Zhihu (NYSE:ZH) Releases Quarterly Earnings Results, Misses Expectations By $0.06 EPS

Zhihu (NYSE:ZH) released its quarterly earnings data on Wednesday. The company reported ($0.07) EPS for the quarter, missing the consensus estimate of ($0.01) by ($0.06), Zacks reports. Zhihu had a negative net margin of 7.25% and a negative return on equity of 4.83%.

Here are the key takeaways from Zhihu’s conference call:

• Revenue was RMB690.1 million, down 3.7% year over year but up 5.9% sequentially, as paid content and IP operations helped offset continued weakness in marketing services. Monthly subscribing members remained stable at 13.1 million.
• Zhihu reported a RMB37.4 million net loss and a RMB10.3 million adjusted net loss, while gross margin declined to 57% from 62.5% a year earlier. Management warned that quarterly profitability may fluctuate as it invests in new initiatives and that marketing recovery remains structural rather than linear.
• IP licensing continued to gain momentum, with licensing cooperation up 105% sequentially and more than sixfold year over year. Management said AI-generated comic dramas can extend the life cycle and improve monetization of Zhihu’s original story library, while maintaining a flexible, relatively disciplined approach to production investment.
• Zhihu is expanding AI initiatives across AI search, community agents, content-asset services and expert data solutions; its AI Works platform hosts more than 2,600 projects and its open-data platform has attracted over 17,600 developers. Management emphasized that these businesses remain early-stage and have not yet produced stable, scalable revenue.
• Operating expenses fell 13% year over year, and the company ended June with RMB4.4 billion in cash and liquid investments. Zhihu repurchased 6.5 million Class A shares during the quarter and said it will continue disciplined capital allocation and share repurchases.

Zhihu Trading Up 1.4%

Shares of ZH stock opened at $3.17 on Wednesday. Zhihu has a 12 month low of $2.57 and a 12 month high of $5.55. The stock has a market cap of $274.80 million, a P/E ratio of -8.82 and a beta of 0.28. The company has a 50 day simple moving average of $3.19 and a two-hundred day simple moving average of $3.21.

Wall Street Analyst Weigh In

Several equities analysts have issued reports on ZH shares. Weiss Ratings restated a “sell (d-)” rating on shares of Zhihu in a research note on Friday, July 17th. Wall Street Zen upgraded shares of Zhihu from a “sell” rating to a “hold” rating in a research note on Saturday, June 6th. One research analyst has rated the stock with a Sell rating, Based on data from MarketBeat, Zhihu presently has a consensus rating of “Sell”.

Institutional Investors Weigh In On Zhihu

A hedge fund recently bought a new position in Zhihu stock. Ameriprise Financial Inc. acquired a new position in Zhihu Inc. Sponsored ADR (NYSE:ZH) in the 2nd quarter, according to its most recent 13F filing with the Securities and Exchange Commission. The institutional investor acquired 25,006 shares of the company’s stock, valued at approximately $100,000. 28.92% of the stock is currently owned by hedge funds and other institutional investors.

About Zhihu

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.