Recruit Holdings Co Adr

Welcome to the Recruit Holdings FY 2024 Earnings Conference Call. This call is simultaneous translation of the original call in Japanese and translation is provided for the convenience of investors only. I'm Mizuho Shen, Manager of IR and PR, and joining me today are Hisayuki Idekoba, Representative Director, President and CEO, and Junichi Arai, Executive Vice President and CFO. First 25 minutes, Deco and Jun will provide a presentation followed by a Q&A session. Please note that today's session, including the Q&A, will be posted on our IR website after the event. Now I'll turn the call over to Deco. Hi, I'm Deco of Recruit Holdings. Thank you so much for your attendance. I'm impressed by this large turnout. Thank you very much. So let us share with you our financial results. First of all, at this time event last year, I predicted the hiring demand in the US. In May last year, we said that the hiring demand in the US would continue to decline for the next 18 to 24 months. And I used this graph. So in the second half, we thought that the hiring demand in the US will hit the bottom and we still see it that way. So we anticipate this difficult environment and run our business based on that. And this is what happened. This is the job ad data in the US. Around October, December, it showed signs of recovery. But as you know well, in February and March, we still see difficult numbers. So we cannot say that the demand has hit the bottom yet. So this is the situation. but it is close to what we anticipated. So the improvement in the business productivity and the product monetization strategy, mainly in the US were pursued and produced certain amount of results. And therefore both revenue and adjusted EBITDA were record high. Now, from April and May onward. The U.S. hiring demand is expected to continue declining. So HR technology U.S. revenue in March and April shows a decline in hiring demand, particularly among small and medium-sized companies. So in the U.S., we expect the job openings to continue declining by around 10% from the current level and run our business based on such assumption. Based on this outlook, we anticipate a slight decrease in revenue and through continued productivity improvement, we expect a slight increase in adjusted EBITDA for this fiscal year. for a recruit group as a whole, we will utilize AI to improve our productivity. So for example, in HR technology business, around 33% of the new program code in HR technology is already being written by AI. That said, I mentioned we anticipate negative 10% in hiring demand, and there is a good possibility that the drop will be bigger than that. So we will continue to prepare for that as we run our business. So the economic circumstances remain challenging, but we believe that the cycle of increased hiring demand will definitely inevitably return next fiscal year or the year after that. So as we've done multiple times in the past decades, we are committed to evolving our products and organizational structure to meet that future demand. So I think that is the timing we are in right now. Today, CFO Arai-san is also here, so I will keep the detailed figures to a minimum. As I mentioned before, We are now using AI to a great extent in our products. And so I would like to take this opportunity to share with you a video to show that.

So please take a look. 20 years ago, Indeed transformed the job market, bringing all online jobs to one site. Today, Indeed helps more than one person get a job every three seconds. But it still takes endless searches, repetitive applications, and sifting through countless resumes just to find the right job or talent. That's why we're reimagining what's possible. By harnessing the power of AI, we're creating a dramatically new and better experience that works tirelessly just for you. Meet Indeed CareerScout, your very own AI talent agent. Forget keyword searches. Now with simple conversational language, tell CareerScout exactly what you're looking for. It understands your skills and experience and guides you to the best matches fast. It can personalize your resume and fill out applications for you. And when you land that interview, practice with CareerScout's Interview AI to build your confidence. Looking beyond your current path, CareerScout can map out new career journeys with earning potential and the steps to get there. Ready to make that move? CareerScout is there to connect you with employers looking for what you have to offer. And for employers, there's indeed TalentScout, your AI recruiting agent that taps into our vast data and insights to optimize your job's title, pay, and description automatically. TalentScout uses your criteria to match you with top talent from over 340 million candidates on Indeed who are open to outreach. Imagine never again sorting through hundreds of applications. Use conversational language to have TalentScout quickly help you narrow down candidates. It highlights qualifications and fit, crafts personalized outreach, schedules, and even runs automated AI interviews. With our new AI agents, Indeed isn't just faster. It's smarter, simpler, more human. For 20 years, we've revolutionized how people get jobs. Now we're doing it again.

