Thank you very much. Welcome to Recruit Holdings Co., Ltd. Q3 FY 2023 earnings conference call. This call is the simultaneous translation of the original call in Japanese, and translation is provided for the convenience of investors only. I am Mizuho Shen from IR NPR, and joining me today is Junichi Arai, Senior Vice President of Corporate Strategy & Investor Relations of Recruit Holdings. Thank you all for joining today. Earlier, at 3 P.M., we disclosed our FY 2023 Q3 financial results, Q4 outlook, and full year guidance. Many of you may have already watched the video presentation of the financial results, but I would like to give you a brief summary. Although we have assumed a decrease in consolidated revenue and adjusted EBITDA for the full year due to the deteriorating business environment and uncertainty in the future during the fiscal year, today, we disclosed that consolidated revenue is expected to be approximately flat year-over-year, at JPY 3.4 trillion. Consolidated adjusted EBITDA is expected to be JPY 585 billion, due to a significant increase in adjusted EBITDA margin in Matching & Solutions, and a margin increase in HR Technology, resulting from cost controls throughout the fiscal year. Profit attributable to owners of the parent is expected to be approximately JPY 354 billion, a record high. Basic EPS and adjusted EPS are expected to increase approximately 34.1% and 16.9%, respectively. Consolidated revenue for Q3 decreased 1.5% due to continued lower revenue in HR Technology, despite revenue increases in Matching & Solutions and Staffing. Consolidated adjusted EBITDA margin increased 2.5 percentage points to 18.3% as a result of cost controls. For Q4, now the results for each SBU. For HR Technology in Q3, U.S. dollar-based revenue decreased 17.2%, and adjusted EBITDA margin was 33.2%, which was above the outlook announced. For Q4, revenue is expected to be approximately flat quarter-over-quarter, with a potential small increment benefit from Indeed PLUS. Adjusted EBITDA margin for Q4 is expected to be approximately 27%, as we expect operating expenses to increase quarter-over-quarter, due primarily to seasonal increases in personnel costs and advertising expenses, and incremental costs related to Indeed PLUS. We expect U.S. dollar-based revenue for FY 2023 to decrease approximately 15.5%, and Adjusted EBITDA margin of approximately 34%. For Matching & Solutions, revenue in HR Solutions for Q3 decreased 0.8% to JPY 73.1 billion, and revenue in Marketing Solutions increased 7.1%. Adjusted EBITDA margin was 23.3%. Revenue in HR Solutions is expected to decrease approximately 4.5%, due to the continued downward revenue trend in the job advertising service and the impact from transition of revenue of HR Technology due to Indeed PLUS. Revenue in Marketing Solutions is expected to increase approximately 7%. Adjusted EBITDA is expected to improve from the previous year to 12.5%, with advertising expenses in anticipation of new next fiscal year and in the past. For FY 2023, revenue in HR Solutions in FY 2023 is expected to increase approximately 2.5%, and revenue in Marketing Solutions for Q4 is expected to increase approximately 9% for FY 2023. Adjusted EBITDA margin in Matching & Solutions for FY 2023 is expected to be approximately 20%, in line with our initial estimate. For Staffing, based on results through Q3 and outlook for Q4, we expect revenue in Japan for FY 2023 to increase approximately 10%, while revenue in Europe, U.S., and Australia is expected to decrease approximately 2%. Adjusted EBITDA margin is expected to be approximately 6%, in line with our initial outlook. Next, I would like to briefly introduce Indeed PLUS, which is quite important to progress on business strategy before moving on to Q&A. I appreciate sell-side equity research analysts who have already published their research reports regarding Indeed PLUS. Starting with Indeed PLUS, we will quickly promote the conversion of HR Solutions in Matching & Solutions into HR Technology, and promote simply hiring in Japan. Sorry, simplify hiring in Japan. Indeed PLUS has been developed and prepared in the Japanese market, which is the second largest HR Matching market after the United States, as a cross-business project by HR Solutions or Matching & Solutions and HR Technology since 2021. It supports the efficient hiring of the best-matched talent and simplifies the complicated hiring process. Indeed PLUS is a job distribution platform that automatically distributes jobs to the most appropriate job boards based on the job content by linking multiple job boards. ...For the 12 months through December 2023, HR Solutions revenue in the job advertising business for full-time and part-time job seekers was approximately JPY 115 billion, and Indeed revenue in Japan was approximately JPY 68 billion. Each of the job boards operated by HR Solutions in Matching & Solutions will gradually become a job board linked to Indeed PLUS, and revenue from job advertising services in HR Solutions will gradually shifted to Indeed Japan. In addition, Indeed expects to further increase its revenue in Japan in the medium to long term by acquiring new employers who use Indeed PLUS, and by increasing the average revenue of existing employers. Now I would like to take your questions. If you have a question, please click on the Zoom Raise Hand button. Please unmute before asking your question. We will accept up to two questions at a time. So first, JP Morgan, Mori-san, please. Thank you very much for this opportunity. I