Hello, everyone. My name is Ian, Ian Siegel. As Ralph just told you, I am the founder and CEO of ZipRecruiter. Tim's going to be my co-presenting partner, and I'm excited to introduce you to the company. For those that aren't familiar with our story, I thought I'd start with some highlights. We've been in business for 15 years. We have been profitable. We have $468 million on the balance sheet. We're the number one rated employer site for recruiting on G2, and we've been the number one rated job search app for more than five years across both the Android and the iOS store. If you look at our job seeker traffic, which is currently growing faster than any of our competitors over the last couple of years, it's really one of the strong indications of the market share that we are gaining.
If you ask how we have achieved this level of success, in addition to building great product, we've also deployed over $1 billion in marketing to build the brand. One of the things we'll cover today is it's very important in our category that when someone thinks of the question, "Where should I post a job?" or someone thinks of the question, "Where should I search for work?" that you are one of the inherent answers that pops into people's minds. That's something we've managed to accomplish at ZipRecruiter, and it's been a key part of our ongoing success. Finally, just to get to the practical brass tacks, if you look at the prior year after what has been an unprecedented two and a half year downturn in the labor market, our business has continued to thrive.
Last year, we did over $78 million of adjusted EBITDA. That was a 16% margin for our business. We have managed to weather the storm with a hardiness and strength that gives us a lot of confidence in the future, in particular as the labor market stabilizes and begins to grow again. For those that have not looked at the recruiting category, it is a big category. Over $300 billion a year spent on recruiting in the United States. Interestingly, the majority of that spend goes against offline, not online. It is still the old school recruiting firms that are collecting the bulk of the revenue in our category. If you add LinkedIn, ZipRecruiter, Indeed, and all the other famous brands that you are aware of, we account for a very small fraction of the overall revenue that is collected inside this category.
We are clearly at the precipice of what should be a period of protracted disruption. The technology solutions, the familiarity with those solutions, and the confidence employers have in those solutions, those are all steadily going up, and we believe we're incredibly well positioned for that inevitable disruption. Going back to the beginning, I said I was the founder. ZipRecruiter started with a very simple premise. The idea was that you could push one button and send a job to all the job sites that existed across the web, and all the candidates that came in would come into one easy-to-review list for vetting said candidates. That business had tremendous traction from day one. It's one of those instant product-market fit stories that you rarely see with startups. We grew like a weed, and as a result, we were able to bootstrap for the first four and a half years.
We got to north of $50 million in revenue with millions in free cash flow before we ever took a dollar. I call that product era one. That was the volume era where the only thing that mattered was delivering as many candidates as possible to employers. We quickly realized that there was a threshold beyond which more candidates was viewed as a negative rather than a positive. No one here who's done any recruiting is excited to go through 150 candidates. What they want is 30 candidates with five extraordinarily qualified candidates amongst the bunch. That led to what we think of as era two in our business, which was the quality era. It was approximately nine years ago. ZipRecruiter went hard after quality. Until this point, all job search sites were using Boolean methods to try and do matching.
Is the title of the job that has been posted matching a job title that a candidate has in their resume? If the two overlap, I will send you that candidate. When we started experimenting with a variety of techniques and strategies, we quickly found ourselves in the realm of what at that time was being called AI, which was machine learning, meta learning, and deep learning. To find the talent of this bleeding edge, emerging category of possible technical innovation, we actually had to build an R&D center in Israel, which we staffed with almost 100 engineers who were specifically focused on applying these techniques to the massive amount of data that we had created through real-world interactions between employers and job seekers on the ZipRecruiter site.
To give you some sense of perspective, ZipRecruiter has been used by more than a million employers to do their recruiting. It's used by approximately 30 million job seekers a year who are looking for jobs. It's created billions of interactions between those job seekers and employers. That is proprietary training data that we were able to effectively deploy against putting these algorithms to work in a way that had never been done before and creating better quality matches than had existed at any point in the history of the labor market.
