Earnings call transcript: Zhihu Q2 2025 sees AI-driven growth amid revenue dip

Zhihu Inc. reported its Q2 2025 earnings, showcasing a mixed financial performance with a decline in total revenue but a promising expansion in gross margin. The company’s stock showed a notable premarket increase of 5.4%, reflecting investor optimism about its strategic focus on AI integration and profitability improvements. According to InvestingPro data, Zhihu maintains a GOOD financial health score of 2.56, with particularly strong performance in cash flow management.

[Want deeper insights? InvestingPro subscribers have access to 10 additional ProTips and comprehensive financial analysis for Zhihu.] Despite a year-over-year revenue decrease, Zhihu maintained its third consecutive quarter of non-GAAP profitability, driven by strong performance in paid memberships and vocational training.

Key Takeaways

• Zhihu’s total revenue decreased, yet gross margin improved to 62.5%.
• The company achieved its third consecutive quarter of non-GAAP profitability.
• Premarket trading saw Zhihu’s stock rise by 5.4%.
• AI integration and product innovation were key focuses during the quarter.
• Zhihu repurchased 31.1 million Class A shares for $66.5 million.

Company Performance

Zhihu’s performance in Q2 2025 was characterized by strategic shifts and financial resilience. While total revenue fell to RMB716.9 million, reflecting a broader trend of -19.15% decline over the last twelve months, the company managed to expand its gross margin to 62.5% from 59.6% a year earlier. The company maintains strong liquidity with a current ratio of 3.49, indicating robust short-term financial stability. This improvement underscores Zhihu’s ability to optimize costs and enhance operational efficiency. The company also reported an adjusted net income of RMB91.3 million, a significant turnaround from a loss of RMB44.6 million in the previous year.

Financial Highlights

• Total Revenue: RMB716.9 million, down from the previous year
• Gross Margin: 62.5%, up from 59.6% year-over-year
• Adjusted Net Income: RMB91.3 million, compared to a loss of RMB44.6 million last year
• Marketing Services Revenue: RMB222.8 million
• Paid Membership Revenue: RMB402 million
• Vocational Training Revenue: RMB62.1 million

Market Reaction

Zhihu’s stock experienced a positive premarket movement, increasing by 5.4% to $4.88. This rise comes after a previous day close at $4.63. The stock’s movement suggests that investors are optimistic about the company’s strategic direction, particularly its focus on AI capabilities and profitability. Year-to-date, the stock has delivered an impressive 30.79% return. Based on InvestingPro’s Fair Value analysis, Zhihu appears undervalued at current levels, suggesting potential upside opportunity. Check out our Most Undervalued Stocks list for more opportunities like this. The stock remains within its 52-week range, with a high of $6.32 and a low of $3.13, indicating room for growth.

Outlook & Guidance

Looking forward, Zhihu plans to deepen its AI integration across its product suite and enhance user trust to drive commercial monetization. Analyst consensus is moderately bullish with a 1.5 rating (where 1 is Strong Buy), suggesting confidence in the company’s strategic direction. Get the full picture with InvestingPro’s detailed research report, part of our coverage of 1,400+ US stocks. The company anticipates a recovery in marketing services in the second half of the year and aims to achieve near breakeven on a full-year non-GAAP basis. Future projections include an EPS forecast of -0.04 USD for Q3 2025 and 0.0 USD for Q4 2025, with revenue forecasts of $104.95 million and $113.89 million, respectively.

Executive Commentary

"Our path forward is a variable formula of trusted content times expert network times AI capabilities," stated Zhou Yuan, CEO. This highlights Zhihu’s commitment to leveraging AI to enhance its content and user engagement. CFO Wang Han expressed confidence in the company’s future, stating, "We expect to see a stabilization and a recovery in the coming quarters with a return to positive year-over-year growth."

