NASDAQ:BZ KANZHUN Q3 2024 Earnings Report $19.82 +0.53 (+2.75%) Closing price 08/5/2025 04:00 PM EasternExtended Trading$19.85 +0.03 (+0.15%) As of 08:00 AM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. ProfileEarnings HistoryForecast KANZHUN EPS ResultsActual EPS$0.15Consensus EPS $0.13Beat/MissBeat by +$0.02One Year Ago EPSN/AKANZHUN Revenue ResultsActual RevenueN/AExpected RevenueN/ABeat/MissN/AYoY Revenue GrowthN/AKANZHUN Announcement DetailsQuarterQ3 2024Date12/11/2024TimeBefore Market OpensConference Call DateWednesday, December 11, 2024Conference Call Time7:00AM ETUpcoming EarningsKANZHUN's Q2 2025 earnings is scheduled for Wednesday, August 27, 2025, with a conference call scheduled at 8:00 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Q2 2025 Earnings ReportConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by KANZHUN Q3 2024 Earnings Call TranscriptProvided by QuartrDecember 11, 2024 ShareLink copied to clipboard.Key Takeaways ConGen reported Q3 revenue of RMB1.91 billion, up 19% year-on-year, with adjusted operating income rising 10% to RMB610 million. Average monthly active users on the BOSS Jiping app reached 58 million (up 30% year-on-year) and new verified users topped 40 million year-to-date. Paid enterprise customers grew 22% year-on-year to 6 million, while ARPU remained stable sequentially. Blue-collar recruitment accelerated, driving the segment to over 38% of total revenue, with enterprise sign-ups up 45% and contract value up 40% quarter-on-quarter. The company repurchased approximately US$130 million in shares this quarter (US$220 million year-to-date), underscoring confidence in its long-term growth. AI Generated. May Contain Errors.Conference Call Audio Live Call not available Earnings Conference CallKANZHUN Q3 202400:00 / 00:00Speed:1x1.25x1.5x2xThere are 6 speakers on the call. Operator00:00:00Ladies and gentlemen, thank you for standing by, and welcome to the ConGen Limited Third Quarter 2024 Financial Results Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a Q and A session. Today's conference is being recorded. At this time, I would like to turn the conference over to Ms. Operator00:00:20Wenbei Wang, Head of Investor Relations. Please go ahead, ma'am. Speaker 100:00:25Thank you, operator. Good evening and good morning, everyone. Welcome to our Q3 2024 earnings conference call. Joining me today are our Founder, Chairman and CEO, Mr. Jonathan Peng Zhao and our Director and CFO, Mr. Speaker 100:00:40Fiyue Zhang. Before we start, we would like to remind you that today's discussion may contain forward looking statements, which are based on management's current expectations and observations that involve known and unknown risks, uncertainties and other factors not under company's control, which may cause actual results, performance or achievements of the company to be materially different. The company caution you not to place undue reliance on forward looking statements and do not undertake any obligation to update this forward looking information, except as required by law. During today's call, management will also discuss certain non GAAP financial measures for comparison purpose only. For a definition of non GAAP financial measures and the reconciliation of GAAP to non GAAP financial results, please see the earnings release issued earlier today. Speaker 100:01:38In addition, a webcast replay of this conference call will be available on our website at ir.jpin.com. With that, I will now turn the call to Jonathan, our Founder, Chairman and CEO. Hello, everyone. Thank you for joining our company's Q3 2024 Earnings Conference Call. On behalf of the company's employees, management team and Board of Directors, I would like to extend our sincere gratitude to our users and investors who have continuously believed in us and supported us. Speaker 100:02:49Let's talk about financial numbers for this quarter first. The company achieved a revenue of RMB1.91 billion, up 19% year on year and a net income of RMB460 1,000,000. Additionally, our adjusted operating income, which excludes share based compensation expenses, reached RMB610 1,000,000, reflecting a 10% year on year growth. During the Q3, which coincided with the Olympic Games and the Euro Cup 2024, the company allocated additional resources to brand promotion, which led to an increase in marketing expenses. It was a one off expenditure. Speaker 100:03:52Our annual profit growth target remains firmly on track. Additionally, it is worth mentioning that as a company listed on NASDAQ for 3.5 years and with a secondary primary listing on Hong Kong Exchange for 2 years, our share based compensation expenses, which have historically accounted for a relatively high proportion of our revenue, has entered the anticipated phase of gradual reduction. In this quarter, these expenses demonstrated a decline both on a year on year and quarter on quarter basis. Reflecting on the Q3, our efforts can be summarized into 2 sentences. While the overall recruitment market environment remains challenging, the company's unwavering focus on key growth drivers continue to yield positive results. Speaker 100:05:39Now let's take a look at a few notable highlights from the Q3. First, our user growth continued to demonstrate strong growth momentum. As we all know, user growth has always been an important growth driver for us. In this quarter, the average monthly active users on our BOSS Jiping app reached 58,000,000, representing a 30% year on year increase. From January to September 2024, newly added verified users exceeded 40,000,000. Speaker 100:06:53Compared to the job seeker side, recruitment demand from enterprises showed a more moderate and steady upward trajectory. The number of newly posted drop off positions in the Q3 increased by 18% year on year. This growth is mainly driven by the user growth and market share expansion fueled by our relatively efficient business model. The second thing in the Q3, the growth of short term payment ratio affected by supply and demand has been slowed down. Despite this, the retention of enterprise user remains solid and the number of paid enterprise customers experienced a decent growth. Speaker 100:08:30From July to September, the ratio of job seeker to enterprise users continued its upward trend since the Q2 with a gap compared to the same period last year continuing to widen. Relatively more job seekers have shortened the recruitment cycle for enterprises. That is the time it takes for enterprises to fill a right time position is reduced. In the short term, this may affect the enterprise users' willingness to pay, leading to a slower growth of the company's paying ratio. However, we have observed that the retention rate on the enterprise side remains solid. Speaker 100:09:39This is definitely a good news in the long term. Investors and analysts who focus on the enterprise service market should have recognized that when the number of annual paying enterprise customers reaches a scale of 1,000,000, the retention of enterprise customers become decisive and it is a prerequisite for sustained growth. The total number of paid enterprise customers for the 12 months ended September 30, 2024 reached around 6,000,000, up 22% year on year. The third thing that is the average revenue per paid enterprise customers, namely ARPU, has remained stable. 