BOSS Zhipin revenue rises 14% as KANZHUN margins expand and AI recruitment investment accelerates

KANZHUN Limited delivered accelerating second-quarter growth as revenue increased 14.1% year over year to RMB2.40 billion and income from operations climbed 32.6% to RMB863.2 million, supported by a larger enterprise customer base and improved operating leverage across its BOSS Zhipin recruitment platform. Average monthly active users surpassed 70 million for the first time, rising 10.4%, while paid enterprise customers increased 10.8% to 7.2 million. Reported net income surged 173.1% to RMB1.94 billion, but that headline increase was heavily influenced by a RMB1.47 billion fair-value investment gain, making adjusted net income growth of 9.4% a more useful measure of underlying earnings. Management simultaneously declared an approximately US$230 million annual cash dividend after completing more than US$300 million of share repurchases this year, reinforcing a capital-return strategy supported by nearly US$2.8 billion of cash and short-term financial assets.

The operating performance was stronger than the statutory net-income comparison alone suggests. Revenue growth accelerated from Q1, while total operating costs and expenses increased only 6.1%, less than half the rate of sales growth. Adjusted operating income reached RMB1.05 billion, producing an adjusted operating margin of approximately 43.8%, a record level according to management.

Investors nevertheless reacted negatively. KANZHUN’s Hong Kong-listed shares closed August 25 down 5.6% at HK$59.05, while the Nasdaq ADSs were trading around $15.10, roughly 5% below the previous U.S. close in the latest market data. The reaction suggests investors are separating the company’s solid operating execution from the unusually large investment gain embedded in reported earnings and weighing whether mid-teens revenue growth can justify a renewed valuation premium.

BOSS Zhipin crosses 70 million monthly users as enterprise customer growth supports revenue

Average monthly active users reached 70.2 million during Q2, increasing from 63.6 million a year earlier and crossing the 70 million threshold for the first time. Total paid enterprise customers over the 12 months ended June reached 7.2 million compared with 6.5 million in the prior-year period.

Those figures matter because KANZHUN operates a two-sided recruitment marketplace. More job seekers can make the platform more valuable to employers, while a broader pool of paying companies can attract additional job seekers, reinforcing network effects that become increasingly difficult for smaller competitors to replicate.

Online recruitment services supplied to enterprise customers generated RMB2.384 billion of Q2 revenue, up 14.7% from RMB2.078 billion. The increase was primarily driven by growth in paying enterprise customers, making the company’s expanding employer base the clearest commercial engine behind the quarter.

Other services generated only RMB14.6 million compared with RMB24.8 million a year earlier. KANZHUN has deliberately simplified some paid services offered to job seekers since 2025, prioritizing platform engagement and long-term ecosystem development rather than maximizing direct monetization of people looking for work.

That strategy places most of the monetization burden on employers, which can be attractive if user growth increases recruitment efficiency and companies remain willing to pay for access. It also means enterprise hiring budgets and China’s broader labor-market environment remain central to KANZHUN’s revenue trajectory.

The Q3 outlook points to continued but not accelerating growth. Management expects revenue between RMB2.41 billion and RMB2.50 billion, representing an 11.4% to 15.6% year-over-year increase.

Operating income grows twice as fast as revenue as KANZHUN controls its cost base

KANZHUN’s Q2 cost structure produced some of the strongest evidence of operating leverage. Total operating costs and expenses rose 6.1% to RMB1.54 billion while revenue increased 14.1%, allowing operating income to climb 32.6% to RMB863.2 million.

Cost of revenue increased only 1.6% to RMB312.4 million, despite the growth in users and customers. Higher server and bandwidth expenses were partly offset by lower payment-processing costs and reduced share-based compensation, helping KANZHUN convert a larger portion of incremental revenue into profit.

General and administrative expenses fell 29.7% to RMB218.6 million, primarily because of lower employee-related expenses. Share-based compensation across the company also declined 18.9% to RMB186.4 million.

Sales and marketing moved sharply in the opposite direction, increasing 38.3% to RMB580.9 million. The increase reflected higher advertising and marketing costs related partly to KANZHUN’s sponsorship activities around the 2026 FIFA World Cup as well as higher sales-employee expenses.

The fact that operating profit still expanded by nearly one-third despite that marketing increase highlights the strength of the underlying cost structure. Adjusted operating income rose 19.2% to RMB1.05 billion and adjusted operating margin reached approximately 43.8%, giving KANZHUN an unusually high profitability level for a consumer-facing internet platform still growing users at double-digit rates.

The question is whether those margins are sustainable as the company invests more aggressively in artificial intelligence and user acquisition. If revenue continues expanding faster than core operating costs, the model can produce additional earnings leverage, but a prolonged period of heavier marketing or AI infrastructure spending could narrow the current gap.

AI recruitment tools could deepen KANZHUN’s moat but commercialization remains early

Artificial intelligence is becoming a larger part of BOSS Zhipin’s product strategy. Management said KANZHUN is continuing to invest in foundation-model capabilities and deploying AI across job recommendations, recruitment matching, chats and interview workflows.

The company has introduced AI-hosted or AI-assisted conversations and AI interview products designed to automate portions of the recruitment process. Management said early user feedback has been positive and initial commercialization efforts indicate substantial potential, although it has not yet disclosed enough revenue detail to quantify AI’s direct financial contribution.

