Zhihu (NYSE:ZH) Posts Quarterly Earnings Results, Misses Estimates By $0.06 EPS

Zhihu (NYSE:ZH) issued its quarterly earnings results on Wednesday. The company reported ($0.07) EPS for the quarter, missing analysts’ consensus estimates of ($0.01) by ($0.06), Zacks reports. Zhihu had a negative return on equity of 4.83% and a negative net margin of 7.25%.

Here are the key takeaways from Zhihu’s conference call:

• Revenue was RMB690.1 million, down 3.7% year over year but up 5.9% sequentially, as paid content and IP operations helped offset continued weakness in marketing services. Monthly subscribing members remained stable at 13.1 million.
• Zhihu reported a RMB37.4 million net loss and a RMB10.3 million adjusted net loss, while gross margin declined to 57% from 62.5% a year earlier. Management warned that quarterly profitability may fluctuate as it invests in new initiatives and that marketing recovery remains structural rather than linear.
• IP licensing continued to gain momentum, with licensing cooperation up 105% sequentially and more than sixfold year over year. Management said AI-generated comic dramas can extend the life cycle and improve monetization of Zhihu’s original story library, while maintaining a flexible, relatively disciplined approach to production investment.
• Zhihu is expanding AI initiatives across AI search, community agents, content-asset services and expert data solutions; its AI Works platform hosts more than 2,600 projects and its open-data platform has attracted over 17,600 developers. Management emphasized that these businesses remain early-stage and have not yet produced stable, scalable revenue.
• Operating expenses fell 13% year over year, and the company ended June with RMB4.4 billion in cash and liquid investments. Zhihu repurchased 6.5 million Class A shares during the quarter and said it will continue disciplined capital allocation and share repurchases.

Zhihu Stock Performance

Shares of NYSE:ZH opened at $3.17 on Wednesday. The company’s fifty day moving average is $3.19 and its 200-day moving average is $3.21. Zhihu has a 52 week low of $2.57 and a 52 week high of $5.55. The company has a market capitalization of $274.80 million, a PE ratio of -8.82 and a beta of 0.28.

Hedge Funds Weigh In On Zhihu

A hedge fund recently bought a new stake in Zhihu stock. Ameriprise Financial Inc. purchased a new stake in Zhihu Inc. Sponsored ADR (NYSE:ZH) during the second quarter, according to its most recent 13F filing with the Securities & Exchange Commission. The fund purchased 25,006 shares of the company’s stock, valued at approximately $100,000. Institutional investors and hedge funds own 28.92% of the company’s stock.

Analyst Upgrades and Downgrades

Several brokerages recently issued reports on ZH. Wall Street Zen upgraded Zhihu from a “sell” rating to a “hold” rating in a research note on Saturday, June 6th. Weiss Ratings reissued a “sell (d-)” rating on shares of Zhihu in a report on Friday, July 17th. One analyst has rated the stock with a Sell rating, According to MarketBeat.com, Zhihu presently has an average rating of “Sell”.

Zhihu Company Profile

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.