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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| | | | | |
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2026
OR | | | | | |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission file number 001-40406
ZIPRECRUITER, INC.
(Exact name of registrant as specified in its charter)
| | | | | | | | | | | | | | |
| Delaware | | 27-2976158 |
(State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification Number) |
ZipRecruiter, Inc.
3000 Ocean Park Blvd., Suite 3000
Santa Monica, CA 90405
(Address of principal executive office, including zip code)
(877) 252-1062
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Class A common stock, $0.00001 par value per share | ZIP | New York Stock Exchange |
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| | | | | | | | | | | | | | |
Large accelerated filer | ☐ | Accelerated filer | ☒ | |
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |
| | Emerging growth company | ☐ | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
The registrant had 69,196,677 shares of Class A common stock outstanding and 13,029,486 shares of Class B common stock outstanding as of July 29, 2026.
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements. All statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact, including statements regarding our future operating results and financial position, our business strategy and plans, market growth, and our objectives for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “potential,” “continue,” “anticipate,” “intend,” “expect,” “could,” “would,” “project,” “plan,” “target,” and similar expressions are intended to identify forward-looking statements.
Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:
•our future financial performance, including our expectations regarding our revenue, cost of revenue, gross profit, operating expenses including changes in research and development, sales and marketing, and general and administrative expenses (including any components of the foregoing), and our ability to achieve and/or maintain future profitability;
•effects of a variety of global business and macroeconomic factors that affect our business, the employment market, and the economy in general, including inflationary pressures, a volatile interest rate environment, elevated borrowing costs, cybersecurity incidents, changes in laws, regulations and administrative policy, including those that impact trade agreements and tariffs, and the impacts of the wars in Ukraine and the Middle East;
•our business plan and our ability to effectively manage our growth;
•our ability to compete with well-established competitors and new entrants;
•our ability to enhance our marketplace and introduce new and improved offerings;
•our ability to increase the number of employers and job seekers in our marketplace;
•our ability to strengthen our technology that underpins our marketplace;
•our ability to attract and retain qualified employees and key personnel;
•our ability to execute our strategy;
•our beliefs and objectives for future operations;
•the effects of seasonal trends on our results of operations;
•our ability to expand to new markets;
•our ability to maintain, protect, and enhance our brand and intellectual property;
•our ability to stay in compliance with laws and regulations that currently apply or become applicable to our business; and
•economic and industry trends, projected growth, or trend analysis.
We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q.
We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including those described in the section titled “Risk Factors.” Moreover, we operate in a very competitive and
rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, the future events and trends discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.
You should not rely upon forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, performance, or achievements. We undertake no obligation to update any of these forward-looking statements for any reason after the date of this Quarterly Report on Form 10-Q or to conform these statements to actual results or revised expectations, except as required by law.
You should read this Quarterly Report on Form 10-Q with the understanding that our actual future results, performance, and events and circumstances may be materially different from what we expect.
As used herein, “ZipRecruiter,” “the Company,” “we,” “us,” “our,” and similar terms include ZipRecruiter, Inc. and its subsidiaries, unless the context indicates otherwise.
SUMMARY OF RISK FACTORS
Our business is subject to numerous risks and uncertainties, including those highlighted in the section titled “Risk Factors” later in this Quarterly Report on Form 10-Q. These risks include, but are not limited to, the following:
•Our business is significantly affected by fluctuations in general economic conditions. There is risk that any economic recovery may be delayed, short-lived and/or uneven, and may not result in increased demand for our services.
•We face intense competition and could lose market share to our competitors, which could adversely affect our business, operating results, and financial condition.
•Our marketplace functions on software that is highly technical and complex and if it fails to perform properly, our reputation could be adversely affected and our market share could decline.
•Our future success depends in part on employers purchasing and renewing or upgrading subscriptions and performance-based services from us. Any decline in our user renewals or upgrades or performance-based services could harm our future operating results.
•Significant segments of the market for job advertisement services may have hiring needs and service preferences that are subject to greater volatility than the overall economy.
•Our business depends largely on our ability to attract and retain talented employees, including senior management and key personnel. In particular, 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.
•If internet search engines’ methodologies or other channels that we use to direct traffic to our website are modified to our disadvantage, or our search result page rankings decline for other reasons, our user growth could decline.
•Our quarterly results may fluctuate significantly and may not fully reflect the underlying performance of our business, which makes our future results difficult to predict.
•Our success depends on our ability to maintain the value and reputation of the ZipRecruiter brand.
•If we fail to scale our business effectively, our business, operating results, and financial condition could be adversely affected.
•Our indebtedness could adversely affect our liquidity and financial condition.
•Market volatility may affect the value of an investment in our Class A common stock, could subject us to litigation and could adversely affect our ability to meet NYSE listing requirements.
•The dual class structure of our common stock has resulted in concentration of voting control with our chief executive officer. This ownership will limit or preclude your ability to influence corporate matters, including the election of directors and the approval of any change of control transaction.
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements
ZipRecruiter, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except par values)
(unaudited)
| | | | | | | | | | | |
| June 30, | | December 31, |
| 2026 | | 2025 |
| Assets | | | |
| Current assets | | | |
| Cash and cash equivalents | $ | 129,739 | | | $ | 188,028 | |
| Marketable securities | 44,069 | | | 221,109 | |
Accounts receivable, net of allowances of $2,230 and $2,031 at June 30, 2026 and December 31, 2025, respectively | 26,409 | | | 25,666 | |
| Prepaid expenses and other assets | 12,524 | | | 11,097 | |
| Deferred commissions, current portion | 2,822 | | | 2,951 | |
| Total current assets | 215,563 | | | 448,851 | |
| Property and equipment, net | 3,870 | | | 4,076 | |
| Operating lease right-of-use assets | 8,758 | | | 9,715 | |
| Internal-use software, net | 15,032 | | | 16,050 | |
| Deferred commissions, net of current portion | 3,177 | | | 3,770 | |
| Intangible assets, net | 2,392 | | | 3,369 | |
| Goodwill | 8,518 | | | 8,518 | |
| Deferred tax assets, net | 59,304 | | | 75,192 | |
| Other assets | 4,712 | | | 202 | |
| Total assets | $ | 321,326 | | | $ | 569,743 | |
| | | |
Liabilities and Stockholders' Deficit | | | |
| Current liabilities | | | |
| Accounts payable | $ | 15,665 | | | $ | 9,115 | |
| Accrued expenses | 36,132 | | | 36,610 | |
| Accrued interest | 5,889 | | | 12,864 | |
| Deferred revenue | 11,103 | | | 9,731 | |
| Operating lease liabilities, current portion | 2,223 | | | 2,213 | |
| Other current liabilities | 35 | | | 363 | |
| Total current liabilities | 71,047 | | | 70,896 | |
| Operating lease liabilities, net of current portion | 9,500 | | | 10,688 | |
| Long-term borrowings, net | 253,269 | | | 544,780 | |
| Other long-term liabilities | 21,323 | | | 20,580 | |
| Total liabilities | 355,139 | | | 646,944 | |
Commitments and contingencies (Note 8) | | | |
| | | |
| | | |
| | | |
| | | |
| | | |
Stockholders' deficit | | | |
Preferred Stock, $0.00001 par value; 50,000 shares authorized as of June 30, 2026 and December 31, 2025; no shares issued and outstanding as of June 30, 2026 and December 31, 2025 | — | | | — | |
Class A common stock, $0.00001 par value; 700,000 shares authorized as of June 30, 2026 and December 31, 2025; 69,197 and 71,372 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively | 1 | | | 1 | |
Class B convertible common stock, $0.00001 par value; 700,000 shares authorized as of June 30, 2026 and December 31, 2025; 13,225 shares issued and 13,030 shares outstanding as of June 30, 2026 and December 31, 2025 | — | | | — | |
Class B treasury stock, 195 shares outstanding as of June 30, 2026 and December 31, 2025 | (644) | | | (644) | |
| Additional paid-in capital | 6,497 | | | — | |
Accumulated deficit | (39,666) | | | (76,590) | |
Accumulated other comprehensive income (loss) | (1) | | | 32 | |
Total stockholders' deficit | (33,813) | | | (77,201) | |
Total liabilities and stockholders' deficit | $ | 321,326 | | | $ | 569,743 | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
6
ZipRecruiter, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
June 30, | | Six Months Ended
June 30, |
| 2026 | | 2025 | | 2026 | | 2025 | | |
| Revenue | $ | 118,061 | | | $ | 112,232 | | | $ | 225,608 | | | $ | 222,297 | | | |
| Cost of revenue | 12,589 | | | 11,963 | | | 24,563 | | | 23,618 | | | |
| Gross profit | 105,472 | | | 100,269 | | | 201,045 | | | 198,679 | | | |
| Operating expenses | | | | | | | | | |
| Sales and marketing | 58,936 | | | 58,065 | | | 113,945 | | | 116,533 | | | |
| Research and development | 26,372 | | | 32,095 | | | 52,453 | | | 65,361 | | | |
| General and administrative | 16,026 | | | 16,771 | | | 32,057 | | | 35,116 | | | |
| Total operating expenses | 101,334 | | | 106,931 | | | 198,455 | | | 217,010 | | | |
Income (loss) from operations | 4,138 | | | (6,662) | | | 2,590 | | | (18,331) | | | |
| Other income (expense) | | | | | | | | | |
| Interest expense | (6,686) | | | (7,401) | | | (14,132) | | | (14,793) | | | |
| | | | | | | | | |
| Gain on debt extinguishment | 59,262 | | | — | | | 59,262 | | | — | | | |
| Other income (expense), net | 3,144 | | | 4,953 | | | 6,564 | | | 10,308 | | | |
| Total other income (expense), net | 55,720 | | | (2,448) | | | 51,694 | | | (4,485) | | | |
Income (loss) before income taxes | 59,858 | | | (9,110) | | | 54,284 | | | (22,816) | | | |
Income tax expense (benefit) | 16,433 | | | 396 | | | 15,597 | | | (479) | | | |
Net income (loss) | 43,425 | | | (9,506) | | | 38,687 | | | (22,337) | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
Net income (loss) per share: | | | | | | | | | |
| Basic | $ | 0.53 | | | $ | (0.10) | | | $ | 0.47 | | | $ | (0.24) | | | |
| Diluted | $ | 0.53 | | | $ | (0.10) | | | $ | 0.46 | | | $ | (0.24) | | | |
| | | | | | | | | |
Weighted average shares used in computing net income (loss) per share: | | | | | | | | | |
| Basic | 81,659 | | | 90,569 | | | 82,659 | | | 94,297 | | | |
| | | | | | | | | |
| Diluted | 82,674 | | | 90,569 | | | 83,309 | | | 94,297 | | | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
7
ZipRecruiter, Inc.
Condensed Consolidated Statements of Comprehensive Income (Loss)
(in thousands)
(unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
June 30, | | Six Months Ended
June 30, |
| 2026 | | 2025 | | 2026 | | 2025 | | |
Net income (loss) | $ | 43,425 | | | $ | (9,506) | | | $ | 38,687 | | | $ | (22,337) | | | |
Other comprehensive income (loss), net of tax: | | | | | | | | | |
Change in unrealized gains (losses) on available-for-sale debt securities | 29 | | | 25 | | | (33) | | | (47) | | | |
Total other comprehensive income (loss) | 29 | | | 25 | | | (33) | | | (47) | | | |
Total comprehensive income (loss) | $ | 43,454 | | | $ | (9,481) | | | $ | 38,654 | | | $ | (22,384) | | | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
8
ZipRecruiter, Inc.
Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit)
(in thousands)
(unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | |
| | | | 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 (Deficit) |
| | | | | | | | | | | |
| | | | | | | | | | Shares | | Amount | | Shares | | Amount | | Shares | | Amount | | | | |
| Balance as of December 31, 2025 | | | | | | | | | | 71,372 | | | $ | 1 | | | 13,225 | | | $ | — | | | (195) | | | $ | (644) | | | $ | — | | | $ | (76,590) | | | $ | 32 | | | $ | (77,201) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Conversion of Class B stock to Class A stock | | | | | | | | | | 144 | | — | | | (144) | | | — | | | — | | — | | | — | | | — | | | — | | | — | |
| Issuance of common stock upon exercise of options | | | | | | | | | | 6 | | — | | | 144 | | | — | | | — | | — | | | 301 | | | — | | | — | | | 301 | |
| Issuance of common stock upon the vesting and settlement of RSUs | | | | | | | | | | 842 | | — | | | — | | — | | | — | | — | | | — | | | — | | | — | | | — | |
| Stock-based compensation | | | | | | | | | | — | | — | | | — | | — | | | — | | — | | | 8,617 | | | — | | | — | | | 8,617 | |
| Shares withheld related to net share settlement | | | | | | | | | | (376) | | | — | | | — | | | — | | | — | | — | | | (1,066) | | | — | | | — | | | (1,066) | |
| Repurchase and retirement of common stock | | | | | | | | | | (3,495) | | | — | | | — | | — | | | — | | — | | | (7,852) | | | (1,681) | | | — | | | (9,533) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Share repurchase excise tax | | | | | | | | | | — | | — | | | — | | — | | | — | | — | | | — | | | (82) | | | — | | | (82) | |
Net loss | | | | | | | | | | — | | — | | | — | | — | | | — | | — | | | — | | | (4,738) | | | — | | | (4,738) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other comprehensive loss | | | | | | | | | | — | | — | | | — | | — | | | — | | — | | | — | | | — | | | (62) | | | (62) | |
| Balance as of March 31, 2026 | | | | | | | | | | 68,493 | | $ | 1 | | | 13,225 | | $ | — | | | (195) | | | $ | (644) | | | $ | — | | | $ | (83,091) | | | $ | (30) | | | $ | (83,764) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Conversion of Class B stock to Class A stock | | | | | | | | | | 15 | | | — | | | (15) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| Issuance of common stock upon exercise of options | | | | | | | | | | — | | | — | | | 15 | | | — | | | — | | | — | | | 15 | | | — | | | — | | | 15 | |
| Issuance of common stock upon the vesting and settlement of RSUs | | | | | | | | | | 1,052 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| Stock-based compensation | | | | | | | | | | — | | | — | | | — | | | — | | | — | | | — | | | 7,683 | | | — | | | — | | | 7,683 | |
| Shares withheld related to net share settlement | | | | | | | | | | (363) | | | — | | | — | | | — | | | — | | | — | | | (1,310) | | | — | | | — | | | (1,310) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Share repurchase excise tax | | | | | | | | | | — | | | — | | | — | | | — | | | — | | | — | | | 109 | | | — | | | — | | | 109 | |
Net income | | | | | | | | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 43,425 | | | — | | | 43,425 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other comprehensive income | | | | | | | | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 29 | | | 29 | |
| Balance as of June 30, 2026 | | | | | | | | | | 69,197 | | $ | 1 | | | 13,225 | | $ | — | | | (195) | | | $ | (644) | | | $ | 6,497 | | | $ | (39,666) | | | $ | (1) | | | $ | (33,813) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
9
ZipRecruiter, Inc.
Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit)
(in thousands)
(unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | |
| | | | 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 (Deficit) |
| | | | | | | | | | | |
| | | | | | | | | | Shares | | Amount | | Shares | | Amount | | Shares | | Amount | | | | |
| Balance as of December 31, 2024 | | | | | | | | | | 75,615 | | | $ | 1 | | | 22,829 | | | $ | — | | | (195) | | | $ | (644) | | | $ | 32,402 | | | $ | (18,385) | | | $ | 56 | | | $ | 13,430 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Conversion of Class B stock to Class A stock | | | | | | | | | | 10,924 | | | — | | | (10,924) | | | — | | | — | | — | | | — | | | — | | | — | | | — | |
| Issuance of common stock upon exercise of options | | | | | | | | | | 10 | | — | | | 1,308 | | — | | | — | | — | | | 1,485 | | | — | | | — | | | 1,485 | |
| Issuance of common stock upon the vesting and settlement of RSUs | | | | | | | | | | 901 | | — | | | 18 | | — | | | — | | — | | | — | | | — | | | — | | | — | |
| Stock-based compensation | | | | | | | | | | — | | — | | | — | | — | | | — | | — | | | 14,828 | | | — | | | — | | | 14,828 | |
| Shares withheld related to net share settlement | | | | | | | | | | (363) | | | — | | | (6) | | | — | | | — | | — | | | (2,201) | | | — | | | — | | | (2,201) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Shares issued under employee stock purchase plan | | | | | | | | | | 256 | | — | | | — | | — | | | — | | — | | | 1,665 | | | — | | | — | | | 1,665 | |
| Repurchase and retirement of common stock | | | | | | | | | | (4,390) | | | — | | | — | | | — | | | — | | — | | | (27,475) | | | — | | | — | | | (27,475) | |
| Share repurchase excise tax | | | | | | | | | | — | | — | | | — | | — | | | — | | — | | | (155) | | | — | | | — | | | (155) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net loss | | | | | | | | | | — | | — | | | — | | — | | | — | | — | | | — | | | (12,831) | | | — | | | (12,831) | |
Other comprehensive loss | | | | | | | | | | — | | — | | | — | | — | | | — | | — | | | — | | | — | | | (72) | | | (72) | |
| Balance as of March 31, 2025 | | | | | | | | | | 82,953 | | $ | 1 | | | 13,225 | | $ | — | | | (195) | | | $ | (644) | | | $ | 20,549 | | | $ | (31,216) | | | $ | (16) | | | $ | (11,326) | |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Conversion of Class B stock to Class A stock | | | | | | | | | | 903 | | | — | | | (903) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| Issuance of common stock upon exercise of options | | | | | | | | | | 13 | | | — | | | 903 | | | — | | | — | | | — | | | 915 | | | — | | | — | | | 915 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Issuance of common stock upon the vesting and settlement of RSUs | | | | | | | | | | 1,050 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| Stock-based compensation | | | | | | | | | | — | | | — | | | — | | | — | | | — | | | — | | | 13,022 | | | — | | | — | | | 13,022 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Shares withheld related to net share settlement | | | | | | | | | | (363) | | | — | | | — | | | — | | | — | | | — | | | (1,899) | | | — | | | — | | | (1,899) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Repurchase and retirement of common stock | | | | | | | | | | (10,475) | | | — | | | — | | | — | | | — | | | — | | | (32,587) | | | (24,031) | | | — | | | (56,618) | |
| Share repurchase excise tax | | | | | | | | | | — | | — | | | — | | — | | | — | | — | | | — | | | (481) | | | — | | | (481) | |
Net loss | | | | | | | | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (9,506) | | | — | | | (9,506) | |
Other comprehensive income | | | | | | | | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 25 | | | 25 | |
| Balance as of June 30, 2025 | | | | | | | | | | 74,081 | | $ | 1 | | | 13,225 | | $ | — | | | (195) | | | $ | (644) | | | $ | — | | | $ | (65,234) | | | $ | 9 | | | $ | (65,868) | |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
10
ZipRecruiter, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
| | | | | | | | | | | | | |
| Six Months Ended
June 30, |
| 2026 | | 2025 | | |
| Cash flows from operating activities | | | | | |
Net income (loss) | $ | 38,687 | | | $ | (22,337) | | | |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | | | | | |
| Stock-based compensation expense | 15,738 | | | 27,239 | | | |
| Depreciation and amortization | 5,928 | | | 6,369 | | | |
Provision for bad debts | 597 | | | 507 | | | |
| Deferred income taxes | 15,888 | | | (9,182) | | | |
| Non-cash lease expense | 957 | | | 2,015 | | | |
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| Amortization and accretion of marketable securities | (1,731) | | | (4,132) | | | |
| Gain on debt extinguishment | (59,262) | | | — | | | |
| Other | 1,793 | | | 1,185 | | | |
| Change in operating assets and liabilities: | | | | | |
| Accounts receivable | (1,340) | | | (2,830) | | | |
| Prepaid expenses and other assets | (1,153) | | | (47) | | | |
| Deferred commissions | 722 | | | 448 | | | |
| Other assets | (1,496) | | | 675 | | | |
| Accounts payable | 3,857 | | | (2,356) | | | |
| Accrued expenses and other liabilities | (457) | | | 4,257 | | | |
| Accrued interest | (6,975) | | | (4) | | | |
| Deferred revenue | 1,346 | | | 900 | | | |
| Operating lease liabilities | (1,178) | | | (2,073) | | | |
Net cash provided by operating activities | 11,921 | | | 634 | | | |
| Cash flows from investing activities | | | | | |
| Purchases of property and equipment | (371) | | | (602) | | | |
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| Capitalized internal-use software costs | (3,927) | | | (3,990) | | | |
| Purchases of marketable securities | (62,905) | | | (270,062) | | | |
| Sales of marketable securities | 1,301 | | | 983 | | | |
| Paydowns, maturities, and redemptions of marketable securities | 239,311 | | | 342,162 | | | |
Net cash provided by investing activities | 173,409 | | | 68,491 | | | |
| Cash flows from financing activities | | | | | |
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| Repurchase of common stock | (9,533) | | | (84,093) | | | |
| Proceeds from exercise of stock options | 301 | | | 2,427 | | | |
| Payments of tax withholdings on net settlement of equity awards | (2,376) | | | (4,100) | | | |
| Proceeds from issuance of stock under employee stock purchase plan | — | | | 1,665 | | | |
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| Repurchases of senior unsecured notes | (229,684) | | | — | | | |
Net cash used in financing activities | (241,292) | | | (84,101) | | | |
Net decrease in cash, cash equivalents, and restricted cash | (55,962) | | | (14,976) | | | |
| Cash, cash equivalents, and restricted cash | | | | | |
| Beginning of period | 188,028 | | | 218,432 | | | |
| End of period | $ | 132,066 | | | $ | 203,456 | | | |
| Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets | | | | | |
| Cash and cash equivalents | $ | 129,739 | | | $ | 203,456 | | | |
| Restricted cash included in prepaid expenses and other assets | 259 | | | — | | | |
| Restricted cash included in other assets | 2,068 | | | — | | | |
| Total cash, cash equivalents, and restricted cash | $ | 132,066 | | | $ | 203,456 | | | |
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| Supplemental disclosure of non-cash activities | | | | | |
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| Repurchases of senior unsecured notes included in accounts payable and accrued expenses | 3,129 | | | — | | | |
Operating lease right-of-use assets obtained in exchange for operating lease liabilities | — | | | 7,148 | | | |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
11
ZipRecruiter, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
1. Organization and Description of Business
ZipRecruiter, Inc. was incorporated in the state of Delaware on June 29, 2010. Hereinafter, ZipRecruiter, Inc. and its wholly owned subsidiaries ZipRecruiter Israel Ltd., ZipRecruiter UK Ltd., ZipRecruiter Canada Ltd., and Poplar Technologies Ltd. (d/b/a Breakroom) (“Breakroom”) 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.
