Zhihu Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the Juhu Inc. Second Quarter 2025 Financial Results Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a Q&A session. Today's conference is being recorded and webcasted. At this time, I would like to turn the conference over to Yolanda Liu, Director of Investor Relations. Please go ahead, ma'am.

Thank you, Sarah. Hello, everyone. Welcome to Zhihu's 2025 Second Quarter Financial Results Conference Call. Joining me today on the call from the Senior Management Team are Mr. Zhou Yuan, Founder, Chairman, and Chief Executive Officer, and Mr. Wang Han, Chief Financial Officer. Before we begin, I'd like to remind you that today's discussion will include forward-looking statements. made under the Safe Harbor provisions of the U.S. Private Security Legitimacy Reform Act of 1995. These statements involve inherent risks and uncertainties. As such, the actual results may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties is included in our public filings with the U.S. Securities and Exchange Commission and Hong Kong Stock Exchange. The company does not assume any obligation to update any forward-looking statements except as required under X law. Additionally, the discussion today will include both GAAP and non-GAAP financial measures for consideration purpose only. For reconciliation of these non-GAAP measures to the most directly comparable GAAP measures, please refer to our earnings release issued earlier today. In addition, a webcast replay of this conference call will be available on our IR website at ir.zhuo.com. Today, Zhou Yuan, our founder and CEO, and Wang Han, our CFO, will have their prepared remarks delivered in English through their representative AI voice agents. The content is prepared by them, while the agents serve only as a voice interface. As the agents are still learning, We appreciate your understanding. First, let's hear from Zhou Yuan's agent, Victor.

Victor, please go ahead.

Thank you, Yolanda.