So this is currently being tested in the US and is being developed as we speak. We truly believe that this year will be the year when AI actually changes everyone's lives. We plan to continue providing new products that will make life more convenient for hundreds of millions of users around the world. We have also prepared a video of products that are actually being made and used in Japan. So please take a look. So second video, please.

In the HR technology business, the collaboration between the technology of Indeed and the data of the human resources matching business in Japan has led to the creation of AI that searches for jobs and supports careers for various users. One of these is Gakuchika AI Assistant. This AI supports students to overcome the barriers that they face when making the first application documents, such as what they have been doing in their student days and what kind of experiences and learning they can take advantage of in society.

We are in charge of integrated robot development and team management, including climate, transmission, and software. We were able to achieve our goals as a team, and we were able to make it to the final league of the Japanese tournament.

Just by answering questions from AI, your own experience will be developed. Students will organize what they have done, what they have learned, and create a document for application documents.

Oh, so this is how you write it. I see.

The application that took 2 hours to complete took only 6 minutes to complete. More than 45,000 students have already used it. In addition, to provide support to more people, we have started to provide career assistance tests using AI. Career Assistants understand users' concerns and hopes about finding a job and provide appropriate support. Here is an example of a teacher working in a elementary school.

I really like teaching now, and I find it rewarding to watch the growth after teaching, but when I think about holidays and pay, I want to see other industries. I'm interested in creating educational content. What kind of company do you have? I didn't know there was such a career path.

In this way, the career assistant will show you a new career choice that you didn't even notice. It's pretty nice, isn't it?

So finally, AI has evolved from when it was called co-pilot to the point where it can actually take over human tasks. And we are finally getting there. Not just receive recommendation, but have AI do tasks, human tasks for us. The largest... Large language models are already utilizing all available online data, as some people say, but Recruit Group possesses large amounts of matching data, proprietary matching data, and offline conversational data. So by combining our unique jobs and hiring data with AI, We believe we can make life easier for everyone around the world. Now, our CFO Jun Arai will provide details on the consolidated and segment results and guidance. Thank you very much. Hello, this is Ari. This is the first face-to-face event in a while. Before COVID, we did this every quarter, but after COVID pandemic, we escaped to online, if you will, but we can't just keep on doing that. So this time it is real, live, face-to-face. Thank you so much. I watched the video earlier. If we had this Rikunabi AI assistant, Gakuchika in Japanese, or these tools when I was in college, what would I have done? I would have been able to utilize them. I don't have any fun video, only numbers. So I hope you won't get bored. I'm sure the content is not boring, so I hope you could bear with me. So I will discuss FY2024 full year consolidated results and FY2025 full year guidance as some analysts thought that we will do this on a quarterly basis. So this is a full year guidance. FY2024 full year results and the FY2025 full year outlook by our three segments. and updates on measures based on our capital allocation policy. The latest updated measures on capital allocation. As time is limited, and as we want to leave enough time for Q&A session, I will provide a condensed executive summary And after this presentation, we will have a follow-up meeting at 545 with the equity research analysts to discuss further details. All content discussed in each of these presentations will be fully disclosed later on our IR site as part of the earnings call transcript. So please take a look. As previously mentioned, Starting this fiscal year, we have integrated HR technology and HR solutions, which includes the job advertising business and the placement business of Matching in Solutions. As a result, Matching in Solutions now only consists of marketing solutions, including SaaS solutions. And accordingly, the segment name has been changed to Marketing Matching Technologies, or MMT. To facilitate a comparison with our FY 2025 segment outlook, we are presenting FY 2024 pro forma segment financial data, which assumes the integration of these businesses had been in effect from April 1st, 2024. First, regarding the FY 2024 consolidated financial results. Revenue increased by 4.1% to 3,557.4 billion yen as a result of continued focus on improving operational efficiency throughout the fiscal year. Adjusted EBITDA increased 13.5% and reached a record high of 678.8 billion yen, exceeding the revised guidance announced in February. And adjusted EBITDA margin, as you may remember, was 19.1%, surpassing the FY 2021 level, which saw significant growth in the performance of the HR technology segment. Basic EPS increased 20.1% to 271.44 yen, partly due to the effect of share buybacks. The full-year consolidated earnings guidance for FY 2025 disclosed today is based on the following full-year assumed exchange rates, 145 yen per US dollar, 158 yen per euro, and 92 yen per Australian dollar. For FY 2025, we are assuming that US hiring demand will continue to decline with an expected further decrease of approximately 10% from the current level.

