Zhihu Clocks 144% Revenue Growth In Q2, Issues Solid Q3 Outlook

Online content community Zhihu Inc ZH reported second-quarter FY21 revenue growth of 144.2% year-on-year to $98.9 million, beating the analyst consensus of $97.14 million.
Expanding user scale and continued development of average revenue per user drove the numbers.
Microsoft Corp's MSFT Q4 Productivity and business processes revenue of $14.7 billion was led by growth in Dynamics of 33% and LinkedIn up 46%, including marketing revenue up 97% year over year.
Segments: Zhihu's Advertising revenue increased 48.4% Y/Y to $38.5 million.
Paid membership revenue expanded 123.5% Y/Y to $24.0 million.
Content-commerce solutions revenue rose over 16x to $32.1 million. Other revenue grew over 2x to $4.3 million.
Drivers: Average monthly active users (MAUs) grew 46.2% Y/Y to 94.3 million.
Average monthly paying members rose 121.1% Y/Y to 4.7 million.
The content-centric monetization yielded 144% Y/Y growth in revenue.
Margin: The gross margin expanded by 1,060 bps to 59%.
Loss per ADS of $(0.08) beat the analyst consensus loss of $(0.11).
Zhihu held $1.2 billion in cash and equivalents.
Outlook: Zhihu sees Q3 revenue of $126.2 million - $127.0 million, above the analyst consensus of $125.61 million.
Price Action: ZH shares closed lower by 5.58% at $9.30 on Friday.

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