Zhihu (ZH) Returns To Trailing Profitability Challenging Concerns Over Earnings Narrative

Zhihu (NYSE:ZH) has posted a mixed FY 2025 update, with Q3 revenue at C¥658.9 million and basic EPS of C¥0.58 loss per share, while trailing 12 month figures show revenue of C¥2.97 billion and basic EPS of C¥1.25. Over recent quarters, revenue has shifted from C¥933.8 million in Q2 2024 to C¥859.2 million in Q4 2024, then to C¥716.9 million in Q2 2025 and C¥658.9 million in Q3 2025. Net income moved from a C¥82.7 million loss in Q2 2024 to a C¥72.5 million profit in Q2 2025, before a C¥46.7 million loss in Q3 2025. For investors, the picture is one of stabilising margins at the trailing 12 month level, set against choppier quarterly profitability.

See our full analysis for Zhihu.

With the headline numbers on the table, the next step is to see how these earnings stack up against the widely held narratives about Zhihu’s growth potential and risk profile, and where the data reinforces or challenges those views.

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Revenue down from ¥933.8m to ¥658.9m

• Quarterly revenue has moved from ¥933.8 million in Q2 2024 to ¥716.9 million in Q2 2025 and then to ¥658.9 million in Q3 2025, while trailing 12 month revenue is ¥2.96 billion against ¥3.88 billion a year earlier.
• Consensus narrative highlights AI tools, diversified revenue streams and higher margin services as key long term drivers. However, the step down from ¥3.88 billion to ¥2.96 billion in trailing 12 month revenue, and the move from ¥933.8 million to ¥658.9 million at the quarterly level, shows that the quality over scale shift is currently coming with a smaller top line, which tests how quickly those higher value segments can make up for the lost volume.
  • Analysts in the consensus view refer to diversified monetization through advertising, memberships, vocational training and IP licensing, while the actual reported revenue trend still reflects an adjustment period rather than broad based expansion.
  • The consensus also talks about future revenue growth, but the trailing numbers on ¥2.96 billion and the year on year drop in Q3 revenue mean investors need to see more evidence that engagement and AI usage will translate into a larger revenue base.

Profit flips between losses and profits

• Net income over the last six quarters has swung from a loss of ¥82.7 million in Q2 2024 to a profit of ¥86.3 million in Q4 2024, then to a profit of ¥72.5 million in Q2 2025 and back to a loss of ¥46.7 million in Q3 2025, while trailing 12 month net income moved from a loss of ¥361.8 million to a profit of ¥102.0 million.
• Bulls argue that AI driven efficiencies and cost controls can support recurring profitability, and the shift from a trailing loss of ¥361.8 million to a trailing profit of ¥102.0 million, plus positive quarters like Q4 2024 and Q2 2025, is used to support that view, even though the Q3 2025 loss of ¥46.7 million shows the earnings path is still bumpy.
  • The bullish narrative points to operating cost discipline and AI powered productivity gains, and the reduction in trailing losses to a positive ¥102.0 million suggests those efforts have already filtered through to the bottom line over the past year.
  • At the same time, the return to a loss in Q3 2025 reminds investors that management is still in an investment and adjustment phase, so the bullish case depends on these quarterly swings settling into a more consistent profit run rate.

Bulls point to these profit swings as a sign Zhihu is passing through an investment phase that could set up more durable earnings once AI and higher value segments reach scale. 🐂 Zhihu Bull Case

P/E of 15.9x with modest revenue outlook

• The stock is reported on a trailing P/E of 15.9x, compared with 14.4x for the US Interactive Media & Services industry and 9.7x for peers, while revenue is forecast to grow 1.3% per year, which is below the 10.4% per year forecast for the broader US market.
• Bears highlight that slower expected revenue growth and a higher P/E than peers could pressure sentiment. The combination of a 1.3% revenue growth forecast with a 15.9x P/E versus 9.7x peers supports that caution, even though the move into a trailing profit of ¥102.0 million and analysts’ average target of US$5.32 from a current price of US$2.83 indicate some implied upside in the data.
  • Critics focus on the gap between Zhihu’s P/E and the peer average, and the modest 1.3% revenue growth expectation means there is less top line momentum in the figures to justify that premium compared with faster growing names in the same industry set.
  • On the other hand, the transition from a trailing loss of ¥361.8 million to a profit of ¥102.0 million, and analyst targets that sit above the current US$2.83 share price, show that some market participants are willing to pay up for earnings improvement despite slower revenue projections.

Skeptics point to the higher than peer P/E and modest revenue expectations as reasons to question how much of the earnings recovery is already embedded in the price. 🐻 Zhihu Bear Case

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Zhihu on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

Given the mix of bullish and cautious views above, it makes sense to move quickly and test the story against the numbers yourself. To see what others are optimistic about, take a closer look at the 4 key rewards.

See What Else Is Out There

Zhihu’s earnings story combines a shrinking revenue base, uneven quarterly profits and a P/E above peers, all tied to relatively modest growth expectations.

If you are weighing whether that balance of risk and potential reward suits you right now, it may be helpful to compare it with companies in the 75 resilient stocks with low risk scores category that focus on steadier fundamentals and potentially smoother performance.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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