have two questions. First is Indeed PLUS that you just mentioned. If I could ask you to elaborate on that? I'm sorry if I don't have a full understanding. First of all, your job ad JPY 115 billion revenue, this will shift gradually to HR technology, I understand. So if it's just a simple shift, by moving to PPC, the revenue per customer may dip in the short term, but in the medium to long term, I understand it has a big potential. So what is the timeline you have in mind for customers, for the client, the users to shift? And how do you think the revenue will trend? Will it dip once and then recover and grow from there onward? And, what will the, which part of the phase will next year be? It's only been 10 days since you started, but the current advertisers, response or feedback, or how do you feel the acquisition of the, acquiring new, advertisers? Thank you. Please go ahead with your second question. HR Tech. So you stop PPA this time. The revenue per job will... The effort to increase revenue per job will go back to 0 once, or are you taking various measures? Next measure will come very shortly. Is this a trial? So the revenue per job after you stop using PPA, what will it look like? Could you elaborate on your initiatives to raise your added value? I'm sorry, for another question. Smart Sourcing will be launched in spring, my understanding is correct, and I'm sorry I don't have the full picture yet, but with such service, you are trying to increase the revenue per job. Is that part of your effort? Thank you very much. First, starting with Indeed PLUS. Our job ad business in Japan, this is the revenue that our sales is creating and generating and the sales through agency, and this has been the case historically. This has been the model all along. So our clients' preference and the agency's actions and job seekers' evaluation will all come into play. So it's not that we set the timeline. All these factors will need to be watched and monitored and shift smoothly and expeditiously. So we want to have business clients understand this as soon as possible and shift smoothly. We have no intention of taking unnecessarily long time on this. When we in May, we will explain more on how we plan to progress. Will we decline once, dip once or not? Even if that happens, as Mori-san just said, this will lead to a more efficient, simplified hiring process in the medium to long term. So there may be some ups and downs or decline as part of the transition, but this will be beneficial in the long run. And revenue, you mentioned, JPY 115 billion... whether this shifts it to Indeed? The revenue recognition is different. Indeed side, Indeed side, HR technology side. For revenue via the agencies, the invoice comes from the agency, so revenue will be recognized on net. Now, from Recruit, the business from Recruit, Recruit issues the invoice, and so the revenue is recognized on gross basis. The fee paid to the agency is included in the sales promotion expenses, and so the number is different. It's not just 100, full 100 shifts to the other side. We hope to realize this shift as quickly as possible. It depends on how our business clients manage their budget, but if it goes well, we should be able to avoid a big downside. From the 30th, we started this launch on January 30th, and so it's too early to make any judgment, but our business clients say that they are enjoying a simpler process. So, talk with Recruit and then make, and then send, and sent back, all these back and forth communication can be avoided. They said that this is very convenient and easy to use. So the feedback is positive. That's the feedback we get from our business department on the business side. On the job seeker side, Rikunabi NEXT, the number of jobs is increasing. Job seekers are increasing, is experiencing this positive change. So if this trend continues, we can realize and complete the smooth transition. To your second question, the abolition of PPA. In FAQ, second question, we referred to the content, expecting such question. Pay for performance will continue being validated. So it's not going to be a dramatic change like PPA, but it will be like PPSA, to adjust the billing, by understanding the response by our clients. The launch of Smart Sourcing. So the new product evolution using AI, we are trying many things. We always do. The strong response from the clients came from this Smart Sourcing that Mori-san said. As you rightly said, this is to improve the revenue unit price. So how we can improve our performance will be pursued further. We will take on various challenges to try to approach our goal. So we stopped using PPA, but we will continue our pursuit for further value. Thank you. Follow-up question on my second point. So next year, HR Technology revenue will be volume linked, more volume linked. I think it was somewhere in the FAQ or in my script at hand. So even with the declining job revenue decline may be smaller or flat. That means the revenue per job is increasing. And so, of course, it is a business that is heavily impacted by volume, but compared to the past, unit price is increasing. So we will continue pursuing that and try to increase this further. So it's not that we are heavily dependent on volume. We are trying to improve our performance, and improve the unit price per job, and continue having our clients use our product and enjoy our value that we can offer. Thank you very much. Next, Munakata-san from Goldman Sachs, please. Can you hear me? Yes. Thank you. I have two questions. First