ZipRecruiter, Inc. (ZIP) Earnings Call Transcript & Summary

All right. I think we're ready to get started on our next session. It's my pleasure to have the team from ZipRecruiter. We've got Ian Siegel, David Travers. Guys, great to see you in person. We're doing this live, which we've done a lot of Zoom time together over the last year or so, but it's good to be in person, and it's great to have the conversation. Thanks for being part of the conference.

Delighted to be here.

Happy to be here.

Ian, I wanted to start with you, maybe obviously, what you've built as a company, maybe level set for those who don't know the company as well or even at a minimum, just trying to set your strategic initiatives and what you're trying to build for the long term. Would love it if you take the first few minutes just to take us through that.

Absolutely. So ZipRecruiter is in its 13th year. And when we started, we were basically designed to be a super sourcing tool for employers. So we were focused on distribution of jobs to over 100 job boards and then having all the candidates come into one easy-to-review list. And I call that the haystack phase of our business. We were just trying to get you as many candidates as fast as we could. And then a few years ago, we had an epiphany, which was if you keep sending more and more candidates to employers, they're not more and more happy with you because, in fact, they don't want that. All employers really wanted 5 quality candidates that are ready to be interviewed. And so began our exploration of machine learning, which has turned into deep learning and ultimately, meta-learning. Because at that point, we became a quality-focused business. And now I call it the needle phase of our business. So over 1 million businesses have used ZipRecruiter to do their recruiting. Tens of millions of job seekers have been on ZipRecruiter looking for work. We use an AI algorithmic approach to match those 2 together. So it's no longer this do-it-yourself search experience for job seekers where they come into a website and try to find the right jobs to apply to. And for employers, we're actually curating the best candidates in market for them and giving them the opportunity to proactively recruit those candidates before they even wait for their first candidate to find them on their own and directly apply. Our ultimate ambition so as simply as possible is to be a matchmaker. We do not want to be just another job site. We want to be something that really hasn't existed before, which is software that can operate at scale, bringing together the 2 sides of the labor market.

Okay. That's clear. And against that broader end demand environment, I think one of the biggest questions we get is the competitive landscape. And I think there's a lot of misunderstandings about who you compete against and what the competitive landscape is, and you've obviously built a 2-sided marketplace where there's probably elements of competition on both sides that you want to highlight. So just help us better understand who you frame up as your competitors when you think against the market opportunity you're trying to capture?

Yes. Well, if you look at the whole category of the recruiting industry, it's over $200 billion. And the majority of that TAM exists in traditional offline recruiting still. So when we look at the world, we look at are we growing faster than the industry and are we taking market share from that total TAM? If you look at the online competition, which represents a very small percentage of that total $200 billion at this point, the real 3 players in there that are worth talking about are going to be LinkedIn, Indeed, and ZipRecruiter. We're the 3 biggest players inside the U.S. LinkedIn is a social network, it's not really a job site. So that's the place where recruiters and businesses can go try to steal currently employed multiyear experienced professionals, predominantly white-collar physicians. That's what happens inside of LinkedIn, which is a very valuable segment of the market. But if you're talking about companies that are directly focused on active job seekers who are looking for a new job, it's really about Indeed and ZipRecruiter. Indeed is a great optimized version of the traditional job board. If you look at where Monster and CareerBuilder started, Indeed has taken the baton and expanded from a walled garden, where you have limited set of jobs that were directly posted to a job site, having all the jobs in one place and all the search filters that you would ever want, but it's still a self-guided experience for the job seeker. They come in and they have to try and find the right jobs to apply to. The difference with ZipRecruiter is we're a matchmaker. So our software curates opportunities for the job seeker to apply to, to make sure that every opportunity that they consider is a job for which they would be a top 10 candidate. We have an AI personal recruiter named Phil who is greeting you at the door and figuring out who you are and how urgent you're searching, and that's directly informing those jobs that we curate and it's that matchmaking experience for those job seekers that is really the biggest difference between us and what has come before us.

