Zhihu Inc. (NYSE:ZH), a prominent Chinese online content community, posted a significant financial turnaround in the second quarter of 2025, swinging to profitability thanks to efficiency measures and AI integration.
Following the announcement, Zhihu’s stock rose 2.59% in pre-market trading.
The company reported a net income of RMB72.5 million (US$10.1 million) for Q2, compared with a net loss of RMB80.6 million in the same quarter of 2024. Adjusted net income came in at RMB91.3 million (US$12.8 million), versus an adjusted net loss of RMB44.6 million a year earlier. Earnings per share were RMB0.30.
Revenue for the quarter fell to RMB716.9 million (US$100.1 million) from RMB933.8 million in Q2 2024. Despite the decline, gross margin improved to 62.5% from 59.6% year-over-year, highlighting Zhihu’s emphasis on profitability over sheer growth.
“We achieved our third consecutive quarter of non-GAAP profitability,” said Yuan Zhou, Zhihu’s chairman and CEO. “This reflects the continued effectiveness of our refined operational strategies and the efficiency improvements driven by AI integration.”
Zhihu reported an average of 13.2 million monthly paying members during the quarter. Paid membership revenue, the company’s largest business segment, totaled RMB402.0 million (US$56.1 million), slightly down from RMB432.7 million in Q2 2024.
Total operating expenses fell 27.2% to RMB539.2 million, with significant reductions across sales and marketing, research and development, and general administrative costs, demonstrating the company’s commitment to disciplined cost management.
“These results reflect the ongoing improvements to our cost structure and operating efficiency, supported by AI-driven productivity gains,” said CFO Han Wang. “We remain focused on disciplined execution and sustainable monetization to drive long-term growth.”
As of June 30, 2025, Zhihu held cash, cash equivalents, term deposits, restricted cash, and short-term investments totaling RMB4,820.8 million (US$673.0 million).
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