Hello, everyone, and thank you for joining Zhihu as second quarter 2025 earnings call. I am Victor Zhou, an AI-powered voice agent of Zhou Yuan. I am pleased to deliver today's opening remarks on behalf of Mr. Zhou Yuan, founder Chairman and CEO of Zhihu, we posted our third consecutive quarter of non-GAAP profitability, once again beating market expectations by a wide margin. Adjusted net income for the second quarter reached RMB 91.3 million compared to a loss of RMB 44.6 million in the same period last year, while gross margin expanded by approximately three percentage points year over year. These results highlight the strength of our disciplined operating strategy and the value of our AI-powered productivity gains. Zhihu's ecosystem continues to flourish with our trustworthy content and professional creators, enriching the experience for users and creators alike. In particular, leading experts continue to drive deeper engagement within the community, steadily amplifying the influence and strengthening the ecosystem. This increased engagement is clearly reflected in several key user metrics. While MAUs remained stable from last quarter, daily time spent, core user retention, and high tier creator engagement all posted notable gains both sequentially and year over year. Our expanding in-house AI capabilities and growing industry influence have reinforced our platform's unique value Proposition as the go-to destination for professional, trustworthy Chinese language content with an increasing number of users and creators flocking to the platform. Notably, our platform has emerged as the preferred launchpad for new AI technologies and products while becoming the leading network for AI talent and expertise. As our synergistic development of high-quality content trusted creator network and AI capabilities accelerates. Zhihu is delivering greater and differentiated value to users and clients, not only on our platform, but also across the broader internet, continuously widening our competitive mode. As AI tools surge in popularity, professional content from the Zhihu community is increasingly being cited by a growing number of leading large AI models and AI search engines. We are pleased to see Zhihu serve as a key source for credible information and research especially in practical use cases such as scientific education, consumer decision-making, and career development. Moving forward, we will further enhance the user and creator experience by integrating AI more deeply throughout our community by adding intuitive features like personal knowledge assistance. We will continue to test, refine, and enhance our AI capabilities to amplify the value of Zhihu as trusted content and expert network across the broader internet. We believe these efforts will establish our platform as a foundational source of reliable content for the Chinese AI ecosystem. Our persistent efforts to optimize the trustworthiness of our content system and foster greater creator engagement across the community continue to deliver tangible results. In the second quarter, average daily user time spent exceeded 39 minutes, reflecting a 15% year-over-year increase. Core user retention improved significantly, both on a sequential and year-over-year basis, while the depth of DAU content engagement increased quarter-over-quarter. This progress reflects our ongoing efforts to optimize community features and refine operational strategies throughout the year. Through AI integration, we've created a more user-friendly and reliable user experience while strengthening connections among our users and key contributors. Over the past 14 years, we've developed and continuously refined the Zhihu's content model, building a robust foundation where professional content thrives and consistently inspires trust, drives citations, and encourages discussions online. In the second quarter, daily high-quality content creation increased by over 10% sequentially. AI has emerged as a key vertical with professional AI-related content, maintaining year-over-year growth of over 45% for two consecutive quarters. Recently, we've seen a growing trend of more and more frontline engineers and AI model developers openly sharing key insights that go beyond academic papers. This has made Zhihu a uniquely valuable community where new products debut, in-depth discussions unfold, and knowledge is continuously built and preserved. Over the past month alone, Zhihuo has been the go-to platform for top AI teams and the frontline developers to launch and discuss new technologies and products. For example, Moonshot AI unveiled the technical details of their Kimmy K2 model, with core developers actively engaging in Q&A sessions to break down the architecture and technical details. ByteAdvance's seed team also released their GR3 robot model on our platform, accompanied by an exclusive article outlining their development principles and journey. The trade team at ByteAdvance also shared a comprehensive overview of their model iteration process. In addition, G4AI launched its GLM 4.5 model on our platform, and Alibaba's Qteam team released three consecutive models, sparking a series of vibrant community discussions. Even StepFind's co-founder, Yi Bozhu, chose Zhihu to thoroughly explain the design ideas behind the Step3 architecture. Through ongoing improvements to our content ecosystem and algorithms, we continue to identify and suppress the spread of low-quality content, reducing its distribution by more than 98% year-over-year and over 59% sequentially. During the challenging annual Gaokao college entrance exam in June, when students are often overwhelmed with information and they need to make critical life decisions, Zhihu leveraged its trustworthy structured content ecosystem to provide