question is regarding the sunset of PPA. In your explanation, you talked about the paying for the qualified job applicants. And there was a discrepancy from the expectations to the actual usage by the clients. But the concept of pay-per-application itself may have been different, but having the client corporate client accept within 72 hours was that where there was a discrepancy in terms of the process? So or was there some positive feedback from the pay-per-application model itself or the concept itself, which could help you continue to promote pay-for-performance model going forward? And the second question may be difficult to respond immediately. In terms of the next fiscal year, in the Q3 earnings report one year ago, 2024-2025, it is likely to be declining in revenue. That was the comment from the management one year ago, and so one year has passed since then. Is there any changes in the outlook for the next fiscal year? If there's anything that you can comment now, thank you very much. Let me respond to your second question first. We would like to talk about this in May. We are currently having various discussions with the business side, looking at the various numbers. That is where we are at. So it is premature to make any comments clearly today. So I would like to refrain from giving any clear answer. But it is the first time that we're able to provide the full year outlook at this juncture. And so for May, are we going to do this or not? That could be one fork in the road, and that's of course dependent on the visibility of the market. As I responded to the previous question, we will never stop evolving our business, how we can grow our revenue and expand our margin. We will develop excellent service, which will be accepted by clients and used by many job seekers. That is the way for us to grow our business, and this is not something that we do in a single year. So what kind of a year the next fiscal year will be? This is still being formulated as a plan, and so we are still working on that. So from Q3 to Q4, please refer to the trend in order to consider what will be the next fiscal year projections as you wait for the main announcement. Going back to your first question. The reject and replace within 72 hours from the application. From the employer side, looking for the applicants, this actually initiated a large scale change in their hiring process. That was one discovery. So especially for large clients, they had to work on the weekends, and even during long holidays, they had to respond, and it was quite cumbersome. That was the feedback that we received. In order for the client to use this product, they had to comply with these requirements, and there was a hurdle for the client side. On the other hand, for the job seekers, it's an excellent scheme, but what is the change to resolve these challenges? We did try, but we were not able to resolve the challenges. It was difficult for us to further expand PPA. Something that happened was that employers, in this reject or replace, they took advantage of this scheme, and so they would reject and then send an email to the applicant directly to hire that person. So this was something that ended up happening, which was not expected. We saw a growth in the number of rejections, a surge in the number of rejections toward the end. We decided not to continue to use PPA and improve the scheme, but rather to sunset the scheme itself. Thank you. I have one follow-up to that. Regarding PPA, thank you very much for the clear explanation, and there may be some overlap with the previous question. Regarding the next fiscal year, in the U.S., I understand that the shift to PPSA is almost complete. So you will all establish the PPSA, and rather than a drastic change, you will be looking at a more minor change, adding value without a drastic change, while improving the unit price. Is this the understanding? For the next fiscal year, I will explain in more detail in May, as mentioned, but basically, we will forge ahead with PPSA. We will also conduct various trials. For the successful trials, we will be able to share with you as soon as possible. Not every trial is going to be successful, so there will be trial and error. We will choose the initiatives that have a high probability of success. So, after launching, we will listen to customer feedback. If possible, we will make improvements and expand, and we will be continuing this cycle, so our challenge will continue. Thank you very much. That's very clear. I look forward to your new trials. Thank you. Toward the end of March, the leaders of businesses will talk in more detail about their specific initiatives. So also, please look forward to the event in March. Thank you. I look forward to it. So next, Citi Securities, Yamamura-san, please. Thank you. Yamamura is my name. Thank you. Can you hear me? I have two questions. First is on Indeed PLUS medium-term perspective. First, you will eliminate the redundancies, and this will improve the efficiency in terms of your structure. In the medium term, wallet share will increase. How could I understand this? So with Indeed PLUS, if the hiring can be done more efficiently, there will be less job ad required, so the demand will come to Indeed PLUS, and share will increase. Business clients will use multiple media. Maybe that will be the case, to see how it goes. So including the timeline, how do you think of the progress in the medium term? Second question, in Q3, Matching & Solutions, HR Solutions revenue. So in Q3, Indeed PLUS