Operator: Thank you for joining the Recruit Holdings FY 2026 Q1 earnings call. This call is a simultaneous translation of the original call in Japanese, and translation is provided for the convenience of investors only. Earlier at 3:30 P.M., we disclosed the earnings release, earnings summary, and the presentation slides of this results call on our IR page. The video and transcript of this results call will be posted on our IR website after the session. As announced on our website 2 days ago, Envalith, an independent research firm, will publish a flash report on this earnings call. Please refer to it as well. Today's presenters are Hisayuki Idekoba, Representative Director, President, and CEO, and Junichi Arai, Executive Vice President and Chief Financial Officer. In the first 30 minutes, Deko and Jun will provide a presentation, followed by a Q&A session. I'll turn the call over to Deko.
Hisayuki Idekoba: Hello, I'm I am Deko of Recruit Holdings. Today, I am pleased to share our Q1 FY 2026 results and to raise our full-year consolidated guidance. HR Technology delivered a strong Q1 performance, with U.S. revenue increasing 30% year-over-year. Based on this momentum, as of today, we are raising our full-year HR Technology revenue outlook to up 18.7% year-over-year globally and up 25.1% year-over-year for the U.S. As you all know, truly AI is evolving at such an incredible pace almost every single week. And many of you are probably noticing how AI agents are rapidly taking off as automation tools across so many industries. We ourselves genuinely feel it, that we've finally entered a whole new phase where our AI automation tools are boosting productivity for HR teams worldwide, teams that have historically been bogged down by time-consuming manual work. First, let me walk you through why our Q1 performance came in stronger than expected, even in a market environment where U.S. hiring demand remains down year-over-year. Continuing the previous trends, our revenue from small and medium businesses was very strong in Q1. For lean SMBs, having an open role stay unfilled for too long can literally be a matter of life or death for their businesses. By adopting our AI products, their time-consuming manual tasks get automated, dramatically shortening their time to hire. In this environment, many of these clients prioritize hiring speed over cost. And as a result, growth in both the number of SMB clients and spend per client drove our overall top-line expansion. On top of that, what we are seeing now is revenue growth from large enterprise clients becoming more pronounced. Enterprise clients typically take longer to onboard. Decision-making for budget adjustments takes time and legal reviews, especially when it comes to AI products, can be quite time-consuming. Even so, in Q1, many larger customers were willing to trial our AI products. For instance, one healthcare client tested how much AI automation could boost their recruiters' productivity, and they concluded that our AI products helped them significantly reduce time spent screening candidates, delivering output equivalent to several full-time recruiters. Hearing feedback like that is very rewarding. The reality is many large enterprises employ dozens, sometimes even hundreds of recruiters, incurring massive costs from manual processes. By enabling clients to dramatically boost their productivity by adopting our AI products, we believe we have a major source of growth ahead of us. So when you look at our recent revenue growth, it is really the result of 2 key drivers working in tandem: higher spend per client, driven by the added value our AI delivers, and a growing number of clients using our products. Using AI automation tools to boost the productivity of HR teams around the world burdened with manual work isn't just a win for employers, it is a huge plus for job seekers, too. By automating processes that previously required time-consuming manual work, job seekers are now experiencing firsthand that using Indeed means faster responses from employers, earlier access to first interviews and ultimately finding a job sooner. And that is precisely why more people than ever are engaging our platform. At the end of the day, getting people hired faster through AI automation creates a win for everyone, and we believe that's what matters most. At the same time, it is also true that average spend per client has risen rapidly over a short period. To protect our sustainable long-term growth, we will continue to monitor client satisfaction very closely. The incredible pace of AI evolution is amazing, but the rapid change naturally brings wider implications. As such, we intend to carefully gauge the pace at which our customers and society are adapting and navigate this with both caution and flexibility. Our ability to leverage AI to raise customer productivity is advancing faster than anticipated, which is welcoming, but to be honest, makes precise forecasting genuinely challenging. Today's updated guidance represents our estimate based on what we can see as of today. As the picture becomes clearer over time, we will share our latest progress with you every quarter. That concludes my remarks for today. I will now turn it over to our CFO, Arai, to walk you through the detailed numbers. Arai-san, over to you.
