ZipRecruiter, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the ZipRecruiter, Inc. Q4 2023 earnings conference call. 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'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you'd like to withdraw your question, press star one. As a reminder, today's call is being recorded. I will now hand today's call over to Drew Harrelson, Investor Relations. Please go ahead, sir.

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 year ended December 31st, 2023, and guidance for the first quarter, 2024. 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 31, 2023, 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, and ZIP Recruiter 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 in isolation from GAAP results. Reconciliations of the non-GAAP metrics to the nearest GAAP metrics are included in ZIP Recruiter's shareholder letter and in our Form 10-K. And now I will turn the call over to Ian.

Thank you, Drew. Good afternoon to everyone joining us today. In 2023, demand for recruiting services dropped throughout the year for companies of all sizes. This culminated in Q4 of 2023, which had the lowest BLS reported hiring rate since 2014, excluding the onset of the pandemic. Quits and separations, some of the primary drivers of employer hiring, are down to pre-pandemic levels. While in 2021 and 2022 workers left jobs for higher wages, wage inflation has abated and macroeconomic uncertainty has increasingly kept people in their current roles. With fewer job openings and lower employee turnover, the great resignation has turned into the big stay. As has been our standard operating practice, ZipRecruiter responded to the downturn by rapidly reducing expenses. As a result, in 2023, we delivered net income of $49 million and adjusted EBITDA of $175 million. This represented a net income margin of 8% and adjusted EBITDA margin of 27% year-over-year increases of 1 and 7 percentage points respectively. While there have been significant top line headwinds in 2023, product improvements have continued at full speed. Our long-term product and technology roadmap has remained fully funded. A few examples include our AI assistant, Phil. Phil continues to improve as a conversational AI-driven career advisor, helping job seekers understand their goals and providing personalized job recommendations. Job seekers onboarded by Phil generate nearly twice as many applications as job seekers who come in through other channels. Another example is building solutions for enterprise. In the third quarter of 2023, we introduced programmatic campaign optimization for larger customers. In Q4, we delivered the first round of optimizations to that solution, resulting in a 40% improvement in campaign performance over the prior quarter. A final example of our investment is our ongoing efforts to deeply integrate with applicant tracking systems. In 2023, we continue to deploy ATS integrations, which allow enterprises to activate ZipApply, our one-click application flow for job seekers. ZipApply delivers three times more applications per job for the same amount of spend. These integrations also enable customers to share hiring signals with us. which makes our matching technology smarter over time. Navigating the ups and downs of the labor market is a reality of our business. In 2023, this meant conserving capital by primarily pulling back on marketing expenses. Although we retain flexibility to manage expenses if the labor market slows further, we think it is prudent to continue investing in long-term initiatives like the ones I've shared. The long-term opportunity to disrupt how job seekers and employers connect remains large. We will continue to improve our matching algorithms and products to increase engagement between employers and job seekers. While the shape and duration of the current labor market cycle remains out of our control, we remain focused on our mission of actively connecting people to their next great opportunity. With that, I will now turn the call over to Dave to review progress on our growth strategies.