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Recruit Holdings, one of the largest staffing firms in the world, reported revenue fell 0.9% in constant currency to ¥901.5 billion (US$5.60 billion) in its fiscal first quarter ended June 30. Revenue in the Tokyo-based firm’s HR technology division — which includes Indeed and Glassdoor — fell 2.5% year over year on a US dollar basis to $1.83 billion.
“While the labor market in the US continued to normalize, business sentiment in Japan continued to gradually improve,” Junichi Arai, senior VP of corporate strategy and investor relations, said in a conference call with analysts.
However, US job postings on Indeed — both free and paid — continued to decline year over year.
HR technology revenue in the US fell 5.0% year over year in the first quarter to $1.25 billion. HR tech revenue rose in Japan though it fell in the rest of the world when measured on a US dollar basis.
HR technology revenue in Japan rose 29.3% on a US dollar basis to $155 million. In the rest of the world, HR technology revenue fell 3.5% on a US dollar basis to $422 million.
Arai also noted demand for temporary staffing slowed outside of Japan, though the number of temporary staff on assignment in Japan grew.
Temporary staffing revenue in Europe, the US, and Australia fell 8.1% in the first quarter on a constant currency basis.
In the US, Recruit’s staffing operations include Staffmark Group and The CSI Cos. Outside the US and Japan, this segment’s businesses include Chandler Macleod Group in Australia and RGF Staffing in Europe.
Recruit also reports results for a third segment after HR tech and staffing. That segment, matching and solutions, saw revenue rise 1.5% year over year in the first quarter. The segment includes HR consulting and recruitment in Japan, permanent recruitment in Asia, and nonstaffing marketing platforms such as Hot Pepper Beauty, Hot Pepper Gourmet, and Suumo as well as an online real estate website. Rikunabi, a jobs website for graduates, is included in this segment as well as staffing firm Recruit Agent.
Recruit Holdings - Q1 2024
(¥ billions) | Q1 2024 | Q1 2023 | % change | % constant currency | Q1 2024 (US$ billions) |
Revenue | 901.5 | 850.8 | 6.0% | -0.9% | 5.6 |
Gross profit | 530.6 | 495.6 | 7.1% | - | 3.3 |
Gross margin | 58.9% | 58.3% | - | - | - |
Profit for the period | 106.3 | 98.3 | 8.1% | - | 0.66 |
Revenue by Segment
(¥ billions) | Q1 2024 | Q1 2023 | % change | % constant currency | Q1 2024 (US$ billions) |
HR technology | 285.1 | 257.9 | 10.6% | -1.1%* | 1.77 |
Matching and solutions | 202.9 | 199.9 | 1.5% | - | 1.26 |
Staffing | 422.5 | 401.4 | 5.3% | -0.9% | 2.62 |
Staffing Revenue by Geography
(¥ billions) | Q1 2024 | Q1 2023 | % change | % constant currency | Q1 2024 (US$ billions) |
Japan | 200.2 | 186.1 | 7.6% | - | 1.24 |
Europe, US and Australia | 222.3 | 215.2 | 3.3% | -8.1% | 1.38 |
*As measured in US dollars.
Guidance
Recruit forecast revenue for its full fiscal year 2024 will range from a decline of 3.4% to an increase of 2.4%. The forecast is unchanged from the May 15 estimate.
The company expects staffing revenue to be up between 0.1% and 0.9% for the fiscal year and HR technology revenue is expected to range from a decline of 7% to an increase of 5%.
Share Price
Shares closed down 0.08% to ¥7,773 today in Japan. They were 18.61% below their 52-week high.
ZipRecruiter (NYSE: ZIP) reported soft hiring demand resulted in second-quarter revenue falling 27.4% year over year to $123.7 million. The job aggregator — which ranks as the sixth-largest online job advertising firm — also announced the acquisition of Breakroom, a UK-based jobs review website.
The company noted second-quarter revenue came in above the high end of guidance.
“We’re continuing to invest in product and technology initiatives, which we believe will bear significant fruit in years to come,” CEO Ian Siegel said in a press release.
ZipRecruiter announced results after the close of the market on Aug. 7.
The number of quarterly paid employers fell 31% year over year in the second quarter to 70,458. The company noted the decline was driven primarily by reduced demand from small and midsize businesses. The quarterly paid employers metric includes all actively recruiting employers (or entities acting on behalf of employers) on a paying subscription plan or performance marketing campaign for at least one day in the quarter.
“We saw signs that we were potentially approaching a trough for much of Q2, but trends in the last few weeks of June through July make us more cautious in our expectations for Q3,” according to a shareholder letter released by ZipRecruiter.
The company forecast third-quarter revenue of between $109 million and $115 million, which represents a decline of 28% at the midpoint.
Breakroom
ZipRecruiter acquired UK-based Breakroom, an employer review website focused on frontline industries such as retail and hospitality. ZipRecruiter plans to bring Breakroom, which was founded in 2020, to the US.
“While traditional employer review sites have predominantly become places where workers go to voice their job dissatisfaction, Breakroom collects insights about what the day-to-day is like working for different companies,” Siegel said in a press release. “Breakroom’s ratings give job seekers a clear picture of what it’s really like to work for an employer, setting better expectations than a traditional job description.”
Breakroom will continue to operate as an independent brand.
