Kanzhun (BZ) Q4 2024 Earnings Call Transcript

Image source: The Motley Fool.

DATE

Tuesday, March 11, 2025 at 8 a.m. ET

CALL PARTICIPANTS

• Chairman and Chief Executive Officer — Jonathan Peng Zhao
• Chief Financial Officer — Phil Yu Zhang
• Senior Vice President — Wenbei Wang

Need a quote from a Motley Fool analyst? Email pr@fool.com

TAKEAWAYS

• GAAP Revenue -- RMB 1.82 billion for the quarter and RMB 7.36 billion for the full year, representing 15% and 24% year-on-year growth, respectively.
• Adjusted Net Income -- RMB 720 million in the quarter and RMB 2.71 billion for the year, reflecting 15% and 26% year-on-year increases, respectively.
• Average Verified Monthly Active Users (MAU) -- 52.7 million in the quarter and 53 million for the year, up 28% and 25.3% year-on-year, respectively.
• Paid Enterprise Customers -- 6.1 million for the full year, up 17.3% year-on-year.
• Adjusted Operating Income -- RMB 2.32 billion for the year, up 41% year-on-year.
• Adjusted Operating Margin -- Reached 36.1% for the quarter (historical high), and improved 4 percentage points to 31.5% for the year.
• Share-Based Compensation Expenses -- Decreased by 6% year-on-year for the quarter; as a percentage of revenue, reduced by 4 points quarter-on-quarter and 2 points year-on-year for the full year.
• Total Users and Verified Enterprises -- Over 225 million users and 16.6 million enterprises served as of year-end.
• Newly Added Verified Users -- Nearly 49.5 million for the year, a company record.
• Resume Exchanges Facilitated -- More than 1.85 billion for the year.
• Blue-Collar Revenue Contribution -- Accounted for 38% of overall revenue, driven by manufacturing sector growth.
• Non-Tier 1 Cities and Micro/Small Enterprises -- Revenue contributions from these segments continued to rise.
• ARPPU (Average Revenue Per Paying User) -- Up 6.8% year-on-year and 3.9% quarter-on-quarter for the quarter; exceeded RMB 1,200 for the year, over 5% year-on-year growth.
• Cost of Revenues -- Increased 14% year-on-year to RMB 314 million in the quarter and 17% to RMB 1.2 billion for the year.
• Operational Employee-Related Costs -- As a percentage of revenue, decreased by 0.9 percentage points year-on-year, attributed to AI efficiency gains.
• Gross Margin -- Rose 0.9 percentage points to 83.1% for the year.
• Sales and Marketing Expenses -- Down 2% to RMB 426 million for the quarter; up 4% to RMB 2.1 billion for the year; Olympic campaign spending declined 10% year-on-year.
• R&D Expenses -- Increased by 2% to RMB 440 million in the quarter and by 18% to RMB 1.8 billion for the year, mainly from AI investments.
• G&A Expenses -- Rose 23% to RMB 276 million in the quarter and 35% to RMB 1.1 billion for the year, driven by employee and new business costs.
• Adjusted Net Margin -- Achieved a historical high of 36.9% for the year.
• Net Cash Provided by Operating Activities -- RMB 956 million in the quarter; RMB 3.5 billion for the year, up 16% year-on-year.
• Share Repurchases -- Total of $229 million in 2024, including $93 million in the quarter, reducing total shares outstanding by 3.7% for the year and 1.1% versus the previous quarter.
• AI Strategy -- Multiple AI features implemented for both job seekers and recruiters, including a proprietary Nanbeige model and DeepSeek-R1 deployment.
• AI-Related Job Postings -- Daily posting of AI-related jobs surged by over 60% year-on-year post-spring festival.
• Business Outlook -- 1Q25 revenue expected between RMB 1.9 billion and RMB 1.92 billion, or 11.5%-12.7% year-on-year growth.
• Hailuo Placement Service -- Contract value exceeded RMB 200 million in the year; client participation up 21% sequentially in the fourth quarter.

SUMMARY

Kanzhun Limited (NASDAQ:BZ) emphasized user-driven revenue growth, underpinned by record verified user additions and an expanding enterprise client base. Management presented detailed AI integration progress with measurable impacts on operational efficiency, cost control, recruiter workflows, and job seeker engagement. Diverse revenue streams, notably from blue-collar segments, micro and small enterprises, and non-Tier 1 cities, were identified as key structural drivers. The company provided explicit guidance for continued year-on-year revenue growth in the next quarter, supported by high retained cash balances and a commitment to further margin expansion.