4th, in the blue collar manufacturing sector, we are committed to purifying the market environment while striving to expand our front cycle and continue to achieve satisfactory growth. Speaker 100:11:58Our strategy focuses on providing high quality recruiting companies with great opportunities to connect with candidates, leveraging a combination of innovative products, refined algorithms and robust operational capabilities. In terms of data on our platform, in the Q3, the accumulated number of enterprises joining Hailo, Cooch Select project grew by 45% quarter on quarter and signed contract value increased by over 40% quarter on quarter. This also helped as a result, this also helped the revenue contribution from overall blue collar business in terms of total revenue further increased to more than 38%. 5th, the company continues to invest in technology to create greater value. In the Q3, our platform facilitated an average of nearly 200,000,000 monthly mutual achievements, demonstrating a continued rise in the number of successful interaction based on mutual consent between enterprise users and job seekers on a per capital basis. Speaker 100:14:05As an entrepreneur, I and my friends all view this data as a testament to the value of our company brings to the world. And this has always been the goal that our company will long pursue. Last, regarding shareholder returns, the company has repurchased around $130,000,000 worth of shares since our last earnings call, bringing the total repurchase for this year to approximately US220 million dollars representing 3.4% of our total shares. This underscores the company's confidence in our long term growth prospects and our commitment and our concern to delivering sustained returns to shareholders in any circumstances. That concludes my part of the call. Speaker 100:15:43I will now turn it over to our CFO, Phil, for the overview of our financials. Thank you. Speaker 200:15:50Thanks, Jonathan. Hello, everyone. Now let me walk through the details of our financial results of the Q3 of 2024. We delivered a solid set of financial results in this quarter despite the industry headwinds, with revenue grew by 19% year on year to RMB1.9 billion. This growth was mainly driven by the continued expansion of our enterprise user base as we further penetrated into blue collar industries, lower tiered cities, as well as small sized companies market, even facing a generally soft recruitment market. Speaker 200:16:35Number of paid enterprise customers was 6,000,000 in the trailing 12 months ended September 30, 2024, up by 22 percent year on year and 2% quarter on quarter. ARPU in this quarter remained stable sequentially. Notably, our overall operating cost and expenses were flattish quarter on quarter, even including several one off or non structured expense items in this period. As one of our key focuses being sustainable cost control, we are confident that our effective business model can continue to generate strong operating leverage in the future. Looking at detailed financial metrics, excluding share based compensation expenses, adjusted operating costs and expenses increased by 23% year on year to RMB1.3 billion, flattish quarter on quarter. Speaker 200:17:47Adjusted operating profit reached RMB6005 million, up by 10% year on year, with an adjusted operating margin of 32%. Cost of revenues increased by 17% year on year to RMB 314 1,000,000 in this quarter, mainly driven by higher server and bandwidth costs, payment processing costs as well as employee related expenses. Gross margin kept at the same level of 84% as last quarter. Sales and marketing expenses increased by 14% year on year to RMB522 1,000,000 in this quarter, primarily driven by the marketing campaigns launched during the Paris 2024 Olympic Games and the Euro Cup of 2024. Excluding the sponsorship expenses, we witnessed the improved efficiency and business leverage in both our selling and marketing expenses due to our strong brand recognition and powerful network effect inherent in our business. Speaker 200:19:12We are confident that the enhanced marketing efficiency trend will continue to improve along with our top line growth. R and D expenses increased by 12% year on year to RMB464 1,000,000 in this quarter. Excluding share based compensation expenses, adjusted R and D expenses increased by 18% year on year to RMB361 1,000,000. The depreciation cost associated with our earlier investments in AI infrastructure has largely stabilized and is not expected to increase in the near future. Our G and A expenses increased by 31% year on year to RMB286 1,000,000 in this quarter, mainly due to higher employee related expenses and some one off expenditures that will not occur in the coming year. Speaker 200:20:15Our net income was RMB464 1,000,000 in this quarter, up 9% year on year. And our adjusted net income in this quarter reached RMB739 million and increased by 4% year on year, which was affected by the decrease in the interest and investment income. Total share based compensation expenses amounted to RMB275 1,000,000 in this quarter, down by 9% quarter on quarter and 5% year on year. As Jonathan just mentioned, we are expecting total share based compensation expenses to continue the downward trend in 2025. Net cash provided by operating activities in this quarter was RMB812 1,000,000 relatively stable with that of the same period of last year. Speaker 200:21:21As of September 30, 2024, our cash and cash equivalents, short term time deposits and short term investments totaled RMB16.6 billion. We launched an additional share repurchase program in August 2024, running concurrently with the March program, which allows us to buy back up to US350 million dollars of shares. Since the announcement of the August program, as Josephine just mentioned, we have repurchased a total consideration of approximately 130,000,000 dollars making the total buyback amount reached US220,000,000 dollars this year, demonstrating our commitment in shareholders' return and long term confidence of our business. And now for our business outlook. For the Q4 of 2024, we expect the total revenues to be between RMB1.795 billion and RMB1.81 billion, a year on year increase of 13.6 percent to 14.5%. Speaker 200:22:47That concludes our prepared remarks. And now, we would like to answer questions. Operator, please go ahead with the queue. Operator00:22:56Thank you. Our first question comes from Eddie Huang with Morgan Stanley. Your line is open. Speaker 300:24:01Thank you, management, for taking my question. I have two questions. The first one is that the government has launched a supportive policy since September end. Have you witnessed any signs of this policy has helped you boost the recruitment market? And have you witnessed any operating metrics improvement as well? Speaker 300:24:28The second question is, given the uncertainty of the macro economy, which could sustain into 2025, how should we think we could maintain the revenue growth in 2025? Thank you. Speaker 100:25:44Thank you for your question. About the first one regarding the supporting policy since the end of September, I have several observations to share with you. Firstly, we noticed that the newly added enterprise users every day has been improving on a year on year basis since the end of October. And please note that November December are traditionally relatively low season for recruitment. However, the newly added enterprise users improving on a year on year basis since October, My understanding is that this is a good news and this trend have continued into November December. Speaker 100:27:16And the second thing about the job seeker to recruiter ratio, which I believe many of you concerned have been continued to fall back. I have just discussed in my prepared remarks that during July to September, that number is high compared to the same period last year and now it is lower than the same period last year, which and reached relatively low level within this year, which means the supply and balance supply and demand unbalance issue is improving. Actual improvement of economy and actual improvement of the enterprise