On December 2, 2025, the Company formally dissolved its ZipRecruiter UK Ltd. subsidiary. The dissolution of ZipRecruiter UK Ltd. did not have a material impact on the Company’s financial statements.
2. Basis of Presentation, Principles of Consolidation, and Summary of Significant Accounting Policies
The unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, certain information and disclosures normally included in consolidated financial statements presented in accordance with U.S. GAAP have been condensed or omitted.
The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the “2025 Form 10-K”). The condensed consolidated balance sheet as of December 31, 2025 has been derived from the Company’s audited consolidated financial statements.
In the opinion of the Company’s management, the unaudited condensed consolidated financial statements include all adjustments (consisting of normal recurring adjustments) necessary for the fair statement of the condensed consolidated financial statements.
There have been no changes in the Company’s accounting policies from those disclosed in the Company’s audited consolidated financial statements and the related notes included in the 2025 Form 10-K.
The operating results for the three and six months ended June 30, 2026 are not necessarily indicative of the results expected for the full year ending December 31, 2026 or any future period.
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and footnotes thereto. Actual results could differ from those estimates.
Cash and Cash Equivalents, and Restricted Cash
Cash and cash equivalents consist of cash on deposit with financial institutions and highly liquid investments with maturities of 90 days or less from the date of purchase.
Restricted cash consists of cash pledged as collateral for the letters of credit issued in conjunction with the Company’s long-term office leases. These funds are legally restricted from general corporate use and are released over time based on terms of the Company’s lease agreements. The Company classifies its restricted cash within “Prepaid expenses and other assets” and “Other assets” in the Company’s condensed consolidated balance sheets, based on the remaining term of the restrictions.
ZipRecruiter, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
Investments
The Company classifies and accounts for its money market mutual funds which have readily determinable fair values as equity securities, and it carries such securities at fair value with unrealized gains and losses reported in other income (expense), net in its condensed consolidated statements of operations.
The Company classifies and accounts for its debt securities as available-for-sale, and it carries such securities at fair value with unrealized gains and losses reported net of tax as a separate component of stockholders' deficit in accumulated other comprehensive income (loss). In connection with its available-for-sale debt securities, the Company recorded immaterial pre-tax unrealized gains and losses during the three and six months ended June 30, 2026 and 2025 in other comprehensive income (loss) with no associated tax expense.
The Company determines any realized gains and losses on the sale of its available-for-sale debt securities using a specific identification method, and it records such gains and losses through other income (expense), net in its condensed consolidated statements of operations. During the three months ended June 30, 2026 and 2025, the Company did not have any sales of its available-for-sale debt securities and consequently, did not reclassify any amounts out of accumulated other comprehensive income (loss) into other income (expense), net in the condensed consolidated statements of operations. During the six months ended June 30, 2026 and 2025, the Company recorded $1.3 million and $1.0 million, respectively, in proceeds related to sales of its available-for-sale debt securities and no material gross realized gains or gross realized losses as a result of such sales. Such securities were purchased during the six months ended June 30, 2026 and 2025, and consequently, the Company did not reclassify any amounts out of beginning accumulated other comprehensive income (loss) into other income (expense), net in the condensed consolidated statements of operations.
Segments and Geographic Information
The Company operates as a single operating and reportable segment. The Company’s Chief Operating Decision Maker (“CODM”), its Chief Executive Officer, regularly reviews financial information presented on a consolidated basis for purposes of assessing financial performance and allocating resources.
The accounting policies of the Company’s single reportable segment are the same as those described in the summary of significant accounting policies in Note 2 within the 2025 Form 10-K. The CODM uses net income (loss) as reported within the Company’s condensed consolidated statements of operations as the primary measure of profit or loss for purposes of assessing performance for the Company’s single reportable segment and determining how to allocate resources into the Company’s single reportable segment or into other parts of the entity, such as for acquisitions. 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 condensed consolidated statements of operations, as well as marketing and advertising expense, depreciation and amortization, and stock-based compensation expense, are significant.
The Company has disclosed amounts related to marketing and advertising expense within the table below in this Note 2, depreciation and amortization within the condensed consolidated statements of cash flows and stock-based compensation expense within Note 10. Additionally, the CODM does not evaluate operating or reportable segments using asset information.
ZipRecruiter, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
Sales and marketing costs are expensed as incurred, and consist of the following:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
June 30, | | Six Months Ended
June 30, |
| 2026 | | 2025 | | 2026 | | 2025 |
Marketing and advertising | $ | 35,682 | | | $ | 32,646 | | | $ | 68,209 | | | $ | 64,023 | |
Other sales and marketing | 23,254 | | | 25,419 | | | 45,736 | | | 52,510 | |
Total sales and marketing | $ | 58,936 | | | $ | 58,065 | | | $ | 113,945 | | | $ | 116,533 | |
Marketing and advertising expense includes advertising, online lead generation, customer and industry events and candidate acquisition. Other sales and marketing expense includes personnel-related costs (including salaries, sales commissions, bonuses, benefits, and stock-based compensation) for the Company’s sales and marketing employees, marketing activities, and related allocated overhead costs. The Company allocates a portion of overhead costs, such as rent, IT costs, supplies, and depreciation and amortization, to other sales and marketing expense based on headcount.
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 each of the three and six months ended June 30, 2026 and 2025. In addition, long-lived assets outside of the United States were not material as of June 30, 2026 and December 31, 2025.
Concentrations of Risk
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, restricted cash, marketable securities, and accounts receivable. The Company maintains its cash accounts with large financial institutions and at times, the cash accounts may exceed Federal Deposit Insurance Corporation limits. The Company has not experienced any losses in such accounts. The Company monitors the relative credit standing of the financial institutions with which it transacts and limits its credit exposure to any singular entity. Accordingly, the Company believes minimal credit risk exists with respect to these cash balances.
The Company invests only in highly rated debt and equity securities. The Company believes the financial institutions that hold its investments are financially sound, and accordingly, are subject to minimal credit risk.
One customer accounted for 17% and 14% of the Company’s outstanding accounts receivable as of June 30, 2026 and December 31, 2025, respectively. One additional customer accounted for 10% and 16% of the Company’s outstanding accounts receivable as of June 30, 2026 and December 31, 2025, respectively. The Company closely monitors the financial conditions of the foregoing customers, which have been in good credit standing. No other customer individually accounted for 10% or more of the Company’s outstanding accounts receivable as of June 30, 2026 and December 31, 2025. As such, the Company does not consider the concentration of its accounts receivable to be a material risk. For the three and six months ended June 30, 2026 and 2025, there were no customers that individually represented 10% or more of revenue.
The Company uses third parties to collect its credit card receivables and believes risk related to its credit card processors is minimal. The Company’s business is also subject to certain risks and concentrations related to its dependence on third-party suppliers for its hosting services.
Recent Accounting Pronouncements
Accounting Pronouncements Not Yet Adopted
In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement—Reporting Comprehensive Income—Expense
ZipRecruiter, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires disaggregated information about certain income statement expense line items on an annual and interim basis. The update will be effective for annual periods beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027 on either a prospective or retrospective basis. Early adoption is permitted. The Company is currently evaluating the effects of the adoption of this update on its consolidated financial statements.
In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which modernizes the accounting for internal-use software costs and increases the operability of the recognition guidance about when to start capitalizing software costs by removing all references to prescriptive and sequential software development stages throughout Subtopic 350-40. The update will be effective for annual periods beginning after December 15, 2027, and interim periods within those annual periods, on a prospective, modified, or retrospective basis. Early adoption is permitted. The Company is currently evaluating the effects of the adoption of this update on its consolidated financial statements.
3. Net Income (Loss) Per Share
The following table presents the Company’s basic net income (loss) per share (in thousands, except per share amounts):
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
June 30, | | Six Months Ended
June 30, |
| 2026 | | 2025 | | 2026 | | 2025 |
Net income (loss) per share, basic: | | | | | | | |
Net income (loss) | $ | 43,425 | | | $ | (9,506) | | | $ | 38,687 | | | $ | (22,337) | |
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| Weighted average shares of Class A and Class B common stock outstanding | 81,659 | | | 90,569 | | | 82,659 | | | 94,297 | |
Net income (loss) per share, basic | $ | 0.53 | | | $ | (0.10) | | | $ | 0.47 | | | $ | (0.24) | |
The following table presents the Company’s diluted net income (loss) per share (in thousands, except per share amounts):
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
June 30, | | Six Months Ended
June 30, |
| 2026 | | 2025 | | 2026 | | 2025 |
Net income (loss) per share, diluted: | | | | | | | |
| Numerator: | | | | | | | |
Net income (loss) | $ | 43,425 | | | $ | (9,506) | | | $ | 38,687 | | | $ | (22,337) | |
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| | | | | | | |
| Denominator: | | | | | | | |
| Weighted average shares of Class A and Class B common stock outstanding, basic | 81,659 | | | 90,569 | | | 82,659 | | | 94,297 | |
| Effect of dilutive securities: | | | | | | | |
| Options to purchase common stock | 24 | | | — | | | 32 | | | — | |
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| Unvested restricted stock units | 991 | | | — | | | 618 | | | — | |
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| Weighted average shares of Class A and Class B common stock outstanding, diluted | 82,674 | | | 90,569 | | | 83,309 | | | 94,297 | |
Net income (loss) per share, diluted | $ | 0.53 | | | $ | (0.10) | | | $ | 0.46 | | | $ | (0.24) | |
ZipRecruiter, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
The weighted average number of potentially dilutive common stock equivalents of 6.1 million and 6.7 million were excluded from the computation of diluted net loss per share during the three and six months ended June 30, 2026, respectively, because their inclusion would have been anti-dilutive. The weighted average number of potentially dilutive common stock equivalents of 10.8 million and 11.2 million were excluded from the computation of diluted net loss per share during the three and six months ended June 30, 2025, respectively, because their inclusion would have been anti-dilutive.
4. Revenue Information
The Company disaggregates revenue into two streams: subscription revenue and performance-based revenue. The following table presents the Company’s revenue streams (in thousands):
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| Three Months Ended
June 30, | | Six Months Ended
June 30, |
| 2026 | | 2025 | | 2026 | | 2025 |
| Subscription | $ | 89,919 | | | $ | 87,803 | | | $ | 171,486 | | | $ | 173,168 | |
| Performance-based | 28,142 | | | 24,429 | | | 54,122 | | | 49,129 | |
| Total revenue | $ | 118,061 | | | $ | 112,232 | | | $ | 225,608 | | | $ | 222,297 | |
The Company recognized $9.5 million and $10.4 million of revenue during the six months ended June 30, 2026 and 2025, respectively, that was included in the deferred revenue balances as of December 31, 2025 and 2024, respectively.
As of June 30, 2026 and December 31, 2025, the Company had no contract assets.
Performance Obligations
No revenue was recognized during the three and six months ended June 30, 2026 and 2025 from performance obligations satisfied in previous periods.
As of June 30, 2026, the Company did not have any material remaining performance obligations expected to be recognized in the future. Generally, any remaining performance obligations relate primarily to subscription services such as time-based job posting plans, upsell services, and resume database plans that will be invoiced in future periods, and exclude (i) contracts with an original expected term of one year or less and (ii) contracts for which the Company only recognizes revenue at the amount to which it has the right to invoice for services performed.
ZipRecruiter, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
5. Financial Instruments
Fair Value Measurements
The following table presents the Company’s financial assets measured at fair value on a recurring basis, as well as the amortized cost basis and gross unrealized gains and losses of those assets as of June 30, 2026 (in thousands):
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| | | Balance Sheet Classification |
| | Amortized Cost Basis | | Gross Unrealized Gains | | Gross Unrealized Losses | | Fair Value | | Cash and Cash Equivalents | | Marketable Securities | | Prepaid Expenses and Other Assets | | Other Assets |
| Level 1: | | | | | | | | | | | | | | | | |
| Cash | | $ | 68,453 | | | $ | — | | | $ | — | | | $ | 68,453 | | | $ | 68,453 | | | $ | — | | | $ | — | | | $ | — | |
Restricted cash (1) | | 2,327 | | | — | | | — | | | 2,327 | | | — | | | — | | | 259 | | | 2,068 | |
| Money market mutual funds | | 61,286 | | | — | | | — | | | 61,286 | | | 61,286 | | | — | | | — | | | — | |
| U.S. treasury securities | | 23,596 | | | — | | | (1) | | | 23,595 | | | — | | | 23,595 | | | — | | | — | |
| Subtotal | | 155,662 | | | — | | | (1) | | | 155,661 | | | 129,739 | | | 23,595 | | | 259 | | | 2,068 | |
| Level 2: | | | | | | | | | | | | | | | | |
| Commercial paper | | 12,090 | | | — | | | — | | | 12,090 | | | — | | | 12,090 | | | — | | | — | |
| Certificates of deposit | | 1,533 | | | — | | | — | | | 1,533 | | | — | | | 1,533 | | | — | | | — | |
| Corporate notes and obligations | | 6,843 | | | 1 | | | (1) | | | 6,843 | | | — | | | 6,843 | | | — | | | — | |
| Asset-backed securities | | 8 | | | — | | | — | | | 8 | | | — | | | 8 | | | — | | | — | |
| | | | | | | | | | | | | | | | |
| Subtotal | | 20,474 | | | 1 | | | (1) | | | 20,474 | | | — | | | 20,474 | | | — | | | — | |
| Total cash, cash equivalents, marketable securities, and restricted cash | | $ | 176,136 | | | $ | 1 | | | $ | (2) | | | $ | 176,135 | | | $ | 129,739 | | | $ | 44,069 | | | $ | 259 | | | $ | 2,068 | |
____________
(1) The Company’s credit facility expired on its maturity date of April 30, 2026, and the Company elected not to renew it. Letters of credit previously issued against the credit facility remain outstanding and are cash collateralized by a $2.3 million restricted deposit. These funds are legally restricted from general corporate use and are released over time based on the terms of the Company’s lease agreements. Amounts with restriction periods of less than twelve months are classified within “Prepaid expenses and other assets” and amounts with restriction periods of twelve months or longer are classified within “Other assets” on the Company’s condensed consolidated balance sheets. As of June 30, 2026, restricted cash of $0.3 million was included in “Prepaid expenses and other assets” and $2.1 million was included in “Other assets.”
ZipRecruiter, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
As of December 31, 2025, the Company’s financial assets consisted of the following (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Balance Sheet Classification |
| | Amortized Cost Basis | | Gross Unrealized Gains | | Gross Unrealized Losses | | Fair Value | | Cash and Cash Equivalents | | Marketable Securities |
| Level 1: | | | | | | | | | | | | |
| Cash | | $ | 158,093 | | | $ | — | | | $ | — | | | $ | 158,093 | | | $ | 158,093 | | | $ | — | |
| Money market mutual funds | | 22,336 | | | — | | | — | | | 22,336 | | | 22,336 | | | — | |
| U.S. treasury securities | | 99,553 | | | 38 | | | — | | | 99,591 | | | — | | | 99,591 | |
| Subtotal | | 279,982 | | | 38 | | | — | | | 280,020 | | | 180,429 | | | 99,591 | |
| Level 2: | | | | | | | | | | | | |
| Commercial paper | | 29,569 | | | — | | | — | | | 29,569 | | | 3,782 | | | 25,787 | |
| | | | | | | | | | | | |
| Corporate notes and obligations | | 87,221 | | | 12 | | | (21) | | | 87,212 | | | 3,817 | | | 83,395 | |
| Asset-backed securities | | 12,334 | | | 3 | | | (1) | | | 12,336 | | | — | | | 12,336 | |
| | | | | | | | | | | | |
| Subtotal | | 129,124 | | | 15 | | | (22) | | | 129,117 | | | 7,599 | | | 121,518 | |
| Total cash, cash equivalents, and marketable securities | | $ | 409,106 | | | $ | 53 | | | $ | (22) | | | $ | 409,137 | | | $ | 188,028 | | | $ | 221,109 | |
The Company’s money market mutual funds and treasury securities are measured at fair value using quoted prices in active markets for identical assets and are classified within Level 1 in the fair value hierarchy. The fair values of the Company’s Level 2 commercial paper and certificates of deposit are determined using quoted prices in markets that are not active or using model-driven valuations employing significant inputs derived from observable market data. The fair values of the Company’s Level 2 corporate notes and obligations and asset-backed securities are determined using an evaluated price based on a compilation of reported market information, such as benchmark yield curves, credit spreads and estimated default rates.
The carrying amounts of the Company’s remaining financial instruments not discussed in the above table, including accounts receivable and accounts payable, approximate fair value because of their short-term maturities, except for the Company’s senior unsecured notes due 2030 (the “Notes”) which are valued on a quarterly basis for disclosure purposes only based on quoted prices for the Notes in less active markets and categorized accordingly as Level 2 in the fair value hierarchy. In June 2026, the Company entered into separate, privately negotiated repurchase agreements with certain holders of the Notes to repurchase $294.6 million of aggregate principal amount of the Notes for a discounted par value of $229.4 million (plus fees directly related to the transaction and accrued and unpaid interest to, but excluding, the applicable closing date). The aggregate fair value of the outstanding Notes was estimated to be approximately $195.9 million as of June 30, 2026. The aggregate fair value of the Notes was estimated to be approximately $429.0 million as of December 31, 2025. For more information on the Notes, including the repurchases completed in June 2026, see Note 7.
Equity Securities
The Company’s investments in equity securities consist primarily of money market mutual funds. During the three and six months ended June 30, 2026 and 2025, the Company recorded no unrealized gains or losses in connection with its money market mutual funds held as of June 30, 2026.
ZipRecruiter, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
Available-for-sale Debt Securities
The following table summarizes the fair value of the Company’s available-for-sale debt securities by contractual maturity as of June 30, 2026 (in thousands):
| | | | | |
| Due within 1 year | $ | 41,556 | |
| Due after 1 year through 5 years | 2,513 | |
| Total available-for-sale debt securities | $ | 44,069 | |
Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay certain obligations.
The following table summarizes the available-for-sale debt securities which have been in a continuous unrealized loss position for less than 12 months as of June 30, 2026 and December 31, 2025 (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | |
| June 30, 2026 | | December 31, 2025 |
| Fair Value | | Gross Unrealized Losses | | Fair Value | | Gross Unrealized Losses |
| | | | | | | |
| Corporate notes and obligations | $ | 3,872 | | | $ | (1) | | | $ | 37,956 | | | $ | (21) | |
| Asset-backed securities | — | | | — | | | 6,411 | | | (1) | |
| U.S. treasury securities | 23,594 | | | (1) | | | — | | | — | |
| | | | | | | |
| Total available-for-sale debt securities | $ | 27,466 | | | $ | (2) | | | $ | 44,367 | | | $ | (22) | |
The Company had no available-for-sale debt securities in a continuous unrealized loss position for more than 12 months as of June 30, 2026 or December 31, 2025.
The Company did not recognize any credit losses for its available-for-sale debt securities during the three and six months ended June 30, 2026 and 2025. The Company had no ending allowance balances for credit losses as of June 30, 2026 or December 31, 2025.
During the three months ended June 30, 2026 and 2025, the Company had no sales of its available-for-sale debt securities. During the six months ended June 30, 2026 and 2025, the Company recorded $1.3 million and $1.0 million, respectively, in proceeds related to sales of its available-for-sale debt securities. The Company recorded no material gross realized gains or gross realized losses in its condensed consolidated statements of operations as a result of such sales.
