Technology
Zhihu Inc. Reports Unaudited First Quarter 2024 Financial Results
Published
2 years agoon
By
BEIJING, June 12, 2024 /PRNewswire/ — Zhihu Inc. (“Zhihu” or the “Company”) (NYSE: ZH; HKEX: 2390), a leading online content community in China, today announced its unaudited financial results for the quarter ended March 31, 2024.
First Quarter 2024 Highlights
Total revenues were RMB960.9 million (US$133.1 million) in the first quarter of 2024, compared with RMB994.2 million in the same period of 2023.Gross margin expanded to 56.6% in the first quarter of 2024 from 51.5% in the same period of 2023.Net loss was RMB165.8 million (US$23.0 million) in the first quarter of 2024, narrowed by 7.4% from the same period of 2023.Adjusted net loss (non-GAAP)[1] was RMB135.7 million (US$18.8 million) in the first quarter of 2024, compared with RMB120.2 million in the same period of 2023.Average monthly active users (MAUs)[2] were 89.0 million in the first quarter of 2024. Average monthly subscribing members[3] were 14.8 million in the first quarter of 2024.
“We are delighted to start 2024 with a solid financial and operating performance,” said Mr. Yuan Zhou, chairman and chief executive officer of Zhihu. “We made substantial strides toward our break-even target by enhancing operating efficiency and accelerating loss reduction. Furthermore, our efforts to enhance ‘trustworthiness’ within the Zhihu community continued to drive community prosperity, resulting in significant increases in core users’ engagement and retention rates, as well as our DAU time spent. We believe that our AI search feature’s emerging potential and the value we continue to unlock across the trustworthy Zhihu community will provide fresh momentum for our sustainable growth and a clear path to profitability for the remaining quarters of the year.”
Mr. Han Wang, chief financial officer of Zhihu, added, “We optimized our cost structure and enhanced monetization efficiency during the quarter. Our gross profit margin has improved year-over-year for six consecutive quarters. In terms of operating expenses, we significantly reduced community-related new user acquisition costs and maintained a high ROI across our multiple business lines, while investing prudently in AI. We are confident that with continued strong strategic execution, we will remain on track to achieve our profitability goals.”
First Quarter 2024 Financial Results
Total revenues were RMB960.9 million (US$133.1 million) in the first quarter of 2024, compared with RMB994.2 million in the same period of 2023.
Marketing services revenue was RMB330.5 million (US$45.8 million), compared with RMB392.1 million in the same period of 2023. The decrease was primarily due to our ongoing refinement of service offerings to strategically focus on margin improvement.
Paid membership revenue was RMB449.7 million (US$62.3 million), compared with RMB454.8 million in the same period of 2023. The slight decrease was primarily attributable to a slight decline in our average monthly subscribing members.
Vocational training revenue was RMB145.4 million (US$20.1 million), representing a 35.9% increase from RMB107.0 million in the first quarter of 2023. The increase was primarily due to our further enriched online course offerings.
Other revenues were RMB35.2 million (US$4.9 million), compared with RMB40.3 million in the same period of 2023.
Cost of revenues decreased by 13.4% to RMB417.4 million (US$57.8 million) from RMB482.0 million in the same period of 2023. The decrease was primarily due to a decrease in content and operating costs in connection with the decline in our revenues.
Gross profit was RMB543.5 million (US$75.3 million), representing a 6.1% increase from RMB512.2 million in the same period of 2023. Gross margin expanded to 56.6% from 51.5% in the same period of 2023, primarily attributable to our monetization enhancements.
Total operating expenses were RMB768.2 million (US$106.4 million) in the first quarter of 2024, compared with RMB729.0 million in the same period of 2023.
Selling and marketing expenses increased to RMB478.0 million (US$66.2 million) from RMB445.6 million in the same period of 2023. The increase reflects our continued efforts in promoting our product and service offerings.
Research and development expenses increased to RMB197.4 million (US$27.3 million) from RMB183.0 million in the same period of 2023. The increase was primarily due to our increased spending on technology innovation.
