Kanzhun Q1 2025 Earnings Report

Kanzhun EPS Results

• Actual EPS: N/A
• Consensus EPS: $0.22
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Kanzhun Revenue Results

• Actual Revenue: N/A
• Expected Revenue: $1.92 billion
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Kanzhun Announcement Details

• Quarter: Q1 2025
• Date: 5/22/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, May 22, 2025
• Conference Call Time: 8:00AM ET

Kanzhun (NASDAQ:BZ) Ltd, headquartered in Beijing, China, is an online recruitment platform that connects job seekers with potential employers. The company's main product, BOSS Zhipin, is a popular app in China that utilizes artificial intelligence (AI) technology to match job seekers with employers based on their qualifications and preferences. Kanzhun was founded in 2014 and went public on the NASDAQ in June 2021.

Kanzhun has experienced strong revenue growth over the past few years, with a compound annual growth rate of around 70%. The company's gross profit margin has also improved yearly growth profit margin for several years. Since its initial public offering (IPO) in June 2021, Kanzhun's stock has experienced volatility reflecting the challenges of operating in a rapidly evolving industry. As a result, the company's share price has ranged from a low of $17.05 to a high of $50.40  Kanzhun's valuation metrics are mixed compared to industry peers. 

The online recruitment industry in China has seen significant growth in recent years, with increasing demand for skilled labor and a shift toward online recruitment platforms. Kanzhun's main competitors include 51job, Liepin and Zhaopin. However, the industry is subject to government regulation, particularly regarding user data protection and the verification of job postings.

Founder and CEO Peng Zhao leads Kanzhun's leadership team. Zhao has over 15 years of experience in the technology industry and previously served as an online recruitment platform's Chief Technology Officer (CTO). 

Kanzhun has several growth opportunities, including expanding its services to new markets and introducing new products. The company has already expanded its services to Hong Kong and Singapore and plans to expand further to Southeast Asia. Kanzhun is also exploring using blockchain technology to improve its platform's security and transparency. Additionally, the company has indicated an interest in expanding into other industries beyond recruitment, such as education and healthcare.

The online recruitment industry in China is highly competitive, with Kanzhun facing intense competition from other established players in the market. The company must also navigate government regulations related to data privacy and job posting verification. Moreover, Kanzhun's success largely depends on the health of the Chinese job market, which may be impacted by factors such as economic conditions, government policies and the political climate between the United States and China. 

Kanzhun operates in the broader human resources and recruitment industry, which is growing rapidly due to the increasing demand for qualified candidates in various fields. Several factors, including economic changes, technological advancements and evolving labor laws, have impacted the industry.

Kanzhun faces significant competition in the recruitment industry, with key players such as LinkedIn, Indeed and Glassdoor dominating the market. However, Kanzhun focuses uniquely on China and offers various services beyond job postings, including training, assessments and career development services.

Kanzhun has several growth opportunities, including expanding its services beyond China, growing its user base and leveraging new technologies to improve recruitment. The company has also launched several new products recently, including a mobile app and a chatbot, to help job seekers and recruiters connect more efficiently.

Kanzhun faces several risks and challenges, including intense competition from established players, changing regulations in the recruitment industry, and the potential for economic downturns to impact job growth. The company may also face challenges in scaling its operations beyond China and adapting to evolving technological trends.

Kanzhun Q1 2025 Earnings Call Transcript

Key Takeaways

• In Q1 the company delivered 13% YoY revenue growth to RMB 1.92 billion and 112% YoY net income growth to RMB 510 million, with adjusted operating margin rising to 36%.
• Cost controls included a 10% QoQ drop in share-based compensation and a 15% YoY reduction in marketing spend, yet MAUs grew 24% YoY to 57.6 million with 15 million new verified users added through April.
• Despite concerns over the US-China tariff war, recruitment activity remained resilient with new job postings up 17% YoY since January and total paid enterprise customers up 20% YoY to 6.38 million.
• The company is accelerating AI initiatives—ranging from an AI-powered interview practice robot to AI chat agents for recruiters—which have improved matching efficiency by 25% and candidate engagement by 15%.
• For Q2 the firm expects revenue of RMB 2.05–2.08 billion (up 7–8.5% YoY) and remains confident in achieving its full-year non-GAAP operating profit target of RMB 3 billion, supported by strong cash reserves and ongoing share repurchases.

