normal seasonal pickup; technology postings declined ~5% YoY, indicating continued macro softness .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Millions)$123.7 $110.1 $112.2
Diluted EPS ($USD)$0.07 $(0.24) $(0.10)
Gross Margin %90% 89% 89%
Net Income (Loss) ($USD Millions)$7.0 $(12.8) $(9.5)
Net Income (Loss) Margin %6% (12)% (8)%
Adjusted EBITDA ($USD Millions)$27.8 $5.9 $9.3
Adjusted EBITDA Margin %23% 5% 8%
Quarterly Paid Employers (K)70.5 63.5 66.3
Revenue per Paid Employer ($USD)$1,755 $1,734 $1,693

Q2 2025 vs Wall Street (S&P Global)*

MetricConsensusActualBeat/Miss
Revenue ($USD Millions)111.7*112.2 Beat (~$0.52M)*
Primary EPS ($USD)(0.129)*0.034*Beat*
EBITDA ($USD Millions)6.9*(3.27)*Miss*

Values retrieved from S&P Global.*

Revenue composition

Revenue Stream ($USD Millions)Q2 2024Q2 2025
Subscription$96.4 $87.8
Performance-based$27.2 $24.4
Total$123.7 $112.2

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)Q3 2025—$110–$116 New
Adjusted EBITDA ($USD Millions)Q3 2025—$3–$9 (3–8% margin) New
Full-year Adjusted EBITDA MarginFY 2025 (scenario)Mid-single digits Mid-single digits (scenario) Maintained
Share Repurchase AuthorizationOngoing$650M remaining auth; $39.2M available as of 6/30/25 +$100M increase to $750M aggregate Raised

Earnings Call Themes & Trends

TopicQ4 2024 (Prior)Q1 2025 (Prior)Q2 2025 (Current)Trend
AI/Tech initiativesContinued product investment despite soft hiring Workday certified ATS integration; ZipIntro sessions +16% QoQ; RDB collaboration features ZipIntro sessions +90% QoQ; AI bidding ~20% more effective; SMB resume unlocks +12% QoQ; gen-AI visits +58% QoQ Accelerating adoption and efficacy
Macro/tariffsCautious outlook; stabilizing Q1 guidance cadences “Wait-and-see” employer stance; quits rate near multi-year lows Anxiety around tariffs abating; overall hiring soft but stabilizing; health care strong; education weak YoY Stabilizing; mixed sector signals
Product performance—QPE +10% QoQ; RPE down seasonally QPE +4% QoQ; RPE down 2% QoQ; performance-based revenue steady at 22% of total Sequential employer growth; RPE softer
Regulatory/legal (AI guardrails)——Management emphasized AI compliance guardrails; minimal risk seen from recent lawsuits Active governance
Capital allocation—$95.7M remaining under $650M program at 3/31 +$100M authorization increase to $750M total; 10.2M shares repurchased for $56.5M in Q2 More aggressive buybacks

Management Commentary

  • CEO perspective: “These trends reinforce our belief that a return to modest year-over-year revenue growth in the fourth quarter is an increasingly likely scenario… we are well-positioned to emerge from this period as a stronger company” — Ian Siegel .
  • Product vision: “AI-powered campaign optimization was nearly 20% more effective… ZipIntro scheduled sessions increased by 90% QoQ” — Management in shareholder letter .
  • CFO guidance tone: Q3 revenue $110–$116M; Adjusted EBITDA ~$6M midpoint (5% margin); mid-single-digit full-year margins remain the likely scenario with ROI-driven S&M deployment .

Q&A Highlights

  • SMB vs enterprise stabilization: Momentum broad-based; QPE growth patterns now resemble pre-COVID seasonality; macro still soft but stabilizing .
  • Generative AI traffic: Significant growth in high-intent research traffic; brand strength helps conversion; channel still small but rising .
  • AI Overviews impact: Tailwind to engaged job seeker traffic; active seekers see limited impact; focus on delivering high-intent users .
  • AI guardrails: Company confident in compliance with hiring laws; views recent lawsuits in market as not directly risky to ZIP given internal guardrails .
  • Pricing/monetization: With 32 months of hiring declines, price increases are not optimal; strategy is value-first then monetization as recovery materializes .
  • Category performance: Health care strong; education down significantly YoY despite seasonal pickup; technology postings down ~5% YoY .

Estimates Context

  • Q2 2025 revenue modestly beat S&P Global consensus (~$112.2M vs ~$111.7M); “Primary EPS” beat (consensus negative vs positive actual). The company’s Adjusted EBITDA ($9.3M) was above its prior Q2 midpoint and Q3 midpoint guide. Values retrieved from S&P Global* .
  • Implications: Consensus likely to lift sequentially for Q3 (management midpoint implies +1% QoQ) and modestly for Q4 given management’s increasing confidence in returning to YoY growth .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Sequential stabilization is real: QPEs up 10% in Q1 and 4% in Q2; Q3 guide implies first Q2→Q3 growth since 2021 — supportive for near-term multiple expansion if execution continues .
  • Product/AI traction is measurable: ZipIntro, AI bidding, and RDB are driving employer engagement and campaign efficacy, which should translate into future RPE uplift and retention .
  • S&M mix is elevated (52% of revenue) — a lever to drive employers now and EBITDA later; mid-single-digit FY margin scenario suggests disciplined spend tied to ROI .
  • Capital returns are significant: Authorization lifted to $750M; Q2 repurchases of $56.5M reduce float and can support EPS optics on recovery .
  • Macro risk remains: Education and tech categories show weakness; quit rate remains low — recovery path is likely gradual; watch Q3 conversion and RPE trends .
  • Near-term trading: Modest revenue/“Primary EPS” beat and Q3 sequential guide, plus buyback expansion, are potential positive catalysts; monitor any post-earnings move relative to estimate revisions*. Values retrieved from S&P Global.*
  • Medium-term thesis: As hiring normalizes, AI-led matching and employer tools plus a strong brand and balance sheet position ZIP to recapture RPE and margin, with long-term Adjusted EBITDA target of 30% reiterated in commentary .