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spk05: Thank you. Hello, everyone, and welcome to Headhunter Group first quarter 2021 earnings call. On the call today we have Mikhail Zhukov, our chief executive officer, Gregory Moiseev, our chief financial officer, and Dmitry Sergiyenko, our chief strategy officer. A press release containing our first quarter 2021 results was issued earlier today, and a copy may be obtained through our website at investor.hh.ru. Now I will quickly walk you through the safe harbor statements. Today's discussion will contain forward-looking statements. Actual results may differ materially from the results predicted or implied by such statements, and forward-looking statements made today speak only to our expectations as of today. We undertake no obligation to publicly update or revise these statements. For discussion of some of the risk factors that could cause actual results to differ, please see the risk factor section in our annual report on Form 20F for the year ended December 31, 2020. During this call, we will be referring to some non-IFRS financial measures. These non-IFRS financial measures are not prepared in accordance with IFRS. Reconciliation of the non-IFRS financial measures to the most directly comparable IFRS measures is provided in the earnings release we issued today and the slide presentation, each of which is available on our website at investor.hh.ru. Now I'll turn the call over to Mikhail for opening remarks. Please go ahead.
spk08: Thank you, Roman, and good afternoon, everyone. A year ago we were at the point of great uncertainty and couldn't imagine how much stronger our business would emerge from this crisis. So today we are especially happy to deliver a solid set of financial and operating results. Positive macro trends this year keep driving businesses' confidence up, resulting in ever-increasing competition for labor. this environment of short supply employers have to allocate budgets towards the most effective recruitment channels and that is why we see over 1 million active job vacancies on our platform right now recently we consolidated our ownership in HR tech company skills which we believe would result in further expansion of our business beyond job advertising finally As we have seen fundamental trends strengthening, we are significantly upgrading our growth guidance and also would like to reward our shareholders with 75% of the 2020 net profits to be paid in dividends. Now, I'll turn it to Dmitry to walk you through the key highlights of the first quarter.
spk11: Thanks, Mikhail. Good afternoon and thank you for joining us on this call. Overall, as Mikhail said, we are very happy to report an excellent set of results on Q1. Our revenue was up 43% year-on-year, even despite the relatively limited low-based effects set for the quarter last year. Growth rates accelerated significantly compared to Q4 across all client and product categories. Our adjusted EBITDA margin, including Zarplata, came at 47%, while our core business EBITDA margin, excluding Zarplata, reached 51%. Our CapEx comprised just 1.9% of revenues, thereby contributing to a strong cash flow generation over the quarter. Our key product dynamic is generally consistent with the previous quarter. Job posting demonstrated the strongest growth trend in the first quarter, growing 59% year-on-year. The growth came on the back of solid intake of new customers, predominantly small and medium businesses, as well as the 2020 differentiated monetization applied to key accounts. Bundled subscription and CV database access demonstrated solid revenue growth of 33% and 25%, respectively, mainly driven by small and medium business consumption growth. Even though over 90% of our clients already migrated to a new subscription monetization model, the impact on revenue at this stage is relatively small, and we expect it to gradually accelerate over the year as heavy users use up all their contacts included in the basic subscription and start consuming on a per-contact basis. Value-added services' outperformance is explained by strong growth in the usage of media ads and price-for-performance products, like Virtual Recruiter, both by key accounts and small and medium businesses. We managed to accelerate revenue growth across all client categories, as I said. Apart from rapid organic growth at Headhunter, in Q1, we added a big part of unique customers from Zarplata. Almost all of them were allocated into regional key accounts or small and medium businesses. Those customers who are not unique to Headhunter have significantly increased the combined average revenue per customer, almost doubling its growth in regional key accounts and small and medium business category. Cohort dynamics remain strong with small and medium businesses acquired during 2020, increasing their spend more than 100% in Q1 and key accounts by more than 60%. Our key account revenue increased by 31% in the first quarter of 2021 year-on-year. The growth is mainly attributable to the 18% RPC growth driven by both substantial enhancement in monetization and high consumption per customer. It's really nice to see very limited consumption adjustment despite all the monetization moves in the key account segment. Just give you a sense of our actual pricing power potential. Small and medium revenue increased by an impressive 56% in the first quarter, primarily due to the growth in number of clients. The share of SME revenue reached 62% versus 57% a year ago, Our business becomes more diverse, and online market penetration keeps on growing. Revenue in Moscow and St. Petersburg increased by 36%, while revenue from other regions of Russia went up by an impressive 65% year-on-year. In Q1, we reached a share of revenue generated outside of Moscow and St. Petersburg of 61%, compared to 56% a year ago. So we think these numbers provide evidence of great traction across strategic growth areas, as well as indicate the potential that is still ahead of us. Now, here's Gregory to talk about profitability and cash flow.
