Ladies and gentlemen, good afternoon. My name is Abbie. I will be your conference operator today. At this time, I would like to welcome everyone to the ZipRecruiter, Inc. Q4 2022 Earnings Conference Call. Today's conference is being recorded. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press the star key followed by the one on your telephone keypad. If you would like to withdraw your question, you must press star one once again. Thank you. I will now turn the conference over to Drew Haroldson, Investor Relations. You may begin.
Thank you, operator, and good afternoon. Thank you for joining us in our earnings conference call, during which we will discuss ZipRecruiter's performance for the quarter and the year ended December 31, 2022, and guidance for the Q1 and full year 2023. Joining me on the call today are Ian Siegel, Co-founder and CEO; David Travers, President; and Tim Yarbrough, CFO. Before we begin, please be reminded that forward-looking statements made today are subject to risks and uncertainties related to future events and/or the future financial performance of ZipRecruiter. Actual results could differ materially from those anticipated in these forward-looking statements.
A discussion of some of the risk factors that could cause actual results to differ materially from any forward-looking statements can be found in ZipRecruiter's annual report on Form 10-K for the year ended December 31st, 2022, which will be available on our investor website and the SEC's website. The forward-looking statements in this conference call are based on the current expectations as of today.
ZipRecruiter assumes no obligation to update or revise them, whether as a result of new developments or otherwise. In addition, during today's call, we will discuss non-GAAP financial measures. These non-GAAP financial measures should be considered in addition to, not as a substitute for or an isolation from GAAP results. Reconciliations of the non-GAAP metrics to the nearest GAAP metrics are included in ZipRecruiter's shareholder letter and in our Form 10-K. Now I will turn the call over to Ian.
Thank you, Drew. Good afternoon to everyone joining us today. 2022 was another strong year for ZipRecruiter. Revenue grew 22% in 2022 to $905 million. Notably, our 2022 revenue marks a 28% compounded annual growth rate from 2019. We delivered 20% Adjusted EBITDA margin, up from 15% in 2021. While we expect headwinds on top-line revenue, our guidance calls for strong 24% EBITDA margins in 2023. ZipRecruiter's results demonstrate the resiliency of our business model in volatile macro environments, and we have achieved strong profitability while leaning into long-term strategic investments in both product and matching technology. We made great strides towards building the world's best jobs marketplace, bringing both employers and job seekers together with leading-edge matching technology.
As you can see in our shareholder letter, our employer cohorts remain strong, with each annual cohort showing increasing revenue per paid employer this year. We also served 42 million active job seekers in 2022, a 20% increase from 2021. Despite the current macroeconomic backdrop, I remain steady in my conviction that we will continue to succeed over the long term. First, our flexible OpEx profile gives us the ability to rapidly adjust sales and marketing investments up or down. That lets us take advantage of unique opportunities as they arise, or in conditions like we've observed in 2023 so far, conserve capital when the ROI is not there. While forecasting top-line revenue for 2023 is challenging, the levers we have make driving Adjusted EBITDA far more predictable.
Our track record of strong profitability paired with the $570 million of cash on hand puts us in a position of financial strength. Second, feedback from job seekers and our own data shows that our investment in Phil, our AI personal recruiter for job seekers, is working. Phil has proven to be an engagement amplifier, driving job seekers' activity on ZipRecruiter to record levels.
As an example of this phenomenon from last quarter, Phil now let's job seekers preview how they appear to employers. 60% of job seekers who see this preview choose to edit and improve their presentation. This high level of interaction with a new feature is what Phil brings to the table. Phil puts a human face on navigating the job search process, and you can expect a persistent drumbeat of new capabilities for Phil over the coming quarters.
Third, our move up market into enterprise continues to succeed. Performance-based revenue grew 48% year-over-year and accounted for 24% of total revenue in the most recent quarter. Our marketplace is increasingly balanced with opportunities from companies of all sizes. We continue to believe that over the long term, we will approach a 50/50 split between SMB and enterprise revenue. Fourth, our aided brand awareness is now 80% on both the employer and the job seeker side of our marketplace. The significant investments we've made in job seeker marketing over the last two years have paid off. We believe this balanced awareness across job seekers and employers alike positions us for success in both robust and challenging labor markets.
