Zhihu's Q3 2025 Earnings Call: Contradictions in AI Integration, Marketing Services Recovery, and Strategic Shifts

Date of Call: November 25, 2025

Financials Results

• Revenue: RMB 658.9 million, compared with RMB 845 million in the same period of 2024.
• Gross Margin: 61.3%, compared with 63.9% in the same period of 2024.
• Operating Margin: Non-GAAP operating loss narrowed by 16.3% year-over-year.

Guidance:

• On track to achieve full-year non-GAAP profitability in 2025; Q3 small loss viewed as within planned window.
• Marketing services: Q3 was the bottom; sequential recovery expected in Q4 and goal to keep quarters next year above the Q3 baseline.
• Continue targeted investments while maintaining disciplined cost control and reclassifying/optimizing vocational training into other revenues.
• Maintain active share buyback program given management believes the stock is materially undervalued.

Business Commentary:

* Non-GAAP Operating Loss Narrowing: - Zhihu's non-GAAP operating loss narrowed by 16.3% year-over-year in Q3 2025. - This was driven by structural optimization initiatives, disciplined cost control, and improved operating efficiency.

• AI Integration and Content Growth:
• Daily creation of high-quality content increased by over 25% year-over-year, with professional AI-focused content up by more than 30%.

• The surge in AI-focused content is attributed to Zhihu's role as a platform for frontline engineers and researchers to share and discuss advancements in AI technologies and applications.

• Marketing Services Revenue Stabilization:

• Zhihu's marketing services revenue in Q3 was RMB 1,894 million, with a narrowing year-over-year decrease.

• The stabilization is due to optimization of client mix and upgrading of advertising products, focusing on high-value accounts and enterprise clients.

• Paid Membership Growth and Retention:

• Average monthly paid members increased by 8.1% sequentially to 14.3 million in Q3 2025.

• This growth is a result of diversified initiatives to boost member retention and ARPU, driven by successful long-form writing marathons and improved paid conversion rates in voice live streaming.

• AI Agent Integration and User Engagement:

• Zhida's penetration rate increased to 15%, nearly 4x higher than the same period last year.
• This growth reflects the strategic integration of AI into the community, empowering professionals with AI copilot tools and expanding Zhida into high-frequency consumption scenarios to boost user engagement.

Sentiment Analysis:

Overall Tone: Positive

• Management stated they are "on track to achieve full year breakeven on a non-GAAP basis," non-GAAP operating loss "narrowed by 16.3% year-over-year," revenue decline "narrowed for the third consecutive quarter," and marketing services is expected to "begin growing on a sequential basis in the fourth quarter."

Q&A:

• Question from Yi Jing Wei (Citigroup Inc., Research Division): Will management share some color about the AI progress of Zhihu? For example, the penetration rate of Zhihu Zhida and the progress of the AI integration with the Zhihu Community.
  Response: Zhida penetration reached ~15% (nearly 4x YoY); by late November Zhida will fully augment search with Zhida-generated content, creator AI tools adoption >20%, and product roadmap expands AI capabilities to make Zhida a primary entry and lower creation barriers.

• Question from Luqing Zhou (Goldman Sachs Group, Inc., Research Division): How do you see the current status of Zhihu's user ecosystem? And based on that, could management share more color on the directions for improving Zhihu's future product design and how is the progress so far?
  Response: Ecosystem described as healthy with improving content quality, user structure and creator activity; product strategy centers on two pillars—utility (AI-driven efficiency) and identity (human connection)—with AI + expert network as core infrastructure.

• Question from Kewei Chen (Haitong International Research Limited): Could management update the progress of the adjustments in each business line? Did you see any signs that the revenue has bottomed out or started to rebound? In particular, how do you expect the future of the advertising business? And also, could you share your outlook on the company's profitability?
  Response: Marketing services hit the bottom in Q3 and is expected to recover sequentially in Q4 with the goal of keeping future quarters above the Q3 baseline; paid membership still transitioning and not conclusively bottomed; company expects full-year non-GAAP profitability in 2025.

