Kanzhun Ltd.'s AI-Driven Margin Expansion and Operating Leverage: A Structural Transformation of Profitability

In the high-stakes arena of online recruitment, Kanzhun Ltd. (BZ) has emerged as a standout performer, leveraging artificial intelligence to not only boost margins but to fundamentally reshape its competitive landscape. The company's Q3 2025 results, released on November 18, 2025, paint a compelling picture of a business that is no longer just surviving in a crowded market-it's dominating it through a combination of AI-driven efficiency and strategic market expansion.

The AI Catalyst: From Cost Cutting to Structural Advantage

Kanzhun's financial performance in Q3 2025 is nothing short of extraordinary. Revenue surged 13.2% year-on-year to RMB2.16 billion, while net profit margins hit a record 35.8%, a 11.5 percentage point improvement from the prior year. This margin expansion wasn't a one-off; it was driven by a structural shift. The company slashed sales and marketing expenses by 25% and R&D costs by 12.1%, all while growing its paid enterprise customer base by 13.3% to 6.8 million. How? By embedding AI into every layer of its operations.

AI tools like AI Quick Hiring and AI Interview have revolutionized how enterprises and job seekers interact on the BOSS Zhipin platform. These tools reduce hiring cycles by up to 25%, allowing companies to fill roles faster while minimizing the need for costly human intervention. For Kanzhun, this means lower customer acquisition costs and higher retention. As one analyst noted, "AI isn't just a feature here-it's a structural cost advantage that's hard to replicate".

Building a Durable Moat: Network Effects in Underserved Markets
What truly sets Kanzhun apart is its ability to turn AI into a network effect. By focusing on underserved segments-blue-collar workers, small and medium enterprises (SMEs), and Tier 3+ cities-the company has created a self-reinforcing ecosystem. Blue-collar recruitment, for instance, now contributes the fastest-growing segment of Kanzhun's revenue. In Q2 2025, enterprise customers with under 20 employees accounted for nearly 20% of total revenue.

The Flywheel of Growth: Cash, Efficiency, and Reinvestment
Kanzhun's financial strength is equally impressive. With RMB19.2 billion in cash reserves as of September 30, 2025, the company has the firepower to reinvest in AI while maintaining its aggressive cost discipline. This flywheel-where AI drives efficiency, efficiency fuels profitability, and profitability funds further innovation-is a rare and powerful dynamic.

Critically, Kanzhun's AI-driven cost reductions haven't come at the expense of user experience. The platform added 40 million verified users in the first ten months of 2025 alone, achieving this growth while reducing marketing spend. This is a testament to the stickiness of its AI-enhanced offerings. As one investor put it, "They're getting more users with less money-how's that not a winner?".

Conclusion: A Model for the AI Era
Kanzhun's story is more than a case study in margin expansion-it's a blueprint for how AI can transform a business's DNA. By marrying cutting-edge technology with a focus on overlooked markets, the company has created a competitive moat that's both wide and deep. For investors, the message is clear: Kanzhun isn't just riding the AI wave; it's shaping it.