Kanzhun - Q1 2024
May 21, 2024
Transcript
Operator (participant)
Ladies and gentlemen, thank you for standing by, and welcome to the Kanzhun Limited First Quarter 2024 Financial Results Conference Call. At this time, all participants are in listen-only mode. After the speaker's 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.
Wenbei Wang (Head of Investor Relations)
Thank you, Operator. Good evening, and good morning, everyone. Welcome to our first quarter 2024 earnings conference call. Joining me today are our Founder, Chairman, and CEO, Mr. Jonathan Peng Zhao, and our Director and CFO, Mr. Phil Yu Zhang. Before we start, we would like to remind you that today's discussion may contain forward-looking statements, which are based on management's current expectations and observations that involve known and unknown risks, uncertainties, and other factors not under the Company's control, which may cause actual results, performance, or achievements of the Company to be materially different. The Company cautions you not to place undue reliance on forward-looking statements and do not undertake any obligation to update this forward-looking information, except as required by law. During today's call, management will also discuss certain non-GAAP financial measures for comparison purposes only.
For 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.zhipin.com. With that said, I will now turn the call to Jonathan, our Founder, Chairman, and CEO.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
Hello, everyone. Welcome to our company's first quarter 2024 earnings conference call. On behalf of the Company's employees, management team, and board of directors, I would like to thank our users and investors who have always believed in us and supported us.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
Let me first introduce our financial performance. In the first quarter, the company achieved a calculated cash billings of CNY 2.05 billion, up 24% year-on-year and 15% quarter-on-quarter. Our GAAP revenue reached CNY 1.7 billion, up 33% year-on-year and 8% quarter-on-quarter. We achieved a net profit of CNY 240 million. Meanwhile, our adjusted net income, which excludes share-based compensation expenses, was CNY 530 million, up 117% year-on-year.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
In the first quarter, the average verified MAU on the BOSS Zhipin app reached 46.62 million, representing a 17% year-on-year growth. The growth rate of enterprise users is faster this quarter compared with the same period last year.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
In March, the number of verified MAU on the BOSS Zhipin app exceeded 50 million for the first time, reaching 55 million, up 24% year-on-year. At the same time, the ratio of DAU to MAU remained stable.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
As of the end of April, the cumulative number of verified users served by our platform exceeded 190 million, with the cumulative number of verified enterprises surpassing 40 million, which means from January to April this year, the company attracted more than 17 million newly added verified users.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
As of March 31, 2024, approximately 5.7 million enterprise customers across more than 3.5 million enterprises conducted paid recruitment activities on BOSS Zhipin during the past trailing twelve months.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
In past 12 months, there are more than 350 million companies paid for our service. This number seems very large in terms of the global enterprise service market. It, it even exceeding the total population of some countries. However, it only represents less than 10% of China's over 40 million enterprises, so which means there is enormous growth potential in the number of paying companies for China's online recruitment service in the future.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
Furthermore, it is obvious that to calculate that the average annual payment per enterprise is currently less than CNY 2,000. As the vast pool of Chinese enterprises gradually become more willing to pay for valuable and that adds to the services, the situation will continue to improve, which means ARPU will continue to rise.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
Therefore, for BOSS Zhipin, both BOSS Zhipin and the entire online recruitment industry in China, we see significant growth potential in both the number of paying enterprises and their ARPU, and their ARPU.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
In our last earnings call, we shared some key characteristics of this year's spring recruitment season. Today, we would like to provide additional insights and updates on recent trends.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
First, still be blue-collar segment. The number of blue-collar users and this segment's revenue count continue to grow rapidly. Among new users in the first quarter, both the absolute amount and the growth rate of blue-collar users surpassed that of the white-collar users, with the blue-collar users' revenue contribution climbing up to over 35%.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
It's worth mentioning that compared with last year, the manufacturing and logistic industries have seen a good improvement in business sentiment this year, maintaining a steady upward trend. From the post-Spring Festival to mid-May, the number of daily average newly added job positions in manufacturing and logistic industries increased by approximately 40% compared with the same period last year. At the same time, the white-collar sector has also shown some improvement trend.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
The second trend relates to enterprise size. Driven by the recovery in the white-collar sector, the large companies' recruitment demand has increased better year-on-year compared to that of smaller enterprises, showing the further recovery.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
The third one is by city tiers. Second-tier and lower-tier cities have showed continued increase in both user growth and revenue contribution. However, the recruitment demand from first-tier cities has also recovered to some degree this year compared to the same period last year.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
Manufacturing, supply chain, logistics, Internet, AI technology, finance, and procurement trade subsectors have shown relatively better growth momentum recently.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
You may have noticed that we have recently acquired WD Technology, the leading manufacturing talent delivery platform in China, Wo De Da Gong Wang.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
At the same time, the Hailuo Project, which we have been running for several years, have showed a very fast growing numbers of job postings and enterprises. In the first quarter, the Hailuo Project's number of active job positions exceeded 260,000, covering more than 27 million job seekers.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
So, we believe that with Wo De Da Gong Wang, more than 11 years of exploration and industry experience, combined with BOSS Zhipin app's user scale and our exploration in blue-collar service, we should be able to continue to explore more, more service, more mature service in blue-collar manufacturing industry, and also in our revenue.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
That concludes my part of the call. I will now turn it over to our CFO, Phil, for the review of our financials. Thank you.
