Indeed pulled in 35% more revenue from each job posting on its U.S. platform in the April-to-June quarter than a year earlier.
Earlier this month Recruit Holdings reported that revenue in its U.S. HR Technology segment, which is almost entirely Indeed, rose 30% year over year to $1.64 billion. That surge in revenue came as U.S. job post volume fell about 4%.
The revenue strength came from the rising prices as well as employers buying more sponsored jobs and add-ons. Indeed has been decreasing the visibility of free job postings recently, and the efforts appear to have been successful at transitioning employers to paid products.
CEO Hisayuki Idekoba, who goes by Deko, was candid on a recent analyst call that increases in client spend have been steep. “It’s also true that average spend per client has risen rapidly over a short period,” he said, according to Recruit’s English translation of the call, which was conducted in Japanese. “To protect our sustainable, mid to long-term growth, we will continue to monitor client satisfaction very closely.”
Robust revenue growth off a shrinking base of postings is not sustainable, so the company is looking to a larger market for its future growth. Rather than the $34 billion job advertising market, CFO Junichi Arai told analysts the company is targeting employers’ total hiring expenditures, which it estimates at $200-$300 billion, depending on what is included in the figure.
He’s talking about money that currently goes to recruiter salaries and agency fees.
“Rather than simply selling software tools, to put it very simply, we are eliminating downstream processes,” Deko said. “Even when an employer doesn’t want to interview 20 or 30 candidates they don’t plan to hire anyway, they still end up having to manually review each resume, verify licenses, contact candidates, and so on. By targeting and delivering extremely high-quality candidates right from the start, we are effectively eliminating that downstream work.”
Clients, he said, “might compare AI sourcing or AI screening against their internal in-house recruiters, or more often, it results in them reducing their reliance on external placement agencies.”
The company sees a future where much of the work that has traditionally been done by recruiters is handled by Indeed. If this vision sounds familiar, it’s because it describes an agentic future where AI automates the nuts and bolts of recruiting that take so much time. It’s a vision shared by every major software company in the talent space.
Indeed brings something to the table that these companies — except for LinkedIn — can’t match. Sam Fitzroy, CEO of the candidate conversion platform Dalia and a former senior director at Indeed, put it this way: “Indeed has something the rest of the industry largely doesn’t: a consumer brand that generates massive amounts of free job seeker traffic. Until someone builds a product that meaningfully competes with Indeed for job seeker attention, the dynamic isn’t going to change.”
When asked by an analyst how Indeed planned to get past resistance from HR departments, Deko said that Indeed has changed who it calls. “Previously, we rarely had opportunities to speak directly with CFOs or CEOs, but those instances have increased dramatically over the past six months or so,” he said. Indeed has started sponsoring CEO-level gatherings and major events, including the World Cup, and hosting client dinners around them.
Indeed deliberately does not open with cost-cutting when pitching new business. Instead, it invites enterprises to trial premium products on the promise of reducing downstream work, and expands from there. “Many HR professionals themselves are simply glad that their manual workload is reduced, especially since many of those tasks were already outsourced to begin with,” he said. “So we haven’t experienced as much pushback as one might expect.”
