Zhihu Inc. 2025 Annual Report: Key Highlights, Risks, and Strategic Developments

Date: April 17, 2026

Executive Summary

Zhihu Inc. (HKEX: 2390; NYSE: ZH), a leading online content community in China, has released its 2025 Annual Report. This year marks a significant turning point for the company, with notable improvements in financial performance, operational efficiency, and strategic positioning, particularly in the integration of artificial intelligence (AI) and content monetization strategies.

Financial Performance Highlights

• Return to Profitability (Non-GAAP): Zhihu achieved a non-GAAP adjusted net income of RMB 37.9 million in 2025, a substantial turnaround from the adjusted net loss of RMB 96.3 million in 2024.
• Revenue Decline: Total revenues fell from RMB 3,598.9 million in 2024 to RMB 2,749.0 million in 2025, reflecting ongoing business transformation and market headwinds.
• Cost Optimization: Significant reduction in operating expenses, particularly in selling and marketing (down from RMB 1,599.2 million to RMB 1,252.3 million) and R&D (down from RMB 732.6 million to RMB 525.0 million).
• Impairment Charges: RMB 126.3 million goodwill impairment recorded in 2025, reflecting reassessment of long-term asset values amid market conditions.
• Balance Sheet Health: Total assets decreased to RMB 5,190.9 million (from RMB 5,733.0 million in 2024). Shareholders’ equity stands at RMB 3,875.0 million.
• Cash Position: Declining current assets (RMB 4,732.0 million in 2025 vs. RMB 5,484.6 million in 2024) suggests ongoing pressure on liquidity, but overall liabilities also decreased.

Strategic and Operational Developments

• AI Integration and Content Ecosystem: Zhihu has deepened the integration of AI technologies across its platform, enhancing user experience, content quality, and operational efficiency. Management believes Zhihu’s expert network and authentic discussion scenarios provide a strong foundation for AI-enabled data solutions and new forms of monetization.
• Community and Monetization Balance: The company is optimizing the balance between its community and commercial ecosystems, focusing on high-value users and professional creators. Enhanced monetization tools for creators are expected to drive sustainable growth.
• Ongoing Cost and Resource Optimization: Strategic resource allocation and disciplined spending are delivering improved margins and operating leverage.
• Exploration of New Revenue Streams: Zhihu is accelerating exploration of AI-related monetization opportunities, such as providing high-quality, structured data for large language models (LLMs).

Key Risks and Regulatory Considerations

• VIE Structure and Regulatory Uncertainty: Zhihu operates through a variable interest entity (VIE) structure due to foreign investment restrictions in China’s publishing and internet sectors. Any adverse regulatory changes or enforcement by PRC authorities could severely impact the company’s operations and financial performance.
• Potential Delisting Risk: The ongoing risk under the U.S. Holding Foreign Companies Accountable Act (HFCAA) remains. If the PCAOB is unable to fully inspect Zhihu’s auditors, its ADSs may be delisted from U.S. exchanges, which could significantly affect share value.
• Macroeconomic and Political Risks: Changes in China’s economic, political, or regulatory environment could materially affect business operations.
• Content and Community Risks: Zhihu’s success depends on maintaining a trustworthy community and high-quality user-generated content. Any deterioration in brand, reputation, or user engagement could hinder monetization and growth.
• Goodwill and Asset Impairment: The RMB 126.3 million goodwill impairment indicates sensitivity to market capitalization and asset valuation risks.

Shareholder and Corporate Governance Updates

• No Dividend Recommendation: The Board does not recommend a dividend for 2025, citing the need to balance financial flexibility and investment for growth.
• Weighted Voting Rights (WVR): The company maintains a dual-class share structure, with Class B shares (held by founder Yuan Zhou) carrying 10 votes per share, potentially limiting minority shareholder influence on significant corporate matters.
• Major Shareholders: Tencent and Kuaishou remain substantial shareholders, with Tencent controlling nearly 15% of Class A shares through subsidiaries.
• Connected Transactions: Ongoing transactions with major connected parties such as Tencent and China Literature (affiliated with Tencent) have been reviewed by independent directors and auditors, with no material issues found.
• Corporate Governance: The Board and its committees (Audit, Compensation, Nomination, Corporate Governance) continue to oversee risk, compliance, and governance practices. No significant related party or competing business interests were reported among directors.

Important Events and Outlook

• No Major Post-Reporting Events: No significant events occurred after December 31, 2025, that would affect the Group’s financial or operational position.
• 2026 Outlook: Zhihu remains committed to sustainable growth, deepening AI integration, enhancing monetization, and maintaining community health. The company aims to further empower professional creators and improve operational efficiency, while actively pursuing new AI-driven data product opportunities.

Investor Takeaways and Potential Share Price Impacts

• Return to Non-GAAP Profitability: The shift to profitability (on a non-GAAP basis) could signal an inflection point and drive positive investor sentiment, though continued revenue declines warrant caution.
• Strategic AI Initiatives: Zhihu’s focus on AI-enabled data monetization and community-driven content could open new high-margin revenue streams, potentially re-rating the company if executed successfully.
• Regulatory and Delisting Risks: The VIE structure and U.S. regulatory environment remain significant uncertainties that could cause share price volatility or downside risk.
• Major Shareholder Influence and WVR Structure: The dual-class structure may deter some institutional investors but ensures founder control and strategic continuity.
• No Dividend Payout: The lack of a dividend may disappoint yield-seeking investors but signals reinvestment into growth and technology.

Conclusion

Zhihu’s 2025 annual report reflects a company at a strategic crossroads: achieving non-GAAP profitability, actively embracing AI opportunities, but facing ongoing top-line headwinds and structural regulatory risks. Investors should closely monitor execution on AI monetization, regulatory developments, and signs of revenue stabilization for future share price direction.

Disclaimer: This article is a summary and analysis based on Zhihu Inc.’s 2025 Annual Report and is intended for informational purposes only. It does not constitute investment advice or a recommendation to buy or sell securities. Investors should conduct their own due diligence and consult professional advisors before making any investment decisions. The author and publisher are not responsible for any losses resulting from reliance on this information.

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