Zhihu Q3 2025: Revenue Decline Amid Cost Discipline and AI-Driven Growth

Zhihu Inc. reported Q3 2025 revenue of RMB658.9 million. This figure represented a 22% decline YoY, with declines across its marketing, membership, and vocational training segments.

The membership business accounted for 58.5% of revenue at RMB385.6 million. It supported 14.3 million average monthly subscribers.

Despite the revenue pressure, the company maintained a 61.3% gross margin, thanks to cost discipline.

Cost of revenues fell 16.3% to RMB255.3 million. R&D expenses dropped 36.2%.

Overall operating expenses were 19.4% lower, driven by these reductions.

This discipline contributed to a 30.4% YoY narrowing of the adjusted net loss to RMB21.0 million.

The company ended the quarter with RMB4.58 billion in cash reserves, providing financial flexibility amid the revenue challenges.

User Engagement Signals

Zhihu Inc. reported a continued contraction in its core membership base during Q3 2025, with average monthly subscribers falling to 14.3 million. This decline persisted across revenue segments despite narrowing losses, though the platform's cash position remained relatively stable at RMB4.58 billion. Crucially, the company did not disclose any user engagement metrics for Q3, creating a data gap for recent performance assessment.

Turning to Q2 2025 data, user interaction showed notable improvement. Average daily session time rose sharply, exceeding 39 minutes per user - a 15% year-over-year increase. This engagement uptick coincided with growing AI-related content contribution, reinforcing Zhihu's position as a hub for AI talent and innovation. Management views these interaction metrics as key building blocks for future monetization strategies focused on premium content and AI integration.

The absence of comparable Q3 engagement figures means investors cannot yet confirm if the positive Q2 momentum persisted. While the subscriber count decline suggests user acquisition challenges, the demonstrated ability to significantly increase time-on-platform in prior quarters indicates existing users are engaging more deeply. This creates a mixed picture: underlying engagement capacity exists, but the platform must now address subscriber attrition to fully capitalize on these interaction gains.

Monetization Shift to Subscription Model

Zhihu's shift toward subscription-based monetization accelerated in Q3 2025, with paid membership revenue reaching RMB385.6 million, the largest single contributor to its total revenue. This segment accounted for 58.5% of overall revenue, underscoring the platform's strategic pivot away from reliance on advertising. Institutional investors hold a 24% stake in Zhihu, signaling confidence in its knowledge-platform model amid broader market skepticism. While advertising remains part of its revenue mix, the company has focused on content partnerships and AI-driven engagement to bolster subscription growth, with average monthly subscribers rising to 14.3 million. Cost discipline further supported margins, as R&D expenses fell 36.2% year-over-year.

Cost Discipline Fuels Strategic AI Push

Zhihu's third-quarter results reveal sharp cost discipline, particularly in R&D. R&D expenses fell 36.2% year-over-year, a significant reduction amid ongoing revenue pressure. This cut reflects broader operational tightening while still funding core AI initiatives. The company emphasized its focus on integrating AI to build an "AI-native community" despite these reductions.

Structural efficiencies helped offset declining revenue streams. Cost of revenues dropped 16.3% to RMB255.3 million. Gross margin held relatively steady at 61.3%, demonstrating resilience in maintaining profitability during the cost-cutting phase.

The narrowing adjusted net loss to RMB21.0 million represents a 30.4% improvement from the prior year. This progress highlights the effectiveness of expense controls, though revenue declines persisted across key segments like marketing and vocational training.

Strategic flexibility remains intact. Cash reserves of RMB4.58 billion provide a buffer for sustaining long-term AI investments. While short-term metrics show contraction, the deliberate reinvestment into AI infrastructure suggests confidence in future monetization pathways. This positioning balances immediate financial prudence with bets on content-driven growth, though sustained execution risk remains if user engagement metrics fail to accelerate significantly.