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What changed in ZIPRECRUITER, INC.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of ZIPRECRUITER, INC.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+334 added−318 removedSource: 10-K (2024-02-28) vs 10-K (2023-02-27)

Top changes in ZIPRECRUITER, INC.'s 2023 10-K

334 paragraphs added · 318 removed · 258 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWe believe that our employers are able to cost-effectively attract the right job seekers in our marketplace compared to other online recruiting sites due to the combination of the strength of our job seeker community and our proven matching technology that continues to get smarter over time. 1 “Active Job Seeker” means a job seeker who, within a specified period, takes one or more of the following actions: (1) makes at least one visit to a ZipRecruiter-hosted site, (2) launches a ZipRecruiter job seeker iOS mobile application, or (3) opens a ZipRecruiter-hosted engagement email.
Biggest changeWe believe that our employers are able to cost-effectively attract the right job seekers in our marketplace compared to other online recruiting sites and traditional “offline” recruiting service providers due to the combination of the strength of our job seeker community and our proven matching technology that continues to get smarter over time.
That means presenting strong fit job opportunities, proactively pitching potential candidates to employers and providing job seekers with updates on the status of their applications and guidance on how to get more attention from potential employers. This makes job seekers feel supported while searching for work. Creating Value for Employers.
That means presenting strong fit job opportunities, proactively pitching strong fit potential candidates to employers and providing job seekers with updates on the status of their applications and guidance on how to get more attention from potential employers. This makes job seekers feel supported while searching for work. Creating Value for Employers.
Our employees are encouraged to champion great ideas, embrace innovative approaches and use data to advocate for their point of view. • We embrace diversity, equity & inclusion, or DE&I : We believe our company is strengthened by a culture that embraces diversity and inclusion.
Our employees are encouraged to champion great ideas, embrace innovative approaches and use data to advocate for their point of view. • We embrace diversity, equity and inclusion, or DE&I : We believe our company is strengthened by a culture that embraces diversity and inclusion.
The information contained on, or that can 14 Table of Contents be accessed through, any website reference herein is not incorporated by reference into, and is not a part of, this Annual Report on Form 10-K, and the inclusion of such website addresses is as inactive textual references only.
The information contained on, or that can be accessed through, any website reference herein is not incorporated by reference into, and is not a part of, this Annual Report on Form 10-K, and the inclusion of such website addresses is as inactive textual references only. 14 Table of Contents
We have efficiently operated and adapted as a remote and hybrid workforce since the beginning of 2020; however, we maintain office spaces for in-person work in Santa Monica, California, Palo Alto, California, Phoenix, Arizona, the United Kingdom, and Tel Aviv, Israel.
We have efficiently operated and adapted as a remote and hybrid workforce since the beginning of 2020; however, we maintain office spaces for in-person work in Santa Monica, California, Palo Alto, California, Phoenix, Arizona, London, the United Kingdom, and Tel Aviv, Israel.
With a relevant data pipeline created from billions of interactions between job seekers and employers, we are uniquely positioned to harness that data to fuel the advanced artificial intelligence behind our matching, recommendation and marketplace optimization capabilities. Through our deep learning-based natural language processing, we understand job seekers’ and employers’ nuanced needs.
With a relevant data pipeline created from billions of interactions between job seekers and employers, we are uniquely positioned to harness that data to fuel the advanced artificial intelligence, or AI, behind our matching, recommendation and marketplace optimization capabilities. Through our deep learning-based natural language processing, we understand job seekers’ and employers’ nuanced needs.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Factors Affecting our Performance—Seasonality.” Intellectual Property We rely on a combination of trademarks and trade secrets, as well as contractual provisions and restrictions, to protect our intellectual property. As of December 31, 2022, we owned three U.S. and 20 international trademark registrations for the mark ZIPRECRUITER.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Factors Affecting our Performance—Seasonality.” Intellectual Property We rely on a combination of trademarks and trade secrets, as well as contractual provisions and restrictions, to protect our intellectual property. As of December 31, 2023, we owned three U.S. and 20 international trademark registrations for the mark ZIPRECRUITER.
Collectively, we view the team at ZipRecruiter as our greatest asset, and we take great pride in having been recognized by companies such as Comparably and Newsweek for various awards including “Best Company Culture”, “Best Place to Work,” and “Newsweek’s Top 100 Most Loved Workplaces” to name a few.
Collectively, we view our team as our greatest asset, and we take great pride in having been recognized by companies such as Comparably and Newsweek for various awards including “Best Company Culture”, “Best Place to Work,” and “Newsweek’s Top 100 Most Loved Workplaces” to name a few.
We also use our Investor Relations page on our website at www.ziprecruiter.com, press releases, public conference calls, public webcasts, Twitter feed (@ZipRecruiter), Facebook page, and LinkedIn page as means of disclosing material information and for complying with our disclosure obligations under Regulation FD.
We also use our Investor Relations page on our website at www.ziprecruiter.com, press releases, public conference calls, public webcasts, X (formerly known as Twitter) feed (@ZipRecruiter), Facebook page, and LinkedIn page as means of disclosing material information and for complying with our disclosure obligations under Regulation FD.
Personalized Recruiter Assistance • “Phil,” your personal (automated) recruiter . Our automated recruiter “Phil” welcomes job seekers to our marketplace and engages with them throughout their onboarding and job seeking journeys. Through Phil, job seekers are presented with curated opportunities for which they might be a Great Match.
Personalized Recruiter Assistance • “Phil,” your (automated) career advisor . Our automated career advisor “Phil” welcomes job seekers to our marketplace and engages with them throughout their onboarding and job seeking journeys. Through Phil, job seekers are presented with curated opportunities for which they might be a Great Match.
Our Employees and Human Capital Resources As of December 31, 2022, we employed over 1,400 individuals across the United States, the United Kingdom, Canada and Israel. We also engage independent contractors and consultants.
Our Employees and Human Capital Resources As of December 31, 2023, we employed over 1,000 individuals across the United States, the United Kingdom, Canada and Israel. We also engage independent contractors and consultants.
Our commitment to diversity, equity and inclusion is aligned with our mission to actively connect people from all backgrounds to their next opportunity. • We reward high performance . We focus on attracting and retaining results-oriented employees who are passionate about our mission.
Our commitment to DE&I is aligned with our mission to actively connect people from all backgrounds to their next great opportunity. • We reward high performance . We focus on attracting and retaining results-oriented employees who are passionate about our mission.
We believe our offering to job seekers compares favorably to alternatives due to the combination of our large and unique pool of job opportunities, and the personalized job seeker experience facilitated by our AI-powered personal recruiter named Phil.
Our marketplace is free to job seekers. We believe our offering to job seekers compares favorably to alternatives due to the combination of our large and unique pool of job opportunities, and the personalized job seeker experience facilitated by our AI-powered career advisor named Phil.
In 2023, the UK government may turn its focus back to data protection reform to make further modifications to the UK GDPR. In any event, we are subject to laws, rules, and regulations regarding cross-border transfers of personal data, including laws relating to the transfer of personal data outside the EEA and the UK.
In 2024, the UK government will likely continue its focus on data protection reform to make further modifications to the UK GDPR. In any event, we are subject to laws, rules, and regulations regarding cross-border transfers of personal data, including laws relating to the transfer of personal data outside the EEA and the UK.
We focus on continually making ZipRecruiter faster and simpler for employers and job seekers to use. • Metrics-driven culture. We are a metrics and data-driven company. We are disciplined about setting quantitative operating goals and then finding innovative ways to achieve those goals. • Powerful network effects .
This product design philosophy permeates our entire company. We focus on continually making ZipRecruiter faster and simpler for employers and job seekers to use. • Metrics-driven culture. We are a metrics and data-driven company. We are disciplined about setting quantitative operating goals and then finding innovative ways to achieve those goals.
This addresses the #1 complaint we hear from job seekers: applying to a job and then hearing nothing back. 9 Table of Contents Our Strengths Our core competitive advantages that have been critical to our success include: • Large and unique set of jobs.
This addresses the #1 complaint we hear from job seekers: applying to a job and then hearing nothing back. 9 Table of Contents Our Strengths Our core competitive advantages that have been critical to our success include: • Large and proprietary data set. We capture billions of user interactions facilitated by our marketplace.
For the year ended December 31, 2021, our revenue was $741.1 million and we generated net income of $3.6 million and Adjusted EBITDA of $108.3 million. Adjusted EBITDA is a financial measure not presented in accordance with generally accepted accounting principles, or GAAP.
For the year ended December 31, 2022, our revenue was $904.6 million and we generated net income of $61.5 million and Adjusted EBITDA of $184.9 million. Adjusted EBITDA is a financial measure not presented in accordance with generally accepted accounting principles, or GAAP.
As a result of Brexit, we now have compliance obligations under the EU’s GDPR and the UK’s GDPR. The European Commission adopted a decision on the UK’s adequacy under the GDPR in June 2021, meaning that most data can continue to flow from the European Economic Area, or EEA, to the UK without the need for additional safeguards.
The European Commission adopted a decision on the UK’s adequacy under the GDPR in June 2021, meaning that most data can continue to flow from the European Economic Area, or EEA, to the UK without the need for additional safeguards.
Similarly, other jurisdictions are instituting privacy and data security laws, rules, and regulations, or may do so in the future, which could increase our risk and compliance costs. Seasonality For a discussion of the seasonality of our business, see “Item 7.
Similarly, other jurisdictions are instituting privacy and data security laws, rules, and regulations, or may do so in the future, which could increase our risk and compliance costs.
The California Privacy Rights and Enforcement Act of 2020, or CPRA, which took effect January 1, 2023, further expanded the CCPA with additional data privacy compliance requirements and rights for California consumers, and established a new regulatory agency dedicated to enforcing those requirements. Comprehensive privacy legislation has also been enacted in four other states and imposes similar compliance obligations.
The California Privacy Rights and Enforcement Act of 2020, or CPRA, which took effect January 1, 2023, further expanded the CCPA with additional data privacy compliance requirements and rights for California consumers, and established a new regulatory agency dedicated to enforcing those requirements.
The combination of the scale on both sides of our marketplace, our efficient go-to-market strategy and intelligent use of technology has resulted in compelling financial results. For the year ended December 31, 2022, our revenue was $904.6 million and we generated net income of $61.5 million and Adjusted EBITDA of $184.9 million.
The combination of the scale on both sides of our marketplace, our efficient and highly flexible go-to-market strategy and intelligent use of technology has resulted in compelling financial results. For the year ended December 31, 2023, our revenue was $645.7 million and we generated net income of $49.1 million and Adjusted EBITDA of $175.3 million.
In the United States, several data privacy proposals (including proposed comprehensive legislation) are pending before federal and state legislative and regulatory bodies, which may impose additional obligations and restrictions. 12 Table of Contents In Canada, the federal Personal Information Protection and Electronic Documents Act, or PIPEDA, sets forth ten principles that are designed to protect the personal information of individuals in Canada, and places obligations on companies that process personal information.
In Canada, the federal Personal Information Protection and Electronic Documents Act, or PIPEDA, sets forth ten principles that are designed to protect the personal information of individuals in Canada, 12 Table of Contents and places obligations on companies that process personal information.
Each of these laws creates new privacy rights for consumers residing in those states and new obligations for businesses operating in those states, including obligations relating to data minimization, processing of sensitive information, and targeted advertising practices.
Similar comprehensive privacy legislation has also been enacted in at least ten other U.S. states and imposes similar compliance obligations. These laws create new privacy rights for consumers residing in those states and new obligations for businesses operating in those states, including obligations relating to data minimization, processing of sensitive information, and targeted advertising practices.
We apply an “Act Fast!” label to notify employers when their candidates have received interest from other employers, encouraging them to reach out quickly. In a tight, competitive market for top-quality talent, these notifications prompt hiring managers to move quickly to avoid losing out on a potentially great hire. Flexible Pricing • Flexible pricing based on customer needs .
In a tight, competitive market for top-quality talent, these notifications prompt hiring managers to move quickly to avoid losing out on a potentially great hire. Flexible Pricing • Flexible pricing based on customer needs .
We compete for job seekers on many fronts, including our ability to surface unique and attractive jobs, our ability to simplify the search process, the transparent feedback job seekers receive on the status of their applications, and our trusted brand. Our marketplace is free to job seekers.
We compete for job seekers on many fronts, including our ability to surface unique and attractive jobs, our 1 Based on job seeker app ratings, as of January 2024 from AppFollow for ZipRecruiter, CareerBuilder, Glassdoor, Indeed, LinkedIn, and Monster. 10 Table of Contents ability to simplify the search process, the transparent feedback job seekers receive on the status of their applications, and our trusted brand.
Since our founding, we have invested to build the ZipRecruiter brand to over 80% aided brand awareness among U.S. employers and job seekers. Our Competition Hiring is a vast, competitive, and highly fragmented market. We compete in varying degrees with other online job sites including CareerBuilder, Craigslist, Glassdoor, Indeed, LinkedIn, Monster and hundreds of others.
Our Competition Hiring is a vast, competitive, and highly fragmented market. We compete in varying degrees with other online job sites including CareerBuilder, Craigslist, Glassdoor, Indeed, LinkedIn, Monster and hundreds of others. Competition for Employers Employers have a range of options when posting job opportunities. We compete to attract and retain employers to advertise their jobs in our marketplace.
Informed consent is required for the placement of a cookie or similar technologies on a user’s device and for direct electronic marketing. The GDPR also imposes conditions on obtaining valid consent, such as a prohibition on pre-checked consents and a requirement to ensure separate consents are sought for each type of cookie or similar technology.
In the EU and the UK, for example, regulators are increasingly focusing on compliance with requirements in the digital advertising 13 Table of Contents ecosystem. The GDPR also imposes conditions on obtaining valid consent, such as a prohibition on pre-checked consents and a requirement to ensure separate consents are sought for each type of cookie or similar technology.
Jobs posted on ZipRecruiter are distributed to well over 1,000 sites managed by our Job Distribution Partners. Job Distribution Partners are third-party sites who have a relationship with us and advertise jobs from our marketplace, and include job boards, newspaper classifieds, search engines, social networks, talent communities and resume services.
Job Distribution Partners are third-party sites who have a relationship with us and advertise jobs from our marketplace, and include job boards, newspaper classifieds, search engines, social networks, talent communities and resume services. The diversity and depth of our partner network enables employers to reach an especially broad job seeker audience. • Access to an expansive database of job seekers.
The diversity and depth of our partner network enables employers to reach an especially broad job seeker audience. • Access to an expansive database of job seekers. We provide employers the ability to search through our database of job seekers who have broad skill sets and a range of experiences. Efficient Candidate Vetting • All the applicants in one place.
We provide employers the ability to search through our database of job seekers who have broad skill sets and a range of experiences. Efficient Candidate Vetting • All the applicants in one place. For employers who do not already have an established process to manage hiring, job applicants are captured inside the ZipRecruiter Applicant Tracking System, or ATS.
We seek to protect our trade secrets and confidential information through a variety of methods, including confidentiality agreements with employees, third parties, and others who may have access to our proprietary information. We also require employees to sign invention assignment agreements with respect to inventions arising from their employment, and strictly control access to our proprietary technology.
We also own numerous domain names, including www.ziprecruiter.com. We rely primarily on trade secrets and confidential information to develop and maintain our competitive position. We seek to protect our trade secrets and confidential information through a variety of methods, including confidentiality agreements with employees, third parties, and others who may have access to our proprietary information.