Junichi Arai: This is Arai speaking. Today, I will be using the slides to focus on our upward revision to the FY 2026 full-year consolidated guidance. First, our consolidated results for Q1 FY 2026. Revenue, EBITDA+S, and basic EPS each substantially exceeded our initial expectations and reached record highs. Revenue increased 18.9% year-over-year to JPY 1.04 trillion. EBITDA+S increased 56.5% year-over-year to JPY 292.8 billion, and EBITDA+S margin was 28.0%. Basic EPS was JPY 145.48, up 73.2% year-over-year. As of the end of July, we had repurchased 12.5 million shares for JPY 120 billion under the ongoing JPY 350.0 billion share repurchase program, representing 34.3% of the total program. Gross cash and cash equivalents were JPY 908.5 billion at the end of June. Based on these Q1 results and the latest outlook for each segment, we have revised upward the FY 2026 full-year consolidated guidance disclosed in May. This revision is mainly driven by HR Technology, where Q1 results significantly exceeded our initial expectations, and we expect this trend to continue from Q2 onward. We assume an exchange rate of JPY 159.0 per U.S. dollar for FY 2026. We now expect consolidated revenue to increase 14.4% year-over-year to JPY 4.23 trillion, compared with our initial guidance of JPY 4.03 trillion. We expect EBITDA+S to increase 39.1% year-over-year to JPY 1.105 trillion, surpassing the JPY 1 trillion mark for the first time compared with our initial guidance of JPY 949 billion. We have revised the EBITDA+S margin from 23.5% to 26.1%. We have also revised the basic EPS upward from JPY 447 to JPY 543, an increase of 55.2% year-over-year. This reflects the upward revision to net income from our initial guidance of JPY 623.0 billion to JPY 755.0 billion, an increase of 51.9% year-over-year, as well as the number of shares repurchased from April through the end of July 2026. Staffing in Japan was subject to an on-site inspection by the Japan Fair Trade Commission in June 2026 in connection with suspected violations of the Antimonopoly Act. As we are currently cooperating with the inspection, it is difficult to reasonably estimate the financial impact at this time. Accordingly, this guidance does not reflect any such impact. Of our 3 business segments, HR Technology continues to drive our growth and remains the core of our consolidated financial performance. The segment will account for approximately 43% of revenue and approximately 75% of EBITDA+S. I will now discuss the full-year outlook for HR Technology. We now expect segment revenue on a US dollar basis to increase 18.7% year-over-year to $11.4 billion above our initial outlook of 11% growth. On a Japanese yen basis, we have revised our outlook from growth of 13.4% year-over-year to growth of 24.9% year-over-year or JPY 1.82 trillion. By continuing to focus on revenue growth and disciplined business management, we have revised the segment EBITDA+S margin outlook from 41.0% to 45.8%. Looking at the segment revenue outlook by region. The USD 615 million increase in the U.S. was a key factor behind the substantial upward revisions to both the segment outlook and consolidated guidance for the U.S., which is expected to account for 58% of segment revenue. We have upwardly revised our year-over-year revenue growth outlook from 13.6% to 25.1%, reaching USD 6.6 billion. For Europe and others, we have revised our year-over-year revenue growth outlook from 17.1% to 23.2%, reaching USD 2.5 billion. For Japan, we have revised our initial outlook up by JPY 11.5 billion from growth of 2.1% year-over-year to growth of 5.4% year-over-year or JPY 367.0 billion. On a US dollar basis, we expect revenue to be virtually flat year-over-year at USD 2.3 billion. I will provide further details later. Now on to Q1 segment results. As stated at the outset, Q1 results substantially exceeded our initial outlook. Revenue on a US dollar basis increased 20.9% year-over-year to USD 2.8 billion. On a Japanese yen basis, revenue increased 33.2% year-over-year to JPY 455.4 billion. Segment EBITDA+S margin increased significantly to 47.4%, driven by strong revenue growth and continued discipline in cost management. Employee benefit expenses, including share-based payment expenses, together with outsourcing expenses, which represent broadly defined personnel expenses, were approximately 37% of revenue, down significantly from approximately 48% in Q1 FY 2025. While AI-related compute and infrastructure expenses are growing and reflect our expanded capabilities, they remain a small portion of our cost base and are not yet a material factor in our margin profile. We will continue managing them with a clear focus on return on investment. I will next discuss the results by region, starting with the U.S., followed by Europe and others, and Japan. Before discussing the U.S. results and outlook, I will again explain the definition of the U.S. ARPJ growth rate, which we began disclosing with our Q2 FY 2025 results. The U.S. ARPJ growth rate is the year-over-year rate of change in average revenue per job posting on Indeed, which we disclose each quarterly earnings announcement to demonstrate how our monetization progress is on track, driven by the expansion of higher value features and packages, even as business clients' hiring demand and activity fluctuate due to macroeconomic and other factors. U.S. ARPJ as average revenue per job posting on Indeed is calculated by dividing HR Technology revenue in the U.S. by the total number of U.S. job postings on Indeed. The numerator, total HR Technology U.S. revenue, comprises revenue from Sponsored Jobs, which consists of paid job ads like Standard and Premium Sponsored Jobs, as well as other products and services, including Smart