Zhihu Q2 2026 Earnings Call Transcript

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August 26, 2026

Key Takeaways

  • Positive Sentiment: 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.
  • Negative Sentiment: 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.
  • Positive Sentiment: 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.
  • Positive Sentiment: 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.
  • Positive Sentiment: 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.
AI Generated. May Contain Errors.
Earnings Conference Call
Zhihu Q2 2026
00:00 / 00:00

Transcript Sections

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Zhihu Inc Second Quarter 2026 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question and answer session. Today's conference is being recorded and webcasted. At this time, I would like to turn the conference over to [Damie Leung] of Investor Relations. Please go ahead, ma'am.

Company Representative at Zhihu

Thank you, Sharon. Hello, everyone. Welcome to Zhihu second quarter 2026 financial results conference call. Joining me today from our senior management team are Mr. Zhou Yuan, Founder, Chairman, and Chief Executive Officer, Mr. Wang Han, Chief Financial Officer, and Mr. Zhang Ronghua, Chief Operating 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, actual results may be materially different from the views expressed here today. Further information regarding this included in our public filings with the U.S. Securities and Exchange Commission and the Hong Kong Stock Exchange. The company does not assume any obligation to update any forward-looking statements except as required under applicable law.

Company Representative at Zhihu

Additionally, today's discussion will include both GAAP and non-GAAP financial measures for comparison purposes 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. A replay of this conference call will be available on our IR website at ir.zhihu.com. Today, Mr. Zhou Yuan will deliver prepared remarks in Chinese and followed by English translation. Please go ahead, sir.

Zhou Yuan
Zhou Yuan
Founder, Chairman, and CEO at Zhihu

[Non-English content]

Translator

Hello everyone, and thank you for joining Zhihu second quarter 2026 earnings call. Today, I will cover three areas: our core business performance in the second quarter, how AI is expanding the value of our community content, IP and expert network, and our priorities for the.

Zhou Yuan
Zhou Yuan
Founder, Chairman, and CEO at Zhihu

[Non-English content]

Translator

Let me start with our core businesses. Overall, our core business remains stable while some areas continue to adjust and recover. In the second quarter, total revenue was CNY 619 million, down 3.7% year-over-year, and up 5.9% sequentially, with a year-over-year decline narrowing further. Adjusted net loss was CNY 10.25 million, reflecting changes in the revenue mix and phased business investments. Our CFO will discuss the financial details shortly. Community engagement among core users remains stable. Average daily time spent was about 39 minutes. Daily creation of high-quality content grew more than 16%. As AIGC makes content creation easier, authentic experiences, clear sourcing, and professional judgment are becoming more valuable. These remain the foundation of Zhihu and our long-term value.

Zhou Yuan
Zhou Yuan
Founder, Chairman, and CEO at Zhihu

[Non-English content]

Translator

Turning to marketing services, revenue were CNY 199 million, down 10.7% year-over-year and up 4% sequentially. We continue to focus on key verticals including technology, automotive, consumer electronics and home appliances, and gaming. Spending on performance 1% sequentially, including a 22% increase in gaming. This has not yet translated into a broader recovery in the marketing revenue. But it supports our strategy of strengthening key verticals, products and algorithms. Marketing services remain in structural recovery and will continue to improve the matching of professional content user needs and client demand.

Zhou Yuan
Zhou Yuan
Founder, Chairman, and CEO at Zhihu

[Non-English content]

Translator

For paid content and IP, revenue reached CNY 426 million, up 4.4% year-over-year and 5.9% sequentially. Average monthly subscribing members were 13.11 million, broadly stable, while member ARPPU also remained stable. We will continue to improve membership content and product experience while expanding knowledge based offerings. IP operation continued to contribute incremental growth, licensing increasing 105% sequentially and 600% year-over-year. We are expanding the initial IP from one time licensing toward multi-format for lifecycle development. Overall, challenges remain, but our business mix continues to adjust and our strategic direction remain unchanged. We will continue to stabilize our core businesses while maintaining the investment discipline.

