Zhihu Inc.

The company does not assume any obligation to update any forward-looking statements, except as required under the actual law. Additionally, the discussion today will include both GAAP and non-GAAP financial measures for a compilation 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. A webcast replay of this conference call will be available on our IR website at ir.jufu.com. This quarter, Victor Zhou, Zhou Yun's AI agent, will once again deliver the prepared remarks in English on his behalf. Victor is due in training, so we appreciate your patience as he continues to improve. Victor, please go ahead.

Thank you, Yolanda.

Hello everyone, and thank you for joining Zhihu third quarter 2025 earnings call. I am Victor Zhou, and I am pleased to deliver today's opening remarks on behalf of Mr. Zhou Yuan, founder, chairman, and CEO of Zhihu. The third quarter marked another meaningful step toward our goal of achieving non-gap breakeven on a full year basis. As our structural optimization initiatives continue to take effect, we further refined our service offerings and balanced commercialization with community health. We also maintained disciplined cost control and improved operating efficiency. As a result, our non-gap operating loss narrowed by 16.3% year-over-year in the third quarter. At the same time, our community ecosystem continues to strengthen user mix and engagement improved, while MAUs increased modestly from the second quarter. Daily time spent continued to trend higher year over year and quarter over quarter. Our users and creators remain highly active, supporting improved core user retention and a steady stream of reliable, high-quality content on the platform. With our high-quality content, expert network and AI capabilities working greater synergy, we are accelerating our agentic AI upgrades to deliver trusted and differentiated experiences to users both within and beyond the community. As the AI industry enters a new phase of real-world integration and accelerated deployment, Zhihu as a trusted source of high-quality content and data upstream of Chinese LLMs and AI applications is gaining prominence creating expanding opportunities for collaboration. With rising high-quality content, a highly active base of professional creators, and accelerating AI integration, our community ecosystem radiates vitality. Our competitive mode of trusted content continues to strengthen. In the third quarter, daily creation of high-quality content increased by over 25% year over year, with professional AI-focused content up by more than 30%. compared to the same period last year. As AI technologies and applications rapidly advance in China, Zhihu remains a go-to platform for frontline engineers and researchers for sharing and lively discussions. AI-focused content covers a range of subjects, including deep technical analysis, innovative product applications, emerging industry trends, personal growth, career development, and a growing array of emerging topics driven by rapid AI adoption. From the technical debates between Minimax and Moonshot AI over efficient attention, which sparks heated discussions on Zhihu and highlighted China's diverse approaches to LLM innovation, to the in-depth engineering analyzes of new models shared by leading companies, Zhihu has become a trusted source for authentic first-hand exchanges. These discussions have made our platform a place where AI innovations are first interpreted, validated, and shared. Meanwhile, we continue to strengthen our trustworthy content ecosystem through ongoing improvements to content governance mechanisms and recommendation algorithms. Professional creators are a vital force in our community. In the third quarter, daily active high-tier creators increased significantly on both year-over-year and sequential basis. The number of verified honored creators also grew by 29% year over year. Engagement among AI-focused creators also continues to strengthen. Zhihu now brings together more than 16 million continuous learners and 3.56 million proficient creators in science and AI, and 150,000 ecosystem builders. These contributors not only add consistent, high-quality input to our AI content ecosystem, but also show significant potential as future service providers for enterprises. Beyond science and AI, creator activity in humanities and social sciences also remains strong across the platform. In September, we launched the co-benefit, co-creation initiative, Gong Yi Gong Chuang Ji Hua, in collaboration with leading institutions such as Alibaba Foundation, Tencent Charity Foundation, One Foundation, and Greenpeace, alongside psychologists, medical experts, and the writers. This initiative generated a wide range of high-quality content across disability rights, mental health, environmental