Zhihu Inc. (ZH) Q2 2026: AI Expansion and IP Growth Offset Marketing Service Challenges
Zhihu's core community and paid content remain stable amid ongoing structural recovery in marketing services, while AI-driven IP and expert data solutions emerge as strategic growth pillars. Management emphasizes cautious investment in new AI initiatives alongside disciplined cost control. The company’s evolving content ecosystem and AI integration position it for long-term value creation despite near-term profit volatility.
Summary
- Community Resilience and Content Quality: Core user engagement and high-quality content growth sustain platform value despite revenue headwinds.
- AI as a Strategic Growth Lever: AI-powered IP development and expert data capabilities expand commercial opportunities beyond traditional content monetization.
- Prudent Investment Focus: Management balances selective AI-related investments with the imperative to stabilize core business profitability.
Business Overview
Zhihu Inc. operates a knowledge-sharing platform that monetizes through marketing services, paid content subscriptions, intellectual property (IP) licensing, and expert data solutions. Its major segments include marketing services focused on vertical industries such as technology and automotive, paid content and IP operations, and emerging AI-driven data research labs. The company’s business model leverages community-generated professional content and expert networks to create value across multiple digital and AI-enabled formats.
Performance Analysis
In Q2 2026, Zhihu reported total revenues of RMB 690.1 million, reflecting a 3.7% year-over-year decline but a 5.9% sequential increase. This sequential growth was mainly driven by paid content and IP operations, which grew 4.4% year-over-year and 5.9% sequentially to RMB 425.9 million. Marketing services revenue declined 10.7% year-over-year to RMB 199 million but showed a 4% sequential uptick, supported by stronger traction in key verticals including gaming, which grew 22% sequentially.
Gross margin contracted to 57% from 62.5% a year ago, primarily due to efforts to broaden and enhance content offerings. Operating expenses were reduced by 13% year-over-year to RMB 469.4 million through efficiency improvements in selling, marketing, research and development, and general administration. These cost controls helped narrow the adjusted operating loss by 32% compared to the prior year, although adjusted net loss stood at RMB 10.3 million.
- Segment Revenue Dynamics: Paid content and IP operations now represent over 60% of total revenue, underscoring a strategic shift toward subscription and licensing models.
- Marketing Services Recovery: Despite ongoing structural challenges, the 4% sequential revenue increase and 22% gaming vertical growth indicate early signs of stabilization.
- Cost Discipline and Profitability: Meaningful reductions in operating expenses demonstrate management’s focus on sustainable profitability amid investment in new initiatives.
Overall, the quarter reflects a business in transition, balancing core stability with strategic investments in AI and IP to drive future growth.
Executive Commentary
"Our core community remained resilient, paid content stayed stable, IP operations continued to grow, and marketing services improved sequentially. Our authentic, professional, and trustworthy community remains the foundation, while AI helps us reach new users, applications, and commercial scenarios."
Zhou Yuan, Founder, Chairman and CEO
"During the second quarter, our revenue trend continued to improve sequentially, supported by growth in paid content and IP operations. Disciplined cost management drove year-over-year reductions in operating expenses and operating losses."
Wang Han, Chief Financial Officer
Strategic Positioning
1. AI-Driven Content Discovery and Community Openness
Zhihu is integrating AI-powered search and discovery tools to open its community content to a broader audience without compromising authenticity. By merging AI call-to-answer and call-to-search functionalities, the company aims to make high-quality professional content more accessible, enhancing user engagement and retention. Early product tests show positive workflow impact, signaling a structural shift in content consumption and discovery.
2. Expansion of IP into Multimedia Formats
AI is lowering barriers to transform textual IP into diverse multimedia formats such as comic dramas and short films. Zhihu’s IP library, enriched by content from 2025 and earlier, is being efficiently monetized through licensing and selective in-house production. This strategy extends the lifecycle and monetization potential of existing IP assets while maintaining a flexible, asset-light approach to content development.
