This article is an updated version of an earlier news item on ZipRecruiter’s IPO filing

 

  • Revenue of $418.1 million in 2020, with net profit of $86 million
  • Took a remarkably small revenue hit in 2020 of just 3%
  • CEO and three co-founders took a 50% pandemic pay cut in March

When ZipRecruiter filed its 248-page filing for an initial public offering back in April, the company offered a window into some obvious, and some not-so-obvious, facts about the company.

ZipRecruiter filed an S1 registration statement in April with the U.S. Securities and Exchange Commission. The job search company went public on the NYSE the next month under the ticker name ZIP. The IPO plans were no surprise; the AIM Group covered them in December and the company confirmed them off-the-record.

The obvious

  • Total revenue in 2020: $418.1 million; net profit, $86 million. The 2019 numbers: $429.6 million revenue, net loss $6.3 million. In 2018, net loss was $25.4 million.
  • It took a remarkably small revenue hit in 2020 of just 3%, $11.4 million, from 2019, while many recruitment marketplaces worldwide saw revenue drop 30% to 40% due to the Covid-19 pandemic. (Revenue bounced back well at many companies globally in the second half of 2020, as it did at ZipRecruiter.)
  • ZipRecruiter generates revenue primarily from fees paid by employers to post and distribute jobs on its marketplace, as well as across multiple sites managed by job distribution affiliates, including job boards, classifieds, search engines and social networks. Almost all revenue is generated in the U.S.
  • In 2018, the company raised $156 million, bringing its total funding to $219 million and its valuation to $1.5 billion. The company said at the time that it was profitable before the funding round; in 2014, announcing its first funding round, it also said it was profitable.
  • partners, including job boards, classifieds, search engines and social networks. Almost all revenue is generated from the U.S. market.

The not-so-obvious

Programmatic and other performance- based advertising grew 28% year-over-year in 2020, from $55.7 million to $71.4 million; subscription revenue dropped 8% from $373.9 million to $346.8 million, “primarily due to the adverse economic impact of Covid-19.”

Performance-based revenue grew “primarily due to a 24% increase in the number of paid engagements (paid clicks and paid applications) attributable to the onboarding of new customers who run sophisticated recruitment marketing campaigns with consistent budgets through the year.”

“The corresponding revenue per paid engagement was 42 cents and 44 cents in 2019 and 2020, respectively.”

Sales and marketing expenses plummeted 31% in 2020, from 64% of revenue to 46% of revenue – $276.2 million in 2019, $191.1 million in 2020. While one might attribute those cuts to Covid-19, the company cut nearly 40% of its staff two-and-a-half weeks into the pandemic, a decision that predated the pandemic.

Most of those personnel cuts targeted the sales and marketing teams.

CEO Ian Siegel and three co-founders took a 50% pandemic pay cut in March. Siegel’s total 2020 compensation was $626,635, including $458,000 in salary.

CTO Boris Shimanovsky, who joined the company in June 2020, received total compensation of $2.9 million for the half year, most of it in stock awards; chief people officer Renata Dionello, who joined in September 2020, received $2.4 million in total compensation for that four-month period, again, most of it in stock awards.

ZipRecruiter said the sales and marketing cuts included “a decrease of $71.4 million in advertising, online lead generation, customer and industry events, and candidate acquisition expenses, a decrease of $10 million in personnel-related costs for our sales and marketing employees, and a decrease of $4.5 million in non-essential travel and entertainment expenses.” The company booked one-time costs of $3.7 million related to the “reduction in force.”

Interestingly, the number of paid employers at ZipRecruiter was practically flat even before Covid-19 hit. Revenue increases over the years have been the result of fewer employers spending more.

AIM Group principal Peter M. Zollman joined Chris Russel, MD of U.S.-based RecTech Media, this week to dive deeper into the ZipRecruiter S1 numbers.

The No. 8 job site by traffic globally

Siegel told Yahoo in 2018 that he built ZipRecruiter because he was tired of having to post job listings to multiple job boards.

“I always wished for a magic button I could push that would send my job to all job boards and have all the candidates come into one list, so I just built it,” he said.

As of December 2020, ZipRecruiter had 772 employees across the U.S., primarily in California and Arizona. Internationally, the company had 68 employees in the U.K., Canada and Israel. This was down from a pre-pandemic peak of a total of 1,260 workers. However, the company said in October it had more than 100 job openings and was recruiting IT employees.

The AIM Group ranked ZipRecruiter as the No. 8 recruitment site in the world by revenue in 2020, behind Zhaopin of
China. Its $418 million in revenue is dwarfed by the $3.8 billion in revenue for Indeed.com and Glassdoor, the two primary job sites owned by Recruit Holdings Co. Ltd.

In the U.S., ZipRecruiter is the No. 2 recruitment marketplace by total monthly visits, behind the Recruit Holdings group of companies (Indeed, Glassdoor, SimplyHired).

Originally launched as a cost-per-click job listing aggregator, the company has added revenue in recent years through its job skills marketplace, which offers courses from providers EdX, Coursera, and others.

Founder and CEO Siegel and other executives, along with several institutional investors, will maintain control over the company with Class B shares, which will have 20 votes each compared to the Class A shares available to the public.

The company said more than 2.8 million businesses and 110 million job-seekers have used ZipRecruiter since it was founded.

This article is an updated version of an earlier news item on ZipRecruiter’s IPO filing

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