BEIJING, May 24, 2023
/PRNewswire/ -- Zhihu Inc. ("Zhihu" or the "Company") (NYSE:
ZH; HKEX: 2390), a leading online content community in China, today announced its unaudited financial
results for the quarter ended March 31,
2023.
First Quarter 2023 Highlights
- Total revenues were RMB994.2
million (US$144.8 million) in
the first quarter of 2023, representing a 33.8% increase from the
same period of 2022.
- Net loss was RMB179.0 million (US$26.1 million) in the first quarter of 2023,
narrowed by 70.9% from the same period in 2022.
- Adjusted net loss (non-GAAP)[1] was
RMB120.2 million (US$17.5 million) in the first quarter of 2023,
narrowed by 67.3% from the same period of 2022.
- Average monthly active users
(MAUs)[2] reached 102.4 million in the first
quarter of 2023, compared with 101.6 million in the same period of
2022.
- Average monthly subscribing
members[3] reached 14.9 million in the first
quarter of 2023, representing a 116.0% increase from the same
period of 2022.
"We are pleased to report a strong first quarter of 2023, with
impressive revenue growth and another quarter of significantly
narrowed loss. Our user growth reaccelerated during this quarter,
and in March our MAUs surpassed 110 million, driven by our diverse
content formats and enriched consumption scenarios. Our paid
membership revenue reached the historical high while vocational
training revenue continued to grow rapidly, as we extended our user
coverage beyond the Zhihu community and deepened our services along
the industry value chain. Our outstanding performance is a
testament to our continued innovation in content community
development and integration of cutting-edge AI technology." said
Mr. Yuan Zhou, chairman and chief executive officer of Zhihu.
Mr. Henry Sha, chief financial
officer of Zhihu, added, "We outperformed this quarter by beating
market consensus in terms of both top line and bottom line. Our
total revenues for the quarter increased by 33.8% year over year to
RMB994.2 million, driven by robust
growth in both paid membership and vocational training businesses,
and our gross margin expanded to 51.5% from 45.1% in the same
period last year. We also achieved RMB59.9
million operating cash flow during the first quarter. It is
the first time that Zhihu generates positive operating cash flow
since its initial public offering. We will continue to focus on our
core business development and remain prudent in exploring potential
opportunities."
First Quarter 2023 Financial Results
Total revenues were RMB994.2
million (US$144.8 million) in
the first quarter of 2023, representing growth of 33.8% from
RMB743.2 million in the same period
of 2022.
Marketing services revenue[4] was RMB392.1 million (US$57.1
million), compared with RMB444.1
million in the same period of 2022. The decrease was
primarily due to the challenging macroeconomic environment.
Paid membership revenue was RMB454.8 million (US$66.2
million), representing a 105.2% increase from RMB221.7 million in the same period of 2022. The
increase was primarily attributable to the continued growth of our
average monthly subscribing members which reached 14.9 million from
6.9 million in the same period of 2022.
Vocational training revenue was RMB107.0 million (US$15.6
million), representing a 170.6% increase from RMB39.5 million in the first quarter of 2022. The
significant increase was primarily attributable to our further
enriched online course offerings and the revenue contributions from
our recently acquired businesses in the period.
Other revenues were RMB40.3
million (US$5.9 million),
representing a 6.3% increase from RMB37.9
million in the same period of 2022. The year-over-year
increase was primarily attributable to the increased sales of our
private label products and book series.
Cost of revenues increased by 18.2% to RMB482.0 million (US$70.2
million) from RMB407.7 million
in the same period of 2022. The increase was primarily due to an
increase in content and operating costs to enhance our content
attractiveness, as well as an increase in payment processing costs
in connection with our revenue growth, partially offset by the
decrease in cloud services and bandwidth costs resulting from our
improved technology efficiency.
Gross profit was RMB512.2
million (US$74.6 million),
representing a 52.7% increase from RMB335.5
million in the same period of 2022. Gross
margin expanded to 51.5% from 45.1% in the same period of 2022,
primarily attributable to our enhanced monetization efforts and the
improvement of cloud services and bandwidth utilization
efficiency.
Total operating expenses decreased by 25.9% to
RMB729.0 million (US$106.1 million) from RMB983.7 million in the same period of 2022.
Selling and marketing expenses decreased by 12.0% to
RMB445.6 million (US$64.9 million) from RMB506.6 million in the same period of 2022,
primarily due to more disciplined promotional spending and decrease
in salaries and welfare expenses.
