Monster Worldwide,'s CEO Discusses Q2 2011 Results - Earnings Call, Jul 28, 2011 Transcript

 |  About: Monster Worldwide, Inc. (MWW)
by: SA Transcripts


Good morning. My name is Carrie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Monster Worldwide Second Quarter 2011 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to, Lori Chaitman, Chairman, Vice President of Investor Relations. Thank you. Ms. Chaitman, you may begin the conference.

Lori Chaitman

Good morning, and thank you for joining us on Monster Worldwide's Second Quarter 2011 Conference Call. We will have formal remarks from Sal Iannuzzi, Chairman, President and Chief Executive Officer; and James Langrock, Executive Vice President and Chief Financial Officer. In addition to Sal and James, several members of our executive management team are available to answer your questions during the Q&A part of the call. They are Tim Yates, Andrea Bertone, Darko Dejanovic, Patrick Manzo, Michael Miller, Lise Poulos and Mark Stoever.

Before we begin, I'd like to remind you that except for historical information, the statements made during this conference call constitute forward-looking statements under applicable securities laws. Such forward-looking statements involve certain risks and uncertainties, including statements regarding the company’s strategic direction, prospects and future results. Certain factors, including factors outside of our control, may cause actual results to differ materially from those contained in the forward-looking statements, including economic and other conditions in the markets in which we operate, and the other risks discussed in our Form 10-K and our other filings made with the Securities and Exchange Commission.

With that, I'd like to turn the call over to Sal for his comments.

Sal Iannuzzi

Thank you, Lori. Good morning and thank you, all for joining us for our second quarter conference call. We are pleased with our financial performance and continued stronger execution of our strategy during the quarter.

Consolidated bookings increased 26% year-over-year, while bookings of our core global careers business were up 30%. Consolidated revenue grew 25% year-over-year and global careers increased 28%. Operating expense remains well under control, with an increase in operating income equivalent to 50% of the increase in revenue over the first 6 months. EPS was $0.09. EBITDA was $48 million.

James will provide detailed financial commentary, I will update you on recent product development, provide high-level commentary on our bookings trend and provide our guidance for the remainder of the year.

While generating stronger financial results, we continue to enhance our global product portfolio. BeKnown launched late in the quarter, is Monster's new professional social network application on Facebook, and brings Monster's global leadership in connecting people to jobs together with the world's largest and most active social network. It is another important tool in our arsenal for connecting seekers with employers. BeKnown was launched simultaneously in 35 countries and 19 languages, and is steadily gaining members. We continually enhance BeKnown as we receive feedback from our members. We plan to launch mobile BeKnown by the end of the third quarter.

Our Enterprise Suite product, SeeMore, was formally launched last week in North America, and the U.K. SeeMore is a cloud-based semantic search and analytics platform that enables our customers to manage their own resume databases. Built on 6Sense search, SeeMore allows companies to search all their recruitment resources and talent pools from one place, so they can easily identify, access and match their talent. The feedback from early users of the SeeMore has been consistently positive.

PRS continues to be an important product for a large section of our client base, representing around 50% of resume search product bookings in the U.S. On a global basis, Monster today has the broadest product portfolio in our industry, has large and diverse sources of traffic and the most advanced technology for precisely matching jobs and candidates.

As you know, Monster's rate of new product introduction has significantly increased in recent years. Our new product portfolio can, PRS, SeeMore, and now BeKnown, combined with our core product, position us well to win business even in today's uncertain market environment and will drive bookings and revenue growth this year and into the future. Our core search technology and investment in global infrastructure have enabled us to build and deliver these new products to our customers, quickly and cost efficiently.

We will continue to introduce new products and features while enhancing our existing portfolio all within a [indiscernible] short and long-term profitability and when -- within our expectation of 50% of incremental revenue will drop to the operating income line.

Turning to bookings for the quarter. Each quarter recently has had its own set of economic and political uncertainty. This quarter among others, the market confronted $115 oil prices, the possibility of a Greek and other European countries defaulting and the continuing recovery from the Japanese earthquakes and tsunami. In this environment, our consolidated bookings increased 26%. Our global careers bookings increased 30%.