Risks and Challenges

• Revenue Decline: Continued revenue decreases could impact overall financial stability.
• Market Competition: Intense competition in the AI and content sectors may pressure growth.
• Economic Conditions: Macroeconomic factors could affect consumer spending and advertising revenue.
• Content Authenticity: Ensuring content quality and authenticity remains a challenge.
• AI Integration: Successful implementation of AI capabilities is crucial for future growth.

Q&A

During the earnings call, analysts inquired about Zhihu’s AI product development strategy and its impact on user engagement. Executives also addressed concerns regarding growth outlooks for various business segments and explained shareholder return strategies, emphasizing the company’s focus on long-term value creation.

Full transcript - Zhihu Inc ADR (ZH) Q2 2025:

Conference Operator: Ladies and gentlemen, thank you for standing by, and welcome to the Zhuhu Inc. Second Quarter twenty twenty five Financial Results Conference Call. At this time, all participants are in listen only mode. After the speakers’ presentation, there will be a Q and A session. Today’s conference is being recorded and webcasted.

At this time, I would like to turn the conference over to Yolanda Lu, Director of Investor Relations. Please go ahead, ma’am.

Yolanda Lu, Director of Investor Relations, Zhuhu Inc.: Thank you, Zohra. Hello, everyone. Welcome to Jufu’s twenty twenty five second quarter financial results conference call. Joining me today on the call from the senior management team are Mr. Zhou Yun, Founder, Chairman and Chief Executive Officer and Mr.

Wang Han, Chief Financial Officer. Before we begin, I’d like to remind you that today’s discussion will include forward looking statements made under the Safe Harbor provisions of The U. S. Private Securities Litigation Reform Act of 1995. These statements involve inherent risks and uncertainties.

As such, the actual results may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties is included in our public filings with the U. S. Securities and Exchange Commission and Hong Kong Stock Exchange. The company does not assume any obligation to update any forward looking statements, except as required under actual law.

Additionally, the discussion today will include both GAAP and non GAAP financial measures for consideration purpose only. For a reconciliation of these non GAAP measures to the most directly comparable GAAP measures, please refer to our earnings release issued earlier today. In addition, a webcast replay of this conference call will be available on our IR website at ir.jihoo.com. Today, Zhou Yuan, our founder and CEO, and Wang Han, our CFO, will have their prepared remarks delivered in English through their representative AI voice agents. The content is prepared by them while the agents serve only as a voice interface.

As the agents are still learning, we appreciate your understanding. First, let’s hear from Julian’s agent, Victor. Victor, please go ahead.

Zhou Yuan, Founder, Chairman and CEO, Zhuhu Inc.: Thank you, Yolanda. Hello, everyone, and thank you for joining Zhihu second quarter twenty twenty five earnings call. I am Victor Zhou, an AI powered voice agent of Zhou Yuan. I am pleased to deliver today’s opening remarks on behalf of Mr. Zhou Yuan, Founder, Chairman and CEO of Zhou.

We posted our third consecutive quarter of non GAAP profitability, once again beating market expectations by a wide margin. Adjusted net income for the second quarter reached RMB91.3 million compared to a loss of RMB44.6 million in the same period last year, while gross margin expanded by approximately three percentage points year over year. These results highlight the strength of our disciplined operating strategy and the value of our AI powered productivity gains. Zhuhu’s ecosystem continues to flourish with our trustworthy content and professional creators, enriching the experience for users and creators alike. In particular, leading experts continue to drive deeper engagement within the community, steadily amplifying the influence and strengthening the ecosystem.

This increased engagement is clearly reflected in several key user metrics. While MAUs remained stable from last quarter, daily time spent, core user retention and high tier creator engagement all posted notable gains both sequentially and year over year. Our expanding in house AI capabilities and growing industry influence have reinforced our platform’s unique value proposition as the go to destination for professional, trustworthy Chinese language content with an increasing number of users and creators flocking to the platform. Notably, our platform has emerged as the preferred launch pad for new AI technologies and products while becoming the leading network for AI talent and expertise. As our synergistic development of high quality content, trusted creator network, and AI capabilities accelerates, Zhuhu is delivering greater and differentiated value to users and clients, not only on our platform, but also across the broader Internet, continuously widening our competitive mode.

