‭Investor Day - Simplify Hiring‬‭Chris Hyams‬‭- Monetization‬‭March 27, 2024‬‭Slide 1-6-1‬‭Chris:‬‭Thanks Raj.‬‭Once more, we have two strategic priorities.‬‭Slide 1-6-2‬‭First,‬ ‭improve‬ ‭the‬ ‭effectiveness‬ ‭of‬ ‭our‬ ‭marketplace‬ ‭in‬ ‭order‬ ‭to‬ ‭drive‬ ‭more‬ ‭hires,‬ ‭which‬ ‭Maggie‬ ‭&‬ ‭Raj‬ ‭just‬‭ overed.‬c‭Second, as we improve matching and drive more hires, we need to effectively monetize the marketplace.‬‭Slide 1-6-3‬‭The‬ ‭most‬ ‭common‬ ‭question‬ ‭we‬ ‭get‬ ‭here‬‭is‬‭“why‬‭don’t‬‭you‬‭just‬‭raise‬‭your‬‭prices?”.‬‭That’s‬‭a‬‭great‬‭question,‬‭ nd the answer goes back to our core value of pay for performance.‬a‭Slide 1-6-4‬‭ he‬‭key‬‭to‬‭Indeed’s‬‭success‬‭from‬‭the‬‭very‬‭start‬‭has‬‭been‬‭our‬‭alignment‬‭to‬‭our‬‭customers,‬‭and‬‭to‬‭job‬‭seekers.‬
T‭We‬‭get‬‭paid‬‭when‬‭we‬‭deliver‬‭value,‬‭which‬‭means‬‭we‬‭grow‬‭revenue‬‭when‬‭we‬‭deliver‬‭more‬‭value.‬‭We‬‭can’t‬‭just‬‭raise prices by, say 10%, without jeopardizing that alignment.‬‭However,‬‭there‬‭are‬‭multiple‬‭areas‬‭where‬‭we‬‭are‬‭charging‬‭less‬‭than‬‭the‬‭value‬‭we’re‬‭delivering,‬‭and‬‭that‬‭means‬‭ ignificant opportunity to improve monetization by better capturing the value we already deliver.‬s‭Slide 1-6-5‬‭ e‬‭started‬‭our‬‭journey‬‭from‬‭search‬‭engine‬‭to‬‭marketplace‬‭back‬‭in‬‭2011‬‭with‬‭the‬‭introduction‬‭of‬‭Hosted‬‭Jobs‬
W‭and‬ ‭Indeed‬ ‭Apply.‬ ‭Since‬ ‭then‬ ‭we‬ ‭have‬ ‭made‬ ‭extraordinary‬ ‭progress,‬ ‭with‬ ‭a‬ ‭45%‬ ‭CAGR‬ ‭over‬ ‭the‬ ‭past‬ ‭12‬
‭years.‬‭This‬‭is‬‭an‬‭ongoing‬‭transformation‬‭and‬‭if‬‭we‬‭look‬‭at‬‭Indeed‬‭Apply‬‭penetration,‬‭we‬‭are‬‭barely‬‭halfway‬‭through‬t‭his journey.‬‭Slide 1-6-6‬‭That continued journey represents a massive opportunity ahead.‬‭The‬ ‭key‬‭is‬‭that‬‭the‬‭marketplace‬‭total‬‭addressable‬‭market‬‭is‬‭significantly‬‭larger‬‭than‬‭the‬‭search‬‭engine‬‭TAM.‬‭ he global HR matching market is north of $300 billion.‬T‭ hen‬ ‭we‬ ‭look‬ ‭at‬ ‭the‬ ‭various‬ ‭segments‬ ‭that‬ ‭make‬ ‭up‬ ‭this‬ ‭market,‬ ‭the‬ ‭search‬ ‭engine‬ ‭opportunity‬ ‭is‬ ‭a‬W
