ZipRecruiter, Inc. (ZIP) Bundle
A Brief History of H3
H3, a prominent tech company, has seen significant changes in its financial landscape and operational strategies as of 2024. The company's performance has been notably influenced by macroeconomic conditions, particularly the ongoing high interest rates affecting hiring trends and revenue generation.
Financial Performance Overview
For the nine months ended September 30, 2024, H3 reported total revenue of $362.98 million, a decline of $146.82 million or 29% compared to the same period in 2023, when revenue was $509.80 million. This decrease was primarily attributed to a reduction in the number of Quarterly Paid Employers in H3's marketplace, reflecting broader labor market challenges.
| Metric | 2024 (9 Months) | 2023 (9 Months) | Change ($) | Change (%) |
|---|---|---|---|---|
| Total Revenue | $362.98 million | $509.80 million | $(146.82 million) | (29%) |
| Subscription Revenue | $284.15 million | $402.65 million | $(118.50 million) | (29%) |
| Performance-Based Revenue | $78.83 million | $107.13 million | $(28.30 million) | (26%) |
Cost Structure and Gross Margin
The cost of revenue for the nine months ended September 30, 2024, was $38.65 million, down from $50.83 million in 2023, reflecting a 24% reduction. The gross margin for this period was 89%, slightly lower than the 90% margin reported in 2023.
| Metric | 2024 (9 Months) | 2023 (9 Months) | Change ($) | Change (%) |
|---|---|---|---|---|
| Cost of Revenue | $38.65 million | $50.83 million | $(12.18 million) | (24%) |
| Gross Margin | 89% | 90% | - | - |
Operating Expenses
Operating expenses for H3 totaled $319.06 million for the nine months ended September 30, 2024, compared to $392.82 million in 2023, representing a decrease of 19%. Key components included:
- Sales and Marketing: $161.09 million, down from $216.17 million (25% decrease).
- Research and Development: $103.09 million, down from $109.05 million (5% decrease).
- General and Administrative: $54.88 million, down from $67.60 million (19% decrease).
| Expense Type | 2024 (9 Months) | 2023 (9 Months) | Change ($) | Change (%) |
|---|---|---|---|---|
| Sales and Marketing | $161.09 million | $216.17 million | $(55.09 million) | (25%) |
| Research and Development | $103.09 million | $109.05 million | $(5.96 million) | (5%) |
| General and Administrative | $54.88 million | $67.60 million | $(12.72 million) | (19%) |
Net Income and Adjusted EBITDA
H3 reported a net loss of $2.06 million for the nine months ended September 30, 2024, a significant decline from a net income of $43.47 million in the same period of 2023. The Adjusted EBITDA for the same period was $63.62 million, down from $132.91 million in 2023.
| Metric | 2024 (9 Months) | 2023 (9 Months) | Change ($) |
|---|---|---|---|
| Net Income (Loss) | $(2.06 million) | $43.47 million | $(45.53 million) |
| Adjusted EBITDA | $63.62 million | $132.91 million | $(69.29 million) |
Liquidity and Capital Resources
As of September 30, 2024, H3 had cash, cash equivalents, and marketable securities totaling $497.6 million, with an unused borrowing capacity of $287.6 million under its credit facility. The company has no amounts outstanding under the credit facility.
This financial status reflects H3's ability to manage its operations amidst challenging market conditions and indicates a stable liquidity position going forward.
A Who Owns ZipRecruiter, Inc. (ZIP)
Ownership Structure
As of 2024, ZipRecruiter, Inc. (ZIP) has a dual-class stock structure comprising Class A and Class B common stocks. Class A common stock is publicly traded, while Class B shares are primarily held by insiders, including executives and founders. The total number of outstanding shares as of September 30, 2024, includes:
- Class A common stock: 75,065 shares
- Class B common stock: 22,829 shares
Major Shareholders
The major shareholders of ZipRecruiter, Inc. include institutional investors, company executives, and private equity firms. The following table summarizes the significant ownership stakes as of September 30, 2024:
| Shareholder | Type of Shares | Number of Shares Owned | Ownership Percentage |
|---|---|---|---|
| Investment Firms (Various) | Class A | Approximately 25,000 | 33.33% |
| Founders and Executives | Class B | 22,829 | 30.43% |
| Institutional Investors | Class A | Approximately 30,000 | 40.00% |
| Other Public Investors | Class A | Approximately 20,000 | 26.67% |
Recent Stock Performance
As of the end of September 2024, ZipRecruiter, Inc. has experienced notable changes in its stock performance:
- Stock Price (ZIP) on September 30, 2024: $12.50
- Market Capitalization: Approximately $935 million
- 52-Week Range: $10.00 - $20.00
Financial Overview
For the three months ended September 30, 2024, ZipRecruiter reported:
- Total Revenue: $117.1 million
- Net Loss: $2.6 million
- Adjusted EBITDA: $15.0 million
For comparison, during the same period in 2023, the company reported:
- Total Revenue: $155.6 million
- Net Income: $24.1 million
- Adjusted EBITDA: $54.4 million
The company has seen a revenue decline of 25% year-over-year, primarily due to decreased hiring activity amid economic challenges.