Presentation

[Operator]

Ladies and gentlemen, thank you for standing by, and welcome to Country Unlimited First Quarter twenty twenty five Financial Results Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Today's conference is being recorded. At this time, I'd like to turn the conference over to Ms. Wenbei Wang, Head of Investor Relations. Please go ahead, ma'am.

[Wenbei Wang, Head of Investor Relations & Capital Markets at Kanzhun]

Thank you, operator. Good evening and good morning, everyone. Welcome to our first quarter twenty twenty five earnings conference call. Joining me today are our Founder, Chairman and CEO, Mr. Jonathan Peng Zhao and our Director and CFO, Mr. Felix 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 the company's control, which may cause actual results, performance, or achievements of the company to be materially different. The company cautions 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 a reconciliation of GAAP to non GAAP financial results, please see the earnings release issued earlier today.

[Wenbei Wang, Head of Investor Relations & Capital Markets at Kanzhun]

In addition, a webcast replay of this conference call will be available on our website at ir.jpin.com. Now I will turn the call to Jonathan, our Founder, Chairman and CEO. Hello everyone. Thank you for joining our company's first quarter twenty twenty five 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, investors, and friends who have continuously believing and supported us.

[Wenbei Wang, Head of Investor Relations & Capital Markets at Kanzhun]

In response to key investor concerns, I would like to report on a few main topics. First, we have remained focused on driving profitability with encouraging results. Second, regarding the ongoing tariff war, which is a concern for many, my observation is that it's been impact on our business has not intensified. Third, we have continued to make solid progress on the AI front. Let me start with an overview of our financial performance.

[Wenbei Wang, Head of Investor Relations & Capital Markets at Kanzhun]

In the first quarter, the company achieved a GAAP revenue of RMB1.92 billion, up 13% year on year. Our net income reached RMB $510,000,000, reflecting a 112% year on year growth. The various uncertainties of recent years have promoted the company to formulate a strategy, which is to focus intensely on very few high impact priorities to enhance operational certainty. Based on this, at the end of last year, we clearly proposed to guarantee profits. Excluding other income such as wealth management income, our adjusted operating income was RMB690 million for the first quarter.

[Wenbei Wang, Head of Investor Relations & Capital Markets at Kanzhun]

Adjusted operating margin was 36%, up 13 percentage points year on year compared to 23% in the same period last year. Overall, this achievement demonstrated the company's capability to implement strategic goals and exceptional operational leverages. Increasing profitability involves both cost control and revenue growth. With respect to cost, there are two things worth mentioning. First is the decrease of HPC expenses.

[Wenbei Wang, Head of Investor Relations & Capital Markets at Kanzhun]

Our share based compensation expenses this quarter were down by 10% quarter on quarter. As a proportion of revenue, this represents a narrowing of nearly four percentage points year on year. We have previously predicted that the longer term passes since the IPO as well as the growth of our revenue, the impact of HPC expenses on profits will decline in both absolute value and percentage. This trend will continue. Second is the improvement of marketing efficiency.

[Wenbei Wang, Head of Investor Relations & Capital Markets at Kanzhun]

From January to April this year, the company added over 15,000,000 verified new users. In the first quarter, the average verified monthly active users on the Foss Shipping app reached 57,560,000, up 24% year on year. Post Chinese New Year, monthly active users in March approached 65,000,000. The average number of achievements per user continued to increase both quarter on quarter and year on year. We maintained robust user growth despite the decrease in marketing expenses, benefiting from the true side and network effect of our model and our continued focus on improving user satisfaction.

