Summary: Zhihu will release its Q3 2025 financial results before market open on November 25. Membership business is currently a highlight for Zhihu, with paid reading seen as one of its most promising segments. AI development is also expected to drive greater content monetization.
Q2 Review
In Q2 2025, Zhihu reported revenue of RMB 717 million and adjusted net profit of RMB 91.3 million, achieving Non-GAAP profitability for three consecutive quarters and exceeding market expectations. Average monthly subscribing members remained industry-leading at 13.2 million during the quarter.
Current Quarter Expectations
According to Tiger Trade App, analysts generally expect Zhihu's Q3 total revenue at RMB 681 million (down 19.38% YoY), earnings per share of RMB 0.12, and EBIT of negative RMB 124 million.
Key Focus Areas
AI-Driven Content Consumption and Monetization
Over the past three quarters, continued investment in AI applications like "Zhihu Direct Answer" has significantly increased user engagement and core user retention, with AI search enhancing distribution efficiency for high-value content through community sourcing and expert networks. Despite advertising headwinds from competitors and macro environment, AI-driven content matching and monetization touchpoints (e.g., paid reading, membership upgrades) should continue benefiting membership and value-added services.
AI integration has improved marginal efficiency in content production and distribution, helping maintain gross margin above 60% amid revenue pressure. Targeted investments in high-conversion user groups could partially offset net profit volatility.
With ongoing AI product iterations (e.g., search sourcing, advanced reasoning models), Q3 strategy prioritizes "efficiency first + premium content supply" to boost ARPPU and subscription renewal rates while stabilizing DAU/MAU. Near-term stock impact hinges on revenue recovery elasticity and expense control.
Resilience of Membership and Paid Reading
Q2 membership/paid reading revenue reached RMB 402 million (56.1% of total), solidifying cash flow and profit foundations. With advertising weakness and education business restructuring, membership should maintain high contribution. Sustained retention could support stable ARPPU through content and pricing optimization.
AI integration enhances discovery of professional content and identification of potential paying users, potentially improving conversion rates and lifetime value. If new subscriptions slow, tiered content and benefit upgrades may smooth revenue.
Risks include macro consumption sentiment and competition for premium content. Reduced marketing efficiency or delayed content supply could slow membership growth, weakening revenue and gross profit support.
Marketing Services and Advertising Recovery Pace
Marketing services generated RMB 223 million (31.1%) in Q2. With cautious ad budgets, brand advertising recovery remains slow while performance advertising emphasizes ROI. Zhihu's quality content and community context provide brand ad advantages, but significant near-term rebound appears limited.
AI primarily optimizes ad targeting and conversion efficiency. Improved commercialization products (e.g., interest-based ad units, contextual matching) could lift eCPM and advertiser retention, though incremental contributions may be marginal under revenue pressure.
Resource allocation favoring membership and AI products may constrain ad investments, prioritizing profit stability over scale expansion. Stock impact depends on market pricing of revenue troughs and profit inflection timing.
Analyst Views
Over the past six months, public analysis shows market focus on Zhihu's profit sustainability and AI efficiency gains, though significant target price revisions remain limited. Some research maintains neutral views on Q3 revenue pressure and controlled profits, with target prices largely unchanged while emphasizing long-term membership-AI synergy value.
Financial institutions generally believe membership/paid reading will continue supporting profits and cash flow. Target price adjustments depend more on revenue recovery and AI monetization cadence—clearer advertising and education business recovery could trigger consensus expectation rebalancing.
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