Q4 2023 Kanzhun Ltd Earnings Call

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Operator: Ladies and gentlemen, thank you for standing by. Welcome to the Kanzhun Limited fourth quarter and fiscal year 2023 financial results conference call. At this time, all participants are in a listen-only mode.

Ladies and gentlemen, thank you for standing by and welcome to the country limited fourth quarter and fiscal year 2023 financial results conference call at.

At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session. Today's conference is being recorded at this time I'd like to turn the comprehensive mattress B swamp wasn't paywall head of Investor Relations. Please go ahead ma'am.

Operator: After the speaker's presentation, there will be a question and answer 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.

Wenbei Wang: Thank you, operator. Good evening and good morning, everyone. Welcome to our fourth quarter and four year 2023 earnings conference. Joining me today are our founder, chairman, and CEO, Mr. Jonathan Peng Zhao, and our director and CFO, Mr. Phil 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 new reliance on forward-looking statements and does not undertake any obligation to update this forward- During today's call, management will also discuss certain non-GAAP financial measures for comparison purposes only.

Thank you you are pretty darn good evening and good morning, everyone welcome to our fourth quarter and before you can get to industry earnings Conference call. Joining me today, our founder chairman and CEO Nick to jump.

And I went there after I understand Mr. Phillipe junk.

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.

Patients that enrolled.

The risks uncertainties and other factors not under the company's control, which may cause actual results performance or achievements of the company, which will be maturity.

The accompanying crusher you not to place undue reliance on forward looking statements.

Not undertake any obligation to update its forward looking information, except as required by law.

During today's call management will also discuss certain non-GAAP financial metrics for comparison purpose only.

Wenbei Wang: 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. In addition, a webcast replay of this conference call will be available on our website at ir.jpain.com. With that, I will now turn the call over to Jonathan, our founder, chairman, and CEO., 2023 Hello everyone, welcome to our company's 4th quarter and year-over-year conference in 2023. On behalf of the company's employees, management, and board of directors, I would like to thank the users and investors who have always believed in us and supported us. Hello everyone, welcome to our fourth quarter and full year 2023 earnings conference. On behalf of the company and our employees, management team, and the board of directors, I would like to express our sincere gratitude to our partners and investors who trust and support us.

Our definition of non-GAAP financial matters, and then Reconsolidation of GAAP to non-GAAP financial results. Please see the earnings release issued earlier today.

In addition, a webcast replay of this conference call will be available on our website.

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With that I will now turn the call to Donaldson, our founder Chairman and CEO.

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Hello, everyone welcome to our fourth quarter and full year, two deep industry earnings conference call.

On behalf of the company and our employees management team and our board of directors.

Choice, whereas our sincere gratitude.

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First I would like to share our performance we see in the first in the fourth quarter. The company achieved a calculated cash sitting RMB 178 billion up 61% year on year, and a 9% quarter on quarter.

Wenbei Wang: 2023 First, let me introduce the performance of Four Seasons in 2023 17.8 Four Seasons calculated the cash revenue of 17.8 billion yuan 61% 9% The growth rate is 61% and the return rate is 9% Gap income is 15.8 billion yuan, which is 46% higher than the previous year, which is basically equal to the previous year. After deducting the interest on equity, First, I would like to share our performance with you.

Our GAAP revenue reached RMB 158 billion up 46% year over year and remain flattish with last quarter.

Our adjusted net income, which excludes share based compensation expenses was RMB 650 meters.

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In the fourth quarter, the average verified or May you under busted Blue App reached 41.2 million, representing a 33% year over year increase in.

Jonathan Peng Zhao: In the fourth quarter, the company calculated cash billings of RMB 1.78 billion, up 61% year-on-year and 9% quarter-on-quarter. Our gap revenue reached RMB 1.58 billion, up 46% year-on-year, and remained flat-ish with last quarter. Our adjusted net income, which excludes share-based compensation expenses, was RMB 630 million.

In the first quarter, we noted and improving the ratio between the two months from actual enterprise users and the supplies comes up secrets we.

We also noted continued a steady recovery of medium and large scale enterprises, it's just that.

All of which contributes to our cash billings GAAP revenues and profit level in the fourth quarter.

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Jonathan Peng Zhao: In the 4th quarter, BOSS's APT performed an average of 41.2 million MAUs, an increase of 33%. In the fourth quarter, we observed an improvement in the supply-demand-ratio relationship between recruiters and workers. We observe that medium-sized enterprises have maintained a steady growth pattern for the past three quarters. This is all beneficial to our cash flow, GAAP income, and profit level in the fourth quarter. They surpassed all of us.

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Excluding share based compensation expenses.

Jonathan Peng Zhao: In the fourth quarter, the average verified MAU on the bus flipping app reached 41.2 million, representing a 33% year-on-year increase. In the fourth quarter, we noted an improving ratio between the demands from active enterprise users and the supplies from drop-seekers. We also noted continued steady recovery of medium and large scale enterprises since the, all of which contributed to our cash spilling, gap revenues, and profit levels in the fourth quarter to exceed our expectations. 2023 Let's take a look at the situation for the whole year of 2023. The company's cash revenue is estimated to be $66.91 billion. 45% The total revenue is 5.95 billion yuan, which is 32% higher than the previous year. After deducting the interest rate of the equity, the net profit that has been adjusted throughout the year is 2.16 billion yuan.

Adjusted net income for the year reached RMB 2.16 billion.

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Furthermore, excluding other income such as wealth management income.

Operating income for 10 patient history was RMB 126 4 billion.

Lacking a remarkable 191%.

This resulted in a 27, 5% adjusted operating margin underscoring the company's robust profitability come up any.

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In history, we attracted more than 49 million already added are you finding users representing the largest annual growth of user base since the company's inception.

Jonathan Peng Zhao: Let's take a look at the full year of 2023. The company achieved a calculated cash spilling of RMB 6.65 billion, up by 45% year-on-year, and a gap revenue of RMB 5.95 billion, up by 32% year-on-year. Excluding share-based compensation expenses, the adjusted net income for the year reached RMB 2.16 billion.

This year the number for you that we serve has increased by nearly.

100 medium.

And we have been able to help them with our product, which we are quite deeply proud off.

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Jonathan Peng Zhao: After the adjustment in 2023, the profit margin is 16.4 billion yuan, which is an increase of 191%. It corresponds to 27.5% of the profit margin after the adjustment. This shows the company's profitability. Furthermore, excluding other income such as wealth management income, the adjusted operating income for 2023 was RMB 1.64 billion, reflecting a remarkable 191% year-on-year increase. This resulted in a 27.

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As of December 31st 10 days in history. The company has served a total of over 178, neither individual users and inflection points, where you need it with the prices.

Average glorified EMEA you under the bus sitting at 42 point can be $7 million in Canadian history, representing a year on year increase of 47%.

Approximately one 5 billion mutual achievement between job seekers and recruiters have.

Have been accomplished on a platform throughout the year.

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Intended to necessarily the number of paid enterprise customers increased by 44% year on year to $5 2 million.

Moreover, both the number of paid into place users and the paying ratio of active users continue to achieve record high.

Jonathan Peng Zhao: In 2023, we added 49 million users to our website, which is the largest number of new users since the company was founded. Over the past year, the number of users we serve has increased by nearly one-half billion. We can help them, and we are very proud of this.

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Jonathan Peng Zhao: In 2023, we attracted more than 49 million new Wi-Fi users, representing the largest annual growth in user base since the company's inception. This year, the number of users we serve has increased by nearly half of 100 million, and we are able to help them with our products, which we are quite deeply proud of. 1231,, 1.78 billion users, and 13.3 million companies., The average monthly usage of the app is 42.27 million 47% There are nearly 1.5 billion users all year round. We have achieved a double-edged sword on the platform.

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As the company continues to expand our user coverage, both the user and the revenue structure on that growth curve and evolution highlighted by the following key points.

First in Canadian history, the scale of newly added Blue collar users matched that of the white collar users with revenue contribution of the whole year.

Paula users cities cities or so.

44%.

Second some new contribution from second in the lower tier cities exceeded 60%, a five percentage point increase year on year.

<unk> revenue contribution from enterprises with less than 100 employees also increased by more than five percentage points, yes.

