Kanzhun Limited (NASDAQ:BZ) Q3 2023 Earnings Call Transcript

And also, it was very easy to acquire customers and consumers for other services industry. So this industry is the best one. And other industries performed relatively better transportation, logistics, automobile, new energy, environment protection and et cetera. But also, we’d like to share some numbers for third quarter active online job posting, which is very strict metrics which means the [indiscernible] very active in recruiting. So the urban service industry is active online job posting for this quarter grew by more than 13% sequentially, among which the restaurant and the retailing grew more than 20% sequentially. Another convincing number is that among the logistics industries, transportation and warehousing in terms of active online job postings grew more than 35% quarter-over-quarter.

So in terms of the white-collar industries, white-collar people, a lot of people have already noticed that the new energy and the automotive, aftermarket, this industry demand recover [indiscernible]. Another interesting observation is that people might get jobs related to artificial technology might increase, which is exactly the case and also a more general job positions, such as from development of Internet technology also show a significant increase in this quarter. And another interesting number is enterprise with less than 100 employees expected average unit posting job in the third quarter compared to last quarter, increased by around 3% while enterprise with more than 10,000 people, their average daily new added jobs increased more than 8%, which also shows the difference in this quarter.

Regarding your second question for our further penetration strategy and the monetization model in blue-collar market [indiscernible] in terms of our current penetration coverage in blue collar users, and the user satisfaction rate, which is [indiscernible] scores, we are quite satisfied with current situation, and we don’t have any more aggressive plans to accelerate this process. But also, we are continuously exploring the service capability to the blue collar users. For example, in the manufacturing sector, we are already on cost service to provide for the manufacturing sector users.

Operator: The next question comes from Wei Xiong of UBS.

Wei Xiong: My first question is regarding the competition landscape. So given the uncertain macro situation and the market conditions, is it the case that the existing recruiting platforms lack the growth potential, while the new entrants seems to make a slow progress, which makes our market leadership even more stronger. Looking into next year, how do we expect the the competitive landscape change in the online recruiting market? And second, could management share more color on the paying ratio as well as ARPPU trend on our platform, especially on the KA side, how is the ARPPU growth trending recently?

Peng Zhao: Thank you for your question. And for the first 1 about the competitive landscape, the overall situation is relatively stable, no clear change in the third quarter. However, in the past 2 years due to all kinds of pressure internally on [indiscernible] , I believe actually, every company has quite showed their strategic advantages. For the company, it has very own advantage in state from an companies and the group strategic plans and we have been seeing a competitive [indiscernible] in that front. For a company, they are good at providing service to new to high-end talent in that perspective also recognized by the market. And I think every enterprise has its unique characteristics and will continue to further enhance that. And that’s my answer for the competitive landscape.

Yu Zhang: Okay. So regarding your second question of the ARPU trend. So I’d like to come a little bit. So we announced that in the quarter, we recorded of 4.9 million of trailing 12 months paid enterprise customers. So as you probably remember that in second quarter, the months paid customers, that number was 4.4 million. So we roughly increased 0.5 million paid enterprise customers. So this growth of the paid enterprise customers. I think the main reason is that the overall user growth at this moment is still fast. So when a new user comes to our platform, when they want to pay to use our service, most of them, they prefer purchase or try our service through the self-serve online portal to do the online purchase. So that increased our overall paid enterprise customer number.

In terms of the paying ratio, we see an improved trend for the small size purchase. And we believe that when they are familiar with our service and they — a lot of our affiliates, they definitely will use more, and we have well try to convert them into heavy user usage and by the services through our off-line contract sales. And so what we believe some of the online and the active users, the paid active users definitely will continue to grow and the paying ratio definitely will also improving and the ARPPU from small medium sized enterprises have at a relatively stable situation in the quarter. And the same trend happened with key accounts. So basically, large corporates, their ARPPU also increased driven by the increasing recruitment demand.

But the contribution to our revenue, small size enterprises, they contribute the higher, larger revenue to the overall of our business. So basically, they are smaller ARPU landed with higher ARPU than the overall land data ARPU declined a little bit. So basically, small size they maintain the good ARPU and the large accounts, their ARPU increase, but overall lending ARPU creates a little bit. This is the current situation with the ARPU in quarter 3.

Operator: The next question comes from Robin Zhu of Bernstein.

Robin Zhu: My first question, so how does management think about the magnitude and major growth investments for 2024. How does the company plan to balance growth versus margin expansion as we go forward. Second question, [indiscernible] 2024 the state of renewal discussions with key accounts going into the next year? And to the extent that possible if management can share any outlook on ’24 growth in ARPPU growth and retention.