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ZIP, ZipRecruiter Inc.

Software asset-light Distress / turnaroundCyclical

A software business, earning high margins on code once it is written.

Latest annual: FY2025 10-K

ZIP · ZipRecruiter Inc.

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$449M

−5.3% YoY · 1% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $446M 5-yr avg $643M

Gross margin 89% 5-yr avg 90%

Operating margin −2.1% 5-yr avg 3.6%

ROIC −3% 5-yr avg 10%

Owner-earnings margin 4% 5-yr avg 12%

Free cash flow margin 4% 5-yr avg 12%

The business in brief

What this business is and what moves its needle, from its own SEC filings.

Situation: Distress / turnaround. Thin interest coverage, or operating cash burned against real debt, across the record. The balance sheet carries this situation; the debt schedule sets the clock. Cyclical. Margins collapse and recover repeatedly across the record; a single year, good or bad, misstates the through-cycle earning power.
What moves the needle: Gross margin has run about 89% and operating margin about 0.3% through the cycle, a wide spread between price and the cost of what it sells — whether that advantage is durable pricing power or a margin that can erode is the question the record is for. The operating margin has swung widely — from −4.3% to 15% — on a steadier 89% gross margin, so what moves it sits below the gross line, in operating spend and one-off charges more than in the cost of the product itself. The cash cycle has run negative through the cycle (a median of −72 days): the operation is paid before it pays, so working capital releases cash as the business grows rather than tying it up. Read this kind of business on retention and the cost of growth.
Is it a good business?: Return on capital has sat near the cost of capital (median 10%). The steadier read is owner earnings: roughly 14% of revenue reaches owners as cash, consistently, and customers and suppliers fund the business through negative working capital. The cycle and the balance sheet decide this one; the worst year tells more than the median, and the rest is in the 10-K.

Every line is arithmetic on the company's filings, shown in full in the sections below.

The record

Ten years of arithmetic, read across the cycle.

