Labor Market Flattening
Q: Is the labor market showing signs of flattening?
A: Management observed early signs of the labor market flattening over the last few weeks, marking a new phenomenon after 18 months of decline. This flattening is gradual and broad-based across industries and employer sizes, but it's too early to confirm a sustained trend. " "

Operating Philosophy on EBITDA Margins
Q: How will you manage EBITDA margins amid uncertain recovery?
A: The company expanded adjusted EBITDA margins from 20% to 27% in 2023 compared to 2022 by cutting operating costs by over 47% during the demand decline. If the flattening continues, they are willing to accept lower EBITDA margins to remain ready to capitalize on an inevitable market recovery, adapting expenses as the market evolves. "

Market Share Gains
Q: Are you gaining market share in this environment?
A: Despite industry-wide revenue declines, management believes they are gaining market share. Organic job seeker traffic increased over 40% in 2023, with total applications up 17%, indicating higher engagement. They achieved 80% aided brand awareness among employers and job seekers, positioning them to press their advantage when the market recovers. " "

AI and LLM Investments
Q: Will AI investments impact revenue or expenses this year?
A: ZipRecruiter, an AI company for nearly a decade, is integrating large language models to enhance matching and engagement. While immediate revenue impact is uncertain, management believes better service from AI improvements will lead to increased revenue over time. They are redeploying resources made efficient by AI to deepen customer relationships. "

Job Seeker Engagement
Q: How are you improving job seeker engagement?
A: The company focused on enhancing engagement features and matching algorithms, resulting in organic job seeker traffic increasing 40% in 2023 and applications per job seeker up 17%. This indicates a significant improvement in interaction and engagement on the platform. " "

Quarterly Paid Employers
Q: Where could quarterly paid employers number trough?
A: The hiring rate in Q4 reached the lowest level since 2014, impacting the number of paid employers. If hiring rates continue to decline, paid employers could decrease further. However, structural shifts are not evident outside of tech, and most hires are still for backfilling positions rather than net growth, suggesting the metric could improve with market stabilization. "

Vertical Trends
Q: What trends are you seeing across industry verticals?
A: The tech sector continues to be slow, while the government sector, initially strong, has softened recently. Education is a bright spot with aggressive hiring due to teacher shortages. These dynamics shift regularly, but no major structural changes to the marketplace mix are observed. "

Performance Revenue Decline
Q: Why did performance revenue decline despite increased matches?
A: Despite a 24% increase in great matches and 60% more applications per paid employer, performance marketing revenue declined due to a significant change in employer demand amid the challenging macroeconomic environment. "

Revenue Beat and Guidance
Q: How did you beat revenue estimates despite conservative guidance?
A: The upside in revenue came from a higher than expected count of paid employers. Q4 is traditionally hard to predict due to seasonality and holidays, compounded by macro headwinds, but the company navigated these factors better than anticipated. "

Marketing Efficiency
Q: Any learnings from reduced marketing spend?
A: By reducing marketing spend by 45%, the company still achieved growth in organic job seekers due to high brand awareness. This indicates potential for increased marketing efficiency and supports confidence in achieving their long-term 30% EBITDA margin target. "