20-F: Zhihu Reports 23.6% Revenue Drop, Net Loss Widens in 2025

Zhihu Inc. announced a significant 23.6% decline in revenue and an increased net loss for the fiscal year ended December 31, 2025, alongside strategic shifts and AI investments.

Summary

• Revenues decreased by 23.6% from RMB3,598.9 million in 2024 to RMB2,749.0 million (US$393.1 million) in 2025.
• Gross profit decreased by 24.4% from RMB2,180.8 million in 2024 to RMB1,647.7 million (US$235.6 million) in 2025.
• Net loss increased from RMB169.0 million in 2024 to RMB195.2 million (US$27.9 million) in 2025.
• Negative operating cash flow worsened, increasing from RMB280.2 million in 2024 to RMB363.6 million (US$52.0 million) in 2025.
• Marketing services revenue decreased by 32.3% to RMB843.9 million (US$120.7 million) in 2025, attributed to proactive refinement of service offerings.
• Paid membership revenue decreased by 12.7% to RMB1,538.9 million (US$220.1 million) in 2025, due to a decline in average monthly subscribing members.
• Other revenues, including vocational training, decreased by 37.9% to RMB366.1 million (US$52.4 million) in 2025, following strategic refinement of the vocational training business.
• An impairment of goodwill of RMB126.3 million (US$18.1 million) was recognized in 2025, primarily due to lower valuations amid current market conditions.
• Average monthly subscribing members decreased by 10.0% from 15.0 million in 2024 to 13.5 million in 2025.
• Cumulative content creators reached 80.3 million, contributing 953.9 million cumulative pieces of content covering over 1,000 verticals as of December 31, 2025.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a negative report due to significant declines in revenue and gross profit, coupled with an increased net loss and worsening operating cash flow. While cost control and AI investments are positive, the core business performance indicates substantial challenges.

Positives

• Investment income significantly increased from RMB65.4 million in 2024 to RMB231.9 million (US$33.2 million) in 2025, primarily due to unrealized gains from re-measuring the fair value of a privately held company investment.
• Operating expenses saw reductions across categories: selling and marketing expenses decreased by 21.7% to RMB1,252.3 million (US$179.1 million), research and development expenses decreased by 28.3% to RMB525.0 million (US$75.1 million), and general and administrative expenses decreased by 23.9% to RMB251.4 million (US$36.0 million).
• Continued investment and advancement in artificial intelligence technologies, including the launch of Zhihu Zhida (AI search product) and integration of AI across content creation, distribution, and community governance.
• User engagement metrics improved, with increased time spent, stronger retention among core users, and more active participation within the community, despite a stable monthly active user base.
• Total payouts under core incentive programs for content creators increased by approximately 70% year-over-year in 2025, with the number of creators receiving incentives growing by a double-digit percentage and income per participating creator increasing by over 40% year-over-year.
• Management concluded that internal control over financial reporting was effective as of December 31, 2025.

Negatives

• Overall revenue decreased by 23.6% in 2025, indicating a substantial contraction in core business activities.
• Net loss increased from RMB169.0 million in 2024 to RMB195.2 million (US$27.9 million) in 2025, demonstrating a worsening profitability trend.
• Negative operating cash flow increased from RMB280.2 million in 2024 to RMB363.6 million (US$52.0 million) in 2025, highlighting ongoing cash burn from operations.
• Marketing services revenue declined by 32.3% in 2025, reflecting challenges in attracting or retaining advertisers and brands.
• Paid membership revenue decreased by 12.7% in 2025, driven by a 10.0% decline in average monthly subscribing members.
• Other revenues, including vocational training, decreased by 37.9% in 2025, indicating a significant downturn in these complementary monetization channels.
• An impairment of goodwill of RMB126.3 million (US$18.1 million) was recognized in 2025, signaling a re-evaluation of prior acquisitions' value amid market conditions.
• Interest income decreased from RMB115.0 million in 2024 to RMB71.5 million (US$10.2 million) in 2025, primarily due to a decrease in term deposits.
• Income tax expenses of RMB21.7 million (US$3.1 million) were incurred in 2025, contrasting with income tax benefits of RMB9.4 million in 2024.

