Q4 2025 Recruit Holdings Co Ltd Earnings Call

May 15, 2026

Speaker #1: Welcome to the Recruit Holdings FY 2025 earnings call. This call is a simultaneous translation of the original call in Japanese, and translation is provided for the convenience of investors only.

Mizuho Shen: Welcome to the Recruit Holdings FY 2025 earnings call. This call is a simultaneous translation of the original call in Japanese. Translation is provided for the convenience of investors only. I'm Mizuho Shen, Manager of Investor Relations and Public Relations. Earlier at 3:30 PM, we disclosed the earnings release, earnings summary, and the presentation slides of this results call on our IR page. The video and transcript of this results call and the transcript of follow-up meeting and sell-side follow-up meeting with sell-side analysts, which will be conducted followed by this results call, will be posted promptly on our IR website after the session. Today's presenters are Hisayuki Idekoba, Representative Director, President, and CEO, and Junichi Arai, Executive Vice President and Chief Financial Officer. Hello, everyone. In the first 25 minutes, Deko and Jun will provide a presentation followed by a Q&A session.

Speaker #1: I'm Mizuho Shen, Manager of Investor Relations and Public Relations. Earlier at 3:30 PM, we disclosed the earnings release, earnings summary, and the presentation slides for this results call on our IR page.

Speaker #1: The video and transcript of this results call, as well as the transcripts of the follow-up meeting and the sell-side follow-up meeting with sell-side analysts, which will be conducted following this results call, will be posted promptly on our IR website after the session.

Mizuho Shen: The video and transcript of this results call and the transcript of follow-up meeting and sell-side follow-up meeting with sell-side analysts, which will be conducted followed by this results call, will be posted promptly on our IR website after the session. Today's presenters are Hisayuki Idekoba, Representative Director, President, and CEO, and Junichi Arai, Executive Vice President and Chief Financial Officer. Hello, everyone. In the first 25 minutes, Deko and Jun will provide a presentation followed by a Q&A session.

Speaker #1: Today's presenters are Kisayuki Itekoba, Representative Director, President, and CEO; and Junichi Arai, Executive Vice President and Chief Financial Officer. Hello, everyone. In the first 25 minutes, Deko and Jun will provide a presentation, followed by a Q&A session.

Speaker #1: Now I'll turn the call over to Deko.

Mizuho Shen: Now I'll turn the call over to Deko.

Speaker #2: I hope you can hear me. Hello, everyone. My name is Itekoba. I'll recruit Holdings. First of all, I'd like to start with this page.

Hisayuki Idekoba: I hope you can hear me. Hello, everyone. My name is Idekoba of Recruit Holdings. First of all, I'd like to start with this page regarding revenues and EBITDA+S. I spoke to you around this time last year. I mentioned that we are going to be engaged in various activities utilizing AI. You did not seem convinced yet. I think numbers are very important to validate this point. We have been utilizing AI in various areas. We are now showing results in numbers. For the period that's descended, we have achieved a record high profits for the fiscal year 2026. In terms of revenues as well as profits, we are now poised to further accelerate growth.

Speaker #2: Regarding revenues and EBITDA plus S, I spoke to you around this time last year. I mentioned that we were going to be engaged in various activities utilizing AI; you did not seem convinced yet, but I think numbers are very important to validate this point.

Speaker #2: We have been utilizing AI in various areas, and we are now showing results in numbers. For the period that just ended, we have achieved record-high profits.

Speaker #2: For the fiscal year 2026, in terms of revenues as well as profits, we are now poised to further accelerate growth. We are adopting AI across many parts of our businesses.

Hisayuki Idekoba: We are adopting AI across many parts of our businesses and today I would like to address HR tech because this is the area we're receiving many questions. I would like to elaborate to you how we are utilizing AI and to accelerate revenue growth. Now, recently, the other day, I recently bought a new tablet. Because I travel a lot for work, I often download movies onto my tablet. That means that plenty of storage will be required. At the same time, screen size is very important. It has to be reasonably large and easy to watch, not too small. I found that there is a big price gap between the expensive models and the cheap ones.

Speaker #2: And today, I would like to address HR tech because this is an area we're receiving many questions. I would like to elaborate to you how we are utilizing AI to accelerate revenue growth.

Speaker #2: Now, recently—the other day—I bought a new tablet. Because I travel a lot for work, I often download movies onto my tablet.

Speaker #2: That means that plenty of storage will be required. At the same time, screen size is very important; it has to be reasonably large and easy to watch, not too small.

Speaker #2: I found that there is a big price gap between the expensive models and the cheap ones. It took about one hour just going through the different offerings, and I found that it's very difficult to select a piece of electronics.

Hisayuki Idekoba: It took about 1 hour, just going through the different offerings, and I found that it was very difficult to select a piece of electronics. It occurred to me, what if everything were offered for free? Now, if it were all free, deciding would be incredibly easy. It wouldn't take 1 hour. Just 1 click will suffice to find the best choice for oneself. I put this in the context of looking to changing jobs as well. I found that in a way it's akin to a completely free e-commerce site.

Speaker #2: And then it occurred to me, what if everything were offered for free? Now, if it were all free, deciding would be incredibly easy. It wouldn't take one hour—just one click would suffice to find the best choice for oneself.

Speaker #2: And I put this in the context of looking to changing jobs as well. And I found that, in a way, it's akin to a completely free e-commerce site.

Speaker #2: There might be various factors taken into consideration, but you can also apply for a job that pays two or three times your current salary.

Hisayuki Idekoba: There might be very attractive take into consideration, but you can also apply for job that pays 2 or 3 times your current salary, or maybe 3 times or 1 day a week of working could be your condition. For Japanese people, we are very straightforward. If it was conditions like this, there would be many applicants overseas. Please think about this. In the past, in a competitive site, when they started JobSearch, people said that Indeed and Recruit will be overwhelmed because if you ask AI, they can make recommendations in terms of jobs, and people were concerned about the future of Indeed. How algorithm is developed must be taken into consideration. Whether it is AI model or machine learning, there is not much difference.

Speaker #2: Or maybe two times or one day a week of working could be your condition. For Japanese people, we are very straightforward. Therefore, if it was a condition like this, there would be many applicants.

Speaker #2: Overseas. Now, please think about this. In the past, in a competitive site, when they started the job set, people said that indeed, in recruit, it will be overwhelmed.

Hisayuki Idekoba: In the past, in a competitive site, when they started JobSearch, people said that Indeed and Recruit will be overwhelmed because if you ask AI, they can make recommendations in terms of jobs, and people were concerned about the future of Indeed. How algorithm is developed must be taken into consideration. Whether it is AI model or machine learning, there is not much difference.

Speaker #2: Because if you ask AI, they can make recommendations in terms of jobs, and people were concerned about the future of Indeed. How the algorithm is developed must be taken into consideration.

Speaker #2: Whether it is AI or machine learning, there is not much difference. The best job for one person—what is the job that one likes, what is popular—is data that is not so relevant.

Hisayuki Idekoba: The best job for one person, what is a job that one likes, what is popular, is data that is not so relevant, because when company or the employers might actually want to hire the person, regardless of your intention. HR matching may take significant data from the user side, but that is not significant. It depends on whether the employer will be impressed. It is a two sides of matching that is required. Company or the employer side has many solutions as well. There is data showing the tendency of hiring, but appropriate matching cannot be made. This is a very unique matching model that we have between job seeker, employer.

Speaker #2: Because company employers might actually want to hire the person regardless of your intention. HR matching may take significant data from the user side, but that is not significant; it depends on whether the employer will be impressed.

Speaker #2: So, it is two sides. Matching is required. On the company or employer side, there are many solutions as well. There is data showing the tendency of hiring, but appropriate matching cannot be made, so this is a very unique matching model that we have between job seeker and employer.

Hisayuki Idekoba: Therefore, in the past several years, the employer side AI development has been areas where we have made investment. Of course, on the user side, the premise to jobs is also very important. The employer side have to identify the tendency of hiring for certain positions for certain companies is also data that is required in order to have effective matching. That is the reason why we have been making investment on the employer side. This might be difficult to understand, so let me give you an example to illustrate my point. Let's imagine you're running a restaurant with 2 chefs and 10 servers. You are managers of this restaurant. At that time, if one of your servers quit, of course, there will be a concern on the part of the owner.

Speaker #2: And therefore, in the past several years, the employer-side AI development has been an area where we have made investment. Of course, on the user side, the preference for jobs is also very important.

Speaker #2: But the employer side also has to identify the tendency of hiring for certain positions at certain companies. This is also data that is required in order to have effective matching.

Speaker #2: That is the reason why we have been making investments on the employer side. This might be difficult to understand, so let me give you an example.

Hisayuki Idekoba: That is the reason why we have been making investment on the employer side. This might be difficult to understand, so let me give you an example to illustrate my point. Let's imagine you're running a restaurant with 2 chefs and 10 servers. You are managers of this restaurant. At that time, if one of your servers quit, of course, there will be a concern on the part of the owner.

Speaker #2: To illustrate my point, let's imagine you're running a restaurant with two chefs and ten servers. You are managers of this restaurant. At that time, if one of your servers quit, of course there will be a concern on the part of the owner.

Hisayuki Idekoba: It isn't as if the restaurant will remain closed for this purpose. There might be some instances where customers have to wait on certain weekdays. What would happen if 1 chef of the 2 chefs quits? The situation changes dramatically. In such cases, the owner doesn't care as much about cost. Their priority is to hire someone with solid experience and skills as quickly as possible. Otherwise, the restaurant cannot be operated. A truck company in the United States have more trucks than the drivers. Construction workers are hard to find because of construction of many AI data centers. Hiring, which is directly related to value increase, is very important. Here, what we are proposing is Sponsored Jobs. Keyword search is very important.

Speaker #2: But it isn't as if the restaurant will remain closed for this purpose. There might be some instances where customers have to wait on certain weekdays.

Speaker #2: But what would happen if one chef of the two chefs quits? The situation changes dramatically. In such cases, the owner doesn't care as much about cost.

Speaker #2: Their priority is to hire someone with solid experience and skills as quickly as possible. Otherwise, the restaurant cannot be operated. A truck company in the United States has more trucks than drivers.

Hisayuki Idekoba: Otherwise, the restaurant cannot be operated. A truck company in the United States have more trucks than the drivers. Construction workers are hard to find because of construction of many AI data centers. Hiring, which is directly related to value increase, is very important. Here, what we are proposing is Sponsored Jobs. Keyword search is very important.

Speaker #2: And construction workers are hard to find because of construction of many AI. So hiring, which is directly related to value increase, is very important.

Speaker #2: And here, what we are proposing is sponsored jobs. If it's a keyword such as 'very important,' 'French chef' could be the keyword. And the result is where the job is posted.

Hisayuki Idekoba: A French chef could be the keyword, the result is where the job is posted. You might understand that the matching may not be impacted, but in fact, with AI, matching can become very effective. A keyword search is made, the result will be subject to jobs. However, only 30% are responding to that. If AI sourcing, AI screening is utilized for certain companies, the recommendation will be made. They're sending emails that a company is looking for a person like you as a pop-up. This is accounting for 70% recommendation and AI tools. This is reflection the fact that AI is evolving. Furthermore, from last AI, we are promoting the premium product.

Speaker #2: You might understand that matching may not be impacted, but in fact, with AI, matching can become very effective. Key: one search is made and the result will be subject to jobs.

Speaker #2: And if, however, only 30% are responding to that, but if AI sourcing or AI screening is utilized for certain companies, the recommendation would be made by sending an email that says companies are looking for a person like you, as a pop-up.