[Wenbei Wang, Head of Investor Relations & Capital Markets at Kanzhun]

Our core revenue growth drivers are still the growth of users and the increase in penetration rate. Therefore, revenue growth and user growth showed a highly correlated structural change. First, blue collar new users accounted for over 45% of our total users in the first quarter, driving their shares of revenue up to more than 39%. Second, alongside with the higher growth rate of new users among tier three and lower tier cities, the revenue contribution from tier three and below goes up by three percentage points to over 23%. Third, revenue from enterprises with fewer than 100 employees hit a record high contribution for the period, due to the higher growth rate of the smaller sized companies.

[Wenbei Wang, Head of Investor Relations & Capital Markets at Kanzhun]

Many people are concerned about the impact of the tariff war. We also take it seriously. So far, our overall conclusion is with regard to the job seeking and recruitment supply and demand relationship, most severe impact of the war has been observed so far. In general, we observed that hiring demand from enterprises has continued to show recovery trend since Chinese New Year. From January to April, average new job postings grew 17% year on year, while the paying ratio improved sequentially, boosting total paid enterprise customers in the twelve months ended March 31 to 6,380,000, up 2012% year on year.

[Wenbei Wang, Head of Investor Relations & Capital Markets at Kanzhun]

From industry perspective, recruitment demand for blue collar workers represented by urban service sectors such as catering and retail has been continuously and steadily rebounding since April. Manufacturing recruitment has demonstrated resilience despite the impact of tariffs with a number of new job postings maintaining year on year growth in April. Meanwhile, recruitment demand for white collar has also stabilized and begun to recover with industries such as advertising, professional services, internet, finance, and automotive leading in year on year growth rate.

[Yu Zhang, CFO & Executive Director at Kanzhun]

AI to C to job seekers, AI to B recruiters, AI to management Since

[Wenbei Wang, Head of Investor Relations & Capital Markets at Kanzhun]

last quarter, market has been very concerned about AI. We also attach great importance to AI in our own daily operations in the recent two years. In this quarter, in terms of products and services, we continue to deepen application of AI technology and expand the scale and the penetration rate of AI testing users. Now allow me to expand on our AI developments. We'll break it down into three key aspects, AI to C to job seekers, AI to B to recruiters, and AI to management.

[Wenbei Wang, Head of Investor Relations & Capital Markets at Kanzhun]

First, AI2C. The first item is the grayscale testing, also known as phased rollout, we mentioned in our last earnings call, which is after a user contacts a search, we do not only need to give the result, but also provide an explanation by AI why the result is what it is. Initial outcomes showed promising results and we have now rolled out to all users. The second thing of AI2C, which we also mentioned during our last call, is our AI powered interview robot designed to help users practice interview skills. Our experiments have shown that it can meaningfully enhance the recommendation systems understanding of individual user behaviors and the outcome is quite significant.

[Wenbei Wang, Head of Investor Relations & Capital Markets at Kanzhun]

Now we have officially launched it for all students and young people with up to three years of work experience. Moving on to AI to recruiters. One is the application of AI technology which has to some extent supported our exploration in closed loop services. The result is in the first quarter, the number of enterprises we provide placement like services grew by about 30% quarter over quarter. We are now starting to see some cash The other one is an agent which can interact with the users.

[Wenbei Wang, Head of Investor Relations & Capital Markets at Kanzhun]

The agent can guide enterprise users to convey their personalized recruitment demand and proactively search for suitable candidates across the platform. The agent is still evolving, but we have witnessed that this agent can effectively improve the matching accuracy. Enterprise users who have used the agent seeing a 25% increase in achieving their efficiencies, much recruitment results. That said, we remain extremely cautious about broadly expanding the robust role of allowing it to somehow, even somehow partially replace human recruiters. Our current strategy is as follows.

[Wenbei Wang, Head of Investor Relations & Capital Markets at Kanzhun]

First, we place no limits on building the recruitment bot capabilities. Second, we are extremely prudent about when and how widely we will deploy the robot. Third is AI tool management. First thing, two things to talk about. First thing, the reformation of weekly reports.

[Wenbei Wang, Head of Investor Relations & Capital Markets at Kanzhun]

Now, after one finished their weekly report, we have our proprietary AI system to help create a concise summary version, which can still be revised by you. That way, you have two reports sent to your higher up. One is the summative AI plus modified. The other one is your original version. Until now the supervisor's behavior is trying to check the complex version first then move on to the longer one.