For Japan, our premise is the continuation of the current business environment with no sudden economic downturn. Our consolidated guidance for the fall year 2025 is calculated by combining the outlook for each segment and is based on plans to further improve productivity and enhance operational efficiency. Until FY 2024, we presented guidance in a range. However, for FY 2025, with a focus on enhancing the clarity of our disclosures, we are providing a single-point guidance that reflects the approximate midpoint of the internal forecast range calculated for each business segment based on assumptions and premises. As a result, consolidated revenue is expected to be 3 trillion 520 billion yen, which is roughly flat or equal to a decrease of 1.1% from our FY 2024 actual results. Adjusted EBITDA, as Deko said, due to further productivity improvement. is expected to increase by 2.7% to reach 697 billion yen, reaching another record high. Margin is expected to be 19.8%. Basic EPS is expected to increase by 8.7% to 295.0 yen. I will now move on to the results and outlook by segment, starting with HR technology. As Deco mentioned earlier, during periods of a challenging business environment as the one we are in right now, we focus on driving operational efficiency and preparing for the next growth phase in job postings. By doing so, we will continue to expand profitability even while facing headwinds. We often receive questions from institutional investors and analysts regarding the midterm outlook for HR technology's profitability or some sort of a guidance. When the business environment improves, not now, during the recovery phase, we expect both the number of paid job ads, in other words, volume, as well as prices per job to rise. This leads to a significant increase in revenue growth. Depending on the extent of revenue growth and the increase in advertising and promotional expenses deemed necessary, we believe there is a strong possibility that we can exceed the previous record high adjusted EBITDA margin of 43.1% achieved in Q2 FY 2021 right after the COVID pandemic by maintaining or even further improving our current cost structure. We believe again there is a strong possibility that we can exceed that level and in order to do so we are currently making preparations Now, going back to the presentation, segment revenue for FY 2024 increased by 5.4% to 7.38 billion US dollars and adjusted EBITDA margin was 35.9%. The 2024 pro forma based segment revenue due to the integration of HR solutions of matching and solutions, and assuming this had taken place a year prior, segment revenue was $8.99 billion, and adjusted EBITDA margin was 33.0%. In FY 2025, First, I will cover the revenue outlook by region. While the US revenue in the most recent month of April was flat compared to both April last year and March this year, and despite anticipating a further decline in U.S. job postings throughout the year, we expect revenue on a U.S. dollar basis to remain flat year over year, supported by ongoing monetization developments. In Europe and others, which was renamed from rest of the world, we anticipate an 8.1% increase in revenue on a U.S. dollar basis driven by continued advancements in monetization. And in Japan, first revenue will be negatively impacted by the shift from growth to net accounting with the migration to Indeed Plus' PPC model, which deducts agency sales commissions. So there is going to be a negative impact from that. And secondly, we are prioritizing the stable operation of our newly reorganized structure following personnel reassignments to facilitate future growth in the coming years. That's the decision management has made. So on a pro forma basis, revenue is expected to decline by 2.7% in Japanese yen However, on a U.S. dollar basis, it is expected to increase by 2.4%. Segment revenue on a U.S. dollar basis is expected to increase by 2.4% or a decrease of 2.8% on a Japanese yen basis. For segment-adjusted EBITDA, it is expected to increase 7.1% on a US dollar basis or an increase of 1.6% on Japanese yen basis driven by continued cost control initiatives resulting in adjusted EBITDA margin improving to 34.5%. As for staffing, Segment revenue for FY2024 increased and segment-adjusted EBITDA margin was 5.8%. For FY2025, segment revenue is expected to decline by 1.6% due to a 6.8% decrease in Europe, US and Australia. This decrease in Europe, US and Australia is more than what Japan can cover. However, we expect to maintain efficient operations and target a segment adjusted EBITDA margin of 5.6%. And lastly, MMT, which consists of only marketing solutions, including SaaS solutions, will continue to promote our long-term management strategy, help businesses work smarter, contributing to the expansion of revenue and the reduction of operating expenses for business clients in Japan, particularly small and medium-sized business clients, while enriching the lives of individual users and steadily building an ecosystem in the Japanese market. We will achieve further business growth of MMT by contributing to the revenue growth of our business clients driven by the evolution of matching technology. We will also increase our revenue through growth-oriented resource allocation and improve profitability through the development of an efficient operating structure. And as a result, In the medium term, we believe the segment-adjusted EBITDA margin will improve 10 percentage points to approximately 35.5%. The starting point of this is FY2024 pro forma based revenue. In FY 2024, revenue would have been 539.5 billion yen with adjusted EBITDA margin of 25.4% after allocating corporate overhead costs. FY2024 actual adjusted EBITDA margin before allocating corporate overhead costs of marketing solutions in matching solutions was 30.2% in line with our initial outlook for FY2024. However, the allocation of these costs resulting from the separation of HR solutions has been recognized in the pro forma results. As a result, that costs have been added. resulting in the margin of 25.4%. For FY 2025, we expect a 5.1% increase in revenue driven by growth in the lifestyle subsegment, including beauty, travel, dining, and SaaS solutions. with adjusted EBITDA margin improving to 27.5% by driving productivity across the entire segment. The margin improvement is by approximately 2 points to 27.5%. Regarding our capital allocation measures, I'd like to cover this topic last. Looking back at EFI 2024, total payouts to shareholders including dividends and share repurchases of 859.1 billion yen resulted in a total payout ratio of 210.3%. Net cash at the end of the year decreased by about 310 billion yen or so to 822.7 billion yen from the end of the last fiscal year. For FY 2025, the ongoing share repurchase program with an upper limit of 450 billion yen is progressing. As of April 30th, we have already acquired 76% of the upper limit or 340.6 billion yen Given the current pace, we expect the program to be completed significantly earlier than initially anticipated. And we have not changed our target announced in May 2024 to reduce net cash to approximately 600 billion yen over the two years ending March 2026. Going forward, while considering potential strategic M&A opportunities, we will closely monitor changes in the economic and capital market environments and the forecast of our financial position and carefully evaluate the necessity, And if it's deemed necessary, we will also consider carefully the scale and timing of the next share repurchase program. The total per share dividend amount in FY 2025 is expected to be 25.0 yen, which consists of 12.5 yen for an interim dividend and a year-end dividend of 12.5 yen per share. As a global technology company, amidst the turbulent changes in the business environment, we are firmly committed to driving a consistent growth strategy and enhancing operational efficiency. And we respectfully request the understanding and support of all stakeholders, including shareholders and capital market participants. That concludes my presentation.