ZipRecruiter, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
6. Accrued Expenses
Accrued expenses consist of the following (in thousands):
| | | | | | | | | | | |
| June 30, | | December 31, |
| 2026 | | 2025 |
| Accrued compensation and benefits | $ | 13,277 | | | $ | 17,681 | |
| Accrued marketing | 10,406 | | | 8,242 | |
Accrued commissions | 4,854 | | | 3,061 | |
Accrued partner expenses | 1,732 | | | 1,865 | |
Accrued refunds and customer liabilities | 1,468 | | | 1,473 | |
| Other accrued expenses | 4,395 | | | 4,288 | |
| Total accrued expenses | $ | 36,132 | | | $ | 36,610 | |
7. Debt
Credit Facility
In April 2021, the Company entered into a $250.0 million credit facility agreement with a syndicate of banks. In July 2024, the Company entered into a supplement to the credit facility agreement, which increased the aggregate revolving commitments available under the credit facility from $250.0 million to $290.0 million. The credit facility expired on its maturity date of April 30, 2026, and the Company elected not to renew it. At the time of expiration, there were no outstanding borrowings under the credit facility. Letters of credit previously issued against the credit facility remain outstanding and are cash collateralized by a $2.3 million restricted deposit.
Senior Unsecured Notes
On January 12, 2022, the Company issued an aggregate principal amount of $550.0 million senior unsecured Notes in a private placement. The Notes will mature on January 15, 2030 and bear interest at a rate of 5% per year. Interest on the Notes is payable semi-annually in arrears on January 15 and July 15 of each year. Unpaid interest amounts are included within accrued interest in the Company’s condensed consolidated balance sheets. At its sole discretion, the Company has the option to redeem the Notes at any time in whole or in part at specified redemption prices.
In June 2026, the Company entered into separate, privately negotiated repurchase agreements with certain holders of the Notes to repurchase $294.6 million of aggregate principal amount of the Notes for a total repurchase price of $232.8 million (plus accrued and unpaid interest to, but excluding, the applicable closing date). The Company accounted for the repurchase of the Notes as a debt extinguishment, which resulted in a $59.3 million gain on debt extinguishment during the three and six months ended June 30, 2026. The gain, recognized in the same period when the debt is extinguished, represents the difference between the reacquisition price of the debt inclusive of $3.4 million of fees directly related to the transaction, and the net carrying amount of the debt being extinguished inclusive of the $2.5 million write-off of a portion of unamortized debt issuance costs.
The Company includes its Notes, net of debt issuance costs, within long-term borrowings in its condensed consolidated balance sheets. As of June 30, 2026, the Company had a carrying amount of approximately $2.2 million of debt issuance costs related to the Notes.
For the three months ended June 30, 2026 and 2025, the Company recognized $6.6 million and $7.2 million, respectively, in interest expense related to the Notes. Such interest expense includes $0.3 million related to the amortization of debt issuance costs for both the three months ended June 30, 2026 and 2025. For the six months ended June 30, 2026 and 2025, the Company recognized $13.8 million and
ZipRecruiter, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
$14.3 million, respectively, in interest expense related to the Notes. Such interest expense includes $0.6 million related to the amortization of debt issuance costs for both the six months ended June 30, 2026 and 2025. The Notes had an effective interest rate of 5.4% for all periods.
8. Commitments and Contingencies
Legal Matters
The Company is subject to various legal proceedings and claims that arise in the ordinary course of business. If the Company determines that it is probable that a loss has been incurred and the amount is reasonably estimable, the Company will record a liability. However, if the Company determines that a contingent loss is reasonably possible and the loss or range of loss can be estimated, the Company will disclose the possible loss in the condensed consolidated financial statements. Legal costs relating to loss contingencies are expensed as incurred.
Proposed Class Action Alleging Breach of Fiduciary Duties
On June 17, 2026, a purported stockholder of the Company filed a proposed class action lawsuit in the Delaware Court of Chancery against the Company and certain current and former members of the Company’s board of directors (the “Director Defendants”) under the caption Smith v. ZipRecruiter, Inc. (the “Complaint”). The Complaint generally alleges that the Director Defendants breached their fiduciary duties in connection with the Company’s share repurchase program authorized by the Company’s board of directors. The Complaint seeks, among other things, monetary damages, disgorgement of any unjust enrichment, interest, and reasonable attorneys’ fees and costs. The Company disputes the allegations in the Complaint and intends to vigorously defend against them. At this time, the Company is unable to predict the outcome of this proceeding or reasonably estimate the amount or range of any possible loss.
Indemnification
In the ordinary course of business, the Company may provide indemnification of varying scopes and terms to customers, investors, directors and officers with respect to certain matters, including, but not limited to, losses arising out of the Company’s breach of such agreements, services to be provided by the Company, or from certain claims made by third parties. These indemnification provisions may survive termination of the underlying agreement and the maximum potential amount of future payments the Company could be required to make under these indemnification provisions may not be subject to maximum loss clauses. The maximum potential amount of future payments the Company could be required to make under these indemnification provisions is indeterminable. The Company has never paid a material claim, nor has the Company been sued in connection with these indemnification arrangements. As of June 30, 2026, the Company has not accrued a liability for these indemnification arrangements because the likelihood of incurring a payment obligation, if any, in connection with these indemnification arrangements is neither probable nor reasonably estimable.
9. Share Repurchase Program
The Company’s board of directors has authorized the Company to repurchase up to $750.0 million of outstanding shares of its common stock pursuant to a share repurchase program (the “Program”). Under the Program, the Company 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 Program
ZipRecruiter, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
does not obligate the Company to repurchase shares of common stock. There is no minimum or maximum number of shares to be repurchased under the Program.
During the six months ended June 30, 2026, the Company repurchased 3.5 million shares of its Class A common stock for an aggregate purchase price of $9.4 million under the Program through open market purchases.
Approximately $111.8 million remains available for future repurchases of common stock under the Program as of June 30, 2026.
All shares repurchased under the Program were immediately retired. Repurchased shares reduced the Company’s outstanding shares and its weighted average number of shares of common stock outstanding for purposes of calculating basic and diluted earnings per share.
10. Stock-Based Compensation
Total stock-based compensation expense is recorded in the condensed consolidated statements of operations as follows (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
June 30, | | Six Months Ended
June 30, |
| 2026 | | 2025 | | 2026 | | 2025 |
| Cost of revenue | $ | 67 | | | $ | 112 | | | $ | 133 | | | $ | 240 | |
| Sales and marketing | 1,131 | | | 2,186 | | | 2,545 | | | 4,615 | |
| Research and development | 3,234 | | | 5,950 | | | 6,838 | | | 13,398 | |
| General and administrative | 2,936 | | | 4,364 | | | 6,222 | | | 8,986 | |
| Total stock-based compensation | $ | 7,368 | | | $ | 12,612 | | | $ | 15,738 | | | $ | 27,239 | |
Equity Incentive Plan
Under the Company’s 2021 Equity Incentive Plan, as of June 30, 2026, 49.9 million shares of Class A common stock were authorized, of which 30.0 million shares of Class A common stock were available for
ZipRecruiter, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
future issuance. The number of shares reserved for issuance was increased in January 2026 pursuant to the evergreen provisions set forth in the 2021 Equity Incentive Plan.
Restricted Stock Units
For all restricted stock units (“RSUs”), the Company recorded stock-based compensation expense of $7.7 million and $16.3 million during the three and six months ended June 30, 2026, respectively, and $13.0 million and $27.8 million during the three and six months ended June 30, 2025, respectively.
A summary of the Company’s RSU activity for the six months ended June 30, 2026 is as follows (in thousands, except weighted average information):
| | | | | | | | | | | |
| Number of Shares | | Weighted Average Grant Date Fair Value Per Share |
Unvested at December 31, 2025 | 6,557 | | | $ | 9.23 | |
| Granted | 3,387 | | | 1.80 | |
| Vested | (1,894) | | | 9.09 | |
| Forfeited/Canceled | (936) | | | 8.08 | |
Unvested at June 30, 2026 | 7,114 | | | $ | 5.88 | |
As of June 30, 2026, total unrecognized stock-based compensation expense for unvested RSUs was $40.1 million, which is expected to be recognized over a weighted average period of 1.1 years.
11. Income Taxes
The Company computes its provision for income taxes by applying the estimated annual effective tax rate to pretax income or loss and adjusts the provision for discrete tax items recorded in the period. The income tax expense (benefit), effective tax rates, and statutory federal income tax rates for the three and six months ended June 30, 2026 and 2025 were as follows (in thousands, except percentages):
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
June 30, | | Six Months Ended
June 30, |
| 2026 | | 2025 | | 2026 | | 2025 |
Income tax expense (benefit) | $ | 16,433 | | | $ | 396 | | | $ | 15,597 | | | $ | (479) | |
| Effective tax rate | 27.5 | % | | (4.3) | % | | 28.7 | % | | 2.1 | % |
| Statutory federal income tax rate | 21 | % | | 21 | % | | 21 | % | | 21 | % |
The effective tax rate for the three and six months ended June 30, 2026 differed from the U.S. federal statutory tax rate of 21% primarily due to tax detriments relating to the settlement of RSUs, certain non-deductible expenses including limitations on the amount of deductible officer compensation, and state taxes, partially offset by net tax benefits from research and development tax credits.
The effective tax rate for the three and six months ended June 30, 2025 differed from the U.S. federal statutory tax rate of 21% primarily due to tax detriments relating to the settlement of RSUs, certain non-deductible expenses including limitations on the amount of deductible officer compensation, state taxes, and net tax benefits from research and development tax credits.
In the normal course of business, the Company is subject to taxation from and is regularly audited by federal, state, and foreign tax authorities. As of June 30, 2026, the Company’s 2023 and 2024 income tax
ZipRecruiter, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
returns have been selected by the Internal Revenue Service for examination. Additionally, the Company is undergoing routine tax examinations in various state and foreign taxing jurisdictions in which the Company has operated. The Company believes that any income taxes ultimately assessed by any taxing authorities will not materially exceed the amounts the Company has already provided.
The realizability of the Company’s deferred tax assets is dependent on generating sufficient future taxable income. Should estimates of future taxable income decline or if sustained cumulative losses emerge, it is possible the amount of the deferred tax asset considered realizable may be reduced. Any future reduction in the realizability of the Company’s deferred tax assets would necessitate an increase to the valuation allowance, resulting in a non-cash income tax expense recognized in the consolidated statements of operations.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with the consolidated financial statements and the related notes included in Item 1 “Financial Statements” in this Quarterly Report on Form 10-Q. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. You should read the sections titled “Risk Factors” and “Note Regarding Forward-Looking Statements” for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
OVERVIEW
Our Mission is to actively connect people to their next great opportunity.
ZipRecruiter is a two-sided marketplace for work. We generate substantially all of our revenue from fees paid by employers to post jobs and access other features in our marketplace. We offer our employers flat rate pricing on terms typically ranging from a day to a year, or performance-based pricing, such as cost-per-click, to align with each employer’s hiring needs.
ZipRecruiter is free to use for job seekers. Job seekers come to ZipRecruiter in search of their next opportunity. After establishing a profile, job seekers are able to apply to jobs with a single click. Our artificial intelligence-powered platform curates jobs and helps job seekers discover new opportunities and stand out to employers. As our matching technology learns more about job seekers’ preferences and attributes, our technology offers increasingly higher quality matches between job seekers and employers.
We plan to continue to invest aggressively in our marketplace to improve functionality and drive growth for the foreseeable future. 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 three months ended June 30, 2026, our revenue was $118.1 million and we generated net income of $43.4 million and Adjusted EBITDA of $14.6 million. For the three months ended June 30, 2025, our revenue was $112.2 million, and we had a net loss of $9.5 million and Adjusted EBITDA of $9.3 million. For the six months ended June 30, 2026, our revenue was $225.6 million and we generated net income of $38.7 million and Adjusted EBITDA of $24.3 million. For the six months ended June 30, 2025, our revenue was $222.3 million, and we had a net loss of $22.3 million and Adjusted EBITDA of $15.3 million. Adjusted EBITDA is a financial measure not presented in accordance with GAAP. 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.”
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, 2025 | June 30, 2025 | September 30, 2025 | December 31, 2025 | March 31, 2026 | June 30, 2026 |
Quarterly Paid Employers | | | | | | | | | | | | | | | | | | | | | 63,466 | | 66,302 | | 66,959 | | 59,104 | | 63,329 | | 70,721 | |
Revenue per Paid Employer | | | | | | | | | | | | | | | | | | | | | $ | 1,734 | | $ | 1,693 | | $ | 1,717 | | $ | 1,889 | | $ | 1,698 | | $ | 1,669 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
June 30, | | Six Months Ended
June 30, |
| 2026 | | 2025 | | 2026 | | 2025 |
| (in thousands, except percentages) |
| Adjusted EBITDA | $ | 14,556 | | | $ | 9,343 | | | $ | 24,256 | | | $ | 15,277 | |
| Adjusted EBITDA margin | 12 | % | | 8 | % | | 11 | % | | 7 | % |
Quarterly Paid Employers
We quantify the revenue-generating customer base as the number of Paid Employers in our marketplace. The Quarterly Paid Employer metric includes all actively recruiting employers (or entities acting on behalf of employers) on a paying subscription plan or performance marketing campaign for at least one day in a given quarter. Paid Employers excludes employers from our third-party sites or other indirect channels, employers who are not actively recruiting and employers on free trials. This group of employers excluded from our Paid Employer count does not contribute a significant amount of revenue.
In the quarter ended June 30, 2026, Quarterly Paid Employers increased 12% when compared to the quarter ended March 31, 2026. We saw strong growth in both new and returning customers as our products continue to improve.
Revenue per Paid Employer
We evaluate Revenue per Paid Employer as a key indicator of our efforts to increase value provided to employers in our marketplace. We define Revenue per Paid Employer as total company revenue in a given period divided by Quarterly Paid Employers in the same period.
In the quarter ended June 30, 2026, Revenue per Paid Employer decreased when compared to the quarter ended March 31, 2026. We experienced an influx of new and returning Paid Employers, some of which only contributed revenue for a portion of the quarter, driving down Revenue per Paid Employer in the quarter ended June 30, 2026.
Adjusted EBITDA and Adjusted EBITDA Margin
We define Adjusted EBITDA as our net income (loss) before interest expense, gain on debt extinguishment, other income (expense), net, income tax expense (benefit), and depreciation and amortization, adjusted to eliminate stock-based compensation expense. 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. 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.
Our Adjusted EBITDA and Adjusted EBITDA margin fluctuate from quarter to quarter depending on a variety of factors including, but not limited to, our investments in research and development, sales and marketing, headcount and our ability to generate revenue.
The following table presents a reconciliation of net income (loss) to Adjusted EBITDA for each of the periods indicated:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
June 30, | | Six Months Ended
June 30, |
| 2026 | | 2025 | | 2026 | | 2025 |
| (in thousands) |
Net income (loss) | $ | 43,425 | | | $ | (9,506) | | | $ | 38,687 | | | $ | (22,337) | |
| Stock-based compensation | 7,368 | | | 12,612 | | | 15,738 | | | 27,239 | |
| Depreciation and amortization | 3,050 | | | 3,393 | | | 5,928 | | | 6,369 | |
| Interest expense | 6,686 | | | 7,401 | | | 14,132 | | | 14,793 | |
| Gain on debt extinguishment | (59,262) | | | — | | | (59,262) | | | — | |
| Other (income) expense, net | (3,144) | | | (4,953) | | | (6,564) | | | (10,308) | |
Income tax expense (benefit) | 16,433 | | | 396 | | | 15,597 | | | (479) | |
| Adjusted EBITDA | $ | 14,556 | | | $ | 9,343 | | | $ | 24,256 | | | $ | 15,277 | |
The following tables present net income (loss) margin and Adjusted EBITDA margin for each of the periods indicated:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
June 30, | | Six Months Ended
June 30, |
| 2026 | | 2025 | | 2026 | | 2025 |
| (in thousands, except percentages) |
| Revenue | $ | 118,061 | | | $ | 112,232 | | | $ | 225,608 | | | $ | 222,297 | |
Net income (loss) | 43,425 | | | (9,506) | | | 38,687 | | | (22,337) | |
Net income (loss) margin | 37 | % | | (8) | % | | 17 | % | | (10) | % |
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
June 30, | | Six Months Ended
June 30, |
| 2026 | | 2025 | | 2026 | | 2025 |
| (in thousands, except percentages) |
| Revenue | $ | 118,061 | | | $ | 112,232 | | | $ | 225,608 | | | $ | 222,297 | |
| Adjusted EBITDA | 14,556 | | | 9,343 | | | 24,256 | | | 15,277 | |
| Adjusted EBITDA margin | 12 | % | | 8 | % | | 11 | % | | 7 | % |
Impact of Macroeconomic Conditions
The labor market remains subdued, with lower hiring demand from employers, at least in part due to effects of a variety of global business and macroeconomic factors, including inflationary pressures, elevated borrowing costs, cybersecurity incidents, changes in laws, regulations and administrative policy, including those that impact trade agreements and tariffs, and the impacts of the wars in Ukraine and the Middle East. Despite the continued uncertainty in the labor market, we had a higher number of Quarterly Paid Employers in our marketplace during the quarter ended June 30, 2026 compared to the quarter ended June 30, 2025. Additionally, in the three and six months ended June 30, 2026, we delivered $118.1 million and $225.6 million in revenue, respectively, a 5% and 1% increase compared to the three and six months ended June 30, 2025, respectively.
Components of Our Results of Operations
Revenue
We generate revenue primarily from fees paid by employers to post and distribute jobs in our marketplace, as well as multiple sites managed by Job Distribution Partners, which are third-party sites who have a relationship with us and advertise from our marketplace, and includes job boards, search engines, social networks, talent communities and resume services.
Our 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.
We offer job posting plans with terms typically ranging from a day to a year on a flat rate subscription basis to access our marketplace, where customers may create and manage job postings and review incoming candidate applications. We recognize revenue ratably over the subscription period beginning on the date the subscription service is made available to the customer. 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. Additionally, upsell services include job posting enhancements which are applied to individual job postings. Such services enhance job postings by providing customers with a temporary boost in the prominence of their job postings, expanding visibility to job postings by inviting highly qualified potential candidates to apply to the job, or highlighting key attributes of job postings to make them stand out to job seekers. Revenue from job posting enhancements is recognized as the customer uses the enhancements on its job postings.
Resume database plans allow our customers to search and view resumes and revenue is recognized ratably over the subscription period.
Performance-based revenue is recognized when a candidate clicks on a job distributed by ZipRecruiter on behalf of a customer. For performance-based revenue, our customers pay an amount per click usually capped at a contractual maximum per job recruitment campaign.
For a description of our revenue accounting policies, see Note 2 – Basis of Presentation, Principles of Consolidation, and Summary of Significant Accounting Policies to our audited consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, or the 2025 Form 10-K.
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. In addition, we allocate a portion of overhead costs, such as rent, IT costs, supplies, and depreciation and amortization, to cost of revenue based on headcount.
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. 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. Such fluctuations may be influenced by our revenue, timing and amount of investments to expand hosting capacity, our continued investments in our support teams, and the amortization expense associated with our capitalized internal-use software and development cost. We expect our gross margin 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.
Costs and Operating Expenses
Sales and Marketing
Marketing and advertising expense includes advertising, online lead generation, customer and industry events, and candidate acquisition. Other sales and marketing expense consists of personnel-related costs (including salaries, sales commissions, bonuses, benefits, and stock-based compensation) for our sales and marketing employees, marketing activities, and related allocated overhead costs. 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 expect that sales and marketing expenses will decrease or increase on an absolute dollar basis as we adjust our highly variable sales and marketing spend budget throughout economic cycles to conserve or reallocate spend where we see the greatest returns. 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. We expect that these expenses will continue to be our largest operating expense category for the foreseeable future as we continue to invest in our sales and marketing efforts over time.
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, reporting that supports our marketplace technology and the cost of certain third-party service providers. 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. This expense may vary as a percentage of total revenue for the foreseeable future as we continue to invest in research and development activities related to ongoing improvements to, and maintenance of, our marketplace, expansion of our services, as well as other research and development programs, including the hiring of engineering, product development, and design employees to support these efforts.
General and Administrative
General and administrative expense consists of personnel-related costs (including salaries, bonuses, benefits, and stock-based compensation) for employees in our executive, finance, human resource and administrative departments, and fees for third-party professional services, including consulting, legal and accounting services. In addition, we allocate a portion of overhead costs, such as rent, IT costs, supplies, and depreciation and amortization, to general and administrative expense based on headcount.
Total Other Income (Expense), Net
Total other income (expense), net is comprised of interest expense, gain on debt extinguishment, and other income (expense), net, as detailed below.
Interest expense consists of interest costs associated with our outstanding borrowings, undrawn fees associated with our expired credit facility, and amortization of issuance costs for our expired credit facility and senior unsecured notes.
Gain on debt extinguishment represents the gain recognized from the repurchase of a portion of our outstanding senior unsecured notes.
Other income (expense), net consists primarily of interest income recognized on cash, cash equivalents and marketable securities, gains and losses from foreign currency exchange transactions, and realized gains and losses recognized on sales of available-for-sale debt securities. We have foreign currency exposure primarily related to personnel-related expenses that are denominated in currencies other than the U.S. Dollar, principally the Canadian Dollar, British Pound and the Israeli New Shekel.