Risks

• Business success depends on the ability to offer high-quality user-generated content and attract/maintain an engaged user base.
• Failure to maintain and strengthen community culture, brand, and reputation could impair user base expansion and content-centric monetization.
• The company has incurred net losses and negative operating cash flow in the past, which may continue in the future.
• Inability to manage growth effectively may compromise business success due to challenges in managerial resources, human resources, technological infrastructure, capital resources, and corporate culture.
• Risks associated with financing activities and liquidity, including potential inability to raise required cash on acceptable terms, which could lead to modification of growth and operating plans.
• Failure to retain or attract merchants and brands, or to increase their spending, could materially and adversely affect marketing services revenue.
• New business initiatives and monetization strategies may not be successfully implemented or generate sufficient revenue to justify investments.
• Operating in a highly competitive market with competitors having longer operating histories, larger user bases, or greater financial resources.
• Failure to keep up with rapid technological developments, including the integration of artificial intelligence capabilities, could adversely affect future success.
• Investments in generative AI may not be commercially successful, and the use of AI in business operations faces potential issues related to effectiveness, user acceptance, and evolving regulatory/legal frameworks (e.g., intellectual property disputes).
• The business is subject to complex and evolving laws and regulations regarding cybersecurity and data privacy in China, with potential penalties for non-compliance or security breaches.
• Potential regulatory actions or legal proceedings in the ordinary course of business, including claims related to defamation, invasion of privacy, or intellectual property infringement.
• Advertisements displayed in the community may subject the company to penalties and other administrative actions if found non-compliant with advertising laws and regulations.
• Dependence on third-party service providers for critical services (online payment, content distribution, data support) exposes the company to risks of breaches, failures, or non-renewal of agreements.
• Any significant disruption to technology infrastructure or failure to maintain satisfactory performance, security, and integrity would adversely affect user experience and harm reputation.
• Non-compliance on the part of employees, business partners, or other third parties involved in the business could adversely affect operations and reputation.
• Content in the online community found objectionable or in violation of PRC laws or regulations may lead to administrative actions or negative publicity.
• Risks associated with strategic acquisitions, including integration challenges, diversion of management attention, and failure to realize expected financial results or synergies.
• Dependence on certain channel partners (pre-installations on mobile devices, application marketplaces) for user growth, with risks of increased charges or termination of collaboration.
• Use of open-source software may pose particular risks to proprietary software, products, and services.
• Dependence on the efforts of key employees, including senior management and technology talents, with intense competition for qualified talent in China.
• Risks associated with cash management activities, particularly investments in wealth management products, which may not generate expected returns or could incur losses.
• Payment processing risk due to reliance on third parties, including security breaches or changes in rules/regulations.
• Inability to adequately protect intellectual property rights from infringement or unauthorized use.
• Failure to implement and maintain an effective system of internal controls over financial reporting could lead to inaccurate reporting, failure to meet obligations, or fraud.
• A severe or prolonged downturn in the Chinese or global economy could materially and adversely affect business, financial condition, and results of operations.
• Uncertainties associated with real-name registration requirements, which may increase compliance burden or adversely affect user growth.
• Inadequate insurance coverage for operations in China could expose the company to substantial costs and business disruption.
• Risks relating to natural disasters, health epidemics, and other outbreaks, which could significantly disrupt operations.
• Current tensions in international trade and rising geopolitical tensions involving China (e.g., U.S. outbound investment regulations, HFCAA) may adversely impact business.
• Real or perceived inaccuracies in key operating metrics may harm reputation and adversely affect business.
• The fair value measurement of short-term investments inherently involves uncertainty, and such investments may incur fair value losses.
• If the PRC government deems that contractual arrangements with Variable Interest Entities (VIEs) do not comply with PRC regulatory restrictions, the company could be subject to severe penalties or forced to relinquish interests.
• Contractual arrangements with VIEs may not be as effective in providing operational control as direct ownership, and VIE shareholders may fail to perform obligations.
• The current corporate structure and business operations may be affected by the Foreign Investment Law, potentially leading to restructuring or invalidation of contractual arrangements.
