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Zhihu Inc. Reports Financial Results for Q4 and Fiscal Year 2024

Zhihu Inc. has revealed its unaudited financial performance for the fourth quarter and the entire fiscal year that concluded on December 31, 2024. Recognized as a premier online content community in China, Zhihu's results showcase a noteworthy recovery and strategic advancements that have set the stage for enhanced user engagement and profitability.

Q4 Financial Highlights

In the fourth quarter of 2024, Zhihu recorded total revenues of RMB 859.2 million (approximately US$ 117.7 million). In comparison, this marks a decline from RMB 1,138.3 million during the same frame in 2023. Despite a revenue decrease, the gross margins saw a promising increase, reaching 62.9%, up from 59.1% in the previous year, signaling improved operational efficiency.

The company also reported a net income of RMB 86.4 million (about US$ 11.8 million), a significant transformation from a net loss of RMB 103.1 million in Q4 2023. Furthermore, the adjusted net income climbed to RMB 97.1 million (roughly US$ 13.3 million), reversing an earlier loss, hence reflecting robust operational improvements.

The average monthly active users (MAUs) in the last quarter reached 81.4 million, alongside 14.1 million average monthly subscribing members, indicating a steady clientele and enhanced user interaction.

Full Year Overview for 2024

For the entire fiscal year 2024, Zhihu recorded total revenues of RMB 3,598.9 million (around US$ 493.0 million), a decrease from RMB 4,198.9 million in 2023. This annual revenue downturn was primarily attributed to strategic adjustments focused on refining service offerings to bolster margins.

The gross margin for the year was 60.6%, an increase from 54.7% in the prior year, showcasing a commitment to operational efficiency and effective cost management practices.

Despite recording a net loss of RMB 169 million (approximately US$ 23.1 million), this was a massive improvement, narrowing down by 79.9% from 2023's loss. The adjusted net loss also saw a significant reduction, reflecting enhanced operational prowess and effective cost discipline throughout the operational spectrum.

Strategic Developments and Looking Ahead

The leadership team, including Mr. Yuan Zhou (Chairman and CEO), emphasized that 2024 represented a pivotal year for Zhihu, marked by a successful deployment of their strategic initiatives. They focused on optimizing their ecosystem not just to foster community engagement but also to enhance user satisfaction. This included leveraging premium content and an esteemed network of knowledgeable contributors, significantly directing efforts towards incorporating artificial intelligence across various user interactions.

According to CFO Mr. Han Wang, the fourth quarter signified a landmark achievement for Zhihu, combining a positive operational profit and net income for the first time based on both GAAP and non-GAAP measures. The growth momentum is projected to continue as Zhihu prepares for sustainable long-term growth while maximizing shareholder and user value.

In addition, the Company has actively initiated share repurchase programs, completing the buyback of 31.1 million Class A ordinary shares under a US$100 million plan, showcasing a commitment to shareholders and reinforcing market confidence.

As Zhihu navigates through its newly charted path, stakeholders remain optimistic for continuous engagement and innovation while ensuring the community remains at the heart of their endeavors. Zhihu Inc. continues to innovate and redefine its positioning within the competitive landscape of online content, leveraging its strengths for further advancement in the digital community arena.