ZipRecruiter, Inc.

The year-over-year decrease was driven by a soft hiring environment, while the sequential decline reflects post-holiday seasonality, where employers join or return our platform over the course of the quarter. We finished the first quarter with over 63,000 quarterly paid employers, which was flat year-over-year and represented a 7% increase sequentially. Quarterly paid employers remaining flat year over year in spite of macroeconomic volatility demonstrates the stability of our employer base. The sequential growth is consistent with our historical seasonal patterns where quarterly paid employers typically grow over the course of Q1 after the holiday slowdown in Q4. Revenue per paid employer was $1,698, down 2% year over year and down 10% sequentially. The year-over-year decrease reflects more muted hiring demand. The sequential decrease was primarily driven by seasonal growth in the number of quarterly paid employers as they ramped up their hiring campaigns over the course of Q1. Our net loss in the first quarter was $4.7 million. Adjusted EBITDA in Q1 was $9.7 million, representing a 9% margin coming ahead of the high end of our guidance range. This compares to an adjusted EBITDA margin of 5% in Q1 of 25. Cash, cash equivalents, and marketable securities totaled $393.5 million as of March 31st. During the first quarter, we repurchased 3.5 million shares, totaling $9.4 million. Moving on to quarterly guidance, our Q2 revenue guidance of $112 million at the midpoint represents a return to flat revenue year over year. and 4% growth quarter over quarter, demonstrating the impact of our hiring solutions despite underlying macro headwinds. Our adjusted EBITDA guidance for Q2 is $13 million at the midpoint, representing a 12% margin. Looking beyond Q2, we continue to expect hiring demand to follow a typical seasonal cadence throughout 2026, albeit at subdued levels. Under this scenario, we expect to achieve flat year-over-year revenue in 2026, which is a 5 percentage point improvement over the 5% decline in 2025. In this scenario, we also believe adjusted EBITDA margins can expand by 5 percentage points from 9% in 2025 to 14% in 2026. This margin expansion reflects our commitment to operational efficiency alongside targeted investments aimed at capturing growth. The stabilization in the business and accelerating pace of innovation we've seen in our marketplace are encouraging. We remain confident that our focus on driving more meaningful conversations between employers and job seekers will position ZipRecruiter to outperform the broader hiring category over the long term. With that, we can now open the line for questions. Operator?

We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from Ralph Shakart with William Blair. Please go ahead.

Good afternoon. Thanks for taking the question. First question, maybe if you could talk about the differences you might be observing between SMB and enterprise segments. Sounds like you're making some good traction within enterprise. And then as 2026 progresses, you know, how would you expect perhaps the behavior within each of these segments to perhaps change? And then I have a follow up.

Great. Thanks, Ralph. This is Dave. So, yes, we've been pleased with the execution we've seen on both sides of the both customer segments, SMB and enterprise. James Rattling Leafs, Enterprise you know mainly comprises performance marketing revenue, so that was up 5% year over year that continues a long term trend. James Rattling Leafs, of expanding our percentage of revenue that comes from enterprise so 24% of revenue this quarter, if you didn't go all the way back to our s one. James Rattling Leafs, pre coven in Q1 of 2019 we were at 12% of revenue so we've doubled our percentage of revenue and we expect to continue to expand revenue there over time. TAB, Mark McIntyre, As it evolves over the course of the year, I think we expect to, as I said, continue to see that and what we've seen in talking to. TAB, Mark McIntyre, The customer base from both sides is consistent with the macro data we've seen we're in a subdued but relatively stable environment and that captures the mood of employers on both sides of the marketplace. they're responding to conversations being driven and job seekers are responding to that as we talked a lot about in the letter and we expect to continue to see the benefits of that as we continue to execute this year is consistent with our guidance when we're guiding to double our top line growth versus what we did Q2 over Q1 last year showing four and a half million of growth top line at the midpoint as opposed to just over two million in the same quarters last year

Great. Thanks, Dave. And then just a follow-up, maybe shifting gears a little bit. You talked about, you know, the Zip app for ChatGPT. Just curious what you're learning there. I think you talked about expanding potential integrations. You know, any more color you could add on the product front there would be great. Thank you.

