Kanzhun - Earnings Call - Q2 2025

Transcript

Speaker 3

Ladies and gentlemen, thank you for standing by and welcome to the Kanzhun Limited Second Quarter 2025 Financial Results Conference Call. At this time, all participants are in a listen-only mode. 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.

Speaker 2

Thank you, Operator. Good evening and good morning, everyone. Welcome to our Second Quarter 2025 Earnings Conference call. Joining me today are our Founder, Chairman, and CEO, Mr. Peng Zhao, and our Director and CFO, Mr. 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 calls for you not to place reliance on forward-looking statements and does 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 matters for comparison purposes only.

For a definition of non-GAAP financial matters and their reconciliation with GAAP to non-GAAP financial results, please see the earnings reviews issued earlier today. In addition, a webcast replay of this conference call will be available on our website at iibudgetin.com. With that, I will now turn the call to Peng Zhao, our Founder, Chairman, and CEO.

Speaker 0

大家好，欢迎参加我们公司2025年二季度业绩发布会。我谨代表公司全体员工、管理人和董事会，向长期信赖我们的用户，诚心祝贺我们投资人之行之之幸。

Speaker 2

Hello everyone, thank you for joining our company's Second Quarter 2025 Earnings Conference call. On behalf of the company's employees, management team, and the Board of Directors, I would like to extend our sincere gratitude to our numerous investors and friends who have continuously believed in and supported us.

Speaker 0

这次报告到四点事情：第一，这次的季度业绩还不错。第二，我们平台上供求生态继续改善。第三，公司持续在AI上做事。第四，关于近期我们在香港的增发和未来的回报状态。

Speaker 2

Today, I would like to report on four matters. First, our quarterly performance was good. Second, the supply-demand dynamics on our platform continue to improve. Third, we are making ongoing progress in AI. Fourth, our recent Hong Kong share offering and future shareholder return arrangements.

Speaker 0

首先报告到主要的业绩突出的是，二季度公司实现收入¥2.1 billion，同比增长9.7%。净利润达到¥710 million，同比增长70.4%。净利润率超过33%。

Speaker 2

Let me start with an overview of our financial performance. In the second quarter, our company achieved a total revenue of RMB 2.1 billion, up 9.7% year-on-year. Our net income reached RMB 710 million, reflecting a 70.4% year-on-year growth, achieving a net margin exceeding 33%.

Speaker 0

扣除股权激励费用以及不考虑理财等其他收益，二季度经调整后营业利润为¥880 million，同比增长33%。本季度股权激励费用连续两个季度环比下降近10%，为¥230 million，占收入的比例同比收窄约5个百分点。

Speaker 2

Excluding share-based compensation expenses and other income, such as investment gains, our adjusted operating profit was RMB 818 million, up 33% year-on-year. Share-based compensation expenses for this quarter decreased by nearly 10% quarter on quarter for the second consecutive quarter, amounting to RMB 213 million, with the ratio to revenue narrowed by about 5% year-on-year.

Speaker 0

规模效应带来的经营杠杆和高效的业务模式支撑了我们收入和利润同步提高的高质量增长。

Speaker 2

The operating leverage from the economics of scale and the efficiency of this model supported our high-quality growth, characterized by simultaneous improvement in both revenue and profit.

Speaker 0

well as from SMEs, further increased year-over-year.

Speaker 2

From January to July, we've cumulatively added over 13 million verified users. In the second quarter, the average verified monthly active users on the BOSS Zhipin app reached 63.56 million, up 16.5% year-on-year, consistent with user growth and penetration trends. Revenue contributions from blue collar, lower tier cities, and small and medium-sized enterprises further increased compared to last year.

Speaker 0

than 18% year over year.

Speaker 2

Second, during the second quarter and graduation season, we saw notable improvements in our platform's job supply and demand dynamics. Specifically, on the job seeker side, incremental job seeking demand from fresh graduates moderated, with the number of newly added verified graduates climbing over 20% year-on-year in June and July. On the employer side, recruitment demand for fresh graduates also increased. The number of new job postings for fresh graduates grew by over 18% year-on-year for the same period.

Speaker 0

这也跟整体的招聘市场需求恢复的趋势是一致的。七月份平台新发布职位数量同比增长约20%。无论是新增的发布职位所对应的招聘者数量, 还是招聘者人均发布的职位数量, 均高于去年同期。供需关系的改善也使得新增用户的CD比同比出现明显下降。

Speaker 2

This aligns with the overall trend of recovery in the recruitment market. In July, the number of newly posted jobs on our platform increased by approximately 20% year-on-year. Both the number of employers posting new jobs and the average number of jobs posted per recruiter were higher than the same period last year. The improvement in supply and demand relationships also led to a significant year-on-year decrease in the CEB ratio for new users.

