(Yicai Global) May 26 -- Zhihu’s stock price rose after the operator of China’s largest question-and-answer platform reported a better-than-expected 55 percent jump in first-quarter revenue.

Zhihu [HKG: 2390] gained 0.5 percent in Hong Kong today to end at HKD20.10 (USD2.60), after plunging 9.9 percent yesterday following news of staff layoffs at the firm. In pre-market trading in New York, the firm’s stock [NYSE: ZH] was up 4.4 percent at USD1.42 as of 5.13 a.m. local time today. It climbed 2.3 percent yesterday after Zhihu’s earnings report came out.

Revenue jumped 55 percent to CNY743.2 million (USD117.2 million) in the three months ended March 31 from a year earlier, according to the report, driven by an expansion in Zhihu’s user base and higher average revenue per active user. That beat the market consensus for USD107.3 million.

But the Beijing-based company’s net loss widened 89 percent to CNY614.3 million (USD96.9 million) in the period, as a result of rising labor and marketing costs.

Zhihu's cost of revenue almost doubled to CNY407.7 million due to an uptick in advertising and content expenses, while labor costs climbed as the firm boosted its headcount to support growth. Operating expenses surged 60 percent to CNY983.7 million due to high marketing outlays related to attracting new users and strengthening the platform's brand.

The Quora-like platform is making moves to reorganize its business. Zhihu is taking a series of measures to cut costs and raise efficiency, founder and Chairman Zhou Yuan said on an earnings call yesterday. After integrating its video and community divisions, Zhihu will further optimize its community business to improve communication between its marketing, operations, and technology departments, he said.

The firm’s shares had lost ground earlier this week, including a 14.7 percent dive in New York on May 24, following reports of redundancies. A number of Zhihu employees had said on social media that the company is letting go 20 percent to 30 percent of staff in businesses such as technology, commercialization, education and community.

Speaking yesterday to news outlet Huanqiu, Zhihu said the layoffs were nothing more than a normal optimization and adjustment of the business and organization.

Editor: Emmi Laine, Xiao Yi