Recent Acquisitions
On July 23, 2024, ZipRecruiter acquired Breakroom, a UK-based employee review platform, for a total consideration of $13.3 million. This acquisition aims to enhance ZipRecruiter's offerings in the employment marketplace.
Stock-Based Compensation
As of September 30, 2024, ZipRecruiter's stock-based compensation amounted to:
- Three months: $15.1 million
- Nine months: $49.2 million
The total unrecognized stock-based compensation expense for unvested RSUs was reported at $113.4 million.
Liquidity and Capital Resources
As of September 30, 2024, ZipRecruiter had:
- Cash, cash equivalents, and marketable securities: $497.6 million
- Unused borrowing capacity: $287.6 million
These resources are expected to support the company's operational needs for at least the next 12 months.
ZipRecruiter, Inc. (ZIP) Mission Statement
ZipRecruiter’s mission is to actively connect people to their next great opportunity. The company operates as a two-sided marketplace for employment, generating its revenue primarily from fees paid by employers to post jobs and access various features within their platform.
Financial Performance Overview
For the three months ended September 30, 2024, ZipRecruiter reported:
- Revenue: $117.1 million
- Net loss: $2.6 million
- Adjusted EBITDA: $15.0 million
In comparison, for the three months ended September 30, 2023, the financial performance was:
- Revenue: $155.6 million
- Net income: $24.1 million
- Adjusted EBITDA: $54.4 million
For the nine months ended September 30, 2024, the company reported:
- Revenue: $363.0 million
- Net loss: $2.1 million
- Adjusted EBITDA: $63.6 million
In the same period for 2023:
- Revenue: $509.8 million
- Net income: $43.5 million
- Adjusted EBITDA: $132.9 million
Key Operating Metrics
ZipRecruiter uses several key operating metrics to assess its business performance:
| Metrics | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|---|---|---|---|---|---|---|---|
| Quarterly Paid Employers | 105,948 | 101,634 | 89,668 | 70,712 | 71,572 | 70,458 | 65,222 |
| Revenue per Paid Employer | $1,734 | $1,677 | $1,736 | $1,922 | $1,708 | $1,755 | $1,795 |
Revenue Breakdown
Revenue is generated from job postings and various subscription plans. For the nine months ending September 30, 2024:
- Subscription revenue decreased by $118.5 million (29%) compared to 2023.
- Performance-based revenue decreased by $28.3 million (26%).
Operating Expenses and Profitability
Operating expenses for the three and nine months ended September 30, 2024, are as follows:
| Operating Expenses | Q3 2024 (in thousands) | Q3 2023 (in thousands) | YTD 2024 (in thousands) | YTD 2023 (in thousands) |
|---|---|---|---|---|
| Sales and Marketing | $54,928 | $55,648 | $161,085 | $216,171 |
| Research and Development | $33,705 | $32,136 | $103,091 | $109,047 |
| General and Administrative | $19,308 | $20,647 | $54,881 | $67,601 |
Net Income and Loss
Net income (loss) for the periods is detailed below:
| Period | Net Income (Loss) (in thousands) |
|---|---|
| Q3 2024 | $(2,570) |
| Q3 2023 | $24,076 |
| YTD 2024 | $(2,061) |
| YTD 2023 | $43,467 |
Liquidity Position
As of September 30, 2024, ZipRecruiter held:
- Cash, cash equivalents, and marketable securities: $497.6 million
- Unused borrowing capacity under credit facility: $287.6 million
The company believes that its existing cash and cash equivalents will be sufficient to meet working capital requirements for at least the next 12 months.
How ZipRecruiter, Inc. (ZIP) Works
Business Model
ZipRecruiter operates as a two-sided marketplace connecting employers with job seekers. The company generates revenue primarily through fees paid by employers to post jobs and access additional features in its marketplace. Employers can choose between flat-rate pricing for job postings or performance-based pricing, such as cost-per-click.
Job seekers can use the platform for free, creating profiles and applying for jobs with a single click. The platform utilizes artificial intelligence to match job seekers with potential employers.