protection, and more, drawing over 80 million views. We also hosted the 2025 Zhihu Humanities season, Zhihu Renwenji event, which brought creators together through a blend of online and offline engagement. The campaign attracted nearly 30 influential creators driving a 7.5% quarter-over-quarter increase in creator activity in the humanities category and generating 5.82 million topic views, reinforcing Zhihu's professional influence and cultural relevance. To better support professional creators, we continue to enhance the content creation and distribution experience. Our ideas and products support knowledge-based expression from high-tier creators, and enables more diverse short-form content creation among mid-tier creators. As a result, average daily content volume and interactions increased by 21%, 7%, and 33.1%, quarter over quarter, respectively. Our Circles product also continues to serve as a focused space for users with shared interests to gather and interact with average daily views more than tripling sequentially during the quarter, We also continue to advance our agentic AI upgrades across the community. From a product perspective, Zhihu Zhida evolved into the agentic mode at the end of September, delivering more accurate and smarter search results. Most notably, Zhihu Zhida now serves as a helpful partner for deep thinking and creativity, capable of understanding user intent, performing multi-step reasoning, and synthesizing information across research, learning, and content creation. Our advancements in agentic AI are also amplifying the value of our creators. By strengthening the attribution of content to trusted creators across the knowledge base and the search, AI generated responses. Now sites verify the knowledge during the reasoning stage, significantly reducing hallucination and improving trust. This strengthens creator influence within the generative AI landscape and gives Zhihu a distinct advantage as a trusted content provider in an emerging AI ecosystem. Now moving on to commercialization. In the third quarter, our commercialization continued to recover on a healthier base with total revenues reaching RMB 6589 million in the third quarter. We also made a notable progress in exploring new monetization avenues by leveraging our core strengths. Let's take a closer look at our performance by business unit. In the third quarter, marketing services revenue was RMB 1894 million. Notably, the year-over-year decrease narrowed, indicating the bottoming out of our adjustment cycle. We expect marketing services revenue to begin growing on a sequential basis in the fourth quarter. During the quarter, we made a solid progress in both optimizing our client mix and upgrading our advertising products. We continue to optimize client mix by deepening our focus on high value accounts with our brand power and expanding commercial IP, driving strong uptake from enterprise clients, particularly in technology and other high value verticals. In late September, we hosted the Tech Club Conference, bringing together AI experts and some of the most influential tech creators from the Zhihu community to explore the latest developments and future applications of AI. The event showcased the technology's transforming role in everyday life and our unique ability to connect professional content with meaningful brand engagement, further expanding our high-value client base. Through the Zhihu platform, Leading companies such as Gray, China Mobile, Huawei, and iFlytech further strengthened their brand positioning in technological innovation and product excellence. Backed by the credibility of our brand and strong commercial efficiency created by professional discussions across our community, we made a solid progress in acquiring new clients across diverse sectors such as automotive, consumer, and healthcare. This quarter, we also further upgraded a wide range of our commercial products by integrating AI more deeply across our portfolio. Our dual ecosystem optimization and product efficiency engines drove a significant increase in positive feedback from clients. For example, we launched the upgraded CCS for idea scenarios and introduced the product to more clients. By offering this short content plus precise scenarios format, It bridges authentic experiences and purchase decisions for brands and merchants. At the same time, it makes content consumption and the decision-making for users substantially more efficient. We're also seeing rising demand from clients to improve brand and product presentation in AI generated answers. Leveraging our trusted content and the high citation rate across the internet, we launched our new GEM marketing solution in early November. This new solution provides core insights such as visibility across AI platforms and citation