Zhihu Inc. (NYSE: ZH), a leading online content community platform in China, has released its financial results for the third quarter of 2024, showcasing remarkable improvements in profitability and operational efficiency. The company marked its highest gross profit margin since going public at 63.9% and slashed its net loss by a staggering 96.8% compared to the same period last year.
Key Takeaways
- Zhihu Inc. achieved a significant reduction in total costs and operating expenses, down by 35.6%.
- The company's adjusted net loss narrowed considerably to RMB13.1 million from RMB225.3 million in Q3 2023.
- Despite a decrease in marketing services revenue by 33% year-over-year, paid membership revenue surged to RMB469.4 million.
- Zhihu's user base showed robust growth, with Monthly Active Users rebounding to 81.1 million.
Company Outlook
- Zhihu Inc. aims to reach breakeven by Q4 2024 and is focused on reducing annual losses.
- The company is committed to enhancing the core user experience and strengthening community trustworthiness.
- Innovation across business segments remains a priority for future growth.
Bearish Highlights
- The company experienced a decline in marketing services revenue, which fell to RMB266.6 million.
Bullish Highlights
- Paid membership revenue saw a significant increase, with 16.5 million subscribing members contributing to RMB469.4 million in revenue.
- The gross profit margin reached a record high since the company's listing.
Misses
- There were no specific misses mentioned in the earnings call transcript summary provided.
Q&A Highlights
- CFO Wang Han emphasized the importance of a healthy community and sustainable business ecosystem for long-term success.
- CEO Zhou Yuan likened community work to farming, suggesting the current efforts would yield improvements in two years.
- Wang Han also mentioned the focus on achieving breakeven within the vocational training business and its integration with the Zhihu community.
Zhihu Inc. has made significant strides in Q3 2024, particularly in operational efficiency and cost reduction. The company's strong financial performance is reflected in its highest-ever gross profit margin and a dramatic reduction in net losses. While marketing services revenue has declined, the growth in paid membership revenue and active user engagement indicates a positive trend. Zhihu's leadership is optimistic about the future, projecting a breakeven point in the next quarter and continuing to innovate its business segments. The company's dedication to its community and sustainable ecosystem is at the core of its strategy, as highlighted by the CEO and CFO.
Full transcript - Zhihu Inc ADR (NYSE:ZH) Q3 2024:
Conference Operator: Good morning, ladies and gentlemen. Thank you for standing by, and welcome to the Chuhu Inc. Third Quarter 2024 Financial Results Conference Call.
At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Today's conference call is being recorded. And at this time, I would like to turn the conference over to Ms. Yolanda Lau, Director of Investor Relations.
Please go ahead, ma'am.
Yolanda Lau, Director of Investor Relations, Zhihu Inc.: Thank you, operator. Hello, everyone. Welcome to Juhu's Q3 2024 financial results conference call. Senior management 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 Litigation Reform Act of 1995. These statements involve inherent risks and uncertainties.
As such, actual results may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties is included in our public filings with the U. S. SEC and 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 matters we will discuss today will include both GAAP and non GAAP financial measures for a consideration purpose only. For a definition of non GAAP financial measures and reconciliation of GAAP to non GAAP financial results, please see the earnings release issued earlier today. In addition, a webcast replay of this conference call will be available on our website at ir.juhu.com. I will now turn the call over to Mr. Wang Han, CFO of Juhu.
Han, please go ahead.
Wang Han, Chief Financial Officer, Zhihu Inc.: Thank you, Linda. Hello, everyone. Thank you for joining Zhihu's Q3 20 4 earnings call. I'm pleased to deliver today's opening remarks on behalf of Mr. Zhou Yan, Founder, Chairman and CEO of Zhihu.
We delivered solid 3rd quarter results across key financial metrics, thanks to our continued focus on efficiency enhancement and cost reduction. Gross profit margin improved by over 10 percentage points year over year, reaching 63.9 percent, the highest level since our listing. Total (EPA:TTEF) cost and operating expenses decreased by more than 35.6%, 3.5% respectively, leading to a net loss of RMB9 1,000,000, down 96.8 percent year over year. Our efforts to optimize the community ecosystem are also yielding positive results. Group user engagement in the 3rd quarter propelled a sequential increase in our user base.
