Zhihu shares rise over 2% as company swings to profit in second quarter

BEIJING - On Wednesday, Zhihu Inc. (NYSE:ZH; HKEX:2390), a leading online content community in China, reported a significant turnaround in its second quarter financial results, swinging to a profit as the company’s efficiency initiatives and AI integration bore fruit.

The company’s stock rose 2.59% in pre-market trading following the announcement.

The company reported net income of RMB72.5 million (US$10.1 million) in the second quarter of 2025, compared with a net loss of RMB80.6 million in the same period of 2024. Adjusted net income was RMB91.3 million (US$12.8 million), compared with an adjusted net loss of RMB44.6 million a year earlier. Earnings per share came in at RMB0.30.

Revenue for the quarter declined to RMB716.9 million (US$100.1 million), down from RMB933.8 million in the same period last year. Despite the revenue drop, Zhihu’s gross margin expanded to 62.5% from 59.6% YoY, reflecting the company’s focus on profitability over growth.

"We achieved our third consecutive quarter of non-GAAP profitability," said Mr. Yuan Zhou, chairman and chief executive officer of Zhihu. "This reflects the continued effectiveness of our refined operational strategies and the efficiency improvements driven by AI integration."

The company reported 13.2 million average monthly subscribing members in the second quarter. Paid membership revenue, which constitutes the largest segment of Zhihu’s business, was RMB402.0 million (US$56.1 million), slightly down from RMB432.7 million a year ago.

Total operating expenses decreased by 27.2% to RMB539.2 million, with significant reductions across selling and marketing, research and development, and general and administrative expenses, demonstrating the company’s commitment to cost discipline.

Mr. Han Wang, chief financial officer, noted, "These results reflect the ongoing improvements to our cost structure and operating efficiency, supported by AI-driven productivity gains. We remain focused on disciplined execution and sustainable monetization to drive long-term growth."

As of June 30, 2025, Zhihu had cash and cash equivalents, term deposits, restricted cash, and short-term investments totaling RMB4,820.8 million (US$673.0 million).

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