Release Date: February 12, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Consolidated revenue increased by 3.5% to JPY896.9 billion, driven by growth in HR Technology and Japan staffing.
- The company revised its full-year guidance to a single figure at the upper end of the previous range, indicating confidence in its financial outlook.
- US revenue for HR Technology increased year-on-year, with monetization efforts leading to higher revenue per paid job ad.
- The largest share repurchase program to date was completed, reflecting a commitment to returning value to shareholders.
- The company is making steady progress in shifting job advertising services to Indeed PLUS, which is expected to enhance future growth.
Negative Points
- Revenue in the Matching & Solutions segment decreased, highlighting challenges in certain business areas.
- Quarter-over-quarter, Q3 revenue decreased due to typical holiday seasonality, indicating potential volatility in earnings.
- The outlook for Japan and the rest of the world has been revised lower, partly due to currency fluctuations.
- The shift to Indeed PLUS in Japan has been slower than initially anticipated, which could impact short-term growth.
- The company faces challenges in the US labor market, with a decline in the number of open jobs year-over-year.
Q & A Highlights
Q: Can you provide more details on the progress of monetization efforts in the HR Tech business in the US market? Also, will there be any changes in management structure from April?
A: We have continued our existing initiatives, such as urgent hiring candidate targeting, with no new changes in Q3. Despite seasonal weaker activities, we made good efforts in the US market. Regarding management changes, my title will change, but my duties and the company's mission remain consistent. I aim to enhance the company's value and maintain the same speed in decision-making.
Q: Your revenue guidance accuracy for HR Tech has been high. What factors contribute to this accuracy? Also, what are your considerations for share buybacks?
A: Our guidance accuracy is due to frequent monitoring of the latest information and a stable market outlook. For share buybacks, we consider strategic investments and market conditions. If no significant M&A opportunities arise, we may opt for share buybacks, adjusting the amount and timing based on market conditions.
Q: What has been the impact of Indeed PLUS on HR Tech and Japan business? Also, what are your plans for active investments in the labor market?
A: Indeed PLUS has contributed significantly to HR Tech's growth, with about 60% of Japan's revenue growth attributed to it. We plan to continue expanding HR Tech in Japan. For investments, we focus on improving management efficiency and adapting to market changes, with more details to be shared in May.
Q: How do you view the 4.9% year-on-year revenue growth in the US HR Technology business? Also, how is generative AI being utilized?
A: The 4.9% growth aligns with our expectations, considering seasonality. We are exploring generative AI to enhance user and client experiences, aiming for more effective and convenient products, which may also improve operational efficiency.
Q: Why was there a revision in stock compensation expenses, and does it reflect a change in headcount?
A: The revision is within our expected range, reflecting changes in headcount and performance. We have not made drastic adjustments, and the change is a small gap from our initial expectations.
Q: What is the impact of SaaS business on Marketing Solutions, and how do you anticipate changes in business areas due to rising interest rates?
A: The SaaS business positively impacts each vertical by increasing client satisfaction and efficiency. We focus on enhancing client revenue and profit rather than solely increasing SaaS revenue. The trend in business areas remains unchanged despite rising interest rates.
Q: What is the current phase of the HR Technology business regarding EBITDA margin, and what measures are needed to improve Matching & Solutions business margins?
A: HR Technology is not yet in a profit-harvesting phase; we continue to invest for growth. For Matching & Solutions, we aim to increase revenue and efficiency, leveraging AI and automation to improve client stickiness and internal productivity.
Q: Can you update us on the progress of Indeed's product tests and the performance of Indeed in Europe?
A: We continue testing various products to enhance user experience, with no major new developments in the past three months. In Europe, the market follows US trends, and progress is in line with expectations. We will provide more details in May.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