Okay. I want to ask sort of the macro question from a couple of different ways. First, looking backwards, maybe you can give us your perspective because through the pandemic, you've seen very different end demand environment as we've gone through the last 2 years. The answer to the pandemic and now sort of where we have been in the more recent quarters as we're sort of hopefully exiting the pandemic. Give us your perspective of how your business has evolved and what you've seen as that macroeconomic environment has moved through volatile times?

You want to take this one?

Yes, sure. So we have been in a highly dynamic environment for sure -- to put it mildly. What we saw going into COVID was a dramatic, some daily metrics falling off by 80% within a couple of weeks. We took strong action based on that, reduced our headcount, pulled back on marketing, et cetera, et cetera. And what we saw then was a robust recovery, much faster than a lot of people expected. And as a result, pre-COVID in 2019, we grew 18% with a 2% bottom line. Fast forward through the down 3% in 2020 and up over 70% last year to the midpoint of our guidance for this year, and really the 3-year look through from 2019 to 2022 is 27% compounded top line growth, and moving bottom line adjusted EBITDA margins from 2% to 19%. What do we learn about macro and about ourselves in that process? What we learned about the macro environment is that we're in a volatile time, to put it mildly, which is not news to anyone who's been paying attention here, and that we expect it to continue to be a dynamic environment. And our philosophy is not to make better predictions than anyone else about what's going to happen next, but rather, we're going to be ready for it to get better or worse, depending on what part of the -- which side of the marketplace you're looking at, and we're going to act faster and more decisively based on data we're actually observing rather than a macro forecast. And so what I think you'll see, just like we performed well through the last cycle that was unique, the next cycle will look different, but the results will be very similar, and that we'll act decisively on both sides. And if it's a good time to harvest on the bottom line, you'll see our profitability be very strong. And as the labor market recovers or is strong, you'll see strong top line performance. And what we see right now is as uncertain in an environment about what the next direction is, and we're ready for whatever happens.

So maybe I have 2 or 3 follow-ups against that backdrop. #1, obviously, as a society, we've been in a fairly tight labor market for a long time. And I think there's elements of will that open up, will it not? Are we moving towards enterprise hiring freezes or slowing hiring? Maybe from where you sit, any perspective you can give on how you see the labor market environment sort of evolving from here? Just your perspective would be maybe the first point. Then I want to get into some more idiosyncratic questions on your business.

What I would say is that the future of work was accelerated by 2 decades during the last 2 years as it relates to the long-term impact of COVID. And the 2 dominant trends or themes of that acceleration are, #1 proactive recruiting. If you go back to 1991, 4% of people who got a new job were proactively recruited by the company before they had applied. They were basically recruited as to apply to the job. If you go to 2019, that had grown to 17% of people who are taking a new job were proactively recruiting. And if you look at 2022, it's 38%. So in a hypercompetitive environment where businesses were looking for advantage, the solution that many of them found was to go find and ask the candidates they were interested to apply in quantities that we had never previously seen, and I think that trend is definitely here to stay. For example, on ZipRecruiter, we have a feature called Invite to Apply after an employer creates a job. Our algorithms shows them a list of candidates, and they can invite those candidates to apply. To give you a sense of the volume, that happens more than 1 million times last quarter. That's how actively employers are using this new strategy. The other big theme was, of course, remote work. At this point, 62% of surveyed job seekers want either fully remote work or hybrid work. If you go back to pre-COVID, less than 2% of jobs were offering remote work. So there is an imbalance, a mismatch in the market at this point that is as yet unresolved, and I cannot yet make a prediction about which way this will definitively go. But I will tell you that if capitalistic forces are dictating how work will be in the future, there definitely appears to be an advantage right now for those that are willing to allow either hybrid or remote work from a recruiting standpoint. That is going to be a draw for talent. And historically, things that give you an advantage from a recruiting standpoint stick around. In what quantities? We'll see. I mean, we're all watching the social experiment play out right now where companies are insisting that their employees come back to the office every day of the week. We're going to have to find out how that goes.