Fifth and finally, we believe that we are at the beginning of a generational shift in how technology enables job seekers and employers to come together. Our key strategies of improving Phil, leveraging modern algorithmic matching, and building the best user experiences remain fully staffed and funded. Our level of investment in technology will increase in 2023. You will see us at the forefront of that generational shift. Now I'll turn it over to Dave to talk through some of our progress against the three pillars of our marketplace strategy.
Thank you, Ian. Looking back at 2022, we made significant progress against the three key pillars of our strategy. We are in the early innings of capitalizing on the massive market opportunity and fundamentally changing how employers and job seekers interact. Our investments reflect that. I'm excited to share some highlights with you. We will start with our first strategic pillar, which is increasing the number of employers and revenue per paid employer in our marketplace. While 2022 was a historically tight labor market, in June, we began to see employers reduce the number of jobs posted. This dynamic continued throughout the balance of the year and has persisted so far into 2023. We finished 2022 with 108,000 quarterly paid employers in Q4, a decrease of 26% year-over-year.
We have seen SMBs react earlier and more dramatically to macroeconomic uncertainty than larger enterprises have reacted, a dynamic that is consistent with what we have seen in prior cycles. We continue to succeed in delivering industry-leading matching technology to our customers. Employers of all sizes gained confidence they could pay more to get more by investing in upsells and increasing their effective bids in our marketplace. Revenue per paid employer grew to $1,944 in Q4, an increase of 30% year-on-year. Annual employer cohort trends remained strong throughout 2022. The average revenue for the 2022 employer cohort was approximately 17% higher than the 2021 cohort during its first year.
We saw this growth in revenue per paid employer across employers of all sizes, continuing the years-long trend of increasing year one revenue per employer for each annual cohort. Additionally, revenue per paid employer continued to grow across each annual cohort. For example, $1,146, the average monthly revenue per paid employer in our 2016 cohort, has grown by nearly five times since year one. Further, we continued our growth momentum with larger enterprise customers. Performance-based revenue, which is driven predominantly by enterprise customers, increased 48% year over year in 2022. This represented 24% of revenue in Q4, compared with 20% in Q4 the year prior.
While our marketplace of jobs already reflects the diversity of the United States in terms of geography, industry, and skill level, we have a growing base of larger enterprises with more persistent hiring needs in our marketplace. We are in the early stages of penetrating the enterprise segment and expect meaningful opportunities for growth in this area over the long term. I'll move on to our second pillar, increasing the number of job seekers in our marketplace. In 2022, active job seekers on ZipRecruiter grew to 42 million, a 20% increase from 2021. We believe that investments in our brand have made ZipRecruiter a destination for job seekers in their time of need. Our product improvements have also positioned us well to capitalize on this moment.
As the labor market cools, it provides an opportunity to prove the value of our marketplace to job seekers and create enduring loyalty. Phil has changed the way job seekers find work. Last quarter, we introduced our job calibration feature through Phil, which allows job seekers to train ZipRecruiter on the jobs they prefer by reviewing and providing feedback on a set of potential opportunities. In Q4, we redesigned the process flow such that over 50% of job seekers now engage in the job calibration process when prompted to do so, which ultimately leads to better potential opportunities. One of the reasons why our job seeker products are rated number one in both the iOS and Android app stores is that we bring more transparency to the job-seeking process.
In Q4, we introduced a new feature allowing job seekers who receive an Invite to Apply to a job the opportunity to preview how their application would look to the employer. After engaging with our new View as Employer feature, over 60% of job seekers updated their profiles. This not only gives job seekers more insight into and control over the job search process, but also provides our marketplace with more data for better matching results. Over the course of 2022, we introduced new marketing creative, building mind share around ZipRecruiter being the best place for job seekers to find their next great opportunity. These investments have borne fruit. Aided brand awareness among job seekers grew to 80% in Q4, an all-time high. I'll conclude with our progress around our third pillar, making our matching technology smarter over time.
We bring employers and job seekers together using industry-leading matching technology. This technology benefits from the billions of data points we gather as job seekers and employers interact, leading to better matches over time. As a result of our advancements with matching, we delivered over 30 million Great Match candidates in 2022. In Q4, we introduced more improvements to the meta-learning model, giving job seekers more relevant opportunities to apply to.
