Q2 2023 Recruit Holdings Co Ltd Earnings Call
Yeah.
Welcome to America Holdings' second quarter, FY 2022 earnings conference call.
This call is that simultaneous translation I'm not going to give me and translation you need to provide that for the convenience of being Mississippi I.
I mean, Josh Chen manager of Investor Relations.
And joining me today and you say you can either come up to you.
And you can reach out right now.
But I mean.
Jim will briefly go through the second quarter results, we announced that J P. M. Today and proceed to the Q&A session.
Orientation, we use today is available on our website.
Note that.
All comparisons during this conference call on a year over year, unless otherwise stated.
As a reminder, we have applied the new different mission adjusted EBITA adjusted EBITA margin adjusted EPS.
Oh, Yeah, and then your definition means apart with respectively to the FY 2021 what are the congressman purposes.
Now I'll turn the call over to Jim.
Thank you for your participation today I hope to meet you Ray Executive officer of corporate planning Division over crude holdings.
I will begin with the consolidated results of operations for Q2 of FY 2022.
Holidayed revenue was $878 4 billion yen, an increase of 25, 3% consolidated revenue increased by 12, 4% on a constant currency basis.
<unk> adjusted EBITDA decreased by one 2% to $145 3 billion yen.
Holiday to adjusted EBITDA margin was 16, 5%.
The EPS was 54.70 again.
Consolidated revenue increased as revenue with all segments increase led by HR technology.
Consolidated adjusted EBITDA margin was mainly affected by strategic investments for future growth in HR technology, and matching and solutions, which were executed as planned in line with our May announcement.
There is no change in the guidance for the current fiscal year from the figures disclosed in May.
For the six month period ended September 32022, consolidated revenue was 1.7 to $1 six trillion yen an increase of 26% consolidated adjusted EBITDA was 297 6 billion an increase of six nine.
<unk> percent and consolidated adjusted EBITDA margin was 17, 3%.
Now I will walk through each segment.
First I will talk about HR technology.
U S. Dollar based revenue was $2.173 billion, an increase of 11, 6% year over year and approximately flat compared to Q1.
This is higher than two years ago in Q2 of FY 2020, when revenue was $973 million.
On a Japanese yen basis revenue increased by 41% year over year, and five 9% quarter over quarter.
The increase was supported by strong demand for talent globally, which led to increased demand year over year for indeed in glass towards hiring products and services.
Still tight by historical standards. The labor market has continued to normalize compared to Q1, especially in the U S and Europe .
During Q2, the number of job openings posted on the <unk> declined in the number of job seekers active on the DRAM less toward increased reflecting the easing of the imbalance in the labor market has seen in the U S and other countries in Q2.
An additional reason for the moderating revenue growth rate compared to Q1, what was the significant growth experienced in FY 2021 from Q1 to Q2.
The U S dollar basis revenue in the U S increased by nine 2% and revenue outside of the U S increased by 18, 9%, primarily led by Europe , Canada and Japan.
U S dollar based revenue in the U S and outside of the U S remained at a similar level compared to Q1.
Adjusted EBITDA was $91 2 billion yen and an adjusted EBITDA margin decreased by 12, seven percentage points to 34% 3.3 percentage points lower than Q1 due to a significant increase in operating and development expenses driven by investments.
<unk> been hiring for product and technology development in line with our May announcement.
For the six months period revenue was $584 3 billion, an increase of 46, 5% adjusted EBITDA was $186 7 billion, an increase of 11, 7% and adjusted EBITDA margin was 32%.
We intend to continue to make necessary strategic investments for our long term strategy simplify hiring while managing our operating expenses prudently.
Next I will talk about the results of matching and solutions.
Revenue in matching and solutions was $185 2 billion yen, an increase of 17, 3% with an increase in revenue for both marketing solutions and HR solutions, which reflects the recovery of demand in the Japan economy.
Revenue and marketing solutions was $111 9 billion yen, an increase of 13, 9% exceeding pre pandemic levels. When revenue was $110 6 billion yen in Q2 of FY 2019.
Revenue in HR solutions was 72 billion an increase of 22, 2%. However, it still did not recover to pre pandemic levels of $79 2 billion yet.
