Daisy Chen

Daisy Chen from Haitong International requested an update on the adjustments across Zhihu's business lines, signs of revenue bottoming out or rebounding, the outlook for the advertising business, and the company's profitability.

Answer

CFO Wang Han expressed high confidence in achieving full-year non-GAAP profitability in 2025, noting that Q3's small loss was a strategic investment. He confirmed marketing services revenue bottomed out in Q3 and expects sequential recovery in Q4, with a goal for next year's quarters to exceed the Q3 baseline. Paid membership is in a transition period, with no definitive bottom yet, and vocational training has been reclassified into 'Other revenues' as it's no longer a drag. Zhihu is focused on shedding inefficiencies and strengthening its position in real people interactions, expert networks, and trusted content in the AI era.

Daisy Chen from Haitong International asked for the outlook on customer acquisition costs and marketing expenses, as well as future trends in the cost structure, particularly concerning consumables and the product mix.

Answer

Mona Qiao, Investor Relations, noted that the average customer acquisition cost remains low, in the RMB 100 range, with over 70% of new customers sourced from private domain traffic and referrals. She explained that the cost structure will be further optimized by increasing the use of self-controlled and exclusively distributed products, which will lower the proportion of consumable costs as the center network scales.

Asked about the impact of US-China trade tensions, future investment and cost reduction plans, and expectations for future financial performance.

Answer

The impact from trade tensions is considered minimal, as only one offering uses U.S. equipment, and it's viewed as an opportunity to strengthen the domestic supply chain. Future plans include a measured pace of self-operated center expansion, launching a franchise model for scalable growth, optimizing the service mix, and investing in proprietary products to improve margins. The company is confident in its financial performance, noting that 16 centers were profitable on a monthly basis in March.