Research and development expenses increased to
RMB183.0 million (US$26.6 million) from RMB166.5 million in the same period of 2022. The
increase was primarily attributable to the increase in the salaries
and welfare of research and development personnel, as well as the
increased spending in technology innovation.
General and administrative expenses decreased by 67.7% to
RMB100.4 million (US$14.6 million) from RMB310.6 million in the same period of 2022,
primarily due to lower share-based compensation expenses recognized
and the decrease in professional service fees.
Loss from operations decreased by 66.6% to RMB216.7 million (US$31.6
million) from RMB648.2 million
in the same period of 2022.
Adjusted loss from operations (non-GAAP)[1]
decreased by 60.7% to RMB157.3
million (US$22.9 million) from
RMB400.7 million in the same period
of 2022.
Net loss decreased by 70.9% to RMB179.0 million (US$26.1
million) from RMB614.3 million
in the same period of 2022.
Adjusted net loss (non-GAAP)[1] decreased by
67.3% to RMB120.2 million
(US$17.5 million) from RMB367.4 million in the same period of 2022.
Diluted net loss per American Depositary Share ("ADS")
was RMB0.30 (US$0.04), compared with RMB1.02 in the same period of 2022.
Cash and cash equivalents, term deposits and short-term
investments
As of March 31,
2023, the Company had cash and cash equivalents, term
deposits and short-term investments of RMB6,257.7 million (US$911.2 million), compared with RMB6,261.5 million as of December 31, 2022.
Share Repurchase Program
The Company announced a share repurchase program in May 2022 under which the Company may repurchase
up to US$100 million of Class A
ordinary shares or ADSs for a 12-month period, which was approved
by shareholders at the Company's annual general meeting held on
June 10, 2022. As of March 31, 2023, approximately 6.9 million Class A
ordinary shares (including Class A ordinary shares underlying the
ADSs) had been repurchased on both the New York Stock Exchange and
The Stock Exchange of Hong Kong Limited under the program for a
total price of US$17.8 million.
The board of directors of the Company has approved to extend the
share repurchase program until June 10,
2024, which is subject to the shareholders' approval for
granting a general mandate to the board of directors to repurchase
shares and/or ADSs of the Company not exceeding 10% of the total
number of issued shares of the Company as of the date of such
approval at the forthcoming annual general meeting of the
Company.
[1] Adjusted
loss from operations and adjusted net loss are non-GAAP financial
measures. For more information on the non-GAAP financial measures,
please see the section of "Use of Non-GAAP Financial Measures" and
the table captioned "Unaudited Reconciliations of GAAP and Non-GAAP
Results" set forth at the end of this press release.
[2] MAUs
refers to the sum of the number of mobile devices that launch our
mobile app at least once in a given month, or mobile MAUs, and the
number of logged-in users who visit our PC or mobile website at
least once in a given month, after eliminating
duplicates.
[3] Monthly
subscribing members refers to the number of our Yan Selection
members in a specified month. Average monthly subscribing members
for a period is calculated by dividing the sum of monthly
subscribing members for each month during the specified period by
the number of months in such period.
[4] Starting
with the first quarter of 2023, we report revenues generated
from advertising and content-commerce solutions collectively as
"marketing services revenue" to better present our business and
results of operation in line with our overall strategies. Revenues
for the applicable comparison periods of 2022 have been
retrospectively re-classified.
|
Conference Call
The Company's management will host an earnings conference call
at 7:30 a.m. U.S. Eastern Time on
May 24, 2023 (7:30 p.m. Beijing/Hong
Kong time on May 24,
2023).
All participants wishing to join the conference call must
pre-register online using the link provided below. Once the
pre-registration has been completed, each participant will receive
a set of dial-in numbers, a passcode, and a unique registrant ID
which can be used to join the conference call. Participants may
pre-register at any time, including up to and after the call start
time.
Participant Online Registration:
https://dpregister.com/sreg/10179092/f976dce55c
Additionally, a live and archived webcast of the conference call
will be available on the Company's investor relations website
at https://ir.zhihu.com.
A replay of the conference call will be accessible approximately
one hour after the conclusion of the live call, until May 31, 2023, by dialing the following telephone
numbers:
United States (toll
free):
|
+1-877-344-7529
|
International:
|
+1-412-317-0088
|
Replay Access
Code:
|
1172692
|
About Zhihu Inc.