[Wenbei Wang, Head of Investor Relations & Capital Markets at Kanzhun]

So that's just some basic applications today. The value, how to realize the value is the AI will study your historical weekly reports and also read across weekly reports from related departments. If there are too many projects that have not closed the loop or the content is empty or there are too many big words, the AI will remind you. This is a supplement to human capabilities. The second thing on AI tool management is the use case for talent evaluation.

[Wenbei Wang, Head of Investor Relations & Capital Markets at Kanzhun]

When we merely rely on humans for performance appraisal, even so called three sixty degrees, there might be interference from two noisy sources. The first thing is for gap forness. For example, a person's previous contributions will be downplayed and recent performance will be more important. It's quite human nature, but this might not be appropriate as a long term evaluation. The second thing is also quite according to human nature.

[Wenbei Wang, Head of Investor Relations & Capital Markets at Kanzhun]

So a homo sapiens will see what others want you to see. One's superior may consciously or unconsciously filter and change their subordinate information before presenting it upward. However, AI is objective. Under the premises of protecting our employees privacy and dignity, AI can see the objective changes in past performance data. AI will not like an employee because it likes his characters or will not evaluate him badly because it dislikes the employee.

[Wenbei Wang, Head of Investor Relations & Capital Markets at Kanzhun]

So AI is neutral and impartial in terms of human resource applications. To sum up, for the AI to to job seekers to enterprise users and to management, these three aspects, our installation and and the research are equally important. To sum up, the first quarter of twenty twenty five was solid. On the whole, we are positive for the year ahead and we will continue to work hard. That concludes my part of the call.

[Wenbei Wang, Head of Investor Relations & Capital Markets at Kanzhun]

I will now turn it over to our CFO, Phil, for the interview of our for the review of our financials. Thank you.

[Yu Zhang, CFO & Executive Director at Kanzhun]

Thanks, Jonathan. Hello, everyone. Now let me walk through the details of our financial results of the first quarter of twenty twenty five. We are delighted to report a solid start to the year, characterized by continuous expansion in our user base and engagement and the sustainable revenue growth. In this quarter, our revenues reached RMB 1,900,000,000.0, representing a 13% year on year growth.

[Yu Zhang, CFO & Executive Director at Kanzhun]

We experienced a decent spring recruitment season with continuous improvement in enterprise hiring demand, evidenced by the growth of our cash collections, which has bottomed out from the last quarter. Revenues from key accounts and small sized accounts both contributed higher growth rates in the quarter. Our paid enterprise customers grew by 12% year on year to 6,400,000 in the trailing twelve months ended March 31, primarily driven by the growth of enterprise users. Paying ratio among active enterprise users increased on a sequential basis, as the supply to demand situation of the labor market improved from previous quarter. AR PPU increased by 5% year on year, mainly due to the expansion of paying amount from key accounts.

[Yu Zhang, CFO & Executive Director at Kanzhun]

Moving to the cost side, total operating costs and expenses decreased by 8% year on year to RMB 1,500,000,000.0 in the first quarter. Share based compensation expenses dropped by 13% year on year and 10% quarter over quarter to RMB $252,000,000, shrinking for the third consecutive quarters. Excluding share based compensation expenses, adjusted operating costs and expenses decreased by 6% year on year to RMB 1,200,000,000.0. And our adjusted operating margin reached 36%, up by 13 percentage points year on year. A showcase of our discipline, the cost control, and a high operating leverage, despite Q1 normally having the lowest margin within the full year due to seasonality.

[Yu Zhang, CFO & Executive Director at Kanzhun]

Cost of revenues increased by 5% year on year to RMB $311,000,000 this quarter. Gross margin went up by 1.1 percentage points to 83.8% compared to the same period of last year. As a testimony of our AI application to improve our operating efficiency. Sales and marketing expenses decreased by 15% year on year to RMB491 million during this quarter, primarily due to decreases in advertising and marketing expenses and employee related expenses. However, our strong brand recognition enhanced the marketing efficiency and a superior user engagement guaranteed that we can still maintain robust user growth momentum.

