ZIPRECRUITER: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND OPERATING RESULTS (Type 10-Q)

It is best to learn the next dialogue and evaluation of our monetary situation
and outcomes of operations along with the consolidated monetary statements
and the associated notes included in Merchandise 1 "Monetary Statements" on this
Quarterly Report on Type 10-Q. A number of the data contained on this
dialogue and evaluation or set forth elsewhere on this Quarterly Report on Type
10-Q, together with data with respect to our plans and technique for our
enterprise, contains forward-looking statements that contain dangers and
uncertainties. It is best to learn the sections titled "Threat Components" and "Particular
Word Concerning Ahead-Trying Statements" for a dialogue of necessary elements
that might trigger precise outcomes to vary materially from the outcomes described
in or implied by the forward-looking statements contained within the following
dialogue and evaluation.
OVERVIEW
Our Mission is to actively join folks to their subsequent nice alternative.
ZipRecruiter is a two-sided market for work. We generate considerably all
of our income from charges paid by employers to publish jobs and entry different
options in our market. We provide our employers flat price pricing on phrases
starting from a day to a yr, or performance-based pricing, reminiscent of
cost-per-click, to align with the employer's hiring wants.
ZipRecruiter is free to make use of for job seekers. Job seekers come to ZipRecruiter in
search of their subsequent alternative. After establishing a profile, job seekers are
in a position to apply to jobs with a single click on. Our automated recruiter curates jobs
and proactively sends alerts for brand spanking new alternatives the place they're a Nice Match,
which is a designation assigned by ZipRecruiter's know-how to point a excessive
potential match between a job seeker and a job. As our matching know-how learns
extra about job seekers' preferences and attributes, our know-how affords
more and more increased high quality matches.
We plan to proceed to speculate aggressively in our market to drive progress
for the foreseeable future. Now we have made vital investments in our enterprise
to broaden our employer and job seeker footprints, enhance their engagement, and
improve our datasets and machine studying.
For the three months ended June 30, 2021, our income was $183.0 million and we
generated a internet lack of $52.8 million and Adjusted EBITDA of $(1.7) million. For
the three months ended June 30, 2020, our income was $87.7 million, and we
generated a internet earnings of $21.3 million and Adjusted EBITDA of $25.6 million.
For the six months ended June 30, 2021, our income was $308.3 million and we
generated a internet lack of $39.4 million and Adjusted EBITDA of $18.3 million. For
the six months ended June 30, 2020, our income was $200.9 million, and we
generated a internet earnings of $10.2 million and Adjusted EBITDA of $19.2 million.
Adjusted EBITDA is a monetary measure not introduced in accordance with GAAP.
For a definition of Adjusted EBITDA, an evidence of our administration's use of
this measure and a reconciliation of internet earnings (loss) to Adjusted EBITDA, see
the part titled "Key Working Metrics and Non-GAAP Monetary Measures."
                                       24
--------------------------------------------------------------------------------

KEY OPERATING METRICS AND NON-GAAP FINANCIAL MEASURES
Along with the measures introduced in our consolidated monetary statements,
we use the next key working metrics and non-GAAP monetary measures to
establish tendencies affecting our enterprise, formulate enterprise plans, and make
strategic choices:
                             March        June       September      December        March         June
                              31,         30,           30,            31,           31,          30,
                              2020        2020         2020           2020          2021          2021
Quarterly Paid Employers    98,456      76,867      89,810         89,636         114,705      169,191
Income per Paid Employer   $1,151$1,140$1,145$1,276$1,093$1,081



                               Three Months Ended             Six Months Ended
                                    June 30,                      June 30,
                              2021           2020           2021           2020
Adjusted EBITDA            $ (1,718)$ 25,601$ 18,276$ 19,219
Adjusted EBITDA margin           (1) %          29  %           6  %          10  %


Quarterly Paid Employers
We quantify the revenue-generating buyer base because the variety of Paid Employers
in our market. The Paid Employer metric contains all actively recruiting
employers (or entities performing on behalf of employers), on a paying subscription
plan or efficiency advertising marketing campaign for no less than in the future in a given calendar
quarter. Paid Employers excludes employers from our third-party websites or different
oblique channels, employers who are usually not actively recruiting, and employers on
free-trials. This group of employers excluded from our Paid Employer depend does
not contribute a big quantity of income.
Within the quarter ended June 30, 2021, Quarterly Paid Employers elevated by 48%
when in comparison with the quarter ended March 31, 2021. The US economic system, and the labor
market specifically, continued to get well from the COVID pushed downturn throughout
the second quarter. The mix of longstanding investments in analysis and
growth efforts, plus newer will increase in gross sales and advertising efforts
throughout the previous few quarters of macroeconomic restoration, mixed to generate a
report breaking enhance in Paid Employers throughout the quarter.
Income per Paid Employer
We consider Income per Paid Employer as a key indicator of our efforts to
enhance worth supplied to employers in our market. We outline Income per
Paid Employer as whole firm income in a given interval divided by Quarterly
Paid Employers in the identical interval.
Within the quarter ended June 30, 2021, Income per Paid Employer decreased by 1%
when in comparison with the quarter ended March 31, 2021. As was additionally the case for the
quarter ended March 31, 2021, longstanding tendencies of rising Income per Paid
Employer on a cohort foundation continued, however these tendencies had been offset by the
unprecedented variety of new Paid Employers who solely contributed income for the
latter portion of the quarter. Regardless of quarter to quarter volatility, we count on
the longstanding development of rising Income per Paid Employer to proceed.

