ZIPRECRUITER, INC.ZIP

ZIPRECRUITER, INC. Earnings Per Share Disclosure

10-KFiled Feb 25, 20262 min read
Net Income (Loss) Per Share
Basic and diluted net income (loss) per share are computed using the two-class method as required when there are participating securities and multiple classes of common stock. Basic net income (loss) per share is computed using the weighted-average number of shares outstanding during the period. Diluted net income (loss) per share is computed using the weighted-average number of shares and the effect of potentially dilutive securities outstanding during the period.
As the liquidation and dividend rights are identical for the Company’s Class A and Class B common stock (see Note 14), the undistributed earnings under the two-class method are allocated on a proportional basis and the resulting net income (loss) per share attributable to common stockholders is, therefore, the same for both Class A and Class B common stock on an individual or combined basis.
The following table presents the Company’s basic net income (loss) per share (in thousands, except per share amounts):
Year Ended December 31,
202520242023
Net income (loss) per share, basic:
Net income (loss)
$(32,994)$(12,854)$49,098 
Weighted average shares of Class A and Class B common stock outstanding89,867 98,588 100,730 
Net income (loss) per share attributable to Class A and Class B common stockholders, basic
$(0.37)$(0.13)$0.49 
The Company computes diluted net income (loss) per share under the two-class method where income is reallocated between common stock, potential common stock and participating securities. Potential common stock primarily includes stock options and RSUs computed using the treasury stock method.
The following table presents the Company’s diluted net income (loss) per share (in thousands, except per share amounts):
Year Ended December 31,
202520242023
Net income (loss) per share, diluted:
Numerator:
Net income (loss)
$(32,994)$(12,854)$49,098 
Denominator:
Weighted average shares of Class A and Class B common stock outstanding, basic89,867 98,588 100,730 
Effect of dilutive securities:
Options to purchase common stock— — 4,761 
Unvested restricted stock units— — 267 
Employee stock purchase plan— — 23 
Weighted average shares of Class A and Class B common stock outstanding, diluted89,867 98,588 105,781 
Net income (loss) per share attributable to Class A and Class B common stockholders, diluted
$(0.37)$(0.13)$0.46 
The weighted average number of potentially dilutive common stock equivalents of 10.3 million, 12.7 million, and 6.4 million were excluded from the computation of diluted net income (loss) per share during the years ended December 31, 2025, 2024, and 2023, respectively, because their inclusion would have been anti-dilutive.
The CEO Performance Award is excluded from the above weighted average number of potentially dilutive common stock equivalents because none of the market conditions had been met as of December 31, 2023. Additionally, in December 2023, the Company entered into the Cancellation Agreement with the CEO, which provided for the cancellation of the 1.4 million market-based RSUs included in the CEO Performance Award. For more information on the Cancellation Agreement, please see Note 16.
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About Earnings Per Share Disclosures

The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.

Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.

Other Available Disclosures

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