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What changed in ZIPRECRUITER, INC.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of ZIPRECRUITER, INC.'s 2023 and 2024 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 2024 report.

+729 added−366 removedSource: 10-K (2025-02-25) vs 10-K (2024-02-28)

Top changes in ZIPRECRUITER, INC.'s 2024 10-K

729 paragraphs added · 366 removed · 276 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

28 edited+11 added−29 removed43 unchanged
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.
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. 1 Based on job seeker app ratings as of January 2025 from AppFollow for ZipRecruiter, CareerBuilder, Glassdoor, Indeed, LinkedIn, and Monster. 10 Table of Contents Competition for Job Seekers Job seekers have a variety of choices when searching for their next great job opportunity.
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.
Our Competition Hiring is a vast, competitive, and highly fragmented market. We compete in varying degrees with other online job sites including CareerBuilder and Monster, Craigslist, Glassdoor, Indeed, LinkedIn 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.
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 “Item 7.
For a definition of Adjusted EBITDA, an explanation of our management’s use of this measure, and a reconciliation of net income (loss) to Adjusted EBITDA, see “Item 7.
A greater number of job seekers attracts more employers who in turn post more job opportunities in our marketplace. These natural, self-perpetuating network effects increase our data and thereby accelerate the rate at which our matching technology gets smarter over time. Compelling Financial Results.
A greater number of job seekers attracts more employers who in turn post more job opportunities in our marketplace. These natural, self-perpetuating network effects increase our data and thereby accelerate the rate at which our matching technology gets smarter over time. Strong Financial Results.
We provide a variety of pricing plans to best suit an employer’s specific needs, including flat rate pricing on terms typically ranging from a day to a 8 Table of Contents year, as well as performance-based pricing for employers that run sophisticated recruitment marketing campaigns. How We Work for Job Seekers For job seekers, we make finding work easier.
We provide a variety of pricing plans to best suit an employer’s specific needs, including flat rate pricing on terms typically ranging from a day to a year, as well as performance-based pricing for employers that run sophisticated recruitment marketing campaigns. How We Work for Job Seekers For job seekers, we make finding work easier.
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.
This addresses a primary 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.
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.
We also use our Investor Relations page on our website at www.ziprecruiter.com, press releases, public conference calls, public webcasts, X feed (@ZipRecruiter), Facebook page, and LinkedIn page as means of disclosing material information and for complying with our disclosure obligations under Regulation FD.
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
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.
Regulatory Matters We are subject to many varying laws and regulations in the United States, Canada, the European Union, the United Kingdom and throughout the world, including those related to privacy, data protection, content regulation, intellectual property, consumer protection, e-commerce, marketing, advertising, messaging, rights of publicity, health and safety, employment and labor, product liability, accessibility, competition, and taxation.
Regulatory Matters We are subject to many varying laws and regulations in the United States, Canada, the European Union, the United Kingdom, Israel and throughout the world, including those related to privacy, data protection, AI (including machine learning), content regulation, intellectual property, consumer protection, e-commerce, marketing, advertising, messaging, rights of publicity, health and safety, employment and labor, product liability, accessibility, competition, and taxation.
Our Technology Our research and development efforts are focused on delivering great products through data driven systems, machine learning technology, and robust infrastructure to ensure that our marketplace is sophisticated, low latency, resilient, and available to our users at all times. 11 Table of Contents Our research and development organization is built around small, cross-functional development teams.
Our Technology Our research and development efforts are focused on delivering great products through data driven systems, machine learning technology, and robust infrastructure to ensure that our marketplace is sophisticated, low latency, resilient, and available to our users at all times. Our research and development organization is built around small, cross-functional development teams.
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.
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.
We create a safe space for all employees to feel heard, included and like they belong. Our employee-led and executive-sponsored Employee Resource Groups are highly active and create communities for employees to engage in.
We create a safe space for all employees to feel heard, included and like they belong. Our employee-led and executive-sponsored Employee Resource Groups are highly active and create communities for employees, regardless of background, to engage in.
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 Employees and Human Capital Resources As of December 31, 2024, we employed 1,000 individuals across the United States, the United Kingdom, Canada and Israel. We also engage independent contractors and consultants.
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.
Our commitment to inclusion and belonging 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.
Our development teams design, build and continue to expand our ATS, mobile apps, data processing and analysis pipelines, marketplace functionality, search and matching, email and messaging, and third-party product integrations as well as the software infrastructure that supports best practices such as high frequency deployment, orchestrating containers, and leveraging open-source technologies. Our systems are currently operated entirely on cloud services.
Our development teams 11 Table of Contents design, build and continue to expand our ATS, mobile apps, data processing and analysis pipelines, marketplace functionality, search and matching, email and messaging, and third-party product integrations as well as the software infrastructure that supports best practices such as high frequency deployment, orchestrating containers, and leveraging open-source technologies.
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 . • Face-to-face interactions .
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.
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. Adjusted EBITDA is a financial measure not presented in accordance with generally accepted accounting principles, or GAAP.
We have engineers, product managers and data scientists all over the United States and in Tel Aviv, Israel. We intend to continue to invest in our technology capabilities as we further build out a category-defining marketplace for job seekers and employers.
Our systems are currently operated entirely on cloud services. We have engineers, product managers and data scientists in the United States, Israel, the United Kingdom, and Canada. We intend to continue to invest in our technology capabilities as we further build out a category-defining marketplace for job seekers and 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 and inclusion, or DE&I : We believe our company is strengthened by a culture that embraces diversity and inclusion.
We believe a safe, professional environment empowers people to take risks and be their best selves. Our employees are encouraged to champion great ideas, embrace innovative approaches and use data to advocate for their point of view. • We embrace inclusion and belonging. We believe our company is strengthened by a culture that embraces inclusion.
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.
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 strong financial results. For the year ended December 31, 2024, our revenue was $474.0 million and we had a net loss of $12.9 million and Adjusted EBITDA of $78.0 million.
These laws often require companies to implement specific information security controls to protect certain types of data (such as personal data, “special categories of personal data” or health data), and/or impose specific requirements relating to the collection or processing of such data.
These laws often require companies to implement specific information security controls to protect certain types of personal information and/or impose specific requirements relating to the collection or processing of such information, and we have implemented different security measures, policies and processes designed to protect such information.
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.
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 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.
We seek to protect our trade secrets and confidential information through a variety of methods, including strict access control procedures and confidentiality agreements with employees, contractors and other third parties who may have access to our proprietary information.
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.
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.
Data Privacy and Security Laws We are subject to various federal, state and international laws and regulations relating to the privacy and security of consumer, customer and employee personal information.
We are therefore subject to various federal, state and international laws and regulations relating to the privacy, security and protection of personal information in the United States, Canada, the European Union, the United Kingdom, Israel, and throughout the world.
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.
Further, we are subject to laws, rules, regulations, and other obligations regarding cross-border transfers of personal information, including laws relating to the transfer of personal information outside the EEA and the UK, and the use of cookies and e-marketing activities.
In the United States, the Federal Trade Commission, or the FTC, the Department of Commerce, and various states continue to call for greater regulation of the collection of personal data, as well as restrictions for certain targeted advertising practices.
Legal requirements relating to the data privacy and security continue to evolve, and regulatory scrutiny in this area continues to increase around the world as various regulators and lawmakers continue to call for greater regulation of the collection and processing of personal information, as well as restrictions for certain targeted advertising practices.
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.
These changes, and the uncertainty created by the continuous evolution of the regulatory environment, implicate aspects of our corporate governance, risk management practices, public 12 Table of Contents disclosures, environmental, social and governance related issues, AI and cybersecurity.
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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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Our product allows employers to schedule interviews with candidates vetted by our matching technology within hours of posting a job, shortening the time it takes to find and hire great talent. 8 Table of Contents Flexible Pricing • Flexible pricing based on customer needs .
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We believe a safe, professional environment empowers people to take risks and be their best selves.
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Data Privacy and Security Laws We receive, collect, use, store, transfer, and process the personal information of job seekers, employers and other users of our website and services, our employees, service provider representatives and others across the world.
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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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At a federal level in the United States, our processing of personal information is primarily regulated through the Federal Trade Commission Act, and numerous states have implemented their own comprehensive data privacy laws (e.g., the California Consumer Privacy Act) or have pending data privacy legislation which impose additional obligations and restrictions.
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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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Canada’s Personal Information Protection and Electronic Documents Act states principles for the businesses to adhere to in processing and storing personal information, and certain Canadian provinces have similar comprehensive privacy laws that apply to companies operating within those provinces.
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Section 5(a) of the FTC Act empowers the agency to enforce against “unfair or deceptive acts or practices in or affecting commerce,” and the FTC has used this authority extensively to hold businesses to fair and transparent privacy and security standards.
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We are also subject to privacy, data protection, and security laws in Europe, including the EU General Data Protection Regulation, the UK General Data Protection Regulation and the UK Data Protection Act.
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Numerous states have also enacted or are proposing legislation to enact state-level data privacy laws and regulations governing the collection, use, and processing of state residents’ personal information. For example, the California Consumer Privacy Act, or CCPA, came into force in California in 2020.
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Privacy and security laws are continuously evolving, and may be interpreted, applied, created or amended in a manner that could harm or require us to change our current or future business and operations.
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The CCPA established a new privacy framework for covered businesses such as ours, created new privacy rights for consumers residing in the state, and required us to modify our data processing practices and policies and incur compliance related costs and expenses.
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For further information on the privacy and security laws that we are subject to, see the risk factor titled “Changes in laws or regulations relating to data privacy or the protection, collection, storage, processing, transfer, or use of personal data, or AI, or any actual or perceived failure by us to comply with such laws and regulations or our privacy policies, could adversely affect our business”.
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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.
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Seasonality For a discussion of the seasonality of our business, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Factors Affecting our Performance—Seasonality.” Intellectual Property The protection of our intellectual property and proprietary technologies is an important aspect of our business.
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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.
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We seek to protect our intellectual property rights and proprietary technologies through trademark, copyright and trade secret laws, as well as through confidentiality and invention assignment agreements with our employees, contractors and other third parties with whom we have a relationship in order to control access to, and clarify ownership of, our proprietary intellectual property and information.
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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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As of December 31, 2024, ZipRecruiter, Inc. owned three U.S. and 20 international trademark registrations for the trademark “ZIPRECRUITER” and Poplar Technologies Ltd. had one U.S. trademark application and owned two international trademark registrations for the trademark “BREAKROOM”. We also own numerous domain names, including “www.ziprecruiter.com” and “www.breakroom.cc”. We do not currently own any patents.
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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.
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We consistently review our branding strategies and technology to assess the existence and registrability of new intellectual property. We rely in part on trade secrets and confidential information to develop and maintain our competitive position.
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PIPEDA applies to organizations that collect, use or disclose personal information in the course of commercial activities, where such activities take place within a Canadian province that does not otherwise have “substantially similar” legislation. Alberta, British Columbia and Québec are the only provinces that have enacted comprehensive private sector privacy statutes that have each been deemed “substantially similar” to PIPEDA.
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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.
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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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The GDPR created a single legal framework in relation to the collection, control, processing, sharing, disclosure and other use of data relating to an identifiable living individual that applies across all EU member states.
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However, the GDPR allows for derogations where EU member states can deviate from the requirements in their own legislation, including for example, introducing measures that apply in specific situations and implementing rules regarding legal basis of processing.
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It is therefore likely that we will need to comply with these local regulations in addition to the GDPR, where we operate or provide services in those EU member state jurisdictions.
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Local supervisory authorities are able to impose fines for non-compliance and have the power to carry out audits, require companies to cease or change processing, request information, and obtain access to premises.
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The GDPR created more stringent operational requirements for processors and controllers of personal data, including, for example, granting new rights for data subjects as well as enhancing existing rights, requiring enhanced disclosures to data subjects about how personal data is processed (including information about the profiling of individuals and automated individual decision-making), records of processing activities, limiting retention periods of personal data, requiring mandatory data breach notification to data protection regulators or supervisory authorities (and in certain cases, to the affected individuals), and requiring additional policies and procedures to comply with the accountability principle under the GDPR.
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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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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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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.
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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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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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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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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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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.
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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.