                                       25
--------------------------------------------------------------------------------

Adjusted EBITDA and Adjusted EBITDA Margin
We outline Adjusted EBITDA as our internet earnings (loss) earlier than whole different (earnings)
expense, internet, earnings tax expense and depreciation and amortization, adjusted to
remove stock-based compensation expense. Adjusted EBITDA margin is calculated
by dividing Adjusted EBITDA for a interval by income for a similar interval.
We consider Adjusted EBITDA and Adjusted EBITDA margin are useful to buyers,
analysts and different  events as a result of they will help in offering a
extra constant and comparable overview of our operations throughout our historic
monetary intervals. As well as, these measures are ceaselessly utilized by analysts,
buyers and different  events to judge and assess efficiency.
Adjusted EBITDA just isn't meant to be an alternative to any U.S. GAAP monetary
measure and, as calculated, is probably not akin to different equally titled
measures of efficiency of different corporations in different industries or throughout the
similar trade.
Our Adjusted EBITDA and Adjusted EBITDA margin fluctuate from quarter to quarter
relying on a wide range of elements together with, however not restricted to, our investments
in analysis and growth, gross sales and advertising, headcount and our capability to
generate income.
                                       26
--------------------------------------------------------------------------------

The next desk presents a reconciliation of internet earnings (loss) to Adjusted EBITDA for every of the intervals indicated:

                                                 Three Months Ended June 30,                   Six Months Ended June 30,
                                                   2021                  2020                  2021                  2020
                                                                    (in hundreds, besides percentages)
GAAP internet earnings (loss)(1)                   $       (52,847)         $   

21,323 $ (39,449)$ 10,241
Inventory-based compensation

                             64,366               1,346                  65,592               3,304
Depreciation and amortization                         2,233               2,607                   4,535               5,041
Whole different (earnings) expense, internet                       447                 160                     270                 301
Earnings tax expense (profit)                        (15,917)                165                 (12,672)                332
Adjusted EBITDA                             $        (1,718)$   25,601$       18,276$   19,219


____________
(1)GAAP internet earnings (loss) contains one-time normal and administrative bills
associated to monetary advisory providers, accounting and authorized bills, the bonus
earned by our Chief Govt Officer, and different submitting prices in reference to
our Direct Itemizing totaling $31.9 million and $34.0 million within the three and 6
months ended June 30, 2021, respectively.

The next tables present the GAAP internet earnings (loss) margin and adjusted EBITDA margin for every of the intervals proven:

                                          Three Months Ended June 30,                    Six Months Ended June 30,
                                            2021                  2020                  2021                     2020
                                                              (in hundreds, besides percentages)
Income                              $      182,960$   87,655$    308,332$  200,947
Internet earnings (loss)                           (52,847)              21,323               (39,449)                  10,241
GAAP internet earnings (loss) margin                   (29)  %               24  %                (13)  %                    5  %


                                                    Three Months Ended June 30,                    Six Months Ended June 30,
                                                      2021                  2020                  2021                     2020
                                                                        (in hundreds, besides percentages)
Income                                        $      182,960$   87,655$    308,332$  200,947
Adjusted EBITDA                                        (1,718)              25,601                18,276                   19,219
Adjusted EBITDA margin                                     (1)  %               29  %                  6   %                   10  %


Influence of COVID-19
The COVID-19 pandemic has had, and continues to have, a big affect on
the U.S. economic system and hiring. The financial restoration throughout the first half of 2021
has pushed a big and broadly distributed enhance in demand for labor.
Within the quarter ended June 30, 2021, we delivered $183.0 million in income, a
109% enhance in comparison with the quarter ended June 30, 2020, reflecting sturdy
execution throughout product, advertising and operations, and the continuation of an
financial restoration. We noticed employers in our market enhance by 120% within the
quarter ended June 30, 2021 versus the quarter ended June 30, 2020 as
macroeconomic circumstances improved and we elevated our gross sales and advertising
investments to assist in bringing on extra Paid Employers.

                                       27
--------------------------------------------------------------------------------

Parts of Our Outcomes of Operations
Income
We generate income primarily from charges paid by employers to publish and distribute
jobs in our market, in addition to a number of websites managed by Job Distribution
Companions, that are third-party websites who've a relationship with us and
promote from our market, and contains job boards, classifieds, search
engines and social networks.
Our subscription income consists of time-based job posting plans, upsells which
complement or broaden visibility and prominence to job posting plans, and resume
database plans.
We provide job posting plans with phrases starting from a day to a yr on a flat
price subscription foundation to entry our market, the place clients could create
and handle job postings and evaluation incoming candidate purposes. We acknowledge
income ratably over the subscription interval starting on the date the
subscription service is made out there to the client. Our nonrefundable
subscriptions are usually topic to renewal on the finish of the subscription
time period.
Our upsell providers complement or broaden visibility to job posting plans and are
usually offered on a subscription foundation. Upsell providers income is acknowledged
ratably over the time period of the settlement starting on the date the upsell providers
are made out there to the client. Moreover, upsell providers embody job
posting enhancements that are utilized to particular person job postings to supply
clients with a short lived enhance within the prominence of their job postings.
Income from job posting enhancements is acknowledged because the buyer makes use of the
enhancements on their job postings.
Resume database plans permit our clients to look and look at resumes and income
is acknowledged ratably over the subscription interval.
Efficiency-based income is acknowledged when a candidate clicks on or applies to
a job distributed by ZipRecruiter on behalf of a buyer. For performance-based
income, our clients pay an quantity per click on or per job software normally
capped at a contractual most per job recruitment marketing campaign.
We could distribute jobs to candidates from sources who've job seeker or
candidate databases. When a job seeker from a candidate supply clicks on or
applies to a job posting, we pay the candidate supply a proportion of the
income we earn from our buyer for the press or software in response to the
phrases of the income share settlement. In these preparations, we now have the
duty for promoting the client's job postings, discretion in how
and the place we select to promote the client's job postings, and discretion in
establishing the value paid by the client. We acknowledge the charges we obtain
from our clients as income and the income share due is recorded in value of
income within the Consolidated Statements of Operations.
For an outline of our income accounting insurance policies, see the part titled
"Crucial Accounting Insurance policies and Estimates" under.
Value of Income and Gross Revenue
Value of Income
Value of income consists of third-party internet hosting, bank card processing charges,
personnel associated prices (together with salaries, bonuses, advantages, and stock-based
compensation) for buyer help workers, associate income share quantities, job
distribution prices from performance-based income, and amortization of
capitalized software program prices related to our market know-how to supply
providers for our clients. As well as, we allocate a portion of overhead
prices, reminiscent of lease, IT prices, provides and depreciation and amortization to
value of income primarily based on headcount.
We count on value of income to extend in absolute {dollars} in future intervals due
to fee processing charges, third-party internet hosting charges, personnel associated prices to
help further transaction
                                       28
--------------------------------------------------------------------------------