Speaker #2: And this is accounting for 70% recommendation and AI tools. This is a reflection of the fact that AI is evolving. Furthermore, from last year, we are promoting the premium product.

Speaker #2: This is a sponsored job, and the beta version of the product is offered as premium. Higher quality people can be hired, and they can apply with the utilization of this product.

Hisayuki Idekoba: This is a Sponsored Jobs and a better version of, the product is offered as premium. Higher quality people can be hired, can apply, with the utilization of this product. In the past, the chefs might have to be hired expeditiously, budgets are going to increase for this purpose. For 1 position, there could be 200 to 300 or 400 applicants. However, on the part of the restaurant, even if 500 people apply, it would be difficult to make the selection. It would be difficult to increase budget for this purpose. Now, if budget can be earmarked and payment can be made, AI matching can be enabled, so that quality, high quality applicants, can be identified. This is how evolution is being made.

Speaker #2: In the past, the chef might have to be hired expeditiously, and then the budget can be increased for this purpose. And for one position, there could be 200, to 300, to 400 applicants.

Speaker #2: However, on the part of the restaurant, even if 500 people apply, it would be difficult to make the selection. It would be difficult to increase the budget for this purpose.

Hisayuki Idekoba: However, on the part of the restaurant, even if 500 people apply, it would be difficult to make the selection. It would be difficult to increase budget for this purpose. Now, if budget can be earmarked and payment can be made, AI matching can be enabled, so that quality, high quality applicants, can be identified. This is how evolution is being made.

Speaker #2: But now, if budget can be earmarked and payment can be made, AI matching can be enabled so that quality, high-quality applicants can be identified.

Speaker #2: This is how evolution is to be made. And the hiring period, as a result, has been reduced by 50%. This is becoming more effective.

Hisayuki Idekoba: The hiring period, as a result, has been reduced by 50%. This is becoming more effective with AI matching. What about the job seeker side? What are the issues facing them? They apply to many ads, but receive no replies. They have the concern that whether the employers are actually seeking for applicants. In order to resolve this problem, the premium ad as well as AI matching can be very effective. The chef could be needed immediately, and the relevant person can be matched. That means that for the Sponsored Jobs, if utilized, can receive a response, the response will be provided 40% earlier. The motivation of the companies to hire is also very important.

Speaker #2: With AI matching—now, what about the job seeker side? What are the issues facing them? They apply to many ads, but receive no replies.

Speaker #2: So they have concern about whether the employees are actually seeking applicants. In order to resolve this problem, the premium ad as well as AI matching can be very effective.

Speaker #2: The chef could be needed immediately, and the relevant person can be matched. That means that for the sponsored job, if utilized, you can receive a response 40—the response will be provided 40% earlier.

Speaker #2: So the motivation of the company to hire is also very important. And crawling can be utilized from other sites to obtain data. But the motivation to hire is very important to be identified.

Hisayuki Idekoba: Crawling can be utilized from other sites to obtain data. The motivation to hire is very important to be identified. This is important for the user and for the job seekers as well. The monthly active users was 18% higher than previous year. This is a record high for us. By utilizing AI, user experience can be enhanced in this way. If there is intention to hire, employers will be willing to pay more. Matching is enabled. That means that the ARPJ, the US for Q4, there has been growth significantly in the United States. I would say that the 25% increase in price increase could be subject to criticism.

Speaker #2: This is important for the user, and for the job seekers as well. As a result, the March monthly active users was 18% higher than the previous year.

Speaker #2: This is a record high for us. So, by utilizing AI, user experience can be enhanced. In this way, if there is intention to hire, then employers will be willing to pay more.

Speaker #2: Matching is enabled. That means that with the update in the US for the fourth quarter, there has been significant growth in the United States. Now, in this way, I would say that a 25% increase—could be subject, a price increase could be subject to criticism.

Hisayuki Idekoba: We have to look at the content in more detail. We have to look at this market overall, the job market overall, globally. Online advertising as well as the job seeking is very small. It's only several percentage points, even though we have 60% to 70%. The placement and recruitment offline matching is more significant in terms of market size. When we ask companies, they tell us that Indeed is a free service is utilized, and if a hiring cannot be made, even though a fee is expensive, the retained search could be utilized by through a placement recruitment agency. With Indeed, low cost hiring can be enabled.

Speaker #2: But we have to look at the content in more detail. We have to look at this market overall—the job market overall, globally.

Speaker #2: Online advertising as well as job seeking is very small—it's only several percentage points. Even though we have 60 to 70%, the placement and recruitment offline matching is more significant in terms of market size when we ask companies.

Speaker #2: They tell us that Indeed’s free services are utilized, and if a hiring cannot be made—even though the fee is expensive—the retained search could be utilized by the placement recruitment agency.

Speaker #2: With Indeed, low-cost hiring can be enabled. Offline is more expensive, but because they are pressed for the need to hire, they have to resort to placement and recruitment agencies.

Hisayuki Idekoba: Offline is more expensive, because they are pressed for the need to hire, they have to resort to placement and recruitment agency. If we are able to provide AI matching in the appropriate way, and if we can provide applicants that companies would want to hire, then we will be able to capture more of this market. Now I, whenever, when I became CEO, I have been emphasizing the Simplify Hiring. When a button is pushed, the next job should be realized as quickly as possible. This has been enabled by the evolution of technology. This is our mission. Utilizing AI, various manual work can be automated, which is a wonderful opportunity for all of us.

Speaker #2: But if you are able to provide AI matching in the appropriate way, and if we can provide applicants that companies would want to hire, then we would be able to capture more of this market.

Speaker #2: Now, whenever I became CEO, I have been emphasizing simplified hiring. And when a button is pushed, the next job should be realized as quickly as possible.

Speaker #2: This has been enabled by the evolution of technology. This is our mission. Utilizing AI, various manual work can be automated, which is a wonderful opportunity for all of us.

Speaker #2: This is also shown in the performance, as well as the actual numbers. Now, in this way, utilizing AI, significant changes are being made, and it is reflected in our numbers as well.

Hisayuki Idekoba: This is also shown in the performance as well as the actual numbers. In this way, utilizing AI, significant changes are being made, and it is reflected in our numbers as well. I feel more confident as management as well. I believe that the growth rates can be achieved, which is over 10%, 20% can be. Well, this 10% is conceivable. When the hiring demand recovers, I believe that 20% of revenue growth can also be achieved. We expect to exceed the margins above 50%. Currently, over the global platform, we are seeing 31 hires per minute, meaning that we are helping someone get hired roughly every 2 seconds.

Speaker #2: And I feel more confident as management as well. And I believe that the growth rate can be achieved, which is 10%. 20% can be — 10% is achievable.

Speaker #2: And when the hiring demand recovers, I believe that 20% revenue growth can also be achieved. And we expect to exceed margins above 50%.

Speaker #2: Currently, over the global platform, we are seeing 31 hires per minute, meaning that we are hoping someone gets hired roughly every two seconds. We would like to expand this globally.

Hisayuki Idekoba: We would like to expand this globally, so that we can do more to support people around the world finding their next job. We will continue to make our utmost efforts. Thank you.

Speaker #2: So that we can do more to support people around the world fighting for their next job, we will continue to make our utmost efforts. Thank you.

Speaker #2: Good afternoon. I'm Arai. I was at Deco's presentation. Since he became CEO, about three pages before, there was a big circle, and he's been sharing that with you.

Junichi Arai: Good afternoon. I'm Arai. How was Deko's presentation? Since he became CEO, about three pages before, there was a big circle, and he's been sharing that with you. He's been promoting Simplify Hiring. I think that the times have caught up with the ideal that Deko has been sharing with you. On Indeed, we have seen accumulation of unique data. We are seeing enrichment of this unique data. With the power of AI, I think, we have taken another step closer to realizing the world that Deko has envisaged. This is an exciting time for us. Since FY 2024, we have been talking about year zero, making preparations during year zero, gaining strength.

Speaker #2: He's been promoting Simply Hiring, and I think that the times have caught up with the ideal that Deco has been sharing with you on Indeed.

Speaker #2: We have seen an accumulation of unique data. We are seeing enrichment of this unique data, and with the power of AI, I think we have taken another step closer to realizing the world that Deco has envisaged.

Speaker #2: And this is an exciting time for us. Since FY2024, we have been talking about year zero—making preparations during year zero and gaining strength.

Speaker #2: So that's what we've been saying over the past two years, and I am very pleased to be able to report a significant result as our efforts have been reflected in the numbers.

Mizuho Shen: That's what we've been saying over the past two years, and I am very pleased to be able to report significant results as our efforts have been reflected in the numbers, and this makes me very happy as well. As you can see from the table of contents for my presentation, like last year, I will present the executive summary at the very top from here on stage, and there will be a meeting with equity research analysts scheduled for later today. In that meeting, I will cover the remaining items in more detail. First, for FY 2025, I will cover the consolidated results. Revenue, EBITDA+S and basic EPS each exceeded the revised guidance announced with our Q3 results in February and reached record highs on a full-year basis.

Junichi Arai: That's what we've been saying over the past two years, and I am very pleased to be able to report significant results as our efforts have been reflected in the numbers, and this makes me very happy as well. As you can see from the table of contents for my presentation, like last year, I will present the executive summary at the very top from here on stage, and there will be a meeting with equity research analysts scheduled for later today. In that meeting, I will cover the remaining items in more detail. First, for FY 2025, I will cover the consolidated results. Revenue, EBITDA+S and basic EPS each exceeded the revised guidance announced with our Q3 results in February and reached record highs on a full-year basis.

Speaker #2: And this makes me very happy as well. As you can see, from the table of contents for my presentation, like last year, I will present the executive summary at the very top from here on stage.

Speaker #2: And there will be a meeting with equity research analysts scheduled for later today. In that meeting, I will cover the remaining items in more detail.

Speaker #2: First, for FY2025, I will cover the consolidated results: revenue, EBITDA, SG&A, and basic EPS. Each exceeded the revised guidance announced with our Q3 results in February and reached a record high on a four-year basis.

Speaker #2: And for fiscal 2026, we will see further acceleration of this growth based on the assumption of the exchange rate of 154 yen per US dollar. Although various changes are happening in the economy, we assume no major changes to take place, and we expect revenue and profit growth across all three segments, particularly driven by progress in business evolution and enhanced efficiency in HR technology. Our assumption for consolidated revenue is to increase by 9.0% year over year to 4.03 trillion yen.

Mizuho Shen: For fiscal 2026, we will see further acceleration of this growth based on the assumption of the exchange rate of JPY 154 per USD. Although, various changes are happening in the economy, but we assume no major changes to take place, and we expect revenue and profit growth across all three segments, particularly driven by progress in business evolution and enhanced efficiency in HR technology. Our assumption for consolidated revenue is to increase by 9.0% year over year to JPY 4.03 trillion. EBITDA+S is expected to increase by 19.5% year over year to JPY 949 billion, with margin expanding to 23.5%.

Junichi Arai: For fiscal 2026, we will see further acceleration of this growth based on the assumption of the exchange rate of JPY 154 per USD. Although, various changes are happening in the economy, but we assume no major changes to take place, and we expect revenue and profit growth across all three segments, particularly driven by progress in business evolution and enhanced efficiency in HR technology. Our assumption for consolidated revenue is to increase by 9.0% year over year to JPY 4.03 trillion. EBITDA+S is expected to increase by 19.5% year over year to JPY 949 billion, with margin expanding to 23.5%.

Speaker #2: EBITDA plus 3 is expected to increase by 19.5% year over year to ¥949 billion, with margin expanding to 23.5%. Basic EPS is expected to increase by 27.8% year over year to ¥447.0.

