Q1 2026 Recruit Holdings Co Ltd Earnings Call

Junichi Arai: 2026 Q1 earnings call. This call is a simultaneous translation of the original call in Japanese, and translation is provided for the convenience of investors only. 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 will be posted on our IR website after the session. As announced on our website two days ago, Envolys, an independent research firm, will publish a flash report on this earnings call. Please refer to it as well. Today's presenters are Hisayuki Idekoba, Representative Director, President, and CEO, and Junichi Arai, Executive Vice President and Chief Financial Officer. In the first 30 minutes, Deko and Jun will provide a presentation followed by a Q&A session. Now I'll turn the call over to Deko. Hello, I am Deko of Recruit Holdings.

Speaker #1: This call is a simultaneous translation of the original call in Japanese, and the translation is provided for the convenience of investors only.

Speaker #1: Earlier at 3:30 p.m., 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 will be posted on our IR website after the session.

Speaker #1: As announced on our website two days ago, Envelis, an independent research firm, will publish a flash report on this earnings call. Please refer to it as well.

Speaker #1: Today's presenters are Hisayuki Idekawa, Representative Director, President, and CEO, and Junichi Arai, Executive Vice President and Chief Financial Officer. In the first 30 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. Hello. I am Deko of Recruit Holdings. Today I am pleased to share our Q1 FY2026 results and to raise our full-year consolidated guidance.

Hisayuki Idekoba: Today, I am pleased to share our Q1 FY 2026 results and to raise our full-year consolidated guidance. HR Technology delivered a strong Q1 performance, with US revenue increasing 30% year-over-year. Based on this momentum, as of today, we are raising our full-year HR Technology revenue outlook to up 18.7% year-over-year globally and up 25.1% year-over-year for the US. As you all know, truly AI is evolving at such an incredible pace almost every single week. Many of you are probably noticing how AI agents are rapidly taking off as automation tools across so many industries. We ourselves genuinely feel it, that we've finally entered a whole new phase where our AI automation tools are boosting productivity for HR teams worldwide, teams that have historically been bogged down by time-consuming manual work.

Speaker #1: HR Technology delivered a strong Q1 performance, with U.S. revenue increasing 30% year over year. Based on this momentum, as of today, we are raising our full-year HR Technology revenue outlook to up 18.7% year over year globally and up 25.1% year over year for the U.S.

Speaker #1: As you all know, truly, AI is evolving at such an incredible pace—almost every single week. And many of you are probably noticing how AI agents are rapidly taking off as automation tools across so many industries.

Speaker #1: We ourselves genuinely feel it—that we've finally entered a whole new phase where our AI automation tools are boosting productivity for HR teams worldwide, teams that have historically been bogged down by time-consuming manual work.

Hisayuki Idekoba: First, let me walk you through why our Q1 performance came in stronger than expected, even in a market environment where US hiring demand remains down year-over-year. Continuing previous trends, our revenue from small and medium businesses was very strong in Q1. For lean SMBs, having an open role stay unfilled for too long can literally be a matter of life or death for their businesses. By adopting our AI products, their time-consuming manual tasks get automated, dramatically shortening their time to hire. In this environment, many of these clients prioritize hiring speed over cost. As a result, growth in both the number of SMB clients and spend per client drove our overall top-line expansion. On top of that, what we are seeing now is revenue growth from large enterprise clients becoming more pronounced. Enterprise clients typically take longer to onboard.

Speaker #1: First, let me walk you through why our Q1 performance came in stronger than expected, even in a market environment where U.S. hiring demand remains down year over year.

Speaker #1: Continuing the previous trends, our revenue from small and medium businesses was very strong in Q1, especially for lean SMBs. Having an open role stay unfilled for too long can literally be a matter of life or death for their businesses.

Speaker #1: By adopting our AI products, their time-consuming manual tasks get automated, dramatically shortening their time to hire. In this environment, many of these clients prioritize hiring speed over cost.

Speaker #1: As a result, growth in both the number of SMB clients and spend per client drove our overall top-line expansion. On top of that, what we are seeing now is that revenue growth from large enterprise clients is becoming more pronounced.

Speaker #1: Enterprise clients typically take longer to onboard. Decision-making for budget adjustments takes time, and legal reviews, especially when it comes to AI products, can be quite time-consuming.

Hisayuki Idekoba: Decision-making for budget adjustments takes time. Legal reviews, especially when it comes to AI products, can be quite time-consuming. Even so, in Q1, many larger customers were willing to trial our AI products. For instance, one healthcare client tested how much AI automation could boost their recruiters' productivity, and they concluded that our AI products helped them significantly reduce time spent on screening candidates, delivering output equivalent to several full-time recruiters. Hearing feedback like that is very rewarding. The reality is that many large enterprises employ dozens, sometimes even hundreds of recruiters, incurring massive costs from manual processes. By enabling clients to dramatically boost their productivity by adopting our AI products, we believe we have a major source of growth ahead of us.

Speaker #1: Even so, in Q1, many larger customers were willing to trial our AI products. For instance, one healthcare client tested how much AI automation could boost their recruiters' productivity, and they concluded that our AI products helped them significantly reduce time spent screening candidates—delivering output equivalent to several full-time recruiters.

Speaker #1: Hearing feedback like that is very rewarding. The reality is that many large enterprises employ dozens, sometimes even hundreds, of recruiters, incurring massive costs from manual processes.

Speaker #1: By enabling clients to dramatically boost their productivity by adopting our AI products, we believe we have a major source of growth ahead of us.

Speaker #1: So, when you look at our recent revenue growth, it's really the result of two key drivers working in tandem: higher spend per client, driven by the added value our AI delivers, and a growing number of clients using our products.

Hisayuki Idekoba: When you look at our recent revenue growth, it's really the result of two key drivers working in tandem: higher spend per client, driven by the added value our AI delivers, and a growing number of clients using our products. Using AI automation tools to boost the productivity of HR teams around the world burdened with manual work isn't just a win for employers. It is a huge plus for job seekers, too. By automating processes that previously required time-consuming manual work, job seekers are now experiencing firsthand that using Indeed means faster responses from employers, earlier access to first interviews, and ultimately finding a job sooner. That is precisely why more people than ever are engaging our platform. At the end of the day, getting people hired faster through AI automation creates a win for everyone, and we believe that's what matters most.

Speaker #1: Using AI automation tools to boost the productivity of HR teams around the world, burdened with manual work, isn't just a win for employers. It is a huge plus for job seekers, too.

Speaker #1: By automating processes that previously required time-consuming manual work, job seekers are now experiencing firsthand that using Indeed means faster responses from employers, earlier access to first interviews, and ultimately finding a job sooner.

Speaker #1: And that is precisely why more people than ever are engaging with our platform. At the end of the day, getting people hired faster through AI automation creates a win for everyone, and we believe that's what matters most.

Speaker #1: At the same time, it's also true that average spend per client has risen rapidly over a short period. To protect our sustainable long-term growth, we will continue to monitor client satisfaction very closely.

Hisayuki Idekoba: At the same time, it's also true that average spend per client has risen rapidly over a short period. To protect our sustainable long-term growth, we will continue to monitor client satisfaction very closely. The incredible pace of AI evolution is amazing, rapid change naturally brings wider implications. As such, we intend to carefully gauge the pace at which our customers and society are adapting and navigate this with both caution and flexibility. Our ability to leverage AI to raise customer productivity is advancing faster than anticipated, which is welcoming, to be honest, makes precise forecasting genuinely challenging. Today's updated guidance represents our estimate based on what we can see as of today. As the picture becomes clearer over time, we will share our latest progress with you every quarter. That concludes my remarks for today.

Speaker #1: The incredible pace of AI evolution is amazing. But rapid change naturally brings wider implications. As such, we intend to carefully gauge the pace at which our customers and society are adapting, and navigate this with both caution and flexibility.

Speaker #1: Our ability to leverage AI to raise customer productivity is advancing faster than anticipated, which is welcome. But to be honest, it does make precise forecasting genuinely challenging.

Speaker #1: Today's updated guidance represents our estimate based on what we can see as of today. As the picture becomes clearer over time, we will share our latest progress with you every quarter.

Speaker #1: That concludes my remarks for today. I will now turn it over to our CFO, Arai, to walk you through the detailed numbers Arai sent over to you.

