Mr. Phil Yu Zhang, Chief Financial Officer, added, “We are pleased to deliver a solid year of strong financial performance. The full year calculated cash billings and revenues grew by 44.9% and 31.9% year-on-year respectively, contributed by strong user growth, as well as improved paying ratio with our annual paid enterprise customer number reached historical high of 5.2 million. Noteworthy, our adjusted operating margin improved to 27.5% while we still maintained fast user growth which continues to prove the effectiveness of our business model.”

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¹ Calculated cash billings is a non-GAAP financial measure, derived by adding the change in deferred revenue to revenues. For more information on the non-GAAP financial measures, please see the section of “Non-GAAP Financial Measures.”
² Monthly active users refer to the number of verified user accounts, including both job seekers and enterprise users, that logged on to our mobile application in a given month at least once.
³ Paid enterprise customers are defined as enterprise users and company accounts from which we recognize revenues for our online recruitment services.
⁴ Adjusted net income and adjusted basic and diluted net income per ADS attributable to ordinary shareholders are non-GAAP financial measures, excluding the impact of share-based compensation expenses. For more information on the non-GAAP financial measures, please see the section of “Non-GAAP Financial Measures.”

Fourth Quarter 2023 Financial Results

Revenues

Revenues were RMB1,580.2 million (US$222.6 million) for the fourth quarter of 2023, representing an increase of 46.0% from RMB1,082.3 million for the same quarter of 2022.

• Revenues from online recruitment services to enterprise customers were RMB1,566.7 million (US$220.7 million) for the fourth quarter of 2023, representing an increase of 46.5% from RMB1,069.6 million for the same quarter of 2022. This increase was mainly driven by the user growth and increased user engagement.

• Revenues from other services, which mainly comprise paid value-added services offered to job seekers, were RMB13.5 million (US$1.9 million) for the fourth quarter of 2023, representing an increase of 7.1% from RMB12.6 million for the same quarter of 2022, mainly benefiting from expanded user base.

Operating cost and expenses

Total operating cost and expenses were RMB1,363.3 million (US$192.0 million) for the fourth quarter of 2023, representing a decrease of 4.4% from RMB1,426.1 million for the same quarter of 2022. Total share-based compensation expenses were RMB297.4 million (US$41.9 million) for the fourth quarter of 2023, representing an increase of 21.8% from RMB244.2 million for the same quarter of 2022.

• Cost of revenues was RMB274.8 million (US$38.7 million) for the fourth quarter of 2023, representing an increase of 35.8% from RMB202.4 million for the same quarter of 2022, primarily due to increases in payment processing cost and server and bandwidth cost.

• Sales and marketing expenses were RMB433.5 million (US$61.1 million) for the fourth quarter of 2023, representing a decrease of 36.4% from RMB682.1 million for the same quarter of 2022, primarily due to higher advertising expenses incurred in the same period of 2022 for the market campaigns during the FIFA World Cup.

• Research and development expenses were RMB430.2 million (US$60.6 million) for the fourth quarter of 2023, representing an increase of 46.3% from RMB294.1 million for the same quarter of 2022, primarily due to increased employee-related expenses as well as increased investments in technology.

• General and administrative expenses were RMB224.8 million (US$31.7 million) for the fourth quarter of 2023, representing a decrease of 9.2% from RMB247.6 million for the same quarter of 2022. This decrease was primarily due to higher professional service fees incurred in the same period of 2022 for the dual primary listing on the Hong Kong Stock Exchange, partially offset by increased share-based compensation expenses.

Income/Loss from operations

Income from operations was RMB222.3 million (US$31.3 million) for the fourth quarter of 2023, compared to loss from operations of RMB340.5 million for the same quarter of 2022.

Net income/loss and adjusted net income

Net income was RMB331.2 million (US$46.7 million) for the fourth quarter of 2023, compared to net loss of RMB184.8 million for the same quarter of 2022.

Adjusted net income was RMB628.6 million (US$88.5 million) for the fourth quarter of 2023, compared to RMB59.5 million for the same quarter of 2022.

Net income/loss per ADS and adjusted net income per ADS

Basic and diluted net income per ADS attributable to ordinary shareholders for the fourth quarter of 2023 were RMB0.76 (US$0.11) and RMB0.73 (US$0.10), respectively, compared to basic and diluted net loss per ADS of RMB0.43 for the same quarter of 2022.