• Question from Jing Yi Wang (Guangfa): Could management share some more color about the shareholder return pay in progress.
  Response: Management will maintain an active buyback program—has repurchased shares (open market and via trustee) and believes the stock is significantly undervalued relative to cash on the balance sheet.

Contradiction Point 1

AI Integration and Penetration Rate

It involves changes in the reported AI integration and penetration rates, which are crucial for understanding the company's technological progress and strategy.

Can you provide an update on Zhihu's AI progress, including the penetration rate of Zhihu Zhida and the integration of AI with the Zhihu community? - Yi Jing Wei (Citigroup Inc., Research Division)

2025Q3: Zhida's overall usage and penetration rate continued to increase in the third quarter, reaching 15%, nearly 4x higher than the same period last year. - Yuan Zhou(CEO)

Does the company have new plans for AI and large language model products? What is the current progress? - Xueqing Zhang (CICC)

2025Q2: Zhida's penetration and definition continue to grow, beyond AI search. - Zhou Yuan(CEO)

Contradiction Point 2

Marketing Services Recovery

It involves differing statements about the recovery timeline and status of the marketing services segment, which impacts financial forecasting and strategic planning.

Could you update us on the progress of adjustments in each business line and any signs of revenue bottoming out? Also, could you provide an outlook on the company's profitability? - Kewei Chen (Haitong International Research Limited)

2025Q3: Marketing services have reached the bottom and are expected to recover sequentially. - Wang Han(CFO)

Could management clarify the growth outlook for marketing services, paid membership, and - Lincoln Kong (Goldman Sachs)

2025Q2: Marketing services are nearing the end of an adjustment phase, with stabilization and recovery expected. - Han Wang(CFO)

Contradiction Point 3

AI Integration and User Ecosystem

It involves differing perspectives on the integration of AI with the user ecosystem and the progress of AI features on the platform, which are crucial for the company's future strategy and user engagement.

Can you provide an update on Zhihu's AI progress, including Zhihu Zhida's penetration rate and AI integration with the community? - Yi Jing Wei (Citigroup Inc., Research Division)

2025Q3: Zhida's overall usage and penetration rate continued to increase in the third quarter, reaching 15%, nearly 4x higher than the same period last year. The AI feature was fully integrated into the search functionality, enhancing AI adoption across the community. - Yuan Zhou(CEO)

Can you provide user size data for Zhihu Zhida? How does this data benefit the Zhihu community ecosystem? - Xueqing Zhang (CICC)

2024Q4: Over the past six months, Zhida's user base data has grown healthily, with MAUs increasing from about 1 million to 10 million. - Zhou Yuan(CEO)

Contradiction Point 4

Zhihu's Strategy and Product Focus

It involves differing statements on the company's strategic focus and product direction, which are critical for understanding Zhihu's strategic priorities and growth trajectory.

What is Zhihu's current user ecosystem status and future product development plans? - Luqing Zhou (Goldman Sachs Group, Inc., Research Division)

2025Q3: Zhihu's strategy involves integrating AI with user needs, enhancing efficiency in search, and fostering real human connections. - Yuan Zhou(CEO)

What product changes or innovations can we expect this year? Are there new AI integration initiatives? - Thomas Chong (Jefferies)

2024Q4: This year focuses on strengthening social interactions and enhancing brand trust. Developments include social circles and new content formats. - Zhou Yuan(CEO)

Contradiction Point 5

Revenue and Profitability Outlook

It involves changes in financial forecasts, specifically regarding revenue trends and profitability outlook, which are critical indicators for investors.

Could you provide an update on progress of adjustments across business lines, revenue bottoming out, and the company's profitability outlook? - Kewei Chen (Haitong International Research Limited)

2025Q3: There's a high likelihood of achieving full year non-GAAP profitability in 2025. - Wang Han(CFO)

Can you clarify the revenue trends by segment for 2025 and the profitability outlook? - Thomas Chong (Jefferies)

2025Q1: 2025 is a key year for business model optimization. We are optimistic that our financial performance will exceed expectations. - Wang Han(CFO)