ZipRecruiter, Inc. 2026 Q2 Earnings Call

Thank you for joining us on our earnings conference call, during which we will discuss ZipRecruiter's performance for the second quarter and the June 30th, 2026, and our guidance for the third quarter of 2026. Joining me on the call today are Ian Siegel, Co-founder and CEO, and David Travers, President and Interim CFO. Before we begin, please be reminded that forward-looking statements made today are subject to risks and uncertainties relating 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 quarterly report on Form 10-Q for the quarter ended June 30th, 2026, which is 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, and ZipRecruiter assumes no obligations 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 in 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-Q. Now I will turn the call over to Ian.

Thank you. Good afternoon to everyone joining us today. ZipRecruiter's momentum accelerated in the second quarter. We grew revenue by 5% year-over-year to $118.1 million, coming in $6 million above the midpoint of our guidance range. Adjusted EBITDA came in at $14.6 million, representing a 12% margin, which was above the midpoint of our guidance range and above the Adjusted EBITDA margin of 8% in Q2 of 2025. Additionally, we repurchased $294.6 million of our 5% senior unsecured notes at a $65 million discount to par. That transaction meaningfully reduced our debt burden while leaving our balance sheet strong. We closed the quarter with $174 million in cash and investments, giving us ample capital to fully fund our future growth initiatives.

Turning to our product momentum, our marketplace continued to improve in Q2, with each innovation focused on the same goal: driving more conversations between employers and job seekers. We believe this real-world, outcomes-based focus is what has been driving our growth. First, the ongoing rollout of our next-generation search and matching engine to all parts of the ZipRecruiter platform increased qualified application volume in Q2 by 34% quarter-over-quarter. This lift in qualified applications, paired with our other product improvements, doubled the employer response rate per application year-over-year. Second, we rolled out an option for candidates applying through our Be Seen First feature to record an audio message to accompany their resume, giving job seekers a powerful new way to highlight their personality and stand out. Early data shows that job seekers who record a message saw an 8% lift in response rates from the employer.

Third, we launched a new AI feature called Smart Outreach, which enables employers to instantly turn job descriptions into customized, multi-step message campaigns sent directly to candidates across our resume database. Smart Outreach automates that initial touchpoint to make hiring faster, easier, and more personal. The volume of conversations happening on ZipRecruiter is accelerating as we use cutting-edge technology to help the right people find one another, connect faster, and achieve better outcomes. Each new interaction enriches our proprietary dataset, making our technology more effective and creating a compounding advantage that improves the experience across both sides of our marketplace. Finally, before I turn the call over to Dave, I want to touch on a major addition to our leadership team. We recently announced that Carmen Chan will be joining us as our new Chief Financial Officer, effective August 17th.

Carmen brings a wealth of experience from Barclays, Noom, and Goldman Sachs. She will be instrumental in driving our long-term financial strategy and operational excellence. Once Carmen assumes the role, Dave will be continuing in his role as president. We are absolutely thrilled to welcome her to the team. With that, I'll turn the call over to Dave to share some additional business highlights, financial results, and guidance.

Thanks, Ian, good afternoon. Our marketplace gained momentum in the second quarter as the product improvements we've made over the past several quarters continue to compound. At our core, we are making it easier for employers and job seekers to find one another and start meaningful conversations. I'm excited to share several highlights with you today. We launched our next-generation search and matching engine in Q1, which drove a 37% increase in qualified application volume. The ongoing rollout of our next-generation search and matching engine to all parts of the ZipRecruiter platform increased qualified application volume in Q2 by 34% quarter-over-quarter. This lift in qualified applications, paired with our other product improvements, doubled the employer response rate per application year-over-year. We believe increasing the quantity of qualified applications will lead to more meaningful connections between employers and job seekers.