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 three and six months ended June 30, 2026 differed from the U.S. federal statutory rate of 21% primarily due to tax detriments relating to the settlement of restricted stock units, certain non-deductible expenses including limitations on the amount of deductible officer compensation, and state taxes, partially offset by net tax benefits from research and development tax credits. The effective tax rate for the three and six months ended June 30, 2025 differed from the U.S. federal statutory rate of 21% primarily due to tax detriments relating to the settlement of restricted stock units, certain non-deductible expenses including limitations on the amount of deductible officer compensation, state taxes, and net tax benefits from research and development tax credits.
Results of Operations
The following table sets forth our consolidated results of operations for each of the periods presented:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
June 30, | | Six Months Ended
June 30, |
| 2026 | | 2025 | | 2026 | | 2025 |
| (in thousands) |
Revenue(1) | $ | 118,061 | | | $ | 112,232 | | | $ | 225,608 | | | $ | 222,297 | |
Cost of revenue(2) | 12,589 | | | 11,963 | | | 24,563 | | | 23,618 | |
| Gross profit | 105,472 | | | 100,269 | | | 201,045 | | | 198,679 | |
| Operating expenses | | | | | | | |
Sales and marketing(2) | 58,936 | | | 58,065 | | | 113,945 | | | 116,533 | |
Research and development(2) | 26,372 | | | 32,095 | | | 52,453 | | | 65,361 | |
General and administrative(2) | 16,026 | | | 16,771 | | | 32,057 | | | 35,116 | |
| Total operating expenses | 101,334 | | | 106,931 | | | 198,455 | | | 217,010 | |
Income (loss) from operations | 4,138 | | | (6,662) | | | 2,590 | | | (18,331) | |
| Other income (expense) | | | | | | | |
| Interest expense | (6,686) | | | (7,401) | | | (14,132) | | | (14,793) | |
| Gain on debt extinguishment | 59,262 | | | — | | | 59,262 | | | — | |
| Other income (expense), net | 3,144 | | | 4,953 | | | 6,564 | | | 10,308 | |
| Total other income (expense), net | 55,720 | | | (2,448) | | | 51,694 | | | (4,485) | |
Income (loss) before income taxes | 59,858 | | | (9,110) | | | 54,284 | | | (22,816) | |
Income tax expense (benefit) | 16,433 | | | 396 | | | 15,597 | | | (479) | |
Net income (loss) | $ | 43,425 | | | $ | (9,506) | | | $ | 38,687 | | | $ | (22,337) | |
| | | | | | | |
____________
(1)Revenue was comprised as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
June 30, | | Six Months Ended
June 30, |
| 2026 | | 2025 | | 2026 | | 2025 |
| (in thousands) |
| Subscription | $ | 89,919 | | | $ | 87,803 | | | $ | 171,486 | | | $ | 173,168 | |
| Performance-based | 28,142 | | | 24,429 | | | 54,122 | | | 49,129 | |
| Total revenue | $ | 118,061 | | | $ | 112,232 | | | $ | 225,608 | | | $ | 222,297 | |
(2)Includes stock-based compensation expense as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
June 30, | | Six Months Ended
June 30, |
| 2026 | | 2025 | | 2026 | | 2025 |
| (in thousands) |
Cost of revenue | $ | 67 | | | $ | 112 | | | $ | 133 | | | $ | 240 | |
Sales and marketing | 1,131 | | | 2,186 | | | 2,545 | | | 4,615 | |
Research and development | 3,234 | | | 5,950 | | | 6,838 | | | 13,398 | |
General and administrative | 2,936 | | | 4,364 | | | 6,222 | | | 8,986 | |
| Total stock-based compensation | $ | 7,368 | | | $ | 12,612 | | | $ | 15,738 | | | $ | 27,239 | |
Comparison of the Three and Six Months Ended June 30, 2026 and 2025
Revenue
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
June 30, | | | | | | Six Months Ended
June 30, | | | | |
| 2026 | | 2025 | | $ Change | | % Change | | 2026 | | 2025 | | $ Change | | % Change |
| (in thousands, except percentages) |
| Total revenue | $ | 118,061 | | | $ | 112,232 | | | $ | 5,829 | | | 5 | % | | $ | 225,608 | | | $ | 222,297 | | | $ | 3,311 | | | 1 | % |
Revenue increased by $5.8 million, or 5%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. Despite the continued uncertainty in the labor market, we had a higher number of Quarterly Paid Employers in our marketplace during the quarter ended June 30, 2026 compared to the quarter ended June 30, 2025. Performance-based revenue increased by $3.7 million, or 15%, and subscription revenue increased by $2.1 million, or 2%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. We saw an overall increase in employer spending on our marketplace products and services during the three months ended June 30, 2026 compared to the three months ended June 30, 2025. We believe our products and services continued to improve, providing more value for employers of all sizes by offering solutions with leading matching technology to help employers identify and recruit standout candidates.
Revenue increased by $3.3 million, or 1%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. Performance-based revenue increased by $5.0 million, or 10%, while subscription revenue decreased by $1.7 million, or 1%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. Despite the continued uncertainty in the labor market, we saw an overall increase in employer spending on our marketplace products and services during the six months ended June 30, 2026 compared to the six months ended June 30, 2025. We believe our products and services continued to improve, providing more value for employers of all sizes by offering solutions with leading matching technology to help employers identify and recruit standout candidates.
Cost of Revenue and Gross Margin
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
June 30, | | | | | | Six Months Ended
June 30, | | | | |
| 2026 | | 2025 | | $ Change | | % Change | | 2026 | | 2025 | | $ Change | | % Change |
| (in thousands, except percentages) |
| Cost of revenue | $ | 12,589 | | | $ | 11,963 | | | $ | 626 | | | 5 | % | | $ | 24,563 | | | $ | 23,618 | | | $ | 945 | | | 4 | % |
| Gross margin | 89 | % | | 89 | % | | | | | | 89 | % | | 89 | % | | | | |
Cost of revenue increased $0.6 million, or 5%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. Gross margin was 89% for both the three months ended June 30, 2026 and June 30, 2025, reflecting our continued commitment to operational efficiencies and maintaining costs proportionate to revenue.
Cost of revenue increased $0.9 million, or 4%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. Gross margin was 89% for both the six months ended June 30, 2026 and June 30, 2025, reflecting our continued commitment to operational efficiencies and maintaining costs proportionate to revenue.
Sales and Marketing
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
June 30, | | | | | | Six Months Ended
June 30, | | | | |
| 2026 | | 2025 | | $ Change | | % Change | | 2026 | | 2025 | | $ Change | | % Change |
| (in thousands, except percentages) |
| Sales and marketing | $ | 58,936 | | | $ | 58,065 | | | $ | 871 | | | 2 | % | | $ | 113,945 | | | $ | 116,533 | | | $ | (2,588) | | | (2) | % |
| Percentage of revenue | 50 | % | | 52 | % | | | | | | 51 | % | | 52 | % | | | | |
Sales and marketing expenses increased by $0.9 million, or 2%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase was primarily driven by a $3.0 million increase in marketing and advertising spend as we deployed marketing dollars towards campaigns we believe will drive a strong return on investment and a $0.6 million increase in travel and entertainment expenses. The increase was partially offset by a $1.5 million decrease in personnel-related costs for our sales and marketing employees, corresponding with lower headcount in the current-year period. Stock-based compensation expense for our sales and marketing employees also decreased by $1.1 million corresponding with a lower grant date fair value of equity awards recognized as expense in the current period as well as lower headcount.
Sales and marketing expenses decreased by $2.6 million, or 2%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The decrease was primarily driven by a $4.2 million decrease in personnel-related costs for our sales and marketing employees, corresponding with lower headcount in the current-year period. Stock-based compensation expense for our sales and marketing employees also decreased by $2.1 million corresponding with a lower grant date fair value of equity awards recognized as expense in the current period as well as lower headcount. The decrease was partially offset by a $4.2 million increase in marketing and advertising spend as we deployed marketing dollars towards campaigns we believe will drive a strong return on investment.
Research and Development
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
June 30, | | | | | | Six Months Ended
June 30, | | | | |
| 2026 | | 2025 | | $ Change | | % Change | | 2026 | | 2025 | | $ Change | | % Change |
| (in thousands, except percentages) |
| Research and development | $ | 26,372 | | | $ | 32,095 | | | $ | (5,723) | | | (18) | % | | $ | 52,453 | | | $ | 65,361 | | | $ | (12,908) | | | (20) | % |
| Percentage of revenue | 22 | % | | 29 | % | | | | | | 23 | % | | 29 | % | | | | |
Research and development expenses decreased by $5.7 million, or 18%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, primarily driven by a $2.7 million decrease in stock-based compensation expense for our research and development employees corresponding with lower headcount in the current-year period as well as a lower grant date fair value of equity awards recognized as expense in the current period. Personnel-related costs for our research and development employees also decreased by $2.2 million, primarily driven by lower headcount.
Research and development expenses decreased by $12.9 million, or 20%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily driven by a $6.6 million decrease in stock-based compensation expense for our research and development employees corresponding with a lower grant date fair value of equity awards recognized as expense in the current period as well as lower headcount in the current-year period. Personnel-related costs for our research and development employees also decreased by $5.2 million, primarily driven by lower headcount.
General and Administrative
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
June 30, | | | | | | Six Months Ended
June 30, | | | | |
| 2026 | | 2025 | | $ Change | | % Change | | 2026 | | 2025 | | $ Change | | % Change |
| (in thousands, except percentages) |
| General and administrative | $ | 16,026 | | | $ | 16,771 | | | $ | (745) | | | (4) | % | | $ | 32,057 | | | $ | 35,116 | | | $ | (3,059) | | | (9) | % |
| Percentage of revenue | 14 | % | | 15 | % | | | | | | 14 | % | | 16 | % | | | | |
General and administrative expenses decreased by $0.7 million, or 4%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, primarily driven by a $1.4 million decrease in stock-based compensation expense for our general and administrative employees corresponding with a lower grant date fair value of equity awards recognized as expense in the current period and lower headcount in the current period.
General and administrative expenses decreased by $3.1 million, or 9%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily driven by a $2.7 million decrease in stock-based compensation expense for our general and administrative employees corresponding with a lower grant date fair value of equity awards recognized as expense in the current period and lower headcount in the current period. Personnel-related costs for our general and administrative employees also decreased by $1.2 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily driven by lower headcount.
Total Other Income (Expense), Net
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
June 30, | | | | | | Six Months Ended
June 30, | | | | |
| 2026 | | 2025 | | $ Change | | % Change | | 2026 | | 2025 | | $ Change | | % Change |
| (in thousands, except percentages) |
| Total other income (expense), net | $ | 55,720 | | | $ | (2,448) | | | $ | 58,168 | | | * | | $ | 51,694 | | | $ | (4,485) | | | $ | 56,179 | | | * |
____________
*Change not meaningful due to the impact of the gain on debt extinguishment for the three and six months ended June 30, 2026.
Total other income (expense), net increased by $58.2 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, primarily driven by a $59.3 million gain on debt extinguishment recognized from the repurchase of a portion of our outstanding senior unsecured notes. The increase was partially offset by a $1.4 million decrease related to income accretion for our marketable securities purchased at a discount.
Total other income (expense), net increased by $56.2 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily driven by a $59.3 million gain on debt extinguishment recognized from the repurchase of a portion of our outstanding senior unsecured notes. The increase was partially offset by a $2.6 million decrease related to income accretion for our marketable securities purchased at a discount.
Income Tax Expense (Benefit)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
June 30, | | | | | | Six Months Ended
June 30, | | | | |
| 2026 | | 2025 | | $ Change | | % Change | | 2026 | | 2025 | | $ Change | | % Change |
| (in thousands, except percentages) |
Income tax expense (benefit) | $ | 16,433 | | | $ | 396 | | | $ | 16,037 | | | * | | $ | 15,597 | | | $ | (479) | | | $ | 16,076 | | | * |
| Effective tax rate | 27.5 | % | | (4.3) | % | | | | | | 28.7 | % | | 2.1 | % | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
____________
*Change not meaningful due to higher pre-tax income for the three and six months ended June 30, 2026.
Income tax expense (benefit) increased by $16.0 million and $16.1 million for the three and six months ended June 30, 2026 compared to the three and six months ended June 30, 2025 respectively. The increase was primarily driven by changes in pretax results in each period, including the current period $59.3 million pre-tax gain on debt extinguishment tax affected at the standard U.S. federal and state statutory tax rates.
Liquidity and Capital Resources
As of June 30, 2026, we had cash, cash equivalents and marketable securities totaling $173.8 million and restricted cash of $2.3 million. 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.
We believe our existing cash, cash equivalents, marketable securities, and cash flow from operations will be sufficient to meet our working capital requirements for at least the next 12 months. To the extent existing cash, cash equivalents, marketable securities, and cash from operations are insufficient to fund future activities, we may need to raise additional funds. In the future, we may attempt to raise additional capital through the sale of equity securities or through equity-linked or debt financing arrangements. If we raise additional funds by issuing equity or equity-linked securities, the ownership of our existing stockholders will be diluted. If we raise additional financing by the incurrence of additional indebtedness, we may be subject to increased fixed payment obligations and could also be subject to additional restrictive covenants, such as limitations on our ability to incur additional debt, and other operating restrictions that could adversely impact our ability to conduct our business. Any future indebtedness we incur may result in terms that could be unfavorable to equity investors. There can be no assurances that we will be able to raise additional capital. The inability to raise capital could adversely affect our ability to achieve our business objectives.
Credit Facility
In April 2021, we entered into a $250.0 million credit facility agreement with a syndicate of banks. In July 2024, we entered into a supplement to the credit facility agreement which increased the aggregate revolving commitments available under the credit facility from $250.0 million to $290.0 million. The credit facility expired on its maturity date of April 30, 2026, and we elected not to renew it. At the time of expiration, there were no outstanding borrowings under the credit facility. Letters of credit previously issued against the credit facility remain outstanding and are cash collateralized by a $2.3 million restricted deposit.
Senior Unsecured Notes
On January 12, 2022, we issued an aggregate principal amount of $550.0 million senior unsecured notes due 2030, or the Notes, in a private placement. The Notes were issued pursuant to an indenture dated as of January 12, 2022, or the Indenture. Pursuant to the Indenture, the Notes will mature on January 15, 2030 and bear interest at a rate of 5% per year. Interest on the 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.
At any time prior to January 15, 2030, we have the option, at our sole discretion, to redeem all or a portion of the Notes subject to the payment of certain premiums, make-whole provisions, and accrued and unpaid interest. In addition, we may, at any time and from time to time, seek to retire or purchase our outstanding debt through open-market purchases, privately negotiated transactions, tender offers, exchange offers or otherwise, which, if completed, could involve the use of cash, in amounts that may be material, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors that could materially affect our liquidity. Upon the occurrence of a change of control triggering event, we must offer to repurchase the Notes at a repurchase price equal to 101% of the aggregate principal amount to be repurchased, and any accrued and unpaid interest.
In June 2026, we repurchased $294.6 million of aggregate principal amount of the Notes for a total repurchase price of $232.8 million (plus accrued and unpaid interest to, but excluding, the applicable closing date) via separate, privately negotiated repurchase agreements entered into with certain holders of our Notes. As a result of the repurchases, we retired over half of our outstanding Notes due in 2030 at
a discount to par value, resulting in $255.4 million of aggregate principal amount of our Notes outstanding as of June 30, 2026.
For more information on the Notes, please see Note 11 – Debt to our audited consolidated financial statements in the 2025 Form 10-K.
Share Repurchase Program
Our board of directors has authorized us to repurchase up to $750.0 million of outstanding shares of our common stock, with no fixed expiration. We may, at any time and from time to time, seek to repurchase shares of common stock through open market or privately negotiated transactions, block purchases, or pursuant to one or more Rule 10b5-1 plans which, if completed, could involve the use of cash, in amounts that may be material, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors that could materially affect our liquidity.
During the six months ended June 30, 2026, we repurchased 3.5 million shares of our Class A common stock for an aggregate purchase price of $9.4 million under our share repurchase program through open market purchases.
Approximately $111.8 million remains available for future repurchases of our common stock under our share repurchase program as of June 30, 2026. For more information, see Note 9 – Share Repurchase Program to our condensed consolidated financial statements included in this report.
Investments
As of June 30, 2026, we held $105.4 million in total investments, consisting of money market mutual funds and available-for-sale debt securities. These investments are included within cash and cash equivalents and marketable securities within our condensed consolidated balance sheets. During the three months ended June 30, 2026, a significant amount of our investments held at March 31, 2026 matured to fund the repurchases of the Notes. Our remaining investments consist of money market mutual funds and available-for-sale debt securities, which are included within cash and cash equivalents and marketable securities within our condensed consolidated balance sheets.
During the three and six months ended June 30, 2026, we continued to manage our excess cash reserves by investing primarily in money market mutual funds and also in highly rated debt securities. The 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. 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 condensed consolidated balance sheets.
For more information, see Note 5 – Financial Instruments to our condensed consolidated financial statements included in this report.
Cash Flows
The following table summarizes our cash flows for the periods presented (in thousands):
| | | | | | | | | | | |
| Six Months Ended
June 30, |
| 2026 | | 2025 |
| |
Net cash provided by operating activities | $ | 11,921 | | | $ | 634 | |
Net cash provided by investing activities | 173,409 | | | 68,491 | |
Net cash used in financing activities | (241,292) | | | (84,101) | |
Net decrease in cash, cash equivalents, and restricted cash | $ | (55,962) | | | $ | (14,976) | |
Operating Activities
The primary source of operating cash inflows is cash collected from our customers for our services. Our primary uses of cash from operating activities are for personnel-related expenditures, marketing costs and third-party costs incurred to support our marketplace.
For the six months ended June 30, 2026, cash provided by operating activities was $11.9 million resulting from our net income of $38.7 million, adjusted by non-cash items of $20.1 million and a net decrease of $6.7 million in our operating assets and liabilities. The non-cash items primarily resulted from a $59.3 million gain on debt extinguishment and $1.7 million in amortization and accretion of marketable securities, partially offset by $15.9 million related to the change in our deferred income taxes primarily driven by the utilization of carried forward tax losses resulting from the taxable gain on debt extinguishment, $15.7 million for stock-based compensation expense, $5.9 million pertaining to amortization of intangible assets and depreciation, and $1.0 million pertaining to non-cash lease expense. The decrease of $6.7 million related to changes in our operating assets and liabilities was primarily driven by a $7.0 million decrease in accrued interest, a $1.5 million increase in other assets, a $1.3 million increase in accounts receivable, a $1.2 million decrease in our operating lease liabilities, and a $1.2 million increase in prepaid expenses and other assets, partially offset by a $3.4 million increase in our accounts payable and accrued expenses and other liabilities, a $1.3 million increase in deferred revenue, and a $0.7 million decrease in deferred commissions.
For the six months ended June 30, 2025, cash provided by operating activities was $0.6 million resulting from our net loss of $22.3 million, adjusted by non-cash charges of $24.0 million and a net decrease of $1.0 million in our operating assets and liabilities. The non-cash charges primarily resulted from $27.2 million for stock-based compensation expense, $6.4 million pertaining to amortization of intangible assets and depreciation, and $2.0 million pertaining to non-cash lease expense, partially offset by $9.2 million related to the change in our deferred tax assets driven by our current year capitalization of research costs from a tax perspective and $4.1 million in amortization and accretion of marketable securities. The decrease of $1.0 million related to changes in our operating assets and liabilities was primarily driven by a $2.8 million increase in accounts receivable and a $2.1 million decrease in our operating lease liabilities, partially offset by a $1.9 million increase in our accounts payable and accrued expenses and other liabilities, a $0.9 million increase in deferred revenue, a $0.7 million decrease in other assets, and a $0.4 million decrease in deferred commissions.
Investing Activities
For the six months ended June 30, 2026, cash provided by investing activities was $173.4 million resulting from $239.3 million received from paydowns, maturities and redemptions of marketable securities and $1.3 million received from sales of marketable securities, partially offset by $62.9 million used in purchases of marketable securities and $3.9 million capitalized for software development costs.
For the six months ended June 30, 2025, cash provided by investing activities was $68.5 million resulting from $342.2 million received from paydowns, maturities and redemptions of marketable securities and $1.0 million received from sales of marketable securities, partially offset by $270.1 million used in purchases of marketable securities and $4.0 million capitalized for software development costs.
Financing Activities
For the six months ended June 30, 2026, cash used in financing activities was $241.3 million which consisted of $229.7 million for the repurchases of the Notes, $9.5 million for the repurchase of common stock, and $2.4 million for the net settlement of taxes on equity awards, partially offset by $0.3 million of proceeds from the exercise of stock options.
For the six months ended June 30, 2025, cash used in financing activities was $84.1 million which consisted of $84.1 million used for the repurchase of common stock and $4.1 million for the net settlement of taxes on equity awards, partially offset by $2.4 million of proceeds from the exercise of stock options and $1.7 million of proceeds from the issuance of stock under the employee stock purchase plan.