That proprietary data to this day and the technology platform we've built to train and retrain said algorithms is a key part of our advantage in terms of delivering a better experience to both sides and explains a lot of the high five-star reviews or the high-quality reviews or the million, almost a million reviews we received in the App Store on both Android and iOS about why people love the product. Because they're getting connected to the right party on the other side, and they're actually having the opportunity to engage with people human to human rather than just sending things through this digital process that the labor market had been plagued with prior to that. We also introduced roughly eight years ago, way before it was cool, a character named Phil, who is your AI personal recruiter.
Now, back then, there were no large language models, and when we started experimenting with Phil, we were stunned at the response that we got because by giving a human voice to our software early on, by creating a persona that would engage with you, that was empathic, that was interested in the considerations that you considered most important, we were able to get tremendous increases in engagement. We've experimented with this, as I said, for many years. Large language models have become an icing on top of the cake that we had already baked. Phil was the beginning of our ushering in of what I call era three, which is the engagement era. You can build the world's greatest matching algorithms.
You can get the right job seeker to apply to the right job, but if that employer then reaches out to that excellent candidate and the candidate ghosts them, does not respond, they hear nothing back, the employer hates that experience. The focal point and the purpose of Phil, and in truth, the majority of the R&D that we do today is specifically designed around driving two people to talk to each other face to face as fast as possible. It is beyond matching, and we have described it as social engineering, and we have also described it as engagement. Now what will define the future most successful companies in our space is going to be those that have not just the data to train the algorithms, but actually have the insight and the user experiences to drive conversations.
I mentioned before that we had spent over $1 billion building our brand. It has been a long journey, and we have experimented in every form of media and still have a diverse multi-channel media strategy where we run television ads, radio ads, satellite radio ads, podcasts. You may have heard our ads on podcast, direct mail. We do every form of advertising imaginable, and we still deploy nine figures against advertising every year. It's one of the superpowers that got us to the place where when you think of like, "Where should I go search for work?" ZipRecruiter pops into your head. It's one of the reasons we wound up in the zeitgeist. We were named in a Jimmy Fallon opening monologue last week. We were the answer to a question in a Will Shortz crossword puzzle in a Sunday edition a couple of months back.
ZipRecruiter has entered the overall zeitgeist, as I said, and that's important. You want to be the answer to that question because you don't want people to be forced to go to Google to find you over and over again. Part of the reason why we have thrived in this two and a half year downturn in this industry is because they come to us organically. Both sides of our marketplace, the job seekers and the employers, come to us both from previous positive experience they've had with it, also from the evangelism of these individuals who are giving us these strong reviews on both sides, but also because of all the marketing we've done, we're just an answer to the question of, "Where should I go?" Within that marketing mix, where we are so sophisticated, there is tremendous flexibility.
We've done this long enough and we're smart enough that we have made very few long-term commitments, which gives us the opportunity to lever our spend up or down, and we get signal quickly on what is happening in the market, not in terms of the number of hires that are being made, but literally in terms of the number of job postings that are being deployed. It is a very early indicator that we have access to, and we've been able to use that to manage our business, to be efficient in every form of economy. Here is a look at our cohorts going back to 2019, and I would just highlight to you that if you look at the starting point of every year, you can see that the average revenue per employer is starting at a higher value in terms of where the cohorts began.
If you look at 2019, which is the longest line on that chart at the bottom there, you'll see that over a period of eight years, it increased by nearly 4x from where it started in terms of the contributions. All cohorts were growing. The last couple of years are a little wonky. As I said, historic downturn, truly the longest downturn any of us have seen in our lifetimes. In spite of that, the business continues to charge ahead, continues to grow the cohort value. I think to put a finer point on this, I'll turn it over to my CFO presenting partner who can knock you through some of the actual numbers. Thank you.
Thank you, Ian. Good to see everybody. All right. Okay, a couple of KPIs just at a high level to orient everybody to the size of the business roughly.
