10-Q 1 zip-20220930.htm 10-Q zip-20220930
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 001-40406

ZIPRECRUITER, INC.
(Exact name of registrant as specified in its charter)
Delaware27-2976158
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification Number)
604 Arizona Avenue
Santa Monica, CA 90401
(877) 252-1062
(Address, including zip code, and telephone number, including area code, of principal executive offices)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A common stock, $0.00001 par value per shareZIPNew York Stock Exchange
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes  ☒   No  ☐ 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filer  Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).     Yes   ☐     No   
The registrant had 79,824,291 shares of Class A common stock outstanding and 30,361,349 shares of Class B common stock outstanding as of November 2, 2022.

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NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements. All statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact, including statements regarding our future operating results and financial position, our business strategy and plans, market growth, and our objectives for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “potential,” “continue,” “anticipate,” “intend,” “expect,” “could,” “would,” “project,” “plan,” “target,” and similar expressions are intended to identify forward-looking statements.
Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:
our future financial performance, including our expectations regarding our revenue, cost of revenue, gross profit, operating expenses including changes in research and development, sales and marketing, and general and administrative expenses (including any components of the foregoing), and our ability to achieve and/or maintain future profitability;
effects of a variety of macroeconomic factors that affect our business, the employment market, and the economy in general, including inflationary pressures, a higher interest rate environment, increasing borrowing costs and the ongoing impacts of the COVID-19 pandemic;
our business plan and our ability to effectively manage our growth;
our ability to compete with well-established competitors and new entrants;
our ability to enhance our marketplace and introduce new and improved offerings;
our ability to increase the number of employers and job seekers in our marketplace;
our ability to strengthen our technology that underpins our marketplace;
our ability to attract and retain qualified employees and key personnel;
our ability to execute our strategy;
beliefs and objectives for future operations;
the effects of seasonal trends on our results of operations;
our ability to expand to new markets;
our ability to maintain, protect, and enhance our brand and intellectual property;
our ability to stay in compliance with laws and regulations that currently apply or become applicable to our business;
economic and industry trends, projected growth, or trend analysis; and
increased expenses associated with being a public company.
We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q.
We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including those described in the section titled “Risk Factors.” Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to

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predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, the future events and trends discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.
You should not rely upon forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, performance, or achievements. We undertake no obligation to update any of these forward-looking statements for any reason after the date of this Quarterly Report on Form 10-Q or to conform these statements to actual results or revised expectations, except as required by law.
You should read this Quarterly Report on Form 10-Q with the understanding that our actual future results, performance, and events and circumstances may be materially different from what we expect.
As used herein, “ZipRecruiter,” “the Company,” “we,” “us,” “our,” and similar terms include ZipRecruiter, Inc. and its subsidiaries, unless the context indicates otherwise.
SUMMARY OF RISK FACTORS
Our business is subject to numerous risks and uncertainties, including those highlighted in the section titled “Risk Factors” later in this Quarterly Report on Form 10-Q. These risks include, but are not limited to, the following:
We face intense competition and could lose market share to our competitors, which could adversely affect our business, operating results, and financial condition.
Our business is significantly affected by fluctuations in general economic conditions. There is risk that any economic recovery may be short-lived and uneven, and may not result in increased demand for our services.
COVID-19 and the related health policy measures and macroeconomic impacts have caused significant uncertainty and disruption in our business operations. The ongoing effects of the COVID-19 pandemic continue to be unpredictable, and may have an adverse effect on our business, results of operations, and financial condition.
Our marketplace functions on software that is highly technical and complex and if it fails to perform properly, our reputation could be adversely affected, our market share could decline and we could be subject to liability claims.
Our future success depends in part on employers purchasing and renewing or upgrading subscriptions and performance-based services from us. Any decline in our user renewals or upgrades or performance-based services could harm our future operating results.
We have experienced growth in recent periods and expect to continue to invest in our growth for the foreseeable future. If we cannot manage our growth effectively, our business, operating results, and financial condition could be adversely affected.
Significant segments of the market for job advertisement services may have hiring needs and service preferences that are subject to greater volatility than the overall economy.
Our efforts and ability to sell to a broad mix of businesses could adversely affect our operating results in a given period.