recruitment demand. So this should take some time and we should stay patient and calm. About the second question, facing the uncertainty of macro, how we can guarantee our continued revenue growth trend. Speaker 100:29:44We have several key structural growth drivers for our revenue, which is still unchanged. The first thing is the user growth. Even though of all these uncertainties, we expect that we can still have at least 15% of overall user growth. The enterprise side might be slower, but still it can grow. And if the macro can stable at some level, then we expect that enterprise side have better performance. Speaker 100:30:15So our user growth as the most important driver is still quite solid. And the second important driver is our paying ratio has still maintained a separate level. If you're looking back, our paying ratio started at even like 0% or 5% and improved along this year is now reaching at like 20% to 30% level. And so the upward trend is unchanged. And another opinion is that our pace the increase of payment ratio has some connection with the supply and demand balance. Speaker 100:31:52And as the sign of the supply and demand balance improving, we expect that if the economy can be stable, then our payment ratio can return to our growth trend. If the macro can actually go back to growth, then my paying our paying ratio will experience a significant improvement. Speaker 200:32:57Drivers. Speaker 100:33:00And the 3rd driver is our ARPU. As far as we have got the 1st and second driver, which is NAV, we are not in a hurry to aggressively increase ARPU. So it will keep at a stable and slightly improvement trend. And I have some additional brand new growth driver, which is our Blue Collar business. Our blue collar contributed more than 38% in the Q3 of our total revenue. Speaker 100:34:44This is quite important breakthrough. Several years ago, I have my various thoughts that I want to resolve the problem in the blue collar manufacturing recruitment industry, which is bad money driven on the good money and people with decent background cannot get good jobs. So we launched the College High Law project in the hope of someday, one day, the top good college agents can agree with us to agree with our rules to do a crewman business on our platform. And now we have saw some real money coming back from this, which is our dreams coming into the reality. That's my answer to your question. Speaker 100:35:47Operator, let's move on to the next question. Operator00:35:52Thank you. Our next question comes from Timothy Zhao with GS. Your line is open. Speaker 400:37:04Thank you, management, for taking my questions. My first question is regarding the more detailed breakdown into the Q3, including the customer performance between the blue collar and white collar sectors as well as different sectors, subsectors as well. And as management mentioned that ARPU overall is relatively stable in the Q3. Could management provide more color in terms of ARPU and revenue trend between SMEs and the key accounts? And second question is regarding the user growth. Speaker 400:37:35I think as management mentioned that I think in the 1st 9 months of this year, there were already 40,000,000 newly added verified users. And in my calculation, the individual users should already reach or get close to 200,000,000. Could management share about the total room for the individual users to grow? And as we are aiming for 15% or more than that growth into next year, how should we think about the sales and marketing expenses or the marketing expenses into next year? Thank you. Speaker 100:38:56Thank you for your question. First one regarding different blue, white collar and industries. Of course, the overall growth rate of Blue Collar are still faster than White Collar. As I just mentioned, the revenue contribution have further increased to over 38%. However, compared to the same period last year, we have seen the blue collar revenue growth rate have been significantly slowing down, which was mainly affected by the weak urban service industry performance. Speaker 100:39:33Compared to blue collar, white collar is relatively stable. In terms of subsectors, as I just said, the urban service industry has been relatively weak since the Q2. However, we covered a little bit in recent weeks. For the better performed industries, we have several highlights, manufacturing industries, logistics and warehouse, automobile are the 3 best performed industries in the Q3 and the recent weeks. For example, the manufacturing industry has year on year revenue growth more than 45% in the Q3. Speaker 100:41:44And about the different size of enterprises, we noticed these are on the two end of the market. First one is hypercell enterprise with more than 10,000 employees performed the best in the Q3. And the second one is a small and micro sized enterprises with employee less than 100 people. My understanding that this is actually a quite good news because majority of China's enterprises are small sized companies, which is also the main contribution of our new users new enterprise users. Speaker 200:42:27I would like to add one point regards our 3 accounts breakdown. Key accounts recorded the highest revenue growth, which is up more than 30% year over year. The overall ARPU up 5% year over year, flat quarter over quarter. Among all three segments, key accounts ARPU improved the most. Speaker 100:43:34And about your second question for our user growth potential, it's actually a quite good question. So we have actually started through several different channels on methodology that come to a conclusion that China's marketable employees, the number of China's marketable employees are more than 400,000,000, which means we have a double space to grow. And on the enterprise side, the room or space is even bigger. Official number is that China has more has 40,000,000 to 15,000,000 enterprises. Some channels said even more than 50,000,000. Speaker 100:44:58No matter what, we have very strong advantages in terms of enterprise size service because we are our model are very simple for small or even micro sized companies and across different industries, which can support our very strong and large room for our enterprise users. And we are not planning to spending a lot of money on marketing or user acquisition. There are two reasons. First, due to a very strong double sided network effect, the natural traffic has accounted for a very significant portion of our newly used new users. And secondly, technically speaking, there is no big events or marketing campaign, which we need to spending more money on. Speaker 100:46:41So as a result, we will keep our marketing expense at a relatively low level. And that's my answer to your questions. Thank you, Timothy. And operator, let's move on to the next question. Operator00:46:59Thank you. Our next question comes from Wei Zhang with UBS. Your line is open. Speaker 500:48:02Thank you, management, for taking my question. My first question is on blue collar recruitment. Could management maybe share your future growth strategy for the blue collar business around manufacturing and other verticals? Do we plan to build our offline service capabilities for the blue collar recruitment? And also have we observed any change in the competitive landscape here? Speaker 500:48:26And second, just on the profitability outlook for next year, understand management has shown a very strong commitment to protecting profitability in light of the macro uncertainties. So if we just look at our profit goal for the next year, what do we see as the major drivers for profitability improvement? And is there any potential new investments that we should consider? Thank you. Speaker 100:49:41Okay. Thank