Mizuho Shen: Basic EPS is expected to increase by 27.8% year over year to JPY 447.0. The number of employees decreased from approximately 50,000 at the end of FY 2024 to approximately 45,000 at the end of FY 2025. We do not currently plan any large-scale hiring in FY 2026, so the number of employees will stay almost flat. Next, I will talk about capital allocation. In FY 2025, we returned a total of JPY 713.1 billion to shareholders, this resulted in a total payout ratio of 143.5%. We have maintained a high payout ratio. Net cash at the end of March 2026 was JPY 765.9 billion.

Junichi Arai: Basic EPS is expected to increase by 27.8% year over year to JPY 447.0. The number of employees decreased from approximately 50,000 at the end of FY 2024 to approximately 45,000 at the end of FY 2025. We do not currently plan any large-scale hiring in FY 2026, so the number of employees will stay almost flat. Next, I will talk about capital allocation. In FY 2025, we returned a total of JPY 713.1 billion to shareholders, this resulted in a total payout ratio of 143.5%. We have maintained a high payout ratio. Net cash at the end of March 2026 was JPY 765.9 billion.

Speaker #2: The number of employees decreased from approximately 50,000 at the end of fiscal year 2024 to approximately 45,000 at the end of FY 2025. And we do not currently plan any large-scale hiring in FY 2026.

Speaker #2: So the number of employees will stay almost flat. Next, I will talk about capital allocation. In FY 2025, we returned a total of ¥713.1 billion to shareholders.

Speaker #2: And this resulted in a total payout ratio of 143.5%. We have maintained a high payout ratio. Net cash at the end of March 2026 was ¥765.9 billion.

Mizuho Shen: In May 2024, which is 2 years ago, I said that we would reduce the net cash from JPY 1,135.4 billion at the end of March 2024 to JPY 600 billion over the 2-year period ending March 2026. Actually, we had already reached that level in H1 of FY 2025. However, H2 results exceeded our assumptions. We ended the year above the JPY 600 billion level. ROE was 22.6% in FY 2024. Last year, it was 31.0%, which is a significant increase. As for our capital allocation policy for the next 3 fiscal years, starting this fiscal year, we are making no changes to the current order of priorities.

Junichi Arai: In May 2024, which is 2 years ago, I said that we would reduce the net cash from JPY 1,135.4 billion at the end of March 2024 to JPY 600 billion over the 2-year period ending March 2026. Actually, we had already reached that level in H1 of FY 2025. However, H2 results exceeded our assumptions. We ended the year above the JPY 600 billion level. ROE was 22.6% in FY 2024. Last year, it was 31.0%, which is a significant increase. As for our capital allocation policy for the next 3 fiscal years, starting this fiscal year, we are making no changes to the current order of priorities.

Speaker #2: In May 2024, which is two years ago, I said that we would reduce the net cash from ¥1,135.4 billion at the end of March 2024 to ¥600 billion over the two-year period ending March 2026.

Speaker #2: Actually, we had already reached that level in the first half of FY2025. However, second half results exceeded our assumptions, and we ended the year above the ¥600 billion level.

Speaker #2: ROE was 22.6% in FY2024. Last year, it was 31.0%, which is a significant increase. As for our capital allocation policy for the next three fiscal years, starting this fiscal year, we are making no changes to the current order of priorities.

Mizuho Shen: We intend to maintain year-end gross cash and cash equivalents at around JPY 750 billion. If we execute a strategic acquisition, we intend to fund most of the required amounts with debt while taking our credit ratings into account. Based on our policy of stable and continuous dividends, our dividend outlook for this fiscal year is JPY 13 per share in the H1, JPY 13 in the H2, totaling JPY 26 for the full year. Regarding share repurchases, already a share repurchase program for a total of JPY 350 billion has started from 1 April this year, the current plan is to complete this program by the end of November.

Junichi Arai: We intend to maintain year-end gross cash and cash equivalents at around JPY 750 billion. If we execute a strategic acquisition, we intend to fund most of the required amounts with debt while taking our credit ratings into account. Based on our policy of stable and continuous dividends, our dividend outlook for this fiscal year is JPY 13 per share in the H1, JPY 13 in the H2, totaling JPY 26 for the full year. Regarding share repurchases, already a share repurchase program for a total of JPY 350 billion has started from 1 April this year, the current plan is to complete this program by the end of November.

Speaker #2: We intend to maintain year-end gross cash and cash equivalents at around ¥750 billion. And if we execute a strategic acquisition, we intend to fund most of the required amount with debt while taking our credit ratings into account.

Speaker #2: Based on our policy of stable and continuous dividends, our dividend outlook for this fiscal year is 13 yen per share in the first half and 13 yen in the second half, totaling 26 yen for the full year.

Speaker #2: Regarding share repurchases, an existing share repurchase program for a total of ¥350 billion has started from April 1st this year. The current plan is to complete this program by the end of November.

Speaker #2: And we will make appropriate decisions and act accordingly while monitoring second-half cash flow generation, capital market conditions, and our share price level. Four, the second round of share repurchases.

Mizuho Shen: We will make appropriate decisions and act accordingly while monitoring H2 cash flow generation, capital market conditions, and our share price level for the second round of share repurchases. Going forward, we believe that a growth in net income and continued shareholder returns will of course result in higher ROE than 31%. We believe that such higher levels of ROE will be possible. As you are aware, we operate through 3 segments. Among them, HR technologies revenue growth, profit growth, and also margin expansion are substantially higher than those of the other segments. In FY 2026, HR technology revenue is expected to reach a new record high of over $10 billion or JPY 1.5 trillion. This represents about 40% of consolidated revenue.

Junichi Arai: We will make appropriate decisions and act accordingly while monitoring H2 cash flow generation, capital market conditions, and our share price level for the second round of share repurchases. Going forward, we believe that a growth in net income and continued shareholder returns will of course result in higher ROE than 31%. We believe that such higher levels of ROE will be possible.

Speaker #2: Going forward, we believe that growth in net income and continued shareholder returns will, of course, result in higher ROE than 31%. We believe that such higher levels of ROE will be possible.

Speaker #2: And as you are aware, we operate through three segments. Among them, HR Technology's revenue growth, profit growth, and also margin expansion are substantially higher than those of the other segments.

Junichi Arai: As you are aware, we operate through 3 segments. Among them, HR technologies revenue growth, profit growth, and also margin expansion are substantially higher than those of the other segments. In FY 2026, HR technology revenue is expected to reach a new record high of over $10 billion or JPY 1.5 trillion. This represents about 40% of consolidated revenue.

Speaker #2: In FY 2026, HR technology revenue is expected to reach a new record high of over $10 billion, or ¥1.5 trillion. And this represents about 40% of consolidated revenue.

Speaker #2: However, staffing, which accounts for 45%, records approximately ¥1.8 trillion in accounting revenue. The margin excluding wages paid to temporary staff—in other words, margin substantially for our company—is around ¥300 billion annually.

Mizuho Shen: However, staffing, which accounts for 45% records approximately JPY 1.8 trillion in accounting revenue. The margin excluding wages paid to temporary staff, in other words, margin, substantially for our company is around JPY 300 billion annually. Accordingly, HR Technology accounts for approximately 65% of consolidated gross profit, which we believe better reflects its substantive contribution to consolidated revenue. Profits are even higher. HR Technology's EBITDA+S accounts for about 70% of consolidated EBITDA+S, and it is expected to continue to grow as the core driver of our earnings and value creation. As was mentioned before, as for staffing, we do not expect significant organic growth in staffing under the current business model. However, we will continue to focus on efficiency in our operation and strive to generate stable EBITDA+S margins.

Junichi Arai: However, staffing, which accounts for 45% records approximately JPY 1.8 trillion in accounting revenue. The margin excluding wages paid to temporary staff, in other words, margin, substantially for our company is around JPY 300 billion annually. Accordingly, HR Technology accounts for approximately 65% of consolidated gross profit, which we believe better reflects its substantive contribution to consolidated revenue.

Speaker #2: Accordingly, HR Technology accounts for approximately 65% of consolidated gross profit, which we believe better reflects its substantive contribution to consolidated revenue. Profits are even higher—HR Technology's EBITDA plus S accounts for about 70% of consolidated EBITDA plus S—and it is expected to continue to grow as the core driver of our earnings and value creation.

Junichi Arai: Profits are even higher. HR Technology's EBITDA+S accounts for about 70% of consolidated EBITDA+S, and it is expected to continue to grow as the core driver of our earnings and value creation. As was mentioned before, as for staffing, we do not expect significant organic growth in staffing under the current business model. However, we will continue to focus on efficiency in our operation and strive to generate stable EBITDA+S margins.

Speaker #2: As was mentioned before, as for staffing, we do not expect significant organic growth in staffing under the current business model. However, we will continue to focus on efficiency in our operation and strive to generate stable EBITDA plus S margins.

Speaker #2: Marketing matching technologies, or MMT, will continue refining and evolving its business model to further strengthen its competitive advantages and uniqueness in Japan. And by increasing revenue and improving operating efficiency, we expect EBITDA plus S margin of 30% this fiscal year and aim to increase this to 35% by FY2028.

Mizuho Shen: Marketing Matching Technologies or MMT will continue refining and evolving its business model to further strengthen its competitive advantages and uniqueness in Japan. By increasing revenue and improving operating efficiency, we expect EBITDA+S margin of 30% this fiscal year and aim to increase this to 35% by FY 2028. Now I will discuss each segment in more detail. First, HR technology. Q4 results substantially exceeded the outlook disclosed in February in all regions, including the US, Europe and others, which covers Canada and Japan. As a result, full year revenue in FY 2025 increased by 7.6% year-over-year to $9.67 billion. EBITDA+S margin reflects our progress in efficiency improvements, including lower personnel expenses and significantly exceeding the FY 2024 pro forma margin of 33%.

Junichi Arai: Marketing Matching Technologies or MMT will continue refining and evolving its business model to further strengthen its competitive advantages and uniqueness in Japan. By increasing revenue and improving operating efficiency, we expect EBITDA+S margin of 30% this fiscal year and aim to increase this to 35% by FY 2028. Now I will discuss each segment in more detail.

Speaker #2: Now I will discuss each segment in more detail. First, HR technology. Q4 results substantially exceeded the outlook disclosed in February in all regions, including the US, Europe, and others, which covers Canada and Japan.

Junichi Arai: First, HR technology. Q4 results substantially exceeded the outlook disclosed in February in all regions, including the US, Europe and others, which covers Canada and Japan. As a result, full year revenue in FY 2025 increased by 7.6% year-over-year to $9.67 billion. EBITDA+S margin reflects our progress in efficiency improvements, including lower personnel expenses and significantly exceeding the FY 2024 pro forma margin of 33%.

Speaker #2: And as a result, full-year revenue in FY 2025 increased by 7.6% year over year to $9.67 billion. EBITDA plus S margin reflects progress in efficiency improvements, including lower personnel expenses, and significantly exceeds the FY 2024 pro forma margin of 33%.

Mizuho Shen: The margin recorded was 37.7% despite FY 2025 being the first year of integration of HR Solutions of Matching & Solutions. For FY 2026, while US revenue showed a strong year-over-year growth of 26% in March and 27% in April, our full year outlook, however, reflects a potential risk from the uncertain economic environment, including geopolitical tensions and commodity price volatility. In the US and in Europe, Canada, and other markets, we anticipate continued monetization development, including further growth of Premium Sponsored Jobs. In Japan, we expect steady performance of Indeed PLUS and the recovery of the placement business to FY 2024 levels. As a result, we expect revenue to increase by 11% year-over-year on a dollar basis to more than $10 billion, while EBITDA+S margin is expected to increase to 41%.

