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InvestorRoom Zhihu Inc. Reports Third Quarter 2021 Unaudited Financial Results BEIJING , Nov. 22 , 2021 / PRNewswire / -- Zhihu Inc. ( " Zhihu " or the " Company " ) ( NYSE : ZH ) , the operator of Zhihu , a leading online content community in China , today announced its unaudited financial results for the quarter ended September 30 , 2021 . Third Quarter 2021 Highlights • Average monthly active users ( MAUS ) [ 1 ] reached 101.2 million in the third quarter of 2021 , representing a growth of 40.1 % over the third quarter of 2020 . • Average monthly paying members [ 2 ] reached 5.5 million in the third quarter of 2021 , representing a growth of 109.9 % over the third quarter of 2020 . • Total revenues were RMB823.5 million ( US $ 127.8 million ) in the third quarter of 2021 , representing a growth of 115.1 % over the third quarter of 2020 . • Gross profit was RMB424.8 million ( US $ 65.9 million ) in the third quarter of 2021 , representing an increase of 93.0 % over the third quarter of 2020 . " During the third quarter of 2021 , we continued to deliver solid operating and financial results . As part of our campaign of upgrading content quality to a next level and to promote " fulfilling content , " we focused on optimizing the content creation and distribution mechanisms for purposes of promoting and enhancing content fulfillness and made remarkable progress in the quarter . By expanding content vertical coverage and promoting content timeliness , content consumption experience was further enhanced on our platform , which contributed to a more diversified user base , with average MAUS crossing the 100 million mark for the first time . The various tools and functions that we introduced in the quarter to our content creators continued to improve their creation experience and enhance their monetization potential . We will continue to focus on incentivizing and promoting high - quality content creation in various formats and strengthen and develop monetization approaches within our community , with an aim of cultivating a sustainable and long - term growth momentum of our business . " said Mr. Yuan Zhou , Chairman of the Board and Chief Executive Officer of Zhihu . Mr. Wei Sun , Chief Financial Officer of Zhihu , added , " We continued to deliver strong results in the third quarter of 2021 , driven by our unique content - centric business model . Average MAUS increased significantly on a year - over - year basis , coupled with our continued strengthening of value per user . Active content creation and vibrant user engagement , coupled with our continuously expanding user base constantly unleashes significant monetization potential . In the third quarter , content - commerce solutions revenue grew five times year over year . Despite the headwinds facing the general advertising industry during the period , our advertising revenue grew by 39 % , reflecting solid commitment to our services and firm recognition of our content - centric marketing capability by our clients . In line with our long - term commitment to our users and content creators as well as our obsession with content , we continued to make investments that will support our long - term growth strategy , such as in the vocational training space . " Third Quarter 2021 Financial Results Total revenues were RMB823.5 million ( US $ 127.8 million ) in the third quarter of 2021 , representing an increase of 115.1 % from RMB382.8 million in the same period of 2020. The increase was driven by our continued expansion of our user base and average revenue per active user . Advertising revenue was RMB321.1 million ( US $ 49.8 million ) in the third quarter of 2021 , representing an increase of 38.9 % from RMB231.1 million in the same period of 2020. The year - over - year increase was primarily attributable to the continued expansion of our user base . Paid membership revenue was RMB178.3 million ( US $ 27.7 million ) in the third quarter of 2021 , representing an increase of 95.8 % from RMB91.1 million in the same period of 2020. The year - over - year increase was primarily attributable to increases in our overall user base and paying ratio for the period . Content - commerce solutions revenue was RMB278.4 million ( US $ 43.2 million ) in the third quarter of 2021 , compared with RMB45.5 million in the third quarter of 2020. The strong year - over - year growth was primarily driven by the rapid increases in both our user base and average content - commerce solutions revenue per MAU , reflecting our continued commitment to our content - centric monetization strategy . Other revenues were RMB45.7 million ( US $ 7.1 million ) in the third quarter of 2021 , compared with RMB15.1 million in the same period of 2020. The year - over - year increase was primarily attributable to continued growth of our vocational training and professional course programs as well as our e - commerce services . Cost of revenues increased to RMB398.6 million ( US $ 61.9 million ) in the third quarter of 2021 from RMB162.8 million in the same period of 2020. The increase was primarily due to an increase in execution costs for our advertising services and content - related costs . The rapid growth in user traffic in the quarter also resulted in increases in our cloud services and bandwidth costs . Gross profit was RMB424.8 million ( US $ 65.9 million ) in the third quarter of 2021 , compared with a gross profit of RMB220.1 million in the same period of 2020 . Gross margin in the third quarter of 2021 was 51.6 % , compared to 57.5 % in the same period of 2020 . Total operating expenses were RMB747.3 million ( US $ 116.0 million ) in the third quarter of 2021 , compared with RMB349.9 million in the same period of 2020 . Selling and marketing expenses were RMB374.7 million ( US $ 58.2 million ) in the third quarter of 2021 , compared with RMB219.6 million in the third quarter of 2020 . The increase was primarily due to an increase in expenses in promotion and advertising activities to attract new users and strengthen our brand recognition . Research and development expenses were RMB184.7 million ( US $ 28.7 million ) in the third quarter of 2021 , compared with RMB77.2 million in the same period of 2020. The increase was primarily due to our continued investment in technical infrastructure and research and development capability . General and administrative expenses were RMB188.0 million ( US $ 29.2 million ) in the third quarter of 2021 , compared with RMB53.0 million in the same period of 2020. The increase was primarily due to an increase in share - based compensation expenses . Loss from operations was RMB322.5 million ( US $ 50.0 million ) in the third quarter of 2021 , compared with RMB129.8 million in the same period of 2020 . Net loss was RMB269.8 million ( US $ 41.9 million ) in the third quarter of 2021 , compared with RMB110.0 million in the same period of 2020 . Adjusted net loss ( non - GAAP ) [ 3 ] was RMB112.4 million ( US $ 17.4 million ) in the third quarter of 2021 , compared with RMB79.2 million in the same period of 2020 . Basic and diluted net loss per ADS was RMB0.46 ( US $ 0.07 ) in the third quarter of 2021 , compared with RMB2.15 in the same period of 2020 . Cash and cash equivalents , term deposits , restricted cash and short - term investments As of September 30 , 2021 , the Company had cash and cash equivalents , term deposits , restricted cash and short - term investments of RMB7.6 billion ( US $ 1.2 billion ) , compared with RMB3.1 billion as of December 31 , 2020 . Outlook For the fourth quarter of 2021 , the Company currently expects its total revenues to be between RMB1.01 billion and RMB1.03 billion . The above outlook is based on the current market condition and reflects the Company's preliminary estimates , which are all subject to change . [ 1 ] MAUS refers to the sum of the number of mobile devices that launch our mobile app at least once in a given month , or mobile MAUS , and the number of logged - in users who visit our PC or mobile website at least once in a given month , after eliminating duplicates . [ 2 ] Average monthly paying members for a period is calculated by dividing the sum of monthly paying members for each month during the specified period by the number of months in such period . [ 3 ] Adjusted net loss is a non - GAAP financial measure . For more information on the non - GAAP financial measure , please see the section of " Use of Non - GAAP