analytics. Leading technology clients we have worked with include Lenovo, iFlytech, Vivo, and Proya. We have received a positive endorsement as we help enhance both their SEO and geo performance for brands and new products, looking ahead with a healthier ecosystem, stronger client base, and more robust service offerings. we will continue to leverage AI to drive a steady recovery and a long-term growth in our marketing services business. And now for our paid membership business. In the third quarter, average monthly paid members increased by 8.1% sequentially to 14.3 million, with revenue reaching RMB 386 million. Our efforts to boost member retention and ARPU through diversified initiatives continue to generate positive feedback from both creators and users. The Yanyan Story long-form writing marathon came to a successful close in late October after a six-month campaign, generating tens of thousands of submissions in the third quarter alone. This initiative opened up new development pathways for aspiring creators and provided a steady pipeline of content for our library and future IP development. At the same time, Voice live streaming saw a further improvement in paid conversion rates. We also unlocked further commercial potential for our IP adaptations in China and overseas. During the quarter, revenue from IP licensing maintained its triple digit growth rate year over year and generated high double digit growth quarter over quarter. Year to date, revenue has nearly doubled compared with the same period last year. In mid-October, Yanyan Story debuted at the Frankfurt Book Fair, showcasing Chinese digital literature on a global stage for the first time. It also drew coverage from the UK magazine, The Bookseller, which noted the new growth path for Chinese short-form digital literature in the international markets. By the end of October, Yanyan Story licensed more than 100 titles for publication across major Asian markets, including Japan, South Korea, Thailand, and Vietnam. A number of works have also been adapted into short dramas for overseas markets and performed well, reflecting the growing popularity of Chinese short-form content abroad. Meanwhile, Yanyan Story has established partnerships with international platforms such as Mobile Reader and Good Novel to translate works into English, Spanish, Japanese, Korean, Portuguese, Thai, Indonesian, and other languages, further expanding its international reach. Going forward, we will pursue a diversified set of initiatives to improve member retention and our pool. By enhancing content supply, membership benefits, and personalized experiences, we aim to strengthen long-term member value. As AI enables more efficient content creation, the potential for IP development and commercialization will expand, unlocking new growth opportunities for our membership business. Starting this quarter, We are simplifying our revenue breakdown and will begin reclassifying vocational training revenue into other revenues to align with our overall strategy. Other revenues were RMB $83.9 million, of which we will continue to adjust our vocational training business with a focus on improving operational efficiency and prioritization. Although our vocational training business has been reclassified we continue to build on its creator-driven foundation with the development of our column product. Designed primarily to serve Zihu creators, column is intended to enhance the creator ecosystem rather than act as a new commercial growth driver. During the quarter, we enhanced the product by rolling out a PC version and AI tools that help creators generate column descriptions and cover designs. This enhancement drove sequential growth in both the number of leading column creators and the creator user engagement. Monetization models for column creators is also becoming more diversified, with overall GMV more than doubling compared with last quarter. Going forward, we will continue to operate with discipline, maintaining stability while investing prudently for sustainable growth. With the ongoing enhancements in efficiency and steady cost optimization, we are confident in achieving our full-year profitability target. Building on this foundation, we will continue to invest with a long-term view to strengthen our AI capabilities and improve the efficiency of our core operations. Deeper AI integrations will drive greater synergies across content creation, distribution, and monetized on Zihu. Meanwhile, We will further refine our product and marketing strategies to capitalize on new growth opportunities from high quality users and enterprise clients. With a healthier operating structure and ongoing innovation, we are well positioned to thrive in this next stage of high quality growth. With that, I will hand the call over to our CFO, Wang Han.

