Ladies and gentlemen, thank you for standing by, and welcome to Kanzhun Limited Fourth Quarter and Fiscal Year 2025 Financial Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Ms. Laura Zhan, Senior Manager of Investor Relations. Please go ahead, ma'am.

Thank you, operator. Good evening, and good morning, everyone. Welcome to our Fourth Quarter and Fiscal Year 2025 Earnings Conference Call. Joining me today are our Founder, Chairman and CEO, Mr. Jonathan Peng Zhao; and our Deputy CFO, Ms. Wenbei Wang. 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 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 measures for comparison purpose only. For a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial measures, 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, I will now turn the call to Jonathan, our Founder, Chairman and CEO.

Hello, everyone. Thank you for joining our company's fourth quarter and full year 2025 earnings conference call. On behalf of the company's employees, management team and Board of Directors, I would like to extend our sincere gratitude to our users and investors who have continuously believed in and supported us. Today's presentation will cover four main parts. First, our financial results for fourth quarter and full year of 2025. Second, the robust growth momentum we are seeing in both supply and demand during the spring recruitment season this year. Third, an update on our AI progress. And fourth, further strengthen our commitment to shareholder returns. First, let me briefly review the company's performance for the fourth quarter and full year of 2025. In fourth quarter, we generated a total revenue of RMB 2.08 billion, up 14% year-on-year. Excluding share-based compensation expenses, our adjusted operating profit reached RMB 900 million, up 37% year-on-year. The fourth quarter is traditionally a low season for recruitment in China. However, after adjusting for seasonality, the higher demand from enterprises continued the steady recovery trend since the beginning of this year. The supply and demand ratio also remained within a healthy range. By sector, manufacturing, electronics, communications and semiconductor industries stood out. Urban service, automotive and consumer retail industries saw faster growth. The Internet technology industry achieved a faster year-on-year growth rate in the fourth quarter compared to the third quarter. In full year 2025, the company generated a total revenue of RMB 8.27 billion, up 12.4% year-on-year. Net income reached RMB 2.7 billion. Excluding other income such as investment gains and share-based compensation expenses, our adjusted operating profit reached RMB 3.38 billion, up 45.7% year-on-year. Our adjusted operating profit margin reached 40.8%. The upward growth momentum in users continues. In 2025, the company acquired nearly 46 million newly verified users. As of the end of 2025, the platform had cumulatively served over 250 million job seekers and 36 million enterprise users with the total number of enterprises served exceeding 20 million. In 2025, the average monthly active users, the MAU of the BOSS Zhipin app reached over 60.7 million, representing a year-on-year increase of 14.5%. In 2025, the platform facilitated over 2.27 billion instances of mutually consented exchanges of resume or contact information, what we commonly refer to as mutual consent, representing a year-on-year growth of 22.4%. The average number of mutual consents per job seeker also rose by 7% year-on-year. This demonstrates our strong double-sided network effect on our platform. In 2025, the company continued its momentum in penetrating the blue-collar sector, lower-tier cities and small and medium-sized enterprises. The growth rate of blue-collar users led the overall user base with their contribution to revenue further increasing. Meanwhile, white-collar recruitment demand also recovered steadily with sectors such as Internet technology and communications, semiconductors achieving higher growth rates compared to 2024, reflecting a structural improvement. From a city tier perspective, revenue contribution from third-tier and lower-tier cities approached 25% in fourth quarter, doubling compared to four years ago. This clearly demonstrates that our user penetration strategy in lower-tier markets is steadily gaining traction, while our brand awareness has continued to expand. In 2025, revenue contributed by enterprises with fewer than 100 employees exceeded 50% for the first time. The substantial contribution from SMEs became a key driver of the platform's continuous growth. On the monetization front, in the 12 months ended December 31, 2025, the number of paid enterprise customers reached 6.83 million, up 11.6% year-on-year and 1.3% quarter-on-quarter. The paying ratio among active users continued to see modest growth due to the increased revenue contribution from SMEs; the average revenue per paying user, ARPPU, remained broadly stable. Second, we are seeing robust momentum on both supply and demand sides during the spring recruitment season this year. As we know, the peak season for recruitment in China is after Spring Festival every year. Adjusted for the Chinese New Year holiday, the average daily newly verified users, including both job seekers and enterprise users, exceeded the same period last year and active users after Spring Festival reached a