Kanzhun (Minutes): Recruitment demand on the platform has recovered
The following is a summary of the FY25Q2 earnings call of$Kanzhun(BZ.US) by Dolphin Research. For the earnings interpretation, please refer to《BOSS Zhipin: The environment remains volatile, but the essence of being small and beautiful remains unchanged》
I. Review of Core Financial Information
1. Growth Drivers:
a. The number of paying enterprise customers reached 6.5 million in the 12 months ending June 30, a year-on-year increase of 10%.
b. Willingness to pay: With the recovery of the recruitment market, the willingness of enterprises to pay has increased, especially the demand recovery of small and medium-sized enterprises (SMEs) is more evident, contributing more to revenue on a quarter-on-quarter basis.
c. ARPPU: Maintained stable and moderate growth, mainly benefiting from the increased payment amounts of key accounts.
2. Cash Flow: Net operating cash inflow was RMB 1.052 billion, a year-on-year increase of 21%. As of June 30, 2025, the company held RMB 16 billion in cash.
3. Performance Guidance (Q3 2025): Total revenue is expected to be RMB 2.13 billion to RMB 2.16 billion, representing a year-on-year growth of 11.4% to 13%. Revenue growth is expected to re-accelerate starting from the third quarter.
II. Detailed Content of the Earnings Call
2.1 Key Information from Executive Statements
1. Operational Performance:
a. User Growth: The BOSS Zhipin App had 63.56 million certified monthly active users, a year-on-year increase of 16.5%. From January to July 2025, more than 30 million new certified users were added.
b. Paying Customers: The total number of paying enterprise customers reached 6.5 million in the 12 months ending June 30, 2025, a year-on-year increase of 10%.
c. Growth Drivers: The revenue contribution from blue-collar workers, lower-tier cities, and SMEs continued to increase.
2. Platform Supply and Demand: The overall recruitment market is recovering, the supply-demand relationship on the platform has improved, and the new user C/B (job seekers/positions) ratio has significantly decreased year-on-year.
a. Job Seekers: The job-seeking pressure for fresh graduates has eased, with the number of new certified fresh graduates in June and July decreasing by more than 20% year-on-year.
b. Enterprises: Recruitment demand is warming up. The number of new positions on the platform in July increased by about 20% year-on-year. The demand for fresh graduates has increased, with the number of new positions for fresh graduates in June and July increasing by more than 18% year-on-year.
c. Industry Insights:
-Blue-collar Manufacturing: After a brief slowdown in April due to tariffs, growth resumed in May and continued to lead.
- Service Industry: The service industry in the south accelerated its year-on-year growth in Q2.
- Internet Industry: Significant recovery, with the number of active recruitment positions in Q2 reaching a new high since 2021, led by product and technical positions.
3. AI Technology Progress:
a. AI Empowering Job Seekers (AI2C): The AI interview practice robot has started to be used in job recommendations, improving the job-seeking efficiency of experimental users. AI-assisted search provides users with dynamic job-seeking strategies and salary optimization suggestions. AI is used to identify obscure violations and AI-altered false content, protecting user safety.
b. AI Empowering Enterprises (AI2B): Assisting in posting tens of thousands of positions daily, helping startups and junior HR. Using AI to understand recruiters' intentions, recommending more suitable value-added services, and improving the proactive purchase and repurchase rates of the experimental group.
c. AI Empowering Internal Management (AI2M): AI-assisted coding has greatly improved R&D efficiency. 30% of the code at the Beijing headquarters and 70% of the code in a new R&D department are generated by AI, accelerating product iteration. AI is used in customer service training, quality inspection, and emotion recognition, improving user satisfaction and employee happiness.
4. Shareholder Returns:
a. Secondary Offering in Hong Kong: Completed a secondary offering of HKD 2.2 billion on July 4 to enhance the liquidity of Hong Kong stocks. The trading volume of Hong Kong stocks increased significantly after the offering, with positive effects.
b. Shareholder Return Plan:
- Annual Dividend Policy: The company plans to distribute dividends annually, with USD 80 million to be distributed this fiscal year.
- New Share Repurchase Plan: A new round of repurchase will be initiated, with plans to repurchase up to USD 250 million worth of shares within 12 months starting from August 29.
2.2 Q&A Session
Q: What are the differences in the driving factors of the recruitment demand recovery observed in the second quarter and July compared to the past?
A: Compared to the overall recovery of the recruitment market, we observed two main characteristics:
- The recovery of the internet industry is strong, with recruitment demand returning to a new high since 2021.
- SMEs, especially micro-enterprises with fewer than 20 employees, have a significantly higher growth rate of new positions than the overall platform level.
Q: Has the competition among food delivery platforms driven the surge in blue-collar demand in the service industry?
A: We observed that the overall impact of competition among food delivery platforms on recruitment is minimal. The number of rider-related positions is very small, and their income growth has not exceeded the average level.
