S&P alters ZipRecruiter view to negative

S&P said it changed its outlook for ZipRecruiter Inc. to negative from stable and affirmed its ratings, including its BB- issuer rating.

“Softening employer demand for job posting services is hurting ZipRecruiter's top-line performance. The company experienced declining revenue following a period of explosive growth in 2021 and into 2022. We think a cooling labor market, heightened economic uncertainty, and increasing cost of capital have led to moderated recruitment activities this year. The anticipated uptick in recruiting activity in the first quarter did not materialize this year, and ZipRecruiter's revenue continues to decline at an accelerating pace,” S&P said in a press release.

The company’s management said it forecasts a more than 30% drop in sales in the third quarter.

The negative outlook reflects the potential for a downgrade “in the next 12 months if demand continues to soften and leads to contracting EBITDA and elevated leverage relative to our forecast,” S&P warned.

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