• Phil Yu Zhang cited, "marketing expenses, including Olympic campaign sponsorship decreased by 10% year-on-year despite a higher new user growth," indicating a notable improvement in customer acquisition efficiency.
• Daily active users and job postings reached historical peaks following the Chinese New Year, signaling robust platform activity.
• The contribution of manufacturing to blue-collar revenue rose sharply, highlighting sector-specific growth momentum.
• AI-related jobs, resumes, and job descriptions are accelerating, with Zhao noting "over 200 million of AI-generated resume" and "40 million of AI-generated job description" on the platform.
• CFO Zhang set a full-year 2025 non-GAAP operating profit target of RMB 3 billion, 30% above the prior year's figure, framing clear forward-looking margin objectives.
• Company completed substantial share repurchases, totaling $229 million for the year, reflecting stated commitment to shareholder returns.

INDUSTRY GLOSSARY

• MAU (Monthly Active Users): Unique users who engage with the BOSS Zhipin platform in a given month, verified through platform authentication processes.
• ARPPU (Average Revenue Per Paying User): The total revenue generated divided by the number of paying enterprise customers over a specific period.
• Blue-collar: Refers to jobs and segments involving manual labor or industrial sectors; in Kanzhun Limited’s disclosures, includes manufacturing, logistics, and similar fields.
• Hailuo (Conch Select): Kanzhun Limited’s placement-like recruitment service targeting agencies or enterprises with large-scale hiring demands, operating as a distinct business line.
• DeepSeek-R1 / Nanbeige: Proprietary and open-source AI language models used by Kanzhun Limited to enhance recruitment search and matching functionalities.

Full Conference Call Transcript

Jonathan Peng Zhao: Hello, everyone. Thank you for joining our company's fourth quarter and full year 2024 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 users and investors and friends, who have continuously believed in us and supported us. Let me first provide an overview of our financial performance. In the fourth quarter, the company achieved a GAAP revenue of RMB 1.82 billion, up 15% year-on-year. Our adjusted net income, which excludes share-based compensation expenses, reached RMB 720 million, reflecting a 15% year-on-year growth.

In the fourth quarter, average verified monthly active users or MAU on the BOSS Zhipin app increased by 28% year-on-year to 52.7 million. For the full year of 2024, the company achieved a GAAP revenue of RMB 7.36 billion, up 24% year-on-year. Adjusted net income, which excludes share-based compensation expenses, reached RMB 2.71 billion, up 26% year-on-year. Furthermore, our adjusted operating income, excluding other income such as wealth management income was RMB 2.32 billion for full year 2024, rising by 41% year-on-year. And in 2024, we successfully delivered on our profit commitments.

Share-based compensation expenses as a percentage of revenue in 2024 decreased by 2.3 percentage points compared to 2023 and are expected to further decline in both absolute value and the proportion of revenue in 2025. In 2024, we attracted nearly 49.5 million newly added verified users, setting a new record for end user growth. At the same time, we reduced marketing expenses compared to 2023, thanks to our growing brand recognition and enhanced bilateral network effects, which have significantly improved customer acquisition efficiency. As of December 31, 2024, the company has provided service to over 225 million users and 16.6 million enterprises.

MAU on the BOSS Zhipin app for the full year reached 53 million, representing a year-on-year increase of 25.3%. In the year, we facilitated over 1.85 billion successful resume exchanges based on mutual consent between job seekers and employers, which is what we refer to as achievement in daily operation. Despite macroeconomic challenges in 2024, the company's user growth-driven revenue growth model remains effective, driving notable improvement in both revenue scale and profitability. Some may argue that we are more data-driven business. However, I would like to emphasize that our business model is so much more than that. To date, user expansion has remained our core growth driver.

The structural revenue growth driven by sustained user penetration is clearly reflected in the following key metrics: first, increasing revenue contribution from blue-collar segments. Blue-collar's user growth boosted their revenue contribution to overall revenue in 2024 to 38%. Notably, the manufacturing sector emerged as a bright spot for blue-collar growth, posting the fastest growth rate among all industries. Second, the revenue contribution from non-Tier 1 cities continues to grow. Third, the revenue contribution from micro and small enterprises continue to rise. Micro and small enterprises are defined as business with fewer than 20 employees. These revenue gains stem from structural shifts in user growth.