Understood. Yes, increasingly, a lot of variables at play. But I do want to come back to something David talked about and get one or both of your perspectives on this. You guys have seemingly repositioned the organization to be flexible to respond to whatever you see from the environment. An example I thought was when you look at the last couple of earnings reports, you guys have talked about if things cooled, there's a lever on the margin side where you could surprise to the upside. And it's not just one variable or one input anymore in terms of the way the organization seems to be structured to respond to the environment. Talk a little bit about what you've built to sort of position the organization to be as responsive as it is now for whatever you see on how the landscape might evolve going forward with the full caveat, it's going to remain volatile.

Yes, absolutely. So we spent almost 60% of revenue in the first half of the year on sales and marketing. So that is, by definition, the largest lever that we have that is dynamic based on how we see different needs. Both sides of that are variable over any given period of time. We've proven that through COVID, but marketing, especially, we do not tend to spend very much that we commit very far in advance. So we are day by day, month by month, planning out and deciding which investments to make, and a very low percentage is committed multiple months in advance. And so that keeps us very nimble as things change and able to adapt not to our, like I said, to our forecast, but adapt to actual data we're seeing on return. And we measure that return in a number of different ways in terms of how the brand is being built and how we see that being driven by sales and marketing investments and also what's our cash payback, what's our long-term ROI. And so that is obviously immensely flexible. Conversely, our investment in R&D is not going to change as we go through any part of the cycle. We are at the very early inning still of a technology transformation that is taking the typical job search from 30 to 90 days with uncertain chances of success, and creating much less need for serendipity and much more certainty that you will drive toward a fast resolution that is positive for both sides of the marketplace. And that is our technology like Invite to Apply, like Phil, you'll see much more coming about how we're going to bring people together faster and give both sides of the marketplace much more confidence. But because our go-to-market is so early because we're still in the early stages we believe of building the category-defining brand, we have the flexibility you referenced to ride out whichever part of the cycle we're in.

Okay. Super clear. I want to turn to the employer side of the business of the platform. Maybe give folks a little bit of sense of SKU or industry verticals that you might be exposed to today. And how should we be thinking about investments you're making to continue to widen out employer verticals and SKUs and broaden out the diversity on the platform? That would be question one in this area.

So we look like -- on both the job seeker and the employer side of our marketplace, we look like the U.S. economy. So that's in terms of skill level, industry type, geography, et cetera. There's one major way in which we have a SKU versus the economy, which is the vast majority of our revenue comes from small businesses. And last quarter, about 77% of revenue came -- 78% came from the subscription side of our business, which is almost all small business. And so that -- and the market overall is about 50-50. So we're in the middle of this transition, where we started out 100% SMB in terms of our revenue mix, and we're probably moving towards something like 50-50 over time. And so that is one area where we see significant opportunity to invest. Still we build out a significant go-to-market motion and sales force on the enterprise side of things. We're still in the building phase there. So we have not slowed down in that at all despite our increased profitability guidance. We're continuing to make investments there. And we see -- we have what customers want there. We're just new to going to market to go bring it to them. We have job seekers at scale, and we have the technology to deliver the very best.

And just to give some color on that, the performance marketing, this is an investment we have been making, and it is bearing fruit. So if you look at Q2, it grew 66 -- performance marketing grew 66% in our business. It accounted for 22% of total revenue, whereas a year ago, it accounted for only 17% of total revenue. So you can see how the mix shift is actively already underway, and we have a substantial team that is working against this initiative. So this is where we are definitely going to keep investing in moving upmarket to larger companies because, of course, they have persistent hiring needs, so they're good, rich targets for us.

And how should investors from the outside looking in think about measuring what the progress might look like? If we look off in a couple of years, what are you hoping for in terms of optimized mix shift, either in types of employers on the platform or revenue mix and how your revenue is generated?

