Q1 2023 Kanzhun Limited Earnings Call
Speaker 2: At this time all participants are in listen only mode. After the speakers presentation there will be a Q&A session. Today's conference is being recorded. At this time I would like to turn the conference over to Ms Wenbei Wang, Head of Investor Relations. Please go ahead ma'am.
Speaker 3: Thank you, Peter. Good evening and good morning everyone. Welcome to our first quarter 2023 earnings conference call. Joining me today are our founder, chairman and CEO , Mr. Jonathan Peng Zhao, and our director and CFO , Mr. Phil Yu-Chang.
Speaker 3: 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 conference control, which may cause actual results.
Speaker 3: performance or achievements of the company to be materially different. The company culture will not place a new reliance on forward-looking statements and do not undertake any obligation to update this forward-looking information, expect as required by law.
Speaker 3: During today's call, management will also discuss certain non-depth financial measures for comparison purposes only. For a definition of non-depth financial measures and a reconciliation of depth non-depth financial results, please see the early studies issued earlier today.
Speaker 3: In addition, a webcast replay of this conference call will be available on our website at IR.JIPin.com.
Speaker 3: We said I will now turn the call to Jonathan, our founder, chairman, and CEO .
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Speaker 4: Thank you for your attention.
Speaker 3: Hello everyone, welcome to our first quarter 2020 SRI earnings conference call. On behalf of the company and our employees, I would like to express our sincere gratitude to our users and investors and our employees.
Speaker 4: In general, this is the season when our business began to return to its healthy development trajectory as we step into the post-academic era.
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Speaker 3: In the first quarter, we recorded revenue of RMB 1.28 billion, representing an increase of 12% and 18% year-on-year and sequentially.
Speaker 3: Our calculated cash billions reached RMB 1.65 billion representing an increase of 28% and 49% year-on-year and quote-unquote respectively.
Speaker 3: Along with the recovery of our revenue, we demonstrated our healthy profitability and achieved a net profit of RMB 32.7 million compared to a net loss in the same period of last year.
Speaker 3: Our adjusted net income, which excludes share-based compensation expenses, was RMB 245 million, increasing by 102% year-on-year.
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Speaker 3: After Lunar New Year, our user base grew rapidly. In first quarter, we had 14.61 million newly verified users.
Speaker 3: The average monthly active users on both Japan apps were approximately 14 million, up 58% year-on-year. The average daily active users increased by 54% year-on-year on this quarter, with peak DAU reaching nearly 15 million.
Speaker 3: Notably, blue-collar and lower-tier CT users were the fastest growing cohort across our user base.
Speaker 3: In this quarter, blue-collar users contribute to more than 40% of the newly verified user growth, with accumulated verified blue-collar users accounting for 31% of our total users by end of this quarter.
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Speaker 3: In terms of recruitment demand from enterprise users, which many of you care about, since the first quarter tier now, our monthly active enterprise users scale continuously reached record highs in comparative periods, while maintaining a consistently high level since the spring festival.
Speaker 3: Among all the industry we serve, the urban service industries were the most prominent performers, while the SMEs recovered faster than large enterprises. This is also a demonstration of our software and modeling ability to serve different users from different industries, regions, and enterprise scales.
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Speaker 3: Commercial-wise, thanks to the general recovery of recruitment demand from our enterprise users, the number of our paid enterprise customers in the 12 months period ended March 31st, recovered rapidly and this growth trend is expected to continue in the following quarters.
Speaker 3: Strong user growth has proven the urban service industry to become our second largest RAM new contributor, leading to the results that RAM new contributions from blue-collar users are counted for over 30% of our total RAM new in this quarter.
Speaker 3: In terms of enterprise scale and regional distribution, the revenue contribution of enterprises with less than 100 employees and those from second and lower tier cities also increased year on year.
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Speaker 3: On the business operation side, one of our priorities in the quarter was to alleviate the imbalance between supply and demand under current employment market conditions. Specifically, we worked to ensure individuals, especially job seekers.
Speaker 3: could access more and better employment opportunities on our platform with a continued high quality user experience.
Speaker 3: Through deeper understanding and exploration of user demand, combined with continuous efforts to optimize our algorithms, we made some progress in this area.
