‭Recruit Holdings‬‭Investor Update FY2023 - Help Businesses Work Smarter‬‭March 28, 2024‬‭Contents‬‭Presentation‬‭Fireside chat‬‭Q&A Session‬‭Presentation‬‭Slide 2-01‬‭Yoshi:‬‭I’m Yoshi, Executive Vice President and Head‬‭of the Matching & Solutions SBU.‬‭ lide 2-02‬
S‭Matching‬ ‭&‬ ‭Solutions‬ ‭consists‬ ‭of‬ ‭two‬ ‭subsegments:‬ ‭Marketing‬ ‭Solutions‬ ‭and‬ ‭HR‬ ‭Solutions.‬ ‭We‬ ‭provide‬‭matching‬ ‭platforms‬ ‭and‬ ‭SaaS‬ ‭solutions,‬ ‭centered‬ ‭around‬ ‭Air‬ ‭BusinessTools,‬ ‭for‬ ‭business‬ ‭clients‬ ‭in‬ ‭Japan.‬‭Annual revenue in Matching & Solutions is approximately 800 billion yen.‬‭ s‬‭we‬‭discussed‬‭during‬‭Day‬‭1‬‭of‬‭our‬‭Investor‬‭Update,‬‭HR‬‭Solutions,‬‭with‬‭annual‬‭revenues‬‭of‬‭approximately‬A‭300‬‭billion‬‭yen,‬‭plays‬‭a‬‭pivotal‬‭role‬‭in‬‭promoting‬‭Recruit‬‭Holdings'‬‭most‬‭important‬‭business‬‭strategy,‬‭”Simplify‬‭Hiring”, in Japan’s HR Matching market together with the HR Technology SBU.‬‭Marketing Solutions, with annual revenue of approximately 500 billion yen,‬‭ lide 2-03‬
S‭is‬‭at‬‭the‬‭center‬‭of‬‭Recruit’s‬‭"Help‬‭Businesses‬‭Work‬‭Smarter"‬‭strategy,‬‭which‬‭is‬‭the‬‭second‬‭pillar‬‭of‬‭our‬‭three‬‭management strategies.‬‭Marketing‬‭Solutions‬‭operates‬‭mainly‬‭7‬‭vertical‬‭matching‬‭platforms‬‭that‬‭connect‬‭individual‬‭users‬‭with‬‭business‬‭ lients, and approximately 20 SaaS solutions that support business clients’ operations.‬c‭By‬ ‭utilizing‬ ‭our‬ ‭ecosystem‬ ‭of‬ ‭vertical‬ ‭matching‬ ‭platforms‬ ‭and‬ ‭SaaS‬ ‭solutions,‬ ‭we‬ ‭aim‬ ‭to‬ ‭enhance‬ ‭the‬‭ roductivity and profitability of our business clients in Japan.‬p‭ lide 2-04‬
S‭Our‬ ‭matching‬ ‭platforms‬ ‭in‬ ‭Marketing‬ ‭Solutions‬ ‭are‬ ‭online‬ ‭platforms‬ ‭that‬ ‭enable‬ ‭individual‬ ‭users‬ ‭to‬ ‭find‬‭necessary‬ ‭information‬ ‭and‬ ‭make‬ ‭reservations‬ ‭for‬ ‭daily‬ ‭activities‬ ‭such‬ ‭as‬ ‭choosing‬ ‭hair‬ ‭salons,‬ ‭travel‬‭destinations,‬ ‭and‬ ‭restaurants,‬ ‭and‬‭offer‬‭similar‬‭services‬‭for‬‭major‬‭life‬‭events‬‭such‬‭as‬‭purchasing‬‭a‬‭house‬‭or‬‭getting married.‬‭ usiness‬ ‭clients‬ ‭can‬ ‭advertise‬ ‭on‬ ‭our‬ ‭platforms‬ ‭and‬ ‭post‬ ‭their‬ ‭available‬ ‭booking‬ ‭slots,‬ ‭referred‬ ‭to‬ ‭as‬B‭"inventory”,‬ ‭utilizing‬ ‭these‬ ‭platforms‬ ‭as‬ ‭a‬ ‭means‬ ‭to‬ ‭acquire‬ ‭customers‬ ‭through‬ ‭advertisements‬ ‭and‬ ‭as‬‭reservation management systems, which directly translates into revenue for them.‬I‭n‬ ‭order‬ ‭to‬ ‭accelerate‬ ‭the‬‭development‬‭of‬‭our‬‭vertical‬‭matching‬‭platforms,‬‭Matching‬‭&‬‭Solutions‬‭established‬‭subsidiaries‬‭for‬‭each‬‭vertical‬‭in‬‭2012,‬‭with‬‭each‬‭one‬‭focused‬‭on‬‭managing‬‭and‬‭promoting‬‭its‬‭specific‬‭business‬‭area.‬‭Having‬‭improved‬‭our‬‭competitiveness‬‭to‬‭a‬‭degree,‬‭we‬‭integrated‬‭all‬‭subsidiaries‬‭in‬‭April‬‭2021‬‭to‬‭prepare‬‭for‬t‭he next stage of growth, aiming for revenue growth and productivity improvement of Marketing Solutions.‬‭This transcript is provided for the convenience of investors only and this is a translated version of the Japanese call.‬‭1‬‭ lide 2-05‬
S‭Since‬‭then,‬‭Marketing‬‭Solutions‬‭has‬‭been‬‭actively‬‭working‬‭to‬‭strengthen‬‭its‬‭governance‬‭structure,‬‭focusing‬‭on‬‭effective‬ ‭cost‬ ‭management‬ ‭and‬ ‭investment‬ ‭prioritization.‬ ‭This‬ ‭strategy‬ ‭is‬ ‭aimed‬ ‭at‬ ‭achieving‬ ‭both‬ ‭stable‬‭revenue‬ ‭growth‬ ‭and‬ ‭expansion‬ ‭of‬ ‭adjusted‬‭EBITDA‬‭margin,‬‭which‬‭is‬‭expected‬‭to‬‭be‬‭approximately‬‭28%‬‭for‬‭FY2023, which is the fiscal year ending March 31, 2024, before allocation of corporate and shared costs.‬‭ oing‬‭forward,‬‭we‬‭believe‬‭that‬‭the‬‭evolution‬‭of‬‭our‬‭Marketing‬‭Solutions‬‭matching‬‭platform‬‭and‬‭SaaS‬‭solutions‬G‭will‬ ‭enable‬ ‭us‬‭to‬‭achieve‬‭stable‬‭revenue‬‭growth‬‭and‬‭an‬‭increase‬‭in‬‭adjusted‬‭EBITDA‬‭margins‬‭through‬‭more‬‭efficient business operations.‬‭Today,‬ ‭I‬ ‭will‬ ‭explain‬ ‭the‬ ‭core‬ ‭focus‬ ‭of‬ ‭our‬ ‭efforts‬ ‭in‬ ‭Marketing‬ ‭Solutions‬ ‭up‬ ‭to‬ ‭the‬ ‭present,‬ ‭how‬ ‭we‬ ‭have‬‭ ontinued to evolve, and what we aim to achieve in the future.‬c‭ ver‬ ‭since‬ ‭our‬ ‭foundation‬ ‭in‬ ‭1960,‬ ‭Recruit‬‭Group‬‭has‬‭sought‬‭to‬‭act‬‭as‬‭a‬‭two-sided‬‭marketplace‬‭that‬‭brings‬
E‭together‬‭individual‬‭users‬‭and‬‭business‬‭clients‬‭to‬‭facilitate‬‭the‬‭best‬‭possible‬‭matches‬‭for‬‭the‬‭mutual‬‭benefit‬‭of‬‭both parties. This is the engine of our business model.‬‭ lide 2-06‬
S‭Starting‬ ‭with‬ ‭job‬ ‭advertisements‬ ‭for‬ ‭new‬ ‭university‬ ‭graduates,‬ ‭we‬ ‭have‬ ‭expanded‬ ‭our‬ ‭business‬ ‭areas‬ ‭by‬‭anticipating changes in the industry and society.‬‭From‬‭print‬‭media‬‭to‬‭online‬‭media,‬‭from‬‭online‬‭media‬‭to‬‭matching‬‭platforms,‬‭and‬‭SaaS‬‭solutions‬‭on‬‭top‬‭of‬‭that,‬‭ e continue to evolve by repeatedly disrupting ourselves and creating new business models.‬w‭ lide 2-07‬
S‭Marketing‬ ‭Solutions‬ ‭tends‬ ‭to‬ ‭be‬ ‭more‬ ‭resilient‬ ‭during‬ ‭economic‬ ‭downturns‬ ‭compared‬ ‭to‬ ‭HR‬ ‭matching‬‭businesses.‬ ‭Therefore,‬ ‭Marketing‬ ‭Solutions‬ ‭focuses‬ ‭not‬ ‭only‬ ‭on‬‭revenue‬‭growth‬‭and‬‭expansion‬‭of‬‭adjusted‬‭EBITDA‬ ‭margin,‬ ‭but‬ ‭also‬ ‭on‬ ‭contributing‬ ‭to‬ ‭consolidated‬ ‭adjusted‬ ‭EBITDA‬ ‭especially‬ ‭during‬ ‭challenging‬‭economic conditions.‬‭ urthermore,‬ ‭the‬ ‭relationship‬ ‭built‬ ‭with‬ ‭business‬ ‭clients‬ ‭in‬ ‭Marketing‬ ‭Solutions,‬ ‭and‬ ‭information‬ ‭about‬F‭business‬ ‭clients’‬ ‭operations‬ ‭acquired‬ ‭through‬ ‭our‬ ‭vertical‬ ‭matching‬ ‭platforms‬ ‭and‬ ‭SaaS‬ ‭solutions‬ ‭is‬‭advantageous for HR matching businesses such as Indeed PLUS and the job boards in HR Solutions.‬‭ e‬ ‭manage‬ ‭our‬ ‭operations‬ ‭daily,‬ ‭not‬ ‭only‬ ‭as‬ ‭the‬ ‭Marketing‬ ‭Solutions‬ ‭business,‬ ‭but‬ ‭also‬ ‭as‬ ‭part‬ ‭of‬ ‭the‬W‭Matching‬ ‭&‬ ‭Solutions‬ ‭SBU‬ ‭overall,‬ ‭contributing‬ ‭to‬ ‭the‬ ‭enhancement‬ ‭of‬ ‭enterprise‬ ‭value‬ ‭across‬ ‭the‬ ‭entire‬‭Recruit Group.‬‭ lide 2-08‬
S‭Currently,‬‭Marketing‬‭Solutions‬‭operates‬‭vertical‬‭matching‬‭platforms‬‭for‬‭Beauty,‬‭Travel,‬‭and‬‭Dining‬‭where‬‭the‬‭added value of our business support SaaS solutions, including Air BusinessTools, is readily apparent.‬‭We‬‭also‬‭operate‬‭Housing‬‭&‬‭Real‬‭Estate,‬‭which‬‭generates‬‭the‬‭largest‬‭revenue‬‭in‬‭Marketing‬‭Solutions,‬‭and‬‭we‬‭ anage matching platforms across other verticals including Automobiles, Education, and Bridal.‬m‭ he‬‭annual‬‭revenue‬‭varies‬‭by‬‭vertical,‬‭with‬‭Housing‬‭&‬‭Real‬‭Estate‬‭at‬‭approximately‬‭140‬‭billion‬‭yen,‬‭followed‬
T‭by‬‭Beauty‬‭at‬‭over‬‭100‬‭billion‬‭yen,‬‭Travel‬‭just‬‭below‬‭100‬‭billion‬‭yen,‬‭and‬‭approximately‬‭30‬‭billion‬‭yen‬‭for‬‭each‬‭of the verticals in Others. In each vertical, we have become one of the largest matching platforms in Japan.‬‭ lide 2-09‬
S‭The‬‭pricing‬‭models‬‭for‬‭our‬‭matching‬‭platforms‬‭vary‬‭according‬‭to‬‭the‬‭commercial‬‭practices‬‭and‬‭characteristics‬‭of each sector. These include advertising models, pay for performance models, and subscription models.‬‭For‬ ‭example,‬ ‭in‬ ‭Travel,‬ ‭where‬ ‭hotel‬ ‭room‬ ‭prices‬ ‭fluctuate‬ ‭due‬ ‭to‬ ‭factors‬ ‭such‬ ‭as‬ ‭seasonality‬ ‭and‬ ‭foreign‬t‭ourism, the pay for performance pricing model aligns well with the operations of our business clients.‬‭This transcript is provided for the convenience of investors only and this is a translated version of the Japanese call.‬‭2‬‭ n‬‭the‬‭other‬‭hand,‬‭for‬‭business‬‭clients‬‭in‬‭fields‬‭where‬‭service‬‭fees‬‭tend‬‭to‬‭be‬‭fixed‬‭such‬‭as‬‭hair‬‭salons‬‭and‬O‭restaurants,‬ ‭an‬ ‭advertising‬ ‭based‬ ‭model‬ ‭offers‬ ‭the‬ ‭advantage‬ ‭of‬ ‭easier‬ ‭budget‬ ‭forecasting‬ ‭for‬ ‭business‬‭clients.‬‭ e‬ ‭continuously‬ ‭update‬ ‭our‬ ‭pricing‬ ‭models‬ ‭to‬ ‭ensure‬ ‭they‬ ‭are‬ ‭optimally‬ ‭aligned‬‭with‬‭the‬‭operations‬‭of‬‭our‬W‭business‬ ‭clients.‬ ‭By‬ ‭doing‬ ‭so,‬ ‭we‬ ‭believe‬‭we‬‭can‬‭maintain‬‭long-term‬‭relationships‬‭with‬‭our‬‭business‬‭clients‬‭and maximize the lifetime value or “LTV” per client.‬‭ lide 2-10‬
S‭Over‬‭the‬‭past‬‭few‬‭years,‬‭our‬‭matching‬‭platforms‬‭have‬‭evolved‬‭from‬‭merely‬‭being‬‭media‬‭for‬‭business‬‭clients‬‭to‬‭advertise,‬ ‭to‬ ‭sophisticated‬ ‭matching‬ ‭platforms‬ ‭that‬ ‭can‬ ‭track‬ ‭individual‬ ‭users’‬ ‭actions‬ ‭such‬ ‭as‬‭reservations‬‭and payments.‬‭ o‬ ‭achieve‬ ‭matches‬ ‭that‬ ‭directly‬ ‭contribute‬ ‭to‬ ‭the‬ ‭sales‬ ‭of‬ ‭our‬ ‭business‬ ‭clients,‬ ‭we‬ ‭utilize‬ ‭not‬ ‭only‬ ‭online‬T‭resources‬ ‭but,‬ ‭when‬ ‭necessary,‬ ‭offline‬ ‭ones‬ ‭as‬‭well.‬‭Moreover,‬‭we‬‭leverage‬‭the‬‭vast‬‭amount‬‭of‬‭action‬‭data‬‭and‬‭matching‬‭technology‬‭we‬‭have‬‭accumulated‬‭over‬‭the‬‭years.‬‭This‬‭comprehensive‬‭approach‬‭enables‬‭us‬‭to‬‭facilitate matches that directly increase business client revenues.‬‭ lide 2-11‬
S‭Since‬‭FY2011,‬‭improvements‬‭in‬‭our‬‭services‬‭have‬‭led‬‭to‬‭better‬‭matching‬‭efficiency‬‭and‬‭increased‬‭value‬‭of‬‭our‬‭matching‬‭platforms,‬‭especially‬‭in‬‭high-frequency‬‭user‬‭verticals‬‭such‬‭as‬‭Beauty‬‭and‬‭Dining.‬‭This‬‭has‬‭led‬‭to‬‭a‬‭continuous increase in the number of actions taken by individual users.‬‭By‬‭FY2022,‬‭the‬‭annual‬‭number‬‭of‬‭actions‬‭across‬‭the‬‭Matching‬‭&‬‭Solutions‬‭SBU‬‭reached‬‭approximately‬‭420‬‭ illion.‬m‭In‬ ‭order‬ ‭to‬ ‭continue‬ ‭to‬ ‭grow‬ ‭the‬ ‭number‬ ‭of‬ ‭actions,‬ ‭each‬ ‭vertical‬ ‭matching‬ ‭platform‬ ‭monitors‬ ‭action‬ ‭data‬‭ losely, constantly making improvements, month by month and year by year.‬c‭ t‬‭the‬‭same‬‭time,‬‭the‬‭management‬‭team‬‭is‬‭not‬‭just‬‭focused‬‭on‬‭growing‬‭the‬‭number‬‭of‬‭actions,‬‭but‬‭is‬‭strictly‬A‭managing‬‭unit‬‭economics.‬‭Our‬‭decision-making‬‭is‬‭guided‬‭by‬‭increasing‬‭the‬‭LTV‬‭of‬‭both‬‭individual‬‭users‬‭and‬‭business‬‭clients‬‭while‬‭being‬‭mindful‬‭of‬‭acquisition‬‭costs.‬‭And‬‭we‬‭do‬‭this,‬‭not‬‭from‬‭the‬‭perspective‬‭of‬‭growing‬‭revenue and adjusted EBITDA margin for each vertical, but for Marketing Solutions as a whole.‬‭ lide 2-12‬
S‭We‬‭believe‬‭the‬‭Total‬‭Addressable‬‭Market,‬‭or‬‭TAM,‬‭in‬‭Marketing‬‭Solutions‬‭includes‬‭not‬‭only‬‭business‬‭clients’‬‭advertising‬‭and‬‭promotional‬‭expenses,‬‭but‬‭also‬‭a‬‭portion‬‭of‬‭their‬‭SG&A‬‭costs,‬‭such‬‭as‬‭personnel‬‭expenses.‬‭This‬‭is‬‭because‬‭our‬‭SaaS‬‭solutions,‬‭regardless‬‭of‬‭industry,‬‭can‬‭improve‬‭operational‬‭efficiency‬‭across‬‭various‬‭industries by, for example, replacing the work of one person in store operations.‬‭While‬‭we‬‭aim‬‭to‬‭achieve‬‭stable‬‭revenue‬‭growth‬‭for‬‭Marketing‬‭Solutions‬‭within‬‭this‬‭TAM,‬‭the‬‭contribution‬‭to‬‭the‬‭ rowth varies across verticals due to the market environment and different business models of each vertical.‬g‭ lide 2-13‬
