Zhihu turned a profit in Q4, with revenue down 24.5% year-on-year, and gross margin expanded to 62.9% | Financial Report Insights

Zhihu's revenue in the fourth quarter of 2024 decreased by 24.5% year-on-year, achieving profitability for the first time, mainly due to its progress in cost control. The gross profit margin expanded to 62.9%, an increase of 3.8 percentage points from 59.1% in the same period last year. On the 26th, Zhihu released its performance report for the fourth quarter and the entire year of 2024: 1) Key Financial Data: Revenue: Total revenue for Q4 was 859.2 million yuan, a year-on-year decrease of 24.5%; Net Profit: Q4 net profit turned positive for the first time, reaching 86.4 million yuan, reversing losses year-on-year; Gross Profit Margin: Expanded to 62.9%, an increase of 3.8 percentage points from 59.1% in the same period last year. For the entire year of 2024, Zhihu's revenue was 3.5989 billion yuan, a year-on-year decrease of 14.3%. The annual loss was significantly narrowed by 79.9% to 169 million yuan. CFO Wang Han stated: "The fourth quarter is a milestone for Zhihu, as we achieved positive operating profit and net income under both GAAP and non-GAAP standards for the first time—this is a testament to our strategic focus and successful execution." 2) Business Revenue Data: Marketing Services Revenue: 315.9 million yuan, a year-on-year decrease of 32.1%; Paid Membership Revenue: 420.2 million yuan, a slight year-on-year decrease of 7.8%; Vocational Training Revenue: 84 million yuan, a year-on-year decrease of 50.4%. Zhihu Achieves Quarterly Profit in Q4, Cost Control Shows Initial Results Zhihu's profitability is mainly attributed to its significant progress in cost control. In the fourth quarter, the company's operating expenses were significantly reduced by 37.9% to 528.8 million yuan, with sales and marketing expenses down by 40.1%, R&D expenses down by 37.0%, and general administrative expenses down by 27.5%. Notably, the gross profit margin expanded to 62.9%, an increase of 3.8 percentage points from 59.1% in the same period last year. The financial report shows that Q4 monthly active users (MAU) were 81.4 million; the average monthly paid members were 14.1 million, remaining basically stable quarter-on-quarter. Membership services remain the main source of Zhihu's revenue, accounting for 48.9% of total revenue. Zhihu CEO Zhou Yuan emphasized the company's progress in AI applications in the financial report: "We continue to invest in AI applications, leveraging our high-quality content and trusted expert network. By further integrating AI into our diverse community scenarios, we are unlocking new possibilities, redefining user interaction in the AI era, while strengthening our own competitive advantages."