clear and practical guidance. Tools such as the Gaokao Data Hub offered data-driven support for application submissions, while roundtable discussions such as career paths for humanities majors and how to navigate away from discouraged majors brought together. Expert voices offering valuable insights. Zhehu's university communities also supported students by sharing authentic firsthand perspectives about campus life. Professional creators form the backbone of our ecosystem. In the second quarter, daily active high tier creators continued to grow sequentially. while the number of verified honored creators increased by 26% year over year. This community continues to thrive with high-quality engagement. As of the end of June, over 16 million continuous learners and 3.65 million proficient creators on Zhihu engaged in science and AI-related discussions. Among those who are AI developers, over 56% hold a master's or doctoral degree. Nearly 40% are aged between 18 and 24, and 14% are senior technology professionals, including company executives, CTOs, and tech leads. To provide a better experience for professional creators, we continue to optimize our ideas and column products. The Upgraded Ideas product now seamlessly aligns with the high frequency creation workflow of professionals while encouraging interaction among users with shared interests. This led to a quarter over quarter increase of over 15% in both views and engagement in the second quarter. The column feature has strengthened connections among like-minded users, resulting in a 45.7% quarter over quarter increase in daily visits. Additionally, More professional creators launched their own columns this quarter, fueling solid growth in the total number of columns. At the same time, deepening AI integration within our community has continued to expand our AI capabilities and service scope. In the second quarter, we launched a major update to Zhihu Zhida public knowledge base built on top of existing personal knowledge libraries. This update delivers a seamless AI interaction experience for creators and users across a wide range of reading Q&A and search use cases. It has also further reduced AI hallucinations in professional domains. Within just two weeks of launch, users created hundreds of new entries on the public knowledge base. This momentum also supported the creation of additional private knowledge bases among users enabling them to consolidate and archive their search and research workflows. Moving forward, we will continue to develop Zhihu Zeta as an AI agent embedded within the community, serving as a comprehensive productivity suite for search, research, learning, and content creation. We will further promote open sharing of professional content within the Zhihu community and continue to strengthen the synergy between high-quality content our trusted expert network, and AI capabilities. We are thrilled to see that Zhihu Zhida has entered an exciting new stage of growth and innovation. Once it achieves critical penetration relative to overall platform traffic with the user experience and answer quality reaching key milestones, we will seek to integrate it across our broader suite of products. Now, let's move on to commercialization. In the second quarter, we maintain the dynamic balance between commercial growth and community integrity by proactively refining our product offerings and client mix. While still navigating an adjustment cycle, we are encouraged to see the year-over-year top-line decline moderating, with total revenue reaching RMB 716.9 million in the second quarter. We firmly believe these ongoing adjustments will lay a solid foundation for our sustainable, long-term growth. Moreover, our evolving AI capabilities and content ecosystem will continue to enhance and expand our commercial services, reinforcing the virtuous cycle between commercial growth and community vitality. Let's turn to performance by segment. Our marketing services are progressing through the adjustment phase as planned and remain on track. In the second quarter, Marketing services revenue grew 13.1% quarter over quarter to RMB 222.8 million, with the year over year decline narrowing substantially. We continue to crack down on low quality marketing content, reducing its consumption by over 90% year over year during the second quarter. We also made meaningful progress in optimizing our client mix, Leveraging Zhihu as strong brand equity and influence, we expanded our enterprise-facing or 2B client base and diversified our commercial IP products and services tailored for top-tier clients. During the June the 18th Shopping Festival, we launched the SmartPix Expert Choice Campaign, capitalizing on Zhihu's trustworthy content model and high-value user community. This initiative boosted brand awareness and highlighted product strengths for leading brands such as Dream, Hire, BYD, Roborock, and Nowall. Furthermore, our advertising product upgrades are accelerating, powered by our advanced AI capabilities. While the second quarter is typically peak season for e-commerce, our overall ad load significantly decreased from the same period last year, while CPM performance improved sequentially across most product categories. During the June the 18th shopping festival, users increasingly used our AI capabilities to make more informed purchase decisions reflected in the 190% year-over-year search in the Zhihu June the 18th recommendation search index. The index for June, the 18th purchase-related searches on Zhihu Zhida grew by 61% quarter-over-quarter, and the average order value per user increased by 27% year-over-year. We are also building stronger connections between trusted content creators, high quality content, and products. The number of content creators participating