Hisayuki Idekoba: I will now turn it over to our CFO, Arai, to walk you through the detailed numbers. Arai-san, over to you. This is Arai speaking. Today, I will be using the slides to focus on our upward revision to the FY 2026 full-year consolidated guidance. First, our consolidated results for Q1 FY 2026. Revenue, EBITDA+S, and basic EPS each substantially exceeded our initial expectations and reached record highs. Revenue increased 18.9% year over year to JPY 1.04 trillion. EBITDA+S increased 56.5% year over year to JPY 292.8 billion, and EBITDA+S margin was 28.0%. Basic EPS was JPY 145.48, up 73.2% year over year. As of the end of July, we have repurchased 12.5 million shares for JPY 120 billion under the ongoing JPY 350.0 billion share repurchase program, representing 34.3% of the total program. Gross cash and cash equivalents were JPY 908.5 billion at the end of June.

Speaker #1: This is Arai speaking. Today I will be using the slides to focus on our upward revision to the FY2026 four-year consolidated guidance. First, our consolidated results for Q1 FY2026.

Speaker #1: Revenue, EBITDA, SGA, and basic EPS each substantially exceeded our initial expectations and reached record highs. Revenue increased 18.9% year over year to ¥1.04 trillion.

Speaker #1: EBITDA plus S increased 56.5% year over year to 292.8 billion yen, and EBITDA plus S margin was 28.0%. Basic EPS was 145.48 yen, up 73.2% year over year.

Speaker #1: As of the end of July, we had repurchased 12.5 million shares for ¥120 billion under the ongoing ¥350.0 billion share repurchase program, representing 34.3% of the total program.

Speaker #1: Gross cash and cash equivalents were ¥908.5 billion at the end of June. Based on these Q1 results and the latest outlook for each segment, we have revised upward the FY2026 four-year consolidated guidance disclosed in May.

Hisayuki Idekoba: Based on these Q1 results and the latest outlook for each segment, we have revised upward the FY 2026 full-year consolidated guidance disclosed in May. This revision is mainly driven by HR Technology, where Q1 results significantly exceeded our initial expectations, and we expect this trend to continue from Q2 onward. We assume an exchange rate of JPY 159.0 per US dollar for FY 2026. We now expect consolidated revenue to increase 14.4% year over year to JPY 4.23 trillion, compared with our initial guidance of JPY 4.03 trillion. We expect EBITDA+S to increase 39.1% year over year to JPY 1.105 trillion, surpassing the JPY 1 trillion mark for the first time, compared with our initial guidance of JPY 949 billion. We have revised the EBITDA+S margin from 23.5% to 26.1%.

Speaker #1: This revision is mainly driven by HR technology, where Q1 results significantly exceeded our initial expectations, and we expect this trend to continue from Q2 onward.

Speaker #1: We assume an exchange rate of ¥159.0 per US dollar for FY 2026. We now expect consolidated revenue to increase 14.4% year over year to ¥4.23 trillion, compared with our initial guidance of ¥4.03 trillion.

Speaker #1: We expect EBITDA plus S to increase 39.1% year over year to ¥1.105 trillion, surpassing the ¥1 trillion mark for the first time, compared with our initial guidance of ¥949 billion.

Speaker #1: We have revised EBITDA plus S margin from 23.5% to 26.1%. We have also revised the basic EPS upward from 447 yen to 543 yen, an increase of 55.2% year over year.

Hisayuki Idekoba: We have also revised the basic EPS upward from JPY 447 to JPY 543, an increase of 55.2% year-over-year. This reflects the upward revision to net income from our initial guidance of JPY 623.0 billion to JPY 755.0 billion, an increase of 51.9% year-over-year, as well as the number of shares repurchased from April through the end of July 2026. Staffing in Japan was subject to an on-site inspection by the Japan Fair Trade Commission in June 2026 in connection with suspected violations of the Antimonopoly Act. As we are currently cooperating with the inspection, it is difficult to reasonably estimate the financial impact at this time. Accordingly, this guidance does not reflect any such impact. Of our three business segments, HR Technology continues to drive our growth and remains the core of our consolidated financial performance.

Speaker #1: This reflects the upward revision to net income from our initial guidance of ¥623.0 billion to ¥755.0 billion, an increase of 51.9% year over year, as well as the number of shares repurchased from April through the end of July 2026.

Speaker #1: Staffing in Japan was subject to an on-site inspection by the Japan Fair Trade Commission in June 2026 in connection with suspected violations of the Anti-Monopoly Act.

Speaker #1: As we are currently cooperating with the inspection, it is difficult to reasonably estimate the financial impact at this time. Accordingly, this guidance does not reflect any such segments. HR technology continues to drive our growth and remains the core of our consolidated financial performance.

Speaker #1: The segment will account for approximately 43% of revenue and approximately 75% of EBITDA plus S. I will now discuss the four-year outlook for HR Technology.

Hisayuki Idekoba: The segment will account for approximately 43% of revenue and approximately 75% of EBITDA+S. I will now discuss the full-year outlook for HR Technology. We now expect segment revenue on a US dollar basis to increase 18.7% year-over-year to $11.4 billion, above our initial outlook of 11% growth. On a Japanese yen basis, we have revised our outlook from growth of 13.4% year-over-year to growth of 24.9% year-over-year or JPY 1.82 trillion. By continuing to focus on revenue growth and disciplined business management, we have revised the segment EBITDA+S margin outlook from 41.0% to 45.8%. Looking at the segment revenue outlook by region, the $615 million increase in the US was a key factor behind the substantial upward revisions to both the segment outlook and consolidated guidance.

Speaker #1: We now expect segment revenue on a US dollar basis to increase 18.7% year over year to $11.4 billion, above our initial outlook of 11% growth.

Speaker #1: On a Japanese yen basis, we have revised our outlook from growth of 13.4% year over year to growth of 24.9% year over year, or ¥1.82 trillion.

Speaker #1: By continuing to focus on revenue growth and disciplined business management, we have revised the segment EBITDA plus S margin outlook from 41.0% to 45.8%.

Speaker #1: Looking at the segment revenue outlook by region, the $615 million increase in the U.S. was a key factor behind the substantial upward revisions to both the segment outlook and consolidated guidance.

Speaker #1: For the US, which is expected to account for 58% of segment revenue, we have upwardly revised our year-over-year revenue growth outlook from 13.6% to 25.1%, reaching $6.6 billion.

Hisayuki Idekoba: For the US, which is expected to count for 58% of segment revenue, we have upwardly revised our year-over-year revenue growth outlook from 13.6% to 25.1%, reaching $6.6 billion. For Europe and others, we have revised our year-over-year revenue growth outlook from 17.1% to 23.2%, reaching $2.5 billion. For Japan, we have revised our initial outlook up by JPY 11.5 billion, from growth of 2.1% year-over-year to growth of 5.4% year-over-year, or JPY 367.0 billion. On a US dollar basis, we expect revenue to be virtually flat year-over-year at $2.3 billion. I will provide further details later. Now on to Q1 segment results. As stated at the outset, Q1 results substantially exceeded our initial outlook. Revenue on a US dollar basis increased 20.9% year-over-year to $2.8 billion. On a Japanese yen basis, revenue increased 33.2% year-over-year to JPY 455.4 billion.

Speaker #1: For Europe and others, we have revised our year over year revenue growth outlook from 17.1% to 23.2%, reaching 2.5 billion US dollars. For Japan, we have revised our initial outlook up by 11.5 billion yen from growth of 2.1% year over year to growth of 5.4% year over year, or 367.0 billion yen.

Speaker #1: On a US dollar basis, we expect revenue to be virtually flat year over year at $2.3 billion. I will provide further details later.

Speaker #1: Now, on to Q1 segment results. As stated at the outset, Q1 results substantially exceeded our initial outlook. Revenue on a U.S. dollar basis increased 20.9% year over year to $2.8 billion.

Speaker #1: On a Japanese yen basis, revenue increased 33.2% year over year to ¥455.4 billion. Segment EBITDA plus S margin increased significantly to 47.4%, driven by strong revenue growth and continued discipline in cost management.