Yes. I think what you'll see, that is the same is that the margin structure and the underlying profitability and unit economic attractiveness is very similar in both types, SMBs and enterprises. What will be different is that large enterprises want to buy on a performance basis where they are setting bids and budgets. And so we sell them largely on a cost per click basis applications and job seeker traffic much like Google would do, and lots of our competitors in the space sell that way as well. On the small business side of things, we sell on a subscription basis where small businesses want price certainty, and they don't necessarily want the cognitive load of figuring out what's the right bid, what's the right budget. So we present them a flat rate, and we do, on the backend, an auction-based -- set a bid and a budget for them effectively. And so the technology that is powering the marketplace is the same for both, but the pricing mechanism that they prefer is different, and we know how to price so that the unit economics and the margins are equally attractive.

Okay. Understood. And what we're starting to see now from a lot of platform businesses and businesses with a mix of exposure to enterprise customers and consumer demand is experimentation around pricing. How do you think about the way your offerings are priced today, and how should investors think about the dynamism of either pricing power in your model or the ability to stimulate a lot more adoption and demand by being flexible to the downside node on pricing? Help us understand, as an organization, how you think about price as a lever going forward?

Well, I would say price has always been a lever within our business. It's something we spend a lot of time on. We've moved from monthly subscriptions being the predominant way new customers on the SMB side come in to our business to literally moving to per job per day subscriptions for how customers come into our business. But to us, the pricing model has not had a material differentiation on sort of the margin structure and the value of the customer. And to me, the goal that we have is by improving the product quality, that's the best way to increase the yield and also to have the leverage to increase the amount that we charge for our product, and that is why we keep the pedal down on R&D in spite of whatever the economic cycle is because we think we're at the beginning of what we call disruption cycle right now.

Yes. If you look back over our history, we're at a multiple average revenue per employer of where we were several years ago. Fast forward several years, you're going to see us multiply that again. Why is that? Because, for example, in Q2, the brand new customers on our platform got a great experience, but the customers who have been with us for over a year, where we've used our algorithmic technology to figure out what they want and who the great candidates are for them, those customers who've been with us for more than a year, got 4x as many great matches as the new customers. That delivering value leads us to then be able to monetize the value we deliver over time. And so customers then opt in to increasing their bids or upgrading their subscription plan. And so you'll see us, in addition to the mix shift and enterprise that will drive that average revenue and that pricing higher over time, you'll see within setting aside the mix shift, holding those constant within the same customer, as we've proven over time, we will continue to see pricing be a major lever.

Okay. Understood. You both separately have alluded to staying very focused on the investment side of the equation and R&D and product development. What are you guys, as a team, see as the 2 or 3 mission-critical elements of investment where the success of the business you're building being tied back to the level or the focus of investment? What are those 2 or 3 areas that you view as mission-critical to executing against over the next 2 to 3 years?

There are a few. One is building out the personal recruiter value proposition. So we knew we were on to something a couple of years ago right before the pandemic when we started having job seekers show up at the office to thank Phil and want to take Phil out to coffee to thank him for his help in the recruitment process. And Phil was not yet a major feature part of our product, he was just a little feature off to the side. So we got signal very viscerally. very fast that we were onto something and that this soul-sucking process of looking for work as experienced by a high percentage of the labor force is something where when you feel like there's a real person, even if it's technology-enabled who's there rooting for you and cheering you on and taking your feedback and giving you a very valuable advice through the process, that that is incredibly powerful. And so we have doubled and tripled down on that, and you'll see we're just at the beginning of that. But what does that mean for the job seeker? It's less filling out a form that gets longer and longer as we want more information from you, and it's more engaging in a conversation and saying, "Hey, was that -- did that interview go well? Or was that job I sent you a great match? Or are you still urgently looking for work? Or do you think you're going to look over the next 90 days?" And so that's really powerful information. And so personal recruiter is a huge part of that. And then on the employer side, empowering employers to make it easy to reach out to the very best job seekers before they have even heard of your job or have searched for -- knew about your company to say, "Hey, I'm an employer, I have a job that I think is great for you. You look like the perfect candidate. Please consider applying." That is something that fills a job seeker's soul to get an outreach like that. And we make it simple to do, where we surface a bunch of candidates, and that gives us incredible data to then train on who's the next series of great candidates to send to that job.