Fueled by strong international performance, international bookings now approximate 50% of total bookings. Europe's bookings growth was 37%, driven by exceptionally strong performance in our German and Southern European business. We are capitalizing on the strong German economy and continued conversion from all points of online spend in the European markets.

Asia Pac bookings grew by 29%, with strong year-over-year growth rate in Korea and India, and a pick-up in the growth rate in China to 25%. North American growth was 26% in spite of the soft spot being experienced in the U.S. Revenue from our non-government U.S. client, including their media and the international spend increased approximately 30% on a year-over-year basis. While it is impossible to be precise, we estimate that approximately half of that growth was generated organically.

IAF bookings was down 1% year-over-year. A strong increase in our display advertising was offset by a decrease in our lead generation business. Leads historically, have been generated from Monster's own site, we refer to this as organic traffic. And also through a series of third-party affiliates, we refer to this as arbitrage.

In general, the leads generated organically are of a higher quality to our clients than arbitrage leads, and therefore, result in higher profitability to Monster. As a general rule of market, as an arbitrage opportunity becomes well known, the profitability of that arbitrage is reduced. And we believe that has happened in this market.

For a number of quarters, the profitability in the arbitrage lead gen business largely in the for-profit education space has been in decline, and is currently operating around breakeven. The fact that the lead gen arbitrage profit opportunity has diminished and is not likely in our opinion to return, combined with the new regulations for-profit education space, have led us to stop the arbitrage part of our lead generation business. James will quantify this in his comments, but in making this decision, we are no longer participating in a business that has contributed little, if anything, for our operating income.

To reiterate, since this business is breakeven, it will have no impact on operating income and will improve operating margin. IAF now has a strong display business and a healthier more profitable lead generation business, and we are optimistic about its future growth and profitability.

Summarizing the quarter. Our introduction of BeKnown and SeeMore demonstrate our continuing commitment to providing our customers with the most advanced recruiting tools in the market. We have previously commented that our business is broader than job postings and resume. Our mission is to provide the best recruiting experience for our employers and seekers. We are agnostic about the tools and products we use to accomplish this. Both SeeMore and BeKnown are excellent examples of this philosophy. SeeMore helps us find to identify candidates regardless of the source, and BeKnown is a huge -- opens a huge potential network of Facebook users who might previously not have come directly to Monster's site.

We are pleased with our consolidated 26% bookings growth, particularly the 30% growth in our global careers business. The decision to no longer participate in the arbitrage activity puts the remaining IAF business in a stronger and more profitable position. Consolidated operating margin improved to 6.3% and EBITDA margin to 18%, trends which we expect to continue.

Turning to our outlook for the remainder of the year. While I run the risk of sounding like a broken record by continually pointing out the uncertain environments, unfortunately we've been accurate in doing so. And currently, we are continuing to face extremely uncertain times. Therefore, it's important to context our guidance.

We don't expect a short-term dramatic change in the macroeconomic and political environment, either positive or negative. Of course, we have had a negative shot -- if we were to have a negative shot, we are prepared to take the appropriate action. We characterize the current environment as sluggish economic growth, continuing uncertainty and volatility in the market and continuing high unemployment rates in the United States. Based on that scenario, we currently expect for the third quarter, both bookings and revenue, to increase in the range of 20% to 25% and EPS in the range of $0.10 to $0.14. We reiterate our full year bookings and revenue increase of 20% to 25%. We now forecast 2011 EPS of $0.40 to $0.48.

Now I'd like to turn the call over to James to bring us deeper into the numbers.

James M. Langrock

Thank you, Sal, and good morning, everyone. Turning to Slide 6, our second quarter pro forma income statement. Bookings were $262 million, a 26% year-over-year increase. Bookings were positively impacted by 6% of currency translation on a year-over-year basis. Revenue increased 25% to $270 million and was also positively impacted by 5% of currency translation. Total operating expenses were $253 million, flat on a sequential basis and up 19% year-over-year, which included a 4% negative currency impact.