Hisayuki Idekoba: Segment EBITDA+S margin increased significantly to 47.4%, driven by strong revenue growth and continued discipline in cost management. Employee benefit expenses, including share-based payment expenses, together with outsourcing expenses, which represent broadly defined personnel expenses, were approximately 37% of revenue, down significantly from approximately 48% in Q1 FY 2025. While AI-related compute and infrastructure expenses are growing and reflect our expanded capabilities, they remain a small portion of our cost base and are not yet a material factor in our margin profile. We will continue managing them with a clear focus on return on investment. I will next discuss the results by region, starting with the US, followed by Europe and others, and Japan. Before discussing the US results and outlook, I will again explain the definition of the US RPJ growth rate, which we began disclosing with our Q2 FY 2025 results.

Speaker #1: Employee benefit expenses, including share-based payment expenses, together with outsourcing expenses—which represent broadly defined personnel expenses—were approximately 37% of revenue, down significantly from approximately 48% in Q1 FY2025.

Speaker #1: While AI-related compute and infrastructure expenses are growing and reflect our expanded capabilities, they remain a small portion of our cost base and are not yet a material factor in our margin profile.

Speaker #1: We will continue managing them with a clear focus on return on investment. I will next discuss the results by region, starting with the U.S., followed by Europe and others, and Japan.

Speaker #1: Before discussing the U.S. results and outlook, I will again explain the definition of the U.S. OpJ growth rate, which we began disclosing with our Q2 FY2025 results.

Speaker #1: The US OpJ growth rate is the year-over-year rate of change in average revenue per job posting on Indeed, which we disclose at each quarterly earnings announcement to demonstrate how our monetization progress is on track, driven by the expansion of higher-value features and packages—even as business clients' hiring demand and activity fluctuate due to macroeconomic and other factors.

Hisayuki Idekoba: The US OPJ growth rate is the year-over-year rate of change in average revenue per job posting on Indeed, which we disclose each quarterly earnings announcement to demonstrate how our monetization progress is on track, driven by the expansion of higher value features and packages, even as business clients' hiring demand and activity fluctuate due to macroeconomic and other factors. US OPJ as average revenue per job posting on Indeed is calculated by dividing HR Technology revenue in the US by the total number of US job postings on Indeed. The numerator, total HR Technology US revenue, comprises revenue from Sponsored Jobs, which consists of paid job ads like standard and Premium Sponsored Jobs, as well as other products and services, including Smart Sourcing and Smart Screening, employer branding, and Indeed Flex.

Speaker #1: US OpJ, as average revenue per job posting on Indeed, is calculated by dividing HR technology revenue in the US by the total number of US job postings on Indeed.

Speaker #1: The numerator, total HR Technology U.S. revenue, comprises revenue from sponsored jobs, which consists of paid job ads like standard and premium sponsored jobs, as well as other products and services, including smart sourcing and smart screening, employer branding, and Indeed Flex.

Speaker #1: The denominator, the total number of U.S. job postings, is measured by the Indeed Hiring Lab U.S. Job Postings Index. The Indeed Hiring Lab U.S. Job Postings Index tracks hiring demand in the U.S. labor market and includes hosted jobs.

Hisayuki Idekoba: The denominator, the total number of US job postings, is measured by the Indeed Hiring Lab US Job Postings Index. The Indeed Hiring Lab US Job Postings Index tracks hiring demand in the US labor market and includes hosted jobs, which are jobs employers post directly on Indeed, and index jobs, which are jobs Indeed receives from employers' career sites, applicant tracking systems or ATSs, and other sources across the web. The total number of US job postings includes all job postings on Indeed in the US, whether or not they are job ads. In other words, US OPJ is the average revenue per job posting on Indeed, not the average unit price per sponsored job ad. The Premium Sponsored Jobs is the primary driver of US revenue growth in HR Technology in fiscal year 2026.

Speaker #1: There are jobs employers post directly on Indeed, and 'indexed jobs,' which are jobs Indeed receives from employers' career sites, applicant tracking systems, or ATSs, and other sources across the web.

Speaker #1: The total number of US job postings includes all job postings on Indeed in the US, whether or not they are job ads. In other words, US OpJ is the average revenue per job posting on Indeed.

Speaker #1: Not the average unit price per sponsored job ad. The premium sponsored jobs are the primary driver of U.S. revenue growth in HR Technology in fiscal year 2026.

Hisayuki Idekoba: This slide shows the features currently included in the premium package that support employers throughout the hiring process. Compared to standard Sponsored Jobs and free listings, a Premium Sponsored Job goes well beyond the basic features, offering broader range of advanced features to deliver greater value for business clients looking to make their hiring process faster and more efficient. The US OPJ growth rate reaches 35% in Q1, substantially above the quarterly levels recorded in fiscal year 2025. Although the total number of US job postings declined approximately 4% year-over-year, US revenue increased 30.0% year-over-year to a quarterly record of $1.64 billion. This was driven by further monetization development led by Premium Sponsored Job package. The previous record was $1.61 billion in Q1 2022, when revenue grew significantly up at 24.9% year-over-year.

Speaker #1: This slide shows the features currently included in the Premium package that support employers throughout the hiring process. Compared to Standard Sponsored Jobs and free listings, Premium Sponsored Jobs go well beyond the basic features, offering a broader range of advanced features to deliver greater value for business clients looking to make their hiring process faster and more efficient.

Speaker #1: The U.S. OpJ growth rate reached 35% in the first quarter, substantially above the quarterly levels recorded in fiscal year 2025, although the total number of U.S. job postings declined approximately 4% year over year.

Speaker #1: US revenue increased 30.0% year over year to a quarterly record of $1.64 billion. This was driven by freezer monetization development led by premium sponsored job package.

Speaker #1: The previous record was $1.61 billion US dollars in the first quarter of 2022, when revenue grew significantly, up 24.9% year over year. However, the total number of US job postings was approximately 57% higher than in the first quarter of 2026, and also increased approximately 24% year over year, leveraging the US OpJ growth rate at just 1%.

Hisayuki Idekoba: The total number of US job postings was approximately 57% higher than in Q1 2026, and also increased approximately 24% year-over-year, leveraging the US RPJ growth rate at just 1%. This result demonstrates the extent and the pace of our current monetization development as seen in the difference in the US RPJ growth rates. Our model has evolved from one centered on a search engine and a pay-per-click or PPC job ad to an AI-powered, faster and more

Speaker #1: These results demonstrate the extended pace of our current monetization development, as seen in the difference in the US OpJ growth rates. Our model has evolved from one centered on a search engine and pay-per-click, or PPC, jobs to an AI-powered, faster, and more precise, high-value matching platform in a two-sided decision-making marketplace.

Junichi Arai: A precise and high-value matching platform in a two-sided decision-making marketplace. Our full-year outlook is based on the first quarter results together with our latest performance outlook for Q2 through Q4, which assumes an approximately 4% year-over-year decline in the total number of US job postings, consistent with our assumption at the beginning of the fiscal year. We have substantially revised our year-over-year US revenue growth outlook from 13.6% to 25.1%, reaching $6.6 billion, which would be a record high for full-year revenue on a US dollar basis. We expect the US ARPJ growth rate to be approximately 30% for fiscal year 2026. For context, the previous full-year revenue record was $6.0 billion in fiscal 2022. In that fiscal year, the total number of US job postings increased approximately 3% year-over-year, revenue increased by 4.9% year-over-year, and the US ARPJ growth rate was at 2%. Next, Europe and others.

Speaker #1: Our full-year outlook is based on the first quarter result, together with our latest performance outlook for the second through fourth quarters, which assumes an approximate 4% year-over-year decline in the total number of U.S. job postings, consistent with our assumption at the beginning of the fiscal year.

Speaker #1: We have substantially revised our year over year US revenue growth outlook from 13.6% to 25.1%, reaching 6.6 billion US dollars, which would be a record high for full year revenue on the US dollar basis.

Speaker #1: We expect the US OpJ growth rate to be approximately 30% for fiscal year 2026. For context, the previous full-year revenue record was $6.0 billion in fiscal year 2022.

Speaker #1: In the fiscal year, the total number of U.S. job postings increased approximately 3% year over year. Revenue increased by 4.9% year over year, and the U.S. OpJ growth rate was 2%.

Speaker #1: Next, the European others. First quarter revenue increased 28.5% year over year to $0.6 billion. On a local currency basis, revenue increased approximately 34% year over year in the UK and approximately 46% year over year in Canada.