Well, the new app went live on ChatGPT, and on a percentage basis, the growth of LLMs in general has been impressive as a new traffic source. Overall, LLM still represent a, they are still a tiny contributor in the overall mix of where traffic comes from to ZipRecruiter, but it's good to be there at the beginning and to enjoy the ride up with them as they become an ever more popular way for job seekers to look for work.

If you would like to.

If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. The next question comes from Justin Patterson with KeyBank. Please go ahead.

Great. Thank you very much. Good afternoon. I'd love to hear more about just the upcoming rollout of the next generation AI engine. Sounds like that's a really strong return so far. So how are you thinking about that as a potential market share driver in a market that's still a little bit subdued here? And then the second question, just as a quick follow-up, we've had a lot of companies just trying to balance the productivity benefits against the rising token costs from GenAI tools. So we'd love to hear more about how you're thinking about that dynamic and what it might mean toward your longer-term headcount needs. Thank you.

Well, I'll take the second question first and then go to the first question last, which AI is permeating really every department within our company. It's driving extraordinary efficiencies across the board, which we haven't looked at as a cost-saving opportunity as much as we've looked at it as a mechanism by which we can realize and increase our ambitions. So if anything, it has accelerated our roadmap as opposed to saved us money. And you can see the output of that acceleration in Q1 where multiple large-scale initiatives, some of which had been worked on for over a year, were able to deploy. The next generation search engine is one of those. It increased applications by 37% for the job seekers who were exposed to it. We expect all job seekers to be on the NextGen search engine by the end of Q2. It's really exciting. This algorithm and the other components of this were, they were retrained to prioritize more meaningful signals for job seekers in terms of the depth of their interests and roles. We can see that play out when we use those algorithms to deliver results. in that they're applying at a far higher rate, and these are jobs that they are far more qualified for at the same time. Further, when they do apply for those jobs and when they are qualified for those jobs, adoption of be seen first has been exciting. We saw 12% of total applicants choose to be seen first when they applied, and this is conferring an extraordinary advantage to them because employers who are looking at their list are seeing these very interested candidates who have now got a mechanism to show their enthusiasm. They're not just qualified, they're eager, and that is coming through, and employers are engaging with those candidates at almost twice the rate that they're engaging with candidates who go through the normal apply process. Overall, when we look at all the features that we've launched, not just in this quarter, but really over the last three to four quarters, and it's including things like Zip Intro, it's things like our redesigned resume database, the acquisition and deployment of Break Room, what you see is that the strategy we've built is working. And it's not me saying that, or I should say it's not just me. It's the job seekers. I've been really excited reading the reviews and seeing the spike in the specific language that those reviews contain. The job seekers are using the language that we use internally when we talk about our objective. They are saying that they are getting more interviews and they're getting more phone calls from employers. They are saying ZipRecruiter works. That's exactly how we look at it internally and how we describe it. So it's really rewarding to see the strategy paying off both quantitatively and qualitatively here. There's so many more improvements to come. We're really excited about the momentum we have here. And AI is proving to be an incredible accelerator of our ability to rapidly deploy these improvements.

Your next question comes from Josh Chan with UBS. Please go ahead.

Hi, this is for Josh. Thanks for taking our questions. I wanted to ask on the margin because the margin certainly came way above what we expected. So I'm just wondering if you can provide more color on where, well, what drove that upside against like maybe internal expectations because it also came above the guide as well.

Greg, thanks. This is Dave. Good question. So yeah, the EBITDA margins this past quarter did come in above expectations and above of the high end of the range we'd said earlier. Obviously, when you look at it from a year-over-year basis, we've been driving efficiency across all three major categories of expense, G&A, sales and marketing, and R&D. However, versus our expectations of what we had last quarter, as we've said many times, we're scientists, not artists, when it comes to sales and marketing investments. And this quarter, the team did an extraordinary job looking for and finding high roi marketing opportunities and areas to invest in our go-to-market and so we saw that in the results and the results were that we came in above the high end of the range so obviously that gives us increasing confidence in our ability to to achieve the likely scenario we laid out for the whole year which is you know top line being flat which is five percentage points better than prior year obviously and at the same time William Newburry, M.D.: : Improving bottom line margins from 9% to 14% for the full year, which is also five percentage points improvement along the bottom line, and so that execution this quarter gave us even more confidence about our ability to do that and we felt great about it.

William Newburry, M.D.: : All right, yes, thank you.

That is the end of the Q&A session. This concludes today's call. You may now