Sourcing and Smart Screening, employer branding, and Indeed Flex. The denominator, the total number of U.S. job postings is measured by the Indeed Hiring Lab U.S. Job Postings Index. The Indeed Hiring Lab U.S. Job Postings Index tracks hiring demand in the U.S. labor market and includes hosted jobs, which are jobs employers post directly on Indeed, and index jobs, which are jobs Indeed receives from employers' career sites, applicant tracking systems or ATSs, and other sources across the web. The total number of U.S. job postings includes all job postings on Indeed in the U.S., whether or not they are job ads. In other words, U.S. ARPJ is the average revenue per job posting on Indeed, not the average unit price per sponsored job ad. The Premium Sponsored Jobs is the primary driver of U.S. revenue growth in HR Technology in fiscal year 2026. This slide shows the features currently included in the premium package that support employers throughout the hiring process. Compared to Standard Sponsored Jobs and free listings, a Premium Sponsored Job goes well beyond the basic features, offering broader range of advanced features to deliver greater value for business clients looking to make their hiring process faster and more efficient. The U.S. ARPJ growth rate reaches 35% in the first quarter, substantially above the quarterly levels recorded in fiscal year 2025. Although the total number of U.S. job postings declined approximately 4% year-over-year, U.S. revenue increased 30.0% year-over-year to a quarterly record of USD 1.64 billion. This was driven by further monetization development led by Premium Sponsored Job package. The previous record was USD 1.61 billion in first quarter 2022, when revenue grew significantly up at 24.9% year-over-year. However, the total number of U.S. job postings was approximately 57% higher than in first quarter 2026, and also increased approximately 24% year-over-year, leveraging the U.S. ARPJ growth rate at just 1%. These results demonstrate the extent and the pace of our current monetization development as seen in the difference in the U.S. ARPJ growth rates. Our model has evolved from one centered on a search engine and a pay-per-click or PPC job assigned to an AI-powered, faster, and more precise, and a high-value matching platform in a 2-sided decision-making marketplace. Our full-year outlook is based on the first quarter result together with our latest performance outlook for second quarter through fourth quarter, which assumes an approximate 4% year-over-year decline in the total number of U.S. job postings, consistent with our assumption at the beginning of the fiscal year. We have substantially revised our year-over-year U.S. revenue growth outlook from 13.6% to 25.1%, reaching USD 6.6 billion, which would be a record high for full-year revenue on a U.S. dollar basis. We expect the U.S. ARPJ growth rate to be approximately 30% for fiscal year 2026. For context, the previous full-year revenue record was USD 6.0 billion in fiscal year 2022. In the fiscal year, the total number of U.S. job postings increased approximately 3% year-over-year, revenue increased by 4.9% year-over-year, and the U.S. ARPJ growth rate was at 2%. Next, Europe and others. First quarter revenue increased 28.5% year-over-year to USD 0.6 billion. On a local currency basis, revenue increased approximately 34% year-over-year in the U.K. and approximately 46% year-over-year in Canada. This growth was mainly driven by continued monetization developments through the expanded adoption of Premium Sponsored Jobs. For fiscal year 2026, we have revised our full-year revenue growth outlook from 17.1% to 23.2% year-over-year, reaching USD 2.5 billion. As in previous years, approximately two-thirds of this revenue is expected to come from the U.K., Canada, and Germany. In Japan, first quarter revenue increased 6.7% year-over-year to JPY 93.3 billion. In job advertising services, Indeed crossed upon above our initial expectations, driven by an increase in the number of paid jobs and a growing price per job, while placement services have recovered faster than expected. For fiscal year 2026, we expect this trend to continue, more than offsetting certain headwinds specific to this fiscal year, namely changes in revenue recognition from gross to net and withdrawal from or downsizing of unprofitable businesses. Therefore, we have revised the full-year revenue outlook upward on a Japanese yen basis from growth of 2.1% year-over-year to growth of 5.4% year-over-year or JPY 367 billion. On a U.S. dollar basis, we expect revenue to be flat at 0% year-over-year at USD 2.3 billion. Seeing this upward revision of our revenue and the EBITDA+S margin, we believe some of you might be concerned that HR Technology has already peaked and has limited upside. However, we firmly believe the business has a significant long-term expansion ahead as we leverage AI to build out a comprehensive suite of hiring products and services. As Deko has been explaining since May, HR Technology is not simply aiming to expand within the USD 34 billion job advertising market, we believe we can achieve greater growth over the mid to long term by converting business clients' hiring expenditure, a vast market of approximately USD 200 billion that includes placement services as well as an estimated USD 68 billion for hiring automation into our revenue. Many companies worldwide are actively using AI to improve efficiency across areas of SG&A and hiring processes with its many manual tasks of HR teams is no exception. By further improving matching accuracy and speed for job seekers and business clients in a 2-sided decision-making marketplace, and by using AI automation tools to help improve the productivity and efficiency of the