What's more, we further enhanced What's more, we further enhanced content creators' experience across our community, fostering a renewed sense of confidence in driving more active contribution. This in turn has cultivated a professional insightful community atmosphere in view with the balanced rational optimism. Furthermore, in line with our commitment to exploring AI applications, we launched the professional search feature for Jiwu Zhi at the end of October. This initiative marks a significant step in our differentiated approach to enhancing product capabilities and elevating the user experience, leveraging our massive pool of high quality data and content. I'll dive deeper into Jehujira later in the call.
Now let me focus on users and content. This quarter marked the 3rd consecutive period of our refined user strategy. We achieved sustained improvements across key user metrics alongside a sequential recovery in user growth. NAU for Q3 rebounded quarter over quarter to 81,100,000, despite our continued reduction in community related promotional spending. Overall user engagement across your community also increased sequentially with core user retention showing significant year over year growth.
Additionally, daily active user time spent growth nearly 20% year over year and maintained its upward trend quarter over quarter. As we continue to elevate the experience for content creators and core users, we saw a notable rise in both scale and engagement of high tier content creators, with the number of income generating content creators increasing by over 25% year over year. Since the beginning of this year, we have driven our focus on cultivating new high tiered content creators across diverse fields. By offering advanced creative tools and signature initiatives unique to Zuhu, we foster their growth and enrich Zuhu library with the steady influence of diverse authentic and professional content. Throughout the Q3, Zuhu delivered highly differentiated, rewarding high quality content to Internet users nationwide through in-depth professional discussions on major societal events.
For example, the 2014 Zhehoo Science season launched in tandem with Nobel Prize announcement sparked wealth of contributions across the Weibo (NASDAQ:WB) community, including productions, insights and educational content. Among this content, discussions on 24 Nobel Prize in physics alone generated over 1,500,000 interactions within the Zuhu community. This dynamic engagement earned Zuhu the reputation of being the 2nd home of the Nobel Prize. As of the end of Q3, Quhu had announced a cumulative content volume of 854,500,000 pieces, representing a year over year growth of 14.9%. This includes 600 and 41,400,000 Q and A entries, an increase of 11.8% compared to the same period last year.
The Jiho community now boasts a total of 77,000,000 content creators, marking an 11.6% year over year rise. As the experience of both content creators and users have continued to improve, the Juhu community distinguished by professional discourse and rational optimism has grown stronger. This progress is underscored by a steady decline in negative feedback from user and a normal increase in positive interactions. Average daily engagement per DAU has consistently arrived quarter over quarter with the monthly average of upload surging by over 25% year over year in the quarter. Next (LON:NXT), I would like to share some details about the progress we have made with Zhihu Zhida.
We have capitalized on Zhihu Jada's extensive content library and robust source tracking capabilities to achieve rapid traffic growth and earn an excellent reputation across the industry. According to newly released data from SimilarWeb (NYSE:SMWB), Zhihu Jada's traffic reached 4,700,000 in September, a remarkable increase over 180% compared to August. In B Finance AI product rankings for September, Juhu Jira ranked 3rd among Chinese product in terms of sequential page view growth. Additionally, it claims the 2nd position on the domestic web growth leaderboard, gearing a spot in the top 3 for 2 consecutive months. In October, we introduced professional search for Zhihu Zhida, a new feature meticulously crafted to meet the evolving needs of a wide range of users engaging academic research and professional work.
We integrated over 50,000,000 Chinese and English academic articles from specialized content sources such as Wikipedia and Zhihu for enhancing Zhihu Chida's ability to fulfill users' search inquiries with high quality content. Professional search also supports file upload and comprehensive document parsing, providing tools like single oracle in-depth reading and source specific Q and A to address users' academic research and professional needs. Moving on to our business performance by segment. Our paid membership business continued to demonstrate steady growth momentum in the 3rd quarter. The number of subscribing members rose by 11.5% year over year to 16,500,000, while the segment delivered revenue of RMB 469,400,000, increasing its revenue contribution to 54%.