Speaker 3: In February and March, following the Spring Festival, the number of successful consent reached, which means the successful resume exchange between job seekers and enterprise users, achieved a
Speaker 3: On average, 160 million pairs, and which is an increase by 65% year, to remind you that our monthly active users increased by 58% year, which means we have achieved record highs in terms of total number of resumes changes.
Speaker 3: and the number of red mentions per person.
Speaker 4: So I would like to take this opportunity to give special thanks to our engineers and the product managers who have
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Speaker 3: For those critical users, such as college students, we continue to leverage our resources, trying our best to help them access to more suitable opportunities on our platform.
Speaker 3: This is an important work for our company, this culture and also the corporate culture that more than 55,000 employees of our company has been upholding.
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Speaker 3: We believe many investors and friends are concerned about the challenges and opportunities that the recent development of AI technology has brought to the company. There are only two things we can say as of today. First, the company attaches great importance to this technology development. Secondly, we are making real money.
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Speaker 3: In general, since the beginning of the second quarter, our platform has continued to see solid growth trends in our user base and user engagement, both on the job seeker side and enterprise side.
Speaker 3: It is worth mentioning that the number of active enterprise users and active positions posted have both shown ongoing and steady increase. Seceding the levels we saw at the end of March, this is actually a quite good scenario. In terms of what we are seeing within different industries, the urban service industry and the travel and tourism industry have continued to
Speaker 3: We said I will tend to call over to our safe both fields for review of our financials. Thanks.
Speaker 6: Thanks, Jonathan. Hello everyone. Now let me walk through the details of our financial results for the first quarter of 2023.
Speaker 6: Well, please to deliver a solid order.
Speaker 6: results with strong revenue growths as well as healthy profitability and a strong operating cash flow.
Speaker 6: driven by the robots, the ULLA roads and the McDonald's of the equipment demand, hold the screen festival. We have witnessed our great acceleration of both revenue and the calculated cash-giving strokes.
Speaker 6: Our revenues reached the R&D 1.28 billion up 12% year over year. And our calculated cash bidders reached the R&D 1.65 billion representing a year over year increase of 28%. Quantity number of paid enterprise customers alone reached to Kisar.
Speaker 6: increase in the coming quarters.
Speaker 6: Revolution of contributions from small size accounts increase as the equipment demands from SME group better.
Speaker 6: Moving to the cost of the site, total operating costs and expenses in this quarter will earn the 1.37 billion, half 20% over year, excluding share-based compensation, adjusted cost, and expenses in this quarter.
Speaker 6: 16% to army 1.16 feet. Considering other operating income.
Speaker 6: Our adjusted operating margin for this quarter is 10.6%.
Speaker 6: Calls of randomness in this quarter was RM247.00 Up 29% of the over year maybe driven by increases is sober and that's with cost.
Speaker 6: Use a fire user traffic and a payment of processing costs which is related to the fire growth of cash elections from our online self-service village.
Speaker 6: Excooting sharebase and compensation expenses, our adjusted sales and among the expenses will earn the 568 million off 15% year-from year-to-year. This increase was primarily due to higher among expenses.
Speaker 6: Compared to last year, as we have strong user and active growth this quarter.
Speaker 6: However, we have observed that overall customer acquisition efficiency has improved.
Speaker 6: Compared to the same period of 2021, due to our intense death.
Speaker 6: 2021 due to our enhanced branding recognition.
Speaker 6: This encouraging trend will help us continue to achieve some of the profitability while the and the end dueyer brought them. Thank you You are an incredible sir.
Speaker 6: Sales in poignies, related expenses also increase as a result of higher cash revenue growth.
Speaker 6: Our R&D expenses in this quarter increase by 15% year over year to R&D 333 minutes and a GNA expenses in this quarter increase by 6% over year to R&D 165 million. Don't leave.
Speaker 6: Benefitting from our strategy and efforts to improve operating efficiency, our adjusted R&D expenses and adjusted TNA expenses kept the R&D table with the same period for 2022.