The second quarter of 2010 was the trough in our operating expenses last year. Operating income was $17 million versus $12 million in Q1 and $2 million in last year's second quarter. Currency had a net positive impact on operating income of approximately $1.9 million compared to last year's second quarter. Interest in other was a loss of $500,000.

During the quarter, we had a small gain from our residual auction rate securities. In Q3, interest expense should approximate the level of Q1. Equity income was essentially breakeven, reflecting the continued profitability improvement of our joint venture in Australia. We expect equity income to be around breakeven in Q3 and Q4.

Net income was $11 million. EPS was $0.09 compared to $0.05 in the first quarter and breakeven in Q2 2010. This quarter, there are no pro forma adjustments to call out.

Turning to Slide 7. Salary and related expense was $132 million, a 2% sequential decrease and a 15% year-over-year increase. The sequential decline in salary and related was the result of the normal reduction in benefits expense, partially offset by currency translation and by an increase in the average headcount. Marketing expense during the quarter was $59 million, a 1% sequential and a 25% year-over-year increase. On a sequential basis, the increase in marketing expense is mainly attributable to currency translation.

The largest single contributor to the year-over-year increase was cost associated with the Yahoo! traffic deal. The Yahoo! traffic deal is performing as anticipated, with improvements in both unique visitors and conversion metrics. Recent data indicates that the traffic benefit previously enjoyed by one of our top U.S. competitors has been neutralized.

Office and general expense was $62 million during the quarter, a $2 million or 4% sequential increase and a 20% year-over-year increase. On a year-over-year basis, office and general was negatively impacted by currency translation, amortization related to HotJobs and by small increases in most corporate expense categories.

As you know, our EPS guidance is based on the assumption that 50% of our incremental revenue will drop to operating income. In the first half of the year, we have dropped approximately 50% of the increase in revenue to the operating income line. We are on track to achieve this profitability objective for the full year.

Slide 8 is our bookings and revenue trends summary. Bookings during the quarter were $262 million, a 26% year-over-year increase. The strong 30% increase in our global careers business was partially offset by anticipated weakness in IAF.

North American careers bookings increased 26%. Within North America, we saw a pick-up in our staffing and newspaper channels. After several quarters of lagging performance, we are encouraged by the recent trends and pipeline in the staffing sector.

Our newspaper business is being helped as we had anticipated by the HotJobs newspapers. Enterprise, telesales, healthcare channels, all experienced solid growth. As anticipated, the U.S. government business which increased 9% on a year-over-year basis, continues to lag our overall growth rate.

It's important to note that our government business is not predicated on federal or state government hiring. We sell solutions and services, more like software sales, that assist our government clients with their talent management. As such, our business has been impacted by the uncertainty surrounding the debt ceiling negotiations rather than by the direction of government hiring. We continue to have a historically large pipeline and currently forecast that the year-over-year growth rate of bookings will at least equal the corporate average.

Europe's bookings increased 37% led by a 58% increase in Germany, our largest market in Europe. While bookings in the Netherlands and the U.K. continue to lag the rest of our European markets, bookings growth in the U.K. did accelerate during the quarter.

Asia Pac bookings increased 29%, with the strongest increases continuing in Korea and India. China's growth rate picked up during the quarter to 25%. Developing markets, for example, our business in Mexico and Brazil, had significant percentage increases in bookings off a very small base.

IAF bookings were essentially flat during the quarter. Growth in display advertising was offset by declines in lead generation. In my comments about our guidance for the remainder of the year, I will quantify the bookings, revenue, operating income impacts of our decision to no longer engage in the arbitrage lead gen activity.

Slide 5 summarizes the performance of our operating segments. Consolidated operating margins during the quarter were 6.3% compared to 4.6% in Q1. Global careers operating margin was flat sequentially, with IAF's margin improved slightly to 5.5%. As the year progresses, we expect margin improvement overall.

