Q4 2023 Ziprecruiter Inc Earnings Call

Participants

Drew Haroldson; IR; Ziprecruiter Inc

Ian Siegal; Co-Founder & CEO; Ziprecruiter Inc

Dave Travers; President; Ziprecruiter Inc

Tim Yarbrough; EVP & CFO; Ziprecruiter Inc

Kunal Madhukar; Analyst; UBS

Brian Fitzgerald; Analyst; Wells Fargo

Ralph Schackart; Analyst; William Blair

Justin Patterson; Analyst; KeyBanc

Mark Mahaney; Analyst; Evercore

Eric Sheridan; Analyst; Goldman Sachs

Presentation

Operator

Yes, ladies and gentlemen, thank you for standing by, and welcome to the Ziprecruiter, Inc. Q4 2023 earnings conference call. (Operator Instructions) As a reminder, today's call is being recorded. I will now hand today's call over to Drew Haroldson, Investor Relations. Please go ahead, sir.

Drew Haroldson

Thank you, operator, and good afternoon. Thank you for joining us on our earnings conference call during which we will discuss Ziprecruiter performance for the quarter and year ended December 31, 2023, and guidance for the first quarter of 2020. For joining me on the call today are Ian Siegel, Co-Founder and CEO; David Travers, President, and Tim Yarbrough, CFO.
Before we begin, please be reminded that forward-looking statements made today are subject to risks and uncertainties related to future events and or the future financial performances of Ziprecruiter. Actual results could differ materially from those anticipated in these forward-looking statements.
For a discussion of some of the risk factors that could cause actual results to differ materially from any forward-looking statements can be found in Ziprecruiters annual report on Form 10-K for the year ended December 31, 2023, which will be available on our investor website and the SEC's website. Forward-looking statements in this conference call are based on the current expectations. As of today, Ziprecruiter assumes no obligation to update or revise them whether as a result of new developments or otherwise.
In addition, during today's call, we will discuss non-GAAP financial measures. These non-GAAP financial measures should be considered in addition to not as a substitute for or in isolation from GAAP results. And reconciliations of the non-GAAP metrics to the nearest GAAP metrics are included in that preclude a shareholder letter and in our Form 10-K.
And now I will turn the call over to Ian.

Ian Siegal

Thank you, Drew, and good afternoon to everyone joining us today in 2023, demand for recruiting services dropped throughout the year for companies of all sizes. This culminated in Q4 of 2023, which had the lowest BLS reported hiring rate since 2014. Excluding the onset of the pandemic question separation. Some of the primary drivers of employer hiring are down to pre-pandemic levels, while in 2021 and 2022 workers left jobs for higher wages, wage inflation has abated and macro economic uncertainty has increasingly kept people in their current roles with fewer job openings and lower employee turnover.
The great resignation has turned into the big stay as has been our standard operating practice, Juniper could have responded to the downturn by rapidly reducing expenses. As a result, in 2023, we delivered net income of $49 million and adjusted EBITDA of $175 million.
This represented a net income margin of 8% and adjusted EBITDA margin of 27% year over year increases of one and seven percentage points, respectively. While there have been significant top line headwinds in 2023, product improvements have continued at full speed. Our long term product and technology roadmap has remained fully funded. A few examples include our AI assistant.
Phil continues to improve as a conversational AI driven career advisor, helping jobseekers understand their goals and providing personalized job recommendations. Jobseekers onboarded buy-sell generate nearly twice as many applications as job seekers who come in through other channels.
Another example is building solutions for enterprise in the third quarter of 2023, we introduced programmatic campaign optimization for larger customers. In Q4, we delivered the first round of optimization for that solution, resulting in a 40% improvement in campaign performance over the prior quarter. A final example of our investment is our ongoing efforts to deeply integrate with applicant tracking system in 2023. We continue to deploy ATS integrations, which allow enterprises to activate Zip, apply our one-click application flow for job seekers.
Zip applied delivers three times more applications per job for the same amount of spend. These integrations also enable customers to share hiring signals with us, which makes our matching technology smarter over time. Navigating the ups and downs of the labor market is a reality of our business in 2023. This meant conserving capital by primarily pulling back on marketing expenses, although we retain flexibility to manage expenses if the labor market slows further, we think it is prudent to continue investing in long term initiatives like the ones I shared, the long-term opportunity to disrupt our job seekers and employersconnect remains large.
We will continue to improve our matching algorithms and products to increase engagement between employers and jobseekers. While the shape and duration of the current labor market cycle remains out of our control, we remain focused on our mission of actively connecting people to their next great opportunity. With that, I will now turn the call over to Dave to review progress on our growth strategies. Dave?

