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Recruit earnings: Revenue up 5%; HR Tech segment, which includes Indeed, surges in fiscal Q1

August 09, 2019

Recruit Holdings Co. Ltd., which ranks as one of the world’s largest staffing firms, reported revenue rose 5.1% in its fiscal first quarter ended June 30 with the fastest revenue growth happening in its “HR Technology” segment that includes Indeed and Glassdoor. And it was Indeed that led growth in that segment.

Staffing revenue fell in the first quarter, but the decrease was all in the company’s operations outside of Japan.

(¥millions) Q1 2019 Q1 2018 % change Q1 2019 (US$millions)
Revenue ¥594,409 ¥565,474 5.1% $5,504.2
Gross profit ¥317,032 ¥276,982 14.5% $2,935.7
Gross margin 53.3% 49.0%    
Profit for the period ¥59,610 ¥47,592 25.3% $552.0

Revenue rose 47.5% in the HR Technology segment, and the increase on a US-dollar basis was 46.3%

“Revenue growth, which continued to be supported by a favorable economic environment and tight labor market, was primarily driven by increased sponsored job advertising revenue and ongoing strong demand for recruiting solutions offered by Indeed,” Recruit reported.

It noted that Glassdoor, which was included in results starting in the second quarter of last year, also contributed to revenue growth. Recruit also acquired Syft Online Ltd. during the first quarter; Syft has an online recruiting platform for the hospitality, event and light industrial sectors in the UK.

Indeed has more than 250 million monthly unique visitors while Glassdoor has 60 million.

For the full fiscal year, Recruit expects HR Technology revenue to rise 35% on a US dollar basis.

Turning to staffing revenue, Recruit noted its international staffing operations saw revenue fall 9.6% year over year in the first quarter while revenue in its Japanese staffing operations rose 1.5%.

Recruit cited the negative impact of foreign exchange rates and an uncertain economic outlook in Europe. Excluding the effects of exchange rates, international staffing revenue fell by 2.9%.

For the full fiscal year, Recruit expects Japanese staffing revenue to rise in the low single digits and international staffing revenue to decrease.

Revenue by segment*

(¥millions) Q1 2019 Q1 2018 % change Q1 2019 (US$millions)
HR Technology (Indeed and Glassdoor) ¥102,192 ¥69,303 47.5% $946.3
Media & Solutions ¥187,693 ¥173,543 8.2% $1,738.0
Staffing ¥312,564 ¥329,110 -5.0% $2,894.3

*The total sum of the three segments does not correspond with consolidated numbers due to eliminations and adjustments.

Recruit also has publishing operations in Japan, which are reported in its “Media & Solutions” segments.

Share price and market cap

Shares in Recruit closed up 1.39% to ¥3,651 in Japan; the company had a market cap of ¥6.13 trillion, according to FT.com.


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