Zhihu (ZH) Q2 2025 earnings summary

Executive summary

• Achieved third consecutive quarter of non-GAAP profitability, with adjusted net income of RMB 91.3 million versus a loss of RMB 44.6 million year-over-year, reflecting effective operational strategies and AI-driven efficiency improvements.

• Gross margin expanded by approximately 3% year-over-year, reflecting disciplined operations and AI-driven productivity gains.

• User engagement metrics improved: average daily user time spent exceeded 39 minutes, up 15% year-over-year; core user retention and high-tier creator engagement also increased, with a stable user base and enhanced creator activity.

• Platform solidified its position as a leading hub for AI talent, content, and product launches, with significant growth in professional AI-related content and expert engagement.

Financial highlights

• Total revenue for Q2 2025 was RMB 716.9 million, with the year-over-year decline moderating compared to previous quarters.

• Gross profit was RMB 448.2 million, gross margin rose to 62.5% from 59.6% a year ago.

• Operating expenses declined 27.2% year-over-year to RMB 539.2 million, driven by cost controls and efficiency gains.

• GAAP net income was RMB 72.5 million, compared to a net loss of RMB 806 million in the prior year.

• Cash and equivalents, term deposits, restricted cash, and short-term investments totaled RMB 4,820.8 million as of June 30, 2025.

Outlook and guidance

• Marketing services expected to stabilize and return to positive year-over-year growth in coming quarters.

• Paid membership business focused on improving retention and monetization, with ongoing expansion of premium content and service offerings.

• Vocational training to prioritize efficiency and profitability, with further model and content adjustments anticipated.

• Management expects to approach break-even on a full-year non-GAAP basis for 2025, with continued focus on disciplined execution and sustainable monetization.

• AI-driven productivity gains and cost structure improvements are expected to continue supporting profitability.