S‭For‬ ‭example,‬ ‭Beauty,‬ ‭where‬ ‭individual‬‭user‬‭frequency‬‭is‬‭high,‬‭tends‬‭to‬‭reflect‬‭the‬‭added‬‭value‬‭of‬‭enhanced‬‭productivity‬ ‭through‬ ‭our‬ ‭SaaS‬ ‭solutions.‬ ‭Therefore,‬ ‭in‬ ‭addition‬ ‭to‬ ‭acquiring‬ ‭new‬ ‭business‬ ‭clients‬ ‭to‬ ‭drive‬‭revenue‬ ‭growth,‬ ‭we‬ ‭also‬ ‭expect‬ ‭an‬ ‭increase‬ ‭in‬ ‭revenue‬ ‭per‬ ‭business‬ ‭client‬ ‭due‬ ‭to‬ ‭an‬ ‭increase‬ ‭in‬ ‭the‬‭cross-use of SaaS solutions.‬‭ ousing‬ ‭&‬ ‭Real‬ ‭Estate‬ ‭also‬ ‭has‬ ‭good‬ ‭potential‬ ‭to‬ ‭contribute‬ ‭to‬ ‭future‬ ‭revenue‬ ‭growth.‬ ‭In‬ ‭Japan,‬ ‭offline‬H‭advertisements‬‭in‬‭the‬‭housing‬‭industry,‬‭such‬‭as‬‭flyers,‬‭are‬‭still‬‭common,‬‭but‬‭there‬‭is‬‭a‬‭gradual‬‭shift‬‭from‬‭offline‬‭to‬ ‭online‬ ‭advertising‬ ‭each‬ ‭year.‬ ‭Leveraging‬ ‭our‬ ‭industry‬ ‭leading‬ ‭position‬ ‭in‬ ‭the‬ ‭market,‬ ‭we‬ ‭expect‬ ‭to‬‭grow‬‭revenue‬ ‭by‬ ‭acquiring‬ ‭new‬ ‭business‬ ‭clients‬ ‭and‬ ‭increasing‬ ‭our‬‭wallet‬‭share‬‭of‬‭existing‬‭clients‬‭by‬‭enhancing‬‭convenience for both individual users and business clients.‬‭ lide 2-14‬
S‭Next,‬‭I‬‭will‬‭explain‬‭how‬‭optimizing‬‭productivity‬‭of‬‭our‬‭internal‬‭operations‬‭enables‬‭the‬‭simultaneous‬‭evolution‬‭of‬‭each vertical business area and the Matching & Solutions SBU as a whole.‬‭This transcript is provided for the convenience of investors only and this is a translated version of the Japanese call.‬‭3‬‭ lide 2-15‬
S‭Matching‬‭&‬‭Solutions‬‭is‬‭structured‬‭by‬‭functions,‬‭with‬‭departments‬‭such‬‭as‬‭corporate‬‭staff,‬‭sales,‬‭and‬‭product.‬‭All verticals are represented in each department.‬‭ his‬‭structure‬‭has‬‭enabled‬‭us‬‭to‬‭reduce‬‭redundant‬‭costs,‬‭manage‬‭expenses‬‭more‬‭appropriately‬‭and‬‭optimize‬T‭personnel‬ ‭assignments‬ ‭more‬ ‭quickly‬ ‭when‬ ‭compared‬ ‭to‬ ‭before‬ ‭2021,‬ ‭when‬ ‭each‬ ‭vertical‬ ‭operated‬‭its‬‭own‬‭subsidiary.‬‭The‬ ‭management‬ ‭team‬ ‭strictly‬ ‭manages‬ ‭expenses‬ ‭and‬ ‭personnel‬ ‭assignments‬ ‭across‬ ‭the‬ ‭business‬ ‭to‬‭ chieve revenue growth and expansion of adjusted EBITDA margins for Marketing Solutions as a whole.‬a‭ or‬‭example,‬‭the‬‭product‬‭department,‬‭rather‬‭than‬‭the‬‭sales‬‭department,‬‭has‬‭the‬‭authority‬‭to‬‭make‬‭decisions‬F‭regarding‬ ‭advertising‬ ‭and‬ ‭promotional‬ ‭expenses.‬ ‭This‬ ‭allows‬ ‭us‬ ‭to‬ ‭manage‬ ‭the‬ ‭cost-effectiveness‬ ‭of‬‭advertising‬ ‭by‬ ‭repeatedly‬ ‭analyzing‬ ‭the‬ ‭outcomes‬ ‭of‬ ‭implementing‬ ‭or‬ ‭not‬ ‭implementing‬ ‭advertising‬‭campaigns.‬‭ hile‬ ‭controlling‬ ‭advertising‬ ‭expenses‬ ‭contributes‬ ‭to‬‭an‬‭increase‬‭in‬‭adjusted‬‭EBITDA‬‭margin,‬‭management‬W‭decisions‬ ‭are‬ ‭made‬ ‭carefully‬ ‭to‬ ‭ensure‬ ‭that‬ ‭this‬ ‭does‬ ‭not‬ ‭lead‬ ‭to‬ ‭a‬ ‭long-term‬ ‭decrease‬ ‭in‬ ‭the‬ ‭number‬ ‭of‬‭actions taken by individual users.‬‭ lide 2-16‬
S‭To illustrate how we optimize personnel assignments, let’s take a look at our sales team as an example.‬‭ ur‬‭sales‬‭team‬‭functions‬‭as‬‭a‬‭department‬‭across‬‭all‬‭verticals,‬‭rather‬‭than‬‭being‬‭divided‬‭by‬‭individual‬‭verticals.‬O‭This‬ ‭structure‬ ‭allows‬ ‭us‬ ‭to‬ ‭quickly‬ ‭adjust‬ ‭personnel‬ ‭assignments‬ ‭between‬ ‭and‬ ‭within‬ ‭verticals‬ ‭based‬ ‭on‬‭economic trends and future growth prospects.‬‭We‬‭also‬‭have‬‭a‬‭thorough‬‭system‬‭in‬‭place‬‭that‬‭allows‬‭our‬‭sales‬‭teams‬‭to‬‭utilize‬‭the‬‭anonymized‬‭action‬‭data‬‭of‬i‭ndividual users and the operations data of business clients as assets for their sales activities.‬‭This‬‭minimizes‬‭variability‬‭in‬‭the‬‭quality‬‭of‬‭proposals‬‭from‬‭each‬‭sales‬‭representative‬‭and‬‭helps‬‭them‬‭refine‬‭their‬‭ roductivity while maintaining and improving the quality of our sales team.‬p‭ he‬ ‭relationships‬ ‭that‬ ‭our‬ ‭sales‬ ‭representatives‬ ‭have‬ ‭built‬ ‭with‬ ‭our‬ ‭business‬ ‭clients‬ ‭are‬ ‭an‬ ‭extremely‬T‭important‬‭asset‬‭to‬‭our‬‭company.‬‭Our‬‭corporate‬‭culture‬‭is‬‭built‬‭on‬‭the‬‭idea‬‭of‬‭not‬‭only‬‭proposing‬‭our‬‭services,‬‭but‬‭also‬‭deeply‬‭engaging‬‭in‬‭our‬‭business‬‭clients’‬‭overall‬‭operations‬‭and‬‭thinking‬‭as‬‭a‬‭stakeholder‬‭about‬‭what‬‭improvements can be made.‬‭This‬‭mindset‬‭has‬‭led‬‭to‬‭the‬‭creation‬‭of‬‭many‬‭new‬‭products,‬‭including‬‭Air‬‭BusinessTools,‬‭our‬‭suite‬‭of‬‭business‬‭ upport SaaS solutions.‬s‭By‬ ‭leveraging‬‭these‬‭important‬‭assets‬‭and‬‭our‬‭corporate‬‭culture,‬‭we‬‭believe‬‭that‬‭we‬‭can‬‭further‬‭enhance‬‭the‬‭ fficiency of our sales activities in the future.‬e‭ ather‬ ‭than‬ ‭only‬ ‭focusing‬‭on‬‭our‬‭productivity,‬‭we‬‭aim‬‭to‬‭increase‬‭the‬‭adjusted‬‭EBITDA‬‭margin‬‭in‬‭Marketing‬R‭Solutions‬ ‭by‬ ‭understanding‬ ‭the‬ ‭environment‬ ‭where‬ ‭there‬ ‭is‬ ‭a‬ ‭significant‬ ‭disparity‬ ‭in‬ ‭IT‬ ‭literacy‬ ‭among‬‭business‬ ‭clients.‬ ‭We‬ ‭will‬ ‭do‬ ‭this‬ ‭by‬ ‭introducing‬ ‭customer‬ ‭support‬ ‭systems‬ ‭that‬ ‭do‬ ‭not‬ ‭require‬ ‭sales‬‭representative‬ ‭intervention,‬ ‭and‬ ‭by‬‭establishing‬‭specialized‬‭functions‬‭such‬‭as‬‭new‬‭customer‬‭acquisition‬‭and‬‭customer success, according to the business sectors and characteristics of our business clients.‬‭ rom‬ ‭here,‬ ‭we‬ ‭will‬ ‭detail‬ ‭how‬ ‭we‬ ‭are‬ ‭progressing‬ ‭with‬ ‭identifying‬‭challenges‬‭faced‬‭by‬‭individual‬‭users‬‭and‬F‭business‬ ‭clients‬‭and‬‭how‬‭we‬‭are‬‭implementing‬‭improvements‬‭in‬‭our‬‭matching‬‭platforms‬‭and‬‭SaaS‬‭solutions‬‭for‬ ‭individual‬ ‭users‬ ‭and‬ ‭our‬ ‭business‬ ‭clients‬ ‭aimed‬ ‭at‬ ‭growing‬ ‭revenue‬ ‭and‬ ‭improving‬ ‭adjusted‬ ‭EBITDA‬‭margins.‬‭A‬‭detailed‬‭explanation‬‭will‬‭be‬‭provided‬‭by‬‭Jun‬‭Akiyama,‬‭who‬‭is‬‭in‬‭charge‬‭of‬‭Product‬‭Management‬‭and‬‭Product‬‭ evelopment for Marketing Solutions and Keiichi Ushida, who is in charge of SaaS Product Management.‬
D‭This transcript is provided for the convenience of investors only and this is a translated version of the Japanese call.‬‭4‬‭ lide 2-17‬
S‭Jun:‬‭I’m Jun and I’m responsible for Product Management‬‭and Product Development for Marketing Solutions.‬‭I‬ ‭was‬ ‭involved‬ ‭in‬ ‭the‬ ‭launch‬ ‭of‬ ‭SALON‬ ‭BOARD,‬ ‭a‬ ‭cloud-based‬ ‭reservation‬ ‭and‬ ‭customer‬ ‭management‬‭ ystem in Beauty, and in the product management of SUUMO, a matching platform in Housing & Real Estate.‬s‭ lide 2-18‬
S‭Keiichi:‬‭I’m Keiichi, and I am in charge of SaaS Product‬‭Development.‬I‭‬‭have‬‭been‬‭responsible‬‭for‬‭product‬‭management‬‭and‬‭new‬‭business‬‭development,‬‭working‬‭on‬‭the‬‭launch‬‭and‬‭management‬‭of‬‭products‬‭across‬‭many‬‭of‬‭our‬‭verticals‬‭such‬‭as‬‭HotPepper‬‭Beauty,‬‭HotPepper‬‭Gourmet,‬‭Jalan,‬‭and AirPAY.‬‭ lide 2-19‬
S‭Jun and I will cover the following four key initiatives:‬‭‬ E●‭ nhancing individual user convenience to increase the number of actions‬‭●‬ ‭Increasing‬ ‭available‬ ‭reservation‬ ‭slots,‬ ‭which‬ ‭we‬ ‭call‬ ‭"inventory"‬ ‭on‬ ‭the‬ ‭matching‬ ‭platform,‬ ‭and‬‭strengthening client relationships by improving operational efficiency of business clients‬‭●‬ ‭Optimizing acquisition costs for both individual users and business clients‬‭●‬ ‭Future potential of fintech services utilizing payment transaction volumes‬‭We‬ ‭believe‬ ‭that‬ ‭these‬ ‭initiatives‬ ‭will‬ ‭significantly‬ ‭contribute‬ ‭to‬ ‭the‬ ‭growth‬ ‭and‬ ‭success‬ ‭of‬ ‭our‬ ‭matching‬‭ latforms, and we are excited to explore these opportunities further.‬p‭ lide 2-20‬
S‭Jun:‬‭First, I would like to talk about increasing‬‭convenience for individual users.‬‭Have‬ ‭you‬ ‭ever‬ ‭found‬ ‭yourself‬ ‭thinking‬ ‭that‬ ‭you‬ ‭want‬ ‭to‬ ‭get‬ ‭a‬ ‭haircut‬ ‭or‬ ‭a‬ ‭massage‬‭after‬‭work?‬‭I‬‭too‬‭have‬‭ oments where I think “I have some free time after work today, I should get a massage“.‬m‭ ut‬‭if‬‭salons‬‭only‬‭offer‬‭reservations‬‭by‬‭phone,‬‭you‬‭might‬‭encounter‬‭situations‬‭where‬‭they‬‭are‬‭already‬‭closed‬B‭for‬‭the‬‭day‬‭or‬‭you‬‭can’t‬‭get‬‭through‬‭to‬‭anyone‬‭before‬‭opening,‬‭making‬‭it‬‭difficult‬‭to‬‭book‬‭at‬‭the‬‭right‬‭moment.‬‭So you might end up not going or putting it off to another day.‬‭ ALON‬ ‭BOARD‬ ‭was‬ ‭created‬ ‭in‬ ‭order‬ ‭to‬ ‭meet‬ ‭individuals’‬ ‭demands‬ ‭for‬ ‭features‬ ‭like‬ ‭making‬ ‭a‬ ‭reservation‬
S‭whenever‬‭they‬‭want.‬‭And‬‭it‬‭has‬‭now‬‭become‬‭an‬‭indispensable‬‭infrastructure‬‭for‬‭the‬‭operations‬‭of‬‭hair‬‭salons,‬‭massage parlors, and nail salons in Japan.‬‭ ALON‬ ‭BOARD‬ ‭is‬ ‭a‬ ‭vertical‬ ‭SaaS‬ ‭provided‬ ‭to‬ ‭business‬ ‭clients‬ ‭of‬ ‭Hotpepper‬ ‭Beauty.‬ ‭It‬ ‭enables‬ ‭business‬
S‭clients‬ ‭to‬ ‭accept‬ ‭reservations‬ ‭24‬ ‭hours‬ ‭a‬ ‭day‬ ‭and‬ ‭provides‬ ‭all‬ ‭the‬ ‭functions‬ ‭needed‬ ‭to‬ ‭operate‬ ‭salons:‬‭reservation‬ ‭management,‬ ‭customer‬ ‭management,‬ ‭point-of-sale,‬ ‭or‬ ‭POS,‬ ‭functionality,‬ ‭revenue‬ ‭and‬‭operational performance analysis, and since last year, the ability to create and manage job postings.‬‭We‬ ‭believe‬ ‭SALON‬ ‭BOARD‬ ‭has‬ ‭significantly‬ ‭contributed‬ ‭to‬ ‭the‬ ‭growth‬ ‭of‬ ‭HotPepper‬ ‭Beauty,‬ ‭which‬ ‭has‬‭ ecome one of the biggest matching platforms in Japan in the Beauty segment.‬b‭Housing‬‭&‬‭Real‬‭Estate‬‭is‬‭another‬‭example‬‭of‬‭a‬‭vertical‬‭where‬‭we‬‭have‬‭significantly‬‭improved‬‭convenience‬‭for‬i‭ndividual users.‬‭ ousing‬‭&‬‭Real‬‭Estate,‬‭which‬‭started‬‭with‬‭the‬‭launch‬‭of‬‭“Monthly‬‭Housing‬‭Information”‬‭in‬‭1973,‬‭now‬‭accounts‬H‭for‬ ‭approximately‬ ‭30%‬ ‭of‬ ‭revenue‬ ‭in‬ ‭Matching‬ ‭&‬ ‭Solutions.‬ ‭It‬ ‭offers‬ ‭SUUMO,‬ ‭a‬ ‭matching‬ ‭platform‬ ‭that‬‭provides‬‭information‬‭on‬‭all‬‭types‬‭of‬‭housing,‬‭including‬‭detached‬‭houses,‬‭apartment‬‭and‬‭condominium‬‭sales,‬‭rentals and custom-built-homes.‬
I‭nitially,‬ ‭the‬ ‭magazine‬ ‭started‬ ‭as‬ ‭a‬ ‭collection‬ ‭of‬ ‭real‬ ‭estate‬ ‭advertisements.‬ ‭But‬ ‭we‬ ‭continuously‬ ‭aimed‬ ‭to‬‭make‬ ‭the‬ ‭housing‬ ‭search‬ ‭process‬‭easier‬‭and‬‭more‬‭convenient‬‭for‬‭individual‬‭users.‬‭We‬‭created‬‭the‬‭industry‬‭standard‬‭by‬‭producing‬‭the‬‭first‬‭ever‬‭index‬‭function‬‭which‬‭organizes‬‭property‬‭information‬‭by‬‭train‬‭line,‬‭station,‬‭This transcript is provided for the convenience of investors only and this is a translated version of the Japanese call.‬‭5‬‭ nd‬ ‭price.‬ ‭And‬ ‭we‬ ‭launched‬ ‭an‬ ‭internet‬‭version‬‭of‬‭SUUMO,‬‭being‬‭the‬‭first‬‭to‬‭create‬‭an‬‭online‬‭marketplace.‬a‭We‬ ‭have‬ ‭repeatedly‬ ‭been‬ ‭ahead‬ ‭of‬ ‭the‬ ‭curve,‬ ‭creating‬ ‭services‬ ‭and‬ ‭features‬ ‭which‬ ‭are‬ ‭now‬ ‭the‬ ‭industry‬‭standard.‬‭As‬ ‭a‬ ‭result‬ ‭of‬ ‭our‬ ‭efforts,‬ ‭we‬ ‭have‬ ‭democratized‬‭access‬‭to‬‭real‬‭estate‬‭information‬‭and‬‭drastically‬‭improved‬‭ onvenience for individual users.‬c‭Through‬‭this‬‭evolutionary‬‭history,‬‭SUUMO‬‭now‬‭supports‬‭the‬‭matching‬‭of‬‭individual‬‭users‬‭and‬‭business‬‭clients‬‭ uch as real estate companies.‬s‭ owever,‬‭a‬‭challenge‬‭in‬‭this‬‭field‬‭is‬‭that‬‭individuals‬‭do‬‭not‬‭frequently‬‭move‬‭and‬‭buy‬‭or‬‭rent‬‭new‬‭properties,‬‭so‬H‭most‬‭people‬‭don’t‬‭have‬‭a‬‭lot‬‭of‬‭knowledge‬‭about‬‭how‬‭to‬‭best‬‭manage‬‭this‬‭process.‬‭As‬‭a‬‭result,‬‭it‬‭requires‬‭a‬‭lot‬‭of time and thought to make a decision.‬‭ o,‬‭although‬‭we‬‭made‬‭the‬‭process‬‭more‬‭convenient‬‭for‬‭individual‬‭users‬‭by‬‭providing‬‭information‬‭online,‬‭given‬S‭the‬‭complexity,‬‭we‬‭wondered‬‭how‬‭we‬‭could‬‭more‬‭effectively‬‭and‬‭timely‬‭match‬‭these‬‭individuals‬‭with‬‭business‬‭clients.‬ ‭So‬ ‭we‬‭decided‬‭to‬‭create‬‭offline‬‭services,‬‭in‬‭addition‬‭to‬‭our‬‭online‬‭matching‬‭platform,‬‭to‬‭best‬‭support‬‭the decision making of individual users.‬‭ lide 2-21‬