General and administrative expenses decreased to RMB92.9 million (US$12.9 million) from RMB100.4 million in the same period of 2023. The decrease was primarily due to lower share-based compensation expenses.
Loss from operations was RMB224.7 million (US$31.1 million) in the first quarter of 2024, compared with RMB216.7 million in the same period of 2023.
Adjusted loss from operations (non-GAAP)[1] was RMB193.6 million (US$26.8 million) in the first quarter of 2024, compared with RMB157.3 million in the same period of 2023.
Net loss was RMB165.8 million (US$23.0 million) in the first quarter of 2024, compared with RMB179.0 million in the same period of 2023.
Adjusted net loss (non-GAAP)[1] was RMB135.7 million (US$18.8 million) in the first quarter of 2024, compared with RMB120.2 million in the same period of 2023.
Diluted net loss per American depositary share (“ADS”)[4] was RMB1.76 (US$0.24), compared with RMB1.78 in the same period of 2023.
Cash and cash equivalents, term deposits and short-term investments
As of March 31, 2024, the Company had cash and cash equivalents, term deposits and short-term investments of RMB5,216.9 million (US$722.5 million), compared with RMB5,462.9 million as of December 31, 2023.
Share Repurchase Programs
As of March 31, 2024, the Company had repurchased 31.1 million Class A ordinary shares (including Class A ordinary shares underlying the ADSs) for a total price of US$66.5 million on both the New York Stock Exchange and The Stock Exchange of Hong Kong Limited under the Company’s existing US$100 million share repurchase program (the “2022 Repurchase Program”) established in May 2022, extended in May 2023, and effective until June 10, 2024. The repurchases made under the 2022 Repurchase Program were covered by the general unconditional mandate to purchase the Company’s own shares approved by shareholders at the Company’s annual general meetings held on June 10, 2022 and June 30, 2023, respectively.
The board of directors of the Company has approved an extension of the 2022 Repurchase Program until June 26, 2025, which is subject to shareholder approval for granting a general mandate to the board of directors to repurchase shares and/or ADSs of the Company not exceeding 10% of the total number of issued shares of the Company (excluding any treasury shares) as of the date of such approval (the “2024 Repurchase Mandate”) at the forthcoming annual general meeting of the Company to be held on June 26, 2024 (the “2024 Shareholder Approval”).
The board of directors of the Company further announces that, in addition to the extended 2022 Repurchase Program, it proposes to conduct a concurrent share repurchase program effective until June 26, 2025 (the “2024 Repurchase Program”). The maximum number of shares (including shares underlying the ADSs) that can be repurchased under the 2024 Repurchase Program, together with the remaining number of shares (including shares underlying the ADSs) that can be repurchased under the 2022 Repurchase Program, will not exceed the 2024 Repurchase Mandate, subject to the 2024 Shareholder Approval. The Company’s proposed repurchases, if approved, may be made from time to time in the open market at prevailing market prices or through other legally permissible means, depending on market conditions and in accordance with applicable rules and regulations. The Company plans to fund any such repurchases from its existing cash balance.
[1] Adjusted loss from operations and adjusted net loss are non-GAAP financial measures. For more information on the non-GAAP financial measures, please see the section “Use of Non-GAAP Financial Measures” and the table captioned “Unaudited Reconciliations of GAAP and Non-GAAP Results” set forth at the end of this press release.
[2] MAUs refers to the sum of the number of mobile devices that launch our mobile apps at least once in a given month, or mobile MAUs, and the number of logged-in users who visit our PC or mobile website at least once in a given month, after eliminating duplicates.
[3] Monthly subscribing members refers to the number of our Yan Selection members in a specified month. Average monthly subscribing members for a period is calculated by dividing the sum of monthly subscribing members for each month during the specified period by the number of months in such period.
[4] On May 10, 2024, we effected a change in the ratio of our ADSs to Class A ordinary shares from two ADSs representing one Class A ordinary share to a new ratio of one ADS representing three Class A ordinary shares. Basic and diluted net loss per ADS have been retrospectively adjusted to reflect this ADS ratio change for all periods presented.