Dave Travers

Thank you, Ian, and good afternoon. Despite the headwinds, we were able to continue investing in key strategic initiatives because of our strong financial foundation. Just as we have over our history, we're confident that over the long term, we will continue to gain meaningful market share from both off-line and online recruiting solutions.
We made significant progress in 2023 using innovative technology to deepen engagement between employers and jobseekers. Our first strategic pillar is increasing the number of employers and revenue per paid employer in our marketplace. Growing revenue from large enterprise customers is a significant opportunity. In 2023, we introduced two new solutions that increase the speed of implementation and the effectiveness of enterprise campaigns.
Our automated campaign creation solution simplifies the process of creating and activating new campaigns. And over the course of 2023, we iterated on tools that significantly reduce campaign creation times from hours to minutes by driving customer adoption of our tools, fewer than 10% of new campaigns are now created manually.
Our approximately 140 third party ATS integrations are strategic investments nearly a decade in the making integrations, bringing employers jobs directly into our marketplace where job seekers can apply with our one click Zip apply feature without leaving our website. In Q4 of '23, the proportion of our performance marketing revenue driven by Zip applied enabled jobs grew 23% against the prior year period.
Moving on to our second pillar, increasing the number of jobseekers that our marketplace. As Ian mentioned, the great resignation has turned into the big day with historically low unemployment and turnover resulting in relatively flat jobs activity year over year in the US, labor market. This is consistent with what we see in our marketplace.
Despite the 45% year over year decrease in sales and marketing expense in 2023, we had nearly $58 million unique jobseeker interactions per quarter in 2023 on average compared to nearly $60 million in the prior year. We believe that this is a testament to our high aided brand awareness and superior job seeker products as organic visits from jobseekers grew by more than 40% over 2022 and installs for our number one rated job search app for IOS and Android grew by over 20% year over year.
In Q4, we further integrated the power of large language AI models into our job seeker process. For example, jobseekers can now engage with Phil or AI driven career advisor conversations. This provides an even more engaging experience, particularly when new jobseekers proceed through Phil's onboarding flow. Phil interact with job seekers, more fluidly learning about their experiences and suggesting job titles seekers may be interested in jobseekers love our LLM fueled fill users or 23% more likely to select one of the job titles suggested compared to the job shown in the prior onboarding experience.
We also leverage, though them to introduce a new feature that assist jobseekers with resin may creation long seam is a cumbersome task that involves the meticulous crafting a detailed job experience description. Job seekers can utilize the of new AI enabled tools to create job experience descriptions by selecting key tasks and responsibilities, eliminating a major pain point in the job search and further differentiating our job seeker experience.
I'll conclude with our third pillar, making our matting technology smarter over time. We bring employers and jobseekers together using machine learning and AI. Our marketplace gets smarter over time as our algorithm learn from observed behaviors across billions of interactions between job seekers and employers. In 2023, we delivered nearly $40 million great matches an increase of 24% over the prior year.
Further job seeker engagement has grown with the average job seeker generating 10% more applications in Q4 of '23 than in Q4 of '22. While overall employer demand has been directly impacted by macroeconomic pressures, and uncertainty, our paid employers are getting incredible results. We delivered over 60% more applications per paid employer in Q4 of '23 than in Q4 of '22.
As previously announced in 2023, we leverage cutting edge AI and machine learning techniques to improve our resonate person capability. In Q4, we released an update to our resume a parcel that improved precision by an additional 9% separately. We also introduced new parsing capabilities for job postings, taking a comprehensive look at certain job description details related to qualifications, responsibilities, compensation and company details with improved Carsen capabilities for both resonate and job postings, our algorithms will be able to better match job seekers and employers.
Now I'll turn it over to Tim to talk through the financial results and our guidance. Tim?