As AI tools surge in popularity, professional content from the Zhuhu community is increasingly being cited by a growing number of leading large AI models and AI search engines. We are pleased to see Zhuhu serve as a key source for credible information and research, especially in practical use cases such as scientific education, consumer decision making, and career development. Moving forward, we will further enhance the user and the creator experience by integrating AI more deeply throughout our community by adding intuitive features like personal knowledge assistance. We will continue to test, refine, and enhance our AI capabilities to amplify the value of Zhuhu as trusted content and expert network across the broader Internet. We believe these efforts will establish our platform as a foundational source of reliable content for the Chinese AI ecosystem.

Our persistent efforts to optimize the trustworthiness of our content system and foster greater creator engagement across the community continue to deliver tangible results. In the second quarter, average daily user time spent exceeded thirty nine minutes, reflecting a 15% year over year increase. Core user retention improved significantly both on a sequential and the year over year basis, while the depth of DAU content engagement increased quarter over quarter. This progress reflects our ongoing efforts to optimize community features and refine operational strategies throughout the year. Through AI integration, we’ve created a more user friendly and reliable user experience while strengthening connections among our users and key contributors.

Over the past fourteen years, we’ve developed and continuously refined Zhuhu’s content model, building a robust foundation where professional content thrives and consistently inspires trust, drives citations, and encourages discussions online. In the second quarter, daily high quality content creation increased by over 10% sequentially. AI has emerged as a key vertical with professional AI related content maintaining year over year growth of over 45% for two consecutive quarters. Recently, we’ve seen a growing trend of more and more frontline engineers and AI model developers openly sharing key insights that go beyond academic papers. This has made Zhuhu a uniquely valuable community where new products debut, in-depth discussions unfold, and knowledge is continuously built and preserved.

Over the past month alone, Zhihuo has been the go to platform for top AI teams and the frontline developers to launch and discuss new technologies and the products. For example, Moonshot AI unveiled the technical details of their Kimi K2 model with core developers actively engaging in Q and A sessions to break down the architecture and technical details. By the Dance’s seed team also released their GR III robot model on our platform, accompanied by an exclusive article outlining their development principles and journey. The trade team at Bydance also shared a comprehensive overview of their model iteration process. In addition, Jifle AI launched its GLM 4.5 model on our platform, and Alibaba’s QTEAM team released three consecutive models, sparking a series of vibrant community discussions.

Even Step Fund’s cofounder, Yibo Zhu, chose Zhuhu to thoroughly explain the design ideas behind the STEP three architecture. Through ongoing improvements to our content ecosystem and algorithms, we continue to identify and suppress the spread of low quality content, reducing its distribution by more than 98% year over year and over 59% sequentially. During the challenging annual Gaokao College entrance exam in June, when students are often overwhelmed with information and the need to make critical life decisions. Zhuhu leveraged its trustworthy structured content ecosystem to provide clear and practical guidance. Tools such as the Gaokao Data Hub offered data driven support for application submissions, while roundtable discussions such as career paths for humanities majors and how to navigate away from discouraged majors brought together.

Expert voices offering valuable insights. Zhuhu’s university communities also supported students by sharing authentic firsthand perspectives about campus life. Professional creators form the backbone of our ecosystem. In the second quarter, daily active high tier creators continued to grow sequentially, while the number of verified honored creators increased by 26% year over year. This community continues to thrive with high quality engagement.

