ZipRecruiter at Emerging Tech Summit: Strategic Insights

On Wednesday, 05 March 2025, ZipRecruiter (NYSE: ZIP) participated in the 18th Annual Emerging Technology Summit, offering a strategic overview of its operations. The company discussed its dual-sided marketplace connecting employers and job seekers, highlighting both challenges and opportunities in a fluctuating hiring market. Despite a cooling hiring environment, ZipRecruiter remains optimistic, with positive trends in employer engagement and strategic investments in technology and marketing.

Key Takeaways

• ZipRecruiter is a two-sided job marketplace leveraging matching technology to connect employers and job seekers.
• The company has seen growth in paid employer numbers, particularly among small and medium-sized businesses (SMBs).
• Investments in marketing are data-driven, focusing on lifetime value and brand recognition, which stands at 80% aided awareness.
• Product innovations, including AI persona "Phil" and the acquisition of Break Room, enhance user experience and insights.
• Revenue per employer reached $1,900 in Q4, with gross margins in the 90% range.

Financial Results

• Q1 guidance indicates a 2% sequential decline, an improvement over the 10%-13% declines seen in previous years.
• Q4 paid employer numbers exceeded consensus expectations.
• Gross margins remain strong, positioned in the 90% range.

Operational Updates

• Job seeker growth increased by 15% year-over-year, surpassing competitors by over 10 percentage points.
• Organic search traffic rose 30% from 2023 to 2024.
• The number of new employers using the resume database and the number of resume unlocks both grew by double digits.
• Break Room now hosts 1,500 employer pages, providing insights into frontline worker experiences.

Future Outlook

• ZipRecruiter anticipates a solid recovery in 2025, supported by positive Q1 trends and anecdotal data.
• The company targets mid-single-digit EBITDA margins and prioritizes organic investment while remaining open to mergers and acquisitions.
• International expansion is not a priority, with a focus on the U.S. market.

Q&A Highlights

• Job seeker growth is consistent across all segments, with healthcare and retail sectors performing well.
• Technology, mortgage lending, and financial services sectors have been weaker.
• The integration of GenAI aims to enhance user experience by making "Phil" more conversational.

Readers are encouraged to refer to the full transcript for a detailed understanding of ZipRecruiter’s strategic initiatives and market positioning.

Full transcript - 18th Annual Emerging Technology Summit:

Justin Patterson, Lead of Internet Research Team: Alright. We’ll go ahead and get started. I’m Justin Patterson. I lead the Internet research team. I’m excited to have Tim Yarbrough with from ZipRecruiter with us today.

Hello. Welcome back.

Tim Yarbrough, ZipRecruiter: Thank you very much.

Justin Patterson, Lead of Internet Research Team: Yeah. So to kick things off, Tim, could you provide a just a brief overview for those who aren’t familiar with it? Just what ZipRecruiter does, what problems you’re solving for job seekers and employers.

Tim Yarbrough, ZipRecruiter: Yep. So, ZipRecruiter is a two sided jobs marketplace. We bring together both employers and job seekers using matching technology. So ZipRecruiter was started back in 2010 by Ian Siegel, our CEO, and a couple of his cofounders. And they were all working at separate tech companies trying to solve this owner’s problem of hiring people.

And they would post a job in many different avenues. So this is back in the days of Craigslist and Monster and all of those other, other job boards. They post these, jobs in many different places, and then in would come a lot of different resumes that they would print out and have to go through. And so they said, surely, there has to be a different way. So what they wanted to do is create a button where you can press one button, and it would send your job across the Internet, and all of the applications would come to you, and ZipRecruiter was born.

Justin Patterson, Lead of Internet Research Team: Awesome. Thanks for that, Tim. So let’s step back and just talk about the macro picture. I know you’ve called it the great hiring freeze for the past few years. I like to think it’s just a middle school dance, like can somebody make a move within there?

Nobody’s gonna make

Tim Yarbrough, ZipRecruiter: a move, yeah.