hiring process from candidate attraction through subsequent stages, we can achieve sustainable growth. The segment revenue outlook for fiscal year 2026 is only USD 11.4 billion. There remains a substantial white space and a long, long way for growth. Next, staffing. First quarter segment revenue increased 11.5% year-over-year to JPY 455.2 billion. In Japan, revenue increased 3.5% year-over-year to JPY 220.2 billion, reflecting continued stable performance. In Europe and the U.S. and Australia, revenue increased 20.3% year-over-year to JPY 235.0 billion, including a positive impact from foreign currency -- foreign exchange rate fluctuations and reflecting strong performance in the U.S., capturing solid demand as well as signs of recovery in staffing demand in Europe and Australia, despite market conditions in both regions remaining challenging. EBITDA+S margin was 6.2%. We are making only minor upward revision to our initial full-year outlook. We now expect segment revenue of JPY 1.83 billion -- JPY 1.83 trillion and segment EBITDA+S margin of 5.6%. Finally, Marketing Matching Technologies or MMT. MMT. One of the largest matching platforms in Japan, connecting individual user account base of approximately 99 million Recruit IDs with approximately 980,000 business clients across multiple verticals. Our individual user base and our point program maintain and increase the number of action taken on our platform by providing fulfillment functions that efficiently complete a sequence of process from customer acquisitions through a payment, we accumulate unique data on our platform. Leveraging this unique data, MMT uses AI to propose optimal services and pricing tailored to each business client, most of whom are small and mid-sized businesses, driving growth in their GMV. By shifting multiple platforms, including Beauty and custom home building and renovation consulting, which we discussed in February and May, as well as automobile, which I will discuss today, from fixed monthly listing fees to a GMV-linked model. We believe we can achieve sustainable revenue growth even as AI technology becomes more widespread and continues to evolve. MMT consists of lifestyle, including Beauty, travel, dining, and SaaS solutions, housing and real estate, and others. Before discussing the results and outlook, I will explain the evolution of automobile within others, where we introduce a GMV-linked model starting this fiscal year. Since 1984, automobile has operated our automobile inventory advertising service in Japan under the car sensor brand, primarily covering used vehicles listed by business clients such as used car dealers. Today, it is one of the largest matching platforms in Japan's used car market. Individual users can search business clients' vehicle inventories and then make inquiries and reserve dealership visits through the mobile application or website. Although it is a business model, a transition from print media to online services, it remained based on the fixed monthly listing fees through fiscal year 2025. Revenue in fiscal year 2025 was JPY 33.4 billion. Starting in fiscal year 2026, in addition to the existing fixed monthly listing fees, we introduced a GMV-linked model under which business clients pay based on purchase intent action taken by individual users, such as inquiries and dealership visit reservations. Business clients' vehicle inventory data and the data such as the number of inquiries from individual users are synchronized with our platforms through vertical SaaS solutions. In addition, the use of AI has substantially reduced the workload required for business clients to upload the vehicle images. These capabilities have increased the volume of vehicle inventory images on the platform, as well as the strategic allocation of sales promotion expenses, by driving growth in individual user action and the number of leads delivered through these efforts, we contributed to increasing business clients that completed a transaction and revenue leading them to increasingly recognize the value provided by the platform, which is the driver behind this model's introduction. As a result, first quarter revenue increased to 15.8% year-over-year. The introduction of GMV-linked model led to an increase in the number of vehicles listed, resulting in a year-over-year increase of 12.5% in individual user actions, which was the main driver of the revenue increase. I will now discuss the results and the outlook for MMT. In the first quarter, revenue in lifestyle increased 9.6% year-over-year, driven largely by revenue growth in beauty, resulting from the addition of GMV-linked model. Revenue in housing and real estate increased 2.8% year-over-year, reflecting stronger user action growth, both in custom home building and renovation consulting, where the GMV-linked model was introduced, as well as in residential resale. As a result, the segment revenue increased 3.7% year-over-year to JPY 141.8 billion. Segment EBITDA+S margin was at 36.0% as a result of revenue growth as well as our cost optimization efforts, including reducing service outsourcing expenses. As discussed in May, starting in fiscal year 2026, the MMT is smoothing out the quarterly seasonality of sales promotion, advertising expenses following strategic sales promotion and advertising spending in second quarter in areas where we expect return on investment from the GMV-linked model, including beauty, travel, housing, real estate. We expect the first half EBITDA+S margin to be approximately 31%, in line with our initial outlook. Our full year outlook is unchanged from May. We expect segment revenue to increase 7.1% year-over-year to JPY 605 billion, with a segment EBITDA+S process margin of 30%. Now we would like to go to Q&A.