As of the June, over 16,000,000 continuous learners and 3,650,000 proficient creators on Zhihu engaged in science and AI related discussions. Among those who are AI developers, over 56% hold a master’s or doctoral degree. Nearly 40% are aged between 18 and 24, and 14% are senior technology professionals, including company executives, CTOs, and tech leads to provide a better experience for professional creators. We continue to optimize our ideas and column products. The upgraded ideas product now seamlessly aligns with the high frequency creation workflow of professionals while encouraging interaction among users with shared interests.

This led to quarter over quarter increase of over 15% in both views and engagement in the second quarter. The column feature has strengthened connections among like minded users, resulting in a 45.7% quarter over quarter increase in daily visits. Additionally, more professional creators launched their own columns this quarter, fueling solid growth in the total number of columns. At the same time, deepening AI integration within our community has continued to expand our AI capabilities and the service scope. In the second quarter, we launched a major update to Zhihu ZhiDA public knowledge base built on top of existing personal knowledge libraries.

This update delivers a seamless AI interaction experience for creators and users across a wide range of reading Q and A and search use cases. It has also further reduced AI hallucinations in professional domains. Within just two weeks of launch, users created hundreds of new entries on the public knowledge base. This momentum also supported the creation of additional private knowledge bases among users, enabling them to consolidate and archive their search and research workflows. Moving forward, we will continue to develop Jufusida as an AI agent embedded within the community, serving as a comprehensive productivity suite for search, research, learning, and content creation.

We will further promote open sharing of professional content within the Zhuhu community and continue to strengthen the synergy between high quality content, our trusted expert network and AI capabilities. We are thrilled to see that Zhuhu Zhuhu Zhuhu has entered an exciting new stage of growth and innovation. Once it achieves critical penetration relative to overall platform traffic with the user experience and answer quality reaching key milestones, we will seek to integrate it across our broader suite of products. Now, let’s move on to commercialization. In the second quarter, we maintained a dynamic balance between commercial growth and community integrity by proactively refining our product offerings and client mix, while still navigating an adjustment cycle, we are encouraged to see the year over year top line decline moderating with total revenue reaching RMB716.9 million in the second quarter.

We firmly believe these ongoing adjustments will lay a solid foundation for our sustainable long term growth. Moreover, our evolving AI capabilities and the content ecosystem will continue to enhance and expand our commercial services, reinforcing the virtuous cycle between commercial growth and community vitality. Let’s turn to performance by segment. Our marketing services are progressing through the adjustment phase as planned and remain on track. In the second quarter, marketing services revenue grew 13.1% quarter over quarter to RMB222.8 million with the year over year decline narrowing substantially.

We continue to crack down on low quality marketing content, reducing its consumption by over 90% year over year during the second quarter. We also made meaningful progress in optimizing our client mix, leveraging Zhuho as strong brand equity and influence. We expanded our enterprise facing or 2B client base and diversified our commercial IP products and services tailored for top tier clients. During the June 18 shopping festival, we launched the Smart Picks Expert Choice campaign capitalizing on Zhihu’s trustworthy content model and high value user community. This initiative boosted brand awareness and highlighted product strengths for leading brands such as Dream, Haia, BYD, Roborock and NOWWO.

Furthermore, our advertising product upgrades are accelerating, powered by our advanced AI capabilities. While the second quarter is typically peak season for e commerce, our overall ad load significantly decreased from the same period last year, while our CPM performance improved sequentially across most product categories. During the June eighteen Shopping Festival, users increasingly use our AI capabilities to make more informed purchase decisions reflected in the 190% year over year search in the Zhihu Jun the eighteenth recommendation search index. The index for June 18 purchase related searches on Zhihu ZhiDA grew by 61% quarter over quarter and the average order value per user increased by 27% year over year. We are also building stronger connections between trusted content creators, high quality content and products.

The number of content creators participating in product promotion grew by 10% year over year, while the volume of promotional content increased by 20% year over year. We continue to upgrade our CCS products, which are quickly gaining traction among clients. Advertising spend from the gaming sector saw a fourfold increase year over year, while our client base expanded by 75%. With ongoing improvements to our AI capabilities, we expect marketing services to recover more strongly in the second half, expanding our commercial potential and driving long term value. And now for our paid membership business.

