Zhihu (NYSE:ZH) reported second-quarter 2026 revenue of CNY690.1 million, down 3.7% from a year earlier but up 5.9% sequentially, as growth in content and intellectual-property operations helped offset continued pressure in marketing services.
Founder, Chairman and Chief Executive Officer Zhou Yuan said the company’s core business remained stable while certain areas continued to adjust and recover. He pointed to resilient engagement among core users, with average daily time spent at about 39 minutes and daily creation of high-quality content increasing more than 16%.
Content and IP Growth Offset Marketing Pressure
Chief Financial Officer Han Wang said content and IP operations revenue rose 4.4% year over year and 5.9% from the prior quarter to CNY425.9 million. The increase was primarily driven by continued growth in IP operations. Average monthly subscribing members remained stable at 13.1 million, while management said member average revenue per paying user was also broadly stable.
Zhihu’s marketing services revenue declined 10.7% year over year to CNY199 million, though it increased 4% sequentially. Zhou said the company remains focused on technology, automotive, consumer electronics, home appliances and gaming verticals. Performance-advertising spending increased sequentially, including a 22% rise in gaming, but the improvement has not yet produced a broader recovery in marketing revenue.
Wang said the decline in marketing services revenue reflected the company’s “proactive and ongoing refinement of service offerings.” Management plans to continue investing in product development, performance advertising capabilities and improving the value generated per unit of traffic, rather than pursuing growth at any cost.
IP operations provided a growing contribution during the quarter. Zhou said licensing revenue increased 105% sequentially and 600% from a year earlier. The company is seeking to move IP development beyond one-time licensing toward multi-format and lifecycle-based operations.
Chief Operating Officer Zhang Ronghua said Zhihu sees AI-generated comic dramas as a growing content category. He said improvements in AI-generated character consistency, visual quality, motion and production efficiency are expanding the format’s potential. However, Zhang said the scarcity in the market is increasingly shifting from access to production tools to the availability of strong stories and a sustainable creative pipeline.
Zhang said YanYan Story was among the leading IP providers for native AI comic dramas on TikTok during the first half of 2026, according to third-party data, and ranked among the top three providers on Hongguo. Zhihu also began in-house production during the second quarter and saw what he described as encouraging early heat rates.
The company said it will remain disciplined in its approach, selecting among licensing, in-house production and commissioned production based on project economics rather than materially increasing asset-heavy investments.
Cost Controls Narrow Operating Loss
Zhihu’s gross profit was CNY393.4 million, compared with CNY448.2 million a year earlier, while gross margin declined to 57% from 62.5%. Wang attributed the margin decline primarily to efforts to broaden and improve the company’s content offerings.
Total operating expenses fell 13% year over year to CNY469.4 million. Selling and marketing expense declined 5.4% to CNY308.7 million, research and development expense decreased 25.4% to CNY108.6 million, and general and administrative expense fell 22.7% to CNY52 million.
- Non-GAAP adjusted loss from operations narrowed 32% year over year to CNY48.7 million.
- Non-GAAP adjusted net loss was CNY10.3 million, compared with adjusted net income of CNY91.3 million a year earlier.
- Investment income declined to CNY16.4 million from CNY114.8 million, primarily because the prior-year period included an unrealized gain related to the fair-value remeasurement of an investment in a privately held company.
As of June 30, Zhihu held CNY4.4 billion in cash and cash equivalents, term deposits, restricted cash and short-term investments. The company repurchased 6.5 million Class A ordinary shares for $7.2 million during the quarter. Cumulatively, it had repurchased 41.3 million Class A ordinary shares for $77.9 million across the New York and Hong Kong exchanges.
AI Initiatives Remain in Validation Stage
Management outlined several AI-related initiatives intended to expand the reach and commercial uses of Zhihu’s professional content, IP library and expert network. Zhou said Zhihu is integrating its Zhida product with search to make AI-powered search a gateway to community content, with early testing showing positive signals for user retention.
AI Works hosted more than 2,600 AI projects, while Zhihu’s open-data platform API had attracted more than 17,600 professional developers, about 20% of whom were not previously Zhihu creators, Zhou said. The company also released an updated Zhihu CLI to help users discover and use its content across AI tools.
Zhihu is developing AI content assets for brands, designed to provide professional information with clear sourcing that can be discovered and cited through search and AI channels. The number of clients using the offering increased 50% sequentially in the second quarter, though Zhou said the business has not yet become a stable or scalable revenue contributor.
The company is also positioning its expert data-solutions operation as a research-driven data lab that identifies capability gaps in frontier AI models and develops training data, evaluation systems and complex task environments. Zhou said projects completed during the first half covered coding, search, deep research, visual reasoning and agents.
Looking ahead, management cautioned that second-half performance may not follow the sequential improvement seen in the second quarter. Marketing services could remain affected by client budgets and industry demand, while IP revenue may fluctuate with project timing and changes in industry standards and filing requirements.
Wang said Zhihu will balance selective investments in new initiatives with operating efficiency. Management reiterated that its longer-term objectives remain improving the revenue mix, increasing operating efficiency and returning to sustainable profitability.
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.