At the core of this success is the company's commitment to enhancing the user experience, which is underpinned by our continuous product and service optimization. It's not hard to imagine that within the online recruitment service industry, blue-collar workers, particularly those in the manufacturing sector, lower-tier cities and micro small enterprises are among the more challenging user groups to serve. Breakthroughs and growth in these areas would only validate our user-first strategy, but also highlights the significant potential for our future user expansion and revenue growth. Additionally, we have observed that recruitment demand from white collar and large enterprises have stabilized. Enterprises with over 10,000 employees demonstrated the fastest quarter-on-quarter revenue growth in the fourth quarter.

I want to highlight one more aspect of our products and services. Many investors and friends have shown interest in the company's exploration of closed-loop services initiatives, which we do have some progress. In 2024, the number of enterprises, which we have provided placement-like service was near 40,000. In 2024, the total number of paid enterprise customers reached 6.1 million, representing a year-on-year increase of 17.3%. While the active user paying ratio remained stable, the average revenue per paying user or ARPPU achieved year-on-year growth, both for the full year and in the fourth quarter. Now let me introduce some AI implementation.

We faced rollout in version 13.030 of the BOSS Zhipin app, which was released across major app stores around March 7. I'll start with our AI to seek or AI for job seekers site updates. First, on job seekers interaction for job search, we have added an AI-powered question-based search function, something many of you are likely already familiar with and also kept our traditional keyword search. The search engine is powered by both our proprietary model called Nanbeige and the deployment of DeepSeek-R1. And the second thing on the job seeker side is we have released an AI bot to help job seekers with interview coaching. This feature primarily targets those who have graduated within the past 3 years.

This AI bot has been trained on millions of real interviews and its core skills is that he's very good at interviewing. And as such, there are lots of things he can do. We will go step by step. Now let's take a look at AI true business, which is the recruiter site. Our first application for enterprise users is an AI agent. Recruiters participating in the beta testing can communicate their needs to the agent, which can perform the following tasks: one, understand the recruiters' specific requirements; two, generate a curated list of candidates from our database; three, offer justification for its recommendations; four, deliver these results according to the recruiters' available schedule.

For the second application, a better version has been launched to a selected group of blue-collar enterprise users. The process unfolds as follows: once the recruiter selects a candidate, they deem suitable and explicitly express their willingness to proceed by saying, I'm willing to give this candidate a try. The AI handles all subsequent communication on behalf of the recruiter. The communication process continues until the AI either obtains the job seeker's confirmation of interest through the exchange of content information or the job seeker rejects the outreach of the recruiter who is represented by AI. On the operational front, AI has huge potential to improve management efficiency and reduce cost.

For instance, leverage AI for security review has improved our audit efficiency by 30%. Over the past 2 years, as our user base has expanded rapidly, the workload related to user security protection has increased accordingly. However, AI has enabled us to manage this without a proportional increase in staffing. Next, I will briefly update you on this year's spring recruitment season. Following the spring festival, the recruitment market continued its steady recovery trend that began towards the end of 2024. Post Chinese New Year in February, the company's key metrics, including number of active users, active job postings and new job postings all reached historical highs.

The average daily new job postings after Chinese New Year increased by more than 10% compared to the same period last year. Peak daily active users on the BOSS Zhipin app reached approximately 20 million, which are also historical high. A very important highlight on the supply and demand side, the job seeker to enterprise user ratio among new users improved compared to the same period last year, extending the positive momentum that began in November 2024. From an industry perspective, manufacturing, logistics, automotive, health care, education and professional services have exhibited strong performance. In terms of job type, blue-collar positions have grown faster due to our user expansion, while white collar roles have also demonstrated an improving year-on-year trend.

Notably, since the spring festival, average daily posting of AI-related jobs have surged by over 60% year-on-year, signaling a revitalizing live ecosystem for emerging business. This growth in AI-related roles in turn has fueled good sequential momentum in demand for product and technical positions since the spring festival. Last but not least, we are very committed to shareholder returns. In 2024, the company repurchased approximately $229 million worth of shares, accounting for 3.7% of total outstanding shares. This underscores our confidence in the company's long-term growth. And 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: Thanks, Jonathan. Hello, everyone. Now let me walk through the details of our financial results of the fourth quarter and full year of 2024. We delivered solid financial results for the fourth quarter and the full year of 2024. The recruitment market environment in 2024 was challenging, but we are pleased to see that recruitment demand gradually stabilized towards the end of the year. Under such conditions, our revenues grew by 15% year-on-year to RMB 1.8 billion during this quarter, slightly beating our expectation and grew by 24% to RMB 7.4 billion for the full year. Our number of paid enterprise customers for 2024 expanded to 6.1 million marking a 17% year-on-year growth.