Justin Patterson, Lead of Internet Research Team: So when you kind of step back and just look at the market you’re seeing today, it sounds like you’re actually a little more confident off this last quarter that things are starting to open up a little bit. So talk a little bit more about just what you’re seeing today and what gives you this confidence heading into 2025.

Tim Yarbrough, ZipRecruiter: Yeah. So the hiring cycle has been pretty interesting over the last couple of years. So at the onset of COVID, unsurprisingly, we saw all of our metrics just fall off a cliff because the world was shutting down. And I think to everybody’s great surprise, things started to recover a bit faster than expected. So within a couple of months, we saw, signs of life from our employers.

And then very soon, we were off into the races. And so through the course of 2021 and in through the mid part of twenty twenty two, we saw hiring just be white hot in in The US. And really since the mid part of twenty twenty two, we’ve seen a gradual cooling of that. We are now, as of December, ’20 ’8 months into, year over year monthly declines in the hiring rate as put out by the BLS, and that’s a duration that’s longer than we’ve seen even going back to 02/2008 during the great recession back then. So we’re coming we’re we’re in a very long cycle right now to the downside.

And over the course of the last few months, really starting through December and into January and into February, we saw, the number of paid employers in our marketplace start to come back with a little bit more, higher velocity than, we would typically see during a seasonally downtime. And, so our paid employer trends have been a bit better, than they have been in years past. And all of that is showing up in our q one guidance, being down sequentially 2%. And that is contrasted with the last two years where we were down, 10%, thirteen %. So, we’re seeing something different this time around.

Justin Patterson, Lead of Internet Research Team: Got it. And within that different thing you’re seeing this time around, you know, where where are you starting to see that? Is that more enterprise? Is that SMBs? Is it particular verticals?

So just put a finer point on that. Yeah.

Tim Yarbrough, ZipRecruiter: So it’s not along any particular vertical. The strength that we’ve seen is primarily in SMBs, but enterprises are perking up as well. And, you know, one of the things that you’ve seen is our q four paid employer numbers were a little bit higher than consensus out there, and that’s where you see the SMB strength showing up.

Justin Patterson, Lead of Internet Research Team: Got it. Got it. So, you know, stepping back, you’ve been pretty clear that you’re going to invest when you see a cycle. You’re going to invest in paid marketing, which brings more people to the site and presumably some employers. Mhmm.

So how are you just gauging that that return on marketing spend and making sure you’re sizing that correctly? So you’re not necessarily getting over your skis from a p and l perspective.

Tim Yarbrough, ZipRecruiter: Yes. We are scientists when it comes to marketing and not artists. And, over time, we’ve demonstrated that we could flex our marketing spend up and down pretty quickly. And, a lot of that is because we have, strategically committed very little of our sales and marketing spend to future periods. So that gives us a tremendous amount of flexibility.

We’re also multi channeled in our marketing approach as well. So we can push and pull between different avenues like direct mail or TV or podcast or digital channels, all of which have varying degrees of responsiveness to us being able to pull in and pull out. The, the other thing I’ll say is when we measure, the efficiency of our marketing spend, we do it over a couple of different channels. So one would be a longer term lifetime value over the customer acquisition cost of acquired cohort of employers. And that’s something that we can do reliably because we have now fifteen years of data that we can draw on and draw pretty straight lines between the the actual behavior we’re observing with employers and what we expect to happen to the future.

And then we can also look at more shorter term, cash on cash returns over multi week periods. And then lastly, we look at the impact of our marketing over the brand recognition that we’ve achieved over time. So over the course of our life, we’ve climbed up to 80% hated brand awareness on both sides of our marketplace, and that’s something that we keep a close eye on.

Justin Patterson, Lead of Internet Research Team: So I’m glad you brought up the marketplace point because you are servicing two sides, the job seeker and the employer. Let’s stick with the job seeker side Great. So far. You know, you’ve seen some healthy growth there. What’s your hypothesis of just, you know, as job seekers come in there, what that really does to your business?