Speaker 6: Net income in this quarter was R&B 33 million as compared to a net loss of R&B 12 million in the quarter. In the same quarter, 2022, and however, by just the net income, police quarter increased by 102% over year, to R&B 200 and the point.
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Speaker 6: Net cash provided by operating activities was RM 500.44 billion for this quarter. As of March 31, 2021, our tax tax decrylas and short-term investments increased to RM 13.5 billion.
Speaker 7: The robot, the operating cash blows and cash? enable us to be more flexible on capital education and future development strategy.
Speaker 8: And now, for our business outlook, for the second quarter of 2023, we expect our photo revenues to be between R&B 1.43 million and an R&B 1.46 billion.
Speaker 9: with a E over E or increase of 28.6% to 31.3%.
Speaker 10: Thank you. To ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced.
Speaker 11: To withdraw your question, please press star 1 and 1 again.
Speaker 12: Please stand by while we compile the Q&A queue.
Speaker 13: Our first question comes from the line of Eddie Wang from Morgan Stanley . Please go ahead, your line is open.
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Speaker 17: So, this is the return of the investment. It can be continued for over a year. I will define it. Thank you for taking my question. I have two questions. The first one is that if you look at the use and appointment rate has been rich, a record high in...
Speaker 18: could be a long-term structure issue and how it will impact our business in the longer term. And the second question is that you mentioned in April and May, we do witness that job posting and active enterprise users.
Speaker 19: the level has been higher than we witnessed in March. However, if we consider the overall, the economy recovery actually is slightly lower than we expected. At the same time, we do see the youth employment rate has been high. I do think this, Floyd adaptive
Speaker 20: recruitment demand recovery is sustainable into the second half of this year. Thank you.
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Speaker 29: Thank you for your question and I would like to give my conclusion to your first question first. Regarding the current situation that with more job seekers compared to relatively less recruitment demand, which led to a smaller volume of staff CON asks about the recent <expletive> Real Well Project. they wrote a review concept regarding sponsor all their global support increases Ki Chuck Language Hall 2012
Speaker 30: I'll employ my rate of the younger people, age between 15 to 24. Well, that turned into a long-term structural question. My answer is that no. And I believe the situation has been improving. There are two interesting observations I'd like to share with you. First one is that in February , March, April , and May,
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Speaker 32: The ratio between job seekers and recruiters is relatively, I tell you very...
Unpresentable but after January 21st, after spring festival, about 17 to 80 weeks, we have seen that the situation have been improving on a weekly basis. Then why you will be able to say that, this year, the end of the year.
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active reach out to the small and medium-sized enterprise, the F-ratio has raised about over 10% compared to last year. This is a scenario I have never seen historically, which my personal feeling is that people have tried their best to adjust to the environment.
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And in terms of the impact to the companies, this year today, the pressure I have feeling the most is that the situation of more drug seekers compared to less drop the amount.
supply, which has a great pressure to our recommendation system and our customer service system. If we cannot deal with it, we will have to deal with it.
that will impact our impact in MTS, especially on the drop-secret side. We have been working quite hard on this. And if you look at the from the perspective of the average
we have done pretty well up to now.
And that's it for today. Thank you very much.
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that for each drop opening, the enterprise user, the recruiters behind that, the situation of the recruiters actively looking for people compared to the other and March in 8.5, that situation also.
increased by 6 percent. This is an encouraging number and I'm glad to look at that. Whether this is sustainable, my answer is pretty sure. The situation is improving and quite sustainable.
Thank you, President Zhao. I have one more. Thank you. Thank you.
Thank you. We'll now move on to our next question.
Our next question comes from the line of Wei Zhang from UBS. Please go ahead, your line is open. Try to get better at this one because it sounds Mum. instructor?
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Thank you, Manjumma, for taking my question. Firstly, regarding the enterprise users, could management comment on the recovery trends for your KA users and SME users separately, for example, in terms of the user engagement, paying ratio, recruiting cycle, etc. What has been trending in the past few months and are there any noticeable changes compared to a few years ago?
And secondly, just want to follow up on the blue collar recruiting business. Could management share more progress in that regard as well as your strategic focus for the year? And given we have made very good progress in the services sector, if we want to see bigger breakthrough in the manufacturing sector, what actions do we plan to take this year?
