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Masa Ito: JPMorgan Securities. Mori san, please go ahead.

Haruka Mori: Thank you for allowing this opportunity. So I have two questions. My first question is Idekoba San and second question to Kitamura san.

First is HR technology. Under COVID, what kind of share expansion did you experience? So if you could share with me the information again, so a response to our job ad per case. So in the FAQ, you showed us the information. So, based on that, the last year’s result grew by 16% or more. I think it was a 70% growth in terms of numbers.

So the number of accounts and the revenue per job ad, how did you outperform your projection? So revenue per job ad, long term upside potential, how do you see the long term upside potential? So that is my first question. Second question is about Air business tools. Air pay penetration, your 2.9 million yen, TAM, currently you stand at around 10%. So the penetration how do you evaluate your current penetration? You may have slowed down a bit due to COVID. But given the current circumstances, do you think it is sufficient, this current pace or do you want to pick up the pace and accelerate further? And AirPAY although a little different, had been consumer center but is now having a business version smart up.

So there are players that are making big investments. So if you have to compete head on what do you think you need to do? Thank you. Two questions.

Hisayuki Idekoba: Today Mr. Idekoba and Mr.

Arai will answer these questions just so that you know, okay. So first HR Tech, the market under COVID. A third party conducted a survey and according to that HR matching market, the overall market grew by 33% year-on-year and job add and the talent sourcing tool grew by 36% year-on-year. So that is according to the third party survey. So our revenue growth is over 100%.

So our market share has increased we think. Now medium to long term growth per job ad, as I alluded to earlier, ultimately speaking, revenue, it's not so much the revenue per job, it's the revenue per hire. That is how we have to evolve going forward. So for the sake of calculation, this is two-stage calculation, but this time revenue grew, because the unit price per job ad increased, but also the number of jobs increased and the increase in the number of jobs is -- so the number of jobs per customer increased and the number of clients also increased, business clients increased. So how many business clients successfully hired? Of course there were corporate clients who failed in hiring.

So the job add, it’s advertisement. So it's not gamble. I wouldn't say gamble but it is payment for posting and as HR tech we take pay per performance method. And that is our value. So we want the payments to be in accordance with the performance and therefore CPC, cost per click, payments per click, to CPQA, so that to ensure that the applicants are qualified.

So pay when you are comfortable with the quality of the applicants. So this is what we wanted to do and achieve. Then the payment for successful hire will be the direct hire placement, the 25% to 35% billing for the annual income. So in terms of this per job ad, this is an advertisement style concept. So in terms of revenue per hire, we are only doing less than 1% of the salary.

We want to raise this to 2% to 3% Then how will this per job number be converted? For the job failure it will not be billed and therefore, on average will this go up or down? We think it will go up. But will it double or triple depends on the number of hire. So in the medium term, hire or qualified application at least, so person who the companies are willing to pay for. We want to come close to the cost in that area and increase this 1% to 2% to 3% of the annual salary. So this is how we would like to improve ourselves.

Junichi Arai: Next is Air business tools penetration and our current view on this penetration. On a year-on-year basis, we saw more than 30% growth. Of course under COVID we slowed down but still this is the result and now expecting the recovery from COVID going forward. So dining or travels while they slowed down, we still had 30% growth year on year. So this was a good reasonable growth.

So going forward rather than growing on the short term, depending on the campaign, there are companies that are showing some short term growth, but other players but we want to focus on growing in the medium to long term. So we will take steady steps to achieve that. In AirPAY is now launching a business service for businesses and other players. Few players are now launching their service for businesses. I understand that.

For now, according to our survey or our hearing from the frontline, I do not hear that those players are increasing their market share. But we -- our strength is not spending large marketing cost. We not aerial fight if you will we want a ground fight or working hand-in-hand with the clients, with our clients closely. Thank you very much.

Masa Ito: Kato san from CLSA Securities please.

Jun Kato : This is Kato. Can you hear my voice? Thank you very much for this opportunity. I have two questions. First of all, in HR tech, the global matching market. This is also related to Mori san's question but I like to ask about the competition here.