Obligations and Other Commitments
See the 2025 Form 10-K for our future minimum commitments related to certain software service agreements. Through June 30, 2026, 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.
Critical Accounting Policies and Estimates
Management’s discussion and analysis of financial condition and results of operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures. On an ongoing basis, we evaluate our estimates and assumptions, including, but not limited to, those related to revenue recognition, stock-based compensation, and income taxes. We base our estimates on historical experience and on various other estimates and assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates and assumptions.
Our significant accounting policies are discussed in Note 2 – Basis of Presentation, Principles of Consolidation, and Summary of Significant Accounting Policies to our condensed consolidated financial statements included in this report. There have been no changes to our critical accounting policies and estimates as compared to the critical accounting policies and estimates discussed in the 2025 Form 10-K.
Recent Accounting Pronouncements
See Note 2 – Basis of Presentation, Principles of Consolidation, and Summary of Significant Accounting Policies to our condensed consolidated financial statements included in this report for more information.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We have operations both within the United States and internationally, and we are exposed to market risks in the ordinary course of our business. These risks primarily include changes in interest rates and fluctuations in foreign currency exchange rates.
Interest Rate Risk
We do not believe we are subject to interest rate risk in connection with the senior unsecured notes. Our senior unsecured notes are carried at amortized cost and fluctuations in interest rates do not impact our condensed consolidated financial statements. However, the fair value of our senior unsecured notes, which pay interest at a fixed rate, will generally fluctuate with movements of interest rates, increasing in periods of declining rates of interest and declining in periods of increasing rates of interest.
Additionally, we are subject to interest rate risk in connection with our investments. The primary objectives of our investment activities are to preserve principal, provide liquidity, and maximize income without significantly increasing risk. We do not enter into investments for trading or speculative purposes. Our investments are exposed to market risk due to fluctuation in interest rates, which may affect our interest income and the fair value of our investments. To minimize interest rate risk, we maintain our portfolio of cash equivalents and marketable securities in a variety of securities, including commercial paper, money market mutual funds, U.S. government and agency securities, and corporate debt securities. To assess interest rate risk associated with our investment portfolio, we performed a sensitivity analysis to determine the impact a change in interest rates would have on the value of the portfolio. Based on investment positions as of June 30, 2026, a hypothetical increase in interest rates of 100 basis points across all maturities would not result in a material impact to the fair value of the portfolio. Such losses would only be realized if we sold the investments prior to maturity.
Foreign Currency Risk
We are exposed to fluctuations in foreign exchange risk related primarily to expenses denominated in currencies other than the U.S. Dollar, principally the Canadian Dollar, British Pound, and Israeli New Shekel. The volatility of exchange rates depends on many factors that we cannot forecast with reliable accuracy. We have experienced, and will continue to experience, fluctuations in our net income (loss) as a result of transaction gains and losses related to the remeasurement of our asset and liability balances that are denominated in currencies other than the U.S. Dollar. A hypothetical 10% change in foreign currency exchange rates applicable to our business would not have had a material impact on our condensed consolidated financial statements.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our principal executive officer and our principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of June 30, 2026. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on such evaluation, our principal executive officer and principal financial officer have concluded that as of June 30, 2026, our disclosure controls and procedures were effective at the reasonable assurance level.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act during the quarter ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Part II - Other Information
Item 1. Legal Proceedings
Refer to the disclosure under the heading “Legal Matters” in Note 8 – Commitments and Contingencies to our condensed consolidated 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 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 Quarterly Report on Form 10-Q, before making a decision to invest in our Class A common stock. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are unaware of or that we deem immaterial may also become important factors that adversely affect our business. If any of the following risks occur, our business, financial condition, operating results, and future prospects could be materially and adversely affected. In that event, the price of our Class A common stock could decline, and you could lose part or all of your investment.
Risks Related to Our Business
Operational Risks
Our business is significantly affected by fluctuations in general economic conditions. There is risk that any economic recovery may be delayed, short-lived and/or uneven, and may not result in increased demand for our services.
Our business depends on the overall demand for labor and on the economic health of current and prospective employers and job seekers that use our marketplace. Demand for recruiting and hiring services is significantly affected by the general level of economic activity and employment in the United States and the other countries in which we operate. Any significant weakening of the economy in the United States or the global economy, increased unemployment, reduced credit availability, reduced business confidence and activity, decreased government spending, economic uncertainty, financial turmoil affecting the banking system or financial markets, trade wars and higher tariffs, volatility in interest rates, inflation in the cost of goods and services including labor, and other adverse economic or market conditions may adversely impact our business and operating results. Significant swings in, or periods of reduced, economic activity historically have had a disproportionately negative impact on hiring activity and related efforts to find candidates. We may also experience more pricing pressure during periods of economic downturn.
Economic recoveries are difficult to predict, and may be delayed, short-lived, and/or uneven, with some regions, or countries within a region, continuing to experience declines or weakness in economic activity while others improve. Differing economic conditions and patterns of economic growth or contraction in the geographical regions in which we operate may affect demand for our marketplace. We may not experience uniform, or any, increases in demand for our marketplace within the markets where our business is concentrated.
There has been volatility in financial markets as a result of a number of factors, including, but not limited to, global conflict, including the wars in Ukraine and the Middle East, inflation, changes in interest rates, banking instability, and changes in laws, regulations and administrative policy, including those that impact trade agreements and tariffs. There is a risk that as a result of these macroeconomic factors, we could continue to experience declines in all, or in portions, of our business. Economic uncertainty may cause some of our current or potential employers to curtail spending in our marketplace and may ultimately result in cost challenges to our operations. For example, our employers, including those of our employers that are banks, may be adversely affected by any bank failure or other event affecting financial
institutions. Any resulting adverse effects to our employers’ liquidity or financial performance could reduce the demand for our services or affect our allowance for expected credit losses and collectability of accounts receivable. In addition, any significant changes to U.S. trade policies, treaties or tariffs, or the perception that any of them could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted nations and the United States. These adverse conditions could result in reductions in revenue, increased operating expenses, longer sales cycles, slower adoption of new technologies, and increased competition. We cannot predict the timing, strength, or duration of any economic slowdown or any subsequent recovery generally. There is also risk that when overall global economic conditions are positive, our business could be negatively impacted by decreased demand for job postings and our services. If there is a significant or prolonged decline in economic conditions, our business, financial condition, and operating results could be adversely affected.
Recently, the U.S. government has enacted, and continues to consider, a range of trade-related measures, including tariffs, export controls, and other policies. The President of the United States has directed various federal agencies to further evaluate key aspects of U.S. trade policy and there has been ongoing discussion and commentary regarding potential changes to trade agreements, tariff structures, and foreign investment relations. Shifts in trade policies—whether through legislation, executive action, or international negotiation—could alter the global trade landscape and affect supply chains, pricing, and demand for goods and services. These developments, or the perception that any of them could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted nations and the U.S. These changes could prevent or make it difficult or more expensive for our customers to operate their businesses, which may result in a decrease in their hiring levels, which could affect our sales. Any significant changes in current U.S. trade or other policies that restrict imports or increase import tariffs could have a material adverse effect upon our results of operations.
Substantially all of our revenue is generated by our business operations in the United States. Any significant economic downturn in the United States or other countries in which we operate could have a material adverse effect on our business, financial condition and results of operations.
We face intense competition and could lose market share to our competitors, which could adversely affect our business, operating results, and financial condition.
We face competition from many well-established online job sites such as Craigslist, Glassdoor, Google, Indeed, LinkedIn, and Meta. 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. 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 other companies that utilize emerging technologies and assets, such as large language models (LLMs), machine learning, and other types of AI. While we also may utilize such technologies, these competitors may offer products and services that may, among other things, provide automated alternatives to the services that employers or job seekers would otherwise seek from ZipRecruiter, use machine learning algorithms to connect employers with job seekers more effectively than we do, or otherwise change the way that employers engage with job seekers or the way job seekers apply to jobs or find work so as to make our marketplace less attractive. We may face increased competition from these competitors as they mature and expand their capabilities.
Many of our larger competitors have long-standing relationships or access to employers, including our Paid Employers1, as well as those whom we may wish to pursue. Some employers may be hesitant to
1 “Paid Employer(s)” means any actively recruiting employer(s) (or entities acting on behalf of employers) on a paying subscription plan or performance marketing campaign for at least one day. Paid Employer(s) excludes employers from our third-party sites or other indirect channels, employers who are not actively recruiting and employers on free trials.
use a new platform and prefer to upgrade products offered by these incumbent platforms for reasons that include price, quality, sophistication, familiarity, and global presence. These platforms could offer competing products on a standalone basis at a low price or bundled as part of a larger product sale that could be more attractive to employers than our offerings.
Many of our competitors are able to devote greater resources to the development, promotion, sale, and support of their products and services. Furthermore, our current or potential competitors may be acquired by third parties with greater available resources and the ability to initiate or withstand substantial price competition. Our competitors may also establish cooperative relationships among themselves or with third parties to enhance their product offerings and/or resources. If our competitors’ products, platforms, services or technologies maintain or achieve greater market acceptance than ours, if they are successful in bringing their products or services to market earlier than ours, or if their products, platforms or services are more technologically capable than ours, then our revenue could be adversely affected. Also, some of our competitors may offer their products and services at a lower price. If we cannot optimize pricing, our operating results may be negatively affected. Pricing pressures and increased competition could result in reduced sales, reduced margins, losses or a failure to maintain or improve our competitive market position, any of which could adversely affect our business.
The number of employers distributing their job posting service purchases among a broader group of competitors may increase which may make it more difficult to retain or maintain our current share of business with existing Paid Employers. We also face the risk that employers may decide to provide similar services internally or reduce or redirect their efforts to recruit job seekers through online job advertisements. As a result, there can be no assurance that we will not encounter increased competition in the future.
Our marketplace functions on software that is highly technical and complex and if it fails to perform properly, our reputation could be adversely affected and our market share could decline.
Our marketplace functions on software that is highly technical and complex and may now or in the future contain undetected errors, bugs, or vulnerabilities. Some errors in our software code may be discovered only after the code has been deployed. Any errors, bugs, or vulnerabilities discovered in our code after deployment, inability to identify the cause or causes of performance problems within an acceptable period of time, or difficulty maintaining and improving the performance of our marketplace could result in damage to our reputation or brand, loss of employers and job seekers, loss of revenue, or liability for damages, any of which could adversely affect our business and results of operations.
As the usage of our marketplace grows, we will need an increasing amount of technical infrastructure, including network capacity and computing power, to continue to operate our marketplace. If we cannot continue to effectively scale and grow our technical infrastructure to accommodate these increased demands, it may adversely affect our user experience. 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. If our marketplace is unavailable to our subscribers or job seekers for any period of time, our business could be adversely affected.
Our marketplace technology is constantly changing with new updates, which may contain undetected errors when first introduced or released. Any errors, defects, disruptions in service, or other performance or stability problems with our marketplace, or the insufficiency of our efforts to adequately prevent or timely remedy errors or defects, could result in negative publicity, loss of or delay in market acceptance of our marketplace, loss of competitive position, our inability to timely and accurately maintain our financial records, inaccurate or delayed invoicing of Paid Employers, delay of payment to us, claims by users for losses sustained by them, corrective action taken by gatekeepers of components integral to our marketplace, or investigation and corrective action taken by a regulatory agency. In such an event, we may be required, or may choose, for user relations or other reasons, to expend additional resources to
help resolve the issue. Accordingly, any errors, defects, or disruptions in our marketplace could adversely impact our brand and reputation, revenue, and operating results.
Because of the large amount of data that our Paid Employers collect and manage by means of our services, it is possible that failures or errors in our systems could result in data loss or corruption, or cause the information that we or our Paid Employers collect to be incomplete or contain inaccuracies that our Paid Employers regard as significant. Furthermore, the availability or performance of our marketplace could be adversely affected by a number of factors, including users’ inability to access the internet or to send or receive email messages, the failure of our network or software systems, security breaches or variability in user traffic for our services. We may be required to issue credits or refunds for prepaid amounts related to unused services or otherwise be liable to our users for damages they may incur resulting from certain of these events. In addition to potential liability, if we experience interruptions in the availability of our marketplace, our reputation could be adversely affected and we could lose employers and job seekers.
Our future success depends in part on employers purchasing and renewing or upgrading subscriptions and performance-based services from us. Any decline in our user renewals or upgrades or performance-based services could harm our future operating results.
Many of our Paid Employers pay for access to our marketplace on a per-job-per-day basis, rather than entering into new longer term paid time-based job posting plans, renewing their paid time-based job posting plans when such contract terms expire, or purchasing performance-based services from us. Employers who enter into paid plans have no obligation to renew their plans after the expiration of their contract period, which typically range from one day to 12 months. In addition, employers may renew for lower subscription amounts or for shorter contract lengths. Historically, some of our Paid Employers have elected not to renew their agreements with us and as we expand into new products and markets, we have a limited ability to reliably predict future renewal rates. Our future renewal rates for both existing and potential new products may be lower, possibly significantly lower, than historical trends.
Our future success also depends in part on our ability to sell upsell services to employers who use our marketplace. If employers do not purchase upsell services from us, our revenue may decline and our operating results may be harmed.
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.
Significant segments of the market for job advertisement services may have hiring needs and service preferences that are subject to greater volatility than the overall economy.
The employers in the United States’ private sector are diverse across a number of business characteristics, including company size, geography, and industry, among other factors. Hiring activity may vary significantly among businesses with different characteristics and accordingly, any concentration we may have among businesses with certain characteristics may subject us to high volatility in our financial results. Smaller businesses, for example, typically have less persistent hiring needs and may experience greater volatility in their need for job advertisement services and preferences among providers of such services. Along with a relatively shorter sales cycle, smaller businesses may be more likely to change platforms based on short-term differences in perceived price, value, service level, or other factors. Difficulty in acquiring and/or retaining these employers may adversely affect our operating results.
Our business depends largely on our ability to attract and retain talented employees, including senior management and key personnel. In particular, 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 future success depends in large part on the continued services of our senior management and other key personnel and our ability to retain and motivate them. In particular, we are dependent on the services of Ian Siegel, our Chief Executive Officer, and our technology, marketplace, future vision, and strategic direction could be compromised if he were to take another position, become ill or incapacitated, or otherwise become unable to serve as our Chief Executive Officer. We rely on our leadership team in the areas of marketing, sales, finance, support, product development, human resources, and technology. Our senior management and other key personnel are all employed on an at-will basis, which means that they could terminate their employment with us at any time, for any reason, and without notice. If we lose the services of senior management or other key personnel, or if we cannot attract, train, and retain the highly skilled personnel we need, or if we fail to implement succession plans for such key personnel, our business, operating results, and financial condition could be adversely affected.
Our future success also depends on our continuing ability to attract, train, and retain highly skilled personnel, including software engineers and sales personnel. We face intense competition for qualified personnel from numerous software and other technology companies. This competition for highly skilled personnel is especially intense in the regions where we have significant operations, and we may incur significant costs to attract and retain them. We have, from time to time, experienced, and we expect to continue to experience, difficulty in hiring and retaining highly skilled employees with appropriate qualifications. We may incur significant costs to attract and retain highly skilled personnel, and we may lose new employees to our competitors or other technology companies before we realize the benefit of our investment in recruiting and training them. In addition, in a tight labor market, we may experience increased difficulty in hiring and retaining, or increased costs in attracting and retaining, highly skilled personnel, or we may lose new employees to our competitors or other technology companies at a greater rate. 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.
In addition, job candidates and existing employees often consider the value of the equity awards they receive in connection with their employment and we use equity compensation as a part of a comprehensive compensation package for our personnel. To the extent our stock price declines significantly or is highly volatile due to a variety of factors outside of our control, our equity compensation packages may not provide the retention and motivation incentive that we believe they should, which could harm our ability to attract and retain qualified employees and directors. Prospective and current employees and directors may perceive a low or declining stock price as an indication of instability, making it more difficult to recruit and retain key personnel whose contributions are critical to our success. If we cannot attract and retain suitably qualified individuals who are capable of meeting our growing technical, operational, and managerial requirements, on a timely basis or at all, our business may be adversely affected.
If internet search engines’ methodologies or other channels that we use to direct traffic to our website are modified to our disadvantage, or our search result page rankings decline for other reasons, our user growth could decline.
We depend in part on various internet search engines, such as Google, as well as other channels, such as generative AI engines, to direct a significant amount of traffic to our website. Our ability to maintain the number of visitors directed to our website is not entirely within our control. For example, our competitors’ search engine optimization and other efforts such as paid search may result in their websites receiving a higher search result page ranking than ours, internet search engines or other channels that we utilize to direct traffic to our website could revise their methodologies in a manner that adversely
impacts traffic to our website, or we may make changes to our website that adversely impact our search engine optimization rankings and traffic. As a result, links to our website may not be prominent enough to drive sufficient traffic to our website, and we may not be able to influence the results. Additionally, the manner in which generative AI platforms decide what information to provide in response to a given user query may also result in our website receiving less attention by users of these tools.
Search engines and other channels that we use to drive employers and job seekers to our website periodically change their algorithms, policies, and technologies, sometimes in ways that cause traffic to our website to decline. These changes can also result in an interruption in their ability to access our website or a drop in our search ranking, or have other adverse impacts that negatively affect our ability to maintain and grow the number of employers and job seekers that visit our website. 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.
Our quarterly results may fluctuate significantly and may not fully reflect the underlying performance of our business, which makes our future results difficult to predict.
Our quarterly results of operations, including the levels of our revenue, gross margin, and profitability, may vary significantly in the future and period to period comparisons of our operating results may not be meaningful. Accordingly, the results of any one quarter should not be relied upon as an indication of future performance. As a result, you should not rely upon our past quarterly operating results as indicators of future performance.
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, elevated borrowing costs, actual or perceived instability in the global banking industry and the impacts therefrom, cybersecurity incidents, changes in laws, regulations and administrative policy, including those that impact trade agreements and tariffs, 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.
Our success depends on our ability to maintain the value and reputation of the ZipRecruiter brand.
We believe that our brand is important to attracting and retaining both employers and job seekers. Maintaining, protecting, and enhancing our brand depends largely on the success of our marketing efforts, our ability to provide a compelling job marketplace, including services, features, content, and support related to our marketplace, and our ability to successfully secure, maintain, and defend our rights to use the “ZipRecruiter” mark, our logo, and other trademarks important to our brand. While we constantly measure the expected returns of specific sales and marketing initiatives and adjust spend levels up or down accordingly, it is not certain that these and any future investments have had or will have sufficient positive impact on our brand awareness, and any reduction in our levels of investments in brand awareness may harm our brand awareness. We believe that the importance of our brand will increase as competition further intensifies and brand promotion activities may require substantial expenditures. Our brand could be harmed if we cannot achieve these objectives or if our public image were to be tarnished by negative publicity. Unfavorable publicity about us could diminish confidence in our marketplace and services. Such negative publicity also could have an adverse effect on the volume, engagement and loyalty of our employers and job seekers and could have an adverse effect on our business.
If we fail to scale our business effectively, our business, operating results, and financial condition could be adversely affected.
We experienced a period of significant growth in prior years and expect to continue to invest strategically across our company to support measured growth, while also scaling back certain areas of our business in response to changing macroeconomic conditions. Although we have experienced rapid growth historically, we may not return to prior growth rates or sustain our growth rates, nor can we assure you that our investments to support our growth or to manage expenses by scaling back other areas of our business will be successful. The effective scaling of our business will place significant demands on our management as well as on our administrative, operational, and financial resources. To manage any future growth effectively, we must continue to improve our operational, financial, and management information systems; expand, motivate, and effectively manage and train our workforce; and effectively collaborate with our third-party partners. If we cannot manage any future growth successfully, our business, operating results, financial condition, and ability to successfully advertise our marketplace and serve our employers and job seekers could be adversely affected.
Over time, we expect to expand our operations and personnel. However, from time to time, we realign our resources and talent to respond to macroeconomic changes and to streamline our organization and optimize our cost structure, including through furloughs, layoffs and reductions in force, and opening, closing, or relocating offices. For example, in May 2023, in response to current market conditions and after reducing other discretionary expenses, we reduced our workforce. If there are unforeseen expenses associated with such realignments in our business strategies, and we incur unanticipated charges or liabilities, then we may not be able to effectively realize the expected cost savings or other benefits of such actions. In addition, the loss of certain personnel, through such reduction in force or otherwise, presents significant risks including, among other things, failure to maintain adequate controls and procedures. Failure to manage any growth or any scaling back of our operations could have an adverse effect on our business, operating results, and financial condition.
In addition, our historical growth should not be considered indicative of our future performance. We have encountered in the past, and will encounter in the future, risks, challenges, and uncertainties frequently experienced by growing companies in rapidly changing industries. If 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.
If we are not able to provide successful enhancements and new products, services, and features, our business could be adversely affected.
