Zhihu Inc.

Zhihu reported first-quarter 2026 revenue of RMB 651.6 million, versus RMB 729.7 million in the same period of 2025. Gross profit was RMB 388.3 million, down from RMB 451.1 million a year ago, and gross margin was 59.6% versus 61.8% in 1Q25; gross margin improved sequentially from 53.6% in 4Q25. Net loss narrowed to RMB 8.5 million from RMB 10.1 million in 1Q25, while adjusted net income was RMB 17.2 million compared with RMB 6.9 million a year ago. By segment, marketing services revenue was RMB 191.4 million, paid content and IP operations revenue was RMB 402.3 million, and other revenues were RMB 57.8 million. Operating expenses fell 10.4% year over year to RMB 451.2 million, with selling and marketing expenses at RMB 285.1 million and R&D at RMB 110.1 million. As of March 31, 2026, cash and cash equivalents, term deposits, restricted cash and short-term investments totaled RMB 4.5 billion. The company did not give formal next-quarter or full-year financial guidance, but said it expects 2026 to be a year of high-quality growth, with core businesses showing an accelerated recovery and AI-related new initiatives continuing to gain traction.

The CEO commentary centered on Zhihu’s strategy of building a high-quality, trustworthy community and using AI to enhance, not replace, that community. He said average daily time spent per DAU was nearly 42 minutes and highlighted stronger creator activity, more professional AI-related content, and growing social interaction on the platform. He framed AI as a tool to better serve people, and said Zhihu’s longer-term plan is to connect community, content, IP, and AI into a positive feedback loop that can expand monetization over the next several quarters.

The CFO said the quarter showed a strong sequential return to profitability, supported by gross margin recovery, disciplined cost control, and focused resource allocation. He cited adjusted net income of RMB 17.2 million, gross margin of 59.6%, total operating expenses of RMB 451.2 million, and cash and liquid investments of RMB 4.5 billion as of March 31, 2026. He also noted that operating expenses fell 10.4% year over year, with selling and marketing down 11.1% and R&D down 22.4%, while G&A increased because of higher expected credit loss allowances. On capital allocation, he highlighted ongoing share repurchases, including 3.7 million Class A shares repurchased in Q1 for USD 4.2 million.

Analysts focused on how AI fits into Zhihu’s community strategy, where AI investment is being directed, and whether stronger profitability would change shareholder returns. Management said AI is not the end goal; instead, Zhihu is integrating AI into search, data platforms, open APIs, and creator tools while keeping the community centered on real people and authentic content. On investment priorities, management said it is concentrating on AI short dramas/comic dramas and expert data solutions, describing both as relatively healthy cash-flow businesses, and said it will not pursue cash-burning growth. On capital returns, management reaffirmed a strong buyback stance and said repurchases since 2022 totaled 63.5 million shares for USD 130 million, with 4.61 million shares repurchased year-to-date in 2026 and the first-quarter repurchased shares fully canceled.