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spk01: ladies and gentlemen thank you for standing by and welcome to the conjune limited third quarter 2022 financial results conference call at this time all participants are in listen only mode after the speaker's presentation there will be a q a session today's conference is being recorded At this time, I would like to turn the conference over to Ms. Wenbei Wang, Head of Investor Relations. Please go ahead, ma'am.
spk09: Thank you, operator. Good evening and good morning, everyone. Welcome to our third quarter 2022 earnings conference call. Joining me today are our founder, chairman and CEO, Mr. Jonathan Peng Shao, and our director and CFO, Mr. Phil Yu Zhang. Before we start, we would like to remind you that today's discussion may contain forward-looking statements which are based on management's current expectations and observations that involve known and unknown risks, uncertainties, and other factors may not be under the company's control, which may cause actual results, performance, or achievements of the company to be materially different. The accounting caution is not to place undue reliance on forward-looking statements and do not undertake any obligation to update this forward-looking information, except as required by law. During today's call, management will also discuss certain non-GAAP financial measures for comparison purpose only. For a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results, please see the earnings release issued earlier today. In addition, a webcast replay of this conference call will be available on our website at ir.jping.com. With that, I will now turn the call to Jonathan, our founder, chairman, and CEO.
spk05: Hello, everyone. Welcome to our company's 3rd quarter of 2022. I represent all the employees of the company. I would like to express our sincere gratitude to our users, investors, and friends for your ongoing trust and support. Sanjido Company achieved a revenue of RMB11.8 billion, which is 6% higher than before.
spk09: First, I would like to share with you our performance for the third quarter. In this quarter, we recorded gap revenue of RMB1.18 billion, with a quarter-on-quarter growth of 6%.
spk05: The cash revenue calculated is 12.4 billion, which is 26.4% higher than before.
spk09: Our calculated cash billings reached RMB 1.24 billion, a sequential increase of 26.4%.
spk05: Thanks to the continuous improvement of the company's brand influence and market investment efficiency, we have also achieved a relatively good profit level while rapidly growing users. After three seasons of discounting equity incentive fees,
spk09: Benefiting from our enhanced brand recognition and continuous improvement in marketing efficiency, we maintain the relative growth in our user base while further improving our profit margin to attain a solid level. Our adjusted net income for the third quarter, which excludes share based on compensation expenses, achieved a quarter-on-quarter growth of 55%, reaching RMB 377 million. In this quarter, our user base has been increasing rapidly, As of September 30, the newly verified users achieved 14 million. Verified users is a measure we pay more attention to in our daily operation, referring to job seekers who posted at least one job expectation or enterprise users who posted at least one job position.
spk05: Last quarter, we communicated with everyone that by August 15, the total number of new and complete users in this quarter is about 8 million.
spk09: compared with the accumulated more than 8 million newly verified users as of August 15, which we discussed in our last earnings call.
spk05: And then we continued.
spk09: Our user growth at a sustainable and robust momentum within this quarter. Our average MAU for this quarter reached 32.4 million, hit a record high.
spk05: In the past year, the company has continuously improved its technology and user service capabilities. These efforts have made an obvious return. Look at the numbers.
spk09: The company's efforts on constantly improving its technology and user service capability in the past year have started to bear fruit. Let's take a look at some numbers.
spk05: Let's take a look at some numbers.
spk09: First, the average monthly number of successful mutual communication between job seekers and enterprise users have hit a record high in this quarter, representing a more than 20% year-on-year growth rate, and our MAU grew by 12.5% year-on-year.
spk05: Our DAU and MAU are still stable.
spk09: The day-to-MU ratio remains stable.
spk05: Another number is that each individual user's achievement, either a job seeker or an enterprise user, experienced a steady growth. Overall, my impression of the third quarter is that we experienced a reboot in both users and revenue growth. There are two key factors.
spk09: One is that compared to the third quarter, On one hand, compared to the second quarter, many cities started to recover from the COVID impact.
spk05: And another factor is that we can start to acquire new users by end of June. There are two data that we can look at in the concept of a reboot. First one is our calculated cash feelings achieved a 26.4 increase compared to the second quarter. And the next data is our average MAU in the third quarter recorded a sequential growth of over 20%.
