Hello, everyone. Thank you for joining us and welcome to the ZipRecruiter, Inc. Q3 2026 earnings call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Emilio Sartori, Head of Investor Relations. Emilio, please go ahead.

Thank you, operator, and good afternoon. Thank you for joining us for our earnings conference call, during which we will discuss ZipRecruiter's performance for the third quarter ended September 30th, 2026, and our guidance for the fourth quarter of 2026. Ian Siegel, co-founder and CEO, and Carmen Chan, CFO, will be delivering prepared remarks, while David Travers, president, will be available during the Q&A portion of today's call. Before we begin, please be reminded that forward-looking statements made today are subject to risks and uncertainties relating to future events and or the future financial performance of ZipRecruiter. Actual results could differ materially from those anticipated in these forward-looking statements. A discussion of some of the risk factors that from any forward-looking statements can be found in ZipRecruiter's quarterly report on Form 10-Q for the quarter ended September 30, 2026, which is available on our investor website and the SEC's website. The forward-looking statements in this conference call are based on the current expectations as of today, and ZipRecruiter assumes no obligation to update or revise them, whether as a result of new developments or otherwise. In addition, during today's call, we will discuss non-GAAP financial measures. These non-GAAP financial measures should be considered in addition to, not as a substitute for, or in isolation from, GAAP results. Reconciliations of the non-GAAP metrics to the nearest GAAP metrics are included in ZipRecruiter's shareholder letter and in our Form 10-Q. And now, I will turn the call over to Ian.

Thank you. Good afternoon to everyone joining us today. ZipRecruiter's momentum continued to accelerate in the third quarter as we grew revenue and expanded profitability year over year. Q3 revenue grew 8% year over year to $124.4 million, driven by product improvements that drove the marketplace to record engagement levels and marketing efficiency improvements that fueled growth in quarterly paid employers. Adjusted EBITDA was $20.8 million, an adjusted EBITDA margin of 17%, representing nine percentage points of expansion year over year. This improved upon the 5% revenue growth and 12% margin we delivered in Q2, 2026. Our updated 2026 full year revenue outlook is four to 5% year over year growth. Product improvements delivered over the course of 2026 have been the primary driver of the ramp in our results. Our product strategy is simple. increased the number of conversations between job seekers and employers. Conversations are highly correlated with both job seekers' satisfaction and job seekers' long-term usage of ZipRecruiter. Conversations are also highly correlated with employer satisfaction and their likelihood to post more jobs. ZipRecruiter product improvements aimed at increasing conversations have pushed multiple marketplace engagement metrics to all-time highs. Some highlights of those metrics include quarterly paid employers grew 10% year over year and 5% sequentially, with strength across new employers, reactivation, and retention. The number of job seekers applying to at least one job grew 10% year over year. The average number of applications per job seeker grew 24% year over year. And qualified applications grew 49% quarter over quarter. It's not just our internal algorithms that are evaluating these applications as qualified. Employer response rate per application has now tripled year over year. These results reflect several product improvements we deployed this year, and their impact has grown over time. First, after launching direct integrations with both Claude and ChatGPT earlier in 2026, Q3 traffic from AI platforms nearly doubled year over year. Job seekers coming to ZipRecruiter from these platforms are amongst our most engaged. Second, since deployment in Q1, we have continued to refine our next generation AI-powered search and matching engine. Trained on over 15 years of ZipRecruiter proprietary marketplace engagement data, the engine is designed to predict both which jobs the job seeker will be interested in and also the jobs which give them the highest probability of getting a response. In Q3, Qualified applications grew 49% quarter-over-quarter, building on 34% quarter-over-quarter growth in Q2. Employer engagement has been climbing alongside these metrics. In Q3, the employer response rate per application tripled year-over-year after having doubled the prior quarter. It was not just search and matching improvements which drove up employer engagement. Be Seen First, which showcases qualified candidates who demonstrate the seriousness of their interest by writing a message to the employer explaining why they applied, is now used by 9% of applicants. Those applicants are two and a half times more likely to hear back from the employer. In Q3, we further enhanced Be Seen First by giving these job seekers the option to send a follow-up message to the employer after applying. This new feature significantly increased the back and forth with employers, resulting in over four and a half times more messages exchanged. Be Seen First is increasing both the volume and quality of interactions between the two sides of our marketplace. Turning to our momentum with larger employers, Q3 performance-based revenue grew 13% year over year and 10% sequentially. Enterprise adoption of our automated campaign performance solutions increased 23% year over year. These tools make employer campaigns more efficient and deliver high-quality candidates. We believe that as campaigns perform better, employers will invest more with us, contributing to sustained growth in performance-based revenue over time. Today, ZipRecruiter is a household name with over 80% aided brand awareness. We believe our brand has become part of the zeitgeist as evidenced by numerous unpaid mentions in both scripted and unscripted television, radio shows, political interviews, comedy roasts, and even the Sunday crossword puzzle. Our brand brings people to ZipRecruiter and our product keeps them engaged, a combination we believe is hard to replicate. Looking ahead, every decision we make is guided by our mission to actively connect people to their next great opportunity. Our success driving conversations is the primary reason we are growing again, despite a low hire, low fire market. As AI reshapes how people look for work, we are betting the platform that wins will be the one that delivers human-to-human connections for both job seekers and employers. That vision defines our roadmap, and we believe we are just getting started. With that, I'm happy to welcome our new CFO, Carmen Chan, to the call. She will discuss our financial results and guidance.

