Recruit Holdings revenue up 17.3%, signals signs of slowing hiring

August 12, 2022

Earnings from global staffing firm Recruit Holdings Co. Ltd. reported signs of slowing hiring when it released results for its fiscal first quarter ended June 30. Still, revenue grew 17.3% year-over-year in constant currency.

“High levels of hiring activity showed signs of moderating in the United States and Europe, but remained robust year over year,” the company said.

Recruit’s HR technology segment, which includes Indeed and Glassdoor, continued to lead the growth of the company’s other two segments.

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HR Technology segment revenue grew 53.9% year-over-year in the first quarter. Growth slowed from the 80.4% year-over-year increase in the fourth quarter.

Chairman and CEO Hisayuki Idekoba noted that job postings on Indeed remain high, but growth has stalled or reversed from peak levels in some geographies.

“In the United States in July, we saw a slowdown in hiring and some of the biggest percentage drops in roles that had seen huge growth during the pandemic, like software development and HR,” Idekoba said during a conference call with analysts.

Jobs posted directly to Indeed by employers, mostly small and medium-sized businesses, fell year-over-year for the first time since the pandemic began, he said.

Revenue by segment

Recruit’s reported revenue in the HR technology segment, measured in US dollars, increased 29.9% year over year. Sales outside the United States increased by 46.5%, mainly in Europe and Canada. The company noted that the job market remains tight and the number of active job seekers has been growing year over year on Indeed and Glassdoor.

In Recruit’s recruiting business unit, revenue grew 15.1% year-over-year in the first quarter. At constant exchange rates, the increase is 9.2%.

Recruit cited continued staffing demand. Japanese staff earnings rose 12.4% year-on-year to 165.1 billion Japanese yen (US$1.21 billion). Meanwhile, staff income in Europe, the United States and Australia rose 17.2% to 220.5 billion Japanese yen ($1.62 billion); the increase at constant exchange rate was 6.8%.

Recruit has changed the name of its “media and solutions” business unit to “matching and solutions”. The segment includes the company’s publishing business. First quarter revenue in this segment increased 18.8% year over year.

Tips

Recruit’s forecast revenue for the year 2022 will be up 14.9% compared to the previous year. The guidance is unchanged from the company’s earnings announcement on May 16.

Stock price and market capitalization

Shares of Recruit closed down 4.16% at 5,182 Japanese yen ($39.02) today in Tokyo; they were 39.75% above their 52-week low; according to FT.com. The company had a market capitalization of 8.40 trillion yen ($63.25 billion).

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