Speaker #2: The margin recorded was 37.7%, despite FY2025 being the first year of integration of HR solutions of Matching and Solutions for FY2026. While US revenue showed strong year-over-year growth of 26% in March and 27% in April, our full-year outlook, however, reflects the potential risk from the uncertain economic environment, including geopolitical tensions and commodity price volatility.

Junichi Arai: The margin recorded was 37.7% despite FY 2025 being the first year of integration of HR Solutions of Matching & Solutions. For FY 2026, while US revenue showed a strong year-over-year growth of 26% in March and 27% in April, our full year outlook, however, reflects a potential risk from the uncertain economic environment, including geopolitical tensions and commodity price volatility.

Speaker #2: In the US and in Europe, Canada, and other markets, we anticipate continued monetization development, including further growth of premium sponsored jobs in Japan. We expect steady performance of Indeed Plus and the recovery of the placement business to FY2024 levels.

Junichi Arai: In the US and in Europe, Canada, and other markets, we anticipate continued monetization development, including further growth of Premium Sponsored Jobs. In Japan, we expect steady performance of Indeed PLUS and the recovery of the placement business to FY 2024 levels. As a result, we expect revenue to increase by 11% year-over-year on a dollar basis to more than $10 billion, while EBITDA+S margin is expected to increase to 41%.

Speaker #2: As a result, we expect revenue to increase by 11% year over year on a dollar basis to more than $10 billion, while EBITDA plus S margin is expected to increase to 41%.

Speaker #2: As Deco mentioned earlier, over the medium term, it is well within our reach to not only maintain double-digit annual revenue growth, but to achieve 20% or greater when hiring demand recovers.

Mizuho Shen: As Deko mentioned earlier, over the medium term, it is well within our reach to not only maintain double-digit annual revenue growth, but to achieve 20% or greater when hiring demand recovers. I also believe it is well within our reach, at that time, we expect our EBITDA+S margin to exceed 50%. In the US in fiscal year 2025, amid stagnant hiring demand and while the total number of US job postings on Indeed declined by approximately 7% year-over-year, monetization development resulted in revenue of $5.31 billion, an 8.8% year-over-year increase on a dollar basis with a US ARPA growth rate of 17%.

Junichi Arai: As Deko mentioned earlier, over the medium term, it is well within our reach to not only maintain double-digit annual revenue growth, but to achieve 20% or greater when hiring demand recovers. I also believe it is well within our reach, at that time, we expect our EBITDA+S margin to exceed 50%. In the US in fiscal year 2025, amid stagnant hiring demand and while the total number of US job postings on Indeed declined by approximately 7% year-over-year, monetization development resulted in revenue of $5.31 billion, an 8.8% year-over-year increase on a dollar basis with a US ARPA growth rate of 17%.

Speaker #2: I also believe it is well within our reach, and at that time, we expect our EBITDA plus S margin to exceed 50%. In the US, in fiscal year 2025, amid stagnant hiring demand, and while the total number of US job postings on Indeed declined by approximately 7% year over year, monetization development resulted in revenue of $5.31 billion, an 8.8% year-over-year increase on a dollar basis, with a US RPJ growth rate of 17%.

Speaker #2: And in fiscal year 2026, based on our assumption for the job market that hiring demand will remain flat after bottoming out in Q4 of FY2025, and assuming the total number of US job postings on Indeed declines by approximately 4% year over year, our outlook is for revenue to increase by 13.6% year over year to $6.03 billion, or ¥929.3 billion.

Mizuho Shen: In fiscal year 2026, based on our assumption for the job market that hiring demand will remain flat after bottoming out in Q4 of FY 2025, assuming the total number of US job postings on Indeed declined by approximately 4% year-over-year, our outlook is for revenue to increase by 13.6% year-over-year to $6.03 billion or JPY 929.3 billion, and for US ARPA to increase by 18%. We position this fiscal year as a year to steadily lay the groundwork and pave the way for further US revenue growth from FY 2027 onwards. Keeping in mind the Japanese proverb, "Haste makes waste," we intend to carefully consider the timing and pricing of new plans and product launches before executing them while maintaining close communication with our business clients.

Junichi Arai: In fiscal year 2026, based on our assumption for the job market that hiring demand will remain flat after bottoming out in Q4 of FY 2025, assuming the total number of US job postings on Indeed declined by approximately 4% year-over-year, our outlook is for revenue to increase by 13.6% year-over-year to $6.03 billion or JPY 929.3 billion, and for US ARPA to increase by 18%.

Speaker #2: And for US RPJ to increase by 18%. We position this fiscal year as a year to steadily lay the groundwork and pave the way for further US revenue growth from FY2027 onwards.

Junichi Arai: We position this fiscal year as a year to steadily lay the groundwork and pave the way for further US revenue growth from FY 2027 onwards. Keeping in mind the Japanese proverb, "Haste makes waste," we intend to carefully consider the timing and pricing of new plans and product launches before executing them while maintaining close communication with our business clients.

Speaker #2: Keeping in mind the Japanese proverb, 'Haste makes waste,' we intend to carefully consider the timing and pricing of new plans and product launches before executing them, while maintaining close communication with our business clients.

Mizuho Shen: As for staffing, revenue in FY 2025 increased by 2.2% year-over-year to JPY 1,703.4 billion. By region, revenue in Japan was JPY 846.8 billion, and revenue in Europe, US and Australia was JPY 856.5 billion. EBITDA+S margin was 5.9%, maintaining the FY 2024 level. In FY 2026, while we do not expect major revenue growth in Japan, our outlook for Europe, US and Australia is for revenue to increase by a 5.8% year-over-year in yen terms, supported by performance bottoming out in key markets and a gradual recovery trend.

Junichi Arai: As for staffing, revenue in FY 2025 increased by 2.2% year-over-year to JPY 1,703.4 billion. By region, revenue in Japan was JPY 846.8 billion, and revenue in Europe, US and Australia was JPY 856.5 billion. EBITDA+S margin was 5.9%, maintaining the FY 2024 level. In FY 2026, while we do not expect major revenue growth in Japan, our outlook for Europe, US and Australia is for revenue to increase by a 5.8% year-over-year in yen terms, supported by performance bottoming out in key markets and a gradual recovery trend.

Speaker #2: As for staffing, revenue in FY 2025 increased by 2.2% year over year to ¥1,703.4 billion. By region, revenue in Japan was ¥846.8 billion, and revenue in Europe, the US, and Australia was ¥856.5 billion.

Speaker #2: EBITDA plus S margin was 5.9%, maintaining the FY 2024 level. In FY 2026, while we do not expect major revenue growth in Japan, our outlook for Europe, US, and Australia is for revenue to increase by 5.8% year over year in yen terms, supported by performance bottoming out in key markets and a gradual recovery trend.

Speaker #2: Our outlook is for EBITDA plus S margin of 5.6%, broadly in line with FY2025, and EBITDA plus S of ¥100.5 billion. Finally, MMT, in FY2025, lifestyle led by beauty, drove revenue growth, which increased by 4.7% year over year to ¥564.6 billion, while EBITDA plus S margin was 27.4%.

Mizuho Shen: Our outlook is for EBITDA+S margin of 5.6%, broadly in line with FY 2025 and EBITDA+S of JPY 100.5 billion. Finally, MMT. In FY 2025, Lifestyle led by Beauty drove revenue growth, which increased by 4.7% year-over-year to JPY 564.6 billion, while EBITDA+S margin was 27.4%. In fiscal 2026, our outlook assumes continued growth in Lifestyle, and we expect revenue to increase by 7.1% year-over-year to JPY 605 billion. By smoothing out quarterly seasonality in sales promotion and advertising expenses, our outlook is for EBITDA+S margin of 31% in H1, 29% in H2, and 30% for the full year.

Junichi Arai: Our outlook is for EBITDA+S margin of 5.6%, broadly in line with FY 2025 and EBITDA+S of JPY 100.5 billion. Finally, MMT. In FY 2025, Lifestyle led by Beauty drove revenue growth, which increased by 4.7% year-over-year to JPY 564.6 billion, while EBITDA+S margin was 27.4%. In fiscal 2026, our outlook assumes continued growth in Lifestyle, and we expect revenue to increase by 7.1% year-over-year to JPY 605 billion. By smoothing out quarterly seasonality in sales promotion and advertising expenses, our outlook is for EBITDA+S margin of 31% in H1, 29% in H2, and 30% for the full year.

Speaker #2: In fiscal 2026, our outlook assumes continued growth in Lifestyle, and we expect revenue to increase by 7.1% year over year to ¥605 billion, by smoothing out quarterly seasonality in sales promotion and advertising expenses.

Speaker #2: Our outlook is for EBITDA plus S margin of 31% in the first half, 29% in the second half, and 30% for the full year.

Speaker #2: Recruit Holdings will continue to pursue its growth strategy as a global technology company consistently amid major changes in the business environment, while also working to continue to improve operational efficiency.

Mizuho Shen: Recruit Holdings will continue to pursue its growth strategy as a global technology company consistently amid major changes in the business environment, while also working to continue to improve operational efficiency. We respectfully ask for the continued understanding and support of all stakeholders, including shareholders and capital market participants.

Junichi Arai: Recruit Holdings will continue to pursue its growth strategy as a global technology company consistently amid major changes in the business environment, while also working to continue to improve operational efficiency. We respectfully ask for the continued understanding and support of all stakeholders, including shareholders and capital market participants.

Speaker #2: We respectfully ask for the continued understanding and support of all stakeholders, including shareholders and capital market participants. That concludes my remarks. Now, I would like to proceed to the Q&A session.

Mizuho Shen: That concludes my remarks. Now we'd like to proceed to the Q&A session. If you have a question, for one raising of the hand, one question is allowed with one follow-up question. If you have a question, please raise your hand. When you are pointed and microphone is provided, please introduce your company affiliation and the name before your question. Goldman Sachs, my name is Munakata. I thank you very much for this opportunity to ask a question. I would like to ask a question regarding the labor market, the macroeconomic conditions, and you said that there is uncertainty, but strong growth is shown in your performance. In terms of labor shortage as well as the disruption caused by AI, what is the outlook of the labor market going forward?

Junichi Arai: That concludes my remarks.

Mizuho Shen: Now we'd like to proceed to the Q&A session. If you have a question, for one raising of the hand, one question is allowed with one follow-up question. If you have a question, please raise your hand. When you are pointed and microphone is provided, please introduce your company affiliation and the name before your question.

Speaker #2: If you have a question, for one question, please raise your hand. One question as well, with one follow-up question. If you have a question, please raise your hand. When you are pointed to, and a microphone is provided, please introduce your company affiliation and your name before your question.

Speaker #2: Your question. Goldman Sachs, my name is Monogata. Thank you very much for this opportunity to ask a question. I would like to ask a question regarding the labor market and the macroeconomic conditions.

Minami Munakata: Goldman Sachs, my name is Munakata. I thank you very much for this opportunity to ask a question. I would like to ask a question regarding the labor market, the macroeconomic conditions, and you said that there is uncertainty, but strong growth is shown in your performance. In terms of labor shortage as well as the disruption caused by AI, what is the outlook of the labor market going forward?

Speaker #2: You mentioned that there is uncertainty, but strong growth is evident in your performance. Regarding labor shortages, as well as the disruption caused by AI, what is the outlook for the labor market going forward?

Hisayuki Idekoba: This is being a subject to discussion in the equity market. The US labor market outlook is what I would like to ask Mr. Idecoba. Thank you. Thank you for the outstanding question. It just so happens that today this morning at the Indeed Hiring Lab, the US labor market outlook report is being published up to 2040. I am participating in Davos. I'm participating in meetings in the US. I have opportunity to speak at various conferences. Some people say that the AI will cause unemployment to reach 20% or 30% as headlines. It will attract more clicks. This is the stronger views. What I am saying is considered to be position talk and not so interesting.