impact was probably nonexistent, so the slow revenue growth, there's no technical reasons. Is that correct? In Q2, some business clients canceled, and there was a temporary weakness. Maybe the impact is lingering. After Indeed PLUS started, the situation may change, but advertisement, promotion, expenses was reduced, and so maybe the revenue is remaining weak. Matching & Solutions, HR Solutions may be less competitive, and that is why you are trying to boost by taking these measures by introducing Indeed PLUS? Thank you. So our medium-term view of Indeed PLUS. In the end, the business clients are aiming for hiring people, so using... It's not just about placing ads on multiple media. With the evolution of AI, matching will evolve. So the optimal display to the job seekers can be controlled in accordance with the budget, and so the return will improve vis-a-vis the budget used. So in the end, return on investment from business clients' viewpoint, if that is the best, we can win in this competition. So that is the biggest factor as we see it. So that is the Simplify Hiring, the essence of Simplify Hiring. It's not just about shifting to Indeed PLUS. Beyond that, improving the matching accuracy, we are focusing on that technology to improve the precision.... It's not just about Indeed, it's not just about the Japan business. We are trying to do investment to improve our services, to become more competitive as a company-wide effort. So it's not just about Indeed PLUS. That alone is not the goal. Of course, if it's a good service, if business clients are willing to spend more budget, that will be highly welcome for us, but that is not the goal. How to evolve the matching is our end goal. In Q3, Matching & Solutions, HR Solutions. So that was, the growth was negative 8%. I will not go into the details, the numbers, but placement business is going well. It remains strong. But media side, business clients' appetite and the entire market is slightly weakening. So that is the background. Of course, Indeed PLUS project was progressing, and so development and sales were focused in that area. But the market slowed down a bit, and that was a big factor behind. I said earlier, and I also mentioned in the script, this project started in 2021, so we've been preparing for quite some time. So the breakthrough, it's not something we just came up, because, to address this short-term dip. It was not a quick fix. So the reduction in advertisement is not leading to the revenue decline. Well, other players, peers, are using much advertisement expenses, and of course, there's a comparison, with us and our peers. But the market projection or the views on the environment are different from one another, so that is not the only reason. Understood. Thank you very much. Thank you. Next, Nagao-san from BofA Securities. Thank you. I'm Nagao from BofA. I have two questions. First, regarding the HR tech EBITDA margin actuals, revenue was basically in line with the guidance. But in terms of the EBITDA margin, for three consecutive terms, you have overperformed the guidance. Looking at the EBITDA margin trend, regarding the profitability, is there a sense of optimism among the top management, or is there a continued conservative stance when it comes to the margin? I'd like to ask the management stance. And additionally, looking at the U.S. economic indices, improvement trends have continued for quite a long time. Looking at the most recent HR tech revenue, it is still going down. But looking at the U.S. advertising market, in the second half of 2024, a large recovery is being expected. So little by little, I believe that there are signs of optimism for HR tech revenue going forward. I would like to ask the mindsets of the board members regarding the future trends. That was my first question. My second question, on the thirteenth of December, the share repurchase program was announced. Why was this announced at that timing? This purchase program will be up until July of 2024, and then after that, is there any changes in terms of the shareholder return policy? Those are my two questions. Thank you. To the extent of my knowledge, Deko has never been optimistic. He always feels a sense of urgency, assumes the worst in his management. That is my view. So of course, there are good times and bad times in the market, and it's a balanced mindset, I believe, in growing the business. And that is the thinking of the rest of the board as well. Going back to your question, U.S. IT companies, I believe, share a similar trend. So revenue top line growth, rather than driving the revenue top line growth aggressively, it's more about allocating resources for organizational efficiency and operational efficiency. As time goes by, we have seen increase in productivity for our organization and our operation. In the history of Recruit, when the HR market is tough, we have taken measures to improve the productivity of the organization, which makes us stronger, or as a result. And we have continued these efforts in the past, and we would like to continue going forward. That was the response to your first question. Regarding the share repurchase announced in December, why at that timing? This fiscal year, we have conducted a self-tender offer twice. Now we have the share buyback program, the general or share repurchase program, that we have the securities banks in charge of. We did not want to conduct this simultaneously, so we have completed the self-tender offer, and so we are able to start the share repurchase program. That