spk07: Thank you, Dimar, and hello, everyone. In the first quarter of 2021, our total operating costs and expenses increased by 37.8% compared to the first quarter of 2020. Almost half of this increase is related to consolidation of Zarplata. Going by each bucket, our personal expenses increased by 45.5% compared to the first quarter of 2020. Most of the growth in this bucket came from our main business where we increased our headcount by circa 8% or 68 people over the last 12 months. As usual, this new hiring was mostly in our development and sales functions. However, it was smaller than in the same period last year due to COVID-related higher and freezing 2020. We also have increased wages by circa 10% in the second half of 2020. Additional Zarplata segment has driven approximately one-third of the growth in our personnel expenses in the first quarter of 2021. We also had the COVID-related cost-cutting initiative in the first quarter of 2020, which saved us approximately 35 million rubles through reduction in bonuses, which is not occurring in the first quarter of 2021, and thus also contributes to the growth in our personnel expenses. As a percentage of revenue, our personnel expenses, excluding share-based compensations and other items, have increased in the first quarter of 2021 by circa one percentage point to 27.5. This was a result of a decrease in personal expenses as percentage of revenue in our main business, which was upset by additional Zarplata segment in which personal expenses as percentage of revenue is higher, as well as COVID related savings in the first quarter of 2020 not occurring in the first quarter of 2021. Moving on, our marketing expenses increased by 39% compared to the first quarter of 2020. More than half of this increase was attributable to Zarplata consolidation. Marketing expenses were 15.5% of revenue, a slight decrease compared to 16% in the first quarter of 2020. This was similar to personnel expenses, a result of a decrease in marketing expenses as percentage of revenue in our main business, which was partly offset by additional Zapata segment in which marketing spend is higher as percentage of revenue in general and also skewed towards the first quarter in this year in particular. Our other general and administrative expenses in the first quarter of 2021 increased by 17.4% to 281 million rubles, mostly on the back of 18 hours of PLATA segment expenses. Now a few words on margins. Our adjusted EBITDA margin in the first quarter of 2021 decreased by circa one and a half percentage points to 47.2%. We saw a sizable margin increase in our main business, which was upset by lower margins in our Zerplata segment due to a more accentuated revenue seasonality and timing of marketing expenses in this segment in the first quarter of 2021, which is why we think this decrease is not indicative of the full year results. We expect that in the full year results, South Plata's lower profitability will continue to have a dilutive impact on our margins, but this impact will be absorbed by operating leverage embedded in our main business. Moving on to other key indicators, our capital expenditure in the first quarter 2021, excluding acquisition of assets of Scylla, was 59 million, or approximately 2% of revenue. which was a sharp decrease compared to 103 million in the first quarter of 2020, primarily because our office fit-out project was completed in 2020. Our networking capital as of the first quarter decreased by 1.4 billion rubles to minus 5.3 billion compared to 2020 year-end, primarily due to customer advances we received in the first quarter of 2021. and an increase in other payables due to 630 million consideration payable for the acquisition of Scylla. Our income tax expense was 254 million in the first quarter of 2021, compared to 231 million in the first quarter of 2020, which is circa 10% increase. Our effective tax rate, excluding various short-term effects, was at 26% in the first quarter of 2021, Same as in the first quarter of 2020, also including various short-term effects. Now turn into cash generation metrics. In the first quarter of 2021, we generated almost 2 billion rubles from operating activities compared to 942 million in the first quarter of 2020. This growth was primarily driven by an increase in sales. We used circa 200 million in investment activities in the first quarter of 2021 compared to approximately 100 million in the first quarter of 2020. This increase was mainly due to the 234 million consideration paid in the first quarter of 2021 for acquisition of Zapata which was partly offset by a decrease in the acquisition of fixed assets as we completed our innovations in Moscow in the Yaroslavl office in the second quarter of 2020. Net cash used in financing activities was $258 million in the first quarter of 2021 compared to $59 million in the first quarter of 2020. This change between the periods was primarily