Zhou Yuan
Zhou Yuan
Founder, Chairman, and CEO at Zhihu

[Non-English content]

Translator

Next, I would like to focus on Zhihu in the AI area. Zhihu starts with the community bringing the value accumulated within Zhihu to more people through new products, formats and use cases. Real users, professional content, IP and our next expert network remain our most important assets. AI is helping extend these capabilities into new applications and commercial scenarios. First, the community will become more open. AI is changing how content is discovered and used. For Zhihu, openness does not mean changing our positioning. It means enabling the high quality content to reach more users and developers through the AI tools and applications. This requires clear cultures around content sourcing, creator rights, and community values. We are further integrating Zhihu Zhida with Zhihu search, making AI powered search a new gateway to community content rather than a substitute for it. Early testing has shown positive signals for user retention.

Translator

We are also exploring community agents. AI Kanshan is one example. Rather than another general purpose chatbot, we wanted to help users explore Zhihu and discover real people, professional content and diverse perspectives. The product remain at an early testing stage, and our focus is on content discovery, interaction and retention. AI Works now hosts more than 2,600 AI projects, while the open data platform API has attracted more than 17,600 professional developers. About 20% were not previously Zhihu creators. We also released an updated Zhihu CLI, making it easier to discover and use Zhihu content across AI tools. Through AI search, agents, open platforms, and developer tools, Zhihu's content and professional capabilities can reach more users, developers, and clients beyond the Zhihu app.

Translator

We believe AI is becoming a new medium that can help existing content reach new audiences, enable new applications, and create new opportunities in content licensing, brand content assets and expert services.

Zhou Yuan
Zhou Yuan
Founder, Chairman, and CEO at Zhihu

[Non-English content]

Translator

Second, marketing services are evolving from traffic value to what the content asset value. As more information discovery happens through AI, brands increasingly care not only about visibility, but also whether the professional information can be accurately understood and cited by AI, while helping brands be professional content assets with clear sourcing. Unlike a one-off campaign, these assets can continue to be discovered and used across search, AI and other channels, creating longer term value. Our AI content asset offering remains at an early stage. In Q2, the number of clients increased 50% sequentially. This does not yet represent a stable or scalable revenue contribution, but it's beginning to demonstrate new commercial value. Going forward, we will focus on client outcomes with demand and product standardization.

Zhou Yuan
Zhou Yuan
Founder, Chairman, and CEO at Zhihu

[Non-English content]

Translator

Third, AI is accelerating the expansion of IP into multimedia formats. AI is lowering the cost and barriers of turning text-based IP into multimedia formats. For Zhihu, this allows our large base of original content to be developed more efficiently into comic dramas, short dramas, film and television, and other formats. A meaningful portion of the comic drama projects monetized this quarter came from the works created in 2025 or earlier. This shows that high quality IP can return value over time, while technology improves the development efficiency and expands its reach. In the first half, we also explored in-house with some projects showing encouraging early results. However, we will remain disciplined and will not materially increase asset-heavy investments. We will flexibly choose among licensing, in-house and commission production based on the project economics.

Translator

Going forward, we will continue to strengthen our capabilities in IP selection, development, and cross-format operations to unlock more value from our content library.

Zhou Yuan
Zhou Yuan
Founder, Chairman, and CEO at Zhihu

[Non-English content]

Translator

Fourth, expert data solutions are evolving from project delivery towards reusable capabilities. AI is creating new ways to use Zhihu's expert capabilities, not only creating content for users. Experts can now help translate the professional judgment into model capabilities through training data, model evaluation, and complex task design. We position as a research-driven data lab. We identify model capability gaps and develop training data, evaluation systems, and complex task environments to help improve the model performance. In the first half, we completed projects across coding, search, and deep research, visual reasoning, and agents, while building capability-spanning model analysis. Our expert network plays an important role in defining the professional tasks, setting quality standards, and evaluating whether model outputs meet the professional requirements. We are also becoming more proactive in identifying model gaps, developing training data and evaluation methods in-house, and validating the value through the actual model performance.

Translator

Our goal is not one-off data delivery, but reusable capabilities that can evolve across clients and model iterations. In the next phase, we will continue this and extend them into products, complex tasks, and environments. Finally, let me briefly summarize. In the second quarter, our core community remained resilient. Paid content remained stable, IP operation continued to grow, and marketing services improved sequentially. Our position in the AI area is also becoming clear. Our authentic, professional, and trustworthy community remain the foundation, while AI helps us reach new users, applications, and commercial scenarios. Second, we will continue to validate AI-driven opportunities across our open community ecosystem, AI content assets, IP, and expert data solutions by focusing on real demand, client value, capability reuse, and ROI. Initial validation does not mean these initiatives have become stable growth drivers. Ability may fluctuate due to the business timing and phase investments.