Tim Yarbrough, ZipRecruiter: So the job seeker side of our marketplace is really the supply. That’s the lifeblood of our marketplace. And, in this kind of uncertain time of hiring, we’ve seen, we’ve been pleasantly surprised by the spike in job seeker growth that we’ve achieved. So over the last quarter, we’re up 15% year over year in total traffic, and that’s outstripping all of our competition by 10 plus percentage points. And then, if you look at just the organic search, organic traffic over the year, it was 30% up in ’24 versus ’23.

So we’re pretty excited about that. All of that just means that there’s more inventory for the demand side of the equation or the employer side of the equation when it’s time to hire.

Justin Patterson, Lead of Internet Research Team: Right. And the scientists aren’t just on the marketing side. You’ve got a very built out R and D team within there. Absolutely. So when when you see those job seekers come on, what type of product innovation do you have that that’s in place to help them find better results over time?

I know there’s been ZipIntro and and some other capabilities here.

Tim Yarbrough, ZipRecruiter: Yeah. So we’ll we’ll go across, we’ll go through a couple of them. So one of the things, that job seekers have really appreciated about our service as opposed to others out there is, they are greeted at the front door by Phil. Phil is our Siri Alexa AI persona. If you go to ziprecruiter.com, you’ll see him smiling at you and asking you what you want to do for a living.

And so when job seekers go through the Phil onboarding process, it’s a plain language, friendly way of being introduced into your job, seeking journey, which is otherwise a pretty soul crushing experience. So rather than sending a resume out into the void and never hearing back, you get feedback from Phil saying, hey, good news. Your resume has been viewed. Keep it up. Also, if you like this job, you should you should also look at this other job.

So Phil is providing a a face to the AI engine that’s powering all the job recommendations to our job seekers. So that’s something that, job seekers find really reassuring. The other thing that’s really interesting here is the more conversational Phil gets, and he has gotten quite a lot more conversational through AI, the more data points we’re able to glean from job seekers that makes our matching technology even better. So one of the big competitive advantages we have in this space is that we’re sitting on this trove of billions of data points of interactions between job seekers and employers, and all of that is food for our matching algorithms. So you wrap all of that up into a friendly face of Phil and job seekers job seekers love it.

And one of the pieces of evidence would be that we have the number one job seeker app in the marketplace.

Justin Patterson, Lead of Internet Research Team: That’s great. And then I think another one of your big innovations recently, you’ve been working on just improving the the resume experience. Yeah. So talk about just what that new Zip resume interface looks like and what your thesis is that for what that does for both the job seeker and the paid employer side.

Tim Yarbrough, ZipRecruiter: Yeah. So, the resume database is, it’s an established product that’s been in market for quite a while. We’re not the only ones that had one. But what we did was launch a significant overhaul to how the product works. So we introduced different ways of, semantically searching through our large corpus of job seekers so that when you do make a search as an employer, you get instant results very, immediately and accurately.

So if you’re searching for the thing you want, you will get the thing you want. I know that sounds pretty pedestrian, but believe me, the other products don’t do that. And so, employers love it. They, the number of employers, new employers that are using it is up double digits already, and the number of resume unlocks, which is how an employer interacts with the resume database is also up by double digits. That helps employers find the right candidates faster which of course is good for the candidates as well.

So that’s one of our big flagship employer products. The other one that you hinted at before was ZipIntro. ZipIntro is a video based platform that allows a employer to go from posting a job to actually talking with people in a matter of hours. So, they sit down, fill up the job, post the job, and then sign up for a zip intro session. On the back end, our product is scouring our base of job seekers, finding, candidates that we think are good matches, sending those matches to the employer that they can vet.

So, yes, no, I want to talk to these people. The job seekers then queue up and then like I said within a couple hours, they could be sitting and having real conversations with real job seekers. So, this is a great experience for employers because all they want to do is hire somebody fast. It’s a great experience for job seekers because they just want to talk to somebody. So when we do exit polling, we found that 90% of job seekers said that they would absolutely do this again.