Zhihu Inc. (NYSE: ZH; HKEX: 2390), a leading online content
community in China where people
come to find solutions, make decisions, seek inspiration, and have
fun. Since the initial launch in 2010, we have grown from a Q&A
community into one of the top comprehensive online content
communities and the largest Q&A-inspired online content
community in China. For more
information, please visit https://ir.zhihu.com.
Use of Non-GAAP Financial Measure
In evaluating the business, the Company considers and uses
non-GAAP financial measures, such as adjusted loss from operations
and adjusted net loss, to supplement the review and assessment of
its operating performance. The Company defines non-GAAP financial
measures by excluding the impact of share-based compensation
expenses, amortization of intangible assets resulting from business
acquisitions and the tax effects of the non-GAAP adjustments, which
are non-cash expenses. The Company believes that the non-GAAP
measures facilitate comparisons of operating performance from
period to period and company to company by adjusting for potential
impacts of items, which the Company's management considers to be
indicative of its operating performance. The Company believes that
the non-GAAP financial measures provide useful information to
investors and others in understanding and evaluating the Company's
consolidated results of operations in the same manner as it helps
the Company's management.
The non-GAAP financial measures are not defined under U.S. GAAP
and are not presented in accordance with U.S. GAAP. The
presentation of the non-GAAP financial measures may not be
comparable to similarly titled measures presented by other
companies. The use of the non-GAAP measures has limitations as an
analytical tool, and investors should not consider it in isolation
from, or as a substitute for analysis of, our results of operations
or financial condition as reported under U.S. GAAP. For more
information on the non-GAAP financial measures, please see the
tables captioned "Unaudited Reconciliations of GAAP and Non-GAAP
Results" set forth at the end of this press release.
Exchange Rate Information
This announcement contains translations of certain Renminbi
amounts into U.S. dollars at a specified rate solely for the
convenience of the reader. Unless otherwise noted, all translations
from Renminbi to U.S. dollars were made at a rate of RMB6.8676 to US$1.00, the exchange rate in effect as of
March 31, 2023 as set forth in the
H.10 statistical release of the Federal Reserve Board.
Safe Harbor Statement
This announcement contains forward-looking statements. These
statements are made under the "safe harbor" provisions of the U.S.
Private Securities Litigation Reform Act of 1995. Statements that
are not historical facts, including statements about the Company's
beliefs and expectations, are forward-looking statements.
Forward-looking statements involve inherent risks and
uncertainties, and a number of factors could cause actual results
to differ materially from those contained in any forward-looking
statement. In some cases, forward-looking statements can be
identified by words or phrases such as "may," "will," "expect,"
"anticipate," "target," "aim," "estimate," "intend," "plan,"
"believe," "potential," "continue," "is/are likely to," or other
similar expressions. Further information regarding these and other
risks, uncertainties or factors is included in the Company's
filings with the SEC and the Hong Kong Stock Exchange. All
information provided in this press release is as of the date of
this press release, and the Company does not undertake any duty to
update such information, except as required under applicable
law.
For investor and media inquiries, please contact:
In China:
Zhihu Inc.