Junichi Arai: First quarter revenue increased 28.5% year-over-year to $0.6 billion. On a local currency basis, revenue increased approximately 34% year-over-year in the UK and approximately 46% year-over-year in Canada. This growth was mainly driven by continued monetization developments through the expanded adoption of Premium Sponsored Jobs. For fiscal year 2026, we have revised our full-year revenue growth outlook from 17.1% to 23.2% year-over-year, reaching $2.5 billion. As in previous years, approximately two-thirds of this revenue is expected to come from the UK, Canada, and Germany. In Japan, first quarter revenue increased 6.7% year-over-year to JPY 93.3 billion. In job advertising services, Indeed products performed above our initial expectations, driven by an increase in the number of paid jobs and a growing price per job, while placement services have recovered faster than expected.

Speaker #1: This growth was mainly driven by continued monetization developments through the expanded adoption of premium sponsored jobs for fiscal year 2026. We have revised our full-year revenue growth outlook from 17.1% to 23.2% year over year, reaching $2.5 billion.

Speaker #1: As in previous years, approximately two-thirds of this revenue is expected to come from the UK, Canada, and Germany. In Japan, first quarter revenue increased 6.7% year over year to ¥93.3 billion.

Speaker #1: In Japan, advertising services at Indeed performed above our initial expectations, driven by an increase in the number of paid jobs and a growing price per job, while placement services have recovered faster than expected.

Speaker #1: For fiscal year 2026, we expect this trend to continue. More than setting headwinds specific to this fiscal year, namely, changes in revenue recognition from gross to net, and withdrawal from or downsizing of unprofitable businesses.

Junichi Arai: For fiscal year 2026, we expect this trend to continue more than certain headwinds specific to this fiscal year, namely changes in revenue recognition from gross to net and withdrawal from or downsizing of unprofitable businesses. Therefore, we have revised the full-year revenue outlook upward on a Japanese yen basis from growth of 2.1% year-over-year to growth of 5.4% year-over-year or JPY 367 billion. On a US dollar basis, we expect revenue to be flat at 0% year-over-year at $2.3 billion. Seeing this upward revision in our revenue and the EBITDA+S margin, we believe some of you might be concerned that HR Technology has already peaked and has a limited upside. However, we firmly believe the business has a significant long-term expansion ahead as we leverage AI to build out a comprehensive suite of hiring products and services.

Speaker #1: Therefore, we have revised the full-year revenue outlook upward, on a Japanese yen basis, from growth of 2.1% year over year to growth of 5.4% year over year, or 367 billion yen.

Speaker #1: On a US dollar basis, we expect revenue to be flat at 0% year over year at $2.3 billion. Seeing the same for the revision in our revenue and EBITDA process margin, we believe some of you might be concerned that HR Technology has already peaked and has limited upside.

Speaker #1: However, we firmly believe that the business has significant long-term expansion ahead, as we leverage AI to build out a comprehensive suite of hiring products and services, as Deco has been explaining since May.

Junichi Arai: As Deko has been explaining since May, HR Technology is not simply aiming to expand within the $34 billion job advertising market. We believe we can achieve greater growth over the mid to long term by converting business clients' hiring expenditure, a vast market of approximately $200 billion that includes placement services, as well as an estimated $68 billion for hiring automation into our revenue. Many companies worldwide are actively using AI to improve efficiency across areas of HR and AI, and the hiring processes with its many manual tasks of HR teams is no exception. By further improving matching accuracy and speed for job seekers and business clients in a two-sided decision-making marketplace, and by using AI automation tools to help improve the productivity and efficiency of the hiring process from candidate attraction through subsequent stages, we can achieve sustainable growth.

Speaker #1: HR technology is not simply aiming to expand within the 34 billion US dollar job advertising market. We believe we can achieve greater growth over the mid to long term by converting business clients' hiring expenditure above the market of approximately 200 billion US dollars, increasing placement services as well as an estimated 68 billion US dollars for hiring automation into our revenue.

Speaker #1: Many companies worldwide are actively using AI to improve efficiency across areas of SG&A and hiring processes, which include many manual tasks for HR teams.

Speaker #1: It's no exception. By further improving matching accuracy and speed for job seekers and business clients in a two-sided decision-making marketplace, and by using AI automation tools to help improve the productivity and efficiency of the hiring process, from candidate attraction through subsequent stages, we can achieve sustainable growth.

Junichi Arai: The segment revenue outlook for fiscal year 2026 is only $11.4 billion. There remains a substantial white space and a long runway for growth. Next, Staffing. Q1 segment revenue increased 11.5% year-over-year to JPY 455.2 billion. In Japan, revenue increased 3.5% year-over-year to JPY 220.2 billion, reflecting continued stable performance. In Europe and the US and Australia, revenue increased 20.3% year-over-year to JPY 235.0 billion, including a positive impact from foreign currency, foreign exchange rate fluctuations, and reflecting strong performance in the US, capturing solid demand as well as signs of a recovery in staffing demand in Europe and Australia, despite market conditions in both regions remaining challenging. EBITDA plus its margin was 6.2%. We are making only minor upward revisions to our initial full-year outlook. We now expect segment revenue of JPY 1.83 trillion and segment EBITDA plus its margin of 5.6%. Finally, Marketing Matching Technologies or MMT.

Speaker #1: The segment revenue outlook for fiscal year 2026 is on $11.4 billion. There remains substantial white space on the long runway for growth.

Speaker #1: Next, staffing. First quarter segment revenue increased 11.5% year over year to ¥455.2 billion. In Japan, revenue increased 3.5% year over year to ¥220.2 billion.

Speaker #1: Reflecting continued stable performance in Europe, the US, and Australia, revenue increased 20.3% year over year to ¥235.0 billion, including a positive impact from foreign currency and falling exchange rate fluctuations. This reflects strong performance in the US, capturing solid demand, as well as signs of recovery in staffing demand in Europe and Australia, despite market conditions in both regions remaining challenging.

Speaker #1: EBITDA process margin was 6.2%. We are making only a minor upward revision to our initial full-year outlook. We now expect segment revenue of ¥1.83 trillion, and the segment EBITDA process margin of 5.6%.

Speaker #1: Finally, Marketing Margin Technology, or MMT. MMT operates one of the largest matching platforms in Japan, connecting an individual user account base of approximately 99 million Recruit IDs with approximately 980,000 business clients across multiple verticals.

Junichi Arai: MMT operates one of the largest matching platforms in Japan, connecting individual user account base of approximately 99 million Recruit IDs, with approximately 980,000 business clients across multiple verticals. Our individual user base and our points program maintain and increase the number of actions taken on our platform by providing fulfillment functions that efficiently complete a sequence of processes from customer acquisition through payment. We accumulate unique data on our platform. Leveraging this unique data, MMT uses AI to propose optimal services and pricing tailored to each business client, most of whom are small and mid-sized businesses, driving growth in their GMV. By shifting multiple platforms, including Hot Pepper Beauty and customer home building and renovation consulting, which we discussed in February and May, as well as Car Sensor, which I will discuss today, from fixed monthly listing fees to a GMV-linked model.

Speaker #1: Our individual user base and our points program maintain an increased number of actions taken on our platform by providing fulfillment functions that efficiently complete a sequence of processes from customer acquisition through to payment, while accumulating unique data on our platform.

Speaker #1: Leveraging this unique data, MMT uses AI to propose optimal services and pricing tailored to each business client, most of whom are small and medium-sized businesses driving growth in their GMV.

Speaker #1: By shifting multiple platforms—including beauty, custom home building and renovation consulting, which we discussed in February and May, as well as automobiles, which I will discuss today—from fixed monthly listing fees to a GMV-linked model, we believe we can achieve sustainable revenue growth even as AI technology becomes more widespread and continues to evolve.

Junichi Arai: We believe we can achieve sustainable revenue growth even as AI technology becomes more widespread and continues to evolve. MMT consists of Lifestyle, including Hot Pepper Beauty, travel, dining, and SaaS solutions, Housing and Real Estate, and others. Before discussing the results and outlook, I will explain the evolution of Car Sensor within others, where we introduced a GMV-linked model starting this fiscal year. Since 1984, Car Sensor has operated an automobile inventory advertising service in Japan under the Car Sensor brand, primarily covering used vehicles listed by business clients such as used car dealers. Today, it is one of the largest matching platforms in Japan's used car market. Individual users can search business clients' vehicle inventories and then make inquiries and reserve dealership visits through the mobile application or website.

