Q1 2024 Zhihu Inc Earnings Call
Operator: Ladies and gentlemen, thank you for standing by, and welcome to the Shihu, Inc. First quarter, 2024 financial results conference call. At this time, all participants are in the lesson only mode.
Ladies and gentlemen.
Thank you for standing by and welcome to Ashish, who Inc. First quarter 2020 full financial results conference call.
Speaker Change: At this time.
Speaker Change: Participants are in a listen only mode.
Operator: After the speaker's presentation, there will be a question and answer session. Today's conference is being recorded. At this time, I would like to turn the conference over to Yolanda Liu, Director of Investor Relations. Please go ahead, ma'am.
ashish: After the speaker's presentation, there will be a question and answer session.
ashish: Today's conference is being recorded.
ashish: At this time I would.
ashish: I'd like to turn the conference over to Yolanda.
Yolanda: Director of Investor Relations. Please.
Please go ahead ma'am.
Yolanda Liu: Thank you, operator. Hello, everyone. Welcome to Zhihu's first quarter 2024 financial results conference call. Joining me today are Mr. Zhou Yuan, our founder, chairman, and chief executive officer, and Mr. Wang Han, our chief financial officer. Before we get started, 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 Securities Legislation Reform Act of 1995. These statements involve inherent risks and uncertainties. As such, actual results may be materially different from the views expressed today.
Yolanda: Thank you operator, Hello, everyone welcome to Chew Foods first quarter 2024 financial results Conference call. Joining me today are Mr. Julien, our founder Chairman and Chief Executive Officer, and Mr. Wang Head Albert Chief Financial Officer.
Yolanda Liu: Further information regarding these and other risks and uncertainties is included in our public filings with the USFCC and the Hong Kong Stock Exchange. The company does not assume any obligation to update any forward-looking statements except as required under applicable law. Additionally, the matter we will discuss today will include both GAAP and non-GAAP financial measures for comparison purposes only. For a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results, please see the earnings release issue earlier today. In addition, a webcast replay of this conference call will be available on our website at ir.zhihu.com. I will now turn the call over to Mr. Wang Han, CFO of Zhihu. Han, please go ahead.
Yolanda: Before we get started 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 Securities Litigation Reform Act of 1995.
Yolanda: These statements involve inherent risks and uncertainties as such.
Yolanda: Actual results may be materially different from the views expressed today.
Yolanda: Information regarding these and other risks and uncertainties is included in our public filings with the U S SEC and the Hong Kong stock exchange.
Yolanda: The company does not assume any obligation to update any forward looking statements except as required.
Yolanda: Required under applicable law.
Yolanda: Additionally, the matter well, we'll discuss today will include both GAAP and non-GAAP financial measures for a comfort ration purpose only.
Yolanda: For a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results. Please see the earnings release issued earlier today.
Speaker Change: A webcast replay of this conference call will be available on our website at IR thought your food Dot com.
Speaker Change: I'll now turn the call over to Mr. Wong hand safe all of you who haven't please go ahead.
Wang Han: Thank you, Yolanda. Hello, everyone. Thank you for joining Zhihu's First Quarter 2024 earnings call. I'm pleased to deliver today's opening remarks on behalf of Mr. Zhou Yuan, Founder, Chairman, and CEO. The first quarter of 2004 marked a significant turning point. Strategically, we concentrated on our core strengths and the most crucial aspects of our development in AI. This involved a series of tactical adjustments.
Thank you Yolanda Hello, everyone. Thank you for joining <unk> first quarter earnings call I'm pleased to deliver today's opening remarks on behalf of Mr. Jogger founder Chairman and CEO of careful.
Speaker Change: The first quarter I'll turn on at four marked a significant turning point.
Speaker Change: Strategically we concentrated on our core strengths and our most crucial aspect for development.
Speaker Change: Yeah.
Speaker Change: This involved a series of tactical adjustments, including resource reallocation organizational optimization.
Wang Han: Including Resource Reallocation and Organizational Optimization. From an operating perspective, our top priority in the short term is to achieve profitability. The advent of AI has disrupted the traditional internet business model, which relied on expanding the user base, enhancing user engagement, and boosting user ad value to gain market share. In the AI era, the focus has shifted to high-quality content and user value. Zhihu's core value lies not only in possessing China's highest quality content library but also in our unique content creation mechanism and our community's professional ambition, which foster the continued emergence of new high-quality users. Users are no longer passive recipients of information but are active participants in content creation and knowledge sharing. Our core strengths provide us with a first-mover advantage in exploring new business models and position us uniquely in the market. Thank you for watching. Please subscribe to my channel.
Speaker Change: From an operating perspective, our top priority.
Speaker Change: In the short term is to achieve profitability.
Speaker Change: The element of a yacht has disrupted the traditional internet business model.
Speaker Change: Relied on expanding user base and user engagement and user ads out there to gain market share.
Speaker Change: In the AI era, the focus has shifted to high quality content and user value.
Speaker Change: <unk> core value lies not only presenting Chinese hyatt colleague on the library, but also you know our unique content creation mckenney them and our communities for fashion atmosphere.
Speaker Change: Foster continued emergence of new high quality content.
Speaker Change: Sure where users are not passive recipient of the information.
Speaker Change: But our active participant you Conan crude you create creation and knowledge sharing.
Speaker Change: These core strengths provide us with a first mover advantage and exploring new business models and position us uniquely in the market increasing our pricing policy.
Wang Han: Following our proactive reduction in community-related user acquisition costs, the size of our user base declined to some degree in line with our expectations. However, engagement among our monthly active users increased, core user retention sustained its growth momentum, and daily active user time span also increased. Furthermore, our efforts to enhance trustworthiness within the Zhihu community continue to drive community prosperity. Our strategy for cultivating scenario-oriented content ensures a continuous stream of authentic, in-depth, high-quality content based on our users' own experiences.
Speaker Change: Following our proactive reduction even community related user acquisition costs the size of her user base decline to some degree in line with our expectation.
Speaker Change: However engagement among our monthly active user Empress court use arbitration sustained its growth momentum and daily active user time spent also increased significantly.
Speaker Change: Furthermore, our efforts to your house trustworthy news within a Jew, who community continue to drive community prosperity.
Speaker Change: Our strategy for Coty waiting she never oriented content issuers, a continuous stream of authentic user.
Speaker Change: High quality content based on users' experiences.
Wang Han: As of the end of the first quarter, the cumulative pieces of content on our platform reached 804.2 million, including 611 million Q&As, up 15.4% year-over-year. Cumulative content creators within the Zhihu community reached 73.6 million, an increase of 13% year-over-year.
Speaker Change: I was at the end of the first quarter accumulative pits as I've called on our platform.
Speaker Change: $842 million, including 611 minute Q&A is up 16, 4% year over year.
Speaker Change: Accumulative content creators with NGL communion raised $73 6 million, an increase of 13% year over year.
Wang Han: We also observed a notable year-over-year increase in the proportion of highly active users engaged in creation and the percentage of high-level users. Utilizing the power of AI-driven technology, we continue to equip our content creators with a variety of user-friendly creations, offering a professional and supportive environment to help them break financial barriers. In the first quarter, the total number of content creators who earned income on Zhihu grew by more than Notably, the number of content creators benefiting from our Zhizhi plan was nearly four times larger compared to the same period.
Speaker Change: We also observed a notable year over year increase in the proportion of highly active users engaged in creation and a percentage of a high level of duty active breeders.
Speaker Change: Utilizing the power of AI, driven technology, we continue to equip our content creators with a variety of user friendly accretion.
Speaker Change: Offering a professional is supportive environment to help them break financial rewards.
Speaker Change: The first quarter. The total number of content creators earn income on Zhou who grow by more than 25% year over year.
Speaker Change: Notably the number of content creators benefiting from our church plan was nearly four fold compared to the same period last year.
Wang Han: In the AI era, we have continually upgraded our cybersecurity capabilities to ensure better protection of user data privacy and intellectual property. At the same time, we fully leverage AI models' capability to enhance efficiency of content identification, review, and governance within a... In certain scenarios, AI reviewers can achieve higher accuracy compared to manual identification and review, allowing us to significantly reduce the number of manual reviewers while maintaining high accuracy.
Speaker Change: In the AI era.
Speaker Change: We have continually upgraded our cyber security capabilities to ensure better protection for user data privacy intellectual property rights.
Speaker Change: Same time, we fully leverage AI motives capability to enhance the efficiency of content identification review and governance Committee.
Speaker Change: In certain scenarios.
Speaker Change: Viewers can achieve higher accuracy compare should imagine.
Speaker Change: Identification and preview, allowing us to significantly reduce the number of manual reviewers while maintaining high efficiency.
Wang Han: We continue to refine and upgrade our existing systems, Wali and Wukong, leveraging our Zhihai II LLM. These improvements have further enhanced user engagement and effectively combated fake traffic, leading to a continued decline in users' negative feedback and propelling Zhihu's community-sustainable development. We're progressing steadily towards our goal of achieving quarterly profitability within this. To that end, we have accelerated our loss reduction through two operating technologies. The first was to continually improve employee efficiency.
Speaker Change: We continue to refine and upgrade our existing systems Bobby.
Leveraging our July two O N.
Speaker Change: This improvement has further enhanced user engagement and effectively combated fake traffic leading to a continued decline users not give feedback and propelling triples.
Speaker Change: Energy sustainable development.
Speaker Change: We're progressing well progressing steadily towards our goal of achieving quarterly profitability. We think this year.
Speaker Change: To that end, we have accelerated our loss reduction sort of true operating tactics.
Speaker Change: First was to continually improve employee efficiency.
Speaker Change: Reducing labor costs.
Wang Han: [inaudible] Second, was to reduce community-related user. Meanwhile, we have maintained a high ROI in our pay membership and vocational training, which extended our reach beyond Zhihu. In addition to these efforts, the cost of revenue and total operating expenses in Q1 decreased by over RMB130 million.
Second wasn't reduced commission related user acquisition cost.
Speaker Change: Meanwhile, we have men gender high ROI, you're not paying membership and vocational training businesses, which extended our reach beyond did you have anything.
Speaker Change: Because this effort to close off revenue and total operating expenses in Q1 decreased by over RMB 130 million quarter over quarter.
Wang Han: Notably, we recorded our 6th consecutive quarter of year-over-year growth in gross profit margin and 3 consecutive quarters of sequential decline in our sales and marketing expenses in the first quarter. Additionally, we have been accelerating the application of Zhihai to LLM to further enhance our operating efficiency across every aspect of our business. For example, teaching, learning, and research aspects of vocational training.
