GlobeNewswire Inc | Nov 23, 2021 05:30AM EST

November 23, 2021

BEIJING, Nov. 23, 2021 (GLOBE NEWSWIRE) -- KANZHUN LIMITED (BOSS Zhipin or the Company) (Nasdaq: BZ), a leading online recruitment platform in China, today announced its unaudited financial results for the third quarter ended September 30, 2021.

Third Quarter 2021 Highlights

Revenues for the quarter were RMB1,211.8 million (US$188.1 million), an increase of 105.4% from RMB590.1 million for the same quarter of 2020.

Calculated cash billings1 for the quarter were RMB1,221.0 million (US$189.5 million), an increase of 61.8% from RMB754.8 million for the same quarter of 2020.

Average monthly active users (MAUs)2 for the quarter were 28.8 million, an increase of 28.6% from 22.4 million for the same quarter of 2020.

Total paid enterprise customers3 in the twelve months ended September 30, 2021 increased by 110.5% to 4.0 million from 1.9 million in the twelve months ended September 30, 2020.

Net income for the quarter was RMB286.2 million (US$44.4 million), compared to net income of RMB33.8 million for the same quarter of 2020. Adjusted net income4 for the quarter was RMB385.1 million (US$59.8 million), compared to RMB52.3 million for the same quarter last year.

Mr. Jonathan Peng Zhao, Founder, Chairman and Chief Executive Officer of the Company, commented, It is inspiring to see the effectiveness of our business model continuing to be validated. In the third quarter, we focused on improving our service for existing users and enhancing our core competencies, continually investing in both platform and data security enhancements. We believe this is a key factor in driving the sustainable growth of our business and creating long-term value. Staying true to our mission and commitments as a public company, we will continue to make valuable contributions to the development of individuals, and to the prosperity of the enterprises we serve, by leveraging the power of technology.

Mr. Phil Yu Zhang, Chief Financial Officer, further commented, Our revenues increased by 105.4% year on year to RMB1,211.8 million in the third quarter. Our net income reached RMB286.2 million and our adjusted net income achieved RMB385.1 million, demonstrating the type of healthy and robust margin-profile, that we believe our core online recruitment business can achieve as our business matures. We are firmly committed to continuing investment in talents with headcount of R&D and sales personnel growing sequentially.

Third Quarter 2021 Unaudited Financial Results

Revenues

Revenues were RMB1,211.8 million (US$188.1 million) in the third quarter of 2021, an increase of 105.4% from RMB590.1 million for the same period in 2020. The increase was primarily due to the growth in revenues from online recruitment services.

Revenues from online recruitment services were RMB1,197.1 million (US$185.8 million) in the third quarter of 2021, representing an increase of 104.4% from RMB585.6 million for the same period in 2020. The increase was mainly due to the rapid growth in our paid enterprise customer numbers following the expansion of our user base. Total paid enterprise customers increased by 110.5% from 1.9 million in the twelve months ended September 30, 2020 to 4.0 million in the twelve months ended September 30, 2021.

Revenues from other services, which mainly comprise of paid value-added services offered to job seekers, were RMB14.6 million (US$2.3 million) in the third quarter of 2021, representing an increase of 217.4% from RMB4.6 million for the same period in 2020, benefiting from our continued overall growth in user base.

Operating cost and expenses

Total operating cost and expenses were RMB903.9 million (US$140.3 million) in the third quarter of 2021, representing an increase of 61.7% from RMB559.1 million in the same period of 2020. Total share-based compensation expenses were RMB98.9 million (US$15.4 million) in the third quarter of 2021, compared with RMB18.5 million in the same period of 2020.

Cost of revenues were RMB154.8 million (US$24.0 million) in the third quarter of 2021, representing an increase of 124.7% from RMB68.9 million in the same period of 2020, primarily driven by payroll and other employee-related costs, as well as increases in third-party payment processing costs and server and bandwidth costs, resulting from expanded user base and increased transaction volume.

