HeadHunter Group PLC

Hello everyone and welcome to Headhunter Group second 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 second quarter 2021 results was issued earlier today and the copy may be obtained through our website at investor.hh.ru. Before we begin, we would like to remind you that 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 a discussion of some of the risk factors that could cause actual results to differ, please see the risk factors section in our annual report on Form 20F for the year ended December 31, 2020. During this call, we will refer to some non-IFRS financial measures. These non-IFRS financial measures are not prepared in accordance with IFRS. A 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 would like to turn the call over to Mikhail. Please go ahead.

Thanks, Armand. Hi, everyone. Thanks for joining us today. Halfway through 2021 and I'm increasingly optimistic about the strength of our business. Driven by fundamental market trends, we are currently seeing dramatic corporate activity in the recruitment market. This is evidenced by historical high number of vacancies on our platform and the record intake of new customers. As a result, our total paying customer base in the first half of 2021 exceeded 300,000. Along with customer base expansion, we have completed migration of our users to the new pricing model for subscriptions, allowing us to improve monetization and set the ground for its future enhancement. I'm also excited about our product development in the second quarter. For example, We released to millions of our users an in-platform functionality of direct and instant communication between candidates and employers. Chats and messages are becoming an increasingly important way people consume various digital products, so we are focusing here on integrating recruitment into broadly used interfaces. Another example, we launched cross-posting options for our clients to advertise their vacancies across their platform, thereby extending their candidate outreach. All these are crucial steps in order to help our clients to succeed in this challenging labor market situation. Now let me turn it to Dmitry to walk you through the key highlights of the second quarter. Thank you.

Thank you, Misha. And good afternoon. Thank you for joining us on this call. As Mikhail said, we are very happy to report that our business continued to gain strong momentum and significantly accelerated in the second quarter, delivering across all strategic priorities. Against low comparison base last year, our revenue in Q2 was up 155% year-on-year, driven by average consumption growth, accelerated intake of new small and medium businesses, monetization rollout, and full consolidation of newly assets acquired. Despite some diluting effect from skill as our product consolidation, we improved our profitability with adjusted EBITDA margin came above 57%. Our capex comprised just 2.3% of revenues, contributing to a strong cash flow generation over the quarter. Turning now to our results with customer segment, As a result of organic growth and acquisition of Zarplata, we have increased our customer base by circa 125,000 customers. And over the first half of 2021, we already have more paying clients than the entire pre-COVID-19. During the second quarter, almost all client categories demonstrated triple-digit revenue growth, with small and medium business segments being mostly driven by customer base expansion, both organic and inorganic, while key account segment also reported strong RPC growth, which could be explained by target monetization initiatives. Revenue in Moscow and St. Petersburg increased by 145% year-on-year, while revenue from other regions of Russia went up by 178% year-on-year, now regions reaching nearly a 36% share in total revenue. In terms of product dynamics, we're seeing a tremendous growth in job posting categories, soaring by circa 240% year-on-year and capitalizing on unprecedentedly high demand for labor and labor supply. In small and medium segments, the consumption growth explained circa 70% of total job posting growth, while in key account segments, consumption growth and pricing were nearly equal contributors. CV database access and bundle subscriptions demonstrated 133% and 95% growth year-on-year, respectively. This quarter we completed transition of our clients to a new subscription model and we see that circa 75% of CVDB revenue increase in key account segment is explained by purchase of additional contacts, actually exceeding our original expectations. So overall in terms of top line performance it was arguably the best quarter in our recent history. Having these strong historical numbers coupled with very robust and leading indicators such as long-term subscription bookings and package vacancy purchases, we decided to significantly upgrade our official guidance on full-year revenue growth basis with a range of 63-68% year-on-year. Of course, it assumes continuous recovery trend in the economy and no major restrictive measures in the second half. Now, here is Gregor to talk about our profitability and other financial metrics.