ZipRecruiter signals return to revenue growth with Q4 outlook amid enterprise momentum and AI-driven traffic

Earnings Call Insights: ZipRecruiter (ZIP) Q3 2025

MANAGEMENT VIEW

* CEO Ian Siegel stated that "despite a persistently soft labor market, ZipRecruiter's momentum continued in Q3, which we believe is clear evidence that our strategy is working." Siegel highlighted that from Q1 '25 to Q3 '25, the company delivered consistent sequential revenue and paid employer growth, and Q4 '25 revenue guidance at the midpoint indicates "our first year-over-year increase since Q3 of '22." Siegel emphasized performance-based revenue growth of 12% quarter-over-quarter, the highest in the past three years, driven by enterprise employers. He credited product investments, such as ATS integrations, campaign optimization tools, and improvements to the job seeker experience.
* Siegel noted the company is "focused on reaching people wherever they are no matter how they choose to find work" and observed a "140% sequential increase in visits from generative AI models." He also cited ZipRecruiter's #1 ratings in job search mobile apps and recruiting sites for employers, with over 80% aided brand awareness on both sides of the marketplace.
* President David Travers reported that quarterly paid employers hit 67,000, increasing both sequentially and year-over-year for the first time since Q1 2022. He highlighted "enterprise customer adoption of our automated campaign performance optimization solution increased 19% quarter-over-quarter" and cited ZipIntro's continued momentum with an 80% sequential increase in scheduled sessions. He also noted upgrades to the resume database and the U.S. launch of Breakroom, which published over 10,000 employer profiles.
* CFO Timothy Yarbrough stated, "Revenue in Q3 '25 was $115 million representing a 2% decline year-over-year and a 2% increase sequentially, exceeding the midpoint of our guidance." He added, "Our net loss in Q3 '25 was $9.8 million. Adjusted EBITDA in Q3 '25 was $9.2 million resulting in an adjusted EBITDA margin of 8%." Yarbrough emphasized disciplined capital deployment and investment in high ROI product and marketing opportunities.

OUTLOOK

* Yarbrough provided guidance for Q4 '25, anticipating revenue to be between $109 million and $115 million, with the midpoint representing a 1% increase year-over-year. He said, "our adjusted EBITDA guidance midpoint of $14 million implies a full year 2025 adjusted EBITDA margin of 9%." The guidance assumes a continuation of the stable but subdued hiring environment observed in Q3 and typical seasonality during the holidays.
* Siegel explained that projections are "based on an expectation of a continuation of the market that we are in," indicating an outlook of stability rather than recovery.

FINANCIAL RESULTS

* Revenue for Q3 '25 was $115 million, a 2% increase quarter-over-quarter. Quarterly paid employers reached 67,000, up 3% year-over-year and 1% sequentially. Revenue per paid employer was $1,717, down 4% year-over-year but up 1% sequentially. Performance-based revenue comprised 24% of total revenue, up from 22% in the prior quarter.
* Net loss was $9.8 million. Adjusted EBITDA was $9.2 million with an 8% margin, flat compared to the prior quarter. Cash, cash equivalents, and marketable securities totaled $411 million as of September 30, 2025. The company repurchased 2.2 million shares for $10 million during Q3.

Q&A

* Sergio Segura, KeyBanc: Asked about "product innovation influencing growth against a still weak macro." Siegel responded, "there is clear evidence that our product strategy is working and that in spite of the macro, we have been able to grow both revenue and utilization... we are taking market share."
* Joshua Chan, UBS: Inquired about macro view and Q4 guidance assumptions. Siegel noted, "the overall picture is one of more of a continued modest decline in hiring is what we have observed... our assumptions are fundamentally that the market continues on its current relative trend."
* Chan, UBS: Asked about Q4 margin strength. Yarbrough replied, "what you see in Q4 is reflective of... a typical seasonal pattern in our marketing investment... that's generally going to result in a higher adjusted EBITDA margin in periods like Q4."
* Trevor Young, Barclays: Questioned the drivers of 12% sequential growth in performance-based revenue. Travers said, "it is the cumulative effect of a bunch of things we've been up to for a long time," highlighting both product ratings and campaign performance tools.
* Young, Barclays: Asked if performance-based revenue would be stronger than subscription recovery. Travers replied, "in Q3 we were taking share rather than riding an overall market trend... feel very good about the indicators we see."
* Kishan Patel, Raymond James: Asked about drivers of paid employer trends. Yarbrough cited "a return of new paid -- an increase in new paid employers and a return of former employers... those 2 vectors have been driving the paid employer growth number."
* Patel, Raymond James: Asked about GenAI site traffic conversion. Siegel said, "the quality of traffic from that is on par with the quality of traffic we're seeing from other sources... it is rapidly changing" and Travers emphasized the importance of "creating the great experience once they get there."

SENTIMENT ANALYSIS

* Analysts raised questions about macro headwinds, the durability of product-led growth, and the sustainability of performance-based revenue, reflecting a neutral to slightly positive tone. Their inquiries focused on the drivers of recent outperformance and the impact of emerging channels like generative AI.
* Management maintained a confident but cautious tone, emphasizing product strategy success and disciplined investment. Siegel stated, "we are growing because our solutions are being embraced by the market" and Yarbrough reiterated a focus on "disciplined capital deployment." Management's tone was consistent between prepared remarks and Q&A.
* Compared to the previous quarter, analyst tone shifted from cautious optimism about stabilization to more direct interest in drivers of growth, while management's confidence increased as results began to reflect sequential and year-over-year growth.

QUARTER-OVER-QUARTER COMPARISON

* Revenue increased from $112.2 million in Q2 '25 to $115 million in Q3 '25. Quarterly paid employers rose from 66,300 to 67,000. Revenue per paid employer improved sequentially after a prior decline. Performance-based revenue and enterprise adoption were notably stronger in Q3. Adjusted EBITDA margin remained flat at 8%.
* Q4 '25 guidance projects a return to year-over-year revenue growth, a shift from the stabilization scenario of the prior quarter. Management's remarks reflected increased confidence in product-led growth and market share gains.
* Analysts in Q3 focused more on the sustainability of innovation-driven growth and the impact of AI, compared to Q2's focus on stabilization and sector comparisons. Management's tone in Q3 was more assertive about market share gains and future positioning.

RISKS AND CONCERNS

* Management acknowledged ongoing macroeconomic volatility and a subdued hiring environment, with Q4 guidance assuming these trends persist. Yarbrough stated, "our guidance assumes a continuation of the same stable, but subdued hiring environment observed in Q3."
* Siegel noted that generative AI as a channel is "still emergent" and "rapidly changing," indicating potential uncertainty in traffic and conversion dynamics.
* Management emphasized continued investment in product and technology to mitigate risks and capture future growth, and highlighted disciplined capital deployment.

FINAL TAKEAWAY

ZipRecruiter management underscored the company's ability to generate sequential growth in revenue and paid employers, driven by increased enterprise adoption, performance-based revenue strength, and product innovation. The Q4 2025 revenue outlook signals a return to year-over-year growth for the first time since 2022, while ongoing investments in AI, automation, and marketplace optimization position ZipRecruiter to capture greater market share when broader hiring trends recover.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/zip/earnings/transcripts]

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