Speaker 0

求职招聘供求关系的改善也带动季度付费发生向好的变化。公司在截止6月30日过去12个月，付费企业端客户数同比增长10%，到650万。

Speaker 2

Improved supply-demand dynamics also drove positive changes in monetization. The total paying enterprise customers in the 12 months ending June 30 reached 6.5 million, up 10% year-on-year.

Speaker 0

technology positions leading in growth rate.

Speaker 2

From an industry perspective, blue collar manufacturing experienced a short-term slowdown in April due to tariffs, but resumed year-on-year growth from May onward, with growth rates continuing to outpace other industries. Southern service sectors saw accelerated year-on-year growth in the second quarter. We observed a noticeable recovery in the internet industry, with the number of active job postings in the second quarter reaching a new high since 2021, led by product and technical growth.

Speaker 0

第三个方面报告一下, 公司继续在AI上取得进展。我还是从AI2C、AI2B和AI2Management三个角度谈。

Speaker 2

Sir, the company's continued progress in AI. I will stick to the three perspectives: AI2C job seekers, AI2B enterprise users, and AI2 management.

Speaker 0

先说一下AI2C，AI面试训练机器人有新的进展。这个机器人现在开始作用于推荐工作。在征得求职者同意的前提下，我们运用了面试过程中所获得的数据，为求职者进行职位推荐。参加实验的用户，他们的达成效率得到了提高。

Speaker 2

First, AI to job seekers. The AI interview training robot has made some new progress. This robot now starts to play a role in recommendations. Upon the job seeker's consent, we use data obtained during the interview process to recommend positions to job seekers, and users who participate in the experimental tool have achieved higher efficiency.

Speaker 0

in the experiment received more answers.

Speaker 2

We continue to iterate AI-assisted user search. For users participating in the test, not only can the AI give more explanation for the research results, it can also provide dynamic content summaries, job search strategy planning, and revenue optimization guides based on user queries. Users in the experimental group gain more mutual achievements.

Speaker 0

在保护求职者安全上，我们将AI应用到风险用户识别中。比如，我们训练AI去识别更加隐晦的攻击性和违反平台规则的语言。再比如，我们利用AI研发工具，在识别被其他的AI所篡改过的虚假内容上取得了初步的成效。这显然是一项长期而艰巨的任务，但是我们坚信更多的人会越来越需要它。

Speaker 2

In terms of protecting job seekers' safety, we have applied AI to identify risky users. For instance, we have trained AI to recognize more sexually aggressive language and expressions that violate platform rules. Another example is that the AI tools we developed have made preliminary grades in identifying fake content tampered by other AIs. This is obviously a long-term and challenging test, but we firmly believe that more people are in need of such functions.

Speaker 0

再说一下AI2B, 我们为许多新创立的公司的招聘者和很多刚刚入行的HR提供AI辅助职位优化的功能。目前...

Speaker 3

Ladies and gentlemen, please continue to stand by. The conference will resume shortly. Thank you for your patience.

Speaker 2

Sir, can you hear me now? Can you hear me now?

Speaker 3

Yes, we can hear you now. Please resume.

Speaker 2

Okay, we start at the next hour.

Speaker 0

从哪开始? 再说一下AI2B, 刚才断了, sorry。我们重新说一下AI2B, 我们为许多新设立的创业公司的招聘者和很多新入行的HR提供AI-assisted job posting optimization的功能。目前AI平均每天帮助发布职位在数万。这当中的要点是如何避免把辅助变成替代。这是一个艰巨的任务, 但是也必须坚持。

Speaker 2

Next, about AI to enterprises. We provide AI-assisted job posting optimization features for both many newly established startups and junior HRs. Currently, AI assists in posting tens of thousands of job positions on a daily basis. The key point here is how to prevent turning assistants into replacements. It is difficult, but we must persist in doing so.

Speaker 0

我们在商业化上也广泛地接入AI开展实验。举个例子，我们使用AI增强对招聘者意图的理解，从而帮助招聘者可以选择更适合他们的增值服务。实验组的招聘者进行了更为积极主动的购买，并且由于一开始选的会更准一些，所以增值服务的复购也得到了提升。

Speaker 2

In terms of commercialization, we have extensively integrated AI to conduct experiments. For instance, we use AI to enhance the understanding of recruiters' intentions, thereby helping them to select value-added services which are more suited to their needs. Recruiters in the experimental group have made more proactive purchases, and because they have chosen more suitable products, their repeat purchases have also increased.

