Thank you for standing by. My name is Jordan, and I'll be your conference operator today. At this time, I'd like to welcome everyone to ZipRecruiter Q4 2025 Earnings Call. [Operator Instructions] I would now like to turn the call over to Emilio Sartori, Head of Investor Relations. Please go ahead.

Thank you, operator, and good afternoon. Thank you for joining us for our earnings conference call, during which we will discuss ZipRecruiter's performance for the fourth quarter and full year ended December 31, 2025, and our guidance for the first quarter of 2026. 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, 2025, 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-K. And now I will turn the call over to Ian.

Thank you. Good afternoon to everyone joining us today. 2025 was a year of stabilization and strategic execution for ZipRecruiter. After multiple quarters of sequential growth, I'm pleased to share that we achieved year-over-year revenue growth in Q4 '25, the first time a quarter has grown year-over-year since Q3 of 2022. Throughout 2025, we remain focused on our mission to actively connect people to their next great opportunity by delivering high-impact product enhancements. We upgraded ZipIntro and our resume database to drive faster connections, deployed new AI-powered suggested screening questions to decrease the time it takes employers to vet the candidates they receive, and optimized our automated campaigns to deliver better performance for our enterprise clients. In January of 2026, we took another leap forward with the launch of Be Seen First, a product which enables job seekers to jump to the top of an employer's candidate list. Job seekers earn this advantage when they tell the employer why they are excited about the role and what skills they bring to the table. The results are promising. Be Seen First candidates are nearly 2x more likely to have a conversation with an employer. Following the sequential growth in Q2 and Q3 of 2025, Q4 '25 marked a return to year-over-year revenue growth. We achieved this milestone despite a challenging macroeconomic backdrop. That said, hiring demand in Q4 '25 was soft. Hiring demand dropped below what normal seasonality would have predicted and job openings declined 10% year-over-year. As a result, Q1 '26 started from a lower base of paid employers. Our Q1 '26 revenue guidance of $106 million at the midpoint reflects this lower holiday baseline. However, in Q1 of '26, paid employer trends have rebounded year-to-date. Those trends are, in fact, stronger than the trends we called out as noteworthy…

Thanks, Ian, and good afternoon. Our performance in the fourth quarter reflects the continued success of our product-led strategy. Even in a complex hiring environment, our investments in matching technology and seamless integrations are delivering clear value to both employers and job seekers. I'm excited to share several highlights with you. Q4 '25 revenue reached $112 million, representing 1% year-over-year growth. This is a significant milestone, marking our first quarter of year-over-year growth since the market decline began in Q3 of '22. This performance is consistent with the scenario we outlined over the course of 2025, and we believe our execution, brand resilience and strong market position overcame what continues to be a challenging macroeconomic backdrop. We finished the year with over 59,000 quarterly paid employers in Q4, up 2% year-over-year and down 12% sequentially, consistent with historical seasonal patterns. This is our second consecutive quarter of year-over-year expansion, signaling the long-term health of our employer base. This January, we launched Be Seen First, a new product designed to help job seekers break through the application black hole and turn one-way applications into real 2-way conversations. By adding a short note to their application, job seekers moved to the top of an employer's applicant list, highlighting essential skills and enthusiasm that resumes often missed. This provides recruiters with critical context and surfaces the most engaged talent. Employers are prioritizing these high-intent applicants and Be Seen First candidates are nearly 2x more likely to have a conversation with the employer. In response to the shifting SEO landscape, we optimized our marketplace for generative AI discovery. This drove a significant increase in engagement with site visits from AI engines more than doubling year-over-year in Q4. Additionally, ZipRecruiter's job seeker traffic outperformed our largest competitors throughout 2025, validating our ongoing product improvements. By…