Sales and marketing expenses were RMB416.4 million (US$64.6 million) in the third quarter of 2021, representing an increase of 46.8% from RMB283.6 million in the same period of 2020, primarily due to increased headcount in sales and marketing personnel and enhanced brand advertising activities.

Research and development expenses were RMB209.3 million (US$32.5 million) in the third quarter of 2021, representing an increase of 49.9% from RMB139.6 million in the same period of 2020, primarily due to increased headcount in research and development personnel as well as increased share-based compensation expenses.

General and administrative expenses were RMB123.3 million (US$19.1 million) in the third quarter of 2021, representing an increase of 83.8% from RMB67.1 million in the same period of 2020, primarily due to increased headcount in general and administrative personnel and increased share-based compensation expenses.

Income from operations

Income from operations was RMB311.1 million (US$48.3 million) in the third quarter of 2021, compared to RMB34.4 million in the same period of 2020.

Net income and adjusted net income

Net income was RMB286.2 million (US$44.4 million) in the third quarter of 2021, compared to RMB33.8 million in the same period of 2020.

Adjusted net income was RMB385.1 million (US$59.8 million) in the third quarter of 2021, compared to RMB52.3 million in the same quarter of 2020.

Basic and diluted net income per ADS and adjusted basic and diluted net income per ADS

Basic and diluted net income per ADS attributable to ordinary shareholders were RMB0.66 (US$0.10) and RMB0.62 (US$0.10), respectively, in the third quarter of 2021, compared to basic and diluted net loss per ADS of RMB0.55 in the same period of 2020.

Adjusted basic and diluted net income per ADS attributable to ordinary shareholders4 were RMB0.89 (US$0.14) and RMB0.83 (US$0.13), respectively, in the third quarter of 2021, compared to adjusted basic and diluted net loss per ADS of RMB0.21 in the same period of 2020.

Net cash generated from operating activities

Net cash generated from operating activities was RMB269.9 million (US$41.9 million) in the third quarter of 2021, representing an increase of 13.8% from RMB237.1 million in the same period of 2020.

Cash position

Balance of cash and cash equivalents and short-term investments was RMB11,941.1 million (US$1,853.2 million) as of September 30, 2021, compared to RMB4,534.6 million as of December 31, 2020. The increase was primarily attributable to net proceeds from the initial public offering completed in June 2021 as well as net cash generated from operating activities.

Recent Development

As stated in the press release announced on July 5, 2021, the Company is subject to cybersecurity review by the Cyberspace Administration of China. To facilitate the process, during the review period, the BOSS Zhipin app has been required to suspend new user registration in China. The process is still ongoing and the Company is fully cooperating with the regulator in respect of its review.

Outlook

For the fourth quarter of 2021, the Company currently expects its total revenues to be between RMB1.02 billion and RMB1.05 billion, representing a year-on-year increase of 58.1% to 62.8%. This forecast reflects the Companys current views on the market, operational conditions and the impact of the on-going cybersecurity review, which are subject to change and cannot be predicted with reasonable accuracy as of the date hereof.

_____________________________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 Use of Non-GAAP Financial Measures.2 MAUs refer to the number of verified user accounts, including both job seekers and enterprise users, that logged on to our mobile applications 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/(loss) and adjusted basic and diluted net income/(loss) 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 Use of Non-GAAP Financial Measures.

Conference Call Information

The Company will host a conference call at 7:00 AM U.S. Eastern Time on Tuesday, November 23, 2021 (8:00 PM Beijing/Hong Kong Time on November 23, 2021) to discuss the financial results. Details for the conference call are as follows:

Event Title: KANZHUN LIMITED Third Quarter 2021 Earnings Conference CallConference ID: 9759978Registration Link: http://apac.directeventreg.com/registration/event/9759978

Upon registration, participants will receive an email containing conference call dial-in details, a passcode, and a unique registrant ID. 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.