ARPPU for the quarter was up by 6.8% year-on-year and 3.9% quarter-on-quarter, marking a fourth consecutive quarterly growth. ARPPU for the full year reached [RMB 1,200], up by more than 5% year-on-year. It's a result of our efforts to explore customer needs and providing more valuable services. Moving to the cost and expenses side. Our total operating costs and expenses increased by 7% year-on-year to RMB 1.5 billion during the fourth quarter and by 15% to RMB 6.2 billion for the full year. Total share-based compensation expenses decreased by 6% year-on-year in the quarter. As a percentage of revenue-wise, share-based compensation went down by 4 and 2 percentage points, respectively, for the quarter and the full year.

Excluding share-based compensation expenses, our adjusted income from operations grew by 27% to RMB 659 million and 41% to RMB 2.3 billion, respectively, for the quarter and the full year. The adjusted operating margin for the fourth quarter reached a quarterly historical high of 36.1%, while the annual adjusted operating margin improved by 4 percentage points to 31.5% in 2024, continue to demonstrate our strong operating leverage and beating our target. Cost of revenues increased by 14% year-on-year to RMB 314 million during the fourth quarter and by 17% to RMB 1.2 billion for the full year.

This increase was primarily due to increases in payment processing costs, server and bandwidth costs and other business-related costs alongside with the growth of revenue and user base. It's worth mentioning that operational employee-related costs as a percentage of revenue decreased by 0.9 percentage points year-on-year and evidence of AI application to improve operating efficiency. As a result, our gross margin went up by 0.9% to 83.1% in 2024. Sales and marketing expenses decreased by 2% year-on-year to RMB 426 million during this quarter and increased by 4% to RMB 2.1 billion for the full year. Our marketing expenses, including Olympic campaign sponsorship decreased by 10% year-on-year despite a higher new user growth versus prior year.

We believe this improving trend of user acquisition efficiency will continue in 2025 and led to a further decrease of our marketing expenses on both absolute amount and as a percentage of revenue. R&D expenses increased by 2% year-on-year to RMB 440 million this quarter and by 18% to RMB 1.8 billion for the full year. This increase was primarily driven by our further investments in AI infrastructure, which incurred AI-related server depreciation costs and cloud services fees. G&A expenses increased by 23% year-on-year to RMB 276 million during this quarter and by 35% to RMB 1.1 billion for the full year. This increase was mainly due to increased employee-related expenses and investment in new business initiatives.

Our net income reached RMB 444 million in the quarter and RMB 1.6 billion in 2024. Our adjusted net income increased by 15% year-on-year to RMB 722 million in the fourth quarter and 26% year-on-year to RMB 2.7 billion for the full year. Adjusted net margin continued to expand in the full year and reached a historical high of 36.9%. Net cash provided by operating activities amounted to RMB 956 million during the fourth quarter and increased by 16% year-on-year to RMB 3.5 billion for the full year. And our cash position stood at RMB 14.7 billion as of December 31, 2024, though there was share buyback spending.

The robust cash reserves, coupled with strong operating cash flows strategically positioned us well to support future growth initiatives and shareholder returns. During this quarter, we repurchased 6.7 million ADS for a total consideration of USD 93 million. This led to a 1.1% decrease in our total outstanding shares as compared to September 30, 2024, even after counting in shares issued for our share-based awards. Combined with share repurchased in the preceding quarters, we have spent a total of USD 229 million for the share repurchases in 2024, representing substantial progress of our share repurchase programs.

And now for our business outlook, for the first quarter of 2025, as we witnessed the recruitment spending bottoming out from last quarter and showing upswing trajectory post the Chinese New Year, we expect our total revenues to be between RMB 1.9 billion and RMB 1.92 billion, a year-on-year increase of 11.5% to 12.7%. With that, that concludes our prepared remarks. Now we would like to answer questions. Operator, please go ahead.

Operator: [Operator Instructions] We will now take our first question from the line of Eddy Wang from Morgan Stanley.