Thank you, Dave, and good afternoon, everyone. Our fourth quarter revenue of $111.7 million represents 1% growth year-over-year and a 3% decline quarter-over-quarter. Our first year-over-year increase since Q3 of 2022 was primarily driven by higher performance-based revenue from enterprise employers, which grew to 25% of total revenue. The sequential decline is consistent with seasonal hiring patterns in the fourth quarter. We finished the year with over 59,000 quarterly paid employers, representing a 2% increase year-over-year and a 12% decrease sequentially. This marks our second consecutive quarter of year-over-year growth, demonstrating the stability of our employer base despite macroeconomic volatility. The sequential decline is consistent with our historical seasonal patterns and reflects the typical slowdown of hiring during the holiday period. Revenue per paid employer was $1,889, down 2% year-over-year and up 10% sequentially. The year-over-year decrease reflects continued softness in hiring demand, particularly among SMB customers. The sequential increase is primarily driven by the seasonal reduction in the number of paid employers in the fourth quarter. Our net loss in the fourth quarter was $0.8 million. Adjusted EBITDA in Q4 '25 was $16.2 million, equating to a margin of 15%. This is higher compared to 13% in Q4 '24 and 8% in Q3 '25, with increases driven by a return to revenue growth and continued expense discipline. Our full year adjusted EBITDA margin of 9% exceeded the mid-single-digit expectations we shared at the beginning of the last year. Cash, cash equivalents and marketable securities was $409.1 million as of December 31, 2025. During Q4 '25, we repurchased 1.8 million shares totaling $8 million. As Ian mentioned, after more than 10 incredible years at ZipRecruiter, I'll be stepping down from my role as CFO to pursue a new opportunity. I'm deeply grateful for the growth and experiences that have shaped both my career and me personally. Thank you to our amazing employees for your dedication and partnership. It's been an honor to be a part of this team, and I'm excited to see how ZipRecruiter will continue to transform how hiring is done. With that, I'll pass it back to Dave to discuss our guidance.

Thanks, Tim. I echo Ian's comments, and we wish you luck in your future endeavors. Moving on to quarterly guidance. Our Q1 2026 revenue guidance of $106 million at the midpoint, down 4% year-over-year and 5% sequentially, reflects the lower baseline of paid employers as we started Q1. Our adjusted EBITDA guidance midpoint of $5 million represents a 5% margin, which is flat year-over-year and demonstrates our financial flexibility as we navigate the current labor market backdrop. Looking beyond Q1, we expect hiring demand to follow a typical seasonal cadence over 2026, albeit at subdued levels given the lower starting point post holidays. We believe a likely result in this scenario is for us to achieve flat year-over-year revenue in 2026, which is a 5 percentage point improvement over last year. In this scenario, we expect adjusted EBITDA margins to expand by 5 percentage points from 9% in 2025 to 14% in 2026. This improvement reflects our continued cost discipline alongside targeted investments to ensure ZipRecruiter emerges from this cycle in a position of strength. The stabilization in the business we've seen despite a weak hiring environment is encouraging, and we remain confident in our long-term growth opportunity. We believe our flexible operating model and healthy balance sheet position ZipRecruiter to take advantage of growth opportunities and position us to outperform the broader hiring category over time. With that, we can now open the line for questions. Operator?

[Operator Instructions] Your first question comes from the line of Eric Sheridan from Goldman Sachs.

Tim, thanks for all the help over the years, wishing you the best of luck. Maybe 2, if I can. First, if you look at the demand environment you're facing right now, any different characterizations you would give on the employer side from what you're seeing from large enterprises relative to SMB? And any indications how that might change as we progress into Q1 and deeper into the year?

Eric, this is Dave. Great question. Yes. So what we saw last quarter was in the latter half of the quarter over the holiday period a -- after a strong start to the quarter was a slowdown in SMB demand, particularly. And we've been encouraged since the beginning of the year, as we said, that SMB demand looks as good or actually slightly better than last year and better than we've seen in several years. So our expectation is that from a lower baseline, given the weak latter half of holiday period of last quarter, from that lower baseline, we'll see a stable overall macro environment and that our ongoing investments and continued operational improvements as we just detailed, ZipIntro, resume database and most importantly, perhaps our execution in enterprise, where we see a similarly -- forecasting as the most likely scenario, a similarly stable demand environment but where our execution and obsession with hitting customers' targets, defining clearly for them what their target is and what their definition of success is and then making sure we hit it and are having our -- both our product and our go-to-market teams work relentlessly to make sure that happens. That's paying off, and we see it -- for the first time in 4 years, seeing slight sequential growth in performance marketing revenue in Q4 versus Q3. So what we foresee is -- we're ready for a wide range of scenarios as always, but the most likely scenario being the overall demand environment for both SMB and enterprise being flat from this lower start and that our investments allow us despite a weak starting point for -- to start the year in Q1 that we get to flat this year and are able to expand margins as we do it so that we're increasing revenue by 5 percentage points versus last year and increasing margin by 5 percentage points at the same time.

Your next question comes from the line of Ralph Schackart from William Blair.