Han, please go ahead. Now I will review the details of our third quarter financials.

For a complete overview of our third quarter 2025 results, please refer to our earnings release issued earlier today. In the third quarter, we maintained disciplined cost management and drove further improvements in operational efficiency. As a result, our non-GAAP operating loss narrowed by 16.3% year over year. We continue to invest in areas that reinforce our long-term growth potential, striking a healthy balance between efficiency and investment. Our total revenues for the quarter were RMB $658.9 million compared with RMB $845 million in the same period of 2024. The decrease was mainly the result of our continued efforts to optimize revenue mix and focus on sustainable, high-quality growth. Notably, the year-over-year decrease narrowed for the third consecutive quarter, in line with our expectations. Our marketing services revenue for the quarter was RMB 189.4 million compared with RMB 256.6 million in the same period of 2024. This decrease was mainly driven by our proactive refining of service offerings and optimization of client mix. Encouragingly, the year-over-year decrease narrowed meaningfully, indicating that our adjustment cycle has bottomed out. Paid membership revenue was RMB 385.6 million compared with RMB 459.4 million in the same period of 2024. While the number of average monthly subscribing members fell year over year, they rebounded and grew 8.1% sequentially to 14.3 million. We also continued to enhance retention and ARPU through diversified content and membership initiatives. Other revenues were RMB 83, 9 million, compared with RMB 129 million in the same period of 2024. The decrease was primarily due to the strategic refinement of our vocational training business. Our gross profit for the quarter was RMB 403.6 million, compared with RMB 540.1 million in the same period of 2024. Gross margin was 61.3%. compared with 63.9% in the same period of 2024. Our total operating expenses for the quarter decreased by 19.4% year-over-year to RMB 503.5 million. The decrease was primarily due to a more efficient cost structure and disciplined resource allocation across key operating areas. Selling and marketing expenses decreased by 14.9% to RMB 330.1 million. from RMB $388 million in the same period of 2024. The decrease was mainly due to tighter control over promotional spending and optimized personnel-related expenses. Research and development expenses decreased by 36.2% to RMB $114.4 million from RMB, $179.3 million in the same period of 2024. The decrease was primarily driven by continued improvements in research and development productivity, and efficiency. General and administrative expenses were RMB $59 million compared with RMB $57.2 million in the same period of 2024. Our GAAP net loss for this quarter was RMB $46.7 million compared with RMB $9 million in the same period of 2024. On a non-GAAP basis, our adjusted net loss was RMB $21 million compared with RMB 13.1 million in the same period of 2024. As of the 30th of September, 2025, we had cash and cash equivalents, term deposits, restricted cash and short-term investments of RMB 4.6 billion compared with RMB 4.9 billion as of the 31st of December, 2024. As of the 30th of September, 2025, we repurchased 31.1 million Class A ordinary shares for an aggregate value of US$66.5 million on the open market. Additionally, we repurchased a total of 22.5 million Class A ordinary shares for an aggregate value of US$34.5 million through the trustee of the company as of the end of the third quarter. Looking ahead, we are on track to achieve full-year breakeven on a non-GAAP basis. We will continue to further strengthen our monetization capabilities and pursue new revenue opportunities that leverage Zhihu's strengths in high-quality content creator expertise and AI-driven innovation. Together, these efforts will reinforce our business resilience and support sustainable long-term growth. This concludes my prepared remarks on our financial performance for this quarter. Let's turn the call over to the operator for the Q&A session.

Thank you. To ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 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. Thank you. Please stand by while we compile the Q&A roster. Thank you. We will now begin with our first question. And this is from Vicky Wei from Citi. Please go ahead.

管理层晚上好,谢谢接受我的提问。 我的问题是能否请管理层分享一下公司在AI方面的进展, 比如说知乎直达最新的使用渗透率怎么样? 我们在AI和社区融合的方面近期还有哪些进展的体现? Thanks, management, for taking my question. Would management share some color about the AI progress of Zhihu? For example, the penetration rate of Zhihu Zhida and the progress of the AI integration with the Zhihu community. Thank you.

Hello, Vicky. First of all, I'd like to apologize. I had a cold the other day, so my voice hasn't fully recovered yet. I hope you all take care of yourselves. Let me answer your question. Zeta is one of the most important products in the application layer. Its overall usage and penetration rate are constantly increasing. Our penetration rate has exceeded 15% in the third quarter. This is almost four times the same level as last year. What does this mean? This means that our AI capabilities have been continuously improved in lost scenarios. It also shows that the direction of our AI plus the integration and upgrade of the community has also been recognized by the users. This really gives us more confidence to continue to do AI plus community experience upgrades in more community scenarios in a community way.