Okay. I do want to stick with the topic of Phil for maybe just one second. It probably is, again, one of the big topics that people ask fair bit about. When you think about the state of AI and how it's presented to the consumer today as the product, Phil, what should people be thinking about how that evolves and changes over the next couple of years? And the secondary question is how do you translate it back to either competitive moat or differentiation in the marketplace? What do you think about the broader competitive landscape?

Well, I think Phil is one of the most ambitious projects we have ever undertaken at ZipRecruiter because that's truly what separates us from a traditional job board where a job seeker is plopped down in front of a search engine and have to find the right jobs to apply to, which they are terrible at, which is why they never get a response and also why employers think they get so many terrible candidates. So the goal with Phil is to create the feeling that you have an expert guide who is going to help you not just with this search, but is going to be trusted enough to effectively become a career coach for you over the long term. And the introduction of Phil just to onboard, just having it greet you at the door, increased onboarding completion rate by 29%. So having this feeling that someone who cares is meeting you and trying to figure out what you're actively looking for as well as your urgency, which really is just segmentation, and with segmentation, we can create a custom experience for you that matches the way you want to search for a job. We are transforming how it feels to go to a job site because the first thing you do is not enter a search term into a job search form. The first thing you do is start talking to someone who cares about you. And so long term, I think Phil is going to get smarter and smarter -- and already, every quarter, we've been introducing new things that Phil does for you, to the point where it is going to become the new standard where you're going to feel like if I'm searching for work, am I going to really choose the do-it-yourself way of doing it, where I have to use the operators inside of a search form? Probably not. What you're going to do is you're going to go to an expert who's going to curate opportunities for you and even go so far as to advocate for you with employers before you've applied to try and to get them to reach out to you, reach out to that candidate directly to try to recruit them.

Got it. Understood. I do want to give some room here for questions in the audience. If anyone does have any questions, feel free to raise your hand. We can work them into the conversation. I've got plenty of questions still to go, but okay. Well, raise your hand if you have any questions, and I'll make sure to call on the audience. Let's bring it back to margins because there's been a -- you guys are already a profitable company. You actually have had a fairly sizable inflection in margins over the last couple of years. But investors are increasingly asking more about compounded profitability, expansion of margins. Help us understand some of the building blocks or the levers in your operational margins between where margins are today and how investors should think about the long-term margin structure of your business a couple of years down the road?

Yes. So obviously, as I said earlier, we went from 2% EBITDA margins 2019 pre-pandemic guiding to 19% at the midpoint today, and we have laid out a very clear 30% long-term margin target that we feel increasingly confident of. And so what's the path that got us here and will get us there? So we're in the early stages still of building a category-defining brand, as I mentioned earlier, but we are already reaching at our current scale the vast majority of employers and job seekers in the United States. And so as we scale this business and revenue continues to grow, we just will not need to scale our marketing at the same rate as our revenue grows. And so that, at the most foundational level, the fact we're already at 70% brand awareness with job seekers, 80% plus with employers, we're already making a significant investment. So I do not anticipate reducing, over any long-term period, reducing the nominal dollars we're investing in our brand, but we just don't need to invest at the same scale as we get bigger.

Okay. But along those lines, maybe just one quick follow-up on this. How do you see your sales and marketing efforts evolving? Because there's elements of trying to reach job seekers, there's elements of using sales and marketing as a tool to, as we talked about a little bit earlier, capture the optimized mix between SMBs and enterprise customers and the overall funnel of bringing people on to the supply/demand side of your platform. So within that broader landscape of what you talked about, how should we think about sort of nuance and how sales and marketing might continue to evolve in the years ahead?