Thank you, Ian. I started as ZipRecruiter CFO in August. Since this is my first call, I want to take a moment to share what brought me here and where I will be focusing. I've spent my career advising and covering internet marketplaces, and what drew me to ZipRecruiter is a world-class, product-oriented team, a brand that has become a true household name and a marketplace where engagement metrics across the board are at all-time highs, as this quarter's results show. It's also uniquely compelling to join a founder-led company. In my first few months, I've seen how Ian and the leadership team make decisions with a long-term view, focusing on the health of our marketplace for both job seekers and employers. The way I think about our financial model starts with our product and our conversation strategy. By driving more meaningful conversations, we deepen engagement on both sides of our marketplace, strengthen the value we deliver to employers, and create opportunities for revenue growth. With growth margins around 90%, incremental revenue flows through to the bottom line at a very high rate, and we have operating leverage across R&D and G&A. Sales and marketing is where we make deliberate choices and our brand is a real advantage there. It makes every marketing dollar work harder so we can invest where we see returns. Over time, we believe this model can deliver continued margin expansion and growing cash generation. That gives us flexibility and we will be disciplined in how we use it. We plan to prioritize investments in the business where we see the highest returns, maintain a strong balance sheet and continue to return capital to shareholders opportunistically. I'm looking forward to spending more time with investors, both those who know as well and those just getting to know the ZipRecruiter story. With that, let me turn to our results and guidance. Our third quarter revenue of $124.4 million represents an 8% increase year over year. This was at the top end of our guidance. It is also our second consecutive quarter of growth this year and an increase from the 5% year-over-year growth we saw in Q2. Revenue continues to be driven by a higher number of quarterly paid employers and increased job posting activity. As Ian highlighted earlier, we are seeing product improvements under our conversation strategy compound to drive record engagement on both sides of our marketplace. Our performance-based revenue which represents spend by our larger customers grew 13% year-over-year and 10% sequentially. We believe this was driven by growing adoption of our automated campaign performance solutions and other programmatic tools. These tools help enterprise customers get more out of their hiring spend. We ended the quarter with 74,000 quarterly paid employers, a 10% increase year-over-year and a 5% increase sequentially. This was our highest count of quarterly paid employers since Q3 2023. The strength we saw was broad-based. There was growth in both new and returning employers, along with stronger retention of existing employers as our product improvements continue to resonate with employers of all sizes and industries. Revenue per paid employer was $1,683, down 2% year-over-year, This is a natural timing effect of quarterly paid employer growth. New and returning employers count fully towards quarterly paid employers but contribute revenue only for a portion of the quarter. Sequentially, revenue per paid employer was up 1%, driven by a higher mix of performance-based revenue, which made up 25% of our total revenue. Net income in the third quarter was $5.1 million, representing a 4% margin, Adjusted EBITDA was $12.8 million in Q3, a 17% margin, which exceeded guidance. This also represents a 9 percentage point expansion from Q3 of last year. Adjusted EBITDA and adjusted EBITDA margin both increased on a year-over-year and sequential basis. This was a result of both higher revenue and our continued cost discipline. Looking at our cost structure, we continue to gain operating leverage across the business as we grow revenue. Total operating expenses were $129 million in Q3, essentially flat versus Q2 despite 5% higher revenue. Total operating expenses for Q3 decreased year over year, primarily due to lower stock-based compensation and personnel-related expenses from lower R&D headcount. while AI-powered development tools have increased engineering productivity. Sales and marketing expenses were roughly flat year over year on a dollar basis while revenue grew 8%. As a result, sales and marketing declined from 52% of revenue to 48% of revenue. This reflects the strength of our brand and product, both of which drove improved marketing efficiency. We ended the quarter with $174.7 million in cash, cash equivalents, and marketable securities. In Q3, we opportunistically repurchased $4.7 million of our senior unsecured notes at a discount to par value, as well as $4.5 million of our common stock. Moving on to guidance. For the fourth quarter, We expect revenue in the range of $118 to $122 million, representing 6 to 9% year-over-year growth. This outlook assumes continued product momentum, driven by our conversation strategy, partially offset by a typical seasonal slowdown in hiring. Our Q4 revenue guidance implies full-year revenue of $468 to $472 million, representing 4% to 5% year-over-year growth. This range exceeds the flat revenue outlook we provided at the start of the year because of the success of our product improvements, even as hiring demand continues to reflect a low hire, low fire environment. We expect Q4 adjusted EBITDA in the range of $16 to $20 million, representing 14% to 16% adjusted EBITDA margin. Our outlook assumes sustained investment in sales and marketing supported by the momentum we are seeing in the business. We plan to manage spend in a disciplined manner, adjusting investment based on ROI with a level of investment ultimately determining our margin performance. Our Q4 adjusted EBITDA guidance implies full-year adjusted EBITDA of $61 to $65 million or an adjusted EBITDA margin of 13 to 14%, representing a meaningful expansion from 9% in 2025. This reflects operating leverage as we grow, as well as continued cost discipline across the organization. With that, we can now open the line for questions. Operator.