in product promotion grew by 10% year-over-year, while the volume of promotional content increased by 20% year-over-year. We continue to upgrade our CCS products, which are quickly gaining traction among clients. Advertising spend from the gaming sector saw a four-fold increase year over year, while our client base expanded by 75%. With ongoing improvements to our AI capabilities, we expect marketing services to recover more strongly in the second half, expanding our commercial potential and driving long-term value. And now for our paid membership business. In the second quarter, average monthly subscribing members totaled 13.2 million, with revenue reaching RMB 402 million, representing a slight sequential decline of 3.8%. This was largely driven by our strategic emphasis on acquiring users with longer life cycles and higher ROI potential, which impacted new member sign-ups. Since the start of the year, we have focused on enhancing user stickiness and diversifying our paid content and business models As part of this, we further expanded and upgraded the premium content formats and service offerings under Yanyan's story. Notably, voice live streaming has seen steady growth in both user penetration and paid conversion rates since launch. In the second quarter, its ARPU significantly exceeded our expectations and continues to grow, reflecting strong user endorsement and the monetization potential it offers. The Yanyan Story long-form writing marathon launched in May has generated thousands of high-quality submissions from creators within just two months, significantly outperforming similar initiatives over the period. This highlights the distinct advantages our content creator ecosystem has and the growing mindshare we hold among users in the long-form content space. This directly translates into extended user subscription cycles and builds on our leadership in the short form content space. Our commitment to premium paid content and support for creators has enabled Yanyan Story to consistently deliver high quality works that blend the literary richness with broad emotional appeal. This has allowed us to build a stable and robust content pipeline that is both well received by users and widely recognized across the industry. In June, Yanyan Titles received three major awards in the 2024 China Online Literature Influence Ranking , further validating our content strategy and strengthening our foundation for IP development and monetization going forward. Momentum is also building in the commercialization of our original IPs. In the second quarter, revenue from IP licensing grew by triple digits, both year over year and quarter over quarter. By the end of June, more than 40 premium short-form stories published on Zhihu had generated revenue through film and television licensing. Among them, Fish Lamp, Guiding All Souls, Yu Deng Yin Hun Ji, No Time to Die, Wu Xia Fu Si, and Ting Yin, The Birth of a Queen, together dubbed the three Yanyan masterpieces. Yanyan Sanjue were especially well-received by audiences while attracting strong interest from film and television adaptation partners. Lastly, our vocational training business recorded the revenue of RMB 62.1 million during the quarter, down 34.3% quarter-over-quarter. As we focus resources on high-performing course categories and gradually phase out offerings with limited growth potential or lower profitability. This strategic focus is designed to improve overall business quality and long-term growth. Encouragingly, operating profit of the business for the quarter increased by an impressive 90% year over year, demonstrating the effectiveness of our operating strategy and execution. We continue to make steady progress in the broader strategic transformation of our vocational training business, powered by our high-quality content ecosystem and trusted creator network, we are transitioning from a traditional subject-based expansion model focused on a few core categories to a more community-driven approach that fosters deeper social engagement and knowledge sharing. This will also unlock new monetization opportunities for professional creators. In support of this, we enhanced the creator experience and paid content ecosystem of our new column product this quarter. Since May, We have improved operations, product experience, and algorithms to better support content creation and distribution. These efforts led to a more than 50% increase in shared column content from May to June. Creator user engagement also improved significantly. The growing demand for premium content further fueled the monetization of paid columns with GMV in June, increasing by over 34% month over month. For the remainder of the year, We will continue to drive the integrated development of high-quality content, a trusted creator network, and AI capabilities, further reinforcing Druhu's competitive moat in the AI era. As AI becomes more deeply embedded in our community, we aim to enable more intelligent, reliable experiences for users across a variety of scenarios. On the commercial front, we will accelerate our product upgrades to better serve high value users and professional creators, building a suite of solutions that enhance user trust and support stronger commercial monetization. Leveraging this foundation, we will further expand the reach of Zhihu as AI capabilities beyond our platform, offering our trusted content and services to a wider user base. We are confident that stronger synergies between our community and commercial ecosystems will reinforce Zhihu's value proposition as a trusted platform and unlock long-term sustainable growth. With that, I will hand the call over to our CFO, Wang Han, whose remarks will also be delivered through his AI voice agent. Han, please go ahead.

