Zhihu Inc. Q1 2026 Earnings Call Summary

1Key Financial Results and Metrics

Total Revenue: RMB 651.6 million, down from RMB 729.7 million year-over-year but showing sequential growth.

Adjusted Net Profit: RMB 17.2 million, a significant improvement from an adjusted net loss of RMB 39.4 million in Q4 2025.

Gross Profit: RMB 388.3 million with a gross margin of 59.6%, improving sequentially from 53.6% in Q4 2025 but down from 61.8% year-over-year.

Paid Content and IP Operations Revenue: RMB 402.3 million, up 15.8% sequentially but down from RMB 420.9 million year-over-year.

Marketing Services Revenue: RMB 191.4 million, slightly down from RMB 197 million year-over-year but showing stabilization.

Average Monthly Subscribing Members: 13.1 million, an increase of 7.9% sequentially.

Cash Position: RMB 4.5 billion in cash and equivalents.

2Strategic Updates and Business Highlights

Community Engagement: Average daily time spent per Daily Active User (DAU) reached 42 minutes, indicating strong user engagement.

Content Creation: Cumulative content volume reached 972 million entries, with high-quality content creation rising 18% year-over-year.

AI Integration: Continued integration of AI capabilities across the platform, enhancing user interactions and content quality.

IP Operations Growth: Significant growth in IP operations, with partnerships increasing over fivefold year-over-year.

Share Repurchase Program: Ongoing buyback of shares, with 34.8 million Class A shares repurchased since 2022.

3Forward Guidance and Outlook

Growth Expectations: Management expects continued recovery in core businesses and growth from AI-related initiatives throughout 2026.

Focus Areas: Emphasis on operational profitability, leveraging high-quality content, expert networks, and AI capabilities to drive growth.

Long-Term Strategy: Commitment to building a positive feedback system that enhances user cognition and connections, with a focus on community over AI as an end goal.

4Bad News, Challenges, or Points of Concern

Year-over-Year Revenue Decline: Despite sequential growth, total revenue is still down compared to Q1 2025, indicating ongoing challenges in revenue optimization.

Marketing Services Revenue Stagnation: Marketing services revenue remains flat year-over-year, highlighting potential competitive pressures in that segment.

Operating Expenses: While operating expenses decreased, general and administrative expenses rose due to increased allowances for expected credit losses.

Market Competition: Ongoing competition in the AI and content space poses risks to growth and profitability.

5Notable Q&A Insights

AI Strategy: Management emphasized that AI is a tool to enhance community engagement rather than the primary focus. They aim to integrate AI to improve user experience and content quality.

Revenue Reclassification: The merging of paid membership and IP-related revenues reflects a strategic shift to showcase the full lifecycle value of content and IP operations.

Investment in AI: Future investments will focus on AI short dramas and data solutions, which are expected to have healthy cash flow profiles.

Shareholder Returns: The company remains committed to share repurchases, indicating confidence in its valuation and long-term growth prospects. Overall, Zhihu's Q1 2026 results indicate a positive trajectory with improved profitability and user engagement, although challenges remain in revenue growth and competitive pressures. The strategic focus on community and AI integration is expected to drive future growth.