Operator: [Operator Instructions] First Munakata-san from Goldman Sachs Securities.
Minami Munakata: This is Munakata of Goldman Sachs. Can you hear me?
Operator: Yes, please.
Minami Munakata: Regarding U.S. ARPJ, it increased 35% year-over-year. In the fourth quarter, it was already high at 25%, but you have further accelerated, which is quite amazing. And in Deko's presentation, HR manual works are automated and you are now entering a new phase as per your comment and Arai-san also talks about the expansion of the TAM. So the areas where you compete have changed. I believe the TAM is expanding. Do you actually feel that? Do you feel that where you play have changed? For example, compared to the existing online job ad domain to -- from automating manual processes, you are seeing the expansion of TAM going into the recruiting automation domain. Is that true? In other words, the wallet share that you will be able to go after is expanding. Do you feel that? Deko, what do you think?
Hisayuki Idekoba: Well, currently, I am in conversation with various clients. Looking at the logs of those conversations that we've had with clients, it is particularly true for small and medium businesses. How should I say? This may not be a good example. If you think, for example, food delivery service. When I used food delivery service and I shared this with my wife, she said, well, how wasteful. It's much cheaper to buy at a nearby supermarket. But for me, I had the urge to eat quicker. So I was ready -- I was prepared to pay a certain delivery fees that was an acceptable fee. But for small and medium-sized businesses, what's happening today is that they have certain roles that remain vacant for 2 months, and they are willing to pay an additional $1,000 or $2,000. That's the kind of conversation that we are hearing more from SMBs. And by having these business clients using for HR teams in SMBs, they usually have other responsibilities besides HR. And by using our services, they can now free up some of their time to spend on other tasks. And starting from SMBs to more larger clients, clients with $1 million or $2 million of budget, as I shared an example earlier, sometimes clients have the needs to check the ROI. So for instance, AI sourcing, AI screening, these type of services that are introduced in order to compare with human recruiters that they have internally. And ultimately, the kind of roles or tasks assigned to internal agents have reduced. After a trial of 1 month, they see the ROI and then make a decision to introduce the service. So that's what's happening in some cases. So for us, it's more than just selling tools rather than simple sales of tools. Simply put, the back-end process is ultimately, you don't want to hire 20 or 30 people, and you don't want to screen these candidates. You check their resumes, make sure they have their licenses, they contact them to confirm. So that's what's happening in the back-end processes. So by sending high-quality candidates, by targeting, we have been successfully eliminating all these back-end processes. Maybe my explanation is poor, but for SMBs, ultimately, they are able to hire faster. They have more time to spend on other tasks. From medium to larger enterprises, they are realizing that their manual work has been reduced significantly. After a trial of our products for maybe a month or so, they realize that they are able to reduce manual tasks. Maybe they started with 1 task in mind, but by looking at the results, they are now expanding to cover other tasks. I apologize for the poor explanation, but that's what's happening.
Minami Munakata: No, that's very clear. I believe for SMBs and larger enterprises, their pains and issues differ, I surmise. So the points that they emphasize are clearly understood. You understand their needs, their demands, and by matching solutions to address their issues, automation will further proceed.
