This article first appeared on GuruFocus .
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Total Revenue:RMB690.1 million, down 3.7% year-over-year and up 5.9% sequentially.
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Marketing Services Revenue:RMB199 million, down 10.7% year-over-year and up 4% sequentially.
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Content and IP Operations Revenue:RMB425.9 million, up 4.4% year-over-year and 5.9% sequentially.
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Other Revenues:RMB86 million, with a year-over-year decline narrowing and a 12.7% sequential increase.
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Gross Profit:RMB393.4 million, with a gross margin of 55%.
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Total Operating Expenses:Decreased by 13% to RMB469.4 million.
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Selling and Marketing Expenses:Decreased by 5.4% to RMB308.7 million.
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Research and Development Expenses:Decreased by 25.4% to RMB108.6 million.
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General and Administrative Expenses:Decreased by 22.7% to RMB52 million.
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Adjusted Loss from Operations:Narrowed by 32% to RMB48.7 million.
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Net Loss:RMB37.4 million, compared with net income of RMB72.5 million in the same period of 2025.
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Adjusted Net Loss:RMB10.3 million, compared with adjusted net income of RMB91.3 million in the same period of 2025.
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Average Monthly Subscribing Members:13.11 million, broadly stable.
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Cash and Investments:RMB4.4 billion in cash, cash equivalents, term deposits, restricted cash, and short-term investments as of June 30, 2026.
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Share Repurchases:Repurchased 6.5 million Class A ordinary shares for USD7.2 million during the second quarter.
Release Date: August 26, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Total revenue grew 5.9% sequentially to RMB619 million, with the year-over-year decline narrowing.
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Paid content and IP revenue increased 4.4% year-over-year to RMB426 million, driven by IP licensing growth of 105% sequentially.
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Daily creation of high-quality content grew over 16%, and average daily time spent remained stable at 39 minutes.
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AI initiatives are gaining traction: AI content asset clients grew 50% sequentially, and the open-data platform attracted over 17,600 developers.
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Operating expenses decreased 13% year-over-year, and adjusted loss from operations narrowed by 32%.
Negative Points
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Total revenue declined 3.7% year-over-year, reflecting ongoing business adjustments.
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Marketing services revenue fell 10.7% year-over-year, with no broad recovery yet despite sequential improvement.
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Gross margin dropped to 55% from 62.5% due to increased content investment.
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Adjusted net loss was RMB10.3 million, swinging from adjusted net income of RMB91.3 million in the prior year.
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Other revenues decreased due to strategic refinements in the vocational training business.
Q & A Highlights
Q: How should we think about revenue and profit trending in the second half of the year, and are there any fluctuations between quarters due to business adjustments and new business investments? A: Yuan Zhou (CEO) stated that the sequential improvement seen in the second quarter is expected to continue, but different businesses have different operating rhythms. Marketing services remain in a period of structural recovery and may be affected by client budgets and industry demand. Paid content remains stable, while IP operations will be influenced by project timing and recent industry standard changes. New initiatives like AI content assets and expert data solutions are being validated but may take time to contribute scalable revenue and require near-term investments. The company's long-term goals remain improving revenue mix and returning to sustainable profitability.
Q: Could management share some color on the view of AI-generated comic dramas and how should we think of Zhihu's advantages? A: Rongle Zhang (COO) expressed a positive outlook on the AI comic drama market, noting rapid improvements in AI content generation capabilities. As AI production becomes more widely available, the real scarcity shifts back to the content itselfgood stories and a sustainable pipeline of creative ideas. Zhihu has a clear advantage through its Yanyan Story ecosystem, which provides a broad base of original stories and creators. According to third-party data, Yanyan Story became one of the leading IP providers for native AI comic dramas on TikTok and ranked among the top three IP providers on Fongo in the first half of 2026. The company will remain flexible in business models, including licensing and in-house production, and may selectively move further up the value chain where project economics are validated.