We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from Ralph Shackhart with William Blair. Please go ahead.

Great. Thanks for taking the questions. In the prepared remarks in the letter, you talked about continuing to accelerate in Q3. I'm just curious if that means throughout the quarter, month over month, you saw the acceleration. and then two, can you walk us through the marketing efficiency you talked about for driving the really strong paid employer growth, just some of the efforts that are coming together there? Thank you.

Hey, this is Ian. And yes, we did have a strong Q3. I think that headline is the acceleration there. And that's the result of marketplace improvements that we outlined in our prepared remarks. The thing about those improvements are that when the site works better, new employers who come to the site are more likely to convert, more likely to spend longer, and more likely to post more jobs. And that has been a key component of the numbers that we just put up. So when we talk about our marketing efficiency, site improvements drive marketing efficiency. So do marketing improvements. We outlined in our shareholder letter that we have made many marketing improvements. We are scientists when it comes to the discipline of multichannel marketing. And in the third quarter, we deployed a commercial called the ZipRecruiter that contained a jingle. And that jingle has been spread across a multitude of those channels. It increases the recall of ZipRecruiter, and it has been one of the additional components to our success as it relates to that efficiency.

Great. Maybe just a quick follow-up. Can you maybe talk about? Yeah.

Sorry. It's Carmen here. It's good to talk to you again. I noticed your question at the start around what was the cadence that we saw with Q3. What I would add to what Ian just laid out is that all of Q3 performed well and momentum built throughout the quarter. And we are pleased with the performance that we're seeing quarter to date as well.

Great. Thanks, Carmen. Just one more, if I could, please. Just in terms of the verticals that you're seeing, I guess, strength and growth, can you maybe talk about, you know, the growth that you're seeing by verticals? Any call-ups, that'd be great. Thank you.

Well, I just want to start by saying that the growth that we are seeing is happening across companies of all sizes across a wide range of industries. But Dave, do you want to add some color on this specific area?

Sure. Hey, Ralph. As we think about sectors, you know, there was clear strength in technology, transportation, and logistics in construction over the past quarter. some of the flatter, not as strong areas included in healthcare, retail, and education. But as Ian indicated, it's like, you know, we think we're doing very well versus the labor market overall, and that's driving the strength of our performance.

Okay. Thank you all.

Your next question comes from Eric Sheridan with Goldman Sachs. Please go ahead.