Conference Call
The Company’s management will host an earnings conference call at 7:00 a.m. U.S. Eastern Time on June 12, 2024 (7:00 p.m. Beijing/Hong Kong time on June 12, 2024).
All participants wishing to join the conference call must pre-register online using the link provided below. Once the pre-registration has been completed, each participant will receive a set of dial-in numbers, a passcode, and a unique registrant ID which can be used to join the conference call. Participants may pre-register at any time, including up to and after the call start time.
Participant Online Registration: https://dpregister.com/sreg/10189533/fc960a34f7
Additionally, a live and archived webcast of the conference call will be available on the Company’s investor relations website at https://ir.zhihu.com.
A replay of the conference call will be accessible approximately one hour after the conclusion of the live call, until June 19, 2024, by dialing the following telephone numbers:
United States (toll free):
+1-877-344-7529
International:
+1-412-317-0088
Replay Access Code:
6946527
About Zhihu Inc.
Zhihu Inc. (NYSE: ZH; HKEX: 2390) is a leading online content community in China where people come to find solutions, make decisions, seek inspiration, and have fun. Since the initial launch in 2010, we have grown from a Q&A community into one of the top comprehensive online content communities and the largest Q&A-inspired online content community in China. For more information, please visit https://ir.zhihu.com.
Use of Non-GAAP Financial Measures
In evaluating the business, the Company considers and uses non-GAAP financial measures, such as adjusted loss from operations and adjusted net loss, to supplement the review and assessment of its operating performance. The Company defines non-GAAP financial measures by excluding the impact of share-based compensation expenses, amortization of intangible assets resulting from business acquisitions and the tax effects of the non-GAAP adjustments, which are non-cash expenses. The Company believes that the non-GAAP financial measures facilitate comparisons of operating performance from period to period and company to company by adjusting for potential impacts of items, which the Company’s management considers to be indicative of its operating performance. The Company believes that the non-GAAP financial measures provide useful information to investors and others in understanding and evaluating the Company’s consolidated results of operations in the same manner as it helps the Company’s management.
The non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The presentation of the non-GAAP financial measures may not be comparable to similarly titled measures presented by other companies. The use of the non-GAAP financial measures has limitations as an analytical tool, and investors should not consider it in isolation from, or as a substitute for analysis of, our results of operations or financial condition as reported under U.S. GAAP. For more information on the non-GAAP financial measures, please see the tables captioned “Unaudited Reconciliations of GAAP and Non-GAAP Results” set forth at the end of this press release.
Exchange Rate Information
This announcement contains translations of certain Renminbi amounts into U.S. dollars at a specified rate solely for the convenience of the reader. Unless otherwise noted, all translations from Renminbi to U.S. dollars were made at a rate of RMB7.2203 to US$1.00, the exchange rate in effect as of March 29, 2024 as set forth in the H.10 statistical release of the Federal Reserve Board.
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about the Company’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and a number of factors could cause actual results to differ materially from those contained in any forward-looking statement. In some cases, forward-looking statements can be identified by words or phrases such as “may,” “will,” “expect,” “anticipate,” “target,” “aim,” “estimate,” “intend,” “plan,” “believe,” “potential,” “continue,” “is/are likely to,” or other similar expressions. Further information regarding these and other risks, uncertainties or factors is included in the Company’s filings with the SEC and the Hong Kong Stock Exchange. All information provided in this press release is as of the date of this press release, and the Company does not undertake any duty to update such information, except as required under applicable law.
For investor and media inquiries, please contact:
In China:
Zhihu Inc.
