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Good afternoon, ladies and gentlemen. Thank you for standing by. My name is Erica and I am the conference operator today. At this time, I would like to welcome everyone to the

Thank you, operator and good afternoon. Thank you for joining us in our earnings conference call, during which we will discuss

Thank you, Drew. Good afternoon to everyone joining us today. Second quarter results reflect

Thank you and good afternoon. As Ian just touched on, we have a massive opportunity to disrupt the recruitment category. As fellow shareholders and operators of this business, our strong conviction in our long-term investment thesis remains unchanged. And we continue to work on bringing our jobseekers and employers together using our industry leading matching technology. Our first strategic pillar is increasing the number of employers and the revenue per paid employer in our marketplace. While SMBs enjoy

Thank you, Dave and good afternoon everyone. Our second quarter revenue of $170.4 million was in line with the midpoint of guidance provided in May. This represents a 29% decline year-over-year and is primarily reflective of a continued and accelerating softening in the hiring market. Quarterly paid employers were 102,000 representing a 35% decrease versus Q2 ‘22 and a 4% decrease versus Q1 ‘23. This is primarily reflective of weakness among small and medium-sized businesses, which make up the vast majority of our paid employers. Revenue per paid employer was $1,677, an increase of 9% every year, with sequential decrease of 3%. The sequential decrease was driven by employers’ willingness to pay being unfavorably impacted by overall macroeconomic conditions. However, we remain confident that the growth trends we have seen in all of our cohorts over the years will continue in the long-term. GAAP net income was $14.4 million in Q2 2023 compared to $13.1 million in Q2 ‘22. Q2 ‘23 adjusted EBITDA was $43.3 million, equating to a margin of 25% compared to $45.4 million on margin of 19% in Q2 ‘22. Net income and adjusted EBITDA remained relatively flat year-over-year as lower revenue was mostly offset by lower operating expenses. Cash, cash equivalents and marketable securities was $497.2 million as of June 30, 2023, compared to $519.1 million as of March 31, 2023. The decrease quarter over quarter was primarily due to $50.5 million of share repurchases in the second quarter, given our long-term growth outlook our capital allocation strategy prioritizes organic growth investments and M&A over returning capital to shareholders. However, given the strength of our balance sheet and our free cash flow, but with appropriate consideration of the uncertainty we face, we continue to opportunistically repurchase shares when we believe that there’s an attractive ROI and potential dislocations in the stock price. Moving on to guidance, as Ian mentioned earlier, employers have continued to pull back and hiring in light of an uncertain macroeconomic backdrop, the speed of this deceleration is particularly noteworthy, the July’s revenue being down approximately 31% year-over-year. This informs our Q3 ‘23 revenue guidance of $150 million at the midpoint representing a 34% decline year-over-year. Our adjusted EBITDA guidance of $40 million at the midpoint or 27% adjusted EBITDA margin for the quarter reflects our continued fully funded investment in product innovation, while simultaneously moderating our operating expenses during slowdown. The atypical hiring patterns observed year-to-date give us limited visibility beyond Q3. Q4 has typically been a seasonally softer period for hiring. And we do not yet have a clear view of when employers confidence will recover. Last quarter, we discussed our view of a path to delivering adjusted EBITDA of $178 million to $192 million given the top line scenarios we could reasonably foresee at that time. The rapidity and inconsistency of the cooling hiring environment has however reduced this confidence. Therefore, we are withdrawing our prior full year adjusted EBITDA guidance. However, even with the wide range of possible revenue scenarios for Q4 our adaptable business model gives us confidence in achieving adjusted EBITDA margins in the low to mid 20% range for the full year. This reflects our financial flexibility and an ROI informed propensity to conserve capital during downturns while we also continue investing for long-term growth. One of our strategic assets is our ability to navigate turbulent times, we approach both up and down cycles with the same ROI focused orientation and speed to act. While the current environment calls for cost optimization, we have a healthy balance sheet and remain committed to discipline capital allocation. This includes pressing our technological advantage through our investments in AI driven matching, allocating sales and marketing spend to high performing channels, and restructuring our teams for greater efficiency. It speeds decisions and investments that we believe will position as well for the next several economic cycles. With that, we can now open the line for questions. Operator?

