Japan – Recruit Holdings Q3 revenue rises 3.6%, boosted by HR Technology business

Japanese staffing firm Recruit Holdings (6098: JP) reported revenue for the third quarter ended 31 December 2019 with revenue increasing 3.6% compared to the same quarter during the previous year.

Revenue in the third quarter was driven by strong growth in the HR Technology segment.

(JPY billions) Q3 2019 Q3 2018 Change Q3 2019 (USD millions)
Revenue 608.5 587.0 3.6% 5,539.7
Adjusted EBITDA 92.1 84.8 8.5% 838.4
EBITDA Margin 15.1% 14.4%
Operating Income 69.6 65.6 6.1% 633.6
Profit attributable to owners of the parent 52.3 53.3 -1.9% 476.1

Revenue by segment


(JPY billions) Q3 2019 Q3 2018 Change Q3 2019 (USD millions)
HR Technology 109.5 85.1 28.6% 997.1
Media & Solutions 184.8 178.2 3.7% 1,682.7
Staffing 320.3 331.1 -3.3% 2,916.6
Eliminations and Adjustments -6.2 -7.4 N/A 56.4


Within the HR technology segment, revenue growth was primarily driven by increased sponsored job advertising revenue. Recruiting solutions focused on sourcing and screening candidates and employer branding also contributed to revenue growth year-on-year. As of Q3 2019, Indeed and Glassdoor attracted approximately 250 million and 60 million monthly unique visitors and had approximately 9,800 and 1,000 employees, respectively.

Within Media & Solutions quarterly revenue increased by 3.7%, primarily driven by increased revenue in the Housing and Real Estate, Travel and Beauty sub-segments in Marketing Solutions.

In the Staffing segment quarterly revenue decreased by 3.3%. Quarterly revenue for Japan operations increased by 4.1% and for Overseas operations decreased by 8.7%. For the Overseas operations, quarterly revenue and adjusted EBITDA decreased due to the negative impact of foreign exchange rate movements and the ongoing uncertain outlook for the European economy.

The company also reported revenue for the nine month period of JPY 1.80 trillion (USD 16.39 billion), an increase of 4.6% when compared to the prior year.

Last year Recruit’s subsidiary Recruit Career’s “Rikunabi DMP Follow” services received two admonishments. Recruit’s Rikunabi job board was previously cited for selling information — without users consent — on how likely students would decline job offers based on their browsing history. The company said the incident will not have a significant impact on its consolidated financial results for FY2019.

For FY2019, the company expects:

– Adjusted EBITDA to be approximately JPY 320 billion (USD 2,912 millon)
– Adjusted EPS to grow high single digits
– Revenue and adjusted EBITDA for HR Technology and Media & Solutions to increase
– Revenue and adjusted EBITDA for Staffing to decrease

In trading today Recruit Holdings shares closed at JPY 4,501.00 (USD 40.99), down 0.99% on the day and 1.75% below its 52-week high of JPY 4,581.00 (USD 41.71), set on 6 February 2020. Based on its current share price the company has a market value of JPY 7.71 trillion (USD 70.20 billion).

Source: Staffing Industry Analysis | Visit: Japan – Recruit Holdings Q3 revenue rises 3.6%, boosted by HR Technology business