spk09: The performance of blue-collar and gold-collar users was more gratifying.
spk05: The revenue of urban service industry, sorry, the cash billing of the urban service industry for the third quarter recorded a 28% year-on-year growth. And the average GAU of our gold-collar workers for this quarter also increased by approximately 30% year-over-year.
spk09: The safety operation has always been the most essential cornerstone driving the sustainable development of our company.
spk05: In the third quarter, we continue to improve our safety capabilities in three aspects.
spk09: The first of which is technical security. In September, we were awarded by the China Academy of Information and Communication Technology the first data security management capability certification in the online equipment industry.
spk05: And the second is user security. As of October 31st, our verification team has finished a few visits and inspections to accumulate more than 500,000 companies. And the third one is about the operational security. We submitted a due primary listing application in Hong Kong in early October, aiming to ensure the stability of the capital market conditions. For the last quarter up to now, since the beginning of September, the resurgence of COVID-19 has naturally impacted our business and slowed down the enterprise recruitment demand.
spk09: However, we have observed that recruiting activities of enterprises will recover quickly once the resurgence is effectively controlled, evidenced by our experience in July and August.
spk05: We have also seen some opportunities such as industry undergo structural changes.
spk09: For example, internet and network-related positions, including technology, products, design, and operations, have become infrastructure roles in driving digital transformation for traditional industries.
spk05: For example, high-end manufacturing has grown rapidly, representing new energy, vehicles, and semiconductors. In September, the same position has grown by more than 40%.
spk09: The high-end manufacturing industries, such as new energy, automobiles, and semiconductors, have been growing fast. And the active job positions in September increased by more than 40% year-over-year.
spk05: So, even though there are short-term fluctuations, we are still full of confidence in the long-term growth of BOSS Stream's high-efficiency mode.
spk09: Despite the short-term turbulence, we are still quite confident in our long-term growth supported by our high-efficient business model.
spk05: The fundamental reason is that our model is more efficient and suitable for people from different regions and industries. In a one-line city,
spk09: The core strength lies in the fact that our model is extremely efficient in the areas of job hunting and recruitment and is suitable for people in different regions and industries. While our service continues to grow in first tier cities and among white collar workers, there is still huge growth potential in lower tier cities and with blue collar users.
spk06: We are the official sponsor of Qatar Air World Cup Asia-Pacific region in 2022.
spk05: With its high attention and wide coverage, we also expand the brand influence of the company to better influence the human rights of South America and the human rights of the lower cities.
spk09: We are the official Asia-Pacific region sponsor of the 2022 Qatar World Cup. We can further and effectively extend our brand awareness through this high-profile and widely-covered event, especially among those blue-collar and lower-tier cities.
spk06: At one stage, we can see that user growth is something
spk05: For a certain historical period, user growth is always the primary driver for our business' long-term and sustainable development.
spk09: Our platform has a robust scale effect and can support more accurate matching within a larger population.
spk05: We are still at the stage of focusing on achieving rapid user growth.
spk09: We expect to obtain at least an additional 100 million users in the next three years. We are quite confident of this and believe that it will be the most effective driver for our business development.
spk05: There is always a cycle in the economy, but an enterprise relies on sincerity, hard work, and scientific technology to serve its users. This does not exist in a cycle.
spk09: There are always cycles in the economy. However, there are no cycles in an enterprise effort to service their customers with sincerity and agility, leverage of science and technology.
spk05: This is what we have been doing for a long time, and we will continue to do so in the next three seasons.
spk09: Success rests on always staying true to our core values and original aspirations. Doing the right thing in good faith at all times is what we have been doing. We have done like this in the third quarter and we'll keep doing so moving forward.
spk05: He said, I will turn to our CFO for the review of our financial. Thank you.