Tim Yarbrough

Thank you, Dave, and good afternoon, everyone. Our fourth quarter revenue of $136 million represents a 35% decline year over year and is reflective of a continued soft hiring environment. Quarterly paid employers were 71,000, representing a 35% decrease versus Q4 2022 and a 21% decrease versus Q3 2023. 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 $1,922, down 1% year over year and up 11% sequentially. The decrease year over year is another signal of a tighter hiring market, while the increase quarter-over-quarter is consistent with historical seasonal trend, net income was $6 million in Q4 '23 compared to $19 million in Q4 '22 and $24 million in Q3 '23.
Q4 '23 adjusted EBITDA was $42 million, equating to a margin of 31% compared to $51 million a margin of 24% in the prior year period and $54 million with a margin of 35% in Q3 '23. Net income and adjusted EBITDA decreases both year over year and quarter over quarter are primarily related to revenue declines. Fourth quarter was also impacted by a onetime $7.5 million charge in general and administrative expenses attributable to the acceleration of unrecognized stock-based compensation expense from the cancellation of market-based restricted stock units.
Cash, cash equivalents and marketable securities was $520 million as of December 31st, 2023 compared to $497 million as of September 30th, 2023, cash, cash equivalents and marketable securities increased quarter over quarter as the fourth quarter cash provided by operating activities was $34 million.
Moving on to guidance. As discussed above, the macroeconomic backdrop remains challenging. Our Q1 '24 revenue guidance of $120 million at the midpoint represents a 35% decline year over year. Our adjusted EBITDA guidance of $17 million at the midpoint or 14% adjusted EBITDA margin for the quarter reflects our continued fully-funded investment in hiring top engineering talent, new technology solutions and sequential increase in sales and marketing, consistent with how we typically approach marketing at the start of the year.
Despite continued uncertainty compared to prior quarters, there's more positive consensus among macroeconomic forecasters around a smoother transition back to a more typical economic environment. Therefore, we remain prepared for a wide range of outcomes in 2024. As we evaluate the evolving backdrop, our operating philosophy to level off adjusted EBITDA margins in the low to mid 10s. If we see the labor market downturn reaching a trough.
We will continue to assess the labor markets recovery and the expected return on our Invest remaining poised to increase investment as opportunities arise. And alternatively, we are always prepared to show further cost discipline if conditions deteriorate in any scenario. Our flexible financial model and operating discipline allow us to invest in technology and grow our data advantage.
We continue to be focused on what we can control, maintaining our strong financial foundation while staying ready for the eventual labor market recovery. With over $500 million of cash on the balance sheet and historical track record of profitable performance, we are ready to respond to whatever the external environment throws at us in 2024. With that, we can now open the lines for questions. Operator?

Question and Answer Session

Operator

(Operator Instructions)
Kunal Madhukar, UBS.

Kunal Madhukar

Hi, thank you for taking my question. Up one of them. When we look at January first, when we looked at the number of matches that increased 24% year over year, and you delivered 60% more applications per field employee in 4Q versus the year-ago period. So wireless performance revenue down like 40%. That's second here. And then when you gave the guide for the fourth quarter at that time, the guide seems to be conservative to maybe or maybe even lower than that given seasonality. So what changed during the quarter and that you were able to come in and beat the estimates by you? Thanks.