So the relatively newer part of our marketing efforts is towards job seekers, whereas in the early days of ZipRecruiter, we were exclusively almost speaking to the employer side of our marketplace since it allowed -- since the employers are the ones who pay us directly. It's what allowed Ian to bootstrap the business for the first 4 years of ZipRecruiter's existence. And so we built the brand there much earlier and have much more entrenched mind share among the employer side, whereas we're just a couple of years into the job seeker brand building. Have obviously seen tremendous success there, but we feel like we've still got longer to go on the job seeker front, and that will be a long-term investment we'll continue to do. There are a number of different ways we think about that. But ultimately, making it as simple as possible through our product investments, our R&D investments that will be ongoing for a job seeker to explain to their friend why ZipRecruiter is different, why having a personal recruiter on your side feels different and compelling versus what you've previously always experienced in a job search and amplifying that message and reinforcing it through our marketing spend is one of the key investments we make.

I think I would just say that the overall marketing expense, we have a lot of control over it, and we have already had so much success in building brand and we learned during COVID when we turned marketing way down, we saw the recovery before basically, I think everyone because customers were flooding to our site, even though marketing hadn't been turned back on, and that was new customers and reactivating previous users. So I think we know the value of brand, we understand how to build brand. And once you get to that level of brands, you don't have to keep investing at ever higher levels to keep growing when you've achieved it and you get the long tail value from it. But I do think on particularly the larger customer side of our business, we're going to be ramping up our sales effort for multiple years because there is so much headroom and runway for us in that category. So I think that the mix shift between the S and the M is going to go more towards sales over the long term.

Yes. We do have one question I think in the back room. If we could just give the microphone, so the folks can hear on the webcast.

How do you think about the long-term potential for pulling on the pricing lever, pricing for value add under specific scenarios and sets of circumstances?

Yes. So obviously, I referenced earlier, I think that 90% of the dollars in this business are spent offline still. So online is a tiny fraction of the total hiring market. And a lot of those dollars are already spent today on a cost per hire basis, pay 20% of first year salary or something for a staffing firm. So that is not a novel concept for the end buyer here. What we find consistently throughout our business history is that if we deliver value to customers first, we are very good at finding a way to get rewarded for that value over time, whether through pricing increases or innovation or repackaging how we price. So I think pricing more for value is something we see a lot of people in the industry experimenting with. I would not be surprised over the long term to see that being an option and part of our pricing mix. But we've got a long way to run. And when I talk about having another multiple of revenue per paid employer expansion, that does not rely on us shifting to getting paid 20% for a first year hire in any near-term or medium-term scenario. There's an incredible willingness to pay when you take a 40-day process to hire someone where you think at the end, maybe there's a 50-50 chance that it will be successful and a year later, I think I hired the right person, and you take that down to a process that maybe takes 2 weeks or 1 week, and you have a much higher level of confidence that you've made the right hire. The willingness to pay for that has gone up as we've made progress on that, and we'll continue to go up even more.

Okay. One follow-up that ties back to the sales and marketing. When you see so much of the opportunity still sitting offline versus online, how much of the marketing efforts are really just even mining the penetration curve is about brand awareness, product awareness, awareness of Phil, awareness of you as a company, and that ties back to the marketing budget as opposed to maybe explicit sort of demand generation marketing in a lot of ways? How do you guys think about that?

Every single dollar we spend, we measure both ways. So we don't have a separate here's our brand budget and here's our performance budget. It is one. And so a single marketing spend decision for a particular TV spot or whatever it may be, we may have a strong thesis that it will be stronger in terms of near-term cash and cash payback or maybe stronger in terms of brand building. But the acid test is we want the exact same dollar to build that brand awareness to 80% and beyond as is the dollar that is driving near-term performance. And so that gives us -- as a result, we have a wide variety of investments we're making. And so we are in radio, direct mail, television, podcast, out-of-home, satellite radio, on and on and on, social, search, et cetera. And so we have a highly diversified mix and some of those return in different ways, maybe more brand on the balance, maybe more near-term performance. But overall, we're driving both with the exact same dollar.