Speaker #1: MMT consists of lifestyle, including beauty, travel, dining, and SaaS solutions, as well as housing, real estate, and others. Before discussing the results and outlook, I will explain the evolution of automobile within 'others.'

Speaker #1: We are introducing the GMV-linked model starting this fiscal year. Since 1984, Automobile has operated our automobile inventory advertising service in Japan under the Car Sensor brand, primarily covering used vehicles listed by business clients, such as used car dealers.

Speaker #1: Today, it is one of the largest matching platforms in Japan's used car market. Individual users can search business clients' vehicle inventories and then make inquiries and reserve dealership visits through the mobile application or website.

Speaker #1: Although it is a business model transition from print media to online services, it remains based on the fixed monthly listing fees through fiscal year 2025.

Junichi Arai: Although it is a business model, a transition from print media to online services, it remained based on the fixed monthly listing fees through fiscal year 2025. Revenue in fiscal year 2025 was JPY 33.4 billion. Starting in fiscal year 2026, in addition to the existing fixed monthly listing fees, we introduced a GMV-linked model under which business clients pay based on purchase intent action taken by individual users, such as inquiries and dealership visit reservations. Business clients' vehicle inventory data and data such as the number of inquiries from individual users are synchronized with our platforms through vertical SaaS solutions. In addition, the use of AI has substantially reduced the workload required for business clients to upload the vehicle images. These capabilities have increased the volume of vehicle inventory images on the platform, as well as the strategic allocation of sales promotion expenses.

Speaker #1: Revenue in fiscal year 2025 was 33.4 billion yen. Starting in fiscal year 2026, in addition to the existing fixed monthly listing fees, we introduce a GMV linked model under which business clients pay under which business clients pay based on purchase intent action taken by individual users such as inquiries and dealership visit reservations.

Speaker #1: Business clients’ vehicle inventory data and data such as the number of inquiries from individual users synchronize from within our platform through vertical SaaS solutions.

Speaker #1: In addition, the use of AI has substantially reduced the workload required for business clients to upload vehicle images. These capabilities have increased the volume of vehicle inventory images on the platform, as well as the strategic allocation of sales promotion expenses.

Speaker #1: By driving growth in individual user action and the number of lease deliveries through these efforts, we contributed to increasing business clients' completed transactions and revenue, leading them to increasingly recognize the value provided by the platform, which is the driver behind this model's introduction as a result.

Junichi Arai: By driving growth in individual user action and the number of leads delivered through these efforts, we contributed to increasing business clients that completed a transaction and revenue, leading them to increasingly recognize the value provided by the platform, which is the driver behind this model's introduction. As a result, Q1 revenue increased to 15.8% year-over-year. The introduction of GMV-linked model led to an increase in the number of vehicles listed, resulting in a year-over-year increase of 12.5% in individual user actions, which was the main driver of the revenue increase. I will now discuss the results and the outlook for MMT. In Q1, revenue in lifestyle increased 9.6% year-over-year, driven largely by revenue growth in beauty resulting from the addition of GMV-linked model.

Speaker #1: First quarter revenue increased by 15.8% year over year. The introduction of the GMV-linked model led to an increase in the number of vehicles listed, resulting in a year-over-year increase of 12.5% in individual user actions, which was the main driver of the revenue increase.

Speaker #1: I will now discuss the results and outlook for MMT. In the first quarter, revenue in Lifestyle increased 9.6% year-over-year, driven largely by revenue growth in Beauty, resulting from the addition of the GMV-linked model.

Speaker #1: Revenue in Housing and Real Estate increased 2.8% year over year, reflecting stronger user action growth both in custom home building and renovation consulting, where the GMV-linked model was introduced, as well as in residential resale.

Junichi Arai: Revenue in housing and real estate increased 2.8% year-over-year, reflecting stronger user action growth both in custom home building and renovation consulting, where the GMV-linked model was introduced, as well as in residential resale. As a result, the segment revenue increased 3.7% year-over-year to JPY 141.8 billion. Segment EBITDA profit margin was 36.0% as a result of revenue growth as well as our cost optimization efforts, including reducing service outsourcing expenses. As discussed in May, starting in fiscal year 2026, the MMT is smoothing out the seasonality of sales promotion and advertising expenses following strategic sales promotion and advertising spending in Q2 in areas where we expect return on investment from the GMV-linked model, including beauty, travel, housing, real estate. We expect the H1 EBITDA profit margin to be approximately 31%, in line with our initial outlook. Our full-year outlook is unchanged from May.

Speaker #1: As a result, the segment revenue increased 3.7% year over year to ¥141.8 billion. Segment EBITDA process margin was 36.0%, as a result of revenue growth as well as cost optimization.

Speaker #1: Everything, including reducing service outsourcing expenses. As discussed in May, starting in fiscal year 2026, the MMT is smoothing out the quarter seasonality of the sales promotion advertising expenses following strategic sales promotion and advertising spending in the second quarter in areas where we expect return on investment from the GMV-linked model, including beauty, travel, housing, and real estate.

Speaker #1: We expect the first-half EBITDA process margin to be approximately 31%, in line with our initial outlook. Our full-year outlook is unchanged from May.

Speaker #1: We expect segment revenue to increase 7.1% year over year to ¥605 billion, with a segment EBITDA plus S margin of 30%. Now, we would like to move on to the Q&A.

Junichi Arai: We expect segment revenue to increase 7.1% year-over-year to JPY 605 billion, with a segment EBITDA profit margin of 30%. Now we would like to go on Q&A. Once you are called upon, please unmute, and one question plus a follow-up question will be allowed per hand raise. If you want to ask a question, please use the hand raise button.

Speaker #1: Once you are called upon, please unmute yourself. One question and one follow-up question will be allowed per hand raised. If you would like to ask a question, please use the hand raise button.

Junichi Arai: First, Munakata-san from Goldman Sachs Securities, please go ahead. This is Munakata of Goldman Sachs. Can you hear me?

Speaker #2: First, Minakata-san from Goldman Sachs Securities. Please go ahead. This is Minakata of Goldman Sachs. Can you hear me? Yes, please. Thank you. Regarding US of J, it increased 35% year over year in the fourth quarter.

Hisayuki Idekoba: Yes, please.

[Analyst] (Goldman Sachs): Thank you. Regarding US RPJ, it increased 35% year over year. In Q4, it was already high at 25%, but you have further accelerated, which is quite amazing. In Deko's presentation, HR manual works are automated, and you are now entering a new phase as per your comment. Arai-san also talks about the expansion of the TAM. The areas where you compete have changed. I believe the TAM is expanding. Do you actually feel that? Do you feel that where you play have changed, for example, compared to the existing online job ad domain, from automating manual processes, you are seeing the expansion of TAM going into the recruiting automation domain. Is that true? In other words, the wallet share that you will be able to go after is expanding. Do you feel that? Deko, what do you think?

Speaker #2: It was already high at 25%, but you have further accelerated, which is quite amazing. And in Deco's presentation, HR manual works are automated, and you are now entering a new phase, as per your comment.

Speaker #2: And Alai-san also talks about the expansion of the TAM. So, the areas where you compete have changed. I believe the TAM is expanding. Do you actually feel that?

Speaker #2: Do you feel that where you play has changed? For example, compared to the existing online job ad domain—from automating manual processes—you are seeing the expansion of TAM going into the recruiting automation domain.

Speaker #2: Is that true? In other words, the wallet share that you will be able to go after is expanding. Do you feel that? Deco, what do you think?

Hisayuki Idekoba: Well, currently, I am in conversation with various clients. Looking at the logs of those conversations that we've had with clients, it is particularly true for Small and Medium-sized Businesses. How should I say? This may not be a good example. If you think, for example, food delivery service. When I used a food delivery service, and I shared this with my wife, she said, "Well, how wasteful. It's much cheaper to buy at a nearby supermarket." For me, I had the urge to eat quicker. I was prepared to pay certain delivery fees that was an acceptable fee. For Small and Medium-sized Businesses, what's happening today is that they have certain roles that remain vacant for two months, and they are willing to pay additional JPY 1,000 or JPY 2,000. That's the kind of conversation that we are hearing more from SMBs.