Dave Travers

Thanks Kunal, this is Dave. I'll take the first part of that and let Tim take the second. So yes. So we what we saw over the course of the year is incredible progress on our matching technology as we continue to invest despite the changing macroeconomic environment so as you know, we're a two-sided marketplace and there was a significant change in demand over the past 18 months, and that impacted our revenue initially with small businesses when we first highlighted the change in the environment 18 months ago and over time, it has increasingly impacted large enterprises as well.
And that's really the demand side of the equation is really what has driven the revenue decline in performance marketing to your point. However, we made incredible progress in delivering more value even despite the challenging demand environment where we are growing the value as measured by great matches of that.
We grew by 24% as you as you noted, and that on a per paid employer basis and paid employers obviously declines we're delivering way more value, 60% more applications per paid employer and over time. So the value of the product in the marketplace that we're delivering to employers continues to grow as we continue to invest despite the changing demand environment, which drives revenue in the short term. But what that value delivery is, what gives us tremendous confidence over the long term yes, this is Tim.

Tim Yarbrough

I'll answer that. Second question about Q4 versus the guidance. So the upside in revenue really came from the account of paid employers that came in a bit higher than we expected Q4 inventory slightly difficult to predict and given the holidays and how seasonally they are. But typical quarter cadence is something where it starts off relatively strong.
October through the middle of November and starts to tail off in Thanksgiving and then recover slightly before again declining through the end of the holidays. And so on the back end of that quarter in a traditional year is difficult to predict, but given the macro headwinds that we've been facing as a result of more so but that's the general shape of how revenue kind of that's built out throughout the quarter.

Operator

Brian Fitzgerald, Wells Fargo.

Brian Fitzgerald

Thanks, guys. I'm I would you characterize the I mean, thanks for the color so far, but I'm wondering trying to parse apart a little bit more, how would you characterize the hiring environment right now in terms of what are you hearing from employers that should average close to firming up their hiring plans for the year?
Are they pushing out kind of locking down those hiring plans that that's anomalous from a normal year and then anything to call out in specific verticals or are you seeing any trends across verticals that stand out or are out of sync with what's going on with the rest of the market?

Ian Siegal

Hi, this is Ian. I will take this question. And I think the important thing to understand is that over the last few weeks, we have seen early signs of the labor market, a flattening out. And because of this, I just want to reiterate our operating philosophy. So if you look at what happened last year and really for the last year and a half, we've had an industry-wide slowdown in our top line went backwards.
But in 2023, we still expanded our adjusted EBITDA margins from 20% to 27% when you compare it versus 2022. And that bottom line performance amidst top line contraction is our long-standing operating philosophy. When we see demand from employers decreased. We pulled back on expenses. And in this most recent 18 month long decline, we've actually cut our operating costs by over 47%.
And this both reflects the discipline with which we adhere to our operating philosophy and also highlights the flexibility of our business model. If the current flattening trend continues, we are willing to accept lower EBITDA margins so that we remain ready to capitalize on what we consider to be an inevitable market recovery.
If we see that recovery in 2024, you can expect that we're going to increase investment just as we did in the first economy signals showed us that the economy is reopening after COVID. And alternatively, if we see the market decline further, but we're going to manage our costs accordingly. So effectively, we're in a wait-and-see position and we remain nimble and we will adapt to the realities of the market as it evolves this year. But certainly the flattening we're seeing is something of a new phenomenon given the last 18 months of performance.

Brian Fitzgerald

Thanks again. Appreciate it.

Ian Siegal

Yeah.

Operator

Your next question is from --

Dave Travers

So to the second second part of your question on verticals, we have continued to see a number of verticals move in the dynamic environment we're in. So for example, tech which was a leading vertical that that started to tail off in terms of hiring tech continues to be quite slow as one example. Another example is government sector where started off the downturn quite strong, but over the past quarter has been fairly soft.
And on the flip side, you know, a bright spot is education where there continues to be a teacher shortage and other school and education related shortages and where there's continued catch-up hiring aggressively taking place.
That said, you know, in every quarter and every year over year period, we see sectors moving in different directions. And there's been no major structural change to the mix or the weighting of our marketplace vis a vis the whole economy. Again, in terms of industry in terms of geography or our marketplace in terms of jobs, skill level, our marketplace looks very much like it is very representative of the whole US economy.

