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Zhihu Inc. Reports Unaudited Third Quarter 2024 Financial Results
ZHZHIHU(ZH) Prnewswire·2024-11-26 09:05

Core Insights - Zhihu Inc. reported total revenues of RMB845.0 million (US120.4million)forQ32024,adecreasefromRMB1,022.2millioninQ32023,indicatingayear−over−yeardeclineofapproximately17.4120.4 million) for Q3 2024, a decrease from RMB1,022.2 million in Q3 2023, indicating a year-over-year decline of approximately 17.4% [2][7] - The company's gross margin improved to 63.9% in Q3 2024 from 53.7% in Q3 2023, reflecting enhanced operational efficiency [3][11] - Net loss narrowed significantly to RMB9.0 million (US1.3 million) in Q3 2024, down 96.8% from RMB278.4 million in the same period of 2023 [3][14] Financial Performance - Total revenues for Q3 2024 were RMB845.0 million (US120.4million),comparedtoRMB1,022.2millioninQ32023,markingadeclineof17.4120.4 million), compared to RMB1,022.2 million in Q3 2023, marking a decline of 17.4% [2][7] - Marketing services revenue decreased to RMB256.6 million (US36.6 million) from RMB383.0 million in Q3 2023, primarily due to a strategic focus on margin improvement [7] - Paid membership revenue slightly decreased to RMB459.4 million (US65.5million)fromRMB466.8millioninQ32023,attributedtoamarginaldeclineinaveragerevenuepersubscribingmember[8]−VocationaltrainingrevenuefelltoRMB105.1million(US65.5 million) from RMB466.8 million in Q3 2023, attributed to a marginal decline in average revenue per subscribing member [8] - Vocational training revenue fell to RMB105.1 million (US15.0 million) from RMB144.8 million in Q3 2023, driven by lower contributions from acquired businesses [9] Cost Management - Cost of revenues decreased by 35.6% to RMB304.9 million (US43.4million)fromRMB473.7millioninQ32023,duetoreducedcontentandoperatingcosts[10]−Totaloperatingexpensesdecreasedby30.543.4 million) from RMB473.7 million in Q3 2023, due to reduced content and operating costs [10] - Total operating expenses decreased by 30.5% to RMB624.5 million (US89.0 million) from RMB898.6 million in Q3 2023, reflecting improved operational efficiency [11] - Selling and marketing expenses decreased by 27.4% to RMB388.0 million (US55.3million)fromRMB534.3millioninQ32023,duetomoredisciplinedpromotionalspending[12]UserEngagement−Averagemonthlyactiveusers(MAUs)reached81.1millioninQ32024,indicatinggrowthinuserengagement[4]−Averagemonthlysubscribingmemberswere16.5millioninQ32024,reflectingthecompany′seffortstoenhanceitssubscriptionmodel[5]StrategicInitiatives−Thecompanyintroducedthe′ProfessionalSearch′featuretoenhanceuserexperienceandengagement,buildingonthesuccessofitsAI−poweredsearchtool,ZhihuZhida[6]−Managementemphasizedacommitmenttoreducinglossesandimprovingprofitability,achievingthelowestquarterlylosssinceitsU.S.IPO[6][14]ShareRepurchasePrograms−AsofSeptember30,2024,Zhihurepurchased31.1millionClassAordinarysharesforatotalpriceofUS55.3 million) from RMB534.3 million in Q3 2023, due to more disciplined promotional spending [12] User Engagement - Average monthly active users (MAUs) reached 81.1 million in Q3 2024, indicating growth in user engagement [4] - Average monthly subscribing members were 16.5 million in Q3 2024, reflecting the company's efforts to enhance its subscription model [5] Strategic Initiatives - The company introduced the 'Professional Search' feature to enhance user experience and engagement, building on the success of its AI-powered search tool, Zhihu Zhida [6] - Management emphasized a commitment to reducing losses and improving profitability, achieving the lowest quarterly loss since its U.S. IPO [6][14] Share Repurchase Programs - As of September 30, 2024, Zhihu repurchased 31.1 million Class A ordinary shares for a total price of US66.5 million under its existing share repurchase program [17] - The company also conducted a cash tender offer, repurchasing 33,016,016 Class A ordinary shares, representing approximately 11.2% of its total issued shares before the repurchase [18]