Core Viewpoint - Zhihu demonstrates its profitability during business adjustments, reporting a revenue of 717 million yuan and a non-GAAP net profit of 91.3 million yuan for Q2 2025, achieving non-GAAP profitability for three consecutive quarters [2][3]. Revenue Performance - Zhihu's Q2 2025 revenue decreased by 23.23% year-on-year from 934 million yuan to 717 million yuan, with Q1 2025 revenue at 730 million yuan [3]. - The paid reading business remains the largest revenue contributor, generating 402 million yuan in Q2 2025, accounting for 56.1% of total revenue, down from 433 million yuan in the same period last year [3]. - The average monthly subscription members decreased to 13.2 million in Q2 2025 from 14.7 million in the same period last year [3]. Business Strategy and Adjustments - The company is focusing on improving member retention and increasing ARPU (Average Revenue Per User) through various initiatives, including optimizing new member structures and expanding content offerings [3]. - Marketing service revenue fell to 223 million yuan in Q2 2025 from 344 million yuan year-on-year, attributed to a strategic focus on improving profit margins [4]. - The vocational education segment generated 62.1 million yuan, down from 62 million yuan year-on-year, due to strategic optimization [4]. Profitability and Cost Management - Despite revenue declines, Zhihu achieved a net profit of 72.5 million yuan in Q2 2025, compared to a net loss of 80.6 million yuan in the same period last year [4]. - The adjusted net profit (non-GAAP) was 91.3 million yuan, a significant improvement from an adjusted net loss of 44.6 million yuan in Q2 2024 [4]. AI Integration and Community Development - The company is fully embracing AI technology, with the launch of the new AI search product "Zhihu Direct Answer" aimed at enhancing user experience and content quality [5][6]. - The integration of AI with community content is seen as a key strategy, with ongoing upgrades to improve the search and answer quality [6]. - The CEO emphasized the importance of high-quality content as a trust currency in the AI era, indicating a shift towards more reliable and professional content [5][6]. Future Outlook - The company aims to optimize its client structure and upgrade its commercial products to achieve positive year-on-year growth in marketing services [4]. - Continuous iterations and upgrades of the AI search capabilities are planned, with a focus on enhancing user experience in Q4 2025 [6].

Core Viewpoint - Zhihu-W (02390) reported a significant increase in stock price by over 6% following the release of its Q2 earnings, indicating positive market reception despite a decline in total revenue [1] Financial Performance - For the second quarter ending June 30, 2025, Zhihu achieved total revenue of 717 million yuan, a year-on-year decrease of 23.23% [1] - The company reported a net profit attributable to shareholders of 72.48 million yuan, compared to a loss of 82.73 million yuan in the same period last year [1] - Basic earnings per share were reported at 0.3 yuan [1] Operational Insights - The Chairman and CEO, Zhou Yuan, highlighted that the company has achieved non-GAAP profitability for three consecutive quarters, reflecting the effectiveness of its refined operational strategies and the integration of artificial intelligence technology [1] - Key performance indicators such as daily active user engagement, core user retention rates, and creator activity have shown significant improvement [1] AI Integration and Future Strategy - The integration of artificial intelligence has enhanced the user experience and created greater value for both users and creators, positioning Zhihu as an important platform for AI-related content and expert interactions [1] - The CFO, Wang Han, noted that the company achieved a non-GAAP net profit of 91.3 million yuan in Q2, compared to a non-GAAP net loss of 44.6 million yuan in the previous year [1] - The gross margin increased by approximately 3 percentage points to 62.5%, reflecting ongoing improvements in cost structure and operational efficiency driven by AI [1] - The company aims to maintain rigorous execution and sustainable commercialization to drive long-term growth [1]

Core Insights - Zhihu-W (02390) shares rose over 6% following the release of its Q2 earnings report, with a current price of HKD 13.59 and a trading volume of HKD 1.4538 million [1] Financial Performance - For the three months ending June 30, 2025, Zhihu reported total revenue of CNY 717 million, a year-on-year decrease of 23.23% [1] - The company achieved a net profit attributable to shareholders of CNY 72.482 million, compared to a loss of CNY 82.739 million in the same period last year [1] - Basic earnings per share were CNY 0.3 [1] Management Commentary - The Chairman and CEO, Zhou Yuan, stated that the company has achieved non-GAAP profitability for the third consecutive quarter, reflecting the effectiveness of its refined operational strategy and the efficiency gains from integrating artificial intelligence [1] - Zhou highlighted the active community engagement, stable user base, and significant improvements in daily active user engagement, core user retention, and creator activity [1] - The CFO, Wang Han, noted that the company achieved a non-GAAP net profit of CNY 91.3 million in Q2, compared to a non-GAAP net loss of CNY 44.6 million in the same period last year [1] - Gross margin increased by approximately 3 percentage points to 62.5% year-on-year, indicating ongoing improvements in cost structure and operational efficiency driven by AI [1]