In late August, content creators on Zhuhu Yan's story produced a series of derivative works inspired by Journey to the West, a classic Chinese tale that also formed the core of season's most popular domestically produced 3A games. These works presented a more reinterpretation of the classic saga. Also, building on game's momentum, we launched Journey to the West special series featuring multiple stories that compare Asian and modern perspective to highlight the classic story's timeless lore, a release that has resonated strongly with our users. Turning to marketing services. In the 3rd quarter, revenue from our marketing services was RMB266 point 6 million, a 33% decline year over year.
Although brand advertising and CCS decreased compared to last year, we encouraged our key clients growing recognition of Juhu's brand and the high value they attribute to our users. This progress validates our commitment to optimizing our commercial ecosystem and enhancing the Zhuhu's community's trustworthiness to the strong and viable growth path for our marketing services. According to the iResearch report released in late October, Xhu has established itself as the most trusted content community for consumer decision making. Furthermore, the survey findings indicated that nearly 50% of users supported making purchases after reading product presentations on Tripul. In this year's several 11 events, we also established the Juhu reviewers jewelry in their recommended Goodies 100 campaign, providing consumers with professional, authentic and timely answers to their purchasing platform.
This quarter, brand advertising delivered a solid year over year performance in IDN 3C and e sports. Health clients in the automotive and fast moving consumer goods sectors also ramped up their advertising spending on Zhihu. International FMCG brands in particularly noted that Zhihu's high quality user base aligns well with their target demographics. Consequently, despite tighter budgets across the broader advertising network, we are up to increase our allocations on Zhihu. In addition, our ongoing improvement in data analysis and operational efficiency have generated positive returns on investment for this premium plan.
For our CCS business, after a rigorous crackdown on low quality content, we have gradually integrated high tier content creators from Juhu community into our CCS program, driving a steady increase in premium content contributions. The 2nd quarter customer satisfaction and repurchase rates have significantly improved compared to the beginning of the year, while content creators has been benefited from increased earnings. Next, our vocational training business. We continue to streamline this segment structure and strategy this quarter. We transitioned from a wide array of niche offerings to a focused selection of high performing categories where we hold a competitive edge.
While overall revenue declined by 27.4 percent year over year, mainly due to our streamlined acquired business, our self operated courses demonstrated strong year over year growth, along with notable improvements in profitability sequentially. Our self operated business closely connected to our community continues to perform strongly with increasing predictability and profitability. Programs in production and film post production remain extremely popular among learners reflecting long life cycle potential. What's more, our business structure optimization in the 3rd quarter effectively enhanced overall ROI, allowing us to strategically allocate resources toward high efficiency program categories, thereby supporting greater operational stability. Moving forward, we are focused on narrowing this business segment's losses and aim to achieve breakeven as soon as possible.
In summary, the Q3 highlighted our unwavering commitment to strategic refinement and execution, delivering financial results that once again exceeded our expectations. Commercial and operational efficiencies has been critical metrics during our operations, empowering us to optimize our user company's resources. Looking ahead, we will remain dedicated to enhancing the user experience and strengthening the trustworthiness of our community. We're strategically refining our operational model to unlock the full potential of Juhu's brand and high value user base. With robust fundamentals and a steady focus on achieving profitable growth, we are confident of creating value and delivering meaningful returns for our shareholders.
This concludes Mr. Zhou Yun's remarks. Now, I will review the details of our Q3 financials. For a complete overview of our Q3 2024 results, please refer to our press release issued earlier today. Our commitment to enhancing operational efficiency through disciplined cost control drove a significant margin expansion in the quarter.
These efforts also led to narrowing losses propelling us even closer to profitability, which achieved our lowest quality loss since our U. S. FGO this quarter, demonstrating our momentum in building a more resilient business and sustainable premium value. Our marketing services revenue for quarter was RMB 256,600,000 compared with RMB383,000,000 in the same period of 2023. This decline is largely a result of our strategic ongoing optimization of service offering with a focus on margin improvement.
Paid membership revenue for the Q3 was RMB459,400,000, slightly decreased from 466,800,000 in the same period of last year. Notably, our average number of monthly subscribing members sustained its growth trajectory both year over year and sequentially. This progress was propelled by the growing quality of Jiwu's premium offerings, which are consistently attracting new paid members from both within and beyond the Jiwu community. Additional training revenue for the quarter was RMB 105,100,000, compared with RMB 144.8 1,000,000 in the same period of 2023. This decrease was primarily due to our strategic refinement of acquiredness with a focus on prioritizing the faster growing staff operated program.