A replay of the conference call will be accessible approximately two hours after the conclusion of the live call and will be available until November 30, 2021, via the following details:

International: +61-2-8199-0299China (Mandarin) Toll Free: 800-870-0206China Toll Free: 400-632-2162United States Toll Free: +1-855-452-5696Hong Kong Toll Free: 800-963-117Singapore Toll Free: 800-616-2305Conference ID: 9759978

Exchange Rate

This announcement contains translation of certain RMB amounts into U.S. dollar amounts at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to U.S. dollar were made at the rate of RMB6.4434 to US$1.00, the noon buying rate on September 30, 2021 of RMB as set forth in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or U.S. dollar amounts referred could be converted into U.S. dollar or RMB, as the case may be, at any particular rate or at all.

Use of Non-GAAP Financial Measures

In evaluating the business, the Company considers and uses non-GAAP measures, such as calculated cash billings, adjusted net income/(loss), adjusted net income/(loss) attributable to ordinary shareholders, adjusted basic and diluted net income/(loss) per ordinary share attributable to ordinary shareholders and adjusted basic and diluted net income/(loss) 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 provide valuable insights into the cash that will be generated from sales and is a valuable measure for monitoring service demand and financial performance. The Company defines adjusted net income/(loss) and adjusted net income/(loss) attributable to ordinary shareholders by excluding the impact of share-based compensation expenses, which are non-cash expenses, from the related GAAP measures. The Company believes that these non-GAAP measures help identify underlying trends in the business that could otherwise be distorted by the effect of certain expenses that are included in net income/(loss) and facilitate investors assessment of the Companys 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 presentation of non-GAAP financial measures should not be considered in isolation from, or as a substitute for most directly comparable financial measures prepared in accordance with GAAP. The non-GAAP measures have material limitations as an analytical metric and may not be calculated in the same manner by all companies, and may not be comparable to other similarly titled measures used by other companies. 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 historical non-GAAP financial measures to the most directly comparable GAAP measures has been provided in the financial statement tables 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. Statements that are not historical facts, including statements about the Companys 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 Companys filings with the SEC. 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 (Nasdaq: BZ) operates the largest online recruitment platform BOSS Zhipin in China in terms of average MAU in 2020. Established seven years ago, 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 more information, please visit https://ir.zhipin.com.

For investor and media inquiries, please contact:

KANZHUN LIMITEDInvestor RelationsEmail: ir@kanzhun.com

THE PIACENTE GROUP, INC.Email: kanzhun@tpg-ir.com

KANZHUN LIMITEDUNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS)/INCOME(All amounts in thousands, except for share and per share data, unlessotherwise noted)