For example, by intelligently factoring in how a job seeker's search patterns influence the jobs they are shown, our latest meta-learning model drove up to 8% more applications from job seekers. Many of our job seekers come to ZipRecruiter through job pages found via search engines. In Q4, we deployed a new algorithm to more intelligently rank job advertisements display on curated pages focused on particular jobs in specific regions.
These geographically and occupation-targeted pages result in a 10% increase in job seeker registration rate. The progress we made in 2022 gives us greater confidence in our ability to execute going forward. I'll turn it over to Tim to talk through the Q4 results, as well as guidance for the Q1 and full year for 2023. Tim.
Thank you, Dave. Good afternoon, everyone. Our Q4 revenue of $210.5 million exceeded the high end of the guidance we provided in November. This represents a 4% decline year-over-year and is reflective of a continued softening in the hiring market, as well as facing particularly challenging comparisons against Q4 '21, when we grew 93% year-over-year in the post-COVID reopening of the economy. Paid employers were 108,000, representing a 26% decrease versus Q4 '21, and a 20% decrease versus Q3 '22. A cooling labor market combined with a typical seasonal decline drove sequential decrease in Q4 as employers continued to feel the impact of rising operating expenses and other macroeconomic headwinds.
GAAP net income was $19.4 million in the Q4 of 2022, compared to net income of $21 million in Q4 of 2021. Q4 2022 Adjusted EBITDA was $50.6 million, equating to a margin of 24% compared to $47.6 million, a margin of 22% in Q4 2021, and $51.7 million, a margin of 23% in Q3 2022. The Adjusted EBITDA margin expansion year-over-year primarily reflects lower sales and marketing expenses. We are committed to prudent capital allocation at all stages of the economic cycle, while still remaining focused on long-term strategic investments. Cash, cash equivalents, and marketable securities was $570.4 million as of December thirty-first, 2022, compared to $669.7 million as of September thirtieth, 2022.
The decrease in cash equivalents, and marketable securities quarter-over-quarter was primarily due to $140.6 million spent on repurchases of Class A common stock under our share repurchase program, partially offset by $44.5 million in operating cash flow during the Q4. Turning to guidance, in June of 2022, we saw the beginning of what would prove to be a persistent decline in the number of jobs posted. We now start 2023 with an increasingly difficult macroeconomic backdrop. Employers have been decreasing their willingness to pay for hires, and many companies are executing layoffs as they tighten budgets. Rather than showing a more typical seasonal rebound from the lows of the December holiday period, we saw online job postings in our marketplace remain depressed. As a result, January's revenue was down approximately 15% year-over-year.
Our 2023 and Q1 2023 revenue guidance assumes this trend persists throughout the year. We expect Q1 2023 revenue of $179 million at the midpoint, implying a 21% decrease year-over-year. At $780 million at the midpoint, full year 2023 revenue implies a 14% decrease compared to 2022. Our Q1 2023 Adjusted EBITDA guidance of $25 million equates to a 14% Adjusted EBITDA margin at the midpoint. At $185 million, our full year Adjusted EBITDA guidance reflects an Adjusted EBITDA margin of 24% at the midpoint. This is in line with our 2022 Adjusted EBITDA, while demonstrating a margin expansion of 400 basis points.
The increase in Adjusted EBITDA margin reflects our discipline during this part of the economic cycle, while still allowing us to maintain significant investments in our product and matching technology. With a proven, flexible, and profitable business model, robust balance sheet, and continued focus on innovation for both sides of our marketplace, we expect to continue delivering value to employers, job seekers, and shareholders through economic cycles. We can now open the line for questions. Operator.
Thank you. At this time, I would like to remind everyone in order to ask a question, press star and then the number one on your telephone keypad. We will pause for just a moment to compile the Q&A roster. We will take our first question from Aaron Kessler with Raymond James. Your line is open.
Yes. Hi, guys. Thanks for the questions. First just maybe on the revenue guidance for the year. Obviously, the guidance for kind of Q2 to Q4 assumes a recovery off the Q1 levels. Just what's your confidence in that today? Secondly, just on the expenses for the EBITDA guide for the year, is that? I assume that's primarily coming from sales and marketing leverage, or are you also slowing spend in some of the other OpEx lines as well? Thank you.
