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01/11 03:37
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals mixed signals: revenue guidance is slightly positive, but EBITDA margins have declined YoY. The Q&A indicates stabilization in hiring but no strong rebound, and AI's impact remains limited. Although there's optimism for Q4 growth, the lack of specific guidance and cautious responses on margins suggest uncertainty. Cash reserves are strong, but the market's muted response to AI and hiring trends tempers enthusiasm. Thus, the overall sentiment is neutral, with no strong catalysts for significant stock movement in either direction.
Quarterly Paid Employers (QPEs) QPEs grew 4% sequentially in Q2 2025, reaching 66,300. This marks the first Q1 to Q2 sequential increase since 2022. The growth is attributed to increased employer engagement and hiring campaigns.
Revenue Revenue for Q2 2025 was $112.2 million, a 2% sequential increase. This stabilization contrasts with prior years' declines and reflects steady business performance.
Revenue per Paid Employer Revenue per paid employer for Q2 2025 was $1,693, down 4% year-over-year and 2% sequentially. The decline is due to an increase in the number of paid employers ramping up hiring campaigns.
Net Loss Net loss in Q2 2025 was $9.5 million, compared to a net income of $7 million in Q2 2024 and a net loss of $12.8 million in Q1 2025. The year-over-year decline is attributed to increased sales and marketing investments.
Adjusted EBITDA Adjusted EBITDA for Q2 2025 was $9.3 million, with a margin of 8%. This is a decline from 23% in Q2 2024 but an improvement from 5% in Q1 2025. The year-over-year decline is due to sales and marketing investments.
Cash, Cash Equivalents, and Marketable Securities As of June 30, 2025, the total was $421.2 million. This reflects the company's financial stability despite ongoing investments.
Breakroom platform: Published over 8,000 employer pages with more than 1 million ratings in the U.S. as of July 2025.
ZipIntro adoption: Enterprise customer adoption increased with scheduled sessions growing by 90% quarter-over-quarter.
AI-powered resume database feature: Introduced a feature for SMBs that uses AI to surface qualified candidates, resulting in a 12% increase in SMB customers unlocking resumes in Q2 2025 compared to Q1 2025.
Generative AI integration: Improved marketplace visibility for generative AI engines, leading to a 58% quarter-over-quarter increase in site visits from these tools.
Revenue growth: Revenue grew 2% sequentially in Q2 2025 to $112.2 million, with a forecasted 1% sequential increase in Q3 2025.
Quarterly Paid Employers (QPEs): QPEs increased by 4% sequentially in Q2 2025, reaching 66,300.
Adjusted EBITDA: Achieved $9.3 million in Q2 2025, with a margin of 8%, up from 5% in Q1 2025.
Marketing investments: Focused on high ROI marketing campaigns, contributing to sequential employer growth year-to-date.
Capital deployment: Disciplined approach to capital deployment, including $56.5 million spent on repurchasing 10.2 million shares of Class A common stock in Q2 2025.
Soft labor market conditions: The broader labor market remains soft, with U.S. employers persistently decreasing hiring and employees switching jobs less often over the past three years. This challenging labor market environment could impact ZipRecruiter's growth and revenue potential.
Revenue per paid employer decline: Revenue per paid employer decreased by 4% year-over-year and 2% sequentially in Q2 2025, primarily due to an increase in the number of paid employers ramping up hiring campaigns. This decline could affect overall revenue growth.
Net loss and declining profitability: The company reported a net loss of $9.5 million in Q2 2025 compared to a net income of $7 million in Q2 2024. Adjusted EBITDA margin also declined year-over-year from 23% to 8%, primarily due to increased sales and marketing investments.
Macroeconomic challenges: The company faces ongoing macroeconomic challenges, including a tempered hiring market and dynamic economic environment, which could impact its financial performance and strategic objectives.
Increased marketing and sales expenses: Sales and marketing investments have increased, contributing to a decline in adjusted EBITDA margin. While these investments aim to drive growth, they also pose a risk to profitability if returns are not realized as expected.
Revenue Guidance for Q3 2025: Expected revenue between $110 million and $116 million, with a midpoint representing a 1% sequential increase. This marks the first Q2 to Q3 revenue growth since 2021.
Revenue Growth Outlook: Anticipates a return to modest year-over-year revenue growth in Q4 2025, assuming current trends persist.
Adjusted EBITDA Guidance for Q3 2025: Projected adjusted EBITDA of $6 million at the midpoint, equating to a 5% adjusted EBITDA margin.
Long-term Adjusted EBITDA Margin Goal: Aims to achieve 30% adjusted EBITDA margins in the long term.
Capital Deployment and Investments: Plans to continue disciplined capital deployment, focusing on innovative product initiatives and high ROI marketing campaigns.
Labor Market Recovery Positioning: Confident in the ability to capitalize on the eventual labor market recovery, supported by investments in product and technology.
Share Repurchase: In Q2, we purchased 10.2 million shares of our Class A common stock for a total of $56.5 million.
The earnings call reveals mixed sentiments: a net loss and competitive pressures are negative, while sequential revenue growth and strong performance-based revenue are positive. The Q&A highlights market share gains and innovation success, but a subdued hiring environment and seasonal revenue decline temper optimism. Share repurchase is a positive signal, yet the overall financial outlook remains cautious. Given these factors, the stock price is likely to remain neutral within the next two weeks.
The earnings call reveals mixed signals: revenue guidance is slightly positive, but EBITDA margins have declined YoY. The Q&A indicates stabilization in hiring but no strong rebound, and AI's impact remains limited. Although there's optimism for Q4 growth, the lack of specific guidance and cautious responses on margins suggest uncertainty. Cash reserves are strong, but the market's muted response to AI and hiring trends tempers enthusiasm. Thus, the overall sentiment is neutral, with no strong catalysts for significant stock movement in either direction.
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