3. Expert Data Solutions as a Research-Driven Capability
The company’s expert data lab is evolving beyond traditional data delivery to focus on improving AI model capabilities through training data, evaluation frameworks, and complex task design. Leveraging its expert network for professional task definition and quality standards, Zhihu aims to create reusable, scalable data assets that enhance AI model performance across clients and applications, positioning this segment for future growth.
4. Marketing Services Structural Recovery
Marketing services remain in a structural recovery phase, affected by client budget shifts and industry demand seasonality. Zhihu is prioritizing strengthening performance advertising capabilities and enhancing unit traffic value rather than volume growth. Focused verticals such as gaming are showing encouraging sequential momentum, indicating potential for gradual recovery.
5. Disciplined Investment and Profitability Focus
Management emphasizes cautious investment in AI-related initiatives, balancing exploration of new commercial opportunities with the imperative to stabilize core business profitability. Profit fluctuations are expected due to business rhythm and phased investments, but the long-term goal remains improved operating efficiency and sustainable profitability.
Key Considerations
Zhihu’s Q2 results highlight a company navigating a complex transition between legacy monetization and AI-enabled growth opportunities.
- Content Ecosystem Strength: Sustained growth in high-quality content and stable core user engagement underpin the platform’s moat.
- AI Integration as Growth Catalyst: AI tools are expanding content reach and enabling new monetization formats, but commercialization remains in early stages.
- Marketing Services Headwinds: Structural recovery is uneven and dependent on client budgets and industry cycles, requiring ongoing product refinement.
- Cost Management Success: Significant expense reductions support improved profitability metrics, allowing selective investments without compromising financial health.
- IP Monetization Flexibility: A balanced approach between licensing and in-house production mitigates risk while maximizing asset value.
Risks
Zhihu faces risks from ongoing regulatory changes affecting project timing, particularly in IP operations. The structural recovery of marketing services remains uncertain with potential volatility from client budget fluctuations and industry demand shifts. Early-stage AI initiatives may require sustained investment before generating scalable revenue, posing near-term profitability challenges.
Forward Outlook
For Q3 2026, management anticipates continued sequential growth in paid content and IP operations, with marketing services expected to remain in structural recovery influenced by client budget and industry demand seasonality. Profitability may fluctuate due to phased investments and business rhythm.
- Focus on improving user experience and stabilizing membership base.
- Advance IP development efficiency and marketing services recovery.
For full-year 2026, management maintains a cautious investment stance, emphasizing real customer value, return on investment, and long-term sustainable profitability while validating AI-driven opportunities.
Takeaways
Zhihu’s Q2 2026 results reveal a platform balancing core business resilience with pioneering AI-driven content and data strategies, setting the stage for future growth amid current market headwinds.
- Core Business Stability: Stable community engagement and paid content underpin a resilient revenue base despite marketing service softness.
- AI and IP as Differentiators: The integration of AI expands content discovery and multimedia IP monetization, creating new commercial avenues.
- Investment Discipline Imperative: Management’s cautious capital allocation reflects prudent risk management amid early-stage AI commercialization.
Conclusion
Zhihu’s second quarter underscores its strategic pivot toward AI-enabled content innovation and expert data solutions, balancing this with disciplined cost management and a focus on core business stability. While near-term profit volatility persists, the company is laying foundational capabilities for sustainable growth in a rapidly evolving digital knowledge economy.
Industry Read-Through
Zhihu’s experience highlights broader industry trends where AI is reshaping content discovery, IP monetization, and expert-driven data services. The shift toward AI-powered platforms demands robust content ecosystems and flexible monetization models. Marketing services across digital platforms continue to face structural headwinds, emphasizing the need for innovation in performance advertising and client value creation. Other knowledge-sharing and content platforms should watch Zhihu’s AI integration and IP strategies as indicators of evolving competitive dynamics in the digital economy.