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Our business depends largely on our ability to attract and retain talented employees, including senior management and key personnel. If we lose the services of Ian Siegel, our Chief Executive Officer, or other members of our senior management team, we may not be able to execute on our business strategy.
If internet search engines’ methodologies or other channels that we use to direct traffic to our website are modified to our disadvantage, or our search result page rankings decline for other reasons, our user growth could decline.
Our quarterly results may fluctuate significantly and may not fully reflect the underlying performance of our business, which makes our future results difficult to predict.
Our success depends on our ability to maintain the value and reputation of the ZipRecruiter brand.
Our indebtedness could adversely affect our liquidity and financial condition.
Market volatility may affect the value of an investment in our Class A common stock and could subject us to litigation.
The dual class structure of our common stock concentrates voting control with those stockholders who held our capital stock prior to our listing, including our directors, executive officers, and 5% stockholders. This ownership will limit or preclude your ability to influence corporate matters, including the election of directors and the approval of any change of control transaction.

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Part I - FINANCIAL INFORMATION
Item 1. Financial Statements
ZipRecruiter, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except par values)
(unaudited)

September 30,December 31,
20222021
Assets
Current assets
Cash and cash equivalents$482,978 $254,621 
Marketable securities186,723  
Accounts receivable, net of allowances of $3,136 and $3,325 at September 30, 2022 and December 31, 2021, respectively
47,640 41,657 
Prepaid expenses and other assets11,334 9,721 
Deferred commissions, current portion4,740 4,640 
Total current assets733,415 310,639 
Property and equipment, net8,521 8,702 
Operating lease right-of-use assets13,145 18,515 
Internal-use software, net15,433 13,657 
Deferred commissions, net of current portion4,522 4,011 
Goodwill1,724 1,724 
Deferred tax assets, net40,626 38,029 
Other assets1,025 3,342 
Total assets$818,411 $398,619 
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable$13,736 $24,862 
Accrued expenses75,761 86,213 
Accrued interest5,938  
Deferred revenue24,059 23,253 
Operating lease liabilities, current portion5,677 6,109 
Other current liabilities2,456 2,457 
Total current liabilities127,627 142,894 
Operating lease liabilities, net of current portion14,339 19,179 
Long-term borrowings541,313  
Other long-term liabilities1,870 1,578 
Total liabilities685,149 163,651 
Commitments and contingencies (Note 7)
Stockholders' equity
Preferred Stock, $0.00001 par value; 50,000 shares authorized as of September 30, 2022 and December 31, 2021; no shares issued and outstanding as of September 30, 2022 and December 31, 2021
  
Class A common stock, $0.00001 par value; 700,000 shares authorized as of September 30, 2022 and December 31, 2021; 81,090 and 87,843 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively
1 1 
Class B common stock, $0.00001 par value; 700,000 shares authorized as of September 30, 2022 and December 31, 2021; 30,557 and 30,571 shares issued and 30,362 and 30,376 shares outstanding as of September 30, 2022 and December 31, 2021, respectively
  
Class B treasury stock, 195 shares outstanding as of September 30, 2022 and December 31, 2021
(644)(644)
Additional paid-in capital159,752 303,395 
Accumulated deficit(25,701)(67,784)
Accumulated other comprehensive loss(146) 
Total stockholders' equity133,262 234,968 
Total liabilities and stockholders' equity$818,411 $398,619 
The accompanying notes are an integral part of these condensed consolidated financial statements.
6

ZipRecruiter, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022202120222021
Revenue$226,968 $212,672 $694,171 $521,004 
Cost of revenue21,839 22,277 65,202 59,838 
Gross profit205,129 190,395 628,969 461,166 
Operating expenses
Sales and marketing112,574 112,178 386,795 289,825 
Research and development33,008 27,155 93,577 82,079 
General and administrative30,076 33,094 79,805 123,145 
Total operating expenses175,658 172,427 560,177 495,049 
Income (loss) from operations29,471 17,968 68,792 (33,883)
Other income (expense)
Interest expense(7,361)(221)(21,157)(696)
Other income (expense), net321 (154)332 51 
Total other expense, net(7,040)(375)(20,825)(645)
Income (loss) before income taxes22,431 17,593 47,967 (34,528)
Income tax expense (benefit)1,875 (4,467)5,884 (17,139)
Net income (loss)20,556 22,060 42,083 (17,389)
Less: Accretion of redeemable convertible preferred stock   (1,480)
Net income (loss) attributable to Class A and Class B common stockholders$20,556 $22,060 $42,083 $(18,869)
Net income (loss) per share attributable to Class A and Class B common stockholders:
Basic$0.18 $0.19 $0.36 $(0.19)
Diluted$0.17 $0.17 $0.34 $(0.19)
Weighted average shares used in computing net income (loss) per share attributable to Class A and Class B common stockholders:
Basic113,059 115,372 116,184 97,159 
Diluted119,810 126,474 123,616 97,159 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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ZipRecruiter, Inc.
Condensed Consolidated Statements of Comprehensive Income (Loss)
(in thousands)
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022202120222021
Net income (loss)$20,556 $22,060 $42,083 $(17,389)
Other comprehensive loss, net of tax
Unrealized losses on available-for-sale debt securities(146) (146) 
Total other comprehensive loss(146) (146) 
Total comprehensive income (loss)$20,410 $22,060 $41,937 $(17,389)