Q: Could management elaborate on the business model for expert data solutions and what is Zhihu's advantage in this business? A: Yuan Zhou (CEO) explained that Zhihu operates as a research-driven data lab focused on improving frontier model capabilities. The business model includes customized R&D projects based on client needs, with a goal to standardize and reuse data pipelines, environment-building capabilities, and evaluation frameworks across more clients and model generations. Zhihu's expert network is crucial for setting quality standards and validating model outputs. The investment profile differs from traditional data businesses, with more resources directed toward compute, model usage, and R&D infrastructure. The company is focused on three key metrics: consistently improving model performance, building long-term client relationships, and ensuring capabilities can be reused across clients.
Q: What were the key financial highlights for the second quarter of 2026? A: Han Wang (CFO) reported total revenues of RMB690.1 million, down 3.7% year-over-year but up 5.9% sequentially. Marketing services revenue was RMB199 million, down 10.7% year-over-year but up 4% sequentially. Content and IP operations revenue reached RMB425.9 million, up 4.4% year-over-year and 5.9% sequentially. Gross margin was 55%, down from 62.5% in the prior year period, reflecting continued efforts to broaden content offerings. Total operating expenses decreased by 13% year-over-year. Adjusted net loss was RMB10.3 million, compared with adjusted net income of RMB91.3 million in the same period of 2025. The company maintained RMB4.4 billion in cash and cash equivalents.
Q: How is AI expanding the value of Zhihu's community, content, IP, and expert network? A: Yuan Zhou (CEO) outlined four key areas where AI is creating value. First, the community is becoming more open, with Zhihu Jiuda integrated with Zhihu Search, making AI-powered search a new gateway to community content. The open-data platform API has attracted more than 17,600 professional developers, about 20% of whom were not previously Zhihu creators. Second, marketing services are evolving from traffic value toward content asset value, with AI content asset offerings seeing a 50% sequential increase in clients. Third, AI is accelerating IP expansion into multimedia formats, with a meaningful portion of monetized comic drama projects coming from works created in 2025 or earlier. Fourth, expert data solutions are evolving from project delivery toward reusable capabilities across coding, search, deep research, visual reasoning, and agents.
Q: What is the current status of the marketing services business and what is the strategy for recovery? A: Yuan Zhou (CEO) noted that marketing services revenue was RMB199 million, down 10.7% year-over-year but up 4% sequentially. The company continues to focus on key verticals including technology, automotive, consumer electronics, home appliances, and gaming. Performance-based spending increased 1% sequentially, including a 22% increase in gaming. Marketing services remain in structural recovery, and the company will continue to improve the matching of professional content with user needs and client demand. The strategy involves strengthening product R&D, especially performance advertising capabilities, and increasing the value per unit of traffic rather than driving volume.
Q: How is the paid content and IP operations business performing? A: Yuan Zhou (CEO) reported that paid content and IP revenue reached RMB426 million, up 4.4% year-over-year and 5.9% sequentially. Average monthly subscribing members were 13.11 million, broadly stable, while member ARPU also remained stable. IP operations continued to contribute incremental growth, with licensing increasing 105% sequentially. The company is expanding Yanyan story IP from one-time licensing toward multi-format, full-lifecycle development. The company will continue to improve membership content and product experience while expanding knowledge-based offerings.
Q: What is the company's approach to capital allocation and shareholder returns? A: Han Wang (CFO) stated that as of June 13, 2026, the company had repurchased an aggregate of 41.3 million Class A ordinary shares for total consideration of USD77.9 million on both the New York Stock Exchange and the Stock Exchange of Hong Kong. During the second quarter, the company repurchased 6.5 million Class A ordinary shares for total consideration of USD7.2 million. The company will maintain a disciplined approach to capital allocation and continue to execute share repurchases to enhance long-term shareholder returns.
Q: What are the company's priorities for the second half of 2026? A: Yuan Zhou (CEO) outlined two main priorities. First, the company will stabilize core businesses by improving user experience, maintaining a stable membership base, improving IP development efficiency, and advancing the structural recovery of marketing services. Second, the company will continue to validate AI-driven opportunities across the open community ecosystem, AI content assets, IP, and expert data solutions by focusing on real demand, client value, capability
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
