Q4 2025 Recruit Holdings Co Ltd Earnings Call

Okay.

Unknown Executive: It is time. Welcome to the Recruit Holdings FY 2024 earnings conference call.

Each time welcomed to the recruit holdings FY 'twenty 'twenty four earnings conference call. This call is simultaneous translation of the original call in Japanese and translation, which provided for the convenience of investors only I'm miserable Chen manager of I R. N P. R N.

Unknown Executive: This call is simultaneous translation of the original call in Japanese and translation is provided for the convenience of investors only.

Mizuho Shen: I'm Mizuho Shen, manager of IRNPR and joining me today are Hisayuki Idekoba, representative director, president and CEO, and Junichi Arai, executive vice president and CFO. First 25 minutes, Ideko and Jun will provide a presentation followed by a Q&A session.

Joining me today aren't you say you can't Nicola Representative director, President and CEO and you reach out I Executive Vice President and CFO first 25 minutes nickel and Jim will provide a presentation followed by a Q&A session. Please note that today's session, including the Q&A will be posted on our IR website. After the event.

Unknown Executive: Please note that today's session, including the Q&A will be posted on our IRNPR website after the event.

Hisayuki Idekoba: Now I'll turn the call over to Ideko. Hi, I'm Deco of Recruit Holdings. Thank you so much for your attendance. I'm impressed by this large turnout. Thank you very much.

Daniel: Now I'll turn the call over to Daniel.

Speaker Change: Hi, decal of recruit holdings.

Daniel: Thank you so much for your attendance I impressed by this large turn out thank you very much.

Hisayuki Idekoba: So let us share with you our financial results. First of all. at this time event last year. I predicted. The Hiring Demand in the U.S. in May last year. We said that the hiring demand in the U.S. would continue to decline for the next 18 to 24 months. And I used this graph. So.

Daniel: So let us share with you our financial results.

Daniel: First of all.

Daniel: At this time event last year.

I predicted.

Daniel: The hiring demand in the U S.

Daniel: In May last year.

Daniel: We said that the hiring demand in the U S would continue to decline for the next 18 to 24 months and I use this graph.

Daniel: So.

Hisayuki Idekoba: In the second half... We thought that the hiring demand in the U.S. will hit the bottom and we still see it that way. So we anticipate this difficult environment and run our business based on that.

Daniel: In the second half.

Daniel: We thought that the hiring demand in the U S.

Daniel: We'll hit the bottom and we still see it that way so.

Daniel: We anticipate this difficult environment and run our business based on that.

Hisayuki Idekoba: And this is what happened. This is the job ad data in the U.S. Around October, December, it showed signs of recovery. But as you know well, in February and March, we still see difficult numbers. So we cannot say that the demand has hit the bottom yet.

Daniel: And this is what happened.

Daniel: This is the job add data in the U S round October December it showed signs of recovery, but as you know well in February and March we still see difficult numbers.

Daniel: So we cannot say that the demand has hit the bottom yet.

Hisayuki Idekoba: So this is the situation. But it is close to what we anticipated.

Daniel: So this is the situation.

Daniel: But it is close to what we anticipated.

Hisayuki Idekoba: So the improvement in the business productivity and the product monetization strategy, mainly in the U.S. were pursued and produced certain amount of results and therefore both revenue and adjusted EBITDA were record high.

Daniel: So the improvement in the business productivity.

Daniel: And the product monetization strategy, mainly in the U S.

Daniel: Were pursued and produce certain amount of results and therefore, both revenue and adjusted EBITDA were record high.

Daniel: Okay.

Hisayuki Idekoba: Now. from April and May onward. The U.S. hiring demand is expected to continue declining.

Daniel: Now.

Daniel: From April and May onwards.

Daniel: The U S hiring demand is expected to continue declining.

Hisayuki Idekoba: So. HR Technology U.S. Revenue in March and April. shows a decline in hiring demand, particularly among small and medium sized companies. So in the US We expect the job openings to continue declining by around 10% from the current level and run our business based on such assumption.

Daniel: So.

Daniel: The HR technology U S revenue in March and April.

Daniel: Shows.

Daniel: A decline in hiring demand, particularly among small and medium sized companies.

Daniel: So in the U S.

Daniel: We expect the job openings to continuing declining by around 10% from the current level.

Daniel: And run our business based on such assumption.

Hisayuki Idekoba: Based on this outlook. We anticipate a slight decrease in revenue and Through continued productivity improvement, we expect a slight increase in adjusted EBITDA for the fiscal year. or a recruit group as a whole.

Daniel: Based on this outlook.

Daniel: We anticipate a slight decrease in revenue.

Daniel: And.

Daniel: Through continued productivity improvement, we expect a slight increase in adjusted EBITDA for the fiscal year.

Daniel: For it we could group as a whole.

Hisayuki Idekoba: We will utilize AI to improve our productivity. So for example, in HR technology business, Around 33% of the new program code in HR technology is already being written by AI. That said, I mentioned we anticipate negative 10 percent. in hiring demand. And there is a good possibility that the drop will be bigger than that.

We will utilize.

Daniel: Utilizing AI to improve our productivity. So for example.

Daniel: In HR technology business.

Daniel: Around 33% of the New program code in HR technology is already being written by AI that said.

Daniel: I mentioned, we anticipate negative 10%.

Daniel: In hiring demand and there is a good possibility that the drop will be bigger than that so we will continue to prepare for that as we run our business.

Hisayuki Idekoba: So we will continue to prepare for that as we run our business.

Hisayuki Idekoba: So the economic circumstances remain challenging, but we believe that the cycle of increased hiring demand will definitely, inevitably return next fiscal year or the year after that. So as we've done multiple times in the past decades, we are committed to evolving our products and organizational structure to meet that future demand.

Daniel: So the economic circumstances remain challenging, but we believe that the cycle of increased hiring demand will definitely inevitably return next fiscal year or the year after that.

Daniel: So as we have done multiple times in the past decades.

Daniel: We are committed to evolving our products and organizational structure to meet that future demand.

Hisayuki Idekoba: So I think that is the timing we are in right now.

So I think that is the timing we are in right now.

Hisayuki Idekoba: Today, CFO Arai-san is also here, so I will keep the detailed figures to a minimum. As I mentioned before.

Speaker Change: Today CFO ARIA E. Sun is also here so I will keep the detailed figures to a minimum.

Daniel: As I mentioned before.

Hisayuki Idekoba: We are now using AI to a great extent in our products, and so I would like to take this opportunity to share with you a video to show that.

Daniel: We are now using AI to a great extent in our products and so I would like to take this opportunity to share with you a video to show that so please take a look 20 years ago, indeed transformed the job market, bringing all online.

Unknown Executive: So please take a look. 20 years ago, Indeed transformed the job market, bringing all online jobs to one site. Today, Indeed helps more than one person get a job every three seconds.

Daniel: Jobs to one site today, indeed helps more than one person get a job every three seconds.

Unknown Executive: But it still takes endless searches, repetitive applications, and sifting through countless resumes just to find the right job or talent. That's why we're reimagining what's possible. By harnessing the power of AI, we're creating a dramatically new and better experience that works tirelessly, just for you. Meet Indeed CareerScout, your very own AI talent agent.

Daniel: But it still takes analysts searches repetitive applications and 15 crew count with resumes just to find the right job for talent. That's why we're re imagining what's possible by harnessing the power of AI, we're creating a dramatically new and better experience that worked tirelessly.

Daniel: Ireland and Sweden just for you.

Scott: Meet MCU career, Scott your very own AI talent agents.

Unknown Executive: Forget keyword searches. Now, with simple conversational language, help CareerScout exactly what you're looking for. It understands your skills and experience and guides you to the best matches fast. It can personalize your resume and fill out applications for you. And when you land that interview, practice with CareerScout's interview AI to build your confidence. Looking beyond your current path, CareerScout can map out new career journeys with earning potential and the steps to get there.

Speaker Change: Got keyword searches.

Speaker Change: Now with simple conversational language, how careers got exactly what youre looking for.

Speaker Change: It understands your skills and experience.

Speaker Change: And guide you to the best matches.

Speaker Change: It can personalize your resume.

Speaker Change: And fill out applications for Ya.

Speaker Change: And when you land that interview.

Speaker Change: Practice with career Scouts interview AI to build your confidence.

Speaker Change: Looking beyond your current path.

Speaker Change: Careers, so can map out new career journey.

Speaker Change: With earning potential.

Speaker Change: And the steps to get there.

Unknown Executive: Ready to make that move? Career Scout is there to connect you with employers looking for what you have to offer. And for employers, there's Indeed Talent Scout, your AI recruiting agents that taps into our vast data and insights to optimize your job title, pay, and description automatically. Talent Scout uses your criteria to match you with top talent from over 340 million candidates on Indeed who are open to outreach.

Speaker Change: Ready to make that move.

Speaker Change: Careers Scout is there to connect you with employers looking for what you have to offer.

Speaker Change: And for employers there is indeed talent scouts your AI recruiting agents that taps into our vast data and insight to optimize your job title.

Speaker Change: And description automatically.

Speaker Change: Talent Scout uses your criteria to match you with top talent from over 340 million candidates on indeed, we're open to outreach.

Unknown Executive: Imagine never again sorting through hundreds of applications. Use conversational language to have talent scout quickly help you narrow down candidates. It highlights qualifications and fits, crafts personalized outreach, schedules, and even runs automated AI interviews. With our new AI agents, Indeed isn't just faster, it's smarter.

Speaker Change: <unk> never again sorting through hundreds of applications.

Speaker Change: Youth conversational language to have talent Scout quickly help you narrow down candidates it highlights qualifications and fifth craft personalized outreach.

Speaker Change: Schedule.

Speaker Change: And even runs automated AI interface.

Speaker Change: With our new AI agents, indeed is it just faster.

Speaker Change: It's smarter.

Unknown Executive: simpler, more human. For 20 years, we revolutionized how people get jobs. Now we're doing it again.

Speaker Change: Simpler.

Speaker Change: More human.

Speaker Change: For 20 years, we revolutionize how people get jobs.

Speaker Change: Now we're doing it again.

Speaker Change: Okay.

Speaker Change: No.

Hisayuki Idekoba: This is currently being tested in the U.S. and is being developed. As we speak.

Speaker Change: This is currently being tested in the U S.

Speaker Change: And is being developed as we speak.

Hisayuki Idekoba: We truly believe that this year will be the year when AI actually changes everyone's lives. We plan to continue providing new products that will make life more convenient for hundreds of millions of users around the world.

Speaker Change: We truly believe that this year will be the year when AI actually changes everyone's lives.

Speaker Change: We plan to continue providing new products that will make life more convenient for hundreds of millions of users around the world.

Unknown Executive: We have also prepared a video of products that are actually being made and used in Japan.

Speaker Change: We have also prepared.

Speaker Change: A video of products that are actually being made and used in Japan.

Unknown Executive: So please take a look. In the HR technology business, AI is born to search for jobs and support careers for various users by combining in-lead technology and data from Japanese human resources marketing business. One of them is an AI assistant. What did this A.I. do for the students? What kind of experience and learning do you take advantage of in society? We support students so that they can overcome the barriers that students face when preparing for their first application for a job. Including cellular and teleportational software integrated development. and Team Management. We were able to work on our goals as a team, and we were able to make it to the finals of the Japan tournament.

Speaker Change: So please take a look.

Danielle: So second Danielle Brill Eccrinology take out there.

Speaker Change: Indeed on our technology thought.

Danielle: And I might think of as an ethanol ethanol didn't gave us to me.

Speaker Change: Some of them on a user name and get that single dose like I say, our caddy S. L. Cornell I got a lot of things.

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Danielle: Shares of capital Hudson with Alcoa, and I've got to say something about it.

Danielle: But then all of US are is good assignments, Scott Cabell pretty quiet audiobook sales of both of us.

Danielle: <unk> been sort of dwells coming October water cannot noble's Buckeye assets.

Danielle: Both senior.

Danielle: Senior management.

Danielle: Yes.

Danielle: <unk> shown you three clinical so let me say a pleasure the Canadian you want to.

Danielle: So what about on the doorstep.

Unknown Executive: By answering questions from AI, you can deepen your knowledge. What did the students do? What kind of learning did they have? They will create a document for the application. Oh, so this is how you write it. I see. The applications that took 2 hours to create were completed in just 6 minutes. More than 45,000 students have already applied for this program. In addition, we will continue to provide support to as many people as possible. and AI career assistants. Career Assistants have a deep understanding of users' concerns and hopes regarding job search.

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Danielle: It's got the caveat this conference and thank you all had the Redeemer.

Danielle: And he asked me Scott.

It will provide us any confidence you ivano Miami Askable equity guys. Thanks Victor.

Unknown Executive: Eiji Akiyama, Yukari Housui, Recruit Holdings This is an example of a teacher working in an elementary school. I really like what I'm teaching right now, and I think it's a good way to watch my students grow. When I think about holidays and salary, I want to look at other industries as well. I'm interested in making film content. What kind of company do you have? I didn't know there was a career path like this. In this way, the career assistant will show you a new career option that you didn't even notice. Currently, the career assistants are being tested by some of the existing members.

Danielle: Fixed isn't as appose to grammar.

Danielle: So therefore, they had that I'll go through and look at that way today, almost all guys. Good luck.

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Danielle: Welcome Antonio Com Guide adult Ferghana yoga, Mr. Mackay knocked on wood furniture market.

Speaker Change: Sure Michael So skittish about going throw me guiding on this I don't know Chris I got on this call.

Speaker Change: Yeah.

Speaker Change: Oh, My God I forgot about the Kitimat got soft.

Naomi: Well, Naomi <unk> given them a piece of it kind of got that I thought I think <unk> said that grammar.

Speaker Change: Tim di Piazza standoff, given lucky's ongoing nakatani skin think anybody like that idea.

Naomi: You said, you're going to an ethical duty Auckland Amina from Aneel to look at it you do your junior.

Hisayuki Idekoba: We are working hard to prepare for the summer of 2025 so that we can deliver more to more people. is pretty nice, isn't it?

Speaker Change: Julia Smith Amos.

Speaker Change: Yeah.

Speaker Change: Is pretty nice isn't it.

Hisayuki Idekoba: So finally. AI has evolved. from when it was called co-pilot to the point where it can actually take over human tasks. And we are finally getting there. not just receive recommendation, but have AI do tasks, human tasks for us. The largest. Large language models are already utilizing all available online data. As some people say, but recruit group. Possesses. large amounts of matching data. proprietary matching data, and offline conversational data. So by combining our unique jobs and hiring data with AI, We believe we can make life easier for everyone around the world.

Speaker Change: So finally.

Speaker Change: AI has evolved.

Speaker Change: From when it was called co pilot to the point, where it can actually take over human tasks and we are finally getting there.

Speaker Change: Not just receive recommendation, but have a I do.

Speaker Change: Do tasks human tasks for us.

Speaker Change: The largest.

Speaker Change: Large language models are already utilizing all available global online data.

Speaker Change: As some people say, but recruit group.

Speaker Change: Possesses.

Speaker Change: Large amounts of matching data.

Speaker Change: Proprietary messaging data and offline conversational data so by combining our unique jobs and hiring data with AI.

Speaker Change: We believe we can make life easier for everyone around the world.

Junichi Arai: Now Our CFO Jun Arai will provide details on the consolidated and segment results and guidance. Thank you very much.

Speaker Change: Now.

Speaker Change: Our CFO June or I will provide details on the consolidated and segment results and guidance. Thank you very much.

Junichi Arai: Hello, this is Arai. This is the first face to face event in a while. Before COVID, we did this every quarter, but after COVID pandemic, we escaped to online, if you will, but we can't just keep on doing that. So this time it is real, live, face to face. Thank you so much. I watched the video earlier. If we had this Rikunabi AI assistant, Gakuchika in Japanese, or these tools when I was in college, what would I have done? I would have been able to utilize them. We, I don't have any fund value, only numbers, so.

Speaker Change: Hello, This is alright.

Oh. This is the first face to face event in a while.

Speaker Change: Before Covid, we did this every quarter, but after COVID-19 pandemic. We are we were we escaped to online if you will but we can't just keep on doing that so this time it is real life face to face. Thank you so much.

Speaker Change: I watched the video earlier.

Speaker Change: Okay.

Speaker Change: If we had this we could not be AI assistant to <unk> <unk> in Japanese or these tools. When I was in college, what would I have done I would have been able to utilize them.

Speaker Change: These are I don't have any fun video only numbers so.

Junichi Arai: I hope you won't get bored. I'm sure the content is not boring, so I hope you could bear with me.

Speaker Change: Uh huh.

Speaker Change: I Hope you won't get board I'm sure. The content is not boring. So I hope you could bear with me.

Junichi Arai: So I will discuss FY 2024 Full Year Consolidated Results and FY 2025 Full Year Guidance. and some analysts. thought that we will do this on a quarterly basis.

Speaker Change: So I will discuss FY 2020 for full year consolidated results and FY 'twenty 25 full year guidance.

Speaker Change: As some analysts.

Speaker Change: Uh huh.

Speaker Change: The thought that we will do this on a quarterly basis, but this is our full year guidance.

Junichi Arai: So this is a full year guidance.

Junichi Arai: FY 2024 Full Year Results. and the FY 2025 Full Year Outlook by our three segments. and updates on measures based on our capital allocation policy. The latest updated measures on capital allocation.

Speaker Change: FY 'twenty 'twenty four full year results.

Speaker Change: And the FY 2025 full year outlook by our three segments.

Speaker Change: And updates on measures based on our capital allocation policy.

Speaker Change: The latest updated measures on capital allocation.

Junichi Arai: As time is limited and we want to leave enough time for Q&A session, I will provide a condensed executive summary.

Speaker Change: As time is limited and we want to leave enough time for Q&A session I will provide a condensed executive summary.

Junichi Arai: And after this presentation, we will have a follow up meeting at 545 with the equity research analysts to discuss further details.

Speaker Change: And after this presentation, we will have a follow up meetings at 545 with the equity research analysts to discuss further details.

Junichi Arai: All content discussed in each of these presentations will be fully disclosed later on our IR site as part of the earnings call transcript, so please take a look. As previously mentioned. starting this fiscal year. we have integrated HR technology and HR solutions, which includes the job advertising business and the placement business of matching and solutions. As a result, Matching in Solutions now only consists of marketing solutions, including SaaS solutions. And accordingly, the segment name has been changed to Marketing Matching Technologies, or MMT. to facilitate a comparison with our FY 2025 Segment Outlook.

Speaker Change: All content discussed in each of these presentations will be fully disclosed later on our IR site as part of the earnings call transcript. So please take a look.

Speaker Change: As previously mentioned.

Speaker Change: Starting this fiscal year.

Speaker Change: We have integrated HR technology, and HR solutions, which includes the job advertising business and the placement business of matching and solutions.

Speaker Change: As a result matching and solutions now only consists of marketing solutions, including sauce solutions.

Speaker Change: And accordingly, the segment name has been changed to marketing matching technologies or M. M T.

Speaker Change: To facilitate a comparison with our FY 'twenty twenty-five segment outlook.

Junichi Arai: We are presenting FY 2024 Proforma Segment Financial Data, which assumes the integration of these businesses had been in effect from April 1st, 2024.

Speaker Change: We are presenting FY 'twenty 'twenty four pro forma segment financial data, which assumes the integration of these businesses had been in effect from April 1st 'twenty 'twenty four.

Junichi Arai: First. regarding the FY 2024 consolidated financial results. Revenue increased by 4.1% to 3,557.4 billion yen. as a result of continued focus on improving operational efficiency throughout the fiscal year. Adjusted EBITDA increase. 13.5% and reached a record high of 678.8 billion yen exceeding the revised guidance announced in February and adjusted EBITDA margin as you may remember was 19.1% surpassing the FY 2021 level which saw significant growth in the performance of the HR technology segment. Basic EPS increased. 20.1% to 271.44 yen, partly due to the effect of share buyback.

Speaker Change: First <unk>.

Speaker Change: Regarding the FY 'twenty 'twenty four consolidated financial results.

Speaker Change: Revenue increased by 4.1% to three Chilean 557.4 billion yen.

Speaker Change: As a result of continued focus on improving operational efficiencies throughout the fiscal year.

Speaker Change: Adjusted EBITDA increased.

Speaker Change: 13, 5% and reached a record high of $678 8 billion yen exceeding the revised guidance announced in February.

Speaker Change: And adjusted EBITDA margin as you May remember was 19, 1%, surpassing the FY 2021 level, which saw significant growth in the performance of the HR technology segment basic EPS increased.

Speaker Change: 21% to 271.44 yen, partly due to the effect of share buybacks.

Junichi Arai: The full-year consolidated earnings guidance for FY 2025 disclosed today is based on the following full-year assumed exchange rates. 145 yen per US dollar, 158 yen per euro, and 92 yen per Australian dollar. For FY 2025, we are assuming that US hiring demand will continue to decline with an expected further decrease of approximately 10% from the current level. For Japan, our premise is the continuation of the current business environment with no sudden economic downturn. Our consolidated guidance for the four-year 2025 is calculated by combining the outlook for each segment and is based on plans to further improve productivity and enhance operational efficiency.

Speaker Change: The full year consolidated earnings guidance for FY 2025 disclosed today is based on the following full year assumed exchange rates 145 yen per U S. Dollar 150, 58 yen per euro and 92 yen per Australian dollar for FY 2020.

Speaker Change: Five we are assuming that U S hiring demand will continue to decline with unexpected further decrease of approximately 10% from the current level.

Speaker Change: For Japan, our premise is the continuation of the current business environment with no sudden economic downturn.

Speaker Change: Our consolidated guidance for the full year 2025 is a calculated by combining the outlook for each segment and is based on plans to further improve productivity and enhance operational efficiency until FY 'twenty 'twenty four we presented guidance in a.

Junichi Arai: Until FY 2024, we presented guidance in a range. However, for FY 2025, with a focus on enhancing the clarity of our disclosures, we are providing a single-point guidance that reflects the approximate midpoint of the internal forecast range calculated for each business segment.

Speaker Change: Range, However for FY 'twenty to 'twenty five with a focus on enhancing the clarity of our disclosures.

Speaker Change: We provide.

Speaker Change: Providing a single point guidance that reflects the approximate midpoint of the internal forecast range calculated for each business segment.

Junichi Arai: Based on Assumptions and Premises As a result, Consolidated Revenue is Expected to be. 3,520,000,000 yen, which is roughly flat or equal to a decrease of 1.1% from our FY 2024 actual results. Adjusted EBITDA, as DECO said, due to further productivity improvement. is expected to increase by 2.7% to reach 697 billion yen, reaching another record high margin. is expected to be 19.8%. Basic EPS is expected to increase by 8.7% to 295.0 yen.

Speaker Change: Are based on assumptions and premises.

Speaker Change: As a result.

Speaker Change: Consolidated revenue is.

Speaker Change: Expect it to be.

Speaker Change: Three Chilean 520 billion yen, which is roughly flat or equal to a decrease of one 1% from our FY 'twenty to 'twenty four actual results.

Adecco: Adjusted EBIDTA as Adecco said.

Adecco: Due to further productivity improvement.

Speaker Change: Is expected to.

Adecco: Increased by two 7% to reach 697 billion yen, reaching another record high in.

Speaker Change: Margin.

Speaker Change: Is expected to be 19.8% basic EPS is expected to increase by eight 7% to 295.0 yen.

Junichi Arai: I will now move on to the results and outlook by segment, starting with HR Technology. As Seko mentioned earlier, During periods of a challenging business environment, as the one we are in right now, we focus on driving operational efficiency and preparing for the next growth phase in job postings. By doing so, we will continue to expand profitability even while facing headwinds.

Speaker Change: I will now move onto the results and outlook by segment, starting with HR technology.

Speaker Change: As Nicole mentioned earlier.

Speaker Change: During periods of a challenging business environment as the one we are in right now.

Speaker Change: We focus on driving operational efficiency and preparing for the next growth phase and job postings.

Speaker Change: By doing so we will continue to expand profitability, even while facing headwinds.

Speaker Change: Okay.

Junichi Arai: We often receive questions from institutional investors and analysts regarding the midterm outlook for HR technology's profitability or some sort of guidance. When the business environment improves, not now, during the recovery phase, We expect both the number of paid job ads, in other words, the volume, as well as prices per job to rise. This leads to a significant increase in revenue growth. Depending on the extent of revenue growth and the increase in advertising and promotional expenses deemed necessary, we believe there is a strong possibility that we can exceed the previous record high adjusted EBITDA margin of 43.1% achieved in Q2 FY 2021 right after the COVID pandemic by maintaining or even further improving our current cost structure.

Speaker Change: We often receive questions from institutional investors and analysts regarding the.

Speaker Change: The midterm outlook for HR technologies profitability or some sort of a guidance.

Speaker Change: When the business environment improves and not now.

Speaker Change: During a recovery phase.

Speaker Change: Yeah.

We expect both the number of paid job adds in other words, the volume as well as prices per job to rise.

Speaker Change: This leads to a significant increase in revenue growth.

Speaker Change: And depending on the extent of revenue growth and the increase in advertising and promotional expenses deemed necessary we believe.

Speaker Change: So there is a strong possibility that we can exceed the previous record high adjusted EBITA margin of <unk>.

Speaker Change: 43, 1% achieved in Q2, FY 2021 right after the COVID-19 pandemic by maintaining or even further improving our current cost structure.

Junichi Arai: We believe, again, there is a strong possibility that we can exceed that level, and in order to do so, we are currently making preparations.

Speaker Change: We believe again there is a strong possibility that we can exceed that level and in order to do so we are currently making preparations.

Junichi Arai: Now, going back to the presentation.

Speaker Change: Now going back to the presentation.

Junichi Arai: Segment Revenue for FY 2024. increased by 5.4% to 7.38 billion U.S. dollars. and adjusted EBITDA margin was 35.9%. The 2024 Proforma-Based Segment Revenue Due to the integration of HR solutions of matching and solutions, and assuming this had taken place a year prior, segment revenue was $8.99 billion, and adjusted EBITDA margin was 33.0%.

Speaker Change: Segment revenue.

Speaker Change: For FY 'twenty to 'twenty four.

Speaker Change: Increased by five 4% to 7.38 billion U S dollars.

Speaker Change: And adjusted EBITDA margin was 35, 9%.

Speaker Change: Okay.

Speaker Change: The 2020 for pro forma based the segments revenue.

Speaker Change: Due to the integration of HR solutions of matching and solutions and assuming this had taken place a year.

Speaker Change: Prior segment's revenue was $8 nine 9 billion U S dollars and adjusted EBITDA margin.

Speaker Change: It was 33.0%.

Junichi Arai: in FY 2025. First, I will cover the revenue outlook by region, while the U.S. revenue in the most recent month of April was flat compared to both April last year and March this year. Despite anticipating a further decline in U.S. job postings throughout the year, we expect revenue on a U.S. dollar basis to remain flat year over year. Supported by ongoing monetization developments in Europe and others, which was renamed from rest of the world We anticipate an 8.1% increase in revenue on a US dollar basis driven by continued advancements in monetization and in Japan First, revenue will be negatively impacted by the shift from growth to net accounting with the migration to Indeed Plus's PPC model, which deducts agency sales commissions.

Speaker Change: In FY 2025.

Speaker Change: First I will cover the revenue outlook by region.

Speaker Change: While the U S revenue in the most recent month of April was flat compared to both the April last year and March of this year.

Speaker Change: And despite anticipating a further decline in U S job postings throughout the year, we expect our revenue on a U S dollar basis to remain flat year over year.

Speaker Change: Reported by ongoing monetization developments in Europe, and others, which was renamed from rest of the World. We anticipate an eight 1% increase in revenue on a U S dollar basis, driven by continued advancements in monetization.

Speaker Change: And in Japan.

Speaker Change: First our revenue will.

Speaker Change: Will be negatively impacted by the shift from gross to net accounting with the migration to indeed pluses P. P C model, which deducts agency sales commissions.

Junichi Arai: So there is going to be a negative impact from that, and secondly, we are prioritizing the stable operation of our newly reorganized structure following personnel reassignments to facilitate future growth in the coming years. That's the decision management has made. So on a performer basis, revenue is expected to decline by 2.7% in Japanese yen. However, on a U.S. dollar basis, it is expected to increase by 2.4%. Segment revenue on a U.S. dollar basis is expected to increase by 2.4% or a decrease of 2.8% on a Japanese yen basis. For segment-adjusted EBITDA, it is expected to increase 7.1% on a U.S.

Speaker Change: So there is going to be a negative impacts from that and secondly, we are prioritizing the stable operation of our UV reorganize the structure of following personnel reassignments to facilitate future growth in the coming years.

Speaker Change: Thus the decision management is made so on a pro forma basis revenue is expected to decline by two 7%.

Speaker Change: In Japanese yen.

Speaker Change: Yeah.

Speaker Change: Yeah.

Speaker Change: However on a U S dollar basis is expected to increase by two 4%.

Speaker Change: Segment revenue on a U S. Dollar basis is expected to increase by two 4% or a decrease of 2.8% on a Japanese yen basis.

Speaker Change: For segment adjusted EBITA.

Speaker Change: It is expected to increase 7.1% on a U S dollar basis or an increase of one 6% on Japanese yen basis, driven by continued cost control initiatives, resulting in adjusted EBITA margin improving to 34, 5%.

Junichi Arai: dollar basis or an increase of 1.6% on Japanese yen basis, driven by continued cost control initiatives, resulting in adjusted EBITDA margin improving to 34.5%.

Junichi Arai: As for staffing Segment revenue for FY 2024 increased and segment adjusted EBITDA margin was 5.8%. for FY 2025. Segment revenue is expected to decline by 1.6% due to a 6.8% decrease in Europe, US, and Australia. This decrease in Europe, US, and Australia is more than what Japan can cover. However, we expect to maintain efficient operations and target a segment-adjusted EBITDA margin of 5.6%.

Speaker Change: As for staffing.

Speaker Change: Segment revenue for FY 2024 increased and segment adjusted EBITA margin was five 8%.

Speaker Change: For FY 2025.

Speaker Change: Segment revenue is expected to decline by.

Speaker Change: One 6% due to a six 8% decrease in Europe U S and Australia.

This decrease in Europe U S and Australia is more than what Japan can cover.

Speaker Change: However, we expect to maintain efficient operations and target a segment adjusted EBITDA margin of 5.6%.

Junichi Arai: And lastly, MMT, which consists of only marketing solutions, including SaaS solutions, will continue to promote our long-term management strategy, help businesses work smarter, contributing to the expansion of revenue and the reduction of operating expenses for business clients in Japan, particularly small and medium-sized business clients, while enriching the lives of individual markets. We will achieve further business growth of MMT by contributing to the revenue growth of our business clients driven by the evolution of matching technology. We will also increase our revenue through growth-oriented resource allocation and improve profitability through the development of an efficient operating structure.

Speaker Change: And lastly.

Speaker Change: M M T, which consists of only marketing solutions, including source solutions will continue to promote our long term management strategy help businesses work smarter contributing to the expansion of revenue and the reduction of operating expenses for business clients in Japan, particularly small.

Speaker Change: And medium sized business clients.

Speaker Change: Io enriching the lives of individual users and steadily building an ecosystem in the Japanese market.

Speaker Change: Okay.

Speaker Change: We will achieve further business growth of M. T by contributing to the revenue growth of our business clients driven by the evolution of matching technology.

Speaker Change: We will also increase our revenue through growth oriented resource allocation and improve our profitability through the development of an efficient operating structure and as a result.

Junichi Arai: And as a result, In the medium term, we believe the segment-adjusted EBITDA margin will improve 10 percentage points to approximately 35.5 percent.

Speaker Change: In the medium term, we believe the segment adjusted EBITDA margin will improve 10 percentage points to approximately 35.5%.

Junichi Arai: The starting point of this is FY 2024 pro forma based revenue. MFI 2024 revenue would have been 539.5 billion yen with adjusted EBITDA margin of 25.4% after allocating corporate overhead costs. FY 2024 actual adjusted EBITDA margin before allocating corporate overhead costs of marketing solutions and matching solutions was 30.2 percent in line with our initial outlook for FY 2024. However, the allocation of these costs resulting from the separation of HR solutions has been recognized in the pro forma results. As a result of that, costs have been added. resulting in a margin of 25.4%. For FY 2025, we expect a 5.1% increase in revenue driven by growth in the lifestyle subsegment, including beauty, travel, dining, and style solutions.

Speaker Change: The starting point of this is FY 'twenty 'twenty four pro forma base.

Speaker Change: Based on revenue.

Speaker Change: In FY 'twenty to 'twenty four revenue would have been $539 5 billion yen with adjusted EBITDA margin of 25.4% after allocating corporate overhead costs.

Speaker Change: FY 'twenty to 'twenty four actual adjusted EBITA margin before allocating corporate overhead cost of marketing solutions and matching our solutions was 30.2% in line with our initial outlook for FY 'twenty to 'twenty. Four however, the allocation of these costs, resulting from the separation of <unk>.

Speaker Change: Our solutions have been recognized in the pro forma results.

Speaker Change: As a result of that costs have been added.

Speaker Change: Resulting in a margin of 25, 4% for FY 2025.

Speaker Change: We expect a five 1% increase in revenue driven by growth in the lifestyle sub segments, including beauty travel dining and solid solutions.

Junichi Arai: with adjusted EBITDA margin improving to 27.5% by driving productivity across the entire segment. The margin improvement is by approximately 2. to 27.5%.

Speaker Change: With adjusted EBITDA margin, improving to 27.5% by driving productivity across the entire segment.

Speaker Change: The margin improvement is by approximately two points to 27.5% rigor.

Junichi Arai: Regarding our capital allocation measures, I would like to cover this topic last. Looking back at FY 2024, a total payouts to shareholders including dividends and share repurchases of 859.1 billion yen Resulted in a total payout ratio of 210.3%. NETCASH At the end of the year. decreased by about 310 billion yen or so to 822.7 billion yen from the end of the last fiscal year. For FY 2025, the ongoing share repurchase program with an upper limit of 450 billion yen is progressing. as of April 30th. We have. already acquired 76% of the upper limit or 340.6 billion yen.

Speaker Change: Regarding our capital allocation measures I'd like to cover this topic last.

Speaker Change: Looking back at five 2020 for a total payouts to shareholders, including dividends and share repurchases of 859.1 billion yen.

Speaker Change: Ah resulted in a total payout ratio of 210.3%.

Speaker Change: Net cash.

Speaker Change: At the end of the year.

Speaker Change: Decreased by about 310 billion yen also two $822 7 billion yen from the end of the last fiscal year and for FY 'twenty to 'twenty five the ongoing share repurchase program with an upper limit of 450 billion yen its progressing.

Speaker Change: As of April 30th.

Speaker Change: We have.

Speaker Change: <unk> already acquired a 76% of the upper limit or $340 6 billion yen.

Junichi Arai: Given the current pace, we expect the program to be completed significantly earlier than initially anticipated, and we have not changed our target announced in May 2024 to reduce net cash to approximately 600 billion yen over the two years ending March 2026.

Speaker Change: Given the current pace, we expect the program to be completed significantly earlier than initially anticipated and we have not changed our target announced in May 2024 to reduce net cash to approximately 600 billion yen over the two years ending March 'twenty two.

Speaker Change: 26.

Junichi Arai: Going forward, while considering potential strategic M&A opportunities, we will closely monitor changes in the economic and capital market environment. and the forecast of our financial position and carefully evaluate the necessity. And if it's deemed necessary, we will also consider carefully the scale and timing of the next share repurchase program. The total per share dividend amount in FY 2025 is expected to be 25.0 yen, which consists of 12.5 yen for an interim dividend and a year-end dividend of 12.5 yen. as a global technology company. Amidst the turbulent changes in the business environment, we are firmly committed to driving a consistent growth strategy and enhancing operational efficiency.

Going forward, while considering potential strategic M&A opportunities, we will closely monitor changes in the economic and capital market environments.

Speaker Change: And the forecast all of our financial position and carefully evaluate the necessity.

Speaker Change: Okay.

Speaker Change: And if its deemed unnecessary we will also consider them carefully the scale and timing of the next share repurchase program. The total per share dividend amount in FY. 'twenty 25 is expected to be 25.0, yeah, which consists of $12 five yen for an interim dividend in a year end dividend of <unk>.

0.5 Yea end.

Speaker Change: As a global technology company amidst the turbulent to changes in the business environment. We are firmly committed to driving our consistent growth strategy and enhancing operational efficiency.

Junichi Arai: And we respectfully request the understanding and support of all stakeholders, including shareholders and capital market participants.

Speaker Change: And we respectfully request, the understanding and support of all stakeholders, including shareholders and capital market participants.

Junichi Arai: That concludes my presentation.

Speaker Change: That concludes my presentation.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: Yeah.

Unknown Executive: Thank you. Now we would like to proceed to the Q&A session. Please limit the number of questions to one each time and one follow-up question.

Speaker Change: Thank you now we would like to proceed to the Q&A session.

Speaker Change: Please limit the number of questions to one each time and one follow up question.

Unknown Executive: To those participating on on site, if you have a question, please raise your hand. When you're appointed and the microphone is provided, please introduce your belongings and name before a question. And if you're on Zoom, please chat the question.

Speaker Change: For those participating on onsite if you have a question. Please raise your hand when you were appointed in the microphone is provided please introduce your belongings and named before or a question.

Speaker Change: And if you're on zoom. Please cat the question so to my left please.

Yamamura: So to my left, please. JPMorgan Securities, Yamamura is my name. I have one question.

Speaker Change: JP Morgan Securities NIM Amortize my name I have one question.

Yamamura: So in FY 2024, the economic cycle year zero, so you try to improve the efficiency and monetize the product and you solidly achieved revenue and profit growth. So North American HR Tech Plan. On the low currency base, it's flat and the number of cases is down. And so you can cover with the price per case.

Speaker Change: So in FY 'twenty 'twenty four is the economy cycle. Your zero. So you would strike it improve the efficiency and monetize the product and you solidly achieved revenue and profit growth.

Speaker Change: So north American HR Tech plan.

Speaker Change: On the local currency basis flat and the number of cases is down and so you can cover with the price per case.

Speaker Change: Yeah.

Yamamura: How would you see the sustainability of this monetization? How far can you go? If you could explain that, we'd appreciate it. and the paid job ad and the premium service expansion or minimum budget introduction, there are various measures you've been taking to come this far. So where are you? How far along are you?

Speaker Change: How would you see the sustainability of this monetization how far can you go.

Speaker Change: If you could explain that we'd appreciate it.

Speaker Change: N V paid job AD in the premium service expansion or a minimum budget introduction there various measures you've been taking to come this far.

Speaker Change: So where are you how far along are you and in the medium to long term.

Yamamura: And in the medium to long term, which part do you think has the best upside?

Speaker Change: Which part do you think has the best upside.

Hisayuki Idekoba: and Resiliency to the Macroeconomy, where can we find confidence in you? So if you could touch on the sustainability. Thank you very much. Great question.

Speaker Change: And resiliency to the macro economy, how where can we find confidence in you and so if you could touch on the sustainability.

Speaker Change: You're very much great question.

Speaker Change: Yeah.

Hisayuki Idekoba: So first of all, the base underlying premise is. Until now, we tended to sell the number of applications. And when the economy goes down, the number of applicants naturally grow. So, especially using AI. The higher quality applicants who are suited to that job, who the employers want to hire. We send such qualified job seekers in a selective fashion to reduce the load, the workload of the client. to the employers. In case of large clients, in one year, 3 million or 4 million applicants and Client Salons, to narrow this down to maybe 10 very qualified applicants.

Speaker Change: So first of all the base underlying premise.

Speaker Change: Is.

Speaker Change: Until now.

Speaker Change: We tended to sell.

Speaker Change: So the number of applications.

Speaker Change: And when the economy goes down.

Speaker Change: The number of applicants naturally grow.

Speaker Change: So, especially using AI.

Speaker Change: The higher quality applicants.

Speaker Change: The applicants who are suited to that job museum full years want to hire.

Speaker Change: We since such qualified.

Speaker Change: Job seekers in a selective fashion to reduce the low boom.

Speaker Change: Load leak Lance.

Due to the employer just in case of large clients.

Speaker Change: In one of them.

Speaker Change: Year 3 million or food.

Speaker Change: Applicant application.

Speaker Change: In <unk>.

Speaker Change: Clients want to narrow this down to maybe 10 10 very qualified applicants.

Hisayuki Idekoba: So you mentioned premium. Premium is now mainly for the SMEs, small and medium sized enterprises. who want to hire people with certain particular qualifications. So we use the multiple matching criteria and charge for that. Going forward. With AI, as I showed you earlier, AI screening or AI, actual interviews. There are many areas where we can use AI more. We are testing them as we speak. So how we can charge for that. is going to be the key. And we have the so-called demand-side auction. This type of workers we want to hire. And they have an auction and set the price for the kind of job seekers they want.

Speaker Change: So you mentioned premium.

Speaker Change: Premium is now mainly for the Smes small and medium size enterprises.

Speaker Change: Oh, who want to.

Speaker Change: Your people with certain particular qualifications.

Speaker Change: So we use a multiple matching criteria.

And charge for that.

Speaker Change: Going forward.

Speaker Change: With AI as I showed you earlier AI screening or AI actual interviews.

Speaker Change: There are many areas, where we can use AI more we are testing them as we speak so how are we begin.

Speaker Change: Charge for that.

Speaker Change: He is going to be the key and we have the so-called demand side auction this type of workers.

Speaker Change: Workers, we want to hire.

Speaker Change: And they all have.

Speaker Change: Auction and set the price for the kind of job seekers they want.

Hisayuki Idekoba: OCPC, Optimized CPC, or Outcome-Based There are such products. So what I want to say here is It's not just us, but... Person who, let's say there are 10 who click this ad. This one is promising. This one is not so promising. How can we build, structure the billing of the budget? The advertisement technology is evolving in this area, and so will this person, the job seeker, become a very good applicant for this employer? How can we allocate and how can we charge? The supply and demand, if the supply and demand is accurately understood, then we can price more scientifically.

Speaker Change: Oh, CPC optimized C P C or outcome based.

Speaker Change: Others, such products, so what I want to say here is.

Speaker Change: It's not just us but.

Speaker Change: Person, who let's say, they're 10, who clicks this ad.

Speaker Change: This one is promising and this one is not so promising.

Speaker Change: How can we build the structure the billing.

Speaker Change: All of the bullshit.

Speaker Change: The advertisement technology is evolving in this area and so will this person the job seeker become a very good applicant for this year, how can we allocate and how can we charge.

Speaker Change: The supply and demand.

Speaker Change: If the supply and demand as accurately understood then we can price more scientifically in other words.

Hisayuki Idekoba: In other words, How not just how many people want to hire this person, but also in this area for this kind of job type. How many people are likely to be qualified if you can understand that? Am I speaking too much? So like this, this kind of evolution is continuing, will continue.

Speaker Change: How not just how many people want to hire this person, but also in this area for this kind of job types.

Speaker Change: How many people are likely to be qualified if you can understand that.

Speaker Change: Am I speaking too much.

Speaker Change: So like this now this kind of evolution is continuing we will continue so my key point is the.

Hisayuki Idekoba: So my key point is. The client, the employer side and for the user side. We want them to feel that the value has increased and can be possible with the evolution of AI and we charge for that. So we should not haste. We should not rush too much. We want our users and clients and us to be convinced that it's good. Then there will be many other ways other than premium to convince our clients and users and bill for that. I'm sorry, maybe I was a bit too long.

Speaker Change: The client the employer side and for the user side.

Speaker Change: We want them to feel that the value has increased and can be possible with the evolution of AI and we charge for that.

Speaker Change: So we should not haste, we should not rush too much we want our users and clients.

Speaker Change: And to be convinced that it is good then there will be many other ways other than premium do.

Speaker Change: To convince our clients and users and bill for that I'm, sorry, maybe I was a bit too long.

Speaker Change: Okay.

Hisayuki Idekoba: Has it just started? Yes, I believe so. has just started. Thank you.

Speaker Change: Is it just started yes I've been speaking so.

Speaker Change: It has just provided thank you. So our next person who would like to ask a question to my left in the first row. Please.

Kitagawa: So next person who would like to ask a question to my left in the first row. Thank you. This is Kitagawa of Newspick. HR business was performing quite well, but I would like to ask about other businesses. Marketing matching technologies. I see that the organization has undergone significant change. Akushida-san is now leading the business. So what is the aim of shifting to this organization? What are your expectations?

Speaker Change: Thank you this.

Kitagawa: This is kitagawa of news picks.

Speaker Change: HR business Uh Huh, it was performing quite well, but I would like to ask about other businesses marketing matching technologies I see that the organization has undergone significant change because <unk> is now leading the.

Kitagawa: The business.

Kitagawa: So what is the aim of shifting to the so when ization of what are your expectations.

Kitagawa: Thank you for the question. in the past. We had the Japan business and the other HR businesses. This was the rough segmentation. But as you know, in Japan. It's half and half. We have HR related and non HR related business accounting for roughly half each. And this time, of course, the main aim is that rather than having investments made separately into different technologies, especially when it comes to AI related investments, the size, the scale is significant. So we wanted to consolidate the HR related businesses into one team. And at the same time for marketing, Exposure will be higher.

Kitagawa: Thank you for the question.

Kitagawa: In the past.

Kitagawa: We had the Japan business and the other HR businesses.

Kitagawa: This was the rough of segmentation, but as you know in Japan.

Kitagawa: It's half and half we have HR related and non HR related business accounting for roughly half each and this time of course. The main aim is that rather than having investments made a separately into different technologies, especially when it comes to AI related investments at <unk>.

Kitagawa: Is that the scale is a significant so we wanted to consolidate are the HR related businesses into one team and at the same time for marketing.

Kitagawa: Exposure will be higher we will have more people paying attention. So of course. This is a pressure on us as marketing business are we.

Kitagawa: We'll have more people paying attention. So of course, this is a pressure on us as marketing business. We have We have to continue to meet the expectations of our business clients as well as users so that many of them continue to use this service and through IR activities we want to communicate this point and to appeal to users and convince them of the value. We believe that that's the kind of evolution that we will be able to achieve through this organizational change. So as a whole.

Kitagawa: Have.

Kitagawa: We have to continue to meet the expectations of our business clients as well as users. So that many of them continue to use this service and through IR activities, we want to communicate this point and to appeal.

Kitagawa: Two users and convince them of the value.

Kitagawa: We believe that's the kind of evolution that we will be able to achieve through this organizational change so as a whole.

Kitagawa: You have clients, SMEs, you want to enhance productivity of your business clients, but if you are shifting more to the HR business, you fear that this may appear to be a completely different business in nature. I do not believe that to be true. I do not believe this business is a different business. Our commitment is to bring innovation to society. That has been the foundation of our businesses thus far. The visions may be different, make businesses work smarter, help businesses work smarter. This covers not just the HR area, but the other areas as well. Of course, there are our approach to fintech is that you have clients, restaurants, beauty salons, hotels, or real estate companies, among others.

Kitagawa: You have a client's S M. As you want to enhance productivity of Europe is as clients, but if you are shifting more to the HR business fear that that has some may appear to be a completely different business in nature.

Kitagawa: I do not believe that to be true I do not believe this business is a different business. Our commitment is to bring innovation to society that has been.

Kitagawa: The foundation of our businesses. So thus far the visions, maybe different make businesses work smarter health businesses work smarter discover it's not just the HR area, but the other areas as well of course, there are synergies with HR, but if you consider fintech our approach to Fintech is that.

Kitagawa: Well, you have clients restaurants beauty salons hotels or.

Kitagawa: Our real estate companies among others, we focus on what services need to be provided to this particular customer, especially when they are struggling to hire people.

Kitagawa: We focus on what services need to be provided to this particular customer, especially when they are struggling to hire people. How can we help them improve their productivity with our services? So, of course, when we consider that FinTech is something that is in scope, customers are paying, customers are using the service. So that's the basis of how we design our business. So it's not just looking at the category or the segmentation, this is FinTech, what are we going to do? Rather, we follow our vision in a natural manner. We want to simplify hiring. And also, to our business clients, what services can we offer?

Kitagawa: How can we help them improve their productivity with our services. So of course, when we consider that Fintech is something that is in scope.

Kitagawa: <unk> are paying for customers are using the service. So that's the basis of how we design our business. So it's not just looking at the category or the segmentation. This is fintech out what are we going to do rather a we follow our vision in a natural manner, we want to simplify hiring.

Kitagawa: And also to our business clients what services can we offer so looking at the differences in vision.

Kitagawa: So, looking at the differences in vision. I think this has been a natural evolution.

Kitagawa: I think our this has been a natural evolution I hope I answered. Your question. Thank you very much.

Kitagawa: I hope I answered your question.

Unknown Executive: Thank you very much. Next question, please.

Kitagawa: Next question, please to my right sucking throat chicken row. Please.

Munakata: To my right, second row, second row, please.

Munakata: Thank you, Goldman Sachs Securities, Munakata is not my name. So in your earlier, in the earlier question. The corporate client side monetization was referred to.

Monaco Geismar: Thank you Goldman Sachs Securities Monaco Geismar my name.

Kitagawa: So in your earlier in the earlier question.

Kitagawa: The corporate client side monetization was referred to us.

Munakata: I have a question from the job seeker side. So in the earlier videos, career scout and career assistant, these services. This is a potential wish that you had, the needs may be dug out and explored, I think it's that kind of service. So from that perspective, what kind of expectations do you have in the further down the road in an extreme case? People may not. There may be people who do not want to change jobs now, but they may still use it even if they don't want to change jobs now. So how do you see the potential of exploring such population?

Kitagawa: I have a question from the job seeker side.

Kitagawa: So in the earlier videos careers scout and career assistant these services.

Kitagawa: Now this is a potential wish that you have and meet the needs of maybe dug out and explored I think it's kind of that kind of service.

Kitagawa: So from that perspective, what kind of expectations do you have in the further down the road and street in case people may not there maybe people who do not want to change jobs now, but they may still use it even if they want don't want to do to change jobs now so how do you see the potential of exploring such popular.

Unknown Executive: Thank you. Oh, where a dream is expanding! And yes, we talk about such things in our meetings.

Kitagawa: <unk>.

Kitagawa: Okay.

Oh, we're a dream is expanding.

Kitagawa: And yes, so we talk about such things in our meetings.

Unknown Executive: That said, our priority is first the hiring, first do hiring solidly, thoroughly. So, for example... Career Advisor. We have many offline businesses. What kind of advice are they giving exactly, as you said? This is where I am. This is what I'm facing. This is my family situation, and this is how it's changing. And this is my future of image. So, these are all coming in.

Kitagawa: That said our priority is first the hiring first do hiring solidly thoroughly.

Kitagawa: So for example.

Kitagawa: Our career advisor.

Kitagawa: We have many offline businesses.

Kitagawa: What kind of device are they giving you exactly as you've said.

Kitagawa: This is where I am this is what I'm facing this is my family situations and this is how it's changing and this is my future of image.

Kitagawa: So these are all coming in.

Unknown Executive: But what's difficult is. outside of that. So I'm in this school and I qualify for this certification. This is what the recruit has been doing for decades. First of all, in matching business related area. We answer what is being asked first and foremost, and this alone has multiple processes.

Kitagawa: But what's difficult.

Kitagawa: Is.

Kitagawa: Outside of that.

Kitagawa: So I'm in this school and I qualify for this certification.

Kitagawa: This is what they recruit has been doing for decades.

Kitagawa: First of all.

Kitagawa: Isn't matching business related area.

Kitagawa: We answer what is being asked first and foremost and this alone has multiple processes.

Unknown Executive: In cafe This is not the answer we want. We've seen such tests. And we see room for accuracy improvement, precision improvement. And what's difficult here is jobs. There's so many different types of jobs. And what you asked is more on the white collar side, I think. So you graduate from a university and find jobs. That's one step. But there are others who need to work this week and need the money right away. There are many workers like that, too.

Kitagawa: In test.

Kitagawa: Yeah.

Kitagawa: This is not the answer we watch we've seen such tests.

Kitagawa: And we see room for accuracy improvement precision improvement and while it's difficult here is <unk>.

Speaker Change: Job Ah Theres, so many different types of jobs.

Speaker Change: And what you asked is are more on the white collar side I think so.

Speaker Change: So you graduate from a university and find jobs, that's one step, but there are others, who need to work. This week and you need the money right away. There are many workers like that too.

Unknown Executive: So in the majority in Japan and the US, the majority is blue collar workers. Users So first, we have to thoroughly work on the matching part. Then we can broaden the scope. and it becomes possible to ask new questions to users.

Speaker Change: So in the majority in Japan, and the U S.

Speaker Change: The majority is blue collar workers.

Speaker Change: <unk>.

Speaker Change: So first we have after thoroughly work on the matching part and then we can broaden the scope.

And he.

Speaker Change: He comes with a possible to ask new questions lets users now if you go to compute indeed, there are two boxes.

Unknown Executive: Now, if you go, indeed, there are two boxes. where you enter title and area. That's the only question you're asked and answer, but if it becomes more conversational. or more consultational. We receive more broader questions. And what's difficult is. Our thinking is vertical AI. We want to develop vertical AI. So sometimes we are asked if the investment becomes very high.

Speaker Change: Where you enter title an area. That's the only question you're asked and answered, but if it becomes more conversational.

Speaker Change: Or more consultation.

Speaker Change: Oh, we receive more broader questions and what's difficult is ours.

Speaker Change: Our thinking is vertical AI, we want to develop vertical AI. So sometimes we are asked if the investment becomes a very high well, what's the whether tomorrow that you can ask open AI or Google, but what about business John.

Unknown Executive: Well, what's the weather tomorrow? That you can ask OpenAI or Google. But what about business, job? We want to be able to answer job-related questions better than anyone else. So I think we can expand as we move forward.

Speaker Change: We want to be able to answer job related questions better than anyone else. So I think we can expand as we move forward, but for now the priority is we still have a lot to do.

Unknown Executive: But for now, the priority is we still have a lot to do. Thank you.

Unknown Executive: I hope this answers your question. Thank you very much for the matching accuracy. I see that there has been a significant improvement at least that appears to be so from our side but you mentioned that there still needs to be many things that need to be done so I'm looking forward to them.

Speaker Change: Thank you I I hope this answers your question.

Speaker Change: Okay.

Speaker Change: Thank you very much for the matching accuracy I see that there has been a significant improvement at least for that appears to be so from our side by you mentioned that there are still needs to be many things that need to be done so I'm looking forward to them.

Unknown Executive: Right, so as was mentioned before For example, practicing interviews for a job, that may be a possibility. There are many things that may be possible. things that are only related to hiring, there's still so many things that we can pursue so we can further broaden the scope.

Speaker Change: So as was mentioned before.

Speaker Change: For example, practicing interviews for a job that may be a possibility and there are many things that are.

Speaker Change: It may be possible.

Speaker Change: Things are that are only related to hiring there's still so many things that we can pursue so we can further broaden the scope.

Unknown Executive: Thank you very much.

Speaker Change: Thank you very much next question.

Suzuki: Next question on left hand side from the second row from the front.

Speaker Change: On the left hand side the from the second row from the front.

Suzuki: This is Suzuki from Nikkei Shimbun. I have a question. You have been sponsoring and promoting diversity. Mr. Trump is now countering DEI, anti-DEI. Do you think this has any impact on your business or are you going to change your policy?

Speaker Change: This is a key from Nikkei Shimbun I have a question.

Speaker Change: You have been sponsoring and promoting diversity. Mr. Trump is now countering D. I anti D. I do you think this has any impact on your business or are you going to change our policy.

Suzuki: Thank you very much for the question. At our company, by the end of fiscal 2030, we will continue to work to achieve sustainability goals, depending on countries and areas. I understand that difficulties are arising. However, So far, we are not seeing any impact on our business performance, so we will continue to work to achieve our sustainability goals. So does that mean your policy will remain unchanged? Goals policy, you are not going to introduce any significant change to the policy.

Speaker Change: You very much for the question.

Speaker Change: At our company by the end of 'twenty fiscal 'twenty 30, we will continue to work to achieve sustainability.

Speaker Change: Goals, depending on countries and areas I understand that so difficulties are arising.

Speaker Change: However.

Speaker Change: So far we are not seeing any impact on our business performance. So we will continue to work to achieve our sustainability goals.

Speaker Change: So does that mean your policy will remain unchanged.

Speaker Change: Our goals will remain unchanged and goals policy, you will not going to introduce any significant change to the policy I just want to confirm that and to further strengthen your efforts are there anything you are working on internally.

Suzuki: I just want to confirm that.

Suzuki: And to further strengthen your efforts, are there anything you are working on internally? As I briefly mentioned before, To give you examples, things, changes we are seeing in the U.S. Of course, some of them are legal, statutory changes, so... Of course, this requires some change on our side to be compliant, and we are considering some change to that extent, but as a Recruit Holdings, as a whole, our sustainability goals are basically there to leverage our business strengths in... a seeking job. Of course, we want to help people with disabilities, 30 million people, and so on.

Speaker Change: As I briefly mentioned before.

Speaker Change: To give you.

Speaker Change: Examples are things the changes we are seeing in the U S.

Speaker Change: Of course, if some of them are legal statutory changes so.

Speaker Change: Of course that this requires something change.

Speaker Change: On our side to be compliant and we are considering some change to that extent, but as a recruit holdings as a whole our sustainability goals.

Speaker Change: Basically are there to leverage our business strings in.

Speaker Change: In seeking Java of course, if we want to help people with disabilities are 30 million people.

Speaker Change: And so on so.

Suzuki: This is something we'd like to continue to work on and achieve. going forward.

Speaker Change: This is something we'd like to continue to work on and achieve.

Unknown Executive: Thank you very much.

Speaker Change: Going forward. Thank you very much.

Unknown Executive: So the very front row to the right, third person, please. B of A, security is not always my game. Thank you very much.

Speaker Change: So the very front row to the right a third person please.

Speaker Change: Bofa Securities not always my game. Thank you very much.

Unknown Executive: First. A while ago, Indeed Plus started. So, are you feeling traction? How is your reaction to it?

Speaker Change: First.

Speaker Change: While ago, Indeed, plus started.

Speaker Change: So are you feeling traction.

Speaker Change: How is your reaction to it and starting April 1st Middle class.

Unknown Executive: And starting April 1st, middle class, the. Placement and High Class Executive Search now is consolidated to HR Tech. So a labor intensive business and HR technology can be multiplied. What kind of new thing is about to be born and how do you see the value? And not just one plus one is two, just a simple combination. How do you think this will turn out to be? Thank you very much. Thank you.

Speaker Change: The mid <unk>.

Speaker Change: Placement and high class Executive search now is consolidated to HR Tech.

Speaker Change: So a labor intensive business and H, our technology can be multiplied what kind of new thing is about to be born and how do you see the value in not just one plus one is to just the simple a combination.

Speaker Change: Combination how do you think this will turn out to be thank you very much. Thank.

Speaker Change: Thank you.

Speaker Change: Okay.

Hisayuki Idekoba: Two or three years ago. My Daughter Part Me And it made sense. So. So my daughter was thinking of the university and she is a science major. So I thought, I said, maybe computer science. You can make a lot of money with that profession. Then she said, Dad, you're old. Everything can be done by AI. So. I have no plan of doing programming now. And I said, what do you want to do now, AGI, ASI? and offline can be connected. have AGI think and think of raw material or protein or drugs, medicine, these offline evolutions.

Speaker Change: Two or three years ago.

Speaker Change: My daughter.

Speaker Change: Taught me.

Speaker Change: And it made sense.

Speaker Change: So.

Speaker Change: So my daughter was thinking of the University.

Speaker Change: She is a science major so I thought I said Navy computer science, you can make a lot of money with that profession.

Speaker Change: Then she said dad your old everything can be done by AI. So.

Speaker Change: I have no plan of doing programming now and I said, what you want to do now Agi ASI.

Speaker Change: And offline can be connected.

Speaker Change: Have a G I think and I think raw material or protein.

Speaker Change: Or drugs medicine these offline evolution.

Hisayuki Idekoba: We'll evolve. That's the kind of world we will see. And I said, Oh, really? So that was the three years ago.

Speaker Change: We will evolve and that's why the world, we will see and I said, Oh really so that was the three year ago. She went to chemical engineering after that conversation three years ago.

Hisayuki Idekoba: She went to chemical engineering after that conversation three years ago. So I'm conducting a test now. Of course, online signal is used as a basis as an extension of machine learning. AI is used in many cases like that, but along with that. The next evolution is offline and online area where those two converge. This is where the biggest benefit of AI, the biggest return of AI can be seen.

Speaker Change: Okay.

Speaker Change: So I'm conducting a test now of course online signal is used as a basis as an extension of machine learning AI infused and knee cases like that but along with that the.

Speaker Change: The next evolution is offline and online area, where those two converge.

Speaker Change: This is where the biggest benefit of AI. The biggest return of AI can be seen.

Hisayuki Idekoba: What I often think is, for example, Windows, when Windows started, before Windows. You wrote a code and you had to book the code. But with a few hits, application was launched and we were impressed with that back then. large-language model, essentially. What is that evolution as a user experience? You call a call center. And you press 1 if you want to know the balance. If you lost your card, please press 2. They still do that in call centers, but essentially... If you say, I lost the card, I can't find my card. If you know... It will be the next instruction to the machine.

Speaker Change: What I often think is for example, windows when windows started before windows.

You wrote a code and you had to book the code.

Speaker Change: But with a few hits application was launched and we were impressed with that back then.

Speaker Change: Large language model essentially.

Speaker Change: What is that at evolution as the user experience.

Speaker Change: You call a call center.

Speaker Change: And you press one if you want to know the balance if you lost your card. Please press two leased.

Speaker Change: They still do that and call centers, but essentially.

Speaker Change: If you say I lost the card I can't find my card.

Speaker Change: If you know.

Speaker Change: It will be the next instruction to the machine until now.

Hisayuki Idekoba: Until now... You had to write the programming language or you had to convert the numbers like one or two. So in that sense... with large language model. The language that human beings speak becomes the instruction. That is the largest evolution.

Speaker Change: You have to write the programming language or you had to convert the numbers like one or two.

Speaker Change: So in that sense.

Speaker Change: With large language model.

Speaker Change: The language that human being speaks becomes the instruction that is the largest evolution.

Hisayuki Idekoba: So in our staffing business and in our placement. Online and Offline. How the AI evolution can be delivered to people's daily lives. I think that is...

Speaker Change: So in our staffing business and in our placement.

Speaker Change: Online and offline.

Speaker Change: How.

Speaker Change: The AI evolution can be delivered to People's daily lives.

Speaker Change: I think that is the.

Hisayuki Idekoba: The biggest evolution we will see in the next two to three years. So, we're trying to collaborate more to make that happen. Does this answer your question?

Speaker Change: The biggest evolution, we will see in the next two to three years.

Speaker Change: So we're trying to collaborate more to make that happen.

Speaker Change: This is answer your question.

Hisayuki Idekoba: So as a business, I want to have a clear image. Oh, so you're saying my answer is not to the point. So in your earlier presentation, you said from ad model to marketplace, that flow. for Indeed. I can complete a replacement business online or speed up as an asset. You're combining it with HR technology, FBU, that kind of business change.

Speaker Change: So as a business I want to have a clear image Oh.

Speaker Change: Oh, so you're just saying my answer is not to the point.

Speaker Change: So in your earlier presentation, you said from AD model to marketplace that flow.

Speaker Change: So indeed.

Speaker Change: Okay.

Speaker Change: Ah can complete a replacement business online or if eat up as an asset.

Speaker Change: Now you're combining it with HR technology, SBU that kind of business change if I could hear a little more of that I'd appreciate it.

Hisayuki Idekoba: If I could hear a little more of that, I'd appreciate it. What I often think is... What value goes up and how we monetize that? We try to separate this as much as possible. So what you just said, this placement. Cost Per Hire and Agent. There are many offline human beings. That's the structure. So if we break down the process and the value. What can we replace online to increase value for the users and for the client companies? If we think like that, monetization is, we used to do this, and so do this model. It's not like that.

What I often think is.

Speaker Change: What value goes up and how we monetize that we tried to separate this as much as possible. So what you just said.

Speaker Change: This placement.

Speaker Change: Costs were higher.

Speaker Change: An agent there are many offline human beings.

Speaker Change: That's the structure.

Speaker Change: So if we break down the process and they are value.

Speaker Change: What can we were placed online.

Speaker Change: Do you at the increased value for the users and for the client companies. If we think like that monetization is we used to this and so do this model, it's not like that we should have a different way of thinking.

Hisayuki Idekoba: We should have a different way of thinking. So just by combining it and bringing it overseas, not like that, we want a different kind of value to please the customers. So like I said, if the customers are happy, clients are happy, we can monetize one way or another. So first we want to please the client companies and users. That I think is more important. It's good to make money, but thank you.

Speaker Change: So just by combining it.

Speaker Change: And bringing it overseas are not like that we want a different kind of value to please our customers.

Speaker Change: So like I said is the customers are happy clients are happy we can monetize one way or another so firstly wanted to please the client companies and users that I think is more important.

Speaker Change: It's good to make money, but.

Speaker Change: Thank you.

Speaker Change: My apologies we are running out of time, we have received many questions from online participants as well so I would like to pick one question from the online participants. He does is he yamaguchi San from Asa He use paper in.

Unknown Executive: We are running out of time.

Unknown Executive: We have received many questions from online participants as well, so I would like to pick one question from the online participants.

Yamaguchi: This is Yamaguchi-san from Asahi Newspaper. In Mr. Idekoba's presentation, what you talked about for the U.S. market in the first 10 minutes was impressive. the declining birth rate, aggressive M&A activities, but you are facing these earnings announcements in a sincere, earnest manner, and you are generating 50% of your revenues from overseas business. And going forward, do you still need to look to overseas in order to attain growth? What is your future vision of recruits? What will be the overseas ratio? AI, how will that come into play?

Speaker Change: In Missouri, there called Baas that presentation. You want you you talked about for the U S market in the first 10 minutes was impressive.

Speaker Change: The declining birthrate aggressive M&A activities, but you are facing visa earnings announcements are in insincere earnest manner and you are.

Speaker Change: Generating a 50% of your revenues from overseas business and going forward or do you still need to look to overseas in order to attain growth. What is your future vision of recruits and what will be the overseas ratio our AI, how it how will that come into play.

Hisayuki Idekoba: When I made the presentation on Indeed Acquisition at the time, I was in charge of Asia job board. I was an executive officer in charge of that. What I wanted to discuss back then was when we see a technology advancement, we have certain areas, specific areas and others, that's not how technology advancements are made, especially when it comes to AI evolution that we are talking about. We have a protein sequence, the language sequence, they are completely the same for AI, just because it's a Japanese language or the English language, it makes no difference. So in that sense, what we need to consider is making sure technology brings about innovation, bringing convenience to people's lives, and as a result of that, of course, We are still at the level of 300, 350 million users on a monthly basis, but we want to evolve to a business that has 1 billion, 2 billion users.

Speaker Change: When I made a presentation on indeed acquisition at the time.

Speaker Change: I was in charge of our Asia job Board I was an executive officer in charge of that.

Speaker Change: What I wanted to.

Speaker Change: Hum discuss back then was when we'd see a technology advancement, we have certain areas specific areas and others. That's not how technology advancements are made especially when it comes to AI evolution that we're talking about are we have a protein sequence are the.

Speaker Change: Language, a sequencer, they're completely the same for AI, just because it's a Japanese language or the English language. It makes no difference.

Speaker Change: So in that sense, so what we need to consider is may.

Speaker Change: Making sure technology brings about innovation, bringing convenience to People's lives and as a result of that of course.

Speaker Change: We are still.

Speaker Change: At the level of 300 350 million users on a monthly basis, but we want to evolve to a business that has 1 billion 2 billion users. So if we consider that our countries like India Africa Southeast Asia, That's a natural.

Hisayuki Idekoba: So if we consider that countries like India, Africa, Southeast Asia, that's a natural Evaluation introduce a market We don't consider in the reverse way. We do not consider where we can increase revenues, and that's why we make choices as to which markets we enter. That's not our way of thinking.

Speaker Change: Evolution, our entities of markets.

Speaker Change: We don't consider in the the reverse way, we do not consider where we can increase the revenues and that's why we make our choices as to which markets. We we enter that's not our way of thinking. Thank you very much. So it is now time to finish Q&A session.

Unknown Executive: Thank you very much. So it is now time to finish Q&A session.

Hisayuki Idekoba: Lastly, Idekoba-san, thank you very much for speaking, but if you could do a closing remark. I'm speaking too much. Can I speak more? Sure, okay. So as I said at the outset, The global economic situation is so unforeseeable, the U.S. is hard to read, but... More than that...

Lastly, Utica Baja thank you very much for speaking, but if you could do a closing remarks I'm speaking too much can I speak more.

Speaker Change: Sure Okay.

Speaker Change: So as I said at the outset.

Speaker Change: The global economic situation is little unforeseeable.

Speaker Change: The U S is hard to read.

Speaker Change: But.

Speaker Change: More than that.

Hisayuki Idekoba: The AI evolution that we're seeing right now is once every 20 or 30 year opportunity. So there are good economy, bad economy. But more than that, the key is how much we can let you feel that the life has become so much more convenient in the next one year. That is our focus. And this time next year, I hope to speak with you and say, see, you see an improvement, right? I want to say that. Thank you so much for a long time.

Speaker Change: The AI evolution.

Speaker Change: Risking.

Speaker Change: No.

Speaker Change: Is one severine 20, or 30 year opportunity. So there are good economic bad economy, but more than that the key is how much.

Speaker Change: Much weaken let you feel that these are life has become so much more convenient in the next one year that is our focus.

Speaker Change: And this time next year I hope to speak with you and they see you see an improvement right I want to say that thank you so much for a long time.

Unknown Executive: With that, we will close this earnings call. Thank you very much for your attendance. Thank you.

Speaker Change: With that we will close this earnings call. Thank you very much for your attendance.

Speaker Change: <unk>.

Speaker Change: Okay.