‭sub-segment‬ ‭of‬ ‭Job‬ ‭Advertising‬ ‭and‬ ‭Talent‬ ‭Sourcing.‬ ‭At‬ ‭$32‬ ‭billion,‬ ‭it’s‬ ‭less‬ ‭than‬ ‭10%‬ ‭of‬ ‭the‬ ‭total.‬ ‭The‬‭rest—recruitment‬ ‭automation,‬ ‭retained‬ ‭search,‬ ‭direct‬ ‭hire,‬ ‭and‬ ‭temp‬ ‭staffing—are‬ ‭all‬ ‭part‬ ‭of‬ ‭the‬ ‭larger‬‭marketplace opportunity.‬‭This transcript is provided for the convenience of investors only.‬‭1‬‭Slide 1-6-7‬‭The global marketplace TAM is 10 times the size of search.‬‭Our‬‭strategy‬‭to‬‭transform‬‭from‬‭search‬‭engine‬‭to‬‭a‬‭two-sided‬‭marketplace‬‭opens‬‭the‬‭doors‬‭to‬‭this‬‭significantly‬l‭arger opportunity.‬‭Slide 1-6-8‬‭We have a massive opportunity ahead along two simple dimensions:‬‭First, we’ll grow the take rate of existing customers.‬‭Second, we’ll expand our customer base with new employers.‬‭Slide 1-6-9‬‭Our‬‭first‬‭monetization‬‭lever‬‭is‬‭to‬‭grow‬‭take‬‭rate.‬‭Take‬‭rate‬‭is‬‭a‬‭measure‬‭of‬‭the‬‭cost‬‭per‬‭hire‬‭as‬‭a‬‭percentage‬‭of‬f‭irst year salary. If it costs $10,000 to deliver the hire of someone earning $100,000, that’s a 10% take rate.‬‭Today, for hires we measure on Indeed, the average take rate is less than 1%.‬‭Slide 1-6-10‬‭1%‬ ‭might‬ ‭seem‬ ‭reasonable,‬ ‭until‬ ‭we‬ ‭consider‬ ‭market‬ ‭pricing‬ ‭for‬ ‭traditional‬ ‭hiring‬ ‭platforms.‬ ‭Direct‬ ‭hire‬‭ lacement fees average roughly 20%, and executive search firms charge up to 40%.‬
p‭So‬‭we‬‭can‬‭grow‬‭our‬‭take‬‭rate‬‭considerably‬‭and‬‭still‬‭have‬‭the‬‭advantage‬‭of‬‭offering‬‭a‬‭significantly‬‭lower‬‭cost‬‭ er hire.‬p‭There are several levers to increase take rate on Indeed.‬‭Slide 1-6-11‬‭ ne‬‭of‬‭the‬‭biggest‬‭levers‬‭to‬‭grow‬‭take‬‭rate‬‭is‬‭to‬‭continue‬‭to‬‭grow‬‭the‬‭share‬‭of‬‭paid‬‭interactions‬‭on‬‭Indeed.‬‭Our‬
O‭core‬‭value‬‭of‬‭putting‬‭job‬‭seekers‬‭first‬‭means‬‭that‬‭we‬‭want‬‭to‬‭have‬‭all‬‭the‬‭jobs‬‭a‬‭job‬‭seeker‬‭would‬‭be‬‭interested‬‭in, regardless of whether or not the job is paid.‬‭ he‬ ‭majority‬ ‭of‬ ‭jobs‬ ‭on‬ ‭Indeed‬ ‭are‬ ‭what‬‭we‬‭call‬‭“organic,”‬‭or‬‭free.‬‭When‬‭a‬‭job‬‭seeker‬‭searches‬‭on‬‭Indeed,‬T‭they‬‭see‬‭a‬‭blend‬‭of‬‭free‬‭and‬‭paid‬‭jobs.‬‭Over‬‭time,‬‭we‬‭have‬‭grown‬‭our‬‭customer‬‭base,‬‭so‬‭we‬‭have‬‭more‬‭paid‬‭job inventory.‬‭ nd‬ ‭as‬ ‭our‬ ‭matching‬ ‭AI‬ ‭has‬ ‭improved,‬ ‭we‬ ‭have‬ ‭been‬ ‭able‬‭to‬‭dial‬‭up‬‭the‬‭percentage‬‭of‬‭matches‬‭from‬‭paid‬A‭jobs.‬ ‭As‬ ‭we‬ ‭continue‬ ‭to‬ ‭turn‬ ‭the‬ ‭knobs‬ ‭on‬ ‭free‬ ‭and‬‭paid‬‭matches,‬‭take‬‭rate‬‭will‬‭go‬‭up.‬‭This‬‭is‬‭an‬‭essential‬‭point‬‭of‬‭our‬‭alignment‬‭of‬‭values‬‭with‬‭job‬‭seekers‬‭and‬‭employers.