Translator

Our long-term goals of improving operating efficiency and returning sustainable profitability remain unchanged. Over the long term, we want Zhihu to be not only an authentic, professional, and trustworthy community, but also an important platform connecting content, knowledge, and AI applications. Thank you. I will now hand over to our CFO to review the quarter's financial performance.

Han Wang
Han Wang
CFO at Zhihu

Hi, I will now go over our second quarter issued earlier today. During the second quarter, our revenue trend continued to improve sequentially, supported by growth in paid content and IP operations. At the same time, disciplined cost management showed year-over-year reductions in operating expenses and operating losses. Now, turning to the financial highlights of the second quarter. Our total revenues for the quarter were CNY 690.1 million, down 3.7% year-over-year and up 5.9% sequentially. The sequential growth was primarily driven by content in the IP operations. Marketing services revenue was CNY 199 million, compared with CNY 222.8 million in the same period of 2025. Decreased primarily reflected our proactive and ongoing refinement of service offerings. Sequentially, marketing services revenue increased by 4%, with improving traction in key verticals and performance-based products. We also continued to make early progress in AI-related commercial use cases.

Han Wang
Han Wang
CFO at Zhihu

Content and IP operations revenue was CNY 425.9 million, up 4.4% year-over-year, and 5.9% sequentially, primarily driven by continued growth in IP operations. Average monthly subscribing members remained stable at 13.1 million. We will continue to strengthen our paid content offerings while developing and monetizing selected IP across multiple formats with disciplined attention to project returns and risk. Other revenues were CNY 86 million in the same period of 2025. The decrease was primarily due to the continued strategic refinements of our vocational training business. Sequentially, other revenues increased by 12.7%, and year-over-year decline continued to narrow. Our gross profit for the quarter was CNY 393.4 million, compared with CNY 448.2 million in the same period of 2025. Gross margin was 57%, compared with 62.5% in period of 2025. The decline in gross margin primarily reflected our continued efforts to broaden and enhance our content offerings.

Han Wang
Han Wang
CFO at Zhihu

Total operating expenses decreased by 13% to CNY 469.4 million from CNY 539.2 million in the same period of 2025, reflecting continued efficiency improvements across our operations. Selling and marketing expenses decreased by 5.4% to CNY 308.7 million from CNY 326.3 million in the same period of 2025. Disciplined marketing spending. Research and development expenses decreased by 25.4% to CNY 108.6 million from CNY 145.7 million in the same period of 2025, primarily attributable to continued improvements in our research and development efficiency. General and administrative expenses decreased by 22.7% to CNY 52 million from CNY 67.3 million in the same period of 2025, primarily attributable to lower personnel-related expenses. On a non-GAAP basis, adjusted loss from operations narrowed by 32% to CNY 48.7 million from CNY 71.5 million in the same period of 2025. Investment income was CNY 16.4 million, compared with CNY 114.8 million in the same period of 2025.

Han Wang
Han Wang
CFO at Zhihu

The decrease was primarily due to an unrealized gain from the fair value remeasurement of our investment in a privately held company in the same period of 2025. CNY 37.4 million, compared with net income of CNY 72.5 million in the same period of 2025. On a non-GAAP basis, adjusted net loss was CNY 10.3 million, compared with adjusted net income of CNY 91.3 million in the same period of 2025. As of June 30, 2026, we had CNY 4.4 billion in cash and cash equivalents, term deposits, restricted cash, and short-term investments, maintaining a solid liquidity position to support our. As of June 30, 2026, we had repurchased aggregate of 41.3 million Class A ordinary shares for a total consideration of US$77.9 million on both the New York Stock Exchange and The Stock Exchange of Hong Kong.

Han Wang
Han Wang
CFO at Zhihu

During the second quarter, we repurchased 6.5 million Class A ordinary shares for a total consideration of $7.2 million. Looking ahead, we will continue to balance selective investments in new initiatives with operating efficiency. While quarterly profitability may be affected investment, our long-term objective of improving operating efficiency and returning to sustainable profitability remains unchanged. We will also maintain a disciplined approach to capital allocation and continue to execute share repurchases to enhance long-term shareholder returns. This concludes my prepared remarks on our financial performance for the quarter. Now I turn the call over to the operator for the Q&A session.