Our gross profit for Q3 was RMB540.1 million compared with RMB548.5 million in the same period of 29th June. Efficiency, our gross margin also further improved year over year, reaching 63.9 percent record high. Our total operating expenses for the quarter were RMB 624.5 1,000,000,000, a 30.5 percent decrease from RMB898.6 million in the same period last year. Selling and marketing expenses decreased by 27.4 percent to RMB388, down from RMB534.3 million in the same period of 1.3. The reduction was primarily driven by more disciplined promotional spending and a decrease in personnel related expenses.
R and D expenses per quarter decreased by 28.2 percent to RMB179.7 million, down from RMB249.7 million in the same period of 2023. This reduction was primarily attributable to more efficient spending on technological innovation. G and A expenses decreased by 50.1 percent to RMB 57,200,000 from RMB114,600,000 in the same period of 2023. Decrease was primarily attributable to lower share based composition expenses. Consequently, our GAAP net loss for the 3rd quarter narrowed significantly, decreasing by 90 6.8% year over year.
Our adjusted net loss on a non GAAP basis was RMB13,100,000, compared with RMB225,300,000 in the same period of 2023. Adjusted net loss margin decreased more than 20 percentage points year over year to 1.5% in the 3rd quarter. As of September 30, 2024, the company has passed in cash equivalents, term deposit, restricted cash and short term investment of RMB5 1,000,000,000 compared with RMB5.5 billion as of the December 2018. From our Hong Kong IPO until September 13, 2024, we had repurchased 31,100,000 plus 8 ordinary shares at an aggregate price of US56.5 million dollars from the open market and canceled stock shares. We also repurchased a total of 10,100,000 plus 8 ordinary shares at an aggregate price of US16.5 million dollars to be equalized upon investing of restricted shares in the future.
In addition, we had repurchased another 33,000,000 plus A ordinary shares at an aggregate price of 38,500,000 via Tinder offer, which were completed on November 8, 104. In total, the company has purchased 74,200,000 quasi ordinary shares for a total price of US121.5 million dollars As we approach the end of 2024, we'll continue to elevate content quality and enhance the experiences of both users and creators across JUGO community by harnessing the power of innovation and technology. We remain committed to optimizing resource allocation, advancing towards profitability and unlocking the potential of Juho's brand and high value user base. By building a more dynamic platform, we further foster our user engagement and support content creator success, firming our position as a leader in the knowledge sharing and community value. This concludes my prepared remarks on our financial performance for this quarter.
Let's turn the call over to the operator for the Q and A session.
Conference Operator: Thank you. We will now begin the question and answer session. And the first question will come from Zhuqing Zhang with CICC. Please go ahead.
Zhuqing Zhang, Analyst, CICC: Thanks management for taking my question. Congratulations on the further reducing loss in the Q3. And could management share more color on the commitment about achieving a breakeven in the Q1? And what's your outlook for 2025? What will be the main drivers?
Thank you.
Yolanda Lau, Director of Investor Relations, Zhihu Inc.: Thank you for your question, Shijin. This is from Han, Zuhu, CFO. We have been firmly focused on our Q4 breakeven target this year. Achieving a significant reduction in losses in both Q2 and Q3 have further boosted our confidence in reaching this goal. After reducing adjusted net loss by nearly 80% year over year in Q2, we further decreased the adjusted net loss by 70% quarter over quarter and 94% year over year for Q3.
Our adjusted net margin in Q3 of last year was 22%, while this year, it is only 1.5%. So the path to the breakeven in Q4 now is quite clear. The 2 strategic priorities for 2025 are quite clear. First of all, from a financial perspective, our primary objective is to sustainably reduce annual losses and potentially approach profitability on a full year basis. On the operational front, our focus is to enhance core users' experience and engagement level and strengthen Zhihu's content reputation and trustworthiness across all platforms, Creating an environment that encourages our most professional users to actively participate and contribute remains the foundation of Juhu's identity.