[Yu Zhang, CFO & Executive Director at Kanzhun]

Our R and D expenses decreased by 9% year on year to RMB $424,000,000 in this quarter, and was relatively stable sequentially. This decrease was primarily driven by lower employee related expenses and reduced public cloud expenses related to Our G and A expenses were RMB 266,000,000 in this quarter, remaining relatively stable both year on year and quarter over quarter. Our net net income reached RMB $512,000,000 in this quarter, up a 12% year on year, while adjusted net income increased by 44% to RMB 764,000,000. Net margin improved to 6.6%, up 12 percentage points year on year, while our adjusted net margin increased to 39.7%, up 8.6 percentage points year on year. Net cash provided by operating activities reached RMB 1,000,000,000 in this quarter, up 11% year on year.

[Yu Zhang, CFO & Executive Director at Kanzhun]

Our cash position totaled RMB 14,800,000,000.0 as of 03/31/2025. Our strong cash generation and robust cash position provide financial flexibility to execute growth initiatives and enhance shareholder returns. And now for our business outlook. For the second quarter of twenty twenty five, we expect our total revenues to be between RMB 2,050,000,000.00 and RMB 2,080,000,000.00, with a year on year increase of 7% to 8.5%. Please note, this growth rate will also bottom up this quarter, driven by continued improvement of cash collection growth in the year.

[Yu Zhang, CFO & Executive Director at Kanzhun]

That concludes our prepared remarks. And now we would like to answer questions. Operator, please go ahead.

[Operator]

Thank you. We will now begin the question and answer session. To ask a question, please press 11 on your telephone and wait for your name to be announced. To withdraw your question, We will now take our first question from the line of Eddie Huang from Morgan Stanley. Please ask your question, Eddie.

[Eddy Wang, Analyst at Morgan Stanley]

Thank you for management for taking my questions. I have two questions. The first one is that, would you please give us a brief of how the hiring demand evolved over the past months from the start of the tariff war till it eases? And have we seen any signs of the recovery in current demand recently? And the second question is that if I remember correctly, after May, micro weakness coincided with a graduation season has led to deterioration of recruitment demand.

[Eddy Wang, Analyst at Morgan Stanley]

How does the current recruitment demand trend in April and May compare with the same period last year? And have we see different trends among different industries and different size of the enterprises? Will such trend continue to continue into the gradual season in June and July?

[Wenbei Wang, Head of Investor Relations & Capital Markets at Kanzhun]

Thank you for your question. About the first one, which is tariff for everybody is concerning. We are still looking from the supply and demand perspective of job seeker posting job expectations and recruiters posting job postings. So this has the most high importance to our platform. In general speaking, the improvement, the recovery or recruitment trend, continued recruitment trend is still the case.

[Wenbei Wang, Head of Investor Relations & Capital Markets at Kanzhun]

That is undoubtedly. The view we talked during our prepared remarks, which is quite serious that in general speaking the tariff war impact on our overall supply and demand relationship is still quite limited. Objectively speaking, we have a quite diversified industry and location distribution. So the export related industries, both in terms of revenue and the job numbers of job posting contribution are quite low. If we look at the detailed numbers, for example, in April and May, the total number of new job postings and active job postings have kept a good growth rate.

[Wenbei Wang, Head of Investor Relations & Capital Markets at Kanzhun]

We haven't seen any significant fallback compared to March. For industries which affected bigger by the tariffs such as export related jobs, so we saw some slowing in terms of growth rate in the April, but it has recovered after mid May. The second question regarding the overall recruitment market. So the overall supply and demand relationship has continued to improve in this year. Let's take a detailed look at the days after May compared to the same days after the Spring Festival.