due to the repayment of bank and other loans in the amount of 121 million in the first quarter of 2021, not occurring in the first quarter of 2020 due to COVID-related period of non-working days, as well as 42 million fees paid in relation with the 4 billion non-convertible bond issue in the fourth quarter of 2020 to finance acquisition of Zarplata. Our net debt decreased by circa one and a half billion rubles and leverage has decreased from 1.2 times to 0.7 times EBITDA compared to December 31st, 2020, primarily due to an increase in cash balances from cash generated and operating activities in the first quarter of 2021. Now moving to the dividend. We took some time this year to evaluate market situation and considering strong performance here today, we are glad to announce, as Mikhail said, the full year 2020 dividend of 55 cents per share, representing approximately 75% of our adjusted net income for the year 2020. The record date for this dividend is June 9th, 2021, and the payment date is July 16th, 2021. We encourage investors who believe they are eligible to lower withholding tax rates under double taxation treaties to submit relevant documentation to us and to apply for lower rate. Please see details on this process in our earnings release. And now I would like to turn the word back to Dmitry to discuss skill as consolidation and provide updated guidance for 2021. Thank you.
spk11: Thank you, Gregory. We're pretty excited to announce the acquisition of our additional 40% stake in Skillus. This week we finally triggered our call option right that we received at the time of the original transaction two years ago. We had a pretty convenient final decision timeline over which Skillus, with our help, expanded their revenue base by almost 10 times and evolved from a promising technology startup to one of the leading SaaS platforms in the market. We acquired 40% in skillets from various financial investors for 623 million rubles, a well-earning company at circa 1.5 billion. And I'm planning over 60% discount to Headhunter LTM Revenue Multiple. So the implied price is quite attractive due to the way we structured the call option. Post-closing, Headhunter will own 65%, while the remaining 35% will stay with the founder and the CEO. To remind you, Skillast develops a cloud-based end-to-end software, allowing it to automate many integral parts of the recruitment process and significantly improve speed and cost per hire. As part of their product strategy, Skillast targets large enterprises with complex recruitment processes and high customization demands. The company operates a highly attractive SaaS business model with average contract duration of two to three years, leading to high revenue visibility. perfectly scalable in our view, enjoying high operating leverage effect when on scale as they grow. Strategically, we believe that getting control or basic recruitment system is very important for headhunter future growth, and this is expected to increase our client retention, guide our product development strategy, and also allow us to expand into various HR tech areas down the road. In terms of skill as operating traction, The company demonstrated sound diversification of an enterprise client base, now having exposure to over 15 different industry segments. That facilitated strong expansion of their contract portfolio and growing share of recurring SaaS revenue. For this year, we expect the company to at least double their revenue base as their pre-booked revenue of 2021 to date already exceeding full year revenue of 2021. A few words about market opportunity. The addressable market for enterprise ATS solution is estimated to be over 10 billion rubles, of which only 7% is currently taken by SKILAS and their smaller ATS competitors. The vast majority of the markets still use outdated or legacy home-built systems lacking to compete with modern cloud solutions in terms of real impact on core recruitment KPIs. This facilitates a rapid penetration of SaaS ATS platform posting overall over 60% CAGR since 2018. But SkillUS has been growing even faster. We believe that company share in SaaS ETS markets almost doubled over the last two years, reaching over 50% now. Going forward, being seamlessly integrated with our sourcing platform, SkillUS would represent a totally unique customer proposition, and that should help them benefit from the structural trends and gradually grab a bigger share of this $10 billion market. A lot of general successful precedents of building sizable and profitable business in this space globally, and that's why we're really excited about this opportunity. Finally, turning to our guidance, to reflect the impact of skill loss consolidation as well as core business outperformance year-to-date, we'd like to increase our revenue growth guidance range by 8% to 45% to 50% year-on-year. That is it for Q1 2021. We're now opening the floor for your questions.
