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ZipRecruiter share price plunges as CEO admits to a “cooling hiring environment”
https://www.whatjobs.com/news/usa/us-business-news/ziprecruiter-share-price-plunges-as-ceo-admits-to-a-cooling-hiring-environment
By Kris Paterson in US business news, posted August 18, 2022
Online job search giant Ziprecruiter.com has admitted that there is " cooling in the hiring environment" in its latest quarterly stock market report.
Reported earnings of $239 million were not enough to impress investors as the company's stock price dropped from almost 21 cents per share to 18 cents (9 percent).
Year to date, the Ziprecruiter share price is down 27 percent.
Speaking with Brian Sozzi of Yahoo Finance Zip CEO Ian Siegel was quoted as saying: "What you have right now is effectively peak employment. It is extremely difficult for employers to find people who have the right skills for their open jobs. And a lot of them rather than continuing to recruit are basically trying to do more with the people that they already have."
Ian Siegel Co-Founder and Chief Executive Officer Q2 interview
Speaking on a company earnings call on Monday, August 15, Ian Siegel said:
"Q2 2022 was another exceptionally strong quarter for ZipRecruiter.
"We generated a record $240 million in revenue, up 31 percent over the second quarter of 2021. We posted adjusted EBITDA of $45 million or an adjusted EBITDA margin of 19 percent.
"These results are once again above the guidance provided for both revenue and adjusted EBITDA and demonstrate strong profitability even as we continue to make significant investments in our marketplace. "
"The U.S. labor market added over 350,000 jobs each month in Q2, continuing its record-setting pace.
"These jobs were broad-based across multiple industries.
"The labor market also remained tight, with approximately one unemployed person for every two job openings in Q2 '22.
"However, in spite of the strength of the quarter as a whole and the shortage of talent for currently open job postings, we began to see employers pulling back on job postings during the final weeks of June.
"We see our marketplace as a leading indicator for job activity, and as has now been widely reported, U.S. job openings fell by over 5 percent to 10.7 million in June of 2022.
"As we see signs of a cooling hiring environment, we are revising our 2022 revenue guidance to $890 million at the midpoint.
"A strategic advantage we enjoy is the ability to quickly respond to a changing operating environment.
"We are raising full-year adjusted EBITDA guidance to $170 million at the midpoint.
"This represents an adjusted EBITDA margin of 19 percent, a 3 percentage point increase versus the annual guidance we provided in May, and demonstrates the resiliency of our business and our commitment to profitable growth. We remain confident in our strategic priorities and focused on the long-term opportunity.
With over 4 million workers still quitting their jobs every month for the past 13 months, it's clear that job seekers are demanding more from where they work and need the right tools to help them find the right jobs.
Employers, in turn, need the best technology to surface the right job seekers in the market. ZipRecruiter helps both sides of the marketplace achieve their goals.
The U.S. labor market saw more than 350,000 new vacancies in Q2 and continues to grow rapidly
Tim Yarbrough Chief Financial Officer of Ziprecruiter pointed out that second quarter revenues of $239 million represent year-on-year growth of 31%, indicating a very vibrant US employment market.
Speaking with The Motely Fool he said: "We expect $220 million of revenue in Q3 '22 at the midpoint, which translates to three percent year-over-year growth.
"We now estimate revenue for the full year of 2022 to be $890 million at the midpoint, representing 20 percent growth versus 2021
Ziprecruiter was founded in 2010, in Santa Monica. According to Linkedin, they employ over 1000 people in the U.S, Canada, UK and Israel.
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