Slide 10 summarizes our cash flow and liquidity. EBITDA was $48 million in the quarter. Net cash provided by operations was $28 million. This compares to $6.7 million in last year's second quarter, primarily resulting from the increase in EBITDA. This quarter's operating cash flow compared to the first quarter of $49 million was impacted by a seasonal reduction in deferred revenue and by bonus payments. Capital expenditures was $16 million, deferred revenue was $383 million. Net cash was $77 million, a $6 million increase over Q1.

As we have noted, we are no longer participating in the arbitrage lead gen business. On a full year basis, this activity was forecasted to produce revenue during 2011 of $50 million, essentially flat with 2010. On an operating income basis, this activity is essentially breakeven. Most of the operating expense associated with this activity is marketing spend to drive leads. With this in mind, we provide the following guidance on Slides 11 and 12.

For Q3, we anticipate bookings in the range of $266 million to $276 million. Revenue in the range of $260 million to $270 million. Both exclude $15 million of arbitrage lead gen business, which had previously been included in our forecast. EPS of $0.10 to $0.14. The arbitrage lead gen decision has no impact on EPS. For the full year, we currently anticipate that bookings and revenue will grow in the range of 20% to 25%. This excludes $29 million and $26 million of arbitrage lead gen from the second half of both 2011 and 2010. EPS in the range of $0.40 to $0.48.

Now I'd like to turn the call back to Sal for his concluding remarks.

Sal Iannuzzi

Thank you, James. At the start of the year, we forecasted that our business would grow bookings and revenue by 20% to 25% year-over-year. And we would bring approximately 50% of that increase in revenue to the operating income line. We remain fully committed to these financial objectives and are well on target to achieving them, even in the face of the continued confusion on the political and economic fronts. This strong forecasted performance for the full year is a testimony to the global breadth of our business, the strength of our technology and product, and the diversity and scale of our traffic. And the fact that we are serving our clients better as each quarter goes by.

Thank you very much. Operator, if we could now open it up for questions.

Question-and-Answer Session


[Operator Instructions] And your first question comes from Glenn Greene with Oppenheimer.

Glenn Greene - Oppenheimer & Co. Inc., Research Division

I guess the first question, given to all the sort of macro concerns out there. Wonder if you could give us a little bit of color on the trends you saw, sort of month-to-month-to-month throughout the quarter and kind of in the early part of this quarter through July? And maybe just contrast domestic versus international on a high-level.

Sal Iannuzzi

Sure. Sure, Glenn. I think that first in the United States, what we saw in Q2 was really not much different than Q1. I think business in general, there were brighter spots and slightly darker spots, but in general, business has been sluggish all year, more sluggish than we would have anticipated in the fall of last year. July is holding its own. It's actually doing better than we would have expected, given the overall negativity, if you will, in the marketplace, whether it be because of the factors I mentioned or, of course, the one that we all know of, the debt ceiling situation in Washington. So business, I will not say it's robust, but it is continuing along line and given the factors that are out there, actually performing better than we would have expected under these conditions. With regard to Europe, Europe has been a mixed story. The U.K. and the Netherlands continues to be sluggish as it has been. Since the end of last year, the last quarter or 2 of last year up until present. U.K., our business grew in the U.K. by about 8% to 9%, and that's been fairly consistent. Just as an example, where we've done very well and continue to see very strong performance is in Germany and in Southern Europe, France in particular. Now during the quarter, we did see a pause, particularly in France I guess, in the beginning of June roughly, there was a little trough there but then as we -- and we were watching it very closely, as you might expect, but as the month progressed, it finished very much on target to where we expected it to be. So there was a trough there, I think probably at the height of the concern regarding Greece and that quickly subsided. The best way to categorize it is people decide to -- companies decide to just wait and see, rather than commit. But then when things clarified themselves or felt more comfortable, they came right back into the market. That's pretty much in Asia, you didn't ask, but Asia has been consistently growing, the environment as still bullish, whether it would be India or Korea and China.


Your next question comes from Tobey Sommer with SunTrust.