quantity, and amortization expense related to our capitalized internal-use
software program and growth value. Our value of income could fluctuate in absolute
{dollars} from interval to interval primarily based on the quantity and timing of all of those
gadgets.
Gross Revenue and Gross Margin
Our gross revenue and gross margin could fluctuate from interval to interval. Such
fluctuations could also be influenced by our income, timing and quantity of investments
to broaden internet hosting capability, our continued investments in our help groups, and
the amortization expense related to our capitalized internal-use software program
and growth value.
Prices and Working Bills
Gross sales and Advertising
Gross sales and advertising expense consists of personnel associated prices (together with
salaries, gross sales commissions, bonuses, advantages, and stock-based compensation)
for our gross sales and advertising workers, advertising actions, and associated
allotted overhead prices. Advertising actions embody promoting, on-line lead
era, buyer and trade occasions, and candidate acquisition. We allocate
a portion of overhead prices, reminiscent of lease, IT prices, provides and depreciation
and amortization to gross sales and advertising expense primarily based on headcount.
We count on that gross sales and advertising bills will enhance on an absolute greenback
foundation and should differ from interval to interval as a proportion of income for the
foreseeable future as we plan to proceed to spend money on gross sales and advertising to
entice each employers and job seekers to our market and to extend our
model consciousness. We count on that these bills will proceed to be our largest
working expense class for the foreseeable future as we proceed to broaden
on our gross sales and advertising efforts. Our advertising expense will proceed to develop
on an annual foundation, however is more likely to decline as a proportion of whole income
over time.
Analysis and Growth
Analysis and growth expense consists of personnel associated prices (together with
salaries, bonuses, advantages, and stock-based compensation) for our analysis and
growth workers, amortization of capitalized software program prices related
with the event of the databases supporting our market, and the fee
of sure third-party service suppliers. We allocate a portion of overhead
prices, reminiscent of lease, IT prices, provides and depreciation and amortization to
analysis and growth bills primarily based on headcount. Analysis and growth
prices, apart from software program growth prices qualifying for capitalization, are
expensed as incurred.
We consider continued investments in analysis and growth are necessary to
attain our strategic aims, and count on analysis and growth expense to
enhance in absolute {dollars}. This expense could differ as a proportion of whole
income for the foreseeable future as we proceed to spend money on analysis and
growth actions associated to ongoing enhancements to, and upkeep of,
our market, growth of our providers, in addition to different analysis and
growth packages, together with the hiring of engineering, product growth,
and design workers to help these efforts. Our analysis and growth
expense will proceed to develop, however is more likely to decline as a proportion of whole
income over time.
Basic and Administrative
Basic and administrative expense consists of personnel associated prices
(together with salaries, bonuses, advantages, and stock-based compensation) for
workers in our government, finance, human useful resource and administrative
departments, and charges for third celebration skilled providers, together with
consulting, authorized and accounting providers. Basic and administrative expense
additionally consists of non-recurring prices as a part of our transition to a
publicly-traded firm and contains charges paid to our monetary advisors in
connection
                                       29
--------------------------------------------------------------------------------

with our Direct Itemizing. As well as, we allocate a portion of overhead prices,
reminiscent of lease, IT prices, provides and depreciation and amortization to normal
and administrative expense primarily based on headcount.
We count on to spend money on company infrastructure and incur further bills
related to transitioning to and working as a public firm, together with
bills associated to compliance and reporting obligations pursuant to the principles
and rules of the SEC, and better bills for investor relations prices,
skilled providers, and director and officer insurance coverage. In consequence, we
count on normal and administrative expense to extend in absolute {dollars} in
future intervals, however this expense could differ as a proportion of whole income.
Curiosity Expense
Curiosity expense consists of curiosity prices related to our excellent
borrowings, undrawn charges related to our credit score facility, and
payment-in-kind curiosity on our convertible notes with associated events. Our
convertible notes with associated events transformed into shares of frequent inventory in
reference to the Direct Itemizing in Could 2021.
Sublease Earnings (Expense)
Sublease earnings consists of earnings earned from a noncancellable sublease
settlement for one in every of our workplace services. The settlement terminated in March
2021.
Different Expense, internet
Different earnings (expense) consists primarily of positive aspects and losses from overseas
forex change transactions. Now we have overseas forex publicity primarily
associated to personnel associated bills which might be denominated in currencies different
than the U.S. Greenback, principally the Canadian Greenback, British Pound, and the
Israeli New Shekel.
Earnings Tax Expense (Profit)
We're topic to federal and state earnings taxes in the USA. The
efficient tax price for the three and 6 months ended June 30, 2020 differed
from the U.S. federal statutory tax price of 21% primarily because of the valuation
allowance maintained in opposition to internet U.S. federal and state deferred tax property. As
a results of our present earnings in 2020 and forecasted taxable earnings, we
launched our valuation allowance in opposition to our internet deferred tax property, which
resulted in an earnings tax profit for 2020. For the three and 6 months ended
June 30, 2021, our efficient tax price of 23% and 24%, respectively, differed
from the U.S. federal statutory price of 21% primarily on account of extra tax advantages
regarding the train of non-qualified inventory choices and settlement of RSUs,
partially offset by different everlasting gadgets reminiscent of our Direct Itemizing prices and
Part 162(m) officer compensation limitations.
                                       30
--------------------------------------------------------------------------------