• Loss of ability to use, or otherwise benefit from, the licenses, approvals, and assets held by the VIEs, which could hinder business operations and growth.
• Contractual arrangements with VIEs may be subject to scrutiny by tax authorities in China, potentially leading to additional taxes.
• Equity holders, directors, and executive officers of the VIEs may have potential conflicts of interest with the company.
• If the option to acquire equity ownership of the VIEs is exercised, the ownership transfer may subject the company to certain limitations and substantial costs.
• The PRC laws, rules, and regulations and their interpretation and enforcement may evolve quickly, which could have a material adverse effect.
• The PRC government's oversight over business operations could result in a material adverse change in operations and the value of Class A ordinary shares and ADSs.
• Failure to obtain and maintain the requisite licenses and approvals required under the complex regulatory environment applicable to businesses in China.
• The PCAOB's historical inability to inspect the company's auditor in relation to audit work performed for financial statements deprived investors of inspection benefits.
• ADSs may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely registered public accounting firms located in China, leading to potential delisting.
• Difficulties for overseas regulators to conduct investigations or collect evidence within China.
• The company may be classified as a PRC resident enterprise for PRC enterprise income tax purposes, which could result in unfavorable tax consequences.
• China's M&A Rules and certain other regulations establish complex procedures for certain acquisitions by foreign investors, making growth through acquisitions more difficult.
• Heightened scrutiny over acquisition transactions by PRC tax authorities may negatively impact business operations or acquisition strategy.
• Discontinuation of preferential tax treatments or other unfavorable changes in tax law could result in additional compliance obligations and costs.
• PRC regulations of loans and direct investment by offshore holding companies to PRC entities may delay or prevent the use of offshore financing proceeds.
• Potential penalties, including restriction on capital injection and profit distribution, if resident shareholders or beneficial owners in China fail to comply with PRC foreign exchange regulations.
• Principal reliance on dividends and other distributions from PRC subsidiaries, with limitations on their ability to make payments.
• Restrictions on the remittance of Renminbi into and out of China and governmental regulations of currency conversion may limit ability to pay dividends and affect investment value.
• Fluctuations in exchange rates could result in foreign currency exchange losses.
• Failure to comply with PRC regulations regarding the registration requirements for employee stock incentive plans may subject participants or the company to fines and penalties.
• Failure to make adequate contributions to various employee benefit plans as required by PRC regulations may subject the company to penalties.
• The trading prices of Class A ordinary shares and ADSs have been and may be volatile, resulting in substantial losses to investors.
• The dual-class voting structure will limit the ability of other shareholders to influence corporate matters and could discourage change of control transactions.
• If securities or industry analysts cease to publish research or reports or adversely change recommendations, market price and trading volume could decline.
• Techniques employed by short sellers may drive down the market prices of Class A ordinary shares and ADSs.
• No expectation of paying dividends in the foreseeable future; investors must rely on price appreciation for return on investment.
• Substantial future sales or perceived potential sales of Class A ordinary shares or ADSs in the public market could cause prices to decline.
• Voting rights of holders of ADSs are limited by the terms of the deposit agreement.
• ADS holders may not receive cash dividends if the depositary decides it is impractical to make them available.
• Limitations on transfer of ADSs.
• Dilution of holdings due to inability to participate in rights offerings.
• Difficulties in protecting interests through Hong Kong or U.S. courts due to Cayman Islands incorporation.
• Certain judgments obtained against the company by shareholders may not be enforceable.
• Forum selection provisions in memorandum and articles of association and deposit agreement could limit the ability of security holders to obtain a favorable judicial forum.
• ADS holders may not be entitled to a jury trial with respect to claims arising under the deposit agreement.
• An ADS holder's right to pursue claims against the depositary is limited by the terms of the deposit agreement.
• As a Cayman Islands company, the company is permitted to adopt certain home country practices in corporate governance that differ significantly from NYSE listing standards.
• As a foreign private issuer, the company is exempt from certain provisions applicable to U.S. domestic public companies, potentially affording less protection or information to investors.
• The company believes it was a Passive Foreign Investment Company (PFIC) for U.S. federal income tax purposes for the taxable year ended December 31, 2025, and will likely be a PFIC for the current taxable year, which could subject U.S. investors to significant adverse U.S. income tax consequences.