Speaker 0

说一下AI2 Management，我们推进AI在研发中的使用，改造研发工具和研发流程。北京总部的一个技术部目前的30%的代码由AI生成。在另一个城市建立的一个研发基地，当前有70%的代码为AI生成。结果是产品研发迭代上线的速度提高了很多，因此我们可以在单位时间当中，同样的时间当中尝试更多的可能性。

Speaker 2

Now, AI to management. We promote the use of AI in research and development, transforming R&D tools and processes. In a certain technical department at the Beijing headquarters, 30% of the coding is now AI-generated. In another city, a newly established R&D department, 70% of the code is AI-generated. As a result, the speed of product R&D iteration and launch has significantly increased, allowing us to explore more possibilities within the same time frame.

Speaker 0

AI对于客服工作的帮助也越来越大。AI在新的客服人员的培训上，在客户服务质量的自动化检验上，以及在客户情绪识别和应对的建议上都取得了成绩。这对于提升我们用户的满意度，以及提升客户服务部门员工的信服度都非常重要。

Speaker 2

AI is playing an increasingly important role in customer service. It has achieved results in training new customer service staff, automatically inspecting customer service quality, and providing suggestions for recognizing and responding to customer emotions. This is crucial for improving user satisfaction and enhancing the well-being of customer service employees.

Speaker 0

最后报告一下公司近期在香港增发和股东回报的安排。公司在2023年7月4日完成了HKD 2.2 billion的香港公开增发，主要目的就是为了提升公司在香港的流动性，让更多港股市场的投资人能够了解参与公司的交易。发行的效果是不错的，目前港股的成交量相比发行前有明显的增长。

Speaker 2

The last one, we would like to report our recent Hong Kong offering and shareholder return arrangements. The company completed a Hong Kong secondary share offering of HKD 2.2 billion on July 4th. The primary purpose was to enhance the liquidity in Hong Kong, allowing more investors in the Hong Kong stock market to understand and participate in the company's trading. The offering has achieved positive results, with a significant increase in Hong Kong stock trading volume compared to the pre-offering levels.

Speaker 0

在股东回报方面，今天董事会批准了两项关于股东回报的方案。第一项是宣布一个年度分红的安排，公司计划未来每年实施年度分红。今年分红的额度是$80 million。第二是启动新的一期，也是我们累计到今的第五期股份回购计划。公司拟在8月29日起，未来的12个月内累计回购不超过$250 million的公司股票。我们相信这能够充分展示公司积极回报股东与所有投资人共同分享公司持续成长的红利的诚意。

Speaker 2

Regarding shareholder returns, the Board of Directors approved two shareholder return proposals today. First, an annual dividend policy was adopted. The company plans to pay out annual dividends going forward, with dividends of $80 million for the current fiscal year. Second, a new share repurchase program on a phased and accumulative perspective is launched. The company intends to repurchase up to $250 million of these shares over the next 12 months, starting August 29. We believe this fully demonstrates the company's sincerity in actively rewarding shareholders and sharing the benefits of our sustained growth with all investors.

Speaker 0

Yu Zhang 为大家介绍我们的财务情况。

Speaker 2

That concludes my part of the call. I'll now turn it over to our CFO Yu Zhang for the review of our financials. Thank you.

Speaker 1

Thanks, Jonathan. Hello everyone. Now, let me walk through the details of our financial results of the second quarter of 2025. We continued to achieve high-quality results in this quarter, represented by solid revenue growth and further improved profitability. The revenue growth this quarter was primarily attributed to the continued expansion of our user base, with the number of paying enterprise customers increased by 10% year-on-year to 6.5 million over the trailing 12 months ended June 30th. As the recruitment market demand has gradually recovered since the beginning of this year, and the job seeker recruiter ecosystem has improved, the willingness of enterprise clients to pay has been rising. Among them, the recovery in recruitment demand from small and medium-sized enterprises has been more pronounced, driving a quarter-on-quarter increase in the revenue contribution from SMEs.