S‭In 2005, we launched a service that provides the face-to-face introduction of properties to individual users.‬‭ pecifically,‬‭we‬‭operate‬‭more‬‭than‬‭200‬‭physical‬‭locations‬‭in‬‭shopping‬‭centers‬‭and‬‭other‬‭locations‬‭nationwide,‬S‭known‬‭as‬‭SUUMO‬‭Counters.‬‭SUUMO‬‭Counter‬‭offers‬‭free‬‭consultations‬‭to‬‭individual‬‭users‬‭about‬‭purchasing‬‭custom‬ ‭built‬ ‭homes‬ ‭and‬ ‭new‬ ‭condominiums,‬ ‭operating‬ ‭with‬ ‭a‬ ‭performance‬ ‭based‬ ‭pricing‬ ‭model,‬ ‭where‬‭business clients pay commissions upon completion of a deal.‬‭ he‬‭conversion‬‭rate‬‭of‬‭individual‬‭users‬‭who‬‭utilize‬‭SUUMO‬‭Counters‬‭is‬‭significantly‬‭higher‬‭compared‬‭to‬‭those‬T‭who‬‭only‬‭use‬‭the‬‭online‬‭matching‬‭platform.‬‭This‬‭is‬‭due‬‭to‬‭the‬‭“human”‬‭involvement‬‭in‬‭the‬‭offline‬‭process,‬‭and‬‭for us, this leads to revenue through performance based fees rather than advertising fees.‬I‭n‬‭order‬‭to‬‭solve‬‭the‬‭fundamental‬‭issues‬‭faced‬‭by‬‭individual‬‭users‬‭and‬‭business‬‭clients,‬‭we‬‭are‬‭enhancing‬‭the‬‭value‬‭of‬‭our‬‭matching‬‭platforms‬‭by‬‭utilizing‬‭all‬‭of‬‭our‬‭assets‬‭including‬‭online‬‭and‬‭offline‬‭services‬‭and‬‭matching‬‭technologies. This evolution is not only happening in Housing & Real Estate, but also in other verticals.‬‭ lide 2-22‬
S‭Keiichi:‬ ‭Next,‬ ‭I‬ ‭will‬ ‭talk‬ ‭about‬‭our‬‭efforts‬‭to‬‭increase‬‭the‬‭“inventory”‬‭available‬‭on‬‭our‬‭matching‬‭platforms‬‭by‬‭improving the operational efficiency of our business clients and strengthening our relationships with them.‬‭Earlier, Jun presented how SALON BOARD is equipped with all the functions necessary for salon operations.‬‭ y‬‭having‬‭SALON‬‭BOARD‬‭handle‬‭all‬‭administrative‬‭tasks‬‭other‬‭than‬‭treatments,‬‭business‬‭clients‬‭can‬‭devote‬B‭more‬ ‭time‬ ‭to‬ ‭serving‬ ‭their‬ ‭customers,‬ ‭resulting‬ ‭in‬ ‭an‬ ‭increase‬ ‭in‬ ‭the‬ ‭inventory‬ ‭available‬ ‭on‬ ‭our‬ ‭matching‬‭platform.‬‭ lide 2-23‬
S‭Additionally,‬‭since‬‭February‬‭2023,‬‭we‬‭have‬‭been‬‭offering‬‭HotPepper‬‭Beauty‬‭WORK,‬‭an‬‭HR‬‭matching‬‭service‬‭that‬ ‭combines‬ ‭with‬ ‭HotPepper‬ ‭Beauty.‬ ‭In‬ ‭addition‬ ‭to‬ ‭a‬‭monthly‬‭service‬‭usage‬‭fee,‬‭this‬‭service‬‭introduces‬‭a‬‭performance‬ ‭based‬ ‭pay‬ ‭per‬ ‭hire‬ ‭pricing‬ ‭model,‬ ‭with‬ ‭the‬ ‭revenue‬ ‭accounted‬ ‭for‬ ‭in‬ ‭Beauty‬ ‭in‬ ‭Marketing‬‭Solutions.‬‭HotPepper‬ ‭Beauty‬ ‭WORK‬ ‭automatically‬ ‭links‬ ‭information‬ ‭from‬ ‭HotPepper‬‭Beauty‬‭which‬‭is‬‭important‬‭for‬‭job‬‭ eekers, such as details about the store’s staff, treatment menus, and user reviews.‬s‭ his‬‭means‬‭job‬‭seekers‬‭don’t‬‭need‬‭to‬‭go‬‭back‬‭and‬‭forth‬‭between‬‭job‬‭boards‬‭and‬‭HotPepper‬‭Beauty‬‭to‬‭gather‬T‭all‬ ‭of‬ ‭this‬ ‭information.‬ ‭They‬ ‭can‬ ‭search‬ ‭for‬ ‭jobs,‬ ‭collect‬ ‭salon‬ ‭information‬ ‭and‬ ‭apply‬ ‭for‬ ‭jobs‬ ‭all‬ ‭through‬‭HotPepper Beauty WORK.‬‭This transcript is provided for the convenience of investors only and this is a translated version of the Japanese call.‬‭6‬‭ lide 2-24‬
S‭And‬‭for‬‭business‬‭clients,‬‭they‬‭don’t‬‭need‬‭to‬‭duplicate‬‭salon‬‭information‬‭which‬‭is‬‭already‬‭on‬‭HotPepper‬‭Beauty‬‭to‬ ‭post‬‭a‬‭job‬‭advertisement.‬‭They‬‭can‬‭hire‬‭directly‬‭from‬‭SALON‬‭BOARD,‬‭which‬‭they‬‭are‬‭already‬‭using‬‭on‬‭a‬‭daily basis.‬‭ his‬ ‭convenience‬ ‭allows‬ ‭business‬ ‭clients‬ ‭to‬ ‭streamline‬ ‭their‬ ‭hiring‬ ‭processes‬ ‭dramatically‬ ‭by‬ ‭reducing‬ ‭the‬T‭effort‬ ‭required‬ ‭to‬ ‭create‬ ‭job‬ ‭advertisements,‬ ‭allowing‬ ‭them‬ ‭to‬ ‭post‬ ‭jobs‬ ‭much‬ ‭faster‬ ‭and‬ ‭more‬ ‭easily‬ ‭than‬‭before.‬‭It’s‬ ‭been‬ ‭one‬ ‭year‬ ‭since‬ ‭we‬ ‭launched‬ ‭this‬ ‭service‬ ‭and,‬ ‭as‬ ‭of‬ ‭the‬ ‭beginning‬ ‭of‬ ‭March‬ ‭2024,‬ ‭there‬ ‭were‬‭ pproximately 34,000 salons using HotPepper Beauty WORK.‬a‭ lide 2-25‬
S‭Next, I’ll talk about Air BusinessTools, the core of our SaaS solutions.‬‭ ir‬‭BusinessTools,‬‭which‬‭improves‬‭the‬‭efficiency‬‭of‬‭management‬‭operations‬‭regardless‬‭of‬‭vertical,‬‭began‬‭as‬‭a‬A‭response‬ ‭to‬ ‭the‬ ‭common‬ ‭operational‬ ‭challenges‬ ‭faced‬ ‭by‬ ‭various‬ ‭business‬ ‭clients‬ ‭using‬ ‭our‬ ‭matching‬‭platforms and in particular within Beauty, Travel and Dining.‬‭In‬ ‭2013,‬ ‭we‬ ‭launched‬ ‭our‬ ‭first‬ ‭service,‬ ‭AirREGI,‬ ‭a‬ ‭POS‬ ‭register‬ ‭application‬ ‭and‬ ‭now‬ ‭we‬ ‭offer‬ ‭16‬ ‭Air‬‭ usinessTools services.‬B‭ lide 2-26‬
S‭Although‬ ‭there‬ ‭are‬ ‭differences‬ ‭from‬ ‭business‬ ‭to‬ ‭business,‬ ‭stores‬ ‭that‬ ‭provide‬ ‭services‬ ‭like‬ ‭restaurants‬ ‭or‬‭beauty‬ ‭salons‬ ‭are‬ ‭said‬ ‭to‬ ‭have‬ ‭at‬ ‭least‬ ‭50‬ ‭processes‬ ‭that‬ ‭are‬ ‭necessary‬ ‭to‬ ‭operate‬ ‭the‬ ‭business.‬ ‭Among‬‭these,‬ ‭30%‬ ‭to‬ ‭70%‬ ‭of‬ ‭the‬ ‭time‬ ‭is‬ ‭spent‬ ‭on‬ ‭administrative‬ ‭tasks,‬ ‭such‬ ‭as‬ ‭marketing‬ ‭activities,‬ ‭facilitating‬‭reservations, inventory management, and hiring staff.‬‭ oreover,‬ ‭each‬ ‭of‬ ‭these‬ ‭tasks‬ ‭are‬ ‭often‬ ‭managed‬ ‭in‬ ‭separate‬ ‭systems‬ ‭or‬ ‭even‬ ‭paper-based,‬ ‭which‬M‭complicates‬ ‭the‬‭processes‬‭and‬‭requires‬‭considerable‬‭time‬‭and‬‭effort,‬‭hindering‬‭productivity‬‭improvement‬‭for‬‭business clients.‬‭ ir‬‭BusinessTools,‬‭including‬‭AirPAY,‬‭AirREGI,‬‭and‬‭various‬‭other‬‭services‬‭we‬‭offer‬‭reduce‬‭the‬‭time,‬‭effort,‬‭and‬A‭costs‬‭associated‬‭with‬‭these‬‭tasks‬‭by‬‭replacing‬‭the‬‭analog‬‭operations‬‭of‬‭a‬‭business‬‭with‬‭digital‬‭solutions.‬‭This‬‭spans‬ ‭from‬ ‭reservation‬‭and‬‭reception‬‭management,‬‭to‬‭accounting‬‭and‬‭payments,‬‭from‬‭recruitment‬‭and‬‭shift‬‭management to cash management and invoice management.‬‭These‬ ‭characteristics‬‭of‬‭Air‬‭BusinessTools‬‭are‬‭behind‬‭Yoshi's‬‭earlier‬‭explanation‬‭that‬‭the‬‭TAM‬‭for‬‭Marketing‬‭ olutions includes a portion of a business client's labor and sales administration costs.‬
S‭Now,‬ ‭let‬ ‭me‬ ‭introduce‬ ‭a‬ ‭case‬ ‭study‬ ‭that‬ ‭demonstrates‬ ‭how‬ ‭our‬ ‭business‬ ‭clients‬ ‭have‬ ‭leveraged‬ ‭our‬‭ cosystem to achieve improvements in productivity and performance.‬e‭ ‬ ‭restaurant‬ ‭utilizing‬ ‭HotPepper‬ ‭Gourmet,‬ ‭a‬ ‭matching‬ ‭platform‬ ‭for‬ ‭Dining,‬ ‭along‬ ‭with‬ ‭its‬ ‭accompanying‬A‭reservation‬ ‭management‬ ‭system‬ ‭Restaurant‬ ‭Board,‬ ‭that‬ ‭was‬ ‭also‬ ‭using‬ ‭AirPay‬ ‭and‬ ‭AirREGI‬‭for‬‭enhanced‬‭cashless payment support, started to use AirREGI Order following the COVID–19 outbreak.‬‭ s‬ ‭a‬ ‭result,‬ ‭most‬ ‭of‬ ‭the‬ ‭customers‬ ‭who‬ ‭now‬ ‭visit‬ ‭the‬‭restaurant‬‭use‬‭mobile‬‭ordering,‬‭which‬‭has‬‭eliminated‬A‭order‬ ‭errors‬ ‭and‬ ‭typing‬ ‭mistakes‬ ‭at‬ ‭the‬ ‭cash‬ ‭register‬ ‭and‬ ‭greatly‬ ‭improved‬ ‭operational‬ ‭efficiency,‬‭simultaneously increasing the average spend per customer.‬‭ hile‬‭in‬‭the‬‭past‬‭customers‬‭tended‬‭to‬‭refrain‬‭from‬‭placing‬‭additional‬‭orders‬‭when‬‭they‬‭saw‬‭busy‬‭staff,‬‭mobile‬W‭ordering‬ ‭has‬‭eliminated‬‭the‬‭need‬‭to‬‭call‬‭on‬‭staff.‬‭This‬‭has‬‭resulted‬‭in‬‭a‬‭significant‬‭improvement‬‭in‬‭lost‬‭order‬‭opportunities and driven higher average spend per customer and increased store revenue.‬‭This transcript is provided for the convenience of investors only and this is a translated version of the Japanese call.‬‭7‬‭ nd‬ ‭the‬ ‭number‬ ‭of‬‭reserved‬‭seats,‬‭which‬‭had‬‭previously‬‭been‬‭managed‬‭by‬‭time‬‭of‬‭day‬‭or‬‭day‬‭of‬‭the‬‭week,‬A‭can‬ ‭now‬ ‭be‬ ‭managed‬ ‭more‬ ‭precisely‬ ‭and‬ ‭appropriately‬ ‭by‬ ‭visualizing‬ ‭the‬ ‭restaurant’s‬ ‭seating‬ ‭status‬ ‭in‬‭real-time.‬‭ ith‬ ‭real-time‬ ‭visibility‬ ‭into‬ ‭availability‬ ‭and‬ ‭the‬ ‭ability‬ ‭to‬ ‭make‬ ‭on-the-spot‬ ‭reservations,‬ ‭convenience‬ ‭has‬W‭increased‬‭for‬‭individual‬‭users‬‭who‬‭want‬‭to‬‭dine‬‭at‬‭the‬‭restaurant,‬‭resulting‬‭in‬‭positive‬‭results‬‭for‬‭the‬‭business‬‭client in terms of improved table turnover and service quality.‬‭ urthermore,‬ ‭with‬ ‭the‬‭increased‬‭revenue,‬‭we‬‭can‬‭expect‬‭increased‬‭use‬‭of‬‭our‬‭services,‬‭for‬‭example,‬‭to‬‭hire‬F‭new‬ ‭employees‬ ‭or‬ ‭part-time‬ ‭workers‬ ‭for‬ ‭restaurant‬ ‭expansion‬ ‭or‬ ‭new‬ ‭restaurant‬ ‭openings‬ ‭using‬‭AirWORK‬‭ATS.‬‭Or‬ ‭to‬‭upgrade‬‭the‬‭advertising‬‭plan‬‭on‬‭our‬‭HotPepper‬‭Gourmet‬‭matching‬‭platform,‬‭or‬‭even‬‭to‬‭add‬‭listings‬‭for‬‭ ew restaurants.‬
n‭In‬‭this‬‭way,‬‭through‬‭Air‬‭BusinessTools,‬‭the‬‭visualization‬‭of‬‭operational‬‭data‬‭and‬‭its‬‭accumulation‬‭enables‬‭us‬‭to‬‭ rovide the most suitable solutions to the challenges faced by our business clients.‬p‭In‬ ‭addition,‬ ‭as‬ ‭productivity‬ ‭of‬ ‭business‬ ‭clients‬ ‭improves,‬ ‭inventory‬ ‭on‬ ‭our‬ ‭matching‬ ‭platforms‬ ‭increases,‬l‭eading to more matches and actions between individual users and business clients.‬‭Next,‬‭we‬‭will‬‭discuss‬‭measures‬‭we’re‬‭taking‬‭to‬‭streamline‬‭the‬‭cost‬‭of‬‭acquiring‬‭individual‬‭users‬‭and‬‭business‬‭ lients, ensuring they continue to use our services over the long term.‬c‭ lide 2-27‬
S‭Jun:‬‭Firstly, let me discuss Recruit ID on the individual‬‭user side.‬‭ ecruit‬ ‭ID‬ ‭is‬ ‭an‬ ‭ID‬ ‭for‬ ‭individual‬ ‭users‬ ‭and‬ ‭is‬ ‭used‬ ‭as‬ ‭a‬ ‭login‬ ‭ID‬ ‭across‬ ‭vertical‬ ‭matching‬ ‭platforms‬ ‭in‬
R
‭Marketing‬ ‭Solutions‬ ‭such‬ ‭as‬ ‭SUUMO‬ ‭and‬ ‭HotPepper‬ ‭Beauty,‬ ‭and‬ ‭those‬ ‭in‬‭HR‬‭Solutions‬‭such‬‭as‬‭Rikunabi‬‭NEXT.‬‭The‬‭number‬‭of‬‭Recruit‬‭IDs‬‭has‬‭been‬‭steadily‬‭increasing,‬‭with‬‭the‬‭total‬‭number‬‭of‬‭IDs‬‭issued,‬‭including‬‭active‬‭ nd non-active accounts, reaching approximately 87 million as of February 2024.‬a‭ e‬‭offer‬‭a‬‭loyalty‬‭program‬‭that‬‭allows‬‭individual‬‭users‬‭to‬‭earn‬‭and‬‭use‬‭points‬‭on‬‭our‬‭multiple‬‭vertical‬‭matching‬W‭platforms,‬‭linked‬‭to‬‭a‬‭Recruit‬‭ID.‬‭These‬‭loyalty‬‭program‬‭points‬‭can‬‭also‬‭be‬‭used‬‭for‬‭a‬‭wide‬‭range‬‭of‬‭services‬‭offered outside of the Recruit Group.‬‭We‬ ‭designed‬ ‭this‬ ‭program‬ ‭to‬ ‭encourage‬ ‭increased‬ ‭engagement‬ ‭on‬ ‭our‬ ‭matching‬ ‭platforms,‬ ‭utilizing‬ ‭the‬‭ ctivities of individual users as a catalyst for further use.‬a‭Keiichi:‬‭Next, I will explain AirID and its impacts‬‭with business clients.‬‭ lide 2-28‬
S‭AirIDs‬‭are‬‭issued‬‭to‬‭business‬‭clients‬‭using‬‭Air‬‭BusinessTools,‬‭allowing‬‭seamless‬‭access‬‭to‬‭all‬‭services‬‭within‬‭the Air BusinessTools suite with just one AirID.‬‭ lide 2-29‬
S‭Based‬‭on‬‭the‬‭latest‬‭economic‬‭census,‬‭the‬‭number‬‭of‬‭potential‬‭customer‬‭establishments‬‭for‬‭our‬‭SaaS‬‭offerings‬‭is‬ ‭estimated‬ ‭at‬ ‭approximately‬ ‭4.38‬ ‭million.‬ ‭We‬ ‭assume‬ ‭that‬ ‭these‬ ‭establishments‬‭would‬‭use‬‭multiple‬‭SaaS‬‭products, and we use the cumulative number of accounts across multiple services as a KPI.‬‭ s‬ ‭of‬ ‭December‬ ‭31,‬ ‭2023,‬‭the‬‭cumulative‬‭number‬‭of‬‭SaaS‬‭accounts,‬‭including‬‭Air‬‭BusinessTools‬‭accounts,‬A‭and‬‭including‬‭where‬‭one‬‭customer‬‭may‬‭have‬‭multiple‬‭accounts‬‭for‬‭different‬‭SaaS‬‭services,‬‭was‬‭approximately‬‭3.6 million.‬‭This transcript is provided for the convenience of investors only and this is a translated version of the Japanese call.‬‭8‬‭Therefore,‬ ‭we‬ ‭believe‬ ‭there‬ ‭is‬ ‭still‬ ‭significant‬ ‭potential‬ ‭for‬ ‭growth‬ ‭in‬ ‭the‬ ‭cumulative‬ ‭number‬‭of‬‭accounts‬‭as‬‭ ore business clients adopt multiple services.‬m‭ lide 2-30‬
S‭In‬‭addition,‬‭with‬‭the‬‭launch‬‭of‬‭Air‬‭BusinessTools,‬‭a‬‭business‬‭support‬‭SaaS‬‭that‬‭is‬‭not‬‭restricted‬‭to‬‭any‬‭specific‬‭field,‬ ‭we‬ ‭are‬‭increasingly‬‭adding‬‭business‬‭clients‬‭in‬‭industries‬‭outside‬‭those‬‭we‬‭traditionally‬‭serve,‬‭including‬‭retail, various service industries, and pharmacies - areas where we previously had no transactions.‬‭ or‬ ‭example,‬ ‭of‬ ‭the‬ ‭approximately‬ ‭450,000‬ ‭AirPAY‬‭accounts‬‭as‬‭of‬‭December‬‭31,‬‭2023,‬‭approximately‬‭55%‬
F‭are‬‭for‬‭business‬‭clients‬‭in‬‭the‬‭Beauty‬‭and‬‭Dining‬‭segments.‬‭The‬‭remaining‬‭45%‬‭are‬‭from‬‭businesses‬‭where‬‭we don’t operate a matching platform.‬‭ e‬ ‭believe‬ ‭that‬ ‭regardless‬ ‭of‬ ‭the‬ ‭business‬ ‭field,‬ ‭we‬ ‭will‬ ‭continue‬ ‭to‬ ‭face‬ ‭the‬ ‭challenges‬ ‭of‬ ‭Japan's‬ ‭aging‬W‭workforce‬ ‭and‬ ‭chronic‬ ‭labor‬ ‭shortages,‬ ‭and‬ ‭that‬ ‭our‬ ‭business‬ ‭support‬ ‭SaaS‬ ‭will‬ ‭help‬ ‭address‬ ‭these‬‭challenges.‬‭We‬‭believe‬‭that‬‭by‬‭providing‬‭solutions‬‭for‬‭business‬‭clients'‬‭that‬‭help‬‭solve‬‭their‬‭operational‬‭issues,‬‭we will continue to expand our client base.‬‭ lide 2-31‬
S‭Offering‬‭business‬‭support‬‭SaaS‬‭solutions‬‭not‬‭only‬‭expands‬‭our‬‭client‬‭base,‬‭but‬‭also‬‭offers‬‭additional‬‭benefits.‬‭Business‬ ‭clients‬ ‭that‬ ‭use‬ ‭both‬ ‭matching‬ ‭platforms‬ ‭and‬ ‭SaaS‬ ‭in‬ ‭their‬ ‭businesses‬ ‭tend‬ ‭to‬ ‭have‬ ‭lower‬‭churn‬‭rates‬ ‭as‬ ‭well‬ ‭as‬ ‭higher‬ ‭revenue‬ ‭per‬ ‭client‬ ‭compared‬ ‭to‬ ‭those‬ ‭that‬‭use‬‭only‬‭matching‬‭platforms‬‭or‬‭only‬‭use‬‭SaaS.‬‭ lide 2-32‬
S‭For‬ ‭example,‬ ‭let‬ ‭me‬ ‭introduce‬ ‭a‬ ‭case‬ ‭study‬ ‭from‬‭Beauty‬‭and‬‭Dining,‬‭where‬‭the‬‭added‬‭value‬‭of‬‭operational‬‭efficiency through our business support SaaS is most evident.‬‭ cross‬ ‭these‬ ‭businesses,‬ ‭when‬ ‭a‬ ‭business‬ ‭client‬ ‭uses‬ ‭both‬ ‭our‬ ‭matching‬ ‭platform‬ ‭and‬ ‭AirPAY,‬ ‭one‬‭of‬‭our‬A‭SaaS‬ ‭solutions,‬ ‭after‬ ‭13‬‭months,‬‭the‬‭churn‬‭rate‬‭of‬‭these‬‭customers,‬‭is‬‭just‬‭one‬‭quarter‬‭that‬‭of‬‭our‬‭business‬‭clients who use the matching platform only.‬‭Finally, I would like to discuss the future potential of fintech services, utilizing payment transaction volumes.‬‭ y‬ ‭completing‬ ‭the‬ ‭transactions‬ ‭of‬ ‭individual‬‭users‬‭within‬‭our‬‭ecosystem‬‭through‬‭AirPAY‬‭and‬‭AirPAY‬‭Online,‬B‭we‬ ‭can‬ ‭enhance‬ ‭payment‬ ‭convenience‬ ‭for‬ ‭individual‬ ‭users,‬ ‭reduce‬ ‭lost‬ ‭revenue‬ ‭opportunities‬‭for‬‭business‬‭clients, and increase the amount of payment transaction volume flowing through our ecosystem.‬‭ lide 2-33‬
S‭Gross‬‭Payment‬‭Volume‬‭continues‬‭to‬‭grow‬‭as‬‭the‬‭ecosystem‬‭expands,‬‭and‬‭is‬‭expected‬‭to‬‭reach‬‭approximately‬‭1.8 trillion yen in FY2023.‬‭ oshi:‬ ‭The‬ ‭expansion‬ ‭of‬ ‭Gross‬ ‭Payment‬ ‭Volume‬ ‭is‬ ‭one‬ ‭of‬ ‭the‬ ‭key‬ ‭performance‬ ‭indicators‬ ‭of‬ ‭our‬ ‭"Help‬Y‭Businesses‬ ‭Work‬ ‭Smarter"‬ ‭strategy.‬ ‭It‬ ‭is‬ ‭the‬ ‭foundation‬ ‭for‬ ‭the‬ ‭expansion‬ ‭of‬ ‭fintech‬ ‭services,‬ ‭potentially‬‭contributing a new revenue stream to our business in the future.‬‭We‬ ‭view‬ ‭the‬ ‭next‬ ‭three‬ ‭to‬ ‭five‬ ‭years‬ ‭as‬ ‭a‬ ‭period‬ ‭to‬ ‭grow‬ ‭revenue‬ ‭and‬ ‭increase‬‭adjusted‬‭EBITDA‬‭margins‬t‭hrough the evolution of our ecosystem of matching platforms and SaaS.‬‭At‬‭the‬‭same‬‭time,‬‭we‬‭will‬‭leverage‬‭the‬‭expansion‬‭of‬‭our‬‭customer‬‭base‬‭through‬‭SaaS‬‭to‬‭lay‬‭the‬‭foundation‬‭for‬‭ ew businesses with the potential to contribute to future revenue.‬n‭ e‬ ‭will‬ ‭further‬ ‭reduce‬ ‭the‬ ‭time‬ ‭required‬ ‭to‬ ‭match‬ ‭individual‬ ‭users‬ ‭with‬ ‭business‬ ‭clients,‬ ‭increase‬ ‭the‬W‭convenience‬ ‭of‬ ‭taking‬ ‭actions‬ ‭such‬ ‭as‬ ‭making‬ ‭reservations,‬ ‭and‬ ‭increase‬ ‭the‬ ‭likelihood‬ ‭of‬ ‭these‬ ‭actions‬‭leading to sales for our business clients.‬‭This transcript is provided for the convenience of investors only and this is a translated version of the Japanese call.‬‭9‬I‭n‬ ‭the‬ ‭future,‬ ‭we‬ ‭plan‬ ‭to‬ ‭utilize‬ ‭technology‬ ‭across‬ ‭our‬ ‭entire‬ ‭business‬ ‭more‬ ‭than‬ ‭ever‬ ‭before,‬ ‭improving‬‭operational‬‭efficiency‬‭while‬‭using‬‭action‬‭data‬‭from‬‭individual‬‭users‬‭and‬‭operational‬‭data‬‭from‬‭business‬‭clients‬‭obtained through SaaS, including Air BusinessTools.‬‭Our‬ ‭goal‬ ‭is‬ ‭to‬‭evolve‬‭into‬‭a‬‭business‬‭model‬‭that‬‭allows‬‭us‬‭to‬‭charge‬‭for‬‭more‬‭precise‬‭matching‬‭and‬‭actions‬t‭aken.‬‭Thank you for your attention.‬‭Shen:‬ ‭Thank‬ ‭you‬ ‭very‬ ‭much‬ ‭for‬ ‭attending‬ ‭Recruit‬‭Holdings'‬‭Investor‬‭Update‬‭Day‬‭2,‬‭Help‬‭Businesses‬‭Work‬‭ marter. I will serve as the moderator today. I am Shen from IR/PR.‬S‭Thank‬ ‭you‬ ‭very‬ ‭much‬ ‭for‬ ‭watching‬ ‭the‬ ‭presentation.‬ ‭From‬ ‭here,‬ ‭we‬ ‭will‬ ‭have‬ ‭a‬ ‭fireside‬ ‭chat‬ ‭with‬ ‭the‬‭ resenters and receive questions from sell-side analysts.‬p‭ oday,‬ ‭we‬ ‭have‬ ‭Yoshihiro‬ ‭“Yoshi”‬ ‭Kitamura,‬ ‭Head‬ ‭of‬ ‭Matching‬ ‭&‬ ‭Solutions‬ ‭Business‬ ‭and‬ ‭President‬ ‭and‬T‭Representative‬‭Director,‬‭Recruit‬‭Co.,‬‭Ltd.,‬‭Ken‬‭Asano,‬‭Executive‬‭Vice‬‭President‬‭of‬‭Product‬‭Management,‬‭and‬‭Mio Kashiwamura, Senior Vice President in charge of CHRO, Public Relations and Sustainability.‬‭Yoshi‬ ‭and‬ ‭Mio‬ ‭are‬ ‭Executive‬ ‭Vice‬ ‭President‬ ‭and‬ ‭Senior‬ ‭Vice‬ ‭President‬ ‭of‬ ‭Recruit‬ ‭Holdings‬ ‭Co.,‬ ‭Ltd.,‬r‭ espectively.‬‭Ken‬ ‭is‬ ‭heading‬ ‭all‬ ‭product‬ ‭teams,‬ ‭including‬ ‭Jun‬ ‭Akiyama‬ ‭and‬ ‭Keiichi‬ ‭Ushida’s‬ ‭team‬ ‭who‬ ‭spoke‬ ‭in‬ ‭the‬‭ resentation.‬p‭Fireside chat‬‭Shen:‬‭We‬‭will‬‭start‬‭the‬‭fireside‬‭chat.‬‭I‬‭will‬‭ask‬‭the‬‭questions‬‭that‬‭are‬‭probably‬‭of‬‭high‬‭interest‬‭from‬‭the‬‭capital‬‭ arkets participants.‬m‭ irst‬‭of‬‭all,‬‭starting‬‭with‬‭revenue‬‭and‬‭profit.‬‭At‬‭the‬‭strategy‬‭briefing‬‭2‬‭years‬‭ago,‬‭Yoshi‬‭announced‬‭that‬‭we‬‭were‬F‭aiming‬‭for‬‭revenue‬‭of‬‭1‬‭trillion‬‭yen‬‭in‬‭the‬‭medium‬‭term‬‭and‬‭adjusted‬‭EBITDA‬‭margin‬‭in‬‭the‬‭low‬‭20‬‭%‬‭range‬‭as‬‭Matching & Solutions.‬‭But‬ ‭with‬ ‭the‬ ‭launch‬ ‭of‬‭Indeed‬‭PLUS‬‭in‬‭January‬‭this‬‭year,‬‭as‬‭mentioned‬‭in‬‭Day‬‭1‬‭just‬‭yesterday,‬‭these‬‭were‬r‭ eset, as revenue in HR Solutions will shift to the HR Technology business.‬‭You‬ ‭explained‬ ‭that‬ ‭the‬ ‭company‬ ‭will‬ ‭now‬ ‭aim‬ ‭to‬ ‭grow‬ ‭revenue‬ ‭and‬ ‭adjusted‬ ‭EBITDA‬‭margin‬‭as‬‭Marketing‬‭ olutions but did not announce any specific numerical targets this time, but those are probably of interest.‬
S‭So‬ ‭in‬ ‭the‬ ‭next‬ ‭three‬ ‭to‬ ‭five‬ ‭year‬ ‭period,‬ ‭what‬ ‭image‬ ‭would‬ ‭you‬ ‭like‬ ‭the‬‭capital‬‭market‬‭participants‬‭to‬‭have‬r‭ egarding revenue growth?‬‭Yoshi:‬‭First‬‭of‬‭all,‬‭the‬‭disclosure‬‭of‬‭the‬‭numbers‬‭and‬‭targets‬‭will‬‭be‬‭in‬‭May‬‭this‬‭year‬‭when‬‭we‬‭announce‬‭our‬f‭inancial results, so I hope you could wait until then.‬‭As‬ ‭mentioned‬ ‭in‬ ‭the‬ ‭presentation,‬ ‭the‬‭annual‬‭revenue‬‭is‬‭approximately‬‭500‬‭billion‬‭yen‬‭and‬‭this‬‭is‬‭managed‬‭ ver multiple business domains.‬o‭Now,‬ ‭Recruit‬ ‭ID‬ ‭is‬ ‭one‬ ‭number‬‭we‬‭disclosed.‬‭The‬‭individual‬‭users‬‭will‬‭book‬‭or‬‭take‬‭some‬‭actions‬‭using‬‭our‬‭ ervices with this ID and this is approximately 87 million IDs, so this is now quite sizable.‬sI‭'m‬‭hearing‬‭that‬‭compared‬‭to‬‭other‬‭services,‬‭you‬‭can‬‭see‬‭the‬‭size‬‭and‬‭magnitude‬‭of‬‭the‬‭service.‬‭So‬‭the‬‭user‬‭base‬ ‭and‬ ‭Air‬ ‭BusinessTools‬ ‭for‬ ‭SMEs,‬ ‭where‬ ‭the‬ ‭number‬ ‭of‬ ‭business‬‭clients‬‭is‬‭increasing‬‭now.‬‭These‬‭two‬‭This transcript is provided for the convenience of investors only and this is a translated version of the Japanese call.‬‭10‬

‭assets‬‭that‬‭we‬‭have‬‭will‬‭be‬‭leveraged‬‭to‬‭evolve‬‭our‬‭existing‬‭matching‬‭platform.‬‭Furthermore,‬‭Air‬‭Business‬‭ ‬‭ ools will also be leveraged to generate new value. And with that, we want to maintain our growth rate.‬T‭ hen:‬‭Thank‬‭you.‬‭Since‬‭we‬‭have‬‭Ken‬‭in‬‭charge‬‭of‬‭product‬‭management,‬‭I‬‭would‬‭like‬‭to‬‭ask‬‭a‬‭more‬‭specific‬
S‭question.‬‭Going‬‭forward,‬‭well,‬‭this‬‭is‬‭maybe‬‭the‬‭same‬‭question,‬‭but‬‭what‬‭is‬‭going‬‭to‬‭be‬‭the‬‭driver‬‭for‬‭growth‬‭going forward in terms of revenue?‬‭Ken:‬ ‭Well,‬ ‭in‬ ‭our‬ ‭Marketing‬ ‭Solutions‬ ‭business,‬ ‭structurally‬ ‭speaking‬ ‭the‬ ‭revenue‬ ‭growth‬ ‭of‬ ‭our‬ ‭business‬‭ lients correlates to our revenue growth.‬c‭Our‬‭growth‬‭driver‬‭is‬‭going‬‭to‬‭be‬‭linked‬‭to‬‭the‬‭performance‬‭of‬‭our‬‭business‬‭clients.‬‭For‬‭example,‬‭the‬‭number‬‭of‬t‭he reservations or the per customer spending at stores, or utilization.‬‭ nd‬ ‭the‬ ‭biggest‬ ‭driver‬ ‭is‬ ‭going‬ ‭to‬ ‭be‬ ‭the‬ ‭number‬ ‭of‬ ‭reservations,‬ ‭the‬ ‭number‬ ‭of‬ ‭actions,‬ ‭the‬ ‭number‬ ‭of‬A
‭customers‬ ‭that‬ ‭we‬ ‭can‬ ‭refer‬ ‭to‬ ‭stores,‬ ‭will‬ ‭directly‬ ‭contribute‬ ‭to‬ ‭our‬‭clients‬‭revenue‬‭growth.‬‭Plus‬‭improving‬‭convenience is the key and there is further room for improvement here.‬‭In‬ ‭the‬ ‭past,‬ ‭when‬‭you‬‭wanted‬‭to‬‭book‬‭online,‬‭you‬‭needed‬‭to‬‭send‬‭a‬‭message‬‭saying‬‭I‬‭want‬‭to‬‭book‬‭on‬‭this‬‭ ate, at what time, and then the store will tell you if that is available or not.‬d‭ ut‬ ‭as‬ ‭of‬ ‭today,‬ ‭you‬ ‭can‬ ‭have‬ ‭an‬ ‭instant‬ ‭reservation.‬ ‭You‬ ‭just‬ ‭need‬ ‭to‬ ‭press‬ ‭a‬ ‭button‬ ‭in‬ ‭order‬ ‭to‬ ‭make‬ ‭a‬B‭booking.‬ ‭That‬ ‭is‬ ‭an‬ ‭instant‬ ‭reservation‬ ‭model,‬ ‭which‬ ‭contributes‬ ‭to‬‭an‬‭improvement‬‭of‬‭convenience‬‭for‬‭our‬‭clients and customers.‬
I‭n‬ ‭HotPepper‬ ‭Gourmet‬ ‭and‬ ‭HotPepper‬ ‭Beauty,‬ ‭you‬ ‭can‬ ‭make‬ ‭a‬ ‭reservation‬ ‭up‬ ‭to‬ ‭one‬ ‭minute‬ ‭before‬ ‭the‬‭desired‬ ‭time.‬ ‭So‬ ‭it's‬ ‭just‬ ‭before‬ ‭the‬ ‭time‬ ‭you‬ ‭wish‬ ‭to‬ ‭visit‬ ‭the‬ ‭restaurant‬ ‭or‬ ‭salon,‬ ‭and‬ ‭the‬ ‭reason‬ ‭that‬ ‭is‬‭possible is because there is a collaboration with Air BusinessTools.‬‭ arlier,‬‭Keiichi‬‭gave‬‭a‬‭message‬‭in‬‭the‬‭video‬‭that‬‭when‬‭you‬‭take‬‭orders‬‭in‬‭AirREGI,‬‭there‬‭is‬‭a‬‭signal‬‭that‬‭the‬E‭table‬‭is‬‭filled‬‭at‬‭the‬‭restaurant‬‭and‬‭that‬‭signal‬‭is‬‭received.‬‭And‬‭when‬‭payment‬‭is‬‭made‬‭in‬‭AirREGI,‬‭it‬‭sends‬‭a‬‭signal that the table is vacant and it would give that signal to HotPepper Gourmet.‬‭So‬ ‭on‬ ‭a‬ ‭real‬ ‭time‬ ‭basis,‬ ‭you‬ ‭can‬ ‭have‬‭real‬‭time‬‭management‬‭of‬‭availability‬‭at‬‭the‬‭restaurant‬‭and‬‭you‬‭don't‬‭ ave to worry about the availability and clients do not need to have strict seat management.‬hI‭n‬ ‭a‬ ‭collaboration‬ ‭with‬ ‭the‬ ‭HotPepper‬ ‭platform,‬ ‭our‬ ‭clients‬ ‭will‬ ‭be‬ ‭able‬ ‭to‬ ‭use‬ ‭this‬‭conveniently‬‭and‬‭on‬‭the‬‭customer‬‭side,‬‭individual‬‭users‬‭will‬‭be‬‭able‬‭to‬‭make‬‭an‬‭instant‬‭booking.‬‭That‬‭is‬‭becoming‬‭possible‬‭today.‬‭And‬‭ever since AirREGI started, we have had such a service.‬‭ or‬ ‭example‬ ‭in‬ ‭Tokyo‬ ‭at‬ ‭this‬ ‭time,‬ ‭I‬ ‭believe‬ ‭thousands‬ ‭of‬‭stores‬‭would‬‭be‬‭available‬‭on‬‭this‬‭instant‬‭booking‬F‭system.‬‭Finally,‬‭I‬‭think‬‭this‬‭has‬‭gained‬‭familiarity‬‭with‬‭a‬‭wider‬‭audience‬‭and‬‭that‬‭is‬‭leading‬‭to‬‭improvement‬‭in‬‭convenience.‬‭Shen:‬‭So‬‭it‬‭was‬‭paper-based‬‭until‬‭recently,‬‭right?‬‭It’s‬‭been‬‭used‬‭in‬‭beauty‬‭salons‬‭also,‬‭but‬‭now‬‭you‬‭can‬‭book‬‭ p until just one minute prior to the visit?‬u‭Ken:‬‭In 2012, HotPepper Gourmet started online reservations‬‭and for SALON BOARD, it's also 2012.‬‭SALON‬‭BOARD‬‭was‬‭developed‬‭in‬‭2012,‬‭and‬‭this‬‭SALON‬‭BOARD‬‭is‬‭a‬‭good‬‭product.‬‭Well,‬‭it‬‭may‬‭sound‬‭like‬‭I‬‭ m boasting, but it’s all based on a beauty stylist’s schedule.‬a‭ hen‬‭they‬‭create‬‭their‬‭schedule,‬‭the‬‭available‬‭schedule‬‭slots‬‭are‬‭going‬‭to‬‭be‬‭released‬‭on‬‭HotPepper‬‭Beauty‬W‭and‬‭on‬‭a‬‭real‬‭time‬‭basis,‬‭the‬‭salon‬‭does‬‭not‬‭need‬‭to‬‭manage‬‭it‬‭by‬‭themselves,‬‭but‬‭they‬‭just‬‭need‬‭to‬‭take‬‭care‬‭of the stylist schedule.‬‭So with such a system customers can enjoy the benefit of this infrastructure with instant booking.‬‭This transcript is provided for the convenience of investors only and this is a translated version of the Japanese call.‬‭11‬‭Shen:‬‭Thank you for that response. So the ceaseless improvement of user experience is the key I believe.‬‭ ext‬‭is‬‭adjusted‬‭EBITDA‬‭margin.‬‭You‬‭gave‬‭a‬‭strong‬‭message‬‭on‬‭that‬‭too.‬‭Now‬‭there's‬‭no‬‭target,‬‭so‬‭how‬‭can‬N‭adjusted‬ ‭EBITDA‬ ‭margin‬ ‭be‬ ‭improved?‬ ‭The‬ ‭sales‬ ‭structure‬ ‭and‬ ‭the‬ ‭improvement‬ ‭of‬ ‭business‬ ‭productivity‬‭execution, I want to ask Mio about it. So what is happening now? That's my first question.‬‭ nd‬‭sometimes‬‭we’re‬‭asked‬‭by‬‭investors‬‭about‬‭the‬‭Housing‬‭&‬‭Real‬‭Estate‬‭and‬‭Beauty‬‭sectors.‬‭How‬‭they‬‭are‬A‭very‬‭competitive,‬‭so‬‭they‬‭imagine‬‭that‬‭the‬‭Housing‬‭&‬‭Real‬‭Estate‬‭and‬‭Beauty‬‭margin‬‭is‬‭higher‬‭than‬‭Matching‬‭& Solutions and Marketing Solutions which are disclosed.‬‭Using‬ ‭this‬ ‭best‬ ‭platform‬ ‭in‬ ‭the‬ ‭industry,‬‭is‬‭it‬‭possible‬‭to‬‭leverage‬‭the‬‭high‬‭competitiveness‬‭of‬‭the‬‭product‬‭to‬r‭ educe costs and investment and raise margins further?‬‭ oshi:‬ ‭As‬ ‭you‬ ‭probably‬ ‭know,‬ ‭Beauty‬ ‭and‬ ‭Housing‬ ‭&‬ ‭Real‬ ‭Estate,‬ ‭if‬‭you‬‭look‬‭at‬‭comparisons,‬‭we‬‭are‬‭in‬‭a‬Y‭strong‬‭position.‬‭We‬‭are‬‭generating‬‭many‬‭actions,‬‭so‬‭business‬‭clients‬‭have‬‭high‬‭expectations‬‭of‬‭us.‬‭So‬‭there‬‭is‬‭an‬‭increase‬‭from‬‭that‬‭and‬‭profitability‬‭and‬‭revenue‬‭is‬‭that‬‭much‬‭bigger‬‭and‬‭profit‬‭margin‬‭is‬‭rising‬‭accordingly.‬‭So‬ ‭that‬ ‭is‬ ‭the‬ ‭model‬ ‭that‬ ‭we‬ ‭now‬ ‭have‬ ‭in‬ ‭the‬ ‭Housing‬ ‭&‬ ‭Real‬ ‭Estate,‬ ‭life‬ ‭event‬ ‭domain,‬ ‭something‬ ‭that‬‭happens‬‭only‬‭once‬‭or‬‭twice,‬‭three‬‭times‬‭in‬‭your‬‭life.‬‭So‬‭it's‬‭less‬‭frequent‬‭matching‬‭in‬‭life‬‭events.‬‭And‬‭Beauty‬‭which is used every month, in one way or another.‬‭ o‬ ‭the‬ ‭market‬ ‭is‬ ‭different,‬ ‭but‬ ‭what's‬ ‭common‬ ‭is‬ ‭the‬ ‭number‬‭of‬‭actions.‬‭The‬‭action‬‭volume‬‭is‬‭converted‬‭to‬S‭sales,‬‭to‬‭revenue,‬‭and‬‭as‬‭a‬‭result,‬‭at‬‭the‬‭same‬‭expense‬‭level‬‭the‬‭adjusted‬‭EBITDA‬‭margin‬‭improves.‬‭So‬‭this‬‭is a good favorable cycle, virtuous cycle.‬‭ e‬‭want‬‭all‬‭businesses‬‭to‬‭move‬‭in‬‭that‬‭direction.‬‭But‬‭there‬‭is‬‭a‬‭certain‬‭order‬‭in‬‭which‬‭they‬‭should‬‭contribute‬‭to‬W‭profitability.‬‭So‬‭we‬‭need‬‭to‬‭manage‬‭the‬‭advertising‬‭and‬‭promotion‬‭expenses‬‭and‬‭other‬‭investments.‬‭So‬‭these‬‭investments,‬‭for‬‭example,‬‭should‬‭have‬‭a‬‭payback‬‭period‬‭of‬‭about‬‭one‬‭year‬‭in‬‭the‬‭short‬‭term.‬‭So‬‭by‬‭meeting‬‭certain conditions we would like to manage to raise the adjusted EBITDA margin level.‬I‭n‬ ‭addition,‬ ‭the‬ ‭sales‬ ‭structure.‬ ‭And‬ ‭as‬ ‭Shen-san‬ ‭said,‬ ‭yes,‬ ‭we‬ ‭were‬ ‭using‬ ‭paper‬ ‭until‬ ‭a‬ ‭while‬‭ago.‬‭In‬‭the‬‭paper‬ ‭media‬ ‭era,‬ ‭the‬ ‭sales‬ ‭structure‬‭was,salespeople‬‭had‬‭to‬‭do‬‭many‬‭things.‬‭And‬‭with‬‭that‬‭sales‬‭structure,‬‭that‬ ‭is‬ ‭the‬ ‭current‬ ‭era‬ ‭in‬ ‭some‬ ‭businesses.‬ ‭So‬ ‭of‬ ‭course‬ ‭that‬ ‭needs‬ ‭to‬ ‭be‬ ‭revisited‬ ‭and‬ ‭improved‬ ‭and‬‭enhanced.‬‭So Mio, you're well versed with this, so share with us your view, please.‬‭ io:‬‭Yes,‬‭first‬‭of‬‭all,‬‭as‬‭an‬‭underlying‬‭premise,‬‭three‬‭years‬‭ago‬‭seven‬‭companies‬‭were‬‭merged‬‭into‬‭one.‬‭And‬M‭so‬ ‭we‬ ‭can‬ ‭flexibly‬ ‭allocate‬ ‭human‬ ‭resources‬‭cross‬‭functionally‬‭according‬‭to‬‭the‬‭business‬‭environment.‬‭And‬‭with that, we can assign people to growth areas.‬‭ nd‬‭this‬‭is‬‭susceptible‬‭to‬‭the‬‭economic‬‭cycle.‬‭HR‬‭is‬‭impacted‬‭by‬‭the‬‭economy.‬‭So‬‭we‬‭can‬‭shift‬‭people‬‭from‬A‭HR‬‭Solutions‬‭to‬‭Marketing‬‭Solutions‬‭when‬‭the‬‭economy‬‭is‬‭down.‬‭So‬‭this‬‭is‬‭the‬‭underlying‬‭premise.‬‭As‬‭Yoshi‬‭just‬‭said,‬‭for‬‭the‬‭customer‬‭interface,‬‭customer‬‭contact‬‭point,‬‭the‬‭key‬‭is‬‭how‬‭to‬‭raise‬‭the‬‭value‬‭of‬‭the‬‭customer‬‭contact activity and reduce the production cost at the same time.‬‭ s‬‭Yoshi‬‭said,‬‭originally‬‭in‬‭2012,‬‭this‬‭was‬‭when‬‭the‬‭beauty‬‭SALON‬‭BOARD‬‭was‬‭launched‬‭and‬‭I‬‭was‬‭head‬‭of‬A‭Beauty‬ ‭area.‬ ‭One‬ ‭salesperson‬ ‭did‬ ‭the‬ ‭first‬ ‭signing‬ ‭of‬ ‭the‬ ‭client’s‬ ‭contract,‬ ‭and‬ ‭then‬ ‭onboarding,‬ ‭and‬ ‭then‬‭explained‬ ‭in‬ ‭detail‬ ‭how‬ ‭it‬ ‭can‬ ‭be‬ ‭used,‬ ‭and‬ ‭the‬ ‭follow‬ ‭up‬ ‭if‬ ‭there‬ ‭were‬ ‭problems.‬ ‭One‬ ‭single‬ ‭person‬ ‭did‬‭everything. But this is difficult from a capability perspective.‬‭ nd‬ ‭so‬ ‭first,‬ ‭the‬ ‭role‬ ‭of‬ ‭starting‬ ‭the‬ ‭new‬ ‭contract,‬ ‭and‬ ‭then‬ ‭supporting‬ ‭through‬ ‭onboarding,‬ ‭the‬ ‭client’s‬A‭success,‬ ‭those‬ ‭tasks‬ ‭are‬ ‭separated‬ ‭to‬ ‭offer‬ ‭value‬ ‭and‬ ‭enhance‬ ‭value.‬ ‭And‬ ‭in‬ ‭each‬ ‭domain‬ ‭we‬‭are‬‭seeing‬‭evolution after the integration. We are trying to accelerate everything.‬‭ o‬ ‭we‬ ‭have‬ ‭taken‬ ‭on‬ ‭many‬ ‭challenges‬‭over‬‭the‬‭past‬‭three‬‭years.‬‭One‬‭is‬‭that‬‭a‬‭Client‬‭Success‬‭department‬S‭was‬‭established,‬‭which‬‭is‬‭a‬‭cross‬‭organization.‬‭So‬‭the‬‭best‬‭knowledge,‬‭the‬‭cutting‬‭edge‬‭knowledge,‬‭is‬‭shared‬‭and systematized.‬‭This transcript is provided for the convenience of investors only and this is a translated version of the Japanese call.‬‭12‬‭ nd‬ ‭the‬ ‭data‬ ‭platform‬ ‭and‬ ‭dashboard‬ ‭infrastructure‬ ‭are‬ ‭also‬ ‭in‬‭place‬‭now.‬‭Data‬‭needs‬‭to‬‭be‬‭extracted‬‭in‬‭a‬A‭timely‬ ‭fashion‬ ‭and‬ ‭available‬ ‭on‬ ‭a‬ ‭dashboard.‬ ‭For‬ ‭Air‬ ‭BusinessTools,‬ ‭after‬ ‭a‬ ‭customer‬ ‭implements‬ ‭Air‬‭BusinessTools,‬‭how‬‭it's‬‭used,‬‭how‬‭they're‬‭troubled,‬‭needs‬‭to‬‭be‬‭understood‬‭in‬‭a‬‭timely‬‭fashion,‬‭so‬‭that‬‭we‬‭can‬‭address customers’ problems in a timely fashion.‬‭ his‬‭is‬‭the‬‭evolution‬‭we‬‭have‬‭achieved‬‭in‬‭the‬‭past‬‭few‬‭years.‬‭One‬‭example‬‭is‬‭in‬‭one‬‭domain,‬‭a‬‭client‬‭report‬T‭exists.‬‭So‬‭we‬‭use‬‭it‬‭to‬‭see‬‭the‬‭impact‬‭of‬‭the‬‭previous‬‭month.‬‭And‬‭this‬‭can‬‭be‬‭viewed‬‭from‬‭the‬‭data.‬‭So‬‭this‬‭is‬‭how we propose using the client report.‬‭ he‬‭salesperson‬‭spent‬‭two‬‭to‬‭three‬‭hours‬‭per‬‭client,‬‭but‬‭now‬‭with‬‭the‬‭data‬‭platform‬‭dashboard,‬‭we‬‭can‬‭have‬‭a‬T‭good,‬‭analyzed‬‭report‬‭in‬‭five‬‭minutes.‬‭So‬‭if‬‭one‬‭person‬‭was‬‭in‬‭charge‬‭of‬‭20‬‭businesses,‬‭client‬‭reports‬‭took‬‭30‬‭to 40 hours a month. But now it's down to less than one hour.‬‭So‬ ‭we‬ ‭are‬ ‭optimizing‬ ‭for‬ ‭each‬ ‭domain‬ ‭and‬ ‭also‬ ‭overall‬ ‭the‬ ‭labor‬ ‭reduction‬ ‭and‬ ‭how‬ ‭you‬ ‭are‬ ‭valued‬ ‭is‬‭ omething we can pursue further.‬s‭Yoshi:‬ ‭So‬ ‭we‬ ‭can‬ ‭go‬ ‭on‬ ‭and‬ ‭on‬ ‭on‬ ‭this‬ ‭point.‬ ‭So‬ ‭maybe‬ ‭we‬ ‭can‬ ‭touch‬ ‭on‬ ‭more‬‭specifics‬‭in‬‭the‬‭following‬‭ uestions.‬q‭Shen:‬‭Thank you. This is going to be my final question.‬‭It is on fintech services.‬I‭‬ ‭think‬ ‭there‬ ‭is‬ ‭a‬ ‭lot‬ ‭of‬ ‭expectation‬ ‭and‬ ‭the‬ ‭capital‬ ‭market‬ ‭participants‬ ‭are‬ ‭wondering‬ ‭what‬ ‭it‬ ‭will‬‭look‬‭like,‬‭especially‬ ‭through‬ ‭Air‬ ‭BusinessTools.‬‭So‬‭we've‬‭already‬‭started‬‭trials‬‭on‬‭the‬‭website,‬‭and‬‭in‬‭IR‬‭meetings‬‭we‬‭talk about it, but it's still in the preparation phase and I think we are aligned on that.‬‭But moving forward, what is going to be a fintech service unique to Recruit? Can you describe it?‬
‭So Yoshi or Ken as the person in charge of the product management?‬‭ oshi:‬‭Yes.‬‭Frankly‬‭speaking,‬‭while‬‭I‬‭have‬‭high‬‭expectations‬‭for‬‭the‬‭future‬‭potential,‬‭when‬‭it‬‭comes‬‭to‬‭fintech‬Y‭services‬‭you‬‭need‬‭to‬‭have‬‭legal‬‭compliance.‬‭And‬‭we‬‭need‬‭to‬‭accumulate‬‭our‬‭own‬‭data‬‭and‬‭have‬‭a‬‭system‬‭to‬‭utilize that data. So it's going to take some time.‬‭ elp‬‭Businesses‬‭Work‬‭Smarter‬‭is‬‭the‬‭concept‬‭where‬‭we‬‭help‬‭business‬‭clients‬‭improve‬‭their‬‭productivity,‬‭that‬H‭is‬ ‭the‬ ‭big‬ ‭concept.‬ ‭Air‬ ‭BusinessTools‬ ‭helps‬ ‭to‬ ‭make‬ ‭the‬ ‭troublesome‬ ‭work‬ ‭easier,‬ ‭or‬ ‭gets‬ ‭rid‬ ‭of‬ ‭the‬‭troublesome work. That is the objective.‬‭ intech‬‭services‬‭that‬‭we‬‭will‬‭develop‬‭will‬‭be‬‭aligned‬‭with‬‭that‬‭service.‬‭And‬‭we'll‬‭be‬‭offering‬‭similar‬‭value.‬‭The‬F‭size‬‭of‬‭GPV‬‭continues‬‭to‬‭increase‬‭as‬‭you‬‭are‬‭aware.‬‭But‬‭just‬‭multiplying‬‭it‬‭with‬‭a‬‭take-rate,‬‭it's‬‭not‬‭as‬‭simple‬‭as‬‭that.‬‭We're‬‭not‬‭just‬‭trying‬‭to‬‭introduce‬‭that‬‭formula.‬‭Cash‬‭related‬‭friction‬‭or‬‭inconvenience‬‭is‬‭something‬‭that‬‭we want to make sure that we can remove.‬‭And‬ ‭that‬ ‭is‬ ‭the‬ ‭value‬ ‭we‬ ‭would‬ ‭like‬ ‭to‬ ‭identify‬ ‭and‬ ‭solidify‬ ‭before‬ ‭offering‬ ‭that‬ ‭to‬ ‭the‬ ‭market.‬ ‭So‬ ‭frankly‬‭ peaking, I hope the market can be patient.‬s‭Do you have any additional comments on the product?‬‭Ken:‬ ‭Yes,‬ ‭as‬ ‭a‬ ‭trial,‬ ‭we‬ ‭have‬ ‭an‬ ‭invitation‬ ‭based‬ ‭trial‬ ‭for‬ ‭the‬ ‭AirCASH‬ ‭service,‬ ‭which‬ ‭improves‬ ‭the‬‭ onvenience of cash management.‬c‭ o‬‭this‬‭is‬‭based‬‭on‬‭GPV‬‭through‬‭AirPAY,‬‭and‬‭based‬‭on‬‭that‬‭cash‬‭flow,‬‭you‬‭only‬‭need‬‭two‬‭clicks‬‭on‬‭the‬‭system‬S‭to‬ ‭raise‬ ‭funds‬ ‭in‬ ‭cash.‬ ‭Through‬ ‭Air‬‭BusinessTools‬‭we‬‭have‬‭access‬‭to‬‭information‬‭and‬‭the‬‭more‬‭the‬‭volume‬‭increases, the more convenience can be offered to our clients to raise funds.‬‭ o‬ ‭it's‬ ‭not‬ ‭just‬ ‭a‬ ‭stand-alone‬ ‭offering,‬ ‭but‬ ‭we‬ ‭need‬ ‭collaboration‬ ‭of‬ ‭various‬‭different‬‭tools‬‭to‬‭offer‬‭a‬‭unique‬S‭distinctive‬ ‭service‬ ‭of‬ ‭record.‬ ‭And‬ ‭we‬ ‭want‬ ‭to‬ ‭offer‬ ‭support‬ ‭to‬ ‭our‬ ‭clients‬ ‭day‬ ‭to‬ ‭day‬ ‭challenges.‬ ‭So‬ ‭we're‬‭hoping that this is going to roll out in various different ways going forward. Thank you.‬‭This transcript is provided for the convenience of investors only and this is a translated version of the Japanese call.‬‭13‬