Thank you. Now we would like to proceed to the Q&A session. Please limit the number of questions to one each time and one follow-up question. To those participating on site, if you have a question, please raise your hand. When you are appointed and the microphone is provided, please introduce your belongings and name before a question. And if you're on Zoom, please chat the question. So to my left, please. JP Morgan Securities, Yamamura is my name. I have one question. So in FY 2024, the economic cycle year zero. So you tried to improve the efficiency and monetize the product and you solidly achieved revenue and profit growth. So North American HR tech plan on the low currency base, it's flat and the number of cases is down. And so you can cover with the price per case. How would you see the sustainability of this monetization? How far can you go? If you could explain that, we'd appreciate it. And the paid job ad in the premium service expansion or minimum budget introduction, there are various measures you've been taking to come this far. So where are you? How far along are you? And in the medium to long-term, which part do you think has the best upside and resiliency to the macro economy? How, where can we find confidence in you? So if you could touch on the sustainability. Thank you very much. Great question. So first of all, the base underlying premise is until now, we tended to sell the number of applications And when the economy goes down, the number of applicants naturally grow. So especially using AI, we hire quality applicants who are suited to that job, who the employers want to hire. We send such qualified job seekers in a selective fashion to reduce the workload of the clients, the employers. In case of large clients, in one year, 3 million or 4 million applicants And clients want to narrow this down to maybe 10, 10 very qualified applicants. So you mentioned premium. Premium is now mainly for the SMEs, small and medium-sized enterprises who want to hire people with certain particular qualifications. So we use multiple matching criteria and charge for that. Going forward, with AI, as I showed you earlier, AI screening or AI actual interviews, There are many areas where we can use AI more. We are testing them as we speak. So how we can charge for that is going to be the key. And we have the so-called demand side auction. This type of workers we want to hire. And they have an auction and set the price for the kind of job seekers they want. OCPC, optimized CPC, or outcome-based, there are such products. So what I want to say here is, It's not just us, but let's say there are 10 who click this ad. This one is promising. This one is not so promising. How can we build, structure the billing of the budget? the advertisement technology is evolving in this area and so will this person the job seeker become a very good applicant for this employer how can we allocate and how can we charge the supply and demand if the supply and demand is accurately understood then we can price more scientifically in other words not just how many people want to hire this person, but also in this area for this kind of job type, how many people are likely to be qualified? If you can understand that... Am I speaking too much? So like this, this kind of evolution is continuing, will continue. So my key point is... the client, the employer side and for the user side, we want them to feel that the value has increased and can be possible with the evolution of AI. And we charge for that. So we should not haste. We should not rush too much. We want our users and clients and us to be convinced that it's good. Then there will be many other ways other than premium to convince our clients and users and bill for that. I'm sorry, maybe I was a bit too long.