Speaker Change: Notably, we recorded our sixth consecutive quarter of year over year growth in gross profit margin and three consecutive quarters of sequential decline in our sales and marketing expenses in the first quarter.
Yeah.
Speaker Change: Additionally, we have been accelerating the application of hydro we all have to further enhance operating efficiency across every aspect of our business as well.
Speaker Change: Example, teaching learning and research aspects for all vocational training business.
Wang Han: By integrating our own knowledge library, we have driven notable efficiency improvements in AI teaching assistants, cell services, and homework assessment. As a leading content-centric community, Zhihu serves as a lending platform where professionals engage in the most extensive and in-depth discussions on AI-related topics. Since the beginning of this year, the amount of AI-related content and the number of graders have continued to surge by double-digit year-over-year growth. Additionally, Unknown Speaker, the number of AI field creators certified by blue label has increased by 130% over the past year. Moreover, tens of thousands of specialized terms related to AI are being discussed within our company. Our exploration of and investment in AI will shift to focus on application learning.
Speaker Change: Integrating our all knowledge library, we have driven notable efficiency improvements in AI teacher assistance self services homework assessment anymore.
Speaker Change: As a leading calling centric community who serves as a lending platform where professionals engaging the most extensive an in depth discussion I thought I got really good topics.
Greta: Since the beginning of this year the amount of AI related content on a number of greta's had continued discharged by double digit year over year growth.
Speaker Change: Specifically the number of AI feel greater certified certified by Blue label has increased by 130% year over year.
But over tens of thousands of specialized terms religion, but he just costs within our community.
Speaker Change: I'm trying to underscore all exploration all investment in AI will shift to focus on application layer.
Wang Han: Our one-spanning AI enables us to enhance our printing efficiency across our existing products, as well as a lot of emerging potential beyond the Zhihu community, all built on a foundation of trust. Since the launch of our AI-powered search feature in March, we have observed double-digit growth in app active days, user retention rates, and user engagement among users who are using our new AI search. Now, I would like to delve into more details of the progress we achieved across multiple business lines for the first quarter.
Speaker Change: While spending AI enables us to enhance the operating efficiency across our existing businesses as well as emerging potential beyond did you want to be albeit on a foundation of trustworthiness.
Speaker Change: Since the launch of our AI powered search feature in March we have observed double digit growth in active days user retention rate and Huger user engagement model users, who are using our new AI search feature.
Speaker Change: No I want to delve into more details on the progress wheelchair, but across our multiple business lines for the first quarter.
Wang Han: First, our vocational training business continues to grow robustly, with revenue increasing by 35.9% year-over-year to RMB145.4 million. Its contribution to our total revenue also grew, surpassing 15% for the first time. As of the end of the first quarter, we established more than 30 subcategory courses through both self-operated business and acquisition.
Speaker Change: First our vocational training business continued to grow robustly with the revenue increasing by 35, 9% year over year to RMB $145 4 million.
Speaker Change: Its contribution to our total revenue also rose.
Speaker Change: 15%.
Speaker Change: Thanks.
That's all.
Speaker Change: That's at the end of the first quarter, we established more than 30 sub category of course, it's true both self operated business and acquisitions.
Wang Han: Notably, our self-operated offerings are closely connected to Zhihu, allowing us to address users' needs swiftly and precisely while eating higher-protein. Our acquired offerings, on the other hand, meet specific demands and cater to a broader market; together, these courses complement each other and broaden our offerings in driving the rapid and sustainable growth of our vocational training. In the first quarter, our self-operated offerings grew rapidly, particularly AI, AGA, and self-reviewed exam courses, demonstrating excellent profitability and revenue.
Notably our self operated offerings are closely connected to the triple combination.
Speaker Change: Allowing us to address you this knee swiftly and precisely well eating higher profits.
Speaker Change: Our acquired offerings on the other hand me specific demands and cater to a broader market.
Together. This of course is complementary charter and broadening of our offerings and drilling.
Speaker Change: The rapid and sustainable girls off our vocational training business.
Speaker Change: In the first quarter, our self operated offerings grow rapidly, particularly AI ags itself through our exam horses, demonstrating excellent profitability and radicals.
Wang Han: Importantly, our program tutors are also current creators within Jiuquan. With this dual role, tutors are deeply involved in course development while maintaining ongoing interactions with students in the community about real course experiences, skill improvement, and other topics.
Importantly, all programmed tutors are also content creators who has been a joy for me to get.
Speaker Change: With this dual role tutors, Italy U box and of course, your battery development, while maintaining ongoing interactions with students in a community about real course experiences skill improvements and other topics.
Wang Han: This approach effectively addresses the ever-growing new demands of our new users. Growth from our acquired offerings remains steady during this quarter, further elevating our brand name, awareness, and service as one of the. In April of this year, one of our subsidiaries, Pingzhi Education, hosted a dedicated live broadcast inviting executives from the CSA Institute, providing professional insight into CFA exam reforms, offering firsthand preparation guidance and expert analysis. This initiative garnered significant attention and sustained feedback from both the industry and industry leaders.
Speaker Change: This approach effectively address the ever growing new demands of our new users.
Speaker Change: Growth from acquired offerings remained steady during the quarter for elevating our brand name awareness and service advantages.
Speaker Change: In April of this year, one of our subsidiaries P and dedication hosted a dedicated a live broadcast you've already executives from the CFA Institute.
Speaker Change: It provided professional he's asking to CFA exam reforms offerings firsthand preparation guidance and expert analysis.
Speaker Change: This initiative garnered significant attention has sustained a feedback from both the industry and <unk>.
Wang Han: Our paid membership business remains our largest revenue contributor this quarter, reaching R&B 449.7 million. As of the end of this first quarter, our average monthly subscribing members stood at 14.8 million, showing a slight decrease of 0.8% year-over-year but an increase of 4.1% quarter-over-year.
Speaker Change: Our paid membership business remained our largest revenue contributor this quarter.
RMB $449 7 million.
Speaker Change: As of the end of the first quarter, our average mostly subscribing members stood at $14 8 million showing a slight decrease of <unk>, 8% year over year, but an increase of four 1% quarter over quarter.
Wang Han: Average revenue per user remains stable compared to the same period last year. Leveraging the support of the Zhihu community and our unique positioning, our premium short stories continue to captivate and resonate with our users. In April, 823 historically chart-topping pieces, including Zhihu's exclusive story, Sand of Time, Xi Tianhua, and Endless River, Sea, Water, Flows, San Wan Li He, Dongwu Hai, were included in the National Library's digital collection, whose premium Kana library, including short stories, continues to expand in the first quarter.
Speaker Change: Average revenue per user or remained stable compared to the same period last year.
Speaker Change: Leveraging the support of cheerful community and our unique positioning our premium short stories continue to captive way to resonate with our users.
Speaker Change: The April 823, historically targeted a chart topping pizzas, including dual horse exclusive Starbucks setup time sheets here, a while and endless River see worst was somebody who wonder why were.
Speaker Change: We're including National libraries does your collection.
Speaker Change: Sure, who was premium kind of library, including short stories continue to expanding the fourth quarter.
Wang Han: The total volume of premium content increased by 14% year-over-year, attracting new subscribers while encouraging increased consumption among existing subscribers. On the common creator side, we are delighted to see our creators building a solid market reputation and achieving financial rewards on our platform. In the first quarter, the number of current traders who earn income increased by 78% year-over-year.
Speaker Change: The total volume of premium content increased by 14% year over year a.
Speaker Change: Striking new subscribers, well encouraging increased consumption amongst existing subscribers.
Speaker Change: Uncommon greater side, we're delighted to see I'll quit her stewarding the solid market reputation ashamed financial rewards on our platform.
Speaker Change: The first quarter the number of content creators, who are income increased by 78% year over year.
Wang Han: In addition to top creators earning substantial income, many mid-tier and long-tail content creators within our community also earn significant income through high-quality content creation. As a market leader, Zhihu continues to unlock the monetization potential of our vast array of premium short story IPs. Spearheading our expansion into the short drama market and consistently setting new industry benchmarks for growth. In the first quarter, IP modernization rapidly increased by 165.7% year-over-year. In April, another short drama, Chippy, adapted from a story in Zhihu's Conan Library, achieved a new record high for popularity on its debut day on Tencent's microdrama platform.
Speaker Change: In addition to top creators or any substantial income each.
Speaker Change: Sure.
Speaker Change: Long tail content creators, we see no community also earn significant income sort of high car to kind of accretion this quarter.
Speaker Change: As a market leader sure who continues to unlock the monetization potential of our own.
Speaker Change: That's a rate of premium short story Ip's spearheading our expansion into the short drama market and consistently setting new industry benchmark for cross.
Speaker Change: In the first quarter IP amortization round it increased by 165, 7% year over year.
Speaker Change: April I Wonder short drama Chippy exactly from a story, Joe what's called a library.
Speaker Change: A new record high for popularity that'd be J I'm champions micro drama platform.
Wang Han: In the long run, the ongoing expansion of our premium content and diverse content consumption formats will continually drive growth in the lifetime value of subscribing members. Let's now shift to our marketing services. InfoSquadron, Marketing Services Rounding of RMB$330.5 million, representing a decrease of 15.7% year-over-year.
Speaker Change: You know Laura the ongoing expansion of our premium content and diverse content.
Speaker Change: Consumption format will continually drive growth in the lifetime value of subscribing members.
Speaker Change: Let's now shift to our marketing services.
Speaker Change: First quarter marketing services revenue were RMB 335 million, representing a decrease of 15, 7% year over year.
Wang Han: Within this total, revenue from our brand advertising business increased significantly by 40% year-over-year. Additionally, performance-based advertising business returned to growth on a quarter-of-quarter basis. Our key clients in Cornerstone already continue to demonstrate healthy improvements in retention rates, consumption, and ARPU. Apart from the ID3C industry, which maintained a year-over-year growth rate of over 40%, the fast-moving consumer goods sector also experienced high double-digit year
Speaker Change: Within this total revenue from our brand advertising business in quite significantly by 40% year over year.
Speaker Change: Well I'll prefer most based advertising business returned to a growth on a quarter over quarter basis.
Speaker Change: Our key clients in cornerstone already goes continue to demonstrate healthy improvements in retention raised consumption in our pool.
Speaker Change: Apart from ITC industry, which we mentioned, which maintain its year over year growth gross rate of over 40%. The fast moving consumer goods sector also experienced high double digit year over year growth.