Operator

Thank you. To ask a question, you will need to press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. In the interest of time, please ask one question each time. If you have any follow-up questions, please go back to the queue. Thank you. We will now go to the first question. One moment, please. Your first question today comes from the line of Thomas Chong from Jefferies. Please go ahead.

Thomas Chong
Thomas Chong
Analyst at Jefferies

[Non-English content]

Thomas Chong
Thomas Chong
Analyst at Jefferies

So I will translate myself. Thanks very much for taking my question. My question is how should we think the revenue and profit trend in the second half of the year? Under the business adjustment and new business investment, are there any fluctuation between quarters? Thanks.

Zhou Yuan
Zhou Yuan
Founder, Chairman, and CEO at Zhihu

[Non-English content]

Translator

This is speaking on behalf of CEO. Looking into the second half, we do not think it's the sequential improvement seen in the second quarter. Different businesses have different operating rhythms. Marketing services remain in a period of structural recovery, like we mentioned before, and may continue to be affected by changes in client budgets and industrial demand. We will strengthen our product R&D and especially the performance advertising capabilities, and also increase the value per unit of traffic, rather than drive.

Zhou Yuan
Zhou Yuan
Founder, Chairman, and CEO at Zhihu

[Non-English content]

Translator

Paid content remains relatively stable, while IP operations will be influenced by project timing. Recent changes in industry standards and filing requirements may also affect the launch timing of certain projects.

Zhou Yuan
Zhou Yuan
Founder, Chairman, and CEO at Zhihu

[Non-English content]

Translator

At the same time, we're still validating the new capabilities like AI content assets and expert data solutions. We have seen like and client validation, but it might take time until we see scalable revenue contribution, and will also require some near-term investments.

Zhou Yuan
Zhou Yuan
Founder, Chairman, and CEO at Zhihu

[Non-English content]

Translator

At this stage, we are more focused on the stability of our core businesses, while whether new initiatives can create real client value and reusable stuff and ROI. We'll continue to invest prudently. Our long-term goals remain to improve our revenue mix and return to sustainable profitability.

Zhou Yuan
Zhou Yuan
Founder, Chairman, and CEO at Zhihu

[Non-English content]

Company Representative at Zhihu

Next question, please.

Operator

Thank you. Your next question today comes from the line of Vicky Wei from Citi. Please go ahead.

Vicky Wei
Vicky Wei
Analyst at Citi

[Non-English content]

Vicky Wei
Vicky Wei
Analyst at Citi

Would management share some color about your view on the AI-generated comic dramas, and how should we think of Zhihu's advantages? Thank you.

Zhang Ronghua
Zhang Ronghua
COO at Zhihu

[Non-English content]

Translator

This is speaking on behalf of COO. We are very positive on the AI comic drama market, and believe the industry is in a clear growth trend. On one hand, AI content generation capabilities continue to improve rapidly, including character consistency, visual quality, motion, and the overall production efficiency. On the other hand, as more creators enter the market, we are seeing greater diversity in ideas and formats. AI comic dramas are gradually becoming a new form of content consumption. As the production continue to improve, we expect content quality and user acceptance to rise further.

Zhang Ronghua
Zhang Ronghua
COO at Zhihu

[Non-English content]

Translator

At the same time, the basis of computation is also changing. In the early stage, the focus was on who could adopt AI faster and produce content at lower cost. As AI production become more widely available, the real scarcity shifts back to the content itself, like the good stories, a sustainable pipeline of creative ideas, and the ability to consistently turn IP into compelling visual content.

Zhang Ronghua
Zhang Ronghua
COO at Zhihu

[Non-English content]

Translator

This is where Zhihu has a clear advantage. Through YanYan story and other products, we have built a broad ecosystem of original stories and creators. Our advantage is not simply the size of the library, but our ability to continuously generate new content and identify the strongest titles supported by a well-established creator. This helps reduce the trial and error costs in IP development and improve the overall efficiency of our content portfolio.