Email: ir@zhihu.com
Piacente Financial
Communications
Helen Wu
Tel: +86-10-6508-0677
Email: zhihu@tpg-ir.com
In the United States:
Piacente Financial
Communications
Brandi Piacente
Phone: +1-212-481-2050
Email: zhihu@tpg-ir.com
ZHIHU
INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (All amounts in thousands, except share, ADS, per
share data and per ADS data)
|
|
|
For the Three Months
Ended
|
|
March
31,
2022
|
|
December
31,
2022
|
|
March
31,
2023
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
Revenues:
|
|
|
|
|
|
|
|
Marketing
services
|
444,104
|
|
572,387
|
|
392,137
|
|
57,100
|
Paid
membership
|
221,670
|
|
402,531
|
|
454,769
|
|
66,219
|
Vocational
Training
|
39,544
|
|
84,591
|
|
106,998
|
|
15,580
|
Others
|
37,909
|
|
54,456
|
|
40,316
|
|
5,870
|
Total
revenues
|
743,227
|
|
1,113,965
|
|
994,220
|
|
144,769
|
Cost of
revenues
|
(407,684)
|
|
(485,442)
|
|
(482,001)
|
|
(70,185)
|
Gross
profit
|
335,543
|
|
628,523
|
|
512,219
|
|
74,584
|
|
|
|
|
|
|
|
|
Selling and marketing
expenses
|
(506,585)
|
|
(509,229)
|
|
(445,565)
|
|
(64,879)
|
Research and
development expenses
|
(166,518)
|
|
(212,495)
|
|
(182,960)
|
|
(26,641)
|
General and
administrative expenses
|
(310,632)
|
|
(123,107)
|
|
(100,438)
|
|
(14,625)
|
Total operating
expenses
|
(983,735)
|
|
(844,831)
|
|
(728,963)
|
|
(106,145)
|
|
|
|
|
|
|
|
|
Loss from
operations
|
(648,192)
|
|
(216,308)
|
|
(216,744)
|
|
(31,561)
|
|
|
|
|
|
|
|
|
Other
income/(expenses):
|
|
|
|
|
|
|
|
Investment
income
|
20,724
|
|
5,922
|
|
6,006
|
|
875
|
Interest
income
|
9,355
|
|
33,671
|
|
39,493
|
|
5,751
|
Fair value change of
financial instruments
|
8,453
|
|
(4,619)
|
|
(3,582)
|
|
(522)
|
Exchange
losses
|
(4,155)
|
|
(1,524)
|
|
(5,649)
|
|
(823)
|
Others, net
|
1,930
|
|
6,099
|
|
6,333
|
|
922
|
|
|
|
|
|
|
|
|
Loss before income
tax
|
(611,885)
|
|
(176,759)
|
|
(174,143)
|
|
(25,358)
|
Income tax
expense
|
(2,398)
|
|
(2,755)
|
|
(4,829)
|
|
(703)
|
Net
loss
|
(614,283)
|
|
(179,514)
|
|
(178,972)
|
|
(26,061)
|
Net income attributable
to noncontrolling
interests
|
-
|
|
(164)
|
|
(2,383)
|
|
(347)
|
Net loss
attributable to Zhihu Inc.'s
shareholders
|
(614,283)
|
|
(179,678)
|
|
(181,355)
|
|
(26,408)
|
|
|
|
|
|
|
|
|
Net loss per
share
|
|
|
|
|
|
|
|
Basic
|
(2.04)
|
|
(0.59)
|
|
(0.59)
|
|
(0.09)
|
Diluted
|
(2.04)
|
|
(0.59)
|
|
(0.59)
|
|
(0.09)
|
|
|
|
|
|
|
|
|
Net loss per ADS
(Two ADSs represent
one Class A ordinary share)
|
|
|
|
|
|
|
|
Basic
|
(1.02)
|
|
(0.29)
|
|
(0.30)
|
|
(0.04)
|
Diluted
|
(1.02)
|
|
(0.29)
|
|
(0.30)
|
|
(0.04)
|
|
|
|
|
|
|
|
|
Weighted average
number of ordinary
shares outstanding
|
|
|
|
|
|
|
|
Basic
|
300,483,336
|
|
304,665,906
|
|
305,245,036
|
|
305,245,036
|
Diluted
|
300,483,336
|
|
304,665,906
|
|
305,245,036
|
|
305,245,036
|
|
|
|
|
|
|
|
|
ZHIHU
INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (CONTINUED) (All amounts in thousands, except
share, ADS, per share data and per ADS data)
|
|
|
For the Three Months
Ended
|
|
March
31,
2022
|
|
December
31,
2022
|
|
March
31,
2023
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
Share-based
compensation expenses included in:
|
|
|
|
|
|
|
|
Cost of
revenues
|
4,770
|
|
3,663
|
|
4,400
|
|
641
|
Selling and marketing
expenses
|
6,472
|
|
5,019
|
|
8,758
|
|
1,275
|
Research and
development expenses
|
15,770
|
|
15,831
|
|
21,205
|
|
3,088
|
General and
administrative expenses
|
218,055
|
|
18,032
|
|
21,555
|
|
3,138
|