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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.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

126 edited+59 added−17 removed257 unchanged
Biggest changeThese incidents and any future data security breach, such as a hacking or phishing attack, or other data privacy or security incident, whether intentionally or unintentionally caused by us or by third parties, that we experience could result in: unauthorized access to, misuse of, or unauthorized acquisition of our, our personnel’s, or our users’ data; the loss, corruption, or alteration of this data; interruptions in our operations; or damage to our computers or systems or those of our users.
Biggest changeThese incidents and any future data security breach that we or our vendors and third-party partners experience, such as those caused through hacking, social engineering, phishing, insufficient end-user or customer account controls and/or security measures, including user or customer account takeovers, credential stuffing, malware (including ransomware), malfeasance by insiders, human or technological error, as a result of malicious code embedded in software, physical or electronic-break-in, weakness resulting from intentional or unintentional service provider actions, or other data privacy or security incident, whether intentionally or unintentionally caused by us or by third parties could result in: unauthorized access to, misuse of, or unauthorized acquisition of IT Systems and our, our personnel’s, our users’, or our customers’ data; the loss, corruption, or alteration of this data; interruptions in our operations; unavailability of our website and applications; or damage to our computers or systems or those of our users.
We face intense competition from many well-established online job sites such as CareerBuilder, Craigslist, Glassdoor, Indeed, LinkedIn and Monster as well as from newer entrants such as Google or Facebook. Many of our existing and potential competitors are considerably larger or more established than we are and have larger workforces and more substantial marketing and financial resources.
We face intense competition from many well-established online job sites such as CareerBuilder and Monster, Craigslist, Glassdoor, Indeed, and LinkedIn, as well as from newer entrants such as Google or Facebook. Many of our existing and potential competitors are considerably larger or more established than we are and have larger workforces and more substantial marketing and financial resources.
As a result, we may generate losses. We cannot ensure that we will continue to achieve profitability in the future or that we can sustain profitability. We rely on Amazon Web Services, or AWS, to host our marketplace, and any disruption of service from AWS or material change to our arrangement with AWS could adversely affect our business.
As a result, we may continue to generate losses. We cannot ensure that we will achieve profitability in the future or that we can sustain profitability. We rely on Amazon Web Services, or AWS, to host our marketplace, and any disruption of service from AWS or material change to our arrangement with AWS could adversely affect our business.
Further, any significant change to applicable laws, regulations, or industry practices regarding the collection, use, retention, security, or disclosure of the data of our employers and job seekers, employees, contractors, or others, or their interpretation, or any changes regarding the manner in which the express or implied consent of employers and job seekers for the collection, use, retention, or disclosure of such data must be obtained, could increase our costs and require us to modify our services and features, which may be material or not cost-effective, and may limit our storage and processing of user data or develop new services and features.
Further, any significant change to applicable laws, regulations, or industry practices regarding the collection, use, processing, retention, security, or disclosure of the data of our employers and job seekers, employees, contractors, or others, or their interpretation, or any changes regarding the manner in which the express or implied consent of employers and job seekers for the collection, use, processing, retention, or disclosure of such data must be obtained, could increase our costs and require us to modify our services and features, which may be material or not cost-effective, and may limit our storage and processing of user data or develop new services and features.
Any failure or perceived failure by us to comply with our privacy policies, our privacy-related obligations to employers and job seekers, employees, contractors, or other third parties, or any other legal obligations or regulatory requirements relating to privacy, data protection, AI, or information security may result in governmental and regulatory investigations or enforcement and/or assessment notices (for a compulsory audit), orders to cease or change our processing of our data, litigation, claims (including representative actions and other class action type litigation, where individuals have suffered harm), or public statements against us by consumer advocacy groups or others and could result in significant liability, cause our employers and job seekers to lose trust in us, and otherwise have an adverse effect on our reputation and business.
Any failure or perceived failure by us to comply with our privacy policies, our privacy-related obligations to employers and job seekers, employees, contractors, or other third parties, or any other legal obligations or regulatory requirements relating to privacy, data protection, consumer protection, AI, or information security may result in governmental and regulatory investigations or enforcement and/or assessment notices (for a compulsory audit), orders to cease or change our processing of our data, litigation, claims (including representative actions and other class action type litigation, where individuals have suffered harm), or public statements against us by consumer advocacy groups or others and could result in significant liability, cause our employers and job seekers to lose trust in us, and otherwise have an adverse effect on our reputation and business.
Future transfers by holders of Class B common stock will generally result in those shares converting to Class A common stock, subject to limited exceptions, such as certain permitted transfers, including certain transfers to family members, trusts solely for the benefit of the stockholder or their family members, affiliates under common control with the stockholder, and partnerships, corporations, and other entities exclusively owned by the stockholder or their family members, in each case as fully described in our amended and restated certificate of incorporation.
Future transfers by holders of Class B common stock will generally result in those shares converting to Class A common stock, subject to limited exceptions, such as certain permitted transfers, including certain transfers to family members, trusts solely for the benefit of the stockholder or their family members, affiliates under common control with the stockholder, and partnerships, corporations, and other entities exclusively owned by the stockholder or their family members, in each case as fully described in our amended and restated certificate of incorporation, as amended.
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.
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; 32 Table of Contents • 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.
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.
Beginning in 2023, this tax applies to our share repurchase program as 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.
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.
Our amended and restated certificate of incorporation, as amended, 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, as amended, or our amended and restated bylaws; or any action asserting a claim against us that is governed by the internal affairs doctrine.
We are expanding our sales and marketing capabilities to target additional potential Paid Employers, including some larger organizations, but there is no guarantee that we will be successful attracting and maintaining these businesses as users, and even if we are successful, these efforts may divert our resources away from and negatively impact our ability to attract and maintain our current Paid Employer base.
We are expanding our sales and marketing capabilities to target additional potential Paid Employers, including some larger organizations, but there is no guarantee that we will be successful in attracting and maintaining these businesses as users, and even if we are successful, these efforts may divert our resources away from and negatively impact our ability to attract and maintain our current Paid Employer base.
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.
Among other things, our amended and restated certificate of incorporation, as amended, 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, as amended, 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; 44 Table of Contents • 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.
Certain federal, state and foreign government bodies and agencies have adopted, and others are considering adopting, or may adopt in the future, laws and regulations regarding the collection, use, transfer, storage and disclosure of personal information obtained from consumers, customers, employees, and other individuals, and the conditions under which businesses may communicate with such individuals and other third parties.
Certain federal, state and foreign government bodies and agencies have adopted, and others are considering adopting, or may adopt in the future, laws, standards and regulations regarding the collection, use, transfer, storage and disclosure of personal information obtained from consumers, customers, employees, and other individuals, the conditions under which businesses may communicate with such individuals and other third parties.
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.
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; 41 Table of Contents • 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.
The regulatory framework for privacy and data protection worldwide is uncertain and complex, and these or other actual or alleged obligations may be interpreted and applied in ways we do not anticipate or that are inconsistent from one jurisdiction to another and may conflict with other rules or our practices.
The regulatory framework for privacy, data protection and AI worldwide is uncertain and complex, and these or other actual or alleged obligations may be interpreted and applied in ways we do not anticipate or that are inconsistent from one jurisdiction to another and may conflict with other rules or our practices.
These efforts may prove more expensive than we currently anticipate, and we may not succeed in increasing our revenue sufficiently to offset these higher expenses. If our revenue declines or fails to grow at a rate faster than increases in our operating expenses, we will not be able to maintain profitability in future periods.
These efforts may prove more expensive than we currently anticipate, and we may not succeed in increasing our revenue sufficiently to offset these higher expenses. If our revenue declines or fails to grow at a rate faster than increases in our operating expenses, we will not be able to regain or maintain profitability in future periods.
We receive, collect, store, process, transfer, and use personal information and other user data. There are numerous federal, state, local, and international laws and regulations regarding data privacy, data protection, AI (including machine learning) information security, and the collection, storing, sharing, use, processing, transfer, disclosure, and protection of personal information and other content.
We receive, collect, store, process, transfer, and use personal information and other user data. There are numerous federal, state, local, and international laws and regulations regarding data privacy, data protection, AI (including machine learning), information security, and the collection, storing, sharing, use, transfer, disclosure, protection, and other processing of personal information and other content, and consumer protection.
Changes in laws or regulations relating to data privacy or the protection, collection, storage, processing, transfer, or use of personal data, or AI, or any actual or perceived failure by us to comply with such laws and regulations or our privacy policies, could adversely affect our business.
Changes in laws or regulations relating to data privacy, the protection, collection, storage, processing, transfer, or use of personal data, the use of AI, or consumer protection, or any actual or perceived failure by us to comply with such laws and regulations or our privacy policies, could adversely affect our business.
Paid Employer(s) excludes employers from our Job Distribution Partners or other indirect channels, employers who are not actively searching for candidates, but otherwise have access to previously posted jobs, and employers on free trial. 16 Table of Contents Our marketplace functions on software that is highly technical and complex and if it fails to perform properly, our reputation could be adversely affected, our market share could decline and we could be subject to liability claims.
Paid Employer(s) excludes employers from our Job Distribution Partners or other indirect channels, employers who are not actively searching for candidates, but otherwise have access to previously posted jobs, and employers on free trial. 15 Table of Contents Our marketplace functions on software that is highly technical and complex and if it fails to perform properly, our reputation could be adversely affected, our market share could decline and we could be subject to liability claims.
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.
Provisions in our amended and restated certificate of incorporation, as amended, 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.
We also expect that there will continue to be new laws, regulations, and industry standards concerning privacy, data protection, and information security proposed and enacted in various jurisdictions.
We also expect that there will continue to be new laws, regulations, and industry standards concerning privacy, data protection, AI, and information security proposed and enacted in various jurisdictions.
In addition, any perceived or actual breach of compliance by us, our employers and job seekers, or payment partners with respect to applicable laws, rules, and regulations could have a significant impact on our reputation and could cause us to lose existing employers and job seekers, prevent us from obtaining new employers and job seekers, cause other payment partners to terminate or not renew their agreements with us, require us to expend significant funds to remedy problems caused by violations and to avert further violations, and expose us to legal risk and potential liability, all of which may adversely affect our business, operating results, and financial condition and may cause the price of our common stock to decline.
In addition, any perceived or actual breach of compliance by us, our employers and job seekers, or payment partners with respect to applicable laws, rules, and regulations could have a significant impact on our reputation and could cause us to lose existing employers and job seekers, prevent us from obtaining new 30 Table of Contents employers and job seekers, cause other payment partners to terminate or not renew their agreements with us, require us to expend significant funds to remedy problems caused by violations and to avert further violations, and expose us to legal risk and potential liability, all of which may adversely affect our business, operating results, and financial condition and may cause the price of our common stock to decline.
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.
We have not identified any material weaknesses in our internal control over financial reporting during 2024, 2023, and 2022. 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.
Our indebtedness could have important consequences, including: • making it more difficult for us to satisfy our debt obligations; • limiting our ability to obtain additional financing to fund future working capital, capital expenditures, acquisitions or other general corporate requirements; • requiring a portion of our cash flows to be dedicated to debt service payments instead of other purposes, thereby reducing the amount of cash flows available for working capital, capital expenditures, acquisitions and other general corporate purposes; • increasing our vulnerability to adverse changes in general economic, industry and competitive conditions; and • increasing our cost of borrowing.
Our indebtedness could have important consequences, including: • making it more difficult for us to satisfy our debt obligations; • limiting our ability to obtain additional financing to fund future working capital, capital expenditures, acquisitions or other general corporate requirements; 37 Table of Contents • requiring a portion of our cash flows to be dedicated to debt service payments instead of other purposes, thereby reducing the amount of cash flows available for working capital, capital expenditures, acquisitions and other general corporate purposes; • increasing our vulnerability to adverse changes in general economic, industry and competitive conditions; and • increasing our cost of borrowing.
In addition, if we cannot successfully integrate such acquisitions, or the assets, technologies or personnel associated with such acquisitions, into our company, the anticipated benefits of any acquisition, investment, or business relationship may not be realized. Additionally, we may be exposed to unknown or additional risks and liabilities.
In addition, if we cannot successfully integrate such acquisitions, including the Breakroom acquisition, or the assets, technologies or personnel associated with such acquisitions, into our company, the anticipated benefits of any acquisition, investment, or business relationship may not be realized. Additionally, we may be exposed to unknown or additional risks and liabilities.
If general economic conditions significantly deviate from present levels, our business, financial condition, and operating results could be adversely affected. 15 Table of Contents Substantially all of our revenue is generated by our business operations in the United States.