Tobey Sommer - SunTrust Robinson Humphrey, Inc., Research Division

I was wondering if you could describe, give us a little bit more color on the strength in staffing that you touched on in your prepared remarks. And perhaps, give us some characterization of the performance of BeKnown to date.

Sal Iannuzzi

Sure. First of all, with regard to staffing, what we're seeing is the staffing industry in certain areas is bullish. Finance, technology, healthcare, are strong, and we're benefiting in those areas. There was overall, the unemployment numbers as we all know very well, unfortunately stand at about an average of 9.2%, 9.3%, but the unemployment numbers for college graduates stand at somewhere between 3% and 4%. And so there is a real push for talent, particularly in those 3 areas. The problem, if you will, is that employment of demands of people at the high school graduate, graduate-level and people that don't have a high school degree is still sluggish. The less educated are having the hardest time in the market. So where we are benefiting from the strength in the more highly trained, but we're still sluggish in others, and I think for the most part, that's also what's going on in the staffing company. Staffing companies have the added benefit I think right now, too. In the sense that they have significant portions of the business is in the temporary services and supplying temporary help. And our opinion is that, that will continue at least until there is more -- less confusion as to the direction of the economy and actions by the government, et cetera, that companies are less apt to commit to full-time people in those sectors, until such time as they get greater clarity. With regard to BeKnown we're -- it's early, we've only been at it for about 4 weeks now. The progress we've made we're extremely happy with. We think it's performing very well, but as I said, I want to make sure that I temper that with the fact that it is early. The site is constantly being improved if you will, based on, as I said in my comments, based on input from users and we expect it to continue to gain momentum over time. But as of this point in time, we are well ahead of where we thought we'd be.


Your next question comes from John Blackledge with Crédit Suisse.

John R. Blackledge - Crédit Suisse AG, Research Division

Two questions. Number one, so the global careers bookings number looks very good. I know Monster is focusing on all markets, but definitely focusing on China and Brazil, et cetera. If you could provide a little bit more detail on the pickup in bookings in China and would you expect them to accelerate in the back half of the year? And then also, I don't if you can provide this, but the North American growth x HotJobs.

James M. Langrock

So John, in China this quarter grew 25%, which is up from Q1 and we anticipate that the China market will -- that will accelerate in the back half of the year, so we anticipate that growth to continue. And the organic growth, John, in North America is -- North America's growth overall was 26% and if we take the revenue, for our nongovernment excluding government, U.S. customers, including the media and international spend, the growth rate in North America was around 30%. So while it's difficult for us to give you a precise number on HotJobs, we estimate that of that 30% growth, that 50% of that growth was generated organically, so about 50% organic growth and about 50% driven by HotJobs.


Your next question comes from Doug Arthur with Evercore.

Douglas M. Arthur - Evercore Partners Inc., Research Division

Two questions. Sal, it looks like your headcount was up about 9% year-over-year in the quarter. Is that a run rate for the year that is likely? Or does that accelerate?

Sal Iannuzzi

No, I think that as a matter of fact, I think the majority of that growth rate was in China and India and it's also the -- as James just pointed out to me, is the increase in headcount for HotJobs year-over-year increase. So I think that's particularly washing out as you all know in Q3, HotJobs washes out the numbers going forward. In Q3, there's less impact from HotJobs. Q4 there was no impact as we have HotJobs in the numbers in last year's fourth quarter. I think the headcount growth will slow in the remainder of the year. And in fact, we know that it will slow the rest of the year.

Douglas M. Arthur - Evercore Partners Inc., Research Division

Okay. And then just 2 specific questions on international, you're building up Brazil, and I know China has been on the bottom line, a bit of a push. Any update on progress in both markets?

