• Execs delivered an animated, if mostly reiterative, presentation
  • Marketing spend continued to be the focus
  • Speed of hire clearly valuable to company strategy

U.S.-based recruitment marketplace business ZipRecruiter held an online investor day on Monday, ahead of its IPO later this month. When it ended 87 minutes later, you had to wonder what you learned.

The first 59 minutes were a well-rehearsed, marvellously executed and slickly produced pre-recorded video version of all the upbeat parts of ZipRecruiter’s stock registration filing. The remaining 28 minutes we saw CEO Ian Siegel and CFO Bill Travers live, fielding curated softball questions from the anonymous audience, which allowed them to remind us of the great things we heard about ZipRecruiter in the first hour.

Focus on the marketing spend

To be fair, ZipRecruiter is in the legally required “quiet” period where any new material matters about the company can only be disclosed by an amendment to the company’s S-1 filing with the U.S. Securities and Exchange Commission. So, there was no expectation anything truly substantive was going to come out of the presentations. On that point, they didn’t disappoint.

What we did learn was that the company executives are a lot more animated and interesting than the C-staff of most other organizations. Travers came across as about the only CFO I’d want to have a beer with, even if he did preface his q-and-a answers with “good question.”

We also heard at least four or five times (more, but I only started counting about 30 minutes in) that ZipRecruiter spent $600 million on marketing to earn an 82% brand awareness among employers. That point was also made in the S-1 filing. Five times. That’s aided brand awareness, which is good, but not nearly as powerful as unaided brand awareness.

The only real news was that ZipRecruiter will hold a guidance call sometime before May 26, when its stock begins to trade on the New York exchange. Date and time to be announced via press release.

Guidance is a forecast public companies issue of their expected earnings and profits for the quarter and year ahead. It’s typically communicated as part of the company’s financial report for a just-ended quarter and discussed by company executives during a conference call with Wall Street analysts. Since ZipRecruiter already reported on Q1 in an amended S-1, a separate guidance call is planned.

‘Persistently disrupting ourselves’

What the Investor Day presentation did do was give us a look at what the company’s leadership holds near and dear and sees as ZipRecruiter’s strengths.

We got to hear how important speed of hire is to the company; 80% of employers get a quality candidate within the first 24 hours of their job post. Time a job posting stays online went from 39 days at the end of 2016 to 16 days at the end of 2020.

Every executive on the pre-recorded video mentioned speed of hire in one way or another.

Shortening the time is great for employers, but as Siegel acknowledged, when 81% of your revenue comes from duration-based listings, it creates an “interesting dynamic.” “We’re, in effect, persistently disrupting ourselves.”

In other words, the faster a hire is made, the shorter a posting stays live and the less money ZipRecruiter makes. Sort of. It’s more nuanced, but over time, that’s what happens.

“But I want to state clearly,” Siegel stated in the video, “We believe this is a long-term winning strategy and intend to continue focusing on driving down the time to hire.”

It’s enough to make an investor shudder. No worries. ZipRecruiter’s S-1 said performance- based pricing is a key growth initiative: “We believe we have multiple pricing optimization opportunities that will provide more flexibility to employers of different sizes.”

Or, as Siegel explained it in the investor day video: “We also recognize there is a big gap between how we charge and what employers are willing to pay in order to fill a hire fast. We’re going to continue to test new approaches to pricing over the next few years.”

How else will the company grow? Siegel laid out three other specific points, all also mentioned in the S-1:

  • “Get all the jobs. Get all the job-seekers and build the best matching job engine on the market.”
  • “We will also continue to invest in our brand to ensure ZipRecruiter further develops as the category defining, enduring destination for employers and job-seekers alike.”
  • “And finally, we are optimistic about the ability to take our solution to multiple countries around the world and will be looking to do so over the next few years.”

About that global expansion. Planning and work is going on, Siegel said during the live q-and-a portion. However, “It’s definitely very U.S.-focused in the near term.” It’s a “massive market” and there’s plenty of opportunity to grow in the States, he said.

What about profitability?

What the upbeat presentation didn’t mention was how ZipRecruiter was going to finance its plans and still be profitable. The

company turned an $86 million profit in 2020, mostly because of an $85 million cut in sales and marketing spending and a $22 million income tax benefit. Yet, as it said in its SEC filing, ZipRecruiter has a “history of incurring net losses,” and it will spend $21.6 million to go public without realizing any proceeds.

Still, the investor day showed an aggressive company on message, committed to addressing the challenging problem of providing both job-seekers and employers a quality online recruitment experience.

The evidence, as least the evidence on display in the presentations, convincingly made the case ZipRecruiter is successfully navigating the interests of both sides of the recruiting equation.

Yet, as industry consultant Chris Russell said after the investor day concluded, going public brings new pressures. Will ZipRecruiter be able to focus on the user experience as it has while also satisfying the demands of Wall Street and investors?

“That could hurt their business long term because of those pressures. Right now, they have two audiences — job-seekers and employers. Once they go public they’re going to have three that they’ll have to worry about.”

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