‬‭For‬‭most‬‭ad‬‭supported‬‭platforms,‬‭the‬‭ads‬‭are‬‭a distraction for the users, a necessary evil.‬‭On‬ ‭Indeed,‬ ‭our‬ ‭“ads”‬ ‭are‬ ‭the‬ ‭reason‬ ‭job‬ ‭seekers‬ ‭visit‬ ‭—‬ ‭to‬‭get‬‭jobs.‬‭And‬‭even‬‭more‬‭importantly,‬‭paid‬‭jobs‬r‭ epresent an employer who is even more eager to fill a position than those that are free.‬‭Slide 1-6-12‬‭On‬‭average,‬‭sponsored‬‭jobs‬‭are‬‭40%‬‭more‬‭likely‬‭to‬‭lead‬‭to‬‭a‬‭hire.‬‭So‬‭we‬‭can‬‭continue‬‭to‬‭grow‬‭the‬‭mix‬‭of‬‭paid‬‭ s free, and still put job seekers first.‬v‭This transcript is provided for the convenience of investors only.‬‭2‬‭Slide 1-6-13‬‭Another‬‭key‬‭lever‬‭is‬‭to‬‭continue‬‭to‬‭grow‬‭ATS‬‭integrations‬‭for‬‭Indeed‬‭Apply.‬‭Enterprise‬‭clients‬‭are‬‭responsible‬f‭or a huge portion of all open jobs, and nearly all of them use an ATS to post their jobs.‬‭ s‬‭I‬‭mentioned‬‭earlier,‬‭Indeed‬‭Apply‬‭jobs‬‭on‬‭average‬‭spend‬‭twice‬‭as‬‭much‬‭per‬‭job,‬‭while‬‭delivering‬‭2.5‬‭times‬A‭as‬‭many‬‭hires.‬‭This‬‭means‬‭that‬‭our‬‭effective‬‭monetization‬‭of‬‭Enterprise‬‭customers‬‭is‬‭driven‬‭considerably‬‭by‬‭Indeed Apply adoption.‬‭Today, less than half of all jobs on Indeed are Indeed Apply-enabled.‬‭We‬‭have‬‭major‬‭new‬‭ATS‬‭integrations‬‭rolling‬‭out‬‭in‬‭2024,‬‭including‬‭with‬‭four‬‭of‬‭the‬‭largest‬‭ATSs‬‭in‬‭the‬‭world.‬‭ his will open up significant opportunities for Enterprise expansion.‬T‭Slide 1-6-14‬‭Another key lever for increasing take rate is effective monetization for high salary jobs.‬‭Throughout‬‭the‬‭HR‬‭industry,‬‭the‬‭higher‬‭the‬‭salary,‬‭the‬‭cost‬‭per‬‭hire‬‭goes‬‭up.‬‭But‬‭even‬‭more‬‭than‬‭that,‬‭the‬‭take‬r‭ ate also increases.‬‭ ou‬ ‭can‬ ‭see‬ ‭this‬ ‭clearly‬ ‭in‬ ‭the‬ ‭sample‬ ‭data‬ ‭here‬ ‭from‬ ‭industry‬ ‭sources.‬ ‭For‬ ‭hospitality‬ ‭roles,‬ ‭we‬ ‭see‬ ‭an‬Y‭average‬ ‭cost‬ ‭per‬‭hire‬‭of‬‭about‬‭$1,000‬‭for‬‭jobs‬‭that‬‭pay‬‭around‬‭$30,000,‬‭for‬‭an‬‭estimated‬‭take‬‭rate‬‭of‬‭3.5%.‬‭For‬‭technical‬‭and‬‭scientific‬‭roles‬‭with‬‭a‬‭$90,000‬‭salary,‬‭the‬‭take‬‭rate‬‭goes‬‭up‬‭to‬‭7%.‬‭Technical‬‭and‬‭scientific‬‭executive roles at $150,000 salary have an estimated take rate of 26%.‬‭Slide 1-6-15‬‭I mentioned before that Indeed’s average take rate is less than 1%.