you for your question. We just talked about the improvement to the achievement we have in the blue collar, especially manufacturing sector. So the essence of that is actually is an idea or concept becomes reality, which is the factories, intermediaries, workers and the platform. Those 4 parties can coexist under one co recognized game rules, which can allow everyone to be more efficient and earn money with dignity. Speaker 100:50:15And now that idea has come into the attitude. So this is actually a very hard process. And I'll talk again about Essence, which is every player, the factories, agents, workers and platforms, they are all battling against the short term interest and long term interest. For example, one manufacturing worker who is quite clearly aware that his working salary should be in the RMB 6,000 per month range. However, if someone posts a job of RMB 150,000 per month, he is quite hard to resist attempt to submit a resume. Speaker 100:52:11So it's a fight for a potential for job and the secured working opportunity. And the example I just said is actually unreal, worker facing on the current market condition in a good season that his salary can raise to around 8,000 per month. So I control the related similar kind of jobs, so salary range is no more than 8,000. If we have that, that can have I have permission to answer your two questions. And the question about the competitive landscape, so if I continue to control the workers' salary range, which are job posting can be no higher than RMB 8,000 per month, in short term, I may not be able to compete with the platform allows people to post jobs with over RMB 150,000 per month. Speaker 100:55:12But in the long term, I have strong advantages because I actually returned the truth of this job position. And second, about how committed I will invest to do the offline placement because the things I'm currently we are doing is quite difficult and need a lot of input from every level. So I hope I can continue to do that, which we have already established very clear advantages. So in the short term, I won't invest heavily in the placement while continuing our current game with those 4 participants and hopefully we can have good results. And the second question, I will give a short but clear answer. Speaker 100:56:46So facing all these difficulties, we need to find out which thing is definitely right to do. And we believe to guarantee our profit or profitability is definitely cracked things. So we need to do and we will guarantee our profit. And in terms of managing our next year profit target, I'm quite I have very strong confidence. I won't talk too much about our management details, but with one thing I can say is that we have very strong operational averages. Speaker 100:58:05So as long as we can have which will majority turn into our profit, this trend is quite clear. Speaker 200:58:19Regarding our company's margin outlook in 2025, I can offer some of our thoughts. Regarding the gross margin, we expect our gross margin will be flat or improve slightly next year. Sales efficiency improvement will leave additional leverage to selling expenses. Absolute amount of marketing spending will be capped at 2024 level or even decrease. R and D headcount likely will not increase. Speaker 200:58:58There is no near term actual investment to AI and hardware. So our and one more thing is our new business. We expect our new business spending will be with disciplined approach. So all in all, our operating margin will further improve, As Johnson said, we'll further improve along with our top line growth. So this is our view towards the margin profit. Speaker 100:59:34Okay. Thank you. In light of the time constraint, I think operator we can take one last question. Operator00:59:44Thank you. Our last question comes from Yanyan Xiao with CICC. Your line is open. Speaker 201:00:36Thanks management for taking my question and I have two questions. My first question is how is our overseas business progressing and how can we balance our profit control goals with overseas business investment? And my second question is, we've noticed that an industry wide trend towards AI products like AI interviews. So how do you view the current application scenarios of AI in the recruitment field? And what potential new revenue or cost reduction opportunities might there be? Speaker 201:01:17Thank you. Speaker 101:02:09Thank you for your question. About your first question of our overseas business and the relation with investment and relation with our profit target. So one thing is clear that this next year, we won't have very big investment in our overseas business. This has a relation to our business developer methodology, which is we want to release the evil until we see the rapid, which means we won't increase investment heritage before we have some certainty. So we have to do some very small experiment with limited cost. Speaker 101:03:12So in our plan, we won't expect we can clearly see that profit next year, so that won't affect our profit target next year. In terms of AI application, actually now within the industry or actually other all the industries, the reality is the high prospect of the technology cannot correlate with real actually application scenario. So there's a very loud, frightening, but very small frame. So that's an industry fact. But I want to further explain our opinion during our industrial practice. Speaker 101:05:00The first one is we will insist on the equality between job seekers and the Kultras. We will not allow once any site to use advantage of AI to have advantages over the other side. And the second principle we insist is the right to know. So whenever a users are facing the potential counterparty of AI, we should let that user know. And the 3rd policy, we insist that the current application scenario, which can be perfectly done without large language model, there is no necessity to use a lot of LMM to do it again, which is a factory kind of waste. Speaker 101:06:43Apart from all those series, we have several real applications. So in terms of protecting the safety of our users, our AI technology has been quite useful. We've disclosed in the past that we have over 900 people of our security team. And this year, we increased more than tens of millions of new users, but we didn't increase the total number of our security team. One important reason is that we used our AI technology to assist with the verification, which largely increased our overall review efficiency. Speaker 101:08:36So in the history of the bad people fighting with the platform, the first principle is actually the fighting of the cost. Whenever evil guys feel like first to do things to do best things on the platform, then he will not continue to do that. With the help of AI, we can actually increase our advantages over that, so it can create real value for our operation. And that's my answer for your questions. And I think that's all the questions for tonight. Speaker 101:09:18Operator? Operator01:09:21Thank you. Due to time constraint, that concludes today's question and answer session. At this time, I will turn the conference back to Wimby for any closing remarks. Speaker 101:09:30Thank you once again for joining us today. If you have any further questions, please contact our IR team directly or TPG Investor Relations. Thank you. Operator01:09:40Thank you for your participation. This does conclude the program. You may now disconnect. GoodRead morePowered by Earnings DocumentsSlide DeckPress Release(8-K) KANZHUN Earnings HeadlinesMeta Platforms Shows Rising Price Performance With Jump To 91 RS RatingAugust 1, 2025 | msn.comKanzhun ADR Earns Membership In 95-Plus Composite Rating ClubJuly 10, 2025 | msn.comThe End of Elon