Wang Han: We're currently in the process of upgrading our CCS product, including proactively enhancing content governance and reducing the distribution of commercial content that negatively impacts user experience. As we are striving for quality profitability by the fourth quarter of 2004, we are putting our efforts to narrow our losses. Meanwhile, we firmly believe the emerging potential of our AI search and the value we continue to unlock across Zhihu's trustworthy community will provide fresh momentum for our sustainable growth and a clear path to profitability for the remaining quarters of this year.
Speaker Change: We're currently in the process of upgrading our 60 as far as like including what proactively hunting kind of governance and reducing the distribution of commercial kind of directly negatively impacts user experience.
Speaker Change: Yes.
Speaker Change: That's what's driving for quality profitability by the fourth quarter on a four well getting our efforts to narrow our losses. Meanwhile, we firmly believe that emerging potential of our AI search and the value. We continue to log across truth was trustworthy committee will provide phys momentum for our sustainable growth and a clear path to profitability.
Speaker Change: For the remaining quarters of this year. He concludes Mr. Johannes remarks.
Wang Han: This concludes Mr. Zhou Yuan's remarks. Now I will review the details of our first quarter financials. For a complete overview of our first quarter 2004 results, please see our press release issued earlier today. We have continually optimized our core structure over the past several quarters. As a result, we recorded our state's consecutive quarter of year-over-year growth in gross profit margin.
Speaker Change: Okay.
Speaker Change: Now I will review the details of our first quarter financials.
Speaker Change: For a complete overview of our first quarter turnaround for resolved. Please see our press release issued earlier today.
Speaker Change: We are continually optimizing our cost structure over the past several quarters.
Speaker Change: As a result, we recorded our sixth consecutive quarter of year over year gross in the gross profit margin.
Wang Han: On the expense side, we significantly reduced community-related user acquisition costs while maintaining a pre-alignment level of events and new cutting-edge technology, including This initiative has effectively optimized our fixed costs, enhancing our commercialization efficiency. Through proven strategic adjustment, we are confident of achieving quarterly profitability within China. Our marketing services revenue for the first quarter was RMB330.5 million, a decline of 15.7% year-over-year.
Speaker Change: On expense side, we significantly reduced commodity related user acquisition costs, while maintaining a prudent level of investment you're cutting edge technology, including AI.
Speaker Change: This initiative has effectively optimize our fixed cost enhancing our commercialization efficiency.
Speaker Change: So is this proved proven strategic adjustments, we are confident of achieving quarterly comparability of wisdom trying out before.
Speaker Change: Our marketing services revenue for the fourth quarter were RMB $335 million or to find out between four 7% year over year. This increase was primarily due to an ongoing refinement of our Ccs product to strategically focus on margin improvement.
Wang Han: This increase was primarily due to the ongoing refinement of our CCS product. However, we observed a recovery in our brand advertising segment in the first quarter. Performance-based advertising also demonstrated sequential growth. Notably, items received, as well as fast-moving consumer goods, led this growth by a very large margin. Pay membership maintained a stable trend in the first quarter, reaching RMB449.7 million. The number of subscribing members grew to 14.8 million, up 4.1% quarter over quarter.
Speaker Change: However, we have observed a recovery in our brand advertising sector in the first quarter performance based advertising also demonstrated sequential growth multiple audiences receipt as well as fast moving consumer goods laddish grows by vertical.
Speaker Change: Paid membership maintaining a stable trend in the first quarter, reaching RMB $449 7 million. The number of subscribing members grew to 48 million up four 1% quarter on quarter.
Wang Han: Vocational training revenues for the quarter were RMB145.4 million, increasing by 35.9% year-over-year. Our soft-operated offerings, particularly AI, AGN, and software exam courses, deliver robust growth, while our acquired business also retains solid. Benefiting from enhanced operating efficiency, our gross profit for the first quarter increased by 6.1% year-over-year to RMB543.5 million, propelling a gross profit margin improvement of 5.1 percentage points year-over-year to. Our total operating expenses per quarter were RMB768.2 million, compared with R Selling and marketing expenses increased to RMB478 million from RMB445.6 million during the same period of time.
Speaker Change: Well Christian as training revenues for the quarter were RMB.
Speaker Change: <unk> $145 4 million in crazy much theres, not a 35, 9% year over year.
Speaker Change: Our self operated offerings, particularly if you're going to sell for example of course is delivered robust growth while our acquired business also retain solid momentum.
Benefiting from enhanced operating efficiency, our gross profit.
Speaker Change: First quarter increased by six 1% year over year to RMB $543 5 million propelling our gross profit margin improvement of 151 percentage points year over year to 56, 6%.
Our total operating expenses for quarter were RMB, $768 2 million compared with RMB 729.0 million same period last year.
Speaker Change: Selling and marketing expenses increased to RMB 478 million from RMB $445 6 million in the same period of 200 to three.
Wang Han: Moving forward, we will maintain our prudent financial policies and rigorously measure ROI across marketing. Our research and development expenses for this quarter amounted to RMB 197.4 million from RMB 183 million in the same period. The increase was primarily due to our increased spending on technology. The GNA expenses decreased by 7.5% to RMB92.9 million.
Speaker Change: Moving forward, we'll maintain our prudent financial policies and rigorously.
Across marketing channels.
Speaker Change: Our research and development expenses for the quarter.
Speaker Change: So RMB $197 4 million.
Speaker Change: RMB 183 million for the same period of time.
Speaker Change: The increase was primarily due to our increased spending on technology innovation.
Speaker Change: G&A expenses decreased by seven 5% to RMB 19.9 million. The decrease was primarily due to lower share based compensation expenses combined with improved operating efficiency.
Wang Han: The decrease was primarily due to lower share-based accommodation expenses, combined with improved operating costs. As a result of all of these, our gap now was, for the first quarter, narrowed by 7.4% year-over-year to RMB165.8 million. Our non-Gadden Outlaws first quarter was R&B 135.5.
Speaker Change: As I read these out of all of those are GAAP net loss for the fourth quarter narrowed by seven 4% year over year to RMB $165 8 million or.
Speaker Change: Our non-GAAP net loss for the first quarter was RMB $135 seven minutes.
Wang Han: As of March 31, 2004, the company had cash and cash equivalents, a term deposit and short-term investment of RMB 5.2 billion, compared with RMB 5.5 billion as of December 31, 2004. In the first quarter, the company repurchased 4.8 million plus eight owner's shares for a total price of US$8 billion. In summary, as we continue to optimize our costs and expand our structure, our operating efficiency is steadily increasing. Throughout the remainder of 2014, we are confident that our strong strategic execution will provide a solid foundation for achieving our quarterly profitability goals in the near future.
Speaker Change: As of March 31st one on four pumping had cash and cash equivalents term deposits and short term investment of RMB, one 2 billion compared with RMB five 5 billion as of December 31st one month free.
Speaker Change: In the first quarter to coffee repurchase $4 8 million plus eight ordinary shares for a total price of U S. U S H.
Speaker Change: In summary, we continue to optimize our cost and expense structure. Our operating efficiency is steadily improving throughout the remainder of 204 were confident that our strong strategic execution will provide a solid foundation, but achieving more quarterly profitability goals in the near future.
Wang Han: Last year, I turned the call over to the operator for the Q&A. Thank you very much. We will now begin the question and answer session. To ask a question, you may press star, then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys.
Speaker Change: This concludes my prepared remarks on our financial performance for this quarter, but I was trying to call turn the call over to the operator for the Q&A session.
Speaker Change: Yeah.
Speaker Change: Yeah.
Thank you very much.
Speaker Change: Now begin the question and answer session.
Speaker Change: To ask a question you May press Star then one on you touched on phone.
Speaker Change: If youre using a speakerphone please pick up your handset before pressing the keys.
Speaker Change: To withdraw your question. Please press Star then two.
Operator: To withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. If you would like to state your question in Chinese, you may do so, but then please also restate your question in English. Our first question is from the line of... Xueqing Zhang, from CICC. Please go ahead. ??????????,???????????????,???????????????????????????????????,??????????????????,??? ??????????,???????????????,???????????????????????????????????,??????????????????,??? This is Han.
Speaker Change: At this time, we will pause momentarily to assemble our roster.
Speaker Change: If you would like to state your question in Chinese you May do so but then please also state your question in English.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Our first question is from.
Speaker Change: On the line.
Shang: Sure thing Thanks Shang.
Speaker Change: From C ICC.
C ICC: Please go ahead.
C ICC: Yeah.
Glenn: Hey, Glenn in Tengiz.
Speaker Change #101: Oh, well then tissue Guoguang quickly moved out.
Speaker Change #102: <unk> Oh my.
Speaker Change #103: Junior English to Washington D C.
Speaker Change #103: Thank goodness.
Speaker Change #104: Oh I'm sorry.
Speaker Change #104: Yeah.
Speaker Change #105: Alright, Thanks management for taking my question my question to that.
Speaker Change #106: But even touch it.
Speaker Change #107: Linda uptick with that.
Speaker Change #108: Most of the coffee break you bet.
Speaker Change #109: But what's the latest 10.
Speaker Change #109: Thank you.
Speaker Change #111: Uh huh.
Wang Han: I want to answer this question. Our target of winning has not changed. We still expect to achieve a quarterly non-gap net profit of $0.01. This is from Wang Han, CFO of Zhihu. Our profitability target remains unchanged.
Speaker Change #112: But I do India.
Okay.
Speaker Change #112: He's asking them to assist us in 'twenty two.
Speaker Change #112: non-GAAP breakeven.
Speaker Change #112: This is from Wuhan Stephane, Paul I'll bet profitability target remains unchanged.
Wang Han: We expect to achieve a quarterly non-gap net profit in the fourth quarter of this year. We made some adjustments and adjustments at the end of the first quarter and the beginning of the second quarter, so we will experience structural shortcomings. [inaudible] Between the size of the user and the quality of the two goals, we will definitely choose Yiwen Zhang. [inaudible]?? Because we believe that the logic of the Internet in the age of AI has changed dramatically.
Expect to achieve our quarterly non-GAAP net net profit in the fourth quarter of this year.
Speaker Change #113: When does that even more argued with fujitsu escalation that's held up much vishal.
Speaker Change #113: With that I'd see it wasn't exactly with immediate.
Speaker Change #114: Or is it some cure patients.
Speaker Change #115: I'm not going to do what that means in the food market.
Speaker Change #116: But he was little room for somebody to come out from the joint venture.
Speaker Change #117: Whenever you do any completion, so I won't read them all.
Speaker Change #117: What you show them you know.
Speaker Change #118: Yeah, I'll jump on the new debt.
Speaker Change #119: Yeah, what I'm, telling you as you know.
Speaker Change #120: Uh huh.
