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Thank you for standing by. My name is Mark, and I will be your conference operator today. At this time, I would like to welcome everyone to

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

Thank you, and good afternoon to everyone joining us today.

Thank you, Ian and good afternoon. Q3 was another strong quarter of execution toward building out each of our three strategic pillars. Our first strategic pillar is to increase the number of employers and the revenue per paid employer in our marketplace. Last quarter we highlighted the initial rollout of

Thank you, Dave and good afternoon everyone. Our third quarter revenue of $117.1 million represents a 25% decline year-over-year, primarily due to reduced demand from SMBS with continued uncertainty and volatility in the labor market. Quarterly paid employers were 65,000, representing a 27% decrease versus Q323 and a 7% decrease sequentially. The year-over-year and quarter-for-quarter decreases in quarterly paid. Employers are primarily reflective of reduced demand from SMBs and the continued uncertainty and volatility of the labor market. Revenue per paid employer was $1795. Up 3% year-over-year and up 2% sequentially. The increases year-over-year and quarter-for-quarter are primarily due to the slight mix shift from subscription revenue to performance revenue. Net loss was $2.6 million in Q3 2024, compared to net income of $24.1 million in Q3 2023 and net income of $7 million in Q2 2024. Q3 2024 adjusted was $15 million, equating to a margin of 13% compared to $54.4 million, a margin of 35% in Q3 2023 and $27.8 million with a margin of 23% in Q2 2022. Net income and adjusted EBITDA decreases year-over-o year were driven by revenue declines, while the sequential decreases were driven by revenue declines and higher operating expenses. Cash, cash equivalents and marketable securities was $498 million as of September 30th 2024. Moving on to guidance our Q4 2024 revenue guidance of $107 million at the midpoint represents a 21% decline year-over-year and a 9% decline quarter-over-quarter. The year-over-year decline represents the continuation of a prolonged labor market downturn, while the quarter-over-quarter decline reflects our expectation of a seasonally softer Q4. Our adjusted EBITDA guidance for Q4 2024 is $9 million at the midpoint or an 8% adjusted EBITDA margin. On a sequential basis this implies a slight decrease to operating expenses as we moderate marketing during a seasonally soft period. Our fourth quarter guidance implies a full year 2024 adjusted EBITDA margin of 16% within the expectations we outlined at the beginning of the year and leveling off adjusted EBITDA margins in the low to mid-teens. As we finish 2024 and enter 2025, our operating philosophy remains unchanged. We remain nimble and are prepared to quickly adjust to a wide range of scenarios, while the labor market remains challenging and uncertain.,

We will now begin the question-and-answer session. [Operator Instructions] And your first question comes from the line of Ralph Schackart with William Blair. Ralph, your line is now open.

Hi, good afternoon. Thanks for taking the questions. First question just in terms of the verticals that you serve, maybe David can you just give a highlight, any pockets of strength that you're seeing and then the early cycle verticals that initially saw the softness be it technology or anything else, anything you'd call out there or any color you could add on those early cycle verticals then I have a follow-up?

Yeah, thanks Ralph. Yeah. So in terms of verticals as has been the case for a long time, our business looks like the whole US economy, so we're not particularly concentrated in one sector in a way that isn't representative of the economy as a whole. But looking at verticals, health care despite softness we saw remained fairly robust compared to other verticals and healthcare is a significant, obviously, chunk of the economy. So that was notable bright spot I would say you know on the on the more negative side of things we saw transportation, storage, travel and leisure being on the weaker side of the ledger where we saw softer performance. And then in terms of those early verticals you talked about, finance and technology in particular, which is where we saw weakness at the very beginning of this particular downturn back in mid 22. They were in the middle, in between the book ends of health care being a little bit stronger and things like transportation and storage being on the weaker side.

Great. Just follow-up sounds like SMBs continue to be a cyclically challenged, so just if you can get an update on what you're seeing from your enterprise customers? Thanks.

Yeah. So enterprise customers as evidenced by the fact that our percentage of revenue that comes from performance marketing, which is driven by enterprise customers ticked up to 22%. Enterprise customers were a little bit more robust than SMBs were during the quarter. What we've seen there is a combination of good execution on our part. And also some hiring needs in particular areas like health care as I mentioned where areas like major medical centers continue to have structural shortages in things like nurses in terms of what we're doing, I'm really pleased with the execution of our teams there and what has been a difficult environment for a couple of years, but we're really optimistic that we've got a long way to go here that 22% is still less than the 50% roughly of the market opportunity in the us that enterprises represent and our optimism there remains very strong as we look at potential for further growth with enterprises.

Great. Thanks, Ian.

Your next question comes from the line of Josh Chan with UBS. Josh your line is now open.

Hi, thank you. Good afternoon. I guess in remarks you mentioned the great day. I was just wondering, if there's any house view on what will cause it to end and how that would kind of unfold. I know it's, you know open ended question but appreciate any color there.

Your next question comes from the line of Doug Anmuth with JPMorgan. Doug, your line is now open.