Revenue increased in housing and real estate and beauty, which together account for more than 50% of the revenue of marketing solutions and both are above pre pandemic levels.
Revenue and travel increased significantly from the same period in the prior year when traveling Japan was subject to COVID-19 related restrictions and revenue also increased in bridal and in dining.
However, revenue has not yet recovered to pre pandemic levels in any of these three verticals.
In HR solutions revenue in the placement service increased year over year exceeding pre pandemic levels due to an increase in hiring demand in many industries, but utilized placement services.
On the other hand in the part time job advertising business revenue did not recover to pre pandemic levels.
However, hiring demand improved year over year, mainly from business clients in dining and retail which had been impacted by the COVID-19 related restrictions in the prior year at this point.
The cumulative number of SaaS accounts as of September 32022 was $2 eight 3 million.
Number of air pay accounts as of September 32022 was 329000, an increase of 36, 4% year over year.
More detailed information in terms of the number of air business tool SaaS accounts can be found in the faqs.
In Q2 FY 2022.
To execute strategic marketing activities for future growth aligned with our business strategy.
Adjusted EBITDA decreased to $27 9 billion and adjusted EBITDA margin was 15, 1% a decrease of five four percentage points.
For the six month period.
<unk> was $365 6 billion yen, an increase of 18, 1% adjusted EBITDA was $59 2 billion yen a decrease of seven 4% and adjusted EBITDA margin was 16, 2%.
Finally, I will talk about the results of staffing.
Revenue was 402 billion yen, an increase of 19, 3% or an increase of 10, 5% on a constant currency basis.
Adjusted EBITDA was $27 9 billion yen and adjusted EBITA margin was 7% at a similar level from the same period last year.
Revenue in Japan was 166 billion, an increase of 14% due to increased demand for staffing business year over year adjust.
Adjusted EBITDA was $14 9 billion, an increase of 17, 7% and adjusted EBITA margin in Japan was 9%.
Revenue in Europe U S and Australia was $234 2 billion yen, an increase of 23, 3% an increase of seven 8% on a constant currency basis.
Demand for staffing business continued despite a year over year slowdown in demand related to supporting COVID-19 mitigation efforts.
It existed in the European region in FY 2021.
Adjusted EBITDA was $12 9 billion yen, an increase of 14, 5% adjusted.
Adjusted EBITDA margin was five 5%, primarily due to the impact of inflationary effects and higher personnel costs, resulting from increased headcount.
For the six months period revenue was 786 billion yen an increase of 17, 2% adjusted EBITDA was $55 2 billion yen, an increase of nine 7% and adjusted EBITDA margin was 7%.
Sedated guidance for the current fiscal year as announced in May is revenue of $3 three trillion yen adjusted EBITDA of 520 billion yen, an adjusted EPS of 176 five yen.
We have decided there will be no change in guidance at this time when taking into account the actual results for the first half the latest outlook for the second half and the impact from exchange rate fluctuations.
In May FY 2022 guidance assumed an exchange rate of 120 yen to the U S dollar for the fiscal year.
But throughout the year, we update our business outlook using actual figures and the latest market consensus exchange rates.
Our full year guidance for each SBU is disclosed as a range and at this time.
Expect results to be within those ranges, while also taking into account the exchange rate fluctuations.
Last but not least as for our capital allocation policy. There are no changes in our policy and order of priority.
The interim dividend per share is 11 yen as forecasted in May on October 17, we announced the share repurchase program.
The total number of shares to be repurchased as up to 42 million shares and a maximum total purchase price is 150 billion yet.
The challenging macroeconomic environment continues to have a significant impact on the global equity markets.
Under this situation and considering multiple factors, including the capacity to pursue strategic business investments stock price level, the market environment and the outlook for our financial position in line with our capital allocation policy, we decided to conduct the share repurchase. This is our first time.
Conducting a share repurchase which does not a company selling by shareholders.
The total amount of dividends per share for FY 2022 is expected to be 22 yen because we expect a dividend per share at the end of Q4 to be 11, yet.
Assuming the share repurchases completed at the maximum total purchase price.
