February 12, 2025

Recruit Holdings Co., Ltd. (TSE 6098)

Consolidated Financial Results for the Nine Months Ended December 31, 2024 (IFRS)

Tokyo, February 12, 2025 ― Recruit Holdings Co., Ltd. announced today its consolidated financial results for the nine months ended December 31, 2024 (April 1, 2024 to December 31, 2024)

Consolidated Operating Results

Adjusted EBITDA: Operating income + depreciation and amortization (excluding depreciation of right-of-use assets)

+ share-based payment expenses ± other operating income/expenses

Adjusted EPS, which was previously disclosed, will no longer be disclosed starting from the fiscal year ending March 31, 2025, due to a revision of voluntary disclosure indicators.

Consolidated Financial Position

Consolidated Financial Guidance for FY2024

The Company has revised the financial guidance for FY2024 from the figures announced on November 11, 2024 as below.

¹ Number of issued shares at the end of the period and number of treasury stock at the end of the period are as of January 31, 2025 on a delivery date basis.
Please refer to page 4. Qualitative Information on Consolidated Financial Guidance for more details.

Significant Changes in Scope of Consolidation

There was no significant change in the scope of consolidation.

Changes in Accounting Policies and Changes in Accounting Estimates

There has been no change in: (1) accounting policies required by IFRS, (2) accounting policies other than the foregoing item (1), and (3) accounting estimates.

¹ The number of treasury stock 167,101,068 as of December 31, 2024 includes treasury stock held by the Company (102,647,158 shares) and the Company’s stock held in the trust account of the Board Incentive Plan (“BIP”) trust and the Employee Stock Ownership Plan (“ESOP”) trust (64,453,910 shares).

Definition of the Abbreviation

Average Exchange Rate during the Period

The Japanese-language originals of the attached consolidated quarterly financial statements have been voluntarily reviewed by certified public accountants or an audit firm.

Forward-Looking Statements

This document contains forward-looking statements, which reflect the Company's assumptions and outlook for the future and estimates based on information available to the Company and the Company's plans and expectations as of the date of this document or other date indicated. There can be no assurance that the relevant forecasts and other forward-looking statements will be achieved. Please note that significant differences between the forecasts and other forward-looking statements and actual results may arise due to various factors, including changes in economic conditions, changes in individual users’ preferences and business clients' needs, competition, changes in the legal and regulatory environment, fluctuations in foreign exchange rates, and other factors. Accordingly, readers are cautioned against placing undue reliance on any such forward-looking statements. The Company has no obligation to update or revise any information contained in this document based on any subsequent developments except as required by applicable law or stock exchange rules and regulations.

Note Regarding Reference Translation

This document has been translated from the Japanese language original for reference purposes only and may not be used or disclosed for any other purpose without the Company’s prior written consent. In the event of any conflict or discrepancy between this translated document and the Japanese language original, the Japanese language original shall prevail in all respects. The Company makes no representations regarding the accuracy or completeness of this translation and assumes no responsibility for any losses or damages arising from the use of this translation.

Third-Party Information

This document includes information derived from or based on third-party sources, including information about the markets in which the Company operates. These statements are based on statistics and other information from third-party sources as cited herein, and the Company has not independently verified and cannot assure the accuracy or completeness of any information derived from or based on third-party sources.

U.S. Disclaimer – Unsponsored American Depositary Receipt (“ADR”)

The Company does not support or encourage, and has not consented to, the creation of any unsponsored ADR facilities in respect of its securities and in any event disclaims any liability in connection with an unsponsored ADR. The Company does not represent to any depositary institution, bank or anyone nor should any such entity rely on a belief that the Web site of the Company includes all published information in English, currently, and on an ongoing basis, required to claim an exemption under U.S. Exchange Act Rule 12g3-2(b).

A full set of materials regarding Q3 FY2024 results announcement is posted on https://recruit-holdings.com/en/ir/financials/

Contact

Investor Relations

+81-3-3511-6383

Recruit_HD_IR@r.recruit.co.jp

Table of Contents

1. 1. Management’s Discussion and Analysis

   4

2. 2. Qualitative Information on Consolidated Financial Guidance

   4

3. 3. Condensed Quarterly Consolidated Financial Statements and Primary Notes

   6

   Condensed Quarterly Consolidated Statements of Financial Position

   6

   Condensed Quarterly Consolidated Statements of Profit or Loss

   7

   Condensed Quarterly Consolidated Statements of Comprehensive Income

   8

   Condensed Quarterly Consolidated Statements of Changes in Equity

   9

   Condensed Quarterly Consolidated Statements of Cash Flows

   11

   Notes to Condensed Quarterly Consolidated Financial Statements

   12

4. Supplementary Information

15

Independent Auditor’s Report on the Interim Review of Quarterly Consolidated Financial Statements

17

1. Management’s Discussion and Analysis

   For Q3 FY2024 results, please refer to TDnet or “Q3 FY2024 Consolidated Results” on our IR website disclosed on February 12, 2025.

   https://recruit-holdings.com/en/ir/

   
   

   There are no significant matters regarding Analysis of Consolidated Financial Position.

