ZipRecruiter (ZIP 2.41%) shareholders had a good day on Thursday. The job-posting platform's stock was up 16% by 2:30 p.m. EST compared to a 4.5% spike in the S&P 500. Shares remain in negative territory so far in 2022, though, down about 32% since early January.
The soaring market played a big role in ZipRecruiter's rally on Thursday. But the more direct factor behind the spike was an encouraging third-quarter earnings update.
ZipRecruiter said before the market opened that sales rose 7% in the Q3 period that ended in late September. The company was also profitable, with net income landing at $21 million, or 9% of sales.
Both the sales and earnings figures came in ahead of management's latest outlook. "ZipRecruiter delivered another strong quarter of growth and profitability," CEO Ian Siegel said in a press release .
The company also raised its full-year outlook on both the top and bottom lines, which helps explain why the stock jumped in the wake of the Q3 earnings report.
The labor market is slowing, but ZipRecruiter believes this shift might add a few tailwinds to its business into 2023. Employers will be getting more selective, after all, and job seekers might become more active as the labor market cools. This scenario might support accelerating sales growth and increased profitability, so long as economic growth doesn't slow too sharply.
Management is projecting that sales will decline in the current quarter as compared to soaring results a year ago. Yet its latest trends suggest that ZipRecruiter can continue expanding profitability as it gains more market share.
"We believe we are well positioned to capitalize on a massive market opportunity," Siegel said. Wall Street appeared to agree with that bullish assessment by sending shares higher on a day that saw broad-based gains across the market.