Thanks for the question, Aaron. This is Ian, and I just want to start by saying some things as plainly as possible, which is, clearly we're in a macroeconomic slowdown, and online recruiting has effectively cooled across the country, especially among SMBs. If you look at other job companies at our scale, they're delivering the same message that we're delivering today.
Similarly, or correspondingly to what you would expect from a macro slowdown, we are seeing a surge in job seekers. When there are less jobs, it's going to take these job seekers longer to find work, and that is in fact what we are seeing. Based on that backdrop, we made the assumption using the information that was available to us at the time from January, that there's going to be a softer hiring environment throughout 2023. We don't have a better prediction than that.
We as we have repeatedly told you, however, that if there is a softening labor market, if there are less opportunity to invest, if we don't see the ROI, we have the ability to rapidly pull spending down. As you saw in particular in the post-COVID period, when the recovery comes, we get very early indication, and we're able to rapidly invest to ride it back up. This is going to be one of those periods where we pull back, profitability is going to go up. If you look at the short term, yes, our top-line revenue our outlook for it is coming down. If you look at our profit outlook, if you look at our cash flow outlook, if you look at our long-term growth outlook, those remain very strong.
We continue to expect to grow our EBITDA margins to 30% plus over time. I just want to reiterate, like, if you ask me why am I so confident in our long term, I would point to the fact that fundamentally, every quarter we share the data with you. We get better at delivering the right candidates to employers. That's just something we're persistently improving at. We delivered eight million Great Matches just last quarter, that was in one of the tightest labor markets that any of us have seen, a historically tight labor market. On top of that, you know, not only do we have 80% brand awareness with employers, we've been able to drive brand awareness with job seekers to 80% after almost $1 billion of investment in order to build those brands.
That's a strategy that seems to be paying off because now that the labor market is rebalancing, the job seekers are coming back, and we are in a strong position to serve their needs as they look for work. I would just also emphasize that all of our long-term initiatives that are focused on innovation, you know, whether it's Phil, our personal AI recruiter or the modern matching techniques we're working on or the novel user experiences we're putting together, all of those remain fully staffed and funded.
In fact, R&D investment is going to go up this year. When you pair that with the size and scale of our existing marketplace and the brand awareness we have, like, I feel very confident in the long term. As to the, two questions you asked, one regarding the, why do we have Q2 through Q3 climbing. Actually, I'm gonna turn it over to Tim, our CFO, and let him take these two questions.
Yeah. Hi, Ian. Tim here. Wanted to double-click on a couple items that Ian mentioned already. As he said, January came in quite a bit below what we would've normally expected because of this unique macroeconomic environment that Ian mentioned. Our assumption in the guidance both for Q1 as well for the full year is that that same kind of lower level of recruiting activity continues throughout 2023. This notably is a significant step down from what we've seen in 2022 and what we otherwise would've expected. The slowdown that we've seen is among both SMBs and enterprises, although SMBs tend to react a bit faster to macroeconomic changes, while enterprises have more consistent hiring needs.
With our revenue mix today being a bit more skewed towards SMBs, this means that the impact of these macroeconomic changes, both positive and negative, would be more pronounced. Jumping to kind of seasonality, and then I'll hit your question on OpEx in a little bit. For seasonality, we would expect paid employers to be roughly flat from through Q2. In Q1, Q2, and Q3, and then probably ticking down sequentially in Q4, and that's pretty consistent with what we've seen in Q4s in the past. Revenue per paid employer, we have high confidence that will continue to go up and to the right over the balance of the year, and that's really driven by a couple factors.
One would be with the generally flat paid employer base, that means that our paid employers will skew more towards the larger mature orgs that have more persistent hiring needs. As you've seen in our cohort data, those employers have a comparatively higher revenue per paid employer. The second thing is our gradual shift towards the enterprise business. Last year, as we noted, performance marketing grew 48% year-over-year. While we expect the growth to be more moderated in 2023, we're still excited that that business is gonna continue to grow. Those factors combined will push revenue per paid employer up throughout the course of the year, and that kind of gives the size and shape of the sequential revenue growth.
On the OpEx question, most of the OpEx reductions that are embedded in our guidance are from sales and marketing. This is from the simple fact that we're scientists, not artists, when it comes to our capital allocation. To the extent that the ROIs aren't shaping up on marketing, we're gonna conserve that capital and save it for other opportunities. We're gonna slim down our hiring plan on SG&A. As Ian noted already, we're gonna continue investing in technology because that's where we think our advantage is, and we wanna keep pushing that advantage.