Total payout ratio for FY 2020 to be approximately 68%.
<unk> visit our IR website for the details of the share repurchase.
In line with our capital allocation policy.
We will continue to pursue the possibility of share repurchases, considering our business performance strategic investment opportunities stock price level in a comprehensive manner, while monitoring stock market trends.
This concludes my presentation. Thank you.
Yeah.
Yeah.
We would now like piano.
Proceed to.
Sean.
The Q1 results call.
First I will ask a few questions.
A copy of it.
All right.
Oh.
Sorry. This is the announcements for the earthquake that just occurred.
So I will ask a few questions about the topic that I believe you have an interesting and we will take your questions.
Hi.
Okay.
Okay.
Please make for a moment until this announcement and.
Okay.
Okay.
Right.
Thank you let me continue.
Thank you again for today.
So first of all.
What are your thoughts on the global HR market, that's a market.
How has the labor market situations.
Last quarter in August .
So.
We always mentioned this when we talk about the forecast of the labor markets our outlook.
The labor market has not changed we are seeing a long term structural change in the labor market and almost all developed country.
Workforce shift from immigration and changing attitude towards work life balance are progressing and resulting in a labor supply shortage in the last three months.
We have seen.
Inquiry.
News of layoffs, especially at Tech company.
In the labor market as a whole layoffs have remained low.
Recent increases in lay off.
Our primarily seen in the industry that ramped up the hiring significantly during the pandemic.
For example.
The number of job postings for software development jobs in the U S.
At 130% above pre pandemic.
Pandemic level and over the last six months has decreased only by approximately 30% as another example.
The number of workers in the leisure and hospitality industry in the U S.
Is still about 1 million lower than pre pandemic level.
And people still say that they are suffering from a labor shortage when demand is high as or even higher than pre pandemic levels.
These examples demonstrate.
The labor market remaining high.
As I said in August , but it is gradually returning to more normal conditions.
Closer to what it was before the pandemic.
We believe that the current situation, where the supply of workers is inadequate and interest rates are rising at an unprecedented rate will continue to make the outlook truly uncertain as they are.
There's no precedent for how quickly and to what extent the demand for hiring will decline.
I see.
Based on this situation.
How are you thinking about HR technology with revenue performance for the remainder of this fiscal year.
Yes in terms of our performance.
There has been no significant change in the trends we discussed in August .
HR technology year over year revenue growth continued to decelerate from at the peak level seen during the recovery from the pandemic.
HR technologies U S dollar revenue growth in Q2 was 11, 6% year over year.
And ultimately to 5% year over ear in October the most recent month in line with our expectation.
However.
One factor that deferred from our initial expectations as the headwinds from Forex on the origami with revenue on U S dollar basis.
Which has been greater than anticipated.
In light of these factors.
And assuming no significant economic downturn occurs during the remainder of this fiscal year.
We now believe that HR technology of revenue growth for this fiscal year.
Likely be closer to 10%.
The bottom of the range rather than in the lower half of the 10% to 20% with all of our guidance range, which I mentioned last quarter.
I see so what matters is HR technology, taking in light of these downward trends and significant macroeconomic uncertainty looking towards next year.
Okay.
As I mentioned earlier.
Hiring demand in the U S has been decelerating towards a normalization and leveling off.
Other regions like Europe and Japan.
We expect that hiring demand will also gradually peak and decline before leveling off.
For the next fiscal year.
I assume.
Size of the global HR matching market will contract.
And considering the current exchange rates.
It is possible our HR technology revenue will decline.
We don't know how long or geek.
A question that is likely to come Mike Dean.
But recruit.
Has grown through many economic cycles, and it's more than 60 year history.
We've had success controlling costs during previous downturns, while balancing this with investments for long term growth, enabling us to expand our business.
The recovery period, and HR technology, considering the current uncertain situation and the level of foreign exchange rates, we are already taking measures to control costs, including pausing hiring as we have already hired 2500 people in the first half of the fiscal year.
We will continue to evaluate the macroeconomic situation and the mid term outlook for HR technologies financial performance, well implementing appropriate cost controls and strategic investments.
I see.
So.
Up to this point.