Wang Han: The main logic of the Internet is that the media... [inaudible] In the AI era, the leverage brought by models and algorithms is the best prediction of the head users. What are the three most important elements?, The first one is to have money to buy a card to make a model.
Speaker Change #121: What's your thinking if at all.
Speaker Change #122: I thought we were sold between alloy music I don't know.
Speaker Change #126: For Ashford that what do you Wanna suddenly it out as it comes out about totally on board so yogurt.
Speaker Change #122: But it hasn't yet.
Speaker Change #123: Suddenly I was worried about ego Uhm my caution motion.
Wang Han: Second, you have the highest quality fish feed. Third, you have the highest production quality fish feed. ?????,??????????…… XIN LIU, YAN XUAN, ZHENG ZHUO, ZHANG YAN, YIN YUAN, ZHOU YUAN, YI WEN, ZHOU XIN, XIN LIU, YAN XUAN, ZHENG ZHUO, ZHENG ZHUO, YIN YUAN, ZHENG ZHUO, YIN YUAN, ZHANG YAN, YIN And then in terms of the second and third high-quality fish and high-performance production users, there will be the most natural, We are very lucky that AI has given Zhihu a great opportunity.
Speaker Change #124: You know what we called around there it sounds like some time, okay got it so you entered it.
Speaker Change #125: The drill Horner from Virginia, you got you.
Speaker Change #125: Total abolition you should've won't mention where the jumbo put all of that.
John: Hi, John.
John: So I hope that Europe would you say, you're wondering the Gulf of Colorado with them yet.
John: Sure.
John: Assuming that Ashford had got a tripling, obviously with shell without triples.
Wang Han: As long as we return to Zhihu's original high-profile Q&A, this will make our strategy adjustment very resilient. At the end of the first quarter and the start of the second, we strategically refined and restructured our approach, driving a notable reduction in losses.
Speaker Change #128: We have Sunshine in Colorado in Dazzle Hoffman Gestured, a woman that's what I told them don't really fit on the tissue front there.
Speaker Change #129: At the end of the first quarter and start up the second we strategically with fines and restructure its Albert approaches.
Speaker Change #130: Driving a notable reduction in losses.
Wang Han: Starting in the second quarter, you will see more pronounced improvements across our matrix. The core philosophy behind this adjustment is what we shared at Lustre Earnings. We will always prioritize user quality over user skill.
Speaker Change #131: Starting from the second quarter, you will see more pronounced improvement.
Speaker Change #132: Albert matrix.
Speaker Change #133: The core philosophy behind this.
Speaker Change #134: Yes men is what we shared at Alaska earnings well always archive user quality over user scale, we are dedicated to testing and elevating our core users experience and ensuring a continuous flow of high quality content or corvette.
Wang Han: We are dedicated to protecting and enhancing our core users' experience and ensuring a continuous flow of high-quality content or core... We believe that our industry is undergoing a fundamental shift as we move from the internet era to the AI era. In the internet era, the dominant logic here was to maximize user engagement through large user bases and metrics like AD load and eCPM. But currently, in the AI era, advancements in LLM and compute power are amplifying the importance of top-tier users and high-quality content. So the most crucial factor for Zhihu going forward is, first of all, having sufficient capital to invest in high-performance chips. Second, we have the highest quality content and data.
Speaker Change #135: We believe that our industry is undergoing a fundamental shift as we move from the Internet era to the AI era in the Internet era. The dominant logic here is to maximize user engagement through large users basis and the metrics.
Speaker Change #137: 80 loads and he said yeah.
Speaker Change #136: But currently.
Speaker Change #136: Era.
Speaker Change #138: Last month in L. L M and compute power are amplifying the importance of top tier users and high quality content.
Speaker Change #138: So the most crucial factor for Joe pool going forward.
Speaker Change #140: Mark first of all having sufficient capital to invest in hypothalamus cheap.
Second having the highest quality content and data.
Speaker Change #139: Third, having the highest quality and productive con and creators.
Speaker Change #141: So if you will has been a pioneer in this aspect first Albert substantial investments have made us one of only a select few platforms in China with our license to operate to self operate L. L.
Wang Han: And third, having the highest quality and productive content creators. So Zhihu has been a pioneer in these aspects. First, our substantial investments have made us one of only a select few platforms in China with a license to operate, to self-operate LLMs.
Wang Han: And second, we already have natural advantages thanks to our abundant, high-quality content and high-quality user base. The advent of the AI era presents a golden opportunity for Zhihu to return to what we do best, that is, high-quality Q&A. This has enabled us to make strategic adjustments with confidence and spontaneity. Next question, please.
And second we already have natural advantages, thanks to our abundance of high quality content and high quality user base.
Speaker Change #141: The advent of AI era presents a golden opportunity for you who to return to what we do best that is high quality Q&A.
Speaker Change #141: This has enabled us to make strategic adjustments with confidence and a spun and spun and team.
Speaker Change #141: Yeah.
Speaker Change #141: Yeah.
Speaker Change #142: Our next question please.
Speaker Change #143: Sure. Thank you.
Speaker Change #143: Hi.
Operator: Thank you. The next question is from the line of Steve Chu from Goldman Sachs; please go ahead. Good evening, management team. I'd like to ask you a question about our sales fee. I would also like to ask you about the trend of users after the implementation of our sales marketing control method and what new strategies our community has to improve the activity of users.
Speaker Change #144: The next question is from the line of Steve Shaw from Goldman Sachs. Please go ahead.
Speaker Change #145: Hey watch them up when he saw it sounds seem to always have Glenn wouldn't take a social feeling they go into.
Speaker Change #146: Sure seem to always have some degree of Sony and marketing in particular, what countries for sure sure Joel I know you. All did you go to the tissue for all bulk was issue I'm sure. It's feeling that you see the takeaway that you should try to do it you teach them to do they don't quit.
Operator: Thank you for taking my questions. I would like to ask about the user trends post your selling and marketing discipline strategy, and what are the future strategies to further improve your user engagement? Thanks. Thank you, Steve. I'm Zhou Yuan.
Speaker Change #147: Good evening. Thank you for taking my questions I would like to ask about the user trends pose who are selling and marketing discipline strategy and what are the future strategy to further improve user engagement. Thanks.
Julien Wang: Well sure Julien.
Julien Wang: [laughter].
Yuan Zhou: Thank you. Sales and Marketing Strategy Adjustment The core is quality orientation. We have just started.
Speaker Change #149: Selling and marketing sort of children.
Speaker Change #150: They seem to suit you don't know.
Speaker Change #151: Oh My gosh.
Yuan Zhou: The overall performance is in line with our expectations. In terms of trend, the core user flow has maintained a continuous upward trend. The daily usage of users has also increased significantly. Thanks, Steve, for your question. This is Zhou Yuan, Zhihu CEO. Our sales and marketing strategy adjustment is based on a quality-oriented approach. Overall, these adjustments are in line with our expectations.
Speaker Change #152: Don't Kid yourself.
Speaker Change #153: Oh the <unk>.
Speaker Change #153: She was a song pushing your whole Nielsen Oh, two especially those tons.
Speaker Change #153: Yeah.
Speaker Change #154: You can't do it themselves.
Speaker Change #155: Thank you for your question. This is Joe you, Andrew who CEO ourselves and marketing strategy adjustment is based on the quality oriented approach overall these adjustments are in line with our expectations.
Yuan Zhou: While our core user retention rates maintain their growth momentum, our DAU time spent also increased significantly. Sales and Marketing Strategy Adjustment is just a part of the overall strategy adjustment of the community. It is also crucial for our users to be active in the work of accepting community content and atmosphere. The self-marketing strategy adjustment is just one part of our broader community strategy. Our efforts to build and enhance the community's content and atmosphere are also crucial to improve the activities of our users. First of all, they are from professional users.
Speaker Change #156: Well, our core user retention rate maintained its growth momentum Albert da use time spend also increased significantly.
Speaker Change #157: It myself and my team sort of told them. It's just it's a soup. So certainty. So they told him that you both as well.
Speaker Change #158: So she needle so suddenly the two so those will fill them and then you'll have a cool yeah, yeah sure.
Speaker Change #157: Yes.
Speaker Change #157: The south marketing strategy adjustment, it's just one part of other prouder community strategy, our efforts to build and enhance the communities content and atmosphere are also crucial to improve activities of outbreak.
Speaker Change #157: There.
Speaker Change #159: So that's what I'd say to you.
Dawn: Thank you dawn.
Speaker Change #161: Finally, I'm trying it sounds a bit equaled a training issue well June she said.
Speaker Change #162: So it was on the Pogo pins on the Eagle with Hyatt.
Yuan Zhou: [inaudible] We have a high degree of penetration among professionals in various industries. For example, the top AI entrepreneurs in the blockchain and the top technology managers of large modeling companies participate in in-depth discussions of cutting-edge technology. [inaudible] The trustworthiness of Zhihu is primarily from our professional users. Many professionals and industry experts whose professional value is often underestimated have found a platform for discussion and sharing on Zhihu. We have very high penetration rates among professionals in various industries.
Speaker Change #162: Well it could.
The Chilean and Sheila if you go to central to it.
Speaker Change #162: So it was a little north of let's say go to Switzerland.
Speaker Change #162: But hopefully with promoting goes through how much of it goes to the general manager.
Speaker Change #162: And switching on tissue the central target.
Speaker Change #163: Yeah absolutely.
Speaker Change #164: And then there are sometimes in J E T.
Speaker Change #165: You bet.
Speaker Change #166: The trustworthiness of chip, who is primarily from our professional users many professionals and industry experts who are professional value is often is often under estimated have found a plot for them for a discussion and the sharing.
We have very high penetration rates among professionals in various industry. For example, fearful has the highest concentration of AI industry professionals and the senior technical executives from leading L. L M companies.
Yuan Zhou: For example, Zhihu has the highest concentration of AI industry professionals and senior technical executives from leading LLM companies who engage in cutting-edge discussions on our platform. The number of our blue-label certified AI participants grew by 130% year-over-year as of the latest.
Speaker Change #167: Companies, who engage in cutting edge discussions on our platform.
Speaker Change #167: The number of our Blue label 35, AI participant group.
Speaker Change #168: <unk> grew by 100, and a 30% year over year at the latest.
Yuan Zhou: A very important job of community operations is to develop the experience of our core creators. [inaudible] The return on investment in the field of science and engineering has increased by 30% to 50%. [inaudible] One important aspect of the community's daily operation is to enhance the experience for our core content creators. For example, recently, our Juju plan in the community, which by optimizing the revenue distribution R goal, the revenue in a broader range of knowledge-related fields such as science and engineering increased by 30% to 50% quarter over quarter, quarter over quarter. [inaudible] These adjustments have been happening in Q2.