Speaker #2: This is being subject to discussion and the equity market. The US labor market outlook is what I would like to ask Mr. Idakoba. Thank you.

Speaker #2: Thank you for the outstanding question. It just so happens that this morning at the Indeed Hiring Lab, the U.S. Labor Market Outlook report is being published, projecting trends up to 2040.

Speaker #2: I am participating in Davos, I'm participating in meetings in the US, and I have the opportunity to speak at various conferences. Some people say that AI will cause unemployment to reach 20% or 30%, as seen in headlines.

Speaker #2: It will attract more clicks, and this is the stronger view, and what I am saying is considered to be position talk and not so interesting.

Speaker #2: But if you look at the actual data, I'd like to emphasize that by each segment, with AI, changes will be different from segment to segment.

Hisayuki Idekoba: If you look at the actual data, I'd like to emphasize that, by each segment with AI changes, will be different from segment to segment. For example, restaurant is a good case in point. The people working in the restaurant, with the utilization of AI, how is this going to have an impact on the labor as well as the construction, as well electricians, plumbers? There are different professions that we have to consider. Apart from that, people who are working in the area of IT or working in the financial services, the impact will be different from industry to industry. Currently, how many people are working in each sector? We have such a data.

Speaker #2: For example, restaurant is a good case in point. People working in the restaurant, with the utilization of AI—how is this going to happen, impact on the labor as well as the construction, as well as electricians, plumbers? There are different professions that we have to consider.

Speaker #2: But apart from that, people who are working in the area of IT or working in the financial services—the impact will be different from industry to industry.

Speaker #2: So currently, how many people are working in each sector? We have such data, so that means that 20% unemployment—20% unemployment—we have to look at how it is calculated.

Hisayuki Idekoba: Therefore, it means that the 20% unemployment, we have to look at how it is calculated. There is no validating data. It's just being become the narrative of the AI experts. If you look at the IT industry, AI replacement case is presented in the IT industry. If you look into this area specifically, 20% job reduction, or unemployment impact of 20% could occur. What is the ratio of people working in the IT industry within the total labor force? Percentage is very small. In the United States even, there is aging of the labor force more serious than Japan. Having said that, amongst the developed nations, US is a young country, relatively speaking.

Speaker #2: There is no validating data; it's just becoming the narrative of the AI experts. But if you look at the IT industry, AI replacement is presented. In the IT industry, if you look at this area specifically, a 20% job reduction, or an unemployment impact of 20%, could occur. But people working in the IT industry, within the total labor force, percentage is very small.

Speaker #2: In the United States, even there is aging of the labor force more serious than Japan. Having said that, amongst the developed nations, the U.S. is a young country, relatively speaking, but up until 2030 or 2031, even in the United States, the labor force is subject to decline—baby boomers will be retiring at that point in time.

Hisayuki Idekoba: Up until 2030 or 2031, even in the United States, the labor force is subject to decline. Baby boomers will be retiring at that point in time, and people 65 and above. Labor participation is much low in the United States compared to Japan. It's around 18%. In the area of healthcare as well as electricians will be poised to retire. This impact is going to be more significant than the changes brought about by AI. This is proven by data demonstrated in numbers, which is clear to see. For example, I believe there is tailwind. Thank you. I understand I can present a follow-up question. Regarding Simplify Hiring, I would like to ask the following question.

Speaker #2: And people 65 and above, labor participation is much lower in the United States compared to Japan. It's around 18%. And in the area of healthcare, as well as attrition, many will be poised to retire.

Speaker #2: This impact is going to be more significant than the changes brought about by AI; this is proven by data demonstrated in numbers, which is clear to see.

Speaker #2: For example, I believe there is tailwind. Thank you. I understand I can present a follow-up question. Regarding simplifying hiring, I would like to ask the following question.

Minami Munakata: I understand I can present a follow-up question. Regarding Simplify Hiring, I would like to ask the following question. To Simplify Hiring means that the AI technological evolution could become more cumbersome. For example, you will be overwhelmed with the applications. From your point of view, what is the progress made in Simplify Hiring? In order to simplify further, what is lacking? What areas can further be improved, and where lies the business opportunity in this regard?

Hisayuki Idekoba: To Simplify Hiring means that the AI technological evolution could become more cumbersome. For example, you will be overwhelmed with the applications. From your point of view, what is the progress made in Simplify Hiring? In order to simplify further, what is lacking? What areas can further be improved, and where lies the business opportunity in this regard?

Speaker #2: To simplify hiring, it means that AI technological evolution could become more cumbersome. For example, you will be overwhelmed with the applications. From your point of view, what is the progress made in simplifying hiring in order to simplify further?

Speaker #2: What is lacking? What areas can further be improved? And where lies the business opportunity in this regard? Thank you for the outstanding question. For example, in US startups, in many startups, if payment is made on a monthly basis, AI can make application 1,000 times or 2,000 times on the part of AI instead of that person.

Hisayuki Idekoba: Thank you for the outstanding question. For example, in US startups, in many startups, if a payment is made on a monthly basis, AI can make application 1,000 times or 2,000 times, on behalf of that person. It's automatic application that is made available in the United States. The companies do not like this, which is easy to understand. From the point of view of the employer side, if applications come in the thousands or 2,000, this will mean incremental cost. Therefore, on the employer side, a reCAPTCHA, I am not a robot. Bot measures against AI have increasingly come to the fore. Furthermore, even if you like someone, some candidate, they may not come to the interview.

Speaker #2: It's an automatic application that is made available in the United States. But companies do not like this, which is easy to understand from the point of view of the employer side.

Speaker #2: If applications come in the thousands or 2,000, this will mean incremental cost. Therefore, on the employer side, recapture 'I am not a robot'—bot measures against AI have increasingly come to the fore.

Speaker #2: Furthermore, even if you like someone, some candidate, they may not come to the interview. Therefore, automatic applications made by AI are not enhancing efficiency.

Mizuho Shen: Therefore, automatic application made by AI is not enhancing the efficiency. This is a good case in point. On our part, automatic applications are being tested. We are conscious about both sides, not just been paying for an increase in number of applications. We have to identify what is good for the employers, what is good for the users, and providing appropriate matching. We are testing this process. If it's just utilizing AI for automation, it will just make the process more cumbersome.

Speaker #2: This is a good case in point. On our part, automatic applications are being tested. But we are conscious about both sides—not just being paid for increasing number of applications.

Speaker #2: We have to identify what is good for the employers, what is good for the users, and provide appropriate matching. We are testing this process.

Speaker #2: But if it's just utilizing AI for automation, it will just make the process more cumbersome. Thank you very much. Thank you. We will take the next question.

Minami Munakata: Thank you very much.

Mizuho Shen: Thank you. We will take the next question. Third row from the front. I am Omu from Nomura Securities. Thank you for picking me. I have two questions. When hiring demand normalizes, you just mentioned that top line further accelerates. When will that happen? This year, you're expecting -4% in terms of volume, what about next year and the year after that? That's my first question. Thank you. Well, we are looking at various labor data, when it comes to economic data, I think you are the expert. As I said before, supply and demand determines this, basically. As you know, when it comes to hiring demand, it's not as strong. That situation that we are seeing today, and perhaps will continue.

Mizuho Shen: Thank you. We will take the next question. Third row from the front.

Speaker #2: Third row from the front. I am Omu from Nomura Securities. Thank you for picking me. I have two questions. When hiring demand normalizes, you've mentioned that top line further accelerates.

Jiyong Oum: I am Omu from Nomura Securities. Thank you for picking me. I have two questions. When hiring demand normalizes, you just mentioned that top line further accelerates. When will that happen? This year, you're expecting -4% in terms of volume, what about next year and the year after that? That's my first question. Thank you.

Speaker #2: When will that happen? This year, you're expecting minus 4% in terms of volume. So, what about next year and the year after that? So that's my first question.

Speaker #2: Thank you. We are looking at various labor data, but when it comes to economic data, I think you are the expert. But as I said before, supply and demand determines this.

Hisayuki Idekoba: Well, we are looking at various labor data, when it comes to economic data, I think you are the expert. As I said before, supply and demand determines this, basically. As you know, when it comes to hiring demand, it's not as strong. That situation that we are seeing today, and perhaps will continue.

Speaker #2: Basically, as you know, when it comes to hiring, demand is not strong. That is the situation we are seeing today, and perhaps it will continue.

Speaker #2: But looking at the past economic patterns, maybe it's time that demand should start rebounding. More recently, the interesting data that we are looking at is, over the past five years or so, we have seen a continuous decline in hiring of software engineers. But in the US, compared to pre-COVID, it has declined to about 50%.

Hisayuki Idekoba: Looking at the past economic patterns, maybe, it's time that demand should start rebounding. More recently, the interesting data that we are looking at is over the past 5 years or so, we have seen continuous decline in hiring of software engineers. In the US, compared to pre-COVID, it has declined to about 50% and many people say AI is taking jobs away from people, but actually it's increasing in the past 6 months. If you look at the substance of this, AI is actually creating new job titles and new job types that we have not seen before. In that sense, it's not so much AI or the change brought on by AI, but post-COVID.

Speaker #2: And many people say AI is taking jobs away from people, but actually, it's increasing in the past six months. And if you look at the substance of this, AI is actually creating new job titles, new job types that we have not seen before.

Speaker #2: So in that sense, it's not so much AI or the change brought on by AI, but post-COVID, because of the pandemic, many people were fired.

Hisayuki Idekoba: Because of the pandemic, many people were fired, and afterwards, companies started hiring en masse, and now, they've hired too much. That kind of dynamism has somewhat stabilized. Over the next 1 to 2 years, I think the situation will further stabilize. In terms of labor situations, that's what we see. As for the economy, I'll leave that up to the experts. Thank you. My second question is regarding US ARPJ increase by 18%, is what you mentioned. Next year and beyond, how sustainable is this? As was mentioned before, hiring directly relates to revenue.

Speaker #2: And afterwards, companies started hiring en masse. And now they've hired too much. So that kind of dynamism has somewhat destabilized. And over the next one to two years, I think the situation will further stabilize in terms of labor situations.

Speaker #2: That's what we see. But as for the economy, I'll leave that up to the experts. Thank you. My second question is regarding US OPJ.

Jiyong Oum: Thank you. My second question is regarding US ARPJ increase by 18%, is what you mentioned. Next year and beyond, how sustainable is this? As was mentioned before, hiring directly relates to revenue. If that's the case, that you want to hire as soon as possible, I think this kind of story will be valid for next year and beyond, given the demographics change and population aging. Should we expect the same level of increase with the Premium Sponsored Jobs that has contributed to higher results this year?

Speaker #2: An increase by 18% is what you mentioned. So, next year and beyond, how sustainable is this? As was mentioned before, hiring directly relates to revenue.

Speaker #2: So, if that's the case, you want to hire as soon as possible. I think this kind of story will be valid for next year and beyond.

Hisayuki Idekoba: If that's the case, that you want to hire as soon as possible, I think this kind of story will be valid for next year and beyond, given the demographics change and population aging. Should we expect the same level of increase with the Premium Sponsored Jobs that has contributed to higher results this year? Thank you for the wonderful question. Personally, that's certainly an area that I would like to specifically address as well. Of course, if possible, we want to aim for 30% and 40%, but at the same time, we don't want to be caught speeding, because this directly drives costs up for our employer hiring clients, particularly if they're already paying so much.

Speaker #2: And given the demographic change and population aging, should we expect the same level of increase? But with the premium sponsored jobs, this contributed to higher results this year.

