Zip Recruiter highlights cooling hiring environment in earnings, stock declines

Yahoo Finance Live anchors discuss quarterly earnings for Zip Recruiter as hiring cools.

Video transcript

[MUSIC PLAYING]

BRIAN SOZZI: Welcome back to Yahoo Finance Live. We're a few minutes away from the opening bell on Wall Street. But first, guys, let's hit some more earnings here. ZipRecruiter shares in focus here. A hot ticker on the Yahoo Finance platform. The company-- the company's quarter was pretty good.

It's just this commentary of them noting they're seeing a bit of a slowdown in the marketplace for job listings. Perhaps no big surprise. Maybe that's why the market is shrugging it off a little bit. But still noting or just capturing, I think, a lot-- there we go-- more declining stock price, I should say. But again, cautious commentary on that earnings release from ZipRecruiter.

BRAD SMITH: Yeah, interesting quarter. The revenue actually increased. And it was up 31% year over year, came in at $239.9 million there. They had addressed their revenue guidance as well. 20% year over year growth is what they're looking for there. And then particularly, the company saying that in June, they began to see signs of a cooling hiring environment.

That has larger implications, especially as we start to think about the employment situation. And really on the economic front, as we have been watching very closely to see which companies have been announcing where they're going to either decelerate some of their hiring plans or all out make cuts, versus where they're still getting added. I point back to the June-- or excuse me, July jobs report as well that we had just seen come out just last week.

JULIE HYMAN: Yeah, I mean, a company like this, they can only do so much if the environment is softening to some degree, as appears to be the case, even though we, obviously, had a strong jobs report last month. But nonetheless, the company is seeing some cooling to hiring here.

Looking at some of the analysts' commentary around it, it looks like most of the analysts believe that ZipRecruiter is taking the right steps to sort of weather this softening environment, including better cost discipline, according to JP Morgan's Doug Anmuth so that he's confident that the company is going to get through this, even given worsening macro trends. But when a company cuts its revenue forecast, obviously, you know, it's going to send the stock down 7 and 1/2%.

BRIAN SOZZI: It makes you wonder a little bit about the next jobs report. ZipRecruiter is out here warning about pullback in job listings. How does the next jobs report look?

BRAD SMITH: Well, and it's also from the Zip recruiting side and in this business that they operate in, they still have a major behemoth in Microsoft that they're going up against, where Microsoft and the subsidiary LinkedIn, LinkedIn specifically, that had a pretty strong quarter.

And so now as you start to think about where LinkedIn is going to lean further into its abilities to combine the advertising side of that social media engine, as much as they perhaps don't want to be coupled in with that, alongside the number of people that are posting new listings and opting in for some of the features that allow them to reach out directly to potential candidates, I think that's one of the headwinds that a ZipRecruiter has to be concerned about, if they do see continued softening, at least in the demand for their service specifically.