Q1 revenue of $110 million and adjusted EBITDA of $5.9 million. That is coming on the heels of 2024, where the business returned $78 million in EBITDA or a 16% margin off of $474 million in revenue. I'll give some sequential trend commentary in a little bit. The last KPI on here is our revenue per paid employer. That is the quarterly amalgamation of the slide that Ian just presented. We collect in revenue $1,734 per employer per quarter, and that was in the last quarter. If you zoom out and look at that number over time, that's been growing consistently at roughly an 11% compounded annual growth rate since 2021. That's one of the big growth levers of the business over time. We're getting better and better at monetizing our business. I'll show you some revenue charts here.
If you look at the trends, we've been in a very unique hiring environment over the last couple of years. If you look pre-COVID through the middle of 2022, that's when America was hiring at a white-hot pace. You see us take advantage of that hiring opportunity. We invested heavily into it and then reaped the benefits from that. We've really been in a prolonged downturn since the middle of 2022. By many measures, this is the longest that we've seen in quite some time. However, if you look at the last couple of months, when we went to December and into January, we noticed that things were looking a little bit differently. We saw that the paid employer trends in our marketplace were quite a bit more favorable than the last couple of years.
If you look at the sequential growth in revenue or trends in revenue from Q4 to Q1 in 2025, roughly flat on a quarter-over-quarter basis. That is in stark contrast to the negative 10% and negative 13% trends that we have seen in the last two years. On the heels of the election and coming in through the beginning of the year, it looks like things were moving in the right direction. That is also informing our Q2 guidance, which again is here in the slide of being up very slightly in Q2 2025. Right now we are looking at the trends right now. Things are appearing to be much healthier than they have been in the past.
As we look towards the future, based on everything we're seeing now, we still see that growing sequentially again in Q3 and returning to year-over-year growth in Q4 as being a likely scenario. Again, we've got a lot of uncertainty out there, but based on what we're seeing today, we're feeling good about this year. Now, that's top line. Let's talk about bottom line. Even though we've been in this trend where revenue has been in a decline, we've remained comfortably profitable. Ian mentioned this already, but we are highly flexible in our operating expenses. When we deploy marketing as an example, we do so scientifically. We're looking at the returns at the end of that dollar. If there is a return to be had, we will spend it. If there is no return to be had, we will conserve it.
That means that as the hiring market overall has been in a chillier state over the last couple of years, we've been able to contract and remain flexible and still retain profitability over time. Even as we're going into this time in Q1, Q2, you see on the chart where EBITDA is a bit lower than it was in the calendar year for 2024, you're seeing us lean into the strength that we've been seeing in Q1 and Q2. In that scenario that I presented before, where we're returning to year-over-year growth in Q4, we think that mid-single-digit EBITDA is the right level of investment for us. This is not a decision that Ian or I make from a top-down perspective, but something that we do on a bottoms-up perspective, looking at the returns at the end of that dollar.
As we lean in, margins would come down to the mid-single digits in 2025 as we achieve year-over-year growth in revenue for 2024 or for year 2025. All right, I'll wrap up just with a couple of the highlights that Ian and I have both hinted on. The TAM overall is much larger than I think most people would possibly assume at the start. At $300 billion in TAM, this is still a part of the world where software has not yet taken over. We are a part of that much smaller but faster-growing part of the TAM, where over time we believe that the winners of this overall market are going to go to those that are deploying the cutting-edge technology that we have. The second pillar relates to why we have that unfair advantage.
We have not only the AI that is needed to draw the right matches between job seekers and employers, but we have the data that the AI needs in order to reach those conclusions. We have a large proprietary set of data. We capture all the interactions between job seekers and employers within our closed marketplace, which gives us that unfair advantage to make better matching over time. We're doing that, and we're surfacing those matches through the best apps in both iOS and Android and the best employment site that Ian already talked about as well. Because we've been at this for quite some time, we've done the hard work of capturing brand recognition on both sides of the marketplace, both with job seekers and employers. Now we enjoy 80+% aided brand awareness on both sides. That's important.