Outcomes of Operations
The next desk units forth our consolidated outcomes of operations for every
of the intervals introduced:
                                                   Three Months Ended June 30,                  Six Months Ended June 30,
                                                      2021                2020                  2021                  2020
                                                                                (in hundreds)
Income (1)                                    $       182,960$   87,655$      308,332$  200,947
Value of income(2)                                      21,600            11,840                  37,561              26,312
Gross revenue                                           161,360            75,815                 270,771             174,635
Working bills:                                                                                    -
Gross sales and advertising(2)                                 114,171            28,069                 177,647             106,949
Analysis and growth(2)                             37,909            16,306                  54,924              35,532
Basic and administrative(2)(3)                        77,597             9,792                  90,051              21,280
Whole working bills                               229,677            54,167                 322,622             163,761
Earnings (loss) from operations                          (68,317)           21,648                 (51,851)             10,874
Different earnings (expense):
Curiosity expense                                          (266)             (367)                   (475)               (646)
Sublease earnings (expense)                                 (141)              275                     151                 557
Different earnings (expense), internet                                (40)              (68)                     54                (212)
Whole different expense, internet                                  (447)             (160)                   (270)               (301)
Earnings (loss) earlier than earnings taxes                      (68,764)           21,488                 (52,121)             10,573
Earnings tax expense (profit)                           (15,917)              165                 (12,672)                332
Internet earnings (loss)                              $       (52,847)$   21,323$      (39,449)$   10,241


____________

(1) Income composed as follows:

                                                   Three Months Ended June 30,                  Six Months Ended June 30,
                                                      2021                2020                  2021                  2020
                                                                                (in hundreds)
Subscription income                           $       151,292        $   

74,002 $ 251,796$ 169,367
Efficiency primarily based earnings

                               31,668            13,653                  56,536              31,580
Whole income                                  $       182,960$   87,655$      308,332$  200,947

(2) Consists of stock-based compensation expense as follows:

                                                Three Months Ended June 30,                   Six Months Ended June 30,
                                                  2021                  2020                  2021                  2020
                                                                             (in hundreds)
Value of income                            $           737          $       18          $          753          $       42
Gross sales and advertising                                 12,317                 119                  12,416                 425
Analysis and growth                            18,573                 712                  19,398               1,573
Basic and administrative                          32,739                 497                  33,025               1,264
Whole stock-based compensation             $        64,366          $    

1,346 $ 65,592$ 3,304


(3)Consists of one-time prices associated to monetary advisory providers, accounting
and authorized bills, the bonus earned by our Chief Govt Officer, and different
submitting prices in reference to our Direct Itemizing totaling $31.9 million and
$34.0 million within the three and 6 months ended June 30, 2021, respectively.

                                       31
--------------------------------------------------------------------------------

Comparability of the Three and Six Months Ended June 30, 2021 and 2020
Income
                            Three Months Ended June 30,                                                     Six Months Ended June 30, 2021
                               2021                 2020            $ Change            % Change               2021                2020             $ Change            % Change
                                                                                           ({dollars} in hundreds)
Whole income           $       182,960$ 87,655$ 95,305                   109  %       $  308,332$ 200,947$ 107,385                    53  %


Income elevated $95.3 million, or 109%, for the three months ended June 30,
2021 in comparison with the three months ended June 30, 2020. Subscription income
elevated by $77.3 million, or 104%, for a similar intervals and was pushed by the
reopening of the economic system as employers began to publish extra job alternatives
inside our market and powerful efforts in gross sales and advertising.
Efficiency-based income elevated $18.0 million, or 132%, for the three months
ended June 30, 2021 in comparison with the three months ended June 30, 2020 on account of
will increase in each the variety of paid engagements and income per paid
engagement. These will increase had been pushed by the onboarding of latest clients and
elevated spend from current clients who run subtle recruitment
advertising campaigns.
Income elevated $107.4 million, or 53%, for the six months ended June 30, 2021
in comparison with the six months ended June 30, 2020. Subscription income elevated
by $82.4 million, or 49%, whereas performance-based income elevated $25.0
million, or 79%, for a similar intervals. The rise is because of the variety of
Quarterly Paid Employers who're becoming a member of our market as we ramped up our
advertising spend and the macroeconomic surroundings continued to enhance.

