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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 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.
Revenue $115 million in Q3 '25, representing a 2% decline year-over-year and a 2% increase sequentially. The sequential increase was primarily driven by a 12% quarter-over-quarter increase in performance-based revenue from enterprise employers.
Quarterly Paid Employers 67,000 in Q3 '25, an increase of 3% year-over-year and 1% sequentially. This marks the first year-over-year increase in quarterly paid employers since Q1 2022, demonstrating the brand's resilience despite macroeconomic volatility.
Revenue Per Paid Employer $1,717 in Q3 '25, down 4% year-over-year but up 1% sequentially. The sequential increase was mainly driven by growth in performance-based revenue from enterprise employers.
Performance-Based Revenue 12% sequential increase in Q3 '25, marking the largest sequential growth in over 3 years. This growth was attributed to improved automated campaign performance optimization solutions and increased adoption by enterprise customers.
Net Loss $9.8 million in Q3 '25.
Adjusted EBITDA $9.2 million in Q3 '25, resulting in an adjusted EBITDA margin of 8%, which is flat compared to Q2 2025. Higher revenue was offset by higher expenses.
Cash, Cash Equivalents, and Marketable Securities $411 million as of September 30, 2025.
Share Repurchase 2.2 million shares repurchased for a total of $10 million during Q3 '25.
Generative AI Optimization: Optimized for AI-driven discovery, leading to a 140% sequential increase in visits from generative AI models.
ZipIntro: AI-powered solution for rapid employer-job seeker connections saw an 80% sequential increase in interviews and scheduled sessions.
Resume Database Upgrades: Enhanced productivity tools for recruiters led to an 11% sequential increase in SMB employer resume unlocks.
Breakroom Launch: Launched in the U.S. with over 10,000 employer profiles and 1 million worker ratings, providing job seekers with workplace insights.
Enterprise Strategy: Performance-based revenue grew 12% quarter-over-quarter, the largest growth in 3 years, driven by enterprise adoption of campaign optimization tools.
Job Seeker Market Share: Generative AI optimization contributed to capturing market share by increasing site visits by 140% sequentially.
Quarterly Paid Employers: Increased to 67,000, marking a 3% year-over-year growth and the first year-over-year increase since Q1 2022.
Revenue Per Paid Employer: Revenue per paid employer was $1,717, down 4% year-over-year but up 1% sequentially.
Long-term Investments: Focused on AI-powered matching algorithms and hiring solutions to lead the shift from offline to online recruiting.
Financial Discipline: Maintained adjusted EBITDA profitability and invested in high ROI product and marketing opportunities despite macroeconomic challenges.
Soft labor market: The persistently soft labor market and low hiring and quits rates in the U.S. since 2015 could adversely impact ZipRecruiter's revenue growth and overall business performance.
Macroeconomic volatility: The subdued macroeconomic environment and economic uncertainties are creating challenges for revenue growth and employer activity on the platform.
Revenue per paid employer decline: Revenue per paid employer decreased by 4% year-over-year, which could indicate challenges in maintaining or increasing monetization levels.
Seasonal revenue decline: The company anticipates a 3% sequential decline in revenue for Q4 2025 due to typical seasonality, which could impact financial performance.
Net loss: The company reported a net loss of $9.8 million in Q3 2025, highlighting ongoing financial challenges.
Competitive pressures: The need to optimize for generative AI-driven discovery and the launch of new tools like Breakroom indicate competitive pressures to innovate and capture market share.
Subdued hiring environment: The stable but subdued hiring environment limits growth opportunities and impacts the company's ability to scale its operations.
Q4 2025 Revenue Guidance: Revenue is anticipated to be between $109 million and $115 million. The midpoint of $112 million represents a 1% increase year-over-year, marking a return to year-over-year revenue growth for the first time since Q3 2022. A 3% sequential decline in revenue is expected due to typical seasonality and a subdued macroeconomic environment.
Adjusted EBITDA Guidance for Q4 2025: The midpoint of $14 million implies a full year 2025 adjusted EBITDA margin of 9%, exceeding the mid-single-digit scenario outlined earlier in the year.
Long-term Adjusted EBITDA Margin Goal: The company aims to achieve a long-term adjusted EBITDA margin of 30%.
Market Conditions Assumptions: Guidance assumes a continuation of the stable but subdued hiring environment observed in Q3 2025, along with normal seasonal slowness during the holiday periods.
Share Repurchase: During Q3 '25, we repurchased 2.2 million shares for a total of $10 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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