Zhihu Stock Jumps 4% on Strong Q2 Growth

The Chinese Q&A platform enjoyed 46% growth in MAUs and saw revenue more than double.
Aug. 16, 2021 14:44
Zhihu Stock Jumps 4% on Strong Q2 Growth

The stock in Zhihu Inc. (NYSE: ZH) jumped 4% in early trading Monday, to $9.69 a share, on better-than-expected business performance in the second quarter.

The company, a Q&A platform in China similar to Quora, enjoyed strong user growth in the second quarter, including a more-than-doubled number of paying users. Average monthly active users (MAUs) during the quarter increased 46% to 94.3 million. Revenue, according to the report, surged 144% during the three months through June to $98.9 million, beating predictions.

Zhihu saw revenue growth across all segments, with ads increasing 48% year-over-year, paid membership up 124%, and content-commerce solutions surging 17 times compared to the same period a year ago.

Net loss nearly tripled to $49.7 million, or 8 cents per share, in the second quarter, the company said. Gross margin was 59% compared with 48.4% a year ago.

Zhihu's chairman and CEO, Yuan Zhou, noted that the company has been "optimizing our content structure and refining our evaluation standards for quality content, thereby enhancing a 'sense of fulfilment' for our users." He continued, "We believe such quality content will broaden horizons, provide resolutions and resonate with minds."

CFO Wei Sun added that Zhihu has further diversified its revenue structure during the second quarter.

In the third quarter, Zhihu expects to generate between $126.2 million and $127 million in revenue.

Zhihu completed its initial public offering in New York in late March 2021, raising a cumulative $773 million in the public deal and the concurrent private placement with investor affiliates of Alibaba Group (NYSE: BABA; HKEX: 9988), JD.com, Inc. (Nasdaq: JD; HKEX: 9618), Tencent Holdings (OTC: TCEHY; HKEX: 0700), and Lilith Games.

To date, ZH stock is up about 15% since IPO.

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