spk04: Thanks, Jonathan. Hello, everyone. Thank you for joining our earnings call today. Before I begin, please note that all amounts in RMB and all comparisons are on a year-on-year basis and otherwise dated. In this quarter, our business began to recover backed by a strong user growth in the third quarter. Our calculated cash billions recorded a fast rebound with over 26% sequential growth to RMB 1.24 billion. Our total revenues being dragged down by the impacted performance in the previous quarters due to new user registration suspension and the COVID resurgence in second quarter recorded of 6% year-over-year, 6% quarter-over-quarter growth to RMB 1.18 billion. The number of total paid enterprise customers in trading 12 months ended September 30th, slightly decreased to 3.73 million, down 1% from 3.77 million of June 30th. But quality-wise, the number of total paid enterprise customers in the third quarter increased by 15% compared to the second quarter, mainly due to the increase in small-sized accounts driven by our active enterprise user growth in the relative mild recovering macro conditions. Revenues from small-sized accounts also contributed a higher sequential recovery compared to other accounts, which proved that this SME segment of business customers that we particularly specialized in are more resilient in the economy. And our customer base, mixed with various sized companies, including both large accounts and small-medium sized accounts, are in a much balanced and healthy structure. It should help us absorb more impact when facing economic downturns, and it can also let us benefit more and faster from the recovery of a macro environment. Moving on to the cost side, total operating costs and expenses for the third quarter increased by 16% year over year to RMB 1.04 billion. Excluding share based compensation, total operating costs and expenses increased by 9% year over year to RMB 879 million in the quarter. Cost of revenues increased by 30% year-over-year to RMB 201 million, primarily driven by increased server and bandwidth costs in accordance with growing user traffic and increased employee-related expenses as we continue to strengthen our security-related personnel. Sales and marketing expenses decreased by 5% year-over-year to RMB 397 million, mainly due to decrease in marketing expenses as a result of our improved brand recognition and marketing efficiency. R&D expenses increased by 39% year-over-year to RMB 219 million due to increased technology-related staff. G&A expenses increased by 27% to RMB 156 million, primarily due to increased headcount and increased share-based compensation expenses. Our overall human related costs remain stable compared to last quarter and we have enhanced the cost control under current market conditions Excluding share-based compensation expenses, our adjusted net income for the quarter was RMB $377 million, with an adjusted net margin of about 32%, which rebounded back to the historical record in the third quarter last year, further demonstrating our high-quality and sustainable operating leverage and profitability. Net cash generated from operating activities was RMB 367 million for the quarter, representing a 36% year-on-year growth. As of September 30, 2022, our cash equivalent and short-term investment increased to RMB 13.9 billion, which would position us well for the future growth. Looking forward at the near-term resurgence of COVID cases are still at a high level across China, which are affecting the recruiting demand of enterprise users. We expect our total revenues to be between RMB 1.05 billion and RMB 1.09 million in the fourth quarter. with a slight year-on-year decrease of 3.8% to 0%. Given that there's still the whole month of December before the quarter end, some level of uncertainties are still ahead. However, as Jonathan just mentioned, and as you have witnessed from our third quarter results, user growth is the key to our business. Our market leading position and competitiveness got further strengthened since the resumption of user registration in recent months. And our users are still accumulating fast. And the online recruitment market in China is proved to be with good rules to work. With the effectiveness of our model being still intact, we are confident that we can ride through the current headwind and continue our secular growth in China's human resource technology market. That concludes our prepared remarks. Now we would like to answer questions. Operator, please go ahead.
spk01: Thank you. To ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced. Please stand by while we compile the Q&A queue. Our first question comes from the line of Eddie Wang from Morgan Stanley. Please go ahead. Your line is open.
spk03: Thank you for accepting my question. I have two questions. The first one is that President Zhao also mentioned that in July and August, the behavior of corporate recruitment has risen relatively quickly, during a relatively stable period of the epidemic. I would like to ask, if we expect that next year, after the Spring Festival, in February and March, the entire reopening expectation will gradually begin to stabilize, The second question is about if next year's reopening is a slow start, because President Zhao also mentioned that we may have to have another 100 million users in the next three years. And we also consider that other platforms will also have some corresponding measures to get customers. What is the level of our next year's marketing or market costs, including the cost of getting customers? Do we have a plan? What is the impact of this on our entire margin? I have these two questions, and then I will translate them myself. Thank you, management, for taking my question. I have two questions. First is, if we consider that the reopening process to gradually happen in the early spring, so how do you think the recruiting activities to picking up quickly, fast, or do you expect that it will take maybe one or two months lead time before these enterprise users to post their jobs? The second question is, if we expect that the reopening to gradually happen in next year, so what's our expectation in terms of the sales marketing and customer acquisition cost? Because we believe that some of the other online recruitment platform will also spend some money to acquire new customers. Considering all this competition and considering that we also have a quite ambitious, you know, the new use acquisition plan in the next three years, how do you think it's best level and what kind of the margin should we expect for the 2023? Thank you.