Speaker Change #169: So she now you're going to.
Speaker Change #170: So it's I mean, it's all women, though was in trouble a judge.
Speaker Change #169: Yeah.
Speaker Change #171: He will tell you as I said, yes, Johan so it should cause this to Congress.
Speaker Change #172: So you sometimes also.
Speaker Change #173: <unk> fun system, either so you'll probably be she's going on.
Speaker Change #174: I was just going to lose it.
Speaker Change #175: Oh gosh.
Speaker Change #176: One important aspect of community daily operation is to enhance the experience for all of our core content creators. For example, we simply average would your plan in the community.
Speaker Change #177: In which by optimizing the Robert He was distribution article the Robin I'm, even prouder of range of knowledge related fees, such as science and engineering increased by 30% to 50%.
Speaker Change #177: Quarter on quarter over quarter.
Speaker Change #178: So to the center hotels are not so cool crashes.
Speaker Change #178: The.
Speaker Change #179: Well lets you don't hold what's the cause of most of the issue.
Speaker Change #180: Jean Shuttle tankers yourself.
Speaker Change #181: Sometimes I'm glad to see you push some junior Senator who puts us in a needle she goes to Angela.
Speaker Change #182: This adjustment has been happening in Q2, our approach to support our creators focuses on operation stray Ben whereas the enhanced efficiency through product development and research and accordingly on the content.
Yuan Zhou: Our approach to support our creators focuses on operations driven with enhanced efficiency through product development and research. And accordingly, in content distribution, we will prioritize professional, in-depth, and authentic content. The second comes from professional depth and real content.
Speaker Change #183: And why we're well prioritize them professional.
Speaker Change #183: That and authentic content.
Speaker Change #184: So that's what's the lights of your training are central to sit on it.
Yuan Zhou: Zhihu gathers a variety of experiences and deep insights from real users. For example, some recent events in the open source field of face-to-face intelligence. This discussion is also on Zhihu's hot list. As we can see in the content, the chief scientist will answer the questions in person, the entrepreneurs in the domestic and international AI industry, the operators and entrepreneurs in the open-source community, and the lawyers are all involved, causing widespread attention and dissemination.
Speaker Change #185: Would you do a socio who the Toyota and GM for simpler Ginger.
Speaker Change #186: I was thinking maybe to know kind of anything you don't really see US again, how long that you saw on the Jo mill.
Speaker Change #186: The only thing I know you always sort of Sequencers out there. It seems that's what have you.
Speaker Change #186: Yeah.
Speaker Change #187: Hi, there so should our Haynesville Toyota.
Speaker Change #187: Those who don't.
Speaker Change #187: You can find a fish umpqua in front of a bunch of switch on both.
Yuan Zhou: Secondly, it comes from professional, in-depth, and authentic content. Zhihu gathers a diverse range of real user experiences and gives insights. For example, the recent incident involving motorbikes in the open source field became a hot topic on Zhihu, with Chief Scientist personally responding.
Speaker Change #187: Secondly in comps from professional in DAP and authentic content.
Speaker Change #188: Who gathered a diverse range of real user experience and insight.
Speaker Change #189: Insights for example.
Speaker Change #190: The recent incident involving model back.
Speaker Change #190: In the open source still became a hot topic country of who.
Speaker Change #191: With chief scientist personally with funding.
Yuan Zhou: AI industry professionals, open source community operators and lawyers from both domestic and international communities participated in the discussion, generating widespread attention and dimension. The impact of these content is not ordinary. Yi Wei, Yolanda Liu, Daisy Chen, Dahai Li, Eileen Lin, Wang Han, Zhihuang Zhang, Yi Wei, Yi Wei, Yuan Zhou, Kewei Chen, Dachuan Sha, Dahai Li, Eileen Lin, Wang Han, Zhihuang Zhang, Yi Wei, Yuan Zhou, Kewei Chen, Dahai Li, Yi Wei, Yuan Zhou, Kewei Chen, Dahai, The influence generated by this content is not just ordinary traffic from curious onlookers.
Speaker Change #191: AI industry professionals open source community operators and lawyers from both domestic and international community participated in the discussion are generating widespread attention and dimension.
Speaker Change #192: So you're telling me a couple of people who don't use them.
Speaker Change #193: So probably I should.
Speaker Change #194: Joining an elite I'm wrong couldn't do the gym pushes you and people that Moshe.
Speaker Change #194: So you wont know tissue Cynthia maybe for Doug on diligence so interesting.
Speaker Change #194: Interesting.
The influence them.
Speaker Change #195: Generally to buy this content, it's not just ordinary traffic from curious.
Chris: I'll go Chris.
Yuan Zhou: But rather, it empowers more people to gain common knowledge behind the news through professional insights, providing a sense of fulfillment. We will continue to upgrade our operational system in line with our content fulfillment standards. The third is the community discussion atmosphere.
Chris: But while there its empowers more people to gain common knowledge behind them through professional insight.
Biding, our central fulfillment.
Speaker Change #197: Well, while continuing to upgrade our operational system in line with our content for film and spend it.
Speaker Change #198: Does that mean Joseph Tung.
Yuan Zhou: In the second quarter, we have begun to reorganize and integrate our operating system and community governance, including our user service teams. The goal is to improve the professional, friendly, and serious community atmosphere. We can see that the level of professionalism and rational content is constantly rising on many hot topics. These changes are in line with our expectations. And thirdly, but not least, the community culture and atmosphere. In the second quarter, we began integrating and streamlining our operational system and community governance.
Speaker Change #198: Well, it's hard to do in cases don't even don't you won't see them in the.
Speaker Change #199: So if you just bought.
Speaker Change #200: Your whole food 100 solar tons into shortly.
Speaker Change #200: It isn't a moody's.
Speaker Change #200: Yeah.
Speaker Change #201: Joining me on Saturday so differently.
Speaker Change #201: We tend to kind of throw some door when she said.
Speaker Change #201: Turning you assume to hoodies and know what it is.
Speaker Change #202: So is that something that you'd be around in a circle.
Speaker Change #202: Yes.
Speaker Change #202: Thirdly, but not a lot yeah.
Speaker Change #202: Community culture and the atmosphere.
Speaker Change #203: In the second quarter, we began integrating and streamlining our operational systems and community governance.
Yuan Zhou: Including the user service team to enhance our community culture of sincerity, expertise, and respect. For example, the proportion of professional in-depth and rational content in discussion on training topics is steadily increasing in line with our expectations. Thanks.
Including the user service team to enhance our community culture.
Speaker Change #203: So therapy expertise and with back for example, the proportion of professional and gap and the rationale content.
I'm training topic is sadly increasing in line with Albert expectation. Thanks. Thank you for the question.
Operator: Thank you for the question. Thank you. Our next question is from the line of Daisy Chen from Haitong International. Please go ahead.
Speaker Change #203: Okay.
Speaker Change #203: Yeah.
Speaker Change #204: Thank you.
Speaker Change #205: Our next question.
Speaker Change #206: It's from the lineup.
Haitong International: <unk> Chan from Haitong International. Please go ahead.
Operator: Good evening, Li Cheng. Thank you for accepting my question. My question is also about AI. It may involve two things. The first is to ask about our progress in AI applications. For example, last quarter, we also released the AI thinking function. Has there been any new product recently? And can you talk more about how these products reflect the community? For example, has there been any positive impact on the users of Alipay?
Speaker Change #208: Oh, that's a whole bunch of I should say.
Speaker Change #209: Well, that's the wrong, just forgotten because she's like Oh gosh, it down yet.
Speaker Change #210: Oh sure it's that want a walkman, but yeah, you know like I think that it was all kind of do you do with Mes Apple that you don't have to go corner. So it seemed that you can apply and there's lots of attention.
Speaker Change #211: For which I think is worthy of attention thing you said that you feel the need to help you with Jordan and Egypt.
Speaker Change #211:
Speaker Change #212: Kids and mens.
Daisy Chen: This is the first question. The second question may be... Because recently, Reddit and OpenAI have joint ventures, and they also have a contract with Google for artificial intelligence training data. On Google's side, they also pay about $60 million a year. I would like to ask if we have considered a similar business model to increase more income. I'll check with myself.
Speaker Change #212: Okay.
Speaker Change #213: How do you go in.
Speaker Change #214: Yeah, once Nicole I'm sure, but what we have.
Speaker Change #215: So you can know why aren't ready to go Oh man.
Speaker Change #215: Well, it's you know, it's all gone out yet so who called.
Speaker Change #216: I'm going to let Don Thank you Betsy.
Speaker Change #217: Uh huh they have Google.
Speaker Change #218: I felt radio just without that Guy who came on the show.
Speaker Change #219: Thank you ladies I want my Chipotle cardio and they let you go.
Speaker Change #219: Moshe I think that can do it like those shows.
Speaker Change #220: I checked with myself.
Daisy Chen: Do we have any new products, and can management elaborate more about how these products empower the community? And, for example, does management see any positive impact on user activity or behaviors? Following that, I think I have a second question. We noted that Radiohead announced a partnership with OpenAI to bring its Q&A content into OpenAI products, and they also reached out to Google to authorize data for some AI training. That would bring it to roughly 60 million US dollars per year in Radiohead's revenue.
Speaker Change #221: Good evening management, that's why I called my question I'm not sure I have two questions about the AI. That's most of what you I like to ask about the recent development of art, Yeah couple of applications such as <unk>.
Speaker Change #222: Uh Huh, Yeah, exactly Fisher, which was announced not corner a do we have any near par that Andrew can management.
Speaker Change #223: And that really is more about how the outboard powered community and Oh, that's nice to see any positive impact on the user behaviors.
Speaker Change #223: Finally that I think.
Speaker Change #224: Taking my question. We noted that there are radio and then I'll give a partnership with <unk> to bring.
Speaker Change #224: E Com has into Oh, that's right.
Speaker Change #225: They also reached a deal a week school go to Arthur I think they would have bought some external.
Speaker Change #225: Great.
Speaker Change #225: Roughly over eight.
Speaker Change #226: Slide 16.
Speaker Change #226: A year or two outside of Australia.
Speaker Change #227: My question was about where they.
Speaker Change #227: Are we talking about I've seen what I've.
Speaker Change #228: It's murdo to add more revenue to the book Thank you.
Yuan Zhou: So my question is whether we can see a similar business model to add more revenue to the group. Thank you. Thank you for your question. I will answer the first question now.
Speaker Change #229: Well excuse me the children, who knows someone with Opdivo and <unk>.