The record, 2019–2025

realized figures from each filing · older years to the left

2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMMar 2026
								Income statement
$430M	$418M	$741M	$905M	$646M	$474M	$449M	$446M	RevenueRevenue
87%	87%	89%	90%	90%	89%	89%	89%	Gross marginGross mgn
9%	9%	20%	12%	15%	15%	15%	15%	SG&A / revenueSG&A/rev
15%	17%	15%	14%	22%	28%	28%	26%	R&D / revenueR&D/rev
($6M)	$64M	($8M)	$97M	$79M	$1M	($19M)	($9M)	Operating incomeOp. inc.
−1.5%	15.4%	−1.1%	10.7%	12.3%	0.3%	−4.3%	−2.1%	Operating marginOp. mgn
($6M)	$86M	$4M	$61M	$49M	($13M)	($33M)	($25M)	Net incomeNet inc.
								Cash flow & returns
($2M)	$88M	$144M	$129M	$103M	$46M	$11M	$17M	Operating cash flowOp. cash
$9M	$10M	$9M	$11M	$12M	$12M	$12M	$12M	DepreciationDeprec.
($11M)	($14M)	$24M	($20M)	($42M)	($18M)	($16M)	($11M)	Working capital & otherWC & other
$3M	$1M	$6M	$3M	$918K	$922K	$1M	$923K	CapexCapex
0.6%	0.3%	0.8%	0.3%	0.1%	0.2%	0.2%	0.2%	Capex / revenueCapex/rev
($5M)	$87M	$138M	$126M	$102M	$45M	$10M	$16M	Owner earningsOwner earn.
−1.1%	20.7%	18.6%	13.9%	15.8%	9.5%	2.2%	3.7%	Owner earnings marginOE mgn
($5M)	$87M	$138M	$126M	$102M	$45M	$10M	$16M	Free cash flowFCF
−1.1%	20.7%	18.6%	13.9%	15.8%	9.5%	2.2%	3.7%	Free cash flow marginFCF mgn
—	—	—	$0	$0	$12M	$0	$0	AcquisitionsAcquis.
$0	$19M	$3M	$339M	$148M	$40M	$102M	—	BuybacksBuybacks
—	—	—	24%	21%	0%	-5%	-3%	ROICROIC
—	—	2%	215%	587%	-96%	—	—	Return on equityROE
—	—	2%	215%	587%	−96%	—	—	Retained to equityRetained/eq
								Balance sheet
$36M	$115M	$255M	$227M	$283M	$218M	$188M	$251M	Cash & investmentsCash+inv
—	$21M	$42M	$44M	$27M	$23M	$26M	$24M	ReceivablesReceiv.
—	$14M	$25M	$21M	$12M	$11M	$9M	$8M	Accounts payablePayables
—	$8M	$17M	$23M	$15M	$13M	$17M	$16M	Operating working capitalOper. WC
—	$145M	$311M	$632M	$562M	$544M	$449M	$431M	Current assetsCur. assets
—	$71M	$143M	$130M	$85M	$82M	$71M	$59M	Current liabilitiesCur. liab.
—	2.0×	2.2×	4.9×	6.6×	6.7×	6.3×	7.3×	Current ratioCurr. ratio
—	$2M	$2M	$2M	$2M	$9M	$9M	$9M	GoodwillGoodwill
—	$212M	$399M	$715M	$660M	$664M	$570M	$551M	Total assetsAssets
—	$25M	$0	$542M	$543M	$544M	$545M	$545M	Total debtDebt
—	($89M)	($255M)	$314M	$260M	$325M	$357M	$294M	Net debt / (cash)Net debt
-11.0×	62.1×	-9.2×	3.4×	2.7×	0.0×	-0.7×	-0.3×	Interest coverageInt. cov.
($122M)	($50M)	$235M	$29M	$8M	$13M	($77M)	($84M)	Shareholders’ equityEquity
1.6%	1.4%	14.5%	8.5%	13.0%	13.6%	10.6%	9.3%	Stock comp / revenueSBC/rev
								Per share
79.3M	94.2M	115M	121M	106M	98.6M	89.9M	83.7M	Shares out (diluted)Shares
$5.41	$4.44	$6.42	$7.45	$6.10	$4.81	$5.00	$5.34	Revenue / shareRev/sh
$-0.08	$0.91	$0.03	$0.51	$0.46	$-0.13	$-0.37	$-0.30	EPS (diluted)EPS
$-0.06	$0.92	$1.20	$1.04	$0.97	$0.45	$0.11	$0.20	Owner earnings / shareOE/sh
$-0.06	$0.92	$1.20	$1.04	$0.97	$0.45	$0.11	$0.20	Free cash flow / shareFCF/sh
$0.03	$0.01	$0.05	$0.02	$0.01	$0.01	$0.01	$0.01	Cap. spending / shareCapex/sh
$-1.54	$-0.53	$2.03	$0.24	$0.08	$0.14	$-0.86	$-1.00	Book value / shareBVPS

Per-share growththe realized rate an owner's share compounded

	6-yr	5-yr
Revenue / share	−1.3%/yr	+2.4%/yr
Owner earnings / share	—	−34.6%/yr
Capital spending / share	−15.0%/yr	−3.6%/yr

The record, charted

FY2019–2025

Each measure over its full record; the current point and the worst year marked.

Share count

90Mpeak FY2022

ROIC

−5%low FY2025

Gross margin

89%low FY2020

Net debt ÷ owner earnings

36.1×peak FY2025

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$10Mowner earningsvs.($33M)net incomelow FY2019

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetainedBeyond op. cash

Each year's outlays against its operating cash: the mix, and how it drifts. The hatched cap is spending beyond that year's operating cash — financed from the balance sheet or borrowing, not operations.

FY2020FY2025

Owner-earnings bridge

FY2021–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business turned a $33M loss into $10M of owner earnings: more cash than the profit line showed, after the non-cash charges and the capital it put back in.

	FY2025	FY2024	FY2023	FY2022	FY2021
Reported net income	($33M)	($13M)	$49M	$61M	$4M
Depreciation & amortizationnon-cash charge added back	+$12M	+$12M	+$12M	+$11M	+$9M
Stock-based compensationreal costnon-cash, but a real cost	+$48M	+$64M	+$84M	+$77M	+$107M
Working capital & othertiming of cash in and out, other non-cash items	−$16M	−$18M	−$42M	−$20M	+$24M
Cash from operations	$11M	$46M	$103M	$129M	$144M
Capital expenditurecash put back in to keep running and to grow	−$1M	−$922K	−$918K	−$3M	−$6M
Owner earnings	$10M	$45M	$102M	$126M	$138M
Owner-earnings marginowner earnings ÷ revenue	2%	9%	16%	14%	19%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position . The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $48M), owner earnings is nearer ($38M).

