Japanese staffing firm Recruit Holdings (6098: JP) reported revenue today for the fourth quarter ended 31 March 2021 of JPY 613.1 billion (USD 5.61 billion), an increase of 4.0% when compared to the same period last year.

The group’s HR Technology business drove growth during the fourth quarter.

Group revenue included the benefit of a rent relief program (the ‘Rent Assistance Program’) introduced by the Japanese government in May 2020 as part of a fiscal stimulus package in response to Covid-19. Revenue excluding the Rent Assistance Program was JPY 594.2 billion (USD 5.44 billion), up 0.8% when compared to the previous year.

“Due to proactive investments for future growth in all three segments made in Q4, consolidated adjusted EBITDA decreased significantly,” the company stated.

Revenue by segment

HR Technology consists of the operations of Indeed, Glassdoor and the other related businesses. Media & Solutions consists of two business operations, namely, Marketing Solutions and HR Solutions. Staffing consists of two business operations, which are Japan operations and Overseas operations.

The revenue increase in HR Technology was primarily driven by increased demand for sponsored job advertising. For the fiscal year, approximately 75% of HR Technology revenue was derived from business clients in the US. By 26 March 2021, job postings on Indeed in the US were 13.5% above those of 1 February 2020, the pre-pandemic baseline after adjusting for seasonal variations.

In Media & Solutions, revenue decreased by 7.0% (-16.8% excluding revenue from the Rent Assistance Program) due to the state of emergency from 7 January 2021 to 21 March 2021 in Japan and an increase in Covid-19 cases.

Revenue for Staffing Japan operations decreased by 0.8% and for Overseas Staffing operations increased by 8.3%.

The group also reported full year revenue as follows:

Guidance

Recruit Holdings forecasted revenue between JPY 2.45 trillion and JPY 2.60 trillion (USD 22.4 billion to USD 23.8 billion) for FY 2021. The company’s guidance is for growth of between 40% and 50% for its HR Technology division (on a USD basis, for marginal incremental growth in its Japanese staffing business and between 5% to 10% growth in its overseas staffing business. For the Japanese staffing operations, there was a certain amount of increase in billing prices following the implementation of the “equal pay for equal work” regulations, which had a positive impact on revenue growth in FY2020. But this positive impact is not expected in FY2021.

“The company’s business environment continues to evolve rapidly, making forecasting difficult, as restrictions in some countries have variously been relaxed and reintroduced,” the group stated. “Therefore the company’s outlook remains cautious and FY 2021 guidance is based on the assumption that long-term stagnation of economic activities caused by new large scale lockdowns and states of emergency will not occur during FY2021.”

According to Reuters, Recruit Holdings also announced today that it aims to have women in half of its senior executive roles within ten years. While the timetable seems unambitious from a global perspective, Recruit claims it is “an industry-leading target in Japan” where corporate leaders are overwhelmingly male. At Recruit, women currently make up 10% of senior executives, 42% of managers and 52% of total employees.

Shares in Recruit Holdings closed at JPY 4,787.00 (USD 43.87), down 2.90% on the day and 14.03% below its 52-week high of JPY 5,568.00 (USD 51.01), set on 25 February 2021. The company has a market cap of JPY 8.36 trillion (USD 76.58 billion).