Recruit Holdings revenue up 17.3%, reports signs of hiring slowdown
August 12, 2022
Revenue from global staffing firm Recruit Holdings Co. Ltd. showed signs of a hiring slowdown when they reported results for the fiscal first quarter that ended June 30. Even so, revenue rose 17.3% year-on-year in constant currency.
“High levels of hiring activity showed signs of moderating in the US and Europe, but remained robust year-over-year,” the company reported.
Recruit’s HR technology segment, which includes Indeed and Glassdoor, continued to lead the company’s other two growth segments.
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HR technology segment revenue increased 53.9% year-over-year in the first quarter. Growth moderated from the year-on-year increase of 80.4% in the fourth quarter.
President and CEO Hisayuki Idekoba noted that Indeed job postings remain strong, but growth has stalled or reversed from peak levels in some geographies.
“In July, in the U.S., we saw hiring slow and some of the biggest percentage drops in roles that had seen tremendous growth during the pandemic, such as software development and human resources,” he said. Idekoba in a conference call with analysts.
Jobs posted directly on Indeed by employers, mostly small and medium-sized businesses, fell year-over-year for the first time since the start of the pandemic, he said.
Revenue by segment
Recruit’s reported revenue in the HR technology segment, measured in US dollars, increased 29.9% year over year. Revenue outside the US increased 46.5%, led primarily by Europe and Canada. The company noted that the job market remained tight and that the number of active job seekers increased year over year on both Indeed and Glassdoor.
For Recruit’s staffing business unit, revenue increased 15.1% year-over-year in the first quarter. At constant exchange rates, the increase was 9.2%.
Recruit cited continued demand for staff. Japanese staff revenue rose 12.4% year-on-year to ¥165.1 billion (US$1.21 billion). Meanwhile, staff revenue in Europe, the US and Australia rose 17.2% to ¥220.5 billion (US$1.62 billion); the increase in constant exchange rate was 6.8%.
Recruit renamed its ‘media and solutions’ business unit to ‘matching and solutions’. The segment includes the company’s publishing operations. First-quarter revenue for this segment was up 18.8% year-over-year.
The hiring revenue forecast for the full year 2022 will increase by 14.9% from the previous year. The forecast is unchanged from the company’s May 16 earnings announcement.
Share price and market capitalization
Shares of Recruit closed up 4.16% to ¥5,182 (US$39.02) in Tokyo today; they were 39.75% above their 52-week low; according to FT.com. The company had a market capitalization of ¥8.40 trillion (US$63.25 billion).