Hisayuki Idekoba: Well, actually, they are the same. The issues are the same, but the way and how they realize the pains are different. So as I said before, why is there such steps as screening and sourcing afterwards? Let's say 20 people apply and you did not find qualified candidates, you want to see more qualified candidates and that's what leads to sourcing. Companies do their own sourcing. They search for resumes, they contact the candidates, but it's not producing results. So maybe they will use an agent. So that's what is happening in most cases. So it's not that they're looking at the ROI from the very beginning and trying to reduce costs, but rather, looking at the conversations we've had with these companies, they've decided to hire and in some larger enterprises as well. Because the hiring is already decided, they now have the budget. So ultimately, this ends up in more payments to us, but I don't feel that we are competing with automation tool providers. I think value propositions are slightly different.
Minami Munakata: Thank you very much for that very insightful response.
Hisayuki Idekoba: I apologize for that.
Minami Munakata: No, that was very interesting. I have one follow-up question. The annual U.S. ARPJ outlook is what I would like to ask about. You've mentioned that it has become more difficult to have a precise forecasting. But as of today, after second quarter and later, what do you think will happen? What are your expectations? For instance, as the example you've shared, growth from large enterprises remains firm. So do you consider that a growth driver? How are you building your guidance right now? What factors do you consider?
Hisayuki Idekoba: That is a wonderful question. For me as well, I am working hard to better understand what will be the drivers going ahead. I have looked at various factors. But at present, SMBs, the spend per client increase is going to contribute. For ARPJ, it's not simply the unit price increase, but if you look at the breakdown, increase in the number of paying clients also contributes as well as the number of paid job postings and unit price per job increase. The 3 factors that I've just mentioned contribute to ARPJ growth. So for SMBs, I think each factor contributes one third. So that's roughly the combination of contribution that we are seeing from those factors. So as I've just mentioned before, clients are starting to realize that our services do help them reduce manual work, and they are now applying the services in other areas. So we are seeing our customers returning and also increase in the number of new clients, all driving ARPJ growth as well as the unit price per job. For larger enterprises, they have introduced automation tools and some are like SMBs. They see roles vacant for 2 months or so, and they see that people on the ground are struggling, so that's why they want to trial our products and services. And if you think about it makes sense. If you think of a good targeting advertisement, it basically uses AI sourcing. And from among resumes, comparing to a human recruiter reaching out to candidates versus AI sourcing, I think over a few years' time, I think the results will be the same. So advertising targeting is also being enhanced, and this is going into the sourcing domain. So maybe companies will focus on several different roles. So the number of jobs may decrease, but on the other hand, unit price may increase. So it's a combination of all these different factors. So what I'm trying to say is that we are seeing such an amazing pace of AI introduction and AI growth. So of course, we are making an effort every day. The market is huge. But what accuracy? Is it 20%, 25%, or 30% growth rate? It's very difficult to calculate and forecast. That's the situation. Again, not a very clear answer, I admit.
Minami Munakata: No, not at all. One thing that's caught my attention is in Deko's comment. You said an increase in unit price, among other factors are robust and client satisfaction needs to be closely monitored. I believe that was a part of the comments. And at present, do you consider this any risk? Rather, things are performing well, and it's difficult to predict 9 months from now what will the levels be, figures be. But you are looking at the U.S. ARPJ outlook based on various perspectives. Do I understand that correctly?
Hisayuki Idekoba: Right. Rather than two 2 or 3 quarters ahead, it's easier to think longer term. No matter how you think about it, manually going through 20 or 30 resumes, making sure these candidates have licenses, calling them to make sure, and scheduling meetings and such communication takes place, and that's still not enough. You need to go into the resume database. You need to contact the candidates, and they say they're not thinking about switching jobs right now. That's an enormous task, and I don't think this will continue. So that manual process will be automated, and this is certain, I'm sure of it. So we need to ascertain changes in customers' demand as well as changes happening in the market, and we need to keep pace with that change. That's the background to my comment earlier.
Minami Munakata: I see. That's very clear. Thank you very much for such insightful comments.
Hisayuki Idekoba: My apologies.
Minami Munakata: No, no. Thank you very much.
Hisayuki Idekoba: The insightful comments, she says. But that's the only way we can describe this. Maybe in September with Munakata-san, we will have a face-to-face meeting, so we will come back to this topic.
Operator: Well, many people raise their hand, so we would like to go quickly. From Nomura Securities, Oum-san, please.
Jiyong Oum: I'm Oum from Nomura Securities. Thank you very much. Well, you explained the example of a healthcare client using this as a hint. So added value from Indeed to the customer, what would be the added value that can be provided? Recruiter gained productivity and that is appreciated by customers. That is what you said. Well, what kind of productivity have increased as a result of the utilization of Indeed sourcing or the checking of the driver license or not? So do you have any keywords into your mind from that perspective?