Thanks so much for taking the question. In the shareholder letter, you talked a lot about the traffic you're seeing from AI platforms. Curious what you're seeing in terms of the conversion of that traffic, how you think about that traffic as a contributor to mix over the medium to long term, and anything you can help us better understand on how the commercial arrangements with LLMs might evolve as you see some of those experiences like horizontal search via agentic continue to scale. Thanks so much.

Well, I'll speak on the traffic first. As we've been talking about for a couple of quarters now, the traffic from AI platforms has been a rapidly growing and high-converting source of new job seekers for ZipRecruiter. The direct integrations that we launched with both ChatGPT and with Claude have been worth the effort. Since launching those integrations, traffic has nearly doubled. And the importance of those integrations is the user experience. Rather than just a straight, traditional, natural language exchange with one of these engines, we have created more of a custom integration with VipRecruiter such that the AI platform can handle the identification of the particular and many others, and we're really excited about this channel because when we were first founded, we were many years behind some of our competitors. And so you look at things like Bluelink search engine optimization, those were efforts that we came to later. and some of the companies we competed with. But here we are right from the beginning at an emerging new channel that not only is growing fast, but is delivering really high quality, highly engaged traffic. So we consider this an important opportunity. And that dovetails into something like a genetic applies, where if you look at where this industry is going, increasingly individuals are able to set up AI agents that perform tasks on their behalf. And it's very clear that job seeking is one of those tasks that will have agents in abundance. The question is, how do you handle those agents that are coming to you? And we are working closely with the different platforms to create the best possible user experience for job seekers in the medium and through the mechanisms that they prefer to use. Very similar to the transition that happened from desktop to mobile about a decade ago. So what we're just seeing now is the beginning of this new trend towards a novel platform. And it is one that we are heavily leaning into.

Thank you.

Your next question comes from Josh Chan with UBS. Please go ahead.

Hi, good evening. Thanks for taking my question. I guess maybe dovetailing on the LLM thoughts, what's your confidence that you're gaining your fair share or maybe even more than your fair share of the LLM traffic in the competitive marketplace as people migrate to that mode of search?

We're highly confident that we have are fair share of the traffic. We have been there from day one working with these companies. We built custom integrations. We are improving upon those experiences, and we are thought partners with them about the next wave of agenda applies that are likely coming our way. We think of this, again, as a growth opportunity for ZipRecruiter. This is clearly something that job seekers are embracing. And so we are paying careful attention to it and optimizing that experience as quickly as possible.

That makes sense. Thanks for the call there. And I guess on the growth in Q3, it looks like the SMB side of the business might have had some acceleration in the quarter as well. I mean, could you talk about whether that's kind of market related or or some of your initiatives have really kind of supported growth in that side of the business. Thank you.

I believe what you're seeing on the SMB side of our business is the impact from multiple quarters worth of improvement combining together to create a better experience in particular for the small business owners who have less time on their hands and features like Be Seen First, where a job seeker can effectively raise their hand and say, I'm a human. I'm very serious about applying to this job. Here are my qualifications. Here is the reason why I'm applying. And as a result of having done that, getting pushed to the top of the candidate list, Employers really, SMBs in particular, seem to really appreciate that feature. The engagement rate with those candidates is two and a half times higher than it is with candidates who just do a standard application. The recent improvement to Be Seen First, which was simply to enable those job seekers who took advantage of Be Seen First to send a follow-up message to those employers, has resulted in four and a half times more exchanges between those job seekers and those employers. So to simplify it all down, this has proven to be a highly effective tool for both identifying who the most qualified and most interested job seekers are, and it allows employers to focus their precious attention and time on those that are most likely to take a job if offered.

Thanks for the color, Ian, and congrats on the good quarter.

Thank you. Your next question comes from Justin Patterson with KeyBank. Please go ahead.

Great. Thanks for taking the question. This is Miles Jakubiak for Justin. I wanted to ask more about the qualified applications growth, which seems to have doubled or so in the last couple quarters. I'm just curious if you could provide some more detail on how this is benefiting the platform. and if you're seeing it translate to more successful hires or if there's a bit of a lag period there.