Great. Thank you.
We will take our next question from Mark Mahaney with Evercore. Your line is open.
A couple of questions. First, the 15% year-over-year decline in January, the guidance for the March quarter implies whatever, low 20s decline. It implies that things are gonna deteriorate through the balance of the quarter. Just the dumb question is that what you're already seeing? Is February already declining more than January? Secondly, a higher level question, Ian, for you. You talk about accelerating innovation in 2023. Are there particular areas that you're focused on that you think they're particularly opportunistic now for innovation? I'll just leave it at those two questions. Thank you.
Yeah, hey Mark, this is Tim. I'll take your first one. on the shape of Q1, yeah, so the 15% we've already noted in the call, 15% down year-over-year. When we kinda zoom out and look at the quarter overall, we think that the provided for Q1 is appropriate given everything that we've seen to date.
Mark, hey, thanks for the question. This is Ian. There's a couple areas I'm particularly excited about. One of them is Phil. We've been talking about Phil for a couple years now and experimenting with Phil, teaching Phil a variety of new skills, expanding the breadth of information that is available to Phil. Fundamentally, everywhere Phil starts interacting with job seekers, we see records in terms of engagement. It's clearly a strategy that is proving through data that it is the right approach. Job seekers seem to really like having a career coach who is guiding them through everything from making themselves look better when they get presented to employers, to giving them advice about which jobs to apply to, and then even going so far as to advocate for them.
That's obviously something that job seekers like a lot, that the employers reach out to the job seeker before they've applied and say, "Hey, will you please apply to my job?" That's our Invite to Apply feature. Really, fundamentally what I see happening in the world of recruiting right now, the big shift is effectively proactive sourcing, which is where employers go first. That is manifest on ZipRecruiter through our Invite to Apply solution. That's where an employer sees a curated list of job seekers that our advanced matching algorithms have selected as the best available candidates in market, then the employer has the opportunity to invite those candidates to apply to their job. Job seekers get that message from an employer. They just love it.
I mean, it has the highest response rate of any message we've ever sent to a job seeker ever. When they do apply, it has the highest thumbs up rate and other quality signals that we collect, any applicant ever. Really, it's fundamentally a solution where both sides of the marketplace love... You look at who's having success, or I should say the most success on ZipRecruiter, but really hiring in general, 'cause if you look at the last couple years and you look at just any data source on proactive sourcing and what... You saw a massive surge in the percentage of overall hires that were coming from proactive sourcing versus sort of the traditional post and wait approach.
I really feel like we're just at the tip of the spear in terms of where the market is going, and that's where we're pushing a lot of our innovation focus. Another way of saying it is like, how fast can we make hires happen? We are laser focused on bringing down the time to hire and making this process simpler for employers, as a result for job seekers as well.
Thank you, Ian. Thank you, Tim.
We will take our next question from Eric Sheridan with Goldman Sachs. Your line is open.
Thanks so much for taking the questions. Maybe two follow-ups of things that have already been asked. Appreciate the color from an SMB versus enterprise perspective. Any color you could give us on industry vertical of what you're seeing? How much are we supposed to read into how many things you've seen might be either leading or lagging in terms of indicators versus your broader array of customers across all the industry vertical exposure? That'd be number one.
Then number two, maybe just following up on Mark there. You know, I think those of us who've done the sector for a long time sort of continue to come back to this theme of the companies that invested through downturns, especially when they see an addressable market dynamic, can capture some of that exit velocity. What do you see as the most mission-critical investments to make in 2023 when you think against the landscape of capturing more of the job market exiting 2023 and going into 2024? Thanks so much.
Thanks, Eric. This is Dave. On the industry verticals, first, yes, we do see a little bit of variance among verticals. As you might expect, healthcare is particularly stable and strong and appears to be less sensitive to the macro backdrop that we're seeing. Retail is actually reasonably strong as well. On the other, you know, side of things, you know, finance and technology are on the weaker side of the spectrum in terms of industry breakdowns. In terms of geography, it's pretty, you know, well spread across, we don't see a huge variance there.