‭Q&A Session‬‭ hen:‬ ‭Thank‬ ‭you.‬ ‭We‬ ‭will‬ ‭now‬ ‭take‬ ‭questions‬ ‭from‬ ‭the‬ ‭sell-side‬ ‭analysts.‬ ‭We‬ ‭will‬ ‭take‬ ‭two‬ ‭questions‬ ‭per‬S‭person,‬ ‭so‬ ‭please‬ ‭raise‬ ‭your‬ ‭hand‬ ‭if‬ ‭you‬ ‭have‬ ‭questions.‬ ‭First,‬ ‭Goldman‬ ‭Sachs‬ ‭securities‬ ‭Munakata-san‬‭please.‬‭ unakata:‬ ‭This‬ ‭is‬ ‭Munakata‬ ‭from‬ ‭Goldman‬ ‭Sachs,‬‭thank‬‭you‬‭very‬‭much.‬‭So‬‭my‬‭first‬‭question‬‭is‬‭about‬‭the‬M‭ecosystem.‬ ‭When‬‭you‬‭build‬‭an‬‭ecosystem‬‭matching‬‭platform,‬‭the‬‭number‬‭of‬‭actions‬‭by‬‭individual‬‭users,‬‭the‬‭number‬ ‭of‬ ‭SaaS‬ ‭accounts‬ ‭of‬ ‭the‬ ‭business‬ ‭clients‬ ‭and‬ ‭the‬ ‭GPV,‬ ‭these‬ ‭3‬ ‭KPIs‬ ‭will‬ ‭increase‬ ‭all‬ ‭together‬ ‭to‬‭expand, as I understand you presented so before.‬‭ o‬ ‭the‬ ‭growth‬ ‭of‬‭three‬‭KPIs,‬‭they‬‭should‬‭not‬‭be‬‭separate,‬‭I‬‭think,‬‭but‬‭looking‬‭back‬‭over‬‭the‬‭past‬‭few‬‭years,‬S‭how‬‭do‬‭you‬‭evaluate‬‭your‬‭performance?‬‭Are‬‭there‬‭areas‬‭where‬‭you‬‭are‬‭satisfactory‬‭or‬‭not‬‭so‬‭satisfactory‬‭yet?‬‭And the three will grow at the same rate or are there KPI that will grow stronger than the others?‬‭ econd,‬ ‭maybe‬ ‭a‬ ‭qualitative‬ ‭answer‬ ‭is‬ ‭fine.‬ ‭From‬ ‭the‬ ‭perspective‬ ‭of‬ ‭reducing‬ ‭the‬ ‭labor‬ ‭costs‬ ‭and‬ ‭the‬S‭inconvenience,‬ ‭you've‬ ‭been‬ ‭explaining‬ ‭from‬ ‭these‬ ‭perspectives,‬ ‭I‬ ‭think,‬ ‭is‬ ‭very‬ ‭powerful.‬ ‭As‬ ‭we‬ ‭need‬ ‭to‬‭improve‬ ‭the‬ ‭labor‬ ‭productivity‬ ‭because‬ ‭labor‬ ‭unit‬ ‭cost‬ ‭is‬ ‭rising,‬ ‭maybe‬ ‭you‬ ‭can‬ ‭receive‬ ‭more‬ ‭pay‬ ‭for‬‭that.‬‭What‬ ‭do‬ ‭you‬ ‭think‬ ‭about‬ ‭monetization‬ ‭there?‬ ‭Do‬‭you‬‭think‬‭the‬‭current‬‭monetization‬‭is‬‭at‬‭a‬‭fair‬‭level,‬‭or‬‭are‬‭there many opportunities, what is your view?‬‭Yoshi:‬‭Thank‬‭you‬‭for‬‭the‬‭questions,‬‭very‬‭good‬‭questions.‬‭So‬‭I‬‭will‬‭answer‬‭your‬‭first‬‭question.‬‭And‬‭then‬‭Ken‬‭ ill also comment.‬w‭ or‬ ‭the‬ ‭past‬ ‭few‬ ‭years,‬ ‭we‬ ‭enhanced‬ ‭our‬ ‭online‬ ‭matching‬ ‭business.‬ ‭And‬ ‭we‬ ‭focused‬ ‭on‬ ‭the‬ ‭actions‬ ‭and‬F‭decided‬ ‭to‬ ‭change‬ ‭our‬ ‭business‬ ‭model‬ ‭from‬ ‭around‬ ‭2010.‬ ‭But‬ ‭the‬ ‭number‬ ‭of‬‭matching‬‭and‬‭the‬‭number‬‭of‬‭business‬‭clients‬‭and‬‭the‬‭GPV‬‭for‬‭the‬‭past‬‭few‬‭years‬‭have‬‭grown‬‭more‬‭than‬‭we‬‭expected.‬‭So‬‭these‬‭three‬‭as‬‭you‬ ‭rightly‬ ‭said‬ ‭are‬ ‭linked‬ ‭as‬ ‭they‬ ‭grow‬ ‭together,‬‭so‬‭the‬‭more‬‭matching‬‭the‬‭more‬‭business‬‭clients,‬‭and‬‭if‬‭a‬‭payment‬‭can‬‭be‬‭completed‬‭then‬‭GPV‬‭will‬‭also‬‭increase.‬‭So‬‭these‬‭will‬‭all‬‭increase‬‭in‬‭a‬‭chain‬‭reaction‬‭manner‬‭if you will. Until now, it's been better than we thought. That is my view.‬‭ ow‬‭our‬‭expectations‬‭for‬‭the‬‭future,‬‭so‬‭the‬‭KPIs‬‭we‬‭can‬‭expect‬‭for‬‭the‬‭future.‬‭I‬‭want‬‭them‬‭all‬‭to‬‭grow.‬‭Grow‬‭all‬N‭of‬‭them,‬‭to‬‭be‬‭greedy.‬‭But‬‭the‬‭number‬‭of‬‭business‬‭clients‬‭is‬‭a‬‭very‬‭important‬‭source‬‭of‬‭information‬‭to‬‭generate‬‭user‬ ‭actions.‬ ‭And‬ ‭it‬ ‭is‬ ‭also‬ ‭an‬ ‭action-based‬ ‭source,‬ ‭and‬ ‭a‬ ‭source‬ ‭of‬ ‭GPV.‬ ‭So‬ ‭increasing‬ ‭the‬ ‭number‬ ‭of‬‭business clients, including Air BusinessTools, is something we need to focus on more and more.‬‭ esterday,‬‭we‬‭talked‬‭about‬‭HR‬‭Technology‬‭and‬‭how‬‭we‬‭will‬‭use‬‭such‬‭a‬‭scheme‬‭to‬‭address‬‭the‬‭HR‬‭market‬‭in‬Y‭Japan.‬‭And‬‭so‬‭we‬‭will‬‭serve‬‭as‬‭the‬‭assisting‬‭role‬‭for‬‭that.‬‭The‬‭number‬‭of‬‭business‬‭clients,‬‭we‬‭expect‬‭to‬‭grow‬‭very strongly. And from a product perspective, what do you think?‬‭ en:‬ ‭From‬ ‭a‬ ‭product‬ ‭perspective,‬ ‭the‬ ‭number‬ ‭of‬ ‭actions‬ ‭and‬ ‭the‬ ‭GPV,‬ ‭by‬ ‭vertical,‬ ‭the‬ ‭growth‬ ‭phase‬ ‭is‬K
‭different,‬‭because‬‭they‬‭started‬‭at‬‭different‬‭points‬‭in‬‭time,‬‭but‬‭if‬‭we‬‭look‬‭at‬‭this‬‭in‬‭a‬‭cross‬‭functional,‬‭horizontal‬‭manner,‬ ‭what‬ ‭we‬ ‭cherish‬ ‭is,‬ ‭the‬ ‭simple‬ ‭number‬ ‭of‬ ‭actions‬ ‭can‬ ‭increase‬ ‭by‬ ‭improving‬ ‭the‬ ‭usability‬ ‭or‬ ‭the‬‭convenience.‬ ‭With‬ ‭that‬ ‭increase‬ ‭in‬ ‭the‬ ‭number‬ ‭of‬ ‭actions,‬ ‭we‬ ‭are‬ ‭also‬ ‭being‬ ‭paid‬ ‭in‬ ‭accordance‬ ‭with‬ ‭our‬‭contribution‬‭to‬‭the‬‭improvement‬‭in‬‭the‬‭business‬‭clients’‬‭performance.‬‭We‬‭are‬‭considering‬‭to‬‭contribute‬‭to‬‭the‬‭spend per customer after sending users to the customers.‬
I‭n‬‭Jalan.net,‬‭the‬‭revenue‬‭assistance‬‭service‬‭for‬‭example,‬‭we‬‭are‬‭involved‬‭with‬‭the‬‭pricing‬‭and‬‭anticipate‬‭the‬‭operational‬ ‭use‬ ‭of‬ ‭utilization‬ ‭ratio‬ ‭in‬ ‭the‬ ‭future‬ ‭and‬ ‭assist‬ ‭and‬ ‭suggest‬ ‭the‬ ‭future‬ ‭possible‬ ‭unit‬ ‭price‬ ‭and‬‭utilization rate.‬‭ nd‬‭as‬‭Keiichi‬‭said‬‭in‬‭the‬‭presentation,‬‭for‬‭example,‬‭customer‬‭orders.‬‭So‬‭in‬‭restaurants,‬‭a‬‭customer‬‭can‬‭order‬A‭by‬‭smartphone‬‭and‬‭therefore‬‭increase‬‭the‬‭spend‬‭per‬‭customer.‬‭Pricing‬‭and‬‭the‬‭unit‬‭price,‬‭these‬‭are‬‭another‬‭area‬ ‭we‬ ‭want‬ ‭to‬ ‭be‬ ‭involved‬ ‭in.‬ ‭And‬ ‭HotPepper‬ ‭Gourmet,‬ ‭when‬ ‭the‬ ‭restaurant‬ ‭is‬ ‭booked,‬ ‭booking‬‭can‬‭be‬‭This transcript is provided for the convenience of investors only and this is a translated version of the Japanese call.‬‭14‬

‭done‬ ‭every‬ ‭15‬ ‭minutes.‬ ‭And‬ ‭points‬ ‭can‬ ‭be‬ ‭given‬ ‭based‬ ‭on‬ ‭the‬ ‭booking‬ ‭time,‬ ‭which‬ ‭means‬ ‭we‬ ‭have‬ ‭the‬i‭nfrastructure where we can manage utilization rate.‬‭ sing‬ ‭points‬ ‭or‬ ‭limited‬ ‭time‬ ‭coupons,‬ ‭the‬ ‭booking‬‭rate‬‭can‬‭be‬‭improved.‬‭And‬‭not‬‭only‬‭that,‬‭we‬‭can‬‭also‬‭be‬U‭involved‬‭in‬‭the‬‭pricing,‬‭utilization‬‭rate‬‭and‬‭this‬‭will‬‭eventually‬‭raise‬‭the‬‭overall‬‭GPV.‬‭The‬‭nature‬‭of‬‭the‬‭number‬‭of actions is different from those in the past. We hope there's room to increase from that perspective.‬‭Yoshi:‬‭So‬‭your‬‭second‬‭question.‬‭The‬‭time‬‭and‬‭the‬‭headcount‬‭that‬‭has‬‭been‬‭reduced‬‭is‬‭powerful.‬‭Now,‬‭is‬‭this‬f‭air? Are we being paid fairly? Thank you. That's a great question.‬‭ o‬‭from‬‭a‬‭product‬‭perspective,‬‭it‬‭is‬‭partially‬‭included‬‭in‬‭our‬‭answers‬‭to‬‭your‬‭first‬‭questions.‬‭But‬‭the‬‭way‬‭we‬‭are‬S‭paid‬‭now‬‭results‬‭from‬‭as‬‭the‬‭number‬‭of‬‭business‬‭clients‬‭increases.‬‭We‬‭want‬‭to‬‭make‬‭this‬‭even‬‭more‬‭powerful.‬‭And‬‭of‬‭course,‬‭with‬‭this,‬‭of‬‭course‬‭there‬‭are‬‭things‬‭that‬‭will‬‭no‬‭longer‬‭be‬‭necessary‬‭for‬‭the‬‭clients,‬‭but‬‭that's‬‭great,‬ ‭but‬ ‭you‬ ‭never‬ ‭know‬ ‭until‬ ‭you‬‭actually‬‭use‬‭it.‬‭Until‬‭you‬‭use‬‭it,‬‭the‬‭business‬‭clients‬‭will‬‭not‬‭understand‬‭how valuable and usable it is.‬I‭f‬ ‭we‬ ‭set‬ ‭higher‬ ‭pricing‬ ‭for‬ ‭those‬ ‭things,‬ ‭it‬ ‭will‬ ‭hinder‬ ‭the‬ ‭introduction‬ ‭and‬ ‭it‬ ‭will‬ ‭not‬ ‭become‬ ‭something‬‭powerful‬ ‭enough‬ ‭to‬ ‭change‬ ‭the‬ ‭entire‬ ‭industry.‬ ‭So‬ ‭at‬ ‭the‬ ‭starting‬ ‭point,‬‭the‬‭profitability‬‭may‬‭be‬‭low,‬‭but‬‭we‬‭want more business clients to use it first of all, so we focus on that point.‬‭ ut‬‭in‬‭order‬‭to‬‭increase‬‭revenue,‬‭we‬‭use‬‭data‬‭and‬‭assist‬‭and‬‭to‬‭find‬‭out‬‭what‬‭unit‬‭price‬‭we‬‭should‬‭set‬‭or‬‭what‬B‭unit‬‭price‬‭is‬‭appropriate‬‭for‬‭which‬‭point‬‭in‬‭time,‬‭to‬‭maximize‬‭profit.‬‭So‬‭data‬‭and‬‭AI,‬‭services‬‭using‬‭AI,‬‭we‬‭will‬‭add‬‭on‬‭or‬‭convert‬‭to‬‭that.‬‭As‬‭clients‬‭use‬‭our‬‭service,‬‭we‬‭can‬‭have‬‭even‬‭more‬‭powerful‬‭usage,‬‭and‬‭profit‬‭as‬‭a‬‭result‬ ‭of‬ ‭that‬ ‭is‬ ‭something‬ ‭we‬ ‭are‬ ‭looking‬ ‭for.‬‭We‬‭are‬‭still‬‭halfway‬‭through‬‭our‬‭journey.‬‭I‬‭hope‬‭this‬‭answers‬‭your question.‬‭Munakata:‬‭Thank you.‬‭Yoshi:‬‭Thank you.‬‭ hen:‬ ‭So‬ ‭as‬ ‭Munakata-san‬ ‭said,‬ ‭the‬ ‭time‬ ‭we‬ ‭were‬ ‭able‬ ‭to‬ ‭reduce‬ ‭in‬ ‭terms‬ ‭of‬ ‭inconvenience,‬ ‭on‬ ‭Air‬S‭BusinessTools‬ ‭10th‬ ‭anniversary‬ ‭brand‬ ‭website,‬ ‭it‬ ‭says‬ ‭that‬ ‭we‬‭were‬‭able‬‭to‬‭reduce‬‭21.72‬‭million‬‭hours‬‭per‬‭year. And the reduced personnel cost was 23 billion yen per year. I think this is a very powerful number.‬‭ oshi:‬ ‭Yes,‬ ‭we‬ ‭can‬ ‭see‬ ‭this‬ ‭result‬‭from‬‭various‬‭perspectives.‬‭The‬‭reduced‬‭number‬‭of‬‭hours,‬‭what‬‭are‬‭they‬Y‭used‬ ‭for‬ ‭instead?‬ ‭When‬ ‭we‬ ‭think‬ ‭about‬ ‭it,‬ ‭well,‬ ‭maybe‬ ‭it‬ ‭can‬ ‭be‬ ‭offered‬ ‭in‬ ‭the‬ ‭form‬ ‭of‬ ‭labor.‬ ‭Improving‬‭productivity‬ ‭means,‬ ‭thinking‬ ‭about,‬ ‭for‬ ‭example,‬ ‭what‬ ‭the‬ ‭reduced‬ ‭number‬ ‭of‬ ‭hours‬ ‭can‬ ‭be‬ ‭allocated‬ ‭to‬‭in‬‭order‬ ‭to‬ ‭maximize‬ ‭the‬ ‭revenue‬ ‭and‬ ‭profits‬ ‭of‬ ‭our‬ ‭clients,‬ ‭which‬ ‭will‬ ‭ultimately‬ ‭lead‬ ‭to‬ ‭the‬ ‭growth‬ ‭of‬ ‭our‬‭revenue.‬‭Like‬‭the‬‭link‬‭of‬‭3‬‭KPIs,‬‭In‬‭terms‬‭of‬‭pricing‬‭as‬‭a‬‭result‬‭of‬‭our‬‭contribution‬‭in‬‭reducing‬‭cost‬‭and‬‭time,‬‭we‬‭need to make sure that we maximize the linkage is a key to grow our profitability in the future.‬‭Shen:‬‭Well let me move on to our next question. JP‬‭Morgan, Mori-san.‬‭Mori:‬‭This‬‭is‬‭Mori‬‭speaking.‬‭Thank‬‭you‬‭so‬‭much‬‭for‬‭your‬‭explanation‬‭today.‬‭I‬‭also‬‭have‬‭two‬‭questions.‬‭One‬‭is‬r‭ elated to AirPAY.‬‭ o‬‭55%‬‭of‬‭clients‬‭are‬‭existing‬‭users‬‭and‬‭others‬‭are‬‭45%,‬‭as‬‭you‬‭mentioned,‬‭in‬‭the‬‭450,000‬‭that‬‭number.‬‭And‬S‭there's‬‭more‬‭than‬‭4‬‭million‬‭potential‬‭business‬‭clients‬‭as‬‭a‬‭TAM.‬‭Can‬‭I‬‭simply‬‭estimate‬‭the‬‭penetration‬‭ratio‬‭is‬‭at‬ ‭10%?‬ ‭Well,‬ ‭I‬ ‭think‬ ‭it‬ ‭depends‬ ‭on‬ ‭what‬ ‭you‬ ‭would‬ ‭like‬ ‭to‬‭achieve‬‭with‬‭AirPAY,‬‭but‬‭is‬‭the‬‭penetration‬‭rate‬‭simply‬‭10%?‬‭And‬‭the‬‭other‬‭question‬‭is,‬‭in‬‭areas‬‭where‬‭matching‬‭is‬‭not‬‭likely‬‭to‬‭happen,‬‭this‬‭45%,‬‭how‬‭are‬‭you‬‭going‬‭to‬‭face‬‭those‬‭areas?‬‭When‬‭there‬‭is‬‭no‬‭scalability‬‭of‬‭matching,‬‭will‬‭it‬‭be‬‭a‬‭profitable‬‭business?‬‭That‬‭is‬‭my‬‭first question.‬‭ nd‬‭my‬‭second‬‭question‬‭is,‬‭maybe‬‭this‬‭is‬‭not‬‭a‬‭good‬‭question,‬‭but‬‭Housing‬‭&‬‭Real‬‭Estate‬‭and‬‭Beauty‬‭are‬‭the‬A‭two‬‭largest‬‭areas.‬‭And‬‭if‬‭the‬‭growth‬‭of‬‭these‬‭two‬‭areas‬‭slow‬‭down,‬‭the‬‭segment‬‭as‬‭a‬‭whole,‬‭may‬‭slow‬‭down.‬‭But‬‭these‬‭two‬‭are‬‭already‬‭large‬‭to‬‭a‬‭certain‬‭extent.‬‭So‬‭I‬‭would‬‭like‬‭to‬‭ask‬‭you‬‭what‬‭is‬‭going‬‭to‬‭be‬‭the‬‭driver‬‭for‬‭these‬ ‭two‬ ‭businesses‬ ‭going‬ ‭forward?‬ ‭Is‬ ‭there‬ ‭any‬ ‭room‬ ‭for‬ ‭further‬ ‭penetration‬ ‭among‬ ‭clients‬ ‭or‬ ‭as‬ ‭you‬‭This transcript is provided for the convenience of investors only and this is a translated version of the Japanese call.‬‭15‬

‭explained‬ ‭in‬ ‭details‬ ‭today,‬ ‭revenue‬ ‭per‬ ‭client,‬‭is‬‭that‬‭going‬‭to‬‭be‬‭able‬‭to‬‭grow‬‭further‬‭and‬‭there's‬‭no‬‭worry?‬‭ hose are my two questions.‬T‭ oshi:‬ ‭Yes.‬ ‭Thank‬ ‭you.‬ ‭Then,‬ ‭for‬ ‭your‬ ‭first‬ ‭question‬ ‭I’m‬ ‭going‬ ‭to‬‭respond.‬‭For‬‭the‬‭second‬‭question‬‭Ken‬‭is‬Y‭going‬‭to‬‭respond,‬‭I‬‭believe.‬‭To‬‭your‬‭first‬‭question,‬‭business‬‭clients‬‭who‬‭are‬‭not‬‭using‬‭a‬‭matching‬‭platform,‬‭how‬‭are we going to tackle that area? And also, there was a question related to the market as a whole.‬‭ s‬ ‭we‬ ‭discussed‬ ‭in‬ ‭the‬ ‭beginning,‬ ‭AirCASH‬ ‭reducing‬ ‭friction‬ ‭is‬ ‭something‬ ‭we‬ ‭want‬ ‭to‬ ‭remove‬ ‭or‬ ‭make‬ ‭it‬A