In Q2, we expanded our Be Seen First feature. We gave applicants the option to record a message to employers, letting them showcase their personality and soft skills alongside their qualifications. Early data shows that job seekers who recorded a message saw an 8% lift in connection rates with the employer. We also launched Smart Outreach, a new AI-driven feature for our resume database that helps hiring teams quickly find and connect with job seekers. We know from our data that over 80% of candidates are more interested in a role when an employer reaches out proactively. To capitalize on this, Smart Outreach uses AI to turn job descriptions into personalized, editable message campaigns. With a single click, hiring teams can tap into our pool of over 50 million job seekers, minimizing the hours traditionally spent chasing replies and replacing administrative bottlenecks with active conversations.

Our enterprise strategy continues to show strong momentum as our investments in programmatic bidding tools deliver tangible growth. Just like last quarter, adoption of our automated campaign performance solutions grew over 50% year-over-year as large employers look for more efficient hiring solutions. Furthermore, these optimizations to our bidding algorithms also drove a 2X year-over-year improvement in our rate of meeting customers' campaign targets. We believe this increased efficacy, as well as other improvements, drove a 15% year-over-year increase in performance marketing revenue in Q2, proving that our technology investments are delivering for employers of every size. We continue to lean into conversational AI platforms to meet job seekers where they are. Following our Q1 launch of the ZipRecruiter app for ChatGPT, we've now deepened that integration so job seekers can search for roles from ZipRecruiter directly within the ChatGPT chat field.

Additionally, in Q2, we launched a new connector for Claude, Anthropic's AI assistant. As job seekers increasingly turn to these AI tools earlier in their search, we view these expansions as a critical step in broadening our distribution footprint and will look to expand our integrations over time. We believe that this is also a testament to our brand strength and quality of jobs in our marketplace. With that, I'll now discuss our financial results and guidance. Our second quarter revenue of $118.1 million represents a 5% increase year-over-year and a 10% increase quarter-over-quarter. These increases were driven primarily by a higher number of paid employers and increased job posting activity, alongside the successful rollout of key product improvements. We ended the second quarter with over 70,000 quarterly paid employers, representing a 7% increase year-over-year and a 12% increase sequentially.

We saw strong growth in both new and returning customers as our product improvements continue to resonate with employers of all sizes. Revenue per paid employer was $1,669, down 1% year-over-year and down 2% sequentially. These decreases are primarily a function of the strong growth in quarterly paid employers. Because many of these new employers joined partway through the quarter, they only contributed revenue for a portion of Q2, which drove down the average. Looking at operating expenses, we continue to gain operating leverage across the business as we scale revenue. Total operating expenses decreased to $101.3 million versus $106.9 million in the prior year period, primarily due to lower stock-based compensation and personnel-related expenses. Turning to profitability, net income in the second quarter was $43.4 million, representing a 37% net income margin.

On a year-over-year and quarter-over-quarter basis, net income increased due to the gain on debt extinguishment from the June 2026 partial repurchase of our 5% unsecured notes due in 2030. Adjusted EBITDA was $14.6 million, equating to a 12% margin. This compares favorably to an Adjusted EBITDA margin of 8% in Q2 of last year and 9% in Q1 of this year. Increases in Adjusted EBITDA and Adjusted EBITDA margin both on a year-over-year and quarter-over-quarter basis are a result of both higher revenue and our continued cost discipline. In June, we repurchased $294.6 million of our 5% senior unsecured notes at a discounted par value of $229.4 million. This allowed us to retire over half our outstanding notes and meaningfully reduce our debt burden. Cash, cash equivalents, and marketable securities totaled $173.8 million as of June 30th, giving us ample flexibility to fully fund our future growth initiatives.

Moving on to quarterly guidance. We expect Q3 revenue of $121 million at the midpoint, representing 5% year-over-year growth and 2% sequential growth. We also project Q3 Adjusted EBITDA of $16 million at the midpoint, yielding a 13% margin, a significant expansion versus the 8% margin we delivered in the prior year period. We believe delivering growth and margin expansion in a stable hiring environment demonstrates that our differentiated hiring solutions are truly resonating with both employers and job seekers. Leading to the second half of 2026, the labor market remains stable, even as overall hires and quits rate remain near their lowest level since 2015.