spk05: Okay, thank you for your question. Your first question is about once there is a reopening, In the past two or three years, I have observed that most of the companies recover very quickly. However, there are some exceptions. One exception is a very large company. Thank you for your question.
spk09: Regarding your first question about reopening, after reopening, what will be the recovery speed for the enterprise equipment? So based on my observations for the past two years, the majority of enterprises can have a very quick recovery, with some very limited exceptions. such as very huge mega enterprises, because they need to take some time to re-adject their expectations for their growth, for their revenue, and also for their expenses, and for the marketing and the human resource and headcount, et cetera. But for SMEs, they have a relatively much faster recovery.
spk05: And then about your second question, Next year, we plan on marketing. In fact, our efficiency in B2 marketing will not decrease. So according to the plan, in the next three years, we have a plan to get 100 million users. If everything goes well next year, we want to get about 40 million users. In this way, from the perspective of digital marketing, it is a normal cost. It is not an excessive cost. In addition, from the perspective of branding, I think everyone knows that there is a big world cup this year. Next year, we have not yet seen a very big opportunity for event marketing. So I think it will also be a normal level of branding. And regarding your second question about our plan for the marketing of next year.
spk09: marketing efficiency for the digital market will not decrease. As I just mentioned, we are planning for over 100 million new users in the next three years. If everything goes normal, we are expecting around 14 million new users next year. And that's a normal circumstance, but we will not pay extra money for that. And in terms of branding, But this year, you have already know that we have sponsored the World Cup. And for next year, we have not witnessed any major matching event which we can sponsor or do brand advertising for, so it also will be a normal year. So my observation is that the marketing expense as a percentage of revenue for next year will remain stable and it will not affect our market in a negative way.
spk04: I'd like to add a little bit about when the reopening is there. First of all, our cash revenue would like to gear up, and then our accounting revenue, because we need some time to book the revenue. then we would like to see our accounting revenue gradually catch up those cash collections with the reopening. So there is a delay effect. So please remember that. So at the beginning of the recovery, we should pay more attention to the cash revenue, and then our accounting revenue can gradually catch up.
spk01: We'll now move on to our next question. Please stand by. Our next question comes from the line of Timothy Zhao from Goldman Sachs. Please go ahead. Your line is open.
spk02: Hello, Mr. Zhao and Ms. Wen. First of all, congratulations on the company's very strong 3D performance. I have two questions here. The first question I would like to ask is because we know that in December, many companies are going to make plans for next year and the 1,000-year plan. I don't know if the company can share some colors about the current situation of the company's 1,000-year plan and contract. How many companies are planning to do some upsells? The second one is about our World Cup sponsorship. I'm interested in how we think about the rationale behind the World Cup sponsorship and how we measure the ROI behind this branding. In addition, in this sponsorship, we also have our team, including Liepin and 58, also sponsored at the same time. How do we consider the competition and our differences with them? I'll translate it quickly. Thank you, Benjamin, for taking my question. I have two questions. First is considering that December is the month when many big enterprises sign annual contracts, renew contracts with us. Could Benjamin share some color on what kind of status that we see across the big contracts and what percentage of the enterprises may have some upsetting potential? And secondly, it's about the branding activities around the World Cup. Could Madman share the rationale and how should we think about the ROI behind these branding activities? And especially considering there are some other recruitment platforms also do similar branding activities during the World Cup and how should we compete with them and what is our differentiation? Thank you.
spk05: Thank you for your question. Your first question is about income. We have been in the private sector for two months. So looking at the situation, The number of clients signed at the end of the year did not disappear among the big clients. Overall, it's pretty good. In the past two months, the number of clients to be signed by the end of the year is higher than 100% in terms of contract amount and contract rate. Thank you for your question. Regarding your first question about our
spk09: refining of any contract at the end of the year. So it has already been two months past for the fourth quarter. And what we have observed in terms of the refining of key accounts, we are happy to see that basically we have seen very, very seldom customers who have stopped refining these apps. So it is basically quite good. And in terms of the upsell or dollar amount, The net retention rate of all of our key accounts still continues to be about 100%. It is not the best of our historical results, but we are still satisfying under current circumstances.