‭easier‬‭to‬‭deal‬‭with.‬‭That's‬‭what‬‭we‬‭have‬‭been‬‭studying‬‭and‬‭using‬‭prototypes‬‭to‬‭hold‬‭trials‬‭with,‬‭as‬‭discussed‬‭earlier.‬ ‭For‬ ‭example,‬ ‭cashless‬ ‭payroll‬ ‭payment‬ ‭is‬ ‭a‬ ‭new‬ ‭system‬ ‭that‬ ‭was‬ ‭on‬ ‭the‬ ‭news,‬ ‭we‬ ‭submitted‬ ‭an‬‭application‬ ‭to‬ ‭the‬ ‭government.‬ ‭And‬ ‭regarding‬ ‭clients‬ ‭whose‬ ‭touch‬ ‭point‬ ‭with‬ ‭us‬ ‭started‬ ‭from‬ ‭cash‬‭management,‬‭then‬‭we‬‭would‬‭like‬‭to‬‭continue‬‭expanding‬‭the‬‭value‬‭in‬‭that‬‭cash‬‭related‬‭service.‬‭And‬‭as‬‭a‬‭result‬‭we would need to discuss the take rate. That is something we hope to offer.‬‭ t‬ ‭the‬ ‭same‬ ‭time.‬ ‭This‬ ‭is‬ ‭a‬ ‭unique‬ ‭strength‬ ‭of‬ ‭Recruit.‬ ‭HR‬ ‭Technology‬ ‭was‬ ‭discussed‬ ‭the‬ ‭other‬ ‭day‬ ‭and‬A‭recruiting‬‭happens‬‭in‬‭such‬‭areas‬‭as‬‭well.‬‭We‬‭have‬‭a‬‭horizontal‬‭service‬‭of‬‭recruiting,‬‭so‬‭by‬‭offering‬‭services‬‭in‬‭one‬ ‭way‬ ‭or‬‭another,‬‭GPV‬‭is‬‭something‬‭we‬‭hope‬‭to‬‭think‬‭about‬‭together‬‭with‬‭cash‬‭management.‬‭And‬‭I‬‭think‬‭you will be able to imagine what is likely to happen in the future.‬‭And to your second question how, well maybe we should respond from a product side perspective.‬‭Ken:‬‭Yes, so if the growth of Housing & Real Estate‬‭and Beauty slows down.‬‭Shen:‬ ‭So‬ ‭we‬ ‭will‬ ‭be‬ ‭growing‬ ‭Marketing‬ ‭Solutions‬ ‭as‬ ‭a‬ ‭whole,‬ ‭but‬ ‭Housing‬ ‭&‬ ‭Real‬ ‭Estate‬ ‭and‬ ‭Beauty‬‭are‬‭ lready large. So what will be the drivers there?‬a‭ en:‬‭In‬‭terms‬‭of‬‭Housing‬‭&‬‭Real‬‭Estate‬‭compared‬‭to‬‭Beauty,‬‭Travel‬‭and‬‭Dining,‬‭using‬‭technology‬‭to‬‭solve‬‭a‬K‭client's‬‭challenges‬‭and‬‭improving‬‭convenience‬‭of‬‭users‬‭in‬‭that‬‭area,‬‭we‬‭delayed.‬‭For‬‭example‬‭from‬‭2018‬‭we‬‭started‬ ‭the‬ ‭online‬ ‭reservation‬ ‭service‬ ‭for‬ ‭model‬ ‭houses,‬ ‭which‬ ‭is‬ ‭six‬ ‭years‬ ‭later‬ ‭compared‬ ‭to‬ ‭the‬ ‭Dining‬‭service.‬‭ here‬‭is‬‭room‬‭for‬‭further‬‭improvement‬‭in‬‭services‬‭as‬‭we‬‭started‬‭from‬‭paper‬‭based‬‭media‬‭and‬‭moved‬‭to‬‭online‬T‭media‬‭and‬‭we're‬‭still‬‭in‬‭progress.‬‭Or‬‭it‬‭just‬‭started‬‭to‬‭become‬‭more‬‭convenient.‬‭So‬‭I‬‭think‬‭there‬‭is‬‭room‬‭left‬‭for‬‭further‬‭improvement.‬‭Depending‬‭on‬‭the‬‭timing‬‭of‬‭transition‬‭of‬‭services‬‭and‬‭timing‬‭of‬‭release,‬‭the‬‭growth‬‭may‬‭seemingly slow down but regarding Housing & Real Estate I believe there is a room left for growth.‬‭ nd‬ ‭regarding‬‭Beauty,‬‭today‬‭in‬‭the‬‭booking‬‭service,‬‭we‬‭are‬‭able‬‭to‬‭offer‬‭a‬‭certain‬‭amount‬‭of‬‭services‬‭to‬‭the‬A‭market.‬‭And‬‭then‬‭there's‬‭Air‬‭BusinessTools‬‭that‬‭are‬‭used‬‭as‬‭an‬‭add‬‭on‬‭and‬‭if‬‭that‬‭happens‬‭we‬‭will‬‭be‬‭able‬‭to‬‭contribute even more. That is the perception from the product side.‬‭Yoshi:‬‭In‬‭the‬‭Beauty,‬‭beauty‬‭salons,‬‭hair‬‭salons‬‭other‬‭than‬‭those‬‭areas,‬‭the‬‭aesthetic‬‭area‬‭is‬‭growing‬‭strongly,‬r‭ ight?‬‭Ken:‬‭Yes. aestheticians and nail salons.‬‭ oshi:‬‭Well,‬‭people‬‭say‬‭that‬‭our‬‭services‬‭are‬‭mainly‬‭around‬‭hair‬‭salons,‬‭but‬‭actually‬‭they‬‭are‬‭in‬‭many‬‭more‬Y‭beauty-related‬‭areas‬‭and‬‭there‬‭are‬‭new‬‭types‬‭of‬‭salons‬‭born‬‭every‬‭day.‬‭I‬‭often‬‭use‬‭massage‬‭for‬‭example.‬‭And‬‭it‬ ‭may‬ ‭be‬ ‭mainly‬ ‭for‬‭women,‬‭but‬‭new‬‭types‬‭of‬‭services‬‭are‬‭born.‬‭And‬‭each‬‭business‬‭client’s‬‭companies‬‭are‬‭trying to acquire new users via various means.‬‭ ompared‬ ‭to‬ ‭that,‬ ‭once‬ ‭they‬ ‭post‬ ‭their‬‭ads‬‭on‬‭our‬‭platform,‬‭they‬‭will‬‭be‬‭able‬‭to‬‭reduce‬‭cost‬‭per‬‭user‬‭when‬C‭they‬‭think‬‭about‬‭user‬‭acquisition.‬‭Because‬‭the‬‭market‬‭is‬‭aware‬‭of‬‭that,‬‭some‬‭early‬‭stage‬‭businesses‬‭choose‬‭us in many cases these days.‬‭We‬‭have‬‭a‬‭platform‬‭with‬‭clear‬‭targets‬‭and‬‭I‬‭think‬‭the‬‭environment‬‭is‬‭encouraging‬‭various‬‭businesses‬‭to‬‭create‬‭ ew types of salons. So I do have a hypothesis that we can grow further.‬n‭This transcript is provided for the convenience of investors only and this is a translated version of the Japanese call.‬‭16‬

‭Mio:‬‭And‬‭recently,‬‭many‬‭services‬‭are‬‭used‬‭by‬‭male‬‭users‬‭as‬‭well.‬‭So‬‭I‬‭think‬‭there's‬‭room‬‭for‬‭growth‬‭there‬‭as‬‭ ell.‬w‭Shen:‬‭So for investors, this aesthetic or beauty-related‬‭area is something new. How do you distinguish it?‬
‭Mio:‬‭Well,‬‭Beauty‬‭is‬‭hair‬‭salon‬‭or‬‭coloring‬‭salon,‬‭then‬‭there’s‬‭aestheticians,‬‭nail‬‭salons‬‭or‬‭eyelash‬‭salons.‬‭So‬‭ verything else is one area and then there is a medical area as well.‬e‭Shen:‬‭So there's just everything right? I can even‬‭use it five days a week.‬‭ oshi:‬‭So‬‭to‬‭your‬‭second‬‭question.‬‭The‬‭growth‬‭in‬‭Housing‬‭&‬‭Real‬‭Estate‬‭on‬‭a‬‭per‬‭client‬‭basis,‬‭using‬‭IT‬‭and‬Y‭internet‬‭services,‬‭we‬‭can‬‭contribute‬‭even‬‭further.‬‭So‬‭we‬‭will‬‭be‬‭able‬‭to‬‭grow‬‭revenue‬‭per‬‭client.‬‭And‬‭I‬‭don't‬‭like‬‭to‬‭describe‬‭it‬‭in‬‭this‬‭way,‬‭but‬‭clients’‬‭digital‬‭transformation‬‭is‬‭something‬‭we‬‭would‬‭like‬‭to‬‭expand‬‭as‬‭measures‬‭to‬‭grow‬‭revenue‬‭per‬‭client.‬‭And‬‭regarding‬‭Beauty,‬‭as‬‭we‬‭said‬‭earlier,‬‭we‬‭can‬‭grow‬‭the‬‭number‬‭of‬‭clients‬‭even‬‭further. So I think that is going to be the driver in these areas. I hope we answered your questions.‬‭Munakata:‬‭Thank you very much.‬‭Shen:‬‭Next question is from Citigroup, Yamamura-san,‬‭please.‬‭Yamamura:‬ ‭Thank‬ ‭you‬ ‭very‬ ‭much,‬ ‭Citigroup,‬ ‭I‬ ‭am‬ ‭Yamamura.‬ ‭Thank‬ ‭you‬ ‭for‬ ‭appointing‬ ‭me‬ ‭and‬ ‭for‬ ‭the‬‭ xplanation.‬eI‭‬‭have‬‭two‬‭questions.‬‭First‬‭question‬‭is,‬‭HR‬‭Technology‬‭shifts‬‭from‬‭the‬‭advertisement‬‭based‬‭revenue,‬‭you‬‭are‬‭shifting‬ ‭to‬ ‭CPC‬ ‭and‬ ‭SaaS‬ ‭data‬ ‭action‬ ‭billing‬ ‭is‬ ‭another‬ ‭plan.‬ ‭In‬ ‭Beauty,‬ ‭where‬ ‭the‬ ‭revenue‬ ‭is‬ ‭large,‬ ‭the‬‭advertising based revenue model is still the mainstream. So the current format, is this the best solution or not?‬‭From‬ ‭the‬ ‭nature‬ ‭of‬ ‭the‬ ‭industry,‬ ‭is‬ ‭this‬ ‭billing‬ ‭model‬ ‭the‬ ‭final‬ ‭format,‬ ‭or‬ ‭will‬ ‭this‬ ‭move‬ ‭to‬ ‭CPC‬ ‭or‬ ‭CPA‬‭ ventually in the future? That's my first question.‬e‭ y‬ ‭second‬ ‭question‬ ‭is‬ ‭about‬ ‭Air‬ ‭BusinessTools.‬ ‭You‬ ‭are‬ ‭trying‬ ‭to‬‭improve‬‭the‬‭productivity‬‭to‬‭maximize‬‭the‬M‭revenue,‬‭I‬‭understand‬‭the‬‭scheme.‬‭But‬‭the‬‭revenue‬‭is‬‭growing‬‭strongly‬‭year‬‭after‬‭year.‬‭In‬‭the‬‭medium‬‭term,‬‭maybe aside from your intent, the SaaS business may contribute to your profit. Is that a possibility?‬‭ ou‬‭said‬‭you‬‭wanted‬‭to‬‭offer‬‭this‬‭for‬‭low‬‭cost‬‭and‬‭focus‬‭on‬‭penetration,‬‭but‬‭now‬‭the‬‭competition‬‭is‬‭intensifying.‬
Y‭In‬ ‭the‬ ‭long‬ ‭term,‬ ‭maybe‬‭the‬‭monetization‬‭will‬‭become‬‭difficult?‬‭Is‬‭that‬‭a‬‭risk‬‭that‬‭we‬‭need‬‭to‬‭think‬‭about?‬‭If‬‭you could share with us your view. Thank you very much.‬‭Shen:‬‭Thank you. That's a question for Yoshi.‬‭Yoshi:‬ ‭Yes,‬ ‭your‬ ‭first‬ ‭question‬ ‭is‬ ‭about‬ ‭shifting‬ ‭to‬ ‭PPC‬ ‭in‬ ‭HR‬ ‭Solutions‬ ‭has‬ ‭progressed,‬ ‭but‬ ‭how‬ ‭about‬‭ atching & Solutions’ progress. There are some examples in Beauty.‬M‭ o‬‭our‬‭monetization,‬‭I‬‭talked‬‭about‬‭this‬‭before.‬‭We‬‭are‬‭doing‬‭substantial‬‭research.‬‭And‬‭the‬‭way‬‭we‬‭research‬S‭is‬ ‭from‬ ‭the‬ ‭perspective‬ ‭of‬ ‭the‬ ‭buyer,‬ ‭the‬ ‭business‬ ‭client,‬ ‭is‬ ‭it‬ ‭an‬ ‭acceptable‬ ‭one‬ ‭that‬ ‭helps‬ ‭their‬ ‭decision‬‭making?‬ ‭Not‬ ‭just‬ ‭in‬‭terms‬‭of‬‭the‬‭price‬‭but‬‭also‬‭the‬‭products.‬‭Which‬‭products‬‭can‬‭be‬‭monetized?‬‭Looking‬‭at‬‭this using psychology, we decided on the current format.‬‭For‬ ‭example‬ ‭in‬ ‭Beauty,‬ ‭it's‬ ‭not‬ ‭transaction‬ ‭based,‬ ‭we‬ ‭take‬ ‭the‬ ‭advertisement‬ ‭based‬ ‭model.‬ ‭We‬ ‭say‬ ‭it’s‬‭ dvertising, but in reality it is a subscription. It is a monthly usage fee in most cases.‬a‭ f‬ ‭course‬ ‭this‬ ‭is‬ ‭to‬ ‭acquire‬ ‭new‬ ‭customers.‬ ‭But‬ ‭we‬ ‭also‬ ‭have‬ ‭the‬ ‭booking‬ ‭management‬ ‭system,‬ ‭SALON‬O‭BOARD‬ ‭which‬ ‭is‬ ‭highly‬ ‭acclaimed.‬ ‭We‬‭need‬‭less‬‭people‬‭to‬‭manage‬‭it.‬‭In‬‭that‬‭sense,‬‭it‬‭is‬‭unlimited‬‭use‬‭per‬‭month. It’s a sense of security, from the individual user's perspective.‬‭ nd‬‭it's‬‭not‬‭an‬‭industry‬‭that‬‭has‬‭much‬‭affluent‬‭cash‬‭flow.‬‭So‬‭it's‬‭easier‬‭to‬‭know‬‭the‬‭payment‬‭to‬‭be‬‭made‬‭the‬A‭following‬ ‭month,‬ ‭not‬ ‭based‬ ‭on‬ ‭the‬ ‭transactions.‬ ‭So‬ ‭we‬ ‭think‬ ‭this‬ ‭is‬ ‭the‬ ‭best‬ ‭at‬ ‭this‬ ‭point‬ ‭in‬ ‭time,‬ ‭but‬ ‭will‬‭This transcript is provided for the convenience of investors only and this is a translated version of the Japanese call.‬‭17‬‭continue‬‭being‬‭the‬‭best‬‭in‬‭the‬‭future?‬‭Maybe‬‭better‬‭but‬‭maybe‬‭not‬‭necessarily‬‭the‬‭best.‬‭And‬‭this‬‭is‬‭not‬‭only‬‭for‬‭ eauty, we need to continue researching to find the best solution.‬B‭ ow‬ ‭suppose‬ ‭we‬ ‭shifted‬ ‭to‬ ‭a‬ ‭PPC‬ ‭model,‬ ‭maybe‬ ‭the‬ ‭inventory‬ ‭that‬ ‭will‬ ‭satisfy‬ ‭individual‬‭users‬‭will‬‭not‬‭be‬N‭there.‬ ‭The‬ ‭days‬ ‭that‬ ‭anyone‬ ‭wants‬ ‭to‬ ‭go‬ ‭or‬ ‭the‬ ‭popular‬ ‭time‬ ‭slots,‬ ‭because‬ ‭we're‬ ‭human‬ ‭beings,‬ ‭there's‬‭concentration‬‭on‬‭particular‬‭days‬‭or‬‭times.‬‭And‬‭when‬‭it‬‭cannot‬‭be‬‭booked,‬‭it‬‭will‬‭lower‬‭the‬‭attractiveness‬‭of‬‭the‬‭platform‬‭and‬‭the‬‭user‬‭action‬‭declines‬‭and‬‭the‬‭user‬‭ID‬‭count‬‭will‬‭no‬‭longer‬‭grow.‬‭Which‬‭means‬‭that‬‭we‬‭will‬‭no‬‭longer have the positive chain reaction of value.‬‭ o‬‭that‬‭is‬‭why‬‭we‬‭did‬‭not‬‭adopt‬‭a‬‭PPC‬‭model.‬‭From‬‭a‬‭monetization‬‭point‬‭of‬‭view,‬‭we‬‭decided‬‭considering‬‭all‬S‭of‬‭these‬‭elements.‬‭And‬‭at‬‭the‬‭same‬‭time,‬‭if‬‭we‬‭can‬‭have‬‭all‬‭the‬‭inventory,‬‭the‬‭higher‬‭the‬‭number‬‭of‬‭bookings,‬‭the‬ ‭lower‬ ‭the‬ ‭unit‬‭cost.‬‭More‬‭seats‬‭means‬‭you‬‭can‬‭register‬‭quickly,‬‭which‬‭means‬‭the‬‭available‬‭seats‬‭on‬‭the‬‭platform‬‭can‬‭be‬‭maximized,‬‭more‬‭than‬‭other‬‭players.‬‭And‬‭that‬‭is‬‭why‬‭HotPepper‬‭Beauty’s‬‭performance‬‭is‬‭so‬‭high.‬
I‭t's‬ ‭a‬‭balancing‬‭act.‬‭The‬‭way‬‭we‬‭offer‬‭value‬‭on‬‭the‬‭platform‬‭and‬‭the‬‭way‬‭we‬‭build.‬‭It's‬‭about‬‭balance.‬‭And‬‭if‬‭the‬‭business‬‭evolves‬‭in‬‭the‬‭future,‬‭if‬‭there‬‭is‬‭a‬‭midpoint‬‭action‬‭that‬‭is‬‭more‬‭valuable‬‭than‬‭the‬‭final‬‭action,‬‭then‬‭we‬‭may‬‭move‬‭to‬‭a‬‭PPC‬‭model‬‭or‬‭some‬‭usage‬‭fee‬‭type‬‭model.‬‭At‬‭this‬‭point‬‭in‬‭time,‬‭especially‬‭in‬‭Beauty,‬‭we‬‭think existing models are the best.‬‭Now monetization is difficult. From a product perspective, anything you can say?‬‭ en:‬‭From‬‭a‬‭product‬‭perspective,‬‭from‬‭the‬‭sales‬‭frontline,‬‭our‬‭salespeople‬‭visit‬‭the‬‭clients‬‭and‬‭have‬‭this‬‭much‬K‭investment,‬‭and‬‭this‬‭much‬‭response‬‭and‬‭this‬‭much‬‭revenue.‬‭On‬‭our‬‭booking‬‭system,‬‭you‬‭can‬‭see‬‭the‬‭amount‬‭of money, so that is the conversation we have with the client.‬‭This‬‭much‬‭investment‬‭and‬‭this‬‭much‬‭return,‬‭that‬‭is‬‭the‬‭basis‬‭of‬‭the‬‭conversation,‬‭resulting‬‭in‬‭a‬‭similar‬‭to‬‭the‬t‭ake rate based model.‬‭ n‬ ‭the‬‭product‬‭side,‬‭the‬‭amount‬‭that‬‭their‬‭sales‬‭increased‬‭by‬‭using‬‭our‬‭platform‬‭is‬‭calculated‬‭and‬‭we‬‭see‬‭if‬O‭the‬‭current‬‭monetization‬‭is‬‭appropriate.‬‭If‬‭we‬‭are‬‭receiving‬‭too‬‭much,‬‭then‬‭the‬‭clients‬‭will‬‭suffer.‬‭So‬‭the‬‭client‬‭side‬‭needs‬‭to‬‭grow‬‭and‬‭we‬‭need‬‭to‬‭grow‬‭and‬‭where‬‭is‬‭that‬‭fine‬‭line.‬‭We‬‭are‬‭trying‬‭to‬‭ascertain‬‭that‬‭fine‬‭line.‬‭The‬ ‭model‬ ‭is‬ ‭an‬ ‭advertising‬ ‭based‬ ‭model,‬ ‭but‬ ‭if‬ ‭we‬ ‭look‬ ‭deeply‬ ‭it‬ ‭is‬ ‭similar‬ ‭to‬‭a‬‭transaction‬‭type‬‭model‬‭in‬‭reality.‬‭Shen:‬‭That is how business clients understand it?‬