Phil Yu Zhang (Director and CFO)
Thanks, Jonathan. Hello, everyone. Now let me walk you through the details of our financial results of the first quarter of 2024. We are happy to report a solid start to the year, characterized by continuous expansion in our user base and engagement, and sustained revenue growth. In this quarter, our revenues hit a new high and reached CNY 1.7 billion in the quarter, representing a solid 33% year-over-year growth. Calculated cash billings reached CNY 2.1 billion, up 24% year-over-year, and 15% sequentially, showing a continued growth momentum. Our paid enterprise customers grew by 43% year-over-year to 5.7 million in the trailing 12 months ended March 31st. The faster growth rate of paid customers compared to that of total users, indicates our increased paying ratio among enterprises and enterprise users.
As Jonathan just mentioned, we noticed a recovery of recruitment demand from large companies. This trend is also demonstrated by the increase of cash revenue contribution from key accounts in the quarter, which was up by 1.5 percentage points compared to the same period last year. While the downward trend of blended staff related ARPU, due to the change of revenue structure mix, has also been mitigated. Moving to the cost side, total operating costs and expenses increased by 17% year-over-year to CNY 1.6 billion in this quarter. Excluding share-based compensation expenses, adjusted operating costs and expenses increased by 14% to CNY 1.3 billion in this quarter, and our adjusted operating margin was 23%, doubled than that of 11% in the same quarter last year.
Cost of revenues increased by 20% year-over-year to CNY 295 million in this quarter. This increase was primarily driven by increases in server and bandwidth costs, payment processing costs, and employee related expenses. Gross margin went up by 2 percentage points compared to the same period last year, thanks to higher revenue growth. Our sales and marketing expenses decreased by 8% year-over-year to CNY 579 million in this quarter. This decrease was mainly due to decreased advertising and marketing expenses, partially offset by increased sales compensation associated with the cash revenue growth. Notably, despite the disciplined marketing investment, we still achieved a record high MAU and enlarged the gap with our industry peers. Our R&D expenses increased by 40% year-over-year to CNY 468 million in this quarter....This increase has two reasons.
One is the increased employee-related expenses, including year-end bonus and share-based compensation. The other, even bigger reason, is the result of our increased investment in generative AI development, which led to higher depreciation costs related to servers. Our G&A expenses increased by 64% year-over-year to CNY 270 million in this quarter, mainly due to increased employee-related expenses, including share-based compensation expenses. Our net income was CNY 292 million in this quarter, compared to CNY 33 million for the same quarter last year. Our adjusted net income reached CNY 531 million, up 117% year-over-year, and adjusted net margin for this quarter was 31%, up by 12 percentage points year-over-year.
Net cash provided by operating activities grew by 66% year-over-year to CNY 906 million for this quarter, mainly contributed by increased cash billings. As of March 31st, 2024, our cash and cash equivalents, short-term time deposits and short-term investments totaled CNY 11.9 billion, and our long-term investments in time deposits and wealth management products were CNY 3.4 billion. Now for our business outlook. For the second quarter of 2024, we expect our total revenues to be between CNY 1.91 billion and CNY 1.96 billion, a year-on-year increase of 28%-32%. With that concludes our prepared remarks, and now we would like to answer questions. Operator, please go ahead with the queue.