spk05: And then your second question is about us and World Cup. First of all, our company is a very young company, an average of 20-something years old. Football is something that everyone likes. The other day, the news said that there are 8 billion people on the earth. To be very honest, there are a few things that are more important from the perspective of human civilization. I think football is one of them. And about your second question, for our sponsorship of the World Cup. Because we are a very young company, the average age of our employees is around mid-20s.
spk09: So football is a sport everybody likes. You have probably seen from the news several days ago that the population on Earth has reached more than 8 billion. And I believe that from a perspective of human civilization, if a very few items will be left in football, it definitely should be one of them. It's a very good thing, and we are happy to support FIFA.
spk05: Based on our support for CIFAR, we have made ads for TV stations and other channels. I think this is a very good deal. Why do I say that? The 2018 World Cup data has been released. About 650 million Chinese people have watched the World Cup. Compared to the Canadian world cup and the Russian world cup, I think the data hasn't come out yet, but I'm confident that no matter from hell or from time difference, for various reasons and other reasons, I think there will be more people watching. I think it will be more than 700 million, 700 to 800 million times. This is the first account I calculated.
spk09: And on top of supporting CIFAM, the first thing we consider is that we think it's a good business for doing all those matching campaigns and advertisements on CCTV and other channels. So in 2018, the Russia World Cup, more than 650 million Chinese audience have watched the event. And for the Qatar World Cup this year, we don't have that number now, but I believe the audience base will be larger, should be more than 700 to 800 million. If you watch four or five matches by yourself, it's probably a 41-person-show.
spk05: And we have a higher advertising rating for each match. And if we assume each audience can watch like four to five games during the whole World Cup event, then there will be more than four billion people and times who have watched our advertisement.
spk09: And you know that our advertisement is quite frequent. between the banks and so the cost for one person to watch our branding is very, very cheap.
spk05: So, whether it's the overall scale of the crowd, or the age of the people who watch the football, and other attributes, or the cost per person, in general, is a very cost-effective business.
spk09: So it's a good business. If you consider the vast audience base, the ages of people who watch the games and the cost, it's a quite good business.
spk05: And then you also noticed that we have a few colleagues who are also investing in the world of advertising. And I think this is a good thing.
spk09: And you notice that several of our peers have also do the same thing, but I believe this is a good thing. So we can give our audience, our customers more choice. They can choose what kind of platform that fits them best. And that's my answer to your question. Thank you.
spk04: I have five comments. So we also consider that red advertisement more like an investment rather than, you know, cost or expense item because of the return is better because it's more effective than traffic acquisition cost and it's long-lasting. So that's probably the very short answer to your question as well.
spk02: Thank you. That's very helpful.
spk09: Thank you, Timothy. Okay, we can move on to the next question.
spk01: Thank you. We'll now move on to our next question. Please stand by. Our next question comes from the line of Wei Zhong from UBS. Please go ahead. Your line is open.
spk07: Thank you for accepting my question. I also have two follow-up questions. First of all, I would like to ask about the first quarter of next year. Because the first quarter is usually the beginning of the recruitment industry. And I just mentioned that the fourth quarter has already invested in the World Cup. It feels a little bit pre-prepared. And then next year's Spring Festival is relatively early. So I would like to ask, in the first quarter of next year, can we talk about the specific plans in terms of customers and marketing? And then, in this quarter, for example, are there any goals in terms of user growth? What kind of impact will it have on the profit rate in the first quarter of next year? The second question is that the management team mentioned that the clients of small and medium-sized enterprises seem to be more flexible when it comes to re-opening. And the client's recruitment budget seems to be more stable. Thanks management for taking my questions. I have two questions. First is that if we look at first quarter next year, and normally it's a strong seasonality for recruitment market. So in addition to the World Cup sponsorship that we mentioned already, could management elaborate your plans in user acquisition, marketing and promotions in the first quarter? Do we have a target for user growth in this peak season? And also, how should we think about the margin level in the first quarter? My second question is, It seems the large enterprise customers may have relatively more resilient recruitment budget compared to the SMEs, given the uncertainties in the macro environment. So just wondering, would the company consider to maybe shift our strategy or focus towards the KA customer side, given this backdrop? And also, what's your latest thoughts and progress in the mid- to high-end recruitment segment? Thank you.
