HeadHunter Group PLC

Q3 2021 revenue was RUB4.7 billion, with revenue growth described as triple-digit and about 103% year over year. Adjusted EBITDA margin was 60.4%, and management said organic segments’ margin was about 64%, versus 56.6% in Q3 2020 for the same segments. Small and medium accounts revenue increased 106% year over year; key account average check increased 71%; vacancies on the platform reached 1.1 million, including 1 million paid vacancies; and value-added services revenue exceeded RUB0.5 billion, up 136%. On cash flow, operating cash flow was RUB2.5 billion, CapEx was RUB49 million, net debt fell to RUB2.3 billion, and leverage was 0.3x adjusted EBITDA. For full-year 2021, management raised revenue growth outlook to 81%-84% and said this implies over RUB15 billion of revenue; they also said Q4 margin should be lower than Q3 and historically has been 4 to 10 percentage points lower.

The CEO framed the quarter as exceptionally solid and said the company doubled its revenue base versus 2020 while hitting all major KPIs. He highlighted continued investment in product innovation, especially a reworked employer mobile app aimed at SMEs and non-recruitment users, where early conversion improvements of 10% to 20% were seen. He also pointed to experiments in job seeker reviews with DreamJob and a strategic push into self-employed and adjacent markets through YouDo and related initiatives.

The CFO said Q3 adjusted EBITDA margin exceeded 60%, helped by strong revenue growth and operating leverage, while consolidation of Zarplata and Skillaz diluted margin by about 4 points. He cited total operating expenses excluding D&A of about RUB2 billion, marketing expense at 12% of revenue versus 10% last year, personnel expense at 19.3% of revenue versus 24.3%, and CapEx of RUB49 million, or circa 1% of revenue. He also noted operating cash flow of RUB2.5 billion, net debt down to RUB2.3 billion from RUB5 billion at year-end 2020, leverage at 0.3x adjusted EBITDA, and a buyback program to repurchase about $27 million of ADRs over nine months through June 2022, with 52,000 ADRs repurchased for circa $3 million by November 8.

Analysts asked about 2022 budgeting, the mobile employer app, the impact of November lockdowns, Skillaz growth, adjacency expansion, regional share trends, marketing focus, and the size of the self-employed market. Management said it was too early to give formal 2022 guidance, but monetization should be more visible than customer-base growth, with subscription rollout and pricing changes expected to help; they also said next year’s budget will include investment spending. On the lockdown, management said they saw a one-week deceleration and estimated they lost about 25 percentage points of growth versus the prior week, with smaller impact in key accounts than in SMEs. On Skillaz, they said 4Q is usually strongest and suggested about RUB400 million of 2021 revenue, while on the self-employed market they said Russia could grow from about 2 million self-employed to 20 million in three to five years.