Brian Fitzgerald

Thanks, David.

Operator

Doug Anmuth, JPMorgan.

Thanks for taking the question. it's Wes for Doug. Products and product improvements and are still investing in the long-term opportunities. I think that's pretty largely consistent with what you did last year as well. So just kind of given the uncertainty ahead and coupling that with what you've already accomplished in 23. What are key priorities or areas of focus for you coming into 24 from like a product or investment perspective?

Ian Siegal

And this is Ian. I'll take this question, and we are tremendously excited about where our product is going because it feels like we've started to really reap the results of what our long-term strategic road map has been focused on and namely for a long time, we've been focused on building the best matching algorithms in the category to bring job seekers and employers together to actively connect them but what we have learned and where we are now currently deeply and intensely focused is that it's not just enough to show the two sides, the right batch. We also have to stoke them to engage.
So we're spending a lot of time working on engagement features, and you already are seeing the impact of that. And I can I can bring that home with data. So if you look at 2023, our organic job seeker traffic increased 40%, which was enough to offset the reduction in investment in paid acquisition for jobseekers we did in that year.
So effectively, 2023 traffic was largely flat with 2022. However, then level of engagement and the number of applications from those jobseekers was up 17%. And that is a massive swing in the level of interaction between the two sides of our marketplace. And we're just really excited about that because it shows that we're on the right path.
And this category for us has very much been about from building a brand so that we get a direct flow of organic traffic to the two sides of our marketplace, building the best matching so that we know who should be talking to whom. And now we are very focused on stoking those two parties to actually engage and engage quickly, and we're seeing really healthy success there.
So we're going to keep investing. It's part of our thesis on staying nimble this year and keeping investment levels where they are because we feel like our product is rapidly improving. And as I said before, we're seeing the first and it's early, but we're seeing the first signs of the market flattening. So and we are going to stay poised and ready for that.

Great. Thank you so much.

Operator

Ralph Schackart, William Blair.

Ralph Schackart

We afternoon and thanks for the question. On the call, you talked about the last few weeks in the labor market flattening out. Just curious, was that sort of a gradual and sort of trend to when it eventually flattened out? Or was it a little bit more pronounced? And then just a follow-up to that. Are you seeing that across the board with SMBs as well as enterprises are. But any color you could add between those two segments as well? Be helpful. Thank you.

Dave Travers

Thanks, Ralph. This is Dave. Yes, so it's been fairly broad-based it's very early, but we've seen a few other periods of a couple of weeks here and there where we've seen some signs of flattening over the past 18 months. And then further down trends, but this has been going on for a few weeks now over a month. And it's been pretty broad-based in terms of industry and category size. But it's I would say, gradual, much more gradual than anything, sharp or like a return.

Ralph Schackart

Okay. Thank you.

Operator

(Operator Instructions)
Justin Patterson, KeyBanc.

Justin Patterson

Great, thank you very much. Good afternoon. Two, if I can. First, just wanted to go back to kind of some of the investment commentary you've given. You've obviously made a lot of progress with the products over this past cycle. It sounds like we can expect investment stepping up a bit more here as you just look at all of the product improvements you've made and are leaning into marketing again, but how should we think about just market share gains coming out of this cycle versus what existed in the past. And then I've got a follow-up after.