Future Outlook

Zhihu Inc. plans to continue investing in AI-related capabilities at the application layer and deepen their integration across the platform to improve operating efficiency and support the development of additional applications and services. The company expects its user base to continue experiencing a growing trend in the near future, with a focus on strengthening its core user base and driving high-quality, sustainable user growth through organic acquisition and content quality. Zhihu also intends to further expand the monetization of its content community and diversify revenue streams, including intellectual property development initiatives, and will continue to invest in people and technology to facilitate future growth. The company believes its current liquidity is sufficient to meet cash requirements for at least the next twelve months.

Management Comments

• "Our approach to AI remains centered on leveraging our content ecosystem and creator network to develop application-layer capabilities aligned with our platform."
• "We believe this will not only enhance the long-term monetization potential of our marketing services, but also help maintain a better balance between our commercial and content ecosystems."
• "We expect to expand our paid membership services by continually enhancing the quality of our premium content, including professionally generated and professional user-generated content, while diversifying the spectrum of our premium content library."
• "We believe that we are still in an early stage of monetization with significant potential for growth across multiple monetization channels."
• "Moving forward, we will continue to enhance our brand recognition to achieve organic user acquisition and retention."

Industry Context

StockSavvy.ai notes that Zhihu's strategic shift towards AI integration and organic user growth aligns with broader trends in the Chinese internet sector, where platforms are increasingly leveraging advanced technologies to enhance user experience and optimize monetization amidst intense competition. The decline in traditional marketing services and vocational training revenues reflects a challenging market and the company's pivot to more sustainable, content-driven growth, similar to how other content platforms like ByteDance (Douyin/TikTok) and Tencent are evolving their ecosystems. The focus on high-quality, human-generated content is particularly relevant given the rise of generative AI, positioning Zhihu as a valuable source in the broader AI ecosystem, a strategy that could differentiate it from competitors relying solely on AI-generated content.

Comparison to Industry Standards

• The filing does not provide explicit comparisons to specific comparable companies or projects. It mentions operating in a highly competitive market against 'other online content communities, including Q&A-inspired online communities,' 'lifestyle sharing platforms, live streaming platforms, knowledge sharing platforms, and hobby communities,' as well as 'search service providers, e-commerce platforms, and social networking platforms.' Without specific metrics for these competitors, a detailed comparison is not possible from the filing.

Management Changes

Corporate Governance

Legal Proceedings

• Currently not a party to any material legal or administrative proceedings.
• In 2024, the company exercised redemption rights in connection with investment arrangements with Shanghai Pinzhi, and the parties are currently resolving pending disputes and litigations. The company may terminate the contractual arrangements with Shanghai Pinzhi and its subsidiaries if the disputes are settled.