Over 66% of our leadership positions are held by people who grew internally at ZipRecruiter, demonstrating our dedication to fostering a culture of professional growth and development.
Over half of our leadership positions are held by people who grew internally at ZipRecruiter, demonstrating our dedication to fostering a culture of professional growth and development. On May 31, 2023, we announced a plan to reduce our global headcount by approximately 270 employees, which represents approximately 20% of our total number of employees prior to the reduction.
The scale of matching activity in our marketplace provides us with a unique and growing data set consisting of billions of signals which help drive superior matching. More jobs, more job seekers and better matching technology over time create more high-velocity hiring activity in our marketplace, fueling a self-perpetuating cycle of network effects. • Our brand.
More jobs, more job seekers and better matching technology over time create more high-velocity hiring activity in our marketplace, fueling a self-perpetuating cycle of network effects. • Best products for job seekers . Job seekers love our #1 rated job search app 1 .
For employers who do not already have an established process to manage hiring, job applicants are captured inside the ZipRecruiter Applicant Tracking System, or ATS. Our ATS centralizes and simplifies the decision-making process. Inside this system, hiring teams can review, rate, manage the status of, and ultimately decide which candidate to hire.
Our ATS centralizes and simplifies the decision-making process. Inside this system, hiring teams can review, rate, manage the status of, and ultimately decide which candidate to hire. For employers already using certain third-party ATSs, we seamlessly populate candidates into their existing workflow. • Great Matches.
Corporate Information We were incorporated in 2010 as ZipRecruiter, Inc., a Delaware corporation. Our website address is www.ziprecruiter.com.
We also require employees to sign invention assignment agreements with respect to inventions arising from their employment, and strictly control access to our proprietary technology. Corporate Information We were incorporated in 2010 as ZipRecruiter, Inc., a Delaware corporation. Our website address is www.ziprecruiter.com.
For employers already using certain third-party ATSs, we seamlessly populate candidates into their existing workflow. • Great Matches. Our technology labels candidates identified as a Great Match to help hiring managers avoid missing high quality candidates. • In-demand candidate alerts.
Our technology labels candidates identified as a Great Match to help hiring managers avoid missing high-quality candidates. • In-demand candidate alerts. We apply an “Act Fast!” label to notify employers when their candidates have received interest from other employers, encouraging them to reach out quickly.
As such, PIPEDA will not apply to commercial organizations operating within Alberta, British Columbia and Québec, although the data protection obligations throughout Canada are substantially the same. In the European Union, the General Data Protection Regulation, or the GDPR, became effective on May 25, 2018.
As such, PIPEDA will not apply to commercial organizations operating within Alberta, British Columbia and Québec. Although these provincial laws are similar in principle to PIPEDA, there are important differences in the details.
In the United Kingdom, the UK Data Protection Act 2018, is the UK’s implementation of the GDPR, which also became effective on May 25, 2018. However, the UK left the EU on January 31, 2020 and entered a transition period, which ended on December 31, 2020.
In the United Kingdom, the UK Data Protection Act 2018, the UK’s implementation of the GDPR, became effective in May 2018 and was statutorily amended in 2019 and further supplemented by the U.K. General Data Protection Regulation, or the UK GDPR, which came into effect on January 1, 2021.
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Our technology brings jobs listed directly in our marketplace as well as those from our Job Acquisition Partners together. Job Acquisition Partners are third-party sites and ATSs who have a relationship with us and from whom we receive jobs for our marketplace.
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Our employers’ jobs are posted not only across ZipRecruiter’s online sites and mobile apps but are also distributed to well over 1,000 sites managed by our Job Distribution Partners.
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ZipRecruiter was the original source for millions of these jobs in 2022, which means a job seeker’s search is incomplete unless they access our marketplace. • Engaged job seeker community. Over 42 million Active Job Seekers 1 engaged in the ZipRecruiter marketplace in 2022.
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Going far beyond the resume, job description and job search history, we observe how job seekers interact with every job and how employers engage with every job seeker in our marketplace. • Leading edge AI-powered matching technology. Our purpose-built technology captures insights from our proprietary data set, driving meaningful increases in match quality over time. • Powerful network effects.
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Those job seekers come to us directly and through our network of sites managed by our Job Distribution Partners. • Powerful artificial intelligence powered technology . Our technology captures insights from billions of user interactions facilitated by our marketplace, driving meaningful increases in the quality of matches we can enable over time.
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Phil, our AI-powered career advisor, gets to know each individual job seeker, helping them discover new opportunities and stand out to employers. • Our brand. Since our founding, we have invested to build the ZipRecruiter brand to 80% aided brand awareness among U.S. employers and job seekers. • Flexible business model.
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We do this by leveraging our software to ingest and analyze candidate behavior, including resume data, searches, and certifications, to find the most relevant jobs for each candidate on the ZipRecruiter network. • Designed for simplicity and speed . We thrive on taking unnecessarily complex processes and simplifying them. This product design philosophy permeates our entire company.
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Our sales and marketing spend is highly variable, allowing us to quickly align investment with a changing macroeconomic backdrop. We respond to employer and job seeker acquisition opportunities quickly, taking advantage where we see great returns on investment. • Designed for simplicity and speed. We thrive on taking unnecessarily complex processes and simplifying them.
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Competition for Employers Employers have a range of options when posting job opportunities. We compete to attract and retain employers to advertise their jobs in our marketplace.
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Competition for Job Seekers Job seekers have a variety of choices when searching for their next great job opportunity.
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For purposes of counting Active Job Seekers, we count only unique users who are registered with ZipRecruiter as job seekers and who have previously visited a ZipRecruiter-hosted site at least once.
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Approximately 50% of the impacted employees were from our sales and customer support teams. This action was taken in response to current market conditions and after reducing other discretionary expenses, with a view toward driving long-term efficiency.
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Activity by users not registered with ZipRecruiter, registered users who are logged out of their job seeker account, or users who have opened an email alert generated by sign-ups with a ZipRecruiter partner will not contribute toward the Active Job Seeker metric. 10 Table of Contents Competition for Job Seekers Job seekers have a variety of choices when searching for their next great job opportunity.
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By streamlining our organization and optimizing our cost structure, we believe we can execute faster with increased focus on our top priorities and long-term strategic growth objectives, including continued development of its technology roadmap.
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These laws are the Virginia Consumer Data Protection Act of 2021, or VCDPA, which went into effect on January 1, 2023, the Colorado Privacy Act, or CPA, and Connecticut Data Privacy Act, or CTDPA, which will each go into effect on July 1, 2023, and the Utah Consumer Privacy Act, or UCPA, which will go into effect on December 1, 2023.
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In the United States, several data privacy proposals (including proposed comprehensive legislation) are pending before federal and state legislative and regulatory bodies, which may impose additional obligations and restrictions.
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Recent legal developments in the EEA and the UK have created complexity and uncertainty regarding transfers of personal information from the EEA and the UK to “third countries,” especially the United States. For example, in July 2020, the Court of Justice of the European Union, or CJEU, invalidated the EU-U.S.
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Moreover, Québec recently made substantial changes to its provincial privacy laws, including An Act respecting the protection of personal information in the private sector , as amended by Law 25 (aka Bill 64) (Quebec Privacy Act). In the European Union, the General Data Protection Regulation, or the GDPR, became effective on May 25, 2018.
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Privacy Shield Framework (a mechanism for the transfer of personal information from the EEA to the United States). The CJEU also made clear that reliance on standard contractual clauses (another mechanism for the transfer of personal data outside the EEA) alone may not be sufficient in all circumstances.
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From the beginning of 2021 (when the transitional period following the United Kingdom’s exit from the European Union expired), we have had to continue to comply with the GDPR as well as the U.K.’s Data Protection Act and the UK GDPR.
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We currently rely on standard contractual clauses and these changes, coupled with additional enforcement on data transfers by EU data protection authorities, are therefore continuing to require us to review and update our current compliance approach (including review of new and existing data processors and subprocessors), and may result in additional compliance costs or the inability to transfer personal data outside of the EEA and/or the United Kingdom.
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On June 4, 2021 the European Commission finalized new versions of the Standard Contractual Clauses, with the Implementing Decision now in effect. The U.K.
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For example, the UK’s Information Commissioner’s Office published new standard contractual clauses for cross-border transfers of UK personal data under the UK GDPR.
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Information Commissioner’s Office of the Data Protection Authority published the U.K. version of the Standard Contractual Clauses, or the SCCS, and by March 2024, we will be required to use and honor these clauses for transfers of U.K. residents’ personal data to a foreign country that does not have adequate data protection. Effective July 10, 2023, the new EU-U.S.
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This new documentation was mandatory for relevant data transfers 13 Table of Contents beginning September 21, 2022, and existing standard contractual clauses arrangements for UK data transfers entered into prior to that date must be migrated to the new documentation by March 21, 2024. We are also subject to evolving EU and UK privacy laws on cookies and e-marketing.
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Data Privacy Framework, or DPF, has been recognized as adequate under EU law to allow transfers of personal data from the EU to certified companies in the U.S. We are currently an active participant in and comply with the EU-U.S. DPF, the UK Extension to the EU-U.S. DPF, and the Swiss-U.S. Data Privacy Framework as set forth by the U.S.
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In the EU and the UK, regulators are increasingly focusing on compliance with requirements in the digital advertising ecosystem. In addition, the current national laws that implement the e-Privacy Directive are highly likely to be replaced by an EU regulation known as the e-Privacy Regulation, which will significantly increase fines for non-compliance.
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Department of Commerce. However, the DPF is subject to further legal challenge which could cause the legal requirements for personal data transfers from the EU to the U.S. to become uncertain once again. We are also subject to evolving privacy laws on cookies and e-marketing.
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The text of the e-Privacy Regulation is still under development, and recent EU regulatory guidance and court decisions have created uncertainty about the level to which such laws and regulations will be enforced, which may require us to review our compliance approach and increase compliance costs.
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In addition, the U.S. and foreign regulatory environment in which we operate is continuously evolving, with both existing and prospective regulations that implicate aspects of our corporate governance, risk management practices, public disclosures, environmental, social and governance related issues, AI and cybersecurity. Seasonality For a discussion of the seasonality of our business, see “Item 7.
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We also own one pending trademark application, and numerous domain names, including www.ziprecruiter.com. We rely primarily on trade secrets and confidential information to develop and maintain our competitive position.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

107 edited+30 added−10 removed263 unchanged
Biggest changeFactors that may cause fluctuations in our quarterly financial results include, without limitation, those listed below: • our ability to attract new employers and job seekers; • Paid Employer renewal rates; • Paid Employers purchasing upsell services; • the addition or loss of large Paid Employers, including through acquisitions or consolidations; • the timing of recognition of revenue; • the amount and timing of operating expenses related to the maintenance and expansion of our business, operations and infrastructure; • network outages or security breaches; • general economic, industry and market conditions; • changes in our pricing policies or those of our competitors; 20 Table of Contents • seasonal variations in sales of our products, which have historically been most pronounced in the fourth quarter of our fiscal year; • the timing and success of new product or service introductions by us or our competitors or any other change in the competitive dynamics of our industry, including consolidation among competitors or strategic partners; and • the timing of expenses related to the development or acquisition of technologies or businesses and potential future charges for impairment of goodwill from acquired companies.
Biggest changeAs a result, you should not rely upon our past quarterly operating results as indicators of future performance. 20 Table of Contents Factors that may cause fluctuations in our quarterly financial results include, without limitation, those listed below: • our ability to attract new employers and job seekers; • Paid Employer renewal rates; • Paid Employers purchasing upsell services; • the addition or loss of large Paid Employers, including through acquisitions or consolidations; • the timing of recognition of revenue; • the amount and timing of operating expenses related to the maintenance and expansion of our business, operations and infrastructure; • network outages or security breaches; • general economic, industry and market conditions, including inflationary pressures, a volatile interest rate environment, increasing borrowing costs, actual or perceived instability in the global banking industry and the impacts, cybersecurity incidents, uncertainty with respect to the federal debt ceiling and budget and potential government shutdowns related thereto and the impacts of the war in Ukraine and the Israel-Hamas war; • changes in our pricing policies or those of our competitors; • seasonal variations in sales of our products, which have historically been most pronounced in the fourth quarter of our fiscal year; • the timing and success of new product or service introductions by us or our competitors or any other change in the competitive dynamics of our industry, including consolidation among competitors or strategic partners; and • the timing of expenses related to the development or acquisition of technologies or businesses and potential future charges for impairment of goodwill from acquired companies.
Provisions in our amended and restated certificate of incorporation and restated bylaws may have the effect of delaying or preventing a merger, acquisition, or other change of control of our company that the stockholders may consider favorable.
Provisions in our amended and restated certificate of incorporation and amended and restated bylaws may have the effect of delaying or preventing a merger, acquisition, or other change of control of our company that the stockholders may consider favorable.
Among other things, our amended and restated certificate of incorporation and restated bylaws include provisions that: • provide that our board of directors will be classified into three classes of directors with staggered three-year terms; • permit the board of directors to establish the number of directors and fill any vacancies and newly created directorships; • require super-majority voting to amend some provisions in our amended and restated certificate of incorporation and restated bylaws, including provisions relating to the classified board, the size of the board, removal of directors, special meetings, actions by written consent, and designation of our preferred stock; • authorize the issuance of “blank check” preferred stock that our board of directors could use to implement a stockholder rights plan; • provide that only the chairman of our board of directors, our chief executive officer, our lead independent director, or a majority of our board of directors will be authorized to call a special meeting of stockholders; • eliminate the ability of our stockholders to call special meetings of stockholders; • prohibit cumulative voting; • provide that directors may only be removed “for cause” and only with the approval of two-thirds of our stockholders; • provide for a dual class common stock structure in which holders of our Class B common stock may have the ability to control the outcome of matters requiring stockholder approval, even if they own significantly less than a majority of the outstanding shares of our common stock, including the election of directors and significant corporate transactions, such as a merger or other sale of our company or its assets; • prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders; • provide that the board of directors is expressly authorized to make, alter, or repeal our bylaws; and • establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.
Among other things, our amended and restated certificate of incorporation and amended and restated bylaws include provisions that: • provide that our board of directors will be classified into three classes of directors with staggered three-year terms; • permit the board of directors to establish the number of directors and fill any vacancies and newly created directorships; • require super-majority voting to amend some provisions in our amended and restated certificate of incorporation and amended and restated bylaws, including provisions relating to the classified board, the size of the board, removal of directors, special meetings, actions by written consent, and designation of our preferred stock; • authorize the issuance of “blank check” preferred stock that our board of directors could use to implement a stockholder rights plan; • provide that only the chairman of our board of directors, our chief executive officer, our lead independent director, or a majority of our board of directors will be authorized to call a special meeting of stockholders; • eliminate the ability of our stockholders to call special meetings of stockholders; • prohibit cumulative voting; • provide that directors may only be removed “for cause” and only with the approval of two-thirds of our stockholders; • provide for a dual class common stock structure in which holders of our Class B common stock may have the ability to control the outcome of matters requiring stockholder approval, even if they own significantly less than a majority of the outstanding shares of our common stock, including the election of directors and significant corporate transactions, such as a merger or other sale of our company or its assets; • prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders; • provide that the board of directors is expressly authorized to make, alter, or repeal our bylaws; and • establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.