spk12: Thank you, dear participants. We will now begin the question-and-answer session. As a reminder, if you wish to ask a question, please press star and 1 on your telephone keypad. The first question comes from the line of Slava Dektarov from Goldman Sachs. Please ask your question.
spk01: Yes, thank you very much for the presentation. A couple of questions. Firstly, can you share your thoughts how much of the recent spike in vacancies is attributed to a temporary one-off factors like the lack of migrants, for example, And how much are the structural developments like demographics problems in Russia or digitalization across the industry that is happening on the back of COVID? And my second question would be if you can elaborate how you approached the addressable market definition, basically this 10 billion rubles opportunity for skill-ups. Thank you.
spk11: Thanks, Pavel. I'll take these questions. On the first one, kind of trying to decompose this, the outperformance happened in Q1. Well, first of all, circa 10% growth is driven by Zarplata consolidation, right? And in our estimate, around 5% growth due to low base effect that kind of was set two weeks last year in the end of March. The rest is in our view is organic growth and largely that is caused by intensifying competition for labor and just general online market consolidation. You rightfully mentioned that actually the market is not really driven now by the kind of existing misbalances. We believe that they are quite fundamental and well-interranged and long-lasting because At the moment, of course, the market is kind of misbalanced and unprecedented employer activity and pretty acute shortage of the candidates. We see business confidence generally is going up on the back of vaccination rollout and just general growing consumer activity. So a lot of demand from new economy, especially for low-skilled labor, such as couriers, drivers, moors, etc., And so employer activities in January in our estimate grew by a circle of 60%, while candidate activity grew by a single digit at the same time. So the major trend that is kind of behind this and why we believe it's quite fundamental is the kind of negative demography prevailing in Russia over the last 10 years that was kind of amplified by the kind of alterations caused by lockdowns and the COVID situation. Employee population, especially in certain categories like 20, 24 age, are declined by a whopping 50% over 10 years. In the age 24, 25, the decline was 25%. So this is actually the core labor force, the target of the new economy, right? obviously the demand is coming from the mobility from e-commerce they are mostly uh targeting these categories that are in the sharp decline and now you as you also mentioned you're adding to this uh circle million immigrants powerful right that hit the construction industry first of all but also e-commerce and new economy and also there's a general understanding so the employees we see the to rotate job in this environment so probably that will kind of roll back over time. But the overall macro and demographic situation, I don't think it will change. And we're probably just entering the face of a very kind of candidate-centric market. And so that is kind of forcing large companies to advertise a bigger number of vacancies, more intensely use the new channels. And this immediately turning to online in kind of expedite manner. And so we see this kind of structural tailwinds. And some of it may actually disappear over time as the kind of situation normalizes, right? And in become more, again, more willing to leave. But the vast majority of it will stay for some years. That's the answer to the first question. And the second addressable market, we actually did a certain kind of bottom-up research. We look at the companies in the market, their profiles. We kind of created their target profile for systems like Scylla's, Cater's. And so we ended up having circle one and a half thousand companies, kind of the biggest 500 from every K-list and then somewhat smaller but still quite big enterprises. And we look at their existing solutions and potential kind of average check that this these companies could pay just for the best example in the industry right because we see actually how skill us affects uh improves the cost of your hire at the company so we believe that the others would just follow suit so technically we just did it bottom up multiplying number of clients by the average check so we end up having this 10 billion in our view it's quite conservative estimate we believe that this kind of total recruitment spend would grow further because we kind of applied a pretty small check. I think the check would be even bigger over time.
spk01: Thank you very much.
spk12: Thank you. The next question comes from the line of Stephen Ju from Credit Suisse. Please ask a question.
spk10: Okay, thank you so much. So will you talk about the overlap of the Skillaz client versus the Headhunter client? It seems like the overlap should be among your perhaps the larger key accounts. And I guess from an integration perspective, when do you anticipate that your salespeople will also begin to sell the Skillaz product as well? Thank you.