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? -0.7×

Does not cover its interest

Operating income ($19M) ÷ interest expense $30M

What this means
A full year of operating profit didn't cover the interest bill. This is the zombie zone: the business depends on refinancing, asset sales, or forbearance to service its debt.
How heavy is the debt, net of cash? $357M

Net debt against an operating loss

Cash $188M − debt $545M

What this means
Netting $188M of cash and short-term investments against $545M of debt leaves $357M owed, with no operating profit this year to measure it against — understand that combination before anything else about the company. Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? -48d

Negative, funded by others

DSO 21 + DIO 0 − DPO 69 days

What this means
Days cash is tied up between paying suppliers and collecting from customers. A negative cycle is a quiet moat: suppliers and customers fund the operation (Buffett's “float”), the company grows on other people's money. (Little or no inventory, a services / asset-light model, so the inventory leg is ~0.)

Is it a good business?

Return on invested capital 0%

Below average through the cycle

4-yr median, range -5%–24%; -5% latest = NOPAT ($15M) ÷ invested capital $280M

Industry peers: median 4%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 4 years (it ran -5% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin 14%

Solid through the cycle

7-yr median margin, range -1%–21%; latest $10M = operating cash $11M − maintenance capex $1M

Industry peers: median 18%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 2% of revenue this year, a 14% median across 7 years. Treating stock comp as the real expense it is (less $48M of SBC) leaves ($38M).
Are earnings backed by cash? $11M

Loss, but cash-generative

Net income ($33M) · cash from operations $11M

What this means
The company reported a net loss, so a conversion ratio isn't meaningful. What matters then is whether operations still threw off cash, here, they did.

How is the cash used?

Where do the earnings go? 1033%

Returned more than it generated

Dividends + buybacks $102M ÷ Owner Earnings $10M

What this means
The company returned more than it generated: against $10M of Owner Earnings, $102M (1033%) went back to shareholders, $0 dividends, $102M buybacks — the excess came from the balance sheet or borrowing, not the year's operations. Net of $48M stock comp, the real buyback was about $54M. Sustained, that pattern draws down cash or adds debt; the net-debt line above shows where it stands.
Investing or harvesting? 0.09×

Harvesting

Capex $1M ÷ depreciation $12M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 1 of 6 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Miss

Revenue ≥ $2B · $449M

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Pass

Current ratio ≥ 2× · 6.33×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Near

Debt ≤ working capital · $545M vs $378M WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Miss

A profit every year (7-yr record) · 3 loss years

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Miss

Uninterrupted dividends · none paid

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth Miss

Earnings +33% over the record · −96%

What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $0.02/share (latest year $-0.46), the averaged base the calculator's gate runs on, and book value is $-1.08/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2019–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 4 of 7

What this means
Lost money in 3 year(s), look at what happened there before trusting the average.
Return on capital ≥ 15% 2 of 4 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin 4% → 3% (3-yr avg ends)

What this means
Through the cycle the operating margin held roughly steady — about 4% early, 3% lately, median 0%.
Reinvestment, incremental ROIC returns capital

What this means
The capital base barely grew: this business returns cash through dividends and buybacks rather than reinvesting. Judge it on the cash returned, not on compounding.
Owner earnings growth −7%/yr

What this means
Owner earnings shrank about 7% a year over the record.
Worst year 2025 · −4.3% op. margin

What this means
Operations went underwater in 2025, understand why before trusting the good years.
Share count +2.1%/yr

What this means
The share count is rising, dilution works against you on a per-share basis.

Does AI threaten the moat?

Elevated contestability

The product is software or information, the very thing capable AI now produces more cheaply, so the moat is more contestable than the record alone implies.

AI has collapsed the cost of building a capable substitute for the very thing this business sells. When a credible alternative can be assembled for a fraction of the incumbent's price, it is pricing power that erodes first, not revenue tomorrow. The live question is whether the moat survives that, not whether it held in the past. Whether that question is answerable at all is yours to decide, against your own circle of competence.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Mar 31, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$431M

Cash & short-term investments$251M
Receivables$24M
Other current assets$157M

Current liabilities$59M

Accounts payable$8M
Other current liabilities$51M

Current ratio7.27×all current assets ÷ what's due · Graham looked for 2×

Quick ratio7.27×stricter: inventory excluded

Cash ratio4.23×strictest: cash alone against what's due

Working capital$372Mthe cushion left after near-term bills

Revenue, latest quarter vs. a year ago−2.3%the freshest read on whether the business is still growing

Current ratio, recent quarters7.5× → 7.3×

Deeper floors

Tangible book value($95M)equity stripped of goodwill & intangibles

Net current asset value($204M)Graham's net-net: current assets less all liabilities

Debt incl. operating leases$557M$12M of it operating leases

Deferred revenue$11Mcustomer cash collected before delivery; operating float

From the company's latest filing.