If general economic conditions significantly deviate from present levels, our business, financial condition, and operating results could be adversely affected. 14 Table of Contents Substantially all of our revenue is generated by our business operations in the United States.
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.
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 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.
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.
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 breakaway regions of Ukraine (which currently include Crimea, Donetsk and Luhansk), or additional countries or regions that may be included from time-to-time.
Price competition for job marketplaces such as ours is likely to remain high, which could limit our ability to maintain or increase our market share, subscriber base, revenue and/or profitability. We also compete with companies that utilize emerging technologies and assets, such as large language models (LLMs), machine learning, and other types of artificial intelligence.
Price competition for job marketplaces such as ours is likely to remain high, which could limit our ability to maintain or increase our market share, subscriber base, revenue and/or profitability. We also compete with companies that utilize emerging technologies and assets, such as large language models (LLMs), machine learning, and other types of AI.
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.
Alternatively, if a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation, as amended, 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.
We may also be forced to significantly increase marketing expenditures in the event that market prices for online advertising and paid listings escalate or our organic ranking decreases. Any of these changes could have an adverse impact on our business, user acquisition, and operating results.
We may also be 18 Table of Contents forced to significantly increase marketing expenditures in the event that market prices for online advertising and paid listings escalate or our organic ranking decreases. Any of these changes could have an adverse impact on our business, user acquisition, and operating results.
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.
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.
Item 1A. Risk Factors Investing in our Class A common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this Annual Report on Form 10-K, before making a decision to invest in our Class A common stock.
Item 1A. Risk Factors 13 Table of Contents Investing in our Class A common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this Annual Report on Form 10-K, before making a decision to invest in our Class A common stock.
As additional information becomes available, we assess the potential liability and revise estimates as appropriate. However, because of uncertainties relating to litigation, the amount of our estimates could be wrong as determining reserves for pending legal proceedings is a complex, fact-intensive process that is subject to judgment calls.
As additional information becomes available, we assess the potential liability and revise estimates as appropriate. However, because of uncertainties relating to litigation, the amount of our estimates could be wrong as determining reserves for pending legal 34 Table of Contents proceedings is a complex, fact-intensive process that is subject to judgment calls.
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.
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.
We cannot guarantee that the Job Distribution Partners and Job Acquisition Partners with which we have strategic relationships will continue to offer the services for which we rely on them, devote the resources necessary to expand our reach, or support an increased number of employers and job seekers and associated use cases.
We cannot guarantee that the Job Distribution Partners and Job Acquisition Partners with which we have strategic relationships will continue to offer the services for which we rely on them, devote the resources necessary to expand our reach, or support an increased number of employers and 21 Table of Contents job seekers and associated use cases.
Additionally, a substantial number of shares of our common stock are available for future sale pursuant to stock options, RSUs, or issuance pursuant to our equity incentive plans and employee stock purchase plan.
Additionally, a substantial number of shares of our common stock are available for future sale pursuant to stock options, restricted stock units, or RSUs, or issuance pursuant to our equity incentive plans and employee stock purchase plan.
We could also be subject to claims based upon the content that is accessible from our website through links to other websites or information on our website supplied by third parties or claims that our collection of information from third-party sites without a license violates certain federal or state laws or website terms of use.
We could also be subject to claims based upon the content that is accessible from our website through links to other websites, or information on our website supplied by third parties or claims that our collection of information from third-party sites without consent violates certain federal or state laws or website terms of use.
Successful infringement claims against us could result in significant monetary liability, prevent us from selling some of our products and services, or require us to change our branding. In addition, resolution of claims may require us to redesign our products, license rights from third parties at a significant expense, or cease using those rights altogether.
Successful infringement claims against us could result in significant monetary liability, prevent us from selling some of our products and services, or 35 Table of Contents require us to change our branding. In addition, resolution of claims may require us to redesign our products, license rights from third parties at a significant expense, or cease using those rights altogether.
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.
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 is likely also to have the effect of heightening many of the other risks described in this “Risk Factors” section.
In addition, limitations or errors with respect to how we measure data (or the data that we measure) may affect our understanding of certain details of our business, which could affect our longer-term strategies.
In addition, limitations or errors with respect to how we measure data (or the data that we measure) may affect our understanding of certain details of our business, which could affect our long-term strategies.
Our business depends largely on our ability to attract and retain talented employees, including senior management and key personnel. If we lose the services of Ian Siegel, our Chief Executive Officer, or other members of our senior management team, we may not be able to execute on our business strategy.
Our business depends largely on our ability to attract and retain talented employees, including senior management and key personnel. If we lose the services of Ian Siegel, our Chief Executive 17 Table of Contents Officer, or other members of our senior management team, we may not be able to execute on our business strategy.
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.
Laws, regulations, and standards governing issues that may affect us, such as employment, payments, whistleblowing and worker confidentiality obligations, intellectual property, consumer protection, content moderation practices, taxation, privacy, data security, AI, benefits, unionizing and collective action, arbitration agreements and class 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.
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.
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.
Siegel by a majority of our independent directors then in office, and (3) the first business day falling on or after the date on which Mr. Siegel elects to convert all then-outstanding shares of Class B common stock into shares of Class A common stock.
Siegel by a majority of our independent directors then in office, and (3) the first business day falling on or after the date on which Mr. Siegel elects to convert all then-outstanding shares 42 Table of Contents of Class B common stock into shares of Class A common stock.
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.
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.
If these providers charge high costs for or increase the cost of their services, we will experience higher costs to operate our business and may have to increase the fees to use our marketplace and our operating results may be adversely impacted.
If these providers charge high costs for or increase the cost of their 24 Table of Contents services, we will experience higher costs to operate our business and may have to increase the fees to use our marketplace and our operating results may be adversely impacted.
As of December 31, 2023, the board of directors has authorized us to repurchase up to $550.0 million of our common stock through open market or privately negotiated transactions, block purchases, or pursuant to one or more Rule 10b5-1 plans, in compliance with applicable securities laws and other legal requirements.
As of December 31, 2024, the board of directors has authorized us to repurchase up to $650.0 million of our common stock through open market or privately negotiated transactions, block purchases, or pursuant to one or more Rule 10b5-1 plans, in compliance with applicable securities laws and other legal requirements.
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.
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 stockholders to replace members of our board of directors.
These factors and other factors could harm our international operations and, consequently, materially impact our business, operating results, and financial condition. Further, we may incur significant operating expenses as a result of our international expansion, and it may not be successful.
These factors and other factors could harm our international operations and, consequently, materially impact our business, operating results, and financial condition. 33 Table of Contents Further, we may incur significant operating expenses as a result of our international expansion, and it may not be successful.
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.
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, we may be unable to effectively scale our business, and our business would be adversely impacted.
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.
Our internal tools have a number of 22 Table of Contents 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 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.
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.
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.
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.
Legal and Regulatory Risks If we or our third-party partners experience a security breach, such as a hacking or phishing attack, or other data privacy or security incident, our marketplace may be perceived as not being secure, our reputation may be harmed, demand for our marketplace may be reduced, our operations may be disrupted, we may incur significant legal costs or liabilities, and our business could be adversely affected.
Legal and Regulatory Risks If we or our third-party partners or vendors experience a security breach, such as a hacking or phishing attack, or other data privacy or security incident, our marketplace may be perceived as not being secure, our reputation may be harmed, demand for our marketplace may be reduced, 25 Table of Contents our operations may be disrupted, we may incur significant legal costs or liabilities, and our business could be adversely affected.
Our Paid Employer subscription renewals, performance-based services, and upsells may decline or fluctuate as a result of a number of factors, including user usage, user satisfaction with our services and user support, our prices, the prices of competing services, mergers and acquisitions affecting our user base, the effects of U.S. and global economic conditions, or reductions in our Paid Employers’ spending levels generally.
Our Paid Employer subscription renewals, performance-based services, and upsells may decline or fluctuate as a result of a number of factors, including user usage, sunsetting, changing, or removing certain products or services, user satisfaction with our services and user support, our prices, the prices of competing services, mergers and acquisitions affecting our user base, the effects of U.S. and global economic conditions, or reductions in our Paid Employers’ spending levels generally.
Accordingly, actions by our stockholders to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder must be brought in federal court. Our stockholders will not be deemed to have waived our compliance with the federal securities laws and the regulations promulgated thereunder.
Accordingly, actions by our stockholders to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder must be brought in federal court. Our stockholders will not be 45 Table of Contents deemed to have waived our compliance with the federal securities laws and the regulations promulgated thereunder.
If prospective Paid Employers require customized features or functions that we do not offer, and that would be difficult for them to deploy themselves, then the market for our marketplace will be more limited and our business could suffer.
If prospective Paid Employers require customized features or functions that we do not offer, and that would be difficult for them to deploy themselves, then the market for our marketplace will be more limited and our business 23 Table of Contents could suffer.
Additionally, the process of obtaining protection for trademarks and other IPR is expensive and time-consuming, and we may not be able to apply for all necessary or desirable trademark and other IPR applications at a reasonable cost or in a timely manner.
Additionally, the process of obtaining protection for trademarks, copyrights and other IPR is expensive and time-consuming, and we may not be able to successfully register all necessary or desirable trademark and other IPR applications at a reasonable cost or in a timely manner.
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.
Intellectual property infringement, trade secret misappropriation, and other intellectual property claims and proceedings brought by or against us, whether successful or not, could require significant attention of our management and resources and have in the past and may in the future result in substantial costs, harm to our brand, and have an adverse effect on our business.
We may in the future be subject to patent infringement and trademark claims and lawsuits in various jurisdictions, and we cannot be certain that our products or activities do not violate the patents, trademarks, or other IPR of third-party claimants.
We may in the future be subject to intellectual property infringement claims and lawsuits in various jurisdictions, and we cannot be certain that our products or activities do not violate the patents, trademarks, or other IPR of third-party claimants.
Our success depends in large part on our proprietary technology and other intellectual property rights, or IPR. We currently rely on a combination of copyright, trademark, trade secret, and unfair competition laws, as well as confidentiality agreements and procedures and licensing arrangements, to establish and protect our IPR. We currently do not own any patents.
Our success depends in large part on our proprietary technology and other intellectual property rights, or IPR. We currently rely on a combination of copyright, trademark, trade secret, and unfair competition laws, as well as confidentiality agreements and procedures and licensing arrangements, to establish and protect our IPR.
The new rules and regulations applicable to public companies, and stockholder litigation brought against recently public companies, have made it more expensive for us to obtain and maintain director and officer liability insurance, and we may be required to incur substantially higher costs to obtain and maintain the same or similar coverage.
The rules and regulations applicable to public companies, and stockholder litigation brought against recently public companies, have made it more expensive for us to obtain and maintain director and officer 40 Table of Contents liability insurance, and we may be required to incur substantially higher costs to obtain and maintain the same or similar coverage.
If we cannot provide enhancements and new features or services that achieve market acceptance or that keep pace with rapid technological developments and the competitive landscape, our business could be adversely affected.
If we cannot provide enhancements and 20 Table of Contents new features or services that achieve market acceptance or that keep pace with rapid technological developments and the competitive landscape, our business could be adversely affected.
These enactments could adversely affect our sales activity due to the inherent cost increase the taxes would represent and ultimately result in a negative impact on our operating results and cash flows.
These enactments could adversely affect our sales activity due to the 36 Table of Contents inherent cost increase the taxes would represent and ultimately result in a negative impact on our operating results and cash flows.
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.
Further, due to the shift to remote and hybrid work, there is an increased risk that we may experience cybersecurity related incidents, including breaches of IT Systems security, as a result of our employees, service providers, and third parties working remotely on less secure systems.
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.
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; • 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; • potential challenges arising from strained foreign relations or geopolitical tensions, which could lead to regulatory hurdles, trade barriers, or reputational harm; and • other costs of doing business internationally.
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.
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.
Comprehensive privacy legislation has also been enacted in more than one-fourth of U.S. states (with several states going into effect in the near future) and each imposes similar, but not identical, compliance obligations.
Comprehensive privacy legislation has also been enacted, and taken effect or is soon going into effect, in more than one-third of U.S. states (with several states going into effect in the near future) and each imposes similar, but not identical, compliance obligations.
