What happened
Shares of Zhihu (ZH -2.98%), which operates a Chinese question-and-answer website similar to Quora, were moving higher today after it delivered strong results in its fourth-quarter earnings report.
As of 1:07 p.m. ET, the stock was up 8%.
So what
Zhihu said revenue in the quarter rose 9.3% to $161.5 million, topping estimates at $156.5 million.
Average monthly users in the quarter declined from 103.3 million to 100.7 million, but average monthly paid subscribers jumped 112.5% to 13 million, showing the company is successfully monetizing the platform even as it is losing some free users.
On the bottom line, its adjusted net loss improved by 44% to $19.4 million, reaching a loss of $0.04 per share, which compared to a per-share loss of $0.10 in the quarter a year ago, and topped analyst expectations at a per-share loss of $0.09.
Referencing the improvement in paid users, CEO Yuan Zhou said:
As we continued to broaden our fulfilling content coverage, we captured the evolving needs from our massive user base for premium content. For the full year, the revenue from our vocational training business increased by more than four times, becoming another growth driver incubated by our vibrant ecosystem.
Now what
Zhihu didn't offer guidance for 2023, but the company said that it would continue to implement strict cost control measures in 2023, showing its focus on profitability, and the momentum in paid membership should also help the company this year.
Like other Chinese stocks, Zhihu shares have collapsed over the last two years under pressure from lockdowns and a regulatory crackdown from Beijing, but the recent results should give investors some optimism.
Analysts are expecting revenue growth to accelerate this year. That could trigger further stock gains if the company makes improvements on the bottom line as well.