Our amended and restated certificate of incorporation, to the fullest extent permitted by law, provides that the Court of Chancery of the State of Delaware will be the exclusive forum for any derivative action or proceeding brought on our behalf; any action asserting a breach of fiduciary duty; any action asserting a claim against us arising pursuant to the DGCL, our amended and restated certificate of incorporation, or our restated bylaws; or any action asserting a claim against us that is governed by the internal affairs doctrine.
Our amended and restated certificate of incorporation, to the fullest extent permitted by law, provides that the Court of Chancery of the State of Delaware will be the exclusive forum for any derivative action or proceeding brought on our behalf; any action asserting a breach of fiduciary duty; any action asserting a claim against us arising pursuant to the DGCL, our amended and restated certificate of incorporation, or our amended and restated bylaws; or any action asserting a claim against us that is governed by the internal affairs doctrine.
Alternatively, if a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation or restated bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results, and financial condition. Item 1B.
Alternatively, if a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation or amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results, and financial condition. Item 1B.
This conduct in our marketplace could result in any of the following, each of which could adversely impact our business: • bad actors may use our marketplace, including our payment processing and disbursement methods, to engage in unlawful or fraudulent conduct, such as identity theft, money laundering, terrorist financing, fraudulent sale of services, bribery, breaches of security, leakage of data, piracy or misuse of software and other copyrighted or trademarked content, and other misconduct; • we may be held liable for the unauthorized use of an account holder’s credit card or bank account number and required by card issuers or banks to return the funds at issue and pay a chargeback or return fee, and if our chargeback or return rate becomes excessive, credit card networks may also require us to pay fines or other fees and the California Department of Business Oversight may require us to hold cash reserves; • we may be subject to additional risk and liability exposure, including for negligence, fraud, or other claims, if employees or third-party service providers fraudulently misappropriate our banking or other information or user information; • employers and job seekers that are subjected or exposed to the unlawful or improper conduct of other employers and job seekers or other third parties, or law enforcement or administrative agencies, may seek to hold us responsible for the conduct of employers and job seekers, lose confidence in our marketplace, decrease or cease use of our marketplace, seek to obtain damages and costs, or impose fines and penalties; • we may be subject to additional risk if employers in our marketplace cannot pay hired job seekers for services rendered, as such job seekers may seek to hold us responsible for the employers’ 27 Table of Contents conduct and may lose confidence in our marketplace, decrease or cease use of our marketplace, or seek to obtain damages and costs; and • we may suffer reputational damage as a result of the occurrence of any of the above.
This conduct in our marketplace could result in any of the following, each of which could adversely impact our business: • bad actors may use our marketplace, including our payment processing and disbursement methods, to engage in unlawful or fraudulent conduct, such as identity theft, money laundering, terrorist financing, fraudulent sale of services, bribery, breaches of security, leakage of data, piracy or misuse of software and other copyrighted or trademarked content, and other misconduct; • we may be held liable for the unauthorized use of an account holder’s credit card or bank account number and required by card issuers or banks to return the funds at issue and pay a chargeback or return fee, and if our chargeback or return rate becomes excessive, credit card networks may also require us to pay fines or other fees and the California Department of Business Oversight may require us to hold cash reserves; • we may be subject to additional risk and liability exposure, including for negligence, fraud, or other claims, if employees or third-party service providers fraudulently misappropriate our banking or other information or user information; • employers and job seekers that are subjected or exposed to the unlawful or improper conduct of other employers and job seekers or other third parties, or law enforcement or administrative agencies, may seek to hold us responsible for the conduct of employers and job seekers, lose 28 Table of Contents confidence in our marketplace, decrease or cease use of our marketplace, seek to obtain damages and costs, or impose fines and penalties; • we may be subject to additional risk if employers in our marketplace cannot pay hired job seekers for services rendered, as such job seekers may seek to hold us responsible for the employers’ conduct and may lose confidence in our marketplace, decrease or cease use of our marketplace, or seek to obtain damages and costs; and • we may suffer reputational damage as a result of the occurrence of any of the above.
Moreover, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all claims brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder and our restated bylaws provide that the U.S. federal district courts will, to the fullest extent permitted by law, be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, or a Federal Forum Provision.
Moreover, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all claims brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder and our amended and restated bylaws provide that the U.S. federal district courts will, to the fullest extent permitted by law, be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, or a Federal Forum Provision.
Accordingly, the forecasts of market growth included in this Annual Report on Form 10-K should not be taken as indicative of our future growth. The growth of our marketplace depends in part on the success of our strategic relationships with our Job Distribution Partners and Job Acquisition Partners.
Accordingly, any forecasts of market growth included in this Annual Report on Form 10-K should not be taken as indicative of our future growth. The growth of our marketplace depends in part on the success of our strategic relationships with our Job Distribution Partners and Job Acquisition Partners.
Our business is vulnerable to damage or interruption from earthquakes, fires, floods, power losses, telecommunications failures, terrorist attacks, acts of war, human errors, break-ins, public health crises, and similar events. Additionally, the third-party systems and operations, such as the data centers and online services we use in our company operations, are subject to similar risks.
Our business is vulnerable to damage or interruption from earthquakes, fires, floods, power losses, telecommunications failures, terrorist attacks, acts of war, human errors, break-ins, public health crises such as global pandemics, and similar events. Additionally, the third-party systems and operations, such as the data centers and online services we use in our company operations, are subject to similar risks.
Additionally, our credit facility provides for an event of default upon the occurrence of certain specified “change of control” events. 42 Table of Contents Our amended and restated certificate of incorporation and our restated bylaws contain exclusive forum provisions for certain claims, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.
Additionally, our credit facility provides for an event of default upon the occurrence of certain specified “change of control” events. 43 Table of Contents Our amended and restated certificate of incorporation and our amended and restated bylaws contain exclusive forum provisions for certain claims, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.
We are in the nascent stages of developing the analytical tools that will allow us to determine how prospective customers can be most effectively directed within, and addressed by, our sales organizations. As a result, we may not always approach new opportunities in the most cost-effective manner or with the most appropriate resources.
We are in the early stages of developing the analytical tools that will allow us to determine how prospective customers can be most effectively directed within, and addressed by, our sales organizations. As a result, we may not always approach new opportunities in the most cost-effective manner or with the most appropriate resources.
This tax will apply to our share repurchase program beginning in 2023, where such program is described in the below risk factor titled “Our share repurchase program could affect the price of our Class A common stock and increase volatility and may be suspended or terminated at any time, which may result in a decrease in the trading price of our Class A common stock.” Other Risks Related to Our Business Our business is subject to the risk of earthquakes, fire, power outages, floods, public health crises, including pandemics, and other catastrophic events, and to interruption by man-made problems such as terrorism.
This tax applies to our share repurchase program beginning in 2023, where such program is described in the below risk factor titled “Our share repurchase program could affect the price of our Class A common stock and increase volatility and may be suspended or terminated at any time, which may result in a decrease in the trading price of our Class A common stock.” Other Risks Related to Our Business Our business is subject to the risk of earthquakes, fire, power outages, floods, public health crises, including pandemics, and other catastrophic events, and to interruption by man-made problems such as terrorism.
The price of our Class A common stock also could be subject to wide fluctuations in response to the risk factors described in this Annual Report on Form 10-K and others beyond our control, including: • the number of shares of our Class A common stock and Class B common stock publicly owned and available for trading; • actual or anticipated fluctuations in our financial condition, operating results and other operating and non-GAAP metrics; • our actual or anticipated operating performance and the operating performance of our competitors; • changes in the projected operational and financial results we provide to the public or our failure to meet those projections; • any major change in our board of directors, management, or key personnel; • the impact of, including but not limited to, market volatility, macroeconomic conditions such as inflation and any recession, and economic disruption caused by COVID-19 or any other worldwide pandemic; • rumors and market speculation involving us or other companies in our industry; • announcements by us or our competitors of significant innovations, new products, services, features, integrations or capabilities, acquisitions, strategic investments, partnerships, joint ventures, or capital commitments; • lawsuits threatened or filed against us; • other events or factors, including those resulting from the COVID-19 pandemic, war, incidents of terrorism, natural disasters, or responses to these events; and • sales or expected sales of our Class A common stock by us, and our officers, directors, and principal stockholders.
The price of our Class A common stock also could be subject to wide fluctuations in response to the risk factors described in this Annual Report on Form 10-K and others beyond our control, including: • the number of shares of our Class A common stock and Class B common stock publicly owned and available for trading; • actual or anticipated fluctuations in our financial condition, operating results and other operating and non-GAAP metrics; • our actual or anticipated operating performance and the operating performance of our competitors; • changes in the projected operational and financial results we provide to the public or our failure to meet those projections; • any major change in our board of directors, management, or key personnel; • the impact of, including but not limited to, market volatility and macroeconomic conditions such as inflation and any recession; • rumors and market speculation involving us or other companies in our industry; • announcements by us or our competitors of significant innovations, new products, services, features, integrations or capabilities, acquisitions, strategic investments, partnerships, joint ventures, or capital commitments; • lawsuits threatened or filed against us; • other events or factors, including those resulting from a pandemic, war, incidents of terrorism, natural disasters, or responses to these events; and • sales or expected sales of our Class A common stock by us, and our officers, directors, and principal stockholders.
We have not identified any material weaknesses in our internal control over financial reporting during 2022, 2021 and 2020. However, to maintain and, if required, improve our disclosure controls and procedures, and internal control over financial reporting to meet the standards of the Sarbanes-Oxley Act, additional and potentially significant resources and management oversight may be required.
We have not identified any material weaknesses in our internal control over financial reporting during 2023, 2022 and 2021. However, to maintain and, if required, improve our disclosure controls and procedures, and internal control over financial reporting to meet the standards of the Sarbanes-Oxley Act, additional and potentially significant resources and management oversight may be required.
Given the technical limitations in developing controls to prevent, among other things, the ability of users to publish in our marketplace false or deliberately misleading information or to develop sanctions-evasion methods, it is possible that we may inadvertently and without our knowledge provide services to individuals or entities that have been designated by OFAC 29 Table of Contents or are located in a country subject to an embargo by the United States that may not be in compliance with the economic sanctions regulations administered by OFAC.
Given the technical limitations in developing controls to prevent, among other things, the ability of users to publish in our marketplace false or deliberately misleading information or to develop sanctions-evasion methods, it is possible that we may inadvertently and without our knowledge provide services to individuals or entities that have been designated by OFAC or are located in a country subject to an embargo by the United States that may not be in compliance with the economic sanctions regulations administered by OFAC.
Any failure to implement and maintain effective internal control over financial reporting could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we are required to include in our periodic reports that will be filed with the SEC.
Any failure to implement and maintain effective internal control over financial reporting could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we are required to include in our periodic reports filed with the SEC.
The costs of compliance with, and other burdens imposed by, such laws and regulations that are applicable to the businesses of our employers and job seekers may limit the use of our marketplace and reduce overall demand, or lead to significant fines, penalties or liabilities for any noncompliance with such privacy laws.
In addition, the costs of compliance with, and other burdens imposed by, such laws and regulations that are applicable to the businesses of our employers and job seekers may limit the use of our marketplace and reduce overall demand, or lead to significant fines, penalties or liabilities for any noncompliance with such privacy laws.
Job Distribution Partners are third-party sites who have a relationship with us and advertise jobs from our marketplace, and includes job boards, newspaper classifieds, search engines, social networks, talent communities and resume services, while Job Acquisition Partners are third-party sites and ATSs who have a relationship with us and from whom we receive jobs for our marketplace.
Job Distribution Partners are third-party sites who have a relationship with us and advertise jobs from our marketplace, and include job boards, newspaper classifieds, search engines, social networks, talent communities and resume services, while Job Acquisition Partners are third-party sites and ATSs who have a relationship with us and from whom we receive jobs for our marketplace.
In addition, because our board of directors is responsible for appointing the members of our management team, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for 41 Table of Contents stockholders to replace members of our board of directors.
In addition, because our board of directors is responsible for appointing the members of our management team, these provisions may frustrate or 42 Table of Contents prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors.
We are dependent on the interoperability of our mobile apps with popular third-party mobile operating systems such as Apple's iOS and Google's Android, and their placement in popular app stores like the Apple App Store and Google Play Store, and any changes in such systems that degrade our apps’ functionality or give preferential treatment or app store placement to competitive apps could adversely affect the access and usage of our apps on mobile devices.
We are dependent on the interoperability of our mobile app with popular third-party mobile operating systems such as Apple's iOS and Google's Android, and their placement in popular app stores like the Apple App Store and Google Play Store, and any changes in such systems that degrade our 26 Table of Contents apps’ functionality or give preferential treatment or app store placement to competitive apps could adversely affect the access and usage of our apps on mobile devices.
Our ability to restructure or refinance our debt will depend on, among other things, the condition of the capital markets and our financial condition at such time. Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations.
Our ability to restructure or refinance our debt will depend on, among other things, the condition of the capital markets and our financial condition at such time. Any refinancing of our debt could be at higher interest 36 Table of Contents rates and may require us to comply with more onerous covenants, which could further restrict our business operations.
If we lose the services of senior management or other key personnel, or if we cannot attract, train, and retain the highly skilled personnel we need, our business, operating results, and financial condition could be adversely affected. Our future success also depends on our continuing ability to attract, train, and retain highly skilled personnel, including software engineers and sales personnel.
If we lose the services of senior management or other key personnel, or if we cannot attract, train, and retain the highly skilled personnel we need, our business, operating results, and financial condition could be adversely affected. 19 Table of Contents Our future success also depends on our continuing ability to attract, train, and retain highly skilled personnel, including software engineers and sales personnel.
Further, due to the recent shift to remote and hybrid work, there is an increased risk that we may experience cybersecurity related incidents, including breaches of information systems security, as a result of our employees, service providers, and third parties working remotely on less secure systems.
Further, due to the recent shift to remote and hybrid work, there is an increased risk that we may experience cybersecurity related incidents, including breaches of information systems security, as a result 27 Table of Contents of our employees, service providers, and third parties working remotely on less secure systems.
As we face increasing competition and gain an increasingly high profile, the likelihood of IPR claims against us has grown and will likely continue to grow. Further, from time to time, we may receive letters from third parties alleging that we are infringing upon their IPR or inviting us to license their IPR.
As we face increasing competition and gain an increasingly high profile, the likelihood of IPR claims against us has grown and will likely continue to grow. 34 Table of Contents Further, from time to time, we may receive letters from third parties alleging that we are infringing upon their IPR or inviting us to license their IPR.
In addition, our policy may not cover all claims made against us and defending a suit, regardless of its merit, could be costly and divert management’s attention. Our future success depends in part on employers purchasing and renewing or upgrading subscriptions and performance-based services from us.
In addition, our policy may not cover all claims made against us and defending a suit, regardless of its merit, could be costly and divert management’s attention. 17 Table of Contents Our future success depends in part on employers purchasing and renewing or upgrading subscriptions and performance-based services from us.
Our operating results may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our operating results to fall below the expectations of securities analysts and investors, resulting in a decline in the price of our Class A common stock.
Our operating results may be adversely affected if our assumptions change or if actual circumstances differ from those 39 Table of Contents in our assumptions, which could cause our operating results to fall below the expectations of securities analysts and investors, resulting in a decline in the price of our Class A common stock.
