ZipRecruiter 2025 Q1 Earnings Misses Targets as Net Loss Widens 97%

ZipRecruiter (ZIP) reported its fiscal 2025 Q1 earnings on May 08th, 2025. The company missed expectations with a revenue of $110.1 million, down 10% year-over-year. Despite exceeding the midpoint of guidance, this decline highlights ongoing challenges. Guidance remains cautious amid macroeconomic uncertainties, with expectations in line with broader hiring trends.

Revenue

The total revenue of ZipRecruiter decreased by 10.0% to $110.06 million in 2025 Q1, down from $122.24 million in 2024 Q1.

Earnings/Net Income

ZipRecruiter's losses deepened to $0.13 per share in 2025 Q1 from a loss of $0.07 per share in 2024 Q1, indicating a poor performance. Meanwhile, the company's net loss widened to $-12.83 million in 2025 Q1, representing a 97.2% increase from the $-6.50 million loss recorded in 2024 Q1. The EPS reflects worsening financial conditions.

Price Action

The stock price of ZipRecruiter has climbed 5.94% during the latest trading day, has climbed 5.74% during the most recent full trading week, and has jumped 10.02% month-to-date.

Post Earnings Price Action Review

Investors following the strategy of buying ZipRecruiter shares after a revenue drop and holding for 30 days have faced significant underperformance. Over the past five years, this approach resulted in a return of -53.70%, compared to a benchmark return of 33.90%, leading to an excess return of -87.61%. The compound annual growth rate (CAGR) stood at -31.80%, with a high maximum drawdown of -65.60%. Moreover, the strategy’s Sharpe ratio was -0.83, indicating poor risk-adjusted returns and substantial losses, underscoring the need for a reassessment of investment strategies in light of ZipRecruiter's performance trends.

CEO Commentary

"Ian Siegel, CEO of ZipRecruiter, noted that Q1’25 revenue of $110.1 million exceeded the midpoint of guidance but represented a 10% decline year-over-year and a 1% decrease sequentially from Q4’24. He described the sequential revenue decline as typical for the season, indicating employers are resuming hiring campaigns post-holiday, contrasting with larger declines in previous years. Siegel expressed cautious optimism, highlighting that employers are adopting a 'wait-and-see' approach amid economic uncertainty. He emphasized continued strategic investments in product and technology to enhance marketplace engagement, positioning the company for growth when hiring activity rebounds."

Guidance

ZipRecruiter acknowledges current economic uncertainty affecting employer hiring but maintains a commitment to strategic investments. The company does not anticipate a sharp pullback in hiring, although there has been no acceleration in activity entering Q2. Forward-looking statements indicate expectations of growth tied to improvements in hiring trends, reinforcing confidence in future performance despite prevailing macroeconomic challenges.

Additional News

In recent developments, ZipRecruiter has announced expanded partnerships with various educational institutions to enhance its recruitment capabilities. These collaborations aim to leverage ZipRecruiter's platform to facilitate internships and entry-level positions, aligning with the company's strategic focus on connecting job seekers with opportunities. Additionally, ZipRecruiter has introduced a new AI-driven feature, Phil, designed to personalize job recommendations, highlighting the company's commitment to technological advancements. The integration of AI is expected to improve the user experience by providing tailored job matches, enhancing engagement on the platform. Lastly, ZipRecruiter has appointed a new Chief Technology Officer (CTO), Emily Chen, who brings extensive experience in AI development, further strengthening the company's leadership team and driving its technological initiatives forward.