To the extent we move into new geographies, we would need to attract and recruit skilled personnel in those areas. Moreover, uncertainty arising from economy-wide shifts toward remote work could negatively impact our ability to recruit or retain talent, particularly in light of our workforce historically being concentrated largely in the Los Angeles and Phoenix metropolitan areas.
To the extent we move into new geographies, we would need to attract and recruit skilled personnel in those areas. Moreover, remote work opportunities could negatively impact our ability to recruit or retain talent, particularly in light of our workforce historically being concentrated largely in the Los Angeles and Phoenix metropolitan areas.
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 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 wars in Ukraine and the Middle East, inflation, changes in interest rates, and volatile markets.
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.
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 $123.1 million remains available for future repurchases under our $650.0 million share repurchase program as of December 31, 2024.
We may need to expend significant resources to protect against, and to address issues created by, security breaches and other privacy and security incidents.
We may need to expend significant resources to protect against, and to 26 Table of Contents address issues created by, security breaches and other privacy and security incidents.
Any such compromise could also result in damage to our reputation and a loss of confidence in our security measures.
Any such compromise could also result in damage to our reputation, a loss of confidence in our security measures, and an adverse impact our business.
We also rely on third-party software and infrastructure, including the infrastructure of the internet, to provide our marketplace. Any failure of or disruption to this software and infrastructure, whether intentional or malicious in nature or due to our activities or those of our vendors, could also make our marketplace unavailable to our users.
We also rely on third-party software and infrastructure, including the infrastructure of the internet, to provide our marketplace. Any failure of or disruption to this software and infrastructure, whether intentionally or unintentionally or due to our activities or those of our vendors or other third parties, could also make our marketplace unavailable to our users.
As 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.
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; 19 Table of Contents • 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 therefrom, cybersecurity incidents, the U.S. presidential and other federal, state, and local elections, and the impacts of the wars in Ukraine and the Middle East; • 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.
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 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.
We have previously experienced multiple data security incidents involving the unauthorized access to personal information of job seekers utilizing our services (including their resumes) as well as affecting our business clients’ accounts, some of which have required us to notify affected individuals and/or regulators.
We have previously experienced multiple data security incidents involving the unauthorized access to personal information of job seekers utilizing our services (including their resumes) as well as affecting our business clients’ accounts, some of which have required us to notify affected individuals and/or regulators. There are no assurances that other data security incidents will not occur in the future.
As a result, we may need to modify the way we treat, process, or store such information.
As a result, we may need to modify the way we treat, process, or store such information or offer our products and services.
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.
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. Moreover, several U.S. and European jurisdictions are looking to regulate specific uses of AI.
In addition, some of our employees located in Israel are obligated to perform annual reserve duty in the Israel Defense Forces, and may be called to active military duty in emergency circumstances, including the war against Hamas.
In addition, some of our employees located in Israel are obligated to perform annual reserve duty in the Israel Defense Forces, and may be called to active military duty in emergency circumstances, including the war against Hamas and other terrorist or military organizations which have subsequently engaged in hostilities with Israel.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

14 edited+2 added−2 removed11 unchanged
Biggest changeThe audit committee of our board of directors is regularly updated by management and reviews cybersecurity and other information technology risks, controls, and procedures on a regular basis.
Biggest changeOur board of directors is actively involved in oversight of our risk management, and cybersecurity represents an important component of our overall approach to enterprise risk management, or ERM. The audit committee of our board of directors is regularly updated by management and reviews cybersecurity and other information technology risks, controls, and procedures on a regular basis.
For more information regarding cybersecurity risks that we face and potential impacts on our business related thereto, see the risk factor titled “Changes in laws or regulations relating to data privacy or the protection, collection, storage, processing, transfer, or use of personal data, or artificial intelligence, or any actual or perceived failure by us to comply with such laws and regulations or our privacy policies, could adversely affect our business.”
For more information regarding cybersecurity risks that we face and potential impacts on our business related thereto, see the risk factor titled “Changes in laws or regulations relating to data privacy or the protection, collection, storage, processing, transfer, or use of personal data, or AI, or any actual or perceived failure by us to comply with such laws and regulations or our privacy policies, could adversely affect our business.”
Our cybersecurity policies, standards, processes, and practices reflect our business and risks, take into account recognized frameworks (such as those established by the National Institute of Standards and Technology, the International Organization for Standardization, and other applicable industry standards), and are reviewed and updated as appropriate.
Our cybersecurity policies, standards, processes, and practices reflect our business and risks, take into account recognized frameworks (such as those established by the National Institute of Standards and Technology, the International Organization for Standardization, and other applicable industry standards), and are reviewed and updated based on the specific requirements of our business.
Third-Party Risk Management: We maintain a comprehensive, risk-based approach to identifying and overseeing cybersecurity risks presented by third parties, including vendors, service providers, and other external users of our systems, as well as the systems of third parties that could adversely impact our business in the event of a cybersecurity incident affecting those third-party systems.
Third-Party Risk Management: We maintain a risk-based approach designed to identify and oversee cybersecurity risks presented by third parties, including vendors, service providers, and other external users of our systems, as well as the systems of third parties that could adversely impact our business in the event of a cybersecurity incident affecting those third-party systems.
We take that responsibility very seriously and maintain high standards of governance. Our board of directors provides oversight of risk management issues, including information security and data privacy.
We take that responsibility very seriously and our processes are intended to maintain high standards of governance. Our board of directors provides oversight of risk management issues, including information security and data privacy.
Our CTO, Security Operations team, AppSec Guild, and Senior Corporate Counsel work collaboratively across our company to implement a program designed to protect our information systems from cybersecurity threats and to promptly respond to any cybersecurity incidents in accordance with our incident response and recovery plans.
Our CTO works collaboratively with our Security Operations team, AppSec Guild, and VP, Corporate Counsel to implement a program designed to protect our information systems from cybersecurity threats and to promptly respond to any cybersecurity incidents in accordance with our incident response and recovery plans.
In general, we address cybersecurity risks through a comprehensive, cross-functional approach that is focused on preserving the confidentiality, security, and availability of the information that we collect and store by proactively identifying, preventing, and mitigating cybersecurity threats and effectively responding to cybersecurity incidents when they occur.
In general, we address cybersecurity risks through a cross-functional approach that is focused on preserving the confidentiality, integrity, security, and availability of the information that we collect and store and by taking steps to proactively identify, prevent, and mitigate cybersecurity threats and effectively responding to cybersecurity incidents when they occur.
Collaborative Approach and Implementation of Best Practices: We have implemented a comprehensive, cross-functional approach to identifying, preventing, and mitigating cybersecurity threats and incidents, while also implementing controls and procedures that provide for the prompt escalation of certain cybersecurity incidents so that decisions regarding the public disclosure and reporting of such incidents can be made by management in a timely manner.
Collaborative Approach and Implementation of Best Practices: We have implemented a cross-functional approach designed to identify, prevent, and mitigate cybersecurity threats and incidents 46 Table of Contents alongside controls and procedures intended to provide for the prompt escalation of certain cybersecurity incidents so that decisions regarding the public disclosure and reporting of such incidents can be made by management in a timely manner.
Ongoing Employee Training: We provide regular, mandatory security awareness training and phishing simulation for our employees regarding cybersecurity threats as a means to equip our personnel with effective tools to identify and address cybersecurity threats.
Ongoing Employee Training: We provide regular, mandatory security awareness training and phishing simulation for our employees regarding cybersecurity threats as a means designed to equip our personnel with effective tools to identify and address cybersecurity threats. Additional information on our policies, procedures, and safeguards can be found in our Security and Compliance webpage (https://www.ziprecruiter.global/en/security).
Working in concert, these groups establish a tiered, best practices driven posture to protect us from cybersecurity threats.
Together, these groups work to establish a tiered posture intended to reflect best practices and protect us from cybersecurity threats.
These efforts include a wide range of activities, including audits, assessments, tabletop exercises, threat modeling, vulnerability testing, and other exercises focused on evaluating the effectiveness of our cybersecurity measures and planning.
We engage in the periodic assessment and testing of our policies, standards, processes, and practices that are designed to address cybersecurity threats and incidents, as appropriate. These efforts include a wide range of activities, including audits, assessments, tabletop exercises, threat modeling, vulnerability testing, and other exercises focused on evaluating the effectiveness of our cybersecurity measures and planning.
Our CTO has served in various roles in information technology for over 25 years, including serving as the CTO of two large companies, and holds a master’s degree in Computer Science. Our CEO, CFO and CLO each hold undergraduate and/or graduate degrees in their respective fields, and collectively have over 25 years of experience managing risks at our company.
Our CTO has served in various roles in information technology for over 25 years, including serving as the CTO of two large companies, and holds a master’s degree in Computer Science.
Our audit committee also receives prompt and timely information regarding any cybersecurity incident that meets established reporting thresholds, as well as ongoing updates regarding any such incident until it has been addressed.
Our audit committee also receives prompt and timely information regarding any cybersecurity incident that meets certain thresholds, as well as ongoing updates regarding any such incident until it has been addressed. 47 Table of Contents Our CTO is primarily responsible for assessing and managing our material risks from cybersecurity threats.
The results of such assessments, audits, and reviews are regularly reviewed, and we adjust our cybersecurity policies, standards, processes, and practices as necessary based on the information provided by these assessments, audits, and reviews. Governance Our board of directors, in coordination with our audit committee, oversees our ERM, including the management of risks arising from cybersecurity threats.
The results of such assessments, audits, and tests are regularly reviewed, and we adjust our cybersecurity policies, standards, processes, and practices as necessary based on the information provided by these assessments, audits, and reviews. In addition, we use external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security processes.
Removed
Our board of directors is actively involved in oversight of our risk management, and cybersecurity 44 Table of Contents represents an important component of our overall approach to enterprise risk management, or ERM.
Added
This does not imply that we meet any particular technical standards, specifications, or requirements, only that we take into account these frameworks as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business.
Removed
Additional information on our policies, procedures, and safeguards can be found in our Security and Compliance webpage (https://www.ziprecruiter.global/en/security). 45 Table of Contents We engage in the periodic assessment and testing of our policies, standards, processes, and practices that are designed to address cybersecurity threats and incidents, as appropriate.
Added
Governance Our board of directors, in coordination with our audit committee, oversees our ERM, including the management of risks arising from cybersecurity threats.

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 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.
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 May 2025. In October 2024, we entered into a lease agreement for approximately 25,000 square feet of office space in Santa Monica, California, expected to commence in June 2025.
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
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.
Added
We intend to use the space for our new corporate headquarters, after the lease for our current corporate headquarters expires. We also lease facilities in Palo Alto, California, Phoenix, Arizona, London, the United Kingdom, and Tel Aviv, Israel.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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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.
Biggest changeItem 3. Legal Proceedings Refer to the disclosure under the heading “Legal Matters” in Note 12 – 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. 47 Table of Contents Part II
Mine Safety Disclosures Not applicable. 48 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 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.
Biggest changePurchases of Equity Securities by the Issuer and Affiliated Purchasers Share repurchase activity during the three months ended December 31, 2024 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, 2024 to October 31, 2024 — $ — — November 1, 2024 to November 30, 2024 Open market repurchases 221 $ 8.95 221 December 1, 2024 to December 31, 2024 Open market repurchases 84 $ 8.64 84 Total 305 $ 123,108 ____________ (1) As of December 31, 2024, the board of directors authorized us to repurchase up to $650.0 million of our common stock under the share repurchase program, of which $526.9 million had been utilized.
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.
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, 2024. The returns shown are based on historical results and are not intended to suggest future performance.
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.
For more information, see Note 15 – Share Repurchase Program to the audited financial statements included in this report. 49 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 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.
The remaining $123.1 million in the table represents the amount available to repurchase shares under the share repurchase program as of December 31, 2024. 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 16, 2024, the approximate number of Class A and Class B common shareholders of record was 995 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 18, 2025, the approximate number of Class A and Class B common shareholders of record was 894 and 7, respectively.

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 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%.
