Zhihu shares surge on earnings, revenue beat
Investing.com | Editor Ahmed Abdulazez Abdulkadir
Published Mar 26, 2024 06:29AM ET
BEIJING - Zhihu Inc. (NYSE: ZH), a prominent online content community in China, reported a significant beat on both earnings and revenue for the fourth quarter of 2023, sending its shares up by 4.37%. The company posted an adjusted net loss of RMB0.18 per share, which was RMB0.12 better than the analyst consensus of a RMB0.30 loss per share. Revenue for the quarter reached RMB1.14 billion, exceeding the consensus estimate of RMB1.07 billion.
The company's revenue saw a modest increase of 2.2% compared to the same period last year, while the adjusted net loss narrowed by 31.9%. Zhihu's gross margin also improved, expanding to 59.1% in the fourth quarter from 56.4% in the previous year. This growth was attributed to the company's successful multi-engine monetization approach and improved efficiency in cloud services and bandwidth utilization.
Mr. Yuan Zhou, Zhihu's CEO, credited the company's strategic execution and cost control for the positive results amid a challenging macroeconomic environment. "By prioritizing user experience and improving our strategic execution, cost control, and overall efficiency, we have set the stage for sustainable growth and continued value creation for our users and stakeholders," said Zhou.
The company's paid membership revenue increased by 13.3%, driven by the growth in subscribing members, while vocational training revenue saw a substantial rise of 100.1%, primarily due to enriched online course offerings and contributions from recently acquired businesses.
Zhihu's stock movement following the earnings release reflects investor optimism about the company's performance and future prospects. The positive market response is further supported by the company's narrowed net loss and increased gross margin, indicating progress towards profitability.
For the full year of 2023, Zhihu reported a 16.5% increase in total revenues and a 46.8% narrowing in net loss compared to the previous year. The company's CFO, Mr. Han Wang, emphasized the resilience and dedication to their monetization strategy, which led to the year-over-year revenue growth.
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