Now I will review the details of our second quarter financials. For a complete overview of our second quarter 2025 results, please refer to our press release issued earlier today. In the second quarter, we maintained our trajectory of non-GAAP profitability for the third consecutive quarter. Gross margin also continued to expand year over year. These results underscore the ongoing strengthening of our financial fundamentals, supported by a leaner cost structure and more efficient operations. Our total revenues for the quarter were RMB 716.9 million, compared with RMB93, $3.8 million in the same period of 2024. The decrease was driven by our ongoing business optimization. The year-over-year decline also narrowed slightly for the second straight quarter, in line with our expectations as we transitioned toward a more resilient and higher quality revenue mix. Our marketing services revenue for the quarter was RMB222.8 million, compared with RMB344 million in the same period of 2024. This decrease was mainly due to our continued refinement of service offerings and our strategic focus on improving margins. Encouragingly, revenue grew 13.1% sequentially, and the year-over-year decline also narrowed meaningfully, reflecting a more stable phase in our adjustment cycle. Paid membership revenue was RMB 402 million, down slightly from RMB 432.7 million in the same period of 2024. This was primarily due to a decrease in new subscriptions following a shift in our focus toward acquiring users with longer life cycles and higher ROI potential. Vocational training revenue was RMB 6.2 million compared with RMB 3.6 million in the same period of 2024. The decline resulted from the ongoing refinement of our acquired businesses as we continue to prioritize faster growing self-operated course offerings. Other revenues were RMB $3.0 million compared with RMB to $3.5 million in the same period of 2024. Our gross profit for the quarter was RMB $448.2 million compared with RMB $556.5 million in the same period of 2024. Gross margin expanded to 62.5% up from 59.6% in the same period of 2024 and 61.8%. in the previous quarter. This was largely driven by improvements to our monetization capabilities and continued gains in operating efficiency. Our total operating expenses for the quarter declined by 27.2% year-over-year to RMB 539.2 million. This decrease reflects tighter cost controls and productivity improvements supported by technological innovation. Selling and marketing expenses decreased by 21.8% to RMB 326.3 million from RMB 417 million in the same period of 2024. The decrease was primarily due to more disciplined promotional spending and lower personnel-related expenses. Research and development expenses decreased by 30.4% to RMB 145.7 million from RMB 209.3 million in the same period of 2024. The decrease was mainly driven by improved efficiency in our research and development activities. General and administrative expenses decreased by 41.1% to RMB 67.3 million from RMB 114.1 million in the same period of 2024. The decrease was largely due to reduced allowance for expected credit losses and lower share-based compensation. Investment income was RMB 140.8 million compared with RMB to 1.8 million in the same period of 2024. The increase was primarily attributable to unrealized gains as a result of re-measuring the fair value of our investment in a privately held company associated with an observable price change in the quarter. As a result, our gap net income for the quarter was RMB 7, 2.5 million compared with a net loss of RMB 8, 0.6 million in the same period of 2024. On a non-gap basis, we remained profitable for the third consecutive quarter, recording adjusted net income of RMB 9, 1.3 million, compared with an adjusted net loss of RMB 4, 4.6 million in the same period of 2024. As of June 3, 2025, we had cash and cash equivalents, term deposits, restricted cash and short-term investments of RMB 4.8 billion, compared with RMB 4.9 billion as of the 31st of December, 2024. As of the 30th of June, 2025, we repurchased 31.1 million Class A ordinary shares for an aggregate value of US $66.5 million on open market. Additionally, we also repurchased a total of 18.6 million Class A ordinary shares for aggregate value of US $27.9 million through the trustee of the company as of the end of Q2. Looking ahead, we will continue to strengthen our monetization capabilities and support long-term growth across key areas of our AI power content ecosystem. As we deepen the synergy between community activity and commercial performance, our solid financial foundation enables us to invest with focus and flexibility to drive sustainable profitability.