Ian Siegal

This is Ian I will take the question. So the way we think about market share is it's really hard to measure quarter to quarter it better measured over years. And especially when you're experiencing the kind of seismic changes in the labor market that we've undergone over the last 1.5 years, it gets really tricky. But that said, we definitely believe we are gaining market share. And while our top line has come down, we are certainly not alone there, our entire industry has effectively suffered a decline.
And while there are a few larger players and many smaller ones, what still seems clear is that online is taking share from off-line and that we Zip recruiter have been winning share in that online segment of the market. So let me explain why we believe that and why we are confident that we're going to continue taking share in the future. Ari mentioned that our organic job seeker traffic is up over 40% in 2023.
That has a significant amount of increase in traffic that going up allowed us to turn paid jobseeker acquisition down. And while we didn't invest at the same levels, we effectively were able to keep jobseeker traffic flat because there were so many jobseekers coming to us for free further. Those jobseekers were highly engaged.
As I mentioned before, the total applications were up 17% in 2023, which we view as validation of our strategy on improving our matching algorithm and also improving sales. So the more we make still feel real, the more conversational and one tail becomes and the better key guides jobseekers through their process of putting together resonate and looking at the right job, it seems to be a virtuous cycle in terms of not only getting more traffic now, but we are optimistic about the future of what this strategy could bring to the site in terms of both users and their engagement.
So if we zoom back out we've also achieved 80% aided brand awareness with both employers and jobseekers, which means we are a top of mind solution for both sides of our marketplace. And that has proven to be incredibly valuable because it generates a foundation of effectively organic traffic. And it gives us tremendous flexibility when it comes to navigating downturns like that because it gives us optionality in terms of control of our expenses.
But further and what we're also excited about is there definitely is a value in having a recognizable brand when it comes to marketing and advertising in terms of the level of response that you get from being a known brand, having higher brand recognition that increases the efficiency of advertising. And when we see the recovery time.
And when we're investing into that recovery, it's just another advantage that we are able to press and as the category resumes to something that looks more like normal, I want to stress. Again, the flattening we've seen is very, very early, and we have seen signals of flattening before and then downturn resumes. So too soon to call it. But we are we are watching closely and staying Gary focused and keeping optionality.

Justin Patterson

Got it. That's helpful. And the second question might also have some too early to call pieces in it, but I'll try anyway, Dave, I have highlighted several examples of how LN.s are being used across the business. When you step back and just look at a lot of this AI investment, do you think you'll see more of an impact on either the revenue side or expense side this year?

Dave Travers

And I'm just curious what why you think one or the other well, I'll I'll talk about it like this, which is typically has been an AI company for almost a decade now. We have explored a variety of different techniques in order to bring this best in class matching that we have produced so far. And now you have these new large language models, which effectively allow software to develop a personality in the voice but there is so many ways you can use it and we have allowed it already to permeate our experience.
And I would say that this is something that is going to dramatically improve the process of employers, finding the right candidates and candidates, finding the right jobs. It will certainly be a tailwind for us as it is already part of the recipe that has led to the increase in the great matches that we see increase in the number of applicants that we've been able to generate per employer.
And so it is already having an impact. And there is a I think there is going to be a lot more to talk about as it relates to these large language models and how they can allow us to improve our service. And while I don't know the when when the revenue impact will come, I do believe better service over the long term, it leads to better revenue. And that is that, that seems very clear to us that that is available to us in the future through continuing optimization.

Tim Yarbrough

Yeah. To add on to that, Trevor, one of the things we've seen thus far as we bring on new technologies to make us more efficient. For instance, the campaign creation process for enterprise customers used to be highly manual now only a tiny percentage of campaigns are made manually, as I spoke about earlier. That's a case where rather than reducing expenses, what we've done is redeployed the resources that would have done that to spend more time with customers align upfront on the shared definition of success, drive results, faster, analyze and optimize campaigns, et cetera. So I think we're seeing early signs that that's going to really pay off for us. But that's how we've approached it thus far. And I look forward to reporting on more about what the results are as we continue.

Justin Patterson

Thank you.

Operator

Mark Mahaney, Evercore.

Mark Mahaney

Okay. I just want to ask about quarterly paid employers, and I apologize that came in late you may have already addressed this, but how do you think about and how should we think about where this number can trough? And I know there's sort of two factors I think going on is obviously the macro issues, but also there may be in certain verticals, large industry verticals there.
Just maybe kind of a change in philosophy on hiring and maybe I'm over over fixated on the tech vertical, but that just may be that we're going to grow first and then maybe add hires later, which is kind of a change in mindset, I think So anyway, just help us think through where that number could could base out and how much of a lagging indicator that could be this time maybe because the structural changes in hiring thoughts versus last economic cycles? Thank you.