The market for job-posting marketplaces is characterized by frequent product and service introductions and enhancements, changing user demands, and rapid technological change. The introduction of products and services embodying new technologies can quickly make existing products and services obsolete and unmarketable. The success of our business will depend, in part, on our ability to adapt and respond effectively and timely to these changes. We invest substantial resources in researching and developing new products and services and enhancing our marketplace by incorporating additional features, improving functionality, and adding other improvements to meet our employers’ and job seekers’ evolving demands in our highly competitive industry. 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. The success of any enhancements or improvements to, or new features of, our marketplace or any new products and services depends on several factors, including timely completion, competitive pricing, adequate quality testing, integration with new and existing technologies in our marketplace and third-party partners’ technologies, overall market acceptance, and resulting user activity that is consistent with the intent of such products or services. We cannot be sure that we will succeed, either timely or cost effectively, in developing, marketing, and delivering enhancements or new features, products and services to our marketplace that respond to continued changes in the market for job placement services, nor can we be sure that any enhancements or new features to our existing or any new products and services will achieve market acceptance or produce the intended effect. In addition, if new technologies emerge that allow our competitors to deliver similar services at lower prices, more efficiently, more conveniently, or more securely, such technologies could adversely impact our ability to compete.
Additionally, because our marketplace operates on a variety of third-party systems and platforms, we will need to continuously modify and enhance our offerings to keep pace with changes in internet-related hardware, operating systems, cloud computing infrastructure, and other software, communication, browser and open source technologies. We may not be successful in either developing these modifications and enhancements or in bringing them to market timely. Furthermore, uncertainties about the timing and nature of new network platforms or technologies, or modifications to existing platforms or technologies, could increase our research and development expenses. Parts of the technology stack supporting our marketplace may also become difficult to maintain and service as there become fewer software engineers who are skilled with respect to the programming languages used to build such pieces of software. Any failure of our marketplace to operate effectively with future network systems and technologies could reduce the demand for our marketplace, result in user dissatisfaction and adversely affect our business.
The forecasts of growth of online recruitment may prove to be inaccurate, and even if the market in which we compete achieves the forecasted growth, we cannot assure you that our business will grow at a similar rate, if at all.
Growth forecasts are subject to significant uncertainty and are based on assumptions and estimates that may not ultimately be accurate and are not under our control. The forecasts relating to the expected growth of the online recruitment market may prove to be inaccurate. Even if the market experiences the growth we forecast, we may not grow our business at a similar rate, or at all. Our growth is subject to many factors, including our success in implementing our business strategy, which is subject to many risks and uncertainties. Accordingly, any forecasts of market growth included in this Quarterly Report on Form 10-Q should not be taken as indicative of our future growth.
The growth of our marketplace depends in part on the success of our strategic relationships with our Job Distribution Partners and Job Acquisition Partners.
To grow our business and the number of job seekers and employers in our marketplace, we anticipate that we will continue to depend, in part, on relationships with Job Distribution Partners and Job
Acquisition Partners. Job Distribution Partners are third-party sites who have a relationship with us and advertise jobs from our marketplace, and include job boards, search engines, social networks, talent communities and resume services, while Job Acquisition Partners are third-party sites and ATSs who have a relationship with us and from whom we receive jobs for our marketplace. Our competitors may be effective in providing incentives to these Job Distribution Partners to favor their products or services or to prevent or reduce engagement with our marketplace. In addition, acquisitions of our Job Distribution Partners or Job Acquisition Partners by our competitors could reduce the number of our current and potential employers and job seekers as well as the number of job postings accessible by our marketplace. 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. Further, some of our Job Distribution Partners and Job Acquisition Partners offer, or could offer, competing products and services or also work with our competitors. They may also choose to develop alternative products and services in addition to, or in lieu of, our marketplace, either on their own or in collaboration with others, including our competitors.
While these relationships have not generated substantial revenue in recent periods and are not expected to generate substantial revenue in the future, they are strategically important in ensuring an appropriate balance of and interaction between jobs and job seekers in our marketplace. If we are unsuccessful in establishing or maintaining our relationships with our Job Distribution Partners and Job Acquisition Partners, or if such Job Distribution Partners or Job Acquisition Partners choose to end their relationships with us, our ability to compete with our competitors and grow our marketplace could be impaired and our operating results may be negatively impacted.
Our corporate culture has contributed to our success, and if we cannot maintain this culture, we could lose the innovation, creativity, and teamwork fostered by our culture, and our business may be harmed.
We believe that our corporate culture has been a key contributor to our success. If we do not continue to develop our corporate culture, it could harm our ability to foster the innovation, creativity, and teamwork we believe that we need. Over time, we may find it increasingly difficult to maintain the beneficial aspects of our corporate culture, which could negatively impact our future success. Furthermore, we have instituted, and may again in the future institute, restructuring plans, such as the one enacted in May 2023, which may result in increased attrition beyond our intended reduction in force, reduce employee morale, and negatively impact employee recruiting and retention. If we fail to attract new personnel, or fail to retain and motivate our current personnel, our business and growth prospects could be harmed.
Additionally, our hybrid working environment may impede our ability to foster a creative environment and adversely affect the productivity of our team members and overall operations, which could have a material adverse effect on our business, results of operations, financial condition, and future prospects. Our hybrid work approach may change at any time, and may vary among geographies.
Technological advances may significantly disrupt the labor market and weaken demand for human capital at a rapid rate.
Our success is directly dependent on our employers’ demands for talent. As technology continues to evolve, more tasks historically performed by people have been and may continue to be replaced by automation, robotics, AI, including machine learning, and other technological advances outside of our control. This trend poses a risk to the job posting and distribution industry as a whole, particularly in lower-skill job categories that may be more susceptible to such replacement.
Our business is seasonal.
Our business is seasonal, reflecting typical behavior in hiring markets, where hiring activity tends to decelerate in the fourth quarter. Such seasonality also causes our revenue to vary from quarter to quarter
depending on the variability in the overall job market. This seasonality can make forecasting more difficult and may adversely affect our ability to predict financial results accurately.
We track certain performance metrics with internal tools and do not independently verify such metrics. Certain of our performance metrics are subject to inherent challenges in measurement, and real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business.
We track certain performance metrics, including Quarterly Paid Employers and Revenue per Paid Employer, which are not independently verified by any third party. 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. If the internal tools we use to track these metrics undercount or overcount performance or contain algorithmic or other technical errors, the data we report may not be accurate. 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. While we periodically implement new or enhanced information systems in order to better manage our business operations, align our global organizations and enable future growth, implementation of new business processes and information systems requires the commitment of significant personnel, training and financial resources, and entails risks to our business operations. If we do not successfully implement information systems improvements, or if there are delays or difficulties in implementing these systems, we may not realize anticipated productivity improvements or cost efficiencies, and may experience interruptions in service and operational difficulties, including our ability to effectively aggregate financial data and report operating results, and otherwise effectively manage our business. If our performance metrics are not accurate representations of our business, user base, or traffic levels; if we discover material inaccuracies in our metrics; or if the metrics we rely on to track our performance do not provide an accurate measurement of our business, our reputation may be harmed, we may be subject to legal or regulatory actions, and our operating and financial results could be adversely affected.
We derive substantially all of our revenue from job advertisements.
We derive substantially all of our revenue from sales of products and services related to the distribution of job advertisements to job seekers across the internet. As such, any factor adversely affecting the sale of these products and services, including market acceptance, product competition, performance and reliability, reputation, price competition, intellectual property claims, legal or regulatory restrictions, and economic and market conditions, could harm our business and operating results.
Failure to effectively expand our sales and marketing capabilities could harm our ability to increase our user base and achieve broader market acceptance of our services.
Our ability to increase our Paid Employer base and achieve broader market acceptance of our marketplace will depend significantly on our ability to continue to expand our sales and marketing operations. We plan to continue to dedicate significant and increasing resources to sales and marketing programs. 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. All of these efforts will require us to invest significant financial and other resources. If we cannot find efficient ways to deploy our marketing spend or to hire, develop, and retain talented sales personnel in numbers required to maintain and support our growth, if our new sales personnel cannot achieve desired productivity levels in a reasonable period of time, or if our sales and marketing programs are not effective, our ability to increase our Paid Employer base and achieve broader market acceptance of our services could be harmed.
Paid Employers may demand more configuration and integration services, or customized features and functions that we do not offer, which could adversely affect our business and operating results.
Our current and future Paid Employers may demand more configuration and integration services, which would increase our upfront investment in sales and deployment efforts, with no guarantee that these Paid Employers will increase their use of our services. As a result of these factors, we may need to devote a significant amount of sales support and professional services resources to individual Paid Employers, which may increase the cost and time required to complete sales. 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. As a result, we may need to devote resources to continue to develop features and technology which may impact our operating results.
Any failure to offer high-quality technical support services may adversely affect our relationships with our Paid Employers and our financial results.
Once our products and services are deployed, our Paid Employers depend on our technical support organization to assist Paid Employers with service support and optimization, and resolve technical issues. We may be unable to respond quickly enough to accommodate short-term increases in demand for support services. We also may be unable to modify the format of our support services to compete with changes in support services provided by our competitors. Increased demand for these services, without corresponding revenue, could increase costs and adversely affect our operating results. In addition, our sales process is highly dependent on our services and business reputation and on positive recommendations from our existing Paid Employers. Any failure to maintain high-quality technical support, or a market perception that we do not maintain high-quality support, could adversely affect our reputation, our ability to sell our services to existing and prospective Paid Employers, and our business, operating results and financial position.
We have incurred net losses in the past, anticipate increasing our operating expenses in the future, and may not regain or sustain profitability.
While we earned net income of $43.4 million and $38.7 million for the three and six months ended June 30, 2026, respectively, as well as $49.1 million and $61.5 million for the years ended December 31, 2023 and 2022, respectively, we have also incurred significant net losses in other periods, including a net loss of $33.0 million and $12.9 million for the years ended December 31, 2025 and 2024, respectively. As of June 30, 2026, we had an accumulated deficit of $39.7 million. 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. 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. 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 other service providers for certain critical business processes, and any disruption of service from AWS or other critical service providers or material change to our arrangement with AWS or other critical service providers could adversely affect our business.
We currently host our marketplace and support most of our operations using AWS, a provider of cloud infrastructure services, and we use other service providers to provide certain critical business processes. We do not control the operations of AWS’s facilities or the facilities of our other critical service providers. AWS’s and other critical service providers’ facilities are vulnerable to damage or interruption
from earthquakes, hurricanes, floods, fires, cyber security attacks, terrorist attacks, power losses, telecommunications failures, and similar events or could be subject to break-ins, cybersecurity incidents (including unauthorized access to or other compromise of information technology systems and data stored therein), sabotage, intentional acts of vandalism, and other misconduct. The occurrence of any of these events, a decision to close the facilities or cease or limit providing services to us without adequate notice, or other unanticipated problems could result in interruptions to our marketplace, which may be lengthy. Our marketplace’s continuing and uninterrupted performance is critical to our success and employers and job seekers may become dissatisfied by service interruption. Sustained or repeated system failures could reduce the attractiveness of our marketplace to employers and job seekers, cause employers and job seekers to decrease their use of or stop using our marketplace, and adversely affect our business. Moreover, negative publicity from disruptions could damage our reputation.
AWS and other critical service providers do not have an obligation to renew their respective agreements with us on commercially reasonable terms, or at all. If we cannot renew our agreements or are unable to renew on commercially reasonable terms, we may experience costs or downtime in connection with the transfer to, or the addition of, new cloud infrastructure or other data center or another critical service provider. 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.
Upon expiration or termination of our respective agreement with AWS or other critical service providers, we may not be able to replace the services provided to us in a timely manner or on terms and conditions, including service levels and cost, that are favorable to us, and a transition from one vendor to another vendor could subject us to operational delays and inefficiencies until the transition is complete. Switching our operations from AWS to another cloud or other data center provider would also be technically difficult, expensive, and time consuming.
Many people are using mobile devices to access the internet. If we cannot optimize our websites for mobile access or offer a compelling mobile app, we may not remain competitive and could lose employers and job seekers.
Many employers and job seekers access our marketplace through our mobile website and job seekers also have the ability to access our marketplace through our mobile app. We must ensure that the experience for our mobile offerings is optimized to ensure a positive experience. It requires us to develop and enhance our offerings to be specifically designed for mobile devices, such as social media job postings. If we cannot optimize our websites and apps cost effectively and improve the monetization capabilities of our mobile services, we may not remain competitive, which may negatively affect our business and results of operations.
Additionally, there is no guarantee that job seekers will use our mobile app rather than competing marketplaces. 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. If it is more difficult for employers and job seekers to access and use our app on their mobile devices, our growth and engagement levels could be harmed.
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, our operations may be disrupted, we may incur significant legal costs or liabilities, and our business could be adversely affected.
Our business involves the storage, processing, and transmission of proprietary, confidential, and personal information, and relies on computer systems, hardware, software, technology infrastructure and online sites and networks for both internal and external operations that are critical to our business, or IT Systems. We own and manage some of these IT Systems but also rely on the use of third-party partners and vendors for a range of IT Systems, who also store, process, and transmit user information. We also maintain certain other proprietary and confidential information relating to our business and personal information of our personnel, website visitors and other individuals we interact with. 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. These 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, malicious actors, insufficient access controls and/or end-user or customer account controls and/or security measures, including user or customer account takeovers, credential stuffing, malware (including ransomware), vulnerabilities, malfeasance by insiders, human or technological error or mistake, 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 incidents, 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; damage to our computers or systems or those of our users; or other security incident, data breach, or ransomware. Moreover, we have acquired and continue to acquire companies with cybersecurity vulnerabilities and/or are similarly susceptible to the risks described above, which exposes us to significant cybersecurity, operational, and financial risks.
An increasing number of online services have also disclosed security breaches, some of which involved sophisticated and highly targeted attacks. As threat actors become increasingly sophisticated in using techniques and tools (including AI) that circumvent security controls, evade detection and remove forensic evidence, we may be unable to protect the confidentiality, integrity and/or availability of our IT Systems or confidential information, and may not be able to detect, investigate, remediate or recover from future attacks or incidents, or to avoid a material adverse impact to our IT systems, confidential information or business. Further, as our profile and name recognition increase, we may be targeted more frequently. Additionally, malware, viruses, social engineering (including business email compromise), and general hacking in our industry have become more prevalent and more complex. 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. Threat actors’ techniques change frequently and often are not foreseeable or recognized until launched against a target. As a result, we and our third-party partners and vendors may be unable to anticipate these techniques, implement adequate preventative measures, or investigate, remediate and recover from incidents. If an actual or perceived breach of our or our third-party partners’ or vendors’ security or privacy or other data privacy or security incident occurs, public perception of the effectiveness of our security measures and brand could be harmed, and we could lose users and business.
Data security breaches and other data privacy and security incidents may also result from non-technical means, for example, through human error. Any such security compromise could result in a violation of applicable data privacy, security, breach notification and other laws, regulatory or other governmental investigations, enforcement actions, litigation (including class action litigation), and legal
and financial exposure, including potential contractual liability. We may need to expend significant resources to protect against, and to address issues created by, security breaches and other privacy and security incidents. These liabilities may exceed the amounts covered by our insurance or our insurance coverage may not extend to or be adequate for liabilities actually incurred, or our insurance may not continue to be available to us on economically reasonable terms, or at all. Any such compromise could also result in damage to our reputation, a loss of confidence in our security measures, and an adverse impact on our business.
Changes in laws or regulations relating to data privacy and the protection, collection, storage, processing, transfer, or use of personal information, or any actual or perceived failure by us to comply with such laws and regulations, our privacy policies or other obligations, could adversely affect our business.
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, information security, and the collection, storing, sharing, use, transfer, disclosure, protection, and other processing of personal information. The scope of these laws and regulations is changing, subject to differing interpretations, and may be inconsistent among countries or between U.S. states, or conflict with other laws and regulations.
We are also subject to the terms of our privacy policies and obligations to third parties related to privacy, data protection, and information security. 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. Further, any significant change to applicable laws, regulations, or industry practices regarding the collection, use, retention, security, disclosure or other processing 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, or any limitations on how we can collect, use, process, retain or disclose such data, could increase our costs, limit our development of new services or features, or the taking of new initiatives, and/or require us to modify our services and features, which may be material, limiting or not cost-effective.
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. For example, in 2018, European legislators adopted the General Data Protection Regulation, or the GDPR, which imposes more stringent European Union, or EU, data protection requirements, and provides for significant penalties for noncompliance. The GDPR also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the GDPR. Compliance with the GDPR has been and will continue to be a rigorous process that may increase our cost of doing business or require us to change our business practices, and may subject us to governmental investigations or enforcement actions, fines and penalties, claims, litigation, and reputational harm in connection with any European activities. Further, the United Kingdom, or the UK, has enacted the UK GDPR, which, together with the amended UK Data Protection Act 2018, or DPA, and the UK Data Use and Access Act 2025, retains the GDPR in UK national law. Fines for certain breaches of the GDPR and the UK data protection regime are significant (e.g., fines for certain breaches of the GDPR or the UK GDPR are up to the greater of 20 million Euros (or 17.5 million GBP under the UK GDPR) or 4% of total global annual turnover), and since we are under the supervision of relevant data protection authorities in both the EU and the UK, we may be fined under both the GDPR and the UK GDPR for the same breach.
Additionally, the California Consumer Privacy Act, or CCPA, which afforded new data privacy rights for consumers and new operational requirements for companies, came into force in 2020, and also provides for fines for noncompliance. The California Privacy Rights Act, or CPRA, which took effect on 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 and which has implemented additional rules, including in the areas of cybersecurity audits, risk assessment, and automated decision-making technology. Comprehensive privacy legislation has also been enacted and taken effect in more than one-third of U.S. states and each imposes similar, but not identical, compliance obligations. Similar laws have been proposed in many other states and at the federal level as well, which may impose significant obligations and restrictions. 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 costs of compliance with, and other burdens imposed by, data privacy, data protection and information security requirements, laws, and regulations may limit the use and adoption of our products and services and could have an adverse impact on our business. As a result, we may need to modify the way we treat, process, or store such information or offer our products and services.
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, 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. Furthermore, the costs of compliance with such laws, regulations and policies may limit the adoption and use of, and reduce the overall demand for, our marketplace.
Our business uses AI Technologies, and the deployment, use and maintenance of these technologies involve significant technological and legal risks.
We use AI and machine learning technologies, or AI Technologies, throughout our business and are making significant investments in this area. For example, we use AI Technologies within our platform to actively connect employers and job seekers, to help retrieve and appropriately display search results, to optimize job matches and recommendations, and to improve the services we provide. As with many technological innovations, there are significant risks involved in developing, maintaining and deploying these technologies and there can be no assurance that the usage of or our investments in such technologies will always enhance our products or services or be beneficial to our business, including our efficiency or profitability. In particular, if the models underlying these AI Technologies are: (i) incorrectly designed or implemented; (ii) trained or reliant on incomplete, inadequate, inaccurate, flawed, biased or otherwise poor quality data, or on data to which we do not have sufficient rights or in relation to which we and/or the providers of such data have not implemented sufficient legal compliance measures; (iii) used without sufficient oversight and governance to ensure their responsible use; (iv) providing outputs that are flawed, biased, discriminatory, inflammatory, unfair, or untruthful; and/or (v) adversely impacted by unforeseen defects, technical challenges, cybersecurity threats or material performance issues, the performance of our products, services and business, as well as our reputation, including as a result of ethical concerns, could suffer or we could incur liability resulting from the violation of laws or contracts to which we are a party or civil claims.
We are in varying stages of development in relation to our products and internal business processes involving AI Technologies. The continuous development, maintenance and operation of our AI Technologies is expensive and complex, and may involve unforeseen difficulties including material performance problems, undetected defects or errors. We may not be successful in our ongoing development and maintenance of these technologies in the face of novel and evolving technical, reputational and market factors. Our efforts to develop proprietary AI models could increase our operating costs. Our ability to develop proprietary AI models may be limited by our access to processing infrastructure or training data, and we may be dependent on third-party providers for such resources.
Further, our ability to continue to develop or use such technologies may be dependent on access to specific third-party software, services and infrastructure, such as processing hardware, and we cannot control the availability or pricing of such third-party software and infrastructure, especially in a highly competitive environment.
In addition to our proprietary AI Technologies, we use AI Technologies licensed from third parties in our technologies or internal business operations, and our ability to continue to use such technologies at the scale we need may be dependent on access to specific third-party software and infrastructure and our ability to adopt such AI Technologies. We cannot control the availability or pricing of such third-party AI Technologies, especially in a highly competitive environment, and we may be unable to negotiate favorable economic terms with the applicable providers or unable to control the data processing, security, or other practices of these AI Technologies. If any such third-party AI Technologies become incompatible with our solutions or unavailable for use, or if the providers of such models unfavorably change the terms on which their AI Technologies are offered or terminate their relationship with us, or if we fail to rapidly adopt such AI Technologies, our solutions may become less appealing to our customers and our business will be harmed. In addition, to the extent any third-party AI Technologies are used as a hosted service, any disruption, outage, loss of information, or mishandling of data through such hosted services could disrupt our operations or solutions, damage our reputation, cause a loss of confidence in our solutions, or result in legal claims or proceedings, for which we may be unable to recover damages from the affected provider.