Maybe just a follow-up on Eric's question. Just trying to square a little bit, I guess, some of the more soft conditions you saw in Q4 after a strong start compared with, I guess, a stronger rebound in Q1, particularly I think you called out SMB. Anything that you sort of call out there for the, I guess, the dramatic or pretty sharp rebound there? And then two, just in terms of the traffic you're seeing from the LLMs, can you maybe sort of walk us through how that traffic is behaving, performing, perhaps converting? And then is it at a level perhaps in 2026 when it could start to impact the results? Just any other color on the LLM traffic would be great.

Thanks, Ralph. This is Dave. I'll take the first one and let Ian take the second one. So on the soft Q4, I think it very much -- what we saw in Q4 very much mapped to what the job openings numbers from the government look like where we saw that 10% decline. And each -- even when you seasonally adjust it, December is always the hardest month of the year to forecast and is always the seasonally weakest month. But even when you adjust for seasonality as the government does in their official data, there was a month-over-month decline each month in Q4 in terms of job openings, and that's very consistent with what we saw. And as we look at it, as we always say, our employer base looks like the whole U.S. economy. But when we look at particular areas of weakness and strength, health care remained resilient as it has for several years now and demographic changes and other structural reasons for that in the U.S. economy. But on the flip side, retail, food service, education were all areas of weak spots during the quarter, and we saw those degrade. And then to the point I said earlier, starting January 1, we saw a different story where we've seen a nice pickup in activity. And so that gives us the confidence to say the most likely scenario of those that we prepare for is that we will be flat from that lower baseline for the year.

And speaking to the LLM question, to give context, ZipRecruiter gets traffic from a wide array of different media sources and sites, and that includes everything from other job sites to organic traffic to SEM to response advertising and LLMs are just one part of the mix. What makes them interesting is they are the fastest growing in terms of both they themselves as a category as well as the traffic that we are getting from them. However, in the overall mix of traffic that ZipRecruiter gets, overwhelmingly still traffic that is highly engaged and active on the site is still coming from the variety of traditional sources. The difference between LLM traffic and those sources is not much. They are active job seekers who are eager and engaged. They are still continuing to grow at a healthy pace, and we are excited about the momentum that we see with LLMs.

Your next question comes from the line of Trevor Young from Barclays.

First one, just as we think about the cadence of growth throughout the year, it would kind of suggest that 1Q is maybe the low point for the year and you would exit the year at low single-digit territory or something like that, such that you're flat overall even with tough compares. What kind of informs that view that growth will accelerate from here given that backdrop? Particularly because you are seeing EBITDA margin expansion, so that maybe suggests not leaning in on marketing meaningfully. And then second one, just on capital allocation. You have about $200 million in cash on hand, Guide implies free cash flow maybe improves a bit here in '26. Clearly, a willingness to buy back stock in the last year. Should we expect opportunistic repurchases of the stock given a bit of an uptick in the outlook here? And then relatedly, any thoughts on the trade-off of stock versus debt repurchases because I know a lot of folks on the credit side also care on that.

Great. Thanks, Trevor. So in terms of the cadence throughout the year, I think what gives us confidence is, a, what we've seen year-to-date since January 1; and b, going back longer than year-to-date, the momentum we have with enterprise. And to the point you made, which is astute that margins going up while we see the cadence of improvement over the course of the year being the most likely scenario is consistent with enterprise continuing to outperform where we're not as -- the demand generation is much more sales-led and much less marketing led on the enterprise side of things. And so those teams are more -- the expense line on those teams is more stable and preexisting, and we see a lot of investments that we've made over the past couple of years starting to pay off and is less dependent on same quarter sales and marketing. Obviously, we remain flexible to and we'll adapt based on changing environments we see, but that's the most likely thing we see, and we see more than just dating back to January 1 in terms of momentum there with that part of the business. And then to your question on capital allocation, so our sort of strategic framework remains the same. The top priority always is organic growth. We were not just EBITDA profitable last year, but free cash flow profitable as well and obviously talked about seeing expanding margins this year. So in terms of organic growth, we're well covered, but we'll always prioritize that first. The second priority is M&A opportunities. You saw us take action there in terms of Breakroom where there's a really strong value proposition to both job seekers and employers about how our entire marketplace gets stronger with better employer branding and giving job seekers the real straight dope on what it's like to work -- in frontline workers, in particular, what it's like to work at a particular employer. The third priority is return of capital. And so as you pointed out, we've been a consistent returner of capital last quarter, about $8 million for about 1.8 million shares. And every single time we have an opportunity to allocate capital, we think about what are our resources. We currently have a very robust balance sheet and lots of liquidity, as you mentioned. And we look at the different opportunity set of different opportunities to repurchase shares or bonds or whatever, as you mentioned, and look at the ROI there, and we'll take action accordingly. You've seen us do that before. We will continue to evaluate that as we see opportunities to do so.