ARPU maintained stable and modest growth, mainly benefiting from the expansion of paying amounts from key accounts. Moving to the cost side, total operating cost and expenses decreased by 7% year-on-year to RMB 1.5 billion this quarter. Share-based compensation expenses dropped by 24% year-on-year and 9% quarter-on-quarter to RMB 230 million, shrinking for the fourth consecutive quarters. Excluding share-based compensation expenses, adjusted income from operations grew by 33% to RMB 881 million, and our adjusted operating margin in the quarter reached 41.9%, up by 7.5% points year-on-year, hit a record high. Cost of revenues decreased by 3% year-on-year to RMB 307 million in this quarter, mainly due to the decrease in operational employee-related expenses as a result of improved operational efficiency as we continue to engage AI in our daily operations. Gross margin went up by 1.9% points year-on-year to 85.4%.

Sales and marketing expenses decreased by 23% year-on-year to RMB 420 million during this quarter, primarily driven by decreases in advertising and marketing expenses and employee-related expenses. However, our strong brand recognition enhanced marketing efficiency and superior user engagement, guaranteed that we can still maintain robust user growth momentum. Our R&D expenses decreased by 6% year-on-year to RMB 416 million in this quarter. This decrease was primarily driven by reduced public cloud service fees related to AI. Our G&A expenses increased by 19% to RMB 311 million in this quarter, primarily due to an increase in employee-related expenses and investment in new initiatives. Our net income increased by 70% to RMB 711 million in this quarter, with adjusted net income increased by 31% to RMB 941 million. Margins also expanded significantly and reached record highs.

Our net margin improved by 12.1% points year-on-year to 33.8%, while our adjusted net margin reached 44.8%, up 7.3% points year-on-year. Both of these two margins have maintained sustainable improvement over the past three consecutive quarters. Net cash provided by operating activities reached RMB 1,052 million in this quarter, up 21% year-on-year. As of June 30, 2025, we continue to maintain a strong cash position of RMB 16.0 billion. In July, we completed the secondary share offering of 34.5 million Class A ordinary shares at HKD 66 per share, comprising a Hong Kong public tranche and an international tranche. Net profits from this share offering amounted to approximately HKD 2.2 billion. This offering, on one side, improved our Hong Kong liquidity and broadened our shareholder base.

On the other side, it further strengthened our cash position, giving us both strategic flexibility and financial capacity to pursue long-term growth initiatives and enhance our shareholder returns. One new initiative Jonathan just mentioned is that our Board of Directors has just approved the adoption of an annual dividend policy with a dividend amount of $80 million for the fiscal year of 2025. Combined with a renewed $250 million share repurchase program, our commitment to shareholder returns continued to enhance. For our business outlook, just like we communicated before, we expect our revenue growth to reaccelerate starting this quarter, along with the recovery of recruitment market momentum. For the third quarter of 2025, we expect our total revenues to be between RMB 2.13 billion and RMB 2.16 billion, a year-on-year increase of 11.4% to 13%. This concludes our prepared remarks, and now we would like to answer questions.

Operator, please go ahead.

Speaker 3

Thank you. As a reminder to ask a question, please 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. Once again, please 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. Thank you. We are now going to proceed with our first question. The questions come from the line of Eddie Wang from Morgan Stanley. Please ask your question.

Speaker 0

赵总, 一个那个文贝, 感谢啊, 接受我的提问。那我这边可能先问两个问题, 第一个就是我们看到就是二季度平台的确体现出这个招聘需求的恢复。就想问一下我们这一次的恢复啊, 跟之前相比呢, 就是有没有一些新的特点啊, 其中有没有一些特殊的原因, 比如说, 二季度开始的这个外卖大战导致了这个服务业蓝领啊, 这个招聘需求的激增啊。然后就还想问一下赵总, 就说这种啊, 招聘需求的恢复是不是可以持续, 我们怎么看这个三季度的这个招聘需求的展望, 这是一个问题啊。第二个问题啊, 想问一下就是赵总刚刚有提到, 咱们比如说研发部门有相当比例的代码, 可能已经是AI生成的啊, 想问一下就是我们公司怎么看未来AI对于整个白领招聘, 尤其是这个程序员招聘的这个需求的影响。那我自己啊, 翻译一下这个两个问题啊。 Thank you, management, for taking my question. I have two questions. The first one is, the recruitment demand recovery we witnessed on BOSS Zhipin platform in the second quarter and July. Is there any different driver for such a recovery this time versus before? For example, has the food delivery battle led to the surge in service industry blue-collar recruitment demand? Do you think the recruitment demand in the second quarter is sustainable or not? How's your view and outlook for the third quarter? The second question is that you mentioned previously that your R&D department, most of the coding has been generated by AI. What's your view on the AI's impact on the white-collar recruitment, especially on hiring demand of the programmers? Thank you.