Musk…?The End of Elon Musk? Don't make him laugh. Jeff Brown has been hearing this same tired story for years, and he's been proven right time and time again. And now, while the media focuses on Tesla's "demise," he's uncovered an AI breakthrough that's about to make Elon's doubters eat their words yet again. According to his research, if you listen to the media and miss out on Elon's newest breakthrough, it's going to cost you the fortune of a lifetime.August 6 at 2:00 AM | Brownstone Research (Ad)KANZHUN LIMITED Announces Pricing of Share Offer to Raise Approximately HK$2.2 Billion - NasdaqJuly 2, 2025 | nasdaq.comKanzhun Prices 34.5 Mln Shares HK$66 A Share - NasdaqJuly 2, 2025 | nasdaq.comStatutory Profit Doesn't Reflect How Good Kanzhun's (NASDAQ:BZ) Earnings AreJuly 2, 2025 | finance.yahoo.comSee More KANZHUN Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like KANZHUN? Sign up for Earnings360's daily newsletter to receive timely earnings updates on KANZHUN and other key companies, straight to your email. Email Address About KANZHUNKANZHUN (NASDAQ:BZ) Limited, together with its subsidiaries, provides online recruitment services in the People's Republic of China. The company offers its recruitment services through a mobile app under the BOSS Zhipin brand name. Its services allow enterprise customers to access and interact with job seekers and manage their recruitment process. The company also provides management consultancy and technical services. Kanzhun Limited was founded in 2013 and is headquartered in Beijing, the People's Republic of China.View KANZHUN ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Palantir Stock Soars After Blowout Earnings ReportVertical Aerospace's New Deal and Earnings De-Risk ProductionAmazon's Earnings: What Comes Next and How to Play ItApple Stock: Big Earnings, Small Move—Time to Buy?Why Robinhood Just Added Upside Potential After a Q2 Earnings DipMicrosoft Blasts Past Earnings—What’s Next for MSFT?Visa Beats Q3 Earnings Expectations, So Why Did the Market Panic? 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There are 6 speakers on the call. Operator00:00:00Ladies and gentlemen, thank you for standing by, and welcome to the ConGen Limited Third Quarter 2024 Financial Results Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a Q and A session. Today's conference is being recorded. At this time, I would like to turn the conference over to Ms. Operator00:00:20Wenbei Wang, Head of Investor Relations. Please go ahead, ma'am. Speaker 100:00:25Thank you, operator. Good evening and good morning, everyone. Welcome to our Q3 2024 earnings conference call. Joining me today are our Founder, Chairman and CEO, Mr. Jonathan Peng Zhao and our Director and CFO, Mr. Speaker 100:00:40Fiyue Zhang. Before we start, we would like to remind you that today's discussion may contain forward looking statements, which are based on management's current expectations and observations that involve known and unknown risks, uncertainties and other factors not under company's control, which may cause actual results, performance or achievements of the company to be materially different. The company caution you not to place undue reliance on forward looking statements and do not undertake any obligation to update this forward looking information, except as required by law. During today's call, management will also discuss certain non GAAP financial measures for comparison purpose only. For a definition of non GAAP financial measures and the reconciliation of GAAP to non GAAP financial results, please see the earnings release issued earlier today. Speaker 100:01:38In addition, a webcast replay of this conference call will be available on our website at ir.jpin.com. With that, I will now turn the call to Jonathan, our Founder, Chairman and CEO. Hello, everyone. Thank you for joining our company's Q3 2024 Earnings Conference Call. On behalf of the company's employees, management team and Board of Directors, I would like to extend our sincere gratitude to our users and investors who have continuously believed in us and supported us. Speaker 100:02:49Let's talk about financial numbers for this quarter first. The company achieved a revenue of RMB1.91 billion, up 19% year on year and a net income of RMB460 1,000,000. Additionally, our adjusted operating income, which excludes share based compensation expenses, reached RMB610 1,000,000, reflecting a 10% year on year growth. During the Q3, which coincided with the Olympic Games and the Euro Cup 2024, the company allocated additional resources to brand promotion, which led to an increase in marketing expenses. It was a one off expenditure. Speaker 100:03:52Our annual profit growth target remains firmly on track. Additionally, it is worth mentioning that as a company listed on NASDAQ for 3.5 years and with a secondary primary listing on Hong Kong Exchange for 2 years, our share based compensation expenses, which have historically accounted for a relatively high proportion of our revenue, has entered the anticipated phase of gradual reduction. In this quarter, these expenses demonstrated a decline both on a year on year and quarter on quarter basis. Reflecting on the Q3, our efforts can be summarized into 2 sentences. While the overall recruitment market environment remains challenging, the company's unwavering focus on key growth drivers continue to yield positive results. Speaker 100:05:39Now let's take a look at a few notable highlights from the Q3. First, our user growth continued to demonstrate strong growth momentum. As we all know, user growth has always been an important growth driver for us. In this quarter, the average monthly active users on our BOSS Jiping app reached 58,000,000, representing a 30% year on year increase. From January to September 2024, newly added verified users exceeded 40,000,000. Speaker 100:06:53Compared to the job seeker side, recruitment demand from enterprises showed a more moderate and steady upward trajectory. The number of newly posted drop off positions in the Q3 increased by 18% year on year. This growth is mainly driven by the user growth and market share expansion fueled by our relatively efficient business model. The second thing in the Q3, the growth of short term payment ratio affected by supply and demand has been slowed down. Despite this, the retention of enterprise user remains solid and the number of paid enterprise customers experienced a decent growth. Speaker 100:08:30From July to September, the ratio of job seeker to enterprise users continued its upward trend since the Q2 with a gap compared to the same period last year continuing to widen. Relatively more job seekers have shortened the recruitment cycle for enterprises. That is the time it takes for enterprises to fill a right time position is reduced. In the short term, this may affect the enterprise users' willingness to pay, leading to a slower growth of the company's paying ratio. However, we have observed that the retention rate on the enterprise side remains solid. Speaker 100:09:39This is definitely a good news in the long term. Investors and analysts who focus on the enterprise service market should have recognized that when the number of annual paying enterprise customers reaches a scale of 1,000,000, the retention of enterprise customers become decisive and it is a prerequisite for sustained growth. The total number of paid enterprise customers for the 12 months ended September 30, 2024 reached around 6,000,000, up 22% year on year. The third thing that is the average revenue per paid enterprise customers, namely ARPU, has remained stable. 