record high. The average daily job postings in the 15 days after the Spring Festival grew by a double-digit percentage year-on-year. In terms of supply and demand dynamics, the ratio of job seekers to enterprise users, which is the C-to-B ratio on our platform, remained within a healthy and reasonable range. By industry sectors, active job postings in areas such as manufacturing, electronics and communications, semiconductors, automotive, advertising and media and urban services grew at a faster pace compared to other industries. Given that the Spring Festival fell later this year compared to last year, and it has been only a few weeks since the holiday period ended, white-collar and large enterprises typically resume operations slightly later than blue-collar and SME sectors. However, based on our current data, both newly added and active job postings in fields such as Internet, AI and technology are already showing signs of accelerated year-on-year growth compared to the same period last year. Third, our AI progress. First, with the empowerment of AI, the company now has significantly greater opportunities to deliver closed-loop services. For enterprise users, the goal is to bring the right people on board. For job seekers, it's about securing a stable position. In this sense, the value that online recruitment has provided since its inception represents only a small part of the big picture so far. In the past, online recruitment advertising platforms primarily offered value through information dissemination between supply and demand sides. Now platforms like BOSS Zhipin focus on increasing the profitability and opportunity of establishing labor contracts between enterprise users and job seekers. Moving forward, the online recruitment industry has the opportunity to evolve towards a closed-loop model. AI can assist companies in completing the last mile of work. By 2025, with the support of AI capabilities, the revenue from closed-loop services has already reached the scale of hundreds of millions of RMB. To date, this segment has been growing faster than other businesses on our platform. In fact, many have recognized that AI can improve the matching efficiency for any roles in the economy. In simple terms, AI enables large-scale closed-loop services by better digitalizing both sides of demand, enhancing the efficiency of frontline workers and reducing the maintenance costs of large teams. Another progress I will describe is between the enterprise user side and job seeker side. The AI quick hiring tool developed for high-end users with demanding recruitment requirements and strong willingness to pay has achieved positive results and is now being scaled up for broader trials. The core function of the tool is to better remember and understand the specific needs and preferences of targeted clients, automatically conduct searches within a database of 250 million job seekers and continuously interact with users to improve hit rate. The feature demonstrates high reusability, and we believe that it holds strong commercial potential. From the job seeker side, our AI-assisted interview feature experiment has been fully rolled out to users within BOSS Zhipin's interview rooms. This has significantly increased both the usage and reusability of the company's proprietary interview rooms, while also enabling the platform to collect a greater volume of high-value interview data. The third progress is that the company has adopted a proactive approach in applying AI agents to assist specific enterprise users by leveraging AI hosting and screening capabilities. Per capita delivery efficiency has significantly improved in hiring scenarios such as for manufacturing workers and live streamers. This progress makes a business model based on successful hires or interviews viable on a large scale. We consistently inform job seekers that they are interacting with AI agents, and we believe that the job seekers' response is quite positive and enterprise user satisfaction rate is high. The last approach in terms of scientific research: the scientists at our company's Nanbeige lab have made some industry-leading exploration into the intelligence and capability ceiling of small models. Among this, the recently open-sourced Nanbeige 4.1/3B model with only 3 billion parameters surpassed models from the Qwen3 series ranging from 4 billion to 52 billion parameters on multiple evaluation tasks. We do not intend to compare with others on scale. In late February, it ranked first in Hugging Face's trending list for text generation models. Fourth, our plan for shareholder returns. Today, the Board passed a resolution approving a plan to allocate no less than 50% of the prior year's adjusted net income for dividend and share repurchase over the three-year period starting from 2026. Meanwhile, the company will increase the share repurchase program upper limit from $250 million to $400 million initially approved in August 2025. We will scale up repurchase as appropriate in response to changing market conditions, and we believe that it fully demonstrates our confidence in the company's long-term growth as well as our long-run commitment to delivering value to our shareholders and friends who supported and believed in us. That concludes my part of the call. I will now turn it over to our Deputy CFO, Wenbei, for the review of our financials. Thank you.

Thanks, Jonathan. Hello, everyone. Now let me walk through the details of our financial results of the fourth quarter and full year of 2025. We are pleased to deliver a quality set of financial results for the fourth quarter and the full year, with revenue growth continuing its accelerating momentum and enlarged profitability. In the fourth quarter, the recruitment market sustained a steady recovery trend throughout the year. Under such conditions, our revenues reached RMB 2.1 billion during this quarter with growth rate accelerating to 14% year-on-year and grew by 12.4% to RMB 8.3 billion for the full year. Our number of paid enterprise customers for 2025 expanded to 6.8 million, marking a 12% year-on-year growth and 1.3% increase compared to the trailing 12 months ended September 30. We witnessed a more balanced growth this year with faster revenue growth from both key accounts and small-size accounts. In the fourth quarter, in particular, revenue from small-size accounts grew 21% year-on-year, outpacing mid-size accounts and key accounts. As a result of this structural impact, overall ARPPU remained stable, but ARPPU for each segment all showed increasing trend. Moving to the cost and expenses side. Our total operating cost and expenses decreased by 7% year-on-year to RMB 1.4 billion during the fourth quarter and by 7% to RMB 5.8 billion for the full year. Total share-based compensation expenses decreased by 23% and 20% year-on-year, respectively, in this quarter and the full year. As a percentage of revenue, SBC went down by 5 percentage points year-on-year, both for the quarter and the full year, and we also expect this trend to continue. Excluding share-based compensation expenses, our adjusted income from operations grew by 37% to RMB 900 million and 46% to RMB 3.5 billion, respectively, for the quarter and the full year. The adjusted operating margin for the fourth quarter reached a quarterly historical high of 43.3%, while the annual adjusted operating margin improved by 9 percentage points to 40.8% in 2025, continuing to demonstrate our strong operating leverage and unwavering commitment to financial discipline. Cost of revenues decreased by 1% year-on-year to RMB 309 million during the fourth quarter and decreased by 0.4% to RMB 1.2 billion for the full year. This decrease was primarily due to a decrease in employee-related expenses and rental expenses, partially offset by an increase in payment processing cost. As a result, our gross margin went up by 2 percentage points to 85.1% in 2025, marking the second year of increase. Sales and marketing expenses decreased by 9% year-on-year to RMB 389 million during this quarter and decreased by 18% to RMB 1.7 billion for the full year. The decrease for the quarter was primarily due to improved sales efficiency, which led to decreased employee-related expenses. No major marketing campaign this year also further decreased sales and marketing expenses for the full year. R&D expenses decreased by 8% year-on-year to RMB 406 million this quarter and decreased by 9% to RMB 1.7 billion for the full year. Excluding share-based compensation expenses, our adjusted R&D expenses decreased by 4% year-on-year to RMB 1.3 billion for the full year and stayed relatively flat year-on-year and sequentially for this quarter. G&A expenses decreased by 7% year-on-year to RMB 256 million during this quarter, which was mainly due to decreased employee-related expenses. G&A expenses increased by 10% to RMB 1.2 billion for the full year primarily due to a one-off impairment of intangible assets booked in the third quarter. Income tax expenses were RMB 165 million this quarter, up 81% year-on-year. This was primarily driven by higher income before income tax expenses as well as the provision of a top-up tax of RMB 38 million related to the OECD Pillar Two global minimum tax rules. Our net income reached RMB 682 million in the quarter and RMB 2.7 billion in 2025. Our adjusted net income increased by 25% year-on-year to RMB 906 million in the fourth quarter and 33% year-on-year to RMB 3.6 billion for the full year. Adjusted net margin continued to expand in 2025 and reached a historical high of 43.6%. Net cash provided by operating activities amounted to RMB 1.3 billion during the fourth quarter and increased by 29% year-on-year to RMB 4.6 billion for the full year. Our cash position stood at RMB 19.9 billion as of December 31, 2025. We will leverage our strong cash position and profitability to invest in future growth initiatives as well as shareholder returns. In 2025, we declared a dividend of USD 80 million. And as of year-to-date in 2026, we have already repurchased a total of USD 50 million worth of shares. Furthermore, as Jonathan just announced, the Board has approved a new shareholder return policy that for each year in the next three years starting from 2026, we will allocate no less than 50% of the company's adjusted net income of the preceding fiscal year for dividend distribution and share repurchases and upsize our share repurchase program to a total of USD 400 million through August 28, 2027. And now for our business outlook, for the first quarter of 2026, we expect our total revenues to be between RMB 2.050 billion and RMB 2.085 billion, a year-on-year increase of 6.6% to 8.4%. This Q1 figure reflects a different seasonality this year as the later Chinese New Year meant a shorter window of the peak recruitment season fell within this quarter. This timing difference aside, our underlying momentum remains strong with the strong demand we are seeing throughout the spring season. We expect a clear acceleration in revenues over the coming quarters. That concludes our prepared remarks. And now we would like to answer questions. Operator, please go ahead.