Thank you for the question, Vicky. This is from Zhou Yuan, Zhihu CEO. First of all, I would like to say sorry about my weak voice because I didn't recover yet from my cold. Anyway, I will just start it with your first question. So, as you can see, Zhida remains one of our key products. Its overall usage and penetration rates continue to increase in the third quarter, with penetration rates exceeding 15%, nearly four times higher than the same period last year. This not only reflects the ongoing evolution of our foundationally AI capability across the community, but also demonstrate strong user endorsement of our strategic depending of AI plus community. This also gives us very strong confidence to continue upgrading this AI plus community experience updates across more touchpoints.

Let me talk about some of our recent progress and plans. First of all, in the search scene, At the end of this month, Zhida will complete a supplement to our comprehensive search AI capability. It will provide a new search result for all of our users, including the content of Zhida's production. At the same time, AI search will gather cross-topic content in the community, and the summary of the hot trends in the community will also be online soon. This will also bring Now, let me just share some recent progress and upcoming plans.

First of all, in the search scenario, by late November, augments our general AI search capability to include Zhida generated content for all users. Additionally, we will soon launch pilot features such as cross-topic content aggregation and the community trend summaries. This will formally navigate Zhida from secondary entry point to a primary one, further boosting AI adoption across the entire community.

The other thing is that in terms of creative scenarios, we are now providing more AI-based tools for creators in the community. In this period, we have launched a lot of AI-based creative tools in the creative assistant. For example, the title of the smart system, the context of the content, and how to extract island language. We are helping them with structural writing and professional use. to further optimize and expand their creative capabilities. As of the end of this quarter, the output rate of these AI support co-pilot functions has already exceeded 20%. We will now continue to launch more tools, such as multi-modal content conversion, smart layout, and short content support generation. And second of all, on the content creation side, we are empowering professionals with strong AI co-pallets

In this quarter, we launched a suite of AI assistant writing tools for our creation assistant, which includes smart headlines, grammar, and factor checking, and lead paragraph generation. This will help creators optimize long-form structured and expert-level content. So by the end of 3Q, Adoption of these new AI features had already surpassed 20%. Looking ahead, we plan to introduce additional capabilities such as AI-powered multi-model content conversion, intelligent formatting, and short-form content generation, and etc. These tools will significantly lower the barrier to entry for mid-tier creators. enabling more users to express themselves effortlessly to increase posting frequency, creation frequency, and engage more actively.

There's one more thing. In terms of traffic and consumption, we will let Zhida's ability to enter more high-end user scenarios in the community. For example, the hotline of callers and the discussion of hot spots in various fields. In addition, on the content consumption and distribution side,

we're also expanding judah into high frequency conception scenarios for example ai powered daily briefing on jufu's training topics and other vertical specific hot topics as well as the ability to ask mention judah in threats or to auto summarize discussions and surface key insights will help users quickly grasp complex conversations and participate more meaningfully. We believe this will further strengthen user engagement and community stickness. Thank you.

Thank you. We'll now take the next question. This is from Luqing Xu from Goldman Sachs. Please go ahead.

Thank you management for the opportunity. So my question is how do you see the current status of Zhihu's user ecosystem? And based on that, could management share more power on the directions for improving Zhihu's future project design and how's the progress so far? Thank you.

Thank you for your question. From the overall point of view, we are now very confident in the current community's ecosystem. The health of the ecosystem does not depend on a single indicator, but on the content quality, the structure and quality of the users, and whether the power is able to form a positive cycle. In the past few seasons, high-tech content has become a professional network and an AI force. This co-development has become a development route that drives our community's ecosystem in the right direction. The current status is stable and continuous improvement, which also meets the team's expectations.

