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Japan – Recruit Holdings Q2 revenue up 11%, growth boosted by staffing and HR technology segments

14 November 2017

Japanese staffing giant Recruit Holdings (6098: JP) reported revenue for the second quarter ended 30 September 2017 of JPY 538.6 billion (USD 4.7 billion), an increase of 10.8% compared to last year.

(JPY billions) Q2 2017 Q2 2016 Change Q2 2017 (USD billions)
Revenue  538.6 486.1 10.8% 4.7
EBITDA 67.3 58.6 14.8% 0.6
Operating Income 52.0 67.4 -22.8% 0.4

Revenue growth during the second quarter was mainly due to continued growth of the company’s Staffing and HR Technology segments.

During the period the company made a number of acquisitions and investments. In June, Recruit announced the acquisition of German-based TrustYou, which claims to be the world’s largest guest feedback platform. Recruit also announced that its subsidiary Indeed had acquired Interviewed, an HR technology company.

In the second quarter, the company invested in Plenty Unlimited, Inc., an agriculture technology company. Recruit also invested in WizRocket, the developer of a mobile marketing platform called CleverTap. Furthermore, the company also invested in Shocard, a company that provides a personal authentication platform using blockchain technology; and Mara Labs Inc., which operates and provides the logistics optimization platform Locus through its Indian subsidiary Mara Studios Pvt. Ltd

Revenue for Recruit during the second quarter was broken down by business segment as follows.

(JPY billions) Q2 2017 Q2 2016 Change Q2 2017 (USD billions)
HR Technology  52.7 29.9 75.8% 0.4
Media and Solutions 166.7 161.1 3.5% 1.4
Staffing 324.6 299.9 8.2% 2.8

The HR Technology segment consists of a single business operation, Indeed. Growth in the segment was due to the combination of new customer acquisition and expanding spend per account.

The Media & Solutions segment, which includes media and its related services of Marketing Solutions and HR Solutions, saw 3.5% growth compared to last year which was mainly due to the Beauty, Housing and Real Estate businesses in Marketing Solutions, and continued steady revenue growth in HR Solutions.

Within the company’s Staffing segment, quarterly revenue saw improvement mainly because of the increased revenue from the operations in Japan which the company states was supported by a solid market environment. Furthermore, revenue from the overseas operation increased as a result of the impact of foreign exchange rate movements in this quarter.

Looking ahead Recruit forecasted revenue of JPY 2.08 trillion (USD 18.2 billion) for the year ended March 2018.

In trading today, Recruit shares closed JPY 2,739.50 (USD 24.08), up 0.02% on the day and 1.81% below its 52-week high of JPY 2,790.00 (USD 24.53), set on 27 October 2017. Based on its current share price the company has a market value of JPY 4.65 trillion (USD 40.8 billion).

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