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ZipRecruiter acquires UK-based Breakroom to expand in US

EditorLina Guerrero
Published 08/07/2024, 06:12 PM
ZIP
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SANTA MONICA, Calif. - ZipRecruiter®, a prominent online employment marketplace, has announced the acquisition of Breakroom, a UK-based employer review platform. The acquisition aims to introduce Breakroom's innovative job insights to the United States, assisting job seekers in making informed decisions. Breakroom, known for its focus on frontline industries, will continue to operate as an independent brand.

Breakroom's platform is designed to provide job seekers with transparent insights into various aspects of employment, such as pay, working conditions, and company culture, through community-powered ratings. This approach contrasts with traditional employer review sites, which often become outlets for employee grievances.

Ian Siegel, Founder & CEO of ZipRecruiter, highlighted the value of Breakroom's ratings in giving job seekers a realistic view of potential employers, thus leading to better employment matches. Since its inception in 2020, Breakroom has accumulated hundreds of thousands of reviews, offering employers actionable insights to improve job satisfaction and retention.

Anna Maybank, Founder & CEO of Breakroom, expressed enthusiasm for partnering with ZipRecruiter to scale their platform in the US market. The collaboration is expected to facilitate better employment opportunities by providing both job seekers and employers with objective and actionable information.

In other recent news, ZipRecruiter has experienced significant corporate changes and financial developments. The company reported a 33% year-over-year revenue decline in its first quarter of 2024, despite generating $2 million in operating cash flow and $21 million in adjusted EBITDA. This resulted in a 17% adjusted EBITDA margin. The firm also noted the first sequential increase in quarterly paid employers since 2022, suggesting a potential labor market stabilization.

ZipRecruiter recently welcomed Mike Gupta to its Board of Directors, following the resignation of Eric Liaw. Gupta brings extensive financial and tech industry experience, having served as CFO at various companies including Twitter and Calm.com. His appointment is expected to provide strategic leadership and financial expertise to the company.

In addition to these changes, ZipRecruiter's stockholders approved amendments to its corporate bylaws, elected Blake Irving and Emily McEvilly as Class III directors, and ratified the appointment of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for 2024.

UBS has adjusted its outlook on ZipRecruiter, reducing the price target from $13 to $11 while maintaining a Neutral rating, due to concerns about the near-term prospects of the U.S. employment market. Despite these developments, ZipRecruiter maintains over $510 million in cash reserves and plans to continue investing in its product and marketing efforts. These are the recent developments concerning ZipRecruiter.

InvestingPro Insights

As ZipRecruiter gears up to integrate Breakroom's employer review platform into its suite of offerings, the company's financial health and market performance offer additional context to stakeholders. According to InvestingPro data, ZipRecruiter's market capitalization stands at $726.92 million, reflecting the company's value as perceived by the market. Despite recent challenges, with the stock price experiencing a significant drop over the past week, the company's gross profit margins remain impressive at 90.24% for the last twelve months as of Q1 2024. This high margin indicates that ZipRecruiter is effective at controlling its cost of goods sold and could provide a buffer against financial headwinds.

InvestingPro Tips highlight that management has been actively buying back shares, which could signify their confidence in the company's future prospects. Furthermore, the platform notes that ZipRecruiter operates with a moderate level of debt, providing it with some financial flexibility. However, analysts are anticipating a sales decline in the current year, which may be a point of concern for investors considering the company's growth trajectory.

For readers interested in a deeper analysis, InvestingPro offers additional tips on ZipRecruiter, including insights on shareholder yield and liquidity metrics. Currently, there are 11 more InvestingPro Tips available, which can be accessed for a comprehensive understanding of ZipRecruiter's financial and market performance.

With the acquisition of Breakroom, ZipRecruiter is poised to enhance its value proposition to job seekers and employers alike. The InvestingPro data and tips provide a nuanced view of the company's financial standing and market sentiment, which are crucial for investors monitoring the impact of this strategic move.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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