Speaker #2: Thank you for the wonderful question. Personally, that's certainly an area that I would like to specifically address as well. Of course, if possible, we want to aim for 30%, 40%.

Hisayuki Idekoba: Thank you for the wonderful question. Personally, that's certainly an area that I would like to specifically address as well. Of course, if possible, we want to aim for 30% and 40%, but at the same time, we don't want to be caught speeding, because this directly drives costs up for our employer hiring clients, particularly if they're already paying so much.

Speaker #2: But at the same time, we don't want to be caught speeding, because this directly drives costs up for our employer-hiring clients, particularly if they're already paying so much—if the budget has to increase by 30%.

Mizuho Shen: If the budget has to increase by 30%, that's something to be considered and be cautious about. As I said before, there are certain costs that are being spent elsewhere, and our clients are diverting this cost to this, JPY 20 million, JPY 30 million being spent. If this amount is to be increased by 20%, that means JPY 600 million, JPY 700 million increase.

Hisayuki Idekoba: If the budget has to increase by 30%, that's something to be considered and be cautious about. As I said before, there are certain costs that are being spent elsewhere, and our clients are diverting this cost to this, JPY 20 million, JPY 30 million being spent. If this amount is to be increased by 20%, that means JPY 600 million, JPY 700 million increase.

Speaker #2: That's something to be considered and to be cautious about. But as I said before, there are certain costs being spent elsewhere, and clients are diverting these costs to this $20 billion, $30 million being spent.

Speaker #2: And if this amount is to be increased by 20%, that means a $600 million or $700 million increase. So I don't think that will be possible as it is.

Hisayuki Idekoba: I don't think that will be possible as is. In conversations with our customers today, especially in the US, the talent acquisition teams, the teams that have to receive the applications, go through the resumes, and decide who to contact and set up interviews. For example, in countries like India and the Philippines, they are increasingly outsourcing these tasks to these countries, and we are seeing an increase in the number of companies that are doing this, and they are diverting budgets from this task to the new area. Structurally, ultimately, employers are able to hire appropriate candidates, and this is reducing their hiring costs, and then we will be able to have nice growth. As I said, we are not pursuing or prioritizing our revenue first.

Speaker #2: So, in conversations with our customers today—especially in the US—the talent acquisition teams, the teams that have to receive the applications, go through the resumes and decide who to contact and set up interviews.

Speaker #2: But, for example, in countries like India and the Philippines, they are increasingly outsourcing these tasks to these countries. And we are seeing an increase in the number of companies that are doing this.

Speaker #2: And they are diverting budgets from this task to the new area. So, structurally, ultimately, employers are able to hire appropriate candidates, and this is reducing their hiring costs.

Speaker #2: And then we will be able to have nice growth. So, as I said, we are not pursuing or prioritizing our revenue first. We want to make sure that our customers are also being successful.

Hisayuki Idekoba: We want to make sure that our customers are also being successful. In that sense, the employers that are currently using Premium Sponsored Jobs and their repeat ratio is higher than regular customers by about 20%, and this is an encouraging fact. They are paying more, they are getting better results. Of course, we have to look at the overall balance as we go along, but we are seeing good results. Thank you. Next question, please. Nikkei Shimbun. My name is Maruyama. In the United States, AI is become the reason for restructuring and losing jobs. We have the Indeed US. As mentioned, the in-person hiring is high.

Speaker #2: So in that sense, the employers that are currently using premium sponsored jobs, and their repeat rate or repeat ratio is higher than regular customers by about 20%.

Speaker #2: And this is an encouraging fact. Because they are paying more, they are getting better results. So, of course, we have to look at the overall balance as we go along.

Speaker #2: But we are seeing good results. Thank you. Next question, please. My name is Mariama. In the United States, AI is becoming the reason for restructuring and losing jobs.

Jiyong Oum: Thank you.

Mizuho Shen: Next question, please.

[Analyst] (Nikkei Shimbun): Nikkei Shimbun. My name is Maruyama. In the United States, AI is become the reason for restructuring and losing jobs. We have the Indeed US. As mentioned, the in-person hiring is high.On the part of Indeed, do you think this is a strength of Indeed, that you are not impacted by AI restructuring?

Speaker #2: But while the Indian U.S., as mentioned, the in-person hiring is high. So, on the part of Indeed, do you think this is a sign for Indeed that you are not impacted by AI restructuring?

Hisayuki Idekoba: On the part of Indeed, do you think this is a strength of Indeed, that you are not impacted by AI restructuring? No, it's, you have to discern whether it's an impression or is it backed up by data as actual facts. Magnificent Seven is often talked about, and they are said to be involved in AI restructuring. In the news, several tens of thousands of people have been laid off. Actually, the number of employees is not really decreasing. What we are often saying is that AI is not a job killer. It is more of a job reorganizer. I'm sure this is also the case in your companies as well. Someone's job to be replaced by AI and this person being laid off is quite rare.

Speaker #2: No, it's—you have to discern whether it's an impression, or if it's backed up by data as actual facts. The Magnificent Seven is often talked about, and they are said to be involved in AI restructuring.

Hisayuki Idekoba: No, it's, you have to discern whether it's an impression or is it backed up by data as actual facts. Magnificent Seven is often talked about, and they are said to be involved in AI restructuring. In the news, several tens of thousands of people have been laid off. Actually, the number of employees is not really decreasing. What we are often saying is that AI is not a job killer. It is more of a job reorganizer. I'm sure this is also the case in your companies as well. Someone's job to be replaced by AI and this person being laid off is quite rare.

Speaker #2: It is in the news that several tens of thousands of people are being laid off. But actually, the number of employees is not really decreasing.

Speaker #2: What we are often seeing is that AI is not a job killer. It is more of a job reorganizer. I'm sure this is also the case in your companies as well.

Speaker #2: Someone's job being replaced by AI, and this person being laid off, is quite rare. This certain process of a certain person can be automated.

Hisayuki Idekoba: This certain process of a certain person can be automated. I think this is more prevalent, especially for IT companies, inclusive of our company. AI is now a part of a workforce, and in this overall context, job allocation must be revisited. This is what is occurring today. For example, a dashboard to view data for looking at charts as well as weekly revenues. We needed dashboards because it is viewed by people, humans. If it can be done by AI, it is no longer necessary. It doesn't have to be displayed. From the beginning to end, the overall process is where value has to be identified, whether it is contributing to increase in revenues. We shouldn't just focus on one certain area for restructuring purpose.

Speaker #2: I think this is more prevalent, especially for IT companies, including our company. AI is now part of the workforce, and in this overall context, job allocation must be revisited.

Speaker #2: This is what is occurring today. For example, a dashboard to view data for looking at charts as well as weekly revenues. We needed dashboards because it is viewed by people, humans, but if it can be done by AI, it is no longer necessary.

Speaker #2: It doesn't have to be displayed. From the beginning to the end, the overall process is where value has to be identified, whether it is contributing to an increase in revenues.

Speaker #2: We shouldn't just focus on one certain area for restructuring purposes. The Magnificent Seven—their employees have not decreased in numbers. So they are restructuring certain areas, but they are also incorporating additional people and redesigning the whole process overall.

Hisayuki Idekoba: Magnificent Seven, their employees have not decreased in numbers, so they are restructuring certain areas, but they are also incorporating additional people, redesigning the whole process overall. I think this is more closer to the truth. I hope I'm making sense. For AI era, as such, that there will be changes in operation with the current Indeed structure. I believe you have unique strength. What is resilient against AI? Do you think that you want to increase jobs that is resilient to AI? It is not so much for us, but Japan is a very good example. There is population decline in Japan, and some people say that the hiring companies will not increase. It all depends on supply and demand, because we have been able to increase revenues.

Speaker #2: I think this is closer to the truth. I hope I'm making sense. But for the AI era, as such, there will be changes in operation with the current Indeed structure.

[Analyst] (Nikkei Shimbun): For AI era, as such, that there will be changes in operation with the current Indeed structure. I believe you have unique strength. What is resilient against AI? Do you think that you want to increase jobs that is resilient to AI?

Speaker #2: Do I believe you have unique strength? And what is resilient against AI? Do you think that you want to increase jobs that are resilient to AI?

Speaker #2: It is not so much for us. But Japan is a very good example. There is population decline in Japan, and some people say that hiring companies will not increase.

Hisayuki Idekoba: It is not so much for us, but Japan is a very good example. There is population decline in Japan, and some people say that the hiring companies will not increase. It all depends on supply and demand, because we have been able to increase revenues.

Speaker #2: It all depends on supply and demand because we have been able to increase revenues. And as I mentioned earlier, for auto mechanics as an example, they were working on combustion engines, they were working on gasoline-powered cars, and if they continue to retire, then there will be no one left to repair the cars.

Hisayuki Idekoba: As I mentioned earlier, for auto mechanics, as an example, and they were working combustion engines, they were working on gasoline-powered cars, and if they continue to retire, then there'll be no one left to repair these cars. Supply and demand, between the two, there is a mismatch. That is the reason why we are being requested on the part of Indeed. It isn't as if we are focused in terms of marketing specifically to that area.

Speaker #2: So, supply and demand—between the two, there is a dispatch. That is the reason why we are being requested on the part of Indeed, and it isn't as if we are focused in terms of marketing specifically to that area.

Speaker #2: Thank you. Next question, second row from the front. I am Nagao from BOB. Thank you for this opportunity. I have two questions. First, regarding margins.

Mizuho Shen: Thank you. Next question, second row from the front. I am Nagao from BofA Securities. Thank you for this opportunity. I have two questions. First, regarding margins, 40% to 50% is possible, as you said, but what is the source of your confidence? Where is it coming from? Do you think you can further increase unit price, or do you think you can improve retention? Are you able to acquire large enterprise customers? What is the background? Thank you for a wonderful question. First of all, I've briefly talked about this, but the sale of AI tools is something we've started over the past year or so. Not maybe particularly because the AI tools that we've introduced, but in case of large companies, the legal departments have to check everything, and through master agreements, everything is determined.

Mizuho Shen: Thank you. Next question, second row from the front.

Yoshitaka Nagao: I am Nagao from BofA Securities. Thank you for this opportunity. I have two questions. First, regarding margins, 40% to 50% is possible, as you said, but what is the source of your confidence? Where is it coming from? Do you think you can further increase unit price, or do you think you can improve retention? Are you able to acquire large enterprise customers? What is the background?

Speaker #2: Forty to fifty percent is possible. As you said, what is the source of your confidence? Where is it coming from? Do you think you can further increase the unit price?

Speaker #2: Do you think you can improve retention? Are you able to acquire large enterprise customers? What is the background? Thank you for a wonderful question.

Hisayuki Idekoba: Thank you for a wonderful question. First of all, I've briefly talked about this, but the sale of AI tools is something we've started over the past year or so. Not maybe particularly because the AI tools that we've introduced, but in case of large companies, the legal departments have to check everything, and through master agreements, everything is determined.

Speaker #2: First of all, I've briefly talked about this, but the sale of AI tools is something we've started over the past year or so. Not maybe particularly because of the AI tools that we've introduced, but in the case of large companies, the legal departments have to check everything, and through master agreements, everything is determined.

Speaker #2: In the US, this is a common practice, and it does take time. But conversely, as I gave an example earlier, in the case of restaurants, for instance, a restaurant may employ 10-some people.

Hisayuki Idekoba: In the US, this is a common practice, and it does take time. Conversely, as I gave an example earlier, in case of restaurants, for instance, a restaurant may employ 10 some people. The accounting person is also doing the hiring, or the manager, the owner is doing the hiring, in many cases. For those people, if the price is increased by JPY 20,000, JPY 30,000, if they can free up the time and do something else, then they are more likely to introduce the service and they will like the service and become repeat customers. This is something we've seen over the years. For SMEs, we provide the service, and we see very nice repeat ratio.