Yuan Zhou: At the end of March, we actually released the AI Search discovery version. This is actually a long-term test version, and we've actually seen some good test results.
She was the sandy probably to go up.
Speaker Change #230: Is it to see you go.
Thompson: Thompson with Scotiabank.
Speaker Change #232: Well I'm not sure kind of before the supposed to do and that's one that you'll just see social at all whether you don't Wanna.
Yuan Zhou: Simply put, users who use AI Search will become more active. We think this will be an important expansion in the use scenario. Thank you. Thanks for your two questions. This is Zhou Yuan, Zhihu's CEO. In the late March, sorry, I will just answer the first question.
Speaker Change #232: So the agenda opened obviously it was really just a.
Speaker Change #233: So don't.
Speaker Change #233: So you're only telling you something that you go for that.
I think thanks for your two questions are this is Joanne Zhu whose C O in the late March sorry, I will just.
Joanne Zhu: Answer the first question in late March we introduced a beta version of our AI search feature discovery named discovery. The initial results of the testing space has been very promising user utilizing our AI search become notably more access.
Yuan Zhou: In the late March, we introduced a beta version of our AI search feature, Discovery, named Discovery. The initial results of the testing phase have been very promising. Users utilizing our AI search become notably more active. We regard this as a positive indicator, demonstrating a significant expansion in our users' content consumption scenarios. Combining the past two months' user experience and feedback, we will launch a new version at the end of June, with a brand new product name.
Joanne Zhu: We regard this as a positive indicator demonstrating a significant expansion in our users' content consumption scenarios.
Joanne Zhu: So we know for sure.
Speaker Change #235: Oh, Yeah, Youll see all the Qing Gong.
Speaker Change #236: Well Mcdonald, our annuity switch where you go simba.
Speaker Change #237: He got a change in the timing.
Speaker Change #237: Yeah.
Speaker Change #238: So judy on the feedback and usage patterns from the past two months. We are excited to announce that we will launch a new version of AI search by the end of June This version well have a fresh product name.
Yuan Zhou: This version will have a fresh product name. This product will be launched at the PC-end. We think that the PC-end is an important production and efficiency scene, and it will have a good complementary relationship with the mobile-end. And it will initially be available on our PC platform.
Speaker Change #239: Cause I mean this was it was a she said listen as you well know.
Speaker Change #240: So you got to me all the same time. So he was hungry. So you don't do I'll tell you how long do you go west.
Speaker Change #241: And it will initially be available on our PC platform, we believe that our PC platform is a crucial scenario of productivity and efficiency perfectly complementing the mobile end.
Yuan Zhou: We believe that our PC platform is a crucial scenario of productivity and efficiency, perfectly complementing the mobile end. In the era of AI, the importance of user and content quality is far greater than quantity. The AI search function of Zhihu relies on high-quality and reliable content in the community to provide users with high-quality search results. In the AI era, the quality of user and content is far overweight the importance of quantity.
Speaker Change #242: So I ask.
Speaker Change #242: You'll have a cool.
Speaker Change #243: Oh sure Yeah, and tell you you just shoot them, but that's also one of them at a time you told us a switch when they go to their own cars.
Speaker Change #242: Neil.
Speaker Change #244: And they'll go away, you'll coach Hugo Doetsch and all the associated with it.
Speaker Change #245: In the AI era, the quality of user and content all smart overweight the importance of quantity.
Yuan Zhou: Our AI search function relies on the high quality and trustworthy content within our community, and it enables it to provide users with high quality search results. We think that AI Search is a fast and efficient tool-to-use scenario, while communities are a scenario where many people interact online. These two have a very strong complementary relationship.
Speaker Change #246: I search function relies on the high quality and trustworthy content within our community and it's enabled it to provide users with high quality search results.
Speaker Change #246: Oh no.
Speaker Change #247: CECO quite so it goes all the countries and counting.
Speaker Change #247: So so you got to put in place.
Speaker Change #248: Hold on those homes.
Speaker Change #248: Uh huh.
Speaker Change #248: So you know that's hunting. So that's also so that's so it's just some kind of a joke.
Yuan Zhou: So, in terms of products, the combination of AI Search and community ecology, we believe that AI search serves as an efficient tool-based scenario, while the community offers a multi-user online interaction environment. These two have strong complementary characteristics. Integrating AI search with our community ecosystem will be our central product development focus moving forward., There are indeed a lot of companies that want to buy and come to us. We haven't decided yet.
Speaker Change #249: Attention to Georgia.
Speaker Change #250: We believe that AI search served as efficient tool based scenario, while the community offers a multi user online interaction environment needs to have strong complementary characteristics.
Speaker Change #251: Integrating AI search with upper community ecosystem, well be our central productive element of focus moving forward.
Speaker Change #252: Oh, Glenn you know Thiago Lindsay.
Speaker Change #253: She often door.
Speaker Change #254: Soma Soma, yeah, that's all of them well.
Speaker Change #254: Well I mean.
Speaker Change #254: Sure.
Yuan Zhou: Thank you. And for the second question, indeed, many companies are interested in acquiring Corbett from us, but we haven't made a decision yet. Thank you. Thank you for the two questions. Thank you. Our next question is from the line of Ceci from CLSA. Please go ahead.
Speaker Change #255: And and for the second question. Indeed, many companies are interested in acquiring corvettes from us, but we haven't made a decision yet. Thank you. Thanks for the two questions.
Speaker Change #255: Thank you.
Speaker Change #256: Our next question is from the line of spicy from CLSA. Please go ahead.
Speaker Change #255: Yeah.
Operator: Thank you for your questions. I would like to ask you about the long-term growth of our business and how we compare our products to other educational institutions. I would like to ask you what the long-term growth outlook is for the vocational training business and how companies can differentiate themselves from other educational institutions. Thank you. I would like to start with your question. In the first quarter, our vocational training achieved a higher rate than the same industry.
Speaker Change #255: Uh huh.
Speaker Change #255: And that's the one we're going to sell.
Speaker Change #257: Just a woman she location, yeah way like turning today isn't changing.
Speaker Change #258: Women my problem, which hasn't been too hard to tell them to go to where they should go up a whole thing John what's our long term growth outlook for vocational training business and how could come when you differentiate yourself from other educational institution. Thank you.
Speaker Change #259: They tell me that you are doing.
Speaker Change #258: Yeah.
Speaker Change #258: Women.
Speaker Change #260: You shouldn't you in that process.
Speaker Change #261: Yeah, Okay I'll take this one.
Operator: This is mainly due to the self-sustaining business of the community, which has grown rapidly in this quarter. The AI and AGI soft tests mentioned in the open remarks just now, these skills-interested courses, Thank you for your questions, Vicky.
Speaker Change #262: Well, it's only minutes. We also told you yes, so to your point on the swing you took.
But you do on the cost will go down.
Speaker Change #262: Yes.
Speaker Change #264: So is it going to have the opening remarks, and then she loves.
So it's you know essentially the question Tom.
Speaker Change #263: So far the yocum.
Speaker Change #265: Oh, the Kobe closer not yet she central Colorado dealerships.
Yuan Zhou: This is Zhou Yuan, Zhihu's CEO. In the first quarter, our vocational training business continued to outperform the industry with a year-over-year growth rate of 35.9%. This is primarily driven by the robust growth of our community-enabled self-operated offerings. Notably, the AI, AGI, and software and other vocational skills and interest courses mentioned in the opening remarks not only received positive feedback but also demonstrated improved profitability. Thank you. Thank you. Thank you. Thank you.
Joe Andrew: Thank you for your question C. C. This is Joe Yes, that's true.
Speaker Change #267: In the first quarter, Alberta vocational training business continues to outperform the industry with a year over year growth rate of 35.9%.
Speaker Change #268: This is primarily driven by the robust growth all of our community in April self operated offering notably the AI a G. I N stopped aware and other vacation no skus and interest of course as mentioned in the opening remarks, not only receive parts.
Speaker Change #269: The feedback, but also demonstrated improved profitability.
Speaker Change #270: But so just to be Super ANTONE to go over the puts them on tissue.
Speaker Change #270: How long of a ship. So you still should go to don't meet them. So it does have some good targets.
Speaker Change #270: Potential, but it will take those shifts to the food itself.
Yuan Zhou: This process is guided by the needs of the users, that is, our potential students. Unlike other educational institutions, Zhixue Tang is built on the foundation of high-quality content and accumulated knowledge originating from our community, which naturally extends to supervised learning services. This process is primarily driven by the needs of our users, who are also potential learners in our vocational training business.
Speaker Change #271: Of course, I'm, not sure who doesn't want that shouldn't cause fetal truth.
Speaker Change #271: Yeah.
Speaker Change #272: Unlike other allocation all institutions Tricia town is built on a foundation of high quality content and accumulated knowledge, our amazing from our community.
Speaker Change #272: Which naturally extends to supervised learning services.
Speaker Change #273: And this process is primarily driven by the needs of our users who are also potential potential learners Oliver vocational training business.
Yuan Zhou: ,, Zhihu,,,, As we shared in last quarter, Zhihu's community mechanism continuously identifies and rapidly validates a user's demands in vocational sub-segments, providing us with a significant customer acquisition advantage. Community users and content creators effectively support our course development, resulting in high labor efficiency across existing offerings. In addition, the demand for students in the community has increased after the delivery of the service.
Speaker Change #274: Some of you doing Oh man things on block.
Speaker Change #275: It's a novel sisters of Firestone hook hires to the engine.
Speaker Change #275: So you shouldn't see if any of the future.
Speaker Change #276: Also note that given the Jalisco.
Speaker Change #276: So it's really it's all of those are longer.
Speaker Change #276: So the cushion that you have.
Speaker Change #277: So yoga sugar don't see central from Goldman Sachs.
Speaker Change #278: As we shared in last quarter Chu Hua, Zhu whose community Mccann is a continuously identify and they're rapidly that validates our users the mines in vocational sub segments, providing us with a significant.
Speaker Change #278: Customer acquisition of vantage.
Speaker Change #279: Community user and the concrete or effectively supports our course development, resulting in higher labor efficiency across existing offerings.
Speaker Change #279: So you saw the shift towards the $2.
Speaker Change #280: So let's also talk to I don't know if I listen to the Cisco Cool alright, So essentially of course individual young talents. The center L. T V. Two but you didn't sell it was on kofler telling you.
Yuan Zhou: Students can also return to the community, promote the launch of some subjects, 2-7-3-7 courses, and extend their own LTV. This has to a certain extent overcome the situation that the professional education industry is not enough to pay for this. Our community-based approach means that when learners' needs are satisfied, they can, in turn, contribute back to the community, fostering the development of subsequent programs and extending learners' lifetime value.