Adjusted basic and diluted net income per ADS attributable to ordinary shareholders⁴ for the fourth quarter of 2023 were RMB1.43 (US$0.20) and RMB1.39 (US$0.20), respectively, compared to adjusted basic and diluted net income per ADS of RMB0.14 and RMB0.13 for the same quarter of 2022.

Net cash provided by operating activities

Net cash provided by operating activities was RMB926.8 million (US$130.5 million) for the fourth quarter of 2023, compared to RMB155.5 million for the same quarter of 2022.

Cash position

Balance of cash and cash equivalents, time deposits and short-term investments was RMB12,909.6 million (US$1,818.3 million) as of December 31, 2023.

Full Year 2023 Financial Results

Revenues

Revenues were RMB5,952.0 million (US$838.3 million) for the full year of 2023, representing an increase of 31.9% from RMB4,511.1 million for the full year of 2022.

• Revenues from online recruitment services to enterprise customers were RMB5,889.1 million (US$829.5 million) for the full year of 2023, representing an increase of 32.0% from RMB4,461.3 million for the full year of 2022. This increase was mainly driven by the user growth and increased user engagement.

• Revenues from other services, which mainly comprise paid value-added services offered to job seekers, were RMB62.9 million (US$8.9 million) for the full year of 2023, representing an increase of 26.3% from RMB49.8 million for the full year of 2022, mainly benefiting from expanded user base.

Operating cost and expenses

Total operating cost and expenses were RMB5,406.4 million (US$761.5 million) for the full year of 2023, representing an increase of 16.1% from RMB4,658.2 million for the full year of 2022. Total share-based compensation expenses were RMB1,057.0 million (US$148.9 million) for the full year of 2023, representing an increase of 52.7% from RMB692.2 million for the full year of 2022.

• Cost of revenues was RMB1,059.9 million (US$149.3 million) for the full year of 2023, representing an increase of 40.4% from RMB754.9 million for the full year of 2022, primarily due to increases in server and bandwidth cost and payment processing cost.

• Sales and marketing expenses were RMB1,991.2 million (US$280.5 million) for the full year of 2023, relatively stable with that of RMB2,000.9 million for the full year of 2022. The decrease in advertising expenses in 2023, as a result of not having similar marketing campaigns like the FIFA World Cup sponsorship in 2022, was largely offset by an increase in employee-related expenses.

• Research and development expenses were RMB1,543.6 million (US$217.4 million) for the full year of 2023, representing an increase of 30.5% from RMB1,182.7 million for the full year of 2022, primarily due to increased employee-related expenses as well as increased investments in technology.

• General and administrative expenses were RMB811.8 million (US$114.3 million) for the full year of 2023, representing an increase of 12.8% from RMB719.7 million for the full year of 2022. This increase was primarily due to increased share-based compensation expenses, partially offset by decreased professional service fees.

Income/Loss from operations

Income from operations was RMB581.0 million (US$81.8 million) for the full year of 2023, compared to loss from operations of RMB129.5 million for the full year of 2022.

Net income and adjusted net income

Net income was RMB1,099.2 million (US$154.8 million) for the full year of 2023, compared to RMB107.2 million for the full year of 2022. Adjusted net income was RMB2,156.2 million (US$303.7 million) for the full year of 2023, compared to RMB799.4 million for the full year of 2022. This increase was primarily driven by enhanced operating efficiency and increased interest and investment income with the Company's treasury management strategy.

Net income per ADS and adjusted net income per ADS

Basic and diluted net income per ADS attributable to ordinary shareholders for the full year of 2023 were RMB2.53 (US$0.36) and RMB2.44 (US$0.34), respectively, compared to basic and diluted net income per ADS of RMB0.25 and RMB0.24 for the full year of 2022.

Adjusted basic and diluted net income per ADS attributable to ordinary shareholders for the full year of 2023 were RMB4.96 (US$0.70) and RMB4.78 (US$0.67), respectively, compared to adjusted basic and diluted net income per ADS of RMB1.84 and RMB1.75 for the full year of 2022.

Net cash provided by operating activities

Net cash provided by operating activities was RMB3,047.0 million (US$429.2 million) for the full year of 2023, compared to RMB1,003.0 million for the full year of 2022.