Speaker #2: The accounting person is also doing the hiring, or the manager, the owner is doing the hiring in many cases. So for those people, if the price is increased by ¥20,000 or ¥30,000, if they can free up the time and do something else, then they're more likely to introduce this service—and they will like the service and become repeat customers.

Speaker #2: And this is something we've seen over the years. For SMEs, we provide a service, and if we see a very nice repeat ratio, of course, they recognize that the product is excellent.

Hisayuki Idekoba: Of course, they recognize that the product is excellent, and they have quite a stringent budget. In case of large companies, it does take time, and of course, when it comes to AI, different states have different laws and regulations, so it is a consuming process. We are seeing more acceptance by our clients. As you know, SMEs, when things go south, of course, they may no longer continue with the services. For large companies, usually they sign annual contracts, and this will certainly contribute to our revenue. As you know, sales efficiency is affected in terms of having one sales rep going to customers and signing contracts. The fact that we have a higher ratio of large companies, of course, adds to higher efficiency.

Speaker #2: And they have quite a stringent budget. In the case of large companies, it does take time, and of course, when it comes to AI, different states have different laws and regulations.

Speaker #2: So, it is a time-consuming process. But we are seeing more acceptance by our clients. As you know, SMEs—when things go south, of course, they may no longer continue with the services.

Speaker #2: But for large companies, usually they sign annual contracts, and this will certainly contribute to our revenue. And as you know, sales efficiency is affected in terms of having one sales rep going to customers and signing contracts.

Speaker #2: The fact that we have a higher ratio of large companies, of course, adds to higher efficiency. And internally, there are many areas where AI could be used.

Hisayuki Idekoba: Internally, there are many areas where AI could be used, if we introduce an AI agent in certain tasks, things could improve. This is something I think about every day, from morning to night. This is certainly enhancing our confidence. From a client's perspective, if the ROI exceeds what they're currently paying for, then they will continue with the service, and that's certainly adding to your confidence. Certainly. Perhaps I should not mention this. Please, by all means. Well, actually, for example, let's say a sales manager has sales reps, the manager checks what kind of sales pitches were made or go to customers together with the sales reps and gives advice.

Speaker #2: If we introduce an AI agent in certain tasks, things could improve. So this is something I think about every day from morning to night.

Speaker #2: So, this is certainly enhancing our confidence. So, from a client’s perspective, if the ROI exceeds what they’re currently paying for, then they will continue with the service, and that’s certainly adding to your confidence.

Speaker #2: Certainly, perhaps I should not mention this. Please, please, by all means. Well, actually, for example, let's say a sales manager has a sales rep, and the manager checks what kind of sales pitches were made, or goes to customers together with a sales rep and gives advice.

Hisayuki Idekoba: Nowadays, everything can be recorded, AI can score, and to give you advice as to what pitches should be made. If a sales person, sales reps, with good results, good performance, gather and bring back their data, everything can be checked and extracted. Of course, self service customers can use this in the future. If that is possible, then maybe we can reach 50%. Maybe I'm wrong, but that's what I'm thinking right now. Thank you. Quickly, last question. Looking at your M&A history, when the economy is down, Indeed also was acquired right after the financial crisis. The software valuations are coming down nowadays, perhaps this is the opportune timing for investing. What's your plan for M&As?

Speaker #2: Nowadays, everything can be recorded. AI can score and give you advice as to what pitches should be made. And if a salesperson, a sales rep with good results and good performance, gathers and brings back their data, everything can be checked.

Speaker #2: And extracted. And of course, self-service customers can use this in the future. And if that is possible, then maybe we can reach 50%. Maybe I'm wrong, but that's what I'm thinking right now.

Speaker #2: Thank you. Quickly, last question. Looking at your M&A history—when the economy is down, Indeed also was acquired right after the financial crisis. The software valuations are coming down nowadays.

Yoshitaka Nagao: Quickly, last question. Looking at your M&A history, when the economy is down, Indeed also was acquired right after the financial crisis. The software valuations are coming down nowadays, perhaps this is the opportune timing for investing. What's your plan for M&As?

Speaker #2: And perhaps this is the opportune timing for investing. So what's your plan for M&As? Well, I think investors say whatever they want, in some cases.

Hisayuki Idekoba: Well, I think investors say whatever they want in some cases. Up to several years ago, some of the investors have told us to go ahead and buy, but now, they praise us, they commend us for not making any acquisitions, and that is because the SaaS is coming down, and they commend us for our discipline. Over a thousand unicorns exist, and of course, there are many companies that are struggling, and that is why we are seeing the issue of the private credit. We are in conversation with many companies, but AI is bringing such a significant, dramatic change. A company that's been around for 7, 8, 10 years. A premium is nice, and there are many excellent companies.

Speaker #2: Up to several years ago, some of the investors have told us to go ahead and buy, but now they praise us—they commend us for not making any acquisitions.

Speaker #2: And that is because the SaaS is coming down, and they commend us for our discipline. But over 1,000 unicorns exist, and of course there are many companies that are struggling, and that is why we are seeing the issue of the private credit.

Speaker #2: So we are in conversation with many companies, but AI is bringing such a significant, dramatic change. A company that's been around for seven, eight, ten years.

Speaker #2: The premium is nice, and there are many excellent companies. If we can share the vision and if we are aligned, then certainly we are keen to pursue such opportunities.

Mizuho Shen: If we can share the vision and if we are aligned, then certainly we are keen to pursue such opportunities, perhaps even more so than before. Thank you. Next question, please.

Hisayuki Idekoba: If we can share the vision and if we are aligned, then certainly we are keen to pursue such opportunities, perhaps even more so than before. Thank you.

Speaker #2: Perhaps even more so than before. Thank you. Next question, please. SE Group Securities, my name is Yonishima. I have just one last question. Regarding ARPJAY and the price, as well as a take rate—for ARPJAY, premium service is strong.

Mizuho Shen: Next question, please.

Mizuho Shen: Citigroup Securities. My name is Yonishima. I have just 1 last question regarding ARPJ and the price as well as take rate. For ARPJ, premium service is strong. AI tool is increasing. When you try to grow this business, how can the price be enhanced for premium? Service is higher by 50%, will it stop there? Beyond that, what are ways to increase price? Is there a pricing rate or does it depend on supply and demand, a way you can continue to increase? What about take rate? After you started the internet service, 1% and below has continued for more than 10 years, in fact. How much progress have you made? Do you think it is possible to exceed 1%?

Keiichi Yoneshima: Citigroup Securities. My name is Yonishima. I have just 1 last question regarding ARPJ and the price as well as take rate. For ARPJ, premium service is strong. AI tool is increasing. When you try to grow this business, how can the price be enhanced for premium? Service is higher by 50%, will it stop there? Beyond that, what are ways to increase price? Is there a pricing rate or does it depend on supply and demand, a way you can continue to increase? What about take rate? After you started the internet service, 1% and below has continued for more than 10 years, in fact. How much progress have you made? Do you think it is possible to exceed 1%?

Speaker #2: AI tool usage is increasing. When you try to grow this business, how can the price for premium services be enhanced by 50%? But will it stop there?

Speaker #2: Beyond that, what are ways to increase price? Is there a pricing rate, or does it depend on supply and demand, where you can continue to increase?

Speaker #2: And what about the take rate? After you started the Indeed service, 1% and below has continued for more than 10 years, in fact. So, how much progress has been made?

Speaker #2: Do you think it is possible to exceed 1%? It's very low. Is it not going to be exceeded in the next 10 years or 20 years down the road?

Hisayuki Idekoba: It's very low. Is it not going to be exceeded in the 10 years or 20 years down the road? I don't really understand what is going to happen. Please clarify. Thank you. I talked about the Premium Sponsored Jobs previously. In terms of increasing price, I mentioned something similar. On the part of customers, if they can hire in 2 or 3 weeks, let's say, and we see a number of clients increase in this area, I think that there is more room to increase the price. It all boils down to supply and demand. The number of hiring is not changing. In the past, they could have been hiring and taking 2 months with a certain cost.

Keiichi Yoneshima: It's very low. Is it not going to be exceeded in the 10 years or 20 years down the road? I don't really understand what is going to happen. Please clarify. Thank you.

Speaker #2: I don't really understand what is going to happen. Please clarify. Thank you. Now, I talked about the premium sponsored jobs previously. Now, in terms of increasing price, I mentioned something similar.

Hisayuki Idekoba: I talked about the Premium Sponsored Jobs previously. In terms of increasing price, I mentioned something similar. On the part of customers, if they can hire in 2 or 3 weeks, let's say, and we see a number of clients increase in this area, I think that there is more room to increase the price. It all boils down to supply and demand. The number of hiring is not changing. In the past, they could have been hiring and taking 2 months with a certain cost.

Speaker #2: On the part of customers, if they can hire in two or three weeks, let’s say, and we see a number of clients increase in this area, I think there is more room to increase the price.

Speaker #2: It all boils down to supply and demand. The number of hirings is not changing. In the past, there could have been hiring that took two months.

Speaker #2: With a certain cost, if we have a market share of 80% or 90%, then there is not room for growth. But in many of the customers, they are utilizing other offline tools or requesting supports.

Hisayuki Idekoba: If we have market share of 80%, 90%, then there is not room for growth. In many of the customers, they're utilizing other offline tools or requesting support. Therefore, we are able to capture this pie. I think that is very important for SMEs. They often have teams involved in the work process. For example, recently, a major company, globally or in the United States, was sitting next to me at dinner. I found out using AI, how many applications sent, 3.5 million have been sent to this company. I asked the president, 3.5 million applications made. If it takes 3 minutes to check the resume, then it's tremendous time. There are AI screening tools that can be utilized.

Speaker #2: Therefore, we are able to capture this pie. I think that is very important for SMEs there. They often have teams involved in the work process.

Speaker #2: For example, recently, a major company globally, or in the United States, was sitting next to me at dinner. And I found out, using AI, how many applications were sent.

Speaker #2: 3.5 million have been sent to this company. And I asked the president, 3.5 million applications made. If it takes three minutes to check the resume, then it's tremendous time.

Speaker #2: There are AI screening tools that can be utilized, for example, reducing that to one-half or one-third. Would you want such a service?

Hisayuki Idekoba: For example, reducing that to 1 half or 1 third, would you want such a service? He was interested, he was eager to discuss immediately. It isn't as if it's a matter of raising price or not. That is the reason why I have more confidence going forward. In terms of progress regarding 1%, the number of people hired is increasing as well, so denominator is also becoming large. It's very difficult to respond. I can see that it is increasing. Do we capture the overall? Do we also take into consideration the free job or the Sponsored Job only? That will have an impact on the calculation. We have to look at that in detail.

Speaker #2: And he was interested. He was eager to discuss. Immediately saw it—it isn't as if it's a matter of raising price or not. That is the reason why I have more confidence going forward.

Speaker #2: And in terms of progress, regarding 1%, the number of people hired is increasing as well. So the denominator is also becoming large, so it's very difficult to respond.

Speaker #2: But I can say that it is increasing. Do we capture the overall? Do we also take into consideration the free job or the sponsored job only?

Speaker #2: That will have an impact on the calculation. We have to look at that in detail. As I mentioned earlier, for the customers that are willing to have serious intentions of hiring and willing to pay, this is where we want to provide more support.

