Thank you for standing by. My name is Jeannie, and I will be your conference operator today. At this time, I would like to welcome everyone to the ZipRecruiter, Inc. Q2 2024 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions]. Thank you. I will now like to turn the conference over to Drew Haroldson, Investor Relations.

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 ended June 30, 2024 and guidance for the third 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 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 in Form 10-Q for the quarter ended June 30, 2024, 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 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 ZipRecruiter's shareholder letter and in our Form 10-Q. And now I will turn the call over to Ian.

Thank you, and good afternoon to everyone joining us today. Since day one, ZipRecruiter has been focused on eliminating friction in the job search process. While we are proud of the progress we have made, many pain points still exist for both sides of the marketplace. We believe ZipRecruiter's brand, proprietary data and technology uniquely position us to further disrupt the industry over the long-term and accelerate the shift from offline to online recruitment. Despite the short-term challenges of navigating the post-COVID macroeconomic cycle, we believe that the advancements we are making towards transforming how the job search process works positions us to thrive through many macroeconomic cycles to come. In Q2 2024, revenue of $124 million was down 27% year-over-year. Net income in Q2 2024 was $7 million, while adjusted EBITDA was $28 million, equating to a net income margin of 6% and an adjusted EBITDA margin of 23%. Both revenue and adjusted EBITDA in Q2 2024 came in above the high end of guidance. As we look toward the second half of 2024, we continue to navigate challenging labor market conditions. Per the Bureau of Labor Statistics, seasonally adjusted hires have declined every month on a year-over-year basis since August of 2022. The quit rate has fallen 9% below the average rate in 2019. Despite the fact that hiring is down and employees aren't quitting, our disciplined investment strategy allows us to build on our product momentum and technology leadership. In Q2 2024, these investments contributed to another quarter of job seeker growth. Total ZipRecruiter web traffic in the U.S. grew by 22% year-over-year, which is 12 percentage points more than any of our largest competitors. Ongoing investments in product brand awareness, paired with a number of product improvements, contributed to a 30% year-over-year increase in organic job seeker traffic. Over time, we believe growing job seeker traffic will lead to meaningful revenue dollar shifts from both offline and online competitors. In Q2, we began the rollout of ZipIntro. ZipIntro enables the acceleration of face-to-face connections, delivering strong results so far, with over 90% of job seekers saying they are likely to use ZipIntro again and employers who have tried it receive over 3x more quality applications per job utilizing ZipIntro. In July, we acquired Breakroom, a U.K.-based employer review site focused on frontline workers. In the coming months, we anticipate launching Breakroom in the U.S., where approximately 70% of the workforce is concentrated in frontline roles. Our innovation is enabled by our flexible financial model and robust balance sheet, which gives us the ability to continue to build our brand and enhance our user experience throughout economic cycles. As we continue to navigate this current cycle, we are confident that our disciplined investment strategy will put us in a strong position to take advantage of the inevitable recovery in the labor market to come. With that, I will now turn the call over to Dave to review progress on our growth strategies. Dave?

Thank you, Ian, and good afternoon. Q2 was another strong quarter of execution towards building out each of our three strategic pillars. Our first strategic pillar is to increase the number of employers and the revenue per paid employer in our marketplace. We believe that ZipRecruiter is at the forefront of a shift in online recruitment characterized by a focus on interactive candidate experiences, increased communication and reduced time to hire. Our initial rollout of ZipIntro is an early example of a product that epitomizes this shift. ZipIntro enables job seekers to connect with employers face-to-face by inviting top candidates to RSVP for a video interview with employers at a specific time. After the employer reviews candidate RSVPs, they are connected for a video interview. Employers are having a great experience with ZipIntro as employers that use ZipIntro for a job receive over 3x more quality applications for that job. Job seekers are loving ZipIntro, too, with over 90% of job seekers who connect with an employer saying they are likely to use ZipIntro again. Our goal is to invest in product initiatives like ZipIntro to facilitate more one-on-one interactions between employers and job seekers earlier in the search process, creating more value for both sides of our marketplace. Our second pillar is increasing the number of job seekers in our marketplace. As we have observed over and over again in our category, market share shifts in job seeker activity have been followed by market share shifts in employer revenue dollars. We believe this pattern will continue, namely that shift in employer spending will be preceded by shifts in job seeker behavior. In Q2, our momentum in both total and organic job seeker traffic continued. As Ian mentioned, according to SimilarWeb, total ZipRecruiter web traffic in the U.S. grew by…