We may not be successful in either developing these modifications and enhancements or in bringing them to market timely. Furthermore, uncertainties about the timing and nature of new network platforms or technologies, or modifications to existing platforms or 21 Table of Contents technologies, could increase our research and development expenses.
We may not be successful in either developing these modifications and enhancements or in bringing them to market timely. Furthermore, uncertainties about the timing and nature of new network platforms or technologies, or modifications to existing platforms or technologies, could increase our research and development expenses.
Further, some of our Job 22 Table of Contents Distribution Partners and Job Acquisition Partners offer, or could offer, competing products and services or also work with our competitors. They may also choose to develop alternative products and services in addition to, or in lieu of, our marketplace, either on their own or in collaboration with others, including our competitors.
Further, some of our Job Distribution Partners and Job Acquisition Partners offer, or could offer, competing products and services or also work with our competitors. They may also choose to develop alternative products and services in addition to, or in lieu of, our marketplace, either on their own or in collaboration with others, including our competitors.
Laws, regulations, and standards governing issues that may affect us, such as employment, payments, whistleblowing and worker confidentiality obligations, intellectual property, consumer protection, taxation, privacy, data security, benefits, unionizing and collective action, arbitration agreements and class action waiver provisions, unfair competition, terms of service, website accessibility, background checks, and escheatment are often complex and subject to varying interpretations, and, as a result, their application in practice may change or develop over time through judicial decisions or as new guidance or interpretations are provided by regulatory and governing bodies.
Laws, regulations, and standards governing issues that may affect us, such as employment, payments, whistleblowing and worker confidentiality obligations, intellectual property, consumer protection, taxation, privacy, data security, AI, benefits, unionizing and collective action, arbitration agreements and class 31 Table of Contents action waiver provisions, unfair competition, terms of service, website accessibility, modern slavery obligations, background checks, and escheatment are often complex and subject to varying interpretations, and, as a result, their application in practice may change or develop over time through judicial decisions or as new guidance or interpretations are provided by regulatory and governing bodies.
We also may be unable to modify the format of our support services to compete with 24 Table of Contents changes in support services provided by our competitors. Increased demand for these services, without corresponding revenue, could increase costs and adversely affect our operating results.
We also may be unable to modify the format of our support services to compete with changes in support services provided by our competitors. Increased demand for these services, without corresponding revenue, could increase costs and adversely affect our operating results.
Many of these laws do not contemplate or address the unique issues of the internet, mobile, and related technologies. Other laws and regulations in response to internet, mobile, and related technologies may also be adopted, implemented, or interpreted to apply to 30 Table of Contents us and other online services marketplaces or our users.
Many of these laws do not contemplate or address the unique issues of the internet, mobile, and related technologies. Other laws and regulations in response to internet, mobile, and related technologies may also be adopted, implemented, or interpreted to apply to us and other online services marketplaces or our users.
The market for job-posting marketplaces is characterized by frequent product and service introductions and enhancements, changing user demands, and rapid technological change. The introduction of products and services embodying new technologies can quickly make existing products and services obsolete and unmarketable.
The market for job-posting marketplaces is characterized by frequent product and service introductions and enhancements, changing user demands, and rapid technological change. The 21 Table of Contents introduction of products and services embodying new technologies can quickly make existing products and services obsolete and unmarketable.
At any given time, we may be engaged in discussions or negotiations with respect to one or more of these types of transactions. Any acquisition, investment, or business relationship may result in unforeseen or additional operating difficulties, risks, and expenditures.
At any given time, we may be engaged in discussions or negotiations with respect to one or more of these types of transactions. Any acquisition, investment, or business relationship may result in 37 Table of Contents unforeseen or additional operating difficulties, risks, and expenditures.
If we cannot attract and retain suitably qualified individuals who 19 Table of Contents are capable of meeting our growing technical, operational, and managerial requirements, on a timely basis or at all, our business may be adversely affected.
If we cannot attract and retain suitably qualified individuals who are capable of meeting our growing technical, operational, and managerial requirements, on a timely basis or at all, our business may be adversely affected.
Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and often are not foreseeable or recognized until launched against a target, we and our third-party partners and vendors may be unable to anticipate these techniques or to implement adequate 26 Table of Contents preventative measures.
Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and often are not foreseeable or recognized until launched against a target, we and our third-party partners and vendors may be unable to anticipate these techniques or to implement adequate preventative measures.
To date, we have not engaged in currency hedging activities to limit 38 Table of Contents the risk of exchange fluctuations and, as a result, our financial condition and operating results could be adversely affected by such fluctuations.
To date, we have not engaged in currency hedging activities to limit the risk of exchange fluctuations and, as a result, our financial condition and operating results could be adversely affected by such fluctuations.
These broad market and industry fluctuations, as well as general economic, political, and market conditions such as recessions, interest rate changes, or international currency fluctuations, may negatively impact the market price of our Class A common stock.
These broad market and industry 40 Table of Contents fluctuations, as well as general economic, political, and market conditions such as recessions, interest rate changes, or international currency fluctuations, may negatively impact the market price of our Class A common stock.
Our internal tools have a number of limitations and our methodologies for tracking these metrics may change over time, which could result in 23 Table of Contents unexpected changes to our metrics, including the metrics we report.
Our internal tools have a number of limitations and our methodologies for tracking these metrics may change over time, which could result in unexpected changes to our metrics, including the metrics we report.
Additionally, we expect to make significant future expenditures related to the development and expansion of our business, including investing in our technology to improve our marketplace and investing in sales and marketing channels to enhance our brand promotion efforts.
Additionally, we expect to make significant future expenditures related to 25 Table of Contents the development and expansion of our business, including investing in our technology to improve our marketplace and investing in sales and marketing channels to enhance our brand promotion efforts.
Prior to the COVID-19 pandemic, the United States had largely experienced positive economic and employment trends since our founding in 2010 and therefore we do not have a significant operating history in periods of weak economic environments and cannot predict how our business will perform in such periods.
Prior to 2020, the United States had largely experienced positive economic and employment trends since our founding in 2010 and therefore we do not have a significant operating history in periods of weak economic environments and cannot predict how our business will perform in such periods.
The scope of these laws and regulations is changing, subject to differing interpretations, and may be inconsistent among countries, or conflict with other laws and regulations. We are also subject to the terms of our privacy policies and obligations to third parties related to privacy, data protection, AI, and information security.
The scope of these laws and regulations is changing, subject to differing interpretations, and may be inconsistent among countries or between U.S. states, or conflict with other laws and regulations. We are also subject to the terms of our privacy policies and obligations to third parties related to privacy, data protection, AI, and information security.
As a result, the dual class structure of our common stock may prevent the inclusion of our Class A common stock in such indices, may cause stockholder advisory firms to publish negative commentary about our corporate governance practices or otherwise seek to cause us to change our capital structure, and may result in large institutional investors not purchasing shares of our Class A common stock.
As a result, the dual class structure of our common stock may cause stockholder advisory firms to publish negative commentary about our corporate governance practices or otherwise seek to cause us to change our capital structure and may result in large institutional investors not purchasing shares of our Class A common stock.
Compliance with these rules and regulations has increased our legal and financial compliance costs and strains our financial and management systems, internal controls, and employees. The Exchange Act requires, among other things, that we file annual, quarterly, and current reports with respect to our business and operating results.
Compliance with these rules and regulations has increased our legal and financial compliance costs and strains our financial and management systems, internal controls, and employees. 38 Table of Contents The Exchange Act requires, among other things, that we file annual, quarterly, and current reports with respect to our business and operating results.
There can be no assurance that our expectations will prove correct, and even if these matters are resolved in our favor or without significant 32 Table of Contents cash settlements, these matters, and the time and resources necessary to litigate or resolve them, could harm our business.
There can be no assurance that our expectations will prove correct, and even if these matters are resolved in our favor or without significant cash settlements, these matters, and the time and resources necessary to litigate or resolve them, could harm our business.
As we rely heavily on our data center facilities, computer and communications systems, and the internet to conduct our business and provide high-quality user service, these disruptions could negatively impact our ability to run our business. 34 Table of Contents Our indebtedness could adversely affect our liquidity and financial condition.
As we rely heavily on our data center facilities, computer and communications systems, and the internet to conduct our business and provide high-quality user service, these disruptions could negatively impact our ability to run our business. Our indebtedness could adversely affect our liquidity and financial condition.
Any significant weakening of the economy in the United States or the global economy, increased unemployment, reduced credit availability, reduced business confidence and activity, decreased government spending, economic uncertainty, financial turmoil affecting the banking system or financial markets, trade wars and higher tariffs, changes in interest rates, inflation in the cost of goods and services including labor, and other adverse economic or market conditions may adversely impact our business and operating results.
Any significant weakening of the economy in the United States or the global economy, increased unemployment, reduced credit availability, reduced business confidence and activity, decreased government spending, economic uncertainty, financial turmoil affecting the banking system or financial markets, including actual or perceived instability in the banking industry, trade wars and higher tariffs, volatility in interest rates, inflation in the cost of goods and services including labor, and other adverse economic or market conditions may adversely impact our business and operating results.
Difficulty in acquiring and/or retaining these employers may adversely affect our operating results. 18 Table of Contents Our efforts and ability to sell to a broad mix of businesses could adversely affect our operating results in a given period.
Difficulty in acquiring and/or retaining these employers may adversely affect our operating results. Our efforts and ability to sell to a broad mix of businesses could adversely affect our operating results in a given period.
Negotiating these transactions can be time consuming, difficult, and expensive, and our ability to close these transactions may often be subject to approvals that are beyond our control. Consequently, these 36 Table of Contents transactions, even if undertaken and announced, may not close.
Negotiating these transactions can be time consuming, difficult, and expensive, and our ability to close these transactions may often be subject to approvals that are beyond our control. Consequently, these transactions, even if undertaken and announced, may not close.
There are significant costs and risks inherent in conducting business in international markets, including: • establishing and maintaining effective controls at foreign locations and the associated costs; • adapting our marketplace to non-U.S. employers’ and job seekers’ preferences and customs; • increased competition from local providers; • longer sales or collection cycles in some countries; • compliance with foreign laws and regulations, including data privacy frameworks like the GDPR; • adapting to doing business in other languages or cultures; • compliance with local tax regimes, including potential double taxation of our international earnings, and potentially adverse tax consequences due to U.S. and foreign tax laws as they relate to our international operations; • compliance with anti-bribery laws, such as the FCPA and the Bribery Act; • currency exchange rate fluctuations and related effects on our operating results; • economic and political instability in some countries, such as the war in Ukraine; • the uncertainty of obtaining and protecting intellectual property rights in some countries and practical difficulties of enforcing rights abroad; and • other costs of doing business internationally. 31 Table of Contents These factors and other factors could harm our international operations and, consequently, materially impact our business, operating results, and financial condition.
There are significant costs and risks inherent in conducting business in international markets, including: • establishing and maintaining effective controls at foreign locations and the associated costs; • adapting our marketplace to non-U.S. employers’ and job seekers’ preferences and customs; • increased competition from local providers; • longer sales or collection cycles in some countries; • compliance with foreign laws and regulations, including data privacy frameworks like the GDPR, UK GDPR and DPA; • adapting to doing business in other languages or cultures; • compliance with local tax regimes, including potential double taxation of our international earnings, and potentially adverse tax consequences due to U.S. and foreign tax laws as they relate to our international operations; • compliance with anti-bribery laws, such as the FCPA and the Bribery Act; • currency exchange rate fluctuations and related effects on our operating results; 32 Table of Contents • economic and political instability in some countries; • the uncertainty of obtaining and protecting intellectual property rights in some countries and practical difficulties of enforcing rights abroad; and • other costs of doing business internationally.
In addition, any policies and procedures that we implement to comply with OFAC regulations may not be effective, including in preventing users from using our services within the OFAC-sanctioned countries of North Korea, Syria, Cuba, Iran, Russia, and the Crimea, Donetsk and Luhansk regions of Ukraine, or additional countries or regions that may be included from time-to-time.
In addition, any policies 30 Table of Contents and procedures that we implement to comply with OFAC regulations may not be effective, including in preventing users from using our services within the OFAC-sanctioned countries of North Korea, Syria, Cuba, Iran, Russia, and the breakaway regions of Ukraine (which currently include Crimea, Donetsk and Luhansk), or additional countries or regions that may be included from time-to-time.
Moreover, the Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures, and internal control over financial reporting. We are required to make a formal assessment and provide an annual management report on the effectiveness of our internal control over financial reporting beginning with this Annual Report on Form 10-K.
Moreover, the Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures, and internal control over financial reporting. We are required to make a formal assessment and provide an annual management report on the effectiveness of our internal control over financial reporting.
We have incurred net losses in the past, anticipate increasing our operating expenses in the future, and may not sustain profitability. While we earned net income of $61.5 million, $3.6 million, and $86.0 million for the years ended December 31, 2022, 2021, and 2020, respectively, we have incurred significant net losses in the past.
We have incurred net losses in the past, anticipate increasing our operating expenses in the future, and may not sustain profitability. While we earned net income of $49.1 million, $61.5 million, and $3.6 million for the years ended December 31, 2023, 2022, and 2021, respectively, we have incurred significant net losses in the past.
Further, the United Kingdom, or the UK, has enacted the UK GDPR, which, together with the amended UK Data Protection Act 2018, or DPA, retains the GDPR in UK national law.
Further, the United Kingdom, or the UK, has enacted the UK GDPR, which, together with the amended UK Data Protection Act 2018, or DPA, retains 29 Table of Contents the GDPR in UK national law.
In addition, acquisitions of the Job Distribution Partners and Job Acquisition Partners that we partner with by our competitors could reduce the number of our current and potential employers and job seekers as well as the number of job postings accessible by our marketplace.
In addition, acquisitions of our Job Distribution Partners or Job Acquisition Partners by our competitors could reduce the number of our current and potential employers and job seekers as well as the number of job postings accessible by our marketplace.
The timing and actual number of shares repurchased will depend on a variety of factors including price, market conditions, corporate and regulatory requirements, and other investment opportunities. Approximately $110.7 million remains available for future repurchases under our $450.0 million share repurchase program as of December 31, 2022.
The timing and actual number of shares repurchased will depend on a variety of factors including price, market conditions, corporate and regulatory requirements, and other investment opportunities. Approximately $63.4 million remains available for future repurchases under our $550.0 million share repurchase program as of December 31, 2023.
To the extent the COVID-19 pandemic or another significant public health threat, or the related macroeconomic impacts, has an impact on our business, results of operations, and financial condition, it is likely also to have the effect of heightening many of the other risks described in this “Risk Factors” section.
To the extent a significant public health threat, or the related macroeconomic impacts, has an impact on our business, results of operations, and financial condition, it 35 Table of Contents is likely also to have the effect of heightening many of the other risks described in this “Risk Factors” section.
As of December 31, 2022, we had an accumulated deficit of $6.3 million. We expect to incur additional expenses in connection with legal, accounting, and other administrative expenses related to operating as a public company in addition to ongoing stock-based compensation expense related to the vesting of our RSUs.
As of December 31, 2023, we had an accumulated deficit of $5.5 million. We expect to incur additional expenses in connection with legal, accounting, and other administrative expenses related to operating as a public company in addition to ongoing stock-based compensation expense related to the vesting of our restricted stock units, or RSUs.
