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Zhihu Integrates AI Platform With DeepSeek, Posts First-Ever Profit

The company, sometimes called the Quora of China, is banking on growth from a new AI tool to improve expert-supplied answers to user questions

Key Takeaways:

Zhihu reported its first-ever profit in the fourth quarter, though its revenue fell by 25% as its marketing and education services both reported big declines

The knowledge-sharing platform may have found a winner in its new Zhida.ai platform, which uses AI to enhance its core Q&A services

After years of searching since its founding in 2010, knowledge-sharing platform Zhihu Inc. (2390.HK; ZH.US) finally found an answer to its profitability challenge in last year's fourth quarter, to the delight of investors who waited more than a decade for the breakthrough.

The profit came as Zhihu became more selective about its users, forgoing less profitable ones to focus on bigger spenders. The company also held out big potential for AI to take its knowledge-sharing content to the next level, saying it is using the technology to complement answers traditionally provided by experts to user questions.

Zhihu reported a profit of 86.4 million for the quarter, reversing a net loss of 103.1 million a year earlier, despite a relatively steep 25% year-over-year revenue decline to 859.2 million yuan over that period, according to its landmark report. Its move to the black owed in part to a gross margin that improved by 3.8 percentage points to 62.9%.

The revenue plunge came as Zhihu's monthly average users fell by 18% year-on-year to 81.4 million from 99 million a year earlier, reflecting a more common theme among Chinese companies lately to focus on quality users over simply quantity. Zhihu remained in the red for the year with an annual loss of 169 million yuan, though that was a big improvement on the 840 million yuan loss a year earlier.

"The fourth quarter of 2024 was a true milestone for us, an inflection point that underscores our strategic focus and strong execution," said founder and Chairman Zhou Yuan on the company's earnings call.

Zhihu's CFO Wang ...

https://www.benzinga.com/markets/asia/25/04/44627057/zhihu-integrates-ai-platform-with-deepseek-posts-first-ever-profit