Financial Performance - In the first half of the year, the company achieved total revenue of 1.447 billion yuan, a year-on-year decline of 23.7% [1] - Adjusted net profit was 98.28 million yuan, compared to a loss of 180 million yuan in the same period last year [1] - In Q2, revenue reached 717 million yuan, with an adjusted net profit of 91.3 million yuan, marking three consecutive quarters of Non-GAAP profitability [1] Cost Management - The company's cost of revenue was 547 million yuan, down 31.1% year-on-year [1] - Operating expenses decreased by 30.9% to 1.043 billion yuan [1] - The CFO indicated that improvements in cost structure and operational efficiency were driven by AI-driven productivity enhancements [1] Revenue Sources - The three main revenue streams all experienced declines, with paid membership being the largest source, accounting for over 50% of revenue, generating 820 million yuan, down 7% year-on-year [2] - Marketing services and vocational education recorded revenues of 420 million yuan and 160 million yuan, with year-on-year declines of 37.78% and 43.87%, respectively [2] Content Strategy - The company is expanding its supply of medium and long-form content to support its membership ecosystem [4] - Paid membership revenue share increased to 56.7%, up over 10 percentage points year-on-year, although the average monthly subscription count decreased by 6.7% to 13.7 million [4] - The short drama industry is seen as a growth area, with the company leveraging its community content for adaptation into popular series [2][4] AI Integration - The company is focusing on two key areas for AI: accelerating integration across the platform and expanding reliable content and services beyond the community [5] - AI-related professional content has seen over 45% year-on-year growth for two consecutive quarters [5] - The CEO emphasized that AI is deeply integrated into the product experience, enhancing value for users and creators [6] Market Outlook - The micro-short drama market in China is expected to exceed 50 billion yuan by 2025, presenting a significant opportunity for the company [4] - The company aims to convert its traffic advantages into revenue, which remains a challenge [4]

Group 1: Financial Performance - The company achieved a revenue of 717 million in Q2, with an adjusted net profit of 91.3 million, and a GAAP net profit of 72.48 million, maintaining a gross margin of 62.5% [1][2] - It has been profitable for three consecutive quarters, indicating an improvement in operational quality with reduced R&D, marketing, and management expenses [2] - The cash flow position is strong, with 4.8 billion in cash on hand and a share buyback of 31.1 million shares, reflecting management's confidence in future prospects [3] Group 2: User Engagement and Revenue Structure - The primary revenue source remains paid reading, contributing over 400 million, while advertising and vocational education account for 220 million and 60 million, respectively [2] - Although the number of subscription members decreased to 13.2 million from 14.2 million, the average daily active user engagement increased to 38 minutes, a 17.6% year-on-year rise [4][5] - The ARPU for paid members is increasing, indicating that while the user base may be shrinking, the remaining users are contributing more value [5] Group 3: AI Integration and Future Prospects - The monthly active users for the "Zhihu Direct Answer" feature have surpassed 10 million, marking a significant step towards instant Q&A capabilities [9] - AI-related content production has increased by 46% year-on-year, showing a deepening integration of AI within the community ecosystem [10] - The company is positioned as a leading platform for AI discussions in China, with a large network of expert contributors, which could lead to differentiated revenue opportunities [13] Group 4: Competitive Landscape and Strategic Choices - Compared to Quora, which has focused on an AI platform, Zhihu is enhancing its existing community by integrating AI to improve its Q&A system [15][17] - The company faces a choice between maintaining a profitable niche community or evolving into a knowledge hub for the AI era, similar to Reddit's approach of content monetization through data licensing [19][20] - The future direction remains uncertain, but the company has the financial stability and time to explore various strategic options [21]

Core Insights - Zhihu reported a revenue of 717 million yuan for Q2 2025, with an adjusted net profit of 91.3 million yuan, marking three consecutive quarters of Non-GAAP profitability [1] - The paid reading business generated 402 million yuan in revenue, accounting for 56.1% of total revenue [1] - Marketing services and vocational education contributed 223 million yuan and 62.1 million yuan, representing 31.1% and 8.7% of total revenue, respectively [1] - As of the end of Q2, Zhihu had a total of 4.82 billion yuan in cash and cash equivalents, time deposits, restricted funds, and short-term investments [1]

Zhihu (ZH) Q2 2025 Earnings Call August 27, 2025 07:00 AM ET Company ParticipantsYolanda Liu - Director - IRYuan Zhou - Founder, Chairman & CEOWang Han - Chief Financial OfficerVicky Wei - Vice President - Citi Internet Research teamLincoln Kong - Executive DirectorConference Call ParticipantsXueqing Zhang - Media AnalystNone - AnalystOperatorLadies and gentlemen, thank you for standing by, and welcome to the Zhuhu Inc. Second Quarter twenty twenty five Financial Results Conference Call. At this time, all p ...