We talked about the global HR matching market.
Focusing on HR technology.
But how do you see the latest trends and the outlook for Notching installations, which operate businesses in Japan.
I believe the Japan economy is now in the recovery phase from the pandemic about six to nine months behind the Western Europe .
We see a significant rebound of demand, especially in travel and tiny.
However.
I believe the potential for slowing of economic growth and Japan is increasing.
So we are prepared to control cost balanced with continued strategic investments for long term growth.
While closely monitoring.
The macroeconomic environment and the outlook for the next fiscal year.
Thank you very much deco.
Now lets take questions from participants.
Please proceed.
Now we would like to proceed to Q&A session.
Please proceed.
Do you have any questions. Please.
Okay.
Jefferies Securities.
Please.
This is the Gucci from Jefferies can you hear me yes.
I have two questions.
Okay.
First is on indeed, so more specifically what are the functional improvements on.
Our ongoing now.
So the personnel costs and indeed employees.
Increased significantly in the past three months.
Which is that a level, we haven't seen in the past.
So the exploration of the new countries or the functional improvement well I want to know some new developments if you could share with us. Some information. Please. Thank you. That's my first question.
Thank you for the question.
Okay.
So at this time.
Other tech companies.
Our restraining.
Holding back we're starting the hiring early on.
Indeed on the other hand.
Continued.
Hiring on engineering and machine learning.
Our specialists.
People with such capabilities. So we were able to hire more.
So engineering.
And Jerry type personnel.
Our working off site improvements.
For example.
Corporate clients and users.
Okay.
To conduct easier in the hiring process, so video and phone and SMS text message. These are also being enhanced and.
More than $3 7 million peoples interviews job interviews had been using dysfunction.
In addition.
That's maybe a low key change or improvement on site, but in a very detailed minor point, but.
On the website.
So the job offer data.
Yeah.
So the salary.
It can be viewed by the job seekers when.
When they are looking.
For jobs.
And so this is also an improvement and evolution.
So as a result.
Users.
Can get.
Job on our platform.
We are seeing a steady increase of users finding jobs on our platform of course.
There are ups and downs in business environment is the nature of our business, but the site improvement is ongoing.
Thank you very much.
My second question is this fiscal year and next fiscal year's company wide.
So now there is a tailwind of weak again.
So I don't think you have any problem achieving this years target cost.
Uh huh.
In the second quarter or you use cost rather than restraining costs. No next year HR technology, you talked about the possible decline so.
Yes.
The cost will be reduced.
And can you maintain profit by reducing cost for us.
Or do you have to spin cost for the medium to long term growth. What's your view. Thank you very much.
Of course for the short term.
Our profit may increase or decrease on a year on year basis.
So yes, there is the goal setting that level the short term.
Level.
But in any case.
Even after the economy declines.
The economy will always pick up.
In the future.
So as you rightly mentioned.
On a cumulative basis, we want to capture the sales and profit in a cumulative basis in the economic downturn period. So how can we do that that is our baseline Inc.
So for example, our clients or users both side.
Oh, we think of lifetime value. So once we capture the users they can use our service for years they stay for at years things like that.
So we may see a declining forecast in the short term and try to avoid a decline, but rather than taking these short measures. We wanted to make it maintain a medium to long term perspective, and prioritize our investments and as a result.
See how the profit trends.
So that is our line of thinking.
Thank you very much.
Our next if Lori song from JP Morgan.
Yes. Thank you I have two questions.
One is related to HR technology upon for the second half of the year.
Oh, you said that you will be closer to the lower end of the range on a full year basis.
So in the second half on dollar basis, I believe you will have 2% increase.
You said two 5% for October so in the second half based on the assumption that there will be no major recession in the second half.
The growth rate is not expected to improve significantly.
And.
When we look at the number in the labor market in the U S.
Yeah.
I believe the negative year over ear might expand in the second half.
And how we can offset that decrease.
What measures do you have in your mind.
If possible.
Can you. Please explain development are different so for all major enterprises in our small and medium.
Companies.
Can you. Please ask the second question all together well actually this is a similar question, but next fiscal year the total revenue.
Could have a negative growth.
