Zhihu Inc. (NYSE:ZH) Q3 2022 Earnings Call Transcript

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Operator: Thank you. And our next question today comes from Yiwen Zhang with China Renaissance. Please go ahead

Yiwen Zhang: So my question is regarding our location. Thank you.

Zhou Yuan: Thank you very much. The answer from CEO, Mr. Zhou Yuan. So for our vocational training business for this year we had already registered multiple times of growth for three consecutive quarters. And for this quarter particularly the contribution from vocational training to total revenue is expanding to over 8% and will continue to increase in the coming days. And our vocational training curriculums center around our target users demand scenarios i.e., academic improvement and career promotion and we are expanding our paying curriculum offerings in those two specific areas for our users. We provide a diversity of curriculums to matter €“ to cater for the needs for the users to study and improve their skills. To be more specific the graduate school examination related program saw a record high enrollment numbers, and our users are really happy and give us some positive feedbacks for our high quality contents.

And exam related for instance, CSA or CPA as well as some skills training for instance, new media operation, writing courses as well as video editing are also main contributors and key contributors to our revenues. And in a third quarter, our paying user number increased by nearly 300% year-over-year and with a quarter-over-quarter 40%, but still right now the paying users are relatively small and still has a great, great room for further growth. And we will keep diversifying and enriching our training programs to cater for their needs and to give them better content for their demands. Another point I want to make is to expand our vocational training business through M&A activities. In October this year, we had acquired a teacher qualification training company so as to make our offerings more comprehensive.

And also thanks to the great branding value and word of mouth and reputation, we are able to attract more people in this area and to be supplementary in this area so as to attract users. And we are also relying on our brand in Zhihu and our technology advantages to empower the inquiry companies. For instance, as of this quarter, the revenue of our inquiry company had registered a 60% increase with ever growing paying users. That’s about our future plan. While actually our vocational training business emerged from our community user’s demand and in 2019, we just started to launch our education training part of our business, make our first trials in vocational training. And over the past three years, we had roughly develop a business presence, either by self operating or acquisition or mergers or cooperation in operating, of the businesses.

And as we keep expanding it, we believe that the successful business model will gradually been expand and be able to provide premium content and drive commercialization for users across board. And we had made quite a lot of effort in launching products in this area. For instance, in June this year, the learning zone went live. And on this learning zone, we launched multiple popular programs for instance, the AI. And we will also launch a special platform for training in December this year which is an app called Zhixuetang. The official version will be released soon. And this will help us to cover the full category of training curriculum for the future development. So overall speaking, I think relying on our technology advantages, we will keep optimizing and transforming the content, and also to increase de-commercialization efficiency of vocational training for our business.

Overall speaking, vocational training will serve as an important second curve for our business revenue. We believe that this will continue to benefit the overall sector and also benefit our company Zhihu. Thank you.

Operator: Thank you. And ladies and gentlemen, this concludes our question-and-answer session. At this time, I will turn the conference back to Jingjing for any additional or closing remarks.

Jingjing Du: Thank you all once again for joining us today. If you have any further questions, please contact our IR team directly or TPG Investment relationship. Thank you. Bye.

Operator: Ladies and gentlemen, this concludes today’s conference call. We thank you all for attending today’s presentation. You may now disconnect your lines and have a wonderful day.

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