Financial Data and Key Metrics Changes - Gross profit margin improved by over 10 percentage points year-over-year, reaching 63.9%, the highest level since the company's listing [7] - Total costs and operating expenses decreased by more than 35.6% and 30.5%, respectively, leading to a net loss of RMB 9 million, down 96.8% year-over-year [7][35] - Adjusted net loss on a non-GAAP basis was RMB 13.1 million compared with RMB 225.3 million in the same period of 2023, with an adjusted net loss margin decreasing more than 20 percentage points year-over-year to 1.5% [35] Business Line Data and Key Metrics Changes - Paid membership revenue for the third quarter was RMB 459.4 million, slightly decreased from RMB 466.8 million in the same period of last year, with the number of subscribing members rising by 11.5% year-over-year to 16.5 million [17][30] - Revenue from marketing services was RMB 256.6 million, a 33% decline year-over-year, attributed to a decrease in brand advertising and CCS [19][29] - Vocational training revenue for the quarter was RMB 105.1 million compared with RMB 144.8 million in the same period of 2023, primarily due to strategic refinement of acquired business [31] Market Data and Key Metrics Changes - MAU for Q3 rebounded quarter-over-quarter to 81.1 million, with daily active user time spent rising nearly 20% year-over-year [10] - Cumulative content volume reached 854.5 million thesis, representing a year-over-year growth of 14.9% [13] - The number of income-generating content creators increased by over 25% year-over-year, indicating a growing engagement among high-tier content creators [11] Company Strategy and Development Direction - The company is focused on enhancing user experience and strengthening community trustworthiness, with a commitment to optimizing operational models [26] - Strategic priorities for 2025 include sustainably reducing annual losses and enhancing core user engagement [42] - The company aims to innovate its marketing services by reducing low-quality content and enhancing collaboration with quality content creators [61] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving breakeven in Q4 2024, citing significant reductions in losses in Q2 and Q3 [41] - The company plans to continue enhancing the user experience and community engagement, which are seen as critical for long-term growth [42][44] - Management acknowledged that improvements in user metrics stem from earlier strategic adjustments and emphasized the importance of high-quality content [49] Other Important Information - The company has repurchased 74.2 million Class A ordinary shares for a total price of USD 121.5 million since its Hong Kong IPO [37] - The company is committed to optimizing resource allocation and advancing towards profitability while enhancing user engagement [38] Q&A Session Summary Question: Can management share more color on the commitment about achieving breakeven in the first quarter? - Management confirmed a strong focus on achieving breakeven in Q4 2024, with significant reductions in adjusted net loss over the past quarters [41] Question: Can management provide more details on the adjustments made to the community and user strategies? - Management highlighted a focus on algorithm optimization and enhancing the experience for core users, which has led to improved user retention and engagement [49] Question: What are the future features planned for Zhihu Zhida? - Management indicated that future upgrades for Zhihu Zhida will focus on scenario-oriented updates to meet the needs of various user groups, particularly in academic and professional contexts [55] Question: What is the outlook for the advertising business and membership growth? - Management stated that they will continue to reduce low-quality content in the advertising business while maintaining strong growth in paid memberships, with a focus on enriching member benefits [60][63] Question: What progress has been made in optimizing the vocational training business? - Management reported ongoing efforts to improve efficiency and reduce losses in the vocational training segment, aiming for breakeven by the end of 2025 [67]
ZHIHU(ZH) - 2024 Q3 - Earnings Call Transcript