Zhang Ronghua
Zhang Ronghua
COO at Zhihu

[Non-English content]

Translator

We have already seen this validated in the AI comic. According to the third-party data, in the first half of 2026, YanYan stories became one of the leading IP providers for native AI comic dramas on TikTok, and ranked among the top three IP providers on Hongguo. We also began the in-house information production in the second quarter, and have seen encouraging heat rates so far. As AI creates new media formats, a strong story can be visualized. In this way, AI helps extend the life cycle of quality IP and improve the monetization efficiency of our existing content assets.

Zhang Ronghua
Zhang Ronghua
COO at Zhihu

[Non-English content]

Translator

Strategically, our focus is to build on Zhihu's strength in the content and our creator ecosystem, like we mentioned before. While using AI to improve the development efficiency across scripting, production and distribution, we will remain flexible in our business models, including licensing in-house products, where the market demand and project economics are well validated. We may selectively move further upstream in the value chain.

Zhang Ronghua
Zhang Ronghua
COO at Zhihu

[Non-English content]

Translator

Over the long term, we believe Zhihu's moat in this market will come from a combination of capabilities, including a sustainable supply of the original IP, content selection based on real user behavior, a stable creator ecosystem and a clear license framework, and AI-enabled cross-media IP development.

Zhang Ronghua
Zhang Ronghua
COO at Zhihu

[Non-English content]

Translator

Thank you.

Company Representative at Zhihu

Next question, please.

Operator

Thank you. Your next question today comes from the line of Xueqing Zhang from CICC. Please go ahead.

Xueqing Zhang
Xueqing Zhang
Analyst at CICC

[Non-English content]

Xueqing Zhang
Xueqing Zhang
Analyst at CICC

Thanks management for taking my question. Could management elaborate a little more on the business model for expert data solutions? What is Zhihu's advantage in this business? Thank you.

Zhou Yuan
Zhou Yuan
Founder, Chairman, and CEO at Zhihu

[Non-English content]

Translator

As a data lab focused on improving frontier model capabilities. Simply put, we continuously study where models still have capability gaps, identify the tasks they cannot perform reliably, and then design the training data, complex task environments, and benchmarks around these gaps. We then validate whether these efforts actually improve the performance through the training and evaluation. Our goal is not simply to deliver data, but to solve the specific model capability problems for our clients.

Zhou Yuan
Zhou Yuan
Founder, Chairman, and CEO at Zhihu

[Non-English content]

Translator

Our business model currently includes the customized R&D projects based on the client's frontier needs, while we also increasing our own research and exploring ways to productize selective capabilities. As we complete more projects, we aim to standardize and reuse our data pipelines, environment building capabilities, like evaluation frameworks and knowhow across more clients and different generations of models. These should improve both scalability and capability reuse.

Zhou Yuan
Zhou Yuan
Founder, Chairman, and CEO at Zhihu

[Non-English content]

Translator

Zhihu's expert network is an important part. At the same time, we are building an end-to-end R&D loop from identifying model gaps and designing tasks and training signals, to building environments and graders, and ultimately validating model performance. In areas such as coding, search, and deep research, data production increasingly rely on the model requirements rather than the large-scale manual work. Experts therefore play a greater role in setting standards, providing the professional judgment, and validating the results.

Zhou Yuan
Zhou Yuan
Founder, Chairman, and CEO at Zhihu

[Non-English content]

Translator

The investment profile of this business will differ from the traditional one. Going forward, more of investment will be directed towards compute, model usage, and R&D infrastructure with the goal of building capabilities that can continuously evolve and be reused. At this stage, we are focused on three things: whether we can consistently improve the model performance, whether the long term relationships with the clients and whether our capabilities can be reused across them. If these metrics continue to validate resources in a measured way based on the client demand and the ROI. Thank you.

Operator

Thank you. That concludes today's Q&A session. At this time, I will turn the conference back to Demi for any additional or closing remarks.

Executives
    • Company Representative
    • Zhou Yuan
      Zhou Yuan
      Founder, Chairman, and CEO
    • Han Wang
      Han Wang
      CFO
    • Zhang Ronghua
      Zhang Ronghua
      COO
Analysts
    • Translator
    • Thomas Chong
      Analyst at Jefferies
    • Vicky Wei
      Analyst at Citi
    • Xueqing Zhang
      Analyst at CICC
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