Value of revenues and gross margin

                              Three Months Ended June 30,                                                      Six Months Ended June 30, 2021
                                2021                 2020            $ Change            % Change                  2021                 2020            $ Change            % Change
                                                                                              ({dollars} in hundreds)
Value of income           $      21,600$ 11,840$  9,760                    82  %       $       37,561$ 26,312$ 11,249                    43  %
Whole gross margin                   88   %             86  %                                                           88   %             87  %


Value of income elevated $9.8 million, or 82%, for the three months ended
June 30, 2021 in comparison with the three months ended June 30, 2020, primarily on account of
a rise of $4.6 million in job distribution prices from performance-based
income, a rise of $2.2 million in bank card processing charges and an
enhance of $1.2 million in associate income share quantities. Whole gross
margin improved from 86% to 88% within the three months ended June 30, 2020 and
June 30, 2021, respectively, and displays our continued dedication to
operational efficiencies and sustaining prices proportionate to income progress.
Value of income elevated $11.2 million, or 43%, for the six months ended
June 30, 2021 in comparison with the six months ended June 30, 2020, primarily on account of
a rise of $7.1 million in job distribution prices from performance-based
income, a rise of $2.4 million in bank card processing charges and an
enhance of $1.7 million in associate income share quantities. Whole gross
margin remained comparatively constant within the six months ended June 30, 2021 and
June 30, 2020.
                                       32
--------------------------------------------------------------------------------

Gross sales and Advertising
                                Three Months Ended June 30,                                                       Six Months Ended June 30, 2021
                                   2021                 2020            $ Change            % Change                  2021                  2020            $ Change            % Change
                                                                                                 ({dollars} in hundreds)
Gross sales and advertising         $      114,171$ 28,069$ 86,102                   307  %       $      177,647$ 106,949$ 70,698                    66  %
Proportion of income                   62   %             32  %                                                           58   %              53  %



Gross sales and advertising bills grew $86.1 million, or 307%, for the three months
ended June 30, 2021 in comparison with the three months ended June 30, 2020. The
enhance was primarily attributable to a further $64.7 million in advertising
and promoting versus the prior yr interval. Inventory-based compensation prices
elevated $12.2 million, primarily attributable to our RSUs which vested as a
results of our board of administrators' waiver of the liquidity event-based vesting
situation throughout the second quarter of 2021, along with the continued
stock-based compensation expense associated to our RSU awards over the remaining
service interval. Lastly, personnel associated prices for our gross sales and advertising
workers elevated by $8.1 million, largely on account of a rise in headcount.
Gross sales and advertising bills grew $70.7 million, or 66%, for the six months
ended June 30, 2021 in comparison with the six months ended June 30, 2020. The rise
was primarily on account of a further $58.8 million in advertising and promoting
versus the prior yr interval. Inventory-based compensation prices elevated $12.0
million, primarily attributable to our RSUs which vested because of our
board of administrators' waiver of the liquidity event-based vesting situation throughout
the second quarter of 2021, along with the continued stock-based compensation
expense associated to our RSU awards over the remaining service interval, partially
offset by a lower of $0.5 million in occupancy prices.
Analysis and Growth
                                  Three Months Ended June 30,                                                      Six Months Ended June 30, 2021
                                    2021                 2020            $ Change            % Change                  2021                 2020            $ Change            % Change
                                                                                                  ({dollars} in hundreds)
Analysis and growth      $      37,909$ 16,306$ 21,603                   132  %       $       54,924$ 35,532$ 19,392                    55  %
Proportion of income                    21   %             19  %                                                           18   %             18  %



Analysis and growth bills elevated $21.6 million, or 132%, for the
three months ended June 30, 2021 in comparison with the three months ended June 30,
2020. The rise was primarily on account of a rise in stock-based compensation
of $17.9 million primarily attributable to our RSUs which vested because of
our board of administrators' waiver of the liquidity event-based vesting situation
throughout the second quarter of 2021, along with the continued stock-based
compensation expense associated to our RSU awards over the remaining service
interval. Personnel associated prices for our analysis and growth workers
elevated by $3.4 million, primarily attributed to a rise in headcount.
Analysis and growth bills elevated $19.4 million, or 55%, for the six
months ended June 30, 2021 in comparison with the six months ended June 30, 2020
primarily on account of a rise in stock-based compensation of $17.9 million
primarily attributable to our RSUs which vested because of our board of
administrators' waiver of the liquidity event-based vesting situation throughout the
second quarter of 2021, along with the continued stock-based compensation
expense associated to our RSU awards over the remaining service interval. Personnel
associated prices for our analysis and growth workers elevated by $2.2
million, primarily attributed to a rise in headcount.
                                       33
--------------------------------------------------------------------------------

Basic and Administrative
                                    Three Months Ended June 30,                                                      Six Months Ended June 30, 2021
                                       2021                 2020           $ Change            % Change                  2021                 2020            $ Change            % Change
                                                                                                    ({dollars} in hundreds)
Basic and administrative      $       77,597$ 9,792$ 67,805                   692  %       $       90,051$ 21,280$ 68,771                   323  %
Proportion of income                       42   %            11  %                                                           29   %             11  %