Hisayuki Idekoba: Well, this particular customer. Looking at the majority of the healthcare-related customers, especially, there are many cases which will require the driver license. In those cases, they are struggling. So looking at the resume database and then approaching to the candidates, how about this job? So to that end, they have many lineups of recruiters. In this particular customer, what do we compare against? Well, how many job interview have you established and they are divided by the cost. So resume database search, a contract fee on top of that, recruiters personal expenses. And based Based on that, how many job interviews have been set up, and also AI automated recruiters make suggestions about the people and reaching out the possible candidates, and then the AI set up a job interview. So comparing these 2 cases and then how much does this AI account for in terms of the number of personnel? So that is why I bring up this example. Does this answer to your question?
Jiyong Oum: Well, does it mean this is for general purpose rather than this product is suited for a particular customer or not necessarily for healthcare, but this can be versatile or as long as this is customized, this can be applicable to other industry and other customers?
Hisayuki Idekoba: Yes, this is a general purpose to some extent, but as you may be aware, in the U.S., the healthcare is the toughest market in terms of demand and the supply. So the skills or qualification or the driver's license required.
Jiyong Oum: So to put it simply, out of candidates who submitted their resume, how many percentage of those candidates are they desirable candidates that the businesses feel like having an interview? Is it better to do the screening by AI or the sourcing by AI, which is a better value for money?
Hisayuki Idekoba: Well, a screening can be done during the night. So screening is more universal. It can be easily expanded. Be it the construction workers, well, even if 1,200 candidates apply, this can be introduced.
Jiyong Oum: Basically speaking, what would be the cost to feature how many job interview can be set up?
Hisayuki Idekoba: That is a perspective of customers.
Jiyong Oum: Well, I have follow-up question. For this area, you said this will be a major driver of growth for Indeed. So what will be the picture in 3 years? Currently, majority of your market cap, well, 90% of Indeed is cap and the majority of the customer is SME. So If the no advertisement is increasing and if the major enterprises portion is increasing, that would be interesting. What will be your landscape in 3 years from now?
Hisayuki Idekoba: Well, my vision, simplify hiring. That is what I would like to accomplish. What it means is that make the manual work easier with technology. This is what I have been saying since acquiring Indeed. Will the landscape will change in 3 years? Well, it depends on how much AI will evolve. Well, what I really want to accomplish is now achieved with the evolution of AI. So rather than introducing AI as a tool, however, we have to make an improvement for the matching as a result, and we can reduce the undesirable candidate, and that will eliminate the back-end process. That is where the automation occurs and that is quite interesting. And SaaS company or AI company before they are entering into this market -- because we have eliminated back-end process, I think this is a quite efficient way of operation. And also it is difficult for other company to emulate. So if we can expand this kind of operation and then we can expand, but -- well, if we can increase by 10-fold, that will be most interesting.
Operator: Next, Nagao-san of BofA Securities.
Yoshitaka Nagao: Yes, this is Nagao of BofA Securities. President Idekoba gave us a healthcare client example. I think that was a very well laid out example. The reason I say that is because with hiring automation tools, the people who will be using tools and people who will be eliminated as a result of the introduction of tools are the same. So there is a contradiction in this structure. So how are you going to further penetrate? I think it's a battle against speed. It's a race against speed at the same time. So what I would like to ask is, how are you going to enter the automation tool industry? By implementing these tools, won't there be some opposition or resistance from the HR teams of companies? How are you going to overcome such resistance?
Hisayuki Idekoba: Yes. I briefly touched upon this, especially for enterprise clients. Cost reduction is not the entry point for us. Rather, we focus on the reduction of the back-end processes, the substantial reduction. So maybe for the premium jobs, we can ask clients to trial our services. So that's more of the case. So in terms of speed, that's where we're seeing much of entry or adoption among enterprise clients. And besides that, I think besides our company, companies that sell AI tools abound. And I think they are following similar patterns in that. Not just approaching the HR top person, but going after CFOs or COOs or CIOs. So companies that have already launched AI automation projects can be found in large numbers. So we approach the top tier, the management layer, and we introduce our tools. This is not something we have done much of in the past. In the past, we didn't really have conversations with CFOs or COOs in many cases. But over the past 6 months or so, we are seeing more cases in which we approach those officers. So we do go to events targeting COOs, or we also appear and join various events, including the World Cup this time. We sponsor those events, invite our clients, host dinners and such. So that's something we have started doing. So how should I say? For clients as well, HR teams and their clients, they are satisfied that their manual processes have been reduced, and many clients have outsourced these processes. So we have not seen such opposition or resistance as expected. So rather than approaching the HR, you are approaching the management layer.