spk05: Thank you for your question. The end of this year's World Cup campaign will be on December 18th, which is CCTV. Next year's Spring Festival will be on January 22nd. So there will be five weeks in the middle. On the 8th of January, it's time to go to work, which is January 29th and 30th. So, in fact, at that time, it was the traditional work after the Spring Festival. If you calculate it this way, the brand promotion campaign of the World Cup and the brand promotion campaign after the Spring Festival are only six weeks apart. I can think of it as connected.
spk09: Thank you for your question about your first question on marketing plan for the first quarter next year. So our World Cup campaign will end on December 18th. And the spring festival starts on January 22nd next year. And there are only five weeks in between. And by the end of January, people will go back to work, where the traditional recruitment peak season will start. So there are only six weeks in between the World Cup campaign and the Spring Festival. So I can assume these two events are fairly connected.
spk05: And given the strength and the frequency and the intensity of our marketing campaign of the World Cup,
spk09: We strongly believe that this campaign site can continue to be successful.
spk05: Therefore, after the Spring Festival, the marketing and marketing work of recruiting employees and forgetting to promote the brand will not be an extra cost. Instead, it will benefit Shifei's investment.
spk09: So, our marketing plan for the big season after Spring Festival will not require extra money. So, on the other hand, you will benefit from the World Cup campaign.
spk05: This is a part of our strategy interpretation. Another thing that you all pay attention to is the re-opening. I think we also keep a high level of attention. In terms of marketing, And that's part of our strategy. Another part is that for the reopening, everybody is concerned. We are also highly focused on that.
spk09: So our marketing plan efficiency and the intensity of our marketing input will be highly connected to the reopening process. So currently we will stay flexible and focused on the progress.
spk05: Now I have explained my strategy and based on my attention to reopening, I can be relatively sure that we will not do
spk09: And on top of our strategy and the focus on the reopening, currently I'm thinking that we will not do some marketing events which will have huge negative impact on marketing in the quarter next year.
spk05: The second question is about the relationship between us and our major K&A clients. I think it's like this. We are not ready to use more resources to reduce our attention to SMEs and strengthen our attention to K&A clients. We are not doing this. But when we have the opportunity to strengthen our overall resources, including our technical resources and service resources, we will also strengthen the care and service of our customers.
spk09: Regarding your second question about our relationship with our T-account customers, currently we do not have any plan to apply our resources towards the T-accounts apart from the SMEs. But I can assure you that whenever we would like to strengthen our total resources, we will also increase that for our T-account customers.
spk05: In a very long time, a huge number of SMEs in China need us to provide better services. We have been insisting on this for a very long time.
spk09: In a quite long period of time, the massive huge number of SME customers in China who demand better service. And that's what we are doing. We are increasing on better service for all of our customers, including especially SMEs. And that's my answer to your question.
spk04: To the market statistics, in China, more than 90% of the enterprises are small, medium-sized companies. So basically, our our own company composition is also, you know, in the same pattern. So we have more than 80% of our, you know, enterprise customers or companies. They are the small, medium-sized enterprises. So they are the very important components to our business. And I just mentioned, you know, compared with the, you know, peers, we are more specialized in this area. So we definitely will you know, serve them well and try to provide them with better service. So, but meanwhile, we definitely will also pay more attention to KA, you know, accounts. So we have a much balanced, you know, structure, as just mentioned as well.
spk07: Got it. Thank you, management.
spk09: Okay. Thanks, Yongwei.
spk01: Now we move on to our next question. Thank you. Please stand by. Our next question comes from the line of Natalie Wu from Haitong International. Please go ahead. Your line is open.