For our other business models, we will continue to innovate centered around Zuhu community's professionalism and trustworthiness. This approach will comprehensively leverage Zuhu's unique advantages. So to be more specific, in terms of our marketing services, we will continue to reduce low quality and untrusted commercial content. We aim to innovate and make improvements through business model refinements and data infrastructure updates, building Juhu's commercialization on a solid and trustworthy foundation. We are working to achieve breakeven within the vocational training business while strengthening its integration and interaction with Zuho community.
This will establish a faster feedback mechanism for user demands and accelerate service capability development. For our pay membership business, we will also leverage community content and user feedback to create a better product mechanism for this business and to further enhance yen selection members' renewal rates and consequently increasing the lifetime value LTV of our pay members. So in summary, our fundamental driver here is still a healthy, prosperous community along with a sustainable business ecosystem that can fully integrate and interact with the community itself. Thank you for your question.
Conference Operator: The next question will come from Daisy Chen with Haitong International. Please go ahead.
Daisy Chen, Analyst, Haitong International: My question is about the losers and the community. This quarter, we noted that the Zuhu's MAU has improved and stopped the sequential decline. At the beginning, you made some financial adjustments to the community and the users. Can management provide more details on the adjustments you have done? And what are the key advantages you think that affected for and what the changes were made on to the community and the user behavior?
And one more question is about when do you expect the TUKHU's MAU to recover to a positive year ago? Thank you.
Yolanda Lau, Director of Investor Relations, Zhihu Inc.: Thank you, Daisy. This is from Zhou Yuan, Zhi Hu, CEO. So I will just start with the answer to your second question. So our MAU numbers may be influenced by 2 factors here. First of all, the reduction in community related promotion spending, which may lead to the loss of the low frequency users.
And the second, our focus on enhancing our core users' experience. Consequently, the high frequency users have been growing. So the combination of these two factors may not guarantee the overall numeral MAU growth in next year. However, what is certain is that we will continue to increase the investment in our core users' experience. What I want to address here is that the improvements in Q3 actually stem more from the work we've done in the first half of the year.
I believe we have still a long way to go. Community work is pretty much like working as a farmer or as I just mentioned work like a farmer. The work we're doing now may contribute to the improvements in 2 years later. As the improvements we've made so far this year, so firstly, we've been focusing on the algorithm optimization to encourage more professional in-depth and authentic content and increase the visibility of them in our community. And we significantly increased the weighting of like follows, shares and followers as high engagements often align with our criteria for high quality content.
As a result of these adjustments, user retention has also risen. This shows that our users are eager to consume high quality content across various professional views. For our content creators, we have been continuously improving the creation experience and income mechanism for them by enhancing like the experience in a lot of ways and by all means. For example, for a community perspective, we strictly control AIGC content, but have been integrating user friendly AI tools into our creation tools to improve the creation efficiency. We also recently reinstated the Juhu column feature, which was popular among creators and the core users with upgraded product mechanism.
And in the rest of the year, we will keep this upgrading. In terms of creators' revenue mechanism, for 3 consecutive quarters this year, the number of creators' earning income has grown by over 25% year over year with better diversified revenue streams. At the same time, Juhu continues to prioritize income opportunity for those mid tier and the long tail creators. The professional, authentic and in-depth content has gained more visibility across various dimensions in the community. And high level creators saw double digits year over year growth in both average views proposed and positive interaction per user in Q3.
So the latest data reviews that the average exposure share of relatively low quality content on the recommendation page have decreased by over 40 percent compared to the beginning of the year, while negative feedback from users has dropped by more than 30%. At the same time, positive interactive behaviors have grown steadily. Going ahead, we will take a systematic approach and staff by staff to enhance our community ecosystem. This is I believe this is a long term project. Just as I mentioned earlier, works like a farmer.
Thank you again for your question.
Conference Operator: The next question will come from Lincoln Kong with Goldman Sachs (NYSE:GS). Please go ahead.
Lincoln Kong, Analyst, Goldman Sachs: So thank you management for taking my question. My question is about the Zuhu product upgrade and as well as the Zuhu JUDA. So recently, we launched this Zhuhu JUDA, a professional search function. So could management share with us what are the other features that could be added to this Zhuhu in future and how my base integrates with the Zhuhu community, our monetization efforts and as our AI strategy to our product? Thank you.