And the quality of matches that our employer’s getting are roughly three x what they would get otherwise through the Zip Venture product. So that’s another example, another tool that we’re giving to our employers so they can find better matches faster.

Justin Patterson, Lead of Internet Research Team: Got it. And then lastly, before I jump to the employer side, you know, you’ve got one more kind of big product update, albeit through just fucking acquisition Yes. Break Room. So we’d love to hear you just talk about what the Break Room product does and what sort of internationally and how you’re thinking about scaling that up domestically.

Tim Yarbrough, ZipRecruiter: Yeah. So Break Room is an acquisition we did, in the middle of last year. Smaller acquisition of The UK. Great team that we are very happy to bring on. So what this is, is a product that gives job seekers real life information about what it’s like to work for specific employers.

This is focused on front line workers, so those that are in, you know, the fast food business or hospitality, places like that. And so, what this does, it’s not, subject information that it’s pulling out, but rather objective data. Like, you know, how if you ask for ten hours of work, how often do you get the schedule that you request? How many hours per week are you spending on your feet? What is it really like to work in these places?

And so what we’re doing is getting this information from actual employees of these companies and then turning that around into actual insights for other job seekers to view what it’s like to work for that place. So, it gives them a lot of great information. Then, in turn as we build the number of ratings and recommendations that we have from employers, we can turn that around into an employer page. So in the last quarter, we have 1,500 employer pages and counting right now. And that provides even more, more tools for job seekers to assess what it’s really like to work for specific places.

Justin Patterson, Lead of Internet Research Team: Great. So switching over the employer side of the equation, talk about just the different go to market strategies you have here. Since you’ve got SMBs on one side, enterprise on the other, very different sales motions.

Tim Yarbrough, ZipRecruiter: Very different sales motions. Yeah. So, of our total revenue SMBs comprise roughly 80% with the balance being larger enterprises. SMBs, they tend to have, they don’t have their own applicant tracking system and for examples, I would say, Talayo or ISins or Workday. These are larger pieces of software that more experienced talent acquisition teams would use to manage their hiring.

Instead they come to places like ZipRecruiter where they pay us on a per job per day basis or on a monthly basis for a certain number of job slots and then they sign into the dashboard that we give them, and they could see all their job postings. They can see their candidates, and they can rate them up or down, and invite them to apply or invite a zip intro session, etcetera. It’s a great solution because the SMBs want price certainty and they oftentimes have just one or two jobs to hire for and so they’ll pay us on a per job per day basis. It’s a really hand in glove solution for SMBs. On the enterprise side, we have larger enterprises that have more sustaining hiring needs.

They have their own applicant tracking system and they want to buy on a per click basis. So it’s really performance based and that, that cost per click can vary based on the job and the location of it, supply and demand at its finest. And so that comprises roughly 20% of our of our revenue. The go to market motion between those two segments is quite different. We have an inside sales team, that works our small medium sized business, customer leads that come in and then, a longer sale minded, enterprise sales team that goes after the 20% as well.

But functionally, both sides of the marketplace work very similar no matter how it’s priced. It’s an auction based product. We have same gross margins high in 90% gross margins on both sides. And for both sides of that, of the marketplace, the more you pay whether you’re an SMB or an enterprise, the more you get.

Justin Patterson, Lead of Internet Research Team: Got it. So to go full circle here, I mean, you’re investing in product growth, which should benefit both the job seeker and the employer side. And you’re starting to invest in marketing coming out of this great hiring freeze. So talk about just where your market share is today and what you think that could look like as we start to see this recovery happen. So, this is a big market.

When

Tim Yarbrough, ZipRecruiter: you look at hiring overall inclusive of offline recruiting solutions, we’re looking at $2.50 to $300,000,000,000 of TAMs, really big. And of that, the online portion in which we play directly is only $1,515,000,000,000, so comparatively small percentage. Put simply, software has not eaten this part of the world yet and we feel very good that it will. So of that $15,000,000,000 of TAM, there’s really three main players. There’s ZipRecruiter, LinkedIn, and Indeed.

