Financial Data and Key Metrics Changes - In Q4 2024, the company reported an adjusted net income of RMB97.1 million, a significant turnaround from an adjusted net loss of RMB91.3 million in the same period last year [8] - The adjusted operating profit improved from a loss of RMB165.3 million in Q4 2023 to a profit of RMB23.1 million in Q4 2024 [8] - Total revenues for Q4 2024 were RMB859.2 million, down from RMB1,138.3 million in Q4 2023, reflecting a strategic shift away from lower-quality revenue [39][41] - The gross margin expanded to 62.9%, driven by improved operational efficiency and disciplined cost management [44] Business Line Data and Key Metrics Changes - Paid membership revenue was RMB420.2 million, a decrease from RMB455.9 million in Q4 2023, with average monthly paid members slightly declining by 0.8% year-over-year [41][25] - Vocational training revenue decreased by 50.4% year-over-year to RMB84 million, primarily due to strategic refinements in the acquired business [32][42] - Marketing services revenue reached RMB315.9 million, down from RMB465.2 million in Q4 2023, but showed a sequential growth of 23.1% [28][41] Market Data and Key Metrics Changes - The average monthly active users (MAUs) were 81.4 million, reflecting a 0.3% sequential increase despite a significant reduction in promotional expenses [13] - The community of content creators grew to 77.7 million, an increase of 8.9% year-over-year, with income-generating creators rising by over 22% year-over-year [18][19] Company Strategy and Development Direction - The company is focusing on enhancing community trust and user experience while forgoing some peripheral users to drive profitability [9][23] - AI is viewed as a historic opportunity, with plans to deepen integration between AI and the community to improve content quality and user engagement [10][36] - The company aims to strengthen its position as a trusted content platform by expanding into specialized verticals and introducing new original IPs [58] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategic roadmap and execution capabilities, highlighting a transformative turnaround in 2024 [7] - The CEO emphasized the importance of trustworthiness in the AI era, stating that the expert network is essential for combating AI-generated content issues [52] - The company plans to maintain a focus on profitability while exploring new opportunities arising from AI integration [74] Other Important Information - The company repurchased a total of 75.3 million Class A ordinary shares for an aggregate value of US$1.2 billion since its Hong Kong IPO [46] - The company achieved a double-digit non-GAAP net profit margin of 11% in Q4 2024, marking a significant milestone in its financial performance [72] Q&A Session Summary Question: Insights on Zhihu Zhida user size data and its benefits to the community - The CEO reported that Zhida's MAUs grew from about 1 million to 10 million, driven by high repeat visits and positive word-of-mouth [51] - The expert network is crucial in the AI era, as it provides trustworthy content amidst the rise of AI-generated content [52] Question: Expected changes and innovations on the product side this year - The CEO mentioned a focus on strengthening social interactions and enhancing the brand as a trusted content platform, with developments in social circles and new content formats [58][61] Question: How AI and large language models can benefit Zhihu's online marketing product - The CFO noted that AI is changing the monetization model of advertising, with a shift towards content marketing and brand reputation management on the platform [66][69] Question: Long-term margin profile and cash utilization outlook - The CFO indicated that the company achieved a double-digit net profit margin and sees AI as a historical opportunity for growth, with plans for share repurchases due to undervaluation [72][74]
ZHIHU(ZH) - 2024 Q4 - Earnings Call Transcript