Our first question comes from Eddy Wang from Morgan Stanley.

We have seen a very extensive debate around the narratives of AI disruption and substitution. I think the market and investors have two key concerns regarding the impact of AI on the industry and on your company. I would appreciate your insights on two questions. First: will the adoption of AI agents significantly reduce the future demand of white-collar hiring and jobs, thereby affecting the long-term growth potential of the recruitment market in China? Second: does the development of AI technology pose a very big challenge to BOSS Zhipin's competitive advantage and business moat in the future?

Thank you for your question. I have made some observations and considerations I can share. First, I have noticed discussions about AI capability to replace human labor, especially for white-collar work. Many reference OpenAI and related technologies as being very popular and influential. My view is that AI improvements are likely to be a strong supplement to the overall labor force in the coming 10 to 20 years. We made reasonable and practical calculations: if we consider age between 16 and 59 as the primary labor force, that number in 2026 is about 880 million in China. According to current trends, we estimate that in 2036, that number will decline by around 9%. Toward 2046, the number could further decline by 20% to about 690 million. This projected 9% to 20% decrease over the next 10 to 20 years is a severe challenge. What can help address this is the application of AI in daily work. There are two differences between the U.S. and China relevant to this discussion. First, the ratio between blue-collar and white-collar workers is different. In the U.S., the white-collar proportion is relatively larger, whereas in China we have a larger blue-collar population. Second, the enterprise landscape is different: in China, the number of active operational enterprises is around 40 million, and about 98% of them are small or micro-sized enterprises. From SMBs' perspective, many successful SaaS models struggle in China because the average company size is so small. These micro and small firms often hire small numbers of people—for example, hiring eight versus nine employees is not a major difference. This context helps explain why many enterprise software companies find scale more difficult in China. China has around 40 million enterprises hiring about 420 million urban employees; on average, one company hires around 10 people. Even if AI reduces hiring slightly—say, nine instead of ten employees—that incremental impact is different given the enterprise composition. Beyond substitution effects, we've observed that AI development has generated strong enthusiasm among technology entrepreneurs and surged demand for AI-related talent. After the Spring Festival this year, AI-related newly posted jobs grew by 172% year-on-year and active online AI jobs increased by 80% year-on-year. That's a large improvement. Beyond direct AI jobs, there's an emergence of what we call an 'AI path'—a set of roles and job tracks that incorporate AI skills even outside traditional tech hubs. This trend is reaching second-tier and lower-tier cities and expanding into lower salary ranges. As I mentioned earlier, white-collar job postings overall increased this year in categories like Internet, information and communication, semiconductors and automotive—outgrowing the overall platform. Indeed's data in the U.S. also show white-collar job increases this year. Regarding the competitive challenge AI poses to BOSS Zhipin: first, our platform is fundamentally a marketplace for human-to-human employment matches—real people seeking jobs and enterprises hiring people to perform real work. That marketplace characteristic remains unchanged. Second, we have a strong bilateral network effect: as our user base grows, the value each user receives increases. So far we have not felt our business model is being undermined. On the contrary, our unique data assets should allow AI to help solidify our advantages. Third, AI enables us to pursue the large closed-loop placement market—multi-hundred-billion RMB in scale—by making result-oriented business models (e.g., success-based placement) viable. AI helps automate last-mile work and improves matching and efficiency. To summarize, I cannot predict every possible influence AI could have on the real world, but based on our data and daily operations, AI so far has been more of an enabler and a growth driver than an existential threat for our platform.

Our next question comes from Timothy Zhao of Goldman Sachs.