Together with LinkedIn revenue, 70% of 26 trillion is accounted for. And there's a 10% increase every year. And you and LinkedIn, do expect the two players to be the dominant players going forward? And do you see revenue ramping up in other emerging markets? And are you expecting new players in the competition, whether it is a traditional service providers? Or is it going to be an immersion type of companies? The second question is also related to HR technology. Within HR tech, indeed, traditional advertisement income, how much does it account for? And also in the next three to five years period how are you going to evolve that? And other than advertisement, what kind of revenue do you expect? And do you have any numerical targets?

Junichi Arai: Thank you. Regarding your first question.

So out of the 26 trillion I believe you said that we and LinkedIn account for 70% together. But I believe that is not true. The two companies do have a high market share in the job advertisement market. But am I understanding your question?
Jun Kato : Right. Yes.

Junichi Arai: So conventionally, over the past three to five years, what we've been saying is that from job advertisement hiring tools market, we would like to expand into other markets. That has been our challenge over the past five years. And we included it this in our disclosures this time, but domestic hiring placement service, including Recruit Agent, such company's hiring operation. Well 30% or 35% of the first year salary is how we bill for the services. But recruiters, the so called recruiters have been manually working on matching in these businesses.

We are trying to evolve this using AI algorithm. We have been testing that over the past six months. For the number of interviews we have seen significant increase. What I'm trying to deliver here is that the HR matching market or hiring tools market or job advertisement is rather a minority. It is accounting for a small proportion.

And the placement service market is actually double the size of that. And how we bill the clients, is quite different here. When hire is made, if we bill for every hire, we will have better monetization. And from customer's point of view, there will be no waste of cost for hiring activity that may not be successful. However, there's something in the middle as well.

Maybe we can ask clients to pay if they believe they thought the applicant the candidate is reasonable for them to target at. So with that kind of change we would like to go into the placement market. For corporate clients, HR operations which is mostly manual today could be a shifted to a new digital form in order for us to increase our revenue. That is what we envision. So it is no that we aim for extremely high market share only in the job advertisement market.

And indeed, online job advertisement percentage in terms of revenue, it accounts for about 90% of the total revenue, which is basically the majority of the revenue today. And how we're going to transition from here is how we recognize revenue may change and we have been testing different options in three to five years. We do not have any clear numerical target as to what percentage we would like to achieve. However, we're seeing increase in the number of clients and if we can ask them to pay for the service if we find a reasonable applicant, and we are still not sure whether we can call that a job advertisement business. Perhaps it is close to booking for travel and restaurants, which is a paying per performance type of mechanism, rather than advertisement revenue, maybe it will be called a matching revenue.

Various monetization options will be explored going forward. Thank you.
Jun Kato : And what about your competitor? Where do you expect your competitor from?

Junichi Arai: As of today, to be honest, well, globally speaking mainly in Europe, we still see traditional job for business models. And therefore, I believe in many countries we can generate revenue in this area, but in terms of new business models, who could be our competitors? As of today, we do not see any potential competitors. But do you have any particular competitor in your mind?
Jun Kato : No, I was just asking out of curiosity.

Thank you. That is all. Thank you very much.

Masa Ito: SMBC Nikko Securities Mr. Maeda?

Eiji Maeda: Yes, one question on media and solutions.

Earlier in the presentation you showed us the ecosystem. So currently, how is this working? Each media advertisement sales, they collaborate link with each other to scale up their revenue. Is it still in the development phase and still take time for monetization? Or is it already producing significant results and impact as the advertising and media? Advertising media revenue, I think it's big but SaaS, when do you think you can say you've transformed SaaS. Around when do we can expect that?

Junichi Arai: Thank you for the question. So M&S, SaaS, existing advertisement sales and the linkage there.

And as monetization change, when can we say we have successfully transformed to a SaaS business model? So I understand that was your question. This is a difficult question to answer. But first, the existing SaaS business or the current advertising business in SaaS linkage collaboration. This depends on domain. It differs from domain to domain.

For example, in dining or beauty the SMEs or each individual customers are small. AirPAY usage is high in this area, it's increasing. Now, if you look at AirPAY alone, hotels, Inn in Japanese have introduced considerably but we cannot say that great number of customers are using it, not just yet. And so hotels and Japanese inns we are trying to come up with a separate SaaS solution. So hotels and Japanese Inns have their unique original website.