Sal Iannuzzi

Yes, first of all, you're very generous to say that China's been a bit of a push. China is costing us money, so I appreciate you softening that a little bit. With regard to China, look, China we are making investments. We are improving the overall quality of our business. We are improving the quality of everything from our technology to our office space to broadening ourselves, capability, et cetera, and that will continue to occur. The growth is good. But we fully expect that as we gain more traction given the kinds of investments and the kind of things that we're doing, that to continue to grow. I think our goal certainly is to be a much more significant player in the Chinese market. With regard to Latin America, we are in very much there in an investment mode. I think I've pointed out in the past, one of our senior executives was moved from Europe, Rob Brouwer from Europe to the Latin American theater. We have been very successful in our recruitment efforts. We brought on some very strong people in Mexico and Brazil. Rob also manages Turkey and we've gained great traction there. The growth is accelerating very rapidly. But it's the rule of small numbers, it's not going to matter much to the bottom line, it is costing us money but I think that will -- not to distant future, that will go into the positive column. And we expect that to be really a good growth, strong growth area for Monster going forward. And it really helps complete our mosaic in terms of supporting our customers on an international scale.


Your next question comes from Jim Janesky with Avondale Partners.

James J. Janesky - Avondale Partners, LLC, Research Division

Sal, I'd like to take a bigger picture question, ignoring the near-term uncertainties in the market. But looking cycle-to-cycle at the market potential and what you think is the market growing, is it going to be as big as the last cycle? You've had increased competition, pricing has changed as well. I mean, essentially, how fast can you grow over the next cycle? And does growth kind of depend just upon the growth of the employment market, because the migration from help wanted to online is essentially over. So I'm just trying to get your thoughts on that as we move let's say, over the next 3 years or so.

Sal Iannuzzi

I think that first of all, with regards to our growth, our growth is -- we expect it to be as I've said, in the 20%, 25% range for the rest of this year. It would be careless of me to project any further than that at this point. I think that in terms of our growth, yes, competition has increased but our position in terms of competing with the competition has also gotten much stronger. All of the things that we've done over the past several years are geared towards, to put it simply, to give the competition a real run for the money. Okay? And if we were stagnant, if we had remained in what the business was 5 years ago, I'd be very concerned at this juncture. But we have evolved. We are changing the model and we will continue to do so. It's part of what the firm is today, and so I won't say I'm not concerned about the composition, I always need to be concerned about the competition, obviously. But we are in a strong position to compete. And it is also true and we realize there's a concern out there about the commoditization of product and pricing, et cetera. But at the same time, innovation brings new demand and it also brings a competitive advantage, which gives us the opportunity to increase prices or to demand stronger prices in other areas. So what all of that really sums up for us is that we really view our growth potential to be strong. We have said, and I reiterate today, that I think that one measure in terms of operating margin of being somewhere in the mid-20s, 25% of the goal, is attainable. It is something that we are still shooting for. And we see the opportunity for growth, if anything, to be honest with you, to be greater than it was before. I think we've stumbled, obviously, due to the -- largely due to the situation with the recession. But I think that the company is performing well. And if it could perform at these levels, given what the uncertainty that's in the world today, both in Europe and here in the United States, that gives us more reason to be -- to take comfort in there's good growth opportunities, strong growth opportunity going forward and that's not even mentioning Latin America and Asia and places like that.

James M. Langrock

And just want to clarify a point I had mentioned, the conversion from offline to online was complete in Europe, in Asia and Latin America, there's still a lot of room for the offline to online conversion.


Your next question comes from Tim McHugh with William Blair.

Timothy McHugh - William Blair & Company L.L.C., Research Division

Just wanted to ask, one question was on the growth rate you talked about the organic growth rate for the U.S. You mentioned it included international, the international contribution of the U.S. businesses. Can you talk about how you, I guess one, can you strip out just the U.S. operations of the U.S. businesses? And then I guess, so we have a better sense to the U.S. business. And then I guess secondly, talk about the -- I guess how important the U.S. clients are to driving that international growth that you guys have going on right now?

James M. Langrock

So in that case when I mentioned U.S. customers, the international spend, that is U.S. domestic customers of ours that buy international products, so that adds to the overall North American growth rate. So that's what I was talking about international, it was U.S. customers that are spending oversees.

Timothy McHugh - William Blair & Company L.L.C., Research Division

So that gets counted in the U.S. revenue?

