Examining the results of HeadHunter: it was worse only in the midst of COVID‑19

Examining the results of HeadHunter: it was worse only in the midst of COVID‑19

Examining the results of HeadHunter: it was worse only in the midst of COVID‑19

HeadHunter Group PLCHHR15,03 $

Sales structure of the company

The main income of HeadHunter comes from its own online platform, which offers potential employers and recruits paid access to its extensive resume database and job posting portal. Besides, the company is also trying to integrate as many additional services as possible into its core products., to improve the efficiency of the entire ingestion process.

HeadHunter divides its income in three different ways.

Income by type of service. this group consists of four segments:

  1. Vacancy announcements. Clients of the company buy the right to place on HeadHunter a certain number of ads about their vacancies for a certain period.
  2. Access to resume database. HeadHunter provides access to its resume database on a subscription basis for a period of one day to twelve months.
  3. Comprehensive subscription. The company opens access to its resume database and allows clients to post job postings on its website.
  4. Additional products. This is a media ad., echar branding, HR analytics, lead generation, offline events in the field of personnel management and premium services for job seekers.

In the second quarter of 2022, only the "Integrated Subscription" segment showed a positive trend., increased by 17% to 1.195 billion rubles. The main reason for the positive results is that customers usually paid for a subscription for several months at once.. The remaining areas of activity on average showed a decrease in revenues on 5%. The reason is the departure of foreign companies from Russia.

Income by type of clients. The company divides its clients into three groups:

  1. Key customers are customers, which simultaneously hosted more than 10 of vacancies or have used a subscription for 180 days or more.
  2. Medium and small accounts are clients, those who did not pass into the first group. These typically include small companies with fewer than 100 employees..
  3. Other. These are mainly foreign clients in Russia and other clients in other countries.

The results of the segments are diametrically opposed. "Key customers" grew by 7,9% against the background of annual price indexation, "Medium and small accounts" decreased by 2,3% by reducing the number of customers. The indicators of the "Other" group have not changed.

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Income by geography. The company identifies three business areas:

  1. Moscow and St. Petersburg.
  2. Other regions of Russia.
  3. Other. Here the company includes income from foreign clients in Russia and other clients in other countries.

Almost all of these segments remained at last year's level., except for "Other regions of Russia", which has increased by 7,5% to RUB 1.417 billion due to an increase in the number of Key Customers by 9%.

HeadHunter sales structure

By type of service 2к2021 2к2022 The change
Vacancy announcements 1,700 1,637 −3,7%
Comprehensive subscriptions 1,021 1,195 +17%
Access to resume database 0,807 0,753 −6,7%
other services 0,382 0,369 −3,4%
By type of clients 2к2021 2к2022 The change
Key clients 1,205 1,300 +7,9%
Medium and small accounts 2,250 2,198 −2,3%
Other 0,456 0,456 0%
Geography 2к2021 2к2022 The change
Moscow and St. Petersburg 2,080 2,081 0%
Other regions of Russia 1,375 1,417 +7,5%
Other 0,456 0,456 0%

HeadHunter sales structure by type of service

HeadHunter sales structure by customer type

HeadHunter sales structure by geography

HeadHunter operating results

HeadHunter management only discloses two operating metrics. The first is the number of paying customers, which in the second quarter of 2022 decreased by 7,6% up to 242 thousand user accounts against the background of falling demand in the segment "Medium and small accounts".

The second operating indicator is ARPC, or average revenue per customer, which is calculated by dividing the total revenue of the company by the total number of paid users. In the reporting period, ARPC for "Key Customers" increased by 3%, and "Medium and Small Accounts" — to 6,6% thanks to the annual price increase in January.

Besides, there is also one third-party profile operating indicator, which calculates the average daily unique audience of the main site HeadHunter. In the second quarter of 2022, this figure decreased by 4,4% from 16,252 to 15,544 million views year-on-year.

Examining the results of HeadHunter: it was worse only in the midst of COVID‑19

Financial results

HeadHunter's revenue in the second quarter of 2022 increased by 1,1% to RUB 3.955 billion against the backdrop of ARPC growth and good results of the Key Customers segment. However, after rising on 57% last quarter and growth on 93% in 2021, current numbers look bad, although in 2021 there was a "low base" effect after the pandemic.


Adjusted EBITDA of the online platform decreased by 26% to RUB 1.676 billion due to operating expenses, which have increased by 42%. The main items of expenditure – marketing and personnel. EBITDA margin decreased by 15.5 percentage points to 42,4%.

In the current reporting period, the Russian ruble strengthened strongly: the cost 1 $ fell from 84 to 51 R. This led to a negative currency revaluation of HeadHunter investments in the amount of 0.976 billion rubles and the appearance of a net loss of −0.321 billion rubles.. Adjusted net profit amounted to 0.961 billion rubles.

Key financial results HeadHunter, billion rubles

2к2021 2к2022 The change
Revenue 3,911 3,955 +1,1%
Adjusted EBITDA 2,264 1,676 −26%
EBITDA margin 57,9% 42,4% −15.5 p. P.
Net profit 1,279 −0,321
Adjusted net income 1,523 0,961 −36,9%
net debt 1,214 3,663 +201,7%
net debt / EBITDA 0,1 0,4 300%

What prevents the company

There are two negative factors, that prevent the company from restoring its capitalization. The first is the fall of the Russian economy.. According to the latest report of the Central Bank, the government in the baseline scenario expects, that the peak of GDP decline will be in the fourth quarter of 2022. This means, that the financial results of the online platform in the second half of 2022 may be even worse.

The second negative factor is infrastructure risks., which do not allow Russian issuers to distribute dividends and other coupon payments on their depositary receipts. ADR HeadHunter with 26 February are not traded on NASDAQ, but continue to trade on mosbirzh, although it is impossible to receive dividends on them due to the current restrictions. Since the beginning of spring, Russian investors have begun to bypass them., fearing the blocking of securities by Western governments.

Besides, ADR HeadHunter does not fall under the automatic conversion of depositary receipts, which started 15 August and should last until 19 august. The current process will allow Russian investors to receive shares instead of receipts, bypassing foreign accounting infrastructure.

What's the bottom line?

The departure of foreign business from Russia and geopolitical uncertainty led to, that HeadHunter in the second quarter of 2022 showed weak financial results: the company's revenue grew by only 1,1%, and adjusted EBITDA and net income decreased by 26 And 36,9% respectively.

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Given the latest forecast from the Central Bank of the Russian Federation, probably, the worst of the online platform is yet to come, therefore, investors should take a short pause in the matter of new purchases of the company's shares..

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