Zhihu (ZH) Q4 2023 earnings summary

Executive summary

• Q4 revenue rose 2.2% YoY to RMB1,138.3 million; gross margin expanded to 59.1%, while net loss narrowed 42.6% to RMB103.1 million.

• FY2023 revenue grew 16.5% to RMB4,198.9 million; gross margin reached 54.7% and net loss narrowed 46.8% to RMB839.5 million.

• Average monthly active users were 99.0 million in Q4; average monthly subscribing members increased 9.2% YoY to 14.2 million.

Financial highlights

• Q4 gross profit rose 7.1% YoY to RMB673.1 million; cost of revenues fell 4.2% to RMB465.2 million.

• FY gross profit increased 27.0% to RMB2,295.8 million; cost of revenues increased to RMB1,903.0 million amid higher content, operating and payment processing costs.

• Q4 operating expenses were RMB851.3 million, versus RMB844.8 million YoY; FY operating expenses declined to RMB3,368.1 million from RMB3,411.8 million.

• Q4 diluted loss per ADS was RMB0.18, versus RMB0.29 a year earlier; FY diluted loss per ADS was RMB1.41, versus RMB2.59 in 2022.

• Cash, term deposits and short-term investments totaled RMB5,462.9 million at Dec. 31, 2023, down from RMB6,261.5 million a year earlier.

Outlook and guidance

• Management said it will prioritize operating efficiency to reinforce progress toward profitability, alongside continued user-experience focus and strategic execution.

• Management cited sustainable growth and continued value creation as priorities, supported by cost control and improved overall efficiency.