Email: ir@zhihu.com
Piacente Financial Communications
Helen Wu
Tel: +86-10-6508-0677
Email: zhihu@tpg-ir.com
In the United States:
Piacente Financial Communications
Brandi Piacente
Phone: +1-212-481-2050
Email: zhihu@tpg-ir.com
ZHIHU INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(All amounts in thousands, except share, ADS, per share data and per ADS data)
For the Three Months Ended
March 31,
2023
December 31,
2023
March 31,
2024
RMB
RMB
RMB
US$
Revenues:
Marketing services
392,137
465,153
330,542
45,780
Paid membership
454,769
455,906
449,724
62,286
Vocational training
106,998
169,272
145,436
20,143
Others
40,316
47,966
35,161
4,870
Total revenues
994,220
1,138,297
960,863
133,079
Cost of revenues
(482,001)
(465,197)
(417,384)
(57,807)
Gross profit
512,219
673,100
543,479
75,272
Selling and marketing expenses
(445,565)
(527,604)
(477,954)
(66,196)
Research and development expenses
(182,960)
(232,585)
(197,356)
(27,333)
General and administrative expenses
(100,438)
(91,069)
(92,917)
(12,869)
Total operating expenses
(728,963)
(851,258)
(768,227)
(106,398)
Loss from operations
(216,744)
(178,158)
(224,748)
(31,126)
Other income/(expenses):
Investment income
6,006
12,279
16,902
2,341
Interest income
39,493
38,828
30,763
4,261
Fair value change of financial instruments
(3,582)
14,780
9,408
1,303
Exchange (losses)/gains
(5,649)
(937)
120
17
Others, net
6,333
15,032
3,043
421
Loss before income tax
(174,143)
(98,176)
(164,512)
(22,783)
Income tax expense
(4,829)
(4,929)
(1,284)
(178)
Net loss
(178,972)
(103,105)
(165,796)
(22,961)
Net (income)/loss attributable to
noncontrolling interests
(2,383)
(666)
950
132
Net loss attributable to Zhihu Inc.’s
shareholders
(181,355)
(103,771)
(164,846)
(22,829)
Net loss per share
Basic
(0.59)
(0.36)
(0.59)
(0.08)
Diluted
(0.59)
(0.36)
(0.59)
(0.08)
Net loss per ADS (One ADS represents
three Class A ordinary shares)
Basic
(1.78)
(1.07)
(1.76)
(0.24)
Diluted
(1.78)
(1.07)
(1.76)
(0.24)
Weighted average number of ordinary
shares outstanding
Basic
305,245,036
291,056,615
281,549,707
281,549,707
Diluted
305,245,036
291,056,615
281,549,707
281,549,707
ZHIHU INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)
(All amounts in thousands, except share, ADS, per share data and per ADS data)
For the Three Months Ended
March 31,
2023
December 31,
2023
March 31,
2024
RMB
RMB
RMB
US$
Share-based compensation expenses included in:
Cost of revenues
4,400
1,575
2,497
346
Selling and marketing expenses
8,758
(7,001)
3,272
453
Research and development expenses
21,205
(57)
3,680
510
General and administrative expenses
21,555
12,983
16,363
2,266
ZHIHU INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(All amounts in thousands)
As of December 31,
2023
As of March 31,
2024
RMB
RMB
US$
ASSETS
Current assets:
Cash and cash equivalents
2,106,639
2,194,419
303,923
Term deposits
1,586,469
1,553,663
215,180
Short-term investments
1,769,822
1,468,801
203,427
Trade receivables
664,615
638,226
88,393
Amounts due from related parties
18,319
31,277
4,332
Prepayments and other current assets
232,016
239,814
33,214
Total current assets
6,377,880
6,126,200
848,469
Non-current assets:
Property and equipment, net
10,849
10,794
1,495
Intangible assets, net
122,645
117,113
16,220
Goodwill
191,077
191,077
26,464
Long-term investments
44,621
51,176
7,088
Right-of-use assets
40,211
31,141
4,313
Other non-current assets
7,989
7,875
1,090
Total non-current assets
417,392
409,176
56,670
Total assets
6,795,272
6,535,376
905,139
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued liabilities
1,038,531
1,023,973
141,819
Salary and welfare payables
342,125
332,077
45,992
Taxes payables
21,394
16,328
2,261
Contract liabilities
303,574
310,307
42,977
Amounts due to related parties
26,032
9,491
1,314
Short term lease liabilities
42,089
33,729
4,672
Other current liabilities
171,743
165,873
22,973
Total current liabilities
1,945,488
1,891,778
262,008
Non-current liabilities
Long term lease liabilities
3,642
2,861
396
Deferred tax liabilities
22,574
21,505
2,979
Other non-current liabilities
121,958
111,664
15,465
Total non-current liabilities
148,174
136,030
18,840
Total liabilities
2,093,662
2,027,808
280,848
Total Zhihu Inc.’s shareholders’ equity
4,599,810
4,393,324
608,468
Noncontrolling interests
101,800
114,244
15,823
Total shareholders’ equity
4,701,610
4,507,568
624,291
Total liabilities and shareholders’ equity
6,795,272
6,535,376
905,139
ZHIHU INC.