The first question is a follow-up on AI and AI progress. Could management share what is your plan for AI product testing and new product launches? Regarding AI product monetization, what kind of expectations should we have for this year? We also note your Nanbeige large language model—what is the rationale behind your continued investments, and what are your expectations for Nanbeige's applications this year? Secondly, regarding recruitment demand after the Chinese New Year, can you elaborate on the recruitment trends compared to previous years and any special points about demand this year after the Chinese New Year?

On AI commercialization: first, regarding closed-loop placement services, last year we already achieved revenue at the RMB hundreds of millions level, and this year we expect that number to double, triple, or even grow multiple times—this is quite certain from our perspective. AI is not a single native product for us; rather, it is empowering many aspects of our operations, technology and product to provide better solutions and user experiences. Kanzhun has made significant investments in AI applications, including resources, product managers and technology teams. We also maintain a relatively smaller science team to develop our Nanbeige model. The reason to keep our own proprietary pretraining models is to pursue what I call a taillight strategy: in a world where AI develops very fast, we need a team that can follow advanced developments and understand how to apply them. We cannot just download open-source models and expect to use them effectively without understanding them. That's why Nanbeige lab exists. We do not want to be left behind. Our smaller-scale models have relatively low training and deployment cost and can deliver smart and practical capabilities useful for our industrial applications. Our science team is relatively small but very young and talented. They have argued that future progress is not just about who can consume more electricity or compute, but about new paradigms and strong scientific thinking. Developing smaller, efficient models allows a company like ours to contribute meaningfully to the broader technology evolution. Regarding the Spring Festival recruitment season, as I mentioned earlier, we saw very strong recruitment demand with both new and active enterprise metrics showing significant year-on-year growth and the situation remains stable. One operational note: the later Chinese New Year this year results in weaker year-on-year GAAP data for the first quarter because there are fewer revenue-recognition days captured in the quarter compared to last year. That could affect quarter-to-quarter comparatives, but on a full-year basis, cash collection growth is positive and we expect to accelerate further throughout the year compared to 2025.

The last question comes from Wei Xiong of UBS.

Firstly, could management update your user growth target for 2026 and, considering additional investment in sales, marketing and AI this year, how should we think about margin trend as well as future room for margin expansion? Secondly, regarding your overseas business, could management please give an update? We noticed very rapid user growth of OfferToday in Hong Kong. What is your plan for the next stage of development?

Thank you for your question. I will answer the first one regarding margin, and then Jonathan will take the overseas question. For 2026, we are still looking at very robust user growth. We want to add at least 40 million newly verified users this year. In terms of investment, we may further invest in AI computing power, buying servers and possibly renting additional computing power. Regarding the World Cup or other one-off events, we have not decided specific actions yet. But even considering those, we expect that given our strong operational leverage, overall adjusted operating margin can slightly increase compared to last year, even taking into consideration potential events and AI investment. From the long term, we still see significant upside potential for our main domestic recruitment business, and we will maintain steady year-on-year growth going forward. However, as Jonathan mentioned, if we see attractive opportunities in new initiatives like closed-loop placement and AI overseas, we will invest and will communicate with the market in a timely manner. At least for now, we expect margins to improve somewhat in the coming years.

Thank you. Regarding OfferToday in Hong Kong: OfferToday ranked number one in Hong Kong in terms of daily active users on mobile. If you compare different platforms, like mobile and PC, among the roughly three million workers in Hong Kong, about one in every 50 workers is using OfferToday daily to look for opportunities. Some of them have already secured new work opportunities through OfferToday. OfferToday is not a simple replica of BOSS Zhipin in mainland China; the core is the same, but localization is important. Our next steps are to further localize the product and to localize the team. We are expecting more native Hong Kong young talents to join us and become product leads and managers of our local office. Beyond OfferToday, for other international approaches, we will be more active in looking for opportunities to cooperate with local institutions. We are making progress but have not reached a stage to report material outcomes. I also want to clarify that Hong Kong is part of China from our perspective, so our overseas remark refers to other international markets beyond Hong Kong. That's all the answers for the question.

Due to time constraint, that concludes today's question-and-answer session. At this time, I will turn the conference back to Laura for any additional or closing remarks.

Thank you once again for joining us today. If you have any further questions, please feel free to contact us. Thank you.

That concludes today's conference call. Thank you for your participation. You may now disconnect your lines. Portions of this transcript that were marked 'Interpreted' were spoken by an interpreter present on the live call.