Hisayuki Idekoba: As I mentioned earlier, for the customers that are willing to have a serious intention of hiring and willing to pay, this is where we want to provide more support. This is the structured matching service. Is the take rate of that platform or is it the take rate for the customers that are eager to hire? This will also have a bearing as well. We will try to disclose better information going forward. Thank you very much. Thank you. Next question will be the last question. Person sitting in the front row, please.

Speaker #2: This is the structure, the matching service. So, is the take rate of that platform, or is it the take rate for the customers that are eager to hire?

Speaker #2: This will also have a bearing as well. So we will try to disclose better information going forward. Thank you very much. Thank you. Next question will be the last question.

Mizuho Shen: Thank you. Next question will be the last question. Person sitting in the front row, please.

Speaker #2: Person sitting in the front row, please. Thank you for the presentation, and thank you for picking me. I'm Ima Mura of JP Morgan Securities.

Mizuho Shen: Thank you for the presentation, and thank you for picking me. I'm Imamura of J.P. Morgan Securities. We already passed the allotted time, but I would like to ask two questions. The first one is something that's repeatedly been mentioned. The potential of large business clients. If it's simply the number times unit price, there will be a ceiling at some time in the future. Maybe that's being discussed. Including the possibilities of monetization in new forms. In any case, we do have expectations for more large clients. On the other hand, your sales style has been very much supporting the SMEs, and the quality of sales necessary to go after large companies may be different.

Junko Yamamura: Thank you for the presentation, and thank you for picking me. I'm Imamura of J.P. Morgan Securities. We already passed the allotted time, but I would like to ask two questions. The first one is something that's repeatedly been mentioned. The potential of large business clients. If it's simply the number times unit price, there will be a ceiling at some time in the future.

Speaker #2: We already passed the allotted time, but I would like to ask two questions. The first one is something that’s repeatedly been mentioned: the potential of large business clients if it’s simply the number times unit price.

Speaker #2: There will be a ceiling at some time in the future. Maybe that's being discussed. So, including the possibilities of monetization in new forms, in any case, we do have expectations for more large clients.

Junko Yamamura: Maybe that's being discussed. Including the possibilities of monetization in new forms. In any case, we do have expectations for more large clients. On the other hand, your sales style has been very much supporting the SMEs, and the quality of sales necessary to go after large companies may be different. Where you excel, where you have strengths, large clients, matched with the strengths that you currently have.

Speaker #2: But on the other hand, your sales style has been very much supporting the SMEs, and the quality of sales necessary to go after large companies may be different.

Speaker #2: So, where you excel, where you have strengths, large clients matched with the strengths that you currently have. Thank you for the wonderful question. It seems like I'm asked questions by internal persons.

Hisayuki Idekoba: Where you excel, where you have strengths, large clients, matched with the strengths that you currently have. Thank you for the wonderful question. It seems like ask questions by internal persons. That's an excellent question, particularly when it comes to Indeed. Well, I know Recruit, so compared to the Japanese Recruit, sales to large clients is where we are somewhat weak. That's an understanding we have. When I became Indeed CEO last June, I started to work on rebuilding and to position us as a strategic partner to our business clients rather than being transactional in the partnership. We wanted to be a strategic partner, and we've made significant investments, and we've introduced change to the teams.

Hisayuki Idekoba: Thank you for the wonderful question. It seems like ask questions by internal persons. That's an excellent question, particularly when it comes to Indeed. Well, I know Recruit, so compared to the Japanese Recruit, sales to large clients is where we are somewhat weak. That's an understanding we have. When I became Indeed CEO last June, I started to work on rebuilding and to position us as a strategic partner to our business clients rather than being transactional in the partnership. We wanted to be a strategic partner, and we've made significant investments, and we've introduced change to the teams.

Speaker #2: That's an excellent question, particularly when it comes to Indeed. Well, I know Recruit, so compared to the Japanese Recruit, sales to large clients is where we are somewhat weak.

Speaker #2: So that's an understanding we have. And when I became Indeed CEO last June, I started to work on rebuilding and to position us as a strategic partner to our business clients.

Speaker #2: Rather than being transactional in the partnership, we wanted to be a strategic partner. And we've made significant investments, and we've introduced change to the teams.

Speaker #2: So, we've implemented various measures, but looking at the current state, the newly developed AI tools are being quite effective. What I'm trying to say is, how are we going to present to clients the ROI?

Hisayuki Idekoba: We've implemented various measures, but looking at the current state, the newly developed AI tools are being quite effective. What I'm trying to say is that how are we going to present to clients the ROI? That's where we were weak in the past. I think we will be able to present this soon. We've already developed the various parts, but when we bring this to clients, how should the sales pitches go? When you ask the AI, everything will be given as advice from the AI. That's the kind of AI tool that we are developing, and that's where we see further potential for growth. I hope that answers your question. Yes. Thank you. This is my second question. You mentioned earlier the job postings market condition.

Speaker #2: That's where we were weak in the past. I think we will be able to present this soon. We've already developed the various parts, but when we bring this to clients, how should the sales pitches go?

Speaker #2: And when you ask the AI, everything will be given as advice from the AI. So that's the kind of AI tool that we are developing.

Speaker #2: And that's where we see further potential for growth. I hope that answers your question. Yes, thank you. And this is my second question. You mentioned earlier the job postings, market condition.

Junko Yamamura: Yes. Thank you. This is my second question. You mentioned earlier the job postings market condition.It is true that the IT professionals account for a small percentage, and the shortage of labor basically exceeds that, so the impact is small, as you said. Suddenly market participants are gaining this medium to long-term perspective. If the negative becomes even bigger, then of course, they start to have this concern for Recruit. Hypothetically speaking, if in the future IT related professionals are laid off, I think personally this will happen.

Speaker #2: It is true that the IT professionals are going for a small percentage. And the shortage of labor basically exceeds that. So the impact is small, as you said.

Mizuho Shen: It is true that the IT professionals account for a small percentage, and the shortage of labor basically exceeds that, so the impact is small, as you said. Suddenly market participants are gaining this medium to long-term perspective. If the negative becomes even bigger, then of course, they start to have this concern for Recruit. Hypothetically speaking, if in the future IT related professionals are laid off, I think personally this will happen. Even after they are laid off, they will not become homeless and live on the streets. Rather, I think optimization will take place in the overall market. There will be more mobility of people than for people switching jobs, pursuing different careers. This is not all negative.

Speaker #2: And certainly, market participants are gaining this medium- to long-term perspective. So if the negative becomes even bigger, then, of course, they start to have this concern for Recruit.

Speaker #2: So, hypothetically speaking, if in the future IT-related professionals are laid off—I personally think this will happen—even after they are laid off, they will not become homeless and live on the streets.

Junko Yamamura: Even after they are laid off, they will not become homeless and live on the streets. Rather, I think optimization will take place in the overall market. There will be more mobility of people than for people switching jobs, pursuing different careers. This is not all negative. I think in companies, they have a variety of talents and they want to focus more on the quality. I think both of these will be effective when it comes to Recruit's business, and that's reflected in the results that you've just presented. That's my view. What's your take?

Speaker #2: Rather, I think optimization will take place in the overall market. There will be more mobility of people. Then, for people switching jobs or pursuing different careers, this is not all negative.

Speaker #2: And I think in companies, they have a variety of talents, and they want to focus more on the quality. So, I think both of these will be effective when it comes to recruit business.

Hisayuki Idekoba: I think in companies, they have a variety of talents and they want to focus more on the quality. I think both of these will be effective when it comes to Recruit's business, and that's reflected in the results that you've just presented. That's my view. What's your take? Well, I would like to talk not based on impression, but on data. Certainly, Indeed Hiring Lab, the research data that we've published today, looking at this data, you will see which sector has which age group of professionals working. As you can imagine, it's not that we have more of sixties and above working in the IT sector. Where are they working?

Speaker #2: And that's reflected in the results that you've just presented. That's my view. What's your take? Well, I would like to talk not based on impression, but on data.

Hisayuki Idekoba: Well, I would like to talk not based on impression, but on data. Certainly, Indeed Hiring Lab, the research data that we've published today, looking at this data, you will see which sector has which age group of professionals working. As you can imagine, it's not that we have more of sixties and above working in the IT sector. Where are they working?

Speaker #2: So certainly, Indeed Hiring Lab, the research data that we've published today—looking at this data, you will see which sector has which age group of professionals working. And as you can imagine, it's not that we have more of the 60s and above working in the IT sector.

Speaker #2: So, where are they working? Maybe as mechanics, in auto repair shops, in the healthcare sector as well. We have more of 60s and above.

Hisayuki Idekoba: Maybe as mechanics in auto repair shops and in the healthcare sector as well, we have more of 60s and above. What if they leave? What if they quit? If we start thinking about this, the story is not as you described. It's not simply AI replacing people as a whole. I think we need to look in more depth. Also, this is not something that is obvious today, but over the past several months, labor participation rate in the US is declining, and this is a rare situation. One thing, and this is only a hypothesis, I'm not sure whether this is true or not, but one thing is that people with not so high salaries, if they are laid off and they cannot find a job, they'll be in trouble.

Speaker #2: So, what if they leave? What if they quit? So, if we start thinking about this, the story is not, as you described, it's not simply AI replacing people as a whole.

Speaker #2: I think we need to look in more depth. And also, this is not something that is obvious today, but over the past several months, the labor participation rate in the US is declining.

Speaker #2: And this is a rare situation. One thing, and this is only a hypothesis—I'm not sure whether this is true or not—but one thing is that people with not-so-high salaries, if they are laid off and they cannot find a job, they'll be in trouble.

Speaker #2: But if it's an IT professional or other professionals, even when they are laid off, they can spend the next one year until they find the next job.

Hisayuki Idekoba: If it's an IT professional or other professionals, even when they are laid off, they can spend the next one year until they find the next job. I don't know where exactly this labor participation rate is declining, but the overall rate is declining, and this is also contributing to a lower unemployment. The denominator, in other words, job seekers are decreasing in number. The economy is not doing so great, and we should not be seeing this kind of trend. This is a very strange trend we are seeing. I'm sure the US government needs to look into this more. If we specifically talk about the past five years, this morning, the data published by the Hiring Lab, I think, is more accurate.

Speaker #2: So I don't know where exactly this labor participation rate is declining. But overall, the rate is declining. And this is also contributing to a lower unemployment.

Speaker #2: But the denominator—in other words, job seekers—are decreasing in number. So the economy is not doing so great, and we should not be seeing this kind of trend.

Speaker #2: This is a very strange trend we are seeing. I'm sure the US government needs to look into this more. But if we specifically talk about the past five years, this morning, the data published by the Hiring Lab, I think, is more accurate.

Speaker #2: In other words, realistically, a truck driver, construction workers, and also the immigration policy that's at play here—the policy is becoming more stringent. That's affecting the overall numbers.

Hisayuki Idekoba: In other words, realistically, truck drivers, construction workers, and also the immigration policy that's at play here, the policy becoming more stringent, that's affecting the overall numbers. There are certain sectors with many immigrants working, and then they include healthcare, for example. Looking at these factors, unless that is the case, we should not seeing this strong results, or there isn't really a relationship. I hope that I answered your question. I will try to put that in the report. Let me think some more about this. Thank you. I apologize for going over the scheduled time, but we would like to conclude the earnings call.

Speaker #2: There are certain sectors with many immigrants working, and they include healthcare, for example. So, looking at these factors, unless that is the case, we should not see these strong results or there isn't really a relationship.

Speaker #2: I hope I answered your question. I will try to put that in the report. Let me think some more about this. Thank you. I apologize for going over the scheduled time.

Junko Yamamura: Thank you.

Hisayuki Idekoba: I apologize for going over the scheduled time, but we would like to conclude the earnings call.