Okay. We only have a few minutes left. I do want to bring it back to capital allocation. Obviously, we've talked a lot about growth, pace and cadence of investments, improvement in margins. When you look at the current state of your balance sheet and when you measure it against your ability to generate cash and align investments against growth, how would possibly your capital allocation priorities change? How should investors think about you allocating capital back into the business versus potentially amplifying equity returns and driving equity share price value through the use of your balance sheet over time?

We have a very disciplined 3-tier priority where Tier 1, by far, the most important area that for investment is in organic growth. Obviously, given our bottom line profitability, we look fully funded there. But to the extent we see the opportunity to invest, we will, when we see a high return on investment. Second priority is we see the ability to accelerate, add amazing members of the team and grow capabilities even faster through M&A. That was the core thinking behind our high-yield, $550 million high-yield debt that we took out earlier this year. So we now have $700 million of cash on the balance sheet as of quarter end, and we're very actively looking for M&A opportunities. We're going to be highly selective. There's a reason we haven't made many acquisitions over the past several years. It's not because we haven't been looking because we have a very high bar. But we continue to be on the hunt. And I would expect you'll see us make several small and medium-sized acquisitions more likely then you will see us make one huge sort of game-changing acquisition. But we're looking at a number of different areas. And then by far, the third priority is return of capital to shareholders where we are in the middle of a buyback program where in total, we've authorized $250 million, about almost $150 million of which we used by the end of the quarter. And there, we just saw this extraordinary opportunity, and we have a balance sheet and we wanted to put our money where our mouth is in terms of seeing the opportunity there. But it's not the beginning of a systematic return of capital program. It's extremely opportunistic, and it's the third priority.

Okay. Super clear. Ian, let's end it with you. I've been trying to end all these conversations this week with as you think about your business or the end market that you compete in and how the industry is going to evolve, what are some of your things you want to share with investors that are either outside-the-box thinking, predictions, things you don't think that the investment community maybe has a broader understanding of that are highly convicted views for you?

Well, I mean, I believe that to be a competitive job company in the labor market space in the next 2 years, you really need 3 things. You need #1, a brand, because winning is getting both employers and job seekers to skip Google and come directly to your site. That's why we've invested so much over such a long period of time in order to accomplish that goal. The second thing is the world changed roughly 8 years ago. And if you are not using a modern algorithmic approach to matching candidates to employers, you're not even at the table stakes level of what is required to compete. The interesting thing about that is in order to build those algorithms, not only do you have to find the talent, you have to have enough data to actually deploy the training that those algorithms can do what they do. It's going to be very tough for startups to do this. This is very much an advantage to incumbents have been collecting data for years. It's those interactions between employers and job seekers that create the wisdom of the crowd in sites that makes this matching so good. And the third thing is there's a very complicated relationship between large customers who have persistent hiring needs and how you have to sell them and get them to activate their accounts. We have literally spent years doing integrations with the applicant tracking systems, which is their canonical sources, so that we can make it as easy as possible for them to turn on the spending with us. That has gotten no easier for a new player in terms of the fact that we have done the work and a couple of others have done the work. These applicant tracking systems are as reluctant today to do these integrations as they have been for years. So if you want to play with the big boy buyers and if you want to actually be a competitor in this space, you need to have the money to go build the algorithms, build the brand and the will to spend the years it requires in order to make it easy to buy from you. I think we're in an incredibly advantaged position regardless of where we are in the cycle because we have done all of these things. And I think as the cycle returns to what I call more of a traditional normal, a pre-COVID normal, you're really going to see the strength of what we have been doing all this time.

Okay. Well, that is super clear and really thoughtful. Thanks so much guys for being part of the conference. Please join me in thanking the team from ZipRecruiter, Ian and David.