   
   

   Please refer to Section 4. Supplementary Information for the “Results of Operation by Segment,” “Selling, General and Administrative Expenses,” “Share-based Payment Expenses and Research and Development Expenses,” and “Net Cash Balance.”

   
   

2. Qualitative Information on Consolidated Financial Guidance

   The Company has revised full-year consolidated financial guidance for FY2024 announced on November 11, 2024.

   
   

   The revised financial guidance is the sum of the cumulative results up to Q3 FY2024 and the guidance for Q4 FY2024, which is largely in line with the guidance for the second half of FY2024 announced on November 11, 2024.

   
   

   (In billions of yen)	REVISED FY2024 Guidance (as of Feb. 2025)	FY2024 Guidance (as of Nov. 2024)
   Revenue	3,560.0	3,468.7 - 3,548.7
   YoY % change	4.2%	1.5% - 3.9%
   Adjusted EBITDA	673.0	622.2 - 682.2
   YoY % change	12.5%	4.0% - 14.0%
   Operating income	488.0	442.7 - 502.7
   YoY % change	21.2%	10.0% - 24.9%
   Profit attributable to owners of the parent	403.0	362.4 - 407.4
   YoY % change	14.0%	2.5% - 15.2%
   Basic EPS (yen)1	267.00	239.64 - 270.64
   YoY % change	18.1%	6.0% - 19.8%

   ¹ Number of issued shares and number of treasury stock for purposes of the guidance calculations are as of January 31, 2025 on a delivery date basis.

   
   

   The foreign exchange rate assumptions for the Q4 of FY2024 are 154 yen per US dollar, 159 yen per Euro and 97 yen per Australian dollar.

   
   

   HR Technology

   
   

   The Company has revised the FY2024 full-year outlook announced on November 11, 2024 as below.

   
   

   	REVISED FY2024 Outlook (as of Feb. 2025)	FY2024 Outlook (as of Nov. 2024)
   Revenue
   (YoY on US dollar basis)
   US	1.5%	1.4%±
   Japan	50.3%	52.1%±
   Rest of World	3.0%	6.2%±
   Total	5.3%	4.1% - 7.9%
   Adjusted EBITDA margin (%)	35.6%	34.1% - 36.0%

   
   

   The total amount of share-based payment expense in FY2024 is expected to be approximately 520 million US dollars.

   
   

   Matching & Solutions

   
   

   The Company has revised the FY2024 full-year outlook announced on November 11, 2024 as below.

   
   

   	REVISED FY2024 Outlook (as of Feb. 2025)	FY2024 Outlook (as of Nov. 2024)
   Revenue (YoY)
   HR Solutions	(10.0)%	(12.3)% - (7.4)%
   Marketing Solutions	7.8%	5.4% - 8.4%
   Total	1.0%	(1.4)% - 2.4%
   Adjusted EBITDA margin (%)
   HR Solutions1	19.5%	18.8% - 21.0%
   Marketing Solutions1	30.0%	30.0%±
   Total	22.5%	21.6% - 23.4%

   ¹Before allocation of corporate overhead costs.

   
   

   Staffing

   
   

   The Company has revised the FY2024 full-year outlook announced on November 11, 2024 as below.

   
   

   	REVISED FY2024 Outlook (as of Feb. 2025)	FY2024 Outlook (as of Nov. 2024)
   Revenue (YoY)
   Japan	6.9%	7.2%±
   Europe, US, and Australia	(1.7)%	(3.9)% - (2.9)%
   Total	2.2%	1.2% - 1.7%
   Adjusted EBITDA margin (%)	5.8%	5.9%±







3. Condensed Quarterly Consolidated Financial Statements and Primary Notes

   Condensed Quarterly Consolidated Statements of Financial Position

   
   