Hi. This is Maggie Hoffman on for Doug. Thanks for taking the question. I was just wondering if there's any color you can provide around the timeline for the launch of Breakroom in the US? And then maybe just more broadly as you roll out new products and features sort of how we should think about the monetization opportunity there over time? Thanks.

Thanks, Maggie. Yeah. So Breakroom, we continue to be very excited about obviously we're a few months into the integration since we acquired them a few months ago over the summer. First of all, they're performing great in the UK. They're a young business. So it's not a material portion of our revenue at this point. But they're you know building both on the job seeker side, where we see strong growth in the UK and on the employer side, where they're performing very well and work is well underway to launch Breakroom in the US. So you know we already have several components of the work that's been done and look forward to updating you on that in 2025 as that launch comes together in the US.

And then, I will -- this Ian, I will just add on new products. We have multiple new products that have already been deployed. One is the new Resume Database. The other is

Great. Thank you so much.

[Operator Instructions] And your next question comes from the line of Glenn Shell with Raymond James. Glenn, your line is now open.

Good evening. I was just wondering how are you thinking about balancing investments for maintaining low to mid-teens margin profile.

Yes. So our philosophy really hasn't changed. We've been in a pretty dynamic environment for the last couple of years, and we respond to the -- that environment as it comes. And so over the course of this year, especially we've seen hiring trends to be relatively flat towards the front part of the year. And then that trend start to soften towards the back end of the year, and we've adjusted accordingly. So over the course of the year, we're delivering margins in the low to mid-teens, consistent with the feedback that we provided all year long. But we're doing that not in response to or in direction of any single quarter's performance. But in terms of long-term performance. That's the primary lens that we use.

Okay. Thank you. And then, you're obviously making really good progress on job seeker traffic growth. What tailwinds do you see coming from this momentum whether new employer conversations, better matching anything like that? I have one more follow-up if we have time.

Yes. This is Dave. So, on the job seeker front to zoom all the way out, obviously, we're a two sided marketplace. We monetize entirely on the employer side of the marketplace but job seekers are the foundational element that brings our employers here. So as we grow and as we grow relative to our competitors, on the job seeker front that makes everything in our business work better, from new business acquisition to matching technology to retention of customers and keeping customers happy, keeping their intent to return as their hiring needs come back in the case of small businesses or keeping their month to month hiring needs. In the case of enterprise customers as robust as possible and keeps our value proposition as robust as possible. And it's not only the absolute number but it's now this compounding trend line of being the fastest growing highest momentum jobseeker destination in the job space that gives us a lot of confidence but this is a forward-looking indicator, every single major move in our view of the history of the online job space in terms of employer revenue dollars has been preceded by a major move in job seeker market share. And we're seeing that job seeker market share in our business, which makes us very, very optimistic for the future as the macro environment changes.

And this is Ian. I would just say that in an environment where every player in the recruiting space is confronted with the reality of reduced hiring demand from employers. The one place where we feel we can most clearly see and fight for market share is with job seekers. And the measure of how our marketplace is improving is I think made apparent by how successful we have been not steps in the quarter, not just in the year but over the last two years in the steady increase in job seeker traffic where we have been a disproportionate winner relative to all of our peers.

Great. Thank you. And then more on the employer side, you said that some employers are coming back to

Yes, so great question. So, we're extremely excited about driving brand awareness above 80% on both the job seeker and the employer side of the marketplace. So you know from a standing start a little over a decade ago to where we are today that's been a significant and ongoing investment. And we see that as being a major asset as we go forward. That said we still believe we're in the growth in early stages of building this marketplace. So we plan to continue to invest in that brand. But we do see over time that significant numbers of every single cohort come back to us as their hiring needs come back. And that's especially true in that small business segment that I mentioned a little bit earlier where their hiring needs are often intermittent. If you have five or 10 or 25 employees, you're not necessarily hiring it every single second. And so staying top of mind in between job searches is critical for us and that's where having brand awareness and being top of mind is so important. So we're going to continue to invest in that. But as we've studied this business, as we've studied other online marketplaces, as we've studied job -- online jobs marketplaces in other countries, what we've seen is marketing and sales have come down over time as businesses cross into the you know two decade you know kind of age in their life cycle. And there's no magic formula of that, but it gives us very high confidence that already at our current scale and at our current brand awareness, we're reaching virtually every single job seeker and every single employer with our marketing and messaging in a given year often multiple times. And so as we scale our revenue, the reason we have confidence in our 30% long term adjusted EBITA target is because we're not going to have to scale on the go to market side as revenue scales.

And I would just add that if you go back to the postcovid initial recovery back when we were still being careful about the investment of marketing dollars, we were not yet certain as to the steadiness or persistence of said recovery. But the advantage of having top of mind brand name recognition really becomes apparent when hiring demand is increasing because without spending money on marketing. Dollars we saw a surge in organic business and that's where it really manifested into the operating leverage that we have come to appreciate so much. So I think we're well positioned as a top of mind answer for most of the employers in America is still like where should I go to post my job?

Okay. Thank you very Much.