‬‭ ut‬ ‭if‬ ‭we‬ ‭look‬ ‭at‬ ‭our‬ ‭take‬ ‭rate‬ ‭by‬‭salary‬‭range,‬‭we‬‭see‬‭that‬‭our‬‭curve‬‭is‬‭in‬‭fact‬‭the‬‭opposite‬‭of‬‭the‬‭industry‬B‭trend.‬‭As‬‭salary‬‭increases,‬‭our‬‭take‬‭rate‬‭decreases.‬‭Jobs‬‭we‬‭fill‬‭with‬‭a‬‭salary‬‭of‬‭$100,000‬‭have‬‭half‬‭the‬‭take‬‭rate of jobs with a salary of $50,000.‬‭Slide 1-6-16‬‭ his‬‭is‬‭one‬‭big‬‭area‬‭where‬‭we‬‭are‬‭charging‬‭far‬‭less‬‭than‬‭the‬‭value‬‭we‬‭are‬‭delivering.‬‭We‬‭can‬‭turn‬‭the‬‭knobs‬
T‭on‬‭value‬‭based‬‭pricing‬‭—‬‭charging‬‭more‬‭for‬‭higher‬‭salary‬‭jobs‬‭—‬‭and‬‭directly‬‭increase‬‭take‬‭rate.‬‭We‬‭have‬‭a‬‭significant opportunity to close this gap, and we think we can drive even more value for these jobs over time.‬‭Slide 1-6-17‬‭ he‬ ‭final‬ ‭lever‬ ‭for‬‭increasing‬‭take‬‭rate‬‭is‬‭to‬‭continue‬‭the‬‭strategy‬‭of‬‭moving‬‭more‬‭employers‬‭from‬‭search‬‭to‬T‭marketplace‬ ‭products.‬ ‭We‬ ‭are‬ ‭growing‬ ‭Indeed‬ ‭Apply‬ ‭integrations,‬ ‭and‬ ‭launching‬ ‭Smart‬ ‭Sourcing‬ ‭as‬ ‭Raj‬‭explained earlier. Long term, we will continue to innovate monetization models that are “closer to the hire”.‬I‭ndeed‬ ‭Flex‬ ‭and‬ ‭Indeed‬ ‭Hire‬ ‭are‬ ‭early‬ ‭stage‬ ‭experiments.‬ ‭They‬ ‭represent‬ ‭more‬ ‭value‬ ‭to‬ ‭employers—we‬‭deliver‬‭hires‬‭and‬‭completed‬‭shifts.‬‭They‬‭also‬‭represent‬‭a‬‭significantly‬‭higher‬‭take‬‭rate‬‭today‬‭of‬‭5%‬‭-‬‭10%,‬‭and‬‭address a significantly larger TAM. You’ll hear more about Indeed Flex from Rob Zandbergen later today.‬‭While‬ ‭we‬ ‭are‬ ‭focusing‬‭on‬‭growing‬‭the‬‭take‬‭rate‬‭from‬‭existing‬‭customers,‬‭of‬‭course,‬‭we‬‭are‬‭also‬‭focused‬‭on‬‭ rowing our customer base.‬g‭Slide 1-6-18‬‭As‬ ‭Raj‬ ‭shared,‬ ‭we‬ ‭have‬ ‭strong‬ ‭market‬ ‭awareness,‬ ‭preference‬ ‭and‬ ‭share‬‭in‬‭markets‬‭around‬‭the‬‭world.‬‭But‬t‭here are numerous opportunities to grow our customer base.‬‭This transcript is provided for the convenience of investors only.‬‭3‬‭At a high level, we have three key areas of focus.‬‭ irst‬‭is‬‭our‬‭continued‬‭investment‬‭in‬‭international‬‭markets.‬‭70%‬‭of‬‭our‬‭revenue‬‭today‬‭comes‬‭from‬‭the‬‭US,‬‭but‬F‭70%‬‭of‬‭global‬‭TAM‬‭is‬‭outside‬‭of‬‭the‬‭US.‬‭Japan‬‭is‬‭a‬‭key‬‭market‬‭for‬‭Indeed‬‭and‬‭Recruit,‬‭and‬‭you‬‭will‬‭hear‬‭more‬‭about our efforts there from Kitamura-san and Yamaguchi-san later today.‬‭Next,‬ ‭our‬ ‭SMB‬ ‭business‬ ‭is‬ ‭powered‬ ‭by‬‭hosted‬‭jobs,‬‭which‬‭is‬‭driven‬‭by‬‭self-serve‬‭signups.