spk11: Thanks, Stephen. This is Midgey here again. In terms of overlap, it's actually 100% overlap because they really target the blue-chip clients. And with, I think, very small exemptions, we actually serve that market in its entirety. So we don't expect the 80 clients of Skilas to be honest, not using basic headhunter services. It's rather actually more for us to upsell Skilas products We actually have been working with Scyllas for two years already, right? We, I think, are quite in good shape in terms of understanding the differences between selling marketplace and access product versus SaaS product and automation product because the latter actually requires quite a lot of client work for maybe months or two. Although even technically, it's a lot of automated on the Scylla side, as I said. But still, it actually requires a very strong kind of customer success team. So from that perspective, I think it would be up to Scylla to build up that capability mostly. And we see our Salesforce rather as kind of lead generation for Scylla, right? Because we have pretty deep in client dialogue. We understand their needs. We kind of identify the need first. And then we kind of transferred that to a very professional, very focused on SaaS sales force by Skillus. And that's what we had already been doing and there are some successful upsells on our site and we'll just kind of roll it out further.
spk07: Thank you.
spk12: Thank you. The next question comes from the line of Ivan Kim from Excellus Capital, please ask your question.
spk06: Hi, just can you talk about the longer term outlook? So I guess it's just building on what you've been talking before, but you reached impressive 1 million job postings on your platform. But what is next, so to say, so do you see over this or next year a significant upside of risk to this number? So can it increase significantly further from here? That's the first question. The second question on SKILOS, when do you expect it to reach a positive EBDA and what could be the stated state of the game margin in that business? And lastly, Justin, the marketing expense, so that was 16% revenue. So I was just wondering, what should we expect in the remainder of the year, if you're comfortable just providing some sort of estimates of marketing to sales for the year as a whole? Thank you.
spk11: Thanks, Ivan. I think I'll meet you here. I'll take the first two, and then Gregorio will comment on marketing. Look, I think we're clearly kind of revising at the moment our longer-term targets, right? Because it was always a bit of a kind of unknown zone where is the potential in this especially small and medium businesses penetration and when the market is going to saturate. Now we see with the dynamics that have been kind of observed last year half a year that this target definitely should be revised upwards. And we believe that with the level of digitalization in Russia among the population, we should be actually exceeding even the kind of European benchmarks set by companies like StepStone or SIG or some US examples just because of the pace of adoption at the moment and candidate penetration, which is most important. So I think that that should result in kind of accelerated adoption, especially from small and medium businesses. I think on the kind of general growth upside is a big chunk of key accounts monetization. And I think in the environment that, as I said, we are entering in, it's much more favorable to execute our monetization strategy. So I think from that perspective, we're also now kind of revising our monetization plan towards acceleration. And then the third one, I think the kind of third pillar of our growth is entering the other areas of HR. And I think that the situation that is happening at the moment that should also spur the high demand, not only in sourcing of the candidate, but also in processing and just the increasing overall efficiency of the process. And I think that's highly beneficial for HR tech market. And that's why I think that in the longer run, it should also benefit the solutions like Skivas and others. So I think we actually see that, of course, that we might not be experiencing this type of growth quarter over quarter for a long term, right? At some point, there will be small deceleration as the market normalized. I think in terms of kind of achieving longer-term targets, I think we're really kind of a few steps ahead of our own plans two years ago. And on EBITDA from Skelos, I think a quick answer. It's going to be kind of dilutive for this year, probably a few percentage points. And Scyllas, of course, is focused on developing their products, so they're hiring a lot of R&D and sales, and so they're a bit less concerned about the profitability in the short term. But I think as per our internal models, even from next year, they may already approach some break-even. They've actually done already a great job over the last two years on this front. But I don't think we will kind of squeeze their growth potential just to kind of hit some EBITDA margin on the skill level. Because as I said, even now, on the group level, it's not material, right, 2%. And it will go further over time. Here, hand over to Gregory to comment on marketing.
spk07: GREGORY PETERSENKOVY- Yeah, hello. I think I mentioned during the presentation that we do see the decrease in marketing as percentage of revenue in our main business in the first quarter. Basically, we expect the same decrease in marketing as percentage of revenue for the whole year in the core business. But at the same time, is in Zartplatte, marketing is slightly higher as percentage of revenue than in Headhunter. We think on consolidated level, it will be essentially probably flat compared to the last year. I understand, I know if that answers your question.
spk06: Yes, thank you. Okay.