Share Repurchase Program

In March 2024, the Company’s board of directors authorized a new share repurchase program effective from March 20, 2024 for a 12-month period, under which the Company may repurchase up to US$200 million of its shares (including in the form of ADSs).

Outlook

For the first quarter of 2024, the Company currently expects its total revenues to be between RMB1.64 billion and RMB1.67 billion, representing a year-on-year increase of 28.3% to 30.7%. This forecast reflects the Company’s current views on the market and operational conditions in China, which are subject to change and cannot be predicted with reasonable accuracy as of the date hereof.

Conference Call Information

The Company will host a conference call at 8:00AM U.S. Eastern Time on Tuesday, March 12, 2024 (8:00PM Beijing Time on Tuesday, March 12, 2024) to discuss the financial results.

Participants are required to pre-register for the conference call at:
https://register.vevent.com/register/BI727e18c038514bbcadf1f22ec8a2c673

Upon registration, participants will receive an email containing participant dial-in numbers and unique personal PIN. This information will allow you to gain immediate access to the call. Participants may pre-register at any time, including up to and after the call start time.

Additionally, a live and archived webcast of the conference call will be available on the Company's investor relations website at https://ir.zhipin.com.

Exchange Rate

This announcement contains translations of certain RMB amounts into U.S. dollar (“US$”) amounts at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to US$ were made at the exchange rate of RMB7.0999 to US$1.00 on December 29, 2023 as set forth in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or US$ amounts referred could be converted into US$ or RMB, as the case may be, at any particular rate or at all.

Non-GAAP Financial Measures

In evaluating the business, the Company considers and uses non-GAAP financial measures, such as calculated cash billings, adjusted net income, adjusted net income attributable to ordinary shareholders, adjusted basic and diluted net income per ordinary share attributable to ordinary shareholders and adjusted basic and diluted net income per ADS attributable to ordinary shareholders as supplemental measures to review and assess operating performance. The Company derives calculated cash billings by adding the change in deferred revenue to revenues. The Company uses calculated cash billings to measure and monitor sales growth because the Company generally bills its paid enterprise customers at the time of sales, but may recognize a portion of the related revenue ratably over time. The Company believes calculated cash billings provides valuable insights into the cash generated from sales and is a valuable measure for monitoring service demand and financial performance. The Company defines adjusted net income and adjusted net income attributable to ordinary shareholders by excluding the impact of share-based compensation expenses, which are non-cash expenses, from the related GAAP financial measures. The Company believes that these non-GAAP financial measures help identify underlying trends in the business that could otherwise be distorted by the effect of certain expenses and facilitate investors’ assessment of the Company’s operating performance.

The non-GAAP financial measures are not defined under U.S. GAAP, and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for most directly comparable GAAP financial measures. The Company encourages investors and others to review its financial information in its entirety and not rely on a single financial measure.

A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures has been provided in the table captioned “Unaudited Reconciliation of GAAP and Non-GAAP Results” at the end of this press release.

Safe Harbor Statement

This press release contains statements that may constitute “forward-looking” statements which are made pursuant to the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “aims,” “future,” “intends,” “plans,” “believes,” “estimates,” “likely to,” and similar statements. The Company may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in announcements made on the website of The Stock Exchange of Hong Kong Limited, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company’s beliefs, plans, and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. Further information regarding these and other risks is included in the Company’s filings with the U.S. Securities and Exchange Commission and The Stock Exchange of Hong Kong Limited. All information provided in this press release is as of the date of this press release, and the Company does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

About KANZHUN LIMITED

KANZHUN LIMITED operates the leading online recruitment platform BOSS Zhipin in China. The Company connects job seekers and enterprise users in an efficient and seamless manner through its highly interactive mobile app, a transformative product that promotes two-way communication, focuses on intelligent recommendations, and creates new scenarios in the online recruiting process. Benefiting from its large and diverse user base, BOSS Zhipin has developed powerful network effects to deliver higher recruitment efficiency and drive rapid expansion.

For investor and media inquiries, please contact:

KANZHUN LIMITED
Investor Relations
Email: ir@kanzhun.com

PIACENTE FINANCIAL COMMUNICATIONS
Email: kanzhun@tpg-ir.com

(1) Include share-based compensation expenses as follows:

(2) Each ADS represents two Class A ordinary shares.