Our approach is fundamentally different from and then others also have a very long tail, many of whom are partners of ours. Our approach to solving this problem is fundamentally different rather than being a social network or verticalized search. Like I said before, we’re focusing on driving connections from a very, on a very personal basis between job seekers and employers. That’s evidenced by the product set that we already talked about. But overall, we’re pretty excited about the category because it’s like I said, the 15 is a small but faster growing part of the whole picture.

And over time, we think this market will gravitate more towards the tech enabled solutions like ours. And of those tech enabled solutions, there’s just a few that have, what it takes to really scale and win in the long run. And that’s, you know, the 80% gated brand awareness that I mentioned before. And that’s the fact that we have, this, guarded set of proprietary data that are that any matching technology would need in order to provide better matching over time.

Justin Patterson, Lead of Internet Research Team: I mean, to that point, I know we always look at it as revenue per paid employer even though that’s somewhat of an output, a function of just the SMB versus enterprise mix. But it seems like if I look at that and look at the value you’re providing to these employers and the job seekers, there’s a bit of a disconnect in there. So what do you think that just from the CFO perspective, what do you think that means for long term pricing? Like, where could that number theoretically go to?

Tim Yarbrough, ZipRecruiter: We feel very good about the trajectory of revenue per employer. So we ended up in q four of $1,900. And, it’s hard to get an apples to apples comparison of that price point with others, because there’s different pricing mechanisms out there. But if you take for example, you know, a given offline staffing firm, they will often charge a flat percent of first year salary and that number alone is much higher than the $1,900 per employer per quarter because each employer will have multiple jobs. So there’s quite a bit of distance between where we are today and where we can go.

And, over time if you zoom out, look at our revenue per paid employer, it’s been scaling up reliably up into the right over time. That’s true when you look at it aggregated on a sequential basis and that’s also true when you look at it on an employer cohort basis as well. When you look at that information which we disclose annually in our case, you can see that every year one, revenue per employer on an annual basis has been going up reliably over time and as that cohort matures and grows, that number also grows. Couple exceptions over the last couple of years as we’ve seen some softness in the market, but the overall trends are pretty clear to me.

Justin Patterson, Lead of Internet Research Team: Got it. Got it. So if I can rewind the clock, your revenue base before the great, hiring freeze was significantly higher. You were north of a 20% margin business.

Tim Yarbrough, ZipRecruiter: Mhmm.

Justin Patterson, Lead of Internet Research Team: If I look at, you know, where guidance is for today, it sounds like you’re kind of managing toward mid single digit EBITDA margins. Yes. So As we see this recovery take place, how do you think about just the timeline to get back to where you used to be? A lot

Tim Yarbrough, ZipRecruiter: of that will depend on the shape of the recovery. So the mid single digits that we’re talking about right now for Q1 and, in our earnings call, we presented a view that the positive trends that we’re seeing right now in Q1 that’s embedded in our guidance plus the positive signs that we’re seeing anecdotally in the data. All that can materialize into a pretty solid recovery throughout the course of the year. And in that type of scenario, we’d be happy to manage to something like a mid single digits EBITDA margin because we invest where there’s strength. That’s something that we’ve shown in the past and the opposite is also true.

To the extent that the market does deteriorate, we can also be just as flexible on the downside and, produce higher adjusted EBITDA margins. But the reason why we’re, happy with Q1 adjusted EBITDA margins of 5% as an example is because we see we’re led by our data that we see. This is not a top down metric that we manage to, but it’s a bottoms up formulation based on the opportunity in front of us. Right.

Justin Patterson, Lead of Internet Research Team: So dreaming the dream, you know, growth is back. You’re throwing off free cash flow. How do you think about just the incremental reinvestment areas? Does it go right back to marketing or you start to look at some more tuck in opportunities since you do have a good track record there?

Tim Yarbrough, ZipRecruiter: Yes. Yeah. I think our eyes are wide open for both of those. So, we’re always our first priority far and away is looking at more organic investment. And that’s we’re fully funded and we’re loaded and ready to go on that one.