You know, as we noted earlier, we're seeing it across the economy, but more in SMB than in enterprise, where, you know, from last year, we had stronger growth in the performance marketing side, where we had 48% growth year-over-year in 2022 from the performance marketing revenue line that comes largely from enterprises. On the mission-critical investment side, so yes, within the R&D, you know, realm is where the majority of those mission-critical investments are. You know, secondarily to that, I would say the enterprise sales team is an area where we continue to invest, given the momentum there. On the R&D side, as Ian referenced earlier, things that enable us to go faster and create better matching.
That means pulling in more sources of data, both directly from our own job seekers and employers, and from third parties like applicant tracking systems, where we made several announcements about new integrations with key partners there, allows us to bring the matching algorithms with more data to make better and better decisions that give us that ability to generate over 30 million great matches last year. I would expect that number to go up over time as both the size of both sides of the marketplace grow and as our matching technology gets better. Finally, making the process more human.
Ian spoke a little bit about Phil, but making each individual employer and each individual job seeker feel like the marketplace is working for them and they aren't just a user interface receptacle for a massive piece of technology, but rather that they are seen for the individuals that they are, or the individual companies that they are, and the needs they have for this particular search for opportunity.
This is Ian again. I just want to tag on that and say, like, when I think about mission-critical investments, obviously I think about our ongoing work to move upmarket into enterprise. We grew at 48% last year. We have tremendous momentum. There's still a lot of market share that we haven't penetrated yet, so I remain optimistic about our growth prospects for it even in 2023. I think that over time we are going to balance our marketplace in more of a 50/50 spread between SMB and enterprise.
Thanks for the color.
We will take our next question from Doug Anmuth, JPMorgan. Your line is open.
Thanks so much for taking the questions. I have two. Just first on the January performance, I know what you're seeing is broad-based across the industry. It does feel like maybe some are down perhaps a bit less than you are. Just trying to understand if that's purely driven, in your view, by the SMB versus enterprise mix, or is there anything else more company specific that's going on? That's one. Just second, just following up on enterprise, and Ian, you mentioned the 50/50 split. Anything you'd point to there in terms of a timeframe or kind of target goal that you think about in reaching that split? Thanks.
Thanks, Doug. Yeah. In terms of how we think about the year-over-year decline, obviously, you know, we've heard other large players in the online job space talk over the past couple of weeks about hiring freezes and dampened outlooks for the future. We've heard about layoffs at another. You know, this is a trend that we're seeing. In terms of the quantum, I don't believe we've seen directly what the January, you know, specific numbers are for many of them. As we look across our data points and across the industry, this looks very much to be an industry-wide phenomenon to us.
I think, you know, from an SMB concentration standpoint, given our higher than, you know, 76% coming from the subscription side of our revenue model that's mainly driven by SMBs last quarter, that concentration is probably gonna make us a little bit more acutely feeling the January slowdown than potentially some others who are more enterprise-focused, but we'll see. What we feel extremely confident in is over the medium to long term, nothing has changed about our outlook. We're in a growing TAM where employers continue to feel like the importance of finding the next great talent is mission-critical for their business. We're in a market where online's gonna continue to take share from offline and nothing about our medium to long-term outlook.
You've seen that in prior cycles from COVID, et cetera, and you'll see that again next time as the economy stabilizes and recovers. To your question about enterprise, you know, I think the core, the core of our ability to drive enterprise to being something more like 50/50 in our marketplace is our ability to build our brand with enterprises and speak to them in a more sophisticated multi-touch way that's different than how SMBs purchase from us, where it's often more of a one touch or fully online experience to get them started, and only do they start talking to people here after they're already customers.
That's, you know, only a couple of years old rather than more than a decade old as a sales motion for us, and we're getting more and more sophisticated, as we go and continue to grow that team that will increasingly cover the large enterprises out there. I don't think it is a, you know, super near-term, you know, path to 50/50, but the path to us, given our current momentum and what the feedback is from customers who are using us increasingly in the enterprise space, makes it increasingly clear that we will get there.
Great. Thank you, Dave.
We will take our next question from Trevor Young with Barclays. Your line is open.
Great. Thanks. First one, just as we look longer term towards a potential revenue recovery, Ian, I think you mentioned, you know, lean back in on marketing once you start to see those signs. How should we think about kind of deleverage from that line? How much of the margin gain that you get this year are you potentially gonna give back in the future in light of the fact that you have really high-branded, aided brand awareness among both job seekers and employers? Second one, just how are you thinking about approach to capital allocation in 23 in light of the revenue headwinds? Do you still have appetite for share repurchases given free cash flow generation?
