Zhihu (NYSE:ZH) executives highlighted a milestone shift to full-year non-GAAP profitability in 2025, alongside growing user engagement and a strategy to deepen AI integration across both the community and commercialization efforts, according to remarks on the company’s fourth-quarter and full-year 2025 earnings call.
Profitability milestone and engagement trends
Management said 2025 marked Zhihu’s “first-ever full-year non-GAAP profit,” with adjusted net income of RMB 37.9 million, compared with an adjusted net loss of RMB 96.3 million in 2024. The company framed the result as evidence of operating leverage driven by ongoing structural optimization and cost discipline.
AI integration across products and governance
Zhihu described AI as a key driver behind both operational efficiency and product upgrades. The company said it has been replacing manual operations with “algorithm-driven automated workflows” to improve community governance, adding new metrics for recognizing trustworthy content and incorporating user feedback into evaluation frameworks to suppress low-quality content and improve the user experience.
Product updates discussed on the call included AI enhancements across search, creation tools, and consumption features:
- Search: An AI upgrade to integrated search in December added cross-topic content aggregation and hot-trend summarization. Zhihu said it tailored answer formats to different query types, driving a double-digit increase in click-through rates for AI direct-answer cards and increasing average AI search interactions per user via more multi-turn conversations.
- Creation tools: The company rolled out features such as content polishing and one-click enhancement using intelligent editing, automated formatting, and image pairing. It also discussed multimodal capabilities, including AI-generated illustrations and image summarization, aimed at making long-form content more visually engaging.
- Consumption: Zhihu said an AI reading panel on PC enables one-click summarization and terminology explanations, improving long-form reading efficiency and generating “interest signals” for future recommendation and monetization.
During Q&A, CEO Yuan Zhou said AI adoption has been actively driven rather than occurring passively. He highlighted user behavior such as calling on AI capabilities in comment threads for fact-checking and professional explanations, which management said supported additional user interaction without disrupting the community atmosphere.
Commercialization: marketing rebound signals and membership optimization
Management said a healthier commercial ecosystem helped stabilize revenue trends in Q4, with total revenue of RMB 643.5 million and a narrowing pace of sequential decline. Marketing services revenue was RMB 234.8 million, down year-over-year but up 24% sequentially, which executives characterized as an “inflection point” after adjustments to client mix and commercial products.
Zhihu said it improved client quality and expanded into additional sectors, noting higher ARPU among clients in high-value verticals such as technology and e-commerce and outreach into automotive and healthcare. The company also cited growth in IP-related marketing projects, saying revenue from IP-related projects increased 21% year-over-year.
Management also emphasized momentum for its “Idea+” advertising solution, describing it as a lightweight format extending native advertising into short-form content. The company attributed its progress to higher interaction levels in the Ideas product, stating that Idea+ achieved a 62% sequential increase in client numbers and 200% sequential growth in average daily client spend.
For paid membership, the company reported Q4 revenue of RMB 333.5 million with average monthly paid members of 12.2 million. Executives said short-term fluctuations were expected as Zhihu prioritized service experience and profitability. They reported sequential improvements, including a 1.4% sequential increase in ARPU and a 2.7 percentage point improvement in quarterly renewal rates.
IP monetization and AI-driven new business priorities
Beyond memberships, management discussed expanding content IP monetization through adaptations and licensing, particularly tied to its Yanyan Stories franchise. Zhihu said IP monetization revenue—recognized within other revenues—grew more than five-fold year-over-year in the first quarter and doubled for the full year.
The company highlighted December releases of two adapted short dramas on Tencent Video—“Fang and Xia” and “The Seventh Year of Secret Love for My Childhood Friend”—saying they quickly ranked among top releases on the platform. Management said “Fang and Xia” set an all-time popularity record for vertical short dramas on Tencent Video, while “The Seventh Year of Secret Love for My Childhood Friend” topped charts and sparked broader social media discussion.
Looking to 2026, CFO Wang Han outlined a two-track approach: maintaining stability and improving profitability in the core community business through AI-driven efficiency, while investing in AI-related initiatives with a visible ROI and a path to healthy cash flow. He emphasized the company does not intend to return to “burning significant cash for growth.”
Wang specifically identified two focus areas for new AI businesses:
- AI-enabled short-form drama and comic adaptations: Management said improving text-to-video and image-to-video models could streamline production, making upstream IP more scarce and valuable, and argued Zhihu’s creator ecosystem and content library give it an advantage.
- AI data services: Zhihu said demand for “high-value, traceable, and structured data” is increasing as competition shifts toward alignment quality and real-world generalization. Management said the company is developing expert data solution capabilities and exploring deeper expert participation in data construction and labeling to support model training and alignment.
Financial results, cash position, and share repurchases
CFO Wang said Zhihu’s financial progress in 2025 was driven by sustained cost discipline and tighter expense control. For Q4, total revenue was RMB 643.5 million, down from RMB 859.2 million a year earlier. By segment, marketing services revenue was RMB 234.8 million versus RMB 315.9 million, paid membership revenue was RMB 333.5 million versus RMB 422.0 million, and other revenues were RMB 75.2 million versus RMB 123.1 million.
Gross profit was RMB 344.8 million, compared with RMB 540.7 million a year earlier, and gross margin was 53.6% versus 62.9%. Management attributed the margin decline primarily to efforts to broaden and enhance content offerings for users.
Operating expenses rose to RMB 608.7 million from RMB 528.8 million, which the company said was primarily due to a one-time non-cash goodwill impairment charge of RMB 126.3 million related to prior acquisitions amid lower market valuations. Excluding that item, management said underlying operating expenses continued to decline year-over-year. Zhihu reported a GAAP net loss of RMB 210.8 million, compared with RMB 86.4 million in the prior-year period, and a non-GAAP adjusted net loss of RMB 39.4 million, compared with adjusted net income of RMB 97.1 million a year earlier.
As of Dec. 31, 2025, Zhihu held RMB 4.5 billion in cash and related balances, compared with RMB 4.9 billion a year earlier. The company also disclosed share repurchases, including 31.1 million Class A ordinary shares bought on the open market for $66.5 million and 16.6 million Class A ordinary shares repurchased through a trustee for $23.4 million, which it said represented 6.29% of total issued ordinary shares.
About Zhihu (NYSE:ZH)
Zhihu is China’s leading online question-and-answer platform, providing a space where users can ask questions, share knowledge, and engage with content across science, technology, business, culture, and lifestyle. Founded in 2011 and headquartered in Beijing, Zhihu has cultivated a community-driven environment that emphasizes credible, in-depth answers from experts, professionals, and enthusiasts.
The company’s core service revolves around its Q&A platform, enabling registered users to post questions and receive comprehensive responses.
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