You suggested but offices previous fiscal year, although it is not disclosed on a quarterly basis, you have been working on increasing unit price.
And the next fiscal year compared to this fiscal year can.
Can we expect that to their fruit.
It's possible.
I would like you to give us some color on how that is going to bear fruit in the next year, yes.
Yes. Thank you.
So I hope I can answer both of your questions.
At the same time, so I've always been saying.
As I said earlier, our hiring process.
And it's something that we hope to.
Improve.
So that we can offer more value to our clients and as a result.
We can receive higher unit price from clients.
That is.
The person is stopped we are hoping to achieve in our development activities.
And the non U S a.
Markets are when we look at the second quarter.
The volume of job advertisement is still increasing our leading to increase in revenue.
But in the U S. For example.
In the second quarter.
Increase in the unit price.
And so I'm, making a larger contribution to revenue rather than increasing the number of drove out.
We have been repeating all several attack.
As I talked about.
Recently.
When we have applications from job seekers.
If their quality is favorable.
The company pays us for it receiving such application and this is primarily for major enterprises.
So clicking on an AD.
So pay per click is not what we are pursuing today, but you click on the advertisement, but there needs to be outdoor application after that in order to a charge.
For a major famous.
Companies.
Senior engineering is the type of job.
Which has a high salary level.
And our students junior engineers.
Our inter.
Interested so they might click on the AD.
But they don't apply for the job.
So conversion rate to application can be different for different types of jobs.
That is what we have discovered and we would like to make sure that customers clients succeed.
And we like to contribute to the success of the clients in order to enhance our corporate value for me to long term perspective.
So that is why we've been focusing on increasing the unit price that is what we have been testing recently.
By continuing such activities.
We have started to see results of these tests.
However.
The goal.
Is not to increase the unit price per se.
Oh, we are prudent.
And.
Okay.
Helping jobseekers and business clients in mid to long term perspective, and contribute to the satisfaction of those are clients and job seekers, we have been repeating very detailed a test so.
It is difficult to tell you by one we are trying to achieve what.
But in the second quarter I can tell you that we have started to see the results of these tests and are up for the second half.
It showed a according to the data from jolt in the U S.
There is a there was a 12 million.
Million of open jobs, but in no way has declined to 10 million jobs.
Charles.
This can come down to eight or 9 million in the future.
So when it comes down further.
How much value we can offer.
And what we would like to and sure going forward.
And you asked the difference in development between large companies and the SME and in the downturn economic cycle.
It is always the case that all the SME.
It's the first want to decrease the number of job ads.
For example.
And then.
The favorable economic conditions strong economic conditions.
And indeed and also other media are used by.
The U S Army.
Got it.
Estimates only use one or two media are in.
More difficult economic condition.
And when we look at our peers.
Do you see decline in the SME.
But.
I believe that we see more concentration of S Amazing our service.
Compared to the peers.
We do see decline among the major enterprises as well, but not as much as the SME as I hope I answered your question.
I'd like to ask a follow up question just one question.
So in the second half.
In terms of the volume.
Uh huh.
Number of your paid job.
So the the decrease is going to become larger but because of the measures.
You will be able to increase unit price and.
You will barely being able to maintain positive number is my understanding correct.
Well I believe we need to see the results and look back in order to answer that question.
Increasing.
Unit price to where the revenue is not what we are trying to do.
But rather than mid to long term perspective, we.
I want to make sure that our clients are would be satisfied and are convinced to pay higher unit price.
For example.
As I said earlier as art, Clint, but not applied for so for such clients.
Revenue may decline all for some of the clients.
So this is not what we do to grow the revenue.
It's not that we have a specific target.
But where.
Trying to improve the kind of functional level of clients, who use our platform that is oracle.
As a result, as I said earlier.
In the second quarter, we started to see results of the test.
And we have seen a increase in unit price.
Well as the satisfaction level of clients being maintained.
But it's not that we're targeting a specific revenue level I hope you understand that point.
Understood. Thank you that was very helpful.
S NBC Nikko Securities microphone. Please yes. Thank you very much can you hear me yes.
I have one question.