spk12: Thank you, dear participants. As a reminder, if you wish to ask a question, please press star and one on your telephone keypad. The next question comes from the line of Anna Kurbatova from Alphabank. Please ask your question.
spk00: Yes, good afternoon. Thank you very much, everyone, for the call and for a great top-line performance. I have actually three questions. The first one, you indicate on your chart with the total addressable market for Scyllas that Scyllas has 51% market share, and there is another big rival with 18% share. and which is more or less three times bigger than all the remaining participants. So it would be great to understand who this player is, advantages or strong parts of the business or disadvantages. The second question would be, what preserves you now from giving us profitability guidance? Because if I'm not mistaken, when you, right after the IPO two years ago, that was common practice that you gave top line growth guidance, both and EBITDA guidance. And just the third question is a technical one. Did I understand correctly that skills will be consolidated in your P&L statement and financial results from 1st of April 2021? Thank you.
spk11: Thanks, Anna. I'll answer the first one. The second player in the kind of special CTS market that we carved out is a company called Handflow. It's an entirely private-owned company. We are obviously tracking their performance. I think they are are a bit more kind of positioned in the lower end of the enterprise market and our in our view they're kind of their capabilities of delivering complex enterprise solutions are not that strong as a skill us and a few years ago when we actually decided to go after the best kind of best horse in the market. We were obviously considering both assets and at the time these companies were more or less equal size. And now actually we see that Skillaz is much more just scalable because of the kind of addressing the probably the part of the market that is the most advanced in their demand because they're really struggling now the most and it seems like they kind of already reached the point when the budgets for HFR are more easier to accept within such enterprises than, say, five years ago. I don't know if that answers your question. I'll hand over to Gregor to comment on profitability and skill as a consolidation.
spk07: Yeah. Thanks, Nima. Hi, Alma. This is Gregory. Frankly, this year, so on the first question, right, about profitability, this year we kind of more focused on business expansion because as you can see, you know, the market is quite turbulent and we saw the tremendous demand for labor force in the Q1, right? We would like to kind of keep our options open on this kind of market in terms of expenses and do not target capital. kind of specific EBITDA margin in 2021. But what we see from the conceptual Q1 results, right, we saw expansion in our main business in our adjusted EBITDA margin, as Dima said before, I think. And we probably expected to kind of go on in the rest of the year. As we said, our plotter will dilute this, but we expect this dilution to be absorbed kind of fully by the separating leverage in the main business, plus skillets will also have a smaller dilutive effect, right? Basically, overall, for the full year, we're kind of looking at margin in the ballpark 50%, as we said on the call, plus quarter, which is slightly above the 2020 adjusted EBITDA margin. But again, it's a ballpark, right? Could be slightly less, could be slightly more.
spk00: Yes, thank you. Thank you very much. And on the exact date of consolidation of kilos?
spk07: Yep. Yeah, it's you're totally right. The will consolidate the company from from the April 1 from the second quarter. So second quarter will have the full skill as results for the full quarter.
spk00: Thank you. Great. Thank you very much.
spk12: Thank you. The next question comes from line of john kim from UBS. Please ask a question.
spk09: Hi, everybody. Two questions, please. Can you comment on business velocity in the April and March months? Are those sustainable levels for you, or is there a bit of time and place in here? Secondly, are you seeing anything new or innovative from competitors on any of the core products? Thanks.
spk11: Hi, John. Well, I will start with the second question. I don't think we see any significant changes on the competitor front, product-wise. We see that they are obviously trying to kind of exploit the existing market opportunities and generally the whole market is kind of benefiting from this situation and we see their vacancies and vacancy base also growing, although if you look at the kind of gap against the number two between us and competitors, I think that the gap was growing both on the kind of content side and also on Canada's side, if you look at the traffic dynamics. Again, the whole market is kind of struggling for Canada in this environment, but a bit disproportionately. And so we believe that our traffic market share also keeps growing. But For product-wise, we don't really see that any of the competitors coming up with anything that is kind of very unique to the market. It's more of an hour to kind of addressing that is coming up in the market from the audience perspective and client perspective. And again, this first one, could you, John, please repeat? Because I was really hearing you very hardly.
spk09: Sure. So just about the business velocity in April and May.