[Operator Instructions] Our first question comes from the line of Ralph Schackart from William Blair. Ralph, go ahead.

Good afternoon. Thanks for taking the question. Two, if I could. Tim, I think you have talked about 30% plus declines in July revenues. Can you maybe give us a broader picture of what the linearity of the revenue decline was to the quarter? And then the follow-up is just more philosophically, how you’re thinking about, if this is sort of a prolonged down cycle for hiring, is there a minimum level of dollar spend that you’d want to maintain in sales and marketing line or would you just be purely focused on preserving margins, whatever that may be, whatever percentage that may be going forward? Thank you.

Hey, Ralph, thanks for the question. This is actually Ian. And I just want to take sort of a meta whack at this before I turn it over to Tim to get into more specificity. But I just want to say that it seems really clear from where we’re sitting that what we’re looking at is macroeconomic. It’s – our data is showing a job postings and we’re talking both free and paid job postings they’re down from a year ago. This is consistent with what others in the industry are reporting. So it seems very clear to us that this trend that we’re observing is something that is an external force as opposed to an internal problem. But I also want to reiterate what we just said in the call, which is we’re literally built for this type of environment. And if the macro continues to soften, the truth about our businesses are well capitalized or profitable. Even in the face of the declining demand we’ve observed over the past year, we’ve been able to maintain that profitability. The product fundamentally works. Our marketplace is rated number one by both job seekers and employers alike. And we have 80% aided brand awareness on both sides of that marketplace. So finally, I just want to say we’re operating at full speed. Our roadmap is focused on making the process of hiring more efficient for employers, and more effective for job seekers. We are hard at work at the next generation of our product right now. So that when a recovery comes, you can look for us to take as rapid action to increase investment and spend into that uptick as we did to bring cost down and operationalize around the reality that we find ourselves in today. And as far as sort of the trend line of what you’re seeing in this specific set, I’m going to turn that over to Tim, and let him give you more granularity on that answer.

Hey, Ralph, this is Tim. As far as revenue trends within Q2, we saw revenue continuing to trend down through the balance of the quarter, but it really accelerated towards the back end into June and July. And as you noted, we disclosed that the July revenue is approximately 31% year-over-year. So, the trend was really back-end weighted generally speaking. And then to your second question about minimum spend in terms of sales and marketing, just kind of give you some high level thoughts on how we think about sales and marketing. So, when you look at the Q2 sales and marketing bucket of roughly $72 million, that’s a fair amount of money and it’s deployed based on a number of different factors that we measure. So it’s not just ROI, but cash on cash payback, LTV and brand as well. One of the reasons why I think our minimum spend can be pretty low is because we have already built up a fairly substantial brand awareness among employers and job seekers. And so we know before but it’s much more expensive and difficult to build a brand than it is to maintain it. And so even as we flex the marketing spend down, we’re doing that because that marginal dollar is not performing to the level that we would otherwise require given the expense of it. And so, we demand a lot from those marketing dollars and kind of flex up and flex down accordingly. The other thing I mentioned is that, as a matter of strategic input, we commit very little capital to outer periods. And so that’s another reason why we’re able to move very quickly. We don’t have large amounts that we have to spend within a given period in other words.

Great, thanks, Ian. Thanks, Tim.

Our next question comes from the line of Trevor Young from Barclays. Trevor, go ahead.

Great, thanks. As you guys look out, 12, 24 months, what opportunities do you see? Or how are you trying to position yourself to come out of this cycle stronger or with greater market share? Ian I think you alluded to maybe some new iterations on product and then as you see those potential share gains coming out of the cycle, are those still coming from some of the incumbent solutions? Or is some of that more coming from direct online competitors? Basically, what’s the recession playbook from here?