Yolanda Lau, Director of Investor Relations, Zhihu Inc.: Thank you for your question, Lincoln. And I will just take this question. This is Zhou Yuan, Zhe Hu, CEO. So the launch of Zhe Hu Jida's professional search feature is fundamentally about scenario oriented updates. Our thinking is that the workflow in different scenarios is the most critical factor in addressing the needs of different user groups.
Workflow represents a fundamental need, and this is also the direction for Jida's integration. For example, professional search is tailored to suit academic research and professional work scenarios across finance, law, healthcare and other views. When searching for a specific professional concept or questions, user can directly assess full tax papers and take advantage of extended features such as single article detailed ratings and customized Q and A with spursified scope. Additionally, user can upload papers and this is very personalized Q and A and in-depth analysis. This means that for specialized knowledge in a vertical field, like from gaining an overview of a topic, collecting related literature and data rating and analyzing documents to answering follow-up questions and offering comprehensive breakdowns and insights.
This capability can also be generalized across multiple scenarios. And besides that, Zhihu Jida can provide a one stop solution. We believe that one of the future directions for upgrading Zhihu Jada is integration with Zhihu community itself. However, at this stage, we're not ready to review too much about this, first of all new features. Thank you, Lincoln, for your question.
Conference Operator: The next question will come from Vicki Wei with Citi. Please go ahead. Mrs. Wei, your line is open. The next question will come from
Analyst, Citi/CLSA: Can you hear me?
Conference Operator: Yes, Sam, your line is open.
Analyst, Citi/CLSA: Can you hear me? Okay. Sorry. Thanks management for taking my questions. Will management share some color about the Q4 outlook for the advertising business and the CCS business adjustment progress?
My second question is related to the membership business. Will management share some color about the competition landscape, user growth and ARPU trend? Thank you.
Yolanda Lau, Director of Investor Relations, Zhihu Inc.: Thank you for your question. I will take this question. The first question is about advertising or the marketing services business. This is Wang Han Zhefu CFO. To fundamentally safeguard and potentially enhance the differentiated advantage we gained from our high value audience and brands, we will continue to reduce low quality untrusted trustworthy commercial content.
To that end, we will remain quite focused on innovating and transforming our product mechanism and the data infrastructure. Recently, we have been reviewing and refining our collaboration models with quality content creators and brands to further bolster the trustworthiness of Zuhu community. So there are a lot of dimensions that we make this thinking and do the upgrading. Our commitment to make this adjustment is resolute even if it means temporarily sacrificing some low quality content. So the know how here is that Juhu is increasingly consolidating its commercial strength and expertise, specifically focusing on how brands build premium value with high quality and high value audience.
In the Q2, we shared examples such as Toshiba (OTC:TOSYY) Refrigerator launched their campaign in Zhihu with this first stop for new product. And Vivo's collaboration with Zuhu, Zuhu's Lighthouse program to promote their Blue Heart AI accessibility feature. Some similar cases that we can see in our Q3 also highlighted the premium value of the high end brands and audience. For example, TCL's new embedded refrigerator gained strong word-of-mouth and seeding effect through Zhuhu's first offer new products campaign, achieving better than expected results. Similarly, like the Bulgari, the luxury brand, during this year's Qixi Festival, they chose Zhihu as a primary platform for its nationwide campaign, recognizing Zhihu's high concentration of affluent, high conception users.
So these examples perfectly illustrate our trustworthy and our high quality content's value and the ability to deliver commercialization results, driving win win outcomes for ourselves. And for your second question, I believe, is about our pay membership business. So we're not seeing significant changes in the competitive landscape here. Juhu Yan Yan Starry In the Q3, our average monthly subscribing members achieved double digit growth both year over year and quarter over quarter, reaching 16,500,000. And the growth momentum for our paid memberships, I believe, also relies on Ginyan Stories' premium content advantage itself.
