Shares of 51job (JOBS) hit a new all-time high on Wednesday, earning it on Thursday by posting another period of accelerating revenue growth. The Shanghai-based provider of online recruitment services came through with its strongest top-line growth since 2011 -- on widening margins to boot.
Revenue at 51job rose 20.3% to $99.3 million for the third quarter, well ahead of the $93 million to $95.9 million that it was targeting back in May. You have to go all the way back to the fourth quarter of 2011 to find the last time that year-over-year growth has risen north of 20%.
The pace of 51job's revenue growth continues to accelerate. We've seen the year-over-year upticks go from 10.2% during last year's second quarter to 13.3%, 13.6%, 16%, and now 20.3% in subsequent periods.
Image source: 51job.
Getting the job done
51job's business can be divided in two segments, and the market darling is coming through with double-digit percentage growth on both fronts. Online recruitment services -- accounting for 66% of its revenue -- rose 19% during the period. Other human resource-related revenue grew by an even better 22.8%.
Results over the past year had been held back by a value-added tax or VAT policy change that went into effect in May of last year. We lapped that results-sandbagging change midway through the second quarter, making it easier for 51job to show its true colors from now on.
It was a period of expanding margins. Gross and operating margins widened, culminating in a 47% surge in operating income. Adjusted earnings clocked in at $0.49 a share, also besting its earlier forecast for adjusted earnings per share of $0.41 to $0.44 for the second quarter.
51job is eyeing another period of growth, looking to post top-line results in the nine figures -- on a dollar-basis -- for the first time during the current quarter. 51job's outlook for the third quarter calls for an adjusted profit of $0.46 to $0.49 a share on $101 million to $104 million in revenue. We'll be looking at decelerating top-line growth even if it lands at the high-end of its range, but it would still be the company's tenth straight quarter of double-digit revenue growth.
Another big milestone hit by 51job is that its balance sheet topped $1 billion in cash and short-term securities -- $1.03 billion -- by the end of the quarter. Chinese companies keep hiring, and clearly they're turning to 51job's platform to help fill many of those jobs.