Operator (participant)
Thank you. 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. Our first question comes from the line of Robin Zhu from Bernstein. Please go ahead. Your line is open.
Robin Zhu (Managing Director and Senior Analyst)
[Foreign language]
So my questions, could management share your observations on the state of recruitment demand in China by white-collar, blue-collar, KAs versus SMEs, et cetera, by industry, compared to a year ago and the company's expectations last quarter? Can you also share some thoughts on BOSS Zhipin's own business trends in the more recent months, looking forward to the rest of Q2, thoughts on growth rates in the rest of the year, and whether high comms in the service industry will have an impact on growth rates in the coming months? Thank you.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
Thank you for your question. If we look at the new job postings and their growth of their recruitment demand, we saw that this year is overall better compared to last year. Every day, we continue to see the new historical high of active, daily active bosses and daily active enterprises. On an overall accumulated basis, we saw that for the existing bosses, their activeness is also better compared to last year.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
In the first quarter, as we have just said, blue-collar definitely grew better compared to other sectors, and we have just talked about numbers. The highlight this year is still manufacturing and logistics. Urban service compared to white-collar is not as fast as the other two sectors.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
In terms of the different company size, based on our historical experience and the estimate, we talked about our view on different on the recovery of different size companies. We saw that the smaller companies, it has a faster recovery speed, and the larger companies will take more time, but once they started to recover, it will show a different performance pattern compared to smaller companies. Currently, we saw that yes, the larger companies is recovery can last better and longer. I will share with one number that in April, for the enterprises with more than 500% is daily newly added job postings compared to March, grew by 10% month-over-month.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
We just talk about our newly added bosses. We talk about the activities of our existing bosses, about the highlight of manufacturing and logistics sector, about medium and larger size companies. And those drivers have in line with our observation and expectations. And also there is another driver, which is lower tier cities, which is also have been successfully demonstrated by many other companies, where they started with the first tier cities and then further penetrate into lower tier cities.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
So, overall, this year's recruitment market, in terms of those five industries and regions, we saw it as more stable and more balanced and more normal situation.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
Normal is more consistent with what we have been observing recently.
Phil Yu Zhang (Director and CFO)
[Foreign language]
Q1 was a strong quarter performed much better than the same period of 2023. Q1 CCB guidance was announced in the middle of March within our last earnings call. The final results of a quarter-over-quarter 15 percentage points growth turned out to be clearly better, affected by the momentum around the end of March. Around this moment, about 10 days before the end of May, second quarter's CCB guidance is still a bit early to tell. We now estimate that on top of a Q1's high base, Q2 will continue to see sequential growth. Magnitude will be likely in low single-digit percentage points quarter-over-quarter. Its year-on-year growth rate will be in the range of 28%-32%, faster than that of a Q1. And our full year's outlook of CCB growth is unchanged. So this is our answers to the second quarter and full year outlook.
Wenbei Wang (Head of Investor Relations)
Okay, thank you for your question, and let's move on to the next question.
Operator (participant)
Thank you. Please stand by. Our next question comes from the line of Eddy Wang from Morgan Stanley. Please go ahead. Your line is open.
Eddy Wang (Executive Director)
[Foreign language]
Thank you for taking my question. I have two questions. The first one, yes, about the paying ratio. We have noticed that the company has a very rapid growth of the paying enterprise users. Could you please share with us the paying ratio trend in the past couple quarters? And on top of that, if you can share us the breakdown of, you know, the ARPU user growth as well as, you know, different sized enterprise contribution on the billings. And my second question is about the upcoming graduation seasons.