So the share repurchase share buybacks you mentioned this earlier so this time.
Market the labor market forecast is now a bit of concern in the market.
So the.
That's a good timing to all of you very good timing for the announcement of the share buyback.
Share price.
How much of a focus with the share price and your.
So now our cashes one trillion yen.
Our cash flow when the market environment declines.
I don't think cash flow will impair significantly.
So.
Your management this decision, including the balance with the flexible M&A option. The cash position that you can utilize at which level. So if you could give us some guidance. Your view. Thank you. Thank you I would like to answer that question.
As we mentioned.
For two three years now.
We've been using a halving of the capital allocation policy, the cash allocation and priorities have changed remained unchanged.
And this time, we executed this.
Buyback.
Because we are doing is the upper layer of more high priority measures that is why we're doing this lower priority cash outlet share buyback this time.
And if there is a negative impact.
We understand.
I understand the need of the cash and we are well aware of that so on that basis. We made this decision and the timing.
This is up to middle of March.
So.
Yeah.
Okay.
Uh huh.
The economic indicator of was announced last week.
From mid October to mid March.
Various events and announcements are taken into account.
So on October 16th 17th share price are.
We think it makes a sufficiently.
Sufficiently reasonable.
So that is why we decided to execute.
I think there is different different views.
On the side, but vis vis our market cap.
We want you to see us as a doing a sizable amount of share buyback.
And given the timing.
We decided on the upper limit of 150 billion yen and this will end in March So we will take the economic situation into account then.
And our view on the financial results and forecast May change.
So I.
We may do another round.
But first of all we use the capital allocation policy and thought that this is the optimal way of using cash.
So for M&A.
So they are the high priority in the allocation policy, but they are now lowered and policy.
Well strategic investment will be prioritized right.
Yes, as you know IPO window.
Is at the current situation and it's difficult for it to reopen.
So when I talk with.
Companies.
I feel that the M&A activity is increasing.
It's M&A until it.
It is always with the counterpart, if we find a good company that can identify with our vision.
In addition, we wanted to be bold.
And go ahead with the M&A.
So it still is a high priority for us.
Thank you.
I don't know Christi I'm on the Russell from Citigroup Securities.
Thank you for this opportunity. This is yamanaka from Citigroup Securities can you hear me yes.
Then I have two questions. One is a from a short term perspective second is meant term perspective related so.
So first question is.
So I apologize if I missed it but the the room left for cost control. So on the personnel cost.
You said that you are all taking proactive measures, but for our advertising and promotional expenses and its not going to be a control. This fall.
Is it something that kind of a function of evolve for operating expenses.
So what is lead the threshold for controllable cost.
The second question is related to midterm perspective.
As you have been explaining.
The new business model shift.
My.
So regardless of the revenue increase you will be offering more.
More value to increase our unit price, but I was worried that it could be labor intensive.
So upfront investment is thought of controlled enough EBITDA margin could be higher than the current level in the short term perspective, but.
To the conventional model.
Do you think profitability can be lower.
Or or would you be satisfied with a the increase in absolute amount of our lives and then HR technology. How many number of people do you need in order to make the business viable one will be the end of the first stage. So those are my two questions.
So what was your question about HR technology can you please repeat.
Yes. So the way you are increasing the number of people and at HR Tech what is your goal.
So.
When do you think the business will be viable so I'm interested in.
When the first stage of the business will be viable and how many number of Italians are required.
Thank you.
So first of all in.
In terms of our cost control room left for marketing expenses.
So this was the case when a pandemic started but.
For job advertising market.
And consists of supply and demand.
Without advertisement.
And economic downturn job seekers will always be there in the market.
Even if no advertising are made.
So if we spend $100 and how many users would come.
And the the fate of labor shortage of.
That rate can be multiplied.
By many times.
And.
And the situation there is no need to post a lot of jokes advertisement.
HR Tech east to enjoy a very high EBITDA margin.
Without spending too much marketing cost you.
Users still came to the service that is the case.
We are expecting for the potential economic downturn.
So regarding marketing cost.
It's not that the market place, we're not function, if we don't spend marketing expenses it will still function.
That is why we believe we have flexibility.