Has it just started? Yes, I believe so. It has just started. Thank you. So next person who would like to ask a question to my left in the first row, please. Thank you. This is Kitagawa of Newspix. HR business was performing quite well, but I would like to ask about other businesses, marketing matching technologies. I see that the organization has undergone significant change. Kushida-san is now leading the business. So what is the aim of shifting to this organization and what are your expectations? Thank you for the question. In the past, We had the Japan business and the other HR businesses. This was the rough segmentation, but as you know, in Japan, It's half and half. We have HR-related and non-HR-related business accounting for roughly half each. And this time, of course, the main aim is that rather than having investments made separately into different technologies, especially when it comes to AI-related investments, the size, the scale is significant. So we wanted to consolidate the HR-related businesses into one team. And at the same time, for marketing, Exposure will be higher. We'll have more people paying attention. So, of course, this is a pressure on us as marketing business. We have We have to continue to meet the expectations of our business clients as well as users, that many of them continue to use this service. And through our activities, we want to communicate this point and to appeal to users and convince them of the value. We believe that that's the kind of evolution that we will be able to achieve through this organizational change. So as a whole, You have clients, SMEs, you want to enhance productivity of your business clients, but if you are shifting more to HR business, you fear that this may appear to be a completely different business in nature. I do not believe that to be true. I do not believe this business is a different business. Our commitment is to bring innovation to society. That has been the foundation of our businesses thus far. The visions may be different, make businesses work smarter, help businesses work smarter. This covers not just the HR area, but the other areas as well. Of course, there are synergies with HR. but if you consider fintech our approach to fintech is that you have clients restaurants beauty salons hotels or real estate companies among others we focus on what services need to be provided to this particular customer especially when they are struggling to hire people How can we help them improve their productivity with our services? So, of course, when we consider that FinTech is something that is in scope, customers are paying, customers are using the service. So that's at the basis of how we design our business. So it's not just looking at the category or the segmentation. This is FinTech. What are we going to do? Rather, we follow our vision in a natural manner. We want to simplify hiring. And also to our business clients, what services can we offer? So looking at the differences in vision, I think this has been a natural evolution. I hope I answered your question. Thank you very much.