For the three months ended September 30, For the nine months endedSeptember 30, 2020 2021 2020 2021 RMB RMB US$ RMB RMB US$ Revenues Onlinerecruitmentservices to 585,556 1,197,135 185,792 1,286,141 3,137,054 486,863 enterprisecustomersOther services 4,576 14,626 2,270 13,085 31,424 4,877 Total revenues 590,132 1,211,761 188,062 1,299,226 3,168,478 491,740 Operating cost and expensesCost of (68,885 ) (154,834 ) (24,030 ) (160,957 ) (404,863 ) (62,834 )revenues^(^1)Sales andmarketing (283,595 ) (416,419 ) (64,627 ) (1,026,513 ) (1,569,199 ) (243,536 )expenses^(^1)Research anddevelopment (139,592 ) (209,323 ) (32,486 ) (361,407 ) (623,051 ) (96,696 )expenses^(^1)General andadministrative (67,052 ) (123,338 ) (19,142 ) (171,343 ) (1,871,950 ) (290,522 )expenses^(^1)Totaloperating cost (559,124 ) (903,914 ) (140,285 ) (1,720,220 ) (4,469,063 ) (693,588 )and expensesOtheroperating 3,400 3,291 511 7,095 10,948 1,699 income, netIncome/(loss)from 34,408 311,138 48,288 (413,899 ) (1,289,637 ) (200,149 )operationsFinancial 504 2,737 425 966 6,754 1,048 income, netForeignexchange (1,099 ) 269 42 (2,222 ) (317 ) (49 )(loss)/gainInvestment 734 7,162 1,112 6,321 15,791 2,451 incomeOther expenses (746 ) (5,072 ) (787 ) (3,580 ) (6,669 ) (1,035 )Income/(loss)before income 33,801 316,234 49,080 (412,414 ) (1,274,078 ) (197,734 )tax expenseIncome tax - (30,066 ) (4,666 ) - (30,066 ) (4,666 )expenseNet income/ 33,801 286,168 44,414 (412,414 ) (1,304,144 ) (202,400 )(loss)Accretion onconvertibleredeemablepreferred (63,805 ) - - (193,820 ) (164,065 ) (25,462 ) shares toredemptionvalueNet (loss)/incomeattributable (30,004 ) 286,168 44,414 (606,234 ) (1,468,209 ) (227,862 )to ordinaryshareholdersNet income/ 33,801 286,168 44,414 (412,414 ) (1,304,144 ) (202,400 )(loss)Othercomprehensive (loss)/incomeForeigncurrency (81,662 ) 40,385 6,268 (53,171 ) 48,269 7,491 translationadjustmentTotalcomprehensive (47,861 ) 326,553 50,682 (465,585 ) (1,255,875 ) (194,909 )(loss)/incomeWeightedaverage number of ordinaryshares?Basic 109,142,384 861,454,878 861,454,878 107,921,949 420,605,543 420,605,543 ?Diluted 109,142,384 927,370,444 927,370,444 107,921,949 420,605,543 420,605,543 Net (loss)/income perordinary share attributableto ordinaryshareholders?Basic (0.27 ) 0.33 0.05 (5.62 ) (3.49 ) (0.54 )?Diluted (0.27 ) 0.31 0.05 (5.62 ) (3.49 ) (0.54 )Net (loss)/income perADS* attributableto ordinaryshareholders?Basic (0.55 ) 0.66 0.10 (11.23 ) (6.98 ) (1.08 )?Diluted (0.55 ) 0.62 0.10 (11.23 ) (6.98 ) (1.08 )

* Each ADS represents two Class A ordinary shares.(1) Includes share-based compensation expenses as follows:

ForthethreemonthsendedSeptember For the nine months ended September 30, 30, 2020 2021 2020 2021 RMB RMB US$ RMB RMB US$ Cost of 307 11,431 1,774 939 24,568 3,813 revenuesSales andmarketing 2,080 17,916 2,781 12,968 44,838 6,959 expensesResearch anddevelopment 7,451 36,688 5,694 20,391 95,321 14,794 expensesGeneral andadministrative 8,661 32,888 5,104 24,449 1,643,447 255,059 expenses 18,499 98,923 15,353 58,747 1,808,174 280,625

KANZHUN LIMITEDUNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS(All amounts in thousands, except for share and per share data, unlessotherwise noted)

As of December September 30,2021 31,2020 RMB RMB US$ ASSETS Current assets Cash and cash equivalents 3,998,203 10,756,365 1,669,362 Short-term investments 536,401 1,184,760 183,872 Accounts receivable 6,999 739 115 Amounts due from related 40,799 6,987 1,084 partiesPrepayments and other current 164,910 602,669 93,533 assetsTotal current assets 4,747,312 12,551,520 1,947,966 Non-current assets Property, equipment and 191,355 272,644 42,314 software, netIntangible assets, net 549 481 75 Right-of-use assets, net 144,063 257,651 39,987 Other non-current assets - 4,000 621 Total non-current assets 335,967 534,776 82,997 Total assets 5,083,279 13,086,296 2,030,963 LIABILITIES, MEZZANINE EQUITYAND SHAREHOLDERS? (DEFICIT)/ EQUITYCurrent liabilities Accounts payable 41,856 33,286 5,166 Deferred revenue 1,200,349 1,879,719 291,728 Other payable and accrued 418,259 440,185 68,316 liabilitiesOperating lease liabilities, 59,559 100,013 15,522 currentTotal current liabilities 1,720,023 2,453,203 380,732 Non-current liabilities Operating lease liabilities, 76,373 158,227 24,557 non-currentTotal non-current liabilities 76,373 158,227 24,557 Total liabilities 1,796,396 2,611,430 405,289 Mezzanine equity 5,587,000 - - Shareholders? (deficit)/ equityOrdinary shares 81 549 85 Treasury shares (3,657,853shares as of December 31, - - - 2020 and nil as of September30, 2021)Additional paid-in capital 452,234 14,482,624 2,247,668 Accumulated other (130,387 ) (82,118 ) (12,744 )comprehensive lossAccumulated deficit (2,622,045 ) (3,926,189 ) (609,335 )Total shareholders? (deficit) (2,300,117 ) 10,474,866 1,625,674 /equityTotal liabilities, mezzanineequity and shareholders? 5,083,279 13,086,296 2,030,963 (deficit)/equity

