Zhihu Inc. Shows Resilience with Strong Financial Results
Zhihu Inc. Reports Strong Performance for Q2 2025
Zhihu Inc. (NYSE: ZH; HKEX: 2390), an influential online content community, has revealed its unaudited financial results for the second quarter, indicating robust growth amidst a competitive landscape.
Key Highlights from Q2 2025
During the quarter, Zhihu achieved total revenues of RMB716.9 million (approximately US$100.1 million), reflecting a strategic optimization in its operations. While this represents a decline from RMB933.8 million in the same period last year, the company has made notable strides in enhancing its gross margins, which rose to 62.5% from 59.6% year-over-year.
Profitability Trends
A significant milestone was reached with Zhihu posting a net income of RMB72.5 million (about US$10.1 million), a remarkable turnaround from a net loss of RMB80.6 million in Q2 2024. The adjusted net income (non-GAAP) also displayed promising progress at RMB91.3 million (US$12.8 million), compared to an adjusted net loss of RMB44.6 million during the same quarter last year.
Membership and Community Engagement
The company's effective engagement strategies have resulted in an impressive average of 13.2 million subscribing members in Q2 2025. Mr. Yuan Zhou, the chairman and CEO of Zhihu, expressed enthusiasm about the company's ongoing evolution, stating, “This marks our third consecutive quarter of non-GAAP profitability, demonstrating the impact of our refined operational strategies alongside advancements in AI integration.”
Operational Efficiency and Revenue Streams
Despite a decrease in marketing services revenue to RMB222.8 million from RMB344.0 million, Zhihu attributed this shift to a deliberate refinement of its service offerings aimed at margin improvement. Paid membership revenue remains strong at RMB402.0 million, though slightly lower than the previous year, which the company attributes to the recent decline in its monthly subscribing members.
Cost Management Initiatives
Zhihu effectively reduced its cost of revenues by approximately 28.8%, resulting in an expenditure of RMB268.7 million, down from RMB377.3 million in Q2 2024. This improvement was chiefly driven by decreased operational costs and enhanced technological efficiency.
Investments and Future Outlook
The company also witnessed an uptick in investment income, which soared to RMB140.8 million (US$19.7 million) from just RMB21.8 million in the previous year. This growth is attributed to unrealized gains from re-evaluating the fair value of investments in privately held companies. With cash and equivalents amounting to RMB4,820.8 million (US$673.0 million), Zhihu is well-positioned to capitalize on future opportunities.
Shareholder Engagement and Equity Investments
As part of its shareholder engagement initiatives, Zhihu has enacted share repurchase programs totaling 31.1 million Class A ordinary shares for $66.5 million. This strategy underscores the company’s commitment to enhancing shareholder value while sustaining growth momentum in the online content space.
Looking Ahead
Mr. Han Wang, CFO, concluded, “Our focus remains steadfast on executing disciplined strategies to ensure sustainable monetization and long-term growth.” As Zhihu continues to evolve, its emphasis on high-quality content and user engagement is expected to create unique competitive advantages, particularly in the AI and online community sectors.
Frequently Asked Questions
What are the key financial results for Zhihu in Q2 2025?
Zhihu reported RMB716.9 million in revenues, RMB72.5 million net income, and RMB91.3 million adjusted net income (non-GAAP).
How many subscribing members does Zhihu have?
Zhihu has maintained 13.2 million average monthly subscribing members in Q2 2025.
What were Zhihu's marketing services revenue figures?
Marketing services revenue decreased to RMB222.8 million from RMB344.0 million.
How has Zhihu managed its costs?
Zhihu reduced its cost of revenues by about 28.8%, achieving RMB268.7 million in Q2 2025.
What is the future outlook for Zhihu?
Zhihu plans to continue focusing on strong operational execution to drive sustainable growth and profitability.
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