这次的招聘需求的恢复跟之前相比, 有一个小的特点和一个大的特点。小的特点就是互联网行业的职位情况, 刚才说过, 恢复到2021年以来的新高。一个大的特点就是小微企业, 它在更加快速的复苏。

Speaker 2

Thank you for your question. About the recovery trend of the recruitment market, compared to before, we saw small features and the big features. The small one is the job postings from the internet sector have recovered to a new high since 2021, as we just communicated. The big one is that the smaller size or micro-size enterprises have been recovering much faster.

Speaker 0

有一个数据, 平台上小于20人的企业在二季度的收入占比提升到将近20%。这是我们所有的不同size的企业当中同比增速最快的一部分。

Speaker 2

One data to share with you is that the company with employees less than 20, less than 20 employees in the second quarter's revenue contribution goes up to almost 20%, which is the highest, representing the highest growth rate among all different size companies.

Speaker 0

然后我们把规模稍微扩大一下，看到100人以下的企业，那么它的新增的职位数同比来看也是增速显著超过平台的平均水平。

Speaker 2

Let's expand the size a little bit to companies with less than 100 employees. The year-on-year growth rate of new job postings by those companies has also significantly exceeded the platform's overall level.

Speaker 0

这个就是这次恢复的一些趋势的观察。然后您提到的这个外卖大战对我们观察到的这个招聘恢复的影响，我看到的这个影响是可以忽略的。实际上虽然外卖大战这个是媒体比较关注，但实际上从能够真正贡献的职位来看，外卖员的起手的职位在我们整个的职位供给当中占比极低。同时也没有看到有可以超过其他行业的增幅。

Speaker 2

Regarding your question of the impact of the food delivery competition, our observation is the impact is quite minor or negative. The data shows that the job postings related to riders or food delivery guys have been quite small among all of our job postings, and we also haven't observed any higher than average level of revenue growth from those jobs.

Speaker 0

Earnings Conference call 上曾经报告过好几次，从去年的 7 月，招聘者跟求职者的比例是比较差的。去年的 11 月这个比例已经恢复到比前年的 11 月好。之后这个比例关系在我们平台看来是持续改善的。今年二季度的数据我已经汇报过，我就不赘述了。

Speaker 2

About your third question, whether this recovery could be sustainable, our view is positive, as have several evidence for it. First one is we have communicated before that the very poor job seeker to recruiter ratio starting last July, the situation had been improved since last November 2024, which by that time has recovered to the same period of November 2023. After that, the job seeker to recruiter ratio or dynamics have been continued to improving, and in the second quarter, we have seen a much more obvious recovery for that number, which we have just communicated.

Speaker 0

就我运营这间企业的体感来看，我现在觉得我们三季度的业务增速将会比二季度进一步加速，这是确定性很强的事情。

Speaker 2

From my perspective, from daily operations, our business growth rate in the third quarter is expected to further accelerate compared to the second quarter, which I have quite confidence with. That's our answer to the question. Operator, let's move on to the next.

Speaker 3

Sure. We are now going to proceed with our next question. The questions come from the line of Wei Qiang from UBS. Please ask your question.

谢谢, 赵总, 宇哥, 文贝晚上好。感谢接受我的提问。我也有两个问题想请教。首先是观察到咱们公司的利润率今年进一步扩张到了已经非常高的水平。在现在的这个高基数的基础上应该怎么考虑明年和以后的利润率趋势? 基于咱们稳健的这个利润率跟现金流, 未来几年我们最重要的投入方向有哪些? 第二个问题呢, 是最近观察到有一些创业公司似乎是在加大这个广告投入的力度。想请教一下这个有没有影响到公司的营销跟获客成本? 咱们怎么评价这个对于蓝领市场, 包括整个在线招聘市场竞争格局的影响和咱们公司在其中的竞争壁垒? 那我也是反映一下。 Thank you, management, for taking my questions. I have two questions. First is our margins continue to expand this year to a very high level. Given such a high base, how should we think about the margin trend in the next year and beyond? Also, considering our healthy and stable margins and cash flow, what do we consider as the most important investment areas going forward? A second, it looks like some startup companies are ramping up advertising investment recently. Does it affect our marketing and user acquisition cost? How do we assess the impact on the competition landscape in blue-collar segments and online recruitment market overall, as well as our competitive moats? Thank you.

