Recruit Holdings Co.,Ltd. Q3 FY2026 earnings call

• HR Technology US revenue in Q3 and Q4 exceeded expectations, leading to upward revision of full year consolidated financial guidance, with revenue raised to JPY 3,664.7 billion, EBITDA+S to JPY 763.8 billion, and basic EPS to JPY 335.
• MMT is evolving its business model, introducing a GMV-linked model in Beauty starting January, which is expected to have an incremental revenue impact of approximately JPY 12 billion in the next fiscal year. MMT is also integrating AI capabilities into its SaaS solutions like SALON BOARD to optimize pricing and drive growth.
• In Beauty, initiatives include a major campaign with 50% points back for the first 1 million reservations in February to stimulate demand, and expanding the GMV-linked model while leveraging AI to support business clients.

In HR Technology, US revenue in Q3 was $1.3 billion, exceeding the outlook of $1.27 billion, up 10.1% y-o-y, with Q4 expected to be $1.33 billion, up 12.4% y-o-y. Europe and others Q3 revenue was $507 million, up 19.6% y-o-y, with Q4 expected $518 million, up 21.7% y-o-y. Japan Q3 revenue was JPY 81.6 billion, down 4.6% y-o-y, with Q4 expected JPY 87.0 billion, down 7.8% y-o-y. In MMT, Housing & Real Estate is the largest subsegment by revenue, Beauty is another key segment. Lifestyle subsegment, including Beauty, accounts for approximately 52% of MMT's revenue. MMT's full year revenue is expected to be JPY 566.8 billion, up 5.1% y-o-y, with EBITDA+S margin expected to be 27.1%.

• Full year consolidated revenue revised to JPY 3,664.7 billion, EBITDA+S to JPY 763.8 billion, basic EPS to JPY 335.
• US ARPJ growth rate is expected to be in the 10% range on a full year basis for HR Technology. MMT aims to raise EBITDA+S margin to 30% next fiscal year and 35% by FY 2028.
• For HR Technology, Q3 US revenue was $1.3 billion, Q4 expected $1.33 billion; Europe and others Q3 revenue $507 million, Q4 expected $518 million; Japan Q3 revenue JPY 81.6 billion, Q4 expected JPY 87.0 billion.

Q: What's the time line for introducing the GMV model in other MMT segments like restaurant and housing and real estate, and Arai-san's take on MMT's margin potential?

A: MMT will find the right timing for introducing the GMV model in other segments, watching beauty clients' response. Restaurant and housing and real estate have partially introduced the model. Arai-san mentioned that MMT's segments have different features, and the current management is laser-focused on priorities. While HRT had 40% margins in the past, MMT's margin potential depends on segment-specific progress, with details to be shared in May.