ZipRecruiter - Q2 2024
(US$ thousands) | Q2 2024 | Q2 2023 | % change |
Revenue | 123,658 | 170,421 | -27.4% |
Gross profit | 110,715 | 154,745 | -28.5% |
Gross margin | 89.5% | 90.8% | - |
Net income | 7,014 | 14,380 | nm |
Share Price
Shares in ZipRecruiter were up 13.81% to $8.24 on Aug. 8. However, they set a new 52-week low when they reached $7.21 on Aug. 7.
Republican presidential nominee Donald Trump is hoping a dramatic sell-off in the U.S. stock market creates an opening to attack his Democratic rival, Kamala Harris, over who is best positioned to shepherd the economy.
Trump’s campaign labeled the Monday drop as a “Kamala Crash,” a message designed to undercut the energy created by the vice president’s entrance into the race. But Wall Street recovered on Tuesday as stocks posted gains. Several economists said the economic data disprove Trump’s comments about a coming crisis, as unemployment remains relatively low and inflation has eased.
For Trump, who has long broken with political norms by openly encouraging market volatility that he hopes will boost his candidacy, the turmoil was a chance to highlight his credentials as a businessman. Trump’s allies and outside strategists have long urged him to focus more on pocketbook issues that resonate with voters beyond the GOP base.
Americans are more likely to think Trump’s presidency helped the country with job creation and cost of living compared to President Joe Biden’s administration, according to an AP-NORC poll conducted in April.
It’s unclear whether the stock market volatility points to more serious economic trouble worldwide that could distract from Harris’ core campaign themes, such as protecting abortion rights and presenting Trump as a threat to Americans’ freedom. For now, many economists say major investors are less interested in the presidential race than what happens at the Federal Reserve, where pressure is building to cut benchmark interest rates.
“We have an economy that is still moving forward,” said Gregory Daco, chief economist at the consultancy EY-Parthenon. “The panic that we’re seeing in the markets — which may already be subsiding — is an overblown interpretation of the Fed being behind the curve, rather than weak economic fundamentals.”
Trump has long staked his campaign on the markets
Trump wrote more than a dozen posts on his social media network on Monday about the markets and U.S. economic policy, along with a video by the Republican’s campaign that seeks to yoke Harris to the market headlines and President Biden, who ended his reelection bid last month. The video features Harris saying, “Bidenomics is working” juxtaposed with news commentators describing the stock market decline.
“VOTERS HAVE A CHOICE — TRUMP PROSPERITY, OR THE KAMALA CRASH & GREAT DEPRESSION OF 2024,” Trump said in a post on his Truth Social account.
Trump has proposed ramping up energy production and making tips and Social Security payments exempt from income taxes. That message has at times been drowned out by a flurry of news — including a gunman trying to assassinate him at a July rally — and by his own mix of messages and personal attacks on issues like Harris’ racial identity.
Monday’s stock market drop as well as higher price levels for groceries and gasoline during Biden’s presidency were evidence of failed policies, argued Chris LaCivita, a Trump campaign senior adviser.
“The bottom line is the chickens are coming home to roost and it’s undeniable. The impacts of bad policy are undeniable,” he said. “This enables us to demonstrate and to show, again, this is what bad policy brings.”
The Harris campaign declined to comment. But Trump’s remarks drew condemnation from some Democrats for seeming to cheer for a downturn that, were it to come to pass, could cause millions to lose their jobs or see their retirement savings suffer.
“It’s a foolish judgment not supported by any serious analysis of data,” said Harvard University economist Larry Summers, a former treasury secretary during Bill Clinton’s presidency. “While there’s increased uncertainty and risk in the economy, it’s just wildly irresponsible to say this is going to be causing a depression.”
Trump has a history of claiming credit for the markets whether they rise or fall. In 2020, he said that the stock market would crash if he was not reelected that year. He was not reelected. The S&P 500 stock index has climbed roughly 35% during Biden’s presidency.
In early January of this year, Trump said in an interview with the late Lou Dobbs that “when there’s a crash, I hope it’s going to be during this next 12 months because I don’t want to be Herbert Hoover.”
Later that same month, as the S&P 500 hit another record high, Trump sought to take credit for it. “THIS IS THE TRUMP STOCK MARKET BECAUSE MY POLLS AGAINST BIDEN ARE SO GOOD THAT INVESTORS ARE PROJECTING THAT I WILL WIN, AND THAT WILL DRIVE THE MARKET UP,” Trump said on social media.
Lower markets can bring good and bad news
The financial markets are something of a double-edged sword: Lower stock prices hurt people’s retirement savings and prompt them to spend less, but the selloff has also accompanied falling interest rates and oil prices — which could help relieve some of the inflationary pressures felt by consumers that have hurt Democrats politically.
Indeed, the markets responded to the selloff by betting the Fed will be more aggressive in slashing interest rates to support the economy, something that Trump has previously warned the U.S. central bank against because he thinks it could help Harris.
The CME Group’s FedWatch tool estimates a 0.5% cut in the Fed’s benchmark rate at its next meeting in September, twice as large as a week ago. A rate cut at that level would almost certainly contribute to lower interest rates for mortgages and auto loans — a potential boost for Harris’ campaign just as voting begins.
The Federal Reserve’s chair and vice chair are appointed by the president and confirmed by the Senate, but the central bank acts independently of the White House in setting rates.
