Release Date: May 27, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Zhihu Inc (ZH, Financial) achieved a non-GAAP net profit for the first time in the first quarter since its IPO, with a net income of RMB6.9 million compared to a net loss of RMB135.7 million in the same period last year.
- The company reported improvements in key user metrics, including time spent per daily active user, core user retention rate, and contributor activeness.
- AI integration has enhanced Zhihu Inc (ZH)'s operating strategy, contributing to increased operating leverage and profitability.
- The platform saw a 46% year-over-year growth in AI-related professional content, highlighting its position as a leading source of trustworthy professional content.
- Zhihu Inc (ZH) has launched innovative features like the contributor attribution feature, which amplifies the influence of its expert network and reduces AI hallucination in specialized domains.
Negative Points
- Total revenue for the first quarter was RMB729.7 million, down 15.1% sequentially, reflecting ongoing adjustments to the business and strategic focus on improving revenue quality.
- Revenue from the marketing services business declined by 40.4% year-over-year, primarily due to the adoption of a trustworthy content model.
- Vocational training revenue decreased by 35% year-over-year, reflecting strategic transformation and a shift away from traditional subject-based expansion.
- The company's total operating expenses for the quarter declined by 34.4% year-over-year, indicating cost management challenges despite efficiency improvements.
- Zhihu Inc (ZH) experienced a decrease in other revenues, which were RMB20.3 million compared to RMB35.2 million in the same period of 2024.
Q & A Highlights
Q: The management mentioned Zhihu's strategic AI plans and user feedback on Zhida. What other AI initiatives can we expect next, both within the Zhihu community and beyond?
A: Yuan Zhou, Executive Chairman, CEO, and Founder, explained that Zhihu's strategic focus in AI centers around trustworthy content and their expert network. Zhida serves as an AI interface for the community, and they plan to launch public knowledge bases to scale their library of trustworthy content. They aim to integrate more experts and aggregate high-quality content, with future developments potentially extending beyond content itself.
Q: Could management share some color on the revenue trends for each business segment in 2025 and the profitability outlook?
A: Han Wang, CFO, stated that 2025 is a crucial year for business model optimization. Despite a year-over-year revenue decline in Q1, each business stream is entering a new growth phase. Marketing services are seeing client mix optimization, paid membership is expanding content offerings, and vocational training is transitioning to a more socially engaging model. They remain confident in exceeding financial expectations for the year.
Q: What are your thoughts about the shareholder return program this year?
A: Han Wang, CFO, announced that the Board approved a 2025 buyback plan, authorizing the repurchase of up to 10% of issued shares. The buyback will be executed in the open market, reflecting management's confidence in the company's long-term success.
Q: Can you elaborate on the quality of the ecosystem and user engagement?
A: Yuan Zhou, CEO, emphasized the focus on ecosystem quality, with key user health metrics improving and a more engaged community atmosphere. Interactions per creator and per post surged significantly year-over-year, and features supporting content creation and monetization have been upgraded, showing exceptional user engagement.
Q: How is Zhihu aligning its community ecosystem with commercial operations?
A: Han Wang, CFO, mentioned that the focus is on aligning the community ecosystem with commercial operations to enhance Zhihu's brand value and pricing power. This involves optimizing client mix, expanding content offerings, and transitioning vocational training to leverage community strength, with AI-driven initiatives playing a key role.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