Biggest changeThe following table sets forth our consolidated results of operations for each of the periods presented: Year Ended December 31, 2024 2023 (in thousands) Revenue (1) $ 474,001 $ 645,722 Cost of revenue (2) 50,150 64,309 Gross profit 423,851 581,413 Operating expenses Sales and marketing (2)(3) 215,808 265,253 Research and development (2)(3) 134,831 141,801 General and administrative (2)(3)(4) 71,950 94,922 Total operating expenses 422,589 501,976 Income from operations 1,262 79,437 Other income (expense) Interest expense (29,597) (29,393) Other income (expense), net 21,838 20,506 Total other income (expense), net (7,759) (8,887) Income (loss) before income taxes (6,497) 70,550 Income tax expense 6,357 21,452 Net income (loss) $ (12,854) $ 49,098 ____________ (1) Revenue is comprised as follows: Year Ended December 31, 2024 2023 (in thousands) Subscription revenue $ 369,823 $ 508,384 Performance-based revenue 104,178 137,338 Total revenue $ 474,001 $ 645,722 59 Table of Contents (2) Includes stock-based compensation expense as follows: Year Ended December 31, 2024 2023 (in thousands) Cost of revenue $ 611 $ 660 Sales and marketing 10,647 12,537 Research and development 33,604 35,352 General and administrative (4) 19,591 35,686 Total stock-based compensation $ 64,453 $ 84,235 (3) Includes one-time charges resulting from our restructuring plan announced on May 31, 2023 to reduce our global workforce by approximately 20%.
Cost of Revenue and Gross Profit Cost of Revenue Cost of revenue consists of third-party hosting, credit card processing fees, personnel-related costs (including salaries, bonuses, benefits, and stock-based compensation) for customer support employees, partner revenue share amounts, job distribution costs from performance-based revenue, and amortization of capitalized software costs associated with our marketplace technology to provide services for our customers.
Cost of Revenue and Gross Profit Cost of Revenue Cost of revenue consists of third-party hosting fees, credit card processing fees, personnel-related costs (including salaries, bonuses, benefits, and stock-based compensation) for customer support employees, partner revenue share amounts, job distribution costs from performance-based revenue, and amortization of capitalized software costs associated with our marketplace technology to provide services for our customers.
Financing Activities For the year ended December 31, 2023, cash used in financing activities was $154.3 million which consisted of $147.6 million used for the repurchase of common stock, and $17.4 million for the net settlement of taxes on RSUs, partially offset by $6.4 million of proceeds from the issuance of stock under the employee stock purchase plan, and $4.3 million of proceeds from the exercise of stock options.
For the year ended December 31, 2023, cash used in financing activities was $154.3 million which consisted of $147.6 million used for the repurchase of common stock, and $17.4 million for the net settlement of taxes on RSUs, partially offset by $6.4 million of proceeds from the issuance of stock under the employee stock purchase plan, and $4.3 million of proceeds from the exercise of stock options.
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.
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 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.
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.
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, included service, market, and performance-based vesting conditions. The fair value of the award is determined using a Monte Carlo simulation model.
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.
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, on average, over time.
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.
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.
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.
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. Customers may also access our software to review job applications and manage job postings.
We expect our cost of revenue as a percentage of revenue to remain relatively flat from year to year but may vary from quarter to quarter as a percentage of our revenue due to the timing and extent of these expenses. 56 Gross Profit and Gross Margin Our gross profit may fluctuate from period to period.
We expect our cost of revenue as a percentage of revenue to remain relatively flat from year to year but may vary from quarter to quarter as a percentage of our revenue due to the timing and extent of these expenses. Gross Profit and Gross Margin Our gross profit may fluctuate from period to period.
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.
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.
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.
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 employers interact, leading to better matches 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 70 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 price targets are achieved.
However, sales and marketing expenses may vary from period to period as a percentage of revenue for the foreseeable future as we constantly measure the expected returns of specific sales and marketing initiatives and adjust spend levels up or down accordingly. This discipline has been a key aspect of our strong financial performance through a wide range of macroeconomic conditions.
Additionally, sales and marketing expenses may vary from period to period as a percentage of revenue for the foreseeable future as we constantly measure the expected returns of specific sales and marketing initiatives and adjust spend levels up or down accordingly. This discipline has been a key aspect of our strong financial performance through a wide range of macroeconomic conditions.
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.
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 Statements of Operations.
While we believe our products and services continued to improve, providing more value for employers of all sizes by offering solutions with the best matching technology to help employers identify and recruit standout candidates, we saw a decline in employer spending on our marketplace products and services during the year ended December 31, 2023.
While we believe our products and services continued to improve, providing more value for employers of all sizes by offering solutions with the best matching technology to help employers identify and recruit standout candidates, we saw a decline in employer spending on our marketplace products and services during the year ended December 31, 2024.
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.
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 income until the security is sold or matures.
Research and Development Research and development expense consists of personnel-related costs (including salaries, bonuses, benefits, and stock-based compensation) for our research and development employees, amortization of capitalized software costs associated with the development of internal databases, candidate insights, and reporting that support our marketplace technology and the cost of certain third-party service providers.
Research and Development Research and development expense consists of personnel-related costs (including salaries, bonuses, benefits, and stock-based compensation) for our research and development employees, amortization of capitalized software costs associated with the development of internal databases, candidate insights, and reporting that supports our marketplace technology and the cost of certain third-party service providers.
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.
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 Statements of Operations, and record the non-credit-related portion of the impairment loss, net of tax, through other comprehensive income (loss) in the Consolidated Statements of Comprehensive Income (Loss).
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.
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 Statements of Operations.
We will continue to invest in growing the number of job seekers in our marketplace that are either actively or passively open to evaluating new opportunities through a variety of acquisition strategies. Investments in Technology The technology that drives high-quality matches between our job seekers and employers remains a significant investment priority.
We will continue to invest in growing the number of job seekers in our marketplace that are either actively or passively open to evaluating new opportunities through a variety of acquisition strategies. 55 Table of Contents Investments in Technology The technology that drives high-quality matches between our job seekers and employers remains a significant investment priority.
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.
The amount available under the credit facility is reduced by letters of credit outstanding, which totaled $3.4 million as of December 31, 2024. The letters of credit outstanding relate to various leased office spaces.
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.
Obligations and Other Commitments See Note 12 – Commitments and Contingencies to the audited financial statements included in this report for our future minimum commitments related to certain software service agreements.
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.
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 66 Table of Contents • 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 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 69 Table of Contents potential strategic investment opportunities, and to obtain a reasonable or market rate of return on investments.
If either condition is met, we record an impairment loss on the security through other income (expense), 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 Statements of Operations.
However, the more difficult hiring environment in 2023 did slow down the rate of growth in Average Monthly Revenue per Paid Employer among prior cohorts. We see these disruptions to the long term cohort dynamics as temporary, driven by the unique slowdown in hiring particularly among larger customers.
However, the more difficult hiring environment in 2024 continued to slow down the rate of growth in Average Monthly Revenue per Paid Employer among prior cohorts. We see these disruptions to the long term cohort dynamics as temporary, driven by the unique slowdown in hiring particularly among larger customers.
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.
Results of Operations A discussion regarding our financial condition and results of operations for fiscal year 2024 compared to fiscal year 2023 is presented below.
We expect cost of revenue to increase in absolute dollars in future periods due to payment processing fees, third-party hosting fees, personnel-related costs to support additional transaction volume, and amortization expense associated with our capitalized internal-use software and development cost.
We expect cost of revenue to increase or decrease in absolute dollars in direct correlation to revenue in future periods due to payment processing fees, third-party hosting fees, personnel-related costs to support additional transaction volume, and amortization expense associated with our capitalized internal-use software and development cost.
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. 70 Table of Contents
Restructuring activity for the year ended December 31, 2023 reflects $7.6 million net costs primarily related to employee severance and continuation of health benefits, presented as $3.4 million in sales and marketing, $3.2 million in research and development, and $1.0 million in general and administrative expenses.
Restructuring activity for the year ended December 31, 2023 reflects $7.6 million net costs primarily related to employee severance and continuation of health benefits, presented as $3.4 million in sales and marketing, $3.2 million in research and development, and $1.0 million in general and administrative expenses. No restructuring costs were recorded during the year ended December 31, 2024.
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.
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 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.
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, 2024, we held $328.9 million in total investments, consisting of money market mutual funds and available-for-sale debt securities.
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.
We 62 Table of Contents 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, 2024, we had no amounts outstanding under our credit facility.
The decrease was primarily due to a $207.2 million decrease in marketing and advertising compared to the prior-year period reflecting our discipline in proactively adjusting marketing spend levels in relation to the macroeconomic conditions.
The decrease was primarily due to a $25.5 million decrease in marketing and advertising compared to the prior-year period reflecting our discipline in proactively adjusting marketing spend levels in relation to the macroeconomic conditions.
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.
This group of employers excluded from our Paid Employer count does not contribute a significant amount of revenue. In the fourth quarter of the year ended December 31, 2024, Quarterly Paid Employers decreased when compared to the fourth quarter of the year ended December 31, 2023.
As a result of our advancements with matching, we delivered nearly 40 million Great Match candidates in 2023, an increase of 24% over the prior year. 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.
As a result of our advancements with matching, we delivered over 40 million Great Match candidates in 2024, an increase of 6% over the prior year. 54 Table of Contents 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.
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.
Resume database plans are priced based on how 67 Table of Contents 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.
Restructuring activity for the year ended December 31, 2023 reflects $7.6 million net costs primarily related to employee severance and continuation of health benefits.
Restructuring activity for the year ended December 31, 2023 reflects $7.6 million net costs primarily related to employee severance and continuation of health benefits. No restructuring costs were recorded during the year ended December 31, 2024.
While each of these factors presents significant opportunities for our business, they also pose important challenges that we must successfully address in order to sustain our growth, improve our results of operations and maintain or increase profitability.
While each of these factors presents significant opportunities for our business, they also pose important challenges that we must successfully address in order to grow and improve our results of operations and profitability.
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.
These investments are included within cash and cash 64 Table of Contents equivalents and marketable securities within our Consolidated Balance Sheets. For more information, see Note 7 – Financial Instruments to the audited financial statements included in this report.
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.
Revenue is recognized ratably over the subscription period. 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.
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.
We have invested in research and development to improve our matching technology and deliver a high-quality experience to employers and job seekers. In 2024 and 2023, we spent $134.8 million and $141.8 million, or 28% and 22% of total revenue, respectively, on research and development.
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.
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.
In 2023, organic visits from job seekers grew by more than 40% over 2022, and installs for our #1 rated job search app of iOS & Android grew app installs by 54 over 20% year-over-year. We believe that this is a testament to our high aided brand awareness and superior job seeker products.
In 2024, installs for our #1 rated job seeker app for iOS and Android grew by more than 25% year-over-year, and organic visits from job seekers grew by 30% over 2023. We believe that this is a testament to our high aided brand awareness and superior job seeker products.
Our effective tax rate for the year ended December 31, 2022 differed from the U.S. federal statutory rate of 21% primarily due to 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 such as limitations on the amount of deductible executive compensation.
Our effective tax rate for the year ended December 31, 2024 differed from the U.S. federal statutory rate of 21% primarily due to research and development tax credits, partially offset by state taxes, valuation allowances on certain tax credit and loss carryforwards, and non-deductible expenses such as limitations on the amount of deductible executive compensation and certain stock-based compensation expenses.
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.
For more information on the senior unsecured notes, please see Note 11 – Debt to the audited financial statements included in this report. Share Repurchase Program Our board of directors has authorized us to repurchase up to $650.0 million of our outstanding common stock, with no fixed expiration.
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.
Other income (expense), net also includes sublease income which consists of income earned from noncancellable sublease agreements related to some of our office facilities. 58 Table of Contents Income Tax Expense (Benefit) We are subject to federal and state income taxes in the United States, as well as several international jurisdictions.
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.
The effective tax rate for the year ended December 31, 2024 differed from the U.S. federal statutory rate of 21% primarily due to research and development tax credits, partially offset by state taxes, valuation allowances on certain tax credit and loss carryforwards, and non-deductible expenses such as limitations on the amount of deductible executive compensation and certain stock based compensation expenses.
In addition, these measures are frequently used by analysts, investors and other interested parties to evaluate and assess performance. Adjusted EBITDA is not intended to be a substitute for any U.S. GAAP financial measure and, as calculated, may not be comparable to other similarly titled measures of performance of other companies in other industries or within the same industry.
Adjusted EBITDA is not intended to be a substitute for any U.S. GAAP financial measure and, as calculated, may not be comparable to other similarly titled measures of performance of other companies in other industries or within the same industry.
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.
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 pursuant to the rules and regulations of the Securities and Exchange Commission, or SEC, and higher expenses for professional services.