Dave Travers

Thanks, Mark. This is Dave. So yes, in terms of the paid employee number, as referenced earlier and in our letter the hiring rate and during Q4 reached the lowest level since 2014, the number of hires in a given month adjusted for the size of the labor force. And so you know that metric, if it were to continue to come down, it could impact paid employers or if that were to recover or stabilize, that could certainly have an impact on paid employers, I think it would have a bigger impact than any permanent shift in attitude toward hiring per year.
On a comment, like I said earlier, tech is one of the if not the most impacted vertical on a year-over-year basis in the entire economy as we look out there. And that's where I think the biggest sort of structural attitude shift toward hiring is being talked about.
We have not seen that from the other sectors to nearly the same extent. But honestly, that's the biggest factor we see there is that what drives that higher number is less than net growth in jobs or anything like that. It's the most hires are to backfill people that have left to take on another job or decided to do something different.
As Ian and I talked about earlier that the great resignation has turned into the big day, and we see that as something that is working through the system after that, a lot of people sort of sheltering in place during COVID, a great reshuffling in terms of the big resignation during COVID in the immediate reopenings. And now there's some sort of digesting of that.
But fundamentally, we continue to see that economy and business needs being extremely dynamic, the needs of different types of jobs. They have employees opportunity to go get even better jobs or get a raise, those things are going to continue to be the case. So structurally, we don't see any massive shift underway despite some of the more tech-oriented and headlines and thought leadership around what that might.

Mark Mahaney

Thank you very much, Dave.

Operator

Eric Sheridan, Goldman Sachs.

Eric Sheridan

Thank you so much. I have two questions, if I could. Topics we've talked about on prior earnings calls. Given the demand environment on the job side, what is the current update on your efforts to keep jobseekers Warwick gauge for longer and potentially set up a healthy rebound when the macro environment's more receptive to that scale of job seeker and level of engagement that you've been building over the last couple quarters you've talked about that would be number one and then we did ability to pull back on marketing.
Do you have more recently any key learnings that you have that could be increased leverage or higher ROI around your marketing dollars that could have longer-term implications for the company beyond the current period.
Thanks so much.

Tim Yarbrough

I'll take the first part of that question, which is I think we're already seeing evidence of success in terms of driving up jobseeker engagement. As I said, organic traffic was up 40% last year. And that trend is something that we're excited about. And if you look at their behavior, it's not just volume of people coming directly to the site without requiring a paid acquisition strategy to bring them here, but they are proving to be much more engaged than the previous year's cohort.
And that is a manifestation of a variety of changes that we have made to the website and those fall into a few big categories. But namely, we're better at matching. We're better at showing opportunities to the right people and we are more respectful of those people in terms of being very selective about what jobs we choose to show them.
So you add all that together and the quality of the average users experience is just persistently going up. So it is definitely our focus and our belief that engagement is something that is important to keep growing. And I think we are well on our way.
Yes.

Dave Travers

And then to take the second part there in terms of marketing efficiency, we certainly think that the well over $1 billion we spent to get 80% brand awareness on both the job seeker and employer side of our marketplace is going to pay dividends as the recovery eventually takes shape. And as we and invest in marketing behind that. I think the key and as Ian was just talking about the most tangible way, you can see that now is this this increase in organic job seeker activity these are the highest quality jobseekers.
And these are the result of long term investments that we've been making in product and brand. And so I think that mix shift toward organic and as you can see, as we bring marketing down, as stated earlier, by 45%, but still drive this growth in organic jobseekers is really going to it has the potential to have a financial impact over time and gives us the continuing confidence about our ability to hit our long-term 30% EBITDA margin target.

Eric Sheridan

Great. Thanks for the color.

Operator

At this time, there are no further audio questions. This does conclude today's call.