Zhihu, Inc. ((ZH)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Zhihu’s latest earnings call painted a picture of a platform at a structural turning point, balancing its first full‑year non‑GAAP profit with visible revenue and margin pressure. Management stressed long‑term upside from AI, content and IP, even as quarterly GAAP losses widened on weaker top‑line trends and a sizable goodwill impairment.
First Full-Year Non-GAAP Profit
Zhihu posted adjusted net income of RMB 37.9 million for 2025, reversing an adjusted net loss of RMB 96.3 million in 2024. This first‑ever full‑year non‑GAAP profit marks a key milestone in the platform’s path toward sustainable profitability.
Sequential Recovery in Marketing Services
Marketing services revenue in Q4 2025 reached RMB 234.8 million, rising 24% quarter on quarter and signaling a clear inflection in advertiser demand. Despite this sequential rebound, the segment remains under year‑over‑year pressure in a still‑challenging ad market.
Stronger Membership Economics, Smaller Scale
Paid membership revenue in Q4 was RMB 333.5 million with 12.2 million average monthly paid users, as ARPU improved 1.4% sequentially and renewal rates rose 2.7 percentage points. Management chose to prioritize healthier unit economics, accepting a year‑on‑year decline in subscriber scale and membership revenue.
Content and Creator Expansion, Especially in AI
Daily generation of high‑quality content grew more than 20% year on year in Q4 and 31% for the full year, underscoring the platform’s depth. Professional AI‑related content climbed over 30% and AI‑focused creators increased about 16%, strengthening Zhihu’s position in knowledge‑driven verticals.
Surging Engagement on Ideas and Circles
The Ideas channel delivered a 73.5% full‑year increase in average daily content volume, with average daily interactions doubling over the same period. Circles saw average daily content creation more than double sequentially, while daily views jumped 72%, highlighting strong traction in new engagement formats.
Rapid AI Feature Adoption and Usage
Direct MAUs for Zhihu Zhida surged more than 260% year on year, with next‑month retention up roughly 83%, pointing to sticky AI usage. By February 2026, average daily search queries per DAU were over 16% higher than in November and AI search click‑through rates climbed by double digits after product upgrades.
Acceleration in IP Monetization
IP monetization revenue, booked in other revenues, grew more than fivefold year on year in Q4 and doubled for the full year, powering a 21% rise in IP‑related revenue. Recent TV and video adaptations performed strongly on partner platforms, validating Zhihu’s strategy to mine its content library for commercial IP.
Liquidity Strength and Share Repurchases
Zhihu ended 2025 with RMB 4.5 billion in cash, deposits and short‑term investments, supporting ongoing investment and capital returns. The company repurchased 31.1 million Class A shares on the market plus 16.6 million through a trustee, spending nearly USD 90 million and retiring about 6.29% of its issued shares.
Revenue Under Pressure Across Segments
Total Q4 revenue fell to RMB 643.5 million from RMB 859.2 million a year earlier, a decline of about 25.1% that underscores ongoing top‑line headwinds. Marketing services, paid membership and other revenues each posted double‑digit year‑over‑year declines, reflecting both market softness and strategic trade‑offs.
Profitability Squeezed in Q4
GAAP net loss in Q4 widened to RMB 210.8 million from RMB 86.4 million, while adjusted net results swung to a RMB 39.4 million loss versus a RMB 97.1 million profit last year. Even with a 33.6% year‑over‑year narrowing in full‑year non‑GAAP operating loss, recent quarters show profit pressure has not yet fully abated.
Gross Margin and One-Time Charges
Gross profit in Q4 slid to RMB 344.8 million from RMB 540.7 million, with gross margin compressing to 53.6% from 62.9% as Zhihu invested in broader content offerings. Operating expenses rose to RMB 608.7 million, driven mainly by a one‑time, non‑cash goodwill impairment of RMB 126.3 million that significantly deepened GAAP losses.
Cash Drawdown Reflects Capital Allocation Choices
The company’s cash, equivalents, term deposits, restricted cash and short‑term investments declined to RMB 4.5 billion from RMB 4.9 billion. Management attributed the drop largely to active share repurchases, balancing balance‑sheet strength with shareholder returns.
Forward-Looking Guidance and AI Monetization
Management guided to a 2026 playbook built on disciplined operations, higher‑margin, capital‑efficient revenue and AI‑driven monetization, following the breakthrough into full‑year non‑GAAP profitability. They expect marketing services, membership and IP revenues to stabilize the top line while leveraging robust content and engagement to build new AI businesses, all underpinned by strict cash discipline and continued buybacks.
Zhihu’s earnings call framed the company as a platform in transition, with improving structural profitability and promising AI and IP engines offset by declining quarterly revenues and thinner margins. For investors, the story hinges on whether burgeoning engagement and AI monetization can outpace near‑term headwinds and translate into consistent, scalable earnings growth.