How the cash was used, 2019–2025

Over the record, the business generated $519M of operating cash; how management split it reads as a cash returner, paying most of what it earns straight back to owners.

Reinvested$16M · 3%
Buybacks$651M · 126%

Returned to owners$651M
129% of the owner earnings the business produced over the span, $0 as dividends and $651M as buybacks.
Source of funding−$148M
Reinvestment and shareholder returns ran $148M beyond the operating cash the business generated, so the gap was financed off the balance sheet.
Average price paid for buybacks—
Buybacks ran $651M over the span, but the filings don't tag the share count needed to deduce the average price paid.
Net change in share count5.5%
The diluted count rose from 79M to 84M: issuance (stock pay, deals) outran any buybacks, so owners were diluted on net.
Dividend record—
No dividend line was reported in the filing data over the span; the record here neither confirms nor rules out a payout.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Chief executive	Pay, as filed	“Actually paid”	Owner earnings
2021	Ian Siegel	$35.2M	$34.4M	$138M
2022	Ian Siegel	$1.1M	−$7.4M	$126M
2023	Ian Siegel	$465k	−$14.0M	$102M
2024	Ian Siegel	$5.7M	$3.8M	$45M
2025	Ian Siegel	$2.9M	$1.4M	$10M

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

Stock-based compensation$48M
The slice of the business handed to employees in shares this year, 11% of revenue. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why ZipRecruiter Inc. is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2019–2025.

2 of the 3 tests turned up something to look into; the other 1 came back clean.

Look hereIs it less profitable than it was?9.2% vs 12.8%
The owner-earnings margin averaged 12.8% early in the record and 9.2% across the last three years, and the latest year has not recovered. Ask the filing whether that is a structural drift or a cyclical trough — price, mix, cost, or a competitor — and whether it is permanent.
Look hereDid the share count rise anyway?5.5%
Diluted shares grew 5.5% over 2019–2025, even as the company spent $651M on buybacks. The repurchases were outrun by issuance — to staff, in a raise, or in a deal — and the filing says which; owners' slice still shrank. Read the buyback line beside this one, not on its own.

And these came back clean

Did reported profit become cash?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

Peers, Software

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
DVDoubleVerify	$748M	83%	12.5%	7%	18%
EVEREverQuote Inc.	$693M	94%	-3.7%	-34%	1%
ZIPZipRecruiter Inc.	$449M	89%	0.3%	10%	14%
GRNDGrindr Inc.	$440M	—	21.4%	22%	26%
DSPViant Technology Inc.	$344M	46%	1.2%	-8%	13%
HSTMHealthStream Inc.	$304M	86%	5.8%	4%	18%
PUBMPubMatic Inc.	$283M	68%	7.5%	8%	25%
NXDRNextdoor Holdings Inc.	$258M	83%	-55.8%	-24%	-28%
Group median	—	83%	3.5%	5%	16%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what ZipRecruiter Inc. has delivered.

Today’s price $

Base Normalize · through-cycle ($52M) Net of stock comp (−$41M)

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · ’21→’25−33%/yr

Owner-earnings growth · ’19→’25−7%/yr

Owner-earnings yield—

P/E (3-yr earnings ’23–’25)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Owner earnings $16M on 71M shares outstanding, the balance-sheet count at 2025-12-31; net debt $294M. The if-converted diluted count is 84M, 17% above the shares outstanding: the dilution overhang (convertibles, options) a buyer inherits. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh ZIP against another business →

The owners of ZIP: the meeting and the votes →

Cite: Owner Scorecard, "ZipRecruiter Inc. (ZIP), the owner's record," https://ownerscorecard.com/c/ZIP, data as of 2026-07-09.

Manual order: ← ZIONP its page in the Manual ZLAB →

Industry order: ← ZETA the Software chapter ZM →