   (In millions of yen)	As of March 31, 2024	As of December 31, 2024
   Assets
   Current assets
   Cash and cash equivalents	1,136,858	871,812
   Trade and other receivables	549,814	572,575
   Other financial assets	5,608	3,744
   Other assets	70,462	100,761
   Total current assets	1,762,744	1,548,895
   Non-current assets
   Property and equipment	66,513	58,041
   Right-of-use assets	170,366	144,429
   Goodwill	510,638	527,786
   Intangible assets Investments in associates and	185,219 26,841	188,215 22,447
   joint ventures Other financial assets	210,271	185,194
   Deferred tax assets	203,482	221,690
   Other assets	8,567	12,089
   Total non-current assets	1,381,902	1,359,895
   Total assets	3,144,646	2,908,790

Condensed Quarterly Consolidated Statements of Profit or Loss

Condensed Quarterly Consolidated Statements of Comprehensive Income

Condensed Quarterly Consolidated Statements of Changes in Equity

For the Nine Months Ended December 31, 2023

For the Nine Months Ended December 31, 2024

Condensed Quarterly Consolidated Statements of Cash Flows

Notes to Condensed Quarterly Consolidated Financial Statements

1. Applicable Financial Reporting Framework

   
   

   The Company’s condensed quarterly consolidated financial statements (condensed quarterly consolidated statements of financial position, condensed quarterly consolidated statements of profit or loss, condensed quarterly consolidated statements of comprehensive income, condensed quarterly consolidated statements of changes in equity, condensed quarterly consolidated statements of cash flows, and notes) are prepared in accordance with Article 5, Paragraph 2 of Tokyo Stock Exchange, Inc.’s standards for the preparation of quarterly financial statements, etc. (however, the omissions set out in Article 5, Paragraph 5 of the same standards apply). The condensed quarterly consolidated financial statements are prepared based on International Accounting Standard No. 34 “Interim Financial Reporting” (hereinafter “IAS 34”), but some of the disclosure items and notes required by IAS 34 are omitted. Accordingly, the condensed quarterly consolidated financial statements are not a set of condensed financial statements in accordance with IAS 34.

   
   

2. Going Concern Assumption

   
   

   Not applicable.

   
   

3. Operating Segments

   
   

   1. Overview of Reportable Segments

      
      

      The Company’s operating segments are those components of the Company for which discrete financial information is available and whose operating results are regularly reviewed by the Board of Directors to decide on the allocation of operating resources and assess business performance. The Company has three operating segments by type of business, HR Technology, Matching & Solutions, and Staffing, which are also the reportable segments.

      
      

      HR Technology consists of three operations, the US, Japan, and Rest of World. Matching & Solutions consists of two operations, HR Solutions and Marketing Solutions. Staffing consists of two operations, Japan and Europe, US and Australia.

      
      

   2. Information on Reportable Segments

   
   

   Segment profit (loss) denotes adjusted EBITDA (operating income + depreciation and amortization (excluding depreciation of right-of-use assets) + share-based payment expenses ± other operating income/expenses).

   
   

   Revenue from external customers in Adjustments includes revenue that is not allocated to a specific reportable segment, and segment profit (loss) of Adjustments includes corporate expenses not allocated to any reportable segments. Corporate expenses consist primarily of general and administrative expenses that are not allocable to the segments. Intersegment revenue or transfers are calculated based on a price used in similar transactions with third parties. Segment assets and liabilities are not stated as they are not subject to review for the purpose of deciding on the allocation of operating resources and assessing business performance.

   
   

   For the Nine Months Ended December 31, 2023

   	Reportable Segment
   (In millions of yen)	HR Technology	Matching & Solutions	Staffing	Total	Adjustments	Consolidated
   Revenue
   Revenue from external customers	756,546	593,238	1,221,968	2,571,754	960	2,572,714
   Intersegment revenue or transfers	1,680	6,428	19,427	27,536	(27,536)	-
   Total	758,226	599,667	1,241,396	2,599,290	(26,576)	2,572,714
   Segment profit (loss)	271,050	135,236	84,680	490,968	(4,555)	486,412
   Depreciation and amortization (Note)						56,245
   Share-based payment expenses						64,171
   Other operating income						3,184
   Other operating expenses						22,376
   Operating income						346,803
   Share of profit (loss) of associates and joint ventures						(722)
   Finance income						39,940
   Finance costs						3,988
   Profit before tax						382,032

Note: Depreciation and amortization exclude depreciation of right-of-use assets.

For the Nine Months Ended December 31, 2024

Note: Depreciation and amortization exclude depreciation of right-of-use assets.

1. Treasury Stock

   Treasury stock recognized in the Condensed Quarterly Consolidated Statements of Financial Position includes Recruit Holdings shares held by the BIP trust and the ESOP trust.