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Jonathan Peng Zhao: As of December 31st, 2023, the company has served a total of over 178 million individual users and 13.3 million enterprises. The average verified MAU on the Boston app was 42.27 million in 2023, representing a year-on-year increase of 47%. Approximately 1.5 billion mutual achievements between job seekers and recruiters have been accomplished on our platform throughout the year. By 2023, the number of clients paid by enterprises will be 5.2 million. 44% The number of paid users and the rate of paid active users continue to reach new highs. In 2023, the number of paid enterprise customers increased by 44% year-on-year to 5.2 million. Moreover, both the number of paid enterprise users and the paying ratio of active users continue to achieve record highs. As the number of users increases, the structure of the company's users and revenue has also changed. The focus is on these areas. First, what will be the size of the new users of LanLin in 2023? Yang Wen's candidacy is the same as Liang Zhang's.

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This trend is further demonstrated that we are confident that our product can serve different users and also our service Hum a different kind of units.

In total we are achieving.

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This is many based on the down to Earth research.

Detailed needs from different kind of users and our continuous efforts in technology investments.

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Heartland with mobile, which is believed to be the first large number to model behind.

Jonathan Peng Zhao: The income contribution is more than 34%. Secondly, the income contribution of second-tier and third-tier cities exceeds 60%. The sum increased by five points. Third, the income contribution of small and medium-sized enterprises of less than 100 people has also increased by more than 500%. As the company continues to expand our user coverage, both the user and the running structure undergo constant evolution, highlighted by the following key points. First, in 2023, the scale of newly added blue-collar users matched that of the white-collar users, with revenue contribution of the whole year from blue-collar users exceeding 34%. Second, family contribution from second- and lower-tier cities exceeded 60 percent, a five-percentage point increase year-on-year.

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The effect of this model has reached the industry leading level on some public benchmarks and gradually being applied.

Recruiting and job seekers scenarios for example for those young.

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Starting up their companies, we provide them with rapid job posting function and for those young people all fresh graduate Jobseekers will provide of mis revenue Polish functions et cetera.

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The company's investment in Aig's menu focus on toothpaste.

First we could keep track of the cutting edge technology to avoid a generational gaps in knowledge second focus on industrial implementation and not make big investment binary.

Jonathan Peng Zhao: Thirdly, revenue contribution from enterprises with less than 100 employees also increased by more than 5 percentage points year-on-year. These changes make us feel confident that our products can serve different users, and our revenue model is also adapted to different needs. All these changes further demonstrate that we are confident that our product can serve different users and also our service can cover different kinds of users. This is mainly based on the fact that we have been studying different users for a long time; he's for the total, and this is mainly based on down-to-earth research on actual detailed needs from different kinds of users and our continuous efforts in technology in medicine. In January of this year, our company developed the first magnetic field model for the recruitment industry. We call it the South-North Pole.

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Next we will briefly update the situation for this spring following the spring festival, the company's embarrass user metrics continued to hit historical highs.

With the PKU omnibus drinking at approaching $17 million for example.

From those data we also identified several characteristics, which are not very different from the same period last year, including the following keywords.

And Steve Conine.

And so as we're talking to them for those same data.

Jonathan Peng Zhao: This is my algorithm just for demonstration. The effect of the model on some public benchmarks has reached the leading level of the industry, and it has gradually tried some land applications at the Zhaopingduan and Qiuchiyouduan. For example, Xiaobai, who just started his business, Jacques Chabri's position will be announced soon. For example, to help, There are many inexperienced youths coming to Ningguan Road. , In January this year, our company's proprietary big model, which we named Nanbei Ge, Big Large Language Model, which is believed to be the first large language model designed specifically for the recruitment industry, successfully completed its online registration for generative artificial intelligence.

The agenda syndrome traditional.

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Yes, Josh.

First recruiters since the spring festival, the daily average number of newly posted jobs participants and active job positions. Both reached a historical high comparator with the same period in the previous year.

The daily average number of active drug positions increased by 20%.

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The second keywords is large enterprises.

Since Spring festival, the average daily position from enterprises with more than 10000 employees increased by 24% compared with the same period maybe industry.

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Jonathan Peng Zhao: The effect of this model has reached the industry-leading level on some public benchmarks and has gradually been applied in some recruiting and job seeking scenarios. For example, for those young entrepreneurs who are starting up their companies, we provide them with a rapid job posting function. And for those young people or fresh graduate job seekers, we provide them with a resume polishing function.

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The daily average number of newly added to our position in <unk> positions across all industries has shown positive growth since this year's Spring Festival comparator.

Compared with the same period up to niche industry.

The blue collar industry has once again reached a new Yorker high driven by the continuous expansion.

Jonathan Peng Zhao: There are two main reasons for the company's investment in AITC. The difference between substitutions. Second, we value the land on which we work, and we will not make blind investments. The company's investment in AIGC mainly focuses on two principles.

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Additionally, the manufacturing and the supply chain logistics sector has shown accelerated year on year growth rate.

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Jonathan Peng Zhao: First, we keep track of cutting-edge technology to avoid generational gaps in knowledge. Second, we focus on industrial implementation and not make big investments blindly. Next, let's briefly update the situation after this year's Spring Festival. After this year's Spring Festival, the company's various data continues to create historical highs. For example, the DAU of the app end is close to 17 million, which also shows some similarities with last year. There are several key points for the different characteristics.

Don't clear the jobs, which on their culture.

At least in the white collar industry sectors, such as consumer goods medical equipment, automotive and advertising media a leading the growth.

If we look going into this.

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The fourth key words is business.

There has been a noticeable shift in the types of job positions compared with last year the positions focusing on the development and growth of the enterprise business such as sales guys.

Jonathan Peng Zhao: Next, we will briefly update the situation for this spring. Following the Spring Festival, the company's various user metrics continued to hit historical highs, with the peak DAU on the BossJP app approaching 17 million, for example. From these data, we also identified several characteristics which are notably different from the same period last year, including the following keywords.

So as far as his finance and.

And the related positions.

There is a clear rebound in growth rate.

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Revenue for the first quarter.

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Jonathan Peng Zhao: The first key word is recruiters. After the Spring Festival until now, the number of new Japanese military positions, and the number of online positions, have all reached a new high in the same period of history. The number of Japanese military positions online has increased by about 20%.

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I'm pleased to announce the company's board of directors approved a new share repurchase plan today upsizing to repurchase up to USD 200 million of the company's shares over the next 12 months.

Jonathan Peng Zhao: Since the Spring Festival, the daily average number of newly posted job positions and active job positions has both reached historical highs compared with the same period in the previous year. The daily average number of active job positions increased by 20% year-on-year. The second key word is large enterprises, for example, large enterprises with more than 10,000 employees. Since the Spring Festival until now, in 2023, the share price increased by 24%. The second key word is large enterprises. Since Spring Festival, the average daily active position of enterprises with more than 10,000 employees increased by 24% compared with the same period in 2023. The third key word is industry. After the Spring Festival this year, compared to 2023, the number of new and online jobs in all industries has all shown positive growth in the same period of time. Among them, Lanling has been led by the service industry and continues to create new heights.

This marks our third share repurchase plan alongside the U S. Dollar 80 million special cash dividend you should invest the limber demonstrating the management's commitment and the facility towards long term shareholder return.

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Several fields, we don't ask yourself how would you.

That concludes my part of the call I will now turning to our two hour CFO Phil for the review of our financials. Thank you.

Thanks, John and Hello, everyone now, let me walk through the details of our financial results.

Fourth quarter and full year of 2023.

We are pleased to deliver a strong set of results for the fourth quarter and the full year 2023 for the fourth quarter, our calculated cash billings reached a historical high of RMB, One 8 billion grew.

<unk> grew by 61% year over year, and notably nine.

Quarter on quarter, beating our expectations.

Revenues increased by 46% to RMB, one 6 billion compared to the same period last year and has stayed relatively stable sequentially due to the lower seasonality.

Jonathan Peng Zhao: The third key word is industry. The daily average number of newly added job positions and active job positions across all industries has shown positive growth since this year's Spring Festival compared with the same period of 2023, among which the blue-collar industry has once again reached a new record high, driven by the continuous expansion of urban services. In addition, the growth of mechanical manufacturing and transportation logistics is accelerating.

