Kanzhun Earnings Call Highlights AI Gains, Buybacks

Kanzhun Ltd. Sponsored Adr ((BZ)) has held its Q1 earnings call. Read on for the main highlights of the call.

Kanzhun Ltd. delivered an upbeat earnings call that balanced strong fundamentals with measured caution. Management highlighted solid user and customer growth, expanding margins, and powerful cash generation, while acknowledging seasonal headwinds and volatile investment income. AI is emerging as a meaningful driver of productivity and future revenue, but still contributes only a small slice of the current topline.

User Growth Rebounds After Holiday Lull

Kanzhun underscored a robust user acquisition trend, adding over 15 million newly verified users between January and April 2026. March monthly active users topped 72 million, up 4.6% year on year, while average MAU was around 60 million in Q1, with April levels close to March as hiring activity rebounded after the Chinese New Year slowdown.

More Paying Customers and Rising ARPU

The company reported 7.1 million paid enterprise customers in the 12 months ended March 31, a 10.9% year on year and 4.4% sequential increase. Average revenue per paying user also edged higher, with ARPU up about 2% year on year, signaling that Kanzhun is not only adding more clients but also deepening monetization per customer.

Topline Growth Solid Despite Seasonal Drag

First quarter revenue came in around RMB 2.07–2.1 billion, up roughly 7.6%–8% year on year despite a compressed peak hiring season. Management said the later Chinese New Year left only one true peak recruiting month in 2026 versus two in 2025, muting Q1 comparisons but setting up cleaner growth metrics in later quarters.

Profitability Strengthens on Scale Efficiencies

Adjusted operating income, excluding share based compensation, reached about RMB 810–815 million, rising nearly 18% year on year. The adjusted operating margin improved to 39.4%, up 3.4 percentage points, showing Kanzhun is extracting more profit from each revenue unit even as it invests in new technologies and services.

Cash Engine Powers Balance Sheet

Operating cash flow remained a standout, with net cash from operating activities around RMB 1.2 billion, up 19% year on year. Kanzhun ended March with approximately RMB 19.8 billion in cash and equivalents, giving the company ample firepower to fund AI initiatives, overseas expansion, and shareholder returns without straining its balance sheet.

Margins Remain Among Industry’s Highest

Kanzhun’s gross margin rose to an impressive 85.6%, up 1.8 percentage points from a year earlier, underscoring the asset light nature of its platform. Reported net income was about RMB 1.1 billion, while adjusted net income reached RMB 856 million, up 12%, translating to a strong 41.4% adjusted net margin, 1.7 points higher year on year.

Buybacks Signal Confidence in Long-Term Value

Management emphasized continued capital returns, noting over USD 200 million of share repurchases year to date, equivalent to roughly 3% of shares outstanding. Since 2022, Kanzhun has bought back close to 10% of its stock and reiterated a commitment to return at least half of the prior year’s adjusted net income annually via dividends and buybacks.

AI Shows Explosive Growth and Productivity Gains

AI related roles on the platform more than doubled in revenue, pointing to strong demand from employers in emerging tech fields. Internally, AI agents lifted time to consent conversion by about 50%, boosted human plus agent productivity roughly fourfold, and helped AI powered closed loop services grow fastest among experiments, with Q1 revenue near RMB 50 million.

Seasonality Weighs on Q1 But Not Trend

Management acknowledged that Q1 revenue growth appeared modest largely due to the timing of the Chinese New Year, which compressed activity into March. With 2026’s peak hiring period shortened versus last year, executives argued the underlying demand trend remains healthy and should be more visible in upcoming quarters.

AI Revenues Still Small but Building Foundation

Despite eye catching growth rates, AI monetization remains in its infancy, with AI facilitated closed loop services contributing only about RMB 50 million of Q1 revenue. Management framed these projects as laying the groundwork for future growth, suggesting the real payoff will come as adoption widens and more product lines are infused with AI capabilities.

Investment Gains Add Earnings Volatility

Interest and investment income surged 422% year on year to RMB 781 million, primarily because of a one time fair value gain of roughly RMB 640 million from an investee’s IPO. This windfall also pushed income tax expense up 293% to RMB 299 million, introducing noise into reported earnings that investors should adjust for when assessing core profitability.

Ongoing Investments to Temper Margin Upside

Executives cautioned that margin expansion from here will likely be modest, as Kanzhun continues to pour money into AI, brand building, and new business lines. Adjusted R&D spending, excluding share based compensation, rose about 5% year on year, reflecting higher AI infrastructure and service costs that management views as critical to sustaining growth.

Sales and R&D Costs Creep Higher

Sales and marketing expenses grew around 2% year on year to RMB 502 million, though the impact was cushioned by gains in sales staff efficiency. Adjusted R&D reached roughly RMB 351 million, up about 5%, showing that while cost discipline remains, Kanzhun is not shying away from spending where it sees strategic long term returns.

Overseas Push Still in Early Days

Kanzhun’s Hong Kong business is progressing but remains small relative to its mainland operations, with around 60,000 daily active users reported. Management stressed that monetization is not yet the focus overseas, framing these efforts as an investment stage designed to build user scale and product market fit before shifting attention to revenue.

Guidance Points to Accelerating Growth Ahead

For the second quarter of 2026, Kanzhun guided revenue to RMB 2.38–2.42 billion, implying 13.2%–15.1% year on year growth and a clear step up from Q1. Management expects full year revenue growth to surpass Q1’s pace and remain at least in double digits, while continuing aggressive user acquisition, disciplined buybacks and dividends, and only modest further margin expansion as AI and new business investments continue.

Kanzhun’s earnings call painted a picture of a platform with strong user and customer momentum, elite margins, and a fortress balance sheet, even as short term seasonality and investment gains add noise. AI is rapidly enhancing productivity and opening new revenue channels, though still small in scale, and management’s ongoing buybacks underline confidence in long term value creation for shareholders.