Thank you for your question. This is from Zhou Yuan, Zhihu CEO. We believe overall the community ecosystem is very healthy. We do not rely on any single metric to assess its health. Instead, we focus on content quality, user structure, and user quality, and whether our content creator incentives are forming a virtuous cycle. We have also deployed AI as a core product driver at the strategic level. Over the past few quarters, we have made the synergistic development of high quality content, multiply expert network, multiply AI capabilities as a core path for driving our ecosystem in a positive direction. From this perspective, our ecosystem is stable and continuously improving. This is a fully in line with our expectations as well.

This is a fully in line with our expectations as well. This is a fully in line with our expectations as well. This is a fully in line with our expectations as well. This is a fully in line with our expectations as well. This is a fully in line with our expectations as well. the new high-level content of the Japanese military has shown a double growth. AI is the most representative field in recent years. In the past few months, we have continued to achieve a double growth in AI professional content. On this basis, users' trust in the content has also remained stable.

First of all, the trustworthiness and professionalism of our content are very crucial. They are crucial indicators of the ecosystem health. Over the past few quarters, we have continued to strengthen our trustworthy content ecosystem and our expert network while also cracking down on low-quality content and traffic to keep the ecosystem healthy. at its core and reforce the virtuous cycle. As a result, we have delivered several consecutive quarters of double digit growth in daily high quality content creation. The AI category is the most reflective of this progress with the professional AI related content regarding double digit growth for four consecutive quarters. On this basis, users' trust in our content has also continued to increase steadily.

The second is the improvement in the structure and quality of users. Since Q4 last year, our active users have been stable for four consecutive seasons. Based on this, active users have been a very important indicator of their activity and flow. we have achieved a double-digit increase of 6 consecutive seasons. Today, the number of users after that is still based on young growth groups. Over 65% of 18 to 30-year-old users account for most of the users. Among them, the first-tier entrepreneurs representing the technology and AI fields have become the most representative group. They have long-term needs in professional learning, front-end exploration, and interest expansion, as well as contribution to content,

And secondly, our user structure and user quality have improved, and users' need across different scenarios has been addressed. As we can see from last Q4, our MAU has remained stable on a sequential basis for four consecutive quarters. And building on that, average of daily user time spent which we believe as a proxy for engagement and retention, has delivered double-digit year-over-year growth for six consecutive quarters. Our users remain mainly young and focus on learning and growth, with user age between 18 to 30 accounting for more than 65% of our total user base. Among them, Frontline professionals in technology and AI have become one of the most representative groups. They have long-term professional learning, frontier exploration, and interest development needs, and contribute more content and provide a stronger positive feedback to the ecosystem.

The third one is creative ecology. Creative ecology. Creative ecology has been constantly growth and expansion. We have continued to maintain steady growth for seven consecutive seasons. At the same time, as I mentioned earlier, we will use more AI tools to continuously reduce the thresholds of creators in the business sector, and then to improve the creative frequency of the entire creator. Through this method, the community's supply chain can be more diversified, and the interaction can continue to improve. In short, I want to say that the health of the entire ecosystem, is fundamental to the entire supply chain. We will continue to invest in high-end content and expert networks in the future, so that we can continue to maintain our professionalism and the reliability and trust of our users as we scale up.

And last but not the least, the creator ecosystem continues to grow and expand. Output from top-tier professional creators have remained stable over seven consecutive quarters. At the same time, by using AI tools, we are continuously lowering the creation threshold for mid-tier creators. and increasing the creation frequency of the entire creator group. This makes the supply side of the community more diverse and keeps social interaction within the community growing. So in summary, ecosystem health is foundational to Zhihu. Going forward, we'll continue to invest in trust content and expert network so that as a community skills, it can maintain its professionalism, vibrancy, and trustworthiness.

The second question is about our thoughts on the future product form. Here, we have several judgments. The first is that if we limit it to three years, people will consume more AIGC content in the next three years. At the same time, human-to-human communication will also become more valuable. These two will be established at the same time.