   The breakdown of treasury stock is as follows:

   
   

   	As of March 31, 2024		As of December 31, 2024
   (In millions of yen, unless otherwise stated)	Number of shares (shares)	Carrying amount	Number of shares (shares)	Carrying amount
   Treasury stock directly held by Recruit	50,413,104	214,070	102,647,158	757,887
   Recruit Holdings shares held by the BIP trust	54,788,017	192,979	64,453,910	248,415
   Total	105,201,121	407,049	167,101,068	1,006,303

   
   

2. Significant Subsequent Events

   Share Repurchase

   
   

   The Company, by resolution of its Board of Directors on July 9, 2024, implemented the following share repurchase program, pursuant to Article 156 of the Companies Act as applied by replacing certain terms pursuant to Article 165, Paragraph 3 of the said Act.

   
   

   1. Details of common stock repurchased on and after January 1, 2025

      
      

      (i) Type of shares to be repurchased	Common shares of Recruit Holdings
      (ii) Total number of shares repurchased	3,605,800 shares
      (iii) Total purchase price	39,287 million yen
      (iv) Acquisition period	From January 1, 2025 to January 31, 2025 (delivery date basis)

   2. Details of the purchases resolved by the Board of Directors on July 9, 2024

      
      

      (i) Type of shares to be repurchased	Common shares of Recruit Holdings
      (ii) Total number of shares to be repurchased	87,000,000 shares (Maximum)
      (iii) Total purchase price	600,000 million yen (Maximum)
      (iv) Repurchase period	From July 10, 2024 to July 9, 2025
      (v) Method of repurchases	(1) Market purchases on Tokyo Stock Exchange, Inc. through an appointed securities dealer with transaction discretion (2) Purchases through Off-Auction Own Share Repurchase Trading System (ToSTNeT-3)

   3. Total number of common stock repurchased pursuant to the Board of Directors resolution described above (As of January 31, 2025)

      
      

      (i) Type of shares repurchased	Common shares of Recruit Holdings
      (ii) Total number of shares repurchased	63,142,100 shares
      (iii) Total purchase price	583,787 million yen

1. Supplementary Information

Supplementary Information is not subject to review by a certified public accountant nor an independent auditor.

Results of Operations by Segment

¹ Before allocation of corporate overhead costs.

¹Included in employee benefit expenses.

²Consisted primarily of compensation expenses for engineering and other technical employees of HR Technology responsible for the development of new products and enhancement of existing products using new technologies, which are accounted for as employee benefit expenses.

Net Cash Balance

(English Translation)

Independent Auditor’s Report on the Interim Review of Quarterly Consolidated Financial Statements

February 12, 2025

The Board of Directors
Recruit Holdings Co., Ltd.

Ernst & Young ShinNihon LLC
Tokyo, Japan

Hitoshi Matsuoka

Certified Public Accountant
Designated and Engagement Partner

Takeshi Saida

Certified Public Accountant
Designated and Engagement Partner

Takuto Miki

Certified Public Accountant
Designated and Engagement Partner

Taisuke Horie

Certified Public Accountant
Designated and Engagement Partner

Conclusion

We have conducted an interim review of Recruit Holdings Co., Ltd.’s condensed quarterly consolidated financial statements for the third quarter (October 1, 2024 to December 31, 2024) and first nine months (April 1, 2024 to December 31, 2024) of the consolidated fiscal year from April 1, 2024 to March 31, 2025, listed in the “Attachments” to the quarterly financial results, which comprise the condensed quarterly consolidated statements of financial position, condensed quarterly consolidated statements of profit or loss, condensed quarterly consolidated statements of comprehensive income, condensed quarterly consolidated statements of changes in equity, condensed quarterly consolidated statements of cash flows, and notes to condensed quarterly consolidated financial statements.

As a result of conducting our interim review, there were no matters that cause us to believe that the condensed quarterly consolidated financial statements referred to above have not been prepared in accordance with Article 5, Paragraph 2 of the Tokyo Stock Exchange’s Standards Used for Preparation of Quarterly Financial Statements, etc. (however, the omission of the description prescribed in Article 5, Paragraph 5 of the Standards Used for Preparation of Quarterly Financial Statements, etc., has been applied), in all material respects.

Basis for the Conclusion

We conducted our interim review in accordance with interim review standards generally accepted in Japan. Our responsibility under the interim review standards is stated in the “Auditor’s Responsibility for the Interim Review of the Condensed Quarterly Consolidated Financial Statements.” We are independent of the Company and its consolidated subsidiaries in accordance with the provisions related to professional ethics in Japan, and are fulfilling other ethical responsibilities as an auditor. We believe that we have obtained sufficient and appropriate evidence to provide a basis for our conclusion.