The accompanying notes are an integral part of these condensed consolidated financial statements.
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ZipRecruiter, Inc.
Condensed Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)
(in thousands)
(unaudited)


Three and Nine Months Ended September 30, 2022
Redeemable Convertible Preferred StockCommon StockClass B Treasury StockAdditional
Paid-in
Capital
Accumulated
Deficit
Accumulated Other Comprehensive LossTotal
Stockholders'
Equity
Series ASeries BClass AClass B
SharesAmountSharesAmountSharesAmountSharesAmountSharesAmount
Balance as of December 31, 2021 $  $ 87,843 $1 30,571 $ (195)$(644)$303,395 $(67,784)$ $234,968 
Conversion of Class B stock to Class A stock— — — 1,446 — (1,446)— — — — — — — 
Issuance of common stock upon exercise of options— — — — — 1,180 — — — 2,078 — — 2,078 
Issuance of common stock upon the vesting and settlement of restricted stock units— — — 354 — 433 — — — — — — — 
Stock-based compensation— — — — — — — — — 21,112 — — 21,112 
Shares withheld related to net share settlement— — — (133)— (181)— — — (5,902)— — (5,902)
Shares issued under employee stock purchase plan— — — 290 — — — — — 5,293 — — 5,293 
Repurchase and retirement of common stock— — — (2,420)—  — — — (62,349)— — (62,349)
Net income— — — — — — — — — — 8,417 — 8,417 
Balance as of March 31, 2022 $ $ 87,380 $1 30,557 $ (195)$(644)$263,627 $(59,367)$ $203,617 
Conversion of Class B stock to Class A stock— — — 663 — (663)— — — — — — — 
Issuance of common stock upon exercise of options— — — 5 — 460 — — — 1,099 — — 1,099 
Issuance of common stock upon the vesting and settlement of restricted stock units— — — 275 — 348 — — — — — — — 
Vesting of early exercised options— — — — — — — — — 97 — — 97 
Stock-based compensation— — — — — — — — — 18,200 — 18,200 
Shares withheld related to net share settlement— — — (94)— (145)— — — (3,665)— — (3,665)
Repurchase and retirement of common stock— — — (4,807)—  — — — (82,878)— — (82,878)
Net income— — — — — — — — — — 13,110 — 13,110 
Balance as of June 30, 2022 $ $ 83,422 $1 30,557 $ (195)$(644)$196,480 $(46,257)$ $149,580 
Conversion of Class B stock to Class A stock— — — 619 — (619)— — — — — — — 
Issuance of common stock upon exercise of options— — — — — 421 — — — 646 — — 646 
Issuance of common stock upon the vesting and settlement of restricted stock units— — — 380 — 341 — — — — — — — 
Stock-based compensation— — — — — — — — — 19,844 — — 19,844 
Shares withheld related to net share settlement— — — (127)— (143)— — — (5,168)— — (5,168)
Shares issued under employee stock purchase plan— — — 159 — — — — — 2,836 — — 2,836 
Repurchase and retirement of common stock— — — (3,363)—  — — — (54,886)— — (54,886)
Net income— — — — — — — — — — 20,556 — 20,556 
Other comprehensive loss— — — — — — — — — — — (146)(146)
Balance as of September 30, 2022 $ $ 81,090 $1 30,557 $ (195)$(644)$159,752 $(25,701)$(146)$133,262 


The accompanying notes are an integral part of these condensed consolidated financial statements.
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ZipRecruiter, Inc.
Condensed Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)
(in thousands)
(unaudited)