In particular, we incorporate generative AI Technologies (i.e., AI Technologies that can produce and output new content, software code, data and information) into our services and internal business practices. There is a risk that generative AI Technologies could produce inaccurate or misleading content or other discriminatory or unexpected results or behaviors, such as hallucinatory behavior that can generate irrelevant, nonsensical, or factually incorrect results, all of which could harm our reputation, business, or customer relationships. While we take measures designed to ensure the accuracy and safety of such AI-generated content, those measures may not always be successful, and in some cases, we may need to rely on end users to report such inaccuracies. In addition, we may experience difficulties in enforcing the intellectual property rights in output generated by generative AI Technologies. The United States Copyright Office has previously denied copyright protection for content generated by AI Technologies, and the United States Patent and Trademark Office has similarly stated that an AI tool cannot be an “inventor” of a patent, rendering it impossible to obtain patent protection for inventions created solely by AI Technologies.
Further, if we are deemed to not have sufficient rights to the data we use to train our generative AI Technologies, we may be subject to litigation by the owners of the content or other materials that comprise such data, similar to the litigation that is currently pending in various U.S., UK, and EU national courts against other developers of generative AI Technologies, and in which the outcome of such litigation is uncertain.
The regulatory framework for AI Technologies is rapidly evolving and uncertain, and current and future laws and regulations could require us to expend significant resources to comply with, and any failure to comply with such laws and regulations could materially adversely affect our business.
The regulatory framework for AI Technologies is rapidly evolving as many federal, state and foreign government bodies and agencies have enacted or are currently considering laws and regulations governing AI. Additionally, existing laws and regulations may be interpreted or enforced in ways that would affect our use of AI Technologies. As a result, implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, and we cannot predict the impact future laws, regulations, or standards, or the market perception of their requirements, may have on our business or how we will respond to these laws or regulations.
Several U.S. and European jurisdictions currently or will soon regulate specific uses of AI Technologies. For example, New York City currently regulates the use of automated employment decision tools by employers and employment agencies; Utah regulates disclosures for the use of generative AI Technologies; Illinois regulates AI Technologies in employment decision-making process; Colorado regulates the use of automated decision-making technologies (ADMT) in consequential decisions, and Texas prohibits specific AI Technologies use cases (including those developed or deployed with the intent of unlawfully discriminating against a protected class under federal or state law). California has also enacted several new AI laws that further regulate use of AI Technologies and provide consumers with additional protections around companies’ use of AI Technologies, such as requiring companies to disclose certain uses of AI Technologies and the types of data used to train such AI models. Relatedly, various state laws including the CCPA regulate the use of automated decision making technology that results in legal or similarly significant effects on individuals, and provide rights to individuals with respect to that automated decision making.
In the EU, the Artificial Intelligence Act, or the EU AI Act, entered into force in August 2024. The EU AI Act seeks to create a comprehensive legal framework for the regulation of AI systems across the EU. In July 2026, the Digital Omnibus on AI entered into force, deferring obligations for high-risk AI systems to December 2027 (for high-risk AI systems described in Annex III, including those related to recruitment) and August 2028 (for high-risk AI systems described in Annex I, including those embedded in regulated products). Transparency obligations for providers and deployers of certain AI systems, including generative and interactive AI systems and deepfakes, took effect in August 2026. Once fully applicable, the EU AI Act will have a material impact on the way AI is regulated in the EU, including, for certain types of AI systems, requirements around transparency, conformity assessments and monitoring, risk assessments, human oversight, security, accuracy, general purpose AI and foundation models, and fines for breach of up to 7% of worldwide annual turnover. Failure to comply with such laws or regulations could subject us to legal or regulatory liability. Further, the cost to comply with such laws or regulations could be significant and would increase our operating expenses, which could adversely affect our business, financial condition and results of operations.
The regulatory framework for AI Technologies has also already shifted significantly as the technology and regulatory approaches to it continue to evolve. For example, in July 2025, the Trump Administration issued America’s AI Action Plan focusing on the three pillars of innovation, infrastructure, and international diplomacy and security in AI, and seven underlying principles. In December 2025, the Trump Administration issued another executive order establishing a federal policy favoring a uniform national AI regulatory framework designed to promote innovation and U.S. global competitiveness and directing federal agencies to identify, challenge, and potentially pre-empt state and local AI laws that are viewed as inconsistent with or burdensome to this national approach. The White House also released a National Policy Framework for Artificial Intelligence in March 2026 that calls for broad federal preemption of existing state AI laws while taking a “light-touch” regulatory approach using existing agencies. The release of this framework follows the release of a discussion draft of Senator Marsha Blackburn’s TRUMP AMERICA AI Act, which would represent the most comprehensive piece of federal AI legislation proposed in the U.S.
It remains to be seen how agencies will effectuate this directive, and how states will approach AI legislation moving forward, and the Trump Administration may continue to rescind other existing federal orders and/or administrative policies relating to AI Technologies, may implement new executive orders and/or other rule making relating to AI Technologies in the future, and may seek to enjoin state laws regulating AI in judicial proceedings. Any such changes at the federal level could require us to expend significant resources to modify our products, services, or operations to ensure compliance with old frameworks or meet new obligations.
Failure to comply with anti-corruption and anti-money laundering laws, including the Foreign Corrupt Practices Act, or FCPA, and similar laws associated with our activities outside of the United States, could subject us to penalties and other adverse consequences.
We have voluntarily implemented policies and procedures designed to allow us to comply with U.S. economic sanctions laws and prevent our marketplace from being used to facilitate business in countries
or with persons or entities included on designated lists promulgated by the U.S. Department of the Treasury’s Office of Foreign Assets Control, or OFAC, and equivalent foreign authorities. We may be subject to fines or other penalties in one or more jurisdictions levied by federal, state or local regulators, in the event that we engage in any conduct, intentionally or not, that facilitates money laundering, terrorist financing, or other illicit activity, or that violates sanctions or otherwise constitutes sanctionable activity.
Regulators continue to increase their scrutiny of compliance with these obligations, which may require us to further revise or expand our compliance program, including the procedures that we use to verify the identity of our users and to monitor our marketplace for potential illegal activity. 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. Given the technical limitations in developing controls to prevent, among other things, the ability of users to publish in our marketplace false or deliberately misleading information or to develop sanctions-evasion methods, it is possible that we may inadvertently and without our knowledge provide services to individuals or entities that have been designated by OFAC or are located in a country subject to an embargo by the United States that may not be in compliance with the economic sanctions regulations administered by OFAC.
Consequences for failing to comply with applicable rules and regulations could include fines, criminal and civil lawsuits, forfeiture of significant assets, or other enforcement actions. We could also be required to make changes to our business practices or compliance programs as a result of regulatory scrutiny. 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.
We are also subject to the FCPA, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, and the UK Bribery Act 2010, and other anti-bribery, anti-money laundering, and sanctions laws in countries in which we conduct activities or have employers and job seekers. The FCPA prohibits providing, offering, promising, or authorizing, directly or indirectly, anything of value to non-U.S. government officials, political parties, or political candidates for the purposes of obtaining or retaining business or securing any improper business advantage. The provisions of the Bribery Act extend beyond bribery of government officials and create offenses in relation to commercial bribery including private sector recipients. The provisions of the Bribery Act also create offenses for accepting bribes in addition to bribing another person. We face significant risks if we cannot comply with the FCPA, the Bribery Act and other applicable anti-corruption laws.
Public companies listed in the United States are required to maintain records that accurately and fairly represent their transactions and have an adequate system of internal accounting controls. We maintain internal controls, policies, procedures and/or training to ensure compliance by us and our directors, officers, employees, agents, and contractors with the FCPA, the Bribery Act, and other applicable anti-corruption laws. We cannot ensure that all of our employees, employers and job seekers, and agents, as well as those contractors to which we outsource certain of our business operations, will not take actions in violation of our policies, internal controls, procedures or agreements and applicable law, for which we may be ultimately held responsible.
Any violation of the FCPA, the Bribery Act, other applicable anti-corruption laws, and other laws could result in investigations and actions by federal or state attorneys general or foreign regulators, loss of export privileges, severe criminal or civil fines and penalties or other sanctions, forfeiture of significant assets, debarment from government contracts, whistleblower complaints, and adverse media coverage,
which could have an adverse effect on our reputation, business, operating results, and prospects. In addition, responding to any enforcement action or internal investigation related to alleged misconduct may result in a significant diversion of management’s attention and resources and significant defense costs and other professional fees.
We are subject to a wide variety of foreign and domestic laws. As we look to expand our international footprint over time and as new domestic laws are implemented, we may become obligated to comply with additional laws and regulations of the countries or markets in which we operate or have employers and job seekers.
We and our employers and job seekers are subject to a wide variety of foreign and domestic laws. 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. Many of these laws do not contemplate or address the unique issues of the internet, mobile, and related technologies. Other laws and regulations in response to internet, mobile, and related technologies may also be adopted, implemented, or interpreted to apply to us and other online services marketplaces or our users. Likewise, these laws affect our users, and their application, or uncertainty around their application, may affect demand for our marketplace.
Further, in June 2024, the U.S. Supreme Court reversed its longstanding approach under the Chevron doctrine, which provided for judicial deference to regulatory agencies. As a result of this decision, we cannot be sure whether there will be increased challenges to existing agency regulations or how lower courts will apply the decision in the context of other regulatory schemes without more specific guidance from the U.S. Supreme Court. For example, the U.S. Supreme Court’s decision could significantly impact consumer protection, advertising, privacy, AI, anti-corruption and anti-money laundering practices and other regulatory regimes with which we are required to comply.
New approaches to policymaking and legislation may also produce unintended harms for our business, which may impact our ability to operate our business in the manner in which we are accustomed. Any of these regulations could negatively impact our users, including perceptions regarding their use of our marketplace, or have a material adverse effect on the demand for job postings in our marketplace or on how we operate our marketplace.
As we look to expand our international footprint over time, we may become obligated to comply with additional laws and regulations of the countries or markets in which we operate or have customers or job seekers. We may be harmed if we are found to be subject to new or existing laws and regulations or if those laws are interpreted and applied to us in a manner that harms our business or is inconsistent with the application of U.S. laws, including with respect to those subjects mentioned above. In addition, contractual provisions that are designed to protect and mitigate against risks, including terms of service, arbitration and class action waiver provisions, disclaimers of warranties, limitations of liabilities, releases of claims, and indemnification provisions, could be deemed unenforceable as to the application of these laws and regulations by a court, arbitrator, or other decision-making body. If we cannot comply with these laws and regulations or manage the complexity of global operations and support an international user base successfully or cost effectively, or if these laws and regulations are deemed to apply to our users or cause a decline in demand for our marketplace, our business, operating results, and financial condition could be adversely affected.
We face payment and fraud risks that could adversely impact our business.
Requirements in our marketplace relating to user authentication and fraud detection are complex. If our user authentication and fraud detection measures are not effective, our marketplace may be perceived as not being secure, our reputation may be harmed, and our business may be adversely impacted. In addition, bad actors use increasingly sophisticated methods to engage in illegal activities involving personal information, such as unauthorized or fraudulent use of another’s identity, payment information, or other information; misrepresentation of the user’s identity or skills, including using accounts that they have purchased, sold, or leased; and acquisition or use of credit or debit card details and bank account information. 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 Financial Protection and Innovation may require us to hold cash reserves;
•we may be subject to additional risk and liability exposure, including for negligence, fraud, or other claims, if employees or third-party service providers fraudulently misappropriate our banking or other information or user information;
•employers and job seekers that are subjected or exposed to the unlawful or improper conduct of other employers and job seekers or other third parties, or law enforcement or administrative agencies, may seek to hold us responsible for the conduct of employers and job seekers, lose confidence in our marketplace, decrease or cease use of our marketplace, seek to obtain damages and costs, or impose fines and penalties;
•we may be subject to additional risk if employers in our marketplace cannot pay hired job seekers for services rendered, as such job seekers may seek to hold us responsible for the employers’ 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.
Despite measures we have taken to detect, prevent, and mitigate these risks, we do not have control over the employers and job seekers in our marketplace and cannot ensure that any of our measures will stop or minimize the use of our marketplace for, or to further, illegal or improper purposes. We may receive complaints from employers, job seekers and other third parties concerning misuse of our marketplace and wrongful conduct of other employers and job seekers. We may also bring claims against employers and job seekers and other third parties for their misuse of our marketplace in the future. Even if these claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the attention and resources of our management and adversely affect our business and operating results.
We plan to expand our international operations which could subject us to additional costs and risks, and our continued expansion internationally may not be successful.
We plan to expand our operations internationally in the future. Outside of the United States, we currently have operations in the United Kingdom, Israel, and Canada. 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.
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 any international expansion, and it may not be successful. We have limited experience with regulatory environments and market practices internationally, and we may not be able to penetrate or successfully operate in new markets. We also have more limited brand recognition in certain parts of the world, leading to delayed acceptance of our marketplace by international employers and job seekers. If we cannot continue to expand internationally and manage the complexity of our global operations successfully, our financial condition and operating results could be adversely affected.
Privacy concerns and laws or other domestic or foreign regulations may reduce the effectiveness of our marketplace, disrupt our communication processes, and adversely affect our business.
In order to use our marketplace, employers, job seekers, and, to a lesser extent, other third parties including advertisers, partners, and our own employees, entrust us to collect, use, and store their personal information. Our ability to leverage this information and to effectively and efficiently provide our services, including by communicating electronically and otherwise with employers and job seekers of our marketplace, is critical to our business. By way of example, our services may include the sending and receiving of emails, SMS/text messages, in-platform messages, and push notifications on mobile devices.
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. A perception or determination that we have violated laws or other legal requirements relating to our communications, such as the Telephone Consumer Protection Act (TCPA), could also result in claims against us (including class actions), which could be costly to litigate, whether or not they have merit, and could expose us to significant damage awards, fines and other penalties that could, individually or in the aggregate, materially harm our business. In addition, the costs of compliance with, and other burdens imposed by, such laws and regulations that are applicable to the businesses of our employers and job seekers may limit the use of our marketplace and reduce overall demand, or lead to significant fines, penalties or liabilities for any noncompliance with such privacy laws. Moreover, third-party gatekeepers and service providers and their interpretation and application of privacy and data protection laws, rules, regulations, and best practices, may limit, disrupt, or require alteration of our operations, service offerings, and ability to communicate with and among employers and job seekers, and may adversely affect our business.
From time to time, we may be subject to legal proceedings, regulatory disputes, and governmental investigations that could cause us to incur significant expenses, divert our management’s attention, and materially harm our business, financial condition, and operating results.
From time to time, we may be subject to claims, lawsuits (including class actions), government investigations, arbitrations and other proceedings involving competition and antitrust, intellectual property, privacy (including claims that the collection or provision of certain information, including personal information, by us or by third parties with whom we interact breached laws or regulations relating to privacy or data protection), consumer protection, securities, tax, labor and employment, commercial disputes (including claims relating to our marketplace functionality), and other matters that could adversely affect our business operations and financial condition. For example, in June 2026, a purported stockholder of the Company filed a complaint against certain current and former directors of the Company and the Company, generally alleging breaches of the directors’ fiduciary duties in connection with the Company’s share repurchase program authorized by the Company’s board of directors. 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. If we do not prevail in litigation, we could incur substantial liabilities. We may also determine in certain instances that a settlement may be a more cost-effective and efficient resolution for a dispute. Any applicable insurance policies may be inadequate or may not be available in the future on acceptable terms, or at all, and such policies may not cover all claims made against us.
Where we can make a reasonable estimate of the liability relating to pending litigation and determine that it is probable, we record a related liability. 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. The results of legal and regulatory proceedings cannot be predicted with certainty, and determining reserves for pending litigation and other legal and regulatory matters requires significant judgment. There can be no assurance that our expectations will prove correct, and even if these matters are resolved in our favor or without significant cash settlements, these matters, and the time and resources necessary to litigate or resolve them, could harm our business. Any adverse determination related to legal proceedings or a settlement agreement could require us to change our technology or our business practices in costly ways, prevent us from offering certain products or services, require us to pay monetary damages, fines, or penalties, or require us to enter into royalty or licensing arrangements, and could adversely affect our operating results and cash flows, harm our reputation, or otherwise negatively impact our business.
Our failure or inability to protect our intellectual property rights, or claims by others that we are infringing upon or unlawfully using their intellectual property, could diminish the value of our brand and weaken our competitive position, and adversely affect our business, financial condition, operating results, and prospects.
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, patent, trade secret, and unfair competition laws, as well as confidentiality agreements and procedures and licensing arrangements, to establish and protect our IPR. We have devoted substantial resources to the development and protection of our IPR. As a part of our efforts to protect our IPR, we require employees and contractors who may be involved in the creation or development of intellectual property to enter into invention assignment agreements assigning ownership of such IPR to us. To protect our proprietary technologies and information, we rely in part on trade secret laws and confidentiality agreements with our employees, licensees, independent contractors, commercial partners, and other third parties with whom we have a relationship. While these agreements will give us contractual remedies upon any unauthorized use or disclosure of our IPR or proprietary information, these agreements may not effectively prevent disclosure or use of our IPR or proprietary information, and we cannot guarantee that we will be able to detect such unauthorized disclosures or use.
We have filed trademark, copyright and patent applications to protect certain aspects of our IPR; however, we cannot guarantee that we will be successful in registering our trademarks, copyrights or patents. Additionally, the process of obtaining protection for trademarks, copyrights, patents 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. Moreover, intellectual property protection may be unavailable or limited in some foreign countries where laws or law enforcement practices may not protect our IPR as fully as in the United States, and it may be more difficult for us to successfully challenge the unauthorized use of our IPR by other parties in these countries. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our IPR, and our failure or inability to obtain or maintain IPR protection or otherwise protect our IPR could adversely affect our business.
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. Companies in the technology industry and other patent, copyright, and trademark holders seeking to profit from royalties in connection with grants of licenses own large numbers of patents, copyrights, trademarks, domain names, and trade secrets and frequently commence litigation based on allegations of infringement, misappropriation, or other violations of intellectual property or other rights. For instance, though an issued patent is presumed valid and enforceable, its issuance is not conclusive as to its validity or its enforceability and it may not provide us with adequate proprietary protection or competitive advantages against competitors with similar products. Proceedings challenging our patents, trademarks, or other IPR could result in either loss of the IPR or denial of the application or loss or reduction in the scope of protection provided by such IPR.
Further, from time to time, we may receive letters from third parties alleging that we are infringing upon their IPR or inviting us to license their IPR. 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. As we face increasing competition and gain an increasingly high profile, the likelihood of intellectual property infringement claims against us has grown and will likely continue to grow. While it is our policy to protect and defend our IPR, we cannot predict whether steps taken by us to protect our intellectual property will be adequate to prevent infringement, misappropriation, dilution or other violations of our IPR.
Additionally, we may in the future bring claims against third parties for infringing our IPR. Costs of supporting such litigation and disputes may be considerable, and there can be no assurances that a favorable outcome will be obtained. 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 use open source software in our services and will continue to use open source software in the future. Use and distribution of open source software may entail greater risks than use of third-party commercial software, as open source licensors generally do not provide support, warranties, indemnification or other contractual protections regarding infringement claims or the quality of the code, and such open source software may not be regularly maintained and updated in order to contain and patch possible security vulnerabilities. To the extent that our services depend upon the successful operation of open source software, any undetected errors or defects in this open source software could prevent the deployment or impair the functionality of our platform, delay new solutions introductions, result in a failure of our platform, and injure our reputation. Some open source licenses contain requirements that we make available source code for modifications or derivative works we create based upon the type of open source software we use, or grant other licenses to our intellectual property. If we combine our proprietary software with such open source software in a certain manner, we could, under certain open source licenses, be required to release or license the source code of our proprietary software to the public. Although we monitor our use of open source software to avoid subjecting our platform to conditions we do not intend, we cannot assure that our processes for controlling our use of open source software in our platform will be effective.
We rely on products, technologies and intellectual property that we license from third parties for use in our services, and that may not be easily replaceable. We cannot assure that these third-party licenses, or support for such licensed products and technologies, will continue to be available to us on commercially reasonable terms, if at all. We also cannot be certain that our licensors are not infringing the intellectual property rights of others or that our suppliers and licensors have sufficient rights to the technology in all jurisdictions in which we may operate. If we are unable to obtain or maintain rights to any of this technology because of intellectual property infringement claims brought by third parties against our suppliers and licensors or against us, or if we are unable to continue to obtain the technology or enter into new agreements on commercially reasonable terms for use of such technology, our ability to develop and offer our products and services containing that technology could be severely limited and our business could be harmed. Additionally, if we are unable to obtain necessary technology from third parties, we may be forced to acquire or develop alternate technology, which may require significant time and effort and may be of lower quality or performance standards. This would limit and delay our ability to provide new or competitive offerings and increase our costs. If alternate technology cannot be obtained or developed, we may not be able to offer certain functionality as part of our offerings, which could adversely affect our business, financial condition and results of operations.
Adverse tax laws or regulations could be enacted or existing laws could be applied to us or our employers and job seekers, which could increase the costs of our services and adversely impact our business.
The application of federal, state, local and international tax laws to services provided electronically is evolving. New income, sales, use or other tax laws, statutes, rules, regulations or ordinances could be enacted at any time (possibly with retroactive effect), and could be applied solely or disproportionately to services provided over the internet. 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.