Basic and administrative bills elevated $67.8 million, or 692%, for the
three months ended June 30, 2021 in comparison with the three months ended June 30,
2020. The rise was primarily on account of a rise in stock-based compensation
of $32.2 million primarily attributable to our RSUs which vested because of
our board of administrators' waiver of the liquidity event-based vesting situation
throughout the second quarter of 2021, along with the continued stock-based
compensation expense associated to our RSU awards over the remaining service
interval. Moreover, we incurred non-recurring charges for authorized, accounting, and
different prices associated to the Firm's Direct Itemizing within the three months ended
June 30, 2021 totaling $21.9 million, of which $19.4 million was paid to our
monetary advisors. Additionally included within the enhance between intervals is a $10.0
million bonus paid to our CEO in reference to the Direct Itemizing together with
an general enhance basically skilled consulting charges, administrators' and
officers' insurance coverage, and normal investor advertising charges totaling $1.6 million
because the Firm incurs further bills as a part of the transition to changing into
a public firm. Lastly, personnel associated bills for our normal and
administrative workers elevated by $2.1 million on account of elevated headcount
between intervals.
Basic and administrative bills elevated $68.8 million, or 323%, for the
six months ended June 30, 2021 in comparison with the six months ended June 30, 2020
primarily on account of a rise in stock-based compensation of $31.8 million
primarily attributable to our RSUs which vested because of our board of
administrators' waiver of the liquidity event-based vesting situation throughout the
second quarter of 2021, along with the continued stock-based compensation
expense associated to our RSU awards over the remaining service interval.
Moreover, we incurred non-recurring charges for authorized, accounting, and different
prices associated to the Firm's Direct Itemizing within the six months ended June 30,
2021 totaling $24.0 million, of which $19.4 million was paid to our monetary
advisors. Additionally included within the enhance between intervals is a $10.0 million bonus
paid to our CEO in reference to the Direct Itemizing together with an general
enhance basically skilled consulting charges, administrators' and officers'
insurance coverage, and normal investor advertising charges totaling $2.3 million because the
Firm incurs further bills as a part of the transition to changing into a
public firm. Lastly, personnel associated bills for our normal and
administrative workers elevated by $1.0 million, primarily attributed to an
enhance in headcount.
Different Expense, Internet
                                                                                                      Six Months Ended June 30,
                          Three Months Ended June 30,                                                           2021
                             2021             2020            $ Change            % Change              2021             2020           $ Change            % Change
                                                                                      ({dollars} in hundreds)
Different expense, internet        $   (447)$ (160)$    (287)                  179  %       $   (270)$ (301)$     31                   (10) %


There have been insignificant fluctuations in different bills for the three and 6 months ended June 30, 2021 in comparison with the three and 6 months ended June 30, 2020.

                                       34
--------------------------------------------------------------------------------

Earnings tax expense (Benefit)

                     Three Months Ended June 30,                                                  Six Months Ended June 30, 2021
                         2021              2020            $ Change            % Change                2021              2020            $ Change            % Change
                                                                                   ({dollars} in hundreds)
Earnings tax expense
(profit)           $  (15,917)$  165$ (16,082)                (9747) %       $  (12,672)$  332$ (13,004)                (3917) %
Efficient tax price          23   %            1  %                                                        24   %            3  %



Earnings tax expense decreased $16.1 million for the three months ended June 30,
2021 in comparison with the three months ended June 30, 2020. For the three and 6
months ended June 30, 2020, our tax expense primarily associated to taxes for our
overseas operations as we maintained a full valuation allowance in opposition to our
federal and state deferred tax property. We launched the valuation allowance
throughout the fourth quarter of 2020. For the three and 6 months ended June 30,
2021, our efficient tax price of 23% and 24%, respectively, differed from the U.S
federal statutory price of 21% primarily on account of extra tax advantages regarding
the train of non-qualified inventory choices and settlement of RSUs, partially
offset by everlasting gadgets reminiscent of our Direct Itemizing prices and Part 162(m)
officer compensation limitations.
Liquidity and Capital Sources
As of June 30, 2021 we had money totaling $153.3 million, and $243.7 million
out there in unused borrowing capability underneath our present revolving credit score
facility. Now we have financed our operations and capital expenditures primarily
by means of money generated from operations, gross sales of shares of frequent and most well-liked
inventory and from financial institution loans and convertible notes. As of June 30, 2021, we had no
quantities excellent underneath our revolving credit score facility.
We consider our current money, money stream from operations, and quantities out there
for borrowing underneath our financial institution mortgage settlement might be ample to fulfill our
working capital necessities for no less than the following twelve months. To the extent
current money, money from operations, and quantities out there for borrowing are
inadequate to fund future actions, we might have to boost further funds.
Sooner or later, we could try to boost further capital by means of the sale of
fairness securities or by means of equity-linked or debt financing preparations. If we
elevate further funds by issuing fairness or equity-linked securities, the
possession of our current stockholders might be diluted. If we elevate further
financing by the incurrence of further indebtedness, we could also be topic to
elevated mounted fee obligations and may be topic to further
restrictive covenants, reminiscent of limitations on our capability to incur further
debt, and different working restrictions that might adversely affect our capability
to conduct our enterprise. Any future indebtedness we incur could lead to phrases
that could possibly be unfavorable to fairness buyers. There may be no assurances that
we will elevate further capital. The lack to boost capital
might adversely have an effect on our capability to attain our enterprise aims.
Prior Revolving Credit score Facility
We beforehand entered right into a mortgage and safety settlement with a monetary
establishment that supplied for a revolving credit score facility, or the Prior
Revolving Line. Our Prior Revolving Line terminated on April 30, 2021 once we
entered into a brand new credit score facility as described under.
Present Revolving Credit score Facility
In April 2021, we entered right into a Credit score Settlement with the lenders named
therein, and JPMorgan Chase Financial institution, N.A., as administrative agent, or the Present
Revolving Line. The Present Revolving Line supplies for a $250.0 million
revolving credit score facility and has a maturity date of April 30, 2026. The quantity
                                       35
--------------------------------------------------------------------------------