This concludes my prepared remarks on our financial performance for this quarter. Let us turn the call over to the operator for the Q&A session.

Thank you. To ask a question, you need to press star, one, one on your telephone keypad and wait for your name to be announced. To withdraw a question, please press star, one, and one again. In the interest of time, please ask one question each time. If you have any follow-up questions, please go back to the queue. This will take a few moments.

And now we're going to take the first question.

And it comes from the line of Zhejing Zhang from CICC. Your line is open. Please ask your question.

Thank you, Director Guan, for accepting my question. Director Zhou and Director Han's speech just now impressed me. My question is also about AI. Thanks, management, for taking my question. The prepared marks delivered by AI agents is really impressive. So my question is also about AI, regarding to whose AI and the large language model-related products Does the company have any new plans? And how should we think its current progress?

Thank you. 雪星,你好,我是周源。 本质上来说,知乎在AI上的进展其实和大模型行业是同步的。 这个呢,它其实是一个模型和应用之间水涨船高的这么一个解析关系。 Thank you, Zhiqin, for your question.

This is from Zhou Yun. CEO of Juhu. So our progress in AI is kept pace with the broader large language model industry. And over the past quarter, we've seen a lot of new integrations of many new models, including both open sources and closed sources. And we believe our capability will naturally rise along with all these new models. And we are accelerating the upgrade of our agentic capability to more fully leverage this increase and innovation of the entire industry.

Zhidao is actually a product in the application stage. In the past one quarter, it has performed well. The penetration rate and usage have continued to increase. So that is a very key product at the application layer for us.

And it has performed very well over the past quarter with its penetration and usage both continue to grow. So this progress reflects our ongoing innovation and the product updates, as well as increasing word of mouth among our users.

Speaking of product upgrades, there are two stages of the upgrade. First, it's AI Search, and then it's AI Search plus the knowledge library. We believe that this is all part of the AI community,

The evolution of Drupal Jita has gone through two stages. First, as AI search, then AI search combined with a knowledge base. We see these not as as a latest feature upgrades. but as necessary scenario extensions of AI plus community.

Let me give you an example. Last week, on August 22, the upgrade of our knowledge base can already allow its single content to be shared in the community. This is a perfect experience to use. You won't find or notice that this is already a container that is cross-border with community native and AI native.

Just last week, August 22, to be specific, we see knowledge-based entries became shareable and circulable within our community. The experience is similar So our users don't even notice they are already engaging with the container that spans both community-native and AI-native domains. Something really saying in the standalone AI application, as we believe the room for this future upgrade is substantial.

So back to what you said about the current stage, our upgrade and update will Looking ahead, I believe AI Search and the knowledge base will become further integrated.

with the community scenarios. In Q4, we plan to deliver a more significant experience update on top of this foundation.

So please stay tuned. Thank you for your question. Thank you. Now we're going to take our next question.

Just give us a moment. And the question comes from the line of Vicky Way from Citi. Your line is open. Please ask your question.

我们看到的哪些机会又比如说我们发现面临最大的挑战又是什么? Thanks, management, for taking my question. So will management share some color about the current user metrics for Zhihu Zhida? How does management view the unique value of Zhihu's authentic user-generated content? What opportunities has Zhihu identified, and what are the biggest challenges facing? Thank you.

Thank you, Vicky.

It's still me. As I said earlier, in this quarter, the penetration rate and usage rate of Zhihu Zhida in the community is still increasing. Zhida's definition itself is also changing. When we first met, Zhida was more of an ASO. Today, it's not just an ASO. I think you can understand that Zhida Thank you, Vicky, for your question.

This is a student from Zhou Yuan, Zhihu CEO. As I just mentioned earlier, this quarter Zhida's penetration with the community continues to grow. At the same time, we believe the definition of Zhihu Zhida itself is also evolving. Of course, Zhida initially just launched as many people's understanding is for AI search within the community. But now definitely it's been beyond of that definition. It should be understood as our AI capability apply across diverse community scenarios.

So you just asked about the value of real-time content. The value of real-time content is very high. You also asked about the value of human generated content.

In my opinion, its value is huge and Its value is the currency of trust in the AI era, the gold standard, where the quality and authenticity of content set the baseline of this value.

What we see here is also our thinking. The core, I think, is how to scale trust. In other words, what is the scaling role of trust? And from our understanding, the opportunity we see here is in how trust can scale, what we call scaling law of trust.

So our path forward is a variable formula of trusted content times expert network times AI capabilities. And we will move forward with strong conviction along this direction. Thank you. Thank you for your question.

Thank you.

Now we're going to take our next question. And the question comes from Lincoln Kong from Goldman Sachs. Your line is open. Please ask your question.

Thank you, Ms. Guan, for accepting my question.