Hisayuki Idekoba: By having these business clients using for HR teams in SMBs, they usually have other responsibilities besides HR. By using our services, they can now free up some of their time to spend on other tasks. Starting from SMBs to more larger clients with JPY 1 million or JPY 2 million of budget, as I shared an example earlier, sometimes clients have the needs to check the ROI. For instance, AI sourcing, AI screening, these type of services are introduced in order to compare with human recruiters that they have internally. Ultimately, the kind of roles or tasks assigned to internal agents have reduced. After a trial of one month, they see the ROI and then make a decision to introduce the service. That's what's happening in some cases. For us, it's more than just the selling tools.

Hisayuki Idekoba: Rather than simple sales of tools, simply put, the backend process is ultimately, you don't want to hire 20 or 30 people, and you don't want to screen these candidates. You check their resumes, make sure they have their licenses, they contact them to confirm. That's what's happening in the backend processes. By sending high-quality candidates, by targeting, we have been successfully eliminating all these backend processes. Maybe my explanation is poor, but for SMBs, ultimately, they are able to hire faster. They have more time to spend on other tasks. From medium to larger enterprises, they are realizing that their manual work has been reduced significantly. After a trial of our products for maybe a month or so, they realize that they are able to reduce manual tasks.

[Analyst] (Goldman Sachs): Maybe they started with one task in mind, by looking at the results, they are now expanding to cover other tasks. I apologize for the poor explanation. That's what's happening. No, that's very clear. I believe for SMBs and larger enterprises, their pains and issues differ, I surmise. Are the points that they emphasize clearly understood, you understand the needs, their demands, and by matching solutions to address their issues, automation will further proceed. Well, actually, they are the same. The issues are the same, but the way and how they realize the pains are different. As I said before, why is there such steps as screening and sourcing afterwards? Let's say 20 people apply and you did not find a qualified candidate. You want to see more qualified candidates, and that's what leads to sourcing. Companies do their own sourcing.

Hisayuki Idekoba: They search for resumes, they contact the candidates, but it's not producing results, maybe they will use an agent. That's what is happening in most cases. It's not that they're looking at the ROI from the very beginning and trying to reduce costs, but rather, looking at the conversations we've had with these companies, they've decided to hire, and in some larger enterprises as well, because the hiring is already decided, they now have the budget. Ultimately, this ends up in more payments to us. I don't feel that we are competing with automation tool providers. I think value propositions are slightly different. Thank you very much for that very insightful response. I apologize for that. No, that was very interesting. I have one follow-up question. The annual US ARPJ outlook is what I would like to ask about.

[Analyst] (Goldman Sachs): You've mentioned that it has become more difficult to have a precise forecasting, as of today, after Q2 and later, what do you think will happen? What are your expectations? For instance, as the example you've shared, growth from large enterprises remains firm. Do you consider that a growth driver? How are you building your guidance right now? What factors do you consider? That is a wonderful question. For me as well, I am working hard to better understand what will be the drivers going ahead. I have looked at the various factors, but at present, SMBs, the spend per client increase is going to contribute. For ARPJ, it's not simply the unit price increase, but if you look at the breakdown, increase in the number of paying clients also contributes, as well as the number of paid job postings, and unit price per job increase.

Hisayuki Idekoba: The three factors that I've just mentioned contribute to ARPJ growth. For SMBs, I think each factor contributes one third. That's roughly the combination of contribution that we are seeing from those factors. As I've just mentioned before, clients are starting to realize that our services do help them reduce manual work and that they are now applying the services in other areas. We are seeing our customers returning and also increase in the number of new clients, all driving ARPJ growth as well as the unit price per job. For larger enterprises, they have introduced automation tools, and some are like SMBs. They see roles vacant for two months or so, and they see that people on the ground are struggling, that's why they want to trial our product and services. If you think about it makes sense.

Hisayuki Idekoba: If you think of a good targeting advertisement, it basically uses AI sourcing and from among resumes, comparing to a human recruiter reaching out to candidates versus AI sourcing, I think over a few years' time, the results will be the same. Advertising targeting is also being enhanced, and this is going into the sourcing domain. Maybe companies will focus on several different roles. The number of jobs may decrease, but on the other hand, unit price may increase. It's a combination of all these different factors. What I'm trying to say is that we are seeing such an amazing pace of AI introduction and AI growth. Of course, we are making an effort every day. The market is huge. But what accuracy? Is it 20%, 25%, or 30% growth rate? It's very difficult to calculate and forecast. That's the situation.

[Analyst] (Goldman Sachs): Again, not a very clear answer, I admit. No, not at all. One thing that's caught my attention is in Deko's comments. You said an increase in unit price, among other factors, are robust and client satisfaction needs to be closely monitored. I believe that was a part of the comments. At present, do you consider this any risk? Rather, things are performing well, and it's difficult to predict nine months from now, what will the levels be, figures be? You are looking at the US ARPJ outlook based on various perspectives. Do I understand that correctly? Right. Rather than two or three quarters ahead, it's easier to think longer term.

Hisayuki Idekoba: No matter how you think about it, manually going through 20 or 30 resumes, making sure these candidates have licenses, calling them to make sure, and scheduling meetings, and such communication takes place, and that's still not enough. You need to go into the resume database, you need to contact the candidates, and they say they're not thinking about switching jobs right now. That's an enormous task, and I don't think this will continue. That manual process will be automated, and this is certain, I'm sure of it. We need to ascertain changes in customers' demand as well as changes happening in the market, and we need to keep pace with that change. That's the background to my comment earlier. I see. That's very clear. Thank you very much for such insightful comments. My apologies. No, no. Thank you very much. The insightful comments, she said.

Hisayuki Idekoba: Well, that's the only way we can describe this. Maybe in September with Munakata-san, we will have a face-to-face meeting. We will come back to this topic. Thank you very much.

Inside, for comments, she said,

Well, that's the only way we can describe this.

Maybe in September, with Manicata Sam, we will have a face-to-face meeting. So we will come back to this topic. Thank you very much.

Junichi Arai: Well, many people raise their hand. We'd like to go quickly. Nomura Securities? Nomura Securities, Oum-san, please? Thank you. I'm Nomura from Nomura Securities. Thank you very much. You explained the example of a healthcare client using this as a hint. Added value from Indeed to the customer, what will be the added value that can be provided? Recruiter, again, the productivity, and that is appreciated by customers. That is what you said. What kind of productivity have increased as a result of the utilization of Indeed sourcing or the checking of the driver's license or not? Do you have any keywords into your mind from that perspective? This particular customer, looking at the majority of the healthcare related customers, especially, there are many cases which will require the driver's license. In those cases, they are struggling.

Well, many people raised their hand. The survey would like to go quickly from number securities.

From the Oman, please.

Thank you. I'm from Security. Thank you very much.

Well, you uh explained the example of a healthcare, a client using this as an hint. Uh, so, uh, out there the value of from indeed to the customer, what will be the added value that can be provided, uh, recruiter again the productivity and that is appreciated by customers. That is what you said, well, uh, what kind of productivity, uh, have, uh, increased as a result of the utilization of indeed soothing or the check in.

Of the driver's license or not. So, uh, do you have any keywords in your mind from that perspective?

Well, uh, this particular customer—well, uh, looking at the majority of the, uh, healthcare-related customers.

Uh, especially, there are many cases in which we require the driver's license. In those cases, there are struggles.

Hisayuki Idekoba: Looking at the resume database, approaching to the candidates, how about this job? To that end, they have many lineups of recruiters. In this particular customer, what do we compare against? How many job interviews have you established? They are divided by the cost. A resume database search, a contract fee, on top of that, recruiters' personal expenses. Based on that, how many job interviews have been set up? Also, AI automated recruiters make suggestions about the people, reaching out the possible candidates. The AI set up a job interview. Comparing these two cases, how much does this AI account for in terms of the number of personnel? That is why I bring up this example. Does this answer to your question? What does it mean?

Do you have you established and they are divided uh, by uh the cost. So a resume database, uh, search a contract fee on top of that. Uh, recruiter is a personal expenses.

And, based on that, how many job interviews have I been set up with, and also...

AI automated recruiters.

[Analyst] (Nomura Securities): This is for general purpose rather than this product is suited for a particular customer, or not necessarily for healthcare, but this can be versatile, or as long as this is customized, this can be applicable to other industry and other customers. Yes, this is a general purpose to some extent, but as you may be aware, in the US, the healthcare is the toughest market in terms of demand and the supply. The skills or qualification or the driver's license are required. To put it simply, out of candidates who submitted their resume, how many percentage of those candidates are desirable candidates that the businesses feel like having an interview? Is it better to do the screening by AI or the sourcing by AI? Which is a better value for money? A screening can be done during the night. Screening is more universal.