Q: How does management view the sustainability of this recovery? What are the expectations for recruitment demand in the third quarter? Given that most of the coding in the company's internal R&D department is now generated by AI, how does management view the long-term impact of AI on white-collar (especially programmer) recruitment demand?
A: We have a positive view on the sustainability of the recovery. On the one hand, the key "job seeker to recruiter ratio" has been continuously improving since November last year and showed a more significant recovery in the second quarter, indicating that the supply-demand relationship in the market is gradually returning to health. On the other hand, from daily operations, we are very confident that the business growth rate in the third quarter will exceed that of the second quarter.
Q: This year's profit margin has already reached a high level. Considering this high base, how should we view the profit margin trend in the coming years? With stable profits and cash flow, what are the company's most important investment directions in the future?
A: The continuous improvement in our profit margin fundamentally benefits from the significant economies of scale brought by the online recruitment platform model. In the past few quarters, we have effectively controlled costs, making the cost growth rate lower than the revenue growth rate, thereby achieving a clear improvement in profit margin while revenue steadily grows. We believe this is a long-term, gradual process rather than a short-term surge.
As for future investments, we will continue to focus on core areas such as R&D, innovation, and new businesses. At the same time, we have very healthy cash flow—generating over RMB 1 billion in operating cash flow for two consecutive quarters. These ample cash reserves will mainly be used for talent development, potential overseas expansion, and more importantly, future shareholder return plans.
Q: Recently, some startups seem to be increasing their advertising spending. Does this affect our marketing and customer acquisition costs? How do you evaluate the competitive landscape in the blue-collar recruitment field and the entire online recruitment market, and its impact on our moat?
A: Regarding market competition, we have indeed noticed that peers are increasing their marketing spending, but the impact on us is limited. Although our marketing expenses as a percentage of revenue are decreasing, the absolute amount invested is still the highest in the industry. More importantly, with strong bilateral network effects, we can efficiently acquire users at very low costs and maintain the highest retention rate in the industry. Therefore, we believe that at this stage, simply initiating a marketing war is of little significance.
Regarding the impact of AI on programmer recruitment, we observe that recruitment is indeed shifting towards higher-end positions. Although our recruitment of junior programmers has slowed down, it has not stopped. Instead, we are more focused on recruiting those with greater potential and a broader perspective, and we are willing to pay higher recruitment costs for this.
The future team structure may shift from "one senior leading multiple juniors" to "one senior leading a senior team working collaboratively with AI". However, considering that junior programmers account for a very small proportion of the entire white-collar group (we estimate less than 2%), this change has a very limited impact on the overall recruitment market.
Q: Can the company provide more details on the specific application scenarios of AI on the enterprise side and the potential commercial products that may be launched in the future? Among the many functions and applications recently developed using AI, which ones do you think have the most commercial potential?
A: We have made good progress in AI product development. For example, we have developed an AI recruitment assistant that helps our internal team of about 500 recruitment consultants complete most of their work through conversations. Another more ambitious example is the AI interview system designed for large state-owned enterprises, which supports customized digital humans, AI follow-up questions, and emotion recognition functions. It has hosted more than 20 interviews for over 10 state-owned enterprises, attracting nearly 30,000 graduates, with positive feedback.
We believe that the integration of AI with business is still in the early exploratory stage, and the process is like "Brownian motion." We have enough patience and resources to try various attempts and wait for revolutionary "killer applications" to emerge. We believe that AI will eventually integrate into all aspects of daily life.
Q: The company recently conducted financing in Hong Kong and announced a stock repurchase and annual dividend policy. What are the management's considerations for future capital market strategies? Specifically, what plans does the company have to enhance the liquidity of Hong Kong stocks? Is there a more detailed plan for dividends?
A: We have over RMB 16 billion in cash reserves and generate over RMB 1 billion in operating cash flow each quarter, so our financial situation is very healthy, and we have no financing needs. The purpose of the public offering in Hong Kong in July was purely to address the issue of poor liquidity of Hong Kong stocks caused by the previous introduction listing, and this successful issuance has indeed brought breakthrough improvements.
We have always regarded shareholder returns as a top priority. In the past, we have cumulatively returned over USD 400 million through four repurchase programs. Now, we have not only updated the USD 250 million stock repurchase plan but also announced an annual dividend policy of USD 80 million for the first time and plan to make it regular. The total amount of repurchase and dividends announced (USD 330 million) has exceeded the amount of this financing (USD 280 million), demonstrating our commitment. In addition, we actively respond to shareholder concerns and continue to reduce the proportion of equity incentive expenses to revenue, and we will continue to strive to create value for shareholders in the future.
<End of Document>
Risk Disclosure and Statement of this Article:Dolphin Research Disclaimer and General Disclosure