Thank you for the question. I think, what I said up front is what I will reiterate, which is because of the sensitivity of our ability to measure the appetite, amongst both small and large employers for recruiting services, we’re able to very rapidly respond to whatever macroeconomic condition we find ourselves in. And the playbook for us is to operate a profitable business. And when there is demand on the increase, we will invest into that, which as I said, we can detect very quickly. And when we see demand on the decrease, we will moderate our spend, and we will reorganize our business, bring down our operating expenses, build the largest war chests we can to prepare for whatever the next uptick is. Now, what does that mean? It means that we’re going to bring down investments that have either a slower rate of return and or do not have the same level of LTV to them. However, we’re going to keep pedal to the metal on technology investments. As we build the next generation of our product, we have been working with AI for multiple years now, everywhere we introduce it into our product is either an engagement force multiplier, or it has produced some fairly profound results in terms of the quality of the results that both the employers and job seekers on our service are able to achieve, that is going to continue. I think you look at the world as it exists today and the opportunities presented by AI and their application to our category are more exciting right now than they have ever been. And I think you can expect that you will see us continue to update over the coming quarters on what we are doing with the opportunities that are, as I have said, apparent, as of this moment. And I think the playbook is simply to continue to invest in building a truly disruptive product when it makes things easier and more efficient for both sides of our marketplace. As we prepare for in the cyclical environment that we are in the inevitable uptick and the increase in demand and need for recruiting services.

That’s really helpful color and actually probably a good segue into my follow-up, just on the efficacy of seekers onboarding VFL, to x number of applications. What proportion of new to

When we look at Phil, initially, Phil was deployed on just a couple of entry points into our service. And every quarter, we have been updating you as we take what has proven to be a winner and spread that entry onboarding experience across every possible entry point into our product. So, you have seen us over the previous quarters, tell you that we have brought Phil to our mobile apps, tell you that we have brought Phil to our salary pages. There are many, many entry points into

Great. Thank you.

[Operator Instructions] Next question comes from Doug Amith from JPMorgan. Doug, go ahead.

Hi. Thanks. Hi, thanks for taking the question. This is Wes on for Doug. Just wanted to ask about an enterprise, I think it stepped back again a little bit this quarter as far as overall mix of that business and kind of around to where you were in 1Q of ‘22. Just how should we think about it going forward? Are there any things that you can kind of get it going in the other direction again, or is it just a function of macro at this point?

Thanks Wes. Yes, this is David. We have incredible long-term confidence in enterprise what we have seen is that whereas SMB the year ago, were the first to feel the effects of the downturn. In the labor economy enterprises are feeling that now or responding by reducing their demand for labor now. And so you see that reflected in some of the enterprise numbers there. From a product market fit standpoint, everything about our long-term outlook for the enterprise business remains intact. We have been onboarding amazing new customers, getting incredible experiences and testimonials. We have shared some of those with you to see over time that will share more and more. And we are increasingly tuning our go to market with evermore sophistication. We started this business over a decade ago, really focused on the SMB market and just in the past few years have transitioned to also focusing on market with a more sophisticated, go-to-market. And just recently, in the past few quarters have really uplevel the sophistication and infrastructure, we have to serve these low sophisticated customers in the world. And they are long-term investment, sales cycles are vastly longer than the one-day, five-day closing process that an SMB has. And so all the long-term outlook there is excellent. What we are seeing now is that enterprises were slower to react, but they are now reacting to the downturn in pulling back some of their hiring plans. And so we remain incredibly ambitious. And this will be a growth area for us for a long time to come through ups and downs and multiple cycles.

And I just want to add to that, if I could, that part of the reason for our confidence in the long-term and enterprise is it’s one thing to sell customers, it’s a very different thing to both onboard and deliver for them. And the 140 plus ATS integrations that we have now completed. And what turning

Great. Thank you, both.