For a job advertisement.
And the other question is on the new business model monetizing.
Model.
If we shift to a new business model or you said you are worried about lower profitability.
So as I said earlier, when we have application or when we have a job interview.
When an applicant was satisfied.
These are all done online.
Which means that we do not manually intervene.
In that sense.
We are not expecting a increase in cost because of shift to new business model.
Okay.
So, but rather the revenue growth, but costs will remain the same so in terms of margin.
We believe that it will actually increase and improve.
So.
Sales client support client success.
And.
Other than these are.
Functions, we have back end.
System Engineering, how many number of people do we need in order to make the business.
Viable.
I believe that was off of your question.
To be honest.
It depends on how much innovation this market would.
Require.
I believe we have set this a couple of times already but.
Our innovation in the advertising market is not our goal.
Job switching.
The largest cost required a in any businesses around the world is a personal expenses.
So our people in HR hiring recruiters.
Their cost is large.
And selecting a regimen screening a resume moving onto arranging the job interview.
Touch recruiting coordinators are exist.
We want to make their job easier.
We want to use technology to reduce manual human intervention that has our mid to long term goals.
And when we think about that.
I believe we are off to need more engineering power.
That has been our view I.
I hope I answered your question.
Yes that was clear thank you.
So because of time next will be the last I feel like I'm from UBS Securities. Please.
Okay on my phone.
Are you there.
Your hand disappeared. So if you could press the reset button again.
Okay.
Please go ahead.
Yes. Thank you.
I have two questions first at HR Tech second does not change solutions.
So regarding HR tech.
So in the recessionary.
Sir you May ask your next year.
So during recession in general.
The process up to hiring decision slow down or speed up in general.
If you have a could enlighten me on that please.
Regardless of the economic cycle.
The hiring process can be shortened with our own effort. So during recession, even top line can be maintained fairly easily.
Is that the case. Thank you very much. That's my first question second question is about air business tool current monetization status update.
So as we reopen the paying option is increasing or the Smes.
Not improving much and so as we have recession next year the amount of full scale monetization will still take a little while so that's my question.
Yeah.
Thank you very much.
So first in the recessionary period.
The hiring speed.
As to your first question. So let me answer generally speaking.
Our HR business is.
If there's a particular candidate.
We present, the person and until the decision is made.
Companies become more cautious and the span the period tends to become longer in the.
Recessionary period, but.
As I mentioned earlier.
In the U S. For example, and in Europe and Japan.
Structurally speaking.
The supply side labor supply.
Is in shortage.
So that's the baseline.
As I alluded to earlier hotels and restaurants hospitality.
So they are 1 million short are lower than pre pandemic. So labor shortage is still there.
So K shaped recovery happened after COVID-19.
And this is continuing.
So engineers.
And Teck.
Domain.
And hospitality and health care.
Oh, they're also facing labor shortage.
And in the U K.
Because of Brexit.
Truck.
Inspiration truck drivers are in severe shortage.
So.
This shortage Ah was not evenly distributed and now we are going into recession.
So we do not need to be that cautious I think.
<unk>.
In Japan too.
The restaurant dining they are suffering from labor shortage.
We often hear that.
So with such labor shortage going into recession, we have never experienced this before so I not sure how what this will all turn out to be like we need to watch closely and next point.
It's air business tools monetization.
Thank you for the question on this point.
As we've been mentioning before.
Air business tools are charging with air business tool than raising profit just with this is not our plan we want to.
To increase as comprehensively overall, an increase the solution to our customers and through that process. We wanted to little by little increase the amount that is billed.
So we are still in the process.
Air invoice.
With launched in July .
August .
These initiatives are ongoing.
The plot, we want to focus on the platform side and increase the size, we're still in that phase. Thank you I hope. This answers. Your question. Thank you very much.
Thank you.
This is the end of the call and we apologize for the technical trouble on the Japanese flying in the beginning.
Oh clean audio file and the the duck or are going to be uploaded on our website for your convenience. Thank you very much for joining.
Hmm.
[music].
Hmm.
[music].
Okay.
[music].
Uh huh.
[music].
Yeah.
[music].
Uh huh.