KANZHUN LIMITEDUNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(All amounts in thousands, except for share and per share data, unlessotherwise noted)

For the three months ended September 30, For the nine months ended September 30, 2020 2021 2020 2021 RMB RMB US$ RMB RMB US$ Net cashgeneratedfrom/(used 237,128 269,928 41,892 (56,456 ) 1,106,471 171,722 in)operatingactivitiesNet cash(used in)/generated (260,519 ) (638,386 ) (99,076 ) 797,570 (805,751 ) (125,051 )frominvestingactivitiesNet cashgeneratedfrom/(used 78,998 (2,370 ) (368 ) 1,127,704 6,409,844 994,792 in)financingactivitiesEffect ofexchangeratechanges on (82,763 ) 38,234 5,934 (55,258 ) 47,598 7,387 cash andcashequivalentsNet(decrease)/increase in (27,156 ) (332,594 ) (51,618 ) 1,813,560 6,758,162 1,048,850 cash andcashequivalentsCash andcashequivalentsat 2,248,071 11,088,959 1,720,980 407,355 3,998,203 620,512 beginningof theperiodCash andcashequivalents 2,220,915 10,756,365 1,669,362 2,220,915 10,756,365 1,669,362 at end ofthe period

KANZHUN LIMITEDUNAUDITED RECONCILIATION OF GAAP AND NON-GAAP RESULTS(All amounts in thousands, except for share and per share data, unlessotherwise noted)

For the three months ended September 30, For the nine months endedSeptember 30, 2020 2021 2020 2021 RMB RMB US$ RMB RMB US$ Revenues 590,132 1,211,761 188,062 1,299,226 3,168,478 491,740 Add: Changein deferred 164,677 9,241 1,434 290,588 679,370 105,437 revenueCalculatedcash 754,809 1,221,002 189,496 1,589,814 3,847,848 597,177 billings Net income/ 33,801 286,168 44,414 (412,414 ) (1,304,144 ) (202,400 )(loss)Add:Share-based 18,499 98,923 15,353 58,747 1,808,174 280,625 compensationexpensesAdjusted netincome/ 52,300 385,091 59,767 (353,667 ) 504,030 78,225 (loss) Net (loss)/incomeattributable (30,004 ) 286,168 44,414 (606,234 ) (1,468,209 ) (227,862 )to ordinaryshareholdersAdd:Share-based 18,499 98,923 15,353 58,747 1,808,174 280,625 compensationexpensesAdjusted net(loss)/income (11,505 ) 385,091 59,767 (547,487 ) 339,965 52,763 attributableto ordinaryshareholders Weightedaveragenumber of ordinaryshares?Basic 109,142,384 861,454,878 861,454,878 107,921,949 420,605,543 420,605,543 ?Diluted 109,142,384 927,370,444 927,370,444 107,921,949 480,361,688 480,361,688 Adjusted net(loss)/income perordinary shareattributableto ordinaryshareholders?Basic (0.11 ) 0.45 0.07 (5.07 ) 0.81 0.13 ?Diluted (0.11 ) 0.42 0.06 (5.07 ) 0.71 0.11 Adjusted net(loss)/income perADS attributableto ordinaryshareholders?Basic (0.21 ) 0.89 0.14 (10.15 ) 1.62 0.25 ?Diluted (0.21 ) 0.83 0.13 (10.15 ) 1.42 0.22