Confirmed our observation of a gradual recovery, especially.

Medium and large sized companies.

Revenue contribution from key accounts and there are pool.

Also recover sequentially in this quarter.

For the full year of 2023, our calculated cash curious under revenues increased by 45% and 32% respectively.

Number of enterprise customers reached $5 2 million in 2020 up by 44% year over year.

Jonathan Peng Zhao: Additionally, the manufacturing and supply chain logistics sector have shown accelerated year-on-year growth rates. In comparison, consumer goods, medical equipment,, Within the white-collar industry, sectors such as consumer goods, medical equipment, automotive, and advertising media are leading the growth. The fourth key word is business. In terms of the type of job, it is different from last year. It focuses on business development.

Marking another new high level of paying ratio among active enterprise users.

Demonstrated our ample space and the flexibility in monetization.

Okay.

Moving to the cost side.

Total operating costs and expenses decreased by 4% year over year to RMB, one 4 billion in the fourth quarter and increased by 16% year on year to RMB five 4 billion in 2023.

Jonathan Peng Zhao: We need to hire more people to develop business, to look at positions in sales, human resources, and services that are responding to Taiwanese concerns. The fourth keyword is business. There has been a noticeable shift in the types of job positions compared with last year. The positions focusing on the development and growth of the enterprise business, such as sales, human resource services, finance, and related positions, have experienced a clear rebound in growth rates. Therefore, we expect that there will be a good return on investment and revenue in the first quarter. So we anticipate our quarter-on-quarter increase in both cash billing and debt revenue for the fourth quarter. And today, the board of directors approved a new batch of stock buyback plans and increased the purchase volume to $200 million in the next 12 months.

This year, we managed to achieve a robust user growth, whilst you've seen margin expansion.

The annual adjusted operating margin improved from <unk>.

12, 5% in 2022 to a record level of 27, 5% in 2023.

15 percentage points.

Cost of revenues increased by 36.

<unk> percent year over year to RMB $275 million in the fourth quarter and 40% year over year to RMB, one 1 billion in 2023.

This increase was primarily driven by increased our silver and bandwidth cost and payment processing costs in.

In line with the growth of user engagement and the transactional volume.

Volume.

Our sales and marketing expenses decreased by 36% year over year to RMB $433 million in the fourth quarter as.

Jonathan Peng Zhao: This is our third stock return plan. In addition, in November last year, we issued a special 8,000-dollar cash stock. This proves the management's attitude and sincerity to repay shareholders for a long time. I'm pleased to announce the company's board of directors approved a new share repurchase plan today, recommending to repurchase up to U.S. dollar 200 million of the company's shares over the next 12 months. This marks our third share repurchase plan, alongside the U.S. dollar 18 million special cash dividend issued last November, demonstrating the management's commitment and sincerity towards long-term shareholder returns. That's all for my part. Next, Phil from the CFO will introduce our financial situation. That concluded my part of the call.

As we didn't have a similar marketing campaigns.

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And remained stable with last year.

RMB 2.0 belief for the full year of 2023.

Even excluding the water comp sponsor fees.

Adjusted sales and marketing expenses as percentage of revenue went down by seven percentage points this year compared to 2022.

At that time, we could only have the user growth of half of the year.

This proves the effectiveness of our marketing strategy, which emphasizes more towards branding campaigns.

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

Our R&D expenses increased by 46% year over year to RMB $430 million in the fourth quarter and a 31% at yogurt year to RMB, one 5 billion in 2023.

Phil Yu Zhang: Hello, everyone. Now, let me walk you through the details of our financial results for the fourth quarter and full year of 2023. We are pleased to deliver a strong set of results for the fourth quarter and the full year 2023. For the fourth quarter, our calculated cash billings reached a historical high of RMB 1.8 billion, grew by 61% year-over-year and notably 9% quarter-on-quarter, beating our expectations. Revenues increased by 46 percent to RMB 1.6 billion compared to the same period last year and stayed relatively stable sequentially due to the lower Revenue Contribution from Key Accounts and their R Pool also recovered sequentially in this quarter.

Excluding share based compensation expenses, our adjusted R&D expenses increased by 62% year over year to RMB $316 million in the fourth quarter and 25% year over year to RMB, one 1 billion in.

<unk> 2023.

This increase was mainly driven by our further investments in talent and technology developments, which incur AI related silver in it.

Our service fees.

Our G&A expenses decreased by 9% year over year to RMB 225 million in the first quarter and increased <unk>.

13% year over year to RMB $812 million in 2023 <unk>.

Excluding share based compensation expenses, adjusted G&A expenses decreased by 32% year over year to RMB 122 million in the first quarter and 8% year over year to RMB $482 million in 2023, mainly due to decreased a profession.

Phil Yu Zhang: For the full year of 2023, our calculated cash billions and revenues increased by 45% and 32% respectively. The number of paid enterprise customers reached 5.2 million in 2023, up by 44% year-over-year, marking another new high level of paying ratio among active enterprise users and demonstrating our ample space and flexibility in monetization. Moving to the cost side, total operating costs and expenses decreased by 4% year-over-year to RMB 1.4 billion in the fourth quarter and increased by 16% year-on-year to RMB 5.4 billion in 2023.

Service fees.

Okay.

Our net income was RMB 331 million in the fourth quarter and RMB, One 1 billion in 2023 full year adjusted.

Our adjusted net income increased from RMB <unk>.

15, 9 million in the first quarter of 2022 to RMB 629 million an increase of from.

RMB $799 million in 2022 full year to RMB, two 2 billion.

Full year 2023, representing a significant year over ear acreage.

Adjusted net margin for the full year of 2023 and reached a record high.

Phil Yu Zhang: This year, we managed to achieve robust user growth while still seeing margin expansion. The annual adjusted operating margin improved from 12.5% in 2022 to a record level of 27.5% in 2023, up by 15 percentage points. The cost of revenues increased by 36% year over year to RMB 275 million in the fourth quarter and 40% year over year to RMB 1.1 billion in 2023. This increase was primarily driven by increased server and bandwidth costs and payment processing costs in line with the growth of user engagement and transaction volume. Our sales and marketing expenses decreased by 36% year-over-year to RMB 433 million in the fourth quarter as we didn't have similar marketing campaigns like 2022's FIFA World Cup sponsorship this year, and remained stable with last year at RMB 2.0 billion for the full year of 2023.

So two 6.2% up.

18, five percentage points.

Net cash provided by operating activities was RMB 927 million for the fourth quarter and RMB three <unk> billion for the full year of 2020.

As of December 31, 2023, our cash on cash equivalents time deposits and short term investments totaled RMB 12, 9 billion and long term investments in fixed rate notes and our wealth management products or <unk>.

Two points 3 billion.

With all of our commitment to share our success with shareholders and are supported by our robust attack reserves, we paid a cash dividend of RMB.

$563 million in December 2023, Additionally, our board.

Repurchase program over the next 12 months and Upsized it.

The program to U S dollar 200 minutes, demonstrating our strong commitment to shareholder returns.

And now for our business outlook.

We've seen encouraging trend of recover the recruitment that demand pull.

The Chinese new year, and we are confident to deliver better than expected results for the current quarter.

Phil Yu Zhang: Even excluding the World Cup-sponsored fees, adjusted sales and marketing expenses as a percentage of revenue went down by 7 percentage points this year compared to 2022, when at that time, we could only have user growth for half of the year. This proves the effectiveness of our marketing strategy, which emphasizes more on a branding campaign. Our R&D expenses increased by 46% year-over-year to RMB430 million in the fourth quarter and 31% year-over-year to RMB1.5 billion in 2023. Excluding share-based compensation expenses, adjusted R&D expenses increased by 62% year-over-year to RMB 316 million in the fourth quarter and 25% year-over-year to RMB 1.1 billion in 2023. This increase was mainly driven by our further Our GNA expenses decreased by 9% year-over-year to RMB 225 million in the first quarter and increased by 13% year-over-year to RMB 812 million in 2023.

In the first quarter of 2024, we expect to our calculated cash billions to increase sequentially by at least.

12% one too.

Sure.

Revenues to be between RMB.

164 billion and RMB 167 billion with a year over year increase over 28, 3% to 37%.

With that.

Sure.