In the second quarter, average monthly subscribing members totaled 13,200,000.0 with revenue reaching RMB402 million representing a slight sequential decline of 3.8%. This was largely driven by our strategic emphasis on acquiring users with longer life cycles and higher ROI potential, which impacted new member sign ups. Since the start of the year, we have focused on enhancing user stickiness and diversifying our paid content and business models. As part of this, we further expanded and upgraded the premium content formats and service offerings under Yan Yan Story. Notably, voice live streaming has seen steady growth in both user penetration and paid conversion rates since launch.

In the second quarter, its ARPU significantly exceeded our expectations and continues to grow, reflecting strong user endorsement and the monetization potential it offers. The YanYang Story Long Form Writing Marathon launched in May has generated thousands of high quality submissions from creators within just two months, significantly outperforming similar initiatives over the period. This highlights the distinct advantages our content creator ecosystem has and the growing mindshare we hold among users in the long form content space. This directly translates into extended user subscription cycles and builds on our leadership in the short form content space. Our commitment to premium paid content and support for creators has enabled Yan Yan Story to consistently deliver high quality works that blend the literary richness with broader emotional appeal.

This has allowed us to build a stable and robust content pipeline that is both well received by users and widely recognized across the industry. In June, Yan Yan titles received three major awards in the 2024 China Online Literature Influence ranking further validating our content strategy and strengthening our foundation for IP development and monetization going forward. Momentum is also building in the commercialization of our original IPs. In the second quarter, revenue from IP licensing grew by triple digits both year over year and quarter over quarter. By the June, more than 40 premium short form stories published on Zhuhu had generated revenue through film and television licensing.

Among them, Guiding All Souls, No Time to Die, Wu Xiaofusi, and Ting Yin, The Birth of a Queen, together dubbed the three Yan Yan masterpieces. Yan Yan and Sanjue were especially well received by audiences while attracting strong interest from film and television adaptation partners. Lastly, our vocational training business recorded revenue of RMB62.1 million during the quarter, down 34.3% quarter over quarter. As we focus resources on high performing course categories and gradually phase out offerings with limited growth potential or lower profitability. This strategic focus is designed to improve overall business quality and long term growth.

Encouragingly, operating profit of the business for the quarter increased by an impressive 90% year over year, demonstrating the effectiveness of our operating strategy and execution. We continue to make steady progress in the broader strategic transformation of our vocational training business. Powered by our high quality content ecosystem and trusted creator network, we are transitioning from a traditional subject based expansion model focused on a few core categories to a more community driven approach that fosters deeper social engagement and knowledge sharing. This will also unlock new monetization opportunities for professional creators. In support of this, we enhanced the creator experience and paid content ecosystem of our new column product this quarter.

Since May, we have improved operations, product experience and algorithms to better support content creation and distribution. These efforts led to a more than 50% increase in shared column content from May to June. Creator user engagement also improved significantly. The growing demand for premium content further fueled the monetization of paid columns with GMV in June, increasing by over 34% month over month. For the remainder of the year, we will continue to drive the integrated development of high quality content, a trusted creator network and AI capabilities, further reinforcing DrHu’s competitive moat in the AI era.

As AI becomes more deeply embedded in our community, we aim to enable more intelligent, reliable experiences for users across a variety of scenarios. On the commercial front, we will accelerate our product upgrades to better serve high value users and professional creators, building a suite of solutions that enhance user trust and support stronger commercial monetization. Leveraging this foundation, we will further expand the reach of Zhuhu AI capabilities beyond our platform, offering our trusted content and services to a wider user base. We are confident that stronger synergies between our community and commercial ecosystems will reinforce Zhuhu’s value proposition as a trusted platform and unlock long term sustainable growth. With that, I will hand the call over to our CFO, Wang Han, whose remarks will also be delivered through his AI voice agent.