Related Party Transactions

• Purchased services from Tencent Group (payment, cloud, bandwidth) amounting to RMB22.9 million (US$3.3 million) in 2025, down from RMB25.9 million in 2024.
• Provided marketing services to Tencent Group amounting to RMB17.2 million (US$2.5 million) in 2025, up from RMB16.5 million in 2024.
• Amount due from Tencent Group was RMB13.5 million (US$1.9 million) as of December 31, 2025, up from RMB6.6 million in 2024.
• Amount due to Tencent Group was RMB3.5 million (US$0.5 million) as of December 31, 2025, down from RMB4.9 million in 2024.
• Purchased services from Kuaishou Group (marketing, cloud, bandwidth) amounting to RMB28.2 million (US$4.0 million) in 2025, down from RMB60.1 million in 2024.
• Provided marketing services to Kuaishou Group amounting to RMB30.0 million (US$4.3 million) in 2025, up from RMB11.7 million in 2024.
• Amount due from Kuaishou Group was RMB12.1 million (US$1.7 million) as of December 31, 2025, up from RMB11.3 million in 2024.
• Amount due to Kuaishou Group was RMB0.4 million (US$0.1 million) as of December 31, 2025, down from RMB2.0 million in 2024.
• Provided other services to Beijing ModelBest Intelligent Technology Co., Ltd. (investee) which were immaterial in 2025. Amount due from ModelBest was nil as of December 31, 2025, down from RMB23.7 million in 2024.
• Purchased consulting and marketing services from Beijing Radio and Television Station (VIE shareholder) amounting to RMB2.8 million (US$0.4 million) in 2025, down from RMB5.7 million in 2024.
• Amount due to Civil Spectrum Limited (investee) for unpaid investment consideration was RMB12.3 million (US$1.8 million) as of December 31, 2025, which was paid in January 2026.

Stakeholder Impact

• Shareholders face negative impact due to increased net loss, declining revenue, and goodwill impairment. U.S. shareholders may incur significant adverse U.S. income tax consequences if the company is classified as a PFIC. The dual-class voting structure limits influence on corporate matters, and potential future equity financings could lead to dilution.
• Employees may experience workforce adjustments or efficiency drives, as indicated by decreased staff costs, although the company continues to invest in people and technology and increased incentive payouts for content creators.
• Customers (users) are targeted with enhanced user experience, content quality, and AI-powered features. However, the decline in paid membership suggests some users may be seeking alternatives or are less satisfied with current offerings.
• Merchants and brands are impacted by the decline in marketing services revenue, indicating reduced spending or effectiveness of current solutions. The company is refining services and leveraging AI to improve marketing outcomes.
• Content creators benefit from increased incentive payouts and support for high-quality content creation, with AI tools aimed at improving efficiency and monetization opportunities.
• Creditors might view the negative operating cash flow and increased net loss with concern, although the company asserts sufficient liquidity for the next 12 months.

Next Steps

• Continue to invest in AI-related capabilities at the application layer and deepen their integration across the platform.
• Improve operating efficiency across existing businesses and support the development of additional applications and services over time.
• Further strengthen the core user base and drive high-quality, sustainable user growth, with an emphasis on organic user acquisition and content quality.
• Expand paid membership services by continually enhancing the quality of premium content and diversifying the content library.
• Further expand the monetization of the content community and seek to further diversify revenue streams, including intellectual property development initiatives.
• Continue to invest in people and technology to facilitate future growth.
• Resolve pending disputes and litigations with Shanghai Pinzhi and its founders, potentially leading to the termination of contractual arrangements.
• Apply for renewal of the Internet Religious Information Service License, which expired on August 25, 2025.
• Adjust capital contribution periods for existing companies to meet new PRC Company Law requirements within the interim period from July 1, 2024, to June 30, 2027.

Key Dates

Recommendation

Zhihu Inc.'s 2025 performance shows a significant deterioration in core business metrics, with substantial revenue decline, increased net loss, and worsening operating cash flow. While the company is investing in AI and optimizing costs, these efforts have not yet translated into improved financial results. The goodwill impairment and potential PFIC status for U.S. investors add further downside risk and uncertainty. The decrease in paid membership and marketing services revenue indicates challenges in core monetization strategies. A seasoned investor would likely view these trends as a strong signal to exit or reduce exposure, awaiting clear evidence of a turnaround in fundamental business performance and sustained profitability.

Keywords

Online content community, AI, Generative AI, Zhihu Zhida, Marketing services, Paid membership, Vocational training, China internet, SEC filing, Form 20-F, Financial results, Corporate governance, Risk management, User engagement, Content creators, Monetization, Cybersecurity, Data privacy, VIE structure, PRC regulations, Goodwill impairment, Share repurchase