In addition, existing tax laws, statutes, rules, regulations or ordinances could be interpreted, changed, modified or applied adversely to us (possibly with retroactive effect), which could require us or our employers and job seekers to pay additional tax amounts, as well as require us or our employers and job
seekers to pay fines or penalties and interest for past amounts. If we are unsuccessful in collecting such taxes from our employers and job seekers, we could be held liable for such costs, thereby adversely impacting our operating results and cash flows.
Furthermore, the Inflation Reduction Act imposes a 1% non-deductible excise tax on the fair market value of any stock repurchased by a publicly traded domestic corporation during any taxable year, with the fair market value of such repurchased stock reduced by the fair market value of certain stock issued by such corporation during such taxable year. 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 business is vulnerable to damage or interruption from earthquakes, fires, floods, power losses, telecommunications failures, terrorist attacks, acts of war, human errors, break-ins, public health crises such as global pandemics, and similar events. Additionally, the third-party systems and operations, such as the data centers and online services we use in our company operations, are subject to similar risks. Our insurance policies may not cover losses from these events or may provide insufficient compensation that does not cover our total losses. 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. Such events have impacted, and could in the future impact, demand for products sold in our marketplace, which in turn could adversely affect our revenue and results of operations. In addition, acts of terrorism, which may be targeted at metropolitan areas that have higher population density than rural areas, could also cause disruptions in our business or the economy as a whole. Our corporate offices and our primary data center facilities are located in California, a state that frequently experiences earthquakes and wildfires, such as the wildfires which occurred in the Los Angeles area in January 2025. We may not have sufficient protection or recovery plans. As we rely heavily on our data center facilities, computer and communications systems, and the internet to conduct our business and provide high-quality user service, these disruptions could negatively impact our ability to run our business.
Our indebtedness could adversely affect our liquidity and financial condition.
We had $255.4 million of indebtedness (excluding intercompany indebtedness) as of June 30, 2026. 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.
In addition, the indenture governing the remaining $255.4 million aggregate principal amount of our outstanding senior unsecured notes that we issued in January 2022 contains restrictive covenants that
limit our ability to engage in activities that may be in our long-term best interest. Our failure to comply with those covenants could result in an event of default under the indenture governing the senior unsecured notes which, if not cured or waived, could result in the acceleration of substantially all of our indebtedness.
We may not be able to generate sufficient cash to service all of our indebtedness, and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.
Our ability to make scheduled payments on or to refinance our debt obligations depends on our financial condition and results of operations, which in turn are subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond our control. We may not be able to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness.
If our cash flows and capital resources are insufficient to fund our debt service obligations, we could face substantial liquidity problems and may be forced to reduce or delay investments and capital expenditures, or to sell assets, seek additional capital or restructure or refinance our indebtedness. 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. The terms of existing or future debt instruments may restrict us from adopting some of these alternatives. In addition, any failure to make payments of interest and principal on our outstanding indebtedness on a timely basis would likely result in a reduction of our credit rating, which could harm our ability to incur additional indebtedness. In the absence of such cash flows and resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations.
Further, any future credit facility or other debt instrument may contain provisions that will restrict our ability to dispose of assets and use the proceeds from any such disposition. We may not be able to consummate those dispositions or to obtain the proceeds that we could realize from them and these proceeds may not be adequate to meet any debt service obligations then due. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations.
If we cannot make the scheduled payments on our debt, we will be in default and, as a result, the holders of the senior unsecured notes could declare all outstanding principal and interest to be due and payable and we could be forced into bankruptcy or liquidation, which could result in an adverse impact to your investment in our company.
Covenants in our indenture may restrict our operations, and if we do not effectively manage our business to comply with these covenants, our financial condition could be adversely impacted.
We entered into an indenture in January 2022, which governs the senior unsecured notes. Such indenture contains various restrictive covenants, including, among other things, net leverage ratio requirements, and restrictions on our ability to dispose of assets, make acquisitions or investments, incur debt or liens, make distributions to our stockholders, or enter into certain types of related party transactions. These restrictions may restrict our current and future operations, particularly our ability to respond to certain changes in our business or industry, or take future actions. See the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources” for additional information.
Our ability to meet these restrictive covenants can be impacted by events beyond our control and we may be unable to do so. The indenture governing the senior unsecured notes provides that our breach or failure to satisfy certain covenants constitute an event of default. Upon the occurrence of an event of default, holders of the senior unsecured notes could declare all outstanding principal and interest to be due and payable. If the senior unsecured notes were to be accelerated, we may not have sufficient cash
on hand or be able to sell sufficient collateral to repay such debts, which would have an immediate adverse effect on our business, liquidity, and financial condition.
We may engage in merger and acquisition activities, which could require significant management attention, disrupt our business, dilute stockholder value, consume resources that are necessary to sustain our business, and adversely affect our operating results.
As part of our business strategy, we may make investments in other companies, products, or technologies. For example, in July 2024, we acquired 100% of the outstanding share capital in Breakroom. Additionally, at any given time, we may be engaged in discussions or negotiations with respect to one or more of these types of transactions. Any acquisition, investment, or business relationship may result in unforeseen or additional operating difficulties, risks, and expenditures. We may not be able to find suitable acquisition candidates and we may not be able to complete acquisitions on favorable terms, if at all. If we do complete acquisitions in the future, we may not ultimately strengthen our competitive position or achieve our goals, and any acquisitions we complete could be viewed negatively by employers and job seekers. 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.
We may in the future seek to acquire or invest in additional businesses, products, technologies, or other assets. We also may enter into relationships with other businesses to expand our marketplace or our ability to provide our marketplace in foreign jurisdictions, which could involve preferred or exclusive licenses, additional channels of distribution, discount pricing, or investments in other companies. Negotiating these transactions can be time consuming, difficult, and expensive, and our ability to close these transactions may often be subject to approvals that are beyond our control. Consequently, these transactions, even if undertaken and announced, may not close. Acquisitions may disrupt our ongoing operations, divert management from their primary responsibilities, dilute our corporate culture, subject us to additional liabilities, increase our expenses, and adversely impact our business, financial condition, operating results, and cash flows. We may not successfully evaluate or use the acquired technology and accurately forecast the financial impact of an acquisition transaction, including accounting charges. We may have to pay cash, incur debt, or issue equity securities to pay for any such acquisition, each of which could affect our financial condition, result in dilution to our stockholders or increase our fixed obligations.
We may require additional capital to support business growth and objectives, and this capital might not be available to us on reasonable terms, if at all, and may result in stockholder dilution.
We expect that our existing cash, cash equivalents, and marketable securities will be sufficient to meet our anticipated cash needs for the foreseeable future. However, we intend to continue to make investments to support our business growth and may require additional capital to fund our business and to respond to competitive challenges, including the need to promote and enhance our marketplace, develop new products and services, enhance our operating infrastructure, and potentially to acquire complementary businesses and technologies. Accordingly, we may need to engage in equity or debt financings to secure additional funds. There can be no assurance that such additional funding will be available on terms attractive to us, or at all, especially during periods of negative economic conditions, which could make it more difficult or impossible for us to obtain funding to support business growth and our objectives, including making additional investments in our products and for repaying outstanding indebtedness. Our inability to obtain additional funding when needed could have an adverse effect on our business, financial condition, and operating results. If additional funds are raised through the issuance of equity or convertible debt securities, holders of our Class A common stock could suffer significant dilution, and any new shares we issue could have rights, preferences, and privileges superior to those of our Class A common stock. Additionally, a substantial number of shares of our common stock are available for future sale pursuant to stock options, restricted stock units, or issuance pursuant to our equity incentive plans and employee stock purchase plan. Any debt financing secured by us in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational
matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions.
The requirements of being a public company, including maintaining adequate internal control over our financial and management systems, may strain our resources, divert management’s attention, and affect our ability to attract and retain executive management and qualified board members.
We are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, the rules subsequently implemented by the Securities and Exchange Commission, or SEC, the rules and regulations of the listing standards of the New York Stock Exchange and other applicable securities rules and regulations. 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. Moreover, the Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures, and internal control over financial reporting. We are required to make a formal assessment and provide an annual management report on the effectiveness of our internal control over financial reporting. We have not identified any material weaknesses in our internal control over financial reporting during 2025, 2024, and 2023. 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.
Further, weaknesses in our disclosure controls and internal control over financial reporting may be discovered in the future. Any failure to develop or maintain effective controls or any difficulties encountered in their implementation or improvement could harm our business or cause us to fail to meet our reporting obligations and may result in a restatement of our financial statements for prior periods. Any failure to implement and maintain effective internal control over financial reporting could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we are required to include in our periodic reports filed with the SEC. Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors to lose confidence in our reported financial and other information, which would likely have a negative effect on our stock price.
The rules and regulations applicable to public companies, and stockholder litigation brought against 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.
Our reported financial results may be adversely affected by changes in accounting principles generally accepted in the United States.
Generally accepted accounting principles in the United States are subject to interpretation by the Financial Accounting Standards Board (FASB), the SEC, and various bodies formed to promulgate and interpret appropriate accounting principles. A change in these principles or interpretations could have a significant effect on our reported financial results and could affect the reporting of transactions completed before the announcement of a change.
If our estimates or judgments relating to our critical accounting policies prove to be incorrect, our operating results could be adversely affected.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. The results of these estimates form the basis
for making judgments about the carrying values of assets, liabilities, and stockholders’ equity/deficit, and the amount of revenue and expenses that are not readily apparent from other sources. 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.
Fluctuations in currency exchange rates could harm our operating results and financial condition.
Transactions generated in countries other than the United States as well as those incurred by our international subsidiaries are often denominated in the currencies of the local countries. As a result, our consolidated U.S. dollar financial statements are subject to fluctuations due to changes in exchange rates as the financial results of our international subsidiaries are translated from local currencies into U.S. dollars. Our financial results are also subject to changes in exchange rates that impact the settlement of transactions in non-local currencies. To date, we have not engaged in currency hedging activities to limit the risk of exchange fluctuations and, as a result, our financial condition and operating results could be adversely affected by such fluctuations.
Risks Related to the Ownership of Our Class A Common Stock
Market volatility may affect the value of an investment in our Class A common stock, could subject us to litigation and could adversely affect our ability to meet New York Stock Exchange, or NYSE, listing requirements.
Technology stocks have historically experienced high levels of volatility. The price of our Class A common stock is volatile and also could be subject to wide fluctuations in response to the risk factors described in this Quarterly Report on Form 10-Q 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.
Furthermore, the stock market has experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies and financial services and technology companies in particular. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. These broad market and industry fluctuations, as well as general economic, political, and market conditions such as recessions, interest rate changes, or international currency fluctuations, may negatively impact the market price of our Class A common stock. In the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could harm our business.
Additionally, significant declines in our stock price could cause us to fail to satisfy the continued listing requirements of the NYSE, such as the average closing price requirement, and in such case, the NYSE may take steps to delist our Class A common stock. In such event, we can provide no assurance that any action taken by us to restore compliance with listing requirements would allow our Class A common stock to become listed again, stabilize the market price or improve the liquidity of our Class A common stock, prevent our Class A common stock from dropping below the NYSE average closing price requirement or prevent future non-compliance with the NYSE’s listing requirements.
The dual class structure of our common stock has resulted in concentration of voting control with our chief executive officer. This ownership will limit or preclude your ability to influence corporate matters, including the election of directors and the approval of any change of control transaction.
Our Class B common stock has twenty votes per share and our Class A common stock has one vote per share. As of June 30, 2026, Ian Siegel, our chief executive officer and the sole holder of our outstanding Class B common stock, beneficially owned approximately 15.8% of our total outstanding common stock as a class and held approximately 79.0% of the voting power of our total outstanding common stock as a class. Because of the twenty-to-one voting ratio between our Class B and Class A common stock, the sole holder of our Class B common stock controls a substantial majority of the combined voting power of our common stock and therefore is able to control all matters submitted to our stockholders for approval until the earliest of (1) the first business day falling on or after 180 days after the date on which Mr. Siegel beneficially owns less than 4,000,000 shares of Class B common stock, (2) the date which is (a) 90 days after the date of death or disability of Mr. Siegel or (b) such later date, not to exceed a total period of 180 days after the date of death or disability of Mr. Siegel, as may be approved prior to the date that is 90 days after the date of death or disability of Mr. 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. This concentrated control limits or precludes your ability to influence corporate matters for the foreseeable future, including the election of directors, amendments of our organizational documents, and any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transaction requiring stockholder approval. In addition, this may prevent or discourage unsolicited acquisition proposals or offers for our capital stock that you may feel are in your best interest as one of our stockholders.
Future transfers by the holder 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 his family members, affiliates under common control with the stockholder, and partnerships, corporations, and other entities exclusively owned by the stockholder or his family members, in each case as fully described in our amended and restated certificate of incorporation, as amended. The conversion of Class B common stock to Class A common stock has had the effect, over time, of increasing the relative voting power of the holder of Class B common stock.
The dual class structure of our common stock may adversely affect the trading market for our Class A common stock.
Several stockholder advisory firms and large institutional investors oppose the use of multiple class structures. As a result, the dual class structure of our common stock may cause stockholder advisory firms to publish negative commentary about our corporate governance practices or otherwise seek to cause us to change our capital structure and may result in large institutional investors not purchasing shares of our Class A common stock. Any actions or publications by stockholder advisory firms or institutional investors critical of our corporate governance practices or capital structure could also adversely affect the value of our Class A common stock.
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.
As of June 30, 2026, the board of directors had authorized us to repurchase up to $750.0 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. 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 $111.8 million remains available for future repurchases under our $750.0 million share repurchase program as of June 30, 2026.
Repurchases pursuant to our share repurchase program could affect the price of our Class A common stock and increase its volatility. The existence of our share repurchase program could also cause the price of our Class A common stock to be higher than it would be in the absence of such a program and could reduce the market liquidity for our Class A common stock. Additionally, repurchases under our share repurchase program will diminish our cash reserves, which could impact our ability to further develop our business and service our indebtedness. There can be no assurance that any repurchases will enhance stockholder value because the market price of our Class A common stock may decline below the levels at which we repurchased such shares. Any failure to repurchase shares after we have announced our intention to do so may negatively impact our reputation and investor confidence in us and may negatively impact our Class A common stock price. Although our share repurchase program is intended to enhance long-term stockholder value, short-term price fluctuations could reduce the program’s effectiveness.
If securities or industry analysts do not publish research, or publish inaccurate or unfavorable research, about our business or our future prospects, the price of our Class A common stock and trading volume could decline.
The trading market for our Class A common stock depends in part on the research and reports that securities or industry analysts publish about us or our business, our market, and our competitors. We do not have control over these securities analysts. If one or more of the analysts who cover us downgrade our Class A common stock or publish inaccurate or unfavorable research about our business, our Class A common stock price would likely decline. If one or more of these analysts cease coverage of us or cannot publish reports on us regularly, demand for our Class A common stock could decrease, which might cause our Class A common stock price and trading volume to decline.
We do not intend to pay dividends for the foreseeable future.
We have never declared or paid any cash dividends on our common stock and do not intend to pay any cash dividends in the foreseeable future. Additionally, our ability to pay dividends on our common stock is limited by the restrictions under the terms of our credit agreement. We anticipate that for the foreseeable future we will retain all of our future earnings for use in the development of our business and for general corporate purposes. Any determination to pay dividends in the future will be at the discretion of our board of directors. Accordingly, investors must rely on sales of their Class A common stock after
price appreciation, which may never occur, as the only way to realize any future gains on their investments.
Provisions in our charter documents and under Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may limit attempts by our stockholders to replace or remove our current management.
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. 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. 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;
•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.
Moreover, Section 203 of the Delaware General Corporate Law, or DGCL, may discourage, delay, or prevent a change in control of our company. Section 203 imposes certain restrictions on mergers, business combinations, and other transactions between us and holders of 15% or more of our common stock. See the section titled “Description of Class A Common Stock” in Exhibit 4.6 to the 2025 Annual Report on Form 10-K for additional information. In addition, under the indenture governing the senior unsecured notes, if certain “change of control” events occur, each holder of the notes may require us to repurchase all of such holder’s notes at a purchase price equal to 101% of the principal amount of such notes.
Our amended and restated certificate of incorporation, as amended, and our amended and restated bylaws contain exclusive forum provisions for certain claims, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.
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.
Moreover, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all claims brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder and our amended and restated bylaws provide that the U.S. federal district courts will, to the fullest extent permitted by law, be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, or a Federal Forum Provision. Our decision to adopt a Federal Forum Provision followed a decision by the Supreme Court of the State of Delaware holding that such provisions are facially valid under Delaware law. While there can be no assurance that federal or state courts will follow the holding of the Delaware Supreme Court or determine that the Federal Forum Provision should be enforced in a particular case, application of the Federal Forum Provision means that suits brought by our stockholders to enforce any duty or liability created by the Securities Act must be brought in federal court and cannot be brought in state court. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all claims brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder and neither the exclusive forum provision nor the Federal Forum Provision applies to suits brought to enforce any duty or liability created by the Exchange Act. 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.
Any person or entity purchasing or otherwise acquiring or holding any interest in any of our securities will be deemed to have notice of and consented to our exclusive forum provisions, including the Federal Forum Provision. These provisions may limit our stockholders’ ability to bring a claim in a judicial forum they find favorable for disputes with us or our directors, officers, or other employees, which may discourage lawsuits against us and our directors, officers, and other employees. 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.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
10b5-1 Plans
During the quarter ended June 30, 2026, no individual serving as a director and/or an officer (as defined in Rule 16a-1(f) of the Exchange Act) of our company adopted or terminated a trading plan for the purchase or sale of our securities as described in Item 408 of Regulation S-K.
Amended and Restated Change in Control and Severance Agreements
On July 30, 2026, we entered into amended and restated change in control and severance agreements with certain of our executive officers, including: Ian Siegel, Chief Executive Officer; David Travers, President and interim Chief Financial Officer; Amy Garefis, Executive Vice President, Chief People Officer; Ryan Sakamoto, Executive Vice President, Chief Legal Officer; and Boris Shimanovsky, Executive Vice President, Chief Technology Officer. Carmen Chan, who will commence serving as our Chief Financial Officer and principal financial officer effective as of August 17, 2026, also signed a change in control and severance agreement on the terms described below in connection with her commencement of employment with the Company.
The change in control and severance agreements provide for the following benefits if the executive is terminated by us without cause (as such term is defined in the change in control and severance agreement) outside of a change in control (as such term is defined in the change in control and severance agreement) in exchange for a customary release of claims: (1) a lump sum severance payment of six months’ base salary, (2) a lump sum payment equal to the executive officer’s then-current target bonus opportunity on a prorated basis, and (3) payment of premiums for continued medical benefits (or equivalent cash payment if applicable law so requires) for a period of twelve months.
If the executive officer’s employment is terminated by us without cause or by the executive for good reason within the three months preceding a change in control or within the 12 months following a change in control, the change in control and severance agreements provide the following benefits in exchange for a customary release of claims: (1) a lump sum severance payment of twelve months’ base salary, (2) a lump sum payment equal to the executive officer’s then-current target bonus opportunity, (3) 100% acceleration of any then-unvested equity awards, other than awards that vest on the satisfaction of performance criteria; provided, however, with respect to any outstanding equity awards that would vest only upon satisfaction of performance criteria, such awards shall accelerate and become vested and exercisable as if such awards had been achieved at the greater of (x) actual achievement (if measurable on the date of termination) or (y) target levels, (4) payment of premiums for continued medical benefits (or equivalent cash payment if applicable law so requires) for a period of twelve months, and (5) any unpaid annual bonus for the calendar year prior to the year in which the executive's termination occurs, to the extent earned and not already paid.
The foregoing description of the amended and restated change in control and severance agreements are qualified in their entirety by reference to the full agreement, a form of which is filed as Exhibit 10.2 and incorporated herein by reference.
Item 6. Exhibits
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| | Incorporated by Reference | Filed or Furnished Herewith |
Exhibit Number | Description | Form | | File No. | Exhibit | Filing Date | |
| 3.1 | | 10-Q | | 001-40406 | 3.1 | 8/07/2024 | |
| 3.2 | | 8-K | | 001-40406 | 3.1 | 4/27/2023 | |
| 10.1 | | | | | | | X |
| 10.2 | | | | | | | X |
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| 31.1 | | | | | | | X |
| 31.2 | | | | | | | X |
| 32.1 | | | | | | | X |
| 32.2 | | | | | | | X |
| 101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the inline XBRL document. | | | | | | X |
| 101.SCH | XBRL Taxonomy Extension Schema Document | | | | | | X |
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | | | | | | X |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | | | | | | X |
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document | | | | | | X |
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | | | | | | X |
| 104 | The cover page from this Quarterly Report on Form 10-Q, formatted in Inline XBRL. | | | | | | X |
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in Santa Monica, California, on August 5, 2026.
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| ZIPRECRUITER, INC. |
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By: | /s/ Ian Siegel |
| Ian Siegel |
| Chief Executive Officer |
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By: | /s/ David Travers |
| David Travers |
| President and interim Chief Financial Officer |