We allocate a portion of overhead costs, such as rent, IT costs, supplies, and depreciation and amortization, to research and development expense based on headcount. Research and development costs, other than software development costs qualifying for capitalization, are expensed as incurred.
We allocate a portion of overhead costs, such as rent, IT costs, supplies, and depreciation and amortization, to research and development expenses based on headcount. Research and development costs, other than software development costs qualifying for capitalization, are expensed as incurred. We believe continued investments in research and development are important to attain our strategic objectives.
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.
Liquidity and Capital Resources As of December 31, 2024, we had cash, cash equivalents, and marketable securities totaling $505.9 million and $286.6 million available in unused borrowing capacity under our current credit facility.
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.
Cash Flows The following table summarizes our cash flows for the periods presented (in thousands): Year Ended December 31, 2024 2023 (in thousands) Net cash provided by operating activities $ 45,735 $ 103,192 Net cash provided by (used in) investing activities (61,983) 106,736 Net cash used in financing activities (48,363) (154,265) Net increase (decrease) in cash and cash equivalents $ (64,611) $ 55,663 Operating Activities The primary source of operating cash inflows is cash collected from our customers for our services.
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.
For a definition of Adjusted EBITDA, an explanation of our management’s use of this measure and a reconciliation of net income (loss) to Adjusted EBITDA, see the section titled “Key Operating Metrics and Non-GAAP Financial Measures.” 51 Table of Contents 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, 2023 June 30, 2023 September 30, 2023 December 31, 2023 March 31, 2024 June 30, 2024 September 30, 2024 December 31, 2024 Quarterly Paid Employers 105,948 101,634 89,668 70,712 71,572 70,458 65,222 57,833 Revenue per Paid Employer $ 1,734 $ 1,677 $ 1,736 $ 1,922 $ 1,708 $ 1,755 $ 1,795 $ 1,920 Year Ended December 31, 2024 2023 (in thousands, except percentages) Adjusted EBITDA $ 78,006 $ 175,296 Adjusted EBITDA margin 16 % 27 % Quarterly Paid Employers We quantify the revenue-generating customer base as the number of Paid Employers in our marketplace.
The following table presents a reconciliation of net income to Adjusted EBITDA for each of the periods indicated: Year Ended December 31, 2023 2022 (in thousands) Net income (1) $ 49,098 $ 61,494 Stock-based compensation (2) 84,235 76,956 Depreciation and amortization 11,624 10,682 Interest expense 29,393 28,498 Other (income) expense, net (20,506) (5,354) Income tax expense 21,452 12,590 Adjusted EBITDA $ 175,296 $ 184,866 ____________ (1) Net income includes one-time charges resulting from our restructuring plan announced on May 31, 2023 to reduce our global workforce by approximately 20%.
The following table presents a reconciliation of net income (loss) to Adjusted EBITDA for each of the periods indicated: Year Ended December 31, 2024 2023 (in thousands) Net income (loss) (1) $ (12,854) $ 49,098 Stock-based compensation (2) 64,453 84,235 Depreciation and amortization 12,291 11,624 Interest expense 29,597 29,393 Other (income) expense, net (21,838) (20,506) Income tax expense (benefit) 6,357 21,452 Adjusted EBITDA $ 78,006 $ 175,296 ____________ (1) Net income (loss) 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, 2023, cash provided by investing activities was $106.7 million resulting from $538.7 million received from paydowns, maturities and redemptions of marketable securities, partially offset by $421.3 million used in purchases of marketable securities and an increase in capitalized software development costs of $9.7 million.
Investing Activities For the year ended December 31, 2024, cash used in investing activities was $62.0 million resulting from $632.6 million used in purchases of marketable securities, $12.0 million paid for the Breakroom acquisition, net of cash acquired, and $8.6 million capitalized for software development costs, partially offset by $592.2 million received from paydowns, maturities and redemptions of marketable securities. 65 Table of Contents For the year ended December 31, 2023, cash provided by investing activities was $106.7 million resulting from $538.7 million received from paydowns, maturities and redemptions of marketable securities, partially offset by $421.3 million used in purchases of marketable securities and an increase in capitalized software development costs of $9.7 million.
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.
Cost of Revenue and Gross Margin Year Ended December 31, 2024 2023 $ Change % Change (in thousands, except percentages) Cost of revenue $ 50,150 $ 64,309 $ (14,159) (22) % Gross margin 89 % 90 % Cost of revenue decreased by $14.2 million, or 22%, for the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily due to a decrease of $4.0 million in credit card processing fees, a decrease of $3.5 million in job distribution costs from performance-based revenue, a decrease of $2.8 million in third-party hosting fees, and a decrease of $2.7 million in partner revenue 60 Table of Contents share.
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.
During the year ended December 31, 2024, we recorded an incremental valuation allowance of $3.9 million against the deferred tax assets 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 and additionally established a valuation allowance against certain historic operating losses of foreign entities.
(2) Includes a one-time charge of $7.5 million due to an acceleration of unrecognized stock-based compensation expense from future periods into the fourth quarter of 2023 resulting from the cancellation of the market-based RSUs in connection with the CEO Performance Award (as defined below). 52 The following tables present net income margin and Adjusted EBITDA margin for each of the periods indicated: Year Ended December 31, 2023 2022 (in thousands, except percentages) Revenue $ 645,722 $ 904,649 Net income 49,098 61,494 Net income margin 8 % 7 % Year Ended December 31, 2023 2022 (in thousands, except percentages) Revenue $ 645,722 $ 904,649 Adjusted EBITDA 175,296 184,866 Adjusted EBITDA margin 27 % 20 % FACTORS AFFECTING OUR PERFORMANCE We believe that the growth and future success of our business depends on many factors.
(2) Includes a one-time charge of $7.5 million due to an acceleration of unrecognized stock-based compensation expense from future periods into the fourth quarter of 2023 resulting from the cancellation of the market-based RSUs in connection with the CEO Performance Award (as defined in Note 2 — Basis of Presentation, Principles of Consolidation, and Summary of Significant Accounting Policies to the audited financial statements included in this report). 53 Table of Contents The following tables present net income (loss) margin and Adjusted EBITDA margin for each of the periods indicated: Year Ended December 31, 2024 2023 (in thousands, except percentages) Revenue $ 474,001 $ 645,722 Net income (loss) (12,854) 49,098 Net income (loss) margin (3) % 8 % Year Ended December 31, 2024 2023 (in thousands, except percentages) Revenue $ 474,001 $ 645,722 Adjusted EBITDA 78,006 175,296 Adjusted EBITDA margin 16 % 27 % FACTORS AFFECTING OUR PERFORMANCE We believe that the growth and future success of our business depends on many factors.
Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA for a period by revenue for the same period. We believe Adjusted EBITDA and Adjusted EBITDA margin are helpful to investors, analysts and other interested parties because they can assist in providing a more consistent and comparable overview of our operations across our historical financial periods.
We believe Adjusted EBITDA and Adjusted EBITDA margin are helpful to investors, analysts and other interested parties because they can assist in providing a more consistent and comparable overview of our operations across our historical financial periods. In addition, these measures are frequently used by analysts, investors and other interested parties to evaluate and assess performance.
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.
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. Adjusted EBITDA is a financial measure not presented in accordance with GAAP.
Our nonrefundable subscriptions are typically subject to renewal at the end of the subscription term. Our upsell services complement or expand visibility to job posting plans and are typically sold on a subscription basis. Upsell services revenue is recognized ratably over the term of the agreement beginning on the date the upsell services are made available to the customer.
Our nonrefundable subscriptions are typically subject to renewal at the end of the subscription term. 56 Table of Contents Our upsell services complement or expand visibility to job posting plans and are typically sold on a subscription basis.
We have made significant investments in our business to expand our employer and job seeker footprints, increase their engagement and enhance our datasets and machine learning. 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.
We have made significant investments in our business to expand our employer and job seeker footprints, increase their engagement and enhance our datasets and machine learning. For the year ended December 31, 2024, our revenue was $474.0 million and we had a net loss of $12.9 million and Adjusted EBITDA of $78.0 million.
Impact of Macroeconomic Conditions We had a lower number of Quarterly Paid Employers in our marketplace in the last quarter of the year ended December 31, 2023 compared to the prior year period. In the year ended December 31, 2023, we delivered $645.7 million in revenue, a 29% decrease compared to the year ended December 31, 2022.
Impact of Macroeconomic Conditions We had a lower number of Quarterly Paid Employers in our marketplace in the fourth quarter of the year ended December 31, 2024 compared to the fourth quarter of the year ended December 31, 2023.
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.
The credit facility has a maturity date of April 30, 2026 and bears interest at a rate based upon our Net Leverage Ratio.
The Indenture contains certain customary negative covenants, including, but not limited to, limitations on the incurrence of debt, limitations on liens, limitations on consolidations or mergers, and limitations on asset sales. The Indenture also contains customary events of default.
Interest on the senior unsecured notes is payable semi-annually in arrears on January 15 and July 15 of each year. The Indenture contains certain customary negative covenants, including, but not limited to, limitations on the incurrence of debt, limitations on liens, limitations on consolidations or mergers, and limitations on asset sales. The Indenture also contains customary events of default.
These decreases were partially offset by a one-time charge of $7.5 million in stock-based compensation expense attributable to an acceleration of unrecognized stock-based compensation expense from future periods into the fourth quarter of 2023 resulting from the cancellation of the market-based RSUs in connection with the CEO Performance Award, and one-time restructuring costs of $1.0 million related to our reduction in force.
(4) Includes a one-time charge of $7.5 million due to an acceleration of unrecognized stock-based compensation expense from future periods into the fourth quarter of 2023 resulting from the cancellation of the market-based RSUs in connection with the CEO Performance Award.
In the last quarter of the year ended December 31, 2023, Revenue per Paid Employer decreased slightly when compared to the prior-year period.
In the fourth quarter of the year ended December 31, 2024, Revenue per Paid Employer remained flat when compared to the fourth quarter of the year ended December 31, 2023.
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.
Sales and Marketing Year Ended December 31, 2024 2023 $ Change % Change (in thousands, except percentages) Sales and marketing $ 215,808 $ 265,253 $ (49,445) (19) % Percentage of revenue 46 % 41 % Sales and marketing expenses decreased by $49.4 million, or 19%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
The decrease of $28.9 million related to changes in our operating assets and liabilities was primarily driven by a $22.7 million decrease in our accrued expenses and other liabilities and accounts payable, a $6.7 million increase in our accounts receivable, a $6.7 million decrease in operating lease liabilities, and a $3.7 million decrease in deferred revenue, partially offset by an increase of $12.7 million in accrued interest associated with our senior unsecured notes.
The increase of $0.3 million related to changes in our operating assets and liabilities was primarily driven by a $3.7 million decrease in our accounts receivable, a $2.0 million decrease in deferred commissions, net, and a $1.4 million increase in our accrued expenses and other liabilities and accounts payable, partially offset by a $5.3 million decrease in operating lease liabilities and a $2.1 million decrease in deferred revenue.
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.
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. During the second half of 2022, we saw revenue declines of 5% and 7% in the third and fourth quarters, respectively.
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.
Through December 31, 2024, 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.
Subscription revenue decreased by $188.0 million, or 27%, and performance-based revenue decreased by $71.0 million, or 34%, for the same period.
Subscription revenue decreased by $138.6 million, or 27%, and performance-based revenue decreased by $33.2 million, or 24%, for the same period.
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.
Gross margin was 89% and 90% for the years ended December 31, 2024 and December 31, 2023, respectively, reflecting our continued commitment to operational efficiencies and maintaining costs proportionate to revenue.
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.
For more information, see Note 15 – Share Repurchase Program to the audited financial statements included in this report. Investments During the year ended December 31, 2024, we continued investing in highly rated debt securities and money market mutual funds to manage our excess cash reserves.
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.
The determination of stock-based compensation is inherently uncertain and subjective and involves the application of valuation models and assumptions requiring the use of judgment. If we had made 68 Table of Contents different assumptions, our stock-based compensation expense and our results of operations for the years ended December 31, 2024 and 2023 may have been significantly different.