That concludes our prepared remarks, and now we would like to answer your questions. Operator. Please go ahead with questions.

We will now begin the question and answer session to ask a question. Please press star one on your telephone and wait for a name to be announced.

I would like to cancel your request please press star one again.

Our first question comes from the line of Eddy Wang from Morgan Stanley. Please go ahead.

Hey, Jonathan.

So Sharon.

Great on content.

Japan, Dr. Glenn.

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Why are you talking about trends, you're Holton Cheetah Julien.

Phil Yu Zhang: Excluding share-based compensation expenses, adjusted GNA expenses decreased by 32% year-over-year to RMB 122 million in the first quarter and 8% year-over-year to RMB 482 million in 2023, mainly due to decreased professional service fees. Our net income was RMB 331 million in the fourth quarter and RMB 1.1 billion in 2023, the full year. Adjusted net income increased from RMB 59 million in the first quarter of 2022 to RMB 629 million and increased from RMB 799 million in the full year of 2022 to RMB 2.2 billion for the full year of 2023, representing a significant year-over-year increase. Adjusted net margin for the full year of 2023 reached a record high of 36.2%, up by 18.5 percentage points.

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Operator: Net cash provided by operating activities was RMB 927 million for the fourth quarter and RMB 3.1 billion for the full year of 2020. As of December 31, 2023, our cash and cash equivalents, prime deposits, and short-term investments totaled RMB 12.9 billion, and long-term investments in fixed-rate notes and wealth management products were RMB 2.3 billion. With our commitment to share our success with shareholders and supported by our robust tech reserve, we paid a cash dividend of RMB$2.5 billion. 563 million in December 2023. Additionally, our board has upsized the repurchase program over the next 12 months to U.S. dollar 200 million, demonstrating our strong commitment to shareholder return. And now, for our business outlook, we have seen an encouraging trend of recovered recruitment demand post the Chinese New Year, and we are confident to deliver better than expected results for the current quarter.

As you find yourself.

Thank you for taking my question.

First question is about this.

For the equivalent amount.

After Chinese new year.

Give us some more details in terms of the difference.

Industries.

Difference.

Enterprise sizes.

This supply demand.

Saturation compared with last year.

My second question you guys, what's your forecast or expectation for the revenue growth of the company for this year. Thank you.

Hello.

Mhm.

Four months, leading Huntington job Julia tonnage.

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Attrition of go kind of oxygen, which you mentioned, which is a huge dominated go on yet.

Thanks, John.

Okay.

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Okay.

No.

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Sure.

Operator: In the first quarter of 2024, we expect our calculated cash billions to increase sequentially by at least 12%, one, and two. And revenues to be between RMB 1.64 billion and RMB 1.67 billion with a year-over-year increase of 28.3% to 30.7%. With that, that concludes our prepared remarks, and now we would like to answer questions. Operator, please go ahead with the questions. Thank you. We will now begin the question and answer session. To ask a question, please press star 11 on your telephone and wait for a name to be announced. If you'd like to cancel your request, please press star 111.

The total job in driving the BD.

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Steven.

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Sure.

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Yes.

Okay.

Thank you for your question.

Regarding the first question, we are not too soon to comment on the entire market.

We as a platform we have our own data and what I found the Paris, we would like to share with you our depletions.

Eddy Wang: Our first question comes from the line of Eddy Wang from Morgan Stanley. Please go ahead. Good evening, Mr. Zhao, Mr. Yu, and Mr. Wenbei. First of all, congratulations on your strong performance. I have two questions.

Alright.

Is about the enterprise side, which we have witnessed year over year growth from enterprise side higher compared to the top secret sauce.

Jonathan Peng Zhao: The first one might be related to you, Mr. Zhao, but I would like to ask about the overall employment market situation after the Spring Festival. Including the recruitment of different enterprises in the western industry, including the situation for consensus, compared to the second half of last year, has it become better? On this basis, I would like to hear Mr. Zhao's opinion.

Well rich right now to even up.

The ratio between Jobseekers and enterprise users continued to improve.

I have been meeting this industry for quite a long time and any.

Leaving any detailed England space the ratio between enterprise users and job seekers.

Two pilots have been quite good.

Since desperate back toward this year.

Jonathan Peng Zhao: Do you think that companies are more confident in the recovery of the economy at this time? This is the first question. The second question is, after seeing the employment situation after the Spring Festival, what is our outlook for this year's annual revenue? Let me translate it for you. My second question is, what is your forecast or expectation for the revenue growth of the company this year? Thank you.

The information Scott the ratio between enterprise users and job seekers.

It has been.

Adam.

Balances towards the relatively normal situations.

So Sean civil cannot.

Yes, David at SCC.

One cannot fully beneficial to shirt Jean Ann.

Jonathan Peng Zhao: Okay, and then...?? We may not be able to assess the situation in the employment market. We can only see our own data; we are just players in this field. , But we are also willing to share what we have seen. First of all, we can see that the whole B-end...,, C One of the changes is that the percentage of applicants on the platform is gradually improving. Because I've been in this industry for a long time, so I see that in any region or field, there is a relatively balanced ratio between B and C.,, Thank you for your question.

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Okay.

Regarding whether the enterprises have restored the confidence for that.

Market and for the future.

The data, which estimation is that both newly posted drops and online at <unk> com.

Record new high.

Marissa can EBIT year on year growth.

Okay.

And I'll say it as children unit attrition was.

Conundrum Nino they are bound to tissue Ebola mechanical group.

Got it.

Yes.

Can you hold on to that Julien.

And to share with you some details.

On particular sectors.

For example for manufacturing.

Correct.

Mobile service.

Jonathan Peng Zhao: Regarding the first question, we are not qualified to comment on the entire job market, but we, as a platform, have our own data, and as one of the players, we would like to share with you our observations. First, it's about the enterprise side, which we have witnessed a year-on-year growth from the enterprise side higher compared to the job seekers, which results in the ratio between job seekers and enterprise users continuing to improve. I have been in this industry for quite a long time, and earnings. I mean, within any detailed industry, the ratio between enterprise users and job seekers, the relative balance, has been quite significant to me.

Blue collar sector have recovered quite well after the spring festival.

Highly reduced.

Sure.

Hello, Chinese Shanghai Jonathan.

Yeah sure.

Can you, Jim O'neil, who sundar on Asia.

Tokyo Shanghai.

Jean <unk>, who will be judged.

Another angle is debt.

For those cities, along the sea, which is more.

External related economics, so bad for unit growth after the spring festival, so rich in pipe manufacturing related to exports have been performing performing quite well.

You can fine tune your entrant Gencon Danielle please I'm going to shift.

Sure Rich.

Jonathan Peng Zhao: Since the Spring Festival this year, my observation is that the ratio between enterprise users and job seekers has been balancing, rebalancing towards a relatively normal situation, from the perspective of the company's confidence in the future, as we can see from the data just shared, including new jerseys and hats. For the online location search and the matching community-based lists, the numbers show an objective increase. Regarding whether enterprises have restored confidence in the market and for the future, the data we just mentioned shows that both newly posted jobs and online active jobs have reached a record new high and very significant year-on-year growth. I have some suggestions that might be helpful to you.

Correct.

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Sure Patrick I appreciate it.

Another observation, we assured we discussed on our last training center small and micro companies, which have a much better after the spring festival last year.

Alright.

There's a lot of companies.

Postpone currently.

However, this year as we just said.

Enterprises with more than 10 Southern company.

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Jonathan Peng Zhao: On the one hand, we can see that transport and metal engineering and the service industry... all these are showing strong economic potentials after the Chinese new year destruction, and to share with you some detailed trends on a particular sector. For example, for manufacturing workers, logistics, and urban service-related blue-collar sectors have recovered quite well after the Spring Festival. And one more thing... Some coastal cities are more industrial-oriented.

Much better compared to medium size enterprises.

And this situation Christine.

Started since August last year and continued after the spring Festival.

Sure.

Alrighty excellent white collar covering.

No.

Darren.

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Danielle.

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One kind of a chip launch issues that were done in the backhaul.

Regarding your second question our outlook for this year.