Eddy Wang: I have two questions. The first one is that could you please share your thoughts on how the AI boom driven by the DeepSeek might impact the online recruitment industry? And this includes the transformations in the industry technology and products as well as its influence on the market recruitment demand, for example, the hiring surge in the tech industry. What are our competitive advantage in this context? The second question is we actually have made a quite big or significant investment in AI already. So with the emergency of DeepSeek, will this promote any adjustments to our AI R&D investment strategy? And what is the -- our future road map for AI product development?

Jonathan Peng Zhao: Thank you for your question. Let me first talk about the implication of the DeepSeek have on the online recruitment industry. First, in the -- especially for the demand side, in short term, we do see some changes. For example, on the recruiter side, as I just mentioned, the average daily newly added AI-related jobs surged by more than 64%, which is quite rare. And also the existing jobs became more active. So the average daily online active job -- number of AI-related jobs increased by more than 24%, which is also quite a big number. On the job seeker side, of course, everyone was trying to look for opportunities in this AI trend.

So on the numbers, we find that the active search results -- active search keywords with AI increased by more than 34% year-on-year. And on the -- I believe these changes will deeply affect the future of the recruitment industry. I will talk about 1 positive side and maybe 1 slightly negative side. On the positive side, this trend of AI, its first initial usage is it has very strong understanding of human natural language and generate human natural language. And this is first one and can easily be understanding. So when people starting to find a job, turning to the word, it will become a resume.

And when the recruiter is trying to hire someone in the formatting of word it will be a job description. So in terms of description -- expression of resume and job description, this kind of wording format in front of AI is very simple and transparent and it's easy to understand this can be very deeply affected. And second one on the negative one is a concern, I will express with numbers. For example, on my platform, there are over 200 million of AI-generated resume. And on the other side, there are 40 million of AI-generated job description.

So under such conditions and circumstances, what is the meaning of the people behind all those resumes and JDs and what our machines are matching for. So this is not a new topic. Currently, more and more people are using AI to search for results to write articles, and there will be more and more AI made up, which is a historical fact that was not existing. And with more than 1,000 times of repeat, that will become a fact. So a lot of things have been polluted. Now the massive pollution of resume or job description have not started yet. So we need to be alert and prepared for that.

And after the moment, I have also been considering your question about what our advantages, and we believe -- I believe we do have some. First, we have been continuously investing in AI science in the past 2 years. We also have our own pretrained model Nanbeige, which is quite good. We have a lot of AI application scenarios and accumulated a lot of unique user behavior and vertical-related data. So I think that's something we have facing this challenge at this moment. And your second question about our further investment in AI development, which I have always have been considering recently. So in early 2023, that ChatGPT moment 2 years ago, seems like AI has been spur-of-the-moment.

So we have spent more than 1 billion on purchasing GPUs with a lot of curiosity and a little bit fear. So currently, we have stored enough computing power. Before the restriction order of GPU purchasing, we have actually bought a lot of GPUs. But last year, under the overall environment you need to have more and more GPUs and bigger and bigger computing power. Under that situation, we are a little bit awkward in our technology investment. So we cannot buy more and we won't buy more. Actually, DeepSeek has given us very high confidence in terms of the strategy of investment. So as [Yee Ching] has said, when challenges promote changes and changes will lead to progress.

So in the past, the bid is the biggest right and money means the future. That situation has gone and the technology innovation has bring changes to many things. The open source of DeepSeek 671B have enabled a lot of middle-sized Internet companies to have the same level of AI capability with other large companies. We are at the same starting line. So in the future, we will -- and many other companies will focus more on the AI application, AI agents and continue our -- explore in the AI science.

And about our plan for our product road map, I talk a little bit about our current products and services, and we will continue our exploration of AI application agents, and you will see upcoming launch of new services. And on the revenue side, which you may concern more, so from the AI to recruiters, we have 1 product, which has been there for more than 1 year. And I think people might be interested to pay for that service, which can help increase the efficiency of achieving a mutual consent by 60% and saving the boss's time by more than 40%. I think this product should be welcomed by the recruiters. And that's my answer to your questions.

And operator, let's move on to the next question.

Operator: Our next question comes from the line of Timothy Zhao from Goldman Sachs.

Timothy Zhao: I have 2 questions here. First, as you have shared a lot about the recruitment trend year-to-date, especially after Chinese New Year. Could management share more detailed color about the recruitment demand between different enterprise size and also different industries? And more specifically, how should we think about the sustainability of the demand outlook? And second question is regarding the paying ratio and ARPPU trend on the platform. For this year, how we are going to plan to increase the monetization rate or ARPPU on this platform?

