What is the outlook for profit margins and cost structure, especially regarding sales and marketing spending?

Profit‑margin outlook:

ZipRecruiter’s Q2‑2025 release notes a “soft” broader labor market, which typically translates into slower headline‑job‑posting growth and pressure on top‑line expansion. Management emphasized that the company is maintaining a disciplined cost‑control agenda, which should help protect gross‑margin percentages even as revenue growth eases. Assuming the current mix of higher‑margin premium listings holds, we can expect gross margins to stay roughly flat to modestly improve in the near term, provided the firm does not need to slash pricing to win volume.

Cost‑structure and sales‑&‑marketing spending:

The shareholder letter highlights a continued focus on “efficient scaling” of the sales and marketing engine. While ZipRecruiter is still investing in brand awareness and product‑marketing (e.g., paid‑search, partnership spend), the guidance signals a slower pace of incremental spend versus prior quarters, aiming to keep SG&A as a stable or slightly declining share of revenue. If the company successfully reins in its marketing burn‑rate, the operating‑margin trajectory should be resilient; however, any unexpected uptick in spend—especially to counter a soft labor market—could compress operating margins and weigh on earnings.

Trading implications:

Given the margin‑preservation narrative and a modest pull‑back in sales‑&‑marketing outlays, the stock is positioned for a neutral‑to‑positive earnings‑beat scenario. A price‑action breakout above the current 20‑day SMA (≈ $30) with volume support could signal that the market is pricing in the margin upside, presenting a short‑term buying opportunity. Conversely, a breach below the 20‑day SMA accompanied by widening SG&A (evident in subsequent filings) would flag margin compression risk and may warrant a defensive stance or a stop‑loss around 5 % under the current level. Keep an eye on the next guidance update and any forward‑looking comments on marketing budget discipline for the next catalyst.