‬‭By‬‭continuing‬‭to‬‭ implify and optimize the onboarding process, we can drive significant new spending conversions of SMBs.‬s‭Finally,‬ ‭we‬ ‭have‬ ‭substantial‬ ‭headroom‬ ‭to‬ ‭grow‬ ‭enterprise‬ ‭penetration.‬ ‭Our‬ ‭investments‬ ‭in‬ ‭Indeed‬ ‭Apply‬i‭ntegrations will continue to open up new opportunities with Enterprise employers.‬‭Slide 1-6-19‬‭We have significant headroom to expand our current monetization across these two dimensions.‬‭We’ll grow take rate by growing the mix of paid and free matches.‬‭Growing Indeed Apply for enterprise employers.‬‭Growing value-based pricing for high salary jobs.‬‭Growing adoption of “closer to the hire” solutions.‬‭And, of course we’ll grow new customers.‬‭These two strategies will work together to drive overall revenue growth.‬‭Slide 1-6-20‬‭Our‬ ‭transformation‬ ‭from‬ ‭search‬ ‭engine‬ ‭to‬ ‭marketplace‬ ‭is‬ ‭well‬‭underway.‬‭But‬‭with‬‭Indeed‬‭Apply‬‭adoption‬‭at‬l‭ess than half, we are still in the early innings of this evolution.‬‭Slide 1-6-21‬‭As‬‭we‬‭continue‬‭this‬‭strategy,‬‭we‬‭will‬‭drive‬‭more‬‭value‬‭for‬‭job‬‭seekers‬‭and‬‭employers,‬‭and‬‭unlock‬‭more‬‭of‬‭the‬‭ early $300 billion marketplace TAM.‬n‭Slide 1-6-22‬‭Overall, the key takeaways for Indeed are:‬‭One,‬‭our‬‭core‬‭principles‬‭of‬‭“Job‬‭seeker‬‭first”‬‭and‬‭“Pay‬‭for‬‭performance”‬‭have‬‭fueled‬‭our‬‭position‬‭as‬‭the‬‭global‬l‭eader in hires.‬‭Two,‬‭ongoing‬‭AI‬‭innovation‬‭is‬‭fueling‬‭our‬‭progress‬‭to‬‭transform‬‭from‬‭a‬‭job‬‭search‬‭engine‬‭into‬‭a‬‭matching‬‭and‬‭ iring marketplace.‬h‭Three,‬ ‭we‬ ‭have‬ ‭significant‬ ‭levers‬ ‭to‬ ‭grow‬ ‭our‬ ‭take‬ ‭rate‬ ‭and‬ ‭customer‬ ‭base‬ ‭to‬ ‭effectively‬ ‭monetize‬ ‭our‬‭ arketplace, and address a much larger HR matching TAM.‬m‭No doubt we have a lot of work ahead of us, but the opportunity to grow hires and revenue is inspiring‬‭This transcript is provided for the convenience of investors only.‬‭4‬‭Slide 1-6-23‬‭ hen‬‭I‬‭joined‬‭Indeed‬‭in‬‭October‬‭2010,‬‭we‬‭had‬‭130‬‭people,‬‭with‬‭just‬‭45‬‭in‬‭our‬‭Austin‬‭office‬‭where‬‭I‬‭work.‬‭Two‬W‭weeks‬‭after‬‭joining,‬‭we‬‭moved‬‭into‬‭a‬‭new‬‭office‬‭space.‬‭In‬‭true‬‭startup‬‭fashion,‬‭we‬‭met‬‭on‬‭a‬‭saturday‬‭morning‬‭with coffee, bagels, and yes, our own power tools.