Speaker Change #280: Now if we go to.
Sure.
Speaker Change #280: Besides ever community based approach means that when learners needs are satisfied they can in turn contribute contribute back to the community fostering the development of development of a subsea subsea quint programs and the exec.
Speaker Change #280: Anting learner lifetime value. This helps them navigate the common challenge of low renewal rates in the vocational training industry.
Yuan Zhou: This helps mitigate the common challenge of low renewal rates in vocational training. Our future growth strategy for vocational training is also a line of growth. First, in the three major areas of the academic exam, the admission qualification exam, and skills and interests, we will continue to expand the sub-sections. The main focus is on higher certainty and better profitability. [inaudible] Our future growth strategy targets enhanced profitability. First of all, we will continue to expand into sub-segments across three main categories, academic improvements, career enhancements, and vocational skills and interests.
Speaker Change #281: Oh, well there too.
Speaker Change #281: Sure.
Speaker Change #282: So do I know you shouldn't you shouldn't do that but the you know for.
Speaker Change #282: So there's truly call ship total would still go closer to know since you just some thoughts on selling so well it puts our CFS yokota, especially like Twitter Giuliano how should she she's outside tradition can go.
Speaker Change #282: Got it.
Speaker Change #282: Essentially it could push it up with just a simple rule. So should the total yours, she's actually I should say for sure but frugal 12.
Speaker Change #282: Oh man Cushing opinion, though Jim would be the T cells.
And our future growth strategy target enhanced profitability.
Speaker Change #282: First of all we will continue to expand into sub segments across the three main categories of stomach improvements Korea enhancements and vocational Skus and interest.
Yuan Zhou: Our primary focus will remain on vocational SKUs and interests, which have higher certainty and better profit margins. We aim to enhance our learners' renewal and repurchase rate by leveraging Zhihu's unique advantages, thereby increasing our average GMB. Second, we will further improve the level of R&I that resources are invested in and improve the internal operation efficiency with AI-enabled. We hope to reach a break-even on the operating level as soon as possible.
Our primary focus well women on vocational skus and interests, which are with higher certainty and a better profit margin.
Speaker Change #282: We aim to enhance our learners renewal and the repurchase rate.
Speaker Change #282: By leveraging Zhu whose unique advantages, thereby increasing our average G M D.
Speaker Change #283: I Dunno tunable too soon so in total the how I was thinking.
Speaker Change #283: In the U S with them too soon.
Jim Cushing: So Jim how much Oh Gee information on the breakeven J D. You joked turnkey, though it seem to be all you see Egypt.
Yuan Zhou: This is in line with our overall new goal. Thank you. Second of all, we will further improve the ROI of our resources in investment and leverage AI to enhance internal operational efficiency. Our goal is to achieve operational breakeven as soon as possible. This is in line with Zhihu's overall top priority. Thanks. Next question, please. Thank you. The next question is from the line of Vicky Wei from Citi; please go ahead. Good evening, Management. Thank you for accepting my question. My question is about the membership business.
Speaker Change #283: Sure.
Speaker Change #283: Second of all well fall there improve the ROI of our resources and investment and the leverage AI to enhance internal operational efficiency.
Speaker Change #283: Our goal is to achieve an operational breakeven as soon as possible. This is in line with the truth with overall top priority.
Speaker Change #285: Next question.
Jim Cushing: Jim Please.
Jim Cushing: Thank you.
The next question is from the lineup Vicki Lee from Citi. Please go ahead.
Operator: I would like to ask how the company sees the competitive structure and business strategy of the membership business at this stage. Can you please share with us the recent situation of the payment of the actors' stories users and the situation of the business of copyright operation? Thanks, management, for taking my question. My question is related to the membership business.
Speaker Change #286: Glen is so hot.
Speaker Change #287: All of that Sheila well, the one too so glad you're well yeah, yeah, well, that's the one Goldman shouldn't deprive you'll have come directly and you would've been don't go through a year, where they're trying to no smoking gun is only I think that it does seem to be of course, they haven't pulled off I'll say that shouldn't call hold onto Union I'm gonna here, what's involved there.
Speaker Change #288: It's madness muscle taking my question. My question is related to the membership is that how should we think of membership. This is competition landscape and business strategy would you. Please share some color about different stories paying yourself behaviors. Now also other places such as IP operations update thank you.
Operator: How should we think of the membership business, the competition landscape, and business strategy? Would you please share some comments about yin-yang stories, paying user behaviors, and also other businesses such as IP operation business updates? Thank you. I am Wang Han. I will answer this question.,,,,,,,, Thank you, Vicky, for your question.
Speaker Change #289: Thank you.
Speaker Change #290: I wish of Ohio went up with as we went through it.
Speaker Change #290: Guaymi Jones with you George.
Speaker Change #290: Should we assume that all that even though we all make.
Speaker Change #291: College inside of your license without homes, you can do some geo premier sort of with one another for the pendulum.
Speaker Change #292: Social Macondo English and drill holes.
Speaker Change #293: Ill throw me look real hard around shirts Fisher floods, some inclement weather turns out this clinical trial.
Wang Han: This is Han, Zhihu's CFO. In terms of the competitive landscape, we remain the leader in this segment. While we have experienced competition from other big internet companies, as well as some fluctuation in content creator numbers and submissions, a significant number of content creators have returned to Zhihu, notably confirming that Zhihu provides the best environment for short story creators to thrive. [inaudible] And I would like to share two points about our strategic plan. First, there are many people in the market who know that Zhihu's story is very good. But there are also some people who will take Zhihu's story as a negative thing.
Thank you for your question. This is Hans you foods CFO and COO.
Speaker Change #294: In terms of the competitive landscape, we remain the leader in this segment as.
Well, we have experience computation from other big Internet companies as well as some saturation in Conakry eater numbers and a submission.
A significant number of content creators have a half return such a fool.
Hans: Notably confirming that jus, who provides the best environments for a short story creators to thrive.
Hans: Well each other as long as you all know something on that with you.
Hans: And I would like to share two points on that.
Speaker Change #296: Our strategic plan.
Speaker Change #297: Yeah sure so I'm trying to put our internal truckload.
Speaker Change #298: Especially yours Union not trip with a portion of it sounds like you got a couple of minutes or so I'm sure you'll push her daughter truthfully for sure and then once you have quite a builder C.
Wang Han: It seems that if you have a story, it is a standard for the content of the Zhihu community. On this matter, we would like to share our different experiences. You see, the Nobel Prize has a literary award, and the New York Times has a creative award.???? The problem is that if we separate non-story content and story content in the future, it will give a lot of different preferences to users. You can see that the best libraries in the world, the most advanced bookstores, are also of fiction and non-fiction categories.
C. J just trying on what Michelle stringent on this album and where are you on that.
Speaker Change #298: Sure.
No, there's a little bit uhm Jewish about though we're trying to intercept football visit that shouldn't much Neal.
Because it doesn't do sure.
Speaker Change #298: Jumped on board the FIC wasn't there wasn't even with some production gains is off to a quick okay.
Speaker Change #299: But I'm, telling you what would I call it to you.
Speaker Change #300: That's what it is the hottest who once it goes into food did you do show a fiction and nonfiction.
Wang Han: So the point is to split it up so that we can give you a better view. Therefore, our Yanyan Story app is a way for us to test our users. Yanyan's app achieved nearly 40% of MAUs in the first quarter.
Speaker Change #301: So Julia just sometimes from here generally.
Speaker Change #301: I don't know how long ago.
Speaker Change #302: So it wasn't a big English sheep Jewish woman Tushar.
Speaker Change #303: Oh sure.
Speaker Change #303: I mean, you're right.
Speaker Change #304: Did you do sometimes you don't.
Speaker Change #304: And they don't you don't.
Wang Han: , Zhihu's excellence in short-form story segments has been widely recognized. However, some view this negatively, as if the presence of stories on our platform dilutes the quality of our content library. So on this, we would like to share some insights. We believe that literature itself is undeniable, valuable content. After all, the Nobel Prize has a literature prize, and the New York Times has the fastest-selling list of novels. But we have concluded that by separating the display and distribution of story content from non-story content, we can provide a better experience for users with different preferences. The BAFTA library and bookstores globally also categorize fiction and nonfiction separately to enhance users' experiences.
Speaker Change #304: Craig's educate them do this virtually with us.
Speaker Change #304: It doesn't seem to be only one that'd be pushing all accomplished I can put it to you.
Speaker Change #305: Cheerfulness excellence in short form story segment has been widely recognized.
Speaker Change #306: However, some views this next totally as if that presents all stories on our platform.
Speaker Change #307: It's the quality of our content library.
Speaker Change #308: On this we would like to share. Some insights are we believe that literature itself. It's undeniable valuable content. After all the Nobel Prize has electrics or price and a New York times has the fastest seller list also novels, but we have conclude that.
Speaker Change #309: By separating the display and a distribution of story content from non sorry content, we can provide better experience for users with different preferences.
Speaker Change #309: The basket library, and bookstores globally also CAC write fiction and nonfiction separately to enhance user experience. Therefore.
Wang Han: Therefore, we launched the standalone Yanyan Story app. Yanyan Story achieved a nearly 40% quarter-over-quarter increase in MAU for Q1 2024, reaching millions of users. This segmentation allows us to optimize each domain for specific user preferences without affecting the experience of the other groups.
Speaker Change #309: We launch it as a stand alone game, yes, sorry app.
Speaker Change #310: Yeah, sorry, a cheap a nearly 40% quarter over quarter increase in Ami you for.
Speaker Change #311: Q1, 'twenty 'twenty four reaching millions of users.
Speaker Change #312: This segmentation allows us to optimize each domain for specific user preferences without affecting the experience of the other group of users.
Wang Han: Unknown Executive, Xueqing Zhang, Yiwen Zhang, Dachuan Sha, Dahai Li, Eileen Lin, Wang Han, Zhihu. All major video platforms have come to realize the true value of Zhihu's story. Many of the best channels have come to cooperate with us. The IP value of our story is also on the car. How should we understand the IP value of the whole story? I would also like to share with you my recent academic friendship. Thank you. The short film may be five years ahead of the long film, and the online film may be ahead of the short film.
Speaker Change #312: She was on target.
Speaker Change #313: Youll Triple what we got to know what you mean.
Speaker Change #314: It should also have a shovel, how many children, which isn't John to let's say go to us to be blunt your so called Ash meeting.
Andrew Fisher: It's Andrew from Dawson James.
Cool.
Speaker Change #316: I'd be glad to.