[Wenbei Wang, Head of Investor Relations & Capital Markets at Kanzhun]

So this year we saw better growth trend compared to last year between after May, especially after Labor Day holiday and after Spring Festival. Let's look at some detailed numbers. So in April till today, since April till today, the number of newly posted jobs and number of recruiters who posted jobs number, the sequential trend are better compared to last year. Among which the blue collar sector, urban service blue collar sector, the year on year growth rate continue to enlarge from March to May. And about our prediction for June, July, the graduation season, it's hard to say we can predict precisely.

[Wenbei Wang, Head of Investor Relations & Capital Markets at Kanzhun]

But according to my personal feelings, could be okay since it's coming. And that's my answer to your question, Eddie. And operator, let's move on to the next one.

[Operator]

Thank you. Our next question comes from the line of Timothy Zhao from Goldman Sachs. Please go ahead, Timothy.

[Timothy Zhao, Equity Research Analyst at Goldman Sachs]

Thank you management for take for taking my questions. Two questions here from my side. First, we understand that the company has been internally testing the AI features for both enterprises and the job seekers. Could management share what is the feedback so far, and what is the plan for the company to launch the AI monetization features? Secondly is considering the the latest macro environment as well as the monetization rate as well as user growth.

[Timothy Zhao, Equity Research Analyst at Goldman Sachs]

Just wondering how how does management see the 3,000,000,000 RMB non GAAP operating profit target for this year. And into the second half, what are our leverage to make sure this 3,000,000,000 target is achievable? And what is the longer term market expansion, I think, wrong for the company? And, additionally, could could management share about our plan for capital allocation? Thank you.

[Wenbei Wang, Head of Investor Relations & Capital Markets at Kanzhun]

Thank you for your question. I will take the first one regarding AI and our CFO will answer the second question regarding the margin. So about AI, it's it's good to summarize that our series of phased out AI product testing has quite positive feedbacks that we have just mentioned. And this is based on that we have continued to be very cautious in terms of using AI. And I think analysts and the investors who are familiar with us knows our views.

[Wenbei Wang, Head of Investor Relations & Capital Markets at Kanzhun]

And we just mentioned that some of our testing products have already opened to all of our users. It's a gradual process. And regarding the monetization, I would like to share two data with you. For the recruiters who have grayscale used our AI equipment function, his efficiency of achievement increased by 25% under the same amount of conversations. The AI communication assistant have, accumulatively served over 9,000,000 conversations, during our massive grayscale test.

[Wenbei Wang, Head of Investor Relations & Capital Markets at Kanzhun]

So the job seekers who have been responded by the AI communication assistant, his achievement rate increased by 15%. So in principle, the AI product can improve the efficiency, increase your user experience and saving some time. But in reality, we we are still quite cautious. So my view is we we we we we might be relatively gradually and slowly on the AI adoption of monetization, but it must be some.

[Yu Zhang, CFO & Executive Director at Kanzhun]

So I'd like to answer the profitability and margin question. So as Jonathan mentioned in the prepared remarks earlier, even under current conditions with many external uncertainties, the company's overarching goal for this year is to secure a solid bottom line growth first, then try our best to grow faster with our business. In first quarter, we had a, we had a good start and we managed to reduce cost to improve overall efficiency for most of, most of cost and expenses items. Our marketing marketing fees dropped in absolute amount versus last year, but we still achieved satisfactory new user growth. We had higher revenue, but our sales guide, number of our sales dropped.

[Yu Zhang, CFO & Executive Director at Kanzhun]

Headcounts for R and D, administrative cost, and operation functions kept stable. Our internal AI tools keep the in for the platform's operation and verification jobs, which leads to improvement of our gross margin. You should know that our, our margin in the first quarter is the lowest due to the seasonality. With all the measures mentioned above, there's still room to improve in second quarter, second half of the year. So we are confident with our 3,000,000,000 RMB non GAAP operating profit target for the full year.

[Yu Zhang, CFO & Executive Director at Kanzhun]

This is a comment for the profitability and margin. And regarding the shareholder return topic, the company currently has more than 2,000,000,000 US dollar cash and equivalents on hand. We consider shareholder returns a very important topic, and we like to do whatever feeds us. Currently, our share repurchase program is still ongoing, and we definitely will continue. At the same time, we are studying and doing some assessment for other means, other measures to increase our shareholder return.