That's been a big part of the reason why we've been able to weather the storm over the last two and a half years so well, because we know that when it is time to hire, employers will come back. They'll come back without us having to market to them. Same thing with job seekers as well. Lastly, as a strategic imperative, we kept our operating expense structure very flexible so that we can manage up, manage down as the needs of the market dictate. Overall, we're feeling very good. We're in a great position, well capitalized. We can own our own destiny. All right, great. I think that's it from us.
Great. Maybe just to kick things off, Tim, you touched on it during the presentation, but on the Q4 call, I think you talked about seeing some stabilization trends in December and in January.
On the Q1 call, there might have been maybe some change in behavior that you might have been observing. Can you kind of walk us through that trend line and maybe give us sort of an update of what you're currently seeing sort of across ZipRecruiter and maybe any specific verticals you call out of strengths or weaknesses?
Yeah, absolutely. Like I said during the presentation, what we saw from December through the end of Q1 was meaningfully different than what we had seen in the previous two years. You see that in the results when we disclosed our paid employer number, that was up 10% sequentially from Q4 to Q1, which is substantial. If you look at interesting metrics such as the NFIB's S&B Optimism Index, that also shot up significantly, especially after the election.
In April, April 2nd, after the new tariff regime was rolled out, we saw basically the water cooler chatter changed a little bit, whereas before that, things were much more optimistic among S&Bs in particular. The hiring behavior reflected that. After April 2nd, we still saw healthy trends in hiring, but the water cooler chat was a little different. The vibes were a little different, for lack of a better word. Generally speaking, we have not seen the change in temperature reflect into hiring. Things are still remaining steady. You see that embedded in our sequential guidance being up very modestly from Q1 to Q2. As far as areas of strength are concerned, generally speaking, healthcare has been quite healthy. Retail has been up or down over the last couple of years or last couple of quarters, but generally down this last time around.
Healthcare has been kind of where we've seen the most strength.
Great. Generally speaking, you'll see the most sort of dramatic movements with S&Bs, both in your industry and I cover a lot of digital ad companies where you see it tends to be more volatile with S&Bs. Maybe give us an update of what you're seeing with S&Bs and maybe how that compares or contrasts with enterprises.
Yeah, our paid employer number that you see overwhelmingly biased is towards S&Bs. When you see that number move up significantly, that's what you're looking at, the number of S&Bs. What we've learned from them is that they tend to react much more quickly to macro changes, both good and bad, than enterprises overall.
However, the strength that we saw at the start of the year was reflective on both sides of our customer segments.
Great. One question I received last call is, what if the market's sort of volatile, what signals is ZipRecruiter seeing or calling out that gives them sort of the optimism to invest for growth? Historically, when things are bouncing around and being choppy, companies will pull back what you did. There was a noticeable shift where you lean into sort of an investment mode. If you could sort of expand on what you're seeing and what gives you that confidence to sort of reinvest in the business.
Yeah, we make decisions based on what we see in our marketplace. What we saw in our marketplace starting in December encouraged us. That's why we leaned in through Q1.
That is why you're seeing our embedded 6% EBITDA margin being what it is in Q2, just because the paid employer activity, that is including not just the number of new entrants into the marketplace, but also those that are recurring or reactivating, has remained at a steady clip that warranted such investment.
Great. Can you maybe sort of double-click on that and perhaps be a little bit more specific where those investments are going, give us a sense between brand spend and/or performance?
Sure. Yeah, we think of our sales and marketing spend as a unified bucket. We do not necessarily differentiate between brand and performance because we expect both from all the dollars that we are spending. When we are deploying capital, we are doing so with a couple of different lenses. One is more of a shorter-term kind of cash-on-cash payback window, much more performance-oriented.
Relatedly, we look at a longer-term return because we've been at this for quite some time now. We have the benefit of being able to accurately predict how an employer cohort that we bring in will mature with us over time. Ian showed you a couple of charts to that very point. We are looking at a longer lifetime value versus the acquisition costs that we're deploying. Lastly, we're staring at that 80% aided brand awareness that I mentioned before and making sure that all of these things are working towards increasing or supporting that metric as well.
Maybe shifting gears to products, Ian.