Speaker 1

Thanks for the question, and I'll answer the margin question first. You were right that our margin continues to improve. We think that this is mainly related to our business model. Because we run an online recruitment marketplace, the scale effect brought by our company's business model is significant. We believe this is the fundamental reason for the continuous improvement of our profit margins. In the past several quarters, we implemented effective cost control to make sure we put our focus on the high-quality part of growth, which kept our cost growth rate lower than that of revenue. With our revenue steady growth, the direction of gradual improvement of our profit margin is quite clear, and this is a kind of a definite.

We believe the margin improving is a long-term thing, and it should run step by step, not all of a sudden, not grow too fast or too high in the short term. In terms of the areas that we would like to invest, we will continue to invest into our business. Our future investment priorities remain consistent with our previous ones, mainly focusing on R&D, innovation, and new business initiatives, etc. You also can see that we generated a very healthy cash flow. In this quarter, we generated more than RMB 1 billion operating cash flow. Actually, this is the consecutive two quarters. The first quarter, the operating cash flow is also about RMB 1 billion. We already had two consecutive quarters with over RMB 1 billion operating cash flow.

With such healthy cash reserves, we will mainly use our cash at talent development, probably like overseas expansion, and more importantly, shareholder return programs in the future. That's my comment related to the margin and our use, how to use the cash in the future. Go ahead, thank you.

Speaker 0

Also, the second question. 我们看到许多同行在特定的季节会打广告, 包括一些成熟公司和创业公司。So far, 我觉得对我们的影响是比较小的。

Speaker 2

About the second question, yes, we do observe that many of our peers will do some advertising marketing events in certain segments, including both mature companies or startups. However, so far till now, the impact to us is quite limited.

Speaker 0

首先说一下在现在这个阶段搞广告战的意义是非常非常小的。我们自己的市场推广费占比收入的比例在下降，但是从绝对值上来讲，据我了解，我们的市场推广费在绝对值的投入上在全行业仍然是最大的，只是确实占比我们的收入水平是低的，这点我觉得要值得澄清一下。

Speaker 2

My observation or my understanding is that at this current stage, a marketing wall, the meaningness of a marketing wall is very small. I want to clarify one thing is that even though our marketing expenses as a percentage of revenues continue to decline, on an absolute amount basis, we are still investing in the largest amount of marketing and advertising expenses among the industry.

Speaker 0

与此同时，由于我们已经建立起来的强大的双边网络生态效应，所以使得我在花同样的钱能够获得的用户会较多，我的混合成本较低，同时我的用户存留情况较好。那么综上呢，在 marketing 费用上我们的力量非常强劲，在 marketing 的效率上我们是最高的，在用户的存留的效率上我们也是最高的。这就是我解释为这个阶段在我们这个行业搞 marketing wall 是意义非常小的。

Speaker 2

In the meantime, due to our very powerful double-sided network effect, we have a very high user acquisition efficiency. We can maintain a very robust user growth while our user acquisition costs are still kept at quite a low level. Also, our user retention is the highest among our peers. To sum up, we have very strong marketing investments. Our user acquisition efficiency is high. Our user retention is high. That's why I said at the current stage, the meaningness is quite low to start a marketing wall.

Speaker 0

this is the same in many technology companies.

Speaker 2

We would like to answer the second question from Eddie about whether AI will replace the programmers. From our own situation, yes, our recruitment for entry-level programmers has been slowing down, but we are still hiring. We are focusing on those people who have more potential, who are much smarter, can break down the questions, and look from a bigger picture perspective. I think that's also happening in many other technology companies.

Speaker 0

然后我自己在招募程序员这件事情上我的变化就是我其实会花更多的salary去请到高潜的一个entry level的程序员，以及我为了请到这样一个人，由于这样的人总是很强的竞争激烈，所以我在招聘上我花的人力物力也会增加。我相信我遇到的处境也会是很多技术公司的处境。

Speaker 2

What I'm facing to recruiting the entry-level programmers are I'm spending more money, more cost, recruitment cost to hire the people with more talents or more potentials. We will actually, we might somehow increase the recruitment cost for those types of people. I think that that's also happening to many other technology companies.

Speaker 0

所以我这段时间对这件事的思考大概可以这样来总结：过去呢是一个高级程序员带着一波人手，高级程序员做复杂工作，人手做简单工作，敲代码。现在呢可以是一个高级程序员带着一个AI，这是变化。但是所谓高级程序员其实他的稀缺性，他的招聘的难度和要付给他的钱恐怕是更加增加了，而不是减少了。

Speaker 2

My thinking on this issue is that in the past, the normal structure is one senior programmer with some junior level team to do a more simplified job. Now it will turn into one senior programmer or senior technical guys with AI. The salary we need to pay and the hiring efforts we need to invest to hire that senior guy actually increases.

