Zhihu Inc.

Ladies and gentlemen, thank you for standing by and welcome to Chihu Inc's first quarter 2026 financial results conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be question and answer session. Today's conference is being recorded and webcasted. At this time, I'd like to turn the conference over to Yolanda Liu, Director of Investor Relations. Please go ahead, ma'am.

YOLANDA LIU Thank you, Amber. Hello, everyone. Welcome to Zhihu's first quarter 2026 results conference call. Join me today on the call from the senior management team, our Mr. Zhou Yuan, founder, chairman, and chief executive officer, Mr. Wang Han, chief financial officer, and Mr. Zhang Rongle, our chief operating 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, actual results may be materially different from 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 the Hong Kong Stock Exchange. The company does not assume any obligation to update any forward-looking statements except as required under active law. Additionally, the discussion today will include both GAAP and non-GAAP financial measures for a consideration purpose only. For a consideration 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.zhifu.com. Today, Victor Zhou, an AI agent representing Mr. Zhou Yuan, will deliver prepared remarks in English on his behalf. As Victor is still being refined, we appreciate your understanding. Victor, please go ahead.

Thank you, Yolanda. Hello, everyone. and thank you for joining Ji Hu's first quarter 2026 earnings call. I'm Victor Zhou, and I'm pleased to deliver today's opening remarks on behalf of Mr. Zhou Yuan, our founder, chairman, and the CEO. The first quarter of 2026 marked a strong start to the year as we advanced our high quality growth strategy our community ecosystem continued to thrive, fueled by a more dynamic user base, deeper social connections, and a stronger engagement. Average daily time spent per DAU reached nearly 42 minutes. Our content creators remained highly active and expanded across AI and other specialized domains, further strengthening our trusted expert network. This quarter, professional, authentic, and in-depth content from real people continued to flourish across our community. Its influence extended beyond our platform and reinforced our unique competitive mode in the AI era. We also accelerated the integration of AI capabilities across our platform and business operations, with the social interactions significantly enhanced across multiple use cases. Building on this solid foundation, Jifu has continued to gain momentum along its recovery trajectory. In the first quarter, our total revenues achieved positive sequential growth, and the year-over-year decline narrowed substantially, reflecting our healthier business ecosystem and more efficient monetization. Our core businesses are showing encouraging signs of recovery, while our new initiatives continue to gain momentum and deliver steady growth. Specifically, Marketing services saw a meaningful narrowing of the year-over-year decline, signaling near-term stabilization. Revenue from IP operations delivered robust growth. Capitalizing on our premium IP library, we have significantly elevated both the production capacity and the quality of our short drama and comic drama adaptations. Multiple short dramas and comic dramas garnered billions of views and consistently topped the popularity charts. This success serves as a strong validation of the commercial potential of our high quality IPs. Our expert data solutions have started to gain traction among key clients with early stage monetization opportunities gradually taking shape. Our vibrant community fosters genuine connections and deep user trust assets that are increasingly valuable in the age of AI. This has directly fueled continued growth in user engagement on our platform. In 1Q26, average daily time spent per DAU reached approximately 42 minutes, increasing on both year-over-year and quarter-over-quarter basis. The daily active user coverage of positive interactions also grew year-over-year. Underpinning this momentum, our content ecosystem is scaling at a healthy pace. As of the end of the first quarter, cumulative content volume reached 972 million entries and cumulative topics grew to 4.38 million, up 8.8% and 15.7% respectively from the same period last year. High quality content creation continued to gain momentum. This quarter, daily creation of high quality content rose 18% year over year. with professional AI-related content growing over 30% year-over-year. Against the backdrop of rapid AI evolution, Zhihu's professional ecosystem and high-quality creator network continue to offer distinct, differentiated value. As a hub for frontline developers, researchers, and tech professionals, Zhihu remains the premier platform where cutting-edge industry trends are first discussed rigorously analyzed and professionally evaluated. In the first quarter, we saw heightened engagement from subject matter experts across top universities, leading internet companies and AI labs. They actively participated in deep discussions on topics such as AI self-evolution, next generation, large model development, video generation, model iteration, and open source ecosystems. From computer science scholars at institutions like Tsinghua University to R&D leaders at tech giants and leading AI startups like Alibaba, ByteDance, and Moonshot AI, Kimmy, a growing number of professionals are sharing their frontline insights, technical reproductions, and in-depth analysis on Zhihu. A substantial cohort of core experts from top-tier labs has joined the platform and remains highly active. In addition, updates to mainstream AI products consistently spark systematic technical interpretations and professional evaluations within our community. Notably, this quarter saw substantial in-depth discussions surrounding Deep6 expert mode, Alibaba's new video model, Happy Horse, and developments related to Google's Gemma 4. This high-quality content ecosystem, continuously enriched by frontline practitioners, not only enhances Jihoo's professional credibility, but also further solidifies our core competitive mode in the AI era. Professional creators are the core engine that powers the vitality, trustworthiness, and the uniqueness of our expert network. In the first quarter, the number of verified honored creators on Jihoo grew over 10% year over year. Reflecting our continued commitment to amplifying their industry influence, momentum in AI-related creator activity remains strong. We have aggregated over 19 million AI-focused creators who not only fill our community's high-quality content ecosystem, but also represent a robust pipeline of potential 2B service providers. We also saw a notable influx of top research teams, institutional executives, and core developers in fields like commercial aerospace and frontier technology. Their active participation has further solidified Zhihu's standing as a hub for professional discourse on advanced tech. At the same time, In the film, entertainment, and cultural verticals, we deepened our reach and engagement among upstream IP holders, co-production teams, and dedicated enthusiasts. In May, we hosted the 12th Zhihu Xinzhi Youth Conference, Xinzhi Qingyan Dahui in Beijing. This year's event placed a strong focus on the value of human creativity in the AI era, exploring the irreplaceable worth and core strengths of authentic creators amid rapid technological advancements. Overall, sustained engagement of high-quality creators across diverse verticals not only strengthens our foundation of professional, trustworthy content, but also enhances the strategic value of our content assets. This ecosystem directly accelerates our AI-driven commercialization and reinforces the unique competitive advantages of our trusted expert network. Alongside the deeper professional engagement, our ecosystem is also becoming increasingly social and interactive. In the first quarter, we optimized both the creation and the consumption experiences for our short-form ideas product. This initiative effectively lowered barriers to entry while significantly boosting community vitality. Looking ahead, we will focus on deepening the synergies between ideas and our community-based Circle product. By implementing more refined operations and expanding distribution scenarios, we aim to drive further positive momentum in core user retention and total time spent. Ultimately, this will unlock and expand a wider range of native commercial monetization opportunities. We continue to integrate core AI capabilities across content creation, discovery, consumption, and community interactions. Through our open platform, API and offline events like the AI Hackathon, we empowered developers and the creators to explore AI-native content and the interaction formats, further extending the practical application of AI technologies across the Jihu community. As we embrace AI as a tool for creative efficiency, we further refined our AI-generated content governance framework to rigorously filter out low-quality machine-generated spam. Since the start of 2026, we have removed over 250,000 pieces of low-quality AI-generated content and have penalized more than 11,000 violating accounts. These efforts have meaningfully safeguarded Jihoo's authentic atmosphere and significantly enhanced experience for our creators and users. Now, turning to commercialization. In the first quarter, total revenues grew sequentially and the year-over-year decline narrowed significantly, signaling a clear recovery. Underpinned by a healthier commercial ecosystem, our monetization efficiency continues to improve, with new growth momentum steadily materializing. Let's take a closer look at our performance by segment. First, paid content and IP operations. Starting from the first quarter of 2026, we combined IP-related revenue previously included in other revenues with our existing paid membership revenue into paid content and IP operations revenue. This change more accurately reflects the commercialization potential of our Yanyan Story