ZipRecruiter, Inc. ((ZIP)) has held its Q2 earnings call. Read on for the main highlights of the call.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
The recent earnings call for ZipRecruiter, Inc. painted a mixed picture of the company’s financial health and strategic direction. While there was optimism surrounding sequential growth in paid employers and revenue stabilization, challenges such as a decrease in revenue per paid employer, a net loss, and a decline in adjusted EBITDA margin were also highlighted. These developments occur against a backdrop of a persistently soft labor market.
Sequential Growth in Quarterly Paid Employers
ZipRecruiter reported a notable increase in quarterly paid employers (QPEs), with a 10% growth in Q1 2025 followed by an additional 4% in Q2 2025. This marks the largest Q4 to Q1 increase since 2021, indicating a positive trend in employer engagement with the platform.
Revenue Stabilization and Growth
The company achieved a 2% sequential increase in revenue in Q2 2025, reaching $112.2 million. Looking ahead, ZipRecruiter projects a 1% sequential growth in Q3 2025, suggesting stabilization and potential year-over-year growth by Q4.
AI-Powered Product Innovations
ZipRecruiter’s introduction of new AI-powered features, such as ZipIntro and enhanced resume databases, has driven significant engagement. The company reported a 12% increase in SMBs unlocking resumes and a 90% increase in scheduled ZipIntro sessions, showcasing the impact of these innovations.
Generative AI Traffic Surge
The company experienced a 58% quarter-over-quarter increase in site visits from generative AI engines, which has enhanced job seeker engagement and contributed to the platform’s growing traffic.
Decrease in Revenue Per Paid Employer
Despite growth in paid employers, revenue per paid employer decreased by 4% year-over-year and 2% sequentially. This decline is attributed to an increase in the number of employers ramping up their hiring campaigns.
Net Loss in Q2 2025
ZipRecruiter reported a net loss of $9.5 million in Q2 2025, a significant shift from a net income of $7 million in Q2 2024. This loss underscores the financial challenges the company is currently facing.
Decline in Adjusted EBITDA Margin
The adjusted EBITDA margin fell to 8% in Q2 2025 from 23% in Q2 2024, primarily due to increased investments in sales and marketing. This decline highlights the cost pressures impacting the company’s profitability.
Continued Softness in the Labor Market
Despite some signs of stabilization, the broader labor market remains soft, affecting hiring and quit rates. This ongoing softness presents a challenge for ZipRecruiter’s growth ambitions.
Forward-Looking Guidance
Looking ahead, ZipRecruiter provided guidance for Q3 2025, forecasting revenue between $110 million and $116 million, with a 1% sequential increase at the midpoint. This marks the first expected revenue growth from Q2 to Q3 since 2021. The company also anticipates an adjusted EBITDA of $6 million, implying a 5% margin. Despite macroeconomic challenges, ZipRecruiter is confident in achieving modest year-over-year revenue growth by Q4, driven by a 15% increase in QPEs over the first half of 2025 and strategic investments in product and technology.
In conclusion, ZipRecruiter’s earnings call revealed a company navigating a challenging economic landscape with both optimism and caution. While there are positive signs of growth and innovation, financial hurdles remain. The company’s focus on AI-powered tools and strategic investments aims to drive future growth, even as it contends with a soft labor market and profitability pressures.