Han, please go ahead.

Wang Han, Chief Financial Officer, Zhuhu Inc.: Now I will review the details of our second quarter financials. For a complete overview of our second quarter twenty twenty five results, please refer to our press release issued earlier today. In the second quarter, we maintained our trajectory of non GAAP profitability for the third consecutive quarter. Gross margin also continued to expand year over year. These results underscore the ongoing strengthening of our financial fundamentals supported by a leaner cost structure and more efficient operations.

Our total revenues for the quarter were RMB716.9 million compared with RMB93.8 million in the same period of 2024. The decrease was driven by our ongoing business optimization. The year over year decline also narrowed slightly for the second straight quarter, in line with our expectations as we transition toward a more resilient and higher quality revenue mix. Our marketing services revenue for the quarter was RMB222.8 million compared with million in the same period of 2024. This decrease was mainly due to our continued refinement of service offerings and our strategic focus on improving margins.

Encouragingly, revenue grew 13.1% sequentially and the year over year decline also narrowed meaningfully, reflecting a more stable phase in our adjustment cycle. Paid membership revenue was RMB402 million, down slightly from RMB432.7 million in the same period of 2024. This was primarily due to a decrease in new subscriptions following a shift in our focus toward acquiring users with longer life cycles potential. Vocational training revenue was RMB62.1 million compared with RMB13.6 million in the same period of 2024. The decline resulted from the ongoing refinement of our acquired businesses as we continue to prioritize faster growing self operated course offerings.

Other revenues were RMB30 million compared with million in the same period of 2024. Our gross profit for the quarter was RMB448.2 million compared with RMB5565 million in the same period of 2024. Gross margin expanded to 62.5%, up from 59.6% in the same period of twenty twenty four and sixty one point eight percent in the previous quarter. This was largely driven by improvements to our monetization capabilities and continued gains in operating efficiency. Our total operating expenses for the quarter declined by 27.2% year over year to RMB539.2 million.

This decrease reflects tighter cost controls and productivity improvements supported by technological innovation. Selling and marketing expenses decreased by 21.8% to RMB326.3 million from million in the same period of 2024. The decrease was primarily due to more disciplined promotional spending and lower personnel related expenses. Research and development expenses decreased by 30.4% to RMB145.7 million from RMB209.3 million in the same period of 2024. The decrease was mainly driven by improved efficiency in our research and development activities.

General and administrative expenses decreased by 41.1% to 67.3 million from RMB114.1 million in the same period of 2024. The decrease was largely due to reduced allowance for expected credit losses and lower share based compensation. Investment income was RMB140.8 million compared with RMB21.8 million in the same period of 2024. The increase was primarily attributable to unrealized gains as a result of remeasuring the fair value of our investment in a privately held company associated with an observable price change in the quarter. As a result, our GAAP net income for the quarter was RMB72.5 million compared with a net loss of RMB806 million in the same period of 2024.

On a non GAAP basis, we remain profitable for the third consecutive quarter, recording adjusted net income of RMB9, 1,300,000.0 compared with an adjusted net loss of RMB44.6 million in the same period of 2024. As of 06/30/2025, we had cash and cash equivalents, term deposits, restricted cash and short term investments of RMB4.8 billion compared with RMB4.9 billion as of the 12/31/2024. As of the 06/30/2025, we repurchased 31,100,000.0 Class A ordinary shares for an aggregate value of $66,500,000 on open market. Additionally, we also repurchased a total of 18,600,000.0 Class A ordinary shares for aggregate value of US27.9 million through the trustee of the company as of the end of Q2. Looking ahead, we will continue to strengthen our monetization capabilities and support long term growth across key areas of our AI powered content ecosystem.

