Zhihu (NYSE:ZH) reported a narrower year-over-year revenue decline and a sequential return to adjusted profitability in the first quarter of 2026, as management pointed to improving monetization, growth in intellectual property operations and continued investment in artificial intelligence-related initiatives.
Founder, Chairman and Chief Executive Officer Zhou Yuan, whose prepared remarks were delivered in English by an AI agent identified as Victor Zhou, said the company’s “high-quality growth strategy” helped strengthen user engagement and the platform’s content ecosystem. Average daily time spent per daily active user reached nearly 42 minutes, increasing both year-over-year and quarter-over-quarter, according to Zhou.
Zhou said Zhihu’s community remains centered on “professional, authentic, and in-depth content from real people,” which he described as a competitive advantage in the AI era. The company also said it is expanding AI capabilities across content creation, discovery, consumption and social interaction while maintaining controls over low-quality AI-generated content.
Revenue Decline Narrows as Adjusted Profit Turns Positive
Chief Financial Officer Wang Han said first-quarter revenue was CNY 651.6 million, compared with CNY 729.7 million in the same period of 2025. The decline reflected continued revenue mix optimization and a focus on higher-quality services, he said, while revenue grew sequentially due to contributions from paid content and IP operations.
On a non-GAAP basis, adjusted net profit was CNY 17.2 million, compared with an adjusted net loss of CNY 39.4 million in the fourth quarter of 2025. Adjusted net income also increased from CNY 6.9 million in the prior-year period. The company’s GAAP net loss narrowed to CNY 8.5 million from CNY 10.1 million a year earlier.
Gross profit was CNY 388.3 million, down from CNY 451.1 million in the first quarter of 2025. Gross margin was 59.6%, compared with 61.8% a year earlier, but improved from 53.6% in the fourth quarter of 2025. Wang attributed the sequential improvement to cost controls across content and cloud operations.
Total operating expenses decreased 10.4% year-over-year to CNY 451.2 million. Selling and marketing expenses fell 11.1% to CNY 285.1 million, while research and development expenses declined 22.4% to CNY 110.1 million. General and administrative expenses rose to CNY 56 million, which Wang said was primarily due to a higher allowance for expected credit losses on trade receivables.
Paid Content and IP Operations Become Key Focus
Zhihu said it began combining IP-related revenue previously reported in other revenue with paid membership revenue into a new “paid content and IP operations” segment. Zhou said the change better reflects the commercialization potential of the company’s Yan Yan story franchise.
Revenue from paid content and IP operations was CNY 402.3 million in the quarter, compared with CNY 420.9 million a year earlier and up 15.8% sequentially. Average monthly subscribing members reached 13.1 million, up 7.9% quarter-over-quarter. Management said the increase was driven by Chinese New Year content consumption and improved customer acquisition efficiency.
Chief Operating Officer Zhang Rongle said during the question-and-answer session that the reclassification reflects a broader strategy to move beyond subscription revenue and develop the full commercial life cycle of Zhihu’s original content and IP. Zhang said Zhihu’s short-form original stories can be monetized through short dramas, comic dramas, film and television adaptations and games.
Zhang said the number of IP partnerships increased 564% year-over-year and 248% quarter-over-quarter in the first quarter. He also said total creator earnings from copyrights rose 5.6 times from the prior-year period, indicating that Zhihu’s creator ecosystem is contributing more directly to IP commercialization.
Marketing Services Stabilize, Other Revenue Declines
Marketing services revenue was CNY 191.4 million, compared with CNY 197 million in the same quarter of 2025. Zhou said the year-over-year decline in marketing services narrowed meaningfully, while Wang said the segment showed stabilization due to continued refinement of service offerings.
Management cited improved average revenue per user in core verticals such as gaming and automotive, as well as better commercial efficiency across gaming, travel and transportation. Zhou also highlighted the launch of “Tech Bytes,” a technology-themed commercial IP introduced at the Appliance & Electronics World Expo, where Zhihu creators provided guided walkthroughs and technical explanations for consumers.
Other revenue was CNY 57.8 million, compared with CNY 111.8 million a year earlier. Wang said the decrease was primarily due to strategic refinements in the vocational training business. Zhou said Zhihu’s expert data solutions business began generating revenue in the quarter and has gained recognition from leading enterprise clients and top-tier AI labs.
AI Strategy Emphasizes Community, IP and Data
In response to an analyst question from CICC’s Xueqing Zhang, Zhou said Zhihu does not view its strategy as simply “AI plus” community or adding AI features to the community. Instead, he said users primarily seek cognitive improvement, experience sharing and real connections.
Zhou said Zhihu is in a second phase of AI development that includes building a data platform based on cleaned and credibly ranked community data, as well as an open platform that provides access to community APIs. He said Zhihu has opened data to developers through MCP and Skills and has hosted its first hackathon based on the open platform.
Wang told Goldman Sachs analyst Lincoln Kong that Zhihu’s AI investment priorities remain AI short dramas and comic dramas, along with expert data solutions. He said these areas have among the healthier cash flow profiles in AI-related verticals and are where Zhihu believes it has advantages. Wang added that the company would not “burn cash to chase growth” and would focus investment on long-term capabilities.
The company also described efforts to preserve content quality as AI-generated material increases. Since the start of 2026, Zhihu said it has removed more than 250,000 pieces of low-quality AI-generated content and penalized more than 11,000 violating accounts.
Balance Sheet and Share Repurchases
As of March 31, 2026, Zhihu had CNY 4.5 billion in cash and cash equivalents, term deposits, restricted cash and short-term investments.
Wang said in prepared remarks that, as of March 31, the company had repurchased 34.8 million Class A ordinary shares for an aggregate value of US$70.7 million on the New York Stock Exchange and the Stock Exchange of Hong Kong. During the first quarter, Zhihu repurchased 3.7 million Class A ordinary shares for US$4.2 million.
In response to Haitong International analyst Daisy Chen, Wang said Zhihu remains committed to large-scale repurchases. He said that since 2022, the company has repurchased 63.5 million Class A ordinary shares for US$130 million, and that year-to-date in 2026 it had repurchased 4.61 million shares for US$5.06 million. Wang said shares repurchased during the first quarter of 2026 had been fully canceled.
Management said it expects 2026 to be a year of “high-quality growth,” with continued focus on operational profitability, execution efficiency and AI-related initiatives tied to content, expert networks and data solutions.
About Zhihu (NYSE:ZH)
Zhihu is China's leading online question-and-answer platform, providing a space where users can ask questions, share knowledge, and engage with content across science, technology, business, culture, and lifestyle. Founded in 2011 and headquartered in Beijing, Zhihu has cultivated a community-driven environment that emphasizes credible, in-depth answers from experts, professionals, and enthusiasts.
The company's core service revolves around its Q&A platform, enabling registered users to post questions and receive comprehensive responses.
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