Let me just turn to the second question you mentioned. It's about our core product going forward plan. Here we hold few key beliefs. First of all, over the next three years, people will consume more AIGC content. At the same time, human to human interaction will become more valuable. So we believe both trends will co-exist.

The second judgment is that AI is becoming more and more powerful, and people are also experiencing more and more existential crises. So the sense of participation in the community, the social capital and social relationships generated by the sense of participation, will become more and more scarce, and the demand for users will continue to rise.

And the second belief we hold here is that the stronger AI becomes, the more people will experience a sense of diminished presence, which means the participation, social capital, and relationships enabled by community will become increasingly scarce and increasingly deminded.

The third judgment is that high-quality AI And the third belief here is that high quality human generated content and data will become extremely scarce.

as well as valuable on the supply end. This supply matters on both ends. It's crucial for the advancement of AI, as well as for human development.

So, the next step is to address the functional social needs of the community. For example, when a user wants to ask a question, to search for information and find help. When this kind of functional social need arises, ANN will greatly help to enhance its efficiency. ANN will greatly promote the publicization of the community. Even a new user who uses it on the first day can also quickly gain a good experience. On the other hand, we will focus on Um...

So going forward, Zhida will definitely integrate with our users functional social needs. For example, when a user wants to ask a question, search, or look for resources, AI will dramatically raise efficiency. And Zhida will push the community further towards utility, enabling even a first day user to get a meaningful experience immediately. At the same time, we will double down on the social needs that come from real human connection things like feeling recognized, growing together, and finding people who share your identity. We want to build these things with user feel like a sense of belonging in an environment grounded in real people, real culture, and trusted interactions.

we will develop around utility and identity. I hope that Zhihuo can become a high-quality human connection layer in the AI era. We will provide AI tools to understand the world and become a community where people can find resonance and gain understanding. In addition, we also plan

So our future product direction is built around two pillars, utility and identity. My hope is for Zhuhu to become the connection layer for humans in AI era as a place where people can use AI tools to understand the world as well as a community where they can find renaissance and understanding from one another. At the same time, we plan to build our trusted content and expert network as two foundational layers of infrastructure. Thank you. Thank you again for your question.

Thank you. We will take the next question. This is from Daisy Chen from Hightong International. Please go ahead.

Thank you, Manager Chen, for answering my question. Can you share with the Manager Chen about the adjustment of each line? For example, do you see any signs of revenue rebound, especially in terms of how the advertising business will look in the future? And also, can you share with the Manager Chen about the profit and loss of the company? Thanks, Megan, for taking my question. Could measurement update the progress of the adjustments in each business line? Did you see any signs that the revenue has bottomed out or started to rebound? In particular, how do you expect the future of the advertising business? And also, could you share your outlook on the company's profitability? Thank you.

Thank you for the question. I am Wang Han. I will answer this question. I will answer it first. In the first two months of this year, we have already had a lot of profit. Based on this, we are now more certain that in 2025, we can achieve the first non-GAAP full-time profit in Japanese history. So based on this, our Q3 and Q4 also want to continue adjusting and investing with such a buffer and a good time. So you can see that our Q3 will be able to withstand a little bit.

Thank you for your question, Desi. This is from . So I will just pick up your second question. Here is a quick take on our profitability outlook. After delivering a solid profit in the first two quarters, we now see a very high likelihood of achieving our first full-year non-GAAP profitability in 2025. So with that buffer in place, we are using Q3 and Q4 as a window to keep fine-tuning and investing where needed. That's why you can see a small loss in Q3, which is well within what we can comfortably take.

Now, let's talk about the progress of the adjustment of the income line. First of all, the marketing service. Last quarter, we mentioned that Q3 will be the first, and Q4 will start to grow again. From what we've seen so far, we can be confident in maintaining this change. And we also hope that next year, the goal is to achieve this. Every quarter of next year is not less than this year's Q3.