Speaker 0

那么初级程序员的话在整个白领, 我们国家有一个多亿的白领脑力劳动者, 其中entry level的engineers根据经验判断我觉得低于2%。所以的话这个变化我觉得对于整个白领领域的招聘的影响迄今为止是微乎其微的。

Speaker 2

The junior engineer or junior programmer as a percentage of overall white-collar employees, which in our country might be more than 100 million, my gut feeling is less than 2%. That change to the impact of hiring of white-collar is very limited.

Speaker 0

对, 这是我的回答。

Speaker 2

That's all of our answers to the questions. Operator, let's move on to the next one.

Speaker 3

Sure. We are now going to proceed with our next question. The questions come from the line of Timothy Zhao from Goldman Sachs. Your line is open. Please go ahead.

Speaker 0

赵总, 宇哥, 文贝晚上好, 感谢接受我的提问。我这边也有两条问题想要请教一下。第一个是可否请赵总再详细介绍一下在AI这边我们在这个招聘者端和在商业产品上面的一些应用场景, 包括我们看到公司最近也利用AI开发了一些不同功能的小程序或者是APP。想请赵总分享一下我们觉得哪些是比较有潜力的, 之后的商业化的计划是怎样。第二个问题是关于我们最近在港股市场上面的融资, 我看到公司今天也宣布了派息和回购, 可否请关于分享一下公司整体在资本市场上后续的一些想法或者安排, 有哪些计划, 比如可以持续的提升港股的流动性, 比如我们的每年的红利的计划是具体怎么去思索的。我很快翻译一下。 Thank you, management, for taking my question. Two questions from my side. First is regarding the AI application or AI features. If management can introduce more detail about the specific use scenarios on the enterprise side and what kind of commercial product that we are thinking of. Also, we note that recently the company leveraged AI to develop mini programs or applications of different features. Just wondering from your perspective, which ones have the more commercial potential? Secondly is regarding your recent financing activities in Hong Kong markets. I'm very glad to see you also announced the share purchase and the annual dividend policy this year. Just wondering if management can share what is your thoughts on the capital markets going forward. For example, what are your plans to improve the liquidity in the Hong Kong markets?

What are the detailed dividend plans that you have in mind? Thank you. AI在我们的工作当中有很大的潜力。刚才我做了一些介绍, 实际上的话我们正在广泛的进行很多的新产品的开发和实验, 也可以稍微再举点例子。

Speaker 2

Actually, yes, we do have some good progress on the AI product development side. We have been broadly to do some new product launching and development. I can give you more examples.

Speaker 0

500 多个招聘者在使用这个叫 Hammer 的 agent。简单的讲呢，招聘者可以通过跟 Hammer 进行对话交互，之后就完成大部分的一个招聘者日常要干的活，直到能够跟求职者完成一次达成。这里面我们当然提醒求职者说对面是一个 agent，你愿意继续吗？有的求职者就拒绝了，有的人愿意继续。

Speaker 2

The first one is an agent. We developed a recruitment agent called Hammer AI recruitment agent. Currently, we use it with approximately 500 recruiters daily. The recruiters can complete the majority of their work on our platform by simply interacting with Hammer AI recruitment agent through dialogue. Of course, this part should have the job seeker's consent. Sometimes job seekers might say no, but if the job seeker is okay, the Hammer AI recruitment agent will complete its job until to get to achieve an exchange of revenue or company formation or achievement.

Speaker 0

还不如说我们已经感到 Hammer 会把我们带向更多的位置。

Speaker 2

We will attach very great patience to iterate this agent Hammer. Rather than saying that we are using new technology to validate what we have already known, Hammer actually will let us be to even greater harmony.

Speaker 0

我们在Hammer AI recruitment agent上是比较克制的，但另外的一个例子呢，就是我们的实验会比较激进一些。这个例子有一个背景，就是求职者他们的接受度和忍耐度比较高，而招聘者的相对谈判地位会比较高。比如说我们为大型的一些国央企开发了一套AI产品，已经上线了。

Speaker 2

on Hammer AI recruitment agent is actually quite strange. The second one, we have been more aggressive. The second example is where the job seekers have more tolerance towards this product. The recruiters, it has higher leverages in terms of the negotiation program. It is actually a product we designed for large state-owned enterprises which have just launched.