Next question, please. To my right, second row, please. Thank you, Goldman Sachs Securities. Munakata is my name. So in the earlier question, the corporate client side monetization was referred to. I have a question from the job seeker side. So in the earlier videos, CareerScout and Career Assistant, these services, This is a potential wish that you had. The needs may be dug out and explored. I think it's that kind of service. So from that perspective, what kind of expectations do you have further down the road in an extreme case? There may be people who do not want to change jobs now, but they may still use it even if they don't want to change jobs now. So how do you see the potential of exploring such population? Thank you. Oh, a dream is expanding. And yes, we talk about such things in our meetings. That said, our priority is first the hiring, first do hiring solidly, thoroughly. So for example, our career advisor, we have many offline businesses. What kind of advice are they giving? As exactly as you said, this is where I am. This is what I'm facing. This is my family situation, and this is how it's changing. And this is my future of image. So these are all coming in, but what's difficult is outside of that. So I'm in this school and I qualify for this certification. This is what a recruit has been doing for decades. First of all, in matching business related area, we answer what is being asked first and foremost. And this alone has multiple processes. In tests, This is not the answer we want. We've seen such tests and we see room for accuracy improvement, precision improvement. And what's difficult here is jobs. There's so many different types of jobs. And what you asked is more on the white collar side, I think. So you graduate from a university and find jobs. That's one step. But there are others who need to work this week and need the money right away. There are many workers like that too. So the majority in Japan and the US, the majority is blue collar workers, users. So first we have to thoroughly work on the matching part and then we can broaden the scope and becomes possible to ask new questions to users. Now, if you go come to you, indeed, there are two boxes where you enter title and area. That's the only question you're asked and answer. But if it becomes more conversational or more consultational, We receive broader questions. And what's difficult is our thinking is vertical AI. We want to develop vertical AI. So sometimes we are asked if the investment becomes very high, well, what's the weather tomorrow? That you can ask OpenAI or Google. But what about business, job? We want to be able to answer job-related questions better than anyone else. So I think we can expand as we move forward. But for now, the priority is we still have a lot to do. Thank you. I hope this answers your question.

Thank you very much for the matching accuracy. I see that there has been a significant improvement, at least that appears to be so from our side, but you mentioned that there still needs to be many things that need to be done. So I'm looking forward to them. Right, so as was mentioned before, for example, practicing interviews for a job, that may be a possibility. There are many things that may be possible. things that are only related to hiring. There are still so many things that we can pursue so we can further broaden the scope. Thank you very much. Next question on left-hand side from the second row from the front. This is Suzuki from Nikkei Shimbun. I have a question. You have been sponsoring and promoting diversity. Mr. Trump is now countering DEI, anti-DEI. Do you think this has any impact on your business or are you going to change your policy? Thank you very much for the question. At our company, by the end of fiscal 2030, we will continue to work to achieve sustainability goals. Depending on countries and areas, I understand that difficulties are arising. However, so far, we are not seeing any impact on our business performance. So we will continue to work to achieve our sustainability goals. So does that mean your policy will remain unchanged? Goals. remain unchanged. And goals, policy, you are not going to introduce any significant change to the policy. I just want to confirm that. And to further strengthen your efforts, are there anything you are working on internally? As I briefly mentioned before, to give you examples, things, changes we are seeing in the US, of course, some of them are legal, statutory changes. So Of course, this requires some change on our side to be compliant, and we are considering some change to that extent. But as a Recruit Holdings as a whole, our sustainability goals are basically there to leverage our business strengths in seeking jobs. Of course, we want to help people with disabilities, 30 million people, and so on. but this is something we'd like to continue to work on and achieve going forward. Thank you very much.