‬‭Slide 1-6-24‬‭We assembled desks, installed power and cabling, and stocked the kitchen.‬‭But‬ ‭as‬ ‭fun‬ ‭as‬‭this‬‭was,‬‭I‬‭had‬‭been‬‭working‬‭in‬‭startups‬‭for‬‭15‬‭years‬‭at‬‭that‬‭point,‬‭and‬‭at‬‭130‬‭people,‬‭Indeed‬‭ as actually the biggest company I had ever joined.‬w‭Slide 1-6-25‬‭I was inspired by the mission and the people, but honestly, I was a bit worried that I’d missed all the fun.‬‭Looking back now of course it’s clear that we were just getting started.‬‭Slide 1-6-26‬‭When‬ ‭I‬ ‭look‬ ‭at‬ ‭all‬ ‭the‬ ‭opportunities‬ ‭ahead‬ ‭of‬ ‭us‬ ‭today,‬ ‭I‬ ‭can‬ ‭say‬ ‭with‬ ‭absolute‬ ‭conviction‬ ‭that‬‭we‬‭are‬‭just‬‭ etting started.‬g‭Thank you.‬‭[END]‬‭Forward-Looking Statements‬‭ his‬‭document‬‭contains‬‭forward-looking‬‭statements,‬‭which‬‭reflect‬‭the‬‭Company's‬‭assumptions‬‭and‬‭outlook‬‭for‬T‭the‬ ‭future‬ ‭and‬ ‭estimates‬ ‭based‬ ‭on‬ ‭information‬ ‭available‬ ‭to‬ ‭the‬ ‭Company‬ ‭and‬ ‭the‬ ‭Company's‬ ‭plans‬ ‭and‬‭expectations‬ ‭as‬ ‭of‬ ‭the‬ ‭date‬ ‭of‬ ‭this‬ ‭document‬ ‭or‬ ‭other‬ ‭date‬ ‭indicated.‬ ‭There‬ ‭can‬ ‭be‬ ‭no‬ ‭assurance‬ ‭that‬‭the‬‭relevant forecasts and other forward-looking statements will be achieved.‬‭ lease‬ ‭note‬ ‭that‬ ‭significant‬ ‭differences‬ ‭between‬ ‭the‬ ‭forecasts‬ ‭and‬ ‭other‬ ‭forward-looking‬ ‭statements‬ ‭and‬P‭actual‬ ‭results‬ ‭may‬ ‭arise‬ ‭due‬ ‭to‬ ‭various‬ ‭factors,‬ ‭including‬ ‭changes‬ ‭in‬ ‭economic‬ ‭conditions,‬ ‭changes‬ ‭in‬‭individual‬ ‭users’‬ ‭preferences‬ ‭and‬ ‭business‬ ‭clients'‬ ‭needs,‬ ‭competition,‬ ‭changes‬ ‭in‬ ‭the‬ ‭legal‬‭and‬‭regulatory‬‭environment,‬ ‭fluctuations‬ ‭in‬ ‭foreign‬ ‭exchange‬ ‭rates,‬ ‭climate‬ ‭change‬ ‭or‬ ‭other‬ ‭changes‬ ‭in‬ ‭the‬ ‭natural‬‭environment,‬‭the‬‭impact‬‭of‬‭the‬‭spread‬‭of‬‭COVID-19,‬‭the‬‭occurrence‬‭of‬‭large-scale‬‭natural‬‭disasters,‬‭and‬‭other‬‭factors.‬‭ ccordingly,‬ ‭readers‬ ‭are‬ ‭cautioned‬ ‭against‬ ‭placing‬ ‭undue‬‭reliance‬‭on‬‭any‬‭such‬‭forward-looking‬‭statements.‬
A‭The‬‭Company‬‭has‬‭no‬‭obligation‬‭to‬‭update‬‭or‬‭revise‬‭any‬‭information‬‭contained‬‭in‬‭this‬‭document‬‭based‬‭on‬‭any‬‭subsequent developments except as required by applicable law or stock exchange rules and regulations.‬‭This transcript is provided for the convenience of investors only.‬‭5‬