As we deepen the synergy between community activity and commercial performance, our solid financial foundation enables us to invest with focus and flexibility to drive sustainable profitability. This concludes my prepared remarks on our financial performance for this quarter. I’ll turn the call over to the operator for the Q and A session.

Conference Operator: Thank you.

Yolanda Lu, Director of Investor Relations, Zhuhu Inc.: And now we’re going

Conference Operator: to take our first question. And it comes from the line of Xuejing Zhang from CICC. Your line is open. Please ask your question.

Yolanda Lu, Director of Investor Relations, Zhuhu Inc.: Thanks management for taking my question. The prepared remarks delivered by AI agent is really impressive. So my question is also about AI regarding Zhihu’s AI and the large language model related products. Does the company have any new plans? And how should we think its current progress?

Thank you. Thank you, Jueqing, for your question. This is from Zhou Yuan, CEO of Zhuhu. So our progress in AI is kept pace with broader large language model industry. And over the past quarter, we’ve seen a lot of new integrations of many new models, including both open sources and closed sources.

And we believe our capability will naturally rise along with all these new models. And we are accelerating the upgrade of our agentic capability to more fully leverage this increase and innovation of the entire industry. So that is a very key product as an application layer for us. And it has performed very well over the past quarter with its penetration and usage both continue to grow. So this progress reflects our ongoing innovation and product updates as well as increasing word-of-mouth among our users.

The evolution of Zhuge ZhiDA has gone through two stage. First, as AI search, then AI search combined with a knowledge base. We see these not as the latest feature upgrades, but as necessary scenario extensions of AI plus community. Just last week, on August 22, to be specific, we see knowledge based entries became shareable and circulable within our community. The experience is similar.

So our users don’t even notice they are already engaging with the container that spans both community native and AI native domains. Something really staying in the standalone AI applications as we believe the room for this future upgrade is substantial. Looking ahead, we believe AI search and the knowledge base will become further integrated with the community scenarios. In Q4, we plan to deliver a more significant experience update on top of this foundation. So please stay tuned.

Thank you for your question.

Conference Operator: Thank you. Now we’re going to take our next question. Just give us a moment. And the question comes from the line of Vicky Wei from Citi. Your line is open.

Please ask your question.

Yolanda Lu, Director of Investor Relations, Zhuhu Inc.: Management for taking my question. So will management share some color about the current user matrix for Zhuhu Zhuhu Zhuhu? How does management view the unique value of Zhuhu’s authentic user generated content? What opportunities has Zhuhu identified and what are the biggest challenges facing? Thank you.

Thank you, Vicki for your question. This is Sue from Zhou Yuan, Zhuhu CEO. As I just mentioned earlier, this quarter, Zhuhu’s penetration with the community continued to grow. At the same time, we believe the definition of Jufu Juda itself is also evolving. Of course, Juda initially just launched as many people’s understanding is for AI search within the community.

But now definitely it’s spent beyond of that definition. It should be understood as our AI capability apply across diverse community scenarios. You also asked about the value of human generated content. In my opinion, its value is huge and its value is the currency of trust in the AI era, the gold standard, where the quality and authenticity of content set the baseline of this value. And for our from our understanding, the opportunity we see here is in how trust can scale, what we call scaling law of trust.

So our path forward is a variable formula of trusted content times expert network times AI capabilities. And we will move forward with strong conviction along this direction. Thank you. Thank you for your question.

Conference Operator: Thank you. Now we’re going to take our next question. And the question comes from the line of Lincoln Kung from Goldman Sachs. Your line is open. Please ask your question.

Thank you, management, for taking my question. So could management provide some color on the growth outlook for the marketing service, paid membership and the vocational training business? So how should we think about the key drivers for each segment in the second half? And how should we think about the full year profitability for 2025? Thank you.

Yolanda Lu, Director of Investor Relations, Zhuhu Inc.: Question. This is from Zhihu’s CFO, Wang Han. So I will just start it with your first question. So first on our marketing services, In the past several quarters, we have often mentioned that we are in an adjustment phase. Now we can say that this phase is nearing its end.