out there underneath the Present Revolving Line is lowered by letters of credit score
excellent, which pertains to numerous leased workplace areas, which was $6.3
million as of June 30, 2021.
As described within the Present Revolving Line, the credit score facility bears curiosity
at a price primarily based upon our Internet Leverage Ratio. Our Internet Leverage Ratio is outlined
as whole debt much less whole money and permitted investments excellent at interval
finish, with a most whole money and permitted investments adjustment of $100.0
million, divided by the trailing twelve month of earnings, adjusted for gadgets
reminiscent of noncash bills and different nonrecurring transactions. We're additionally
obligated to pay different customary charges for a credit score facility of this dimension and
kind, together with a dedication price on a quarterly foundation primarily based on quantities dedicated
however unused underneath the Present Revolving Line at a price between 0.25% to 0.35%,
primarily based upon our Internet Leverage Ratio.
The Present Revolving Line is collateralized by safety pursuits in
considerably all of our property. The Revolving Credit score Facility contains
customary occasions of default that embody, amongst different issues, non-payment of
principal, curiosity or charges, inaccuracy of representations and warranties,
violation of sure covenants, cross default to sure different indebtedness,
chapter and insolvency occasions, materials judgments in opposition to us, and a change of
management. The prevalence of an occasion of default might consequence within the acceleration
of the obligations underneath the Present Revolving Line.
The Present Revolving Line accommodates customary representations, warranties,
affirmative covenants, reminiscent of monetary assertion reporting necessities,
adverse covenants, and monetary covenants, reminiscent of upkeep of sure internet
leverage ratio necessities, relevant to us. The adverse covenants embody
restrictions that, amongst different issues, prohibit our and our subsidiaries'
capability to incur liens and indebtedness, make sure investments, declare
dividends, eliminate, switch or promote property, make inventory repurchases and
consummate sure different issues, all topic to sure exceptions.
Now we have no quantities excellent underneath the Present Revolving Line and are in
compliance with our debt covenants as of June 30, 2021.
Convertible Notes with Associated Events
In June 2020, we issued subordinated secured convertible promissory notes, or
the Convertible Notes, to associated events who're holders of our Redeemable
Convertible Most well-liked Inventory. The Convertible Notes totaled $25.0 million and had
a maturity date of June 22, 2023. In Could 2021, our convertible notes with
associated events transformed into shares of frequent inventory in reference to the
Direct Itemizing and was now not excellent as of June 30, 2021.
Money Flows
The next desk summarizes our money flows for the intervals introduced:
                                                   Six Months Ended June 30,
                                                       2021                 2020

Internet money supplied by working actions    $      37,715               $  

9 870

Internet money utilized in investing actions               (8,215)                

(4,686)

Internet money supplied by financing actions            9,303                 15,485
Internet enhance in money                         $      38,803$ 20,669


                                       36
--------------------------------------------------------------------------------

Working Actions
The first supply of working money inflows is money collected from our
clients for our providers. Our major makes use of of money from working actions
are for personnel associated expenditures, advertising prices and third-party prices
incurred to help our market.
For the six months ended June 30, 2021, money supplied by working actions
was $37.7 million ensuing from our internet lack of $39.4 million, adjusted by
non-cash prices of $60.2 million and a internet enhance of $17.0 million in our
working property and liabilities. The non-cash prices primarily resulted from
$65.6 million for stock-based compensation expense, $13.4 million associated to the
change in our deferred tax property pushed by the conclusion of stock-based
compensation, $4.5 million pertaining to depreciation and amortization of
intangible property, and $2.8 million pertaining to non-cash lease expense. The
enhance in our working property and liabilities was primarily pushed by an
enhance of $18.5 million in our accounts payable as we elevated our advertising
spend focused at job seekers within the first half of 2021.
For the six months ended June 30, 2020, money supplied by working actions
was $9.9 million ensuing from our internet earnings of $10.2 million, adjusted by
non-cash prices of $13.8 million and a internet lower of $14.2 million in our
working property and liabilities. The lower in our working property and
liabilities was primarily pushed by a lower of $16.4 million in our accrued
bills and different liabilities because the Firm carried out cost-cutting measures
instantly because of the COVID-19 pandemic.
Investing Actions
For the six months ended June 30, 2021, money utilized in investing actions was
$8.2 million consequence from a rise in capital expenditures of $4.4 million
primarily associated to leasehold enhancements for one in every of our working leases and
a rise of $3.8 million associated to capitalized software program growth prices.
For the six months ended June 30, 2020, money utilized in investing actions was
$4.7 million primarily ensuing from a rise in capitalized software program
growth prices of $3.8 million and a rise in capital expenditures of
$0.9 million to buy property and tools.
Financing Actions
For the six months ended June 30, 2021, money supplied by financing actions
was $9.3 million which consisted of $13.3 million of proceeds from the train
of inventory choices partially offset by $2.8 million for the repurchase of frequent
inventory and $1.3 million for the fee of the issuance prices associated to our
Present Revolving Line.
For the six months ended June 30, 2020, money supplied by financing actions
was $15.5 million, which primarily consisted of $25.0 million in proceeds from
our convertible notes with associated events, $10.0 million in proceeds from our
time period mortgage, and $0.5 million of proceeds from the train of inventory choices,
partially offset by a $20.0 million compensation of our time period mortgage. The drawdowns on
our revolving line within the six months ended June 30, 2020 of $16.5 million had been
repaid in full in the identical interval.
Obligations and Different Commitments
See Word 11 of the audited consolidated monetary statements and associated notes
included within the Firm's remaining prospectus filed with the SEC pursuant to Rule
424(b) underneath the Securities Act of 1933, as amended, on Could 26, 2021 (the
"Prospectus") for our future minimal commitments associated to sure software program
service agreements. Via June 30, 2021, we didn't have any relationships
with unconsolidated organizations or monetary partnerships, reminiscent of structured
finance or particular goal entities which were established for the aim
of facilitating off-balance sheet preparations or different contractually slender or
restricted functions.
                                      (1)
                                       37
--------------------------------------------------------------------------------