Yeah, let me paint a full picture for you of what's happened. The absolute number of job seekers who are applying to at least one job is up 10%. Those users are way more engaged than they have been historically. The average number of applications they they they submit is up 24% year over year. And then If you look at the percentage of applications that are scored as qualified by our internal algorithm, that's up 49% quarter over quarter. And that was after we reported that it was up 34% quarter over quarter in Q2. And I realize that those numbers are eye-popping and sound almost impossible. But what validates the accuracy of our internal algorithm is the response rate from employers. So we told you back in Q2 that the response rate from employers to total applications on ZipRecruiter had doubled. In Q3, it actually tripled. What is driving this increase in the quality of applications is the new search and matching platform that we launched earlier in the year. That is a foundational technology that has been completely rebuilt It is the best search and matching that we have ever run on the site as evidenced by the data. And what it is very good at is not only identifying the right jobs for job seekers by their stated interests and location requirements, but it is also very good at looking at the anticipated response from the employers to whom they are submitting those applications and predicting and therefore showing that the jobs for which they have the highest likelihood of getting a response. So this is all by specific, explicit design. This is the outcome of a carefully thought through feature set that has now been deployed successfully and persistently optimized quarter after quarter since its initial launch.

Dave, just to add on to what Ian said, You know, large enterprise customers that drive the performance revenue line in our business are the most sophisticated, most well set up to immediately measure the impact of the improvements Ian just laid out. And so growing 13% year over year in Q3 was the fifth straight quarter we grew the performance revenue line. And that's because of those improvements that Ian just talked about. continues to be a reason those improvements and what we see coming down the pipeline in terms of further improvements continues to give us confidence in our ability to grow the enterprise part of the business going forward.

Thank you so much.

Your next question comes from Josh Beck with Raymond James. Please go ahead.

Yeah, thank you for taking the question. I'm just kind of curious, you know, what you're seeing with respect to Google traffic, you know, both organic and paid. Certainly, they've been embracing AI overviews and AI mode and, you know, that's presented, you know, somewhat divergent trends, you know, I'd say, across the consumer Internet. So I'm kind of curious on what you're seeing there. And then in terms of the integrations with the LLMs, is there opportunity to do more or do you really feel like the product and the integration work is effectively dialed in and now it's kind of more of a scaling phase or is there still a lot more product work ahead with the likes of OpenAI and Anthropiq? Thank you.

I will take your question in reverse order and start with the AI integrations and say we are at the early stages of how these platforms will ultimately be used by job seekers. So I certainly think there will be more product work and improvements to the existing integration over and above what has already been done. As it relates to AI overviews, certainly Google has been increasing the frequency with which they serve AI overviews. They've been doing it since the beginning of the year. So if you look at 2026 in its entirety on the year, our traffic and the number of the absolute number of individual job seekers who are applying to at least one job has been increasing. It was up 10% last quarter in Q3, quarter over quarter, sorry, year over year. And that the reason why we can weather a diminishing amount of opportunity from something like Google Organic is because of both our brands and because are multi-channel marketing sophistication. We are not overly dependent on any one channel either side of our marketplace to bring us the users who make up that marketplace. And so even in the quarter where AI overviews have reached sort of their peak impact, which would be Q3, not only does ZipRecruiter grow traffic, but we were able to launch or launch new traffic sources like AI platforms almost doubled in their contribution year over year. And that pattern of seeking out new channels is something that we have persistently been engaged in, and it is a discipline that we will continue to pursue. And it inoculates us, if you will, to the AI overview impact significantly more than has happened to other companies in our category.

Josh, this is Carmen here. Just to add to that, when we look at our marketing investments on a multi-channel perspective, we did see stronger efficiency across the board and higher conversion rates across and on top of the funnel. And so I think this is reflected in the fact that our sales and marketing spend was down 1% year-on-year, while totally paid-on-voice is still up 10%.

That's super helpful. Maybe just kind of a follow-up on the automated campaign solutions that obviously has been a real driver to success in enterprise. I don't really expect anything quantitative, but any sense on kind of where we are in the adoption of those type of tools and maybe kind of how much room we have to go there? Thank you.

Yeah, good question, Josh. This is Dave. We are well into the adoption curve, so the majority of our enterprise customers are now using the automated campaign performance tool. I don't think we fully realize the benefits of that in terms of customers responding to the better performance they see from those campaigns. and so along with the improvements to job seeker engagement Ian detailed earlier along to the with the improvements in matching quality overall that combination of improving tooling and technology for employers for job seekers and for matching that brings the two together gives us ongoing confidence in our ability to grow the performance marketing

We have reached the end of the Q&A session. This concludes today's call. Thank you for joining. You may now disconnect.