spk11: seem to be backing out growth rates around 50 to 40 percent does that make sense and is that sustainable in the first quarter I think we were more or less discuss this question than before right because what there were some sectors that were kind of helping right we're coming into a little busy sector and an end of qq1 and that will continue and accelerate, as you may expect, in the second quarter, right? Because I think we're kind of consistently seeing our triple-digit growth numbers back very low base last year. There are some, I'm afraid to say, kind of features on the market that are We believe they may change over time, especially kind of candidate behavior. At the moment they are maybe too relaxed and they may be kind of more active with the kind of high confidence over time. But what drives at the moment the market is the demographic situation and we don't see how this can be really resolved in a short pace. So from that perspective, I think that growth driver will just remain for quite a long time. And also monetization, obviously, was a really strong factor. And in our numbers, you see very limited impact from our last year change of subscription model, right? Because As I said, most of the clients already migrated to new subscriptions, but they're still using the packages that are included in the basic subscription. In April, for example, we saw that revenue from these contacts, they kind of exceeded their revenue for the preceding three months. So that will accelerate, I would say. It's very strong. environment for monetization improvement. And so we believe that may even enhance from current level over time.
spk03: Okay, thank you.
spk12: Thank you, dear participants. As a reminder, if you wish to ask a question, please press star and one on your telephone keypad. The next question comes from the line of Ivan Kim from Exxelos Capital. Please ask your question.
spk06: Thank you for the opportunity. I just wanted to follow up on the margin dilution effect from Scyllas. I'm not sure I heard it right, that it's going to be a three percentage point impact on the margin. Seems a little high. So if you could elaborate on that, that would be great. And then secondly, just on the key accounts ARPC, So what was driving the acceleration in that in the first quarter, which was quite significant even before the price increase in April, and also, as Dmitry mentioned, before paper contact effect kicks in this year, which is later. Thank you.
spk07: Hey, Juan. This is Gregor. I think I'll take the first question. No, actually, the estimate is much lower, I think, potentially maybe around one percentage point on four-year results.
spk11: Ivan and Dmitry here on your second question on RPC. Actually, there are two major factors. The first is consolidation of Zerplatta, because we really acquired a lot of regional key accounts. Not acquired, but actually those who were not uniquely added, their RPC on top of ours. So that's kind of quite technical. But that's not the major. The major one was effectively the initiative that we rolled out last year. First of all, if you remember, maybe a year ago, we were discussing at length our differentiated approach towards key accounts, right? And obviously all the initiatives that are kind of proposed in the market, they're having sort of delayed effect. And starting from January, we kind of started reaping the rewards. And I think that was probably the major the major driver especially given the dynamics in the key accounts job posting right because it was well first the Intensified competition so they started consuming more and also side effect of our new subscriptions because they are kind of trying to optimize their budget and replacing our contact with job postings and And at the same time, we don't see real impact on contact revenues, but on job posting side, we see incremental demand and revenue.
spk06: Great. Thank you very much.
spk12: Thank you, dear participants. Once again, if you wish to ask a question, please press star and 1 on your telephone keypad. The next question comes from Maria Sukhanova from BCS. Please ask your question. Yes, hello, just a quick one. What is your message about the revenue growth guidance?
spk04: Is it, would you say it's based on conservative assumptions or you think that it's really reflects what you're seeing now? Thank you.
spk03: Yes, hi Maria, it's Nidri.
spk11: We're, well, I would say that kind of The range, they were pretty much confident at this point, and we said that sort of 2% would expect to be added from skill-less consolidation, and the remaining kind of, we upgraded guidance by 8%, the remaining 6% actually stems from our business outperformance We see very strong year-to-date, quarter-to-date results, and there are no signs of deceleration at this point of time, but we kind of bear in mind that the COVID situation is not over yet, and it won't be over in the second half, right? We're not safe from any potential lockdown on this popular non-working days announcement all of a sudden. So I think at this point of time, we're pretty much confident to kind of hit this range. and we also reserve the right to review it later in the year.
spk04: Thank you. Thank you. Dear participants, if you wish to ask a question, please press star and one. There are no further questions at this time. Please continue.
spk03: Thank you, everybody, for joining, and take care. Bye-bye.
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