We remember that, if you look at last year, the search of the graduates during the summer actually has hit on the supply demand dynamic in the recruitment market. Just want to hear your view on the upcoming, you know, the season. And do you see this will happen again? Thank you.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
Thank you for your question. First, I will talk about our basic growth strategy for our revenue. Till the end of March 31st, there are more than 350 million paid enterprise customers using our service, which is less than 10% of China's total number of enterprises. We have initially verified, demonstrated that our business model, our service model, can adapt to a variety and vast range of different type of customers. So for me, for us, our future growth strategy is that we will continue to attract more and more enterprises to pay for our service for their recruitment. That's my basic growth strategy.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
Basically, based on this premise, we will focus on to improve our number of paid enterprises. But that will be our key target, since our overall market share is quite low. So, based on that, we intend to be very cautious in dealing with companies who have not paid for recruitment service or online recruitment service before, which means the priority of ARPU increase is not that high.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
Based on those situations, for larger companies, key accounts, when there is a recruiter using our service, he will add to buy more account with us. The same case is for the smaller companies and SMEs. When there are one recruiter using us, then there will be one more buying more accounts. That leads to the result. In the first quarter, we saw that in our cash revenue perspective, both large accounts, middle and small size companies, there are ARPU increased, and that which means, in every on an average basis, in every company, more users are using our service, and also demonstrates the better recovery trend of larger companies.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
The factors which related to our paying ratio, which is, within one industry for a particular role, the number of recruiters, and compared to that, the supply of job seekers, if the supply and demand continue to grow, then we will gradually started to charging for that type of role, to maintain a balanced supply and demand. For example, for real estate agents, where a lot of people are recruiting, a lot of companies are recruiting real estate agents, but very little job seekers want to do that job. So for real estate agents, our paying ratio is actually 100%.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
So the principle for the paying ratio is that with more recruiters than in one industry and particular role, the with the will be higher paying ratio and then related to the increased ARPU.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
Since we have been doing this type of monetization for quite a while, and have been relatively successful with this model, so we will continue to go down this way. So we will stick to increase our penetration of paid enterprise customers, and if that happens, everything else will naturally follow.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
About your second question of the coming graduation season. Last year, the situation is relatively difficult, because post the COVID, we have seen two or even three years of graduation coming out, starting to looking for jobs in a short period window, the summer graduation season. So we see they competing heavily with each other.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
Last year also, graduates who doesn't want to come out looking for jobs, that portion is larger compared to this year. There are two reasons for that. First, of three years of the COVID, they spend a lot of time at home, and they just reluctant to come out. And secondly, the job opportunities is relatively less, and the job opportunities they find interesting is also relatively less, so they don't want to come out a lot looking for jobs actively.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
We expect this year the situation should be better compared to last year.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
First reason is that, the active opening job postings on our platform, as we just discussed, have reached a historical highs this year and obviously improved compared to last year. And secondly, the large companies, white collars, first-tier cities, their recovery should be largely helped with, graduates to find a job.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
I noticed a number. So after the Spring Festival till the middle of May, we saw that the full-time jobs, the bosses who post a full-time jobs actively talking with those graduates, the daily active job posting number grew by more than 30% year-on-year.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
As a matter of fact, BOSS Zhipin have tried our best to help those, newly graduated children. We will continue to do that, and wish them all the best.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
And that, that's my answer to all your questions. And operator, let's move on to the next one.
Operator (participant)
Thank you. Please stand by. Our next question comes from the line of Timothy Zhao from Goldman Sachs. Please go ahead, your line is open.
Timothy Zhao (Equity Research Analyst)
[Foreign language]
Thank you very much for taking my questions. I have two questions. The first question is regarding the blue-collar sector, especially after the company acquired the WD Technology, could manage and share your thoughts on how to develop the blue-collar business going forward? User contribution from the lower-tier cities is becoming bigger and bigger going forward. What are your thoughts on how to serve this kind of users going forward? And secondly, I think, as we see, the user growth so far this year is pretty good. Just wondering, what is your sales marketing strategies for the rest of this year, especially given the Paris Olympics is a few months away. Could you share your marketing campaign thoughts around the Olympics? Thank you.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
So thank you for your question. My Wo De Da Gong Wang, which we will short for WD. Actually, somehow similar with BOSS Zhipin, so we both founded in 2013, and have been with this industry for more than 11 years. So BOSS, we started as white-collar platform focusing on internet technology companies and WD, they focused and started with manufacturing factory workers. And so I have known WD for quite a long time, so my definition for them, actually they are survivor lucky guy.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
So, WD, they are the pioneer in inventing some capability, which is suitable for digitalize, which combined with manufacturing, related recruitment. So, for example, they are one of the first to concentrate or prioritize the user experience of the job seekers and for the users, helping improve their user experience. So that's why today they can be the leading platforms for certain sectors.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
This is the first time BOSS have to discuss about our acquisition. I will also want to share that our acquisition strategy is we want to acquire some core abilities respectfully, which cannot be accumulated by our own, and that will help us to cut the chase and work together to achieve better results.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
That's our consideration for our collaboration with WD or for your reference.