Well, I'll take the first part of your question. This is Ian again. I would say that our posture remains opportunistic and that when we see a buying opportunity, we intend to buy. You know, we think that there is a lot of headroom for growth still in this business, and we expect to grow. In a scenario where we see a healthy return on investment, we will invest to the maximum in those scenarios just so that we can become a bigger company. The bigger we are, the more liquidity we have in our marketplace for both sides of our marketplace, fundamentally makes our product better for both sides of our marketplace. That's how we look at it. Dave, do you wanna take the second part?
Yeah. Exactly to Ian's point, from a deleverage standpoint, the sharper the recovery, the more we will lean into it, and the more you'll see revenue growth tick up more rapidly, and we'll be willing to invest some of that profitability in the short term to generate that outsized growth in the long term. We find that when we're more decisive and act faster, that the very beginning of cycles is often one of the best times to invest in that way.
In terms of capital allocation, nothing has changed about our underlying view of the intrinsic value of our own business, our ability to generate free cash flow per share at greater and greater rates over time, which gives us a strong sense of when buying our own stock creates real meaningful opportunity for significant returns. It's not still part of our long-term ongoing strategy, but when we see an outsized opportunity, we'll continue to do it.
Obviously, you know, last year we bought over 18 million shares. We now have just under 119 million shares outstanding. The average price of that was a little over $18, and nothing about our view of intrinsic value has changed. Our balance sheet remains exceptionally strong, and our ability to generate cash flow remains strong, so our posture remains aggressive when we see an exceptional opportunity to be aggressive.
Yeah, Trevor, this is Tim. I'll just add on a little bit just to reiterate our priorities when it comes to capital allocation. Our first priority has been and still is organic investment. As we talked about before, we're fully funded. You know, we're pulling back on sales and marketing, but fully funding our product roadmap and our tech teams. Our second priority is M&A corp dev activities and, you know, we have a said process going on there. The third would be shareholder capital returns like Dave just talked about. That priority structure remains as it was in the past.
Great. Thanks, guys.
We will take our last question from Ralph Schackart with William Blair. Your line is open.
Great. Thanks for taking the question. Just first question philosophically on margins. Obviously, your model provides you a lot of flexibility and, you know, in the variable environment, which is great. If the macro were continued to, I guess, sort of stiffen going forward, I guess, how committed are you to protecting margins?
Is there, I guess, a minimum base level of sales and marketing spend that you would need to carry through 2023, or is that, you know, going to continue to be variable? Just last, a clarifying question for Tim. Tim, I think in Aaron's question, you talked about paid employers being sort of flat Q1 to Q3. Would that be flat off of the most recent quarter, or should we expect a step down in Q1 and sort of flatten out for Q1 to Q3 in 2023? Thank you.
Yeah, Ralph. I'll clarify that second point first. We'd expect paid employers to be roughly flat sequentially Q4 to Q1. Would be, I think, a reasonable assumption. For your other question about margins, we're not targeting very specific margins necessarily, but we're much more bottoms up in how we're focusing our dollars. That means to the extent that we see opportunities pencil out where in the deck, there's going to be return behind that investment. There's a lot of flexibility in our operating expense structure. That's how we're able to show 24% EBITDA margins at the midpoint of our guidance this year. That flexibility comes primarily from sales and marketing, like I said before.
However, we, you know, we have more flexibility, you know, if need be, both up and down. There's a minimum amount of spend, of course, when it comes to marketing, where we already enjoy 80% plus aided brand awareness on both job seeker and employer sides of our marketplace. That's because we've invested a lot of capital, and it's less expensive to maintain that brand awareness than it is to build it. I think, I think we're going to be well-positioned to benefit from that brand recognition over the long run, without having to do increase our sales marketing investments massively there.
ll say is, to the point of our flexible operating expense structure, if you go back to COVID from Q1 to Q2 of 2020, we took down our total operating expenses by roughly 50%. We're not, you know, planning on doing that. I don't think that's as necessary right now, consistent with our guidance, but we have that ability to flex very quickly if we need to
Okay. Thanks, Tim.
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