Jonathan Peng Zhao: So this year's spring recruitment season compared to last year, we find that the sequential trend has been quite strong. But one number is that the online active job postings before and after the spring festival, so this year, the sequential growth is more than 173%, while last year's 141%. So this is a big picture. White collar industry are stably recovering. So the highlight is that the AI-related drops have been helping with some subsectors or subindustries of Internet to start regrowing. One important point is that compared to last quarter, this quarter, our overall cash in have shown accelerating growth trend. And on the ARPPU side, I don't have a very strong motive to increase ARPPU very aggressively.

I am witnessing recovery across different industries and different size of companies, so I will give them space to improve together. So last year, we saw some good growth on the ARPPU side, but -- and also stabilized paying ratio. I don't have very big aggressive plans to accelerate monetization, just waiting for things to turn better together. I would rather to look at things on the side of we are able to provide service to different kind of users, especially enterprises. Our model can provide service to different kind of enterprises.

There is a number that after the COVID reopening in the past 2 years, we have served accumulatively more than 6 million new enterprises and annual paid enterprise customer -- enterprise numbers increased by 1.5 million. I hope this data can mean something and show our view on the growth potential. And that's my answer to your question. And operator, let's move on to the next question.

Operator: Our next question comes from the line of Wei Xiong from UBS.

Wei Xiong: Firstly, I want to ask what's our current customer acquisition cost? And how does it compare to a few years ago? If we look at 2025, are there any major marketing or promotion plans that we should be aware of? Given the continued margin expansion over the past few years, how should we think about the long-term sustainable margin level for the company? And second, on the blue collar business, wondering if management could share the revenue contribution and client feedback from our current program. What's our strategic focus and planning for our blue-collar business among other new initiatives for this year? And how should we think about the change in revenue mix from the blue-collar segment?

Phil Yu Zhang: I'll answer the first question. Simply speaking, there's no big marketing campaign ahead in 2025. We are still at a fast user growth stage. Our user growth target for this year is set as over 35 million above for 2025. In terms of the selling marketing to our business is still with the business leverage. Traffic acquisition per user today compared with the prior years is much lower because of -- this is mainly because of our brand awareness. So the margin -- so the overall selling and marketing as a percentage of total revenue, we continue to see this percentage going down.

Except for marketing, other major cost and expenses items like COGS, sales expenses to the revenue and also R&D expenses are all well under control. So looking ahead, the gross margin and the operating margin are all expected to further improve for the full year. As we communicated last earnings call, we will -- we hope to secure high-quality bottom line growth first, then we hope to actively look for additional upsides. So we set our full year non-GAAP operating profit target as RMB 3 billion for 2025, which is 30% higher than RMB 2.3 billion non-GAAP operating profit for 2024.

And lastly, our share-based compensation expenses, as I just mentioned in the prepared remarks, these expenses will decline sequentially and which makes our GAAP-based bottom line net profit with even higher growth. So that's my comment to the margins and our financial focuses for 2025.

Jonathan Peng Zhao: Thank you for remembering Hailuo, which we have been talking about several years. So for the Conch select Hailuo project, which is targeted for those agents with massive hiring demand. So last year, we saw the contract amount -- full year contract amount for Hailuo more than RMB 200 million. So I think any new business have more than 2% of our revenue contribution and is growing is a good and valuable input. So -- and also in the fourth quarter, the accumulated agencies who have joined Hailuo improved by 21% sequentially, covered -- served more than 40 million of job seekers. And with the development of AI, I believe things might potentially have some change.

In the past, those well-trained [indiscernible] agencies have always had their advantages. The new guys who have a shorter period of experiences, they -- in the past, they don't have advantages. But now with the empowerment of AI, things are potentially to change to be equal. So in the -- when we initiated Hailuo, we didn't foresee this. But now with potential changes, we will keep you updated on progress. And also, we will keep our investment or exploring into closed-loop services and placement-related services. And that's my answer to your question. And given the time constraint, operator, I think that's our last question for today.

Operator: That concludes today's question-and-answer session. At this time, I'll turn the conference back to Wenbei for any additional or closing remarks.

Wenbei Wang: Thank you once again for joining us today. If you have any further questions, please contact our team directly or TPG Investor Relations. Thank you.

Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. Parts of this article were created using Large Language Models (LLMs) based on The Motley Fool's insights and investing approach. It has been reviewed by our AI quality control systems. Since LLMs cannot (currently) own stocks, it has no positions in any of the stocks mentioned. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability.

The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.