Jonathan Peng Zhao: After the Spring Festival, the number of users has increased significantly. Recently, the export-related manufacturing industry has been in a tight spot. Another angle is that for those cities along the sea, which is more externally related economics, shows better user growth after the Spring Festival. This implies that manufacturing related to export has been performing quite well. There is an observation that I shared with you last spring. Xiaowei Enterprises started to recruit people. Now it looks like, for example, companies with more than 10,000 employees, the growth rate of jobs is actually faster than before, with some Chinese and inviting some English companies. This situation is...

Starting with Walgreens, Florida, performing well last year, so since beginning of clinical history, what we which means that we have seen improvement.

I'm, Chris Schott from Q1 to Q4.

To answer this.

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And Jack observations have been proved by our quarter on quarter.

Jonathan Peng Zhao: There were more companies graduating in August, giving rise to some increased applications to the company.?? Another observation we shared we discussed last spring is that the small and micro companies recovered much better after the spring festival last year. However, this year, the larger companies they are have postponed a recovery trend.

Sequential growth data.

We hope that can continue or we can share.

And therefore, the first quarter DCF as Joe just discussed we are expecting our calculated billings actually.

She is the chairperson.

Quarter over quarter growth compared to the fourth quarter last year.

The muscle of the union the sugar on a tablet.

Sure.

Industry box issue.

Chili's fit onshore.

And given my experience.

Jonathan Peng Zhao: However, this year, as we just said, enterprises with more than 10,000 employees grew much better compared to those medium-sized enterprises. And this situation has been started since August last year and continued after the Spring Festival, which shows the continuity of the white-collar recovery. The second question is about the outlook for the new year. Let me look back first, from last year's Q1 to this year's Q2. To this day, this year's Q1 is not over yet, but simply speaking, the situation we see in these five Qs is constantly changing.

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What drove it item.

Jason.

And that concludes my answer to your question. Thank you.

Sure.

Sure.

Thank you for the questions. Next question is comes from Timothy Zhao from Goldman Sachs. Please go ahead.

Hello Charles.

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Jonathan Peng Zhao: Regarding your second question for our outlook for this year, I would start with a review of the performance for last year. So since the beginning of 2023, what we have witnessed is that we have seen improvement from Q1 to Q4 and then till Q1 this year for the consecutive five quarters.,...

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Jonathan Peng Zhao: In the past four quarters, including this year's first quarter, we have been able to verify the quarter-by-quarter data. As for this year's Q1, Phil also talked about the forecast, and we are more confident that this year's Q1 and last year's Q4 should be at least a 12% increase. And that observation has been proved by our quarter-on-quarter sequential growth data, and we hope that the trend can continue this year. And for the first quarter this year, as Phil just discussed, we are expecting our calculated cash billings to have at least 12% of quarterly-over-quarter growth compared to the fourth quarter last year. Based on my first impression of the game, I think the return of Q2 this year will continue to grow. It's definitely very strong.

<unk> Hello.

Thank you management for taking my questions and congrats on the very strong results I have two questions here.

First we noticed that some of our competitors have increased marketing spending post Chinese new year.

Share your strategy for this years user growth and marketing campaigns have you observed any incremental change.

In the competitor landscape second question is your outlook regarding this years operating expenses as well as profit margin. Thank you.

Timothy Zhao: And given my experience and observations of the operation, I'm pretty sure that in the second quarter, we will continue to have sequential growth. And that concludes my answer to your question. Thank you. Thank you for the questions. Our next question comes from Timothy Zhao from Goldman Sachs. Please go ahead. A lot of questions. You go, Wenbei, answer my questions. I have two questions. The first one is..., and Johnny Kadala.

No.

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Unnamed Speaker: Second, I'd like to ask... Jinyan, Fei-Yong De, Liu, and Li Rui. Thank you very much, out. I have two questions. First, we noticed that some of our competitors are doing Thank you. Co-measure and share your strategy. Thank you all.

Sean.

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The higher demand.

I think we're done yet.

What's your I know you guys captured.

Sure.

Jonathan Peng Zhao: Thank you. – Thank you, thank you. First of all, thank you for taking the time to speak out. From the basic design of competitive play, we also noticed data from the third party, new third-party data. We know our own data very well.

Josh so even upon the departure challenge equipment.

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Jonathan Peng Zhao: So we don't think there is a big change in the basic aspects. This is a fundamental judgment. On the other hand, other than that, I am also considering...?????? I think everyone should be. Some companies are not listed companies, so we can't see their numbers. But I guess, based on what I've done in the industry for so many years, I think everyone should have felt some good news in terms of income. Therefore, they are more generous when it comes to spending money. I think this is a reasonable deduction.

Jonathan.

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Jonathan Peng Zhao: And this deduction itself is also verified in my own data. So it makes me feel that the whole industry has a kind of...?? . From the user's growth target, I think we should talk about a total of 40 million this year. , the overall strategy. As you said, I thought about this strategy, and as you said, everyone is working hard this year. So it's not convenient for me to talk about the details of the strategy.

Sure they don't push Optionality.

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Yes.

Thank you for your question regarding the competitive landscape. Yes, we have noticed is a newly published those third party data and we have.

Our own data, which we did the conversion you said, we don't notice any fundamental changes regarding the competitiveness.

And for some of our peers core increase their investment in marketing after spring Festival this year.

Okay.

Because some of them some of them are not public companies, we cannot have the eight.

Jonathan Peng Zhao: But we will still keep a reasonable investment. I won't suddenly start spending a lot of money. I don't think it's necessary today, but we can still talk about it in a reasonable way. The market, the user market, the penetration rate, the occupancy rate, and the relative lead can still be maintained. I do have some subtle interests in it.

Correct.

I had been built in this industry for long term.

Know that because there are some signs of improvement from the revenue side than people are willing more willing to invest in the marketing spend more which I believe is a reasonable.

Jonathan Peng Zhao: The above is for your reference only. Thank you for your question. Regarding the competitive landscape, yes, we have noticed the newly published third-party data, and we are quite aware of our own data. The conclusion is that we don't notice any fundamental changes regarding the competitive landscape.

And our nation.

And also <unk>.

Our own data. So this is actually a positive sign for me because not only at.

Industry recovery moving up so we have not.

The earnings deck.

Morning.

And therefore, our user growth target, we are still targeting for at least 14 million newly very exciting this year.

Jonathan Peng Zhao: And for some of our peers who increased their investment in marketing after Spring Festival this year, because some of them are not public companies, we cannot have their data, but I have been in this industry for a long time, so I know that because there are some signs of improvement from the revenue side, then people are willing or more willing to invest in marketing to spend more, which I believe is a reasonable explanation and also confirmed as a code by our own data. So this is actually a positive sign for me because not only us but the whole industry is recovering or moving up. So we are not only back within the warming water.

Because as you said our shares have increased their investment on marketing, so I will not discuss too much on the details.

So I can guarantee you that move our skills.

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We increased a lot.

Our Mexico expenses.

Not actually necessarily so we'll spend a reasonably in Mexico.

Our same time, we'll maintain our strong competitive.

Jonathan Peng Zhao: And for our user growth target, we are still testing for at least 40 million new verified users this year. Because, as you said, our peers have increased their investment or marketing, so I will not discuss too much about the details. But I can guarantee you that we will still... spend money reasonably. I don't have the ability to increase a lot of our marketing expenses.

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In terms of user penetration matchups here.

The whole already probation.

Okay.

The answer to your first question.

So regarding the.

User.

Acquisition, but definitely there will be.

Jonathan Peng Zhao: It's not actually necessary, so we will spend reasonably within a reasonable range. But at the same time, we will maintain our strong competitive edge in terms of user penetration, in terms of market share, and in terms of the whole leading position. And that's the answer to your first question.

Expenses.

Simply speaking, we would like to keep.

Our user growth.

Hi, Steve.

Quick a fast pace, but meanwhile, we will have to keep selling and marketing as a percentage of revenue.

And the most flat or.

Phil Yu Zhang: So regarding user acquisition, definitely, there will be expenses. So simply speaking, we would like to keep our user growth at still at a quick or fast pace. But meanwhile, we would like to keep selling marketing as a percentage of the revenue at the most flat, or in a better scenario, it would be slightly lower than 2023.

And in better scenario, it would be slightly lower than.

2023.

This setting marketing percentage over revenue.

Regarding the <unk>.

Gross margin trend.

Alright.