Let me just work through the adjustments across our major revenue lines. First, about the marketing services. As we mentioned last quarter, this Q3 will become the bottom. we expect a sequential recovery starting in Q4. What we see now give us confidence to maintain that guidance. Looking ahead to next year, our goal is for each quarter to stay above the baseline set by Q3 this year.

As for the paid members, we are still in the process of making adjustments. As we said before, the world's top libraries and the best bookstores in Kobe are all in the areas of fiction and non-fiction. The question is how we can integrate and divide them better. We will continue to try and work on this. So, we can't say that we are in the first place when it comes to paid members. But even if we are in the second place, it's not ideal for us to be in the second or third place.

And second, about the paid membership. This segment is due in a transition period. As we said before, even the best libraries and bookstores separate fiction from nonfiction. The real challenge here is how to differentiate and integrate them in a way that feels natural to users. We will continue experimenting here. So we cannot say membership, pay membership revenue has hit its bottom yet. But even if there is some decline, it will be about products or cohorts with lower ROI, weaker probability, or less than ideal retention.

And then professional education is currently not losing money. But because the technology is a bit low, we have already merged with others.

Search is about vocational training. This business is no longer a drag on our overall bottom line.

Given this relatively low base or small scale, we have now reclassified it into others. So overall, you've seen us deliver several consecutive quarters of profitability, followed by the small loss in Q3.

Even so, we remain confident in achieving full year profitability. With that foundation, we are taking this period to make necessary adjustments and targeted investments. As we approach our first full year of profitability, we also want to use this moment to shed some legacy inefficiencies and to start fresh.

we certainly wouldn't want to stop at the current market position and make profits. We still think we are on the path of entrepreneurship, but we have just adjusted to a relatively healthier state of mind, and we are on the path of rejuvenation and recovery. Um...

We have no intention of staying where we are and simply just squeezing out profits. We are now operating from a healthier foundation and getting back onto a trajectory that aligns with Zhuhu's long-term development. Also, we have a very solid cash position, and we're not reverting to the old model of spending aggressively just for skill. And this new AI cycle, or in this AI era, our focus is on strengthening Juhu's position in real people interactions, expert network, and trusted content areas. And these capabilities are becoming increasingly important and carry real social value. Thank you for your question.

Thank you. We will now take the next question. And this is from Jingyi Huang from Guangfa. Please go ahead. Next question is from Jingyi Huang from Guangfa. Please go ahead with your question.

Hello caller, is your line on mute? We cannot hear you.

Once again, that's Jingyi Huang, Guangfa. If you have a question, please go ahead. Your line is open.

Hello, can you hear me? Yes, we can. Yes, we can hear you. Okay. Okay, okay. I would like to ask, how should we look at the future shareholder return plan? Could management share some more color about the shareholder return plan in progress?

Thank you for your question. In the past two years, we have been one of the most significant companies in the entire medium-sized company. Because we believed before that we could make a profit. And this year, we should let everyone see that we delivered about two years ago. The judgment and goal can indeed be achieved to make a profit. But the investment is still as significant as the cash on our account. In this case, we must be clearly underestimated. We will continue to maintain the return. And we should still be one of the most significant companies in the medium-sized company. Thank you.

Thank you for your question. This is from Wang Han, Zhuhu CFO. We can see over the past two years, we've been one of the most active buyback companies among U.S.-listed Chinese names. That conviction came from our confidence in reaching profitability. And this year, we expect to demonstrate that our outlook and the targets set two years ago are being delivered. Even so, Zhuhu's current market cap remains significantly below the cash on our balance sheet, so we believe we are super undervalued. Therefore, we intend to maintain our buyback program and expect to remain one of the most active repurchasers in this sector. Thank you again for your question.

Thank you. That concludes today's Q&A session. At this time, I will turn the conference back to Yolanda for any additional or closing remarks.

Thank you once again for joining us today. If you have any further questions, please contact our IR team directly or Chris Stanson Advisory. Thank you. Thank you so much.

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