Yoshitaka Nagao: I see. 2 quick questions. So you have a pool of employers and you screen them. And of course, there are various stages in which paid services could be introduced. And then beyond that, you negotiate terms for the employment. And further down the process, there will be the onboarding process. Are you thinking of automating all these different steps in the process and monetizing in the future?
Hisayuki Idekoba: Of course, we want to try a variety of things. And there is a need to, of course, connect various systems, which could slow us down. So as I said before, first, we want to introduce candidates to clients, and we want to strengthen monetization and speed there first. And I believe that will be fastest because with introducing various FTEs and having conversations with customers on those projects, that will be an enormous project. So we need to look at the right balance. I hope that answered your question.
Operator: Next JPMorgan Securities, Yamamura-san, please.
Junko Yamamura: Thank you very much for your explanations. Thank you very much for calling me out. I am Yamamura, am I through? Thank you. I'd like to ask you one question. Well, this might be a difficult question to answer. So listening to you so far at this point in time, the speed and the productivity and the qualities, these are the areas that you add value. So these are the area of value addition, and I understand this is the most important thing. But looking into the further future, with these 2 horizons, to how much extent can you increase the U.S. ARPJ? To how much extent can increase the number of customers? Well, from the outsiders, I cannot synchronize your vision with this horizon. So I feel that there is a limit. Well, the media is entering into the market. On top of speed and productivity, but with AI, what kind of additional value do you think you can add potentially? Or otherwise, as you mentioned -- explained, with only those factors for the several years, still there are untapped market you can explore. So this might be a difficult question, but what is your take on this point?
Hisayuki Idekoba: Well, Hot Pepper Beauty reservation system was developed. That was a typical question I received. From which market, which biodata do you secure? Are there any such kind of market available? The beauty salon do not have such a budget. Therefore, you will not be able to tap into such kind of a market when we are working on Jalan. So if you reach that level of revenue, unless the other travel agency is bankrupt, I don't think you can achieve that kind of revenue. In case of Uber in San Francisco, well $500 million is the size of the taxi market, and unless the market size is growing furthermore, they wouldn't be successful. However, after 8 months, they are very successful. If you can call the taxi much easily, there are more demand. So the price and the convenience resulted in the expansion of the market quite easily. So what I'm trying to say here is that beauty salon reservation or travel reservation, if we provide the convenience, there will be more demand, there will be more users. We are a product-oriented people, therefore, this is our way of thinking. And if we can use the services quite easily, as I mentioned earlier, in case of food delivery, rather than capturing the market from other area, if we provide the convenience, there will be more demand or more users. Well, unconsciously, the market has expanded to that extent. Based on those past experiences, when we acquired Indeed, job market is JPY 100 billion at the maximum. If you purchase at such a purchase price, what are you going to do? Oh, you will go nowhere. That was the criticism I received. However, if we provide ease of use or convenience, to how much extent can we expand the market? Well, such a internet technology, there was such an expansive market available. Thinking about the AI potential, if you post a job, then we do not get a good effectiveness. However, you ask a question with AI, how about this methodology? In this methodology, unless you increase the hourly rate, you cannot get or attract the candidates. And based on those experiences, some customers place the job advertisement. So looking at these example of customer, I think there are other potential that we can tap into. Well, finance people may think I am stupid, however, from the viewpoint of person with product innovation, this is where I would like to bet on. Well, this answer is not appropriate. I will be scolded. Well, that's okay. As I mentioned earlier, with great matching and a hire-ready candidate, if one person is provided cost per hire or the intermediary services, I think we can, little by little, capture this market.
Junko Yamamura: So Idekoba-san, looking based on your experiences, MMT and also Indeed, beyond that, you have a sense of excitement. And that is the sentiment of running the company. So 30% growth of JPY 1.5 trillion size businesses. So how to put it?
Hisayuki Idekoba: It will be difficult to make a precise calculation as to which market we are capturing.
Junko Yamamura: Well, I look forward to your business.
Operator: We see many more hands up, but in the interest of time, we would like to wrap up. Our apologies.
Hisayuki Idekoba: No, my explanations were poor. My apologies. Thank you very much.
Operator: We would like to conclude the earnings call at this time. Thank you very much.