In the short term.

Due to <unk>.

So the analogy Q4 is low quarter. So gross margin was affected.

Slightly.

So Q1.

Gross margin to be flat.

Phil Yu Zhang: So this setting the marketing percentage of revenue. So regarding the gross margin trend, All right. In the short term, due to, you know, seasonality, Q4 is the low quarter, so gross margin was affected slightly.

And this is mainly because of the higher online revenue contribution and.

Which involves higher payment processing fees in short term, but for the full year of 2024, we'd like to see.

Gross margin improvement, mainly due to the leverage.

Phil Yu Zhang: So Q1, the gross margin is expected to be flat, and this is mainly because of the high online revenue contribution, which involves higher payment processing fees in the short term. But for the full year of 2024, we would like to see gross margin improvement, mainly due to the leverage from personnel costs backed up by quick revenue growth. So basically, simply speaking, gross margins are to further improve in 2024. As I just mentioned, selling and marketing expenses, and the rest of other items like R&D and G&A, we won't expect to increase these expenses aggressively. So operating margin on the bottom line, to continue seeing art trends. So basically, we would like to keep our, you know, Most of the cost or expenses lie in a self-disciplined manner. So, therefore, we can leverage, you know, driven by our faster business or revenue growth for the full year. And that concludes our answer to the question. Operator, let's proceed to the next question. Thank you.

From a personnel cost backed up by.

Quick revenue growth, so basically simply speaking gross margin to be further improving in 2024.

As I just mentioned setting on the marketing.

Expenses so.

Rest of other items.

Like our R&D and SG&A.

We expect to increase these expenses aggressively so operating margin on the bottom line.

To continue seeing trends, so basically we will have to keep a hour.

Most of the costs or.

<unk> expenses lines.

In the self disciplined manner.

So therefore.

Leverage.

Driven by our faster faster business or revenue growth for the full year.

Yes.

And that concludes our answer to the question I will point out to the next.

Thank you one moment for the next question.

Our next question comes from the line <unk> Yang from CIBC. Please go ahead.

Operator: One moment for the next question. Our next question comes from Yang Bai from CICC. Please go ahead.

Thank you Manny.

And Eagle in Houston from Don.

Yang Bai: Thank you, Manager. I have two questions. First, I'd like to ask you about our business strategy for this year. What kind of change do we expect from the return rate and the uptrend? Second, I'd like to ask you about our blue-chip business. I would also like to ask you to talk about the progress of the blue-chip business and its future direction. My first question is what is the company's strategy for commercialization this year and what are the expected trends in the payment ratio and the uptrend? My second question is how is the progress of the company's blue-collar business and what are the future planning directions for the blue-collar sector? Thank you.

We will continue in Shanghai, there John is a truly.

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Thanks, Jeff.

My first question.

Whats the company strategy of commercialization this year and what are they.

<unk> change in the payment the ratio at Apple.

As I said congrats on your progress.

Progress of the company the Blue collar business and what has the future direction for the blue collar sector.

Yes.

Okay. So I'll answer the first question regarding the.

Phil Yu Zhang: Okay, so I'll answer the first question regarding monetization or commercialization of our business. So we just reported that for the latest quarter, there were 5.2 million trailing 12 months paid enterprise customers, which was a historical high.

The monetization of our commercialization.

So we just reported that.

For the for the latest quarter there was a 5.2.

$2 million.

Trailing 12 months period enterprise customers. So this is this was a historical high.

Phil Yu Zhang: And regarding our commercialization, there were two components. One was the paying ratio, and another was ARPU. So we expect that the paying, in terms of the paid enterprise customers in 2024, so we would like to continue to see the growth of the paid enterprise customers sequentially, and and in terms of their art pool.

Regarding our commercialization there was there were two components one is.

Paying ratio another is our pool, so we expect to that.

The pain in terms of the pay to enterprise customers.

In 2024, so we would like to continue to see.

The growth of the pay to enterprise customers all sequentially.

And in terms of our pool.

Phil Yu Zhang: The blended R&P in the last quarter dropped a little bit. This is mainly because of the contribution from small, medium-sized enterprises. Their round of contribution is bigger because of the fast growth from SME companies. The blended R&P in the last quarter dropped a little bit; this effect makes blended ARPU drop a little bit.

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Luke.

Dropped a little bit this is mainly because of the contribution from small and medium sized enterprises.

Around the contribution.

You know as a bigger because of the SaaS growth from SME companies.

Yes.

Glen data.

Uh huh.

Blended effector mix.

Blended our pool dropped a little bit but win but if you look at our small medium sized.

Phil Yu Zhang: But if you look at small, medium-sized accounts and the key accounts separately, you would like to see both of them, their ARPU increased in the last quarter. So there are all inquiries, respectively. And in terms of the pain ratio, compared with 2022-2023, the overall pain ratio increased by three percentage points.

Accounts and key accounts.

Youll have to see both of them.

There are increased in the last quarter.

So.

There are all increase.

Respectively.

In terms of the paying ratio.

The comparator with 2022 two.

<unk> 2023, the overall <unk> ratio increased by three percentage points.

Phil Yu Zhang: At this moment, the pain ratio for the platform is still at a low level, so we believe there is still a good room to grow, so it will take several years to gradually increase the pain ratio for us. And in the short term, the paid enterprise customers' growth mainly comes from user growth. And as we just mentioned, our marketing strategy, so basically, this year, we will still continue to acquire users and at a very quick or fast pace. So basically, that will provide us with new users, new business users, and new paid enterprise customers. And for the longer term, we expect the paying ratio to continue to grow, and the recovery from large enterprises, as Jonathan just mentioned, definitely will increase their output.

At this moment the paying ratio for the platform is still at a low level. So we believe.

They are what the steel.

Loan growth so.

It will take.

Several years to gradually increase the paying ratio for us.

In short terms the period enterprise customers growth mainly comes from the user groups and.

As we just mentioned our margin strategy. So basically in this year, where we will still continue to.

Acquire users and at a very quick fast pace, so basically that will contribute to us with some new users new business users new enterprise pay to enterprise customers and for the longer term, we expect our paying ratio to continue to grow and.

The recovery from large enterprises ask Jocelyn, Jonathan just mentioned.

With that definitely will increase there.

Phil Yu Zhang: So the pay ratio increase and output increase, those two parts have good potentials, will support our long-term growth with our commercialization. I'd like to talk about the business side of Lanling. This year, it looks like, as we just said, the entire Blue Forest business is developing healthily. From the point of view of income, in our revenue, it was originally a... from 20% to 34%. This is actually a good explanation. In terms of blue-collar workers, there are mostly blue-collar workers in the service industry, the manufacturing industry, the construction industry, as well as blue-collar workers who deliver goods in the warehouse on the road.

So I think the ratio increase on our pool increase those two parts.

<unk> Cuda potentials.

Support of our long term growth with our.

Commercialization.

Okay.

Learning from and.

On the show, which lays out for sure.

<unk>, an kao to women.

And going on a year, which does that.

You can't run a progress.

Oh sure.

No revenue.

Yes.

Tim John Chamberlain shop mix usage.

Sure Chad.

Yo Yo China.

Tony.

We are starting to talk about.

Hum.

Shlomi.

So much from that intervention Darci Sanyo, we are allowed to.

Jonathan Peng Zhao: , We should serve them well. At the moment, we are in the service industry, in the field of production and manufacturing. To be honest, we are still in the process of hard exploration. We've been talking about this for a long time. In the end, there are four people., One is an agency that has existed in the field for a long time. The other is... Ping Tai. So the game between these four people has been going on for a long period of time, and there have been many conflicts. This might be the one,?? There is a way to make it a multilingual film.

The last name.

Jim.

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Jonathan.

Glen.

Yes.

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Okay.

Duffy.

Rich I'll call trying.

Sure.

So short answer though.

Sure sure.

Jim potential liquidity.

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Sure.

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Sure Greg.

Eager to issue shares <unk>.

Can we get gibeau Huguenot sure.

Impact.

I am just similar to Jennie O.

So shlomo comments, you're getting that don't know Santana.

Youll kind of until sure Heiko.

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Sheena.

How much is actually seeing magically.

Sure My children Amendment either intellectually.