And that booking system we are offering our SaaS system in their booking site so that they can use it. So it's a different kind of support. And we monitor that. And so it's difficult to say how much linkage there is between SaaS and the advertisement revenue because the area is very broad but simply put, the advertisement domain and booking transaction domain. So, in terms of affinity transaction type area is closer to SaaS type business model.

That is our take. And when can we say we successfully transform the SaaS business. Currently the number of customers with the advertisement style and the SaaS type, the number of customers with SaaS is exceeding, is more. But in terms of that revenue amount we have more advertisement type customers. So in terms of ARR, if we calculate using value as sales, if SaaS sales account for 30% to 40%, then we can say we are starting to transform successfully to SaaS type business model.

But we are not there yet. Does this answer your question?

Eiji Maeda: Yes. Thank you.

Masa Ito: Thank you. I'm conscious of the time, we can take one more question.

Fukuyama from UBS Securities, please.

Kenji Fukuyama: Thank you for this opportunity. I have two questions. First is related to HR technology. First is related to hiring.

Can you recap the hiring situation? In FY 2021, you mentioned there are 13,000 hires. But what was the progress against target? And in FY22, I believe you're forecasting 30% increase in the headcount. I would like to ask this question in order to confirm the accuracy of this target. And second question is related to corporate clients shift to CPQA model, what kind of technological breakthrough do you think you would need to achieve that? Thousands of applications are being processed automatically, sounds pretty difficult. Is this really achievable? And this is a solution where clients assess candidates, and from the viewpoint of neutrality, is it going to be difficult for you to provide as a service?

Junichi Arai: Thank you for your question.

First of all, 30% increase in headcount for this fiscal year. Well, last previous fiscal year was concentrated in the second half, especially after October hiring activities accelerated. When we look at the number of recruitment per month, it continued to increase every month. And as a result, the number of headcount increase was close to 3,000. In that sense, in February and March, the progress as hiring has been larger.

To put it simple, if you imagine sales having 100 clients to 200 clients, that is the kind of change the sales reps have been experiencing, even with the same headcount. Therefore, we've been quickly picking up the numbers of sales reps. Therefore, actually, we have fewer hiring plan in the second half of the year, when we look at the current progress at a quite high probability, we're confident that we can achieve 30% increase. Especially in the U.S., high commission is paid for the sales people. So if the economic situation deteriorates, I'm afraid that the situation might change but at least for now, that is the situation.

And secondly, introducing CPQA for corporate clients, well, large corporate enterprise clients are already using the SaaS-based platform for some of the services. Why is that? There have been a lot of clients struggling to hire people. As soon as the candidates flow into the platform, they disappear. They have that kind of experience. So utilizing indeed IP, if they can use their assessment, they can enjoy higher yield.

And they have learned that from the past experience. So if they have a clear target of hiring, a lot of clients choose to use our platform. And in terms of CPQA, if they have 1,000 open jobs, if they really want to secure hiring for the 50 jobs out of 1,000, they can pay for that 5%. But even when they say open jobs, it doesn't mean that they would like to hire anyone. They're looking for very attractive talent.

But at the same time, they have open jobs, where they're willing to hire essentially anyone. So the situation varies, but the platform is already used by many clients. And a lot of SaaS solutions are going to be using API connection. And for various HR tasks, we have been working with clients hand in hand to test integration or to discuss integration. And this is based on requests from enterprise clients in a long term perspective.

We believe this is going to continue as a trend. I hope that all satisfies your question.

Kenji Fukuyama: That was very clear. Thank you very much. Thank you.

Masa Ito: Thank you so much. We apologize that we were unable to address all the questions but we would like to conclude today's earnings call. With regards to the long term strategy, help businesses work smarter and prosper together, we're planning to hold a one hour presentation and Q&A session at a later date. Prosper Together will be facilitated by Senaha at 5 pm Tuesday, June 28 and Help Businesses Work Smarter will be facilitated by Kitamura at 4 pm, Tuesday, July 12. The details are going to be provided on our IR website.

Thank you very much for attending today once again. This concludes today's earnings call.