ZHIHU INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (All
amounts in thousands)
|
|
|
As of December
31,
2022
|
|
As of March
31,
2023
|
|
RMB
|
|
RMB
|
|
US$
|
ASSETS
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
4,525,852
|
|
4,172,007
|
|
607,491
|
Term
deposits
|
948,390
|
|
744,020
|
|
108,338
|
Short-term
investments
|
787,259
|
|
1,341,687
|
|
195,365
|
Trade
receivables
|
834,251
|
|
758,352
|
|
110,425
|
Amounts due from
related parties
|
24,798
|
|
19,127
|
|
2,785
|
Prepayments and other
current assets
|
199,249
|
|
215,087
|
|
31,319
|
Total current
assets
|
7,319,799
|
|
7,250,280
|
|
1,055,723
|
Non-current
assets:
|
|
|
|
|
|
Property and
equipment, net
|
7,290
|
|
7,057
|
|
1,028
|
Intangible assets,
net
|
80,237
|
|
76,667
|
|
11,164
|
Goodwill
|
126,344
|
|
126,344
|
|
18,397
|
Long-term
investments
|
-
|
|
30,000
|
|
4,368
|
Right-of-use assets
|
100,119
|
|
94,188
|
|
13,715
|
Other non-current
assets
|
22,450
|
|
22,450
|
|
3,270
|
Total non-current
assets
|
336,440
|
|
356,706
|
|
51,942
|
Total
assets
|
7,656,239
|
|
7,606,986
|
|
1,107,665
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Accounts payables and
accrued liabilities
|
916,112
|
|
1,001,454
|
|
145,823
|
Salary and welfare
payables
|
283,546
|
|
284,801
|
|
41,470
|
Taxes
payables
|
25,975
|
|
21,293
|
|
3,101
|
Contract
liabilities
|
355,626
|
|
377,637
|
|
54,988
|
Amounts due to related
parties
|
24,861
|
|
21,006
|
|
3,059
|
Short term lease
liabilities
|
53,190
|
|
60,639
|
|
8,830
|
Other current
liabilities
|
165,531
|
|
174,400
|
|
25,395
|
Total current
liabilities
|
1,824,841
|
|
1,941,230
|
|
282,666
|
Non-current
liabilities
|
|
|
|
|
|
Long term lease
liabilities
|
43,367
|
|
33,616
|
|
4,895
|
Deferred tax
liabilities
|
11,630
|
|
11,030
|
|
1,606
|
Other non-current
liabilities
|
82,133
|
|
89,154
|
|
12,982
|
Total non-current
liabilities
|
137,130
|
|
133,800
|
|
19,483
|
Total
liabilities
|
1,961,971
|
|
2,075,030
|
|
302,149
|
|
|
|
|
|
|
Total Zhihu Inc.'s
shareholders' equity
|
5,653,696
|
|
5,479,882
|
|
797,933
|
Noncontrolling
interests
|
40,572
|
|
52,074
|
|
7,583
|
Total shareholders'
equity
|
5,694,268
|
|
5,531,956
|
|
805,516
|
|
|
|
|
|
|
Total liabilities
and shareholders' equity
|
7,656,239
|
|
7,606,986
|
|
1,107,665
|
ZHIHU
INC. UNAUDITED RECONCILIATIONS OF GAAP AND NON-GAAP
RESULTS (All amounts in thousands)
|
|
|
For the Three Months
Ended
|
|
March
31,
2022
|
|
December
31,
2022
|
|
March
31,
2023
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
Loss from
operations
|
(648,192)
|
|
(216,308)
|
|
(216,744)
|
|
(31,561)
|
Add:
|
|
|
|
|
|
|
|
Share-based
compensation expenses
|
245,067
|
|
42,545
|
|
55,918
|
|
8,142
|
Amortization of intangible assets resulting
from business acquisition
|
2,400
|
|
3,490
|
|
3,490
|
|
508
|
Adjusted loss from
operations
|
(400,725)
|
|
(170,273)
|
|
(157,336)
|
|
(22,911)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
(614,283)
|
|
(179,514)
|
|
(178,972)
|
|
(26,061)
|
Add:
|
|
|
|
|
|
|
|
Share-based
compensation expenses
|
245,067
|
|
42,545
|
|
55,918
|
|
8,142
|
Amortization of
intangible assets resulting
from business acquisition
|
2,400
|
|
3,490
|
|
3,490
|
|
508
|
Tax effects on
non-GAAP adjustments
|
(600)
|
|
(600)
|
|
(600)
|
|
(87)
|
Adjusted net
loss
|
(367,416)
|
|
(134,079)
|
|
(120,164)
|
|
(17,498)
|
View original
content:https://www.prnewswire.com/news-releases/zhihu-inc-reports-unaudited-first-quarter-2023-financial-results-301833208.html
SOURCE Zhihu Inc.