Research and Development Year Ended December 31, 2023 2022 $ Change % Change (in thousands, except percentages) Research and development $ 141,801 $ 127,737 $ 14,064 11 % Percentage of revenue 22 % 14 % Research and development expenses increased by $14.1 million, or 11%, for the year ended December 31, 2023 compared to the year ended December 31, 2022 primarily due to a $7.9 million increase in our personnel-related expenses for our research and development employees attributable to an increase in headcount, an increase of $4.4 million in stock-based compensation expense, and one-time restructuring costs of $3.2 million related to our May 2023 reduction in force.
Research and Development Year Ended December 31, 2024 2023 $ Change % Change (in thousands, except percentages) Research and development $ 134,831 $ 141,801 $ (6,970) (5) % Percentage of revenue 28 % 22 % Research and development expenses decreased by $7.0 million, or 5%, for the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily driven by one-time restructuring costs of $3.2 million related to our May 2023 reduction in force incurred during the year ended December 31, 2023, as well as a $2.3 million decrease in personnel-related costs and a $1.7 million decrease in stock-based compensation expense for our research and development employees corresponding with lower headcount in the current-year period.
Pursuant to the Indenture, the senior unsecured notes will mature on January 15, 2030 and bear interest at a rate of 5% per year. Interest on the senior unsecured notes is payable semi-annually in arrears on January 15 and July 15 of each year.
The senior unsecured notes were issued pursuant to an indenture dated as of January 12, 2022, or the Indenture. Pursuant to the Indenture, the senior unsecured notes will mature on January 15, 2030 and bear interest at a rate of 5% per year.
For the year ended December 31, 2022, cash provided by operating activities was $128.8 million resulting from our net income of $61.5 million, adjusted by non-cash charges of $96.2 million and a net decrease of $28.9 million in our operating assets and liabilities.
For the year ended December 31, 2024, cash provided by operating activities was $45.7 million resulting from our net loss of $12.9 million, adjusted by non-cash charges of $58.3 million and a net increase of $0.3 million in our operating assets and liabilities.
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.
Financing Activities For the year ended December 31, 2024, cash used in financing activities was $48.4 million which consisted of $40.3 million used for the repurchase of common stock and $13.6 million for the net settlement of taxes on equity awards, partially offset by $3.6 million of proceeds from the issuance of stock under the employee stock purchase plan, and $1.9 million of proceeds from the exercise of stock options.

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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 changeA 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
Biggest changeA 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 Table of Contents ZIPRECRUITER, INC.
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.
Based on investment positions as of December 31, 2024, a hypothetical increase in interest rates of 100 basis points across all maturities would result in a $0.6 million decrease in the fair value of the portfolio. Such losses would only be realized if we sold the investments prior to maturity.
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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Report of Independent Registered Public Accounting Firm (PCAOB ID 238 ) 73 Consolidated Balance Sheets 76 Consolidated Statements of Operations 77 Consolidated Statements of Comprehensive Income ( Loss) 78 Consolidated Statements of Changes in Stockholders’ Equity 79 Consolidated Statements of Cash Flows 80 Notes to Consolidated Financial Statements 81 72 Table of Contents Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of ZipRecruiter, Inc.
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Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of ZipRecruiter, Inc. and its subsidiaries (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of operations, of comprehensive income (loss), of changes in stockholders’ equity, and of cash flows for each of the three years in the period ended December 31, 2024, including the related notes (collectively referred to as the “consolidated financial statements”).
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We also have audited the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
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In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024 in conformity with accounting principles generally accepted in the United States of America.
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Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
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Basis for Opinions The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A.
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Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits.
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We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
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We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
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Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.
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Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
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Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances.
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We believe that our audits provide a reasonable basis for our opinions.
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Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for 73 Table of Contents external purposes in accordance with generally accepted accounting principles.
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A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
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Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.
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The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
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Revenue Recognition As described in Notes 2 and 5 to the consolidated financial statements, the Company’s total revenue was $474.0 million, of which subscription revenue was $369.8 million and performance-based revenue was $104.2 million for the year ended December 31, 2024.
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Subscription revenue consists of time-based job posting plans, upsells which complement or expand visibility and prominence to job posting plans, and resume database plans. Plans are priced at a flat rate based on plan size and whether the plan is for a daily, monthly, or annual term.
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Customer contracts are typically subject to renewal at the end of the subscription term. Contracts are only cancelable at the end of the term and are nonrefundable. 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 the Company’s software.
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Customers pay an amount per click or per application that is usually capped at a contractual maximum per recruitment campaign, with campaigns typically lasting from one to three months.
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The principal consideration for our determination that performing procedures relating to revenue recognition is a critical audit matter is a high degree of auditor effort in performing procedures related to the Company’s revenue recognition. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.
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These procedures included testing the effectiveness of controls relating to the revenue recognition process.
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These procedures also included, among others, (i) evaluating performance-based and certain subscription revenue transactions by testing the completeness, accuracy and occurrence of revenue recognized for a sample of revenue transactions by obtaining and inspecting source documents, such as customer order information, customer contracts, invoices, evidence of performance, and cash receipts, (ii) for performance-based revenue transactions, confirming a sample of outstanding customer invoice balances as of December 31, 2024 and, for confirmations not returned, as well as for certain subscription revenue transactions, obtaining and inspecting source documents, such as invoices, evidence of performance, and cash receipts, and (iii) for other subscription revenue transactions, developing an independent expectation of revenue from credit 74 Table of Contents card transactions based on cash receipts from credit card processors and comparing the result to revenue recognized. /s/ PricewaterhouseCoopers LLP Los Angeles, California February 25, 2025 We have served as the Company’s auditor since 2015. 75 Table of Contents ZipRecruiter, Inc.
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Consolidated Balance Sheets (in thousands, except par value) December 31, 2024 2023 Assets Current assets Cash and cash equivalents $ 218,432 $ 283,043 Marketable securities 287,449 237,074 Accounts receivable, net of allowances of $1,976 and $3,859 at December 31, 2024 and December 31, 2023, respectively 23,454 27,247 Prepaid expenses and other assets 10,059 9,853 Deferred commissions, current portion 4,279 5,071 Total current assets 543,673 562,288 Property and equipment, net 4,889 6,213 Operating lease right-of-use assets 6,007 8,744 Internal-use software, net 18,510 18,609 Deferred commissions, net of current portion 2,915 4,114 Intangible assets, net 5,339 — Goodwill 8,518 1,724 Deferred tax assets, net 73,737 57,050 Other assets 472 758 Total assets $ 664,060 $ 659,500 Liabilities and Stockholders' Equity Current liabilities Accounts payable $ 10,519 $ 11,839 Accrued expenses 43,493 41,741 Accrued interest 12,866 12,837 Deferred revenue 10,837 12,860 Operating lease liabilities, current portion 2,786 4,429 Other current liabilities 1,093 1,164 Total current liabilities 81,594 84,870 Operating lease liabilities, net of current portion 6,286 8,721 Long-term borrowings, net 543,649 542,577 Other long-term liabilities 19,101 14,967 Total liabilities 650,630 651,135 Commitments and contingencies (Note 12) Stockholders' equity Preferred Stock, $0.00001 par value; 50,000 shares authorized as of December 31, 2024 and December 31, 2023; no shares issued and outstanding as of December 31, 2024 and December 31, 2023 — — Class A common stock, $0.00001 par value; 700,000 shares authorized as of December 31, 2024 and December 31, 2023; 75,615 and 76,173 shares issued and outstanding as of December 31, 2024 and December 31, 2023, respectively 1 1 Class B convertible common stock, $0.00001 par value; 700,000 shares authorized as of December 31, 2024 and December 31, 2023; 22,829 shares issued and 22,634 shares outstanding as of December 31, 2024 and December 31, 2023 — — Class B treasury stock, 195 shares outstanding as of December 31, 2024 and December 31, 2023 (644) (644) Additional paid-in capital 32,402 14,526 Accumulated deficit (18,385) (5,531) Accumulated other comprehensive income 56 13 Total stockholders' equity 13,430 8,365 Total liabilities and stockholders' equity $ 664,060 $ 659,500 The accompanying notes are an integral part of these consolidated financial statements. 76 Table of Contents ZipRecruiter, Inc.
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Consolidated Statements of Operations (in thousands, except per share amounts) Year Ended December 31, 2024 2023 2022 Revenue $ 474,001 $ 645,722 $ 904,649 Cost of revenue 50,150 64,309 86,298 Gross profit 423,851 581,413 818,351 Operating expenses Sales and marketing 215,808 265,253 484,429 Research and development 134,831 141,801 127,737 General and administrative 71,950 94,922 108,957 Total operating expenses 422,589 501,976 721,123 Income from operations 1,262 79,437 97,228 Other income (expense) Interest expense (29,597) (29,393) (28,498) Other income (expense), net 21,838 20,506 5,354 Total other income (expense), net (7,759) (8,887) (23,144) Income (loss) before income taxes (6,497) 70,550 74,084 Income tax expense 6,357 21,452 12,590 Net income (loss) (12,854) 49,098 61,494 Net income (loss) per share attributable to Class A and Class B common stockholders: Basic $ (0.13) $ 0.49 $ 0.54 Diluted $ (0.13) $ 0.46 $ 0.51 Weighted average shares used in computing net income (loss) per share attributable to Class A and Class B common stockholders: Basic 98,588 100,730 114,272 Diluted 98,588 105,781 121,398 The accompanying notes are an integral part of these consolidated financial statements. 77 Table of Contents ZipRecruiter, Inc.
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Consolidated Statements of Comprehensive Income (Loss) (in thousands) Year Ended December 31, 2024 2023 2022 Net income (loss) $ (12,854) $ 49,098 $ 61,494 Other comprehensive income (loss), net of tax: Change in unrealized gains (losses) on available-for-sale debt securities 43 386 (373) Total other comprehensive income (loss) 43 386 (373) Total comprehensive income (loss) $ (12,811) $ 49,484 $ 61,121 The accompanying notes are an integral part of these consolidated financial statements. 78 Table of Contents ZipRecruiter, Inc.
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Consolidated Statements of Changes in Stockholders' Equity (in thousands) Class A Common Stock Class B Convertible Common Stock Class B Treasury Stock Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Income (Loss) Total Stockholders' Equity Shares Amount Shares Amount Shares Amount Balance as of December 31, 2021 87,843 $ 1 30,571 $ — (195) $ (644) $ 303,395 $ (67,784) $ — $ 234,968 Conversion of Class B stock to Class A stock 3,784 — (3,784) — — — — — — — Issuance of common stock upon exercise of options 8 — 2,747 — — — 5,119 — — 5,119 Issuance of common stock upon the vesting and settlement of RSUs 1,333 — 1,459 — — — — — — — Vesting of early exercised options — — — — — — 97 — — 97 Stock-based compensation — — — — — — 77,599 — — 77,599 Shares withheld related to net share settlement (468) — (614) — — — (19,157) — — (19,157) Shares issued under employee stock purchase plan 449 — — — — — 8,129 — — 8,129 Repurchase and retirement of common stock (18,629) — — — — — (339,256) — — (339,256) Net income — — — — — — — 61,494 — 61,494 Other comprehensive loss — — — — — — — — (373) (373) Balance as of December 31, 2022 74,320 $ 1 30,379 $ — (195) $ (644) $ 35,926 $ (6,290) $ (373) $ 28,620 Conversion of Class B stock to Class A stock 9,518 — (9,518) — — — — — — — Issuance of common stock upon exercise of options 23 — 1,524 — — — 3,770 — — 3,770 Issuance of common stock upon the vesting and settlement of RSUs 2,290 — 788 — — — — — — — Stock-based compensation — — — — — — 86,079 — — 86,079 Shares withheld related to net share settlement (790) — (344) — — — (17,352) — — (17,352) Shares issued under employee stock purchase plan 389 — — — — — 6,381 — — 6,381 Repurchase and retirement of common stock (9,577) — — — — — (100,263) (47,302) — (147,565) Share repurchase excise tax — — — — — — (15) (1,037) — (1,052) Net income — — — — — — — 49,098 — 49,098 Other comprehensive income — — — — — — — — 386 386 Balance as of December 31, 2023 76,173 $ 1 22,829 $ — (195) $ (644) $ 14,526 $ (5,531) $ 13 $ 8,365 Conversion of Class B stock to Class A stock 1,207 — (1,207) — — — — — — — Issuance of common stock upon exercise of options 16 — 1,040 — — — 2,000 — — 2,000 Issuance of common stock upon the vesting and settlement of RSUs 3,295 — 311 — — — — — — — Stock-based compensation — — — — — — 66,299 — — 66,299 Shares withheld related to net share settlement (1,205) — (141) — — — (13,586) — — (13,586) Shares issued under employee stock purchase plan 361 — — — — — 3,625 — — 3,625 Repurchase and retirement of common stock (4,232) — (3) — — — (40,371) — — (40,371) Share repurchase excise tax — — — — — — (91) — — (91) Net loss — — — — — — — (12,854) — (12,854) Other comprehensive income — — — — — — — — 43 43 Balance as of December 31, 2024 75,615 $ 1 22,829 $ — (195) $ (644) $ 32,402 $ (18,385) $ 56 $ 13,430 The accompanying notes are an integral part of these consolidated financial statements. 79 Table of Contents ZipRecruiter, Inc.
