Shares of ZipRecruiter Inc. dropped more than 12% in the aftermarket Tuesday after the job-posting site reported quarterly earnings above expectations but said employers are more reluctant to pay for job ads and the number of job openings has dwindled.
ZipRecruiter ZIP, +1.93% earned $14.4 million, or 14 cents a share, in the second quarter, compared with $13.1 million, or 11 cents a share, in the second quarter of 2022.
Revenue dropped 29% to $170.4 million, the company said. Analysts polled by FactSet expected earnings of 8 cents a share on sales of $170 million.
“Although the over 160 million people employed in the U.S. labor force (and the resulting 3.6% unemployment rate) remains at historically robust levels, the number of job openings and employers’ willingness to pay for those job openings has been declining significantly from the peaks of 2021 and 2022,” the company said.
“Both [small and medium businesses] and enterprise employers are posting fewer jobs while also spending less to advertise those jobs,” ZipRecruiter said.
That runs counter to the seasonal hiring pattern ZipRecruiter has seen, the company said.
“The macroeconomic backdrop continues to impact our business (and the recruitment category) materially as it has throughout the ups and downs of the COVID and post-COVID period,” it said.
ZipRecruiter guided for third-quarter revenue of $150 million, which would represent a 34% decline year over year.
It shied away from yearly guidance on the “atypical hiring patterns” it has seen but warned that the fourth quarter is typically a seasonally softer period for hiring, “and we do not yet have a clear view of when employers’ confidence will recover.”
Shares of ZipRecruiter have gained 6% so far this year, compared with gains of around 17% for the S&P 500 index SPX.