Jonathan Peng Zhao: So, this matter can... and play better. Everyone will benefit from it. I think this is a good thing, and we are still continuing to explore, especially these two. The manufacturing industry has undergone some major changes.,...

Interesting.

How should that shows you that genworth has told the issue.

Yes.

Okay.

Finally shipyard that at scale.

So in Ohio on them.

That Australia.

Okay.

Okay.

I will firstly talk about.

Recall, our business. So our book of business has been experiencing continued healthy growth.

Jonathan Peng Zhao: So, we...?? I will briefly talk about the blue-collar business. So, our blue-collar business has experienced continued healthy growth. So data points to support that, which is our revenue grew by 32% year-on-year. However, the revenue contribution from blue-collars went up by 6 percentage points from 28% to 34%, which is a very powerful demonstration of the good performance of our blue-collar business. And there are four detailed sectors within Blue Colors, which are urban service, manufacturing, construction, and warehousing and logistics. For every sub-sector, the number of users is less than White Colors.

So.

Data points.

It's a product which is our revenue grew by 22% year over year.

The revenue contribution from Blue collar.

Gross by six six percentage points from today's press intrusive.

4%, which is a very powerful demonstration.

Okay.

Good performance of our particular business.

And therefore.

<unk> said, Chris we can blow colors, which has.

Based on these manufacturing constructions and warehousing logistics every subset.

Numbers of users is less than white collar Carlyle combined scandal.

Jonathan Peng Zhao: However, combined together, they are quite a considerable amount, so we need to better serve them. Within the urban service sector, we have been doing well. We have a good reputation and good recommendations, so we have also made some money from there. Within manufacturing, we are still under very hard exploration, which has actually been going on for a while. Now, we talked about there being four players within the manufacturing recruitment business, which are the factories, which are the employers, the workers, the agents, and the offline agents, who have been playing there for a long time. And the last one is the platform. So the game is that for a considerable longer term, within those four parties, among two or three of them, there have been contradictory situations.

Considerable.

So we need to better symptom.

Maybe the other service sector, we have.

<unk> been doing well we have a good.

Good.

So we also met some money, but we think manufacturing yes.

Very high.

Exploration.

This has been going for a while we talk about asphalt manufacturing.

The new subsea equipment business Wechat.

Factories, which is a point employers and workers.

The offline agents.

Or have been paid for long time, and lastly, the password so their.

Damian.

Considerable long term longer term.

We think those four parties.

Among two or three of them there have been contradictory situations. So actually you said there are some games.

Jonathan Peng Zhao: So actually, it's a zero-sum game. But we have been exploring for quite a long time, and we have made some progress. And also, the industry situation for manufacturing in the past two or three years has been quite different from the previous period, so we will continue to work on that area. So that's my update on our progress on blue-collar business. And that concludes our question for CSEC, and I'll move to the next question. The next question comes from the line of Robin Chu of Bernstein. Please go ahead.

Until we have been.

The hach sourcing historic story.

Long term and we made some progress and also the.

The industry situation for manufacturing in the past that two or three years.

Have been kind of just like on premise.

So we will continue to work on that area.

Thats my update on our progress on slick water business and that does conclude our question.

SEC and operator, let's move to the next question certainly.

Next question comes from the line of Robin Zhu All Bernstein. Please go ahead.

Robin Zhu: Thank you, Dr. Wang. I have two questions to ask. First, I'm happy to see that the company is increasing its returns. What are your plans for the future? How should we think about the overall cash allocation plan of the company and whether the recovery plan is going to be more stable and complete every month? The company has now raised more than 130 billion yuan in cash. I don't know if the company will grow with the company's revenue and cash flow. Will you consider a more systematic, Second, I would like to ask about the company's future product development path. How can we provide more services in the recruitment process? How can we expand the application through AI model development?

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While many of them are just cyclical Mr. Jones.

Hey, there you go to your what you suggested if we go into numbers it does limit.

Just one on the lunch and so.

So conclusion Jonathan.

Yeah, you bet.

The whole discussion we'll.

We'll throw goes up over with vehicles that you can drill those engineered lithium coupled with call of duty.

On the.

Pivotal NPV of children, who don't really bother you don't so call the August.

Jonathan joined that goes through our <unk>, but it just sounds about right. So it's aman.

The adoption of a little generally means you wont gondola pool.

I am watching going into Asia.

To quote you only gives them a bunkering solutions yeah sure.

Robin Zhu: How can we help the company achieve income and profit? And do we have any new ideas and actual plans overseas? One, it's good to see management raise the buyback for the coming year. I was hoping that you could share some thoughts on capital return policy going forward and the monthly pace of buybacks. Given there's almost $2 billion of cash on the balance sheet, will the company commit to a systematic capital return program going forward as revenue and cash flows grow?

I always used to the highway.

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So two questions. Please.

It's good to see management raised the buyback for the coming years, hoping that you could share some thoughts on capital return policy going forward and the monthly pace of buybacks given theres almost $2 billion of cash on the balance sheets will the company commit to a system at a capital return program going forward as revenue and cash flows grow.

Jonathan Peng Zhao: Second, I'm keen to hear management talk about future product development and specific ways for the company to leverage AI to capture more value and profit in the recruiting process. Also, we'd love an update on overseas expansion if management has any new thoughts or concrete plans. Thank you, all.

<unk>.

Okay and to hear management talk about future product development.

Specific ways the company could leverage AI to capture more value and profit in the recruiting process also love an update on overseas expansion.

Management has any sort of.

Concrete plans.

Thank you.

Sean you mentioned Gina.

Jonathan Peng Zhao: From our perspective as a company,, In the course of the company's development, the shareholder's return has constantly been improved. I think this is the duty of any listed company, any management team, any CEO of a listed company. So, as you said, our short-term money. We've invested more than 1.3 billion yuan, which is not a long-term investment, but it adds up to 1.5 billion yuan. How will this thing be used?

Tom will amount to eagle constitute genre and agile.

So most of that Susan.

Hi.

So consider partnering with Amgen put on tissue could almost say Bob.

Sean.

Generally the consequence declining some.

Josh <unk> CEO.

Yes.

How much harder than usual Jan woman the time she does.

Essentially that you on that Josh.

Josh Archie talked about Natasha Giordano.

Sure.

Did you see any mentioned.

Jonathan Peng Zhao: I actually have a priority in my heart. When I have a chance to develop myself, I will do it first because of the expansion of the company and the growth of the company, to expand the model created by the company. More industries,, and Tutu. Thank you for your question.

Sure.

Well Julien financial initially anyway.

And when you put out and when we reach a global citizen.

Quite a bit.

In trauma.

Sure.

Some broader engineering.

Okay.

Hi, Ed.

<unk> core data.

Hi, John.

Okay.

Okay.

Okay.

Thank you for your question so.

Regarding the cash allocation so it is actually.

Jonathan Peng Zhao: So regarding the cash allocation, so it is actually, To make the best arrangement, optimize the allocation of the company's capital, and continue to increase shareholder return is the duty for any public company, any management of a public company, and the CEO of any public company is our pursuer and our duty. And we have roughly, as you said, 15 billion in cash on hand. So for me, the priority to use this Cash, there are priorities. The top priority will always be to use our money for future development, for user growth, to expand our advanced model to more user groups, to more industries, areas, and countries to initiate our business. The money can be repaid in many ways.

To make the first arrangement to optimize the allocation of capital and continue to increase shareholder return.

It is the duty for any public company any management.

The company and to see all of any other company our procurement in our duty and.

We have roughly 15.

<unk> 15 billion cash on hand.

For me the priority to users.

The top priority will always be we will use our money for future development.

The gross spend our advanced model to more user groups to more industries, Eric in the country.

To initiate our business.

We are whole.

Increase.

Jonathan Peng Zhao: The research we are currently working on. In December of last year, we held our first cash-in-the-bank summit. At present, we are studying and promoting a future plan for continuous cash-in-the-bank, and, As a second priority to provide shareholder return, we are currently exploring a possibility, following our initial special cash dividend last year, to pay cash dividends continuously in the future. From the perspective of repurchase, Today's board of directors approved a $200 million recovery plan.

So both of them are faster and bulk Corp.

Yes.

Well remember we changed.

Sure.

Yes, sure Michele <unk> for which element Timna, yes, Joe Jeannette <unk> relax you don't purchase price.