So the very front row to the right, third person, please. B of A, Securities Nagao is my name. Thank you very much. First, a while ago, Indeed Plus started So are you feeling traction? How is your reaction to it? And starting April 1st, middle class, the placement and high class executive search now is consolidated to HR tech. So a labor intensive business and HR technology can be multiplied. What kind of new thing is about to be born and how do you see the value? And not just one plus one is two, just a simple combination. How do you think this will turn out to be? Thank you very much. Thank you. Two or three years ago, my daughter taught me and it made sense. So my daughter was thinking of the university as she is a science major. And so I thought, I said, maybe computer science. You can make a lot of money with that profession. Then she said, dad, you're old. Everything can be done by AI. So I have no plan of doing programming now. And I said, what do you want to do now? AGI, ASI, and offline can be connected. Have AGI think and think raw material or protein or drugs, medicine. These offline evolution will evolve. That's the kind of world we will see. And I said, oh, really? So that was the three year ago. She went to chemical engineering after that conversation three years ago. So I'm conducting AI tests now. Of course, online signal is used as a basis. As an extension of machine learning, AI is used in many cases like that. But along with that, the next evolution is offline and online area where those two converge. This is where the biggest benefit of AI, the biggest return of AI can be seen. What I often think is, for example, Windows, when Windows started, before Windows, you wrote a code and you had to boot the code. But with a few hits, application was launched and we were impressed with that back then. Large language model, essentially, what is that evolution as a user experience? You call a call center, and you press one if you want to know the balance. If you lost your card, please press two. They still do that in call centers, but essentially, if you say, I lost a card, I can't find my card. If you know, it will be the next instruction to the machine. Until now, You had to write the programming language or you had to convert numbers like one or two. So in that sense, with large language model, the language that human being speaks becomes the instruction. That is the largest evolution. So in our staffing business and in our placement, online and offline, how the AI evolution can be delivered to people's daily lives. I think that is the biggest evolution we will see in the next two to three years. So we're trying to collaborate more to make that happen. Does this answer your question? So as a business, I want to have a clear image. Oh, so you're saying my answer is not to the point. So in your earlier presentation, you said from ad model to marketplace, that flow. So Indeed can complete the placement business online or speed up as an asset. You are combining it with HR technology, SBU, that kind of business change. If I could hear a little more of that, I'd appreciate it. What I often think is, what value goes up and how we monetize that. We try to separate this as much as possible. So what you just said, this placement, cost per hire, and agent, there are many offline human beings. That's the structure. So if we break down the process and the value, What can we replace online to increase value for the users and for the client companies? If we think like that, monetization is, we used to do this, and so do this model. It's not like that. We should have a different way of thinking. So just by combining it and bringing it overseas, not like that. We want a different kind of value to please the customers. So like I said, if the customers are happy, clients are happy. We can monetize one way or another. So first we want to please the client companies and users. That I think is more important. It's good to make money, but thank you.

My apologies. We are running out of time. We have received many questions from online participants as well. So I would like to pick one question from the online participants. This is Yamaguchi-san from Asahi newspaper. In Mr. Idekoba's presentation, what you talked about for the U.S. market in the first 10 minutes was impressive. the declining birth rate, aggressive M&A activities, but you are facing these earnings announcements in a sincere earnest manner and you are generating 50% of your revenues from overseas business and going forward, do you still need to look to overseas in order to attain growth? What is your future vision of recruits? What will be the overseas ratio? AI, how will that come into play? When I made a presentation on Indeed acquisition at the time, I was in charge of Asia job board. I was an executive officer in charge of that. What I wanted to discuss back then was when we see a technology advancement, we have certain specific areas and others. That's not how technology advancements work. are made, especially when it comes to AI evolution that we are talking about. We have a protein sequence, the language sequence, they are completely the same for AI. Just because it's a Japanese language or the English language, it makes no difference. So in that sense, what we need to consider is making sure technology brings about innovation, bringing convenience to people's lives. And as a result of that, of course, we are still at the level of 300, 350 million users on a monthly basis, but we want to evolve to a business that has 1 billion, 2 billion users. So if we consider that countries like India, Africa, Southeast Asia, That's a natural evolution into these markets. We don't consider in the reverse way. We do not consider where we can increase revenues, and that's why we make choices as to which markets we enter. That's not our way of thinking. Thank you very much. So it is now time to finish Q&A session. Lastly, Irekoba-san, thank you very much for speaking.

But if you could do closing remarks. I'm speaking too much. Can I speak more? Sure. Okay. So as I said at the outset, the global economic situation is so unforeseeable. The U.S. is hard to read. But more than that, The AI evolution that we're seeing right now is once every 20 or 30 year opportunity. So there are good economy, bad economy, but more than that, the key is how much we can let you feel that the life has become so much more convenient in the next one year. That is our focus. And this time next year, I hope to speak with you and say, see, you see an improvement, right? I want to say that. Thank you so much for a long time. With that, we will close this earnings call. Thank you very much for your attendance. Thank you.