From single-season to full-year profitability, Zhihu undergoes a valuation reevaluation

Question AI · Behind the Surge in IP Copyright Revenue, How Large is the Zhihu Ecosystem’s Reservoir?

Author | Huang Yida

Editor | Zhang Fan

Cover Source | Visual China

On March 25, Zhihu (stock code: ZH.N; 2039.HK) released its full-year results for 2025.

The most significant highlight of Zhihu’s 2025 financial report is that it has achieved non-GAAP profitability for the first time for the entire year, with an adjusted net profit of 37.9 million yuan. From a quarterly perspective, Zhihu has achieved non-GAAP profitability for three consecutive quarters from Q4 2024 to Q2 2025; among them, Q2 2025 performed the best, achieving its first quarterly profit, with a net profit of 72.48 million yuan, and the non-GAAP net profit for the same period was 91.34 million yuan.

Therefore, the strong performance in the first half of 2025 is key to Zhihu’s non-GAAP profitability for the year. The core logic behind this lies in the steady improvement of operational efficiency and quality, combined with the continuous empowerment of AI on the company’s core business, ultimately driving Zhihu to achieve its first annual non-GAAP profit.

So, what important highlights are there in the company’s business during the reporting period while Zhihu achieved profitability? How should Zhihu be valued?

AI Continuously Strengthens the Underlying Logic of Zhihu’s Operations

As a content community, Zhihu’s underlying logic is based on a positive cycle between creator incentives and high-quality content production. Nowadays, AI capabilities are becoming an important supplement to this core logic:

AI empowers creators as a tool, enhancing both the efficiency and quality of high-quality content production, while also continuously generating more original high-quality content, feeding back into large model training, thereby further enriching and reinforcing this positive cycle system. Moreover, in the AI era, the weight of high-quality content is greater, which not only constitutes a natural advantage for Zhihu but will also further consolidate Zhihu’s competitive moat.

During the reporting period, the most critical progress in AI for Zhihu was upgrading the Zhihu Direct Answer feature from traditional AI search to an agentic intelligent assistant, elevating it to a primary entry point in the Zhihu APP. Against the backdrop of significant increases in usage and penetration of Zhihu Direct Answer, this upgrade is expected to further enhance the reach and user engagement of AI features within the Zhihu community.

In terms of content production and operations, with the continuous enhancement of the synergistic effect among high-quality content x expert networks x AI technology, AI effectively empowers content production and drives improvements in distribution efficiency, while also significantly optimizing internal operational efficiency. Corresponding results are reflected in the business data for Q4 2025: a sustained output of high-quality in-depth content, an increase in user activity and engagement depth, and a significant improvement in new user retention.

According to the information disclosed in the annual report, Zhihu will continue to increase investment in AI technology and accelerate AI-related commercialization exploration in 2026, with a focus on related layouts in AI manga and the growth of associated IP quantity.

How to Value Zhihu?

Based on Zhihu’s current business composition, the paid reading business is its revenue pillar, accounting for as much as 56% of revenue in 2025. The core highlight of the paid reading business is the emerging potential of IP monetization. Financial data shows that IP copyright revenue in Q4 2025 grew more than fivefold year-on-year. Notably, the number of authors earning copyright revenue from Zhihu grew sixfold year-on-year, indicating that Zhihu’s IP assets are gradually beginning to release value while the IP ecosystem’s reservoir is also expanding, providing ample room for future growth.

The marketing business is Zhihu’s second-largest source of revenue, accounting for about 31% of revenue in 2025. The core highlight of this business during the reporting period is the accelerated recovery of revenue in the fourth quarter. The annual performance of Zhihu’s marketing business was impacted by the downturn in the advertising market, but the marginal recovery in the fourth quarter was primarily driven by customer structure optimization and product upgrades.

From Zhihu’s current revenue structure, both core businesses of paid reading and marketing have shown significant marginal improvement and positive expectations, providing strong support for Zhihu’s overall profitability expectations. Zhihu’s transition from quarterly profit to annual profit is mainly driven by high-quality content and expert networks, with AI playing the role of catalyst and lubricant, further reinforcing the underlying logic of Zhihu’s operations.

Looking ahead, with the support of AI, Zhihu will unleash stronger growth potential, coupled with ongoing efforts to reduce costs and increase efficiency, the certainty of improved performance for Zhihu is high. In terms of valuation, Zhihu’s current valuation level has not fully reflected its AI capabilities and performance improvement expectations. In the future, under the catalyst of share buybacks, Zhihu is expected to usher in a valuation re-evaluation.

*Disclaimer: