Good morning, ladies and gentlemen. Thank you for standing by, and welcome to the Zhihu Inc. Q3 2024 financial results conference call. At this time, all participants are in a listen-only mode. After the speaker's 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 Liu, Director of Investor Relations. Please go ahead, ma'am.
Thank you, Operator. Hello, everyone. Welcome to Zhihu 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 comparison 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.zhihu.com. I will now turn the call over to Mr. Wang Han, CFO of Zhihu. Han, please go ahead.
Thank you, Yolanda. Hello, everyone. Thank you for joining Zhihu Q3 2024 earnings call. I'm pleased to deliver today's opening remarks on behalf of Mr. Zhou Yuan, Founder, Chairman, and CEO of Zhihu. We delivered solid Q3 results across key financial metrics thanks to our continued focus on efficiency enhancement and cost reduction. Gross profit margin improved by over 10% points year-over-year, reaching 63.9%, the highest level since our listing. Total costs and operating expenses decreased by more than 35.6%, 30.5% respectively, leading to a net loss of RMB 9 million, down 96.8% year-over-year. Our efforts to optimize the community ecosystem are also yielding positive results. Deep user engagement in Q3 propelled a sequential increase in our user base. What's more, we further enhanced content creators' experience across our community, fostering a renewed sense of confidence and driving more active contributions.
This, in turn, has cultivated a professional, insightful community atmosphere being built with a balanced, rational optimism. Furthermore, in line with our commitment to exploring AI applications, we'll launch the professional search feature for Zhihu at the end of October. This initiative marks a significant step in our differentiated approach to enhancing product capabilities and elevating the user experience by reaching our massive pool of high-quality data and content. I'll delve deeper into Zhihu later in the call. Now, let me focus on users and content. This quarter marked the third consecutive period of our refined user strategy. We achieved sustained improvements across key user metrics alongside a sequential recovery in user growth. Q3 MAU ended quarter-over-quarter at RMB 81.1 million, despite our continued reduction in community-related promotional spending. Overall, user engagement across the Zhihu community also increased sequentially, with core user retention showing significant year-over-year growth.
Additionally, daily active user timespan rose 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 the 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 deepened our focus on cultivating new high-tier content creators across diverse fields. By offering advanced creative tools and signature initiatives unique to Zhihu, we fostered their growth and enriched the Zhihu library with the steady influx of diverse, authentic, and professional content. Throughout third quarter , Zhihu delivered highly differentiated, rewarding high-quality content to internet users nationwide through in-depth professional discussions on major societal events.
For example, the 2024 Zhihu Science Season, launched in tandem with Nobel Prize announcements, sparked the wealth of contributions across the Zhihu community, including productions, insights, and educational content. Among these contents, discussions on 2024 Nobel Prize in Physics alone generated over 1.5 million interactions within the Zhihu community. This dynamic engagement earned Zhihu the reputation of being the second home of the Nobel Prize. As of the end of third quarter, Zhihu had amassed a cumulative content volume of 854.5 million pieces, representing a year-over-year growth of 14.9%. This includes 641.4 million Q&A entries and an increase of 11.8% compared to the same period last year. The Zhihu community now boasts a total of 77 million content creators, marking an 11.6% year-over-year rise. As the experience of both content creators and users has continued to improve, the Zhihu community, distinguished by professional discourse and rational optimism, has grown stronger.
This progress is underscored by a steady decline in negative feedback from users and a notable increase in positive interactions. Average daily engagement per DAU has consistently risen quarter-over-quarter, with the monthly average of upvotes surging by over 25% year-over-year in Q3. Next, I would like to share some details about the progress we have made with Zhihu Zhida. We have capitalized on Zhihu Zhida'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, Zhihu Zhida's traffic reached 4.7 million in September, a remarkable increase of over 180% compared to August. In Benchmark AI product rankings for September, Zhihu Zhida ranked third among Chinese products in terms of sequential page view growth.
Additionally, it claimed the second position on the domestic web growth leaderboard, securing a spot in the top three for two 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 engaged in academic research and professional work. We integrated over 50 million Chinese and English academic articles from specialized content sources such as Wikipedia and Zhihu, further enhancing Zhihu Zhida's ability to fulfill users' searching queries with high-quality content. Professional Search also supports file uploads and comprehensive document parsing, providing tools like single-article in-depth reading and source-specific Q&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 Q4.
The number of subscribing members rose by 11.5% year-over-year to 16.5 million, while the segment delivered revenue of RMB 459.4 million, increasing its revenue contribution to 54%. In late August, content creators on Zhihu Yany an Story produced a series of derivative works inspired by Journey to the West, a classic Chinese tale that also forms the core of season's most popular domestically produced AAA games. These works presented a modern reinterpretation of the classic saga. Also, building on the game's momentum, we launched a Journey to the West special series featuring multiple stories that compare Asian and modern perspectives to highlight the classic story's timeless allure, a release that has resonated strongly with our users. Turning to marketing services, in third quarter, revenue from our marketing services was RMB 256.6 million, a 33% decline year-over-year.
Although brand advertising and CCS decreased compared to last year, we were encouraged by our key clients' growing recognition of Zhihu's brand and the high value they attribute to our users. This progress validates our commitment to optimizing our commercial ecosystem and enhancing the Zhihu community's trustworthiness as a strong and viable growth path for our marketing services. According to the iResearch report released in late October, Zhihu has established itself as the most trusted content community for consumer decision-making. Furthermore, the survey's findings indicated that nearly 60% of users reported making purchases after reading product recommendations on Zhihu. During this year's Double 11 event, we also established the Zhihu Reviewers Jury in their Recommended Goodies 100 campaign, providing consumers with professional, authentic, and timely answers to their purchasing questions. This quarter, brand advertising delivered a solid year-over-year performance in IT and 3C and e-sports.
Top clients in the automotive and fast-moving consumer goods sectors also ramped up their advertising spending on Zhihu. International FMCG brands, in particular, noted that Zhihu's high-quality user base aligns well with their target demographics. Consequently, despite tighter budgets across the broader advertising network, we opted to increase our allocations on Zhihu. In addition, our ongoing improvements in data analysis and operational efficiency have generated positive returns on investment for this premium client. For our CCS business, after a rigorous crackdown on low-quality content, we have gradually integrated high-tier content creators from the Zhihu community into our CCS program, driving a steady increase in premium content contributions. This Q4, customer satisfaction and repurchase rates have significantly improved compared to the beginning of the year, while content creators have benefited from increased earnings. Next, our vocational training business. We continue to streamline the 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% 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 BI drive and categories such as media production and film post-production remain extremely popular among learners, reflecting long lifecycle potential. What's more, our business structure optimization in Q4 effectively enhanced overall ROI, allowing us to strategically allocate resources toward high-efficiency program categories, thereby supporting greater operational stability. Moving forward, we'll focus on narrowing this business segment losses and aim to achieve break-even as soon as possible.
In summary, this fourth quarter highlighted our unwavering commitment to strategic refinement and execution, delivering financial results that once again exceeded our expectations. Commercial and operational efficiencies have been critical metrics during our operations, empowering us to optimize our use of complex resources. Looking ahead, we will remain dedicated to enhancing the user experience and strengthening the trustworthiness of our community, while strategically refining our operational model to unlock the full potential of Zhihu'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 Yuan's remarks. Now, I will review the details of our third quarter financials. For a complete overview of our third quarter financial results, please refer to our press release issued earlier today.
Our commitment to enhancing operational efficiency through discipline and cost control drove a significant margin expansion this fourth quarter. This effort also led to narrowing losses, propelling us even closer to profitability, which achieved our lowest quarterly loss since our U.S. IPO in this quarter, demonstrating our momentum in building a more resilient business and sustainable creating value. Our marketing services revenue for Q4 was RMB 256.6 million, compared with RMB 383 million in the same period of 2023. This decline is largely a result of our strategic ongoing optimization of service offerings, with a focus on margin improvement. Paid membership revenue for third quarter was RMB 459.4 million, slightly decreased from RMB 466.8 million 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 Zhihu's premium offerings, which are consistently attracting new paid members from both within and beyond the Zhihu community. Vocational training revenue for fourth quarter was RMB 105.1 million, compared with RMB 144.8 million in the same period of 2023. This decrease was primarily due to our strategic refinement of our acquired business, with a focus on prioritizing the faster-growing self-operated program. Our gross profit for fourth quarter was RMB 540.1 million, compared with RMB 548.5 million in the same period of 2023. Boosted by our enhanced operating efficiency, our gross margin also further improved year-over-year, reaching 63.9%, a record high. Our total operating expenses for Q4 were RMB 624.5 million, a 30.5% decrease from RMB 898.6 million in the same period last year.
Market expenses decreased by 27.4% to RMB 388 million, down from RMB 534.3 million in the same period of 2023. This reduction was primarily driven by more disciplined promotional spending and a decrease in personnel-related expenses. R&D expenses for Q4 decreased by 28.2% to RMB 179.3 million, down from RMB 249.7 million in the same period of 2023. This reduction was primarily attributable to more efficient spending on technological innovation. G&A expenses decreased by 50.1% to RMB 57.2 million from RMB 114.6 million in the same period of 2023. The decrease was primarily attributable to lower share-based acquisition expenses. Consequently, our GAAP net loss for fourth quarter narrowed significantly, decreasing by 96.8% year-over-year. Our adjusted net loss on non-GAAP basis was RMB 13.1 million, compared with RMB 225.3 million in the same period of 2023.
Our adjusted net loss margin decreased more than 20% this Q4 year-over-year to 1.5% in this Q4. As of September 30, 2024, the company has cash and cash equivalents, term deposit, restricted cash, and short-term investment of RMB 5 billion, compared with RMB 5.5 billion as of December 2023. From our Hong Kong IPO until September 13, 2024, we had repurchased 31.1 million Class A Ordinary Shares at an aggregate price of $56.5 million from the open market and canceled those shares. We also repurchased a total of 10.1 million Class A Ordinary Shares at an aggregate price of $16.5 million to fulfill upon vesting of restricted shares in the future. In addition, we had repurchased another 33 million Class A Ordinary Shares at an aggregate price of $38.5 million via tender offer, which were completed on November 8, 2024.
In total, the company has purchased 74.2 million Class A Ordinary Shares for a total price of $121.5 million. As we approach the end of 2024, we'll continue to elevate content quality and enhance the experiences of both users and creators across the Zhihu community by harnessing the power of innovation and technology. We remain committed to optimizing resource allocation, advancing towards profitability, and unlocking the potential of Zhihu'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 us turn the call over to the operator for the Q&A session.
Thank you. We will now begin the question-and-answer session. To ask a question, you may press star then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. And to withdraw your question, please press star then two. In the interest of time, please ask one question for each time. If you have any follow-up questions, you may re-enter the question queue. Thank you, and please hold until we get an order together. And the first question will come from Jialei Zhang with CICC. Please go ahead.
[Foreign language]. Thanks, Management, for taking my question. Congratulations on the further reducing loss in the third quarter. Could Management share more on the commitment about achieving a break-even in the fourth quarter and what's your outlook for 2025? What will be the main drivers? Thank you.
[Foreign language].
Thank you for your question, Jialei. This is from Han Wang, Zhihu CFO. We have been firmly focused on our Q4 break-even target this year. Achieving a significant reduction in losses in both Q2 and Q3 has 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 break-even in Q4 now is quite clear.
[Foreign language].
The two 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.
[Foreign language].
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.
[Foreign language.
Creating an environment that encourages our most professional users to actively participate and contribute remains the foundation of Zhihu's identity.
[Foreign language].
For our other business models, we will continue to innovate, centered around Zhihu community's professionalism and trustworthiness. This approach will comprehensively leverage Zhihu's unique advantages.
[Foreign language].
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 refinement and data infrastructure updates, building Zhihu's commercialization on a solid and trustworthy foundation.
[Foreign langauge]。
We are working to achieve break-even within the vocational training business while strengthening its integration and interaction with Zhihu community. This will establish a faster feedback mechanism for user demands and accelerate service capability development.
[Foreign language] LTV.
For our paid membership business, we will also leverage community content and user feedback to create a better product mechanism for this business and to further enhance Yanxuan members' renewal rate and consequently increasing the Lifetime Value (LTV) of our paid members.
[Foreign language]
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.
The next question will come from Daisy Chen with Haitong International. Please go ahead.
[Foreign language]? Thank you, management, for taking my question. My question is about the users and the community. This quarter, we noted that Zhihu's MAU has improved and stopped the sequential decline. At the beginning, you made some substantial adjustments to the community and the users. Can management provide more details on the adjustments you have done and what are the key strategies you think that are successful, and what the changes were made on Zhihu's community and the user behavior? And one more question is about when do you expect Zhihu's MAU to recover to our positive year-on-year goals? Thank you.
Foreign language].
Thank you, Daisy. This is from Zhou Yuan, Zhihu CEO.
[Foreign language].
So I will just start with the answer to your second question. So our MAU members may be influenced by two 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.
[Foreign language].
So the combination of these two factors may not guarantee the overall numerical MAU growth in next year. However, what is certain is that we will continue to increase the investment in our core users' experience.
[Foreign language] work like a farmer. [Foreign language].
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 two years later.
[Foreign langauge].
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. We significantly increased the weighting of, like, follows, shares, and followers, as high engagement often aligns with our criteria for high-quality content.
[Foreign language]
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 fields.
[Foreign langauge].
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.
[Foreign langauge].
We also recently reinstated the Zhihu column feature, which was popular among creators and core users, with upgraded product mechanism. In the rest of the year, we will keep this upgrading.
[Foreign lanaguage].
In terms of creators' revenue mechanism, for three 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, Zhihu continues to prioritize income opportunity for those mid-tier and long-tail creators.
[Foreign language].
Some of the professional, authentic, and in-depth content has gained more visibility across various dimensions in the community. And the high-level creators saw double digits year-over-year growth in both average views per post and positive interaction per user in Q3.
[Foreign language].
So the latest data reveals that the average exposure share of relatively low-quality content on the recommendation page have decreased by over 40% 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.
[Foreign language] work like a farmer. [Foreign language].
Going ahead, we will take a systematic approach and step by step, to enhance our community ecosystem. This is, I believe this is a long-term project, just as I mentioned earlier, work like a farmer. Thank you again for your question.
The next question will come from Lincoln Kong with Goldman Sachs. Please go ahead.
[Foreign language]. So thank you, Management, for taking my question. My question is about, the Zhihu, product upgrade and as well as this Zhihu Zhida. So recently we launched this Zhida, professional search function. So could Management share with us what are the other features that could be added to this Zhida in future, and how, might this integrate, with the Zhihu community, our monetization efforts, and, as well our AI, strategy into our product? Thank you.
[Foreign language] workflow [Foreign language]. workflow [Foreign language].
Thank you for your question, Lincoln. And I will just take this question. This is Zhou Yuan, Zhihu CEO. So the launch of Zhihu Zhida'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 Zhihu Zhida's integration.
[Foreign language].
For example, professional search is tailored to suit academic research and professional work scenarios across finance, law, healthcare, and other fields. When searching for a specific professional concept or questions, users can directly access full text papers and take advantage of extended features such as single-article detailed reading and customized Q&A with specified scope. Additionally, users can upload papers, and this is a very personalized Q&A and in-depth analysis.
[Foreign language].
This means that for specialized knowledge in a vertical field, like from getting an overview of a topic, collecting related literature, and in-depth reading and analysis of documents, to answering follow-up questions and offering comprehensive breakdowns and insights, this capability can also be generalized across multiple scenarios. Besides that, Zhihu Zhida can provide a one-stop solution.
[Foreign language].
We believe that one of the future directions for upgrading Zhihu Zhida is integration with Zhihu community itself. However, at this stage, we are not ready to reveal too much about the specified new features. Thank you, Lincoln, for your question.
The next question will come from Vicki Wei with Citigroup. Please go ahead. Mrs. Wei, your line is open. The next question will come from Stella Wang.
Hello? Can you hear me?
Yes, ma'am, your line is open.
Can you hear me? Okay, sorry. [Foreign language]. Thanks, Management, for taking my questions. Will Management share some color about the fourth quarter 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.
[Foreign language].
Thank you for your question, Vicki. I will take this question. The first question is about the advertising or the marketing services business. This is Wang Han, Zhihu CFO.
[Foreign language].。
To fundamentally safeguard and potentially enhance the differentiated advantage we gain from our high-value audience and brands, we will continue to reduce low-quality, untrustworthy commercial content. To that end, we will remain quite focused on innovating and transforming our product mechanism and the data infrastructure.
[Foreign language].
Recently, we have been reviewing and refining our collaboration models with quality content creators and brands, to further boost the trustworthiness of Zhihu 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.
[Foreign language] core systems，[Foreign language].