franchise. This quarter, revenue from paid content and IP operations reached RMB $402.3 million, increasing 15.8% sequentially, driven primarily by the rapid growth of our IP operations, which reflected strong momentum in unlocking the commercial value of our original content IP. Average monthly subscribing members reached 13.1 million, up 7.9% sequentially with structural optimization. This growth was primarily driven by seasonal content consumption during the Chinese New Year holiday and improved the customer acquisition efficiency with Zhifu's premium short-form paid content continuing to play a key role in attracting and retaining users. We maintain disciplined high ROI standards by proactively optimizing inefficient acquisition channels to drive high quality growth in our subscriber base. Meanwhile, synergies between our AI-powered comic dramas and paid membership businesses are gradually emerging. By distributing JiFu's high quality IP and adapted content beyond our community, we effectively attract new users to in-community consumption scenarios. creating a strong connection with membership benefits. This strategy expands the reach of our IP while driving conversion among potential members, improving overall acquisition efficiency, and enabling us to continuously optimize the returns on our marketing spend. Revenue from IP operations delivered a strong growth momentum this quarter. The number of our IP partnerships grew more than fivefold year over year and more than doubled sequentially. Several of our top titles sold both film and gaming rights, and we signed additional licensing deals in verticals like science fiction. Together, these deals further validate both the depths of our IP monetization capabilities and the pricing power of our IP assets. Supported by our IP library, both the production capacity and the content quality of our short drama and comic drama adaptations remain stable in the first quarter. Multiple short dramas and comic titles achieved billions of views, consistently ranking at the top of various major platforms. Looking ahead, leveraging our strong IP pipeline, we will continue to pursue end-to-end multi-dimensional commercialization and further extend the lifecycle of each individual IP. Moving to marketing services, in the first quarter, Marketing services revenue was RMB 191.4 million, broadly in line with the same period last year. Our disciplined execution across the client mix optimization and the product upgrades continued to deliver results. On client mix, Apple rose sharply both year over year and sequentially in core verticals like gaming and automotive. Our industry mix also continued to improve. with commercial efficiency improving notably across gaming, travel, and transportation. This was supported by the ongoing consumption recovery and a wave of new game launches during the quarter. On commercial products, in March, we launched our technology-themed IP Tech Bytes, Tech Zhishitang, at this year's Appliance and Electronics World Expo, with a focus on the home appliance and consumer electronics sector. At the on-site immersive exhibition zone, Zhihu creators hosted guided walkthroughs to answer consumer questions with professional technical insights. They also shared the latest trends in home appliances and consumer electronics. At the same time, Zhihu reviewers' jury hosted an online discussion forum, helping decode industry jargon and highlight the real value behind product innovation. Turning to other revenues, in the first quarter, other revenues were RMB 57.8 million. As I mentioned earlier, we have reclassified IP-related revenue into our new paid content and IP operations segment, which better reflects how each business is developing. Within other revenues, our expert data solutions business won recognition from leading enterprise clients and began generating revenue this quarter. As a pioneer in defining and delivering high value data solutions, we are now translating our expertise into tangible value for our clients. Our differentiated value has been firmly validated by the top tier AI labs. Looking ahead through the rest of 2026, we remain committed to deepening our services for key clients while expanding our footprint into new industries. To wrap up, The first quarter gave us a solid start to the year. As we move through 2026, our priorities remain clear. We will continue to strengthen operational profitability while leveraging our unique strengths in the AI era to drive higher quality, accelerated growth. We believe the combined power of high quality content times expert network times AI capabilities will further set Ji Hu apart in this new era. Over the next three quarters, we will continue to execute on our strategy with discipline. We expect our core businesses to show an accelerated recovery. In parallel, our AI-related new initiatives should continue to gain traction and contribute meaningfully to growth. With that, I will hand the call over to our CFO, Wang Han, Remarks will be delivered through his AI voice agent. Han, please go ahead.