Phil Yu Zhang (Director and CFO)
Well, I can comment Timothy's second question regarding the user growth and marketing strategy. So basically, we will keep marketing expenses at a reasonable level and maintain a disciplined user growth approach. This is we mentioned many, many times, so definitely we will like to leverage Paris Olympic Games to enhance our brand, but we will have to spend appropriately within current marketing environments. Leading platform like us, we believe enjoys higher economy of scale and have a better marketing efficiency, which means at a not heightened spending, our user growth is still satisfactory. Our new user growth totally recorded as 17 billion in the first four months this year, close to half of our annual target of 30-40 billion new users. So with this situation, we don't need to be extra aggressive at this front.
So hope my comment answers your question.
Wenbei Wang (Head of Investor Relations)
Okay, that's all of our answers, and operator, let's move on to next question.
Operator (participant)
Thank you. Please stand by. Our next question comes from the line of Yang Bai from CICC. Please go ahead, your line is open.
Yang Bai (Asset Management Intern)
[Foreign language] I will translate for myself. The first one is, have we seen any change in the competitive landscape after the spring recruitment?
The second one is, we have mentioned the sales and marketing strategy for this year before, we also noticed that, Internet companies are increasing their AI CapEx, including our AI related expenses. Have we adjusted our outlook on profit margin this year? Thank you.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
Thank you for your question. So for the first one, regarding competition, this year, we have noticed that this spring, many of our peers, they, or majority of them have spending more aggressively this year, during the spring festival recruitment season. So we noticed that when we was also doing the same marketing, investment, so the competition is more fierce. And, so the overall spending, has increased. A lot during the last earnings call, I have also analyzed why, because, this year, people feel that there is opportunity there in the market, and they would like to spend more to increase their revenue.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
After the completion of marketing in the first quarter, so I think you have all already noticed that the third-party data is in April, so the overall competitive landscape is very stable. Some data, some operating metrics in the past, we are still maybe a little bit below our peers, and in April, we have surpassed all of our competitors in all operating metrics.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
And so, to conclude of the first quarter's competitive situation, that we very, very highly respect our peers active marketing events. But, we firmly believe that to continue to improve our service for both job seekers and recruiters, is still the effective or maybe the only effective way in terms of quote unquote, "marketing", strategies.
Jonathan Peng Zhao (Founder, Chairman, and CEO)
[Foreign language]
Wenbei Wang (Head of Investor Relations)
Our numbers of both MAU, DAU activities, and the user time spend, and all the operating metrics, we continue to maintain good momentum and advantages. That's my answer for the competitive question.
Phil Yu Zhang (Director and CFO)
Regarding your second question related to our margin profile for the full year, so I could quickly run through the major cost and the expenses item, and mention our thoughts. Regarding the gross margin, so basically the line below the costs, gross margin, we think that will slightly improve due to a higher economy of scale, starting from second quarter. So mainly, marketing expenses, we think will maintain at a current level, absolute amount will increase a little bit. Percentage wise, will be flat or decline. In terms of selling expense, which is mainly compensation of sales guys, its percentage to revenue will be flat or decline. So combined, the selling and the marketing expenses, the total selling and marketing expense, its total percentage points to revenue will further improve in 2024.
And then is R&D expenses, which is related to you just mentioned AI spending. You're right that we increase our investment related to the AI, and but that part could be offset by the revenue in the full year. So the full year, percentage wise, R&D expense would be flat, similar percentage points compared to last year. And then is G&A. So G&A percentage to revenue for full year will be improved compared with last year. In first quarter, temporarily, it's increased, but we expect the second quarter will drop. So the full year, percentage wise, will be better compared with last year. So the trend I just mentioned feeds both for our GAAP numbers and our adjusted non-GAAP numbers. So all in all, our operating margin in 2024 would like to improve along with our continued revenue growth.
So that's my comment to the most cost items and the overall margin for the company.
Wenbei Wang (Head of Investor Relations)
That's all of our answer to the question. Operator, please go ahead.
Operator (participant)
Due to time constraints, that concludes today's question and answer session. At this time, I will turn the conference back to Wenbei for any additional or closing remarks.
Wenbei Wang (Head of Investor Relations)
Thank you once again for joining us today. If you have any further questions, please contact our IR directly. Thank you.
Operator (participant)
This concludes today's conference call. Thank you for participating, you may now disconnect.