Responsibilities of Management, Audit and Supervisory Board Members and Audit and Supervisory Board for the Condensed Quarterly Consolidated Financial Statements

Management is responsible for the preparation of condensed quarterly financial statements in accordance with Article 5, Paragraph 2 of the Tokyo Stock Exchange’s Standards Used for Preparation of Quarterly Financial Statements, etc. (however, the omission of the description prescribed in Article 5, Paragraph 5 of the Standards Used for Preparation of Quarterly Financial Statements, etc., has been applied), and for designing and operating such internal control as management determines is necessary to enable the preparation of the condensed quarterly consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the condensed quarterly consolidated financial statements, management is responsible for assessing whether it is appropriate to prepare the condensed quarterly consolidated financial statements in accordance with the premise of a going concern, and for disclosing matters relating to going concern when it is required to do so in accordance with Article 5, Paragraph 2 of the Tokyo Stock Exchange’s Standards Used for Preparation of Quarterly Financial Statements, etc. (however, the omission of the description prescribed in Article 5, Paragraph 5 of the Standards Used for Preparation of Quarterly Financial Statements, etc., has been applied).

Audit and Supervisory Board members and Audit and Supervisory Board are responsible for monitoring the execution of Directors’ duties related to designing and operating the financial reporting process.

Auditor’s Responsibilities for the Interim Review of the Condensed Quarterly Consolidated Financial Statements

Our responsibility is to give a conclusion on the condensed quarterly consolidated financial statements from an independent standpoint in an interim review report based on our interim review.

As part of an interim review in accordance with interim review standards generally accepted in Japan, we exercise professional judgment and maintain professional skepticism throughout the interim review. We also:

・Ask questions primarily to management and persons responsible for financial and accounting matters, perform analytical procedures and other interim review procedures. Interim review procedures are more limited procedures than audits of annual financial statements performed in accordance with auditing standards generally accepted in Japan.

・If we determine that there is significant uncertainty in regard to events or conditions that may cast significant doubt on the entity’s ability to continue as a going concern, we conclude, based on the evidence obtained, whether there are any matters that cause us to believe that the condensed quarterly consolidated financial statements have not been prepared in accordance with Article 5, Paragraph 2 of the Tokyo Stock Exchange’s Standards Used for Preparation of Quarterly Financial Statements, etc. (however, the omission of the description prescribed in Article 5, Paragraph 5 of the Standards Used for Preparation of Quarterly Financial Statements, etc., has been applied). In addition, if there is significant uncertainty concerning the premise of a going concern, we are required to call attention to the notes to the condensed quarterly consolidated financial statements in the interim review report, or if the notes to the condensed quarterly consolidated financial statements pertaining to the significant uncertainty are inappropriate, issue a modified opinion or a negative opinion on the condensed quarterly consolidated financial statements. While our conclusion is based on the evidence obtained up to the date of the interim review report, depending on future events or conditions, an entity may be unable to continue as a going concern.

・Assess whether there are any matters that cause us to believe that the presentation of and notes to the condensed quarterly consolidated financial statements have not been prepared in accordance with Article 5, Paragraph 2 of the Tokyo Stock Exchange’s Standards Used for Preparation of Quarterly Financial Statements, etc. (however, the omission of the description prescribed in Article 5, Paragraph 5 of the Standards Used for Preparation of Quarterly Financial Statements, etc., has been applied).

・Obtain evidence regarding the financial statements of the Company and its consolidated subsidiaries that forms the basis for giving a conclusion on the condensed quarterly consolidated financial statements. We are responsible for direction, supervision and inspections relating to the interim review of the condensed quarterly consolidated financial statements. We remain solely responsible for our conclusion.

We communicate with the Audit and Supervisory Board members and Audit and Supervisory Board regarding the planned scope and timing of the interim review and material interim review findings.

We also provide the Audit and Supervisory Board members and Audit and Supervisory Board with a statement that we have complied with the ethical requirements in Japan regarding independence, and communicate to them all relationships and other matters that may reasonably be thought to have impacts on our independence, and where applicable, related measures in order to eliminate obstruction factors or safeguards to reduce them to an acceptable level.

Conflicts of Interest

We have no interest in the Company which should be disclosed in accordance with the Certified Public Accountants Act.

The original Independent Auditor’s Interim Review Report related to the condensed quarterly consolidated financial statements is in Japanese. This English translation is prepared only for readers’ convenience.

Notes:

1. The above is a digital version of the matters stated in the original interim review report. The original is stored separately by the Holding Company (the company submitting the quarterly financial results).

2. XBRL data and HTML data are not included in the scope of the interim review.