Like many other businesses globally, Recruit Holdings witnessed a tumultuous period this past quarter. However, its revenue showed signs of recovery in July.

In Q1, revenue fell 20% year-on-year to Y475.4 billion ($4.5 billion U.S.), which together with escalating operating expenses related to Covid-19 measures drove operating income sharply down 63% to Y27 billion.

“Operating income significantly decreased due to tumbling revenue and 9.8 billion yen of operating expenses,” Recruit Holdings said in its earnings report. Emergency measures caused unusual operating expenses.

Adjusted earnings per share dipped 48% to Y17.49. However, the company’s consolidated revenue for July surpassed that of June.

HR Technology

The segment covers job marketplace and recruitment and employer-review site Its quarterly revenue fell 28% to Y74.1 billion and 26% to $689 million.

The company attributed the downtrend to falling job ads and tepid demand for recruitment products.

The segment’s adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) plummeted 59.4% due primarily to falling revenue. Adjusted EBITDA margin was 10.6% compared to 18.9% the same period a year ago.

Notably, the global recruitment giant pumped the brakes on investments in sales and marketing, as well as new hiring in March.

Recruiting in Japan

Quarterly revenue from the group’s jobs sites in Japan — including Indeed JapanRikunabi Next and — decreased 32% to Y49.1 billion. This was again due to expansive economic malaises from the preceding quarter.

Revenue for housing and real estate segment mostly came from advertising on Recruit’s Japanese property vertical, In Q1, the segment’s revenue dropped 7% to Y25 billion.

In July, the overall company’s revenue decreased approximately 15% year-on-year, which was slightly worse than that of June. Monthly revenue in the HR Technology segment decreased approximately 7% in dollar terms.

Recruit didn’t provide financial guidance for the whole of FY2020, citing significant uncertainty in the forecast. But it does expect that Covid will continue to have an effect on its bottom line.

“The company expects that the global spread of Covid-19 will continue to have a significant adverse impact on financial performance in Q2 FY2020 and beyond,” it said.

Recruit Holdings was founded in 1960 and operates 18 recruitment, auto, and real estate sites, as well as dozens of staffing companies worldwide.

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