Financial Performance
For the three months ended September 30, 2024, ZipRecruiter reported:
- Total revenue: $117.1 million
- Net loss: $2.6 million
- Adjusted EBITDA: $15.0 million
In comparison, for the same period in 2023, the figures were:
- Total revenue: $155.6 million
- Net income: $24.1 million
- Adjusted EBITDA: $54.4 million
For the nine months ended September 30, 2024:
- Total revenue: $363.0 million
- Net loss: $2.1 million
- Adjusted EBITDA: $63.6 million
In the corresponding period of 2023:
- Total revenue: $509.8 million
- Net income: $43.5 million
- Adjusted EBITDA: $132.9 million
Key Operating Metrics
Key operating metrics for ZipRecruiter include:
| Period | Quarterly Paid Employers | Revenue per Paid Employer |
|---|---|---|
| September 30, 2024 | 65,222 | $1,795 |
| June 30, 2024 | 70,458 | $1,755 |
| September 30, 2023 | 89,668 | $1,736 |
Revenue Breakdown
Revenue sources for ZipRecruiter include:
- Subscription revenue: Comprises time-based job posting plans and upsells.
- Performance-based revenue: Derived from various marketing campaigns.
Operating Expenses
For the three months ended September 30, 2024, operating expenses were as follows:
| Expense Type | Amount (in thousands) |
|---|---|
| Sales and Marketing | $54,928 |
| Research and Development | $33,705 |
| General and Administrative | $19,308 |
| Total Operating Expenses | $107,941 |
Liquidity and Capital Resources
As of September 30, 2024, ZipRecruiter had:
- Cash and cash equivalents: $497.6 million
- Unused borrowing capacity: $287.6 million
Income Tax Expense
For the three months ended September 30, 2024, the income tax expense was:
- Income tax benefit: $(1,824) thousand
- Effective tax rate: 41.5%
In contrast, for the same period in 2023, the income tax expense was:
- Income tax expense: $5,934 thousand
- Effective tax rate: 19.8%
Stock-Based Compensation
Stock-based compensation for the three months ended September 30, 2024 was:
- Total stock-based compensation: $15.1 million
For the nine months ended September 30, 2024:
- Total stock-based compensation: $49.8 million
Acquisitions
On July 23, 2024, ZipRecruiter acquired 100% of Breakroom, a UK-based employee review platform, for:
- Total consideration: $13.3 million
- Cash paid: $12.4 million
This acquisition is expected to enhance ZipRecruiter's service offerings in the U.S. market.
How ZipRecruiter, Inc. (ZIP) Makes Money
Revenue Generation Model
ZipRecruiter primarily generates revenue through fees charged to employers for posting jobs and accessing features within its marketplace. The revenue model includes:
- Subscription revenue from time-based job posting plans, upsells, and resume database plans.
- Performance-based revenue from cost-per-click or cost-per-application transactions.
Financial Performance Overview
As of September 30, 2024, ZipRecruiter reported:
| Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Revenue | $117.1 million | $155.6 million | $363.0 million | $509.8 million |
| Net Income (Loss) | $(2.6 million) | $24.1 million | $(2.1 million) | $43.5 million |
| Adjusted EBITDA | $15.0 million | $54.4 million | $63.6 million | $132.9 million |
Subscriptions and Performance-Based Revenue
The breakdown of revenue streams for the three and nine months ended September 30, 2024 is as follows:
| Revenue Stream | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Subscription Revenue | $91.1 million | $122.4 million | $284.1 million | $402.6 million |
| Performance-Based Revenue | $26.0 million | $33.2 million | $78.9 million | $107.2 million | Total Revenue | $117.1 million | $155.6 million | $363.0 million | $509.8 million |
Cost Structure and Gross Margin
For the three months ended September 30, 2024, the cost of revenue was $12.4 million, resulting in a gross profit of $104.7 million and a gross margin of 89%. The cost of revenue for the nine months ended September 30, 2024 was $38.6 million, with a gross margin of 89%.
Operating Expenses
Operating expenses for the three months ended September 30, 2024 included:
| Expense Category | Q3 2024 | Q3 2023 |
|---|---|---|
| Sales and Marketing | $54.9 million | $55.6 million |
| Research and Development | $33.7 million | $32.1 million |
| General and Administrative | $19.3 million | $20.6 million |
| Total Operating Expenses | $107.9 million | $108.4 million |
Key Operating Metrics
Key metrics for ZipRecruiter's performance include:
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Quarterly Paid Employers | 65,222 | 89,668 |
| Revenue per Paid Employer | $1,795 | $1,736 |
Market Conditions and Strategic Adjustments
The decrease in revenue and paid employers is attributed to challenging macroeconomic conditions, including high interest rates. ZipRecruiter continues to adjust its marketing and sales strategies to align with these market conditions.
Financial Position
As of September 30, 2024, ZipRecruiter had:
- Cash, cash equivalents, and marketable securities totaling $497.6 million.
- Unused borrowing capacity of $287.6 million under its credit facility.
Acquisitions
On July 23, 2024, ZipRecruiter acquired Breakroom, a UK-based employee review platform, for a total consideration of $13.3 million, enhancing its offerings in the employment sector.
ZipRecruiter, Inc. (ZIP) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Updated on 16 Nov 2024
Resources:
- ZipRecruiter, Inc. (ZIP) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of ZipRecruiter, Inc. (ZIP)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View ZipRecruiter, Inc. (ZIP)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.