And we expect to see a stabilized stabilization and a recovery in the coming quarters with a return to positive year over year growth. Our focus will be on optimizing our client structure and upgrading our commercial products. On client structure wise, we will further leverage Zhuhu brand and high quality user base to expand into more trust driven categories, such as high value FMCG and maternal and infant products, as well as clients with stronger professional B2B attributes. At the same time, we’ll also continue to strengthen the monetization of Jufu’s high profile commercial IPs. For our paid membership business, we are currently in a stage of active experimentation with the core goal of improving renewal and retention as well as driving ARPU growth across multiple dimensions.

So on retention wise, have optimized the structure of new members to attract users with longer life cycles, such as extend our monthly paid members to more like half year and annual paid members. We’re also actively exploring media and longer form content. ARPU, we are expanding premium content format and service benefits for our members. For example, like I mentioned, the voice live streaming. At the same time, we will further accelerate the monetization efficiency of our IPs of the payment membership.

Thereby to strengthen member stickiness and to enhance the commercial value of each member. On vocational training, our operating strategy remain focused on efficiency and profitability. In the second half of this year, we will continue to adjust both our model and the content, though these adjustments are already approaching a more stable stage. So strategically, we will keep moving towards a more social and knowledge sharing oriented model, enabling knowledge based content to better meet our users’ needs and experience and to foster healthy circulation and consumption within the community. In return, we believe it will further strengthen the community’s ecosystem.

Wang Han, Chief Financial Officer, Zhuhu Inc.: So

Yolanda Lu, Director of Investor Relations, Zhuhu Inc.: this is basically about the current development of our business services. Thank you for your question.

Conference Operator: Thank you. Now we’re going to take our next question. Just give us a moment. And the question comes from the line of Xiaohanneson from HTR. Your line is open.

Please ask your question.

Yolanda Lu, Director of Investor Relations, Zhuhu Inc.: Thank you for giving me the opportunity to ask a question. I would like to ask management to share how we should anticipate the method and extent of shareholder returns going forward. Thank you. This is Sue from Zhuhu at Bohan. And we will just pick up the question about the shareholder return first, and then I will add on the second question from Lincoln about the outlook of the full year profitability.

Within the 10% share repurchase authorization approved by our Board and the shareholders earlier this year, we remain firmly committed to enhance shareholders’ returns through buybacks. Disclosed in today’s earlier earnings release, by June 30, we had repurchased 7,410,000.00 ordinary shares in open markets, representing 2.8% of total shares outstanding. And since this July, we have also continued to execute actively on the repurchase program. And we believe in the second half of this year, we will stay the same course and carry out this strategy with a strong commitment. Also, over the past two years for a and for the foreseeable future, we expect to remain one of the most significant U.

S. Listed Chinese companies in terms of our share repurchase ratio. And now I will just add on about the second question raised from Lincoln, and it’s on about our full year profitability. In the first half of this year, we achieved the profitability on both the GAAP and non GAAP net income basis. In each of these two quarters, also existing expectations on market.

And this has not only provided us with more flexibility to make adjustments in certain businesses for longer term healthy development, but also significantly increase the likelihood, the possibilities of reaching near breakeven on a full year non GAAP basis.

Wang Han, Chief Financial Officer, Zhuhu Inc.: Thank

Yolanda Lu, Director of Investor Relations, Zhuhu Inc.: you all for your questions.

Conference Operator: Thank you. That concludes today’s question and answer session. At this time, I will turn the conference back to Yolanda for any additional or closing remarks.

Yolanda Lu, Director of Investor Relations, Zhuhu Inc.: Thank you, operator. And thank you all once again for joining us today. If you have any further questions, please contact our IR team directly or Kristensen Advisory. Thank you.

Conference Operator: The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect. Have a nice day.

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