When you built this business, when we had legacy AI pattern recognition, ML, etc., maybe give us a sense of what Gen AI brings on the product set, both from innovation, products to market, and then also internally, how you're able to leverage the technology.
I think a lot of people, when they think about large language models and its opportunity for disruption, presume it's going to be in the front-end interface where it's how users will engage with a system or software, and they'll be able to talk to it in a natural language fashion. That is an unproven thesis within the job category at this point. The second you put one of the chat interfaces in front of a job seeker, it actually takes them much longer to get to the jobs.
In many cases, when we make the process take longer, we see that there is drop-off in terms of those who successfully get to the outcome they're looking for. Where large language models have been really helpful is they are very good in a generalized way at extracting information from a document. Whether it be things like a job description or it be a resume, it is better than any parser that has ever been built in the past at not just extracting information today, but adapting to variable formats without needing specific heuristics written. The better the information that goes in, the better the training you can do on the matching algorithms that you produce.
It has been a tremendous boon in terms of building a training and retraining pipeline for the algorithms that do the real heavy lifting, which is the picking of jobs or the picking of job seekers.
Great. We have time, about four minutes here or so, if there are any questions in the audience. Afternoon, everybody's tired. All right, maybe just during the downturn, as you have acquired more on the demand side of the marketplace and the job seeker side, maybe if you sort of give us a sense of how that tees you up for eventual recovery and sort of your thoughts on how the platform sort of grows coming out of it.
I mean, the product ultimately that we sell is job seekers. They are the product.
The more job seekers we have on the platform, the more we can demonstrate and flex the capabilities of the matching algorithms we've built, the more we can prove out the engagement features that we've been imposing into the site. In the past year, we launched what was sort of the pinnacle of our innovation attempts in a product called ZipIntro, which to simplify for you guys is just speed dating for hiring. An employer now can post a job on ZipRecruiter, pick a time the following day that they want to meet with candidates, and we will bring a slate of candidates who meet the qualifications for what they have just posted that they can back-to-back interview over video to very quickly get to a short list of candidates. Response to that has been tremendous.
It's an example of how what we're trying to focus on is not just matching innovation, but experience innovation to try and bring the two sides together to actually speak human to human. That has proven to be our most complimented, most raved about feature when we deploy it in such a fashion. I think the more job seekers we have and where the market will go is very much indicated by whoever is gaining market share amongst job seekers.
Tim, what are the biggest hurdles? You talked about kind of that point of disruption within your response. You showed that big problem in the online market. To me, what are really the biggest hurdles to further the market share?
The question was, what are the biggest hurdles to penetrating the offline opportunity?
I think the greatest challenge we face is overcoming inertia and the way things have always been done. It is an old-school industry that feels pretty good about the way it has been operating for many years. There is a baked-in economy around the cost of recruiting that is understood and accepted. The claims we can make are fantastical. We can get you talking to candidates in 24 hours who are as qualified as what any offline recruiter has ever produced. We can bring you a high volume of candidates so that if you need to staff a call center or you need to staff your frontline workers at whatever your entity is, we can do that in a tenth of the time it has previously taken these offline organizations to do it. When you make claims like that, you face both entrenched behavior and disbelief.
It is just a process to build reputation over time. I think tipping points are coming in specific verticals within the offline world that are more saleable than others because of the urgency, particularly now when every part of the labor market is becoming more cost-sensitive to go look for efficiency solutions.
Not only can we bring that solution at a fraction of the time, but at a fraction of the cost as well. I showed you the $1,700-plus revenue per employer per quarter. That is in stark contrast to the 20% to sometimes 30% of first-year salary that a lot of the offline recruiters are charging. We are talking about a significant difference in cost as well.
I just want to say, because I know where that leads, we do not have to charge less for that because the solutions we bring allow the companies that are engaged in this type of recruiting to have much less people. The software value is a premium value because it allows you to manage costs within your organization.
Great. Thank you. Unfortunately, we are out of time. Ian, Tim, thanks for attending. And thanks for interesting.