James M. Langrock

That gets counted in international revenue, but when you look at the overall health of the North American business, we think it's appropriate to include it in there.

Timothy McHugh - William Blair & Company L.L.C., Research Division

Okay. That's all I had.

Sal Iannuzzi

On that, let me just -- that was U.S. driven activity. And in terms of weighing the business in the United States, we believe the appropriate way to view that is U.S. business. In other words, if we weren't in the United States, that business would not exist, and it's generated by the sales force and the sales group within the United States. In terms of where it's accounted for, okay? It accounted for in the country, in the location where the services are provided. Okay? But this methodology, this is consistent to over time and we see no -- we're not -- in the event we should change it in the future, which I see no reason why we would at this point, we'll let you know. But this has always been the way we measure the business.


Your next question comes from Mark Mahaney with Citibank.

Mark S. Mahaney - Citigroup Inc, Research Division

A couple of quick questions. Sal, latest thoughts on the share buybacks? Secondly, could you comment, and maybe I missed it, maybe you already did, on marketplace acceptance traction for the Power Resume Search product. And then finally, just to ask your big picture about your guidance for the back half of the year, bookings growth of 20% to 25% given that comps are going to be a lot tougher, given that you're anniversary-ing the HotJobs acquisition, especially for Q4. Are there 1 or 2 factors that give you particular confidence that you can still grow bookings at 20% to 25% in the back half of the year?

Sal Iannuzzi

Sure. I think first of all, I'll answer the last piece first, I may ask you repeat 1 of your 3 questions in case I can't remember them. Look, I think that certainly as we pointed out, the growth is tied -- in the first half of the year, we did not have job HotJobs in the numbers a year ago. Going forward though, I think because of product introduction, which we really don't include the numbers right now, for example, SeeMore is not included in the numbers. We think that the growth in the business, the traction we're getting, the new customers that are joining, the momentum that's building there gives us confidence. I guess the best way to put it that, growth will continue in that 20% to 25% range. Even discounting for the impact of HotJobs. In Q3, please remember that HotJobs, we have 2 months of Q3 includes HotJobs. In other words, we bought HotJobs at the end of August. So there's possibly 2 months of HotJobs in there and 1 month is purely organic growth, because HotJobs existed already. But given where we're seeing in our business in Europe, what we're seeing here in the United States, albeit that the picture is a little bit muddy right now, with the general economy, et cetera, we feel that we're in a good place for all the reasons we've stated to hit those numbers. We're not going to go beyond that. One question could be, well, you were at the high end of that -- of those numbers in Q1, you were above it in Q2, should we raise the guidance? I think that I will be foolish at this point, given what's going on with the economy, the macro picture, that would be a foolish place to go at this juncture. But in terms of being able to achieve what we said we'd achieve, we have a fair amount of confidence that we'll be able to do that. PRS and SeeMore acceptance, SeeMore first of all, has just gone live in terms of the product. The betas that we have done are very promising. We've gotten very good reaction from a number of our customers, a number of -- even at our staffing customers, they see advantages and I'm very happy with very substantive beta tests that have been done. PRS continues to, as I think I noted in my comments, it's about 50% of our search business now in the United States. It's very close to that in France and the United Kingdom, and as we introduce it later in the year in Germany and elsewhere, we expect the same types of results. So that's going quite nicely. And that is as you know, a product going back to one of the earlier question, where we are enjoying a premium price because of its uniqueness and it's one of those products that has not been commoditized. With regard to the share buyback, we obviously, it was something that we discussed and with our board on a continuous basis. We do not believe, given where we are at this point, that this is the right time to do it. And that is because of investments and things that we may want to do in the future. But we are prepared in the event that there is a situation out there that promises to act very swiftly. Now I want to clarify my comments one moment, I do not want anyone to think that we're looking at an acquisition or anything of that sort. I think with the uncertainty in the general market, okay? Keeping our pilot [ph] drive is prudent. It's just not the right time. It's not the best use that we prefer to keep our pilot [ph] drive and protect the company going forward for whatever eventuality there may be. Now having said that, if there is some sort of calamity that we don't see right now, we'll be ready to act and act very swiftly.