UNAUDITED RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS
(All amounts in thousands)
For the Three Months Ended
March 31,
2023
December 31,
2023
March 31,
2024
RMB
RMB
RMB
US$
Loss from operations
(216,744)
(178,158)
(224,748)
(31,126)
Add:
Share-based compensation expenses
55,918
7,500
25,812
3,575
Amortization of intangible assets resulting
from business acquisitions
3,490
5,365
5,365
743
Adjusted loss from operations
(157,336)
(165,293)
(193,571)
(26,808)
Net loss
(178,972)
(103,105)
(165,796)
(22,961)
Add:
Share-based compensation expenses
55,918
7,500
25,812
3,575
Amortization of intangible assets resulting
from business acquisitions
3,490
5,365
5,365
743
Tax effects on non-GAAP adjustments
(600)
(1,069)
(1,069)
(148)
Adjusted net loss
(120,164)
(91,309)
(135,688)
(18,791)
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SOURCE Zhihu Inc.
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Media Contact
Media Team, Integrow, Inc., 1 855-333-4769, info@integrow.com, www.integrow.com
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Mr. Chim was an independent non-executive director of Standard Chartered Bank (China) Limited from October 2015 to October 2017. He served as an independent non-executive director of HDR Global Trading Limited, owner and operator of the BitMEX digital asset trading platform, from February 2021 to February 2022. Mr. Chim served as a non-executive director of China Chengtong Hong Kong Company Limited from July 2022 to June 2025. Mr. Chim is currently an independent non-executive director of OCBC Bank (Hong Kong) Limited, since November 2017; an independent non-executive director of Banco OCBC (Macau), S.A., since August 2023; an independent non-executive director of China Intellogis Technology Co., Ltd., since June 2024; and a director of Hong Kong Dance Company Limited since June 2026.
Mr. Chim obtained a Bachelor of Science degree from the Chinese University of Hong Kong in 1983 and an MBA degree from Indiana State University, USA, in 1985. He also graduated from the Senior Executive Program at Columbia University in 2000.
In connection with these changes, with effect from July 25, 2026, Ms. Cai will step down from the Nomination and Remuneration Committee, and Mr. Koon Wing Ernest Ip has been appointed as a member to that committee. The Company’s Special Committee will comprise Mr. Dicky Peter Yip, Mr. Koon Wing Ernest Ip and Mr. Siu Hong Cheng, continuing under the chairmanship of Mr. Dicky Peter Yip, with effect from July 25, 2026.
The Board would like to take this opportunity to thank Ms. Cai, Mr. Guo, Mr. Li and Mr. Xi for their service during the tenure of their office and warmly welcome Mr. Chim to the Board.
About Lufax
Lufax is a leading financial services enabler for small business owners in China. The Company offers financing products designed principally to address the needs of small business owners. In doing so, the Company has established relationships with 85 financial institutions in China as funding partners, many of which have worked with the Company for over three years.