We are exploring the multiple channels to extend our pay membership space, including like within Jufu community and beyond Jufu community. And we are aiming to further bolster the brand recognition and the positive word-of-mouth of Yinyuan itself. Our strategy does not call for the direct intervention in paid members' ARPU. Rather, the core focus is on enriching our members' benefits, which we believe will lead to an increase in the lifetime value LTV for our paid members. And in this quarter, through our premium paid membership, Chunshan Huiwen, supported by its differentiated pricing strategy, we not only expanded the content offerings in audiobooks and redo dramas that we launched before, but also introduced a broader range of membership benefits, including short dramas, which significantly boosted the demand and order growth.
And additionally, Yanyan Story's ability to transfer its premium IPs into video form content is also being constantly unlatched. In the Q3, two works by Yan Yan story creators, Remember the Mission and Live Well, and the Story of ER 2nd, were selected for the 3rd Yangtze River Online Literature's most potential IP list. The short drama adapted from the Remember, the Mission and Live Well achieved over 10,000,000 views and within just 7 hours of its release and inspired over 100,000,000 released topics. So looking ahead, we expect to launch new product formats and more membership benefits based on the synergy between Yin Yang's story and the Jifu community. So please stay tuned.
Operator, please, next question.
Conference Operator: The next question will come from Stella Wang with T. H. Capital. Please go ahead.
Analyst, Citi/CLSA: So I will translate by myself. Good evening management. Thanks for taking my question. My question is about the advancement in optimizing the vocational training business. Could the management share some colors about this progress and what's the financial target in the long term?
Thank you.
Yolanda Lau, Director of Investor Relations, Zhihu Inc.: Thank you for your question. This is from Wang Han, Zhe Hu, CFO. Currently, the primary goal of our vocational training business remains improving efficiency and accelerating loss reduction with the goal of achieving breakeven for this segment itself by the end of 'twenty five. So to that end, our Q2 and Q3 adjustments pretty much focus on the scaling back on profitable course offerings and like the low margin acquired business. This allowed us to concentrate more resources on expanding our strong performing courses, resulting in improved overall efficiency and profitability.
So from a management perspective, both operating losses and the net losses for the vocational training segment declined quarter over quarter for the Q3. So looking ahead, we aim to bolster a faster and closer integration between the vocational training business and the community. This will enable us to quickly validate new demands, leverage precise customer acquisition advantages and build brand reputation and user recognition. We expect this effort to deliver the substantial empowerment and eventually translated into sustained positive unit economics. This adjustment process will span the Q4 this year and continue throughout the next year.
Thank you for your question.
Conference Operator: The next question will come from C. C. Chang with CLSA. Please go ahead.
Analyst, Citi/CLSA: Thanks, management, for taking my question. And is there encouraging to hear that the company is on track to achieve breakeven in the Q1? In light of this, whether the company has any plan to consider shareholder arrangement post breakeven in order to enhance shareholder return and whether the company's prefer share repurchase or dividend? Thank you.
Yolanda Lau, Director of Investor Relations, Zhihu Inc.: Thank you for the question. This is Wang Han, Zhe Hu, CFO. As we mentioned earlier, since our Hong Kong IPO, we have repurchased over USD 120,000,000 worth of shares via virus means, including open market buybacks and tender offers. So the total number of shares that we purchased exceeds 25% of the total issued and outstanding shares, if calculated using the total number of the outstanding shares prior to the tender offers. So on the one hand, this results in a significant enhancement in shareholders' value.
On the other, this clearly demonstrated the management's strong confidence in the undervaluation of its assets. This is also worth mentioning that earlier in the beginning of November, we completed a share buyback via tender offers both in Hong Kong and U. S. Market. This is a very first practice in the market.
And for a total consideration of over HKD300 1,000,000. And on the open market side, we will continue to do the buyback on open market to further demonstrate the management's confidence. So at the same time, we are also accelerating our path to profitability and a positive cash flow. So with this foundation, we will consider exploring more diverse methods for the shareholder returning. Thank you for your question.
Conference Operator: This concludes today's question and answer session. At this time, I would like to turn the conference back over to Ms. Yolanda for any closing remarks. Please go ahead, ma'am.
Yolanda Lau, Director of Investor Relations, Zhihu Inc.: Thank you. And thank you all once again for joining us today. If you have any further questions, please contact our IR team directly or Piacente Financial Communications. Thank you all.
Conference Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
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