Your next question comes from the line of Josh Chan from UBS.

Good luck, Tim. I guess maybe just 2 questions. So I guess, first, what do you make of the Q4 slowdown and then Q1 recovery? And relatedly, why doesn't the Q1 recovery get you back to the same spot? Is it just like not enough of a recovery in magnitude? And then the second question would be, are you seeing meaningful changes in terms of how employers are trying to find candidates as in moving away from the traditional resume? I mean you launched this Be Seen First feature, which allows people to feature different things other than their resume. So just curious if something like that is starting to happen in the environment?

Yes, go ahead.

So on the first one, your question is a good one. So the way we think about it in terms of the cadence in Q1, it is very typical in Q1, given the seasonality, as I mentioned or we mentioned before, that the holiday period is the weakest period of the year seasonally, then Q1 can look fairly flat to Q4 in a typical year, plus or minus a couple of points. But it's really a story of building throughout the quarter from a lower starting point given what happens, the slowdown over the holidays, especially in the SMB part of the business. And so what we see here is just a steeper climb. And the starting point was lower. The trend line within the quarter looks good, but we're just starting from a lower point where the SMB part of the business was a little bit weaker over the course of late November and December, which is what causes that cadence.

And then on Be Seen First, without question, the world of recruiting is experiencing a renaissance as it relates to both the way candidates are sourced and the way -- the opportunities they have to communicate with the employers and the hiring managers. Resumes are very much still in play. They are a necessary part of a comfortable expected process that employers are not willing to let go of. What Be Seen First is, it's really a mechanism for job seekers to show their enthusiasm, to stand out when they apply to a job in a novel way, and job seekers are using it exactly as we intended. They are not spamming employers with Be Seen First. They're being selective about which jobs that they express their enthusiasm for and employers are responding as we would expect, which is in a sea of candidates, many of whom resumes look highly qualified for the role in which they are applying. They are looking for other signals that will allow certain candidates to stand out from the rest of the pack. A candidate participating in Be Seen First, showing their enthusiasm and getting pushed to the top is not only advantaging themselves, they're actually doing the employer a favor by giving them one more method from which to assess the pool of candidates they received to decide who were the very best that they want to bring in for an interview.

Your next question comes from the line of Kishan Patel from Raymond James.

This is Kishan Patel on for Josh Beck. You mentioned in the shareholder letter that you're optimizing the platform for Gen AI discovery. How do you think about optimizing the ZipRecruiter platform for agentic search or engagement by job seekers?

Well, this is certainly a topic that we are spending a lot of time thinking about. And we are excited about the potential and opportunities that is represented by AI. There are so many different directions we could choose to take this in. And certainly, already AI is permeating our site. I mean you can go all the way back to our S-1 when we first went public where we described ourselves as an AI-powered marketplace long before there was ever an LLM and everyone was talking about AI. And when we talked about AI, we were really talking about the matching engines that we built that are powered by those billions and billions of interactions between employers and job seekers, which is what allows us to not only do an exceptional job of matching keywords and resumes to the keywords and job descriptions, but also to benefit from what's known as the wisdom of the crowd, where insights can be gleaned by the different AI methodologies that we were applying in order to find the very best jobs for job seekers and the very best candidates for employers. As we look at our own service today, already, you can see AI making its way in. We talked about suggested screening questions in our shareholder letter. That is a product that has reached massive levels of adoption on our product. It's skyrocketed with the launch of suggested screening questions. The difference between putting a blank page in front of an employer and saying, come up with screening questions versus putting a set of AI-created pre-written screening questions in front of them, has been fundamentally night and day. It has been a sea change in how our product works and how applications are processed, and it's fantastic for employers because again, employers are always looking for signal, how can I differentiate between the seemingly equally qualified candidates who I have received, screening questions is a fantastic tool for that. I would expect you will hear many more AI-driven features coming through the ZipRecruiter development team and entering into our platform over the coming years. And I think you will see that AI becomes a fundamental tool and a fundamental advantage for ZipRecruiter to enhance the marketplace that we have already created.

There are no further questions. That concludes the question-and-answer session. That also concludes today's meeting. You may now disconnect.