Speaker Change #317: Jonathan we don't control.
So who should I teach out.
Speaker Change #317: No.
Speaker Change #318: The message I want to just I am sure sure who did the older children.
Speaker Change #318: Hum.
Speaker Change #319: Quarter coalition, they don't show up.
Speaker Change #320: Upon himself to Shenzhen.
Speaker Change #320: I don't even tell people we get for Goldman.
Speaker Change #321: Oh, yes.
Speaker Change #322: The passion Ginger just let me just answer Josh.
Speaker Change #323: Susan Schuman with Jack I wanted to say.
Wang Han: [inaudible] I hope to share more and more Zhihu IP content with you in the future. [inaudible] Second of all, Zhihu's short story, Zhibi, has become the most popular premium revenue-sharing drama on the market. The premium short drama Zhibi, adapted from Zhihu's short story, has achieved excellent market results, becoming the highest revenue-sharing short drama to date. Its success has raised major video platforms' awareness of the value of Zhihu's short story copyright. Premium Channels are approaching us for collaboration, further highlighting the value of our IP. How should we understand short story IP's value?
Speaker Change #324: But I don't know that definitely I'm gonna do why opinion don't go for the holidays.
Speaker Change #324: And.
Speaker Change #325: Second of all <unk>.
Sure sorry, Juppe has become the most popular premium revenue sharing drama on the market the premiums sure drama.
Speaker Change #326: Adapted from Zhu who is the short story has achieved excellent markets without becoming the highest revenue sharing short run out to date. Its success has raised a major redo platform awareness is awareness of the value of Sherwood short story copyrights.
Speaker Change #326: Premium channels are approaching us for collaboration further allocating the value of our I T.
Speaker Change #327: How should we understand I'm sure sorry, I P value.
Wang Han: So, in our recent discussion with the academic community, we shared that short stories may represent the most advanced format of content evolution as we precisely and quickly showcase the latest authentic and value trends. Short stories may be as much as five years ahead of novels, which in turn are five years ahead of film and television production.
In our wisdom to discussion with the academic community. The shares that shot story may represent the most of that format of content evolution as the precisely and quickly showcase the latest authentic and value.
Speaker Change #327: Trends.
Speaker Change #328: Sure sorry, maybe as much as five years ahead of novel novels, which in turn are five years ahead of fume and TV production, we look forward to sharing more truthful IP content success story with all of you in the future. Thank you for your question.
Operator: We look forward to sharing more Zhihu IP content success stories with all of you in the future. Thank you for your questions. Thank you. The next question is from the line of Thomas Chong from Jeffries. Please go ahead.
Speaker Change #328: Yeah.
Speaker Change #329: Thank you.
Speaker Change #329: Okay.
Speaker Change #330: The next question is from the line of Thomas Chong from Jefferies. Please go ahead.
Operator: ,,, Thanks for taking my question. My question is about online marketing strategies. So, I want to ask about online marketing, exactly what our look is like, and our long-term strategy. Thank you for your questions. I am Wang Han. Like we said in the last session, in order to gain credibility, Xinhu sacrificed some short-term low-quality income as a price.
Speaker Change #331: Oh, that's a boddington Jojo why don't you want I wouldn't disappoint me with.
Speaker Change #331: Uh huh.
Speaker Change #333: Just on one kind of woman in South Florida.
Speaker Change #333: Uh huh.
Sandy: Thank you Sandy.
Speaker Change #335: Thanks management for taking my question. My question was about our marquee franchises. So I want to ask about online marketing and that in your outlook.
Maam: Maam you may begin.
Speaker Change #337: Okay, and you don't hear well sure it'll have whenever that happens.
Speaker Change #338: So when we're trying to do with what the young.
Speaker Change #338: Felicia.
Speaker Change #340: He shouldn't you shouldn't do it she did it I'm Troy data to them.
Wang Han: So we took the initiative to promote business content and special mechanisms. [inaudible] So in the next few quarters of this year, we will be the rich farmers of AI and digital infrastructure. Thank you for your question.
Speaker Change #339: Without using the treaty, it's just that simple.
Speaker Change #341: Actually it wasn't material. So it doesn't you just because you know it can be done, especially something that children are saying you're allergic to.
Speaker Change #342: So your junior and know what to do what you do and what would you say.
Sure.
Speaker Change #342: If you're looking at.
Wang Han: This is Wang Han, Zhihu's CFO. As we mentioned in last quarter, Zhihu is committed to enhancing the community's trustworthiness. Even at the cost of satisfying some short-term, low-quality revenue, we proactively refine our commercial content and distribution mechanism, resulting in an expected CCS decrease. However, our brand advertising increased by 40% year-over-year during the non-peak season, and performance advertising delivered quarter-over-quarter growth compared to Q4-23.
Speaker Change #343: Thank you for your question. This is a one hand, Zhu who's the CFO as.
Speaker Change #343: As we mentioned in last quarter Chu, who is committed to enhancing the communities trusted worsen this even at the cost of satisfying some short term low quality revenue as such we proactively refine our commercial content and distribution in Canada.
Speaker Change #343: Resulting in.
Speaker Change #344: And expect that Ccs decrease however, our brand advertising increased by 40% year over year during the non peaks isn't and performance advertising delivered quarter over quarter growth compared to Q4 'twenty three week for their breath off 24, we will focus on improving performance advertising.
Wang Han: For the rest of 24, we will focus on improving performance advertising through enhancing AI and data infrastructure. [inaudible] Unknown Executive, Xueqing Zhang, Yiwen Zhang, Dachuan Sha, Dahai Li, Eileen Lin, Wang Han, Zhihu. They think Zhihu is the only company that can make their technical customers professional enough. In the long term, we believe that Zhihu's commercial potential should be assessed with Zhihu's brand premium instead of only focusing on in-platform traffic. Let's take an example.
Speaker Change #345: Rising through enhancing AI and data infrastructure.
Speaker Change #345: Well.
Speaker Change #346: Well remember that in Egypt through who has that shown it on this felicia.
Speaker Change #347: If I can go through since you have done and they didn't know or something that'll come up sure who noncore parts of travel that actually pay each other chips.
Speaker Change #347: Sure.
Speaker Change #347: During the fourth century cleaning up as I said short haul long time, they just aren't useful again.
Speaker Change #348: It shows that your whole medical pacifico without some quota cranial syndrome kidney Chivas Jameson.
Speaker Change #348: Okay.
Speaker Change #348: Sort of who's doing what we're doing.
Speaker Change #348: So just trying to do that.
Speaker Change #349: And long term, where the leaves that touch you, whose commercial potential should be assessed with few who spread premiums instead of only focusing on any platform traffic, let's take an example, many emerging domestic three sea Tac.
Wang Han: Many emerging domestic 3C tech brands showcase their R&D technologies and principles on Zhihu. They believe that only on Zhihu can they popularize their tech in a sufficiently professional and in-depth way and establish market awareness for new product categories. They even integrate and upgrade their products based on Zhihu's data and user feedback.
Speaker Change #350: Friends showcase your R&D technologies and the principles untruthful. They believe that's only on Zhou who can be popularized the attack sufficiently professional and aimed at.
Speaker Change #351: In fact approach and establish market awareness for new product category.
Speaker Change #351: The either integrate and operate them there are product based on Zhu whose data and user feedback.
Speaker Change #352: And so I don't know the outcome was hindered at all I'm, assuming I'll talk from the time the engineer shipyard later one.
Wang Han: [inaudible], You may often see some content on the Internet, such as Zhihu Gaozai or Zhihu Davi, as the title of the article, which proves that the word Zhihu has a positive connotation and a negative connotation in relation to the content of the public Internet. [inaudible] In the consumer industry, most of the products on the market are actually quite similar. The main difference is the level of investment in advertising and promotion.
Speaker Change #353: He's going to die, who pretty much pulled off of tumor type.
Speaker Change #354: Local was a true first true teenage drinking water British homecare not put on another floor should we should think about that.
Speaker Change #355: One of them or they don't come along as you knew Joe Zhou who will go the Mohawk Sumitomo put Russia through what are some of the most with minimum ability to tell them in towards somebody you don't want them on some of the legal youll tune their E mail based food and I'm sure, we'll make mention to the Australians right you see young people, who that'd be that way.
Speaker Change #356: Your daughter bags and piping jumping through their journey.
Speaker Change #356: Okay.
Speaker Change #357: In the consumer industry most of products on the market are actually quite similar.
Speaker Change #358: The difference is as the level of investment in advertising and promotion. However product that you can earn a solid reputation among professional users within jugal and community likely have a genuine competitive ash.
Wang Han: However, products that can earn a solid reputation among professional users within the Zhuhu community likely have a genuine competitive edge. For example, you might have phrases like Zhihu High Phrase followed by the rest of the title, or Zhihu KL plus the rest of the title in many articles. These validate the trust, premium, and endorsement value of Zhihu's content compared to that of content from other internet platforms. We are quite confident that in the commercial domain, Zhihu has great potential to further enhance a brand's credibility.
Speaker Change #359: I have singing phrases like Duke who high res followed by a wrap up the title or cheerful kill L. Plus the rest of the title in in many articles.
Speaker Change #359: This.
Speaker Change #360: Validates the trust premium and the endorsement value of Zhu whose content compared to that of content from other internet software.
Speaker Change #360: We are quite confident that and commercial area, a few who has great potential to further enhance brand credibility.
Operator: Thank you for questioning me. 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. Thank you all once again for joining us today. If you have any further questions, please contact our IR team directly or PSN Financial Communications. Thank you. Thank you. This conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
Thank you for question.
Speaker Change #361: Thank you.
Speaker Change #362: That concludes today's question and answer session.
Operator: Transcribed by https://otter.ai, [inaudible] [inaudible] Unknown Executive, Xueqing Zhang, Yi Wei, Yi Lin, Wang Han, Dachuan Sha, Dahai Li, Yi Lin, Wang Han, Zhihu Unknown Executive, Xueqing Zhang, Yi Wei, Yi Lin, Wang Han, Dachuan Sha, Dahai Li, Yi Lin, Wang Han, Zhihu
Speaker Change #363: At this time.
Speaker Change #363: I will turn the conference back to Yolanda for any additional or closing remarks.
Yolanda: Thank you operator, thank you all once again for joining US today. If you have any further questions. Please contact our IR team directly or if yes and financial communications. Thank you.
Yolanda: Thank you.
Yolanda: Yeah.
Speaker Change #364: This conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Speaker Change #364: Yeah.
Speaker Change #364: [music].
Speaker Change #364: Yes.
Speaker Change #364: [music].