Uh, make a suggestions about the, uh, people and the reaching out, the, uh, possible candidates and then the AI set up a job interview. So comparing these 2 cases and then uh, how much does this? I AI, uh, account for, in terms of the number of personnel. So that is why I bring up this example. Does this answer to your question? Well, does it mean, uh, this is for general purpose.

Rather than, uh, this product is, um,

Uh, suited for a particular customer or not necessary for a healthcare but this can be a versatile or this as long as this is customized and this can be applicable to other industry and other customers. Yeah. So this is a general purpose, to some extent but as you may be aware in the US, uh, that his career is the toughest market in terms of demand and Supply. So uh, the skills or qualification or the driver's license are required.

So, uh, to put it simply,

Out of, uh, candidates who submitted their resume, how many—what percentage of those candidates?

Are they are desirable candidates that the businesses are few feel like having an interview. Is it better uh, to do the screening or by AI or, uh, the

Hisayuki Idekoba: It can be easily expanded, be it construction workers. Even if 1,200 candidates apply, this can be introduced. Basically speaking, what will be the cost to feature how many job interviews can be set up? That is a perspective of customers. I have follow-up question. For this area, you said this will be a major driver of growth for Indeed. What will be the picture in 3 years? Currently, majority of your market cap, 90% of Indeed is cloud, and the majority of the customer is SME. If the no advertisement is increasing and if the major enterprises portion is increasing, that would be interesting. What will be your landscape in 3 years from now? My vision, simplify hiring. That is what I would like to accomplish. What it means is that make the manual work easier with technology.

Uh, sourcing by AI, which is a better value for money. Well, a screening can be done during that night. So screening is a more Universal. It can be easily expanded. Be it a construction workers. Uh, well, even if a 1,200 candidates, uh, apply, uh, this can be, uh, introduced basically speaking. Uh, what will be the cost uh of the Future? How many uh job interview can be set up? That is a perspective of customers. Well, I have follow up a question uh, for this area.

Uh, you said this will be a major, uh, driver of growth for Indeed. So, what would be the picture in three years, uh, currently?

The majority of your market cap—well, about 90% of it—is Indeed, and the majority of the customers are SMEs.

So if, uh, the no advertisement is increasing, and if the, uh, the major enterprises portion is increasing, that would be interesting. What would be your landscape, uh, in three years from now? Uh, well.

Hisayuki Idekoba: This is what I have been saying since acquiring Indeed. Will the landscape really change in 3 years? It depends on how much AI will evolve. What I really want to accomplish is now achieved with the evolution of AI. I wasn't introducing AI as a tool. However, we have to make an improvement for the matching as a result. We can reduce the undesirable candidate, and that will eliminate the back-end process. That is where the automation occurs, and that is quite interesting. Sales company or AI company, before they are entering into this market, because we have eliminated the back-end process, I think this is quite the efficient way of operation, and also it is difficult for other company to emulate. If we can expand this kind of operation, and then we can expand.

Well, my vision, uh, simplify, uh, hiring that is what I would like to accomplish. What it means, is that the, uh, make the manual work, uh, easier, uh, with, uh, technology. Uh, this is what I have been saying, uh, since acquiring indeed, well, the landscape will change in 3 years. Well, uh, it depends on how much I, I will, uh, evolve. Well what I really want to accomplish is now achieved with the evolution of AI, so I wasn't introducing AI as a tool. However, uh, we have to make an improvement for the matching as a result. So, um, we can reduce the undesirable uh, candidate and then we will eliminate the back and a process and that is where the automation occurs and that is quite interesting.

And the S company or AI company before, and they are entering into this Market because we have eliminated the bucket and, uh, process. I think, uh, uh, this is a quite a, quite a efficient way of operation. And, and also, it is difficult for other company to emulate. So if we can expand this kind of, uh, operation and

Junichi Arai: If we can increase by tenfold, that will be most interesting. Thank you.

Then, uh, we can expand, but—

Uh, well, if we can increase by, uh, 10-4, that will be most interesting. Thank you.

Junichi Arai: Thank you. Next, Nagao-san of BofA Securities, please go ahead. Yes, this is Nagao of BofA. President Idekoba gave us a healthcare client example. I think that was a very well laid out example. The reason I say that is because with hiring automation tools, the people who will be using tools and people who will be eliminated as a result of the introduction of tools are the same. There is a contradiction in this structure. How are you going to further penetrate? I think it's a battle against speed. It's a race against speed at the same time. What I would like to ask is that how are you going to enter the automation tool industry? By implementing these tools, won't there be some opposition or resistance from the HR teams of companies? How are you going to overcome such resistance? Please go ahead. Yes.

Thank you. Uh, next, Son of BofA Securities, please go ahead.

Yes, this is

Healthcare client example. I think that was a very well laid out example. The reason I say that is because...

with hiring automation towards

Are you going to further penetrate? Um, I think it's...

A battle against the speed, it's a race against the speed at the same time. So what I would like to ask is that how are you going to, uh, enter the automation tool industry by implementing these tools won't there be some opposition or resistance from the HR teams, uh, of companies. How are you going to overcome such uh resistance?

Please go ahead.

Hisayuki Idekoba: I briefly touched upon this, especially for enterprise clients. Cost reduction is not the entry point for us. Rather, we focus on the reduction of the back-end processes, the substantial reduction. Maybe for the Premium Sponsored Jobs, we can ask clients to trial our services. That's more of the case. In terms of speed, that's where we're seeing much of entry or adoption among enterprise clients. Besides that, I think besides our company, companies that sell AI tools abound, and I think they are following similar patterns in that not just approaching the HR top person, but going after CFOs or COOs or CIOs. Companies that have already launched AI automation projects can be found in large numbers. We approach the top tier, the management layer, and we introduce our tools. This is not something we have done much of in the past.

Yes.

So, I briefly touched upon this, especially for, uh, enterprise clients.

Cost reduction is not the entry point for us. Rather,

We focus on the reduction of the back-end processes, uh, the substantial reduction. So maybe for the premium, uh, jobs, we can ask clients to trial our services, so that's more of the case.

So, in terms of speed, that's how we are seeing much of the entry, uh, or adoption among enterprise clients. And besides that, I think, uh, besides our company, the companies that sell AI tools are about, and I think they are following similar patterns in that,

Not just approaching the HR top person, but going after CFOs or CEOs or CIOs.

So companies that have already launched AI automation projects can be found in large numbers, so we approach the top tier, the management layer, and we introduce our tools.

This is not something.

[Analyst] (BofA Securities): In the past, we didn't really have conversations with CFOs or COOs in many cases. Over the past 6 months or so, we are seeing more cases in which we approach those officers. We do go to events targeting COOs, or we also appear and join various events, including the World Cup this time. We sponsor those events, invite our clients, host dinners, and such, so that's something we have started doing. How should I say? For clients as well, HR teams and their clients, they are satisfied that their manual processes have been reduced, and many clients have outsourced these processes. We have not seen such opposition or resistance as expected. Rather than approaching the HR, you are approaching the management layer, I see. Two quick questions. You have a pool of employers, and you screen them.

Uh, we have done much of in the past, in the past that we didn't really have uh conversations with CFOs or uh, cos uh, in many cases, but over the past 6 months or so. We are seeing more cases, uh, in which we approach, uh, those uh, officers.

so,

We do go to events targeting COs, or we also appear and join various events, including the World Cup. This time, we sponsored those events, invited our clients, hosted dinners, and such. So that's something we have started doing.

so,

How should I say?

For clients as well HR.

Teams are in their clients. They are satisfied that their manual processes have been reduced.

And the many clients have, um, outsourced these processes. So, um, we have not seen such, um, um, oppositional resistance, um, as uh expected so rather than approaching the HR, uh, you are approaching the management layer. I see, uh, 2 quick questions. So,

Hisayuki Idekoba: Of course, there are various stages in which paid services could be introduced. Beyond that, you negotiate terms for the employment, and then further down the process, there will be the onboarding process. Are you thinking of automating all these different steps in the process and monetizing in the future? Of course, we want to try a variety of things, and there is a need to, of course, connect various systems, which could slow us down. As I said before, first, we want to introduce candidates to clients, and we want to strengthen monetization and speed there first. I believe that will be fastest because with introducing various FTEs and having conversations with customers on those projects, that will be an enormous project. We need to look at the right balance. I hope that answered your question. Thank you.