4th, in the blue collar manufacturing sector, we are committed to purifying the market environment while striving to expand our front cycle and continue to achieve satisfactory growth. Speaker 100:11:58Our strategy focuses on providing high quality recruiting companies with great opportunities to connect with candidates, leveraging a combination of innovative products, refined algorithms and robust operational capabilities. In terms of data on our platform, in the Q3, the accumulated number of enterprises joining Hailo, Cooch Select project grew by 45% quarter on quarter and signed contract value increased by over 40% quarter on quarter. This also helped as a result, this also helped the revenue contribution from overall blue collar business in terms of total revenue further increased to more than 38%. 5th, the company continues to invest in technology to create greater value. In the Q3, our platform facilitated an average of nearly 200,000,000 monthly mutual achievements, demonstrating a continued rise in the number of successful interaction based on mutual consent between enterprise users and job seekers on a per capital basis. Speaker 100:14:05As an entrepreneur, I and my friends all view this data as a testament to the value of our company brings to the world. And this has always been the goal that our company will long pursue. Last, regarding shareholder returns, the company has repurchased around $130,000,000 worth of shares since our last earnings call, bringing the total repurchase for this year to approximately US220 million dollars representing 3.4% of our total shares. This underscores the company's confidence in our long term growth prospects and our commitment and our concern to delivering sustained returns to shareholders in any circumstances. That concludes my part of the call. Speaker 100:15:43I will now turn it over to our CFO, Phil, for the overview of our financials. Thank you. Speaker 200:15:50Thanks, Jonathan. Hello, everyone. Now let me walk through the details of our financial results of the Q3 of 2024. We delivered a solid set of financial results in this quarter despite the industry headwinds, with revenue grew by 19% year on year to RMB1.9 billion. This growth was mainly driven by the continued expansion of our enterprise user base as we further penetrated into blue collar industries, lower tiered cities, as well as small sized companies market, even facing a generally soft recruitment market. Speaker 200:16:35Number of paid enterprise customers was 6,000,000 in the trailing 12 months ended September 30, 2024, up by 22 percent year on year and 2% quarter on quarter. ARPU in this quarter remained stable sequentially. Notably, our overall operating cost and expenses were flattish quarter on quarter, even including several one off or non structured expense items in this period. As one of our key focuses being sustainable cost control, we are confident that our effective business model can continue to generate strong operating leverage in the future. Looking at detailed financial metrics, excluding share based compensation expenses, adjusted operating costs and expenses increased by 23% year on year to RMB1.3 billion, flattish quarter on quarter. Speaker 200:17:47Adjusted operating profit reached RMB6005 million, up by 10% year on year, with an adjusted operating margin of 32%. Cost of revenues increased by 17% year on year to RMB 314 1,000,000 in this quarter, mainly driven by higher server and bandwidth costs, payment processing costs as well as employee related expenses. Gross margin kept at the same level of 84% as last quarter. Sales and marketing expenses increased by 14% year on year to RMB522 1,000,000 in this quarter, primarily driven by the marketing campaigns launched during the Paris 2024 Olympic Games and the Euro Cup of 2024. Excluding the sponsorship expenses, we witnessed the improved efficiency and business leverage in both our selling and marketing expenses due to our strong brand recognition and powerful network effect inherent in our business. Speaker 200:19:12We are confident that the enhanced marketing efficiency trend will continue to improve along with our top line growth. R and D expenses increased by 12% year on year to RMB464 1,000,000 in this quarter. Excluding share based compensation expenses, adjusted R and D expenses increased by 18% year on year to RMB361 1,000,000. The depreciation cost associated with our earlier investments in AI infrastructure has largely stabilized and is not expected to increase in the near future. Our G and A expenses increased by 31% year on year to RMB286 1,000,000 in this quarter, mainly due to higher employee related expenses and some one off expenditures that will not occur in the coming year. Speaker 200:20:15Our net income was RMB464 1,000,000 in this quarter, up 9% year on year. And our adjusted net income in this quarter reached RMB739 million and increased by 4% year on year, which was affected by the decrease in the interest and investment income. Total share based compensation expenses amounted to RMB275 1,000,000 in this quarter, down by 9% quarter on quarter and 5% year on year. As Jonathan just mentioned, we are expecting total share based compensation expenses to continue the downward trend in 2025. Net cash provided by operating activities in this quarter was RMB812 1,000,000 relatively stable with that of the same period of last year. Speaker 200:21:21As of September 30, 2024, our cash and cash equivalents, short term time deposits and short term investments totaled RMB16.6 billion. We launched an additional share repurchase program in August 2024, running concurrently with the March program, which allows us to buy back up to US350 million dollars of shares. Since the announcement of the August program, as Josephine just mentioned, we have repurchased a total consideration of approximately 130,000,000 dollars making the total buyback amount reached US220,000,000 dollars this year, demonstrating our commitment in shareholders' return and long term confidence of our business. And now for our business outlook. For the Q4 of 2024, we expect the total revenues to be between RMB1.795 billion and RMB1.81 billion, a year on year increase of 13.6 percent to 14.5%. Speaker 200:22:47That concludes our prepared remarks. And now, we would like to answer questions. Operator, please go ahead with the queue. Operator00:22:56Thank you. Our first question comes from Eddie Huang with Morgan Stanley. Your line is open. Speaker 300:24:01Thank you, management, for taking my question. I have two questions. The first one is that the government has launched a supportive policy since September end. Have you witnessed any signs of this policy has helped you boost the recruitment market? And have you witnessed any operating metrics improvement as well? Speaker 300:24:28The second question is, given the uncertainty of the macro economy, which could sustain into 2025, how should we think we could maintain the revenue growth in 2025? Thank you. Speaker 100:25:44Thank you for your question. About the first one regarding the supporting policy since the end of September, I have several observations to share with you. Firstly, we noticed that the newly added enterprise users every day has been improving on a year on year basis since the end of October. And please note that November December are traditionally relatively low season for recruitment. However, the newly added enterprise users improving on a year on year basis since October, My understanding is that this is a good news and this trend have continued into November December. Speaker 100:27:16And the second thing about the job seeker to recruiter ratio, which I believe many of you concerned have been continued to fall back. I have just discussed in my prepared remarks that during July to September, that number is high compared to the same period