Investor Relations Contact
Lufax Holding Ltd
Email: Investor_Relations@lu.com
ICR, LLC
Robin Yang
Tel: +1 (646) 308-0546
Email: lufax.ir@icrinc.com
View original content:https://www.prnewswire.com/news-releases/lufax-announces-board-and-management-changes-302834065.html
SOURCE Lufax Holding Ltd
Technology
UMD Smith School Researchers Warn AI Security Lapses Highlight Urgent Need for Independent Oversight
Published
36 minutes agoon
July 24, 2026By
COLLEGE PARK, Md., July 24, 2026 /PRNewswire/ — A series of recent AI security lapses—including the OpenAI–Hugging Face breach—raises a fundamental question, say a pair of researchers at the University of Maryland’s Robert H. Smith School of Business: Can tech companies safely govern the powerful AI systems they build, or is stronger outside oversight now essential?
In its incident report, OpenAI confirmed that one of its experimental AI agents exploited a weakness in its testing environment while working on a routine benchmark task. The system wasn’t instructed to behave maliciously; instead, its persistence turned a small design flaw into a real escape. Earlier tests showed similar behavior, including agents that learned to bypass security checks by manipulating authentication tokens.
This pattern echoes findings from Dean’s Professor of Information Systems Siva Viswanathan at the Smith School, who studies how large technology platforms enforce rules. His research on mobile app privacy—published in Management Science—examined Google’s rollout of Android 6.0, which gave users more control over what data apps could collect. Developers were granted a flexible window to update their apps. Many used that flexibility to delay compliance for months, continuing to gather user data until Google imposed consequences such as lower search rankings and reduced visibility in its app store.
Viswanathan’s takeaway: when companies rely on voluntary compliance, self‑interested actors often exploit the slack. Real accountability requires pairing flexibility with firm, enforceable penalties.
That lesson now reverberates across the AI sector. As companies race to build increasingly capable systems, Viswanathan says oversight must treat these AI systems as strategic actors and must include strong safeguards that can pause or reverse a system before harm occurs.
He notes that a separate study from Anthropic underscores the stakes. In controlled tests, even an AI system designed to monitor another AI inherited the same flaws it was supposed to catch. In some cases, the “judge” model failed to flag clear sabotage because it agreed with the agent’s goals, allowing dangerous behavior to pass without human review.
Balaji Padmanabhan, Dean’s Professor of Decisions, Operations and Information Technologies and director of the Smith School’s Center for Artificial Intelligence in Business, extends Viswanathan’s governance argument into the realm of autonomous AI agents, warning that the same structural weaknesses now carry far higher stakes.
“The fact that this breach occurred organically without the AI agent being asked to be malicious is itself notable. Imagine what someone who actually intends to do harm can do. It’s also not terribly reassuring that the same firms we depend on for AI infrastructure, who are facing these issues, are the ones assuring enterprises that their systems with guardrails are perfectly safe,” says Padmanabhan. “We have to wake up to the fact that we’ve created capabilities that let software become as powerful as we want it to be—and then some. It’s time we seriously ask what’s needed to create an infrastructure to play defense well.”
Across the independent studies, the pattern is consistent, says Viswanathan: Voluntary compliance fails when the governed actor is more capable than the regulator. And AI systems cannot be governed by trust or good intentions alone. Oversight must be preventive, independent and capable of stopping harmful behavior before it spreads.
About the University of Maryland’s Robert H. Smith School of Business
The Robert H. Smith School of Business is an internationally recognized leader in management education and research. One of 12 colleges and schools at the University of Maryland, College Park, the Smith School offers undergraduate, full-time and flex MBA, executive MBA, online MBA, business master’s, PhD and executive education programs, as well as outreach services to the corporate community. The school offers its degree, custom and certification programs in learning locations in North America and Asia.
Contact: Greg Muraski, gmuraski@umd.edu
View original content:https://www.prnewswire.com/news-releases/umd-smith-school-researchers-warn-ai-security-lapses-highlight-urgent-need-for-independent-oversight-302834112.html
SOURCE University of Maryland’s Robert H. Smith School of Business
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