The effects of the CPRA, the VCDPA, the CPA, the CTDPA and the UCPA are potentially significant and may require us to modify our data collection or processing practices and policies and to incur substantial costs and expenses in an effort to comply, and increase our potential exposure to regulatory enforcement and/or litigation.
The effects of these laws are potentially significant and may require us to modify our data collection or processing practices and policies and to incur substantial costs and expenses in an effort to comply, and increase our potential exposure to regulatory enforcement and/or litigation.
These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations. 35 Table of Contents If we cannot make the scheduled payments on our debt, we will be in default and, as a result, the lenders under our credit facility and the holders of the senior unsecured notes could declare all outstanding principal and interest to be due and payable, the lenders under our credit facility could terminate their commitments to loan money and foreclose against the assets securing the borrowings under such credit facility, and we could be forced into bankruptcy or liquidation, which could result in an adverse impact to your investment in our company.
If we cannot make the scheduled payments on our debt, we will be in default and, as a result, the lenders under our credit facility and the holders of the senior unsecured notes could declare all outstanding principal and interest to be due and payable, the lenders under our credit facility could terminate their commitments to loan money and foreclose against the assets securing the borrowings under such credit facility, and we could be forced into bankruptcy or liquidation, which could result in an adverse impact to your investment in our company.
Sustaining our growth will place significant demands on our management as well as on our administrative, operational, and financial resources. To manage our growth, we must continue to improve our operational, financial, and management information systems; expand, motivate, and effectively manage and train our workforce; and effectively collaborate with our third-party partners.
The effective scaling of our business will place significant demands on our management as well as on our administrative, operational, and financial resources. To manage any future growth effectively, we must continue to improve our operational, financial, and management information systems; expand, motivate, and effectively manage and train our workforce; and effectively collaborate with our third-party partners.
Additionally, there is no guarantee that employers and job seekers will use our mobile apps rather than competing marketplaces.
Additionally, there is no guarantee that job seekers will use our mobile app rather than competing marketplaces.
In the United States, several data privacy proposals (including proposed comprehensive legislation) are pending before federal and state legislative and regulatory bodies, which may impose significant obligations and restrictions.
In addition, several data privacy proposals (including proposed comprehensive legislation) are pending before U.S. federal and state legislative and regulatory bodies, which may impose significant obligations and restrictions.
We may not be able to consummate those dispositions or to obtain the proceeds that we could realize from them and these proceeds may not be adequate to meet any debt service obligations then due.
We may not be able to consummate those dispositions or to obtain the proceeds that we could realize from them and these proceeds may not be adequate to meet any debt service obligations then due. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations.
If our assumptions regarding these risks, challenges, and uncertainties, which we use to plan and operate our business, are incorrect or change, or if we do not address these risks successfully, our financial condition and operating results could differ materially from our expectations, our growth rates may slow, and our business would be adversely impacted.
If our assumptions regarding 18 Table of Contents these risks, challenges, and uncertainties, which we use to plan and operate our business, are incorrect or change, or if we do not address these risks successfully, our financial condition and operating results could differ materially from our expectations, we may be unable to effectively scale our business, and our business would be adversely impacted.
The outcome of any legal proceeding, regardless of its merits, is inherently uncertain. Regardless of the merits, pending or future legal proceedings could result in a diversion of management’s attention and resources and reputational harm, and we may be required to incur significant expenses defending against these claims or pursuing claims against third parties to protect our rights.
Regardless of the merits, pending or future legal proceedings could result in a diversion of management’s attention and resources and reputational harm, and we may be required to incur significant expenses defending against 33 Table of Contents these claims or pursuing claims against third parties to protect our rights.
The application of federal, state, local and international tax laws to services provided electronically is evolving. New income, sales, use or other tax laws, statutes, rules, regulations or ordinances could be enacted at any time (possibly with retroactive effect), and could be applied solely or disproportionately to services provided over the internet.
New income, sales, use or other tax laws, statutes, rules, regulations or ordinances could be enacted at any time (possibly with retroactive effect), and could be applied solely or disproportionately to services provided over the internet.
We had $550.0 million of indebtedness (excluding intercompany indebtedness) and $244.6 million available under our credit facility as of December 31, 2022.
We had $550.0 million of indebtedness (excluding intercompany indebtedness) and $245.7 million available under our credit facility as of December 31, 2023.
Any decline in our user renewals or upgrades or performance-based services could harm our future operating results. 17 Table of Contents Many of our Paid Employers pay for access to our marketplace on a per-job-per-day basis, rather than entering into new longer term paid time-based job posting plans, renewing their paid time-based job posting plans when such contract terms expire, or purchasing performance-based services from us.
Many of our Paid Employers pay for access to our marketplace on a per-job-per-day basis, rather than entering into new longer term paid time-based job posting plans, renewing their paid time-based job posting plans when such contract terms expire, or purchasing performance-based services from us.
Our competitors may be effective in providing incentives to these job boards and other similar third parties to favor their products or services or to prevent or reduce engagement with our marketplace.
Our competitors may be effective in providing incentives to these Job Distribution Partners to favor their products or services or to prevent or reduce engagement with our marketplace.
As of December 31, 2022, the holders of our outstanding Class B common stock beneficially owned approximately 28.9% of our outstanding common stock as a class and held approximately 89.0% of the voting power of our outstanding common stock as a class.
As of December 31, 2023, the holders of our outstanding Class B common stock beneficially owned approximately 22.9% of our outstanding common stock as a class and held approximately 85.6% of the voting power of our outstanding common stock as a class.
Datasets may be insufficient, of poor quality, or contain biased information. Inappropriate or controversial data practices by data scientists, engineers, and end-users of our systems or elsewhere could impair the acceptance of AI solutions and could result in burdensome new regulations that may limit our ability to use existing or new AI technologies.
Inappropriate or controversial data practices by data scientists, engineers, and end-users of our systems or elsewhere (including the integration or use of third-party AI tools) could impair the acceptance of AI solutions and could result in burdensome new regulations that may limit our ability to use existing or new AI technologies.
Technological advances may significantly disrupt the labor market and weaken demand for human capital at a rapid rate. Our success is directly dependent on our employers’ demands for talent. As technology continues to evolve, more tasks currently performed by people may be replaced by automation, robotics, machine learning, AI and other technological advances outside of our control.
Our success is directly dependent on our employers’ demands for talent. As technology continues to evolve, more tasks currently performed by people may be replaced by automation, robotics, AI, including machine learning, and other technological advances outside of our control.
Patent infringement, trademark infringement, trade secret misappropriation, and other intellectual property claims and proceedings brought against us or brought by us, whether successful or not, could require significant attention of our management and resources and have in the past and could further result in substantial costs, harm to our brand, and have an adverse effect on our business. 33 Table of Contents Adverse tax laws or regulations could be enacted or existing laws could be applied to us or our employers and job seekers, which could increase the costs of our services and adversely impact our business.
Patent infringement, trademark infringement, trade secret misappropriation, and other intellectual property claims and proceedings brought against us or brought by us, whether successful or not, could require significant attention of our management and resources and have in the past and could further result in substantial costs, harm to our brand, and have an adverse effect on our business.
As such, any factor adversely affecting the sale of these products and services, including market acceptance, product competition, performance and reliability, reputation, price competition, intellectual property claims, legal or regulatory restrictions, and economic and market conditions, could harm our business and operating results.
As such, any factor adversely affecting the sale of these products and services, including market acceptance, product competition, performance and reliability, reputation, price competition, intellectual property claims, legal or regulatory restrictions, and economic and market conditions, could harm our business and operating results. 24 Table of Contents Failure to effectively expand our sales and marketing capabilities could harm our ability to increase our user base and achieve broader market acceptance of our services.
Additionally, our hybrid working environment may impede our ability to foster a creative environment and adversely affect the productivity of our team members and overall operations, which could have a material adverse effect on our business, results of operations, financial condition, and future prospects.
If we fail to attract new personnel, or fail to retain and motivate our current personnel, our business and growth prospects could be harmed. 23 Table of Contents Additionally, our hybrid working environment may impede our ability to foster a creative environment and adversely affect the productivity of our team members and overall operations, which could have a material adverse effect on our business, results of operations, financial condition, and future prospects.
From time to time, we may be subject to claims, lawsuits (including class actions), government investigations, arbitrations and other proceedings involving competition and antitrust, intellectual property, privacy, consumer protection, securities, tax, labor and employment, commercial disputes, and other matters that could adversely affect our business operations and financial condition.
From time to time, we may be subject to claims, lawsuits (including class actions), government investigations, arbitrations and other proceedings involving competition and antitrust, intellectual property, privacy (including claims that the collection or provision of certain information, including personal information, by us or by third parties with whom we interact breached laws or regulations relating to privacy or data protection), consumer protection, securities, tax, labor and employment, commercial disputes, and other matters that could adversely affect our business operations and financial condition.
There has been volatility in financial markets as a result of a number of factors, including, but not limited to, the COVID-19 pandemic, the war in Ukraine, inflation, changes in interest rates, and the possibility of a U.S. and global recession.
There has been volatility in financial markets as a result of a number of factors, including, but not limited to, banking instability, global conflict, including the war in Ukraine and the Israel-Hamas war, inflation, changes in interest rates, and volatile markets.
There is also risk that when overall global economic conditions are positive, our business could be negatively impacted by decreased demand for job postings and our services. If general economic conditions significantly deviate from present levels, our business, financial condition, and operating results could be adversely affected.
There is also risk that when overall global economic conditions are positive, our business could be negatively impacted by decreased demand for job postings and our services.
We have encountered in the past, and will encounter in the future, risks, challenges, and uncertainties frequently experienced by growing companies in rapidly changing industries.
In addition, our historical growth should not be considered indicative of our future performance. We have encountered in the past, and will encounter in the future, risks, challenges, and uncertainties frequently experienced by growing companies in rapidly changing industries.
If we cannot manage our growth successfully, our business, operating results, financial condition, and ability to successfully advertise our marketplace and serve our employers and job seekers could be adversely affected. Our historical growth should not be considered indicative of our future performance.
If we cannot manage any future growth successfully, our business, operating results, financial condition, and ability to successfully advertise our marketplace and serve our employers and job seekers could be adversely affected. Over time, we expect to expand our operations and personnel significantly.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Our corporate headquarters are located in Santa Monica, California, where we currently lease approximately 60,000 square feet under agreements that expire in 2023 and 2025. We also lease facilities in Palo Alto, California, Phoenix, Arizona and Tel Aviv, Israel. We intend to procure additional space as we add employees and expand geographically.
Biggest changeItem 2. Properties Our corporate headquarters are located in Santa Monica, California, where we currently lease approximately 45,000 square feet under an agreement that expires in 2025. We also lease facilities in Palo Alto, California, Phoenix, Arizona, London, the United Kingdom, and Tel Aviv, Israel.
We believe that our facilities are adequate to meet our needs for the immediate future and that suitable additional space will be available to accommodate any expansion of our operations as needed.
We believe that our facilities are adequate to meet our needs for the immediate future and that suitable additional space will be available to accommodate any expansion of our operations as needed. 46 Table of Contents

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings 43 Table of Contents Refer to the disclosure under the heading “Legal Matters” in Note 9 – Commitments and Contingencies to the audited financial statements included in this report for legal proceedings. From time to time, we may be involved in various legal proceedings arising from the normal course of our business activities. Item 4.
Biggest changeItem 3. Legal Proceedings Refer to the disclosure under the heading “Legal Matters” in Note 10 – Commitments and Contingencies to the audited financial statements included in this report for legal proceedings. From time to time, we may be involved in various legal proceedings arising from the normal course of our business activities. Item 4.
Mine Safety Disclosures Not applicable. 44 Table of Contents Part II
Mine Safety Disclosures Not applicable. 47 Table of Contents Part II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIn addition, our credit agreement contains restrictions on our ability to pay cash dividends on our capital stock. 45 Table of Contents Purchases of Equity Securities by the Issuer and Affiliated Purchasers Share repurchase activity during the three months ended December 31, 2022 was as follows (in thousands, except per share amounts): Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (1) October 1, 2022 to October 31, 2022 Rule 10b5-1 plan repurchases 1,264 $ 17.15 1,264 November 1, 2022 to November 31, 2022 Rule 10b5-1 plan repurchases 1,699 $ 16.50 1,699 December 1, 2022 to December 30, 2022 Rule 10b5-1 plan repurchases 100 $ 16.05 100 Open market repurchases 2,409 $ 16.29 2,409 December ASR (2) 2,566 (2) 2,566 Total 8,038 $ 110,744 ____________ (1) As of December 31, 2022, the board of directors authorized us to repurchase up to $450.0 million of our common stock under the share repurchase program, of which $339.3 million had been utilized.
Biggest changePurchases of Equity Securities by the Issuer and Affiliated Purchasers Share repurchase activity during the three months ended December 31, 2023 was as follows (in thousands, except per share amounts): Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (1) October 1, 2023 to October 31, 2023 — $ — — November 1, 2023 to November 30, 2023 Open market repurchases 360 $ 12.35 360 December 1, 2023 to December 31, 2023 Open market repurchases 291 $ 13.60 291 Total 651 $ 63,444 ____________ (1) As of December 31, 2023, the board of directors authorized us to repurchase up to $550.0 million of our common stock under the share repurchase program, of which $486.6 million had been utilized.
The remaining $110.7 million in the table represents the amount available to repurchase shares under the share repurchase program as of December 31, 2022. We may repurchase shares of common stock through open market or privately negotiated transactions, block purchases, or pursuant to one or more Rule 10b5-1 plans.
The remaining $63.4 million in the table represents the amount available to repurchase shares under the share repurchase program as of December 31, 2023. We may repurchase shares of common stock through open market or privately negotiated transactions, block purchases, or pursuant to one or more Rule 10b5-1 plans.
There is no separate public trading market for our Class B common stock, which is convertible share for share at any time into Class A common stock. Holders of Record As of February 17, 2023, the approximate number of Class A and Class B common shareholders of record was 1,216 and 7, respectively.
There is no separate public trading market for our Class B common stock, which is convertible share for share at any time into Class A common stock. Holders of Record As of February 16, 2024, the approximate number of Class A and Class B common shareholders of record was 995 and 7, respectively.
An investment of $100 (with reinvestment of all dividends) is assumed to have been made in our Class A common stock and in each index at the market close on May 26, 2021, and its relative performance is tracked through December 31, 2022.
An investment of $100 (with reinvestment of all dividends) is assumed to have been made in our Class A common stock and in each index at the market close on May 26, 2021, and its relative performance is tracked through December 31, 2023. The returns shown are based on historical results and are not intended to suggest future performance.
Stock Performance Graph This performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act or the Exchange Act.
For more information, see Note 14 – Share Repurchase Program to the audited financial statements included in this report. 48 Table of Contents Stock Performance Graph This performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act or the Exchange Act.
The share repurchase program has no expiration date and will continue until otherwise suspended, terminated, or modified at any time for any reason by the board of directors. For more information, see Note 13 – Share Repurchase Program to the audited financial statements included in this report.
The share repurchase program has no expiration date and will continue until otherwise suspended, terminated, or modified at any time for any reason by the board of directors.
Removed
(2) In December 2022, we entered into a new accelerated share repurchase agreement (the “December ASR”) with Wells Fargo Bank, National Association. Under the terms of the agreement, we made a payment of $50.0 million and received an initial delivery of 2.6 million shares of Class A common stock, which represented $42.5 million (or 85%) of the December ASR.
