Zhihu Inc (NYSE:ZH) shares surged 5.28% during intraday trading on Wednesday, as investors reacted positively to the company's third-quarter 2024 earnings report. The strong performance was driven by significant improvements in profitability metrics and cost reductions, which have put Zhihu on a path to achieve breakeven in Q4 2024.

Notably, Zhihu's gross profit margin improved by over 10 percentage points year-over-year, reaching an impressive 63.9%. The company also reported a substantial decrease of 96.8% in its net loss, down to RMB9 million. This was achieved through strategic cost-cutting initiatives, with total operating expenses decreasing by 30.5% and selling, marketing, R&D, and G&A expenses all showing significant reductions.

Despite challenges in some segments, such as a decline in marketing services revenue and vocational training revenue, Zhihu demonstrated resilience in its core business. The company's paid membership revenue increased by 11.5%, reaching RMB459.4 million, with the number of subscribing members growing to 16.5 million. Additionally, user engagement metrics improved, with monthly active users rebounding to 81.1 million in Q3.