My question is, Ms. Guan, can you share with us some of the perspectives of the marketing service, paid members, and professional training services? In the second half of the year, how should we look at some of the major growth factors in each section? Thank you, management, for taking my question. So could management provide some color on the growth outlook for the marketing service, paid membership, and the vocational training business? So how should we think about the key drivers for each segment in the second half? And how should we think about the full year profitability for 2025? Thank you.

Thank you, Lincoln, for your question.

This is from CFO Wang Han. So I will just start it with your first question.

Thank you, Lincoln. This is from CFO Wang Han.

So first on our marketing services, in the past several quarters, we have often mentioned that we are in an adjustment phase. Now we can say that this phase is nearing its end, and we expect to see a stabilization and a recovery in the coming quarters with a return to positive year growth.

Our focus will be on optimizing our client structure and upgrading our commercial products.

Client structure-wise, we will further leverage Zhihu brand and high-quality user base to expand into more trust-driven categories, such as high-value FMCG and maternal and infant products, as well as clients with stronger professional B2B attributes. At the same time, we'll also continue to strengthen the monetization of Zhihu's high-profile commercial IPs. For our paid membership business, we are currently in a stage of active experimentation with the core goal of improving renewal and the retention, as well as driving our pool growth across multiple dimensions.

In terms of the demand flow, we focused on the structure of new members, which attracts more members with longer life cycles, such as Xi Kai and An Tian Kai.

At the same time, we want to try the medium-long term.

So on retention-wise, we have optimized the structure of new members to attract users with longer life cycles, such as expand our monthly paid members to more like half-year and annual paid members. We're also actively exploring media and longer form content. On ARPU, we are expanding premium content format and service benefits for our members. For example, like I mentioned, the voice live streaming. At the same time, we will further accelerate the monetization efficiency of our IPs of the payment membership, thereby to strengthen member's thickness and to enhance the commercial value of each member. On vocational training, our operating strategy remains focused on efficiency and profitability. In the second half of this year, we will continue to adjust both our model and content, though these adjustments are already approaching a more stable stage. So strategically, we will keep moving towards a more social and knowledge-sharing oriented model, enabling knowledge-based content to better meet our users' needs and experience. and to foster healthy circulation and consumption within the community. In return, we believe it will further strengthen the community's ecosystem. So this is basically about the current development of our business services. Thank you for your question.

Thank you. Now we're going to take our next question. Just give us a moment. And the question comes from Xiaohan Sun from HTI. Your line is open. Please ask your question.

Thank you for giving me the opportunity to ask a question. I would like to ask management to share how we should anticipate the method and extent of shareholder returns going forward.

Thank you.

This is you from and we will just pick up the question about the shareholder return first and then I will add on the second question from Lincoln about the outlook of the full year profitability. We need a 10% of repurchase authorization approved by our board and the shareholders earlier this year. We remain firmly committed to enhance shareholders' returns through buybacks. As disclosed in today's earlier earnings release, by June 30th, we had repurchased 7.41 million ordinary shares in open markets, representing 2.8% of total shares outstanding.

And thanks to this July, we have also continued to execute actively on the repurchase program.

And we believe in the second half of this year, we will stay the same course and carry out this strategy with a strong commitment. Also, over the past two years, and for the foreseeable future, we expect to remain one of the most significant U.S.-listed Chinese companies in terms of a share repurchase ratio. And now I will just add on about the second question raised from Lincoln, and it's on about our full year profitability.

In the first half of this year, we achieved the probability on both the GAAP and non-GAAP net income basis.

In each of these two quarters, also existing expectations on the market. And this has not only provided us with more flexibility to make adjustments in certain businesses for longer-term healthy development, but also significantly increased the likelihood, the possibilities of reaching near break-even on a full-year, non-GAAP basis.

Thank you all for your questions. Thank you.

That concludes today's question and answer session. At this time, I will turn the conference back to Yolanda for any additional or closing remarks.

Thank you, operator. And thank you all once again for joining us today. If you have any further questions, please contact our IR team directly or Christensen Advisory. Thank you.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect. Have a nice day.