Boss Zhipin: Not Surprising, but Still Strong

$BOSS ZHIPIN-W(02076.HK) $Kanzhun(BZ.US) The third quarter report has been released, and the overall performance basically meets expectations. It's still the same BOSS—despite the pressure, the company's ability to outperform Beta is still evident.

Specifically:

1. Recovery in billings expectations: Third-quarter billings grew by 14% year-on-year, showing a significant recovery compared to the previous quarter. Although this was within expectations, last year's base was also low. However, in a relatively high-pressure environment, being able to withstand is already commendable.

2. Revenue guidance is average: The company's revenue guidance for the fourth quarter implies a growth rate in the range of 12.4% to 13.5%, slightly improving quarter-on-quarter, in line with sell-side expectations. However, this is also driven by a decrease in the base, which may not satisfy optimistic funds tracking high-frequency data.

3. Net increase in B-end customer numbers: The growth in billings mainly stems from a stable net increase in customer numbers. In the third quarter, paid enterprise customers increased by 300,000 quarter-on-quarter, higher than the previous quarter. However, the calculated average customer price declined year-on-year, and combined with Sensor Tower's tracking of iOS data (19% year-on-year growth), we speculate that this mainly involves incremental growth from small and medium-sized enterprises.

It is worth mentioning that if the trend shown by ST data continues, the recovery of small and medium-sized enterprises in the fourth quarter is currently accelerating.

4. Continued growth in C-end monthly active users: The third quarter saw a total of 63.8 million monthly active users, with a net increase of 3.2 million quarter-on-quarter, slightly below expectations. However, within the industry, BOSS Zhipin's market share is still increasing.

5. Maintaining cost control and efficiency improvement: The final core operating profit was 690 million, exceeding the market expectation of 610 million, with a profit margin of 32%, an increase of 1 percentage point quarter-on-quarter. As in the previous two quarters, this mainly stems from a significant decline in sales and R&D expenses. This strict cost control trend is the main theme of BOSS Zhipin's internal operations this year.

6. Comparison of core performance indicators with market consensus expectations

Dolphin Research's View

Overall, the third-quarter performance, while not surprising, is still decent. The competitive advantage remains solid, and internal efficiency continues to improve, making it a small niche worth long-term tracking.

Despite the palpable pressure from the broader environment, BOSS Zhipin's data shows signs of bottoming out and recovery among more flexible small and medium-sized enterprises. During the conference call, the company mentioned that both B-end and C-end daily active users grew simultaneously for the first time in the third quarter, and since the beginning of the year, the renewal rates of enterprise customers of different sizes have been rising.

This trend is partly influenced by environmental factors, such as the relatively higher vitality of enterprises in new demand areas like manufacturing, blue-collar, AI, and automotive. However, Dolphin Research believes that BOSS Zhipin's competitive advantage is also an important factor driving the "platform data recovery"—its MAU market share continues to increase, and overseas penetration is also advancing.

In terms of valuation, last quarter Dolphin Research slightly raised this year's Non-GAAP operating profit to the range of 3.2 to 3.5 billion. Based on the progress of the third-quarter performance, the possibility of reaching the upper limit has increased. Therefore, switching to next year's valuation, if growth continues at a rate of 15-20% (implying revenue growth of 10-15% and profit margin improvement), then at 18x EV/EBIT, the neutral valuation is around 11 billion, with about 10% space from yesterday's closing. However, there are many recent systemic disturbances, so it is recommended to keep a safety cushion according to one's risk preference.

Detailed Interpretation Below

1. Continued increase in user-end share

In the third quarter, BOSS Zhipin's monthly active users increased by 3.2 million, reaching 63.8 million. Although below market expectations, Dolphin Research believes that changes in market share are more important. According to Questmobile data, BOSS Zhipin has consistently maintained a user scale advantage among leading platforms, reflected in a continuous increase in share proportion.

2. Continued recovery in enterprise-end billings

Third-quarter total revenue was 2.16 billion, up 13% year-on-year, and also increased quarter-on-quarter. Among them, ToB-end online recruitment service revenue was 2.15 billion, up 13.6% year-on-year. Other revenue was 1.644 billion, down 27% year-on-year, mainly due to optimization of value-added services for job seekers, maintaining ecosystem stickiness by providing more free services. Therefore, from this perspective, enterprise-end recruitment revenue actually slightly exceeded market expectations.

Management's guidance for next quarter's total revenue is in the range of 2.05 to 2.07 billion, with a year-on-year growth rate of 12.4% to 13.5%, reflecting growth recovery amid a slowing base.

(1) From BOSS Zhipin's perspective: Accelerated recovery of small and medium-sized enterprises

Third-quarter paid enterprise accounts numbered 6.8 million, with an increase of 300,000 quarter-on-quarter, but the implied average enterprise payment amount shrank by 1.2% year-on-year, indicating a more noticeable recovery speed among small and medium-sized enterprises.

Third-quarter calculated billings growth rebounded to 14% on a low base, but also slightly increased quarter-on-quarter. Sensor Tower data shows BOSS Zhipin's iOS end grew by 19% in the third quarter, and billings accelerated growth up to the current fourth quarter.

(2) From the industry's perspective: Still volatile

From macro indicators (employment indicators, enterprise forward-looking indicators, PMI, etc.), the overall environment is expected to remain volatile for a while, with continued attention to policy releases.

3. Continued internal efficiency improvement

In the third quarter, BOSS Zhipin's gross margin remained stable at 85.8% quarter-on-quarter, improving by 2 percentage points year-on-year. Core business operating profit (revenue-cost-sales expenses-R&D expenses-administrative expenses) reached 690 million, exceeding expectations, with a profit margin of 32%, significantly optimized by 15 percentage points compared to last year's 17%.

Expense optimization points remain in sales and R&D expenses, mainly reflected in reduced marketing spending, team size optimization, and SBC expenses down 21% year-on-year, accounting for 10% of revenue, already down to mature company levels.

Finally, Non-GAAP operating profit excluding stock-based compensation was 900 million, with a profit margin of 41.8%, consistent with the previous quarter, already reaching the company's long-term profit margin target. Although we believe there is still room for improvement, future growth will rely more on the revenue side.

Dolphin Research "BOSS Zhipin" Articles:

Earnings Season

August 21, 2025 Conference Call "Boss Zhipin (Minutes): Recruitment demand on the platform has warmed up"

August 21, 2025 Earnings Review "BOSS Zhipin: The environment remains volatile, but the small and beautiful essence remains unchanged"

May 22, 2025 Conference Call "BOSS Zhipin (Minutes): Second-quarter growth expected to bottom out, recovery trend evident"

May 22, 2025 Earnings Review "BOSS Zhipin: The small leader firmly holds the "Boss" position, but the cycle is too tough"

March 11, 2025 Conference Call "BOSS Zhipin (Minutes): Signs of recovery after the Spring Festival"

March 11, 2025 Earnings Review "BOSS Zhipin: The headwind is fierce, but the "small and beautiful" essence remains"

December 11, 2024 Conference Call "BOSS Zhipin: Calculating carefully to achieve goals (3Q24 Conference Call Minutes)"

December 11, 2024 Earnings Review "BOSS Zhipin: Not giving up, despite the fierce headwind"

August 28, 2024 Conference Call "BOSS Zhipin: Not engaging in price wars, focusing resources on advantageous areas"

August 28, 2024 Earnings Review "BOSS Zhipin: Finally, even "small and beautiful" can't withstand Beta's "big hammer""