Secondly, we are looking at M and A opportunities all the time. We haven’t been, terribly acquisitive, just small ones here and there, but our eyes are wide open to any opportunities that come around. And then thirdly, we’d be looking at shareholder returns through share buybacks and things like that. But we’re participants where we see an opportunity there.

Justin Patterson, Lead of Internet Research Team: Got it. And just how do we think about international these days?

Tim Yarbrough, ZipRecruiter: International is not a near term priority right now. All of the large TAM numbers that I’ve given already are just U. S. Alone. That’s a big market.

And so we are much more focused on, excelling and take advantage of the opportunity in front of us right now versus expanding to other international markets right now. That won’t be true forever, but in the near term that’s our focus.

Justin Patterson, Lead of Internet Research Team: Got it. I’ll pause there, see if there’s any questions from the audience. Otherwise, I’ll close out with one or two more.

Tim Yarbrough, ZipRecruiter: I’m actually just kind of curious about this is a macro question. What kind of cohorts are you seeing in terms of highest growth in seekers? Interesting. Yes, it’s an interesting question. So the growth that we’re seeing right now is really across the board.

So no specific segment is outpacing one versus the other right now. And then the flip side is, are there any particular verticals or areas of that? Yes. Those areas of strength would largely mirror what you’d see in the economy overall. Generally speaking, healthcare has been pacing pretty well, Depending on the quarter, retail has been holding up okay.

But then areas like technology, mortgage lending really took a beating for a while. Financial services, those areas have been down as you would expect.

Justin Patterson, Lead of Internet Research Team: Is that a hand or a scratch? All good. All good. So Gen AI, you’ve talked a lot about just using AI throughout the business. How has Gen AI just changed your approach to product development?

Tim Yarbrough, ZipRecruiter: It’s showing up in a couple different ways. One would be, I referred to this briefly before, but Phil, in his evolution has gotten much more conversational, and that’s not by accident. And so that’s, that helps us to communicate with job seekers in more plain English, which helps them have a better experience. And, you know, they offer more information. We give them better results.

We’ve also used GenAI to eliminate some of the high friction points in the job search and the job filling process. So if you’re a job seeker, one of the most painful points is creating a resume. And so we can help job seekers do that through by using GenAI. And then if you’re an employer looking to fill a job, one of the most painful parts is creating a job description. And by the way, both sides are notoriously terrible at this anyway.

So what we’ve done is create many, many templates for different jobs so that they can just say, oh, you’re looking for a senior accountant? Does it look like this? And we provide them with a job template and then they can post it and they’re on their way. So, those are a couple different ways that we’re using it to just eliminate friction points in the hiring process.

Justin Patterson, Lead of Internet Research Team: Got it. So at that point, you know, what gets you most excited about the product portfolio going forward? So there’s a couple

Tim Yarbrough, ZipRecruiter: of things. We launched a couple of those flagship products that we talked about already. We are still very early stages in optimizing and monetizing those. And by that, I mean, we have a strong bias towards creating lots of value in our marketplace and then monetizing over time. So expect to see more from us there.

But then a lot of the work that’s done on the in the matching world is incremental and compounding. And so these are changes that are made on the edges to our code so so that we are AB testing our way into bigger and bigger matching wins over time. That doesn’t show up in a shareholder letter necessarily, but these are this is the reality of the business. Whereas you’re slowly iterating over time, the value of your the value and quantity of your data keeps getting bigger and better. It’s gonna provide for better matching experiences for both sides of the marketplace.

Justin Patterson, Lead of Internet Research Team: Right. So effectively, you just outline an unstructured data problem. The more data you’re ingesting through Phil and the rest within there, that’s gonna drive better matches. And in turn, to the degree that some of the employers are comfortable with it, if they’re willing to share who has good outcomes, bad outcomes, that’s further gonna help just do look alike, right targeting for some of these people. That’s right.

Cool. Well, I don’t see any more questions. With that, we’ll close it there. Thanks so much for coming back. Thank you.

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