Crucial Accounting Insurance policies and Estimates
Administration's dialogue and evaluation of economic situation and outcomes of
operations is predicated upon our condensed consolidated monetary statements, which
have been ready in accordance with accounting rules usually accepted
in the USA of America. The preparation of those condensed consolidated
monetary statements requires us to make estimates and assumptions that have an effect on
the reported quantities of property, liabilities, income, bills, and associated
disclosures. On an ongoing foundation, we consider our estimates and assumptions,
together with, however not restricted to, these associated to income recognition, stock-based
compensation, and earnings taxes. We base our estimates on historic expertise
and on numerous different estimates and assumptions that we consider to be affordable
underneath the circumstances, the outcomes of which kind the premise for making
judgments concerning the carrying values of property and liabilities that aren't
readily obvious from different sources. Precise outcomes might differ from these
estimates and assumptions.
Our vital accounting insurance policies are mentioned in "Notes to Consolidated
Monetary Statements - Word 2. Foundation of Presentation, Ideas of
Consolidation and Abstract of Vital Accounting Insurance policies" within the Prospectus.
There have been no adjustments to our essential accounting insurance policies and estimates as
in comparison with the essential accounting insurance policies and estimates mentioned within the
Prospectus, aside from the estimated truthful worth of the Firm's market
situation RSU grant for stock-based compensation as described in Word 2 to the
condensed consolidated monetary statements.
JOBS Act Accounting Election
We meet the definition of an rising progress firm underneath the JOBS Act, which
permits us to make the most of an prolonged transition interval to adjust to new
or revised accounting requirements relevant to public corporations. Now we have elected
to make use of this prolonged transition interval till we're now not an rising progress
firm or till we affirmatively and irrevocably decide out of the prolonged
transition interval. In consequence, our consolidated monetary statements is probably not
akin to corporations that adjust to new or revised accounting
pronouncements relevant to public corporations.
Latest Accounting Pronouncements
See Word 2 of the notes to our unaudited condensed consolidated monetary
statements included elsewhere on this Quarterly Report on Type 10-Q for extra
data.
Merchandise 3. Quantitative and Qualitative Disclosures About Market Threat
Quantitative and Qualitative Disclosures about Market Threat
Now we have operations each inside the USA and internationally, and we're
uncovered to market dangers within the extraordinary course of our enterprise. These dangers
primarily embody rate of interest and overseas forex change charges.
Curiosity Charge Threat
We're topic to rate of interest danger in reference to our revolving line of
credit score which bears a floating rate of interest. Now we have not been uncovered to, nor do
we anticipate being uncovered to, materials dangers on account of adjustments in rates of interest.
A hypothetical 10% change in rates of interest throughout any of the intervals introduced
wouldn't have had a fabric affect on our consolidated monetary statements.
International Forex Threat
We're uncovered to fluctuations in overseas change danger associated primarily to
bills denominated in currencies apart from the U.S. Greenback, principally the
Canadian Greenback, British Pound, and Israeli New Shekel. The volatility of
change charges will depend on many elements that we can not forecast with dependable
accuracy. Now we have skilled, and can proceed to expertise, fluctuations in
our internet earnings (loss) as
                                       38
--------------------------------------------------------------------------------

a results of transaction positive aspects and losses associated to the remeasurement of our
asset and legal responsibility balances which might be denominated in currencies apart from the
U.S. Greenback. The impact of a hypothetical 10% change in overseas forex
change charges relevant to our enterprise wouldn't have had a fabric affect
on our consolidated monetary statements.
Merchandise 4. Controls and Procedures
Analysis of Disclosure Controls and Procedures
Our administration, with the participation of our principal government officer and
our principal monetary officer, has evaluated the effectiveness of our
disclosure controls and procedures (as outlined in Guidelines 13a-15(e) and 15d-15(e)
underneath the Change Act, as of June 30, 2021. Disclosure controls and procedures
embody, with out limitation, controls and procedures designed to make sure that
data required to be disclosed by an organization within the stories that it information
or submits underneath the Change Act is collected and communicated to the
firm's administration, together with its principal government and principal monetary
officers, or individuals performing comparable features, as applicable to permit
well timed choices concerning required disclosure. In designing and evaluating our
disclosure controls and procedures, administration acknowledges that any controls and
procedures, irrespective of how properly designed and operated, can present solely
affordable assurance of reaching their aims, and administration essentially
applies its judgment in evaluating the cost-benefit relationship of doable
controls and procedures. Primarily based on such analysis, our principal government
officer and principal monetary officer have concluded that as of June 30, 2021,
our disclosure controls and procedures had been efficient on the affordable
assurance stage.
Adjustments in Inside Management Over Monetary Reporting
There have been no adjustments in our inner management over monetary reporting
recognized in reference to the analysis required by Guidelines 13a-15(d) and
15d-15(d) of the Change Act throughout our most up-to-date fiscal quarter which have
materially affected, or are fairly more likely to materially have an effect on, our inner
management over monetary reporting.
                                       39

————————————————– ——————————-

© Edgar on-line, supply Previews

About Edith J.

Check Also

Omega Healthcare: Be grasping when others are afraid (OHI)

shining stars / E+ by way of Getty Pictures Funding thesis and background Omega Healthcare …