is one aspect. As we disclosed today, margin improvement measures have been quite effective from about that time or a little before that time. Also, we had the one-time tax benefit from the organizational change, which boosts our bottom line above our initial expectations. Then the dividend, as well as the self-tender offer, that we conducted twice. The return to the shareholders in terms of the ratio would be inferior to the previous year, based on the calculations. So given that background, since we have confirmed that there are no immediate plans to invest in a large-scale M&A, we were ready to return to the shareholders, and that is why we announced at that timing. That would be the background. And the program is running to end of July. The reason being, what kind of return we can provide to the shareholders? We considered the amount, and we discussed with the securities firms what timeframe would be necessary, and the reply was that from December to July would be the right amount of time, and so that is why we decided on the timeframe of the program. Regarding the ongoing capital allocation policy, there is no change to that. It is rather that we have done one by one, and the last item is the buyback, which we are conducting in an agile manner in order to secure the return to shareholders. Thank you. In that case, this will not be something that you'll be conducting on a regular basis going forward constantly, but rather you will look at the overall picture and conduct such share repurchases agilely. You're right, there is no change to our stance. Depending on the investor, some would say that agile share buyback is fine, but that the company should provide a more clear direction on this. So, taking those feedback, agile is of course sounds good, but in what kind of situation we will conduct the share buyback may not be as clear. So in May, we do hope to provide some more explanation regarding our capital allocation. Thank you very much. Macquarie Securities, Tanioka-san, please. Thank you very much. Tanioka from Macquarie Securities. I have two questions. First is related to the earlier question. You talked about self-tender offer, it's during the share repurchase period. Corporate shareholders still hold a big amount of your shares, so if you are purchasing from the shareholders, are you prepared to move positively towards purchasing from the existing shareholders, corporate shareholders? And the other question is, second question is, last year, about one year ago, Indeed HR, the headcount reduction was announced, and now you are a lean structure, a highly productive structure. Is there a trigger of rehiring? What will the trigger be? So, again, same question from last time. Thank you. So as I answered in your earlier question, we are currently in the period, and as I said, during this share repurchase period, large shareholders, if there is a request from large shareholders and Self-Tender Offer, will be a discounted transaction in that case. We will probably not run this in parallel. There is no consistency if we do these two in parallel. So if one ends and the other starts, that may be something we can consider, but a timing and other factors need to be aligned. So during the share repurchase period, the TOB tender offer, discounted tender offer, will not be done for the specific shareholders. But if there are requests that come in, we will discuss afterwards, and no particular request at this point, though. Thank you. To your second question, last year, at the end of March, we did the headcount reduction. For hiring, we are doing this in a very selective manner. It's not just a big resumption of hiring. If there are talented, capable personnel, and if there's a focus area we want to increase our resources on, we do hire on a selective basis. So it's not that we will increase the headcount aggressively again. We have new product development or new initiative; these projects are ongoing. We will shift people and also hire people in some cases, including our group companies. Our talent portfolio will be kept at an optimum level. Thank you. Thank you. Thank you very much. We have responded to all the questions raised. It's a bit early, but we would like to close the session here. Lastly, one more comment from Arai-san. In the last week of March 2024, from the 27th of March morning to 28 evening and the 29th evening, we will be hosting our inaugural investor update, FY 2023, virtually, spanning three days. This has already been announced. As I mentioned earlier, in response to questions, this event will feature senior management from Recruit Holdings, as well as our business and product leaders from the SBUs, and members of the sustainability committee. Together, we will discuss updates to our business strategies and latest product innovations. For the institutional investors and the sell-side analysts, our business side members will be presenting their activities and the product development. We hope to share such information to further your understanding. Please note, financial data related to results and guidance, including FY 2023 financial results and guidance for FY 2024, will not be discussed in the event in March. These numbers will be discussed by Deko or myself after our full year results announcement in May. Details of the investor update FY 2023 can be found on our IR website. This will be recorded as well, so that you can view this at a later date. I hope that you will join us for the event. Thank you very much. Thank you. This is the link-