Zhihu Clocks 96% Revenue Growth In Q4 Backed By Content-Commerce Solutions, Paid Membership Businesses

Zhihu Inc ZH reported fourth-quarter FY21 revenue growth of 96.1% year-on-year to $159.9 million.
Segments: Zhihu's Advertising revenue increased 18.4% Y/Y to $59.3 million.
Paid membership revenue expanded 100% Y/Y to $32.8 million. Content-commerce solutions revenue rose 380.1% Y/Y to $57.6 million.
Drivers: Average monthly active users (MAUs) grew 36.4% Y/Y to 103.3 million. Average monthly paying members rose 102% Y/Y to 6.1 million.
Margin: The gross margin contracted by 1,700 bps to 47.1% as the costs surged 188.9% Y/Y.
Loss per ADS of $(0.10) missed the consensus loss of $(0.08).
Zhihu held $1.2 billion in cash and equivalents.
Wei Sun, CFO, added, "During the fourth quarter of 2021, our content-commerce solutions and paid membership businesses continued to grow rapidly, expanding 380.2% and 100.0%, respectively, in terms of revenue on a year-over-year basis, and collectively contributed 56.5% of our total revenue in the quarter. At the same time, despite headwinds faced by the general advertising sector, our advertising business grew by 18.4% during the quarter on a year-over-year basis."
Outlook: Zhihu sees Q1 FY22 total revenues of RMB720 million - RMB740 million.
Price Action: ZH shares traded lower by 11.8% at $1.86 in the premarket session on the last check Monday.

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