Three and Nine Months Ended September 30, 2021
Redeemable Convertible Preferred StockCommon StockClass B Treasury StockAdditional
Paid-in
Capital
Accumulated
Deficit
Accumulated Other Comprehensive LossTotal
Stockholders' Equity (Deficit)
Series ASeries BClass AClass B
SharesAmountSharesAmountSharesAmountSharesAmountSharesAmount
Balance as of December 31, 20202,271 $87,118 6,031 $49,738  $ 78,283 $ (195)$(644)$21,732 $(71,384)$ $(50,296)
Accretion of redeemable convertible preferred stock— 961 36 — — — — 0— — (997)— — (997)
Issuance of common stock upon exercise of options— — — — — 1,965 — — — 3,660 — — 3,660 
Repurchase and retirement of common stock— — — — — (50)— — — (450)— — (450)
Stock-based compensation— — — — — — — — — 1,290 — — 1,290 
Net income— — — — — — — — — — 13,398 — 13,398 
Balance as of March 31, 20212,271 $88,079 6,031$49,774  $ 80,198 $ (195)$(644)$25,235 $(57,986)$ $(33,395)
Accretion of redeemable convertible preferred stock— 466 17— — — — — — (483)— — (483)
Conversion of redeemable convertible preferred stock to common stock(2,271)(88,545)(6,031)(49,791)— — 24,202 1 — — 138,335 — — 138,336 
Conversion of convertible notes with related parties to common stock— — — — — 3,085 — — — 25,653 — — 25,653 
Conversion of Class B stock to Class A stock— — — 82,714 1 (82,714)(1)— — — — —  
Issuance of common stock upon exercise of options— — — — — 5,282 — — — 8,720 — — 8,720 
Repurchase and retirement of common stock— — — — — (100)— — — (2,300)— — (2,300)
Vesting of early exercised options— — — — — — — — — 97 — — 97 
Issuance of common stock upon the vesting and settlement of restricted stock units— — — — — 2,278 — — — — — — — 
Stock-based compensation— — — — — — — — — 65,121 — — 65,121 
Net loss— — — — — — — — — — (52,847)— (52,847)
Balance as of June 30, 2021 $ $ 82,714 $1 32,231 $ (195)$(644)$260,378 $(110,833)$ $148,902 
Conversion of Class B stock to Class A stock— — 2,038  (2,038) — —  — —  
Issuance of common stock upon exercise of options— — — — — 1,036 — — — 2,461 — — 2,461 
Vesting of early exercised options— — — — — — — — — 99 — — 99 
Issuance of common stock upon the vesting and settlement of restricted stock units— — — 112 — 542 — — — — — — — 
Stock-based compensation— — — — — — — — — 22,507 — — 22,507 
Net income— — — — — — — — — — 22,060 — 22,060 
Balance as of September 30, 2021 $ $ 84,864 $1 31,771 $ (195)$(644)$285,445 $(88,773)$ $196,029 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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ZipRecruiter, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Nine Months Ended
September 30,
20222021
Cash flows from operating activities
Net income (loss)$42,083 $(17,389)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Stock-based compensation expense57,478 87,625 
Depreciation and amortization7,989 6,999 
Provision for bad debts2,203 1,296 
Deferred income taxes(2,547)(18,272)
Non-cash lease expense3,467 4,113 
Other2,682 129 
Change in operating assets and liabilities:
Accounts receivable(8,186)(23,762)
Prepaid expenses and other current assets(1,740)(6,122)
Deferred commissions, net(611)(676)
Other assets2,090 43 
Accounts payable(11,008)18,672 
Accrued expenses and other liabilities(11,163)28,066 
Accrued interest5,938  
Deferred revenue 805 10,312 
Operating lease liabilities(5,132)(1,259)
Net cash provided by operating activities84,348 89,775 
Cash flows from investing activities
Purchases of property and equipment(2,224)(5,684)
Capitalized internal-use software costs(6,336)(5,479)
Purchases of marketable securities(186,719) 
Net cash used in investing activities(195,279)(11,163)
Cash flows from financing activities
Payment of issuance costs for credit facility— (1,270)
Proceeds from issuance of senior unsecured notes550,000  
Payment of senior unsecured notes’ issuance fees(9,378)— 
Payments of tax withholdings on net settlement of equity awards(14,735) 
Repurchase of common stock(198,678)(2,750)
Proceeds from exercise of stock options3,950 15,750 
Proceeds from issuance of stock under employee stock purchase plan8,129  
Net cash provided by financing activities339,288 11,730 
Net increase in cash and cash equivalents228,357 90,342 
Cash and cash equivalents
Beginning of period254,621 114,539 
End of period$482,978 $204,881 
Supplemental disclosure of non-cash activities
Capitalized assets included in accounts payable and accrued expenses$1,053 $1,347 
Stock-based compensation capitalized for software1,678 1,293 
Repurchase of common stock accrued but not yet settled1,435