Financial Data and Key Metrics Changes - The company achieved adjusted net income of RMB91.3 million for Q2 2025, compared to a loss of RMB44.6 million in the same period last year, marking the third consecutive quarter of non-GAAP profitability [8][41] - Total revenues for the quarter were RMB716.9 million, a significant increase from RMB93.8 million in Q2 2024, with gross margin expanding to 62.5% from 59.6% year over year [35][38] - Operating expenses decreased by 27.2% year over year to RMB539.2 million, reflecting tighter cost controls and productivity improvements [39] Business Line Data and Key Metrics Changes - Marketing services revenue grew 13.1% quarter over quarter to RMB222.8 million, with a narrowing year-over-year decline [21][36] - Paid membership revenue was RMB402 million, down slightly from RMB432.7 million in the same period of 2024, primarily due to a decrease in new subscriptions [25][37] - Vocational training revenue was RMB62.1 million, compared to RMB13.6 million in Q2 2024, with a focus on high-performing course categories [29][37] Market Data and Key Metrics Changes - The average daily user time spent on the platform exceeded 39 minutes, reflecting a 15% year-over-year increase [12] - Daily high-quality content creation increased by over 10% sequentially, with professional AI-related content maintaining year-over-year growth of over 45% for two consecutive quarters [13] Company Strategy and Development Direction - The company aims to enhance user and creator experiences by integrating AI more deeply into the community, with plans to launch significant updates in Q4 [11][48] - The strategic focus includes optimizing the trustworthiness of content and fostering greater creator engagement, which has shown tangible results [12][30] - The company is transitioning to a more community-driven approach in its vocational training business, fostering deeper social engagement and knowledge sharing [30] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving near breakeven on a full-year non-GAAP basis, supported by ongoing adjustments and a solid financial foundation [66] - The company anticipates stabilization and recovery in marketing services, with a return to positive year-over-year growth expected in the coming quarters [56] Other Important Information - The company repurchased 31.1 million Class A ordinary shares for an aggregate value of $66.5 million, demonstrating a commitment to enhancing shareholder returns [41][63] - The company has seen a significant increase in advertising spend from the gaming sector, with a fourfold increase year over year [24] Q&A Session Summary Question: Plans for AI and large language model products - Management noted that progress in AI is aligned with the broader industry, with ongoing upgrades to agentic capabilities and new integrations [45][46] Question: Current user metrics and value of user-generated content - Management highlighted the evolving definition of Zhihu and emphasized the importance of trust in user-generated content as a key value proposition [50][52] Question: Growth outlook for marketing services, paid membership, and vocational training - Management expects stabilization in marketing services and is focusing on optimizing client structure and enhancing monetization of IPs [55][56] Question: Shareholder returns and profitability outlook - Management confirmed a commitment to share repurchases and expressed optimism about achieving profitability in the second half of the year [62][66]

Zhihu (ZH) Q2 2025 Earnings Call August 27, 2025 07:00 AM ET Speaker0Ladies and gentlemen, thank you for standing by, and welcome to the Zhuhu Inc. Second Quarter twenty twenty five Financial Results Conference Call. At this time, all participants are in listen only mode. After the speakers' presentation, there will be a Q and A session. Today's conference is being recorded and webcasted.At this time, I would like to turn the conference over to Yolanda Lu, Director of Investor Relations. Please go ahead, ma ...

Group 1: Financial Performance - In Q2 2025, the total revenue of the company was 717 million RMB, a decrease of approximately 23% compared to 934 million RMB in the same period of 2024 [1] - The gross margin improved from 59.6% in 2024 to 62.5% in 2025 [1] - The net profit for Q2 2025 was 72.5 million RMB, compared to a net loss of 80.6 million RMB in Q2 2024 [1] Group 2: Adjusted Profitability - The adjusted net profit (non-GAAP) for Q2 2025 was 91.3 million RMB, while in Q2 2024, it was an adjusted net loss of 44.6 million RMB [1] - For the first half of 2025, the net profit was 62 million RMB, down from 246 million RMB in the same period of 2024 [1] - The adjusted net profit for the first half of 2025 was 98 million RMB, compared to an adjusted net loss of 180 million RMB in the previous year [1] Group 3: Revenue Sources - The largest revenue source in the first half of 2025 was paid memberships, generating 820 million RMB, down 7.1% from 882 million RMB in 2024 [2] - The average monthly subscription members decreased to 13.7 million in the first half of 2025, down from 14.7 million in 2024, a decline of 6.7% [2] - Marketing services revenue fell to 420 million RMB, a significant drop of approximately 37.8% from 675 million RMB in 2024 [2] Group 4: Cost Management - The company's cost of revenue decreased by 31.1% to 547 million RMB [3] - Sales and marketing expenses were reduced by 27.7% to 647 million RMB [3] - Research and development expenses decreased by 29.3% to 288 million RMB, while general and administrative expenses fell by 47.6% to 109 million RMB [3]