So the know-how here is that Zhihu is increasingly validating its commercial strength and expertise, specifically focusing on helping brands build premium value with high quality and high-value audience.
[Foreign language] .
In the second quarter, we shared examples such as Toshiba refrigerator launch and launch their campaign in Zhihu with this first stop for new product, and Vivo's collaboration with Zhihu, Zhihu's Lighthouse Program to promote their BlueH eart AI accessibility feature.
[Foreign language] TCL [Foreign language] .
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 Zhihu's first stop for new products campaign, achieving better than expected results.
[Foreign language] luxury brand [Foreign language].。
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 consumption 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.
[Foreign language].
For your second question, I believe is about our paid membership business. So we're not seeing significant changes in the competitive landscape here. Zhihu Yany an Story continues to hold its leading position in the short-form paid content sector, and,
[Foreign language].
In the third quarter, our average monthly subscribing members achieved double-digit growth both year- over year and quarter- over- quarter, reaching RMB 16.5 million.
[Foreign language].
The growth momentum for our paid memberships, I believe, also relies on Yany an Story's premium content advantage itself. We are exploring the multiple channels to extend our paid membership space, including like within Zhihu community and beyond Zhihu community. We are aiming to further foster the brand recognition and the positive word of mouth of Yany an itself.
[Foreign language] ARPU, [Foreign language] LTV [Foreign language].
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.
[Foreign language].
In this quarter, through our premium paid membership, [Foreign language] , supported by its differentiated pricing strategy, we not only extended the content offerings in audiobooks and radio 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.
[Foreign language] IP [Foreign language].
Additionally, Yany an Story's ability to transfer its premium IPs into video form content is also being constantly unleashed.
[Foreign language].
In a third quarter, two were by Yangtze creators Remember the Mission and To Live Well [Foreign language] and the Story of ER II [Foreign language] were selected for the third Yangtze River Online Literature's most potential IP list.
[Foreign language].
The short drama adapted from the Remember, the Mission and Live Well achieved over 10 million views and within just seven hours of its release and inspired over 100 million released topics. So looking ahead, we expect to launch new product formats and more membership benefits based on the synergy between Yanyan Story and the Zhihu community.
The next question will come from Stella Wang with T.H. Capital. Please go ahead.
[Foreign language]. 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.
[Foreign language]. 2025 [Foreign language] break even。
Thank you for your question. This is from Wang Han, Zhihu CFO. Currently, the primary goal of our vocational training business remains improving efficiency and accelerating loss reduction, with the goal of achieving break even for this segment itself by the end of 2025.
[Foreign language] Q2 and Q3 [Foreign language].
So to that end, our Q2 and Q3 adjustments pretty much focus on the scaling back on profitable course offerings and, like, the low, 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 net losses for the vocational training segment declined quarter- over- quarter for the Q3.
[Foreign language].
So looking ahead, we aim to foster 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 translate it into sustained positive unit economics. This adjustments process will span the fourth quarter of this year and continue throughout the next year. Thank you for your question.
The next question will come from C.C. Cheng with CLSA. Please go ahead.
Thanks, management, for taking my question. It's very encouraging to hear that the company is on track to achieve break even in the fourth quarter. In light of this, whether the company has any plan to consider a shareholder arrangement post break even, in order to enhance shareholder return, and whether the company prefers share repurchase or dividend. Thank you.
[Foreign language].
Thank you for your question. This is Wang Han, Zhihu CFO. As we mentioned earlier, since our Hong Kong IPO, we have repurchased over $120 million worth of shares, via various means, including open market buybacks and tender offers, so the total number of shares that we repurchased exceeds 25% of the total issued and outstanding shares, if calculated using the total number of the outstanding shares prior to the tender offers.
[Foreign language]。
On the one hand, this results in a significant enhancement in shareholders' value. On the other, this clearly demonstrates the management's strong confidence in the undervaluation of its assets.
[Foreign language] 。
This is also worth mentioning that in early October, we completed a share buyback via tender offers both in Hong Kong and the U.S. market. This is the very first practice in the market, and for a total consideration of HKD 300 million. And on the open market side, we will continue to do the buyback on open market to further demonstrate the management's confidence.
[Foreign language].
At the same time, we're also accelerating our path to profitability and a positive cash flow. With this foundation, we will consider exploring more diverse methods for the shareholder returning. Thank you for your question.
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.
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.
The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.