last year and now it is lower than the same period last year, which and reached relatively low level within this year, which means the supply and balance supply and demand unbalance issue is improving. Actual improvement of economy and actual improvement of the enterprise recruitment demand. So this should take some time and we should stay patient and calm. About the second question, facing the uncertainty of macro, how we can guarantee our continued revenue growth trend. Speaker 100:29:44We have several key structural growth drivers for our revenue, which is still unchanged. The first thing is the user growth. Even though of all these uncertainties, we expect that we can still have at least 15% of overall user growth. The enterprise side might be slower, but still it can grow. And if the macro can stable at some level, then we expect that enterprise side have better performance. Speaker 100:30:15So our user growth as the most important driver is still quite solid. And the second important driver is our paying ratio has still maintained a separate level. If you're looking back, our paying ratio started at even like 0% or 5% and improved along this year is now reaching at like 20% to 30% level. And so the upward trend is unchanged. And another opinion is that our pace the increase of payment ratio has some connection with the supply and demand balance. Speaker 100:31:52And as the sign of the supply and demand balance improving, we expect that if the economy can be stable, then our payment ratio can return to our growth trend. If the macro can actually go back to growth, then my paying our paying ratio will experience a significant improvement. Speaker 200:32:57Drivers. Speaker 100:33:00And the 3rd driver is our ARPU. As far as we have got the 1st and second driver, which is NAV, we are not in a hurry to aggressively increase ARPU. So it will keep at a stable and slightly improvement trend. And I have some additional brand new growth driver, which is our Blue Collar business. Our blue collar contributed more than 38% in the Q3 of our total revenue. Speaker 100:34:44This is quite important breakthrough. Several years ago, I have my various thoughts that I want to resolve the problem in the blue collar manufacturing recruitment industry, which is bad money driven on the good money and people with decent background cannot get good jobs. So we launched the College High Law project in the hope of someday, one day, the top good college agents can agree with us to agree with our rules to do a crewman business on our platform. And now we have saw some real money coming back from this, which is our dreams coming into the reality. That's my answer to your question. Speaker 100:35:47Operator, let's move on to the next question. Operator00:35:52Thank you. Our next question comes from Timothy Zhao with GS. Your line is open. Speaker 400:37:04Thank you, management, for taking my questions. My first question is regarding the more detailed breakdown into the Q3, including the customer performance between the blue collar and white collar sectors as well as different sectors, subsectors as well. And as management mentioned that ARPU overall is relatively stable in the Q3. Could management provide more color in terms of ARPU and revenue trend between SMEs and the key accounts? And second question is regarding the user growth. Speaker 400:37:35I think as management mentioned that I think in the 1st 9 months of this year, there were already 40,000,000 newly added verified users. And in my calculation, the individual users should already reach or get close to 200,000,000. Could management share about the total room for the individual users to grow? And as we are aiming for 15% or more than that growth into next year, how should we think about the sales and marketing expenses or the marketing expenses into next year? Thank you. Speaker 100:38:56Thank you for your question. First one regarding different blue, white collar and industries. Of course, the overall growth rate of Blue Collar are still faster than White Collar. As I just mentioned, the revenue contribution have further increased to over 38%. However, compared to the same period last year, we have seen the blue collar revenue growth rate have been significantly slowing down, which was mainly affected by the weak urban service industry performance. Speaker 100:39:33Compared to blue collar, white collar is relatively stable. In terms of subsectors, as I just said, the urban service industry has been relatively weak since the Q2. However, we covered a little bit in recent weeks. For the better performed industries, we have several highlights, manufacturing industries, logistics and warehouse, automobile are the 3 best performed industries in the Q3 and the recent weeks. For example, the manufacturing industry has year on year revenue growth more than 45% in the Q3. Speaker 100:41:44And about the different size of enterprises, we noticed these are on the two end of the market. First one is hypercell enterprise with more than 10,000 employees performed the best in the Q3. And the second one is a small and micro sized enterprises with employee less than 100 people. My understanding that this is actually a quite good news because majority of China's enterprises are small sized companies, which is also the main contribution of our new users new enterprise users. Speaker 200:42:27I would like to add one point regards our 3 accounts breakdown. Key accounts recorded the highest revenue growth, which is up more than 30% year over year. The overall ARPU up 5% year over year, flat quarter over quarter. Among all three segments, key accounts ARPU improved the most. Speaker 100:43:34And about your second question for our user growth potential, it's actually a quite good question. So we have actually started through several different channels on methodology that come to a conclusion that China's marketable employees, the number of China's marketable employees are more than 400,000,000, which means we have a double space to grow. And on the enterprise side, the room or space is even bigger. Official number is that China has more has 40,000,000 to 15,000,000 enterprises. Some channels said even more than 50,000,000. Speaker 100:44:58No matter what, we have very strong advantages in terms of enterprise size service because we are our model are very simple for small or even micro sized companies and across different industries, which can support our very strong and large room for our enterprise users. And we are not planning to spending a lot of money on marketing or user acquisition. There are two reasons. First, due to a very strong double sided network effect, the natural traffic has accounted for a very significant portion of our newly used new users. And secondly, technically speaking, there is no big events or marketing campaign, which we need to spending more money on. Speaker 100:46:41So as a result, we will keep our marketing expense at a relatively low level. And that's my answer to your questions. Thank you, Timothy. And operator, let's move on to the next question. Operator00:46:59Thank you. Our next question comes from Wei Zhang with UBS. Your line is open. Speaker 500:48:02Thank you, management, for taking my question. My first question is on blue collar recruitment. Could management maybe share your future growth strategy for the blue collar business around manufacturing and other verticals? Do we plan to build our offline service capabilities for the blue collar recruitment? And also have we observed any change in the competitive landscape here? Speaker 500:48:26And second, just on the profitability outlook for next year, understand management has shown a very strong commitment to protecting profitability