What’s new: Q&A platform Zhihu Inc.’s net losses widened 89% year-on-year to 614 million yuan ($92 million) in the first quarter, according to its quarterly earnings released on Wednesday.
That was despite a previously-stated goal of paring the firm’s losses this year.
The Hong Kong- and NYSE-listed company’s revenue, meanwhile, jumped 55% from a year earlier to 743 million yuan during the period. Its cost of revenue almost doubled year-on-year to 408 million yuan due to increased spending on advertising services, content-related costs, and more staff headcount.
Zhihu’s “content-commerce solutions” and advertising services contributed nearly three-fifths of its revenue in the first quarter, with an 88% year-on-year growth and a 1.7% jump, according to the quarterly report.
Background: In Wednesday’s earnings call, founder and CEO of Zhihu, Zhou Yuan, reiterated that “cost reduction as well as efficiency improvement will remain our work priority for the rest, for the remainder of the year as well as for the year of 2023.” Zhou had also flagged narrowing net losses as the company’s major goals for 2022 in a previous earnings call in March.
Last week, Caixin learned from sources that the Chinese online Q&A platform has sacked up to 30% of its workforce, making it the second round of layoffs this year.
Founded in 2011, the Beijing-based tech firm has yet to turn a profit. Last year, Zhihu’s net loss expanded to 1.3 billion yuan from 518 million yuan a year earlier. Its revenue, meanwhile, soared 119% year-on-year to 3 billion yuan, figures from the prospectus showed.
Contact reporter Manyun Zou (manyunzou@caixin.com) and editor Bertrand Teo (bertrandteo@caixin.com)
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