Research and development spending rose only 3.5% to RMB430.5 million during Q2, with higher cloud-service expenses cited as one driver. That restrained expense growth is notable because KANZHUN is expanding AI capabilities without allowing R&D spending to rise nearly as quickly as revenue.

AI could strengthen BOSS Zhipin in several ways if the technology improves matching accuracy and reduces the time employers spend screening candidates. Better matching can improve the value employers derive from subscription and recruitment products, potentially supporting higher retention or monetization without requiring equivalent growth in sales staff.

The risk is that recruitment AI becomes widely available rather than a differentiated feature. Large internet companies, specialist recruitment platforms and enterprise software providers are all adding AI to hiring workflows, meaning KANZHUN’s advantage will likely depend more on proprietary user behavior and marketplace data than on access to general-purpose AI technology alone.

BOSS Zhipin’s 70.2 million monthly users provide an important data advantage in that competition. A large volume of job searches, conversations, employer interactions and outcomes can potentially improve recommendation models and matching accuracy in ways that are difficult to replicate without similar marketplace scale.

Reported profit surges 173% but investment gains account for most of the increase

KANZHUN’s statutory net income of RMB1.94 billion represents one of the largest headline figures in the release, but it requires substantial adjustment before evaluating operating performance. Interest and investment income jumped to RMB1.63 billion from only RMB157 million a year earlier.

The increase was primarily caused by a RMB1.466 billion pre-tax fair-value gain on KANZHUN’s investment in a company that completed an IPO in January 2026. That gain alone represented more than three-quarters of reported quarterly net income before considering the associated tax effect.

Income-tax expense consequently jumped to RMB550.3 million from RMB97.1 million, including RMB366.5 million associated with the investment gain. After removing non-recurring items and other adjustments, adjusted net income increased a much more modest 9.4% to RMB1.03 billion.

Adjusted diluted earnings per ADS increased to RMB2.23, or approximately US$0.33, compared with RMB2.09 a year earlier. Reported diluted earnings reached RMB4.20 per ADS because of the investment gain.

The distinction is important for valuation. Investors generally place greater weight on recurring earnings generated through recruitment services than on unrealized valuation gains in portfolio investments, particularly when those gains can reverse with changes in market prices.

KANZHUN’s core earnings trend still remains positive. Operating profit growth of 32.6%, expanding margins and adjusted net income growth provide evidence that the recruitment platform is improving economically even without the investment contribution.

$230 million dividend and $300 million of buybacks create a much larger capital-return story

KANZHUN announced an annual cash dividend of US$0.255 per ordinary share, equivalent to US$0.510 per ADS. The total distribution is expected to cost approximately US$230 million and will be funded from surplus cash on the balance sheet.

The dividend sits alongside more than US$300 million of share repurchases already completed during 2026. Management said combined dividends and buybacks this year have exceeded 100% of the prior year’s adjusted net income, representing a substantial acceleration in direct shareholder returns.

KANZHUN has committed, subject to board approval and market conditions, to allocate at least 50% of the preceding year’s adjusted net income toward dividends and share repurchases during each of the three years beginning in 2026. The existing repurchase authorization has also been expanded to US$400 million through August 2027.

The company can support those distributions because its balance sheet remains unusually liquid. Cash, cash equivalents, short-term deposits and short-term investments excluding equity securities totaled RMB18.81 billion, approximately US$2.77 billion, at June 30.

Operating cash flow was weaker during Q2, declining 10.2% to RMB944.8 million. Higher marketing expenditure, tax payments and lower cash investment income outweighed improved collections from customers, making cash-flow growth one area where the quarter did not match the strength of reported operating profit.

That divergence is worth monitoring as KANZHUN increases shareholder distributions. Current liquidity provides more than enough capacity for the announced dividend and repurchases, but sustainable long-term capital returns ultimately depend on recurring free cash flow rather than existing cash reserves.

Key takeaways from KANZHUN’s Q2 growth, record margins and shareholder returns

• Q2 revenue increased 14.1% to RMB2.40 billion as paid enterprise customers grew 10.8%, showing continued monetization of BOSS Zhipin’s expanding recruitment network.
• Average monthly active users reached a record 70.2 million, strengthening the network effect between job seekers and employers that underpins KANZHUN’s competitive position.
• Operating income jumped 32.6% to RMB863.2 million as costs grew only 6.1%, demonstrating significant operating leverage despite elevated World Cup marketing spending.
• Adjusted operating margin reached approximately 43.8%, giving KANZHUN substantial profitability while the company continues investing in AI-driven recruitment and matching tools.
• Reported net income surged 173% to RMB1.94 billion, but a RMB1.47 billion investment gain means the statutory growth rate materially overstates underlying earnings acceleration.
• Adjusted net income rose a more representative 9.4% to RMB1.03 billion, confirming positive core earnings growth without relying on the unusually large investment revaluation.
• KANZHUN declared an approximately US$230 million annual dividend after completing more than US$300 million of buybacks, sharply increasing direct shareholder returns.
• Cash and short-term financial assets totaled about US$2.77 billion, giving the company substantial flexibility to fund dividends, repurchases, AI investment and future growth.
• Q3 revenue guidance implies 11.4% to 15.6% growth, making sustained enterprise-customer expansion and AI commercialization the main operating catalysts for the next quarter.
• KANZHUN shares fell roughly 5% after the results, indicating investors remain cautious despite stronger operations, record margins and a significantly expanded capital-return program.