Added
In addition, our credit agreement contains restrictions on our ability to pay cash dividends on our capital stock.
Removed
The final number of shares to be repurchased will be based on the volume-weighted average price of our Class A common stock during the term of the December ASR, less fees paid to the bank. The final settlement of the December ASR occurred during the first quarter of 2023.
Removed
The ASR transaction was effectuated pursuant to our previously announced $450.0 million share repurchase program.
Removed
The returns shown are based on historical results and are not intended to suggest future performance. 46 Table of Contents Item 6. [Reserved] 47

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeA discussion regarding our financial condition and results of operations for fiscal year 2021 compared to fiscal year 2020 can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” within our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, which is available free of charge on the SEC’s website at http://www.sec.gov. 56 The following table sets forth our consolidated results of operations for each of the periods presented: Year Ended December 31, 2022 2021 (in thousands) Revenue (1) $ 904,649 $ 741,141 Cost of revenue (2) 86,298 79,614 Gross profit 818,351 661,527 Operating expenses Sales and marketing (2) 484,429 410,665 Research and development (2) 127,737 110,470 General and administrative (2)(3) 108,957 148,784 Total operating expenses 721,123 669,919 Income (loss) from operations 97,228 (8,392) Other income (expense) Interest expense (28,498) (916) Other income, net 5,354 32 Total other expense, net (23,144) (884) Income (loss) before income taxes 74,084 (9,276) Income tax expense (benefit) 12,590 (12,876) Net income $ 61,494 $ 3,600 ____________ (1) Revenue is comprised as follows: Year Ended December 31, 2022 2021 (in thousands) Subscription revenue $ 696,334 $ 600,090 Performance-based revenue 208,315 141,051 Total revenue $ 904,649 $ 741,141 (2) Includes stock-based compensation expense as follows: Year Ended December 31, 2022 2021 (in thousands) Cost of revenue $ 807 $ 1,093 Sales and marketing 10,858 17,865 Research and development 30,985 34,230 General and administrative 34,306 54,070 Total stock-based compensation $ 76,956 $ 107,258 (3) Includes one-time charges related to financial advisory services, accounting and legal expenses, the bonus earned by our Chief Executive Officer, and other filing costs in connection with our Direct Listing totaling $0 and $34.0 million in the years ended December 31, 2022 and 2021, respectively. 57 Comparison of the Years Ended December 31, 2022 and 2021 Revenue Year Ended December 31, 2022 2021 $ Change % Change (in thousands, except percentages) Total revenue $ 904,649 $ 741,141 $ 163,508 22 % Revenue increased $163.5 million, or 22%, for the year ended December 31, 2022 compared to the year ended December 31, 2021.
Biggest changeA discussion regarding our financial condition and results of operations for fiscal year 2022 compared to fiscal year 2021 can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” within our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which is available free of charge on the SEC’s website at http://www.sec.gov. 58 The following table sets forth our consolidated results of operations for each of the periods presented: Year Ended December 31, 2023 2022 (in thousands) Revenue (1) $ 645,722 $ 904,649 Cost of revenue (2) 64,309 86,298 Gross profit 581,413 818,351 Operating expenses Sales and marketing (2)(3) 265,253 484,429 Research and development (2)(3) 141,801 127,737 General and administrative (2)(3)(4) 94,922 108,957 Total operating expenses 501,976 721,123 Income from operations 79,437 97,228 Other income (expense) Interest expense (29,393) (28,498) Other income (expense), net 20,506 5,354 Total other income (expense), net (8,887) (23,144) Income before income taxes 70,550 74,084 Income tax expense 21,452 12,590 Net income $ 49,098 $ 61,494 ____________ (1) Revenue is comprised as follows: Year Ended December 31, 2023 2022 (in thousands) Subscription revenue $ 508,384 $ 696,334 Performance-based revenue 137,338 208,315 Total revenue $ 645,722 $ 904,649 (2) Includes stock-based compensation expense as follows: Year Ended December 31, 2023 2022 (in thousands) Cost of revenue $ 660 $ 807 Sales and marketing 12,537 10,858 Research and development 35,352 30,985 General and administrative (4) 35,686 34,306 Total stock-based compensation $ 84,235 $ 76,956 (3) Includes one-time charges resulting from our restructuring plan announced on May 31, 2023 to reduce our global workforce by approximately 20%.
Investing Activities For the year ended December 31, 2022, cash used in investing activities was $351.1 million resulting from purchases of marketable securities of $367.1 million, capitalized software development costs of $7.9 million, and capital expenditures of $2.7 million primarily related to purchases of computer supplies and equipment, partially offset by $25.6 million received from paydowns, maturities, and redemptions of marketable securities and $0.9 million received from sales of marketable securities.
For the year ended December 31, 2022, cash used in investing activities was $351.1 million resulting from purchases of marketable securities of $367.1 million, capitalized software development costs of $7.9 million, and capital expenditures of $2.7 million primarily related to purchases of computer supplies and equipment, partially offset by $25.6 million received from paydowns, maturities, and redemptions of marketable securities and $0.9 million received from sales of marketable securities.
Determination of the Fair Value of Common Stock on Grant Dates Prior to the completion of our Direct Listing on May 26, 2021, our common stock was not publicly traded, and therefore, our board of directors exercised significant judgment in determining the fair value of our common stock on the date of each stock-based grant, with input from management and the assistance from an independent third-party valuation firm based on several objective and subjective factors.
Determination of the Fair Value of Common Stock on Grant Dates Prior to the completion of our Direct Listing on May 26, 2021, our common stock was not publicly traded, and therefore, our board of directors exercised significant judgment in determining the fair value of our common stock on the date of each stock-based grant, with input from management and the 68 assistance from an independent third-party valuation firm based on several objective and subjective factors.
The Quarterly Paid Employer metric includes all actively recruiting employers (or entities acting on behalf of employers) on a paying subscription plan or performance marketing campaign for at least one day in a given calendar quarter. Paid Employers excludes employers from our third-party sites or other indirect channels, employers who are not actively recruiting and employers on free-trials.
The Quarterly Paid Employer metric includes all actively recruiting employers (or entities acting on behalf of employers) on a paying subscription plan or performance marketing campaign for at least one day in a given quarter. Paid Employers excludes employers from our third-party sites or other indirect channels, employers who are not actively recruiting and employers on free-trials.
Investments not considered cash equivalents are classified as marketable securities in our Consolidated Balance Sheets. We classify and account for our money market mutual funds which have readily determinable fair values as equity securities, and we carry such securities at fair value with unrealized gains and losses reported in other income, net in our Consolidated Statement of Operations.
Investments not considered cash equivalents are classified as marketable securities in our Consolidated Balance Sheets. We classify and account for our money market mutual funds which have readily determinable fair values as equity securities, and we carry such securities at fair value with unrealized gains and losses reported in other income (expense), net in our Consolidated Statement of Operations.
Given that we do not have sufficient exercise history to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior, we determine the expected term for our “plain vanilla” stock options using the simplified method, which is calculated as the midpoint of the stock option vesting term and the expiration date of the stock option.
Given that we do not have sufficient exercise history to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior, we determine the expected term for our “plain vanilla” stock options using the simplified method, which is calculated as the midpoint of the stock option vesting term and the expiration date of the stock option. Expected Volatility.
Other Income, Net Other income, net consists primarily of interest income recognized on cash, cash equivalents and marketable securities, gains and losses from foreign currency exchange transactions, and realized gains and losses recognized on sales of available-for-sale debt securities. We have foreign currency exposure primarily related to personnel-related expenses that are denominated in currencies other than the U.S.
Other Income (Expense), Net Other income (expense), net consists primarily of interest income recognized on cash, cash equivalents and marketable securities, gains and losses from foreign currency exchange transactions, and realized gains and losses recognized on sales of available-for-sale debt securities. We have foreign currency exposure primarily related to personnel-related expenses that are denominated in currencies other than the U.S.
Under the income approach, 67 a Discounted Cash Flow, or DCF, model was used, where net cash flows attributable to our business and an assumed terminal value were discounted to present value using a discount rate, based on our estimated weighted average cost of capital that reflected the risks inherent in the cash flows.
Under the income approach, a Discounted Cash Flow, or DCF, model was used, where net cash flows attributable to our business and an assumed terminal value were discounted to present value using a discount rate, based on our estimated weighted average cost of capital that reflected the risks inherent in the cash flows.
For the alternative exit scenario, an OPM with an appropriate time to liquidity was used to estimate the fair value of the share classes assuming the near-term liquidity scenario does not occur, with the resulting share values under each scenario weighted by management’s estimate of their respective probabilities. We also applied a discount for lack of marketability.
For the alternative exit scenario, an OPM with an appropriate time to liquidity was used to estimate the fair value of the share classes assuming the near-term liquidity scenario does not occur, with the resulting share values under each scenario weighted by 69 management’s estimate of their respective probabilities. We also applied a discount for lack of marketability.
Our Net Leverage Ratio is defined as total debt less total cash and permitted investments outstanding at period end, with a maximum total cash and permitted investments adjustment of $550.0 million, divided by the trailing 12 months of earnings, adjusted for items such as non-cash expenses and other nonrecurring transactions.
Our Net Leverage Ratio is defined as total debt less total cash and permitted investments outstanding at period end, with a maximum total cash and permitted investments adjustment of $550.0 million, divided by the trailing 12 months of earnings, adjusted for items such as non-cash 62 expenses and other nonrecurring transactions.
As the satisfaction of the performance condition was not probable for accounting purposes prior to the waiver, the waiver of the liquidity event-based performance condition 68 resulted in the remeasurement of the modified awards at fair value on the date of the waiver, which management estimated to be $25.04 per share or approximately $172.6 million.
As the satisfaction of the performance condition was not probable for accounting purposes prior to the waiver, the waiver of the liquidity event-based performance condition resulted in the remeasurement of the modified awards at fair value on the date of the waiver, which management estimated to be $25.04 per share or approximately $172.6 million.
We determine revenue recognition through the following steps: • Identification of the contract, or contracts, with a customer • Identification of all performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, the performance obligation or obligations are satisfied 64 We identify enforceable revenue contracts when the terms are agreed to by the customer.
We determine revenue recognition through the following steps: • Identification of the contract, or contracts, with a customer • Identification of all performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, the performance obligation or obligations are satisfied We identify enforceable revenue contracts when the terms are agreed to by the customer.
Our primary objectives in investing our excess cash reserves are to preserve capital, provide sufficient liquidity to satisfy both operational cash flow 69 requirements and potential strategic investment opportunities, and to obtain a reasonable or market rate of return on investments.
Our primary objectives in investing our excess cash reserves are to preserve capital, provide sufficient liquidity to satisfy both operational cash flow requirements and potential strategic investment opportunities, and to obtain a reasonable or market rate of return on investments.
If neither condition is met, we evaluate whether the decline is the result of credit-related factors, in which case we record the credit-related portion of the impairment loss through other income, net in our Consolidated Statement of Operations, and record the non-credit-related portion of the impairment loss, net of tax, through other comprehensive loss in the Consolidated Statement of Comprehensive Income.
If neither condition is met, we evaluate whether the decline is the result of credit-related factors, in which case we record the credit-related portion of the impairment loss through other income (expense), net in our Consolidated Statement of Operations, and record the non-credit-related portion of the impairment loss, net of tax, through other comprehensive income (loss) in the Consolidated Statement of Comprehensive Income.
We determine any realized gains and losses on the sale of our available-for-sale debt securities using a specific identification method, and we record such gains and losses through other income, net in our Consolidated Statement of Operations.
We determine any realized gains and losses on the sale of our available-for-sale debt securities using a specific identification method, and we record such gains and losses through other income (expense), net in our Consolidated Statement of Operations.
The sales allowance is estimated by considering historical results and trends and is accounted for as a reduction to revenue or deferred revenue for contracts where payments are received upfront and revenue is recognized over time.
The sales allowance is 67 estimated by considering historical results and trends, and is accounted for as a reduction to revenue or deferred revenue for contracts where payments are received upfront and revenue is recognized over time.
Provided that Ian Siegel continues to be the CEO of ZipRecruiter, stock-based compensation expense is recognized over the requisite service period, regardless of whether the stock price targets are achieved.
Provided that Ian Siegel continues to be the CEO of ZipRecruiter, stock-based compensation expense is recognized over the requisite service period, regardless of whether the stock 70 price targets are achieved.
For more information on the senior unsecured notes, please see Note 8 – Debt to the audited financial statements included in this report. Share Repurchase Program During the year ended December 31, 2022, our board of directors authorized us to repurchase up to $450.0 million of our outstanding common stock, with no fixed expiration.
For more information on the senior unsecured notes, please see Note 9 – Debt to the audited financial statements included in this report. Share Repurchase Program During the year ended December 31, 2022, our board of directors authorized us to repurchase up to $450.0 million of our outstanding common stock, with no fixed expiration.
If either condition is met, we record an impairment loss on the security through other income, net in our Consolidated Statement of Operations.
If either condition is met, we record an impairment loss on the security through other income (expense), net in our Consolidated Statement of Operations.
Investments We maintain an investment portfolio of primarily highly rated debt securities and money market mutual funds to manage our excess cash reserves.
Investments We maintain an investment portfolio of highly rated debt securities and money market mutual funds to manage our excess cash reserves.
We classify and account for our debt securities as available-for-sale, and we carry such securities at fair value with unrealized gains and losses excluded from earnings and reported net of tax as a separate component of stockholders’ equity in accumulated other comprehensive loss until the security is sold or matures.
We classify and account for our debt securities as available-for-sale, and we carry such securities at fair value with unrealized gains and losses excluded from earnings and reported net of tax as a separate component of 71 stockholders’ equity in accumulated other comprehensive income (loss) until the security is sold or matures.
Historically, we have largely focused our marketing spend on employers, and despite being the highest rated job seeker app on iOS and Android 3 , we are not yet the most well-known. Starting in 2021 and continuing in 2022, we have made significant investments in media campaigns focused on job seeker acquisition and engagement.
Historically, we have largely focused our marketing spend on employers, and despite being the highest rated job seeker app on iOS and Android, we are not yet the most well-known. Starting in 2021 and continuing in 2022 and 2023, we have made significant investments in media campaigns focused on job seeker acquisition and engagement.
Revenue from job posting enhancements is recognized as the customer uses the enhancement on their job postings. Unused prepaid job enhancements are not refundable, and we recognize revenue for the estimated portion of prepaid job enhancements that are expected to expire unused, or breakage, based on estimates considering historical breakage levels for upsell plans.
Revenue from job posting enhancements is recognized as the customer uses the enhancement on their job postings. Unused prepaid job posting enhancements are not refundable, and we recognize revenue for the estimated portion of prepaid job posting enhancements that are expected to expire unused, or breakage, based on estimates considering historical breakage levels for upsell services.
We have financed our operations and capital expenditures primarily through cash generated from operations, sales of shares of common and preferred stock and from our senior unsecured notes, bank loans, and convertible notes. As of December 31, 2022, we had no amounts outstanding under our credit facility.
We have financed our operations and capital expenditures primarily through cash generated from operations, sales of shares of common and preferred stock and from our senior unsecured notes, bank loans, and convertible notes. As of December 31, 2023, we had no amounts outstanding under our credit facility.
