Kanzhun Ltd Q1 FY2025 earnings call

• Focused on driving profitability with adjusted operating margin up. - Cost control: Share-based compensation expenses down 10% quarter-on-quarter; marketing efficiency improved with over 15 million verified new users added from January to April, BOSS Zhipin app average verified monthly active users 57.56 million, up 24% year-on-year. - AI developments: AI 2C includes gray scale testing for search explanations (rolled out to all users) and AI interview robot launched for students and young people with up to 3 years of work experience; AI 2B: AI support for closed-loop services with enterprise placement services growth by ~30% q-o-q, agent improving matching accuracy with 25% increase in recruitment results for using enterprises; AI to Management: AI help with weekly reports (creates concise summary) and talent evaluation (objective performance appraisal using AI).

In the first quarter, Kanzhun achieved GAAP revenue of RMB 1.92 billion, up 13% year-on-year. Net income reached RMB 510 million, a 112% year-on-year growth. Adjusted operating income was RMB 690 million, with an adjusted operating margin of 36%, up 13 percentage points year-on-year. Blue-collar new users accounted for over 45% of total users, driving their revenue share to over 39%. Revenue contribution from Tier 3 and below cities increased by 3 percentage points to over 23%. Revenue from enterprises with fewer than 100 employees hit a record high.

• Second quarter 2025 total revenues expected between RMB 2.05 billion and RMB 2.08 billion, up 7.0% to 8.5% year-on-year. - Full-year non-GAAP operating profit target of RMB 3 billion.

• Tariff war impact on business, but so far impact on supply-demand relationship has not intensified.

Q: Brief on hiring demand evolution since tariff war and recovery signs; comparison of April/May 2025 vs same period last year across industries and enterprise sizes.

A: Tariff war impact on supply-demand limited; export-related jobs saw slow growth in early April but recovered by mid-May; this year's recruitment trends better than last year after May, blue collar growth enlarged; graduation season in June/July outlook okay.

Q: AI feature feedback and monetization plan; RMB 3 billion non-GAAP operating profit target and capital allocation.

A: AI features have positive feedback, recruiters' efficiency up 25%, job seekers' achievement rate up 15%; confident in RMB 3 billion target, share repurchase ongoing, studying other shareholder return measures.

Q: Impact of AI on competitive landscape and blue collar recruiting business.

A: AI not causing revolutionary competitive changes yet; blue collar business important, service/products to be simpler, placement business focused on efficiency/reliability with AI help.