I see that.

Now machine.

And.

The second priority.

Provide shareholder return.

Currently.

Possibility.

Following our initial special cash dividend last year too.

Two.

Pay question it continuously.

Okay.

So you're going to target when I tell them that.

She cannot wait of tomorrow image and the Eagles Michael.

Sure Matt you just asked.

To calculate.

Well the agent.

So you should.

Jonathan Peng Zhao: This is what we have been doing, through a stock buyback by focusing on the shareholders to go. Believe. Jiang, as well as I can get a certain guarantee, I think there are several ways of articulating the Chinese character,. We will continue to develop this project.

The Genco Thunder.

So to answer.

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Okay.

BV.

Number two what are you seeing that backdrop.

The genome of caution I want you that how should ease up.

Home total pay them.

Our liquidity policy to ascertain that Ashish.

And the last one from share repurchase perspective, so we just approved it yet.

Jonathan Peng Zhao: And the last one is from a share repurchase perspective. So we just approved this US dollar 200 million new repurchase program. So that's what we have been doing, and we will continue to do. And we want to utilize this share-by-debt program to guarantee our shareholders their shareholding percentage. And in the future, we will coordinate between all these, several methods or several ways to provide the best return on our show. From the perspective of AI, as you mentioned, we will make some investments. And our policy... We've thought it through. First, we need to track... We should not leave the AIGC alone for something like this. In development, there should be no cognitive difference in the generation of the first echelon. Secondly, we still hope to be able to land on the industrial site.

200 <unk>.

New repurchase program.

So that's one we have been doing.

So we want to.

Sure, Matt that program to guarantee our shareholders their shareholding.

And we will in the future will accordingly.

Between all this.

Several methods.

A way to to provide the best return.

But I will say that the chartwell enhanced.

Okay.

Although quite totally just horrible hour on the policy.

Well, Michelle it'd be unchanged.

It's really our regional.

Please understand in Q4 <unk>.

Thank you.

Peter.

Product introduced.

Donna.

Continue to do that that is on the tablet.

I don't want to become the largest shuang <unk>.

Jonathan Peng Zhao: Instead of making a big investment and burning chips and power with others, To be honest, we can't burn this thing. So we should be smart to spend money on AI. And from the AI investment, our policy, like we just discussed, is first to keep up with the latest leading technology and teams to avoid any knowledge gap, or generational gap compared with first-tier teams. And secondly, we will continue to pursue industrial implementation and not blindly invest to compete with chips, or compete with the spending of electricity, which is not worthwhile. We will spend our money wisely. Of course, I think our investors and shareholders will be concerned. All in all, I think everyone is very interested in our company's and the industry's opportunity to develop large-scale models. I'd like to share with you my understanding of the industry so far. I hope to share it with everyone. This is how we see it. If AI leaves the live stream, AI can't do anything about it.

Our Russia model towards a thoughtful roke Nbn shoe Shan Shan Shan Shan T&D and social part two unless you want Michelle the book to remain rational Tony in the patent.

In sum the AI investment our policy.

We just discussed first is to keep up with that.

On May <unk>.

Turning to 92.

To avoid any.

Good morning, Scott duration gap, a comparator with the first tier.

And secondly, we will continue to pursue the industrial instrumentation and.

And launching Brian that investment should compete.

Chip's compete.

Our spending.

E Commerce, which is not.

<unk>, we will spend our money.

Good morning.

Diane will do the woman.

Quick question.

Josh I'm glad you brought up.

Thomas and Nick how are you thinking.

The <unk> region.

Well sure.

But that definitely aissami those aren't just what are you looking on chip.

Sure.

Well, thank you gentlemen.

<unk> yeah.

Jonathan Peng Zhao: This means that this matter should be dealt with by AI. If this matter can be dealt with by AI, We need to be careful in this area. With this, I will express our termination of the financial transaction. Is there a difference between who pays the Phone charges?

Not for me Andrew Yesterday, you guys totally and I asked you about global residential team <unk> young.

Pat.

What's that.

Thank you.

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The improvement to chase short clean shop.

Okay.

Jonathan Peng Zhao: I will share my opinion on this with you. Regarding the opportunity that AI has brought about for our company and for our industry, I would like to share with you one of my understandings, which is if something, if development cannot proceed without artificial intelligence, without AI, then we need to invest in that. So if something can function quite well, even without AI, then we should be very cautious about the investment. That's the distinction between whether we should spend more from an industrial perspective.

Sure.

Quality with PTC on Apollo B is a cheaper way it way up in EMEA.

Okay.

Okay.

Regarding the.

Opportunity.

AI has talked about our company and for our industry I would like to share with you.

Okay.

The cheese.

If something is development cannot go kristi.

Proceed without artificial intelligence AI.

We need to invest.

And Ken it's functioning quite well without AI, and we should be quite cautious on labor.

Extinguish between whether we are spending more on the industrial perspective.

Jonathan Peng Zhao: And then... We have a clear policy on international business that you and many investors are concerned about. First, I want to make money. Secondly, our business is to make money for the rich. Thirdly, because our business is related to...,, and so on, the legal requirements are quite high. In conclusion, I think we should invest in... GDP, Qian Wu, Qian Liu, and so on.

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Got it up and let somebody answer which I don't want.

Let's see.

Potential GDP.

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Steve.

Tony Yes sure Jim.

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How much are you sure daina.

Jonathan Peng Zhao: The legal environment is clear and transparent. At the same time, it is also a good place for corporate payment habits. At the same time, it is also an ancient...

Sure, Jonathan Matuszewski try and tenant default.

Joseph would.

Hi.

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With that one job.

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Jonathan Peng Zhao: I think this is a good place to make money. In general, I think internationalization is a relatively simple way to make money. Chengshu Market, , where there is money, to make a lot of money, that's what I think.

Kennedy Chief to drive, which at one time items to Michelle.

And.

About the overseas business, which many of the Metro may concern. Our policies are also quite a clear first mover.

Jonathan Peng Zhao: And about the overseas business, which many investors may be concerned about, our policies are also quite clear. First, we will go overseas to make money. Second, we want to make money from wealthy people. Third, the recruitment and job-seeking business is quite serious. It's regarding the power and protection of job seekers, which have a quite high requirement for the local labor law. And fourth, and so based on those requirements and considerations, we will invest in the top, like five or six GDP countries or areas where the legal environment is quite clear and mature, and enterprises are used to pay for services. And all those traditional business models can make good money.

We will go to Mcmanus second so we want to make money from wealthy people Sir.

Okay.

Subsequent business as quest theory is regarding the power and protection of top secret, So which has a quite high requirements for the local labor law.

And for Us.

So based on those requirements and consideration, we will invest in that top five or six GDP countries.

Yes.

Okay.

Steven environment quite clear.

Mature.

Enterprises.

Sure.

Services and other traditional business model can make good money.

Jonathan Peng Zhao: So that's quite clear. We will go to mature markets, ancient players, good laws, and wealthy people. So that's our strategy for overseas business.

Quite clear, we don't go too mature market Asia Paris good.

Good luck and.

So thats our Scott Scott.

Wenbei Wang: And for your reference, that wraps up our answers for those questions, and due to the time constraints, that will be the last question. Thank you. At this time, I will turn the conference back to Wenbei for any additional or closing remarks. OK, thank you once again for joining us today. If you have any further questions, please contact our team directly. Thank you. That does conclude today's conference call. Thank you for participating. You may now disconnect. Thank you. Bye-bye. Hello, everyone. I am Jonathan Zhao. I was born on August 4th, 1990 in the hometown of Yunnanxi Changdan. This is my first group of friends. The group of friends I formed through passing through all the challenges. I believe our ?jian is everlasting and is never going to be defeated. So together, we girls are going to make a beautiful future.

Our basic business.

You saw some kuhnian tunnel.

Their efforts and that.

Our.

Thanks for those questions and due to time constraints.

I'll be the last question.

Operator. Thank you at this time I will turn the conference back to one pay for any additional or closing remarks.

Okay. Thank you once again for joining us today, if you have any further questions. Please contact our team directly thank you.

That concludes today's conference call. Thank you for participating you may now disconnect your lines.

Thank you Brian.

Yeah.

Okay.

[music].