spk08: Good evening. Thank you for answering my question. I have two questions. The first one is about the end of the COVID-19 pandemic. The second one is about the end of the pandemic. The second one is about the end of the pandemic. I would like to ask about the change in the number of active businesses and the rate of return. What is the situation from the point of view of Tongbi and Huangbi? And how much of this decline is due to the epidemic? How much is it because of some other, such as some of the company's active psychological behavior at the beginning of this year? And some of this natural loss, such a situation. Let me quickly translate myself. So, good evening. Thanks for taking my question. I have two. First is regarding the paid enterprise user number. We see that this number has a bit decreased again to 3.7 million this quarter. Just wondering if management can share with us the active enterprise user number this quarter, and how did that change on a year-on-year, quarter-on-quarter basis? Or how should we see the paying conversion ratio change how much of that is related with the pandemic and how much is related with the initiative cleanup action by the company and um how much is related with the natural churn and um second questions we related with the blue blue caller um just wondering can management help us understand how much revenue currently comes from the blue collar business and the related MAU and paid enterprise numbers, some measures like that. And how should we see the future growth for that business? And also, under the theme of re-open, how should we see the growth rate if the blue collar business could outgrow the white collar business? in the re-opening. Thank you.
spk04: Okay, thank you. So I'll answer the paid enterprise customer question first. So the 3.73 million, you know, that number was 12 months paid enterprise customers. So that number, you know, reduced mainly because in second quarter, the COVID impact, you know, reduced our paid enterprise customers in that quarter. And starting from third quarter, we see, you know, quick recovery of, you know, quarter over quarter sequential, you know, paid enterprise customer growth. So, but because of its 12 months, so it's, you know, the second quarter, it has some impact to our, you know, the total paid enterprise customers, the number. But if you look at the quarter-over-quarter, if you look at all the paid enterprise customer in third quarter versus the paid customer in second quarter, we see a very clear quarter-over-quarter growth. And in terms of the active enterprise customers, that number, we see starting from June, July, and August, we see a gradual recovery and compared with the second quarter, it's a pretty good sign of business booming. But starting from September, because of the COVID measures, the COVID control measures, we see some impact to the active enterprise customer's number. So the similar things we also witnessed in the early first quarter this year. In terms of the paying ratio, paying ratio is I think is quite stable in second quarter, in third quarter, and even in October and November. Overall, the paying ratio among the active enterprise customers is quite stable. And the R pool is also very stable. So the impact is mainly with the total active enterprise customers, which is highly related to the COVID control measure. And in July and August, when the COVID measure is not that stringent, we see recovery. So we believe in upcoming months, once the COVID is gone, we definitely will see a good comeback for the active enterprise customers. And so this is the first question. Regarding the blue collar, I can offer you with some data. In terms of the users of blue collar, at this moment, in terms of the MAU, it accounts for roughly 30% of our total users. And in terms of the revenue contribution, blue collar accounts for roughly 26% of our debt revenue in third quarter.
spk08: Got it, thank you.
spk05: So we can see that it's growing very fast. In the future, we are confident that in the next three years, we will get 100 million new users, which means that we will double the number of our existing perfect users. In this case, I think today, more than two-thirds of the users will be blue-collar users, as we traditionally call them. I think this is a trend. I would like to add something to Yu Ge's answer.
spk09: And on top of field sponsors, I would like to submit some data. So for logistic industry, we have seen a 20% year-on-year growth in terms of cash billing. And for urban service industry, a 28% year-on-year growth, where our total cash billing compared to last year only grew by 1%. So you can see the blue-collar sector has experienced a very fast increase. And we have quite good confidence that we will acquire additional 100 million users in the upcoming three years, which is double the current total user base. And I believe around two-thirds will be what we call traditional blue-collar workers, including logistics, including urban service and manufacturing, and et cetera. And that's all for my input.
spk04: Also, one more thing to mention is that we resumed the user growth from the end of June. And the middle of the year normally is not the peak season for blue collar to find jobs. Normally, seasonality-wise, it's spring after the spring festival. That is the peak season. for the blue collar to come out to find jobs. So in upcoming years, because of the way, you know, currently we can grow our new users. So they expect that in the peak season after Spring Festival, we can further, you know, grow our blue collar segment users and, you know, customers.
spk01: Due to time constraint, that concludes today's question and answer session. At this time, I will turn the conference back to Wenbei for any additional or closing remarks.
spk09: Thank you once again for joining us today. If you have any further questions, please contact our IRT directly or TPG Investor Relations. Thank you. This concludes today's conference call.
spk01: Thank you for participating. You may now disconnect. Speakers please stand by.
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