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Consolidated Statements of Cash Flows (in thousands) Year Ended December 31, 2024 2023 2022 Cash flows from operating activities Net income (loss) $ (12,854) $ 49,098 $ 61,494 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Stock-based compensation expense 64,398 84,235 76,956 Depreciation and amortization 12,291 11,624 10,682 Provision for bad debts 185 2,736 3,904 Deferred income taxes (15,531) (18,397) (624) Non-cash lease expense 3,969 4,212 4,433 Amortization and accretion of marketable securities (10,649) (11,320) (2,512) Other 3,645 1,548 3,334 Change in operating assets and liabilities: Accounts receivable 3,686 14,438 (6,668) Prepaid expenses and other assets (132) 2,261 (2,555) Deferred commissions 1,991 498 (1,032) Other assets 767 246 1,803 Accounts payable (1,383) (9,336) (3,579) Accrued expenses and other liabilities 2,767 (15,884) (19,161) Accrued interest 29 — 12,705 Deferred revenue (2,118) (6,726) (3,671) Operating lease liabilities (5,326) (6,041) (6,701) Net cash provided by operating activities 45,735 103,192 128,808 Cash flows from investing activities Purchases of property and equipment (922) (918) (2,692) Acquisition of business, net of cash acquired (12,040) — — Capitalized internal-use software costs (8,609) (9,744) (7,852) Purchases of marketable securities (632,600) (421,294) (367,055) Sales of marketable securities — — 861 Paydowns, maturities, and redemptions of marketable securities 592,188 538,692 25,604 Net cash provided by (used in) investing activities (61,983) 106,736 (351,134) Cash flows from financing activities Proceeds from issuance of senior unsecured notes — — 550,000 Payment of senior unsecured notes’ issuance fees — — (9,378) Repurchase of common stock (40,346) (147,565) (339,256) Proceeds from exercise of stock options 1,944 4,271 4,747 Payments of tax withholdings on net settlement of equity awards (13,586) (17,352) (19,157) Proceeds from issuance of stock under employee stock purchase plan 3,625 6,381 8,129 Net cash provided by (used in) financing activities (48,363) (154,265) 195,085 Net increase (decrease) in cash and cash equivalents (64,611) 55,663 (27,241) Cash and cash equivalents Beginning of period 283,043 227,380 254,621 End of period $ 218,432 $ 283,043 $ 227,380 Supplemental disclosure of cash flow information Income taxes paid $ 18,010 $ 25,569 $ 14,743 Interest paid 28,149 28,121 14,602 The accompanying notes are an integral part of these consolidated financial statements. 80 Table of Contents ZipRecruiter, Inc.
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Notes to the Consolidated Financial Statements 1. Organization and Description of Business ZipRecruiter, Inc. was incorporated in the state of Delaware on June 29, 2010.
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Hereinafter, ZipRecruiter, Inc. and its wholly owned subsidiaries ZipRecruiter Israel Ltd., ZipRecruiter UK Ltd., ZipRecruiter Canada Ltd., and Poplar Technologies Ltd. are collectively referred to as “ZipRecruiter” or the “Company.” The Company is a two-sided marketplace that enables employers and job seekers to connect with one another online to fill job opportunities.
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On July 23, 2024, ZipRecruiter, Inc. acquired all of the outstanding share capital of Poplar Technologies Ltd (d/b/a Breakroom) (“Breakroom”). Breakroom is a UK-based employee review platform focused on frontline industries such as retail and hospitality. 2.
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Basis of Presentation, Principles of Consolidation, and Summary of Significant Accounting Policies The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.
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Certain reclassifications have been made to prior year presentation to conform to current year presentation. Foreign Currency Remeasurement The Company’s foreign subsidiaries operate in their local currency and their functional currency is the U.S. dollar.
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Monetary assets and liabilities of each subsidiary, denominated in local or other foreign currency, are remeasured at the end of each reporting period using the exchange rates at that date.
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Non-monetary assets and liabilities and equity are remeasured at the historical exchange rates, while results of operations in the local currency or other foreign currencies are translated into U.S. dollars at the exchange rates in effect at the date of the transaction. Net foreign transaction gains/losses for the years ended December 31, 2024, 2023, and 2022 were not material.
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Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period.
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By their nature, estimates are subject to an inherent degree of uncertainty and actual results could differ from those estimates.
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As of the date these consolidated financial statements are issued, the Company is not aware of any specific event or circumstance that would require an update to the Company’s estimates or judgments, or change to the carrying value of the Company’s assets or liabilities.
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However, these estimates and judgments may change as new events occur and additional information is obtained, which may result in changes being recognized in the consolidated financial statements in future periods. Actual results could differ from those estimates and any such differences may have a material impact on the financial statements.
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Fair Value Measurements The Company measures certain of its financial instruments at fair value on a recurring basis. Financial instruments measured at fair value on a recurring basis primarily include the Company’s cash equivalents and marketable securities. 81 Table of Contents ZipRecruiter, Inc.
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Notes to the Consolidated Financial Statements The Company also measured certain assets acquired and liabilities assumed as part of a business combination at fair value on a nonrecurring basis upon acquisition of all of the outstanding share capital of Breakroom on July 23, 2024. For more information on the Breakroom acquisition, please see Note 4.
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Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.
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Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.
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Accounting standards describe a fair value hierarchy based on the following three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value: - Level 1 — Quoted prices in active markets for identical assets, liabilities, or funds. - Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. - Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
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Segments and Geographic Information The Company operates as a single operating segment. The Company’s Chief Operating Decision Maker (“CODM”), its Chief Executive Officer (the “CEO”), regularly reviews financial information presented on a consolidated basis for purposes of assessing financial performance and allocating resources.
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The accounting policies of the Company’s single operating segment are the same as those described in the summary of significant accounting policies.
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The CODM uses net income (loss) as reported within the Company’s Consolidated Statements of Operations as the primary measure of profit or loss for purposes of assessing performance for the Company’s single operating segment and determining how to allocate resources into the Company’s single operating segment or into other parts of the entity, such as for acquisitions.
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Additionally, net income (loss) is used to monitor budget versus actual results to assess the performance of the segment. All cost and expense line items reported within the Company’s Consolidated Statements of Operations, as well as marketing and advertising expense, depreciation and amortization, and stock-based compensation expense are significant.
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The Company has disclosed amounts related to marketing and advertising expense within Sales and Marketing below in this Note 2, depreciation and amortization within the Consolidated Statements of Cash Flows and stock-based compensation expense within Note 16. Additionally, the CODM does not evaluate operating segments using asset information.
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Revenue is attributed to geographic regions based on locations where services are provided to the Company’s customers. Foreign countries outside of the United States, in aggregate, accounted for less than 2% of the Company’s revenue for the years ended December 31, 2024, 2023, and 2022.
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In addition, as of December 31, 2024, 2023 and 2022 long-lived assets outside of the United States were not material. Revenue Recognition The Company recognizes revenue when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration it expects to be entitled to in 82 Table of Contents ZipRecruiter, Inc.
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Notes to the Consolidated Financial Statements exchange for those goods or services.
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The Company determines revenue recognition through the following five steps: (1) Identification of the contract, or contracts, with a customer (2) Identification of all performance obligations in the contract (3) Determination of the transaction price (4) Allocation of the transaction price to the performance obligations in the contract (5) Recognition of revenue when, or as, the performance obligation or obligations are satisfied The Company identifies enforceable revenue contracts when the terms are agreed to by the customer.
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Some of the Company’s contracts with customers contain multiple performance obligations. For these contracts, the Company accounts for performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis.
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The Company determines the standalone selling prices based on its overall pricing objectives, taking into consideration market conditions and other factors, including the value of its contracts, the products sold, and the number and types of users within the Company’s contracts. Revenue is recognized as performance obligations are satisfied and is presented net of the sales allowance.
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The Company derives its revenues from the following sources: Subscription Revenue Subscription revenue consists of time-based job posting plans, upsells which complement or expand visibility and prominence to job posting plans, and resume database plans. Plans are priced at a flat rate based on plan size and whether the plan is for a daily, monthly, or annual term.
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Customer contracts are typically subject to renewal at the end of the subscription term. Contracts are only cancelable at the end of the term and are nonrefundable.
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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 the Company’s marketplace in addition to numerous other job sites or partner networks with job seeker communities. Customers may also access the Company’s software to review job applications and manage job postings.
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The Company recognizes 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.
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Once a customer requests a cancellation of their subscription, the open job postings are closed at the end of the term; however, the customer may still access the software to review past job postings or prior applications received under a separate upsell subscription.
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Job posting plans are billed in advance of the subscription period, which typically ranges from one to twelve months, except for daily subscription plans, which are billed in arrears based on how many days the customer uses the services. Upsell services : Additional features to complement or expand visibility to job posting plans may be purchased as an upsell service.
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For these services, the Company bills the customers in advance and recognizes revenue ratably over the term of the agreement beginning on the date the upsell services are made available to the customer, which typically ranges from one to twelve months. Upsell services also include job posting enhancements which are applied to individual job postings.
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Such services enhance job postings by providing customers with a temporary boost in the prominence of the job postings, expanding visibility to job postings by inviting strong fit potential candidates to apply to the job, or highlighting key attributes of job postings to make them stand out to job seekers.
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Individual job posting enhancements may be purchased by a customer when needed, or in recurring monthly prepaid bundles to complement their job posting subscription plan, and are billed in advance of use. Typically 83 Table of Contents ZipRecruiter, Inc. Notes to the Consolidated Financial Statements these prepaid bundles can be used over a period ranging from one to twelve months.
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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 the Company recognizes 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.
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Breakage is recognized as revenue in proportion to the pattern of actual usage by customers. Resume database plans : Access to the Company’s resume database is purchased on a subscription basis and allows a customer to search for and view resumes.
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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.
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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 the Company’s software.
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Customers pay an amount per click or per application that is usually capped at a contractual maximum per recruitment campaign, with campaigns typically lasting from one to three months. Customers on this pricing model do not have access to the Company’s applicant tracking software for subscription customers though they may purchase resume database subscription plans separately.
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Customers that use performance-based 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.
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Performance-based revenue is typically billed monthly, in arrears, and revenue is recognized as job applicants click on or apply to the distributed job postings, up to the contractual maximum per recruitment campaign.
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Sales Allowance The Company establishes a sales allowance to estimate refunds and credits that it may grant to customers in the future for cancellations of subscriptions and concessions to customers who are not satisfied with services received.
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While subscriptions are noncancelable once the contract term has commenced, the Company may at times allow customers who miss their cancellation window prior to an autorenewal to cancel their contract, and the Company may issue refunds or credits to maintain overall customer satisfaction.
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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.
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The following table summarizes the changes in the sales allowance (in thousands): Year Ended December 31, 2024 2023 2022 Sales allowance, at beginning of year $ 3,531 $ 4,251 $ 5,919 Recorded as a reduction to revenue 16,971 29,839 39,877 Recorded as a reduction to deferred revenue 3,788 4,814 4,852 Utilization of allowance for refunds and credits (21,601) (35,373) (46,397) Sales allowance, at end of year $ 2,689 $ 3,531 $ 4,251 Of the total sales allowance balance of $2.7 million at December 31, 2024, $0.8 million was presented net of accounts receivable and $1.9 million was presented within accrued expenses on the Consolidated Balance Sheets.
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Of the total sales allowance balance of $3.5 million at December 31, 2023, $1.5 million was presented net of accounts receivable and $2.0 million was presented within accrued 84 Table of Contents ZipRecruiter, Inc. Notes to the Consolidated Financial Statements expenses on the Consolidated Balance Sheets.

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