in light of the macro uncertainties. So if we just look at our profit goal for the next year, what do we see as the major drivers for profitability improvement? And is there any potential new investments that we should consider? Thank you. Speaker 100:49:41Okay. Thank you for your question. We just talked about the improvement to the achievement we have in the blue collar, especially manufacturing sector. So the essence of that is actually is an idea or concept becomes reality, which is the factories, intermediaries, workers and the platform. Those 4 parties can coexist under one co recognized game rules, which can allow everyone to be more efficient and earn money with dignity. Speaker 100:50:15And now that idea has come into the attitude. So this is actually a very hard process. And I'll talk again about Essence, which is every player, the factories, agents, workers and platforms, they are all battling against the short term interest and long term interest. For example, one manufacturing worker who is quite clearly aware that his working salary should be in the RMB 6,000 per month range. However, if someone posts a job of RMB 150,000 per month, he is quite hard to resist attempt to submit a resume. Speaker 100:52:11So it's a fight for a potential for job and the secured working opportunity. And the example I just said is actually unreal, worker facing on the current market condition in a good season that his salary can raise to around 8,000 per month. So I control the related similar kind of jobs, so salary range is no more than 8,000. If we have that, that can have I have permission to answer your two questions. And the question about the competitive landscape, so if I continue to control the workers' salary range, which are job posting can be no higher than RMB 8,000 per month, in short term, I may not be able to compete with the platform allows people to post jobs with over RMB 150,000 per month. Speaker 100:55:12But in the long term, I have strong advantages because I actually returned the truth of this job position. And second, about how committed I will invest to do the offline placement because the things I'm currently we are doing is quite difficult and need a lot of input from every level. So I hope I can continue to do that, which we have already established very clear advantages. So in the short term, I won't invest heavily in the placement while continuing our current game with those 4 participants and hopefully we can have good results. And the second question, I will give a short but clear answer. Speaker 100:56:46So facing all these difficulties, we need to find out which thing is definitely right to do. And we believe to guarantee our profit or profitability is definitely cracked things. So we need to do and we will guarantee our profit. And in terms of managing our next year profit target, I'm quite I have very strong confidence. I won't talk too much about our management details, but with one thing I can say is that we have very strong operational averages. Speaker 100:58:05So as long as we can have which will majority turn into our profit, this trend is quite clear. Speaker 200:58:19Regarding our company's margin outlook in 2025, I can offer some of our thoughts. Regarding the gross margin, we expect our gross margin will be flat or improve slightly next year. Sales efficiency improvement will leave additional leverage to selling expenses. Absolute amount of marketing spending will be capped at 2024 level or even decrease. R and D headcount likely will not increase. Speaker 200:58:58There is no near term actual investment to AI and hardware. So our and one more thing is our new business. We expect our new business spending will be with disciplined approach. So all in all, our operating margin will further improve, As Johnson said, we'll further improve along with our top line growth. So this is our view towards the margin profit. Speaker 100:59:34Okay. Thank you. In light of the time constraint, I think operator we can take one last question. Operator00:59:44Thank you. Our last question comes from Yanyan Xiao with CICC. Your line is open. Speaker 201:00:36Thanks management for taking my question and I have two questions. My first question is how is our overseas business progressing and how can we balance our profit control goals with overseas business investment? And my second question is, we've noticed that an industry wide trend towards AI products like AI interviews. So how do you view the current application scenarios of AI in the recruitment field? And what potential new revenue or cost reduction opportunities might there be? Speaker 201:01:17Thank you. Speaker 101:02:09Thank you for your question. About your first question of our overseas business and the relation with investment and relation with our profit target. So one thing is clear that this next year, we won't have very big investment in our overseas business. This has a relation to our business developer methodology, which is we want to release the evil until we see the rapid, which means we won't increase investment heritage before we have some certainty. So we have to do some very small experiment with limited cost. Speaker 101:03:12So in our plan, we won't expect we can clearly see that profit next year, so that won't affect our profit target next year. In terms of AI application, actually now within the industry or actually other all the industries, the reality is the high prospect of the technology cannot correlate with real actually application scenario. So there's a very loud, frightening, but very small frame. So that's an industry fact. But I want to further explain our opinion during our industrial practice. Speaker 101:05:00The first one is we will insist on the equality between job seekers and the Kultras. We will not allow once any site to use advantage of AI to have advantages over the other side. And the second principle we insist is the right to know. So whenever a users are facing the potential counterparty of AI, we should let that user know. And the 3rd policy, we insist that the current application scenario, which can be perfectly done without large language model, there is no necessity to use a lot of LMM to do it again, which is a factory kind of waste. Speaker 101:06:43Apart from all those series, we have several real applications. So in terms of protecting the safety of our users, our AI technology has been quite useful. We've disclosed in the past that we have over 900 people of our security team. And this year, we increased more than tens of millions of new users, but we didn't increase the total number of our security team. One important reason is that we used our AI technology to assist with the verification, which largely increased our overall review efficiency. Speaker 101:08:36So in the history of the bad people fighting with the platform, the first principle is actually the fighting of the cost. Whenever evil guys feel like first to do things to do best things on the platform, then he will not continue to do that. With the help of AI, we can actually increase our advantages over that, so it can create real value for our operation. And that's my answer for your questions. And I think that's all the questions for tonight. Speaker 101:09:18Operator? Operator01:09:21Thank you. Due to time constraint, that concludes today's question and answer session. At this time, I will turn the conference back to Wimby for any closing remarks. Speaker 101:09:30Thank you once again for joining us today. If you have any further questions, please contact our IR team directly or TPG Investor Relations. Thank you. Operator01:09:40Thank you for your participation. This does conclude the program. You may now disconnect. GoodRead morePowered by