Your last question comes from Jeff Meuler with Baird.

Jeffrey P. Meuler - Robert W. Baird & Co. Incorporated, Research Division

It's Jeff Meuler from Baird in for Mark Marcon, wanted to follow up on SeeMore, could you talk about what the go-to-market strategy is? I know you rolled PRS out over several years to the different countries. But first, SeeMore, what's the go-to-market strategy going to be? What's pricing? And then, how are customers using it, are they using it alongside an ATS, how does it integrate with the major ATSs, et cetera?

Sal Iannuzzi

I'm going to turn that question over to Andrea and to Darko. They'll each take pieces, and of course, I'll reserve the right to comment at the end. Andrea?

Andrea Bertone

Yes. Thank you, Sal. Our go-to-market strategy for SeeMore would be focused predominantly on 2 key segments of the market. We'll be targeting in both the North America and U.S. and in the U.K. the enterprise market. Those companies who have multiple databases and over time have collected, let's say a significant amount of resumes in their databases from multiple sources. These customers they tend to be customers that have either embraced the applicant tracking system or they should be embracing our applicant tracking system. And our screen [ph] is that there are real difficulties in searching those multiple databases, because they come in different format in the areas where our 6Sense search technology will make a significant difference in increasing efficiency and effectiveness in searching the talent. There is a large amount of companies, especially in the U.S. market and in the U.K. market, who are facing these type of challenges in the market. And we believe that this will give us a significant competitive advantage in providing those services. We are also seeing that there is a potential significant more small and medium market, and these are all the customers who over time have accumulated significant amount of resumes in their Monster folders. And this is kind of more the SMB market, where we'd use our services [ph] channel to attack the SMB market, and we're going to be using SeeMore's specialist with experience in selling cloud solutions to attack the enterprise market.

Darko Dejanovic

Let me talk about the implementation. So we rolled out 6Sense over the last 1.5 year or so. We started with the U.S., Canada, moved into major European markets, U.K., France, now Germany. Germany is already in beta, anticipating in the next few months to come out of the beta. So the SeeMore will follow the flow, but we can move very quickly into this market, [indiscernible] within weeks after the launch of 6Sense. So in order to have a SeeMore as a product, you have to have 6Sense technology in a particular market, which we have in most of these markets. In terms of the way it would work with, [indiscernible] than that with ATSs. We have an API, its implementation is quite simple. If we already have an API, an integration with an existing ATS, it's not only moving the data from the customer into the cloud. If we do not, the integration of API is literally a few weeks, and it's a fairly small amount of work to do that, probably a few days of development time for a particular time. So fairly straightforward integration and where we would have that 6Sense success technology in place.

Jeffrey P. Meuler - Robert W. Baird & Co. Incorporated, Research Division

In terms of pricing?

Sal Iannuzzi

I'm going to ask Pat Manzo to comment on the pricing portion of your question.

Patrick W. Manzo

So we spent quite a lot of time trying to come up with what we believe is the best optimum pricing strategy for the SeeMore product. The great thing about SeeMore is that it's really an extension of our existing Power Resume Search technology, our 6Sense technology. So our costs internally are not much more significant than for the PRS product. Obviously, we're looking at a pricing strategy. What you want to do is find something that's going to maximize the value capture, while simultaneously allowing you to penetrate the market and drive adoption. And we think we've come up with a strategy that will allow us to do that and capture significant amount of the value that we believe the product provides, both in terms of the 6Sense technology and allowing that technology to be applied to a much larger base of data, our customers' resume databases. But also a price that we think is fair, reasonable, consistent with the value the product provides and should help us to really drive adoption for the product.


At this time, there are no further questions. Are there any closing remarks?

Sal Iannuzzi

No, operator, there are not. I'd like to just thank everyone, for spending time with us this morning, and look forward to speaking to you in about 3 months. Take care.


Ladies and gentlemen, this does conclude today's conference. You may now disconnect.

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