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Thank you for your attention.
And final once again our story will continueformerly.
I hope to see you again soon. Thank you for your attention.
Any other questions? I'll tell you something. I'm sure. Okay. For the comparison between large companies and SMEs, one interesting point is that we have things different with the strategic profile.
January and February , we have observed that the SME has been recovered very very rapidly while the flat company is more slowly. But in April and May the situation is different.
One data to look at is for the enterprise with less than 100 persons, the daily active job protein increased by 1% in April and may compare to general and February , however, for the enterprise with people more than 10,000.
The daily active...
jobs increased by 7% in April and May, which they showed a trend with faster recovery.
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And another data which we open look at internally, which is in April and May, among the different job categories within enterprise, the job related to marketing and that.
has been increased faster, which means people, these jobs are related to the company's development to help them either spending more or earning more money, which means they have better confidence at this stage.
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Generally speaking, there are millions of enterprises and tens of millions of drug seekers on our platform each month. All the witnesses said they have been working very hard to try to solve their own problems. And we are also trying our best to help with health.
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some concrete evidence on numbers. So we just discussed that either users and revenue contributions from other services industry and the blue colors have increased rapidly.
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And other major subsectors will look at the same manufacturing construction logistics and warehousing professionals.
So we have also been doing our job to create more values for all those industries. We are not as confident as those in the urban service sector, but we are on our way and we are in the right direction. That's my view for this.
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There are hundreds of millions of manufacturing workers working to 15 million of construction workers and
maybe 22-30 million of logistics warehouses jobs secrets. So for all these sectors, they have their own industry, no house. We have been actively and progressively to explore all those solutions to these industries.
to try to provide more value to them while achieving our own business development.
Oh, Chijin, thank you. Thank you. Once again, to ask a question, you will need to press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again.
Please stand by. Our next question comes from the line of Timothy Zhao from Goldman Sachs. Please go ahead, your line is open.
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improving the overall enterprise pain ratio is actually related to the small size and medium size customers as well as the new customer that the company has acquired. And secondly regarding the sales marketing, we understand the first quarter is typically the peak quarter in terms of sales marketing spending. Just wondering if the bedroom could provide some updates on the company's sales marketing plan for the rest of this quarter.
in the quarter compared to last year. And in terms of the APU, APU kept the stable in the quarter.
I think the overall pain ratio improvement is mainly because of the healthy growth of job seekers and business customers in urban services and a few other like the logistics and tourism sectors. So the competition between the business customers that are
you know, let the platform naturally, you know, increase a little bit above our pain ratio. Rest of other sectors maintain the...
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In terms of the new business customers and business customers from lower tier cities, they are the key contributor to their growth.
So this is the first question. The second question regarding our settings, marketing expenses and our overall expenses, you're right that the first quarter in terms of the student's studentality normally...
It's a high quarter because there is usually industry-wide branding campaign happened after this through festival.
So in our situation, we did a little bit of brand advertisement in the third quarter, but looking ahead, there's no other big marketing event in the rest of the year. So this is a branding advertisement. In terms of our...
acquisition costs, which is related to our user growth. Supported by our well-established brand and recommendation, I think this area is shown as a very high efficiency product.
And we believe that this high efficiency will further continue in following quarters. So that means in terms of the branding and in terms of the traffic acquisition marketing and the pricing, we believe that this high efficiency will further continue in following quarters.
So the overall setting marketing will be, you know, will be tapped in a, typically in the situation. So our overall marketing spending will hope to generate further leverage in the year. And after called islands like R&D, like GNA, we'll follow those.
suit in a similar trend. So our overall opening margin for 2020 grade compared with last year will be about 1 foot 4 inches.
will be up in our thoughts. So that's pretty much our directional thoughts regarding our opening margin. So that's my answer to the second question.
Thank you.
Thank you. Due to time constraint, that concludes today's question and answer session. At this time, I will turn the conference back to when they for any additional or closing remarks. Thank you once again for joining us today. If you have any further questions, please contact or we chat directly. Thank you.
This concludes today's conference call. Thank you for participating. You may now disconnect speakers please stand by.
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