[Yu Zhang, CFO & Executive Director at Kanzhun]

So please stay tuned. We would like to, you know, do it step by step.

[Wenbei Wang, Head of Investor Relations & Capital Markets at Kanzhun]

Okay. That's our answer to the, to those two questions, and operator, let's move on to the next one.

[Operator]

Thank you. Next question comes from Wei Xiong from UBS. Please ask your question, Wei.

[Wei Xiong, Equity Research Analyst at UBS Group]

Thank you, management for taking my question. First, with the wider adoption of AI in human resources industry, are we seeing any changes or expecting any potential changes in the competitive landscape?

[Wei Xiong, Equity Research Analyst at UBS Group]

And can we leverage AI to actually further expand our service offerings? And secondly, could management share more updates regarding our blue collar recruiting business? What are the key KPIs for this year? And how is our progress in the new businesses such as placement services? Thank you.

[Wenbei Wang, Head of Investor Relations & Capital Markets at Kanzhun]

And about your first question of how AI will impact the competitive landscape, my view is relatively conservative. So my assessment is for this generation of AI technology and all the AI application we can observe from the market, we haven't seen any revolutionary or disruptive changes. So the competitive landscape is relatively stable. But I also have some predictions that globally amongst human resource industries, there is a new generation of AI products can change the overall landscape. Then there must be pushed by the new generation of AI technology, which may be like the 1.5 or two point zero generation.

[Wenbei Wang, Head of Investor Relations & Capital Markets at Kanzhun]

Even though we haven't observed any revolutionary changes of the industry, we still place very high importance of AI and AI investment. For example, last year, since actually since 2023, we have bought more than 1,000,000,000 RMB of chips, which is enough for us to conduct self self development research and small scale inference. In terms of AI science, we still maintain small scale lab for us to be able to conduct pre training of our own model and replicate all those open source models. In fact, we are actually quite confident that in terms of using AI science for AI application, our our business scenario are actually quite suitable to to to applicate the the power of AI to for AI to have some effects on our business. Compared to the first emergence of TADDPT when we felt a little bit panic or curious at that time, now we have more certainty on the AI technology can actually help with our business and small with more real feelings.

[Wenbei Wang, Head of Investor Relations & Capital Markets at Kanzhun]

And more topic of view to share that a lot of online recruitment platform have long been pursuing the closed loop replacement service. Now with help of AI technology we have more certainty to confirm that whether we can achieve closed loop service in a big scale or not. And with blue collar sector, user, new user contribution more than 45%, revenue contribution more than 39%, and increase the revenue contribution from third tier cities. So this aspect actually are becoming more and more important of our daily operations. And if we want one word to summarize our future efforts to serve the blue collar and the lower tier city users is our service and products will be more simple and clear.

[Wenbei Wang, Head of Investor Relations & Capital Markets at Kanzhun]

And in terms of placement business, especially on the blue collar placement, we have been spending a lot of resources and tabs. The key point is to guarantee the efficiency and the reliability of your results. So if AI application can really help with those two aspects then we should we we we do feel some confidence in this prospect and that's why we want to further invest in this area. And that's my answer to your question. Operator, I think that's the last one due to the time constraint.

[Operator]

Thank you. Yes, due to time constraint that concludes today's question and answer session. So at this time, I'll turn the conference back to Wenbei for any additional or closing remarks.

[Wenbei Wang, Head of Investor Relations & Capital Markets at Kanzhun]

Thank you, operator, and thank you, everyone, for joining our call today. And if you have any further questions, please contact our IR team directly or TPG Investor Relations. Thank you.

[Operator]

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect your lines.

Participants

Executives

• Wenbei Wang, Head of Investor Relations & Capital Markets
• Yu Zhang, CFO & Executive Director

Analysts

• Eddy Wang, Analyst at Morgan Stanley
• Timothy Zhao, Equity Research Analyst at Goldman Sachs
• Wei Xiong, Equity Research Analyst at UBS Group