Recruiting Holdings Announces Third Quarter Fiscal Year 2022 Financial Results, with Total revenue of $6.7 Billion

TOKYO, JAPAN (Feb. 13, 2023) – Recruit Holdings Co., Ltd. (“Recruit Holdings” or the “Company”) today announced its consolidated financial results for the nine months ended December 31, 2022 (April 1, 2022 to December 31, 2022)

Consolidated revenue was 880.1 billion yen($6.7 billion), an increase of 18% as revenue in all segments, HR Technology, Matching & Solutions and Staffing increased. Consolidated revenue increased by 6.5% on a constant currency basis, adjusted EBITDA of 138.2 billion yen(-2.6%.), adjusted EPS of 50.27 yen(-5.7%).

Q3 FY2022 Segment Highlights

HR Technology:

Revenue for Q3 FY2022 increased 24.2% to 280.5 billion yen. On a US dollar basis, revenue decreased 0.1%. While the labor market remained tight globally, the supply and demand mismatch between job seekers and employers continued to ease. Total job postings on Indeed, composed of free and sponsored job postings, returned approximately to the levels of one year ago and job seeker activity as measured by traffic to, and applies on, Indeed and Glassdoor increased year over year.

On a US dollar basis, revenue in the US decreased 2.0%, as the demand for sponsored job postings, from both small and medium sized businesses and large enterprises, declined year over year. Revenue outside of the US increased 5.3%.

Adjusted EBITDA margin for Q3 FY2022 decreased 6.7 percentage points to 28.1% as personnel costs grew more than revenue primarily due to hiring in the first half of this fiscal year. During Q3, HR Technology controlled expenses in light of the business environment and advertising expenses decreased.

For the nine month period, revenue increased 38.4%, adjusted EBITDA margin was 30.7%, and adjusted EBITDA increased 8.1%.

Matching & Solutions

Revenue in Matching & Solutions for Q3 FY2022 increased 13.9% to 191.9 billion yen.

Revenue in Marketing Solutions increased 13.1% as revenue in Housing & Real Estate, Beauty, Travel, Bridal, and Dining all increased. Housing & Real Estate and Beauty continued to account for more than 50% of revenue in Marketing Solutions.

Revenue in HR Solutions increased 17.5% as revenue in the job advertising service and the placement service both increased. Hiring demand recovered year over year in the part-time job advertising service, particularly in the retail and dining industries. Hiring demand for the placement service increased across many of the industries which utilize placement services while some business clients began to act cautiously on hiring.

Adjusted EBITDA margin in Matching & Solutions for Q3 FY2022 decreased 5.2 percentage points to 16.5% as marketing expenses, mainly including advertising expenses, grew more than revenue.

For the nine month period, revenue increased 16.6%, adjusted EBITDA margin was 16.3%, and adjusted EBITDA decreased 9.5%.

Staffing

Revenue for Q3 FY2022 increased 16.2% with an increase in revenue for both Japan and Europe, US, and Australia. Excluding the positive impact of exchange rate fluctuations of 31.4 billion yen, revenue increased 7.4%.

Adjusted EBITDA margin for Q3 FY2022 decreased 0.8 percentage points to 7.2% as adjusted EBITDA margin in both Japan and Europe, US, and Australia decreased.

Revenue in Japan increased 12.1% due to an increase in the number of temporary staff on assignment as continued demand for staffing services grew year over year. Adjusted EBITDA margin for Q3 FY2022 decreased 0.5 percentage points to 9.1%.

Revenue in Europe, US, and Australia increased 19.4%. Excluding the positive impact of exchange rate fluctuations of 31.4 billion yen, revenue increased 3.8% due to continued growth in demand for staffing services in each region, despite a slowdown in demand related to supporting COVID-19 mitigation efforts that existed in the European region in FY2021.

Adjusted EBITDA margin for Q3 FY2022 in Europe, US, and Australia decreased 1.0 percentage point to 5.8%, as expenses grew more than revenue due to the impact of inflationary effects and increased headcount.

For the nine month period, revenue increased 16.8%. Excluding the positive impact of exchange rate fluctuations of 80.6 billion yen, revenue increased 9.0%. Adjusted EBITDA margin was 7.1%, and adjusted EBITDA increased 7.7%.

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