You have a pool of, um, employers, um, um, and you screen them.

And of course, there are various uh, stages which are paid services that could be introduced and then beyond that. You negotiate the terms for the employment and then the further down the, the process that there will be the automate, the onboarding process. Uh, are you thinking of um automating all these uh different steps in the process and monetizing in the future?

Well, of course, we want to try a variety of things.

and,

There is a need, of course, to connect various systems, which could slow us down. So, as I said before, first...

We want to introduce candidates to clients.

And, uh, we want to strengthen monetization and speed there first, and I believe,

That will be fastest because, uh, within trading various FDs and, uh, having conversations with customers on those projects, uh, that will be...

Junichi Arai: Next, JPMorgan Securities, Yamamura-san, please. Thank you very much for your explanations. Thank you very much for calling me out. I am Yamamura, Amaisoo. Thank you. I'd like to ask you one question. Well, this might be a difficult question to answer. Listening to you so far at this point in time, the speed, the productivity, and the qualities, these are the area that you add value. These are the area of value addition, and I understand this is the most important thing. Looking into the further future, with these two horizons, to how much extent can you increase the US RPJ? To how much extent can you increase the number of customers? Well, from the outsiders, I cannot synchronize your vision with this horizon, I feel that there is a limit.

Um, an enormous project. So we need to, uh, look at the right balance. I hope that answered your question. Thank you.

J.P. Morgan Securities, your line is open. Please go ahead.

Thank you very much for the explanation. Thank you very much for calling on me. I am your member. Am I through?

Uh, thank you.

I'd like to ask you one question.

Well, uh, this might be a difficult question to answer.

So, uh, listening to you so far, I had a disappointing time.

These are the earlier, uh— that the, uh, the value. So these are the area of value addition. And I understand this is the most important thing, but, uh, looking, uh, into the further future—

Uh, with these two horizons, to how much extent can you increase? The US RPO, to how much can you increase the number of customers? Well, uh, from The Outsiders.

I, uh, cannot synchronize your, uh, vision with this.

Junko Yamamura: Well, the media is entering into the market on top of speed and productivity. With AI, what kind of additional value do you think you can add potentially? Otherwise, as you mentioned, ex- Spain, with only those factors for several years. Still, they are on top of the market. You can explore. This might be a difficult question, but what is your take on this point? Thank you. Well, Hot Pepper Beauty reservation system was developed. That was a typical question I received. From which market, which data do you secure? Are there any such kind of market available? The beauty salon do not have such a budget, therefore, you will not be able to tap into such kind of a market when we are working on Jalan.

Uh, Horizon. So, I feel that there is a limit. Well,

The meter is entering into the market, on top of the speed and the productivity, but with AI, what kind of additional value? Uh, do you think you can add a potentially or otherwise, as you mentioned the ex explained with only those, uh, factors for that? Uh, several years still, uh, they are on top of the market that you can explore. Uh, so this might be a difficult question, but what if you take on this point? Thank you.

Well, for the book.

Hot Pepper, beauty, reservation assistant was developed and was a typical question. I

Hisayuki Idekoba: If you reach that level of revenue, unless the other travel agency is bankrupt, I don't think you can achieve that kind of revenue. In case of Uber in San Francisco, JPY 500 million is the size of a taxi market, and unless the market size is growing furthermore, they wouldn't be successful. However, after 8 months, they are very successful. You can call the taxi much easily. There are more in demand. The price and the convenience resulted in the expansion of the market quite easily. What I'm trying to say here is that the beauty salon reservation or travel reservation, if we provide the convenience, there will be more demand, there will be more users.

Received, uh, from future Market, uh, which about that? Do you, uh, secure are there? Any such kind of, uh, Market available. The beauty salon, uh, do not have such a bad budget and therefore, you will not be able to tap into such kind of a market when we are working on jalam. So, uh, if you reach that level of Revenue, unless the other tribal agency is background, I don't think you can achieve that kind of Revenue in case of a Uber in San Francisco.

Uh, well, uh, $500 million is the size of the taxi market. And unless the market decides, is it growing further more—you know, they wouldn't be successful. However, after 8 months, they are very successful. If you can call the taxi much more easily, there is more demand. So the price and the convenience resulted in the expansion of the market quite easily.

Hisayuki Idekoba: We are a product-oriented people, therefore, this is our way of thinking, and if we can use the services quite easily, as I mentioned earlier, in case of food delivery, rather than capturing the market from other area, if we provide the convenience, there will be more demand or more users. Well, unconsciously, the market has expanded to that extent. Based on those past experiences, when we acquired Indeed. Global job market is JPY 100 billion at the maximum. If you purchase at such a purchase price, what are you going to do? You will go nowhere. That was the criticism I received. However, if we provide ease of use or convenience, to how much extent can we expand the market? Well, such internet technology, there was such an expansive market available.

So, what I'm trying to say here is that the beauty salon reservation with travel and reservation? If we provide the convenience, that there will be more demand, there will be more users. Uh, we are a product oriented, uh, people, uh, therefore, uh, this is our availability of thinking and, uh, uh, if we can use the services quite a day easily, as I mentioned earlier, in case of hood, a delivery, uh, rather than, uh, capturing the market around other area, uh, if we provide a convenience and

There will be more demand, or more users.

and,

Well, unconsciously, the market has expanded to the extent based on those past experiences when we acquired Indeed.

Uh, Bob Jones Market is $100 billion at the maximum. If you purchase at such a purchase price, uh, what are you going to do? Oh, you will go nowhere. Uh, that was the criticism I received. Uh, however, if what we provide is of use or a convenience, uh, to how much extent can we expand the market,

Hisayuki Idekoba: Thinking about the AI potential, if you post a job, we do not get any good effectiveness. However, you ask a question with AI, how about this methodology? In this methodology, unless you increase the hourly rate, you cannot get or attract the candidates, and based on those experiences, some customers place the job advertisement. Looking at this example of customer, I think there are other potential that we can tap into. Well, finance people may think I am stupid. However, from the viewpoint of person with product innovation, this is where I would like to bet on. Well, this answer is not appropriate. I will be scolded. Well, that's okay. As I mentioned earlier, with great matching and hire-ready candidate, if 1 person is provided cost per hire or the intermediary services, I think we can, little by little, capture this market.

Well, such a, a, a, a, internet technology. Uh, there was such an expansive market available thinking about the AI potential. If you post a job, uh, then, uh, we do not get a good effectiveness. However, uh, you ask a question with AI. How about that, this methodology, in this methodology?

Uh, lets you increase the average rate that you cannot get or attract the, uh candidates. And uh, based on those experiences, some customers Place, uh, the, uh, job, uh, advertisement. So, looking at these, uh, example of customer, I think there are other potential that we can tap into. Well, why not? People may think I am a stupid however uh from the Viewpoint of person with a product in

Salvation. And this is where I would like to bet. Um, well, this answer is not a problem. I might be scolded, but that's okay.

As I mentioned earlier, with a great matching and, uh,

Junko Yamamura: Idekoba-san, looking based on your experiences, M&M, and also Indeed, beyond that, you have a sense of excitement, and that is the sentiment of running the company. 30% growth of JPY 1.5 trillion size businesses. How to put it? It will be difficult to make a precise calculation as to which market we are capturing. Well, I look forward to your business. Thank you.

Higher ready, candidate. If one person is, uh, provided copper higher or the intermediary services, I think, uh, we can little by little, uh, capture these markets.

so,

From that that you have.

A sense of excitement, and that is the sentiment of, uh, learning the company.

So, 30% growth of ¥1.5 trillion, size businesses, uh, so, how to put it?

So, it will be difficult to make a precise calculation as to which market we are capturing. Uh, well, I look forward to your business. Thank you.

Junichi Arai: Thank you. We see many more hands up, in the interest of time, we would like to wrap up. Our apologies. No, my explanations were poor. My apologies. Thank you very much. We would like to conclude the earnings call at this time. Thank you very much.

Thank you. We see many more hands up, but in the interest of time, we'd like to wrap up.

Our apologies.

No, my explanation was poor; my apologies.

Uh, thank you very much.

We would like to conclude the earnings call at this time. Thank you very much.