‭ en:‬ ‭Yes.‬ ‭In‬ ‭Beauty‬‭salons,‬‭to‬‭attract‬‭new‬‭users,‬‭they‬‭need‬‭to‬‭incur‬‭costs.‬‭But‬‭their‬‭repeaters‬‭come‬‭for‬‭the‬K‭hair‬‭stylists’‬‭capabilities.‬‭But‬‭will‬‭it‬‭be‬‭billed‬‭on‬‭Recruit?‬‭That’s‬‭wrong.‬‭Their‬‭stylists’‬‭capability‬‭attracts‬‭existing‬‭and‬‭new‬‭customers.‬‭It‬‭is‬‭difficult‬‭to‬‭ascertain.‬‭So‬‭the‬‭beauty‬‭salon‬‭side,‬‭the‬‭need‬‭to‬‭be‬‭satisfied‬‭and‬‭to‬‭make‬‭it‬‭a‬‭convenient‬‭platform,‬‭the‬‭need‬‭to‬‭be‬‭usable‬‭and‬‭convenient‬‭for‬‭the‬‭users,‬‭and‬‭the‬‭need‬‭for‬‭higher‬‭profits‬‭for‬‭the business clients, the beauty salons. We're trying to take all that into account to come up with the plan.‬‭ otPepper‬ ‭Gourmet,‬ ‭the‬ ‭advertising‬ ‭model‬ ‭was‬‭the‬‭mainstream,‬‭but‬‭after‬‭COVID,‬‭usage‬‭based‬‭plans‬‭have‬H‭been‬‭newly‬‭introduced.‬‭So‬‭when‬‭customers‬‭do‬‭not‬‭come,‬‭no‬‭cost‬‭is‬‭incurred‬‭but‬‭when‬‭the‬‭booking‬‭comes,‬‭it‬‭will be usage based. Pay as you go. According to the market, we change the model, tailor the model.‬‭ oshi:‬ ‭It‬ ‭can‬ ‭use‬ ‭both.‬ ‭So‬ ‭it‬ ‭can‬ ‭be‬‭a‬‭cross‬‭use.‬‭So‬‭for‬‭the‬‭person‬‭who‬‭selects,‬‭we‬‭should‬‭not‬‭narrow‬‭the‬Y‭options‬‭too‬‭much.‬‭In‬‭HR‬‭Solutions,‬‭it‬‭will‬‭shift‬‭to‬‭PPC,‬‭but‬‭in‬‭Japan,‬‭the‬‭advertising‬‭revenue‬‭model‬‭is‬‭adopted‬‭in‬ ‭some‬ ‭parts‬ ‭and‬ ‭the‬ ‭PPC‬ ‭Indeed‬ ‭PLUS‬ ‭model‬ ‭exists‬ ‭in‬ ‭other‬ ‭areas.‬ ‭In‬ ‭the‬ ‭billing‬ ‭model,‬ ‭we‬ ‭need‬ ‭to‬‭increase the options for the business clients along the way.‬‭Shen:‬‭Thank you very much. The second question, Air‬‭BusinessTools.‬‭ oshi:‬ ‭It‬ ‭may‬ ‭as‬ ‭a‬ ‭result‬ ‭contribute‬ ‭to‬ ‭profit,‬ ‭and‬ ‭the‬ ‭long‬ ‭term‬ ‭risks.‬ ‭I‬ ‭think‬ ‭we‬ ‭touched‬ ‭on‬ ‭this‬ ‭before.‬Y‭Standalone‬ ‭SaaS‬ ‭that‬ ‭replace‬ ‭some‬ ‭kind‬ ‭of‬ ‭business‬ ‭operation‬ ‭will‬ ‭become‬ ‭difficult‬ ‭eventually‬ ‭as‬ ‭a‬‭standalone‬ ‭because‬ ‭there's‬ ‭a‬ ‭chain‬ ‭of‬ ‭value.‬ ‭By‬ ‭being‬‭used‬‭for‬‭a‬‭long‬‭time,‬‭lifetime‬‭value‬‭goes‬‭up.‬‭If‬‭it's‬‭a‬‭This transcript is provided for the convenience of investors only and this is a translated version of the Japanese call.‬‭18‬

‭standalone‬ ‭there's‬ ‭no‬ ‭positive‬ ‭chain‬ ‭reaction‬ ‭of‬ ‭value.‬ ‭So‬ ‭including‬‭the‬‭reduction‬‭of‬‭the‬‭workload,‬‭we‬‭have‬‭ een increasing the service lineups.‬b‭ aaS‬‭competition‬‭is‬‭intense‬‭but‬‭the‬‭competition‬‭landscape‬‭is‬‭finished.‬‭We‬‭are‬‭beyond‬‭that,‬‭I‬‭think.‬‭In‬‭a‬‭short‬S‭time‬ ‭frame,‬ ‭our‬ ‭SaaS‬ ‭products‬ ‭were‬ ‭launched‬ ‭one‬ ‭after‬ ‭another.‬ ‭If‬‭it's‬‭a‬‭standalone,‬‭LTV‬‭or‬‭life‬‭time‬‭value‬‭cannot‬‭be‬‭generated.‬‭So‬‭we‬‭have‬‭the‬‭connected‬‭value‬‭and‬‭use‬‭multiple‬‭IDs.‬‭We‬‭are‬‭offering‬‭this‬‭in‬‭a‬‭simple‬‭manner‬‭so‬‭that‬‭we‬‭can‬‭snap‬‭out‬‭of‬‭this‬‭competitive‬‭SaaS‬‭landscape,‬‭this‬‭fierce‬‭competition.‬‭We‬‭are‬‭in‬‭a‬‭good‬‭position. And therefore we are starting to talk about fintech.‬‭ nd‬‭at‬‭the‬‭same‬‭time,‬‭in‬‭the‬‭video‬‭you‬‭saw‬‭matching‬‭platforms‬‭and‬‭SaaS.‬‭If‬‭both‬‭are‬‭used,‬‭LTV‬‭improves.‬‭If‬
A‭both‬ ‭are‬ ‭used,‬ ‭we‬ ‭can‬ ‭reduce‬ ‭the‬ ‭churn‬ ‭rate.‬ ‭Direct‬ ‭sales‬ ‭and‬ ‭assisted‬ ‭sales‬ ‭contribute‬ ‭to‬ ‭both.‬ ‭Air‬‭BusinessTools contributes to both. Probably it's contributing to profit. What do you think?‬‭ en:‬ ‭As‬ ‭Yoshi‬ ‭just‬ ‭said,‬ ‭there’s‬ ‭the‬ ‭verticals‬ ‭with‬ ‭matching‬ ‭platforms‬ ‭and‬ ‭some‬ ‭other‬ ‭industries‬ ‭that‬ ‭are‬K‭irrelevant.‬ ‭So‬ ‭in‬ ‭verticals‬ ‭with‬ ‭matching‬ ‭platforms,‬ ‭with‬ ‭Air‬ ‭BusinessTools‬ ‭the‬ ‭value‬ ‭that‬ ‭is‬ ‭offered‬ ‭by‬ ‭Air‬‭BusinessTools,‬ ‭and‬ ‭is‬ ‭reflected‬ ‭on‬ ‭the‬ ‭matching‬ ‭tool.‬ ‭Air‬ ‭BusinessTools‬ ‭data‬ ‭can‬ ‭capture‬ ‭the‬ ‭availability‬‭information.‬‭ ith‬ ‭higher‬ ‭convenience,‬ ‭the‬ ‭matching‬ ‭platform‬ ‭value‬ ‭goes‬ ‭up‬ ‭and‬ ‭matching‬‭platform‬‭revenue‬‭goes‬‭up,‬‭in‬W‭some‬ ‭verticals.‬ ‭And‬‭in‬‭other‬‭verticals,‬‭it‬‭is‬‭totally‬‭different.‬‭So‬‭when‬‭we‬‭separate‬‭the‬‭two,‬‭which‬‭side‬‭should‬‭we give weight to? And offer more services? We think of that when we design our monetization plan.‬‭On‬ ‭the‬ ‭matching‬ ‭platform‬ ‭side,‬ ‭it‬ ‭is‬ ‭sometimes‬‭the‬‭contribution‬‭to‬‭profit,‬‭but‬‭maybe‬‭the‬‭SaaS‬‭side‬‭or‬‭some‬i‭ndependent vertical. In the balance, between the three, I think the contribution is already being made.‬‭ nd‬ ‭matching‬ ‭platform‬ ‭new‬ ‭client‬ ‭acquisition,‬ ‭some‬ ‭come‬ ‭from‬ ‭the‬ ‭SaaS‬ ‭side,‬ ‭and‬ ‭then‬ ‭paying‬ ‭on‬ ‭the‬A‭matching‬‭platform‬‭side,‬‭in‬‭many‬‭cases‬‭now.‬‭Reducing‬‭the‬‭sales‬‭cost,‬‭churn‬‭rate‬‭improvement‬‭and‬‭follow-up‬‭cost reduction. I think there’s a contribution there too. Thank you, I hope I answered your question.‬‭Yamamura:‬‭Thank you very much, I learned a lot. Thank‬‭you.‬‭ hen:‬‭Thank‬‭you‬‭so‬‭much.‬‭Now‬‭we‬‭are‬‭at‬‭closing‬‭time‬‭so‬‭we‬‭would‬‭like‬‭to‬‭finish‬‭the‬‭Q&A‬‭part.‬‭And‬‭I‬‭would‬
S‭like‬ ‭to‬ ‭ask‬ ‭the‬‭three‬‭of‬‭you‬‭to‬‭give‬‭a‬‭message‬‭to‬‭the‬‭capital‬‭market‬‭participants‬‭and‬‭in‬‭the‬‭order‬‭of‬‭seating,‬‭Ken, Mio and then Yoshi please.‬‭Ken:‬‭Thank‬‭you‬‭for‬‭joining‬‭us‬‭today.‬‭As‬‭someone‬‭in‬‭charge‬‭of‬‭product‬‭management,‬‭our‬‭services‬‭are‬‭being‬i‭mproved every day, and I think it is becoming more convenient than ever.‬‭ o‬‭I‬‭hope‬‭that‬‭you‬‭will‬‭use‬‭HotPepper‬‭Beauty‬‭to‬‭book‬‭a‬‭hair‬‭salon‬‭or‬‭massage‬‭salon‬‭appointment‬‭or‬‭go‬‭on‬‭a‬S‭trip‬ ‭through‬ ‭Jalan‬ ‭or‬ ‭use‬ ‭a‬ ‭HotPepper‬ ‭Gourmet‬ ‭to‬ ‭book‬ ‭a‬ ‭restaurant.‬ ‭And‬ ‭maybe‬‭you‬‭can‬‭use‬‭SUUMO‬‭to‬‭purchase‬ ‭a‬ ‭condominium,‬ ‭perhaps‬ ‭you‬ ‭may‬ ‭be‬ ‭interested.‬ ‭And‬ ‭in‬ ‭that‬ ‭case,‬ ‭we‬ ‭can‬ ‭serve‬ ‭as‬ ‭a‬ ‭point‬ ‭of‬‭contact to introduce you to a real estate company. So I hope you will do that.‬‭Shen:‬‭Thank you. Next, Mio please.‬‭ io:‬ ‭Thank‬ ‭you‬ ‭for‬ ‭your‬ ‭attendance‬ ‭today.‬ ‭I‬ ‭talked‬ ‭as‬ ‭an‬ ‭HR‬ ‭person‬‭today‬‭and‬‭ever‬‭since‬‭the‬‭foundation,‬
M‭Recruit‬ ‭has‬ ‭been‬ ‭putting‬ ‭importance‬ ‭on‬ ‭the‬ ‭Bet‬ ‭on‬ ‭Passion‬ ‭culture,‬‭meaning‬‭that‬‭when‬‭people‬‭take‬‭action‬‭from what comes from within, it leads to the best performance.‬‭ o‬ ‭it's‬ ‭important‬ ‭that‬ ‭employees‬ ‭think‬ ‭about‬ ‭what‬ ‭kind‬ ‭of‬ ‭services‬ ‭they‬ ‭wish‬ ‭to‬ ‭have.‬ ‭And‬‭that‬‭will‬‭lead‬‭to‬S‭offering‬ ‭added‬ ‭value‬ ‭to‬ ‭our‬ ‭clients‬ ‭which‬ ‭will‬ ‭ultimately‬ ‭lead‬ ‭to‬ ‭adding‬ ‭social‬ ‭value.‬ ‭So‬ ‭we‬‭will‬‭continue‬‭to‬‭embrace this culture to maximize the value we can offer. And thank you once again.‬‭Shen:‬‭Thank you. Finally, Yoshi, please.‬‭ oshi:‬‭Thank‬‭you‬‭for‬‭joining‬‭us‬‭today.‬‭In‬‭Recruit,‬‭matching‬‭businesses‬‭are‬‭our‬‭core‬‭business.‬‭In‬‭the‬‭past,‬‭we‬Y‭started‬‭from‬‭paper‬‭based‬‭media,‬‭matching‬‭1.0.‬‭And‬‭then‬‭it‬‭shifted‬‭to‬‭online,‬‭matching‬‭2.0.,‬‭and‬‭then‬‭it‬‭became‬‭This transcript is provided for the convenience of investors only and this is a translated version of the Japanese call.‬‭19‬‭a‬ ‭platform‬ ‭which‬ ‭includes‬ ‭a‬‭payment‬‭function‬‭and‬‭which‬‭completes‬‭a‬‭lot‬‭of‬‭actions.‬‭And‬‭I‬‭recognize‬‭that‬‭as‬‭ atching 3.0. And moving forward, using data and AI is going to be the key to evolve into something new.‬m‭ hen‬ ‭I‬ ‭think‬ ‭ahead,‬‭in‬‭10‬‭years‬‭from‬‭now,‬‭this‬‭kind‬‭of‬‭service‬‭will‬‭be‬‭changed‬‭in‬‭certain‬‭ways‬‭utilizing‬‭new‬W‭technologies.‬‭That‬‭is‬‭something‬‭we‬‭discussed‬‭internally,‬‭to‬‭model‬‭new‬‭platforms,‬‭and‬‭we've‬‭been‬‭working‬‭on‬‭various different trials.‬‭ ompared‬‭to‬‭the‬‭past,‬‭our‬‭services‬‭while‬‭we‬‭disclosed‬‭some‬‭numbers‬‭today,‬‭but‬‭compared‬‭to‬‭what‬‭it‬‭used‬‭to‬C‭be,‬ ‭I‬ ‭think‬ ‭our‬ ‭services‬‭performance‬‭is‬‭higher‬‭than‬‭ever.‬‭And‬‭tomorrow,‬‭next‬‭month,‬‭next‬‭year,‬‭our‬‭services‬‭and‬ ‭as‬ ‭a‬ ‭business‬ ‭as‬ ‭a‬ ‭whole,‬ ‭we‬ ‭would‬ ‭like‬ ‭to‬ ‭aim‬ ‭for‬ ‭what‬ ‭is‬ ‭even‬ ‭better.‬ ‭And‬ ‭after‬ ‭10‬ ‭years,‬ ‭new‬‭technologies and services will be utilized to realize a completely new matching form.‬I‭n‬‭order‬‭to‬‭realize‬‭that,‬‭we‬‭want‬‭to‬‭think‬‭about‬‭what‬‭we‬‭should‬‭be‬‭doing‬‭today‬‭in‬‭our‬‭business‬‭operation.‬‭So‬‭as‬ ‭Ken‬ ‭said,‬ ‭who's‬ ‭in‬ ‭charge‬ ‭of‬ ‭product‬ ‭management,‬ ‭and‬‭Mio‬‭also‬‭commented,‬‭as‬‭someone‬‭in‬‭charge‬‭of‬‭HR,‬ ‭that‬ ‭we‬ ‭need‬ ‭to‬‭recruit‬‭diverse‬‭talents‬‭and‬‭evolve‬‭our‬‭offerings.‬‭We‬‭may‬‭deny‬‭about‬‭half‬‭of‬‭what‬‭we're‬‭already doing in order to become even better.‬‭So‬‭to‬‭the‬‭capital‬‭market‬‭participants,‬‭we‬‭will‬‭strive‬‭to‬‭convey‬‭our‬‭messages‬‭in‬‭an‬‭easy‬‭to‬‭understand‬‭manner,‬‭ o I hope you will keep in touch.‬s‭ hen:‬‭Thank‬‭you‬‭very‬‭much‬‭everyone.‬‭We‬‭would‬‭like‬‭to‬‭conclude‬‭Investor‬‭Update‬‭Day‬‭2.‬‭Tomorrow‬‭is‬‭Day‬‭3,‬S‭the‬ ‭Prosper‬ ‭Together‬ ‭session.‬ ‭Ayano‬ ‭Senaha,‬ ‭COO,‬ ‭and‬ ‭three‬ ‭outside‬ ‭members‬ ‭of‬ ‭the‬ ‭Sustainability‬‭Committee are going to attend. We hope to see you tomorrow. Thank you.‬‭[END]‬‭Forward-Looking Statements‬‭ his‬‭document‬‭contains‬‭forward-looking‬‭statements,‬‭which‬‭reflect‬‭the‬‭Company's‬‭assumptions‬‭and‬‭outlook‬‭for‬T‭the‬ ‭future‬ ‭and‬ ‭estimates‬ ‭based‬ ‭on‬ ‭information‬ ‭available‬ ‭to‬ ‭the‬ ‭Company‬ ‭and‬ ‭the‬ ‭Company's‬ ‭plans‬ ‭and‬‭expectations‬ ‭as‬ ‭of‬ ‭the‬ ‭date‬ ‭of‬ ‭this‬ ‭document‬ ‭or‬ ‭other‬ ‭date‬ ‭indicated.‬ ‭There‬ ‭can‬ ‭be‬ ‭no‬ ‭assurance‬ ‭that‬‭the‬‭relevant forecasts and other forward-looking statements will be achieved.‬‭ lease‬ ‭note‬ ‭that‬ ‭significant‬ ‭differences‬ ‭between‬ ‭the‬ ‭forecasts‬ ‭and‬ ‭other‬ ‭forward-looking‬ ‭statements‬ ‭and‬P‭actual‬ ‭results‬ ‭may‬ ‭arise‬ ‭due‬ ‭to‬ ‭various‬ ‭factors,‬ ‭including‬ ‭changes‬ ‭in‬ ‭economic‬ ‭conditions,‬ ‭changes‬ ‭in‬‭individual‬ ‭users’‬ ‭preferences‬ ‭and‬ ‭business‬ ‭clients'‬ ‭needs,‬ ‭competition,‬ ‭changes‬ ‭in‬ ‭the‬ ‭legal‬‭and‬‭regulatory‬‭environment,‬ ‭fluctuations‬ ‭in‬ ‭foreign‬ ‭exchange‬ ‭rates,‬ ‭climate‬ ‭change‬ ‭or‬ ‭other‬ ‭changes‬ ‭in‬ ‭the‬ ‭natural‬‭environment,‬‭the‬‭impact‬‭of‬‭the‬‭spread‬‭of‬‭COVID-19,‬‭the‬‭occurrence‬‭of‬‭large-scale‬‭natural‬‭disasters,‬‭and‬‭other‬‭factors.‬‭ ccordingly,‬ ‭readers‬ ‭are‬ ‭cautioned‬ ‭against‬ ‭placing‬ ‭undue‬‭reliance‬‭on‬‭any‬‭such‬‭forward-looking‬‭statements.‬
A‭The‬‭Company‬‭has‬‭no‬‭obligation‬‭to‬‭update‬‭or‬‭revise‬‭any‬‭information‬‭contained‬‭in‬‭this‬‭document‬‭based‬‭on‬‭any‬‭subsequent developments except as required by applicable law or stock exchange rules and regulations.‬‭This transcript is provided for the convenience of investors only and this is a translated version of the Japanese call.‬‭20‬