This group of employers excluded from our Paid Employer count does not contribute a significant amount of revenue. In the last quarter of the year ended December 31, 2022, Quarterly Paid Employers decreased when compared to the prior-year period.
This group of employers excluded from our Paid Employer count does not contribute a significant amount of revenue. In the last quarter of the year ended December 31, 2023, Quarterly Paid Employers decreased when compared to the prior-year period.
Dollar, principally the Canadian Dollar, British Pound and the Israeli New Shekel. Other income (expense) also includes sublease income which consists of income earned from noncancellable sublease agreements related to two of our office facilities. Income Tax Expense (Benefit) We are subject to federal and state income taxes in the United States, as well as several international jurisdictions.
Dollar, principally the Canadian Dollar, British Pound and the Israeli New Shekel. Other income (expense), net also includes sublease income which consists of income earned from noncancellable sublease agreements related to some of our office facilities. Income Tax Expense (Benefit) We are subject to federal and state income taxes in the United States, as well as several international jurisdictions.
These investments are included within cash and cash equivalents and marketable securities within our Consolidated Balance Sheets. For more information, see Note 10 – Financial Instruments to the audited financial statements included in this report.
These investments are included within cash and cash equivalents and marketable securities within our Consolidated Balance Sheets. For more information, see Note 11 – Financial Instruments to the audited financial statements included in this report.
We expect to continue to invest in corporate infrastructure and incur additional expenses associated with operating as a public company, including expenses related to compliance and reporting obligations 55 pursuant to the rules and regulations of the SEC, and higher expenses for investor relations costs, professional services, and director and officer insurance.
We expect to continue to invest in corporate infrastructure and incur additional expenses associated with operating as a public company, including expenses related to compliance and reporting obligations 57 pursuant to the rules and regulations of the SEC, and higher expenses for investor relations costs, professional services, and director and officer liability insurance.
Obligations and Other Commitments See Note 9 – Commitments and Contingencies to the audited financial statements included in this report for our future minimum commitments related to certain software service agreements.
Obligations and Other Commitments See Note 10 – Commitments and Contingencies to the audited financial statements included in this report for our future minimum commitments related to certain software service agreements.
We consider all of our investments as available for use in current operations, including those with maturity dates beyond one year, and therefore classify these securities within current assets in our Consolidated Balance Sheets. As of December 31, 2022, we held $404.0 million in total investments, consisting of money market mutual funds and available-for-sale debt securities.
We consider all of our investments as available for use in current operations, including those with maturity dates beyond one year, and therefore classify these securities within current assets in our Consolidated Balance Sheets. As of December 31, 2023, we held $283.0 million in total investments, consisting of money market mutual funds and available-for-sale debt securities.
Results of Operations A discussion regarding our financial condition and results of operations for fiscal year 2022 compared to fiscal year 2021 is presented below.
Results of Operations A discussion regarding our financial condition and results of operations for fiscal year 2023 compared to fiscal year 2022 is presented below.
Phil, our AI-powered personal recruiter, engages job seekers on their journey and provides technology that makes their job search and application process more efficient. Our ability to cost effectively grow the number of job seekers and increase their engagement in our marketplace is critical to strengthen our marketplace.
Phil, our AI-powered career advisor, engages job seekers on their journey and provides technology that makes their job search and application process more efficient. Our ability to cost effectively grow the number of job seekers and increase their engagement in our marketplace is critical to strengthen our marketplace.
For more information on the credit facility, please see Note 8 – Debt to the audited financial statements included in this report. We have no amounts outstanding under the credit facility and are in compliance with our debt covenants as of December 31, 2022.
For more information on the credit facility, please see Note 9 – Debt to the audited financial statements included in this report. We have no amounts outstanding under the credit facility and are in compliance with our debt covenants as of December 31, 2023.
If we had made different assumptions, our stock-based compensation expense and our results of operations for the years ended December 31, 2022, 2021, and 2020 may have been significantly different.
If we had made different assumptions, our stock-based compensation expense and our results of operations for the years ended December 31, 2023 and 2022 may have been significantly different.
Resume database plans are priced based on how many resumes the customer would like to view in a month and may be purchased independent of, or in addition to, a job posting plan. Resume database plans are billed in advance of the subscription period, which typically ranges from one to twelve months.
Resume database plans are priced based on how many resumes the customer would like to view in a month and may be purchased independent of, or in addition to, a job posting plan. Resume database plans are billed in advance of the subscription period, which typically ranges from one to twelve months. Revenue is recognized ratably over the subscription period.
We allocate a portion of overhead costs, such as rent, IT costs, supplies, and depreciation and amortization, to sales and marketing expense based on headcount.
We allocate a portion of overhead costs, such as rent, IT costs, supplies, and depreciation and amortization, to sales and marketing expense based on headcount. Sales and marketing costs are expensed as incurred.
Customers that use performance-based revenue plans are typically companies with consistent hiring needs and sophisticated recruitment campaigns where they manage incoming applications and job postings on their own ATSs.
Customers that use performance-based revenue plans are typically companies with consistent hiring needs and sophisticated recruitment campaigns where they manage incoming applications and job postings on their own applicant tracking systems.
Although we incurred a current year pretax profit and maintain a recent history of cumulative earnings, during the year ended December 31, 2022, we recorded a valuation allowance of $12.7 million against the deferred tax asset associated with carried forward California Research and Development Credits as we believe that it is more likely than not that we will not generate sufficient California sourced taxable income in future years to utilize that deferred tax asset.
Although we incurred a current year pretax profit and maintain a recent history of cumulative earnings, during the year ended December 31, 2023, we recorded an incremental valuation allowance of $2.3 million against the deferred tax asset associated with carried forward California Research and Development Credits as we believe that it is more likely than not that we will not generate sufficient California sourced taxable income in future years to utilize that deferred tax asset.
Given that our marketplace remains free for job seekers, employers’ spending funds our continued investment in matching technology. The majority of our marketing efforts to date have been toward reaching employers. Our investment in employer-specific marketing has driven a significant increase in brand awareness. Our aided brand awareness among employers has grown to over 80% in 2022.
Given that our marketplace remains free for job seekers, employers’ spending funds our continued investment in matching technology. The majority of our marketing efforts to date have been toward reaching employers. Our investment in employer-specific marketing has driven a significant increase in brand awareness.
The amount available under the credit facility is reduced by letters of credit outstanding, which totaled $5.4 million as of December 31, 2022. The letters of credit outstanding relate to various leased office spaces.
The amount available under the credit facility is reduced by letters of credit outstanding, which totaled $4.3 million as of December 31, 2023. The letters of credit outstanding relate to various leased office spaces.
We determined the expected volatility assumption using the frequency of daily 66 historical prices of comparable public company common stock for a period equal to the expected term of the option. We periodically assess the comparable companies and other relevant factors used to measure expected volatility for stock option grants. Risk-free Rate.
We determined the expected volatility assumption using the frequency of daily historical prices of comparable public company common stock for a period equal to the expected term of the option. We assess the comparable companies and other relevant factors used to measure expected volatility for stock option grants on an as-needed basis. Risk-free Rate.
We believe our offering to job seekers compares favorably versus alternatives due to the combination of our large and unique set of jobs to choose from, plus our proven matching technology that continues to get smarter over time. In 2022 alone we engaged with over 42 million Active Job Seekers.
We believe our offering to job seekers compares favorably versus alternatives due to the combination of our large and unique set of jobs to choose from, plus our proven matching technology that continues to get smarter over time.
We have invested in research and development to improve our matching technology and deliver a high-quality experience to employers and job seekers. In 2022 and 2021, we spent $127.7 million and $110.5 million, or 14% and 15% of total revenue, respectively, on research and development.
We have invested in research and development to improve our matching technology and deliver a high-quality experience to employers and job seekers. In 2023 and 2022, we spent $141.8 million and $127.7 million, or 22% and 14% of total revenue, respectively, on research and development.
Revenue is recognized ratably over the subscription period. 65 Performance-based Revenue Performance-based revenue consists of customers who pay on a per click by job applicant or per job application basis for the job postings customers wish to distribute through our software.
Performance-based Revenue Performance-based revenue consists of customers who pay on a per click by job applicant or per job application basis for the job postings they wish to distribute through our software.
The final settlement occurred in February 2023. Approximately $110.7 million remains available for future repurchases of our Class A common stock under our share repurchase program as of December 31, 2022. For more information, see Note 13 – Share Repurchase Program to the audited financial statements included in this report.
Approximately $63.4 million remains available for future repurchases of our Class A common stock under our share repurchase program as of December 31, 2023. For more information, see Note 14 – Share Repurchase Program to the audited financial statements included in this report.
The record-setting levels of hiring activity we saw throughout the first half of 2022 started to show signs of softening near the end of June 2022.
The record-setting levels of hiring activity we saw throughout the first half of 2022 started to show signs of softening near the end of June 2022 and proceeded to slow down significantly during the latter half of 2022.
For the year ended December 31, 2021, cash used in investing activities was $13.3 million resulting from capitalized software development costs of $7.3 million and capital expenditures of $6.1 million primarily related to leasehold improvements for one of our operating leases. 63 Financing Activities For the year ended December 31, 2022, cash provided by financing activities was $195.1 million which consisted of $550.0 million of proceeds from the issuance of our senior unsecured notes, $8.1 million of proceeds from the issuance of stock under the employee stock purchase plan, and $4.7 million of proceeds from the exercise of stock options, partially offset by $339.3 million for the repurchase of common stock, $19.2 million for the net settlement of taxes on RSUs, and $9.4 million for the payment of the issuance costs related to the issuance of our senior unsecured notes.
For the year ended December 31, 2022, cash provided by financing activities was $195.1 million which consisted of $550.0 million of proceeds from the issuance of our senior unsecured notes, $8.1 million of proceeds from the issuance of stock under the employee stock purchase plan, and $4.7 million of proceeds from the exercise of stock options, partially offset by $339.3 million for the repurchase of common stock, $19.2 million for the net settlement of taxes on RSUs, and $9.4 million for the payment of the issuance costs related to the issuance of our senior unsecured notes.
For a definition of Adjusted EBITDA, an explanation of our management’s use of this measure and a reconciliation of net income to Adjusted EBITDA, see the section titled “Key Operating Metrics and Non-GAAP Financial Measures.” 48 KEY OPERATING METRICS AND NON-GAAP FINANCIAL MEASURES In addition to the measures presented in our consolidated financial statements, we use the following key operating metrics and non-GAAP financial measures to identify trends affecting our business, formulate business plans, and make strategic decisions: March 31, 2021 June 30, 2021 September 30, 2021 December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 Quarterly Paid Employers 114,705 169,191 169,535 147,081 150,233 156,537 135,703 108,296 Revenue per Paid Employer $1,093 $1,081 $1,254 $1,497 $ 1,513 $1,533 $1,673 $1,944 Year Ended December 31, 2022 2021 (in thousands, except percentages) Adjusted EBITDA $ 184,866 $ 108,329 Adjusted EBITDA margin 20 % 15 % Quarterly Paid Employers We quantify the revenue-generating customer base as the number of Paid Employers in our marketplace.
For a definition of Adjusted EBITDA, an explanation of our management’s use of this measure and a reconciliation of net income to Adjusted EBITDA, see the section titled “Key Operating Metrics and Non-GAAP Financial Measures.” 50 KEY OPERATING METRICS AND NON-GAAP FINANCIAL MEASURES In addition to the measures presented in our consolidated financial statements, we use the following key operating metrics and non-GAAP financial measures to identify trends affecting our business, formulate business plans, and make strategic decisions: March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 March 31, 2023 June 30, 2023 September 30, 2023 December 31, 2023 Quarterly Paid Employers 150,233 156,537 135,703 108,296 105,948 101,634 89,668 70,712 Revenue per Paid Employer $ 1,513 $1,533 $1,673 $1,944 $1,734 $1,677 $1,736 $1,922 Year Ended December 31, 2023 2022 (in thousands, except percentages) Adjusted EBITDA $ 175,296 $ 184,866 Adjusted EBITDA margin 27 % 20 % Quarterly Paid Employers We quantify the revenue-generating customer base as the number of Paid Employers in our marketplace.
If the stock price targets are met sooner than the derived service period, we will accelerate the recognition of stock-based compensation expense to reflect the cumulative expense associated with the vested shares. Income Taxes We account for income taxes in accordance with Accounting Standards Codification 740, Income Taxes .
If the stock price targets are met sooner than the derived service period, we will accelerate the recognition of stock-based compensation expense to reflect the cumulative expense associated with the vested shares.
Liquidity and Capital Resources As of December 31, 2022, we had cash, cash equivalents, and marketable securities totaling $570.4 million and $244.6 million available in unused borrowing capacity under our current credit facility.
Liquidity and Capital Resources As of December 31, 2023, we had cash, cash equivalents, and marketable securities totaling $520.1 million and $245.7 million available in unused borrowing capacity under our current credit facility.
In the last quarter of the year ended December 31, 2022, Revenue per Paid Employer increased by 30% when compared to the prior-year period.
In the last quarter of the year ended December 31, 2023, Revenue per Paid Employer decreased slightly when compared to the prior-year period.
Cash Flows The following table summarizes our cash flows for the periods presented (in thousands): Year Ended December 31, 2022 2021 Net cash provided by operating activities $ 128,808 $ 144,136 Net cash used in investing activities (351,134) (13,336) Net cash provided by financing activities 195,085 9,282 Net increase (decrease) in cash and cash equivalents $ (27,241) $ 140,082 Operating Activities The primary source of operating cash inflows is cash collected from our customers for our services.
Cash Flows The following table summarizes our cash flows for the periods presented (in thousands): Year Ended December 31, 2023 2022 Net cash provided by operating activities $ 103,192 $ 128,808 Net cash provided by (used in) investing activities 106,736 (351,134) Net cash provided by (used in) financing activities (154,265) 195,085 Net increase (decrease) in cash and cash equivalents $ 55,663 $ (27,241) Operating Activities The primary source of operating cash inflows is cash collected from our customers for our services.
This trend continued through the remainder of the year ended December 31, 2022, as the U.S. labor market continued to be impacted by supply chain disruptions, inflation, and rising interest rates which posed challenges for many businesses.
This trend continued throughout the year ended December 31, 2023, as the U.S. labor market continued to be impacted by high interest rates and high inflation, which posed challenges for many businesses.
We expect that sales and marketing expenses will increase on an absolute dollar basis and may vary from period to period as a percentage of revenue for the foreseeable future as we plan to continue to invest in sales and marketing to attract both employers and job seekers to our marketplace and to increase our brand awareness.
We expect that sales and marketing expenses will increase on an absolute dollar basis as we plan to continue to invest in sales and marketing to attract both employers and job seekers to our marketplace and to increase our brand awareness.
For the year ended December 31, 2021, cash provided by operating activities was $144.1 million resulting from our net income of $3.6 million, adjusted by non-cash charges of $109.2 million and a net increase of $31.4 million in our operating assets and liabilities.
For the year ended December 31, 2023, cash provided by operating activities was $103.2 million resulting from our net income of $49.1 million, adjusted by non-cash charges of $74.6 million and a net decrease of $20.5 million in our operating assets and liabilities.
The effective tax rate for the year ended December 31, 2022 differed from the U.S. federal statutory tax rate of 21% primarily due to the net favorable adjustments related to prior years and research and development tax credits, partially offset by state taxes, state valuation allowances on certain tax credit carryforwards, and non-deductible expenses including limitations on the amount of deductible officer compensation.