Thank you, Dave, and good afternoon, everyone. Our second quarter revenue of $124 million represents a 27% decline year-over-year, primarily due to continued softness in hiring demand. However, revenue increased 1% quarter-over-quarter, our first sequential increase since Q2 2022. Quarterly paid employers were 70,000, representing a 31% decrease versus Q2 '23 and a 2% decrease sequentially. The year-over-year decrease in quarterly paid employers is primarily reflective of reduced demand from SMBs. The slight decline quarter-over-quarter reflects the continued uncertainty and volatility of the labor market. Revenue per paid employer was $1,755, up 5% year-over-year and up 3% sequentially. The increases year-over-year and quarter-over-quarter are primarily due to the slight mix shift from subscription revenue to performance revenue. Net income was $7 million in Q2 '24 compared to net income of $14 million in Q2 '23 and a net loss of $7 million in Q1 '24. Q2 '24 adjusted EBITDA was $28 million, equating to a margin of 23% compared to $43 million, a margin of 25% in Q2 '23 and $21 million with a margin of 17% in Q1 '24. Net income and adjusted EBITDA decreases year-over-year were primarily related to revenue declines, while quarter-over-quarter increases were driven by higher revenue and lower operating expenses. Cash, cash equivalents and marketable securities was $523 million as of June 30, 2024. Moving on to guidance. Our Q3 '24 revenue guidance of $112 million at the midpoint represents a 28% decline year-over-year and a 9% decline quarter-over-quarter. Our adjusted EBITDA guidance for Q3 '24 is $10 million at the midpoint or a 9% adjusted EBITDA margin. While we saw signs that we were potentially approaching a trough for much of Q2, trends in the last few weeks of June and through July make us more cautious in our expectations for Q3. We believe it remains prudent to continue long-term product, technology and marketing investments in our marketplace. Our operating plans continue to call for low to mid-teens adjusted EBITDA margins in 2024. We are constantly assessing the state of the labor market, letting data lead our decision making. We are poised to increase investment as opportunities arise, and alternatively are always prepared to show further cost discipline if conditions deteriorate. The timing and shape of recovery remain uncertain. And while there are encouraging signs that the labor market downturn is bottoming out, there continues to be a high degree of uncertainty and volatility. We continue to lean into investments that we believe will capture market share over time and are well positioned to emerge from this current industry slowdown as a stronger company. With that, we can now open the line for questions. Operator?

Thank you. The floor is now open for questions. [Operator Instructions]. And your first question comes from the line of Doug Anmuth with JPMorgan. Please go ahead.

Great. Thanks for taking the questions. Last quarter, Tim, you kind of hit this towards the end of your comments, but last quarter you expressed some optimism just around the labor market potentially troughing, and I think that was largely based on the flattish sequential paid employer numbers. But maybe you can elaborate just a little bit on the trends that you saw in late June and July, they're making you more cautious in kind of shifting your view relative to three months ago. And I know that was an early -- kind of early potential optimism as well. And then separately, organic traffic grew 30% year-over-year. I think it was 65% last quarter. Can you just talk about that? Is that more comp dynamics or something that you're particularly seeing in the activity levels there? Thanks.

Yes. Thanks, Doug. This is Tim. As far as the trends go, what we saw over the course of the quarter was basically in line with the same signs of stabilization that we noted in prior calls through the first part of the quarter. So -- but as we approached June and into July, we saw general softening trends. You can kind of see that show up in the lighter sequential -- light sequential decrease in paid employers over the course of Q2. And our guidance that we're giving is assuming that that same softness that we've noted in June and July continues throughout the quarter.

Hey, Doug, this is Dave. On the organic traffic growth, to your point, not only this quarter and last quarter, but for well over a year now, every single quarter we've been calling out our organic traffic growth really outpacing the market. And so 30% this quarter is the result of painstaking work on product and on building brand and investments that have been paying off for over the -- over many years. In terms of how they vary over time, the organic traffic growth doesn't come from super straightforward sequential actions taken in any given quarter. So the long-term trend line, as we look out back over many quarters, is very clear that we're taking traffic much faster and the mix shift of our traffic is much more driven such that our total traffic, as we indicated, is up 22%, powered by the 30% growth in organic, and that's over 12% faster than any of our largest competitors. So we feel very good about the sort of investments we've been making. We're making new and more investments in that category that -- some of which we're talking about today, some of which you'll hear about in coming quarters, but the momentum there has been long and sustained and we feel great about it.

Yes. I just want to say real quick, Doug, that the sequential growth in organic traffic is one way to look at it. But I think looking at total traffic is probably the best way to look at it because that's the summation of all our efforts. And we keep saying this, which is we're not trying to anticipate where the market is going. We try to be very rapid in our reactions. So once again, you're seeing us rapidly react where we got an early read on a downward trend in the way the labor market was heading. But what is true is that regardless of which part of the cycle we're in, we have been persistently investing in improving our product. And you can see the two big examples of that this quarter being the acquisition of Breakroom as well as the initial rollout of ZipIntro. And those kinds of persistent product improvements have been ongoing for the last many years. And what you're seeing now is the harvest from all of that investment where every part of our job seeker traffic organic and nonorganic has been growing. And we think that seeing that side of our marketplace grow during this downturn is what optimally positions us to take market share as what we believe is an inevitable recovery will eventually begin here.

Thank you all. Appreciate it.

Your next question comes from the line of David Yueh with Evercore. Please go ahead.

Hi, thank you. This is David from Mark. You called out QPEs being lower due to reduced demand from SMBs. Are there any specific verticals where you're seeing lower demand versus others? Thank you.

Thanks, David. This is Dave. Yes, great question. So as we look at the year-over-year trends, we continue to see areas like retail and government sort of outperforming. But obviously, in a market like this, there are more verticals that are underperforming. And so, interestingly, verticals like finance and technology remain weak as they have been, and verticals like education, which was strong for a long time as there was a catch-up in the number of teachers that needed to be hired after the pandemic, has started to weaken on a year-over-year basis now. And so that's what we see. But obviously, the balance -- as you look across all sectors and geographies of the economy, the balance continues to be difficult. As recent government data shows, we're now 6% or 8% below the number of hires last month that we averaged per month in pre-COVID 2019. And so zooming out for even the sort of overall shape and mix of the economy, we're in a pretty abnormal period currently.

Thank you.

There are no further questions at this time. That concludes our Q&A session. Thank you for attending. This concludes today's conference call. You may now disconnect.