Speaker 0

比如说我们为招聘者设置了数字人形象，设置AI控制的面试题目，设置AI来撰写的面试报告等。同时来讲，我们设置了支持AI自主的进行追问，进行多模态的候选人情绪识别和形象识别等等能力。目前我们用用这一套，用这套产品支持了十几家大型的国企，对应届毕业生开展了二十几场的面试专场，参与者接近30,000人。迄今为止的话，反应还可以。

Speaker 2

Finally, this system allows for customization of digital human avatars, interview questions, and interview reports. It also supports AI-powered follow-up questions, multimodal candidate emotion recognition, and image recognition. Using this technology, we have supported over 20 AI-powered interview events for resident graduates at over 10 large state-owned enterprises, attracting nearly 30,000 participants. The response has been positive.

Speaker 0

在我们公司这样的例子非常多，我相信在很多公司都是如此的。我实际上觉得AI跟我们现有的产品技术商业模式和公司的内部的管理相结合，仍然处在一个早期。我相信新的技术跟老的生意相结合，在相当长的时间里面越是革命性的技术，这种结合越体现为一种布朗运动。真正的Killer级的应用，真正的Winner应该就是在大量的布朗运动中逐步产生的。我们有这个耐心和投入的底气，所以的话我们还可以再边走边看。

Speaker 2

I think that we have a lot of those examples, and that also should be quite common in many other companies. Actually, I felt that the combination of AI technology and the current products, or application in technology management and the daily operation, is still at an early stage. The new technology combined with the older business, for this matter, the more revolutionized the product is, it will be more like a brown activities movement. The killer level applications will be generated among a lot of those brown movements. We have enough patience, and we have enough assets to waiting for that kind of application to be born.

Speaker 0

这个阶段大家关心的AI我们也很关心，然后我觉得它的fundamental principle就是把它当一个布朗运动。

Speaker 2

Everybody cares about the AI, we are also quite cared about it. The fundamental principle is just treating it like a brown movement.

Speaker 0

然后下一个阶段就是水电煤，然后周围都是这个东西，我觉得这是必然的。

Speaker 2

The next stage is AI will be everything in our daily life.

Speaker 0

然后关于钱的这个问题, 我我想请Feel我们CFO来回答这个钱的问题。

Speaker 1

Okay, I will answer the second question. As you know, the company has a very healthy cash balance on hand. We have more than RMB 16 billion cash reserves. In terms of the operating cash flow, every quarter we have incremental more than RMB 1 billion inflow. Basically, the company does not need to raise money from the market. Our capital activity, our fundraising activity.

Speaker 3

In July, the purpose of that activity is to improve our Hong Kong line liquidity because in the past, we got public listed in Hong Kong through the introduction without issuing new shares. That made us with a very poor liquidity in our Hong Kong stock trading. We want to solve this problem, and we think that solving this problem could be both benefit to the company and benefit to our investors, to our shareholders. That's why we took a very rare approach to launch a public offering in Hong Kong. The offering was very successful, and all the participating investors all made money, and our Hong Kong line liquidity realized a breakthrough, and our liquidity started to improve since the offering. What I'm saying is that the company, we consider shareholders as our partners, and we consider the shareholder return a very important topic.

In the past, we mainly used a share repurchase program to return cash to the shareholders. We totally already launched four phases, and the total purchased shares total amount more than about $400 million. This time, the company renewed our share repurchase program, and also we announced our annual dividend policy. We make this as a regular routine and make it an annual thing. Basically, every year we will consider our operating situations and pay dividends to our shareholders. This year, for the fiscal year of 2025, we announced $18 million for the dividend for this year. Our Hong Kong line liquidity, because of the public share offering, we raised HK$2.2 billion. That's roughly $280 million. Compared with our renewed share repurchase program, which is $250 million plus our $18 million annual dividend, our announced amount is already higher than the amount that we raised in our earlier public offering.

That also showed that we had a good commitment to our shareholders' returns. One last thing related to our shareholder returns is that our share-based compensation as an expense, we received comments from shareholders that saying share-based compensation was one a little bit high, and we controlled these expenses. From the results, you can see that in the past several quarters, these expenses continued to decline in terms of total amount and in terms of percentage to the revenues. All the above are just evidence or some kind of things that show that our attitude toward the shareholders' return. We consider this as a very important thing, and we will continue to do that in the future.

Speaker 2

Okay, that's all of our answers to today's questions. Operator.

Speaker 0

Due to time constraints, this concludes today's question and answer session. At this time, I will turn back the call to Wenbei Wang for any additional or closing remarks.

Speaker 2

Thank you again for joining us today. If you have any further questions, please contact the company in tax directly. Thank you.

Speaker 0

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