The effective tax rate for the year ended December 31, 2023 differed from the U.S. federal statutory rate of 21% primarily due to state taxes, state valuation allowances on certain tax credit carryforwards, and non-deductible expenses such as limitations on the amount of deductible executive compensation partially offset by research and development tax credits and a reduction in our Israeli subsidiary’s statutory tax rate for years 2020 through 2023.
Customers may also access our software to review job applications and manage job postings. We recognize revenue from job posting plans ratably over the term of the agreement beginning on the date the subscription service is made available to the customer.
We recognize revenue from job posting plans ratably over the term of the agreement beginning on the date the subscription service is made available to the customer.
No expense is recognized for awards with performance conditions until the performance condition is probable of being met. The Black-Scholes option pricing model requires us to make certain assumptions including: Fair Value of our Common Stock. See the section titled “Determination of the Fair Value of Common Stock on Grant Dates” below. Expected Term.
The Black-Scholes option pricing model requires us to make certain assumptions including: Fair Value of our Common Stock. See the section titled “Determination of the Fair Value of Common Stock on Grant Dates” below. Expected Term.
We have elected to treat stock-based awards with graded vesting schedules and time-based service conditions as a single award and recognize stock-based compensation expense on a straight-line basis over the requisite service period . For awards that contain both performance and service vesting conditions, the grant date fair value is recognized as compensation expense using a graded vesting attribution model.
We have elected to treat stock-based awards with graded vesting schedules and only time-based service conditions as a single award and recognize stock-based compensation expense on a straight-line basis over the requisite service period .
Customer contracts are typically subject to renewal at the end of the subscription term and are nonrefundable. Time-based job posting plans : Job posting plans provide customers access to cloud-based software services, where they may create job postings that are posted to our marketplace in addition to numerous other job sites or partner networks with job seeker communities.
Time-based job posting plans : Job posting plans provide customers access to cloud-based software services, where they may create job postings that are posted to our marketplace in addition to numerous 66 other job sites or partner networks with job seeker communities. Customers may also access our software to review job applications and manage job postings.
The CEO Performance Award also contains an implied performance-based vesting condition as the CEO’s ability to earn the award was contingent upon the completion of the Direct Listing. Accordingly, no expense was recognized prior to the completion of our Direct Listing on May 26, 2021, as vesting was not considered probable for accounting purposes until the Direct Listing occurred.
Accordingly, no expense was recognized prior to the completion of our Direct Listing on May 26, 2021, as vesting was not considered probable for accounting purposes until the Direct Listing occurred.
We bring employers and job seekers together using industry-leading matching technology. This technology benefits from the billions of data points we gather as job seekers and 51 employers interact, leading to better matches over time. As a result of our advancements with matching, we delivered over 30 million Great Match candidates in 2022.
We bring employers and job seekers together using industry-leading matching 53 technology. This technology benefits from the billions of data points we gather as job seekers and employers interact, leading to better matches over time.
The credit facility has a maturity date of April 30, 2026 and bears interest at a rate based upon our Net Leverage Ratio.
Credit Facility In April 2021, we entered into a $250.0 million credit facility agreement with a syndicate of banks. The credit facility has a maturity date of April 30, 2026 and bears interest at a rate based upon our Net Leverage Ratio.
As a result, we now follow the timeline required for adopting new or revised accounting pronouncements applicable to public companies. , Recent Accounting Pronouncements See Note 2 – Basis of Presentation, Principles of Consolidation, and Summary of Significant Accounting Policies to the audited financial statements included in this report for more information.
Recent Accounting Pronouncements See Note 2 – Basis of Presentation, Principles of Consolidation, and Summary of Significant Accounting Policies to the audited financial statements included in this report for more information.
Investments During the third quarter of 2022, we began investing primarily in highly rated debt securities and money market mutual funds to manage our excess cash reserves.
Investments During the year ended December 31, 2023, we continued investing in highly rated debt securities and money market mutual funds to manage our excess cash reserves.
Total gross margins were 90% and 89% in the years ended December 31, 2022 and December 31, 2021, respectively, and this improvement reflected our continued commitment to operational efficiencies and maintaining costs proportionate to revenue growth.
Total gross margins remained flat at 90% in the years ended December 31, 2023 and December 31, 2022, reflecting our continued commitment to operational efficiencies and maintaining costs proportionate to revenue.
Stock-Based Compensation Compensation expense related to stock-based awards is measured and recognized in the financial statements based on the fair value of the awards granted. The fair value of each option award and employee stock purchase right associated with our Employee Stock Purchase Plan is estimated on the grant date using the Black-Scholes option-pricing model.
The fair value of restricted stock units, or RSUs, is estimated based on the fair value of our common stock. The fair value of each option award and employee stock purchase right associated with our Employee Stock Purchase Plan is estimated on the grant date using the Black-Scholes option-pricing model.
For the year ended December 31, 2022, our revenue was $904.6 million and we generated net income of $61.5 million and Adjusted EBITDA of $184.9 million. For the year ended December 31, 2021, our revenue was $741.1 million and we generated net income of $3.6 million and Adjusted EBITDA of $108.3 million.
For the year ended December 31, 2022, our revenue was $904.6 million and we generated net income of $61.5 million and Adjusted EBITDA of $184.9 million. Adjusted EBITDA is a financial measure not presented in accordance with GAAP.
We expect that these expenses will continue to be our largest operating expense category for the foreseeable future as we continue to expand on our sales and marketing efforts. We measure the expected returns of specific sales and marketing initiatives and adjust spend levels up or down accordingly.
We expect that these expenses will continue to be our largest operating expense category for the foreseeable future as we continue to expand on our sales and marketing efforts over time.
Stock-based Compensation for Awards with a Market Condition In April 2021, we granted an RSU award (the “CEO Performance Award”), which included service, market, and performance-based vesting conditions. The fair value of the award is determined using a Monte Carlo simulation model. The associated stock-based compensation expense is recorded over the requisite service period, using a graded attribution method.
Stock-based Compensation for Awards with a Market Condition In April 2021, we granted an RSU award to Ian Siegel, our Chief Executive Officer, or the CEO, and such award, the CEO Performance Award, which included service, market, and performance-based vesting conditions. The fair value of the award is determined using a Monte Carlo simulation model.
Through December 31, 2022, we did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities that have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
Through December 31, 2023, we did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities that have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. 65 Critical Accounting Policies and Estimates Critical accounting policies and estimates are both the most important to the portrayal of our net assets and results of operations and require difficult, subjective, or complex judgments.
We believe the return on these investments will create operating leverage over time while continuing to drive top-line growth. Seasonality Our business is seasonal, reflecting typical behavior in hiring markets. Hiring activity tends to decelerate in the fourth quarter. In 2019, for example, sequential revenue growth was 13% and 4% for the quarters ended June 30 and September 30, respectively.
We believe the return on these investments will create operating leverage over time while continuing to drive top-line growth. Seasonality Our business is seasonal, reflecting typical behavior in hiring markets. Hiring activity tends to decelerate in the fourth quarter. The COVID-19 pandemic interrupted the patterns we typically see in our quarterly seasonality.
Our automated recruiter curates jobs and proactively sends alerts for new opportunities where they are a Great Match, which is a designation assigned by ZipRecruiter’s technology to indicate a high potential fit between a job seeker and a job. As our matching technology learns more about job seekers’ preferences and attributes, our technology offers increasingly higher quality matches.
Our artificial intelligence-powered career advisor, Phil, curates jobs and proactively sends alerts for new opportunities where they are a Great Match, which is a designation assigned by ZipRecruiter’s technology to indicate a high potential fit between a job seeker and a job.
Sales and Marketing Year Ended December 31, 2022 2021 $ Change % Change (in thousands, except percentages) Sales and marketing $ 484,429 $ 410,665 $ 73,764 18 % Percentage of revenue 54 % 55 % Sales and marketing expenses grew $73.8 million, or 18%, for the year ended December 31, 2022 compared to the year ended December 31, 2021.
Sales and Marketing Year Ended December 31, 2023 2022 $ Change % Change (in thousands, except percentages) Sales and marketing $ 265,253 $ 484,429 $ (219,176) (45) % Percentage of revenue 41 % 54 % Sales and marketing expenses decreased by $219.2 million, or 45%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
General and administrative expense also consists of non-recurring costs as part of our transition to a publicly traded company and includes fees paid to our financial advisors in connection with our Direct Listing. In addition, we allocate a portion of overhead costs, such as rent, IT costs, supplies, and depreciation and amortization, to general and administrative expense based on headcount.
In addition, we allocate a portion of overhead costs, such as rent, IT costs, supplies, and depreciation and amortization, to general and administrative expense based on headcount.
Average Monthly Revenue per Paid Employer by Employer Cohort Start Year Satisfied employers continue to expand their relationship with us in terms of additional jobs and tenure in our marketplace. Those with recurring hiring needs remain active in our marketplace over time and tend to increase their spend each year, posting additional jobs and purchasing job enhancement products.
Those with recurring hiring needs remain active in our marketplace over time and tend to increase their spend each year, posting additional jobs and purchasing job enhancement products. Despite the impact on employer hiring demand, our cohort trends remained intact: employers across annual cohorts continue to spend more over time.
Cost of Revenue and Gross Margin Year Ended December 31, 2022 2021 $ Change % Change (in thousands, except percentages) Cost of revenue $ 86,298 $ 79,614 $ 6,684 8 % Gross margin 90 % 89 % Cost of revenue increased $6.7 million, or 8%, for the year ended December 31, 2022 compared to the year ended December 31, 2021, primarily driven by an increase of $3.7 million in credit card processing fees due to the increase in revenue.
Cost of Revenue and Gross Margin Year Ended December 31, 2023 2022 $ Change % Change (in thousands, except percentages) Cost of revenue $ 64,309 $ 86,298 $ (21,989) (25) % Gross margin 90 % 90 % Cost of revenue decreased by $22.0 million, or 25%, for the year ended December 31, 2023 compared to the year ended December 31, 2022, primarily due to a decrease of $9.3 million in job distribution costs from performance-based revenue, a decrease of $5.8 million in credit card processing fees, and a decrease of $5.7 million in partner revenue share.
The non-cash charges primarily resulted from $107.3 million for stock-based compensation expense, $9.5 million pertaining to amortization of intangible assets and depreciation, and $5.4 million pertaining to non-cash lease expense, partially offset by $14.9 million related to the change in our deferred tax assets primarily driven by current year pretax losses and the tax related impact of stock-based compensation.
The non-cash charges primarily resulted from $84.2 million for stock-based compensation expense, $11.6 million pertaining to amortization of intangible assets and depreciation, and $4.2 million pertaining to non-cash lease expense, partially offset by $18.4 million related to the change in our deferred tax assets driven by an increase to our current year 64 capitalization of software and research costs from a tax perspective partially offset by a decrease in our operating loss and tax credit carryforwards, net of valuation allowances, and $11.3 million in amortization and accretion of marketable securities.
During the year ended 61 December 31, 2022, and prior to entering into a new accelerated share repurchase agreement in December 2022, or December ASR, we repurchased 16.0 million shares of our Class A common stock for $289.3 million under our share repurchase program, including 5.1 million shares of our Class A common stock delivered under the completed accelerated share repurchase agreements entered into in March and June 2022, totaling $100.0 million, 7.9 million shares of our Class A common stock delivered under a Rule 10b5-1 plan totaling $137.7 million, and 3.0 million shares of our Class A common stock totaling $51.6 million through open market purchases.
During the year ended December 31, 2023, we repurchased 9.6 million shares of our Class A common stock for $147.3 million under our share repurchase program, including 6.9 million shares of our Class A common stock delivered under a Rule 10b5-1 plan totaling $110.7 million, 2.6 million shares of our Class A common stock purchased in the open market totaling $36.6 million, and 0.1 million shares of our Class A common 63 stock delivered upon the final settlement of an accelerated share repurchase agreement that we entered into in December 2022 with a major financial institution for which the payment was made in December 2022.
The requisite service period is the longer of the service period derived from the Monte Carlo simulation model and the explicit service period the CEO is required to remain employed to vest in the award. The market condition is satisfied upon achieving certain stock price targets for a period following the completion of our Direct Listing.
The associated stock-based compensation expense is recorded over the requisite service period, using a graded attribution method. The requisite service period is the longer of the service period derived from the Monte Carlo simulation model and the explicit service period the CEO is required to remain employed to vest in the award.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeWe are also subject to interest rate risk in connection with the senior unsecured notes. As the interest rate on these senior unsecured notes is subject to a fixed percentage, we do not have significant financial statement risk associated with changes in interest rates pertaining to our senior unsecured notes.
Biggest changeHowever, the fair value of our senior unsecured notes, which pay interest at a fixed rate, will generally fluctuate with movements of interest rates, increasing in periods of declining rates of interest and declining in periods of increasing rates of interest. Lastly, we are subject to interest rate risk in connection with our investments.
A hypothetical 10% change in foreign currency exchange rates applicable to our business would not have had a material impact on our consolidated financial statements. 71
A hypothetical 10% change in foreign currency exchange rates applicable to our business would not have had a material impact on our consolidated financial statements. 73
Based on investment positions as of December 31, 2022, a hypothetical increase in interest rates of 100 basis points across all maturities would result in a $1.3 million decrease in the fair value of the portfolio. Such losses would only be realized if we sold the investments prior to maturity.
Based on investment positions as of December 31, 2023, a hypothetical increase in interest rates of 100 basis points across all 72 maturities would result in a $0.5 million decrease in the fair value of the portfolio. Such losses would only be realized if we sold the investments prior to maturity.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We have operations both within the United States and internationally, and we are exposed to market risks in the ordinary course of our business.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We have operations both within the United States and internationally, and we are exposed to market risks in the ordinary course of our business. These risks primarily include changes in interest rates and fluctuations in foreign currency exchange rates.
Lastly, we are subject to interest rate risk in connection with our investments. The primary objectives of our investment activities are to preserve principal, provide liquidity, and maximize income without significantly increasing risk. We do not enter into investments for trading or speculative purposes.
The primary objectives of our investment activities are to preserve principal, provide liquidity, and maximize income without significantly increasing risk. We do not enter into investments for trading or speculative purposes. Our investments are exposed to market risk due to fluctuation in interest rates, which may affect our interest income and the fair value of our investments.
Because we have no amounts outstanding under the credit facility, we are not currently exposed to material risks due to changes in interest rates. A hypothetical 10% change in interest rates during any of the periods presented would not have had a material impact on our consolidated financial statements.
A hypothetical 10% change in interest rates during any of the periods presented would not have had a material impact on our consolidated financial statements. We do not believe we are subject to interest rate risk in connection with the senior unsecured notes.
These risks primarily include changes in interest rates and fluctuations in foreign currency exchange rates. 70 Interest Rate Risk We are subject to interest rate risk in connection with our credit facility which bears a floating interest rate.
Interest Rate Risk We are subject to interest rate risk in connection with our credit facility which bears a floating interest rate. We have not been exposed to, nor do we anticipate being exposed to, material risks due to changes in interest rates.
Removed
Our investments are exposed to market risk due to fluctuation in interest rates, which may affect our interest income and the fair value of our investments.
Added
Our senior unsecured notes are carried at amortized cost and fluctuations in interest rates do not impact our consolidated financial statements.

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